Paul Krugman introduced the world to the "confidence fairy," the creature that proponents of austerity think will cause investment and growth because governments cut budget deficits. Only people with the right eyes, and a well-respected perch in policy making, are able to see the confidence fairy.

In the same vein, we should also recognize the "regulation monster." The regulation monster is the creature that strangles businesses in bureaucratic paperwork and red tape so that they can't invest and hire people. The NYT had a great piece documenting the work of the regulation monster in western Pennsylvania.

Those following Mitt Romney's presidential campaign or listening to Republicans in Congress have heard their complaints that President Obama's regulations are bottling up domestic energy production. These regulations are unnecessarily leaving the United States at the mercy of foreign oil producers, obstructing job growth and forcing us to pay more for energy.  

Having heard these stories, Jonathan Weisman went to western Pennsylvania, which is at the center of the Marcellus Shale, in search of the regulation monster. While the piece includes comments from industry people who complain about regulation, the people who live in the area all report no evidence of any regulation whatsoever. They seem to believe that the industry gets away with pretty much whatever it wants.

The evidence on natural gas prices would seem to support the residents' case. The current spot price is down by more than 40 percent from what it was when President Obama took office. In fact, there have been many reports in the business press of gas companies scaling back drilling plans because prices are too low.

In short, there is about as much evidence for the regulation monster in the energy industry as there is for the confidence fairy in the macroeconomic picture. Yet, these mythical creatures seem destined to have enormous importance in national politics and policy debates. Better get to know them.

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