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“President 2%” and Regulations December 22, 2016 12:00 PM | Tagged as Stephens
WSJ 18 December 2016 “The Rust Belt is Right to Blame Obama” by Clark S. Judge
WSJ 19 December 2016 “Doomed to Stagnate?” by Bret Stephens
Bret Stephens’ piece hits home on the regulatory burden that Washington and various states put on anyone trying to run a business. “President 2%” (President Obama) has presided over the largest increase in regulations in history, which is partly responsible for eight years of 2% GDP growth. (President Reagan’s GDP growth averaged 4.9%, after he broke the recession of 1980.) Clark Judge also piles on the criticism of our current administration’s proclivity to expanding government control through regulation.
The World Bank produces an annual report of the countries with the most support of business. Eight years ago, the US was third, next to Singapore and New Zealand. We have now fallen to eighth. Where it took 40 days to get a construction permit in 2009, it now takes 81! Where it took 300 days to litigate a contract, it now takes 420! The cost of registering property has risen over that same period from 0.5% of the property value to 2.4%! Did you know any contractor or subcontractor who wants to work for the government must set a goal and a plan to have 7% of their workforce disabled…and redo the plan annually? When will this stop?
The Mercatus Center at George Mason University has estimated that 0.8% has been knocked off of GDP growth since 1980 by the growth in regulations. Had he done anything about it, “President 2%” would at least be “President 2.8%”. The cumulative total of lost GDP is a mere $4 trillion. The Biz Bucks Guy’s calcs make that north of $13,000 per person, man woman or child.
Judge’s op-ed piece recounts that President 2%’s policies have increased the regulatory risk by almost 80%. As this regulatory risk increased, American businesses cut their labor force by 1.1 million jobs.
The only way large businesses are overcoming the regulatory onslaught is through lobbying. In terms of market capitalization, firms with large lobbying staffs have outperformed those without by 5%, since 2010.
No wonder why voters in manufacturing and agriculture states compared the history of President 2% (and his clone, Hillary Clinton) with the message of a real-estate mogul and opted for the mogul.
Let’s hope the promised cut in regulations comes to fruition soon.
[Although opinion is included, The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training.]
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