The Faulty Logic of Jeb Bush’s Anti-Regulation Argument
September 23, 2015
By Eric Harris Bernstein
In today’s Wall Street Journal, Jeb Bush makes the blockbuster claim that “regulations impose a $1.88 trillion silent tax on the U.S. economy each year.” That, he points out, averages out to $15,000 per family.
The startling figure comes from a report from the Competitive Enterprise Institute, which suggests that federal regulations represent a crippling impediment to growth. But before too many readers start picketing the FDA, let’s make sure the math checks out.
Why are we suspicious? Well, for starters, here is a verbatim quote from the report:
WARNING: Estimates herein will exhibit laissez-faire bias, adding of apples and oranges, use of both compliance and economic cost, haphazard distinctions between consumer and employer impacts, consideration of economic transfers as well as compliance and efficiency costs, use of both high-end estimates and best-estimates, old data set syndrome, and a disdain for general equilibrium analysis.
As if that were not enough, a 2013 Washington Post article that listed some key CEI donors can be matched nearly industry-by-industry to the sectors their report finds to be some of the hardest hit by regulation. These are the same sectors that Bush singles out for mention in his op-ed: energy, agriculture, and communications.
He seeks to argue, once again, that government intervention only obstructs the free market and general well-being when, in reality, government rules not only serve to protect Americans, but also, in fact, create the market.
The study Bush cites, which elucidates his thinking on these issues, treats all regulations as costs, with no consideration for the enormous benefits they provide.
It is clear that neither Bush nor the authors of the CEI study performed any such analysis: Included in this estimate and in Bush’s op-ed are the cost of compliance on gender pay equity laws, anti-insurance discrimination rules, protections from toxic and risky financial products, and environmental standards that limit emissions and ensure safe drinking water. These are protections Americans need to remain physically and economically healthy.