Several stories over the past week demonstrate how over-regulated our economy is, due to actions taken by the federal government. The result is a totally unacceptable 9.1% national unemployment rate, as compliance with burgeoning regulations drives up business costs, increases the risk to capital, and decreases private sector expansion and hiring.
The most significant development is the EPA’s regulation of coal-fired power plants. The Congressional Research Service concluded that the flurry of recently released EPA regulations will result in an annual cost to the economy of roughly $35 billion.
But this is just one set of regulations among many being promoted by the current administration. The seven most expensive of these regulations are projected to cost a total of up to $100 billion to our economy annually, and there are another 200 plus regulations that will cost in excess of $100 million each. In other words, these regulations will negate the growth in our economy during the first 6 months of this year and add even more people to the unemployment lines.
Who thinks this is good for our economy?
And iIt doesn’t stop there. The federal government is also are imposing regulations on the smallest and most obscure businesses. For example, goat herders are now being required to provide separate sleeping units and cell phones for each worker.
As a small business owner, I am painfully aware of how every regulation is a disincentive for small businesses to operate. Even well-intended legislation that may sound reasonable ultimately ends up adding to the massive amounts of regulatory code that a business owner must read and adhere to. Adding this overhead increases the likelihood that a small business owner will freeze hiring, lay off personnel, or close their doors all together, resulting in less competition and higher prices for the consumer. Small businesses create more than 70% of all jobs, and these firms are being hurt most by these policies.
But large corporations are affected as well. For decades we have seen our manufacturing base move overseas. This has been almost entirely due to a heavily regulated environment in the U.S., combined with free trade policies with countries that do not have similar regulations. In particular, many of our jobs have gone to China, where environmental, human rights, and intellectual property regulations are largely either non-existent or ignored. As a result, America hais gone from being the world’s largest creditor and exporter to the largest debtor and importer.
And yet the costs do not stop there. Excessive regulation increases costs for the government due to increased enforcement and legal expenses. Over-regulation also raises the potential for the government to selectively apply the law in order to target firms deemed adversarial to the government. In fact, Gibson Guitar is now claiming that they are being so targeted. Only time will tell if this is in fact the case, but in politics and business, perception often becomes reality.
To address these problems, we must restore integrity to Congress.
Integrity is more than doing what seems to be right at the moment. Integrity requires that we establish a consistent set of policies that will stand the test of time, just as a building with structural integrity will survive a hurricane. This means that whenever we decide to adopt a regulation, we must consider its impact on the competiveness of American firms in the global marketplace. If a regulation is deemed worthwhile, we must be willing to accept the costs – which may mean that we impose tariffs on those countries that do not adopt similar policies. We have ignored this issue for too long, and as a result, we have seen millions of domestic manufacturing jobs leave our country. It is time to reverse this trend.
I believe in America, but these policies are moving our country in the wrong direction.
By reducing over-regulation, taking the target off small businesses, and always considering American competitiveness in the global marketplace, we can get the federal government out of the way so the private sector can create good-paying jobs.