Do Regulations Kill Jobs?: Q but no A

Well, the Washington Post  has made a feeble attempt to weigh in on this question but in a way that makes one wonder why. As I wrote on Monday, a front page story that day had at least 13 references to jobs either in quotes or attributions that made the claim that “regulations kill jobs,” exactly the message Republicans want delivered. Even though the reporters of that story admitted in it that those making the claims didn’t provide evidence that it was true, Post reporters David Hilzenrath and Phil Rucker gave a big megaphone to that claim.

When I sent my Monday post to Rucker, he responded that “we will do our due diligence to fact-check industry’s claims.” Perhaps today’s article is that “due diligence.” If so, it is thin gruel served up not on page one in a 1,500+ word story as was Monday’s, but on page A13 and in less than 600 words. And it makes no effort to fact check.

In fact, the story’s headline sort of promises something the article doesn’t deliver. In the print edition this morning, the headline is “Panel: Do regulations kill jobs?” Hilzenrath then spends the first part of the aisle quoting from a clearly partisan report by the staff of the Committee on Oversight and Government Reform, chaired by Republican California Congressman Darrell Issa. All the quotes or attributions are unsubstantiated.

"Many regulations that appear to impose a large burden on the private sector, while providing a dubious benefit to the public, still remain on course and on the books," the staff of the Committee on Oversight and Government Reform says in a report prepared for a hearing Thursday on complaints from business groups.

The report is part of a broad review of federal regulations by the new Republican leadership in the House, spearheaded by the chairman of the oversight panel, Rep. Darrell Issa (Calif.).

Issa asked business groups to identify regulations that have hurt employment, and the report draws on more than 200 responses addressing rules in areas such as the environment, workplace safety and Wall Street.

Though Issa’s staff has said it is still gathering information, some conclusions appear in the report.

"There is some evidence that regulations affecting the financial services industry may limit the job creation and growth capabilities of the U.S., reducing economic growth by as much as 4 percent," the report says.

The report cites Environmental Protection Agency standards for industrial boilers as "an example of the Agency getting the cost-benefit balance wrong."

It cites the U.S. Chamber of Commerce as arguing that "industries are effectively regulated out of business."

And it highlights the benefits of hydraulic fracturing, or "fracking," a process by which natural gas deposits are extracted. Some communities have protested that the process can contaminate drinking water.

The staff report says fracking "is crucial to accessing enormous deposits," and it says the EPA’s approach to the issue "could be a precursor to full-blown EPA regulation of this job-creating domestic power resource."

Similarly, the report expresses concern about potential regulation of the ash created when coal is burned to create electricity. "The substantial costs of handling coal ash as hazardous waste would be insurmountable for many power plants," it says.

Hilzenrath then turns over the last part of the article to arguments from folks with a different view. They say regulations may spur innovation and create jobs in new fields, or that lack of regulations actually hurts the job market, i.e., insufficient financial regulation costs lots of jobs, and not just in the financial sector. Former labor secretary in the Clinton administration Robert Reich argues colorfully.

"Presumably, we could generate a lot of jobs by getting rid of all regulations and working for $2 an hour in dangerous and fetid working conditions in cities whose air could hardly be breathed and spewing out products that one in 10 consumers might die from."

So the article itself never answers the question in the headline. In fact, the headline is misleading as the panel didn’t pose the question as much as gave a one-sided partisan answer. Granted reporters don’t write headlines and headline writers all too frequently seem not to read articles. But the bottom line is that this is just another “he said, she said” article.

Here is another way of getting to the question.

I grant you that it would be pretty easy to argue that regulations cost businesses money. A particular business hit with regulations may be poorer for it and may consequently, not hire as much as they would if they didn’t have to spend the money complying with regulations. However, even that conclusion is suspect. How do we know that the cash saved by not having to comply with regulations won’t simply go to shareholders as higher dividends or executives in the form of higher pay?

And what about the jobs that regulations create. Certainly someone has to work on the regulations and enforce them. And regulations that might hinder one industry create opportunities for other companies in competing industries.

But I don’t think that’s what regulatory critics are arguing. They are referring to jobs in their companies or industry. But is that what is most important for the common good, or as the U.S. Constitution puts it, are the regulations designed to “promote the general welfare”?

After more than 2,100 words from The Post, we still don’t know.

Evidence of Regulations Killing Job? Anyone?

I just discovered what could be a terrific website called Remapping Debate. It launched last October.

The heart of our work will be original reporting.  We take seriously the idea that the job of journalists is to question and to illuminate.  We believe that we need to question ourselves as much as we question others.

We think we need to reject the mental borderlines that leaves "mainstream" reporters generally speaking to "mainstream" sources, and "alternative" reporters generally speaking to "alternative" sources.

We insist that it is probing – not stenography – that can illuminate and inform, and that challenging a policy maker or policy advocate to engage with alternatives to a pre-scripted sound bite represents not commentary but an essential element of real reporting.

While exploring the site, I found this article, which argues that those claiming “regulations kill jobs” clearly have no evidence to back up their claim. Apropos of my post two days ago on this question, the article illuminates.

The idea is widely taken for granted. “Job-killing regulation” has become not only a mantra of today’s Republicans, but also the marketing pitch for a host of plans to have Congress exercise preemptive powers over federal rule-making and enforcement efforts.

It turns out, however, that it is easier to generate provocative rhetoric on this topic than to provide historical evidence for the proposition that regulations do, in fact, kill jobs. Through repeated inquiry, Remapping Debate established that, at least in Washington, vociferous opponents of regulation are often unable or unwilling to offer any such evidence, even in the area of regulation — environmental protection — that is the ground zero of current Republican fury.

The article gives numerous examples of statements on this issue by people who can provide no evidence to back up their claims. I sent it on to Phil Rucker, one of the Post reporters who responded to me when I sent him my post. He said The Post will fact check these claims in future articles.

In this sidebar below, Remapping Debate summarizes the responses it received after asking for the evidence that EPA regulations kill jobs. Note that Congressman Darrell Issa, the new chairman of the House Committee on Oversight and Government Reform who is leading the charge against regulations, is among them.

Show us the evidence

Remapping Debate invited several prominent opponents of regulation, in and out of government, to provide evidence of EPA regulations that “killed” jobs. Each of the following was apparently unable or unwilling to do so:

  • Margo Thorning, chief economist of the American Council for Capital Formation and the author of a 2010 study that predicted a loss of 2.4 million jobs if the Waxman-Markey cap and trade bill were enacted and implemented.
  • Rosario Palmieri, vice president for infrastructure, legal and regulatory policy at the National Association of Manufacturers, which commissioned the ACCF study and which, on its website, declares the EPA’s proposals a threat to "manufacturers, businesses and jobs throughout America."
  • Nicole V. Crain and William M. Crain, co-authors of a widely cited study — done for the Small Business Administration’s Office of Advocacy — putting the total annual cost of all regulation at $1.7 trillion — a figure far higher than most such assessments.
  • Rep. Darrell Issa (R-CA), the new chairman of the Oversight and Government Reform committee, who has announced an inquiry into the "impact of government hyperregulation on job creation."
  • Rep. Geoff Davis (R-KY), the prime House sponsor of the REINS Act, which, by requiring congressional approval of every major rule " before it could be enforced on the American people and businesses," aims to "rein in the costly overreach of federal agencies that stifles job creation and hinders economic growth."
  • Rep. Marsha Blackburn (R-TN), whose Free Industry Act would amend the Clean Air Act to declare that nothing in that law "shall be treated as authorizing or requiring the regulation of climate change or global warming."

This letter to the editor of Remapping Debate has at least two credible examples of regulations killing jobs.

Shared Sacrifice

If you relied on The Washington Post’s coverage of President Obama’s speech yesterday to the U.S. Chamber of Commerce, you would have missed some interesting messaging that approaches a narrative that could be very successful for the president come 2012.

Conventional wisdom is that the Chamber and the GOP with its relentless “creating jobs at all costs” has a winning message. But we can’t forget that many Americans, including Tea Partiers, are mighty upset with business and the damage Wall St. has done to the economy. Voters would need to be living in a cave if they didn’t realize that the gulf between rich and poor is widening and that CEOs are not held accountable for their failures, instead receiving golden parachutes.

Moreover, a wide swath of Americans have been harmed by the recession. It’s not just the unemployed. It is those who are working art-time when they want a full-time job or those working in jobs that pay a fraction of what those folks made before the recession. It is those who can’t see how they can send their kids to college, let alone retire, except in poverty. In short, there’s no shortage of people who are pissed and who are making a lot of sacrifices.

Asking Americans to sacrifice, while not in fashion since Ronald Reagan made greed an admirable trait, has in the past be fruitful. Americans are willing to sacrifice, especially for the benefit of their children.

Which brings me to these lines from Obama’s Chamber speech, from the AP’s telling of it.

"I want to be clear: Even as we make America the best place on earth to do business, businesses also have a responsibility to America," Obama said.

"As we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation."

Yes, it sounds almost Kennedy-esque: “Ask not what your country can do for you….”

He needs to take the narrative a little further:

Americans have made tremendous sacrifices to help this economy recover. They’ve taken jobs that pay less than they used to get paid or part-time work. Some of course, can’t find jobs at all. College seems out of reach. Retirement is a mirage.

What sacrifices are America’s businesses prepared to make? What can CEOs and company directors sacrifice?

I’ve heard business people say [this is an actual quote from a businessman after Obama’s speech] ‘Bottom line, the most patriotic thing a company can do is ensure it is in business and take steps to stay in business; otherwise everyone loses and more people lose their jobs.’

That’s a cop-out. Sure a company needs to stay in business, but this notion that the only thing a company needs to do is maximize shareholder value is wrong-headed and unpatriotic. American business has a moral responsibility to be a good corporate citizen. After all, if the Supreme Court says corporations are citizens, they need to act like citizens. They need to remember they have a responsibility not just to profits, but to the communities they are in, the workers who make them successful. Continually cutting wages and benefits while CEO salaries go through the roof doesn’t sound very American to a lot of American people.

So let’s get back to the idea that we’re all in this together, and that Americans—all Americans including the titans of commerce—must, as the Constitutions exhorts us, “promote the general welfare.”

Profits are good. Capitalism is the basis for the greatest economy in the world. But capitalists have responsibilities just like everyday Americans.

So the next time your board of directors meet ask, “What sacrifices are we willing to make?”

Regulations Kill Jobs?

In this morning’s Washington Post, writers Phil Rucker and David Hilzenrath write of Rep. Darrell Issa’s plan to hold hearings on what regulations can be eliminated in the name of savings jobs.

Issa, chairman of the House Committee on Oversight and Government Reform, and his supporters in the business community had remarkable message discipline. At least 13 times in the article were either quotes or attributions that included the word ‘”jobs” and how regulations are hurting the creation of them.

[House Republicans] are taking guidance from industry groups that say the rules threaten jobs.

…Issa asked industry groups to identify regulations that "have negatively impacted job growth."

…He said the probe is "a starting point for the broader discussion that will unfold about the regulatory barriers to job creation.

Thirteen times. You get the picture: Regulations reduce the number of jobs.

Except the writers place this sentence in the middle of the nearly 1,600-word story.

[M]any of the industry groups broadly said that government regulations would cost jobs but did not back up their claims with evidence.

How many times should reporters allow the purveyors of a point of view for which they offer no evidence that said view is true before said reporters refuse to be stenographers at a fantasy convention?

Maybe the claim by Republicans is true.  Then where is the evidence?

I went looking, of course, via Google. I entered the search term: do regulations hurt job creation [no quotes]. By page 17 in the results I had found no article that made the case that the GOP assertion was false. In fact, most of the results were the same article about Obama calling for relaxing some regulations or GOPers making their claim if not their case. Yet, I didn’t find a clear explanation of how regulations hurt job creation.

I then searched the same term with quotes around it. No results? No where in the entire World Wide Web has someone asked that question!

I then put in the term “regulations don’t hurt job creation” [with quotes].  No results. No one has made that claim.

Sure, people will argue, rightfully, that regulations often cost businesses. And we can all tell stories of how silly regulations waste time and don’t really stop much bad from happening. But costing  businesses money doesn’t mean it costs jobs. How do we know that the money or time saved would result in more jobs? What business would like us all to believe is that with the money they’d save they will invest it by hiring more people. But that it not a proven conclusion. It taint an ipso facto. The money saved could go to shareholders in higher dividends or to senior executives in higher pay.

Is the GOP claim true that regulations hurt job creation?   There appears no evidence easily found.

Maybe Messrs. Rucker and Hilzenrath could, you know, do a little reporting and find out.

Strong Statement and Weak Words

No more stark contrast in messaging styles can we have than these few paragraphs from The Washington Post’s online report today about the employment statistics. The stats, which come from two different sources, paint a contradictory and completely opposite picture of what experts expected. Most thought we’d actually see a bump up in the unemployment rate as more workers, encouraged by improving economic signs, re-enter the job market, while the number of jobs created would increase by nearly 150,000.

Instead, the unemployment rate dropped but few jobs were created, although “the number of people who described themselves as employed rose by 589,000.” The Post’s Neil Irwin does a good job of explaining why this surprise may have occurred.

But, this being Washington, he needs a quote from both sides on the significance of these numbers.

The White House called the the decline in the jobless rate a "welcome development" but generally refrained from celebrating the numbers, given the uneven picture they paint.

"The overall trajectory of the economy has improved dramatically over the past two years, but there will surely be bumps in the road ahead," White House Council of Economic Advisers Chairman Austan Goolsbee said in a statement. "The monthly employment and unemployment numbers are volatile, and . . . estimates are subject to substantial revision. . . . It is important not to read too much into any one monthly report."

House Speaker John A. Boehner (R-Ohio), however, said the weak job creation shows that the Obama administration’s push to speed the economic recovery isn’t working.

"The spending binge is hurting job creation," Boehner said in a statement, "eroding confidence, draining funds away from private investment and spreading uncertainty among job creators."  [emphasis added]

Note the White House, inhabited by Democrats who clearly don’t understand the 24-hour news cycle, hedge their bets, afraid that they will have egg on their faces if the trend isn’t a straight line.  As if anyone will remember.

Boehner, however, isn’t worried about what will happen next month and ignores the good news in the reports. You know he already had his talking points before the report came out. “Spending binge hurting job creation,” even though there is no economic connection between the two. In fact, most economists, both conservatives and progressives, will say government spending is critical to creating jobs in a soft economy. But we’ve left that conventional wisdom in the dust. And we can’t expect journalists to point out the contradiction. That’s not their job. “Truth is relative. We’ve only got our steno pads.” 

“Eroding confidence, draining away funds…spreading uncertainty.” All are strong images, even though it is unclear how the government spending less will cause “private investment” to increase.

Meanwhile, the Dems focus on “bumps in the road ahead,” volatile numbers “subject to substantial revision.”

No wonder we lose the message wars.

Taking It Down a Notch to Raise It to a New Level

The president’s speeches can sound canned, a tutorial on oration without passion, empathy or connection. But this one today at the National Prayer Breakfast was something different. He lowers his voice and comes off more humble and sincere. While it was about faith, he took a moment to defend government’s role, saying that churches, charities and the private sector can’t do all that’s necessary to help those who need it. But doing so it in that quieter tone made it that much more effective.

Leading Wall Streeter: We’re Greedy

Bill Gross is almost a saint on Wall Street. As the managing director of PIMCO bond funds, he’s a great investor and usual suspect on CNBC. So when he says something like this

As a profession we have failed miserably at our primary function – the efficient and productive allocation of capital [emphasis original]: The S&L debacle of the early 1980s, the Asian crisis, LTCM, dotcoms, subprimes, Lehman and the resurrection, instead of the reformation, of Wall Street, are major sins of the modern era of money. Hang your heads, moneychangers. And no, it is not yet time to move on, as many banking CEOs suggest. How can bond traders make ten, one hundred, one thousand times more money than an engineer or social worker given their dismal historical performance? Why is it that some of today’s doctors are using food stamps while investment banking executives complain about millions of dollars in compensation that might be deferred in case of a future bailout?

Financiers have lost their high ground and, if truth be told, we began to lose it a long time ago when we figured out that money was more than a medium of exchange or a poor substitute for a store of value. We figured out a turbocharged way to make money with money and proclaimed ourselves geniuses in the process. Well, we’re not. We may be categorized as “opportunists,” to be generous, but society’s “paragons” and a legitimate destination for a significant percentage of college graduates? Hardly. To paraphrase Paul Volcker, the only productive invention to come out of the banking industry over the past generation was the ATM.

This country desperately requires a rebalancing of priorities. After readjusting the compensation scales via regulation and/or free market common sense, America needs to anoint a new set of Mensans who can create something more than a cash machine and make this country competitive again in the global marketplace. We need to find a new economic Keynes or at least elect a chastened Congress that can take our structurally unemployed and give them a chance to be productive workers again. We must have a President whose idea of “centrist” policy is not to hand out presents to the right and the left and then altruistically proclaim the benefits of bipartisanship. We need a President who does more than propose “Win The Future” at annual State of the Union addresses without policy follow-up. America requires more than a makeover or a facelift. It needs a heart transplant absent the contagious antibodies of money and finance filtering through the system. It needs a Congress that cannot be bought and sold by lobbyists on K Street, whose pockets in turn are stuffed with corporate and special interest group payola. Are record corporate profits a fair price for America’s soul? A devil’s bargain more than likely.

…maybe somebody should listen.

Does Larry Sabato Just Make It Up?

I just received the latest Larry Sabato newsletter assessing Obama’s reelection chances.  I didn’t get but a few sentences into it when I came across this:

Yet presidents riding high—such as Ronald Reagan in 1984, Bill Clinton in 1996 and George W. Bush in 2004—often find themselves surrounded by good fortune.

Yet when you look back at the polls in the months leading up to the 2004 election, Bush’s favorability ratings were often under 50%.  That’s riding high?

GOP on Egypt: Call Us Monday

This article about why the GOP is not criticizing the Obama administration’s handling of the Egyptian crisis goes through all the reasons except for the real one: They want to wait to see how it turns out and then Monday morning quarterback.