Pry loose chokehold on economy’s vitality — slash, burn red tape
America can still hang its hat on being an incubator for newly created, highly successful startups, like Uber and Airbnb. However, we are seeing a decline in the number of small businesses and start-ups over the past 15 years: Enemy No 1 — unchecked increases in government regulation on businesses, according to the free-enterprise think tank, American Enterprise Institute.
The endless bureaucratic red tape that businesses must navigate has taken a toll on small businesses, entrepreneurs, and economic growth of recent times. Yet the issue has largely been absent from the 2016 political campaigns, and during the presidential debates.
The surge in red-tape started during President George W. Bush’s administration. But leave it to President Obama to doubledown on new major regulations, with a cavalier attitude toward their effect on businesses. Although most Fortune 500 companies can navigate the regulations, many small businesses and startups struggle to meet compliance requirements. These regulations dramatically limit revenue, curb profitability, and stymie growth.
The rules leave businesses no choice but to expend billions of dollars to comply. But, what if? Imagine if business leaders, as they see fit, could invest those dollars in research and development, capital projects and, most important, people — their employees and customers. No doubt, many regulations sap economic vitality. As the total number of federal regulations increases every year, we see a decrease in new jobs, a decrease in new small businesses, and a decrease in the availability of capital funds. Essentially, these regulations are potholes and speed bumps in that next great American success story of profitability.
Now, consider this: A disproportionate number of these major regulations are enacted during the three months between the election and the inauguration, giving such rules the name “midnight regulations.” You see, unelected bureaucrats know that, post-election, the media are too preoccupied with forecasting the first 100 days of a new administration; the public at-large is weary of the election rhetoric.
So expect, in the darkness of this upcoming post-election hangover, to see an unprecedented implementation of midnight regulations. The cost of these regulations to the overall U.S. economy is likely to exceed a trillion dollars. They will hit business balance sheets and pick our pockets before we ever realize what happened. And it will be too late.
Pay attention, and call out our elected leaders now. Let them know that burdensome regulatory overreach is not acceptable. If you have any doubts, ask any small business owner or entrepreneur about the chokehold that regulations pose. According to AEI, complaints from small-business owners regarding regulations have doubled since the 1980s.
But do not give up hope. A solution does exist — the Regulations From the Executive in Need of Scrutiny Act of 2015 (REINS Act). In a nutshell, the bill would require that any regulation that would have a $100 million annual impact face an up-or-down vote in Congress. The benefit: It would force voters — consumers and business owners — to wake up and demand that any rule making be done in the sunshine. Ultimately, it would force Congress to be more responsive to, and respective of, the pocketbooks of constituents.
The threat of President Obama’s veto power has, unfortunately, led the U.S. Senate to sit on its hands, even though the REINS Act was passed by the House of Representatives. I get it: Regulatory power is very important to this president, who does not want to bother with the legislative branch. Which brings us back to the main concern: Neither Donald Trump nor Hillary Clinton has addressed the increase in unelected bureaucrat rule-making
What once was the land of innovation, creation and productivity — the mighty U.S. economy — has been hobbled by an infinite obstacle course of bureaucratic red-tape. Thirty years ago, the thought of executive orders being the main source of governing would have been laughable. Today, the thought of governance through the people’s branch seems forgotten. Perhaps it’s hidden somewhere in the 150,000 plus pages of regulations.
Either way, our free-market economy requires minimal friction from the expensive and burdensome regulations. We should demand a check on the power wielded by unelected bureaucrats.