There are multiple ways the federal government criminalizes economic activity that could otherwise help America grow, according to Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor.
They go beyond standard regulatory burdens, and into active efforts from Washington, D.C. to simply forbid or outlaw certain business activities.
None of them have to do with legalizing drugs or gambling.
“Our economy grows when people are allowed to engage in more economic activity. Unfortunately, Washington has criminalized a wide range of beneficial economic activity. No one wins except the bureaucrats,”
Furchtgott-Roth asserted in a MarketWatch opinion column.
Her first example is Federal law that criminalizes exports of oil and natural gas. She noted over 10 million Americans are already employed in the energy industry, and said more jobs could be created with the resumption of U.S. exports.
“The export bans were set up in the 1970s, at a time when America was highly dependent on OPEC for energy. Now we have overtaken Saudi Arabia in oil production, and Congress should update our laws to reflect the new reality.
Furchtgott-Roth is also worried about the reach and power of the new Financial Stability Oversight Council, set up under the Dodd-Frank Act. The shadowy FSOC is chaired by the Treasury secretary and includes the heads of nine federal financial regulatory agencies.
“Currently, FSOC is considering whether money market funds pose a systemically significant risk to the economy, and what regulations it should place on these funds. FSOC has the power to criminalize just about any firm. Proceedings are held behind closed doors, and there is practically no appeals process.”
Then there are the nation’s minimum wage laws, which criminalize low-skilled work, and in Furchtgott-Roth’s view stops some Americans from even entering the work force.
“If people cannot get their first job, how can they get their second or third? People who take minimum-wage jobs gain entry to the professional world. Once they are in, they can keep rising.”
Federal fuel efficiency laws, which force auto makers to calculate average miles per gallon across their respective fleets, also hurt the economy, according to Furchtgott-Roth.
“To balance out larger vehicles, car dealers have to make small ones that sit on the lots and are eventually sold at a loss to rental companies. This raises the price of larger vehicles for everyone else,” she said.
The oft-criticized Affordable Care Act, aka Obamacare, is also a business activity killer, in Furchtgott-Roth’s opinion. “Under the Affordable Care Act, approved plans must include services that many people do not need, such as maternity care, pediatric dental care, mental-health coverage and substance-abuse treatment. It is forbidden to offer other plans, even though people want to buy them.”
The Environmental Protection Agency’s (EPA) new ozone rules may also squelch the economy, she said. “The only way for states to meet the standards is for them to reduce energy-intensive manufacturing, or some forms of energy production. Those activities would all become criminalized.”
Investor’s Business Daily suggested in an editorial that Dodd-Frank regulations are becoming a hydra-headed hindrance to economic growth.
“Congress passed this 2,300-page law in 2010. It since has spawned a massive new regulatory environment with an impact reaching far beyond the nation's $1.1 trillion financial services industry.”
IBD noted the Government Accountability Office originally estimated Dodd-Frank's direct cost at $2.9 billion over the first five years, meaning it would cost the taxpayers roughly $600 million annually, or $5 for each private-sector worker. But that may be the tip of the iceberg.
“The direct cost to taxpayers is only the beginning. Historical estimates show private-sector costs to comply with government regulations tend to be 36 times the direct cost to government,” the newspaper said.
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