Category Archives: Economic Growth

10 Regulatory Recommendations for Trump Administration

IFL

Though discussed for many years, it is only in the last decade that regulatory impacts have been seen by the mainstream political establishment as a driving factor in the health of the US economy—impacting our jobs, our competitiveness, and a host of other societal concerns (including the vitality of the middle class).  10 Regulatory Recommendations for the Trump Admin are some of the Institute for Liberty’s recommendations on the issue, and we offer them with one important caveat: There are no silver bullets when it comes to reducing regulatory costs! Regulatory costs have grown steadily since 1970 (though those costs have accelerated since 2007), and while many focus on so-called “major rules” (costing the economy $100 million or more annually), the bulk of regulatory burdens come from the cumulative effect of much-smaller mandates. Evidence shows that by even making modest changes in regulatory costs, massive economic gains can be had. But regardless of whether these changes are minor or major, regulatory reform must be an essential element of the incoming administration’s economic policies if they want to jump-start the economy and put Americans back to work.

These recommendations cover a wide range of tools that the incoming administration can utilize to have a fundamental impact on the regulatory state.

No Philly Grocery Tax

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ProGrowthCoalition_NoPhillyTax

More than a dozen national pro-growth, pro-job, free-market advocates have released a coalition letter asking the Philadelphia City Council to oppose Mayor Jim Kenney’s plan to impose a 3 cents-per-ounce tax on more than 1,000 beverages—the Philly Grocery Tax. The proposed Philadelphia-only tax will—as former Governor Ed Rendell made clear—unfairly hurt the city’s poorest residents while its wealthiest citizens will be able to avoid the tax altogether.

Media contact: Jerry Rogers 202.302.9783 / Jerry@capallies.com

Jerry Rogers is the founder of Capitol Allies, an independent, nonpartisan effort that promotes free enterprise, and he’s the co-host of  The LangerCast on the RELM Network.

 

Puerto Rico Wants a Great Big Fat… Bailout

By Jerry Rogers

for TownHall

Puerto Rico’s massive welfare state and excessive spending has put it in an economic state worse than Greece. This small island has an enormous problem—$72 billion in bond debt and more than $50 billion in retiree obligations. What’s worse is that the Puerto Rican government doesn’t seem to be serious about reform. Pedro Pierluisi, the island’s nonvoting member of Congress, has sponsored legislation—H.R. 870—to extend Puerto Rico Chapter 9 bankruptcy protection.

The Associated Press reported that “the White House threw cold water Monday on the notion of bailing out Puerto Rico from its financial crisis, instead urging Congress to consider changing the law so the island can declare bankruptcy.” Of course, this is typical Washington doublespeak because bankruptcy protection—H.R. 870—would be a federal bailout by other means.

Puerto Rico, as a commonwealth, does not have the legal authority to file for bankruptcy. Some in Congress—mostly Democrats, but some Republicans, too—are seriously considering H.R. 870 as a backdoor bailout.

What happens when you run out of other people’s money? Well, if you’re the Democratic Governor of Puerto Rico, you demand a bailout, and for others to “share the sacrifice.” Governor Alejandro García Padilla told the New York Times earlier this week that Puerto Rico’s debt “is not payable. There is no other option.” Padilla would love to find “an easier option,” as he swears, “this is not politics, this is math.”

Not politics? Padilla is engaging in the worst kind of politics in which political elites insist that taxpayers pay for their failure. Puerto Rico’s debt crisis is the result of years of big government run amok. Over the past decade, liberal politicians in San Juan engaged in profligate spending and borrowing to cover the costs of everything from welfare to pensions to government services. Progressive policies that saw the public-sector debt grow as the economy shrank. Not politics, but math? Then why are public-sector salaries more than 90 percent higher than salaries in the private sector? Why not cut spending to pay your bills? Because Padilla has promised not to lay off government workers—two-thirds of Puerto Rico’s budget is payroll, and it’s off the table.

Puerto Rico’s political elites refuse to do what is necessary to create economic growth. Changing the nation’s bankruptcy laws to give them a special exemption is wrong. It’s a form of cronyism—politicians in Washington doing favors for politicians in San Juan. It’s letting them off the hook; absolving them of their responsibilities. The political elites in Puerto Rico have implemented anti-growth excise taxes on job creators while crippling the island’s economy with chronic spending on welfare subsidies and an ever-expanding public sector. The government employs more than a quarter of the island’s workforce, and its labor force participation rate—40.6 percent— is the lowest in the Western Hemisphere. More than half the population is not working. Why work if welfare pays more than a job?

So Padilla, Pierluisi, and the island’s political establishment are asking their friends in Washington for a favor. Their plea for Chapter 9 bankruptcy is gaining momentum as the political class looks to protect itself.

The bailout bill—H.R. 870—does not require any meaningful, market-based reforms. It’s a “get out of jail free” card for Puerto Rico’s political elites and their failed statist policies. Chapter 9 is not a solution, but rather, at best, a temporary fix. And, Chapter 9 might not be a fix at all. Bankruptcy procedures can take months or years to work through the system. H.R. 870 is a bad bill. What’s needed is a radical change of less spending, regulating, and taxing.

Americans are tired of bailouts and boondoggles—TARP, Solyndra, General Motors, the ObamaCare rollout. Let’s not add failed governments and political elites to the list. Americans don’t want a “Great Big Fat” bailout for Puerto Rico. We don’t want our very own Greek island.

Carter Redux

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Jimmy Carter Redux?

By Jerry Rogers

In his speech at Northwestern University last week, the president touted—as good news—the unemployment rate. He said that “by every economic measure, we are better off now than we were when I took office.”

By every economic measure, we are better off?

We know from the September Jobs Report that the unemployment rate has fallen to 5.9 percent. However, if you’re like most American workers, your earnings have declined or remained flat. Household income—for most Americans—is lower today than it was five years ago when the great recession officially ended.

Why?

Behind the rosy headlines celebrating the “rebounding” economy and the “reassuring” news of falling unemployment is the gloomy truth that the labor-force participation rate remains shockingly low—1970s, Jimmy Carter low. Earnings are stagnant because we have a surplus of workers sitting on the sidelines.

As I said here yesterday, the unemployment rate dropped because more people simply gave up looking for jobs. President Obama is failing as dramatically as did Jimmy Carter. The last time the labor force participation rate fell to 62.7 percent (today’s level) was during the Carter malaise in 1978. Let’s leave the late-70s behind us, and build an economy for the 21st Century.

Policy-makers need to pass meaningful market-based reforms that will liberate entrepreneurs from taxes and costly, job-killing regulations. The health of America’s economy depends on start-ups and new businesses being able to obtain capital, expand research, and grow into public companies that can hire people while bringing new products to market.

We can do better, and I’ll be exploring how at the CapAllies Post as we lead up to the midterm elections. Stay tuned.

Jerry Rogers is vice president at the Institute for Liberty and the founder of Capitol Allies, an independent, nonpartisan effort that promotes entrepreneurship, economic growth, and free enterprise

 

A Total Collapse in the Labor Force Participation Rate

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5.9% versus 62.7%: The Spin versus the Truth

By Jerry Rogers

At Northwestern University last week, President Obama said we are better off than we were six years ago; and the September Jobs Report—at first glance—supports the President’s assertion. With 248,000 new jobs added to the economy, things appear to be on the upswing.

However, while the keepers of conventional wisdom celebrate the 5.9 percent unemployment rate, the economy continues to sputter. The pundits gladly report on the 248,000 Americans who found jobs—good news! What they’re not reporting is the disturbing news of more than 300,000 Americans who have quit the work force; people who have given up and dropped out.

The unemployment rate dropped because more people simply gave up looking for jobs. The labor force participation rate in September fell to 62.7 percent, a level not seen since 1978. 92.6 million Americans are not participating in the work force!

Too many Americans are still working jobs for which they are overqualified, and wages are still lagging behind the rising costs for housing, healthcare, education, groceries, and energy. More than 500,000 full-time jobs have been replaced by 800,000 part-time jobs since the great recession, the highest increase in part-time employment since 1993.

More than five years after the recession ended, we’re still living in a feeble economy.

 

Jerry Rogers is vice president at the Institute for Liberty and the founder of Capitol Allies, an independent, nonpartisan effort that promotes entrepreneurship, economic growth, and free enterprise.