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DaphneT's avatar

What regulations changed between Bush the 2nd and Obama's administrations that have created a strangle-hold on businesses such that said businesses cannot function in today's economic climate?

Asked by DaphneT (5648 points ) August 28th, 2012

Supposedly regulations have become so tight that businesses can’t spend the trillions they’re sitting on for fear of spending it to no avail. What regulations have tightened up that much? Under which Administration did this actually occur? What Congress was responsible for these regulations?

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24 Answers

wundayatta's avatar

I’m sure it is 99% rhetoric and greediness and 1% actual stupidity.

_Whitetigress's avatar

Actually this question only pertains to extremely large corporations. The type that ship and fly jobs across the sea’s. Businesses want even more Le Saiz Faire policies, they want even cheaper labor and less restrictions to abide to in accordance to environmental regulations. And then the private sectors main complaint is that they don’t get enough sales because larger corporations offer more for less and eventually get over run by the larger corporation. When the coast is clear the larger corporation can then jack up the price.

zenvelo's avatar

The Dodd-Frank Regulatory Reform Act passed, but it hasn’t been implemented. It has restrictions on derivatives trading that require higher capital and margin, that would reduce the number of risky transactions that caused Lehman Bros, Bear Stearns, and other firms to fail. But none of those have been restricted yet.

The Consumer Financial Protection Bureau is supposed to be in place, but the Republicans won’t approve a head for the agency. It is supposed to protect people from financial institution abuse, like jacking up interest rates. It is just getting started though.

DaphneT's avatar

Well, @wundayatta, that’s why I’m trying to figure out what actually changed. Keep in mind that these strangulating regulations are the crux of Romney’s platform. And small businesses think it applies to them!

bkcunningham's avatar

If you are really interested, @DaphneT, this can be an excellent starting point in researching the subject.

woodcutter's avatar

What is strangling business now is- not enough customers. I’m not sure there are any regulations that can’t be worked with, but any business low traffic will not hire more workers.

YARNLADY's avatar

It is not any regulation, but rather the economy.

ETpro's avatar

Let’s remember that it was the Bush 2 era that sent business into the worst tailspin since the Great Depression, and that the Dow has doubled its value under the Obama Administration. That makes the GOP claims that Obama is hostile to business and his “new regulations” are strangling corporate America take on the aroma they deserve—that of elephant manure.

DaphneT's avatar

@ETpro, that is what I don’t understand. Anyone watching the business news would know that, so why are businesses seemingly siding with the GOP platform of regulation strangulation?

Jaxk's avatar

Just a couple of points here. The $trillions thier sitting on are primarily overseas. And to make it worse we’re talking about the large international corporations. According to the SBA the regulatory burden falls disproportionately on small businesses. Regulation is costing us more than $1,75 Trillion each year. That works out to over $15,000 per household. The cost to small business is over $10,000 per employee. And remember that this cost does absolutely nothing to improve your product or service, it merely covers the compliance cost.

Let’s look at how regulation works. If you are planning to start or expand a business, you have to consider both current regulation and proposed or possible regulation. And unless you have a lot of money, you don’t even know what regulation may come down on you. A quick example. I was replacing the bulbs in my florescent light back in June. I was a little short on bulbs so I went to order some more. It urns out that the bulbs I need are no longer made. They were eliminated in the legislation that bans 100 watt incandescent lights. You can imagine my surprise. Since My lights use a ballast, I can’t just replace the bulbs I have to replace the entire light fixtures for the entire store (including the lights on cooler doors, etc. Not a minor change, I’m guessing $20K but I don’t have the estimate yet. Now this legislation was passed in 2007 so Bush signed it but remember the Democrats had taken congress by that time so I blame them. Whoever you blame, the results are the same, I take a major hit that I didn’t see coming.

Just a couple more points that should be registered. Oil refineries are shutting down a result of regulation or the fear of it. Dodd-Frank is crippling the smaller community banks driving them out of business. The average American doesn’t see what the impact of these regulations will have. It’s easy to argue how good you think regulation is when you neither know or have to pay the price. Let those rich businesses pay it.

RocketGuy's avatar

@Jaxk – you were looking into replacing fluorescent bulbs but were surprised to hear that 100W incandescent bulbs were banned? How could that affect you? Those are light bulbs you could not use, and would not want anyway? Maybe you should have gone to Home Depot. They have plenty of choices for fluorescent bulbs.

Jaxk's avatar

@RocketGuy

It turns out that the regulation banned more than just 100w incandescent lights. It covers energy efficiency which also outlaws some of the older florescent lights as well. That’s the part I didn’t know.

Qingu's avatar

@Jaxk, I love how you continue to post that huge made-up number from the SBA as if they were somehow an objective source.

And maybe you can explain why anyone should care about you having to foot 20k to upgrade your 10-year-old (or more) lighting system. I mean, I’m really sorry that the market and technological regulations have not been frozen in time so that small business-owners like yourself never have to pay attention or adapt to a changing world, but I imagine the electronic ballasts will cause you to recoup the 20k in a few years through greater efficiency anyway, so….. who cares?

Jaxk's avatar

@Qingu

Just a quick refresher. The Small Business Administration has been elevated to a cabinet level position by Obama. I you think they are biased against him, why did he do that? If we can’t use government numbers, what do you propose?

Qingu's avatar

I didn’t say anything specific about them being biased against Obama. I said they weren’t objective. They’re not, and their 1.75 trillion number is BS.

If you want the “official government numbers,” here’s what the OMB says:

“A 2009 OMB report, based on data from federal agencies under the Bush and Clinton
Administrations, found that in 2008, total regulatory costs ranged from $62 billion to $73 billion, with total benefits of $153 billion to $806 billion (adjusted from 2001 to 2009 dollars).”

Jaxk's avatar

You are comparing apples and oranges. First the OMB only counts major regulations. That is regulations with a cost of $100 million or more. In 2009 over 3000 regulations were added but only 85 were considered major. If you look at the 2011 OMB report they count 66 major regulations. In thier own report they say that half of them have no cost/benefit numbers to apply. In short, the OMB only looks at a subset and an incomplete subset at that. They also only count the cost of regulations passed in that budget year, nothing cumulative. Use the OMB report if it makes you feel good but it doesn’t tell you the whole story or even come close to the measurement that the SBA is using. Nor do I understand why you would think the SBA is not objective. They are the best to gauge the impact on business.

Qingu's avatar

As usual, @Jaxk, the points you bring up are dishonest, and are dismissed within the source I cited.

As for the SBA being objective, they represent the interests of small businesspeople. Their job is not to elucidate the best public policy for the country overall. Their job is to do what is best for an interest group, small business owners.

I’m not saying the SBA shouldn’t exist. I’m saying you should be skeptical of macroeconomic data coming from them. Remember how you’re automatically skeptical of environmental regulation data coming from the EPA, @Jaxk? Not that I’d ever expect you to demonstrate intellectual consistency, but still.

Jaxk's avatar

@Qingu

The problem here seems to be that you think you know how all this works but don’t have a clue. When regulation is created the agency responsible for that regulation publishes their estimate of the costs and benefits. The OMB takes those numbers they don’t do an independent study. Sometimes the originating agency doesn’t publish the cost, sometimes they don’t publish the benefits and sometimes they don’t publish either one. That leaves the OMB with no data to use in their analysis. If anyone has a dog in this fight it is the agency that creates the regulation. Not the OMB or the SBA. For some reason, you seem to think that the SBA gets some benefit from making the number look larger, they don’t. It is what it is. If you want to cherry pick your number, go ahead. It is what you always do.

Response moderated (Personal Attack)
Jaxk's avatar

@Qingu

If you read the report they tell you that they don’t have the numbers for half of the major rules and don’t even look at the bulk of the regulations. In thier report, for the 66 major rules in 2010, they say

“For 32 rules, the issuing agencies quantified and monetized only the budgetary transfer amounts.” That means they don’t have the cost or benefit. They also say,

“For six rules, the issuing agencies were able to quantify and monetize neither benefits nor costs.” Again that means they don’t have the costs or benefits. That is for 38 of the 66 major rules there is no data. Yet you continue to want to use this for the cost of regulation. Absurd at best.

DaphneT's avatar

~Thank you @Jaxk and @Qingu. ~You two are just the ~absolutely ~most ~helpful two people in Fluther when it comes to asking simple questions about the changes to government over the years.

Thank you @bkcunningham your link I did find informative. Am I correct in my understanding that the Heritage Foundation is a conservative think tank?

Qingu's avatar

@Jaxk, so does the SBA have the costs or benefits of the rules they analyze?

Jaxk's avatar

@Qingu

In the SBA report from 2005 they address the glaring differences between the OMB numbers and the SBA numbers in thier introduction section (Pages 1–3). I won’t reprint the whole section here but they use OMB data where it is available, it just isn’t available for most regulation.

There is another independent study for the state of California which includes state regulation. The numbers get even worse.

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