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Do Regulations Really Kill Jobs Overall? Not So Much

by Marian Wang
ProPublica, Sep. 21, 2011, 10:50 a.m.

It’s become a mantra on Capitol Hill and a rallying cry for industry groups: Get rid of the job-killing regulations. In recent days, with nearly every one of the GOP presidential candidates repeating that refrain, the political echo chamber has grown even louder. Earlier this month, President Obama also asked the Environmental Protection Agency to back off more stringent ozone regulations, citing the "importance of reducing regulatory burdens" during trying economic times.

But is the claim that regulation kills jobs true?

We asked experts, and most told us that while there is relatively little scholarship on the issue, the evidence so far is that the overall effect on jobs is minimal. Regulations do destroy some jobs, but they also create others. Mostly, they just shift jobs within the economy.


"The effects on jobs are negligible. They're not job-creating or job-destroying on average," said Richard Morgenstern, who served in the EPA from the Reagan to Clinton years and is now at Resources for the Future, a nonpartisan think tank.

Almost a decade ago, Morgenstern and some colleagues published research on the effects of regulation [PDF] using 10 years’ worth of Census data on four different polluting industries. They found that when new environmental regulation was applied, higher production costs pushed up prices, resulting in lost sales for businesses and some lost jobs, but the job losses were also offset by new jobs created in pollution abatement.
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Cleaver: If Obama wasn't president, we would be ‘marching on the White House’
By Alicia M. Cohn - 09/18/11 03:48 PM ET

Unhappy members of the Congressional Black Caucus “probably would be marching on the White House” if Obama were not president, according to CBC Chairman Rep. Emanuel Cleaver (D-Mo.).

"If [former President] Bill Clinton had been in the White House and had failed to address this problem, we probably would be marching on the White House," Cleaver told “The Miami Herald” in comments published Sunday. "There is a less-volatile reaction in the CBC because nobody wants to do anything that would empower the people who hate the president."

CBC members have expressed concern in recent months as the unemployment rate has continued to rise amongst African-Americans, pushing for Obama to do more to address the needs of vulnerable communities.

"We’re supportive of the president, but we getting tired, y’all,” Rep. Maxine Waters (D-Calif.) said in August. “We want to give [Obama] every opportunity, but our people are hurting. The unemployment is unconscionable. We don’t know what the strategy is."

Rather than targeting Obama’s leadership, many CBC members aimed their fire at the Tea Party movement over the summer’s congressional recess. Waters said in a public meeting in her district that the Tea Party "can go straight to hell." Another member, Rep. Frederica Wilson (D-Fla.), called the Tea Party “the real enemy” seeking to hold Congress “hostage.”

Rep. Allen West (R-Fla.), the only Republican member of the CBC and also a member of the Tea Party Caucus, objected to hostile language used by members targeting the Tea Party movement and threatened to leave the caucus unless Cleaver condemned remarks made by other members. West singled out comments from Rep. André Carson (D-Ind.), the CBC’s whip, who said that Tea Party-affiliated members of Congress see African-Americans as "second-class citizens" and would be happy to see them "hanging from a tree."

Cleaver persuaded West to remain a member of the caucus, with West indicating later that one reason he decided to stay was that the CBC membership needed a conservative presence.

“I will not be resigning from the Congressional Black Caucus,” West wrote on his Facebook following a meeting with Cleaver at the beginning of September. “Cowards run from challenges, while warriors run to the sound of battle.”

According to West, he is working with Cleaver to produce a plan to confront the rate for unemployment amongst African-Americans, which at 16.7 percent is nearly double the rate nationwide.

Cleaver acknowledged that some of the things members of his caucus say might not be in the best interests of the “aggressive agenda” he said he is seeking to develop as chairman.

“Maxine Waters represents central Los Angeles first and she has to represent her constituents first and she's going to say things in order to represent them,” he said.

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Obama conflicted over Palestine question

Exactly a year ago this week, President Barack Obama stood at the podium at the UN General Assembly and declared his support for a Palestinian state.

“Palestinians will never know the pride and dignity that comes with their own state,” Mr Obama told the general assembly, unless the two parties reached a peace agreement.

So it will be some degree of awkwardness that Mr Obama returns to the UN this week and directs his representatives to vote against a plan that would lead to Palestinians achieving that exact destination, albeit by a different route.

Indeed, the US president will be acutely aware how hypocritical he must appear: voicing support for democratic transitions across the Middle East at the same time as scuppering Palestinian aspirations for recognition. Mr Obama hardly wants to be seen as being on the wrong side of the change sweeping through the Arab world.

Palestinian leaders this week plan to make a bid for full membership of the UN, a move that would officially make it a state, Palestine, on an equal footing with Israel. But the US has explicitly stated that it will use its veto power through the Security Council to block any such move.

Washington has long insisted that the only way to arrive at a Palestinian state is through negotiation and US presidents have long shunned the UN as the vehicle for getting there.

The Palestinians could cut their losses and opt for a lesser goal – becoming a non-voting observer at the UN, the status currently enjoyed by the Vatican. The US could still vote a non-veto “no” in the general assembly but the Palestinians would almost certainly still succeed.

Both are bad options for Mr Obama and either would further diminish the US’s standing the Middle East.

Prince Turki al-Faisal, the former Saudi Arabian ambassador to the US and part of the ruling family, last week warned that an American veto would end the allies’ “special relationship” and would make the US “toxic” in the Arab world.

Blocking the move would also undercut the US’s authority as a genuine mediator in the peace process that Mr Obama has only half-heartedly pursued since taking office.

The peace process broke down last year after a stand-off over Jewish settlements in occupied territories, and even putting aside the wide differences between the two protagonists, prospects remain gloomy.

In Egypt, until this year at peace with Israel and a supporter of the process, protesters attacked the Israeli embassy, forcing the evacuation of the ambassador. Meanwhile in Syria, whose occupied Golan Heights make it a crucial player, the regime has rather more pressing priorities in the shape of a six-month rebellion that will not be quashed.

The chances of protests, particularly in the West Bank, if Palestinians are emboldened by a veto, are not insignificant. Nor are the chances of an offensive response from Israel. The US could further inflame the situation if Congress makes good on its pledge to cut off its $600m in annual aid.

Mr Obama also has domestic political considerations to bear in mind.

With 14 months to go until voters decide whether to give him a second term, the president hardly wants to run afoul of the powerful Jewish lobby in the US and the millions of dollars it has to inject into political campaigns.

For all these reasons, the administration has been trying to make the whole issue go away.

It is trying the full gamut of diplomatic tricks – from sending senior officials to Jerusalem and Ramallah almost as soon as they arrived back from the previous attempt to broker a deal, to issuing rather pessimistic warnings.

Susan Rice, the US ambassador to the UN, put it simply: “What will change in the real world for the Palestinian people,” the day after any vote, she asked. The answer: nothing.

In the days leading up to the expected vote this week, the US will continue to do everything it can to avoid this “train-wreck” scenario, as it is being called in Washington.

Coming up with a fix that both the Israelis and the Palestinians can accept will be difficult – though not impossible, as the ticking clock focuses minds. But the chances are that the Obama administration’s key task this week is going to be damage limitation.

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Lib Activist Physically Assaults GOP Lawmaker in Wisconsin, Media Silent

A known liberal activist that has for months been stalking several Republican lawmakers in Wisconsin, verbally abusing them, has finally crossed the line into a physical attack. So… where is the Old Media to chronicle this assault? Sadly, no where to be seen.

On Sept. 14 left-wing activist Miles Kirstan entered The Inn at 22 S. Carroll Street in Madison, Wisconsin, began to harass some GOP lawmakers patronizing the establishment, and ultimately attacked them, throwing a mug of beer on them.

The Madison Police Department confirmed to the MacIver Institute that the incident occurred and the group found that Republican State Rep. Robin Voss (Burlington) was the main target. Reps. John Nygren (Marinette) and Scott Suder (Abbotsford) were also a victim of the attack.

Kirstan is a well-known face among the extremists that have been railing against the Walker administration over the budget cuts and other legislative efforts.

He’s well enough known that some halfwitted groupies have excitedly delivered their hosannas to him online.

For instance, one young woman named Rachel gushed on tumblr: “I personally know the guy with the microphone in this picture. His name is Miles Kristan and he is a badass motherf**ker. I feel awesome just knowing him.”

If I had fans like that I’d be ashamed.

Of course, Kirstan seems to have no shame, so I doubt he’s much worried about misleading impressionable young girls. He’s been arrested several times during his several years-long campaign as an extremist and activist. Earlier this month, for instance, Kirstan was led away by police from Representative Paul Ryan’s townhall. He was also arrested in August for a driving infraction. Last year he was arrested for trying to disrupt a speech being given by JEB Bush.

Kirstan is not just a Walker-hater, though,. He is also an anti-war activist. It isn’t surprising that he’s dropped his anti-war business to become a member of the anti-walker brigade. Few anti-war activists are much interested in protesting wars during Obama’s presidency, after all. I mean, he has to have something to do while he waits for a Republican to take the White House, ya know?

This stepping up of Kirstan’s violence, though, is not surprising. It shows the increasing desperation of the left in Wisconsin. They went from thinking they had a sure-win issue to one by one losing every effort to destroy Gov. Walker and his party. To such extremists, it is only natural for physical violence to be the next steppingstone in their pathology.

Finally, one has to wonder why this didn’t become a national story? If it was a Tea Party guy throwing a mug of beer at a Democrat lawmaker — no matter when the incident might happen — the news would have this guy, his family, his co workers, his grade school friends, even faux psychologists, talking about the incident for a week solid.

Yet, this uncivil, left-wing troublemaker is ignored.

Gee. Don’t you wonder why that is?

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Obama admin reworked Solyndra loan to favor donor

WASHINGTON — The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.
FILE - In this Aug. 31, 2011, file photo, Solyndra workers leave Solyndra in Fremont, Calif. Newly released emails show that the Obama administration was worried about the financial health of a troubled solar energy company even as officials publicly declared the company in good shape. An email from a White House budget official to a co-worker discussed the likely effect of a default by Solyndra Inc. on President Barack Obama’s re-election campaign. (AP Photo/Paul Sakuma, File)

Administration officials defended the loan restructuring, saying that without an infusion of cash earlier this year, solar panel maker Solyndra Inc. would likely have faced immediate bankruptcy, putting more than 1,000 people out of work.

Even with the federal help, Solyndra filed for Chapter 11 bankruptcy protection earlier this month and laid off its 1,100 employees.

The Fremont, Calif.-based company was the first renewable-energy company to receive a loan guarantee under a stimulus-law program to encourage green energy and was frequently touted by the Obama administration as a model. Obama visited the company's Silicon Valley headquarters last year, and Vice President Joe Biden spoke by satellite at its groundbreaking.

Since then, the implosion of the company and revelations that the administration hurried Office of Management and Budget officials to finish their review of the loan in time for the September 2009 groundbreaking has become an embarrassment for Obama as he sells his new job-creation program around the country.

An Associated Press review of regulatory filings shows that Solyndra was hemorrhaging hundreds of millions of dollars for years before the Obama administration signed off on the original $535 million loan guarantee in September 2009. The company eventually got $528 million.

Given the company's shaky financial condition, Republican lawmakers say the decision to restructure the loan raises questions about whether the administration protected political supporters at taxpayers' expense.

"You should have protected the taxpayers and made some forceful actions here after this analysis," Rep. Cliff Stearns, R-Fla., told a top Energy Department official this week. "Because you should have seen the problems. And you should have said, 'Taxpayers need to be protected and this has got to stop.' "

The loan restructuring is one element congressional investigators are focusing on as they look into the federal loan guarantee Solyndra received under the economic stimulus law.

Under terms of the February loan restructuring, two private investors — Argonaut Ventures I LLC and Madrone Partners LP — stand to be repaid before the U.S. government if the solar company is liquidated. The two firms gave the company a total of $69 million in emergency loans. The loans are the only portion of their investments that have repayment priority above the U.S. government.

Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. The foundation is headed by billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House. Kaiser raised between $50,000 and $100,000 for Obama's 2008 campaign, federal election records show. Kaiser has made at least 16 visits to the president's aides since 2009, according to White House visitor logs.

Madrone Partners is affiliated with the Walton family, descendants of Wal-Mart founder Sam Walton. Rob Walton, the eldest son of Sam Walton, contributed $2,500 last year to the National Republican Congressional Committee.

The AP review also found that officials at Solyndra had been seeking a second round of loans from the Energy Department to expand the company's Silicon Valley headquarters. The request for a second loan was denied.

"We have incurred significant net losses since our inception, including a net loss of $114.1 million in 2007, $232.1 million in 2008 and $119.8 million in the first nine months of fiscal 2009, and we had an accumulated deficit of $505 million at Oct. 3, 2009," the company said in a December 2009 filing to the SEC. "We expect to continue to incur significant operating and net losses and negative cash flow from operations for the foreseeable future."

Energy Department spokesman Damien LaVera said Friday that the company's financial losses were not uncommon for a high-tech startup and were a major reason Solyndra applied for the federal loan. The loan program is intended to help promising companies that cannot receive financing through private banks because of high risk.

Jonathan Silver, executive director of the Energy Department's loan program, said DOE officials faced a stark choice late last year and early this year: Refuse to allow the loan restructuring, "thereby ensuring that Solyndra would close its doors immediately" or allow the company to accept emergency financing, "thereby giving it and its almost 1,000 workers a fighting chance at success, and the government a higher expected recovery on its loan."

The decision by Energy Secretary Steven Chu was not an easy one, Silver told the House Energy and Commerce Committee, but appeared to be the right action at the time.

"Without DOE's agreement to restructure Solyndra's loan, the company likely would have faced bankruptcy much earlier — in December 2010" or soon after, Silver said. "Restructuring gave them a fighting chance to compete and succeed, and kept approximately 1,000 workers from losing their jobs."

Republicans were not impressed.

"If their model was weak to begin with, and then the market gets worse, doesn't that mean that maybe we should have just not thrown good money after bad?" asked Rep. Morgan Griffith, R-Va. "Because now we're in a worse position in the bankruptcy courts to get our money back."

GOP presidential candidate Michele Bachmann called the Solyndra loan an example of "crony capitalism" that benefited political donors.

"It's wrong to abuse executive authority with unilateral actions" Bachmann said at a campaign event Friday in California. "And of course the other problem with Solyndra is the fact that it appears there was crony capitalism, that there were political donors that benefited by this $535 million loan."

Newly released emails show the White House was worried about the likely effect of a default by Solyndra on Obama's re-election campaign.

"The optics of a Solyndra default will be bad," an OMB official wrote in a Jan. 31 email to a colleague. "The timing will likely coincide with the 2012 campaign season heating up."

The budget official, whose name is blacked out in the email, wondered whether Solyndra should be allowed to restructure its loan.

"Questions will be asked as to why the administration made a bad investment, not just once (which could hopefully be explained as part of the challenge of supporting innovative technologies), but twice (which could easily be portrayed as bad judgment, or worse)," the email says.