Obama's New Stance on Competitiveness and Regulation

Welcome to Politics Bites, where every afternoon at It's a Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Rena Steinzor, President of the Center for Progressive Reform, and Jerry Bowyer, author of the Free Market Capitalist's Survival Guide offered opposing perspectives and discussed the Obama administration's new focus on "competitiveness" and regulatory reform.

The President is shifting gears a bit and putting some fire in his step leading up to the State of the Union. The focus of his speech on Tuesday night will be: staying competitive, to "out-innovate, out-build, out-compete, out-educate other countries," he says. Part of this plan, as he said in his Wall Street Journal op-ed last week, is to modernize the regulatory system by removing outdated and "dumb" regulations and creating new ones.

Rena Steinzor said the president is trying to appeal to business interests, but said regulations themselves aren't the problem. It's their enforcement that isn't working.

I think what we have going on right now is a bad case of regulation failure and just as an example, the oil spill in the gulf of Mexico this summer clearly resulted because the regulators were not on the job policing. The alternative to regulation is that industry takes care of business itself, and that's not corporation's main strength. Their main strength is to make money.

Jerry Bowyer said Obama's new move isn't a very convincing shift.

I don't think Obama 2.0 is really an upgrade. I think it's the same Obama, but just with a different package.

He says big business really loves regulations, but regulations make life harder for small business.

There are few groups in America that are less hostile to the free market in many cases than large business interests and that misunderstanding creates a convenient way to push for more regulation when people have a certain resistance to big business. But in fact it doesn't comport with reality. Big business loves regulation because big businesses have big compliance departments that allows them to deal with regulatory barriers to entry and the small businesses which are competing with them do not have that.

According to Steinzor, we haven't had a free market in a long time and the idea that dropping regulations would bring back a free market anytime soon is an "illusion." She returned to her example of the oil spill in the gulf.

If the government cannot put cops on the beat to make sure that people are operating safely than what we get is this kind of uncontrolled blow out because companies don't have non-internalized safety culture and have very little motivation to do it, so I'm for policing big business.

Bowyer turned her example on its head.

Why was Brittish Petroleum out in deep water drilling for oil where the threat of a spill is much greater and the safety concerns are much more egregious? Well, because it's illegal to drill in shallow water. That's a regulation. Now small oil producers would love for it to be legal to drill in shallower water because it doesn't require tens of millions of dollars... but the government says no, you're not allowed to do that... So people who push the regulations, that pushed the rig way out into the deep water now say it's just a failure of regulations, we need more regulations. I say, no. You want less deep water drilling? Then allow shallow water drilling.

Amidst the back and forth, the only thing Bowyer and Steinzor did agree on is that we no longer have a free market. Steinzor would not admit to regulations souring things for small business (or making life better for big business). She said while Bowyer is pushing small business to the forefront and denouncing big companies, his perscription will not help small business at all.

It is very clear to me that the alternative to strong regulation is a sort of wild west atmosphere where the consumer and the person that breathes the air and the children that play in the playground are put at risk from bad practices.

That drew this retort from Bowyer:

I'm not pushing small business to the fore. I'm not pushing big business to the fore. I'm saying whichever business can honestly capture market share and provide the best product at the best price ought to be able to win. What I don't like is a situation, which is what we have right now, where government and big business are in collusion that helps big business and hurts small business.