The Wall Street Journal
BUSINESS WORLD
Regulation vs. The American People
The public rejected his agenda—so President Obama opted for ‘bureaucratic bulldozing.’
By
Holman W. Jenkins, Jr.
Aug. 19, 2016 6:20 p.m. ET
Here’s a different interpretation from that of the New York Times on Sunday, which painted President Obama as “deeply frustrated” by a “dysfunctional Congress.” Thus a president who arrived with a “skeptical streak when it came to the value of regulation” was transformed into one who pursued “bureaucratic bulldozing rather than legislative transparency.” Mr Obama, the paper correctly points out, “imposed billions of dollars in new costs on businesses and consumers and “inserted the United States government more deeply into American life.”
Yet while devoting 3,700 words to this subject, the Times never manages to note that, from their first opportunity, voters were sending Mr. Obama Republican congressional majorities to oppose his actions and plans.
The Times forgets that Mr. Obama was practically gifted the presidency by a GOP president whose immediate legacy was a world-wide financial crisis plus an unpopular war. Mr. Obama ran, with deliberate vagueness, on hope and change. All anybody can remember about his campaign health-care plan was that it lacked an individual mandate.
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It would be hard to develop any interpretation consistent with reality that didn’t have voters rejecting the Obama agenda as soon as they saw it. The evidence, arriving unusually early in his presidential term, began with the Jan. 19, 2010 special election to fill the seat of the late Sen. Edward M. Kennedy. Massachusetts voters, among the most liberal in the country, elected Republican Scott Brown based on his oft-repeated promise to deny Mr. Obama a filibuster-proof majority to pass the Affordable Care Act.
Mr. Obama managed to get re-elected in his own right in 2012, albeit by a smaller margin than in 2008, but all three congressional elections ended with voters imposing a strong GOP opposition to hold his agenda in check.
The 2014 midterm, as Wikipedia puts it, “resulted in the largest Republican majority in the entire country in nearly a century.” It was the “most president-centered midterm election in at least 60 years.”
If Mr. Obama was “deeply frustrated,” the reason was the American people’s lack of support for his agenda. And what the Times calls his regulatory strategy would better be described as unbridled rent seeking.
That’s the term economists use for exercising government power to create private gains for political purposes. Consider:
Mr. Obama’s bank policy dramatically consolidated the banking industry, which the government routinely sues for billions of dollars, with the proceeds partly distributed to Democratic activist groups.
His consumer-finance agency manufactured fake evidence of racism against wholesale auto lenders in order to facilitate a billion-dollar shakedown.
His airline policy, urged by labor unions, led to a major-carrier oligopoly, with rising fares and profits.
His FDA is seeking to extinguish small e-cigarette makers for the benefit of Big Tobacco and Big Pharma (whose smoking-cessation franchise is threatened by cheap and relatively safe electronic cigarettes).
His National Labor Relations Board, by undermining the power of independent franchisees, is working to cartelize the fast-food industry for the benefit of organized labor.
We could go on. Mr. Obama’s own Council of Economic Advisers complains about the increasing cartelization of the U.S. economy—as if this were not a natural output of regulation. In a much-noted Harvard Business Review piece this spring, James Bessen, an economist, lawyer and software entrepreneur, cites increased “political rent seeking” to explain the puzzle of rising corporate profits in the absence of job creation and economic growth.
The truth is, government playing neutral arbiter over the private economy doesn’t produce rents. A stable and predictable regulatory system produces only mingy or non-existent rents.
Mr. Obama claims he’s not “interested in regulating just for the sake of regulating.” When has he shown it? For anybody who cares to notice, Mr. Obama’s remarkable political cynicism was apparent years ago when he ginned up divorce-related scandals against his two most-formidable opponents to clear his path to the U.S. Senate. The same cynicism is present in his relentless use of regulation to create winners and losers in American society that Democrats can exploit for fundraising and electioneering purposes.
Tell us again about Donald Trump ’s shortcomings as a truth teller and democrat, as if the difference between Mr. Trump and what went before is not mostly a matter of tact and manner rather than substance.
Mr. Obama wanted to be a “transformational” president like Reagan, but transformational presidents both lead and listen to the public, and they get their mandate through the ballot box. Unilateral regulation is not the way to a meaningful legacy. It invariably degenerates into omnidirectional bureaucratic opportunism, which is the real legacy of Mr. Obama’s “frustration” with the American people.
BUSINESS WORLD
Regulation vs. The American People
The public rejected his agenda—so President Obama opted for ‘bureaucratic bulldozing.’
By
Holman W. Jenkins, Jr.
Aug. 19, 2016 6:20 p.m. ET
Here’s a different interpretation from that of the New York Times on Sunday, which painted President Obama as “deeply frustrated” by a “dysfunctional Congress.” Thus a president who arrived with a “skeptical streak when it came to the value of regulation” was transformed into one who pursued “bureaucratic bulldozing rather than legislative transparency.” Mr Obama, the paper correctly points out, “imposed billions of dollars in new costs on businesses and consumers and “inserted the United States government more deeply into American life.”
Yet while devoting 3,700 words to this subject, the Times never manages to note that, from their first opportunity, voters were sending Mr. Obama Republican congressional majorities to oppose his actions and plans.
The Times forgets that Mr. Obama was practically gifted the presidency by a GOP president whose immediate legacy was a world-wide financial crisis plus an unpopular war. Mr. Obama ran, with deliberate vagueness, on hope and change. All anybody can remember about his campaign health-care plan was that it lacked an individual mandate.
Advertisement
It would be hard to develop any interpretation consistent with reality that didn’t have voters rejecting the Obama agenda as soon as they saw it. The evidence, arriving unusually early in his presidential term, began with the Jan. 19, 2010 special election to fill the seat of the late Sen. Edward M. Kennedy. Massachusetts voters, among the most liberal in the country, elected Republican Scott Brown based on his oft-repeated promise to deny Mr. Obama a filibuster-proof majority to pass the Affordable Care Act.
Mr. Obama managed to get re-elected in his own right in 2012, albeit by a smaller margin than in 2008, but all three congressional elections ended with voters imposing a strong GOP opposition to hold his agenda in check.
The 2014 midterm, as Wikipedia puts it, “resulted in the largest Republican majority in the entire country in nearly a century.” It was the “most president-centered midterm election in at least 60 years.”
If Mr. Obama was “deeply frustrated,” the reason was the American people’s lack of support for his agenda. And what the Times calls his regulatory strategy would better be described as unbridled rent seeking.
That’s the term economists use for exercising government power to create private gains for political purposes. Consider:
Mr. Obama’s bank policy dramatically consolidated the banking industry, which the government routinely sues for billions of dollars, with the proceeds partly distributed to Democratic activist groups.
His consumer-finance agency manufactured fake evidence of racism against wholesale auto lenders in order to facilitate a billion-dollar shakedown.
His airline policy, urged by labor unions, led to a major-carrier oligopoly, with rising fares and profits.
His FDA is seeking to extinguish small e-cigarette makers for the benefit of Big Tobacco and Big Pharma (whose smoking-cessation franchise is threatened by cheap and relatively safe electronic cigarettes).
His National Labor Relations Board, by undermining the power of independent franchisees, is working to cartelize the fast-food industry for the benefit of organized labor.
We could go on. Mr. Obama’s own Council of Economic Advisers complains about the increasing cartelization of the U.S. economy—as if this were not a natural output of regulation. In a much-noted Harvard Business Review piece this spring, James Bessen, an economist, lawyer and software entrepreneur, cites increased “political rent seeking” to explain the puzzle of rising corporate profits in the absence of job creation and economic growth.
The truth is, government playing neutral arbiter over the private economy doesn’t produce rents. A stable and predictable regulatory system produces only mingy or non-existent rents.
Mr. Obama claims he’s not “interested in regulating just for the sake of regulating.” When has he shown it? For anybody who cares to notice, Mr. Obama’s remarkable political cynicism was apparent years ago when he ginned up divorce-related scandals against his two most-formidable opponents to clear his path to the U.S. Senate. The same cynicism is present in his relentless use of regulation to create winners and losers in American society that Democrats can exploit for fundraising and electioneering purposes.
Tell us again about Donald Trump ’s shortcomings as a truth teller and democrat, as if the difference between Mr. Trump and what went before is not mostly a matter of tact and manner rather than substance.
Mr. Obama wanted to be a “transformational” president like Reagan, but transformational presidents both lead and listen to the public, and they get their mandate through the ballot box. Unilateral regulation is not the way to a meaningful legacy. It invariably degenerates into omnidirectional bureaucratic opportunism, which is the real legacy of Mr. Obama’s “frustration” with the American people.
