Obama: Make Regulation Efficient
President Obama in a Wall Street Journal op-ed piece said that he has directed federal agencies to eliminate job killing regulations. According to Obama the Executive order requires “a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive.” As an example he points out:
For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.
The fact that it has taken a severe economic recession and the lagging poll numbers of a president to make this changes shows how heavy handed our government has become and how Bzyantine our regulatory environment is. I have suggested that the US needs a Regulatory Bill of Rights to provide citizens protections from excessive and contradictory regulations. The Bill of Rights (first ten amendments) do not protect citizens from regulatory rules. With just a few exceptions, if the governmental designates something a regulatory law or civil penalty then it can completely ignore the Bill of Rights. I doubt that this is what the Founding Fathers intended when they passed the Bill of Rights.
If President Obama really wants to get rid of job killing regulations here is a list in order of importance:
1) Repeal Sarbanes Oxley
Sarbanes Oxley has effectively killed the IPO market and the better part of the equity market in the US. See Sarbane Oxley Obstructing Innovation
2) Fully Fund the US Patent Office
Congress has stolen about $2B in user fees from the US Patent Office over the last two decades. This has hurt innovation, job growth, and the economy. See Restore Patent Funding to Create Jobs.
3) Repeal all Securities Laws
Every econometric study of our securities laws shows that they provide no benefit for investors. See Liu, Tung, Santoni, Gary J., Stone, Courtenay C., Federal Securities Regulations and Stock Market Returns. This paper surveys several papers that have studied the effects of securities laws all of which show no meaningful change in investor outcomes.
4) Pass a Regulatory Bill of Rights
This would provide ordinary citizens the tools necessary to require the federal government to only implement regulations that achieve their purpose in a cost efficient manner. See Regulatory Bill of Rights.
5) Eliminate the Income Tax
The income tax is not designed to generate revenue for the federal government. It is designed to punish certain people who have committed no crime (violation of the due process clause of the 5th Amendment) and to allow Senators, Congressmen and the President to sell tax favors to the wealthy. The income tax system should be replaced with a system with the sole goal of providing the federal government the revenue it needs. A flat tax or a national sale tax would both work.
6) Repeal ObamaCare
This is a job killing piece of legislation that we cannot afford.
7) Reform Social Security and Medicare
The best reform is to make them defined contribution programs instead of defined benefit programs.
If President Obama were to implement these five simple changes, the U.S. would see above 7% growth for the next two decades.
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