Obama Buys Into Business’s Regulation Myth: Margaret Carlson
President Barack Obama’s announcement that he would require federal agencies to review regulations on their books and remove those that “stifle job creation and make our economy less competitive” made me wonder.
Which ones would those be? The piddling bit of regulation of the oil industry, the paucity of which led to the BP Plc oil spill?
Obama certainly couldn’t be thinking about the watered-down financial regulations enacted last year to replace the even weaker rules that helped turn Wall Street into a giant casino capable of making a few very wealthy and destroying the rest of us.
Is there anyone who regrets forcing the auto industry to produce cars that are equipped with seatbelts and don’t crumple in a 5 mph crash? If not for government intervention, don’t you think big tobacco would still be insisting that doctors prefer to smoke Camels?
It used to be only Republicans could hear the dog whistle blown by corporate America, which insists it would be No. 1 in the world if only government would get off its back. It took a Democrat, Franklin Roosevelt, to rein in a financial industry that more than any other caused the Great Depression.
That regulatory framework protecting depositors and investors lasted 50 years, until systematically gutted by Republicans with a fair number of Democratic collaborators. Prominent among the latter group was President Bill Clinton. During his period of second-term triangulating, Clinton signed the hopefully titled Financial Services Modernization Act of 1999, which, by repealing the Glass-Steagall Act of 1933, allowed our banks to become too big to fail.
Now Obama is adopting the mindset of Republicans who believe that if business is regulated at all, it is regulated too much. He pledged to rid the country of “excessive, inconsistent and redundant regulation,” and to bring in businessmen and experts to help him do it. K Street, the president is calling on line one.
It’s a chump’s game; Obama can never keep up.
In 1995, a Republican congressman doled out campaign checks from the tobacco industry to his colleagues on the House floor while they were considering the elimination of a tobacco subsidy. Far from being expelled in disgrace, that congressman, John Boehner, is now speaker of the House.
Then there was Tom DeLay, who entered Congress smarting from Big Brother telling him how to handle the poisons used in his pest-control business. He allowed industry to tell him what regulations they wanted killed, if not how much they’d contribute to get it done.
Already this year, the new chairman of the House Committee on Oversight and Government Reform, Republican Darrell Issa, has asked business leaders to let him know which regulations they find too onerous.
Does Obama actually believe in this, or did he buy that it was the anger of the business community that contributed to his midterm shellacking?
Businesses hardly have much to gripe about. Corporate America’s been the first to rebound from the crisis its finance unit caused. A battalion of lobbyists assured that re-regulation would have as few real teeth as possible. The Dodd-Frank financial-regulation law should be called the Polident Act.
As for the regulators, Nancy Nord, appointed by President George W. Bush to the Consumer Product Safety Commission, actually urged Congress not to increase the agency’s budget and staff in 2007 amid worries over tainted toys imported from China.
You might think that the commission can order a recall if a product kills someone. In fact, it has to ask “Pretty please,” or face a protracted procedure that favors the company involved.
In Texas in 2007, a 21-month-old boy climbing on a backyard soccer net fell through the mesh and died when the polyethylene cord tightened around his neck. National Public Radio reported that making a goal with smaller, safer openings in the mesh would cost less than 20 cents in additional polyethylene cord. An agreement with the maker, Regent Sports Corp, to recall the nets took almost a year.
No doubt in the thousands of pages of the federal code, there are overlapping and inconsistent regulations. Obama cited the anomaly of the Food and Drug Administration deciding saccharin was safe in coffee at the same time the Environmental Protection Agency was treating it -- understandably -- as hazardous waste. Fine. But as Obama also noted, EPA did away with this inconsistency last month. Why can’t the president just quietly order more progress like that?
In our age of information technology, it shouldn’t be hard to ferret out the mistakes, the duplication, the conflicts and the unnecessary forms without attacking the general principle that while corporations are capable of doing great good (thanks, Steve Jobs), they can also do great harm (accelerating Toyotas, anyone?).
Their job is to maximize profits and return to shareholders. Government’s job is to temper that goal with concern for the common good.
Margaret Carlson, author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.)
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