By Thomas Belesis
An overly regulated environment is creating uncertainty — and uncertainty is perhaps the greatest obstacle for investing and hiring. The administration hastily introduced the 2,300 page Dodd Frank Wall Street Reform and Consumer Protection Act in the depths of the recession without fully understanding and studying the potential consequences of such unprecedented legislation.
To put the Dodd Frank bill in perspective, it is ten times the length of the Sarbanes-Oxley Act (66 pages) and the Gramm-Leach-Bliley Act (145 pages) combined. While a moderate level of regulation is necessary in large and vital sectors of the economy such as finance, housing, and healthcare, regulation is not the solution to the current economic problems that face the United States.
The administration must stop demonizing banks — as if they are not vital to the growth of credit and new business formation — and consider a moratorium on new regulations, an idea made popular by Presidential candidate Texas Governor Rick Perry.
Liberal democrats have suggested that such a moratorium would lead to anarchy and a repeat of the 2008 financial crisis. Implicit in such a claim is the belief that the federal government is able to foresee, predict and mitigate the risks of the next financial catastrophe. However, the Dodd Frank bill overreaches in its scope and is a catch-all for the specific and unique circumstances that led to our subprime mortgage-related financial crisis. This knee-jerk overreaction by the current administration, coupled with its anti-business rhetoric and its position on taxes, is creating the uncertainty in the financial sector and business community, which is hampering our economic recovery.
Furthermore, Perry’s call-to-action has been misconstrued by the liberal left as a proposal for an absolute repeal of all current regulation. Such irrational fear-mongering is unnecessary; Perry and like-minded conservatives are simply asking for an overdue hiatus on introducing new regulations.
For example, last month a bill was introduced by Republican Senator Ron Johnson that called for a moratorium on burdensome regulation until the unemployment rate falls below 7.7%, or the rate at which it stood before Obama took office.
The bill, co-sponsored by 19 Republican senators, makes an example of the EPA’s MACT rule that could cost $20.7 billion and threaten 338,000 jobs.
At a time when we need businesses to allocate their capital towards hiring people and investing in new facilities and technologies, they are spending their budgets on figuring out how the new regulations will affect their business.
There is no sound argument for anarchy and for no regulation. But for a liberal party that prides itself on fact-based arguments, calm-headed thinking, and most importantly science, their blind support of overregulation seems negligent and irresponsible and is killing our country.
Thomas Belesis is CEO of John Thomas Financial. He is Co-Chairman of the New York State Republican Finance Committee and a member of the Executive Board of the World Energy Forum at the United Nations. He is a frequent contributor on the FOX Business network. The views expressed in this article are only the opinions of Thomas Belesis and are not necessarily the views of John Thomas Financial.