Government regulatory uncertainty puts ‘breaks’ on economy

Small businesses are somewhat resilient when it comes to dealing with state and federal regulations, and to a certain extent, large businesses can deal with the new rules and rule changes a bit more effectively since they can absorb additional costs across different business areas. What small and large businesses both have more difficulty with is regulation uncertainty.

What it comes down to is this … how the heck are small business owners and leaders in large corporations supposed to make sound business decisions – sometimes as far out as three or four years – when they have no idea what the rules will be?

Check out the post by Frank Ryan over at American Thinker this morning.

When there is significant uncertainty caused by a rapidly changing regulatory environment, such as in health care and financial services, economic activity will be severely curtailed until that uncertainty is removed. The final regulations, if too cumbersome, may be the final blow to an already fragile economy.

How can it be worse for business and industry in the United States? Even though the bills are passed, we still do not know what the new regulations will do, how they will be implemented, or even what companies will be able to do, or not do.

Some fruitcakes said we had to wait to pass the legislation to see what’s in the legislation and how it will work. Pure genius I tell ya!

A perfect example is the health care legislation and how it was going to effect – or not effect – McDonald’s mini-med health care plans. Since the plans would not meet the medical loss ratio (MLR) requirements under the new health care legislation, McDonald’s – or whomever – suggested up to 30,000 employees with this coverage may not have future access to the health plans currently offered. It would be cost-prohibitive for McDonald’s to tweak the coverage and ensure they met the MLR requirement.

Of course, that same day, both McDonald’s and Obamacare representatives suggested there really was no problem at all. Oh really? Then why – within 24 hours – did the White House pledge to use their discretion and be flexible with the mini-med plans offered by chains like McDonald’s who mostly have part-time hourly workers?

From the Wall Street Journal on Oct. 1.

The Obama administration said Thursday that its top health official will “exercise her discretion” in enforcing a new health-law requirement, a move that could help McDonald’s Corp. and other employers from disrupting their health-care policies for hourly workers. …

On Thursday, administration officials indicated they are hopeful that HHS Secretary Kathleen Sebelius will be able to allow certain waivers to the requirement, but that it was too early to confirm they will. She must wait for guidance from state insurance commissioners, and the administration doesn’t expect to release the agency’s final guidance until December. The agency said the law gives Ms. Sebelius discretion to apply the requirement.

So the Obama administration can apply – or not apply – the law at it’s discretion? Two thousand-plus pages of garbage federal law that nobody has read or understands … and this is what we get. Just another symptom of the disease.

Hat tip to Sweetness & Light.

Update: Michelle Malkin notes the flood of waivers issued at the beginning of this month includes the United Federation of Teachers Welfare Fund, a New York union providing coverage for city teachers.

Steve McGough

Steve's a part-time conservative blogger. Steve grew up in Connecticut and has lived in Washington, D.C. and the Bahamas. He resides in Connecticut, where he’s comfortable six months of the year.


  1. Dimsdale on October 6, 2010 at 4:48 am

    "Discretion in enforcement"?  Isn't that like "selective enforcement"?  So if you don't play ball,  your company will have an "accident"?  I guess donations to the Dems and Øbama are "protection money" too.


    Chicago corruption and thuggery at its finest.  Or worst, actually.  The gangstas are in the (White) house!

  2. Dimsdale on October 6, 2010 at 4:50 am

    Do Democrats have any idea what "fair and equal" treatment means?  Or are we just going to go under the mantle of "progressive" and selectively punish individuals and corporations?  (that was a rhetorical question)

  3. RoBrDona on October 6, 2010 at 10:44 am

    As a historian I cannot resist this: Let's learn from history: FDRs New Deal led business leaders across the country to worry about the safety of their private ownership rights in their firms capital and their cash flow from income. Everyone was waiting for the next anti-business rules or government grabs. They therefore became less willing to invest in any assets with long lives, including hiring. FDR had first suspended the antitrust laws so that large businesses would aquiesce to government formed cartels, then he used those same laws to prosecute firms for cooperating. Higher tax rates and new regulations/legislation hamstrung businesses' attempts to break out of the death spiral by raising capital or hiring. Polls and surveys of both the public and corporate world at the end of the 30s indicated FDR’s administration was delaying any recovery. The climate was so toxic that 65% of executives surveyed believed this completely and were so spooked that many refused to engage in war contracts at the start of the war, imperiling rearmament for a time.

  4. Dimsdale on October 6, 2010 at 3:34 pm

    That seems to be apropos, inasmuch as the media was pushing Øbama as the next FDR.  Maybe they were right…

  5. JollyRoger on October 6, 2010 at 4:37 pm

    I still can't believe the libs were so afraid that George Mush was going to read their emails and listen to their phone calls- and now they want to sit on Barry's lap while he reads their medical files and decides whether they're worth the cost of treatment.  It may be time to switch parties and make friends with Joe Courtney and Lieberman!

  6. Dimsdale on October 6, 2010 at 6:02 pm

    Steve: did you mean "brakes" or were you being "punny"?

  7. Steve M on October 7, 2010 at 2:30 am

    Yeah, I was trying to be punny with the brakes/brakes thing. Someone tried something similar elsewhere and it was successful … mine failed. Also, WordPress seems to have wiped out the single quotes around the word … or I messed it up.


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