Monday, October 10, 2011

Another novel economic theory

Lately, there have been a lot of novel and bizarre claims about how the economy works, and Rep. Keith Ellison (D-Minn) has yet another one.  His claim is that the more regulations you have on businesses, the more people they will hire because they will need extra people to make sure the businesses are in compliance.  The regulations aren't really much of a burden because the extra costs imposed on firms will have no effect on their operations.  See for yourself.

I believe if the government says, look, we have got to reduce our carbon footprint, you will kick into gear a whole number of people that know how to do that or have ideas about that, and that will be a job engine. I understand what you mean, because if anything adds a cost to a business, you could assume that that will diminish that business's ability to hire. But I don't think that's actually right. I think what businesses want is customers and what -- if they are selling product, if they have a product to sell they will do well even if they have some new regulations to meet.
Wow! I think he's really on to something.  Obviously we need to increase the regulatory burden facilitation on firms to make them hire more compliance people because the firms will produce the same amount no matter what their costs are.  Win-Win!