Elections 2012: More Government Intervention Ahead

by: Harold Fredrick

As I chronicled in my first article for Seeking Alpha, 85% of small business owners see the government as a threat to their businesses. According to Gallup, nearly half of Americans view the federal government as an “immediate threat” to their prosperity.

Many Americans correctly recognize the threat of government regulation to our economy. However, many Americans incorrectly believe that a regime change in Washington would eliminate that threat.

U.S. Presidents from both the Republican and Democrat parties have presided over regulatory agencies that have significantly impeded commerce in this country. Some highlights from the past five administrations:

  • The EPA’s Clean Air Act Amendments of 1990, codified during the George H. Bush administration, encouraged higher utility taxes and laid the groundwork for cap-and-trade legislation and alternative energy subsidies.

  • President Clinton’s Administrator to the EPA, Carol Browner, began the policy of creating regulations without consideration of costs to businesses or the economy. This policy was upheld by the Supreme Court in 2001 and has been continued through the Bush and Obama administrations.

  • The Obama Administration’s FDA recently recently banned asthma inhalers on environmental grounds. The ban is part of an international treaty signed in 1987 by President Reagan.

Here is a graphical depiction of the growing threat of regulation to business during this generation of presidents. Notice that the trend has continued regardless of party control of the White House: (Click to enlarge)


Many people incorrectly believe that a defeat of President Obama would lead to a more business-friendly regulatory environment. These people fail to recognize two important points: 1) No President has the constitutional authority to micro-manage any government agency, and 2) The number of government regulations always grows. Few regulations are ever rolled back.

Expect more government intervention in the economy no matter who wins next year.

Note: Capitalism lost a true visionary today in Steve Jobs. I can only hope that there will be other business leaders as great as he.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.