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White House to eliminate redundant regulations

The White House is seen in Washington, D.C.

Jeremy Hobson: Here in the U.S., the White House will reveal today to streamline federal regulations for businesses. According to an op-ed in this morning's Wall Street Journal, the White House will eliminate rules to save businesses billions of dollars over the next five years.

Marketplace's Nancy Marshall Genzer joins us now, live from Washington with more. Good morning.

Nancy Marshall Genzer: Good morning, Jeremy.

Hobson: So Nancy, give us the details first -- what is the White House planning to do?

Marshall-Genzer: Well, the Obama administration says more than two dozen federal agencies have found regulations that are redundant or unnecessary, and could be scrapped. The White House actually started this process with an executive order back in January. And President Obama has already talked about some of the most obvious examples of unnecessary rules -- things like not making gas stations install valves on pumps to keep gas vapors from escaping, because there's already technology on cars that does exactly the same thing. Also, the Environmental Protection Agency is allowing more paperwork to be filed electronically. The Department of Homeland Security is going to expedite clearance of low-risk travelers through security at airports. And the Transportation Department will only apply certain railroad safety rules where they're actually needed... imagine that, Jeremy.

Hobson: Some people have been saying that getting rid of rules is going to help business help hire workers. Is that likely to be the case?

Marshall Genzer: Hard to say, because there are a lot of reasons companies aren't hiring right now. And some business groups say they're more concerned about new regulations from the health care and financial reform laws. The National Association of Manufacturers says regulations from those new laws are actually more of a threat to job creation and competitiveness.

Hobson: Marketplace's Nancy Marshall Genzer in Washington. Thanks, Nancy.

Marshall Genzer: You're welcome.

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@Ron, Speaking hypothetically- I wouldn't take $1 per hour if it meant giving up my unemployment benefits that are quite a bit higher than that, giving up my food stamps, and giving up an interest free loan to pay my mortgage. I hadn't brought up the minimum wage regulations, but they too are part of the problem. I don't think the market price is as low as $1/hour even for the most unskilled of labor. But people need to be able to legally work these kinds of jobs so that they can aquire skills that will enable them to increase their productivity and command higher wages. We used o have this thing called an apprenticeship where you got paid with knowledge only. Also part of the problem is that these bottom rung jobs are already filled by people here illegally that don't have the option of getting benefits from the state for sitting on their sofa and watching daytime TV.

I have to call BS on the assertion by Elson that the lack of consumer demand is only partly to blame for the slow growth of the economy. So is he telling us that if a company has demand for its product, it wouldn't hire more employees to meet that demand because of regulations like Dodd-Frank or "uncertainty"? It would leave profit on the table? Baloney.

@JayJay, you are correct that the minimum wage regulation is probably preventing companies from hiring at the wage price equilibrium point of supply and demand for labor. But would you work for $1 an hour which is probably where that equilibrium point is? I don't think requiring $7.25 an hour is the main force in slow economic growth and high unemployment.

I was shocked at the biased, highly inflammatory, and largely untrue remarks made by Charles M. Elson in the interview conducted by Jeremy Hobson on this morning's show. Professor Elson did not provide explanations about corporate regulation under the Obama administration but rather attacked the administration as a partisan. I cannot believe that the Marketplace producers did their homework on Mr. Elson before allowing Mr. Hobson to discuss government regulation with him. If you had you would have discovered that Elson's academic position is severely tainted by numerous corporate positions that undermine any claim he can make to objectivity. It appears that his "academic" post allows him to shill for the numerous corporate interests that he actually represents. The Businessweek website provides, in its biography of Elson, his many links to corporate America: "He has been Director of Alderwoods Group Inc., a health care services provider, since January 2, 2002. He has been an Independent Director of Healthsouth Corp. since September 9, 2004. Prof. Elson has been a Director of Gyrus ACMI, Inc. (formerly Circon Corporation), a medical products manufacturer since 1997. He serves as a Director of Nuevo Energy Co., since 1998. Prof. Elson serves as a Director of Sunbeam Corporation and Sunbeam Products, Inc. He serves as Member of Governance Leadership Council of RiskMetrics Group, Inc. He served as an Independent Director of AutoZone Inc., an automobile parts retailer, from 2000 to December 17, 2008." Mr. Hobson did not point out any of these connections, instead introducing Elson as an academic with no pretensions to partisanship. Shame on you Marketplace for allowing such one-sided rhetoric to pollute the public radio airwaves.

@Frank- I'll explain the correlation bewteen regulation and jobs. When an employer is subjected to additional costs such as manadated benefits or special legal liability it raises his costs to employ an american worker. Labor and capital are interchangeable. So as the cost per employee ar raised, he will consider investing in labor saving capital equipment or offshoring that labor. So the higher the per employee cost, the more viable the substitutes become. Additional example: When you groups of unrelated people into so called "protected classes" you subject any employeer dumb enough to hire of the members of that group subject to additional legal liability. You take employers with no particular bias and give them a very particular profit motive to discriminate. The very people that the new regulation were supposed to protect, end up being penalized. Another example: When labor, or any commodity is in surplus, the price should fall, and this in turn brings on more demand at the lower price to utilize that commodity. Our labor market is in surplus, but regulation prevents the price from falling that would in turn bring on more demand for labor. The market is rendered illiquid by virtue of the regulations that make it hard to hire and fire people. The net result is unemployment. We have people with jobs earning more than market rate, and a bunch of other people earning nothing at all. We give the unemployed money and benefits that they must give up if they accept a job, and this raises the bar on what a job must provide before they'd willingly accept it.

I too, came here to review the comments of Prof. Elson. Where are they? His remark that the Administrations regulations and planned cuts are not going to help corporate profits was infuriating. We are we still still peddling the lie that corporate profits equal jobs? Apple just passed the oil companies in profits and not only are their products manufactures over seas, their new profit achievement comes in the same year that Apple factory workers were committing suicide.
Oil Companies and Airlines made record profits this year and neither of those industries are hiring. United is turing those profits around to cater further to the rich by making first class even more comfortable. Businesses that cater to the elite are thriving, making the paltry sum the rest of have to spend even less desirable to business.
Try to keep in mind that those of us without 401k plans or stocks or jobs are also listening and very often lately, you sound like Marie Antoinette.

Why is the very articulate expert on regulation that was interviewed at the end of the program mysteriously missing from this transcript and from this audio? To hear him again is why I went to your website. Please supply an answer.

I grew up in Delaware so it's quite painful to learn that the state's flagship university teaches voodoo economics.

Not only did Prof. Charles Ellson spout counterfactual nonsense that the Obama administration imposes heavy regulation — it doesn't, it's policies are very close to to those of the G.W. Bush administration — he then went on to tell us to believe in the confidence fairy.

If Prof. Ellson's is the kind of nonfactual and superstitious claptrap that is being taught in the economics department, one wonders if the U. of D. has a Department of Alchemy teaching how to convert lead into gold and an Astrology Department teaching how to plan for the future by casting charts of the planets and stars.

As a Delawarean, I am mortified.

I heard this story lying in bed this morning, waking up. Initially I was slightly annoyed in an inarticulate way -- the assertion of a connection between eliminating regulation and increasing jobs seemed vague. Then I was amused at the silly regulations being eliminated. But then when the interview began, I suddenly sat bolt upright in bed and shouted to the wall: " Dude, _seriously??_"

Behind that reaction was this: is it even possible that your guest (mysteriously absent from this online version), and your reporters, are unaware of the common journalistic meme that places DEregulation of the financial sector at the heart of the recent economic implosion? And more: is it now your job to provide a platform for right-wing screeds more suited to FoxNews than APM? How about some analysis? How about some perspective? How about asking AT LEAST ONE question challenging the most ridiculous assumptions of your interviewee? Or at least, how about having someone else on the air to challenge that guy?

I know that in the current political climate you're obliged to adopt The View from Nowhere perspective on the news, but now you've gone beyond that into hardcore partisan territory.

And while I'm at it, I'd like to ask: could you maybe have dug a little deeper to explain the relationship between deregulation and jobs? Another common journalistic meme is that banks and corporations and rich people are sitting on piles of money, but aren't investing in job-creating projects because the demand is not there. (Other reasons too, obviously.) In other words, consumers don't have the money to BUY. How exactly would deregulation change that? This is not a partisan question: Obama should be challenged on it as well as the advocates of total deregulation.

And finally, "regulation" is not a homogeneous substance that can be added or subtracted at will to create various effects. You should stop talking about it as if it is.

I'm pretty disgusted right now.

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