Inside the Numbers

Maybe not as important as you think

 

Avery Untitled 1By Avery Vise

avise@randallreilly.com

 

Each month, Randall-Reilly Market Intelligence surveys senior trucking executives on current business conditions, and a constant refrain in comments for months has been how much we need change in Washington and, specifically, in the White House. So in the July edition of MarketPulse we asked specifically whether the outcome of the November elections would make a significant difference in the health of their businesses.

Given the strong comments, it was hardly surprising that 85 percent said yes. While the survey did not specifically ask for their preference between President Obama and Mitt Romney, it was hardly necessary given the context.

The common theme running through comments in the MarketPulse survey has been that the current regime has adopted an anti-business, pro-labor and pro-environment stance and that things will get only worse for business in the next four years if President Obama is re-elected.

Here’s just one comment that is fairly typical if perhaps a bit stronger than most: “If Obama gets four more years, the amount of regs that will be shoved down the throats of American business in order for him to achieve his dream of a unionized America that runs on wind and solar power will be the death of many small businesses in this country.”

Putting aside a detailed analysis of the claims about motives and effects, let’s assume for purposes of argument that a second Obama administration would pursue a pro-labor and pro-environment agenda that is contrary to business interests in general and trucking interests in particular.

If this is the case, the election’s outcome probably still is not as critical as you might think. Here’s why:

Congressional gridlock is almost certain on most issues. Until very recently, it appeared all but certain the Republicans would take the Senate, but they are an absolute lock to keep control of the House of Representatives. So if President Obama is re-elected, he still won’t be able to get any significant new legislation through Congress even if the Democrats manage to hold onto the Senate.

Circumstances limit the consequences of the November election.

What if Mitt Romney is elected president and the Republicans take the Senate? The Republicans still have a good chance of winning the Senate, but they have virtually no shot at a filibuster-proof 60-seat majority. Without 60 votes, the Republicans couldn’t enact much that is controversial. They could use a tactic called budget reconciliation, which isn’t subject to filibuster, but this option would be available only on matters directly related to federal spending.

Regulatory change isn’t easy and isn’t without checks and balances. If re-elected, President Obama would face some obstacles in implementing any kind of sweeping, groundbreaking regulations.

For starters, many major regulations would require congressional authorization, and the Obama administration wouldn’t get that. Sure, a president still has considerable regulatory and enforcement authority independent of Congress, but don’t overestimate this power.

The courts still can review executive branch action, and they have shown little hesitance to strike down regulations that aren’t justified. Nor can a lame-duck president ignore the political impact of his actions on the next presidential campaign.

Simply put, the kind of radical change many fear from regulation over the next four years simply isn’t easy to accomplish.

Nor could Mitt Romney, if elected president, wave a magic wand to push through a pro-business agenda and reverse Obama administration regulations.

Except for rules issued right at the end of the previous administration, changing an existing regulation requires the same process as imposing one, and that means notice and comment, cost/benefit analyses and the inevitable lawsuits when certain parties don’t like the outcome.

None of this is to suggest the election doesn’t matter. But it probably doesn’t matter as much as domestic and global business conditions that can’t be controlled by politicians and bureaucrats.

Avery Vise is executive director, trucking research and analysis for Randall-Reilly Business Media and Information.

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