Is too much regulation stifling job growth?

President Obama's executive order announcing a government review to "remove outdated regulations that stifle job creation and make our economy less competitive" drew praise Tuesday from some Republicans and the business community. But though most observers agree that some government rules are unnecessary, the evidence that too much federal regulation is a key cause of continued high unemployment appears far from conclusive.

"I've never been terribly persuaded by this," labor expert Gary Burtless of the Brookings Institution told The Lookout. "You've got to give some 'for instances.'"

The Chamber of Commerce, which has led the business community's effort to raise concern about excessive federal regulation, welcomed the order in a statement. It singled out two major pieces of recent legislation -- the health care overhaul and financial reform -- that it said should be included in the review.

But the business lobby is likely to be disappointed on that score: A White House official told the Wall Street Journal that the review will focus on old, outdated regulations, so new laws like these "will not be priorities." Even if the two new laws were reviewed, though, it's not clear that either has stymied job growth.

Critics of the health care law point to a rule that imposes penalties on large companies that don't offer insurance to their employees. The Congressional Budget Office has said this could lead some firms to hire fewer low-wage workers. But because that provision doesn't go into effect until 2014, it's unlikely to be contributing to current slow job growth. (Unemployment is currently at 9.4 percent.) In fact, the health care industry is among the few fields booming right now.

As for the law as a whole, while Republicans call it a "job-killer" and Democrats argue that it will in fact create jobs, independent experts like Katherine Baicker, a former economic adviser to President Bush, say it probably won't have a huge impact either way. "The effect of the law on jobs is likely to be modest," Baicker told the New York Times last week.

And on financial reform, some observers consider it preposterous on its face to propose that current problems stem from too much regulation of the financial sector, rather than too little. "I'm under the impression that we just suffered through a recession that's the worst in the labor market since the Great Depression, and it originated because of a crisis in the financial sector, " Burtless said. "The purpose of financial reform was to make that kind of crisis less likely. Is the argument that the pre-regulatory regime was great for job growth in the United States?"

Burtless allowed that some financial regulations may, on a micro-level, stymie job growth for some companies. "But no one can legitimately say that the lack of regulation was a great job builder, given the fact that we lost 8 million jobs" in the wake of a period of deregulation, he said.

While the Senate Homeland Security and Government Affairs Committee chairman, Joe Lieberman (I-Conn.), praised the president's order, he said too that the financial meltdown showed how "a failure to regulate can lead to catastrophic economic harm."

"Lack of regulation also contributed to the BP oil spill in the Gulf of Mexico, the largest oil spill in U.S. history," said Lieberman in a statement. He caucuses with the Democrats.

Many on the left argue that the president's order will do more harm than good. "What the hell is the point?" Dean Baker of the progressive Center for Economic and Policy Research asked in an email to The Lookout. "Sure, there are stupid regulations, just like there is waste in government. But no one is fighting over stupid regulations. The real fight is over regulations that protect the safety of the financial system, the environment, our food and water etc."

If Obama goes on to roll back important regulations, Baker added, "then this will be another burn in hell item for the President."

The Chamber of Commerce spokesman who provided the group's statement did not respond to two requests from The Lookout to list other regulations that the group thinks are stifling job growth, and to explain how.

The Business Roundtable and the National Association of Manufacturers also hailed the president's order, but spokespeople for the groups similarly did not provide specifics despite requests from The Lookout.

(August photo of Obama visiting a local business in Seattle: Seattle Times/Ken Lambert, via AP)