Tag Archives: sotu

Is Bush or Obama the Bigger Regulator?

President Obama correctly pointed out in his State of the Union speech that he passed fewer regulations in his first three years than President Bush. Over at the Daily Caller, Wayne Crews crunched the numbers and found that Bush passed 12,588 regulations to Obama’s 10,810.

That’s an average of 4,196 rules per year for Bush, and 3,603 for Obama — nearly two fewer rules per day. For those who believe that Bush was a free-marketeer, Obama has given us another nail for that myth’s well-sealed coffin.

But that doesn’t mean President Obama is less of a regulator than his predecessor. He has passed fewer rules, but they tend to cost more. Regulations are classified as “significant” if they cost over $100 million per year. There are different technical definitions for “significant,” “economically significant,” and “major.” And the Federal Register gives different counts than NARA, the National Archives and Records Administration.

With those caveats in mind, the Federal Register data have President Bush passing 30 economically significant regulations in his first three years. Obama passed 953.

The difference is more than a factor of 30. Roughly one quarter of one percent of Bush’s rules were economically significant.  Almost 9 percent of Obama’s are.

What the President said on Tuesday is technically correct. But, as with almost all political statements, there is more to the story.

State of the Union Live-Blog

Here it is, with a few typos corrected. Otherwise unedited.

8:35 Test

8:37 I am glad that my commute to work, unlike the President’s, is not televised.

8:40 Quote from last year’s State of the Union: “We will continue to go through the budget line by line to eliminate programs that we can’t afford and don’t work.” He did propose and enact repeals of a few billion dollars worth of regulations in 2011, and I’m glad he did. Seeing as the total federal regulatory burden is roughly $1.75 trillion, here’s hoping he does more in 2012.

8:44 Here’s Wayne Crews’ take on regulation and the State of the Union over at Forbes – http://www.forbes.com/sites/waynecrews/2012/01/24/president-obamas-state-of-the-union-hyper-regulated/

8:49 Taxes and spending get all the press. And they are important. But I’m more interested in what he has to say about regulation. It’s a neglected issue that is just as important. Moreso, as far as job creation is concerned.

8:55 The choreography sure is elaborate. Glad I went into policy, and not politics.

8:56 Big round of applause for Rep. Gabrielle Giffords. Best wishes for her continued recovery.

9:01 It’s an election year, and that means even more partisanship than usual. This political independent is curious to see how that affects Obama’s rhetoric tonight.

9:04 I’d be curious to see a public choice-influenced analysis of the State of the Union tradition.

9:05 Here comes the Big Guy.

9:06 Much applause, many hellos. It’ll be a few minutes until the speech.

9:11 Here we go.

9:12 CEI takes no foreign policy positions. Any offered are strictly my own.

9:13 That said, I am glad we are winding down Iraq operations. As a fan of Hayek, I’m not a believer in top-down nation-building.

9:14 He is quick to tout Osama bin-Laden’s death. Can’t say I blame him. I would, too.

9:14 Jobs. Energy independence.

9:16 Class rhetoric.

9:17 Uh, manufacturing output is actually near an all-time high.

9:18 American manufacturing is healthy. Fewer jobs, yes. But those few are doing more with less. That’s how prosperity happens.

9:19 As though the president has much to do with employment levels. Bush had terrible economic policies. But Obama’s are largely the same. They differ in degree, but not in kind.

9:20 Bailouts, wealth transfers from taxpayers to corporations, and other Bush-Obama policies hurt the economy. He should abandon them.

9:21 Defending the GM bailouts again. Much more stridently than before.

9:22 If taking money away from taxpayers and giving it to corporations helped the auto industry, why not do that with the rest of the economy?

9:24 “Bring manufacturing back.” Uh, it never left. Domestic output hit an all-time high in 2008. And it’s still very close to that.

9:24 Great. proposing more corporate welfare.

9:25 And proposing higher corporate taxes for multinationals. Seeing as consumers pay all corporate taxes — businesses pass on their costs — consumers should be up in arms over this.

9:25 Tonight’s rhetoric is astoundingly nationalist. Not cool.

9:26 Touting trade agreements passed during last year. Right on! Let’s see more of them.

9:27 Trade Enforcement Unit. Uh-oh.

9:28 If China takes money away from its people to subsidize American consumers, thank them. It isn’t fair to the Chinese people, but it is polite to thank people when they give us free gifts.

9:29 It also frees up American ingenuity for other pursuits.

9:30 Mispronounced “Louisville.” Badly.

9:30 Proposing still more transfers from taxpayers to businesses. Small ones this time.

9:32 Spend more on education. Check out this graph: http://www.cato.org/pub_display.php?pub_id=12775 The problem lies elsewhere.

9:32 Nice! Get rid of bad teachers, localize curricular choices. The NEA must be livid right now.

9:33 All kids must stay in school until they’re 18. Hmm.

9:34 Transfer more money from taxpayers to students.

9:34 Given that most college students end up relatively wealthy, he’s asking poor taxpayers to subsidize wealthy young people. Regressive.

9:35 Nobody likes sky-high tuition. But federal rules are responsible for much of it. More federal rules aren’t the answer.

9:35 Immigration. Sounds like he’s touting the STAPLE Act, which is something I’m very much on board with.

9:36 Uh, fewer illegal crossings have more to do with tough economic times than the fact that Obama happens to be in office.

9:37 Overall, he sounds fairly welcoming to immigrants. If his policies actually reflected that, the economy really would be in better shape.

9:38 “Take money from taxpayers and give it to small businesses.” This is zero-sum at best. Given the usual politicking, likely much worse.

9:39 ‘Take money from taxpayers and give it to energy companies.”

9:40 Energy independence is a sham.

9:40 Gearing up for renewable rhetoric.

9:40 If it’s viable, it doesn’t need a subsidy. If it’s economically viable, it sure doesn’t need a subsidy.

9:41 Hey, energy companies, drill for more gas. Also, here are more regulations to comply with.

9:43 “I will not walk away from the promise of clean energy.” Nor will I. But it will come from entrepreneurs, not Washington. Witness the ethanol and Solyndra debacles, among others.

9:44 He will flight climate change, apparently.

9:45 “Let’s give more taxpayer dollars to energy corporations.”

9:46 Uh, America’s infrastructure spending is the highest it’s been since the Interstate highway system buildup, as a percent of GDP.

9:47 The money we’re no longer spending at war, eh? Afghanistan? Libya? Also, over $1 trillion in debt?

9:48 He wants to set mortgage rates now? The housing crisis will never end until the bubble is allowed to finally, mercifully, and painfully, pop. But that’s bad politics. So it goes.

9:49 Smart regulations to prevent irresponsible behavior. I’m interested. Go on…

9:49 They make the free market work better…

9:50 ‘I’ve approved fewer regulations in my first three years than Bush did.” Mainly because the first year was slow. He’s exactly the same as Bush on this issue, frankly.

9:50 Touting the EPA milk spill = oil spill rule being repealed. Rightly so, though the laughter was awkward.

9:50 Nice segue to the Gulf oil spill.

9:51 I hope that wasn’t a defense of the EPA’s methylmercury rule. That is the most expensive regulation of all time.

9:51 Wall Street never did play by its own rules. There’s a reason they have all those DC offices.

9:53 Touting Corday. Sounds like fewer people who need them will be able to get loans. So it goes.

9:54 Oh boy, lending really will go down. This is bad for investment, and for job creation.

9:54 Extend the payroll tax cut.

9:55 Some of my colleagues disagree with me, but a tax cut now is a tax increase later — with interest.

9:55 The deficit.

9:55 OK. Extend the payroll tax cut, but increase income taxes?

9:56 Uh, capital gains income is double taxed. People pay income tax, invest some of what’s left, then pay capital gains tax.

9:58 Obama has actively proposed subsidizing millionaires several times tonight. Now he wants to tax them more. Pick one, please.

9:59 Again, Buffett’s capital gains income was subject to the income tax before he invested it and than paid capital gains tx on the investment income. He pays more than his secretary, not less.

9:59 Pardon the typos.

10:01 “Nothing will get done in Washington this year. Or next year.” The problem isn’t the man, or the party. It’s the system. Unless he enacts systematic changes at the institutional level, this will continue.

10:01 Ban insider trading by Congress. Fair enough.

10:01 Then again, prices reflect conditions on the ground. The faster those prices reflect the truth, the better.

10:02 Then again, Congress’ Buffett-like investment acumen is surely not due to chance. That colors their decisionmaking.

10:02 Congress; give me more power.

10:03 Sounds just like his predecessor.

10:04 Of all people to bad-mouth the perpetual campaign…

10:04 Way to call out big-government Republicans! Nice.

10:05 When Congress and the President act together, there is nothing America cannot achieve. He is clearly unfamiliar with public choice theory.

10:06 More foreign policy hornblowing in his closing flourish.

10:06 Comment From FMY
Buffet doesn’t have income, only cap gains which he reinvests to make more cap gains

10:07 Comment From bisek
more trade impediments. good!

10:08 Everyone wants a free and prosperous Middle East. But it can’t happen top-down. It has to come from the bottom up. (My opinion, not CEI’s)

10:08 Comment From Guest
And the $3000 per year that Obama just saved homeowners will be gone in 2-3 weeks when lenders pass the increased fee onto borrowers.

10:09 I am not liking this saber-rattling towards Iran.

10:10 America is a pacific power — uh, we’re at war in multiple countries.

10:11 Amurrica!!!

10:12 Keep an eye out for more power grabs at the Internet, under the guise of national security. I expect CEI analysts will have a lot to say about this.

10:13 More tax credits to corporations.

10:13 Simplify the tax code, please. It’s already 70,000 pages. It should be under 100.

10:14 Comment From FMY
VA spending up because of large war casualties

10:14 Good point, FMY.

10:16 65 minute speech. Wow.

10:17 Here are some more reader comments:

10:17 Comment From Mancur Olson
Small distributional coalitions tend to form over time in countries. Groups like cotton-farmers, steel-producers, and labor unions will have the incentives to form lobby groups and influence policies in their favor. These policies will tend to be protectionist and anti-technology, and will therefore hurt economic growth; but since the benefits of these policies are selective incentives concentrated amongst the few coalitions members, while the costs are diffused throughout the whole population, the logic of collective action dictates that there will be little public resistance to them. Hence as time goes on, and these distributional coalitions accumulate in greater and greater numbers, the nation burdened by them will fall into economic decline.

10:17 Comment From Bruce Arians
Could he bring my job back as offensive coordinator of the Pittsburgh Steelers?

10:17 Comment From Freddy Hayek
The results of the individual’s efforts are necessarily unpredictable, and the question as to whether the resulting distribution of incomes is just has no meaning. There is no point in calling the outcome just or unjust. The principle of distributive justice, once introduced, would not be fulfilled until the whole of society was organized in accordance with it. This would produce a kind of society which in all essential respects would be the opposite of a free society.

10:17 Comment From Paul Krugman
“If there were an Economist’s Creed, it would surely contain the affirmations ‘I understand the Principle of Comparative Advantage’ and ‘I advocate Free Trade’.”

10:18 Comment From Freddy Bastiat
Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”

10:18 Comment From Thomas Jefferson
I just sent in a letter describing State of the Union..

10:18 Comment From Guest
Awesome… loosen the underwriting guidelines that are in place to prevent another crisis.

10:22 I’m honored that so many distinguished economists, many of them deceased, are commenting tonight. Keep ’em coming!

10:22 Mitch Daniels’ GOP response coming up.

10:25 Three big themes from tonight are jobs, jobs, and jobs. It is an election year, after all.

10:26 There are also the conflicting themes of giving more to businesses and taking more away.

10:27 Can’t say I care for his isolationism on manufacturing and trade, though he did say good things about the FTAs with Panama, Colombia, and South Korea.

10:28 He didn’t say nearly as much as I would have liked about regulation. He mentioned his minor rollbacks, but the net effect over the last three years has been a Bush-level massive increase.

10:29 Here’s Daniels.

10:29 “I am the loyal opposition.”

10:29 Praise for his education policy rhetoric.

10:30 The State of the Union is grave. Obama has made it even worse. Also, jobs.

10:30 The debt problem is getting worse. Duh.

10:31 Predictable middle class rhetoric.

10:32 I like the line about “haves and soon-to-haves.”

10:32 2012 is emphatically not our last year of opportunity. Too many entrepreneurs are seeing to that.

10:33 Proposals to cut that deficit? Waiting…

10:34 Shot across the bow on the Keystone XL pipeline. Nice.

10:35 Also decries over-regulation. But no specific reform proposals.

10:35 CEI has plenty, by the way.

10:35 Means-test Social Security?

10:36 Timid. Personal accounts would be better. And IRA for everyone.

10:36 *An* IRA for everyone.

10:37 “The other party tends to reject my party’s legislation.” Cuts both ways sir.

10:37 The problem is at the institutional level.

10:38 Here are some institution-level solutions – http://www.amazon.com/Better-Congress-Proposal-Citizens-Legislative/dp/1587332337

10:39 Nice lightbulb-ban reference.

10:40 Comment From FMY
Like the personal responsibility message.

10:40 Ugh. Reagan reference.

10:41 Overall, a timid response to a timid SOTU.

10:45 Light on specifics. Then again, he only had a few minutes. And politicians are generally reluctant to propose reducing their job description.

10:46 He also probably wants to leave platform ideas up to whoever the GOP nominee will be. Since most of them want a bigger federal government, they probably wouldn’t take kindly to Daniels favoring a smaller one.

10:47 And that wraps it up. Thanks for reading, and keep an eye out for more CEI coverage tomorrow!

Bush’s Third Term Continues

President Obama’s policies are remarkably similar to President Bush’s. Most of their differences are in matters of degree, not principle. Both presidents believe in expanding federal involvement in health care, education, energy, you name it. Both grew regulation, spending and deficits at tremendous rates. Even their foreign policy is almost identical.

Over at the Daily Caller, I analyze last night’s State of the Union address (I also live-blogged it here) and find it wanting. There are some real stretches of logic:

In 1957, the Soviet Union launched a satellite into space. Therefore, taxpayers should give more money to politically favored corporations. This is not a rigorous line of thought. But it was typical of yesterday’s State of the Union address.

It wasn’t all bad, though:

There was some good in yesterday’s speech. The president would like to lower corporate tax rates. After Japan’s recent rate cuts, America now has the highest corporate tax rate in the developed world — nearly 40 percent in most states. This is not the way to encourage businesses to invest in America.

I wish the president had spent a little more time on the rate cut. He could have explained to the country and his party that businesses don’t actually pay corporate taxes. That’s because businesses pass on their costs. Consumers — you and I — foot the bill.

Read the whole thing here.

State of the Union Wrap-Up

I’ll post the full text of tonight’s live-blog sometime tomorrow.

Until then, here’s my one-sentence reaction: Bush’s third term continues.

State of the Union Live-Blog

Meant to post this earlier. Here’s last night’s live-blog of the State of the Union:

8:46 Welcome to CEI’s live-blog of the 2010 State of the Union address. President Obama will be touching on all kinds of issues tonight. And I’ll have something to say about them all. But I’ll be paying special attention to what he has to say about regulation and spending. Keep refreshing this post every few minutes for fresh commentary.

8:54 Important people are filing in. Pundits are bloviating. Welcome to Washington.

8:58 Here comes the cabinet.

9:00 Peter Orszag and Christina Romer are there. Romer has done some excellent research on the Great Depression, by the way. Any monetarists out there would find much to like about what she has to say about monetary policy vs. fiscal policy.

9:06 The President enters. Much applause.

9:06 While waiting for the applause to die down, I’ll add that Romer thinks that monetary policy is what drives business cycles. Fiscal policy, such as stimulus spending, has little effect. I largely agree.

9:10 Speaker Pelosi introduces the President. Much applause. Many “thank yous.”

9:11 It begins.

9:11 He refers to the Constitution. Heh.

9:12 American exceptionalism. Neocons cheering somewhere, no doubt.

9:13 He inherited a bad situation. True enough. We must act? Not so much. The recession is largely a creation of over-active monetary and regulatory policy. Not a lack of policy.

9:14 First reference to “the children.”

9:15 He has said both “hope” and “change” already. Campaign 2012 has begun.

9:17 First standing ovation.

9:18 A government that matches our decency? Public choice theory is unknown on Capitol Hill, apparently.

9:18 He hates the bailout. Good! Why did he go through with it, then?

9:18 It was necessary. Unemployment would have doubled. Hyperbole. Now banks know they can continue taking stupid risks and get bailed out for it.

9:19 touts his fee on big banks that received bailouts.

9:20 20 tax cuts. Net tax cuts. While spending goes through the moon. Tax cuts are great, but spending cuts are more important. A tax cut now is a tax increase later if spending isn’t cut to match. An increase. Not a decrease. An increase.

9:22 Many jobs created. Touting the stimulus. Which takes money out of the economy, wastes some of it on bureaucracy, then puts it back into the economy. First instance of the broken window fallacy.

9:23 Anecdotes, people helped by stimulus spending. He sees what is seen. But not what is unseen. Those jobs, and that money, came from somewhere else. Each job created is one lost elsewhere.

9:25 Jobs, jobs, jobs. Bryan Caplan’s make-work bias lives.

9:25 Business creates jobs. Government can help. But only by taking money from somewhere else, and hurting businesses elsewhere. No net effect.

9:26 $30 billion transfer from “Wall Street” to “small businesses.”

9:27 small business tax credit. Eliminate capital gains tax on small businesses. Nice, but tax code simplification would be better. Lobbyists will be all over this one.

9:28 Infrastructure!

9:28 Rail! It’s the 19th century all over again.

9:29 Clean energy. Higher energy bills for all!

9:29 Keep jobs in America! Efficiency be damned! USA! USA! USA!

9:30 Jobs bill, ASAP. But full employment requires…

9:31 still waiting…

9:32 still waiting… the virtues of China’s economy…

9:33 financial reform! For starters. But don’t punish banks. Prevent recklessness. Good. Prevent dumb risks. House has already passed some reform. But lobbyists are all over.

9:34 And they will be as long as Washington is doling out money.

9:34 Plank 2: Innovation and science. More clean energy. More nuclear power. More offshore oil. More biofuels and clean coal. Comprehensive clean energy bil. Cap-and-trade light?

9:36 Consensus on global warming. Jeers from the crowd. Acknowledges doubts, touts clean energy again.

9:37 Plank 3 – trade. More exports! Double them in 5 years = 2 million jobs. National export initiative. Trade, of course, has almost zero effect on the number of jobs. It only affects the kinds of jobs. Also take measures to decrease imports. Renegotiate Doha. Is this a new protectionism?

9:40 4th plank – education. Only reward success. Not failure. Nice. Of course, that would mean less federal involvement in education, not more. Washington has no idea how to educate kids hundreds or thousands of miles away.

9:41 End taxpayer subsidy to banks for college loans. Substitute a tax credit and increase Pell grants. Forgive student loans after 20 years. Why bother paying back, then? This will bode well for future deficits.

9:43 Social Security fix – lend more to homeowners. Yeesh.

9:43 Health care!

9:44 Acknowledges unpopularity.

9:44 Anecdotes!

9:45 Blames insurance industry for regulatory failures. Emphasis on preventive care; no empirical research is cited for obvious reasons.

9:46 We can save money by spending money.

9:46 Reduce deficit by $1 trillion over 20 years. Last year and this year alone will incur nearly $3 trillion in deficits.

9:47 Temperatures cooling? Oh wait, he’s talking about health care.

9:48 Open to other proposals. Not bloody likely.

9:48 Pass a health care bill, any health care bill.

9:49 Spending.

9:50 Blames Bush for the deficit. Rightly so! Where’s he going with this, though?

9:51 Adding debt was the right thing to do. No mention of “the children” who will ultimately pay for it.

9:51 freeze certain types of discretionary spending for three years. This excludes most spending.

9:52. Save $20 billion this year. Or less than one percent of total spending.

9:53 Bi-partisan fiscal commission. Not exactly the Gramm Commission. Good idea, but beware the execution. Wayne Crews and I have done some research on this.

9:54 Pay-Go budget keeps spending in line. The data say otherwise.

9:54 Oh, the freeze won’t take effect until next year. The crowd laughs.

9:55 Says Bush cut regulations. Actually, he passed more than 30,000. See CEI’s Ten Thousand Commandments study for the exact numbers.

9;56 Deficit of trust in Washington, not just dollars. There’s a reason for that, you know. Two of them are the Republican and Democratic parties.

9:57 Excluded lobbyists from policymaking jobs. That isn’t actually true.

9:58 Doesn’t like the Citizens United decision. Or the First Amendment, for that matter. Wants a new campaign finance regulation bill. Presumably so it can be struck down on First Amendment grounds like the last ones.

9:59 I’m liking what he has to say on earmarks. Good luck to you, sir.

10:00 “can’t wage a perpetual campaign.” Tell that to Organizing for America.

10:01 Partisan politics get in the way of doing things. He’s right. And that’s exactly why I like gridlock.

10:02 Hey Republicans, no filibusters, please.

10:03 Will be talking more to the other side of the aisle.

10:03 National security!

10:04 Hope again. I haven’t been keeping track, but that’s at least 3.

10:05 Start getting out of Afghanistan in mid-2011. Good!

10:06 Out of Iraq by August. Good! Foreign aid to Iraq. Bad for Iraq!

10:07 Pork for veterans. Taking a page right out of the Gracchi playbook.

10:08 Nuclear deproliferation. I applaud the sentiment, but prohibition doesn’t work. Good luck to you, sir.

10:11 Would love to hear what Bill Easterly has to say about all the government-to-government transfer programs he’s touting.

10:12 Haiti. I completely agree with the ends. But the effectiveness of the means needs to be questioned.

10:13 Hate crimes. Thought crimes?

10:14 Let gays in the military. Nice! About bloody time.

10:14 Immigration. He has a positive view of immigration. Let’s hope that means much-needed liberalization. The more immigrants, the better. Those who are illegal, make them legal. It is the right thing to do. Obama says this is bi-partisan. I wish he was right.

10:16 Decries cynicism. There’s a reason for all that, you know.

10:19 Anecdote!

10:19 Another anecdote!

10:19 A third!

10:20 A fourth!

10:20 “I don’t quit!” Reminds me of Brett Favre’s advice to a startled referee: take two weeks off, then quit.”

10:21 End of speech.

10:26 Here comes Bob McDonnell’s Republican response. Get ready to be disappointed!

10:30 Thank yous and much applause.

10:31 Jobs. Jobs for all! Good end. The means?

10:31 So far, indistinguishable from Obama.

10:32 Calls for less taxation, regulation, etc. Quotes Jefferson. Says government is trying to do too much. Now he sounds different.

10:33 Likes Obama’s spending freeze. Says it’s small. Not often one hears a politician calls a spending non-increase anything other than draconian.

10:34 Likes bipartisanship. I like gridlock. Boo!

10:34 Likes the Shadegg health insurance reform. And medical malpractice reform. No specifics, though.

10:35 Energy. More of everything! Why isn;t anyone saying, “let the market decide?” Why must government, no matter the party, pick winners and losers?

10:36 Government energy policy can create jobs. Oh, wait, that costs money and jobs from elsewhere. Broken window fallacy again.

10:37 Education. Likes merit pay and school choice. Nothing about reducing federal involvement in this state and local issue.

10:38 Wars abroad. Daughter served abroad. Laudable. But nothing to do with the merits of nation-building.

10:39 Doesn’t like giving due process to the underwear bomber. Well, he’s probably guilty. Let’s find that out for sure and then punish him accordingly, then! What’s to be gained from denying due process?

10:40 I’m liking his rhetoric about taxes, spending, and regulation. But I’ll believe it when I see it. Which is probably never.

10:41 Haiti. Less than a paragraph.

10:42 Big role for government in creating opportunity.

10:43 One more call for bipartisanship, and a big sop to the Religious Right. An utterly conventional speech. If you thought liberals and conservatives have fundamental philosophical differences, think again. Two sides of the same coin.

10:44 That’s all for tonight. CEI scholars will have more in-depth analysis for you tomorrow. Thanks for reading!