President Obama Says We’ve “Turned the Page” – Really?

In previewing his 2015 State of the Union Address, President Obama said … "2014 was the fastest year for job growth since the 1990s. Unemployment fell faster than any year since 1984."

In fact, the President opened the 2015 Address, asserting that America was “turn[ing] the page.”

Others see things very differently. Growth emerging from a painfully low baseline is not turning a page. Unemployment is “down” because statistics omit those who’ve given up looking for work. Over 92 million Americans are not working.

Labor force participation sits at a 36 year low, with nearly 12 million having dropped out during the Obama administration. Data point to high debt per capita, the highest part-time and temporary-job creation rates. A popular blog laments the “slow death of American entrepreneurship”

Headlines tell painful tales. Investor’s Business Daily in January 2015 reports on businesses dying faster than they’re being created, something the Washington Post had noted in 2014. Likewise a Brookings study on small business formation noted declining rates, as did a Wall Street Journal report on business ownership rates among the young.

And if businesses aren’t being created, neither are jobs. One recruiter described to the Wall Street Journal how regulations impact jobs, while others point to an inverse correlation between regulation and innovation. And the anecdotes parallel the statistics. In food service, regulations are driving restaurants out of business and even sending them abroad.

On those occasions when policymakers get traction on regulatory liberalization, it often involves recognizing smaller business burdens and job concerns. One can recognize that small business may not be the hyped “backbone” of the entire economy; rather, new businesses appear to be. Yet, regulations are a hidden tax; while obscured in prices for most of us, small and new businesses see them more clearly.

At least since 1980, the Regulatory Flexibility Act directs federal agencies to assess their rules’ effects on small businesses, and describe regulatory actions under development “that may have a significant economic impact on a substantial number of small entities.” It has (imperfectly) recognized the need for vitality in small business and the need to scale federal actions to the size of those expected to comply. More recent fulfilments have included a permanent OMB regulatory accounting provision; unfunded mandates reforms; and limited congressional review of regulations.

All of these need improvement, and last week the House passed the Regulatory Accountability Act that would codify and enforce many of the oversight mechanisms we have now.

And just this week, Rep. Todd Young and Sen. Rand Paul re-introduced the REINS Act (Regulations from the Executive In Need of Scrutiny), which passed the House during the last Congress.

Obama promises veto pen on both, should they reach his desk. We may see if his fellow Democrats, some perhaps less enamored of regulation and the “pen and phone” impact on their constitutents than he, back him up on keeping the economy’s brakes deployed—or if they conclude we really should turn the page.