06/15/2012 12:39 pm ET Updated Jun 15, 2012

Jobs Crisis Misconceptions: Are Regulations Holding Back Growth? (VIDEO)

WASHINGTON -- Repeated Republican efforts to blame government regulations and the alleged growth of government under President Barack Obama for the weak economy fly in the face of economic conditions, according to data compiled by the Treasury Department.

The Huffington Post recently sat down with Assistant Secretary for Economic Policy Janice Eberly, the Treasury's top expert on monitoring economic conditions and jobs, to examine what she called misconceptions about what is holding the economy back.

Republican presidential candidate Mitt Romney summed up his argument for blaming regulations for the jobs crisis and economic slowdown in a speech on Thursday.

"You got some bankers, everybody goes to a bank from time to time," Romney said. "Go to your credit union or bank and ask them, did Dodd-Frank help you out?"

"Did it make it easier for you to make new loans?" Romney asked. "Or did Dodd-Frank make it harder for you in the banking business? What you're gonna hear, is that small business was not helped by Dodd-Frank. And small banks and community banks weren't helped to make loans because of Dodd-Frank."

But a quick look at the business loans made by banks over the past few years undercuts this argument, Eberly said. By the time Congress passed the Wall Street overhaul in June 2010, business lending had already reached its nadir. Business loans have increased steadily ever since. If Dodd-Frank had created regulatory uncertainty that truly hamstrung businesses, economists say, lending levels would have declined, when they have, in fact, increased. (And small banks are exempted from every major new policy required by the legislation.)

Plenty of firms have trouble accessing credit, of course, but the data examined by the Treasury suggest that banks are being tighter with loans due to poor economic conditions. This would mean that bank managers are worried they won't get paid back, not that they face overly burdensome regulations.

"The investment recovery since the recession has been very strong. The investment has grown at a rate second only to one other recovery," Eberly said. "The commercial and industrial loans have come back even despite the changes in regulation."

Her analysis applies not only to the effects on the economy posed by Dodd-Frank but also to those presented by the health care reform legislation passed by Congress in March 2010. The recent turnaround in business lending suggests that banks have been extending loans based on decisions about the level of demand in the economy. Lending plunged in very early 2009 and started to recover in early 2010 as money from Obama's stimulus was distributed into the economy, boosting household incomes, Eberly said.