January 18, 2011

President Obama Moves to the Right on Regulation; Appeasing Business Has Real Life Costs

Sixteen months ago, President Obama stood in the well of Congress and issued a ringing call for a progressive vision of government. Working to persuade Members of Congress to adopt health care reform, he said that “large-heartedness…is part of the American character.  Our ability to stand in other people's shoes. A recognition that we are all in this together; that when fortune turns against one of us, others are there to lend a helping hand.” Many took comfort from that vision, the first avowedly affirmative one we had heard from a President about the government he leads in many a year. 

Since then, much of the President’s domestic agenda has been adopted, and a mid-term election “shellacking” has intervened. And now, President Obama, with the 2012 election drawing ever nearer, is embracing a far less generous vision. In an op-ed on the opinion pages of today’s Wall Street Journal, truly the belly of the conservative beast, the President embraces a frame for the coming discussion about the role of regulation in society that is right out of the Republican hymnal, calling for “balance” between safety and economic growth, and bemoaning regulations that sometimes “plac[e] unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs.”

He also used the op-ed to announce a new initiative “to review outdated regulations that stifle job creation and make our economy less competitive.”  By casting the discussion in those terms, the President swallows the GOP’s frame for the debate hook, line, and sinker. 

If you listen carefully, you might hear the voices of disbelief and anguish from the families of the 11 workers killed in the Deepwater Horizon disaster, the 29 workers whose lives were extinguished at the Big Branch mine, and the nine who died after eating peanut butter crackers and similar products infected by salmonella. How about the people who knew the uncounted tens of thousands of others who were given cancer by airborne toxics at work or in the neighborhood,  experienced devastating headaches because Chinese manufacturers put sulfur compounds in their drywall and no one checked the product as it crossed our borders, or were crippled by repetitive movements in a slaughterhouse or a poultry processing plant, all on President Obama’s watch? The families, friends, and co-workers of these victims of under-regulation and under-enforcement might conclude that the United States is reverting to a place where the government most definitely does not protect people who can’t protect themselves. Sure, they think to themselves as they read about the president’s new détente initiative with big business, we all need jobs, but aren’t all those billions in profits and executive bonuses enough for the business sector? Didn’t the government bailouts of the big banks do the trick?

Large corporations were at the bottom of all of the human damage listed above, not because they are intrinsically evil but because they cannot be trusted to regulate themselves. And given the current state of regulatory dysfunction at the agencies founded to protect the public, caused by a noxious mix of underfunding, political attacks, and lack of effective enforcement authority, that’s exactly what they’re doing way too much, almost everywhere you look.  

To be sure, public anger and distrust, coupled with massive campaign contributions from corporate and other sources, translated into Republican triumph electorally, and the big companies who brought us the Gulf spill, the Big Branch mine collapse, tainted food, and runaway cars have now come to collect. But Barack Obama is a President from the party that should know better, the evidence of which is that he has appointed great people to lead the very agencies that so badly need rescuing after eight years of George W. Bush’s concerted efforts to de-fund and de-fang them. Instead, the President’s newly stated position diminishes EPA’s Lisa Jackson, FDA’s Margaret Hamburg, and OSHA’s David Michaels, siding instead with his regulatory czar, Cass Sunstein, who has steadily pushed to issue an executive order that throws a net over his colleagues rather than helping them do their jobs.

The principal example of outdated regulations that the President cites is the listing of saccharin as a hazardous waste. EPA removed saccharin from the list recently, a decade after the science supporting the move came together. But in the intervening years, it’s not as if there's evidence the regulation has been costing us jobs. Companies weren’t told to dig special saccharin waste dumps to dispose of the stuff, after all. So it’s business friendly rhetoric that has the unfortunate by-product of making the agencies sound more than a little silly, but it doesn’t make the case that outdated regulations are costing us jobs. Forcing beleaguered agencies to “look back” and find more saccharin examples will have real costs, though, because they are already pushed to their limits by funding shortfalls that give them, in many cases, the same budgets in real dollars as they had in the mid-1980’s, when the White House also was hounding them to control themselves.  Does the President really intend regulators to freeze-frame efforts to solve public health crises that abound all around them so that they can engage in a draining search to placate companies already rushing to Republicans in Congress with regulatory “hit lists”?

As for the argument that we need to loosen regulation in order to create jobs, the believers in this superficially appealing bit of dogma have yet to cite research showing that regulations are slowing the economic recovery. They just serve up the assertion, in part to distract us from the hard reality that it was deregulatory fervor that got us into this mess in the first place. And while President Obama may not accept it, he’s apparently willing to let the debate be conducted in those terms.

Rena Steinzor, Professor of Law, University of Maryland Carey School of Law. Bio.

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1 I didn't know there were any regulations left to reduce. Obama employed rhetoric of the right in an attempt to appeal to the aforementioned right, but I think he really just ended up legitimizing the regulation-killed-the-economy theory. Even if such excessive job-destroying regulations existed, how do regulations that agencies don't have the manpower or funds or political clout to enforce destroy these unnamed, unidentified jobs? Maybe the op-ed is part of some sort of clever political maneuvering to overcome obstructionism? Fingers crossed. Anyway, excellent blog.
-- Christine Gentry
2 I for one applaud the president on his move to prioritize fundamental regulation with this executive order. This blog like many others on the left fail to understand that we could of elected Jesus Christ himself but some corporations would still be themselves and have little to no regard for their consumers. To believe any president can sway what one commentator called "the invincible cult of selfishness" is absurd. The proof is in the pudding. Instead my advice to the professionals on the left would be a full assault on the evils in the corporate world. However that may prevent them from gainful employment Both parties are guilty and my main example would be how Al Gore picked a corporate turncoat for VP from a state he didn't need to win and as a result lost to that dunce W. Yes we on the left have done a horrible job for the past thirty years with our message against all forms of industry. Let's not act like president Obama is the be all end all on this. Let's take responsibility for our failures and instead try to do a better job "having his back" unless you prefer president (Gingrich), (Palin), (Huckabee), (Romney). You decide.
-- Lyman Packard
3 Obama is a man of appeasement: I do applaud his efforts to simultaneously defend the American citizen from corporate abuse strive for bipartisanship. Unfortunately, his honest efforts to protect us from the risks that are frequently ignored by businesses have been twisted into "left-wing-driven" pursuits. I argue that someone be held responsible for when the capitalist system falters in order to protect the consumer. This isn't a novel idea, but yes, it does cost money. For the first two years, Obama did attempt to protect the American citizen in the areas of food, business, the environment. But this "interventionist" way of governing, as conservatives, put it, is new, fresh, and slightly uncomfortable. It's called change. But Obama also realizes that in order to enact real change, he requires the support of both parties. Yes, he will acquiesce, but his will to protect is strong as well. Redelivering autonomy back to businesses will not lead to the downfall of American society, but it will earn the respect of the opposing party, and help him continue to see change in the U.S.
-- Jessica DiCerbo
4 At first I read Obama's WSJ op-ed as a sort of veiled threat to big business to come to the table to discuss regulation or risk further investigation into ways the government can make regulations better (and perhaps more restrictive). But this post does a fine job of fleshing out the notion that the Obama is really just acquiescing to the demands of the right and to corporations to find ways to make regulations work "for them," as opposed to really protecting the public. I agree with Jessica that Obama is a man of appeasement and I wonder if in some ways that's almost a more nefarious way of leading. With the second Bush, many of us knew what we were getting from a leadership standpoint. But to do what Obama has done here, to place talented people to head up the regulatory bodies, and then kick their in teeth by suggesting that regulations unnecessarily constrain business seems not only counter-productive, but subversive as well. I respect the ideals Obama has repeatedly espoused and acknowledge he is just one person, but his new position here is very disappointing.
-- Gabriel Scott

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