It’s hard to find anything much more detrimental to economic growth than a $1.5 trillion federal income tax, but thanks to the Obama administration’s regulatory juggernaut, you certainly don’t have to look far.
Indeed, the economic cost of regulatory compliance now totals an astonishing $1.88 trillion, according to the Competitive Enterprise Institute. This “hidden tax” on consumers, households and business has reached critical mass and may now be the chief reason the economy is stuck in low gear growing at just 0.5 percent in the first quarter of this year.
And the most recent figures are even worse. U.S. job growth in May was the slowest in five years with 458,000 people leaving the labor force. That means nearly 95 million people are no longer working and the civilian labor-force participation rate is just 62.6 percent — the lowest since the ‘malaise’ of the 1970s.
Not that the administration — nor its most ardent defenders — seems to care. Just last month the Department of Labor unveiled two new job-killing rules on top of the 3,400 plus regulations federal agencies issued in 2015. That comes out to about a new agency rule every two-and-half hours, 24/7. In fact, the Federal Register of published proposals and final rules now contains over 82,000 pages, the most since 1936.
The DOL’s new “overtime” edict takes away the needed flexibility for employers and employees in small businesses by arbitrarily classifying salaried workers as those who make $47,476 or more per year. By all accounts — including the Consumer Technology Association — the cost to start-up enterprises that rely on entry-level management positions will be staggering.
The Labor Dept. then followed up with its “add-on” to Dodd-Frank’s “fiduciary rule” seeking to declare commission sales as a defacto ‘conflict of interest’ for anyone giving investment advice, including broker-dealers, insurance agents, etc.
Of course, most anyone who isn’t paid on a government-union scale understands the economic efficiency of a pay-for-performance model. Yet modern liberals are so distrustful of the marketplace that they now consider all producers unscrupulous, all consumers inept and all bureaucrats omniscient.
It is precisely the adversarial relationship between buyer and seller that gives market transactions their value and has resulted in the highest standard of living in history. As Adam Smith famously said a mere 240 years ago, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
Simple, when people are paid to produce, they produce more.
President Obama, Elizabeth Warren and my likely opponent in Minnesota’s 2nd Congressional District, Angie Craig, may believe that all mortgage and auto lenders are corrupt, but when every loan is “predatory” and every “mark-up” discriminatory, don’t blame business for the credit crunch.
The good news is the rule of law is battling back. The federal courts have now rebuffed the administration on its excessive environmental regulations with regard to fracking, navigable waterways, coal and most recently, the president’s so-called “Clean Power Plan.” Earlier this year the Supreme Court put the administration’s signature climate initiative on hold, strongly suggesting that only Congress may impose a $500 billion “cap and trade” plan on energy production.
That hasn’t stopped my opponent, Ms.Craig, who seems downright oblivious to the costs on business, calling the Clean Power Plan a “good start.”
But if she doesn’t think these environmental rules for radicals don’t have a real human cost, she should tell that to the Pierce family of northwest Minnesota, whose peat-mining business was essentially held up “under the threat of high fines and criminal charges,” laments owner Kevin Pierce. Under a very “liberal” interpretation of Clean Water Act permitting rules, the Army Corps. of Engineers told the family that they were mining in wetlands connected to the Red River.
Just one problem, the Red River is 120 miles away.
This case too is now in front of what appears to be, if oral arguments are any indication, a very skeptical Supreme Court. Let’s hope, for the sake of individual property rights as well as this sputtering economy, the bench strikes down yet another federal rule that, in the words of Justice Kennedy, appears “quite vague in its reach, arguably unconstitutionally vague.”
Jason Lewis is a former syndicated radio host who is running as the Republican-endorsed candidate for Congress in Minnesota’s Second Congressional District. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
