SOTU Take 2

Eakinomics: SOTU Take 2 The country got President Biden’s version of the State of the Union (SOTU), with a heavy emphasis on how great the economy is and how wonderful his stewardship of it has been. An alternative view is that the president inherited an economy growing at a 6.5 percent annual rate with a 1.5 percent inflation rate and has simply managed to swap those numbers. Count me underwhelmed. The president is not without his accomplishments, however. As documented by AAF’s Dan Goldbeck, he is the GOAT – Greatest of All (Modern) Times – over-regulator. As Goldbeck notes: “Loyal readers of AAF’s ‘Week in Regulation’ series may be familiar with the ‘Tracking the Administrations’ section. The following table gives the overall final rule totals as of the halfway point of each administration’s first term:”   Administration          Rules            Costs ($B)           Paperwork Hours Biden 517 318.4 218,052,445 Trump 564 -2.0 18,600,331 Obama 740 208.7 131,258,750 Clearly, President Biden is a talented red-taper in action, having burdened the economy with 53 percent more in compliance costs than did President Obama, despite only finalizing 70 percent as many rules. That may also help to explain both the persistence of inflation – regulatory costs, like all costs, end up getting passed along as higher prices – and the slower pace of economic growth. Goldbeck provides a much deeper set of insights on the regulatory costs that merit a close read of his paper. But the top-line is unmistakable and striking: Regulatory costs are a real weakness in the economic stewardship of this administration.