Friday, December 31, 2010

Undoing Regulation and the Cost of Labor

The new governor wants to be the gate keeper of an over reaching legislative body on job killing regulation.  This isn't that he wants to make use of the Wisconsin Governor's extensive veto power, no he wants to be able to undue any regulation, past or present.  With this much power the question that everyone should be asking is why do we need a legislative body?  If you want to cut the budget get rid of the legislature.

Will cutting the job killing regulations bring jobs to Wisconsin when these jobs have gone to places without any job killing regulations or the even greater job killing wages?  If we undue all environmental regulations it would be a start.  But, in the end wages are going to be a problem.  We are competing with countries whose wage rates are 5 or more times less than ours.  Yet you have the Federal Reserve chair stating that he doesn't see deflationary pressure.  He must be blind.  It is all around.  We have lost jobs to low wage countries and workers in this country have taken pay cuts.  The price of products has not declined, so sales are off because wages are down.  At some point the price of products needs to come in line with the new cost of labor.  When that happens we will enter a deflationary economy. 

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