Worcester County Freedom Trail

Well, duh! I’d laugh if the whole situation wasn’t so horrifying. Job losses, reduction in buying power of the dollar, companies going out of business… We cannot sit idly by and let the government further damage what is fundamentally good about the US economy. Nice to see someone in Congress realizes how this latest problem arose. But I’m not holding my breath that the legislators will admit their culpability.

From Townhall.com:

According to a report released from the House Committee on Oversight and Government Reform on Tuesday, Fannie Mae and Freddie Mac were the leading culprits in the housing crisis because they encouraged people to borrow money, despite the fact they might not be able to pay it back. Duh.

It took 9 months and a 26-page government report to realize this?

Conservatives have long been warning that federal programs like the Community Reinvestment Act would build an inflated housing market resting on shaky foundations.

In fact, the report explains how Fannie and Feddie–government programs exempt from the oversights governing other publicly-traded firms–”privatized their profits but socialized their risks.”

CNSNews reports.

Nicolas Sanchez, Professor of Economics at Holy Cross, spoke to a standing room only crowd of more than 100 people on June 30, 2009, at the Worcester Public Library. His talk, “Why President Obama’s Economic Policy Will Not Solve Our Economic Problems,” provided startling information about the economic crisis — how we got here, what’s being done that won’t work, and what should be done to turn things around.

Below is an excerpt from the talk with horrifying numbers about what the current administration has done to the money supply and what that means over the long run.

How, then, is the current Administration dealing with the crisis?

I will begin this third part of my presentation with something that I discussed at the Tea Party in Worcester on June 20th. This is the statistic that you should memorize; and that you can easily obtain if you forget it, for it is available at the web site of the Federal Reserve Bank of St. Louis, one of the branches of our central bank. Five years after the Fed’s creation, in 1918, the monetary base—which is what allows the money supply to expand in multiple proportions—grew from $4.8 billion to $870 billion, as of August of last year. This growth of the monetary base occurred at a steady pace for over 90 years. Yet, between August of last year and May of this year the monetary base has risen by almost $1,000 billion—in other words, it has more than doubled in the past eight months! This is the type of behavior that you find in Argentina or the approach that communist regimes have used to attach the problem of unemployment: print enough money so that firms can hire the people who want to be employed.

Let me make clear that I do not believe that this Administration is simply imitating communist regimes—for some other, non-communist countries have also followed this type of reckless monetary behavior in the past. I gave the example of Argentina, which has never been a communist country, but I do believe that a more appropriate example is the Weimar Republic—in other words, Germany in the 1920s. Germany was an advanced country that was in deep trouble because of its military commitments and the debt that it had acquired as a result of the First World War. Unions were also quite powerful and big business tolerated the power of those unions. Big government, big labor and big business finally decided that the country could only get out of debt by inflating the currency—big time.

The one surprise that you will hear in this lecture is that the policy was in fact successful, at least initially and with regard to unemployment and the financial markets. (The stock market boomed.) The big German inflation began slowly but peaked in 1923; then the German government finally stabilized the mark (which was the German currency) by forcing an exchange of 1 trillion old marks for 1 single new mark. (The stock market collapsed.) The consequence of this approach was that the structural problems of the nation were not addressed and that there was massive redistribution of income within the country that ultimately led to massive social unrest, and ultimately to the rise of Adolf Hitler. People on fixed incomes, like the elderly, were financially devastated by the inflation. This, I believe, is a possible scenario for our own economy.

Great event coming up this week sponsored by the Worcester Tea Party. It’s their first public forum. Nicolas Sanchez, Professor of Economics at Holy Cross, has been an invited speaker at events across the country. Now he’s bringing his extensive knowledge home to us here in Worcester County to talk about Obama’s failed economic policies, how we got here, and what should be done instead.

“Why President Obama’s Economic Policy Will Not Solve Our Economic Problems”

Tuesday, June 30, 2009, 7-8:30pm
Worcester Public Library
3 Salem Square, Worcester

In the talk, Professor Sanchez will discuss:
- Origins of the economic crisis
- Structural problems to overcome
- The wrong policies to take
- The inflation that is to come
- What could have been done instead
- How the media misinforms America

If we care about electing more responsible officials, then we all need to have a better understanding of what’s going on and how things need to change.

The event is free and open to the public.

I find the following survey data quite shocking. From Rasmussen:

Only 53% of American adults believe capitalism is better than socialism.

The latest Rasmussen Reports national telephone survey found that 20% disagree and say socialism is better. Twenty-seven percent (27%) are not sure which is better.

Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided. Thirty-somethings are a bit more supportive of the free-enterprise approach with 49% for capitalism and 26% for socialism. Adults over 40 strongly favor capitalism, and just 13% of those older Americans believe socialism is better.

I was sure everyone knew that socialism (and communism) has been proven unsustainable. Sweden, the long touted paragon of socialism, recently threw out the spendthrift Social Democrats in favor of economic reform. And at the 2009 G20 Summit, Germany, France, and the UK were appalled at the reckless spending of President Obama’s “stimulus” plan.  But apparently not everyone is aware of these latest events. So  I’m thinking of running a series of posts on the topic of economic freedom and what that means to Americans and the rest of the world.

Let’s start with some insightful thinking from Walter E Williams, a well-known conservative economist. Thanks to Mark for this info.

Most of our nation’s great problems, including our economic problems, have as their root decaying moral values. Whether we have the stomach to own up to it or not, we have become an immoral people left with little more than the pretense of morality. You say, “That’s a pretty heavy charge, Williams. You’d better be prepared to back it up with evidence!” I’ll try with a few questions for you to answer.

Do you believe that it is moral and just for one person to be forcibly used to serve the purposes of another? And, if that person does not peaceably submit to being so used, do you believe that there should be the initiation of some kind of force against him? Neither question is complex and can be answered by either a yes or no. For me the answer is no to both questions but I bet that your average college professor, politician or minister would not give a simple yes or no response. They would be evasive and probably say that it all depends.

In thinking about questions of morality, my initial premise is that I am my private property and you are your private property. That’s simple. What’s complex is what percentage of me belongs to someone else. If we accept the idea of self-ownership, then certain acts are readily revealed as moral or immoral. Acts such as rape and murder are immoral because they violate one’s private property rights. Theft of the physical things that we own, such as cars, jewelry and money, also violates our ownership rights.

The reason why your college professor, politician or minister cannot give a simple yes or no answer to the question of whether one person should be used to serve the purposes of another is because they are sly enough to know that either answer would be troublesome for their agenda. A yes answer would put them firmly in the position of supporting some of mankind’s most horrible injustices such as slavery. After all, what is slavery but the forcible use of one person to serve the purposes of another? A no answer would put them on the spot as well because that would mean they would have to come out against taking the earnings of one American to give to another in the forms of farm and business handouts, Medicare, Medicaid, food stamps and thousands of similar programs that account for more than two-thirds of the federal budget. There is neither moral justification nor constitutional authority for what amounts to legalized theft. This is not an argument against paying taxes. We all have a moral obligation to pay our share of the constitutionally mandated and enumerated functions of the federal government.

Unfortunately, there is no way out of our immoral quagmire. The reason is that now that the U.S. Congress has established the principle that one American has a right to live at the expense of another American, it no longer pays to be moral. People who choose to be moral and refuse congressional handouts will find themselves losers. They’ll be paying higher and higher taxes to support increasing numbers of those paying lower and lower taxes. As it stands now, close to 50 percent of income earners have no federal income tax liability and as such, what do they care about rising income taxes? In other words, once legalized theft begins, it becomes too costly to remain moral and self-sufficient. You might as well join in the looting, including the current looting in the name of stimulating the economy.

I am all too afraid that a historian, a hundred years from now, will footnote America as a historical curiosity where people once enjoyed private property rights and limited government but it all returned to mankind’s normal state of affairs — arbitrary abuse and control by the powerful elite.

As if the assault on American’s freedom and capitalism wasn’t bad enough, it just got worse. The Obama administration has several formerly private sectors on tinder hooks waiting for more bailout money. The Treasury Secretary is now resorting to blackmail to get CEOs from these companies to resign (see story about Wagoner at GM). And now, hot off the press, Rep Barney Frank is determined to make the government responsible for setting EVERYONE’s salary in the new Pay for Performance Act of 2009:

Now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

The Pay for Performance Act of 2009 will start with companies who’ve accepted bailout money. But don’t be surprised when it spreads its wings to all private sector companies.

At this point, we would do well to heed the words of Russian Prime Minister Vladimir Putin’s at the opening ceremony of the World Economic Forum in Davos, Switzerland, in January 2009. From the Wall Street Journal:

Esteemed colleagues, one is sorely tempted to make simple and popular decisions in times of crisis. However, we could face far greater complications if we merely treat the symptoms of the disease.

Naturally, all national governments and business leaders must take resolute actions. Nevertheless, it is important to avoid making decisions, even in such force majeure circumstances, that we will regret in the future.

This is why I would first like to mention specific measures which should be avoided and which will not be implemented by Russia.

We must not revert to isolationism and unrestrained economic egotism. The leaders of the world’s largest economies agreed during the November 2008 G20 summit not to create barriers hindering global trade and capital flows. Russia shares these principles.

Although additional protectionism will prove inevitable during the crisis, all of us must display a sense of proportion.

Excessive intervention in economic activity and blind faith in the state’s omnipotence is another possible mistake.

True, the state’s increased role in times of crisis is a natural reaction to market setbacks. Instead of streamlining market mechanisms, some are tempted to expand state economic intervention to the greatest possible extent.

The concentration of surplus assets in the hands of the state is a negative aspect of anti-crisis measures in virtually every nation.

In the 20th century, the Soviet Union made the state’s role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.

I believe in the power of the individual over the power of the government, and that government must at all times be held accountable to the people. This is the surest path to a happy populace and a solid economy. In Massachusetts, our robust high tech and health care industries have given us a bit of respite from the recent economic crunch, but now we, too, are catching up with the hard times. From the Boston Herald:

Specialists say Massachusetts is catching up to other states that have been feeling the effects of the national recession, losing jobs in sectors that had not taken such a bad hit. The professional and business services sector, for example, lost 7,500 jobs, accounting for almost half of December job losses.

Those sectors follow “frontline industries” such as construction, manufacturing and financial services into job losses, said Robb Smith, director of policy and planning at the Executive Office of Labor and Workforce Development.

The office reported Jan. 22 that December’s unemployment rate was 6.9 percent, a full percentage point above November’s rate of 5.9 percent. The Massachusetts jobless rate has been consistently below the national level, but December’s numbers brought the state even closer to the national rate of 7.2 percent. The last time unemployment in Massachusetts was 6.9 percent was October 1993.

But let’s be clear. This is NOT a call for Beacon Hill to start messing even further in the lives of residents. Economic opportunities and societal wealth depend on private initiative. Government policies must encourage and incentivize opportunities so that individuals can generate economic growth and create employment opportunities. Government must not stifle free enterprise or the situation will worsen.

This is the time when government must get out of the way and encourage individuals to devote their talents to productive use…to greater personal fulfillment and intellectual development, while improving their own economic condition and that of others. This is the time to encourage entrepreneurial endeavors and reinvestment in successful businesses (through lower taxes). The dynamic interaction of driven individuals and government support (not government suffocation) will provide the surest path out of the economic crisis, providing for the needs of individuals and for the generation of the minimum required tax revenues to meet appropriate levels of government (police, fire, highways).

A key issue that is rarely discussed is “Business Churning Statistics.” Business churn is calculated as firm births plus firm deaths as a share of total firms. The business churn metric, more than any other, is a good indicator of the level of entrepreneurial activity necessary to move an economy.

Here’s how New England stacks up in terms of business churn:

Percent/National Rank

– New Hampshire 23.4% 34
– Massachusetts 23.2% 37
– Rhode Island 23.2% 38
– Vermont 22.5% 42
– Maine 22.0% 44
– Connecticut 20.4% 46

Note that all of the New England States rank in the bottom third of the nation’s entrepreneurial activity. The sad truth is that no one can benefit from a business that is never started.

Some may attribute this lack of entrepreneurial activity as a result of globalization and the subsequent outsourcing of service sector jobs. But Massachusetts’ position in the business churn is little changed going as far back as 1999, when Massachusetts was ranked 39. And 1999 was prior to the current outsourcing of service sector jobs.

A 2006 study of “small business friendly states” concluded public policy is a big problem:

This list from the SBE Council measures states on 29 criteria, including tax rates on income, property and capital gains; health-care regulations; crime rates; government spending; bureaucracy; and labor costs. The Index focuses only on public policy measures, so indicators such as workforce availability, education, or skill, or affluence of the population are not included. This year South Dakota topped the overall list, followed by Nevada (No. 2), Wyoming (No. 3), Alabama (No. 4), Washington (No. 5), Florida (No. 6), Mississippi (No. 7), Colorado (No. 8), Texas (No. 9) and Michigan (No. 10).

The places that scored lowest on the list are Washington, D.C. (No. 51), followed by New Jersey (No. 50), California (No. 49), Rhode Island (No. 48), Maine (No. 47), Minnesota (No. 46), New York (No. 45), Hawaii (No. 44), Massachusetts (No. 43), Vermont (No. 42) and Iowa (No. 41).

Now is the time for government to get out of the way, before the economy falters further.

Atlas Shrugged, by Ayn Rand, is one of my all-time favorite books. It shows how government really only serves government and that hard work and individual responsibility are what pay off in life. I’m not a fan of Ayn Rand’s real life politics, but didn’t she do a great job predicting events of 2008…back when she finished the book in 1957?!

From the Wall Street Journal:

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

In the book, these relentless wealth redistributionists and their programs are disparaged as “the looters and their laws.” Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the “Anti-Greed Act” to redistribute income (sounds like Charlie Rangel’s promises soak-the-rich tax bill) and the “Equalization of Opportunity Act” to prevent people from starting more than one business (to give other people a chance). My personal favorite, the “Anti Dog-Eat-Dog Act,” aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn’t Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion “Emergency Economic Stabilization Act” and the “Auto Industry Financing and Restructuring Act.” Now that Barack Obama is in town, he will soon sign into law with great urgency the “American Recovery and Reinvestment Plan.” This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion — in roughly his first 100 days in office.

The current economic strategy is right out of “Atlas Shrugged”: The more incompetent you are in business, the more handouts the politicians will bestow on you. That’s the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies — while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to “calm the markets,” another trillion of national wealth is subsequently lost. Yet, as “Atlas” grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate “windfalls.”

I sent in my FreedomWorks letter, begging our legislators to stop the Big 3 bailout. Have you sent yours?

Since the 1970s, Detroit’s Big Three auto makers have failed to keep up in the competitive auto industry. Now they are begging the federal government for a bailout to the tune of $75 billion!

Ten years ago the Big Three posted a combined profit of over $16 billion dollars. But management failed to wisely invest these profits.

The Big Three are heavily weighed down by irresponsible labor costs. The problem in the auto industry is caused by unrealistic union contracts written decades ago. These contracts did not give the industry the flexibility it needed to respond to market changes and burdened the industry with legacy costs.

General Motors is leading the call for the $75 billion taxpayer bailout, speeding up the $25 billion loan program to develop fuel-efficient vehicles, $25 billion in general support to keep the companies operating, and $25 billion to bailout promises to union benefits.

It is time to draw the line in the sand when it comes to federal bailouts. Please do not support a bailout of the Big Three auto makers.

Kudos to Ed for pointing out this analysis of Senator Obama’s proposed “tax decrease.” Who but a socialist would see a tax increase as a decrease?

From National Review:

Joe the Plumber has focused attention on Obama’s plans to raise taxes on individuals earning more than $250,000 a year. This is no mere tax on the rich since many small businesses pay taxes at the individual rate. Obama’s camp says they will target only 2 percent of small businesses in a given year. Economists point out, however, that of the $700 billion in small-business earnings this year, $420 billion — or 60 percent — was generated by businesses earning more than $250,000. That’s a whole lot more than 2 percent.

Obama’s taxes also have a way of adding up. He has called for raising the top marginal tax rate on individuals and small businesses from 35 percent to 39.6 percent. Added to that will be a tax of 12.4 percent on Social Security, which is now capped at $102,000. This will create a top tax rate of 54.9 percent. (Self-employment profits also will face a 2.9 percent Medicare tax.) Adding in the average state income-tax rate, Obama’s top tax rate on small businesses and individuals climbs to about 60 percent. Compare that with Russia’s top tax rate of 13 percent, Hong Kong’s of 15 percent, France’s of 49.8 percent, and Sweden’s of 56.5 percent.

But Joe the Plumber stands for much more than the economics of small-business job creation and capital formation. He represents our aspirations. Joe doesn’t earn $250,000 a year. This is what he hopes to earn. In this light, Obama’s glass ceiling on small-business earnings looks a lot like George McGovern’s suggestion in 1972 that all earnings over $500,000 be taxed at 100 percent. That plan gained unexpected opposition from blue-collar workers who, when asked if they earned anything like $500,000, replied, “No, but I might someday.”

Of course, Obama is going to take more of Joe the Plumber’s future earnings not to pay for roads and the military, but to redistribute to others.

The economists writing Obama’s tax plan look at one set of numbers and think they’re scaring only a few high-income voters. In truth, the Obama tax plan should frighten the half of American households that have their lifetime savings in the stock market and the 25 million small-business owners who do not earn $250,000 today, but hope to in the future. As Langston Hughes wrote, a dream can dry up like a “raisin in the sun.” A whole lot of dreams are poised to dry up if the vote goes Obama’s way on Tuesday.

I’m getting a bit tired of hearing Obama drone on about the US needing more government regulation. Government regulation, not degregulation, is what got us into the current economic mess. I can’t put it better than this article in the Wall Street Journal, “Spitzer and Sarbox Were Deregulation?:

In this fall’s first presidential debate, Barack Obama analyzed the causes of the credit meltdown. “Now, we also have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain, a theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down.”

In the second debate, Mr. Obama offered a similarly vague diagnosis: “I believe this is a final verdict on the failed economic policies of the last eight years . . . that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us.”

Could Mr. Obama really believe that the era of Sarbanes-Oxley was about letting “the market run wild”?

One had to look far and wide in the spring of 2002 to find anyone who thought the Sarbanes-Oxley law was an experiment in cowboy capitalism. For example, on its front page of April 25, 2002, the New York Times reported: “House and Senate negotiators agreed . . . on a broad overhaul of corporate fraud, accounting and securities laws aimed at curbing the rampant abuses that have shaken Wall Street . . . Some lawmakers called it the most sweeping securities legislation since the 1930s.” The Times added that “business and accounting industry lobbyists had tried in recent days to soften the measure, but they got nowhere.”

Of course, in the years since this sweeping securities legislation was enacted, its costs — borne by public companies, and therefore by investors — have been many times official estimates. And with the benefit of time, even liberal Democrats such as New York Sen. Charles Schumer came to realize that the regulatory monster created by Sarbanes-Oxley had to be tamed.

Mr. Schumer was so concerned about the migration of business from Wall Street to London, Hong Kong and even Dubai that he joined New York City Mayor Michael Bloomberg in commissioning a study of the problem and potential solutions. When the study was released in January 2007, Messrs. Schumer and Bloomberg wrote in an accompanying note that “our regulatory framework is a thicket of complicated rules.” They warned that without reform, “we will no longer be the financial capital of the world.”

As heavy as was Washington’s hand upon the financial markets beginning in year two of the Bush era, New York Attorney General Eliot Spitzer may have imposed even greater costs on Wall Street. Dusting off the 1921 Martin Act — an antifraud statute so broad that it does not even require prosecutors to demonstrate criminal intent — Mr. Spitzer forced a series of costly settlements that made Wall Street’s traditional business of underwriting stock offerings much less profitable.

The excesses Mr. Spitzer sought to prevent were clear at the time; only later did the collateral damage to America’s markets become manifest, as New York lost business to London and elsewhere.

In a 2004 Slate column, Daniel Gross described the initial impact when Mr. Spitzer targeted the insurance industry. “In response, the stocks of the biggest players implicated, Marsh & McLennan and AIG, have tanked, losing a combined $38 billion in market capitalization. More alarming for the insurers, Spitzer signaled this was just the beginning of an industry-wide investigation. For when he finds a few bad eggs, Eliot Spitzer cleans out the entire coop and changes the way it is run, as Wall Street’s investment banks and mutual funds have learned to their dismay.”

Mr. Spitzer would ultimately drive the CEOs of both Marsh and McLennan and AIG from office, with disastrous consequences for shareholders. In the case of AIG, the staggering extent of the disaster has lately been revealed.

The combination of Mr. Bush’s enactment of Sarbanes-Oxley and Mr. Spitzer’s Wall Street prosecutions contributed to America’s significant market-share loss of initial public offerings — and the U.S. is yet to return to pre-Bush levels. While government reduced the profit-making potential in Wall Street’s traditional bread-and-butter business, it was simultaneously encouraging investment in the housing sector. Neither activity constituted deregulation.

Perhaps Mr. Obama is looking beyond the financial markets and taking a broad view of the economy in concluding that Mr. Bush was a deregulator. If so, it’s hard to find evidence to support this conclusion.

Wayne Crews of the Competitive Enterprise Institute tracks regulation across the entire federal government. He reports that the Bush administration set an all-time record in 2004, when it published more than 75,000 pages of proposed and enacted rules in the Federal Register.

Leftists might assume that many of these rules were actually watering down earlier standards — but where’s the evidence of declining compliance costs? Lafayette College economist Mark Crain estimates more than $1.1 trillion in federal regulatory costs for 2004, up an inflation-adjusted 16% from 2000. Overall agency enforcement budgets have increased each year since 2004.

A recent report, “Regulatory Agency Spending Reaches New Height,” from Washington University’s Weidenbaum Center puts Mr. Bush’s regulatory activity in historical context. Co-authors Veronique de Rugy and Melinda Warren say that when it comes to spending on regulatory agencies, our current president is almost in a class by himself, with an increase of almost 68% during his two terms. In constant dollars the Bush regulatory budget increases vastly exceed those of predecessors Clinton, Bush, Reagan, Carter, Nixon and, yes, Lyndon Johnson.

Looking at regulatory spending in percentage terms, Mr. Bush’s staggering 2003 increase of more than 24% was the largest in the last 50 years. If Mr. Obama considers this a record of deregulation — and if current polls hold — America’s economy could be in for a very long four years.