Recently, Jan Eberly, the assistant secretary of the Treasury for Economic Policy, wrote a post that essentially amounted to a defense of Washington’s over-regulation, saying to small business owners and entrepreneurs across the country: “There isn’t anything wrong with our regulations. No problem here.”
Dr. Eberly seems to think that polls of Washington insiders and academic economists give policymakers a sense of what’s going on across the country. It’s that kind of head-in-the-sand mentality that defined Washington’s denial of the impending housing crisis in 2008.
If Dr. Eberly took a minute to step outside the Beltway, she would find very little support for her claim that big government overregulation hasn’t been stifling businesses from expanding, investing and hiring. In fact, according to the most recent Job Creators Alliance/YouGov poll, 84% of the Americans now believe that recent government policies have had a negative or no impact on job creation. In fact, 64 percent of those polled – and 71 percent of Independents – said they were worried that there was too much government regulation, taxes and federal spending.
The reality is, the bigger government gets – or threatens to get – the more unlikely it is that private enterprise will thrive or grow. This is especially true for small businesses. Big Business can afford to hire lawyers and compliance officers to ensure that they successfully navigate Washington’s regulatory maze, but most small businesses cannot. We get weighed down with reams and reams of paperwork that cripple our ability to do what we do best and force us to waste valuable time and energy on Uncle Sam, not on our customers.
It’s unfortunate that the voice of the small business owner, entrepreneur and entrepreneurial risk-taker isn’t being heard. It seems like the only people who have a say in how policy is crafted in Washington are either big businesses from Wall Street, or academics who have never hired a person in their life.
But the numbers don’t lie. According to the Small Business Administration, regulations extract $1.75 trillion from the private economy on an annual basis. Couple that with the fact that small businesses have created more than 60 percent of all new jobs in the past 15 years and you see just how wrong-headed this “regulate-first, ask questions later” approach is. When the federal government is taking that much money from the private sector, it’s easy to see why businesses are hiring less, workers are getting paid less and small business confidence remains at historic lows.
Even branches of the Federal Reserve not located in Washington seem to understand this. In a recent speech, Dallas Fed President Richard Fisher summarized business leaders’ concerns in this way: “Those with the capacity to hire American workers – small businesses as well as large, publicly traded or private – are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can’t access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy. In an environment where they are already uncertain of potential growth in demand for their goods and services and have yet to see a significant pickup in top-line revenue, there is palpable angst surrounding the cost of doing business.”
Job creators like me want more relief, not more regulation. The sooner Washington understands that, the better.