Tuesday, January 18, 2011

A "smart regulation" point of interest 

President Obama needed the Wall Street Journal this morning. He published an op-ed piece that called for a more sensible approach to regulation, and he obviously wanted to bask in the Journal's brand equity -- no other publication reaches so many corporate tools, and no other really big media outlet has such a pro-business editorial attitude. Bloggers have been having a field day.

It is curious that the president chose the Food and Drug Administration as the object of his first anecdote, to wit:

But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb.

For instance, the FDA has long considered saccharin, the artificial sweetener, safe for people to consume. Yet for years, the EPA made companies treat saccharin like other dangerous chemicals. Well, if it goes in your coffee, it is not hazardous waste. The EPA wisely eliminated this rule last month.

President Obama sees this as an example of wisdom in regulatory reform. Normal people are aghast, even agog, that the federal government regarded saccharin as a "hazardous waste" in the first place. Barack Obama missed the perfect opportunity to admit to some normality, if that were his inclination.

President Obama's op-ed comes on the same day as the release of a new report from PWC, the largest public accounting firm in the world (and, I should say, the auditor of the TigerHawk Employer's financial statements), the gist of which is that the United States is losing its competitive edge in medical technology. One of the reasons, according to the press coverage:
The report also touches on increasing demands placed on U.S. med-tech companies by the Food and Drug Administration, which regulates the industry. In this area, France, Germany and the United Kingdom rank higher than the United States because they "provide more supportive regulatory processes that encourage innovation yet ensure safety and effectiveness on a timely basis."

Ain't that the truth. When your regulation is more anti-innovation than the French, you know the pendulum has swung too far. Of course, Barack Obama will never confess that the new, er, "diligence" of the FDA toward medical devices is a policy of his appointees and his administration. In addition to a general antipathy toward enterprise, the health care "reformers" that drive Obama administration policy in the field believe that innovation in medical technology drives cost. Which, of course, is bad.

All that said, I wish that the president would stop catering to the Fortune 500 tools. These are not the companies that innovate. They don't create a lot of American jobs in the long run, they are big enough to lobby for legislation to protect their entrenched businesses, their CEOs consort with politicians partly for the fun of it, and they are in general willing and inevitable participants in the government-corporate complex. If President Obama really wants to motivate business, he will start paying attention to the next several thousand companies, which are the real engine of growth and innovation in the great American prosperity machine.


By Blogger JPMcT, at Tue Jan 18, 07:59:00 PM:

Lipstick on a pig.

If he were on the Titanic, he'd be wearing a dress.  

By Blogger Stephen, at Tue Jan 18, 09:54:00 PM:

Let me guess. He'll call for a bipartisan task force to recommend 'sensible' regulatory reform. I wonder if he really believes the old magic will return.  

By Anonymous Anonymous, at Wed Jan 19, 02:58:00 AM:

wow! so prezbo really *is* a pragmatist, despite what all the whacko rightwing conspiracy nuts say! he wants to streamline regulations! end silly regs! get things moving again! in other words, give preference to americans and business over the governing and regulatory class.


and in 1993, al gore was gonna spearhead the revolutionary mission to "reinvent government", making it smaller, leaner, more efficient and more user-friendly to its bosses, the american people. remember? how'd that one end up? . like magicians and 3-card monte dealers, boys: don't listen to what they say, **watch their hands**. i'll, uh, believe it when i sees it, thanks.  

By Blogger Don Cox, at Wed Jan 19, 04:54:00 AM:

You are right that it is the smaller companies that drive the economy long term. Once a company gets too big, it develops all the problems of bureaucracy and internal politics that we see in government.

But it would not be good if the government started "paying attention" to smaller companies. It would be best if these companies were ignored by government.  

By Anonymous Anonymous, at Wed Jan 19, 06:26:00 AM:

And so it begins in earnest, his reelection effort I mean, but he is such a believer in "messaging" that the President confuses this current campaign for policy that will impress business owners. I shouldn't complain; after all, at similar economic crossroads his co-ideologues of the past have usually responded by rounding up kulaks like me. From this President, lame executive orders are lots better than orders with teeth.  

By Blogger TigerHawk, at Wed Jan 19, 07:18:00 AM:

@Don, I agree, and chose my words poorly. Rather, I should have said that the president should start "listening too" the smaller companies. For example, the incremental cost of rewriting our entire proxy statement this year to accommodate the Democrats' notions of good corporate governance is going to run well in to six figures and consume a few hundred hours of executive time. Our costs in this project are probably not materially lower than, say, General Electric's, but it is obviously a much greater burden on us. For us, about $250,000 alters our financial results by about 1 cent a share, on average, so a higher cost for a new proxy statement quite directly will result in us spending less money somewhere else, probably by not hiring somebody at the margin (since less hiring is the most straightforward way to spend less).  

By Blogger TigerHawk, at Wed Jan 19, 07:19:00 AM:

Uh, "listening to," but you got my point.  

By Anonymous SongDog, at Wed Jan 19, 11:12:00 AM:

I differ a bit over the big corporate boys. They may well be able to protect themselves, but will they protect us? Much of what we consume comes from the likes of GM, GE and Exxon. They are too easily made to be tax collectors and social policy enforcers for the feds and even the states.  

By Anonymous Ignoramus, at Wed Jan 19, 12:38:00 PM:

Seriously, this is a big bad joke.

Sometimes Obama just likes to fuck with us ... because he can.

Just like how a tax on tanning salons was included in ObamaCare. Obama, Michelle and Valerie still get a laugh out of that one.  

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