Jill Priluck is fast becoming one of my favorite writers at Slate. In her latest Little-Guy Economy column, Priluck takes a careful, critical look at the new small business jobs bill.
Heavy on lending and tax provisions, the legislation has been touted as a means to spur job growth. But the bill is actually a Cash for Clunkers-like Band-Aid for the intertwined scourges of chronic joblessness and stymied growth. While the aid package will help many small businesses, it won’t create many jobs because it will benefit more established firms, rather than the young ones that do the bulk of hiring.
Her column reminded me of Michael Mandel’s advice for policymakers on job creation:
The federal government has to seriously consider whether an excess of regulation is impeding innovation, especially during this downturn. Over the past ten years—since the tech bust and 9/11—the country seems to have encumbered itself with layer and layer of rules and regulations that didn’t exist before. Companies have put in whole new layers of management to deal with Sarbanes-Oxley, the 2002 legislation that was supposed to protect us from any further financial crisises. The supposedly deregulated airline industry is now completely enmeshed in security measures, so we put up with more and more bureaucratic procedures each time we fly. And financial and healthcare reform seem certain to add even more regulations to the mix.
That’s why I’ve previously suggested countercyclical regulatory policy as an adjunct to countercyclical monetary and fiscal policy. (See, for example, my July 20, 2010 piece, The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy, published by the Progressive Policy Institute). Countercyclical regulatory policy would take a careful look at proposed regulations, to see if postponing them would encourage innovation and entrepreneurship during the downturn. Existing regulations, too, would be scrutinized to see if any could be temporarily relaxed during the downturn, to give the economy and hiring a quick added boost.
I like this idea, and it’s easy to see how it might benefit small, mid-sized, and young firms.