What Deregulation?

What is slowing the economy's rate of recovery?  Since World War II, the economy rebounded at a rate generally proportional to the recession that preceded the recovery.  But not this time.  This time, the downturn was steep, but the "recovery" has been shallow and slow.  See this page from the Minneapolis Federal Reserve for a series of helpful comparison charts.

The red line refusing to curve back upward is the current recession, which began in 2007.

So, what's weighing down the recovery?  Republicans claim excessive regulation is the problem.  Democrats claim that couldn't possibly be true.  From the Wall Street Journal:

 Jan Eberly, an Assistant Treasury Secretary, kicked off the Administration campaign with a white paper in October that purported to debunk the "misconceptions" that "uncertainty is holding back business investment and hiring and that the overall burden of existing regulations is so high that firms have reduced their hiring." Then the Administration mobilized some of the worst offenders, such as Kathleen Sebelius of HHS ("There has been no explosion of new rules") and Lisa Jackson of the EPA (her opponents are "using the economy as cover").

So who is right?  To answer that question, we first must ask if the number of regulations has increased in the last few years. Has it? The chart at the left presents the number of regulations being proposed or added each year.  A few things to note here.  First, not every regulation proposed ends up on the books, but many do.  Second, each of these regulations, when enacted, weighs the economy down by a minimum of $100 million per year.  Third, this chart does not include all the regulations that cost less than $100 million per year, but still add weight.  Fourth, these are only the regulations being added to an already bloated regulatory system, and old regulations never seem to come off the books.

Maybe all these regulations aren't the only reason the recovery has progressed so slowly, but how could they possibly have zero effect?