The Economist Recycles Old Right-Wing Ideas to Gut Public Protections

Comment are off

By Rena Steinzor, reprinted with permission from the Center For Progressive Reform

The Economist’s February 18 edition offers a cover package of five articles on “Over-regulated America” (1, 2, 3, 4, 5). Our British friends want you to know there’s a problem here in the States that needs fixing:

A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.

You can almost feel The Economist’s pain: the jobless rate should be a lot higher than it is, if the premise about the costs of regulations is correct. Surely if the regulatory burden were

photo by jritch77 via flickr

actually 12 percent of GDP – that’s what the SBA numbers say, if you draw them out – things would be far worse than they are. Ideologically unable to consider the obvious alternative – that regulations don’t add $10,585 in costs per employee, The Economist, just, well, “wonders” aloud.

Here’s what The Economist would have found if they’d dug just a little bit: Fully 70 percent of the SBA estimate was actually based on a regression analysis using opinion polling data on perceived regulatory climate across countries (in a strange twist, a separate article in the same issue actually questions the study, briefly). Whole reports have been written on why that number is bogus.

Our economy is still recovering from a tremendous collapse largely caused by under-regulation of financial institutions. But in its group of articles, The Economist wants us to think the opposite: “The home of laissez-faire is being suffocated by excessive and badly written regulation.” That premise, in turn, leads the magazine to – you guessed it – a series of warmed-over right-wing policy ideas aimed at gutting regulations. Let’s take a closer look.

Read the full story here.