Wednesday, November 11, 2015
Even after stunning October jobs report, regulations are holding the economy back
The national jobs report for October was released Friday, and it was so good the media almost ran out of synonyms for “so good” to describe it.
“The latest report on the labor market is a really good one,” intoned Steve Inskeep of NPR, cutting right to the chase.
“It was pretty much everything you could ask for in a jobs report,” gushed Michelle Meyer, deputy head of United States economics at Bank of America Merrill Lynch, in a New York Times report that detailed the “robust” growth of 271,000 jobs during the month.
U.S. News and World Report used “stellar,” “astounding” and “fantastic” to describe the monthly report. And the Washington Post heaped all the credit onto President Barack Obama’s plate.
Yes, the jobs report was a good one, to be sure, and there’s no obvious reason to throw cold water on the excitement surrounding a growing economy. More people working is a good thing, of course.
But what if the reaction to the latest round of data from the Bureau of Labor Statistics is succumbing to a sort-of soft bigotry of low expectations?
Iain Murray, a vice president at Competitive Enterprise Institute, warns that may very well be the case. In looking back at periods of economic growth following recessions, this recovery is still going slower than expected.
In fact, as Murray points out, the economy would have to add about 516,000 jobs per month to match the average pace of economic recovery at this post-recession stage, according to Congress’ Joint Economic Committee.
What kinds of headlines would newspapers be writing if that were the case?
The main reason, he argues, is that regulations have taken their toll on the economy and keep it from getting up to full speed.
“When the nation went into recession in the early 1980s, high taxes were the largest supply-side problem to creation of new jobs. President Reagan worked with Congress to cut taxes significantly, and the result was the Reagan boom,” Murray wrote. “Clearly, overly burdensome regulation is the largest supply-side problem today.”
According to an analysis conducted by CEI, the total annual burden of regulations on the economy is as much as $1.9 trillion. Those costs have a direct link to the growth of jobs.