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Deregulation of What?
It has become a common refrain, repeated ad nauseum: our current financial and economic problems are the result of deregulation, particularly of the banking and finance system. Of course, this supposed deregulation is typically laid at the feed of George W. Bush, and typically no real evidence of such is given (with the occasional exception, such as Paul Krugman, who lays the blame on Ronald Reagan for signing a bipartisan financial reform act).
When claims of deregulation arise, it is illuminating to ask a few questions of the claimant. First of all, what precisely was deregulated? Typically, no specific claims of deregulation can be given. Secondly, did the Code of Federal Regulations increase or decrease in size during the 8 years of the Bush Administration? Thirdly, did the budgets for regulatory agencies increase or decrease during that same time period? And finally, what about Sarbanes-Oxley, the massive regulatory bill put into place in response to the corporate scandals at Enron, WorldCom, etc.?
Upon asking these four simple questions, it is likely that you'll be called a "neocon" at best, perhaps even a fascist (which can prompt further questioning about the claimant's knowledge of the actual economic platform of the fascists; hint: it was left wing, not right wing, as Jonah Goldberg has detailed) after which some exposition on the war in Iraq or Bush's buddies in "Big Oil" are likely to be brought up. But what are the facts?
According to a study by the conservative Heritage Foundation, the answers are different than might be expected. While President Bush liked to speak of limited government and free markets, his record was, of course, much different. As the Heritage Foundation report relays (with footnoted references), while the rate of increased regulation slowed somewhat during the Bush Presidency, the budget for regulatory agencies increased from $27 billion to nearly $45 billion in the first 7 years of President Bush's time in office — a 44% increase, even after considering inflation. Total staffing for those agencies increased by 41% — over 72,000 new regulators employed. Over that same time, the number of pages in the Code of Federal Regulations grew by over 4500, and there were approximately 90 "major rule changes" — changes that had an economic impact of over $100 million.
As President, Bush liked to talk about limiting government and promoting free markets, but all too often his record is one of increased government intrusiveness and restrictions on voluntary exchange. Bush was not, contrary to the conventional wisdom, a deregulater, and our financial situation was not the result of deregulation, because it simply didn't occur: regulation increased during the Bush Administration, and taxpayers and consumers, of course, were forced to foot the bill.
When claims of deregulation arise, it is illuminating to ask a few questions of the claimant. First of all, what precisely was deregulated? Typically, no specific claims of deregulation can be given. Secondly, did the Code of Federal Regulations increase or decrease in size during the 8 years of the Bush Administration? Thirdly, did the budgets for regulatory agencies increase or decrease during that same time period? And finally, what about Sarbanes-Oxley, the massive regulatory bill put into place in response to the corporate scandals at Enron, WorldCom, etc.?
Upon asking these four simple questions, it is likely that you'll be called a "neocon" at best, perhaps even a fascist (which can prompt further questioning about the claimant's knowledge of the actual economic platform of the fascists; hint: it was left wing, not right wing, as Jonah Goldberg has detailed) after which some exposition on the war in Iraq or Bush's buddies in "Big Oil" are likely to be brought up. But what are the facts?
According to a study by the conservative Heritage Foundation, the answers are different than might be expected. While President Bush liked to speak of limited government and free markets, his record was, of course, much different. As the Heritage Foundation report relays (with footnoted references), while the rate of increased regulation slowed somewhat during the Bush Presidency, the budget for regulatory agencies increased from $27 billion to nearly $45 billion in the first 7 years of President Bush's time in office — a 44% increase, even after considering inflation. Total staffing for those agencies increased by 41% — over 72,000 new regulators employed. Over that same time, the number of pages in the Code of Federal Regulations grew by over 4500, and there were approximately 90 "major rule changes" — changes that had an economic impact of over $100 million.
As President, Bush liked to talk about limiting government and promoting free markets, but all too often his record is one of increased government intrusiveness and restrictions on voluntary exchange. Bush was not, contrary to the conventional wisdom, a deregulater, and our financial situation was not the result of deregulation, because it simply didn't occur: regulation increased during the Bush Administration, and taxpayers and consumers, of course, were forced to foot the bill.
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