October 9, 2010

Green and Blue v. Red

Justin Katz

An op-ed in the New York Post, by Sen. James Inhofe (R, OK) points to a couple of topics worth discussion:

One insidious force keeping unemployment high is regulatory uncertainty: Companies that could hire (or re-hire), don't — because they're worried about what new restrictions will be coming down from Washington.

Congress bears much of the blame — especially for the new "financial reform" law, which leaves so many details to be filled in later. But a major contributor to businesses' worries is the Obama Environmental Protection Agency, which is issuing a daily barrage of rules and regulations threatening jobs in American industry.

So concludes "EPA's Anti-Industrial Policy: Threatening Jobs and America's Manufacturing Base" — a new report from the minority staff of the Senate Committee on Environment and Public Works (on which I serve as ranking member).

Inhofe goes on to describe three of the four "most egregiously anti-business proposals" of the EPA, on which the report focuses:

  • New rules for industrial boilers
  • Unnaturally lowered ozone levels
  • The claim that the agency has the authority to regulate carbon dioxide

The fourth proposal addressed in the full report (PDF) has to do with regulation of Portland Cement plants. Notably, all of the proposals have had the effect of putting Republicans and private-sector unions on the same side of advocacy — because both sides have reason to fear policies that could cost the economy almost a million jobs, many of them industrial.

But the Republicans don't have entirely clean hands on a broader view. Return your thoughts to Inhofe's lament over regulatory uncertainty. Such uncertainty is surely an inevitable consequence of our deeply divided political sphere. Indeed, the only thing that has been certain, over the past two decades, has been that government authority would grow and expand, but with a modicum of respect for free market principles that has driven the economy of the United States. Republicans of the current generations have failed to pull government in the other direction — with many, including President Bush, apparently quite comfortable with its expansion. That consistent trend enabled companies (particularly large companies) to adjust and plan for their own benefit, and smaller businesses and individuals could predict what rules would persist and which were prone to adjustment.

What President Obama and the Congressional Democrats have illustrated is that the balance cannot hold. Eventually, government's size and power becomes such that expansion requires it to rewrite rules by which other social powerhouses thrive. That's the line being crossed. Businesses operate by the larger principle (crass as it is) of profit, which makes it unlikely that a new corporate executive regime will change policies based on whim. When they do, the fact that companies are replaceable means that the gap they leave will be filled; another company will spot the poorly managed competitor's dash to the cliff and maneuver to fill its abandoned space. There is no secondary government.

Government, by its nature, is subject to the whims of those who hold its reins. Especially when public offices become the domain of independently wealthy politicians, they become prone to ideological excess, and ideology defines its own larger principles, making their decisions much less predictable. The nation's deep political divide matters most of all because the size of government grants unwieldy power to the side that happens to be winning for the moment.