Regulation explains sickly GDP numbers better than weather

May 2, 2014
Another quarter, another storm of regulation. Another storm of regulation, another quarter of economic drift.

Another quarter, another storm of regulation. Another storm of regulation, another quarter of economic drift.

The US Bureau of Economic Analysis reports gross domestic product in the first quarter increased at a barely noticeable annual rate of 0.1%. Annualized growth in the prior quarter was 2.6%.

Administration excuse-makers blame first-quarter doldrums on wicked weather. But weather hardly explains the whole problem.

American business is mired in regulation.

The oil and gas industry knows that. But industry representatives might be surprised to learn that their biggest headache, the Environmental Protection Agency, is losing ground in the Executive Branch rule-writing contest.

In an annual analysis of regulation published in April by the Competitive Enterprise Institute, EPA fell out of the top five federal agencies in regulatory exertion.

The CEI based its assessment on a government report, Regulatory Plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions, which lists actions at various states of implementation.

One of the top rule-generating agencies strongly affects the oil and gas industry: the Department of the Interior. Others in the top five are the Departments of the Treasury, Commerce, Transportation, and Health and Human Services.

The hyperactive EPA slipped from earlier reports to sixth position.

The CEI analysis contains more alarming data about the Obama administration’s regulatory fervor than can be reported in this limited space.

A highlight by Clyde Wayne Crews Jr., author of the report, is the estimated cost of regulation nation-wide in 2013: $1.863 trillion. That’s 11.1% of estimated GDP.

Crews estimated US households pay $14,974/year in what he calls “the regulatory hidden tax.”

Of course, estimates like these are difficult to make and therefore inherently imprecise and subject to dispute. Crews notes that, in the best of times, the unified agenda paints a vague picture of regulatory costs.

Administration officials have complicated those problems by publishing the report with diminished regularity. With each new quarter of sickly GDP numbers, they’d probably rather discuss windy weather than the stifling regulatory climate.

(From the subscription area of www.ogjonline, posted May 2, 2014; author’s e-mail: [email protected])