Why is America’s economy hogtied? For one answer, consider the excellent chart released Tuesday by the Republican staff of the Congressional Joint Economic Committee (JEC). With devastating clarity, it illustrates the miles and miles of red tape that bind the hands of entrepreneurs and CEOs like those of hijacked jet passengers. Regulation is a major and mounting cost that consumes scare resources — namely growth capital, management time, and basic patience.
In a Capitol Hill press conference yesterday morning, Representative Jeb Hensarling (R., Texas), echoed the growing frustration that he and other congressmen hear from businessmen and women who fruitlessly scream, “Uncle!”
“If you talk to any small businessperson in America — somebody who worked hard, took a risk, risked capital, built something — the first thing they say is, ‘With all due respect, Mr. President, I built this business, you didn’t,’” Hensarling observed.
“The second thing they’re going to say is, ‘Mr. President, since there has now been a 52 percent increase in major regulations or red tape in your administration and more regulations on the books than in any time in the history of America, not only did you not build this business, you’re hurting this business.’”
Onerous regulations erupt from Washington like flaming rocks from a volcano. The National Labor Relations Board regularly coughs up such projectiles. As attorney William J. Kilberg explained in the July 12 Wall Street Journal, the NLRB last September authorized “micro” bargaining units among larger workforces within union shops. An NLRB judge, for instance, recently certified a mini-union that represents the women’s shoes departments on the third and fifth floors of Bergdorf Goodman’s New York City store. Imagine such a retail manager negotiating wages and benefits, not with his entire staff, but with various floors and even departments under his roof.
Tie salesmen of Bergdorf’s unite. You have nothing but your clip-ons to lose!
Representative Vicky Hartzler (R., Missouri) noted yesterday that the Occupational Safety and Health Administration approached a factory in her district and “is demanding that they paint a yellow line on their flat roof ten feet from the edge, just in case an employee goes up there, so they know where the edge of the roof is.” Every dollar spent on that paint job is a dollar that no longer can pay a summer intern or purchase a help-wanted ad.
As the Competitive Enterprise Institute’s Battered Business Bureau reports, the federal government promulgated 1,283 pages of brand-new regulations via the Federal Register just last week. On July 20 alone, 25 new rules sprang to life. Between New Year’s Day 2012 and last Friday, American business people have grappled with 2,127 new regulations.
“Small businesses will tell you that they are strangling under the weight of red tape,” said Representative Kevin Brady of Texas, the JEC’s top Republican. “This president is on pace to add more red tape in America than any president in history.”
An April 16 U.S. Chamber of Commerce poll of 1,339 small-business executives with 500 or fewer employees and revenues up to $25 million found that “80 percent . . . report that taxation, regulation, and legislation from Washington make it harder for their business to hire more employees. Nearly three out of four (73 percent) of small businesses surveyed cite the recent health care law as an obstacle to growing their business and hiring more employees.” The poll’s margin of error is plus or minus 2.5 percentage points. (Full disclosure: I have been a paid participant at several USCOC events over the years.)
Representative Hensarling yesterday recalled his conversation with the owner of a Texas cabinetry shop with 17 workers.
“The guy just finally threw in the keys and shut it down,” Hensarling stated. “I asked him why, and he said, ‘You know what? It got to the point where I thought my federal government didn’t want me to succeed.’”