Government on the Backs of the People

Vast numbers of Americans are angry at the U.S. Government. Even more are frustrated by it. In total in September 2013, some 77 percent of all Americans report being either angry or frustrated at the Government (www.people-press.org). And that was before the screw ups with the Affordable Care Act.

One explanation for this extraordinary level of hostility is the uncertainty and confusion created by a vast new array of government rules and regulations and uncertainty over new regulations yet to be formulated. Another source of hostility is vast uncertainties created by the DC political paralysis, the government shutdown, and the fear of the still-to-come budget debates. Vince Reinhart, chief U.S. economist at Morgan Stanley reported that 40% of companies he surveyed in July, 2013 blamed the fiscal cliff for their spending restraint. Still other explanations vary from the slow economic recovery, the high levels of unemployment, the perception that Obama is a weak leader, and, perhaps, from racism, the one can of worms that neither Republicans nor Democrats and certainly not the President want to open.

Bloomberg has presented an analysis which supports the punishing effects of government rules and regulations on small business, in particular.

(http://www.bloomberg.com/news/2011-10-25/obama-wrote-5-fewer-rules-than-bush-while-costing-business.html)

What is especially noteworthy in the Bloomberg chart is the percentage of small businesses challenged by regulatory change. Their dismay could only have worsened with President Obama’s second term. (It is, of course, noteworthy that small businesses were apparently even more dismayed over the years of George H. W. Bush’s Presidency.)

Another way to approach this question is through the Federal Register.

The Federal Register was established in 1935 by President Roosevelt as a comprehensive record of the activities of the Executive branch of the U.S. government. As such, it contains a complete record of rules and regulations and notices issued by the Executive as well executive orders and other Presidential documents.

The first issue, of March 14, 1936, contained 2,620 pages.

The number of pages climbed steadily until it reached 73,258 pages in 1980. President Ronald Reagan immediately began slashing rules and regulations and got the number of pages in the Register down to 44,812 in 1986.

By 2000, the number of pages had gone back to far more than 74,000, into record territory. The number of pages then steadily increased to over 81,000 in 2010 and hovered there ever since.

(https://www.federalregister.gov/uploads/2013/05/FR-Pages-published.pdf)

The Federal Register indicates the complexities of the federal government’s requirements for the American people. As such, 80,000 plus pages or rules, regulations, and notices,  generated every year, is a burden that the American people, by and large, would like to lift.

Appendix:

The latest issue of The Economist presents two relevant charts. One is “Eroding Trust in Government” that shows that Americans’ confidence in government was below the OECD average in 2007 and has falled further below that average in 2012. http://www.economist.com/news/international/21589902-confidence-crumbles

A second article, “How Economic Uncertainty Dulls Investment” relates more directly to this IPE.

http://www.economist.com/news/finance-and-economics/21589859-how-economic-uncertainty-dulls-investment-holding-tomorrow

Marvin Zonis is Professor Emeritus at the Booth School of Business, the University of Chicago and can be reached at marvin.zonis@chicagobooth.edu.