Wednesday, August 31, 2011


“It’s a strange way to respond to rising gas prices"
-Senate Minority Leader Mitch McConnell (R-KY)

Every presidential election I repeat the same complaint: they all run on what they would do if they could mind control congress rather than as president. Presidents cannot pass legislation or create new law, so any promise, platform, or idea based on that is for congress, not the president do decide.

To be sure, the president has some power initially based on his popularity and the mood of the country to get some things done in congress. For the first year or so, congress plays along with the president, at least if they are the same party. But they do so out of willing agreement, not because he has any power to compel them.

However, that's not to say they president can't do anything. Michelle Bachman recently claimed that elected, she'd get gas prices down to $2 a gallon, something we haven't seen since 2009. A lot of commentators mocked her for that, but the truth is, the president could do an awful lot to help that happen.

For instance, President Obama after the Deepwater Horizon oil leak effectively banned all drilling in the Gulf of Mexico. As soon as he took office, the president immediately reversed a Bush decision to allow drilling for oil in much of the US. The president also has canceled many drilling permits, has slowed the process of getting new ones (something even President Clinton called "ridiculous"), and while some exploratory drilling has been allowed, the president continues to block new production.

Meanwhile, the agencies and various governing bodies of the executive department under the president are following through on his policies by making business in general, but energy production in particular, more difficult. Its virtually impossible to get a new permit to drill for oil - Senator McConnell claims its easier to get a heart transplant than a new coal permit. In some states have already imposed an effective cap and trade scheme which raises costs for energy production and proposed pollution rules would make refining and other energy production even more expensive. All of which raises fuel prices.

Now, a lot of the gas price problem is out of the president's hands, such as turmoil in the middle east, legislation, and disasters that slow production. But there is a lot he can and is doing to make prices go up - and by contrast would make them go down if reversed. Down to $2 a gallon? Who knows, but when President Bush announced he'd allow more drilling in 2008, gas prices plummeted.

Gas prices aren't the only thing the president directly affects. Businesses are very skittish about the future because of the behavior of Democrats in congress (particularly the Government Health Insurance Takeover Act, which no one knows the full impact of, only that it will raise costs for business). But they're made even more skittish by the antics of the regulatory agencies under the president. Every few weeks another regulation is announced that will cost even more money to do business.

Just this week, the president announced seven new rules that businesses estimate would cost more than a billion dollars a year to comply with. I've written several times about various regulations and their burden on business, and its hard to keep up with all that's being piled on.

President Obama promised, several times, that he'd drive energy prices up and shut down coal production, and he's doing his best to make that happen. As a result, unsurprisingly, energy prices are going up. Food prices are going up. Transportation prices are going up. And the result is that businesses are struggling, have to raise prices, and are not hiring.

Business sees this as incredibly hostile and destructive to the economy. They don't trust congress, and they know that they cannot trust the president. As a result, the mood of the country follows and the president of the united states is single handedly slowing business and damaging the economy through attitude and action. In essence, the president is a one-man stagflation machine through executive order and regulatory changes.

In other words, jump starting the economy could be as simple as a new president. Replacing President Obama would send a signal that things are different and we have a change that will make the climate less hostile. Reversing the hundreds of new, onerous and damaging regulations that President Obama's administration has shackled business with would make a tremendous difference as well.

There are things the president can and must do to reverse this course, create growth, and get people jobs. They aren't things that a Democrat would attempt - new spending won't help, new laws won't help, and top-down control will not help. But they can be done. Getting government off the back of entrepreneurs and businessmen would make a tremendous difference.

Right now, the economic mood in the US is like an overburdened horse being loaded up with more stuff, then the owner beating the horse for slowing down. They're blaming the horse when they're the ones making this happen.

What I'd like to see is better evidence that at least one of the GOP candidates understands this. Its fine and dandy to wave the constitution around and complain about debt, its great to see them make noises about cutting spending, but that's not going to do the job. They have to make it clear that they understand what's causing the problem and commit themselves to fixing it.

1 comment:

Philip said...

Surely you mean "harder to get a coal permit than a heart transplant"?

But your point is understood