Although this claim has been definitively disproved—studies show that net employment either remains steady or even increases with regulation—the Chamber and legislative allies have proceeded undismayed.
They have also continued despite emerging evidence that business interests are divided on whether potential regulation contributes to “uncertainty” among business leaders that prevents them from investing. Polling of small business owners, for example, indicates that low demand, not the threat of regulation, has been the source of entrepreneurs’ reluctance to invest.
On display in the Congress this week are two challenges to the balanced approach to regulation that has served the country reasonably well for over sixty years. The Regulatory Accountability Act of 2011, and the Regulations from the Executive in Need of Scrutiny (REINS) Act of 2011, have been designed to make the procedural hurdles for regulation so high that it would be virtually impossible to enact meaningful safeguards in the future.
Since voters would punish conservatives if they tried to repeal the Clean Air Act or food and drug protection legislation, or abolish the Environmental Protection Agency or the Occupational Safety and Health Agency, their new strategy is to make it impossible for regulatory agencies to carry out their mandates in the future. Assessments of the full implications of the legislation can be found at the Coalition for Sensible Safeguards.
One is tempted to add that if business interests are worried about uncertainty caused by regulation, a very simple logic would suggest that withdrawing these threats to the regulatory system would make regulation of business much more predictable, resulting, if one follows the Chambers’ reasoning, in a flood of new investment!
In every regulatory area there is room for improvement—for example, in such critical areas as financial regulation, mine safety, and food protections. Yet as every advocate for improved health and safety will attest, it is very hard to crank the system of safeguards up another notch. Business interests hardly need worry that future regulation will be easy or whimsical.
However, the history of regulation in the post-war period indicates that progress can be made against the special interests when public sentiment is mobilized. As my former colleague James Lardner showed definitively in Good Rules: 10 Stories of Successful Regulation again and again the public has been well served by legislation limiting business behavior.
One hopes the assault on public safety, public health and the environment represented by the legislation under review this week receives wide attention. The proposed anti-regulatory laws will be roundly rejected if people understand that they are not simply calls for managerial restrictions, but are really attacks on the ability of government to provide necessary and, on the whole, popular public protections.
Michael Lipsky is a Distinguished Senior Fellow at Demos.