We can easily use Representative Joe Heck’s (R-NV3) own words to decode the magic economic policy he’s espousing, and one that is antithetical to the requirements of the REAL economy in which people in Nevada and elsewhere are looking for REAL jobs:
“Uncertainty is gripping our economy. It is felt by families and job creators across Nevada, and it is why our economy hasn’t recovered fast enough. The uncertainty stems from the federal government’s spending, leading families to wonder if their taxes will go up to pay for Washington’s misadventures. The uncertainty stems from government’s overly burdensome regulations, leading businesses to wonder if they will be forced to spend more money complying with regulations instead of hiring new workers. ” [Heck]
Now, let’s decode this gibberish: “Uncertainty is gripping our economy. It is felt by families and job creators across Nevada, and it is why our economy hasn’t recovered fast enough.”
Notice that the “uncertainty” is highly generalized, and instead of being predicated on data the implication is offered that this is the cause of a slow recovery. But wait, isn’t Representative Heck being specific when he talks about government spending and “burdensome regulations?” NO. Not exactly.
First off the bat, how often does it need to be pointed out to Representative Heck that federal government spending as a percentage of our GDP is declining? Perhaps he’d need a picture:
Or perhaps the Congressman needs yet another graphic concerning the rate of spending?
“The first step toward recovery is admitting that you have a problem. The administration needs to admit that its policies of record spending, uncontrolled debt, excessive regulations, and the threat of higher taxes are not the solution. They are the problem.” [Amodei]
Do the charts illustrating federal spending levels since 1985, and the rate of increase in federal spending levels since the Reagan Administration look like there’s “record spending?” “Uncontrolled debt?” In short, the individuals in denial, who need to admit they have a problem, are Representatives Heck and Amodei, who are not going to let some inconvenient facts get in the way of their radical economic ideology.
Oh, Those Burdensome Regulations!
Heck: “The uncertainty stems from government’s overly burdensome regulations, leading businesses to wonder if they will be forced to spend more money complying with regulations instead of hiring new workers.”
Amodei: “Washington has tied the hands of small business owners and job creators with onerous regulations and backward fiscal policies that have stalled the economy, slowed innovation and destroyed jobs. We need common sense, pro-growth policies to give small businesses and entrepreneurs renewed confidence in our economy and to remove Washington as the roadblock to job creation.” [Amodei]
Secondly, do we really have any serious questions about which regulations the Congressmen are so concerned will lead to economic atrophy? We can get a few clues by looking at the bills the Republicans have brought to the floor that directly address regulations. What new regulations have taken place in the last few years that have Republicans up in arms?
The Sarbanes Oxley Act (2002) — a statute that was being hacked at in 2009. [NYTimes] Oh, those “burdensome regulations” which sought to prevent another re-enactment of the Enron Debacle, and other financial sector scandals of the recent past. Thus the passage of H.R. 1564 in the House of Representatives the “Audit Integrity and Job Protection Act – which Amends the Sarbanes-Oxley Act of 2002 (SOX) to deny the Public Company Accounting Oversight Board any authority to require that audits conducted for a particular issuer of securities in accordance with SOX standards be conducted by specific auditors, or that such audits be conducted for an issuer by different auditors on a rotating basis.” Both Representatives Heck and Amodei were pleased to vote in favor of this bill to gut the independent accounting rules for large corporations. [roll call 306]
Now it’s time to ask, just how many small business owners were wondering how to comply with the auditing requirements for major corporations? How many garage owners, bakery shop operators, and hardware store businessmen were delaying hiring decisions based on the final resolution of PCAOB jurisdiction? It’s reasonable to conclude that the answer to that question is ZERO.
The Dodd Frank Act, enacted in the wake of the financial sector collapse in the wake of the Housing Bubble and Mortgage Meltdown — from which we are still suffering. As mentioned here before, the Congressional GOP introduced H.R. 1135, “Burdensome Data Collection Relief Act – Amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to repeal the requirement that the Securities and Exchange Commission (SEC) amend certain federal regulations about executive compensation to require each issuer of securities to disclose in any filing: (1) the median of the annual total compensation of all the issuer’s employees, except the chief executive officer; (2) the annual total compensation of the chief executive officer; and (3) the ratio of the first amount to the second.” [Congress.gov]
Again, how many convenience store managers are deferring hiring until it is determined if the SEC may require major corporations to divulge the compensation packages for their chief executive officers?
Over on the Senate side the GOP introduced S. 451, “Dodd-Frank Wall Street Reform and Consumer Protection Technical Corrections Act of 2013 – Makes technical corrections to the Dodd-Frank Wall Street Reform and Consumer Protection Act, including certain Acts within it as well as other specified Acts, regarding definitions affecting regulation of advisers to hedge funds. Extends for one year the deadline for issuance of any rule or regulation, conduct of any study, or submission of any report required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, except any rules already finalized.” [Congress.gov]
How many farm and ranch supply store owners aren’t hiring because they’re waiting to see if there will be any more regulations on hedge fund managers?
Ah, but the House doesn’t want to merely hamstring the implementation of the Dodd Frank Act — it wants to repeal it. H.R. 46 introduced by Congresswoman Bachmann would repeal the bill outright. The bill has been assigned to the House Subcommittee on General Farm Commodities and Risk Management.
How many shoe store owners are delaying hiring decisions because they aren’t sure of the Orderly Liquidation Process included in the Dodd Frank Act for major financial institutions?
Then there’s H.R. 2571 which restricts the Consumer Financial Protection Bureau in terms of the kinds of data it may collect. There’s H.R. 677, a bill to provide that inter-affiliate transactions, when the parties to the transaction are under common control, will not be regulated as swaps. How many barber shop proprietors are so vitally interested in the regulations of financial swaps, they’d not hire an extra barber or bookkeeper?
H.R. 701 passed the House on May 15, 2013 to amend the Securities Act of 1933 to set October 31, 2013, as the deadline for the Securities and Exchange Commission (SEC) “to add a class of domestic securities to those already exempted from regulation under that Act in accordance with specified terms and conditions, including that: (1) the aggregate offering amount of all securities offered and sold within the prior 12-month period in reliance on the new exemption shall not exceed $50 million, (2) the securities may be offered and sold publicly, and (3) they shall not be restricted securities under federal securities laws and regulations.” Now, there’s a bill to glaze the eyes of any dry-wall subcontractor?
How about H.R. 1062, which part of the CRS summary describes as follows:
“SEC Regulatory Accountability Act – (Sec. 2) Amends the Securities Exchange Act of 1934 (Act) to direct the Securities and Exchange Commission (SEC), before issuing a regulation under the securities laws, to: (1) identify the nature and source of the problem that the proposed regulation is designed to address in order to assess whether any new regulation is warranted; (2) use the SEC Chief Economist to assess the costs and benefits of the intended regulation and adopt it only upon a reasoned determination that its benefits justify the costs; (3) identify and assess the available alternatives that were considered; and (4) ensure that any regulation is accessible, consistent, written in plain language, and easy to understand.”
Translation, the SEC would have to perform a cost benefit analysis of any regulations, and justify the regulations if they were to have any effect on a financial institution’s bottom line. Representatives Heck and Amodei both voted in favor of this bill. [roll call 160]
Have the eyes of the average proprietor of the local dress shop rolled back yet… or are these people waiting for the outcome of H.R. 1256 which creates a nice loophole for London Whales, and “Directs the Commissions to exempt from U.S. swaps requirements any non-U.S. person in compliance with the swaps regulatory requirements of a country or administrative region having one of the nine largest combined swap and security-based swap markets by notional amount in the calendar year preceding issuance of such rules (unless the Commissions jointly determine that such requirements are not broadly equivalent to U.S. swaps requirements).”
Are we seeing the pattern here? Those supposedly Burdensome Regulations which are allegedly causing small business owners across this fine land to delay or defer hiring decisions because of “uncertainty” must be the result of the activities of the Securities and Exchange Commission, the passage of the Sarbanes Oxley Act, and the Dodd Frank Act, because those are the laws the House of Representatives are focused upon. The bills introduced, and passed, by the House have precious little to do with real small business owners in this country — and everything to do with the convenience and profitability of the Really Big Banks, and the Really Big Global Corporations.
To conflate the needs of small business owners (who need customers to drive sales and services in order to justify hiring decisions) with the profitability and convenience (not to mention the opacity) of major multi-national corporations is misleading at best and downright obfuscatory at worst.
Reality Check Time
Once again, with feeling — small business owners know there must be an increase in the demand for their goods and services in order to make the addition of staff justified in good old fashioned local economic terms. Small business owners also know that tax policy has demonstrably little to do with demand. The family automobile needs new brake pads regardless of the marginal rate of federal income taxes. They know that uncertainty in this economy doesn’t emanate from whether major financial institutions and global corporations are required to be transparent in their operations — but from whether or not their customers have the wherewithal to spend money from their personal revenue — salary and wages.
And, where do salaries and wages come from —- JOBS.