“The Boehner Uncertainty Principle”

CWRU business professor Scott Shane examines House Speaker John Boehner’s claim that regulatory uncertainty is discouraging business investment and job creation.  His conclusion:

both theory and evidence support the Boehner uncertainty principle: increased government regulation creates uncertainty about the future, which deters small business owners from investing and hiring.

Getting small businesses to invest and hire again requires reducing the currently high level of government regulation-induced uncertainty

UPDATE: If regulatory uncertainty is a problem, and Speaker Boehner is concerned about such uncertainty, does this mean that Congress should lay off trying to reform or repeal the health care or financial reform laws? Not really. Were additional legislative reforms completely off the table it would not do much to reduce existing regulatory uncertainty in these areas. Why? Because each of these laws requires federal agencies to conduct dozens (if not hundreds) of rulemakings over the next several years detailing and clarifying various regulatory requirements. Until these rulemakings are conducted (and any resulting legal challenges run their course) businesses and investors will not have much certainty about what these laws require. As a consequence, even if there were no legislative changes on the table, substantial regulatory uncertainty would persist.