At Tipton’s Townhall meeting, handouts were distributed that describe the work that Tipton has been doing in Washington. Tipton is the Chairman of a Subcommittee, which has allowed him to hold hearings with titles like Drilling for a Solution: Finding Ways to Curtail the Crushing Effect of High Gas Prices on Small Business and Regulatory Injury and How USDA’s Proposed GIPSA Rule Hurts America’s Small Businesses. Come September he’ll be hosting a hearing right here in Grand Junction: Are Excessive Energy Regulations and Policies Limiting Energy Independence, Killing Jobs and Increasing Prices for Consumers?
I know it is naïve to think that a hearing would be about discovering facts. It is hard to imagine how any new information will come out of hearings where the title directs participants to the desired answer and presenters are carefully chosen to present the desired point of view. At the Townhall meeting, Tipton made a point of saying that not all regulations are bad, but his handouts tell a different story.
Tipton truly believes that regulation kills jobs, especially in the oil and gas industry. He even believes that the price of gas is tied to regulation, not market conditions. His main plan to create jobs is to do away with regulations. He’s proposed a bill that would require agencies to report to congress when any rule made by that agency becomes obsolete, or is in conflict with another regulation. I guess he doesn’t know that every regulation is subject to a public comment period, and that those comments are actually taken into consideration before the regulation is implemented. Certainly obsolete and conflicting regulations are discussed in public comment periods by industry spokesmen.
The one plan that sparked some interest for me, until I read it, was the Capital Access on Main Street Act, which Tipton is sponsoring with Ed Perlmutter and Mike Coffman. Tipton claims that it has bi-partisan support and will create jobs. The bill’s number is HR1356, and it has been introduced and moved to committee for review. It is hard for me to think of this bill as a jobs bill, since what it does is change how banks under $10,000,000,000 account for bad loans. In the current regulatory environment banks must write off a loan as soon as a loss is certain or when it becomes 90 days past due—which ever event comes first. This bill allows banks to take the loss over a seven year period. The impact would be to overstate the profits of banks by hiding losses in equity. In theory banks with higher equity levels will make more loans to small businesses, thus creating jobs.
The theory doesn’t hold much water and is reminiscent of how regulators approached the Savings and Loan Industry before that industry crashed. Regulators allowed S&Ls to put what I called “funny money” on their books by issuing certificates to S&Ls, which were actually loans from the regulator. The certificates could be counted as equity, and the S&L looked like it was well capitalized, when in fact it was bankrupt. I’m sure we all remember what happened then.
This bill ignores one other fact. Small Businesses say that they don’t need loans, they need people to buy their products and services. It doesn’t really matter if money is available, even if it is “funny money,” if there is no reason to borrow because there are no sales.
Bottom line, HR1356 will not create any jobs, and it just might tank the banking industry again. Then again, it may never get out of committee. Tipton’s main solution for jobs is get rid of regulations and the tired old Drill Baby Drill, with “reasonable” regulations because everybody likes clean air and clean water.
Tipton intends to introduce legislation to authorize hydropower development on all BLM conduits, including canals. He plans to reduce regulations in order to make development of hydropower projects more economically feasible. Can’t wait to see that one.
Homework:
HR1356 Capital Access on Main Street
WSJ Article Small Firms Hunger for Sales not Credit
Book for Sale that Discusses the Economics of Hydropower
I know it is naïve to think that a hearing would be about discovering facts. It is hard to imagine how any new information will come out of hearings where the title directs participants to the desired answer and presenters are carefully chosen to present the desired point of view. At the Townhall meeting, Tipton made a point of saying that not all regulations are bad, but his handouts tell a different story.
Tipton truly believes that regulation kills jobs, especially in the oil and gas industry. He even believes that the price of gas is tied to regulation, not market conditions. His main plan to create jobs is to do away with regulations. He’s proposed a bill that would require agencies to report to congress when any rule made by that agency becomes obsolete, or is in conflict with another regulation. I guess he doesn’t know that every regulation is subject to a public comment period, and that those comments are actually taken into consideration before the regulation is implemented. Certainly obsolete and conflicting regulations are discussed in public comment periods by industry spokesmen.
The one plan that sparked some interest for me, until I read it, was the Capital Access on Main Street Act, which Tipton is sponsoring with Ed Perlmutter and Mike Coffman. Tipton claims that it has bi-partisan support and will create jobs. The bill’s number is HR1356, and it has been introduced and moved to committee for review. It is hard for me to think of this bill as a jobs bill, since what it does is change how banks under $10,000,000,000 account for bad loans. In the current regulatory environment banks must write off a loan as soon as a loss is certain or when it becomes 90 days past due—which ever event comes first. This bill allows banks to take the loss over a seven year period. The impact would be to overstate the profits of banks by hiding losses in equity. In theory banks with higher equity levels will make more loans to small businesses, thus creating jobs.
The theory doesn’t hold much water and is reminiscent of how regulators approached the Savings and Loan Industry before that industry crashed. Regulators allowed S&Ls to put what I called “funny money” on their books by issuing certificates to S&Ls, which were actually loans from the regulator. The certificates could be counted as equity, and the S&L looked like it was well capitalized, when in fact it was bankrupt. I’m sure we all remember what happened then.
This bill ignores one other fact. Small Businesses say that they don’t need loans, they need people to buy their products and services. It doesn’t really matter if money is available, even if it is “funny money,” if there is no reason to borrow because there are no sales.
Bottom line, HR1356 will not create any jobs, and it just might tank the banking industry again. Then again, it may never get out of committee. Tipton’s main solution for jobs is get rid of regulations and the tired old Drill Baby Drill, with “reasonable” regulations because everybody likes clean air and clean water.
Tipton intends to introduce legislation to authorize hydropower development on all BLM conduits, including canals. He plans to reduce regulations in order to make development of hydropower projects more economically feasible. Can’t wait to see that one.
Homework:
HR1356 Capital Access on Main Street
WSJ Article Small Firms Hunger for Sales not Credit
Book for Sale that Discusses the Economics of Hydropower
RSS Feed