Regulations and Consumer Protection


For What It’s Worth….    return

Here are some compromise solutions that political parties are  ignoring.  Obviously, congressional Republicans are resisting any solution that the administration might claim credit for during the next election cycle.  Regardless, here are some ideas that we can advocate.

Regulations are an important function of government.  The division is where the line is drawn between justified regulations and excessive intrusion.  Special interests, cost/benefits, long term effects and real need are all valid concerns.

Here are several facts that must be included in any regulatory discussion. Please be aware that this entire topic is complicated and often intentionally made confusing by political interests.

1.  The environment surrounding regulations is probably one of the greatest targets of lobbyists.  Powerful interests watch regulations like a hawk.

2.  Every administration creates and/or modifiesthousands of regulations.  The present administration has written fewer regulations than the Bush administration for the same time span but the costs estimates are far higher than the regulations under the Bush administration.

3.  Estimates of "cost" from the Congressional Budget Office, CBO, are required to use the data provided by Congress regardless of the accuracy or sensibility.  Typically the CBO will also "lean" towards the prevailing political party when they come up with their estimates of costs, revenues, etc.

4.  The president and his party can affect the actual implementation of regulatory policy by appointing administrators that will follow White House policies regardless of existing, defined rules.  The Federal Reserve, Security Exchange Commission, Justice Department anti-trust division and the  National Labor Relations Board is a typical examples of administrative polices placed into action without specific written regulations.

5.  Businesses, small and large, have been most vocal and consistent in their message that the high level of regulatory uncertainty is a major reason to delay expansion that would help reduce unemployment.

6.  Many proposed regulations address environment and health, financial reforms and business reporting and restrictions.  The previous (Bush) administration greatly cut back EPA regulations and refused to prosecute violations even when evidence was irrefutable. Now the pendulum is swinging in the other direction.  Some of the business and financial regulations address abuses by those interests while other regulations are more punitive in nature.

7.  Corporate mergers and acquisitions are often expensive for the public.  As companies are bought out at enormous costs the end users usually end up paying higher prices and/or lower services, or both.  For years corporate raiders took over companies and split them up into different companies or sold divisions off thus costing thousands of jobs all in the name of profits. 

     Federal regulations are absolutely essential! Without reasonable regulations our national environment would become a "wild west" of special interests victimizing anyone standing in their way of increased profits, power and control.  On the other hand, regulations can often be used to burden, punish and/or restrict individual freedoms.
    Past efforts to de-regulate has led to disastrous, unintended results.  For example, in the 1980' and 1990's the Savings and Loan deregulations led to wide-spread failures resulting in $87.9 billion in bailouts.  So, what did we learn from this?  Nothing!.  A few years after the dust cleared, Congress began deregulating banks.  The 2008 economic crash was either caused by or greatly aggravated by those deregulations.
     With over 4,000 regulations in the works it's impossible to address all of them.  While researching the regulation issue it was difficult to get a lot of specifics.  The opposition is most vocal while the supporters seem to be keeping a relatively low profile on specifics. Below, we are presenting a number of Internet sources on the subject. 
     Bernie Marcus, Fox news 11/04/11, 13:26 minutes (Co-founder of Home Depot)
     Obama administration moves to cut unneeded regulations
     Small business owners seek 'sensible regulations
     Small Business Owners Speak Out Against Job-Stifling Government Regulations
     Government Regulations Prevent Job Growth (NLRB)
     Example of uncertainty: private room for breast feeding mothers
     Policy Uncertainty Is Choking Recovery - Bloomberg News
     Obama Tax Loopholes to close
     10 Giant Loopholes Re: corporate tax breaks
     Bernie Marcus, Home Depot co-founder & Steve Wynn on Business Frustration 
     Bernie Marcus on CNBC: About Job Creators Alliance.
     Bernie Marcus on CNBC: about Getting America back to work 
     Bankers’ Objections to Volcker Rule Fail on the Merits

Regulations are expensive for both the government and businesses.  The following is from the Job Creators Alliance:
     The U.S. ranks 49th in regulatory competitiveness, well behind China and other competitors.
     The federal government issued 3,573 final rules in 2010 alone. These rules totaled nearly 25,000 pages, up 20% from 2009.
     Regulations cost the U.S. economy more than $1.75 trillion in 2008, equivalent to $15,500 per household. Regulatory costs per employee are 36 percent higher for small businesses than for large firms.
     Regulation costs the economy nearly twice as much as Americans paid in 2010 individual income taxes.
     Regulatory costs represent almost 12% of U.S. Gross Domestic Product.
Corporate takeovers and mergers need closer scrutiny to prevent damage to employees and the economy on the whole.  If customers and/or the public will be charged more to cover excessive take-over costs the transaction should be denied.

     The federal government spent $52 billion in 2010 to administer and enforce regulations and that number is rising every year. Over the last decade, regulatory spending rose 70% more (adjusted for inflation). Regulatory spending is expected to reach nearly $55 billion by the end of this year.
     The Glass–Steagall Act from 1934 greatly restricted what instruments banks could invest in.  As Glass-Steagall was dismantled over the years the nation's financial environment became more volatile and, frankly, more dangerous.  Consumer protection and national stability require sound regulations.  Burdensome and punitive regulations damage our economy and drive business, with their jobs, overseas!
     There are a number of regulations and restraints needed in our financial markets. High-speed trading and trading rules have been liberalized since the markets have been privatized to the point that the individual investor is at a real and significant disadvantage.  This topic is very technical and not to be covered further at this time.

Suggestions to Improve Managing Regulations:
Government regulations, as currently applied, frequently serve special interests and often hurt the economy.  We need a more objective method of evaluating the need of and effect of regulations.  Specific reasons and/or need for a new or revised regulation must be clearly stated by the sponsors and made available to the public. 

     1.  No regulation should be passed by Congress without a full disclosure of the terms and conditions.  There would be no assignment to define the rules after the fact and out of sight in various departments that are generally bound to the current political party.
     2.  Each affected industry and interest group should nominate a select of panel of experts with practical knowledge of the areas needing regulation.  As with the suggestion under "Taxes" this group should be large and meet in privacy
 Each challenged regulation would be reviewed and discussed apart from political interests and lobbyists. Leaking elements of the discussions and attempts to influence panel members would be strictly prohibited by law.
  Regulations need to be subject to "Sunset Laws" where they will expire without further Congressional action.
     5.  Until a regulation is fully defined and published it will not be enforceable and  an effort to retroactively enforce such rules & regulations would be subject to "ex post facto" limitations.
  No future legislation shall redefine elements of any prior law or regulation without a full disclosure of the effect on other elements of law.  (Ref. hidden changes included in H.R. 3 earlier this year.)
  An economic impact and/or environment impact must be determined before new or modified regulations can be considered or passed. 
 (Important) The United States is a consuming nation.  We must take a stand on the quality allowed for imports to our country!  Our current FDA and other regulations place far stronger controls on our own food producers and other suppliers than on foreign imports
     If Japan, a favored trading partner, chooses to ban U.S. beef just because we detected one cow with mad cow disease that came in from Canada (which our procedures did discover) then we must also consider enforcing comparable standards for all nations wishing to supply us!  We need to ban all products containing unacceptable levels of  lead, arsenic, pesticides and filth.  If another country want to do business with us they must do it our way!
   Over-regulation and excessive paperwork can kill local fruit and vegetable growers that we frequent at our local farmers' market.  The recently passed FDA Food Safety Modernization Act (FSMA) while stepping up enforcement powers it also places enormous regulatory burdens on small producers who are seldom the source of contamination.  We need a reasonable balance and consideration rather than blanket policies that hurt small businesses.
    10. Finally,
We must keep the government, and their administrators, from micro-managing an ever expanding realm of our lives!  Likewise, we must keep the government from rendering special conditions to favored lobbyists or campaign contributors.  Many regulations are punitive and unnecessary. Many existing regulations are inadequate and fail to protect Americans.  Politics and Congressional favoritism is the real "ground zero" whether regulations are written to favor the few or funding is withheld to adequately enforce good regulations.  These issues apply across the board whether it's the EPA, FDA, financial markets,  banking and financial special interests. 

Beneath all the political verbiage there are significant, ignored facts and considerations that we need to be aware of.  And, this is what Fogcutters is all about - Finding Where Truth Hides


Copyright © 2011 =2012 H&H Associates.  All rights reserved.       


Searching for solutions avoided by politicians and activists!

Scare Tactics and selective "facts" abound within the arena of regulations. It is totally amazing how opponents can totally ignore some facts and rigidly cling to others.

All sides seem to be sincere but the level of emotions create blinders when discussing issues.

Fraud & Abuses costs Billions of dollars when appropriate regulations are either not created or enforced.  Consumer protection and fraud effect everyone in the short term.  Damages to the environment and hidden favoritism silently drain away public resources.

Congress has failed to effectively crack down on fraud and abuses.

P.S. So why hasn't Congress already cracked down on fraud? Remember "Past is Prologue."

Steve Jobs Slams Obama

Policies & Job Creation - CNBC video, Arthur Brooks, American Enterprise Institute

Audit Finds Lapses in FDA Imported Food Recalls

FDA Continues Efforts to Strengthen Imported Food Safety

Imported Seafood Could Be Contaminated With Feces

Chinese leaders know their food supplies are tainted!



Effects of Past Anti-Trust administrations:
View Video!  from Collbert