Tim Scott Asks Witness If Biden Admin’s ‘Breakneck Speed’ Of Regulations Contributed To Inflation

4 months ago

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Transcript

00:00 Senator Scott of South Carolina is recognized.

00:03 Thank you, Mr. Chairman.

00:05 Thank you all for being here this morning.

00:08 Since taking office, the Biden administration has been on a regulatory bullets.

00:13 What I mean by that is if you compare it to the Obama administration where you saw about

00:17 $300 billion of increased costs resulting from more regulations.

00:23 Under the Biden administration, we've seen about a 1.3, almost a $1.4 trillion increase

00:30 in the regulatory burden put on businesses.

00:34 Having been in business, started a few businesses myself that could only increase the cost of

00:39 being in business.

00:40 Now you compare that with the total cost of the Trump administration that was a little

00:45 bit over $30 billion.

00:47 So 30 billion with the Trump administration, 300 billion with the Obama administration,

00:50 over a 1.3, nearly $1.4 trillion of added regulatory costs.

00:57 Dr. Schrager, do you agree that the breakneck speed of new regulations finalized by this

01:05 administration has contributed to inflation?

01:08 Yeah, it certainly has contributed.

01:11 There's a lot of factors going on.

01:13 But certainly when you make it more expensive for businesses to produce, spend more time

01:17 on paperwork, especially a huge part of inflation that consumers are having problems with is

01:25 the cost of housing.

01:27 And certainly a lot of regulation, and certainly a lot of environmental regulations that make

01:30 it more expensive to build housing is making that more expensive.

01:34 And I think we're seeing in a lot of surveys that, as I said, the cost of housing is really

01:38 number one for a lot of consumers.

01:40 So I think deregulation would certainly-- it wouldn't solve all of the inflation problems,

01:44 but it would certainly help.

01:45 Let me just stay on that subject, because I hadn't thought about what you just said

01:48 as relates to housing.

01:49 Certainly seen the housing costs go up without question.

01:52 I served some time on the local government where we improved and increased the building

01:58 requirements in Charleston County.

02:01 If you think about the regulatory burden that comes from a municipality or a county, and

02:06 then you add that on top of the state, and on top of that is a federal government, you

02:09 see this regulatory burden that is, in many ways for small businesses, frankly oppressive.

02:15 I also think that an oppressive regulatory environment actually reduces competition,

02:20 and only benefits the players who are already in that space, and is more likely to create

02:25 a monopoly in that space.

02:28 That is not good for consumers.

02:29 Thoughts?

02:30 Yeah, that's absolutely true.

02:32 And in fact, we see this a lot in Europe, who have a lot more regulatory burden, particularly

02:38 around technology, which we're talking about here, and how firms use data.

02:43 And this was intended, as I said, to increase competition, but actually had the opposite

02:47 effect because complying with all of these regulations have actually made technological

02:52 entrepreneurship much harder there.

02:53 There's no doubt when you see our largest technological firm saying, "Please regulate

02:58 me, please regulate me," because it closes the door of competition, it kind of answers

03:03 the question itself.

03:04 A different question for you.

03:06 I won't say this very well, but I'll do my best.

03:10 From my perspective, watching the legislation leave Washington and impact the country, whether

03:16 it's the first bill signed into law, the $1.9 trillion legislation, that artificial

03:24 stimulation where you're pouring new resources or cash into our economy, actually artificial

03:31 stimulation called money from the government, increases the demand without increasing the

03:38 supply.

03:39 And so if you increase the demand without increasing the supply and you add on top of

03:43 that the snarl from a transportation perspective that we saw in '21 and '22, it's harder

03:50 to get your supplies.

03:51 So it only increases the demand because you have fewer supply and you have more money

03:54 in the market, which also increases the supply.

03:58 The ultimate outcome of that is less supply, larger demand, and no real ability to see

04:09 when your products are going to get there.

04:12 That is very hard for businesses to manage, and it only leads to a more challenging environment.

04:18 Yeah, exactly.

04:20 I think even economists who associate themselves as Democrats would have been saying that at

04:27 least three to four percentage points of the initial inflation was due to stimulative fiscal

04:33 policy, which has definitely sort of added to demand.

04:37 And it's important to argue we still have very stimulative fiscal policy, despite the

04:41 fact we're in a high inflation environment, which makes the Fed's job a lot harder.

04:44 Great.

04:45 I only have about 20 seconds left.

04:47 You said, I think, during your opening comments that the corporate profits peaked in 2021?

04:51 '22.

04:52 '22.

04:54 I think that's actually relevant as well.

04:56 As we think about the greed of our corporations-- and frankly, I'm not going to sit here and

05:00 defend any of them, but they have the ability and responsibility of defending themselves.

05:05 But as a kid who grew up in poverty, the one thing I could tell you is that the price that

05:11 we're seeing at the pump and the lack of the ability for a single mother to navigate gas

05:18 prices, energy prices, and food prices, when we see a glut of resources coming into the

05:23 marketplace and for 52 consecutive paychecks, inflation outpaces her wage increases.

05:32 That's a devastation.

05:33 that's not a problem but a crisis.

05:34 [BLANK_AUDIO]

Tim Scott Asks Witness If Biden Admin’s ‘Breakneck Speed’ Of Regulations Contributed To Inflation

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