With the nation's job market still stuck in the doldrums, the last thing our economy needs are well-intentioned but unnecessary regulations that would stifle the still-nascent recovery.
But that is precisely the threat that many of America's best engines of job creation—airlines, food manufacturers, energy companies, automakers and others—are potentially facing from federal regulators implementing new financial services reforms under Dodd-Frank.
In PPI's latest policy brief, "The Risks of Over-Regulating End-User Derivatives," Jason Gold and Anne Kim explain how well-intentioned, but potentially overreaching, regulation of the derivatives market could choke off capital and job creation in industries that had nothing to do with the crisis of on Wall Street. They also describe the difference between the derivatives used by companies to manage risk and the kinds of speculative trades that regulators are right to limit.
As long as our economy stays weak, regulators need to stay smart and avoid pitfalls that slow growth.