Liberals love to cite how tax rates are at their lowest in recent memory, ballooning corporate profits, and how Bush era policies caused the financial meltdown. They seem to think these are ample reasons to argue why we shouldn’t deregulate our over-regulated economy. However, it is becoming harder for the political left to argue this point since we are witnessing the worst recovery in American history.
The depth of the 2008 meltdown was shocking, but to lust to curb “reckless” capitalism from the political left was not only irresponsible, but also detrimental to America’s long-term economic health. We are an over-regulated nation. Florida requires its residents to file reports if a vending machine label is missing. The Federal Railroad Administration mandates that a letter “F” be painted on the front of a locomotive to indicate which end of the train you are on. Bethesda officials closed a lemonade stand run by children because they lacked a trading license.
If markets are over-regulated, capitalism cannot flourish, entrepreneurship stalls, and the innovative cream that is inherent in the fabric of this nation cannot rise. Free market enterprise is the only system that has achieved remarkable benchmarks in society. Take China for example. When Deng Xiaoping took over following Mao’s death, he gravitated more market-oriented reforms, especially in the rural parts of the country to help farmers. The loosening of regulations on private business allowed them to flourished and outpace state-run enterprises. He instituted Special Economic Zones, which allowed capitalism to flourish and attract foreign direct investment. In short, China is an economic tiger today because of Mr. Xiaoping. I remember my East Asia Studies Professor, David Strand, stating in lecture that in this period the middle class of china grew from 5-15 million to nearly 300 million during this economic restructuring.
By loosening regulation, China was allowed to grow. America’s political left should consider this. Instead, we roll out disastrous financial regulations, like Dodd-Frank, which is a monstrous 848 pages long! It contains 400 new mandates, of which only 93 are law and intelligible enough to follow. The new law is a mess, whose difficulty has been cited by firms. The regulatory leviathan is worse when you look at health care.
On average, one hour spent on a patient is equivalent to thirty minutes of paperwork. The number of federally mandated reimbursements for hospitals for various ailments will increase from 18,000 to 140,000 that range from parrots, burns, and flaming water skis. In the Obama’s administrations huge power grab with Obamacare, it only adds more red tape, paperwork, and headaches. It is the wonder of socialized medicine. In all, the cost of these regulations is staggering. A study from the Small Businesses Administration found that our over-regulated economy costs an employer $10,585 dollars.
America’s overregulation derives from big government. President Obama’s desire to increase the welfare state has proven to be expensive and killing America’s potential to have robust economic growth. His reforms and new mandates costs employers capital that could be used for investment to grow their businesses. These aren’t fat cat bankers. Small businesses employ the most workers in America and make less than $250,000 a year, but suffer at the behest of President Obama’s intransigent liberalism. Government involvement, and the resulting ineptitude that is killing America’s middle class, can best be summarized in the words of Milton Friedman, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”