Over and over you see, read, hear and watch Democrats and Liberals (but I repeat myself) ask “why isn’t the economy growing” or “why doesn’t big business spend the money they’re hording to create jobs?” And just as often there is a business leader, small business owner or Tea Party member who replies “it’s because of the uncertainty created by the politicians and regulators.”
We haven’t seen a complete list of all the laws regulations and lawsuits either passed or proposed that help to drive the uncertainty and thought we’d have a go at creating such list. We use Comprehensive in the title in quotes as a paean to the propensity of Washington DC to refer to all they do as “comprehensive.” We’re certain that this list isn’t comprehensive! One caveat: the list is limited to Federal issues.
We’ll begin with the MOAUL (mother of all uncertainty laws), Obamacare, aka The Patient Protection and Affordable Care Act (PPACA). On a side note, this is an example of what we wrote about here regarding libs turning our language on it’s head. Also know that on this law and all other laws, but especially those described as “comprehensive,” it isn’t the law itself that creates the uncertainty but the unknowns that are bound up in yet-to-be written regulations.
Obamacare is such a change to our society that it may be impossible to list all the areas of uncertainty the law and accompanying regulations will ultimately cause (assuming it actually survives legal challenges and the threat of repeal). The known regulations that are prescribed in the law but not yet written include:
- The cost of the final regulation has been debated since prior to its passage, but anyone with half a brain and any experience with how governments define costs know that the ultimate costs will exceed the 10 year, $900B described by the bills supporters. It is impossible to add 30M people to an existing system and lower the costs! I don’t intend on arguing over what the final costs will be as I fully expect the law will not see full daylight. Nevertheless, actual costs have been estimated somewhere between $1.75T and $3T the first full ten years of operation. It is doubtful the law as written would survive a second ten years as most of the remaining insurers would have closed shop and the government would be forced to a single-payer system; i.e. a national health care system like in Great Britain.
- Regulations haven’t been completed as to the final requirements for businesses who provide health insurance benefits for employees. Any insurance plan will have to meet criteria developed by HHS (Health and Human Services, another misnomer), including coverage of preexisting conditions. We know that there will be a penalty for employers who don’t provide coverage and the penalty appears as it will be less that the cost of insurance, possibly significantly less. This will cause many businesses to opt for paying the penalty, causing their employees to have to move to a government sponsored plan, such a Medicaid. Additionally, many individuals will opt to pay the penalty rather than buy a qualified insurance plan.
- Taxes will increase by at least $550B. Unknowns not yet defined will certainly grow that number. We could continue, but we have no intention to turn this into a harangue on Obamacare. There are huge numbers of resources on the internets about this monstrosity of a law should you be curious.
We next tackle another “Comprehensive” law that is referred to (lovingly by some) as Dodd-Frank, or “An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.” Really! That’s the official name of this bill (another Newspeak phrase). This law causes even more uncertainty for businesses than Obamacare.
- The very first thing is that not only doesn’t it end “to big to fail,” it makes it law. Big corporations are backed by the full faith and credit of the United States, leaving medium and small sized companies to fend for themselves in an unfriendly regulatory environment. According to Rep Sam Graves (R-MO), Chairman of the Small Business Committee in the House, “The stricter regulatory environment created by Dodd-Frank, and the new Consumer Financial Protection Bureau (CFPB), combined with the uncertainty brought by many of the laws’ vague provisions, is slowing small business lending.” Additionally he says “Small lending institutions lack the capability of their larger counterparts to hire the additional manpower necessary to deal with the hundreds of additional regulations created by Dodd-Frank. The increase in costs associated with these new regulations will lead to a decrease in revenue and will reduce small banks’ ability to meet the credit requirements of their communities.”
- New regulations on small banks, credit unions and others that use credit in the course of their business will add untold thousands of hours each year in order to meet compliance. Many will opt out of the loan business, leaving consumers with fewer choices as to where to go for credit. Now guess what will happen to the cost of credit?
Spending and Debt
The stock market has resoundingly spoken of its displeasure with the so-called resolution of the debt ceiling debate and reduction of spending by the federal government. I recently wrote about some of the causes of spending here. The drivers of this spending take resources from the marketplace, but the real uncertainty is caused by the borrowing.
Government is borrowing so much money from the world markets, it is crowding out other borrowers. Were it not for government-backed programs such as Fannie Mae, Freddy Mac, the student loan program, Small Business Administration, and other lesser known entities, the cost for a loan for private borrowers would be astronomical.
Oil Drilling Moratorium
The Gulf oil well disaster provided a huge opening for the Obama administration to to place its proverbial boot on the necks of the oil industry. Initially stopping all offshore drilling operations, lawsuits eventuality pushed the administration into beginning issuance of new drilling permits, though at less than a snails pace.
Companies in the drilling industry are not going to keep their capital setting idle waiting for some bureaucrat to move a permit from his desk to the desk of the next bureaucrat, in the never-ending slog through officialdom. The driller or supplier is going to find another country that is friendly to private enterprise and take his business there.
The EPA has become a super agency under the Obama administration. It has initiated regulation far beyond its congressional mandate and in the process inhibited business’s ability to function or stopped business in it’s track. We’re not going to go into detail as to why or how each of these regulations cause uncertainty; you’d be bored and we’d just get mad.
- New air quality regulations will be closing coal-fired power plants or prohibiting new plants to open, causing coal mines to close or prohibit new mines from opening.
- New water quality regulations
- The EPA will now be regulating carbon dioxide (CO2) emissions from businesses. These regulations will first affect the energy industry, oil production and refining, and cement manufacturing.
Arizona caught the brunt of a hostile Department of Justice covering for the Administration’s poor performance on controlling our Southern border. With laws passed by multiple states but unenforceable because of these harassment law suits. many businesses hang in limbo until these are resolved.
Consumer Protection and Product Liability
More small businesses have been closed as a result of so-called consumer protection and product liability regulation than from any other cause short of the high rate of new business failures inherent in beginning a new enterprise.If you’ve ever wondered why you see some of the ridicules warning labels on products, this is the reason.
Actually these laws and regulations should be clumped together and called The US Attorney’s Full Employment Act because these laws cause a very large proportion of the law suits every year. Businesses are always watching for changes in these regulations that could and do affect how business is done or products are brought to market. On occasion, these regulations become so stringent that entire industries are shuttered because the cost of compliance exceeds profitability.
Endangered Species Act
The Lord only knows which snail, owl or lizard will be the next species to bring the hammer of the Fish and Wildlife Service down upon the next unlucky enterprise. Currently a lizard is blocking oil exploration in several areas of Texas.
Free Trade Agreements
On occasion Obama mentions our free trade agreements as a source for new jobs (you remember that three letter word, J-O-B-S don’t you?). There are three free trade agreements on his desk awaiting signature and he hasn’t signed any since taking office. Those agreements mean jobs (four letters) if he really cared.
Farmers Required to have Commercial Drivers License
Proposed regulations from the Federal Motor Carrier Safety Administration will require farmers across the country to obtain a commercial drivers license to operate any farm vehicles on public highways. This is far more invasive than it sounds on the surface. Read this article.
Regulation of Goat Herder Workplace
The Department of Labor issued new regulations to assist foreign workers who fill goat herding positions in the U.S. , including employee-paid cell phones and comfy beds. These new special procedures must be followed by employers who want to hire temporary agricultural foreign workers to perform sheep herding or goat herding activities. It describes strict rules for sleeping quarters, lighting, food storage, bathing, laundry, cooking and new rules for the counters where food is prepared.
We’ll end this for now, knowing there are many more laws and regulations hidden somewhere within the massive, 30-some thousand pages of the Federal Register.