The Denver Post's editorial page has a "PointCounterpoint" column that is over the top.
The question: "Should the U.S. loosen regulations on businesses?"
Point: "Yes: Regulations devastate economic growth" by Thomas J. Donohue, who is "president and CEO of the U.S. Chamber of Commerce." He relies upon a dubious study of the cost of business regulation on small business by Nicole V. Crain and W. Mark Crain that I examined a couple of weeks ago at this blog.
Simply put, the claim that business regulation disproportionately burdens small business, or costs $15,500 per U.S. household is baloney.
Counterpoint: "No: Bailouts are to blame for slow recovery," by George Chack and Carolyn Evans, who are business school professors at Santa Clara University arguing for a lassiez-faire approach to an economic downturn that like Donohue's lassiez-faire approach to economic regulation is out of the mainstream of economic scholarship.
They are right that recent regulatory reforms probably don't have any effect on job creation (they are mostly intended to prevent the government from having to bail out banks in the future). But, the argument that allowing bailed out firms to fail would have led to more hiring is also dubious.
Equally important, their argument is not a counterpoint to the argument that there is too much business regulation in the United States.
There are legitimate reasons to think that Lehman Brothers style bankruptcies, rather than bailouts, would have been better options, mostly because of the moral hazard and unfair distribution of risk that the bailouts created. The possibility of a bailout may encourage unreasonable risk taking in the future, and people who took risks that didn't pan out, and should have lost money as a result didn't.
But, it is hard to see how the liquidation of GM and Chrysler, and accompanying elimination of those jobs would have done anything but made the job situation in the United States worse, although it may have helped create jobs abroad. Unlike economic models, the U.S. economy is not a closed system.
A lot of the rest of the bailout funds were of the "nothing to fear but fear itself" variety, as evidenced by the fact that a very large share of the bailout funds have been repaid. If Fannie Mae and Freddie Mac securities had not been guaranteed by the U.S. government, the housing market would have been even weaker than it is now -- the collapse of the mortgage backed securities market left even perfectly safe borrowers without anyone willing to lend to them. Federal Reserve intervention in the form of offering short term credit to well established big businesses and banks when credit market froze prevented lots of healthy businesses from collapsing because their bankers had a fit of panic.
There is no evidence that deeper job cuts in a recession leads to a shorter period of job losses.
The response to the recession was almost certainly not the best possible. Stimulus funds have been spent inefficiently, although the mainstream economic viewpoint is the stimulus funds can create jobs. We could adopt policies that would encourage job creation (like reducing the tax penalty for making profits via labor as opposed to capital). But, given that the U.S. has some of the more lenient regulatory states in the developed world, the claim that government regulation is bad for our economy is a weak one. Generally, less regulated economies have weaker, not stronger economies.