The increasing burdens of doing business in statist America

John T. writes:

The mass of law and regulations that business has to deal with in the U.S. has always grown. However, from the end of World War II until now, it has grown at a dramatically ever-increasing rate. At this point, operating a business, for all the opportunity it represents, has become a proposition where one must capitulate to a mob-like government in order to stay in business. Every special interest under the sun has succeeded in getting their own preferences, mostly immoral ones at that, forced on business. In the practical business sense, this creates an environment of liability and risk, where business owner-operators must tiptoe in a minefield of political correctness and the penalty of one misstep or even misfortune is a business-ending event. And this tiptoeing has a cost: hours of time, thought, effort, legal advice, etc., spent not only complying, but carefully selecting policies which hopefully will avoid legal and financial repercussions. Too often, the cost is the repercussion that was not avoided. Of course we must remember that the legal environment includes the municipal, county, State and Federal levels.

If we think about what government seeks to control we have a list that defies logic: who can be hired and fired (and why), how much they are paid, how the parking lot is laid out, what the sidewalks look like, which air conditioner the business buys, whether employees must have access to free contraception, etc., etc. The list could go on and on—it’s becoming virtually interminable. And not only are so many regulations and laws arbitrary, in fact, many actually promote immorality. Ultimately, immorality exacts a price from society and from businesses. All we have to do to verify this is think about a simple question: where do businesses flock to, towns that are morally-bankrupt or those whose citizens exhibit a high degree of moral behavior. The naysayers can say what they will, but when one sets about starting a business, law and order, a good work ethich and absence of corruption make for the obvious place to build a business.

As if big government were not enough, big business simply ignores any sense of morality and heartily supports new laws and regulations. This is because they create barriers to entry into the marketplace. Big business can easily afford to comply with regulation and hire staff to do just that. Small business, of course, does not have the luxury of compliance being such a small part of their P & L. Absent any real competition, big business is free to increase prices as their internal waste requires. And with a corrupt legislature willing to do their bidding, the attitude of big business of course becomes “pile on the legislation and wipe out my competition.”

Most small U.S. businesses that are able to operate today cannot move their operations offshore to escape the U.S. legal system. None of them can influence their congressmen to tailor legislation to their desires. So we are left with barriers to entry and additional overhead that have effectively hamstrung many small businesses. The barriers ratchet up: they always increase, they never decrease. And they’re approaching a point where they present permanent inhibitions to small business growth.

The only functions the federal government should be handling are Defense, State, Justice, Treasury and perhaps Interior to manage government property. Instead of that, the federal behemoth sits on top of U.S. citizens and simply continues to grow and borrow more to feed it’s vote-buying spending; a recipe for disaster. Of course, this is not conjecture, as we can see our future playing out in Europe. Politicians there are in denial, and the populace is squeezed by decreasing real production brought on by private sector exits from unprofitable operations and simultaneously by currency devaluation which ultimately results from government spending years out ahead of any realistically collectible tax revenue.

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Gintas writes:

I remember reading about post-Soviet Russia, when there were so many taxes levied on businesses that they added up to more than 100 percent of earnings. To stay in business you had to break some tax laws. The mafia would get moles hired into companies, figure out what laws were being broken, and then blackmail them. So not only were you breaking tax laws to stay in business, you were paying hush money to the mafia.

Posted by Lawrence Auster at October 09, 2012 10:19 AM | Send