Wednesday, December 7, 2011

December 7th


(Update: Some hours after this post was put up, the House did in fact pass REINS by a vote of 241-84, with 4 Democrats crossing over and joining the Republicans present for passage.  The White House issued a press release threatening to veto it if the Senate passes the measure.)

It would be difficult for anyone in this nation not to realize that today is the 70th anniversary of the attack at Pearl Harbor; and many today writing blog posts will touch on the dastardly nature of the attack, the courage that so many exhibited on that awful day, and the terrible sense of purpose that awakened in the American people as it entered the last conflict ever preceded by a Declaration of War by Congress.  While I have written such efforts myself in the past, I found myself focusing on another part of the story instead.

Many know (or at least should know if they had  paid attention in American History or watched any of the number of films about the attack), the US at the time could decrypt the Japanese diplomatic code, but not the military one; and there were hints and warning in those communications that went largely ignored.  What most forget however, is that not only weren't the operational army and navy commanders at Pearl Harbor (or any of the other major commands around the world) privy to much of the information in these decryptions, but perhaps even President Roosevelt himself was not included on everything that was being translated in those messages.  

Regulations that had been put in place for the safety of a nation under the threat of impending war by some in unelected positions, in fact did everything but protect us.  Thousands of lives were lost, at least in part, as a consequence of this misjudgment. The men who created these regulations were not evil, but were misguided in thinking that they and they alone knew best what was best for the nation.  These thoughts struck a chord in me as I considered a couple of things that have recently come to my attention.
A recent piece in the City Journal called "The Regulatory Thicket" by Iain Murray and David Schoenbrod speak directly about regulation, and its astonishing growth in this country.  Of course it would be easy to blame Congress (and mostly accurate)  for creating their share of this ponderous pile of policy; but that would be letting them off the hook for likewise creating the un-elected and out-of-control bureaucratic monster to whom they have relinquished the responsibility for the rest of it.  As Mr Schoenbrod tells us, "The Office of Management and Budget has estimated that since 1980, federal regulators have written more than 130,000 rules, an ever-thickening tangle that Americans and American firms must reckon with."  Mr Murray goes on to cite an annual report compiled by Wayne Crews called "The Ten Thousand Commandments" that shows that the Federal Register (the big book of Federal regulations) has grown since 1996 from 67,000 to 81,405 pages.   

One cannot help but wonder at what could possibly have possibly been going on in a 15 year period that it required this 18% increase in regulations.  While questioning the cause, one might also wish to consider what impact the regulatory beast has on the economic growth of businesses in this country in the current recession; especially small ones whose small staffs make dealing with compliance even more difficult.  The 'City Journal' piece in fact states:  "The costs of complying with regulations average $10,585 per employee" according to the Small Business Administration (SBA), "enough to throw a small firm of 20 employees with $200,000 in profits into just-breaking-even territory".  Murray reports that the SBA  estimates that, "the regulatory burden on our economy is a staggering $1.75 trillion annually".

(It should be pointed out that these numbers are before most of the "Affordable Health Care Act" (Obamacare) became law, and before a great number of the regulations required for its full implementation are yet in place.)

One cannot help but compare such sums to the amounts being tossed around by the Administration, Congress, and Keynesian economists for what they believe is the type of stimulus ideally required to jump start the US economy.  What kind of stimulus might be produced if this regulatory morass were in temporarily reduced; or better still, eliminated?

Strangely enough, Congress is currently considering HR 10, the "Regulations From the Executive in Need of Scrutiny Act of 2011". The REINS Act (man, they really need better acronyms for these bills) is designed to impede the addition of new rules by dividing regulations in two categories of cost, using $100 million worth of burden as line between "major" and "non-major" ones.  Major ones would require submission to the Congressional committee whose responsibilities the regulation would fall under, and passage by a joint resolution of Congress or by Executive order before going into effect.  Non-major rules would go into effect unless, after similar review by Congressional committee, a joint resolution of Congress is passed or Executive order issued to keep them from doing so.

Of course, even if REINS manages to get through the House, there isn't a prayer that the Senate will allow it to see the light of day.  Reduction in government regulation is tied to the potential number of unionized government workers required to write and enforce them.  This is turn is tied to the unions those workers belong to, unions who have pledged significant sums to the re-election of the President and other incumbent politicians in Washington this close to an election; which is anything but good politics.

Such potential roadblocks do not deter Murray and Schoenbrod from taking it even further however. They propose setting up a bipartisan commission to review existing rules and identify those that need repeal.  This group would conduct cost / benefit analysis of such regulations and make recommendations to the House for their continuance or removal.  They further suggest a five year 'sunset provision' on all new regulations, which would make them subject to automatic review before extension.  They even have the temerity to suggest creating 'enterprise zones' where businesses might be free of some of these onerous regulations to be able to establish themselves on a profitable basis at lower costs.

Of course these are all intelligent (and some would say common sense) ideas, but like many considered in 1941, they seem unlikely to be put in place.  I can't help but think back on this day however, and wonder if whether Admiral Husband E Kimmel would have wished for a few less regulations early in December of 1941.


1 comment:

Brad Reynolds said...

From what I read I think I must missed a chapter in Prange's at Dawn we Slept.