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The Growth of Regulation Means Pain for You and American Business

Sad to say, if you take a longer-term view and look again at the regulatory environment, youâ??ll find it has been what an investor would call a growth industry, with the number of restrictions in the Code of Federal Regulations growing 28% since 1997 — thatâ??s nearly 2% per year.

There has been a lot of talk about regulations, more specifically about how the number of regulations have grown during the last several years. Sad to say, if you take a longer-term view and look again at the regulatory environment, youâ??ll find it has been what an investor would call a growth industry, with the number of restrictions in the Code of Federal Regulations growing 28% since 1997 — thatâ??s nearly 2% per year. If page count is an indicator, then hang on to your collective hats — in 1975, the Code of Federal Regulations had 71,224 pages. By 2013, the number of pages had grown to more than 175,000!

Pages in the Code of Federal Regulations by Year

Now, itâ??s one thing to watch the number of restrictions grow, but itâ??s quite another to determine what the financial impact has been. And, yes, there are several costs to be had, including the kind that is passed along to you, the consumer. What does a company do when itâ??s faced with higher costs? It raises its prices to pass along those price increases, of course. Weâ??ve seen that during the last several months, as companies like Starbucks (SBUX), Chipotle Mexican Grill (CMG) and dozens of others have faced rising commodity and other input costs.

Think about how much you pay for energy — gasoline in particular. According to the California Energy Commission, State Underground Storage Fees, State and Local Sales Tax, State Excise Tax and Federal Excise Taxes accounted for $0.65 per gallon when the retail price was $3.926 per gallon. Thatâ??s roughly 17% of the price per gallon. Itâ??s affecting not just gasoline, but other forms of energy such as electricity and other utility bills. Restrictions on the oil and gas industry have increased 20% since 2006, and total Environmental Protection Agency (EPA) restrictions now stand at more than 136,000.

Read more about the regulation pain point at Eagle Daily Investor.

Written By

Chris Versace is a financial columnist and equity analyst with more than 18 years of experience in the investment industry. He has been ranked an All Star Analyst by Zacks Investment Research and his efforts in analyzing industries, companies and equity securities have been recognized by both Institutional Investor and Thomson Reutersâ?? StarMine Monitor. Heâ??s frequently published in The Washington Times and is a frequent contributor to the daily radio show â??Americaâ??s Morning Newsâ?ť and â??Americaâ??s Radio Newsâ?ť. He has been quoted in the Wall Street Journal, Investorâ??s Business Daily, The Street, USA Today and other publications. In addition, he can be frequently seen on televisionâ??s â??Fox Businessâ?ť show.

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The Growth of Regulation Means Pain for You and American Business

There has been a lot of talk about regulations, more specifically about how the number of regulations have grown during the last several years. Sad to say, if you take a longer-term view and look again at the regulatory environment, you’ll find it has been what an investor would call a growth industry, with the number of restrictions in the Code of Federal Regulations growing 28% since 1997 — that’s nearly 2% per year. If page count is an indicator, then hang on to your collective hats — in 1975, the Code of Federal Regulations had 71,224 pages. By 2013, the number of pages had grown to more than 175,000!

Pages in the Code of Federal Regulations by Year

Now, it’s one thing to watch the number of restrictions grow, but it’s quite another to determine what the financial impact has been. And, yes, there are several costs to be had, including the kind that is passed along to you, the consumer. What does a company do when it’s faced with higher costs? It raises its prices to pass along those price increases, of course. We’ve seen that during the last several months, as companies like Starbucks (SBUX), Chipotle Mexican Grill (CMG) and dozens of others have faced rising commodity and other input costs.

Think about how much you pay for energy — gasoline in particular. According to the California Energy Commission, State Underground Storage Fees, State and Local Sales Tax, State Excise Tax and Federal Excise Taxes accounted for $0.65 per gallon when the retail price was $3.926 per gallon. That’s roughly 17% of the price per gallon. It’s affecting not just gasoline, but other forms of energy such as electricity and other utility bills. Restrictions on the oil and gas industry have increased 20% since 2006, and total Environmental Protection Agency (EPA) restrictions now stand at more than 136,000.

Read more about the regulation pain point at Eagle Daily Investor.

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