Rob Portman of Ohio and John Barrasso of Wyoming recently made a request of the Obama White House. The two Republican senators want to see the results of the president’s order in July that independent agencies craft plans for improving and streamlining regulations. The lawmakers echoed the argument often made: “Excessive regulation has made it harder and more expensive to create jobs.”
Hard to make an argument for excessive regulation. Government officials must write smart, measured and responsive rules, contributing to public confidence in government and to the strength of the economy. At the same time, amid the easy condemnation of “job-destroying regulations,” it is worth emphasizing that regulations frequently bring benefits that substantially exceed their costs, and more, serve to enhance the quality of life, much as the rule of law does.
The harsh words for regulation reflect the larger Republican theme of government run amok. What role do regulations actually play in the decision-making of businesses?
A recent report in the Washington Post proved revealing. It examined data from surveys conducted by the Bureau of Labor Statistics, the agency asking businesses the leading reasons for their job cuts. In 2010, just 0.3 percent of layoffs were due to “government regulations/intervention.” A far more telling, and obvious, factor? The lack of demand. A recent Hartford Financial Services survey arrived at similar results.
The Post noted that a group of researchers looked at four heavily polluting industries, pulp and paper, steel, plastics manufacturing and oil refining, from 1979 to 1991, and found that increased spending to comply with environmental regulations did not trigger “a significant change” in industry employment. Jobs lost often are recovered or generated elsewhere.
A Deutsche Bank assessment projected that shifting to natural gas and renewable energy will net 500,000 jobs in this country by 2020. Economists reinforce the thinking: Regulations have a minimal impact on employment levels.
That isn’t to deny the many tales of maddening rules. Rather, the aim is the larger context, a reminder that regulations serve an invaluable purpose. They prevent people from inflicting harm on other people. They reflect the simple truth that men and women are not angels, as James Madison famously observed about the need for government to balance greed, selfishness, carelessness.
Consider the recent calamities due to a lack of effective regulation, the financial crack-up, the oil spill in the Gulf of Mexico, the mine collapse in West Virginia. Lisa Heinzerling, a Georgetown law professor, makes these points — and another — in a recent essay for the American Constitution Society. She cites John Locke’s notion that the law promotes freedom by protecting people from other people. In other words, regulations shouldn’t be assessed on a narrow measure of jobs. The true test is whether or not they benefit the whole.
