Regulatory edicts are feel-good politics
Yes, NH regulations can be restructured, but not by memo
Since their respective inaugurations, President Trump and Governor Sununu have issued directives to executive departments and agencies to freeze regulations, and in the case of Sununu, “repeal or suspend the adoption of all existing or proposed regulations the agency finds are neither mandated by law nor essential to the public health, safety or welfare” for 90 days.
Can one point to redundant, burdensome government directives past their shelf life? Absolutely. But we’ve been down this road before. For example, during the 1980s, the Reagan administration gutted bank regulations, resulting in the multibillion-dollar bailout of the savings and loan industry.
A decade later, we experienced the near economic meltdown of the hedge fund Long-Term Capital Management, which operated under almost no regulation.
At the turn of the century, we witnessed the implosion of Enron, probably the biggest Ponzi scheme in history.
Shortly thereafter, came the blowup of WorldCom, HealthSouth, Tyco — the list is numerous.
Then, during the first decade of this century, the administration of George W. Bush as well as Washington lobbyists effectively held back meaningful financial oversight, leading America to almost tank the entire world economy.
Here in New Hampshire, for years the so-called Local Government Center inappropriately used funds to subsidize various insurance and administrative activities without any government check. Then there’s FRM, which operated as a fraud in large part because existing state law does not require commercial mortgage oversight.
Is there too much regulation? Yes, in some areas, like requiring smaller banks — which did not cause the last banking crisis — to currently deal with burdensome regulations.
Too often government overreaches, enacting unnecessary regulations when the economy turns down, only to then roll them back during the next economic up-cycle, leading to yet another crisis.
Taking a broader view, the U.S. Supreme Court’s Citizens United decision — allowing outside, “unregulated” money to dominate our nation’s politics — has institutionalized the blowback of effective regulation. Every year, corporate lobbyists spend billions in Washington and state capitals on important public matters, such as drug safety, bank trading practices, utility expansion and the like.
Talk to people who’ve lost their life savings and see how they feel about regulation when things go wrong and they lose their savings and jobs.
Does New Hampshire have a bloated government with too many regulations? Generally speaking, no. Actually, we have a state workforce less in number per capita than was the case during the 1970s. And comparing New Hampshire to other states, we rank near the bottom in per capita employee number and expenditure.
Does it make sense for a newly sworn-in two-year term governor to direct by memorandum to stop regulations? Not only is such an action an overreach of executive authority, but also it doesn’t even mesh with current law — the Legislature oversees agency regulatory rulemaking.
Yes, regulatory oversight in New Hampshire should be restructured. Any meaningful review of state government indicates a need for reorganization. For example, currently some seventy-six state agencies and departments report to the governor. This just doesn’t make sense.
Regulation by memo shouldn’t be the law of the nation or the state. That’s just more feel-good politics. Real regulatory review takes hard work and actual analysis.
The cycle goes round and round. Almost every seven to 10 years this nation witnesses a regulatory implosion because of a lack of effective regulation.
The clock is now ticking since the last financial mess. If we continue down this path, the next implosion could be catastrophic. We need real leadership, not feel-good memorandums.
Mark Connolly, former Democratic candidate for governor, is the principal of New Castle Investment