The U.S. economy is teetering between progress and regression. As businesses work to overcome staggering odds, many of which are imposed by Washington, each step forward seems to be met by two in the opposite direction. Few would argue that the anemic growth the country has experienced over the past four years is enough to rebound from the trough we find ourselves in, yet policymakers continue to revert to the same failed policies that have yielded little in the way of results.
In the wake of the economic downturn of 2008, the American public unwittingly surrendered innovation and individualism for the promise of federal rescue. Now, as the markets settle, the sober realization that further government intervention has failed is setting in. Recently, the rate of small-business startups hit a record low, businesses revised downward their hiring expectations and government spending peaked — all at the expense of taxpayers.
Instead of empowering the private sector, the Obama administration has targeted it. President Obama’s own comments earlier this month underscore how aloof he is from business owners. He said, “If you’ve got a small business, you didn’t build that. Somebody else made that happen.” Before that, he assessed that the private sector is “doing fine.” All came after an Environmental Protection Agency official’s comments explaining the organization’s policy of “crucifying” businesses became public.
More than ever, business owners are struggling. Cleverly disguised, there are more than 4,000 federal regulations that won’t hit until after the November elections. Those rules carry a price tag of more than a half-trillion dollars. This tidal wave of regulation stands to hurt the economy and the American public alike.
Small businesses are poised to take the biggest fall. Each year, small businesses create two-thirds of new jobs, and they produce half of the U.S. gross domestic product. Unlike their larger competitors, these companies often can’t afford to hire specialists to navigate the burdens federal requirements put on them. It takes valuable time and resources to keep up with all of the rules they are required to follow. It shouldn’t come as a surprise that small businesses recently downgraded their hiring expectations or that earlier this year, nearly half of those surveyed said government regulation was their biggest deterrent to creating new jobs.
The impact of government overreach is much broader still. In private markets, Washington is limiting competition.
Once-proven-safe chemicals have been targeted by regulators in favor of less-tested, possibly insufficient alternatives. The EPA’s de facto regulatory program, Design for the Environment, needlessly promotes compounds that haven’t been sufficiently tested over those already approved. Such moves not only challenge small businesses, they put consumers at risk as well.
In the telecommunications world, a market in which competition is driving technological innovation and cutting costs, lawmakers seem intent on slow-walking important developments. Current regulations are still designed for mid-20th-century technology, which makes no sense in today’s digital age. They should focus efforts on deregulating Internet-protocol technology to provide greater access to information and services.
Developments in domestic energy resources, which could cut prices at the gas pump and already have lowered heating and electrical costs for homeowners, continue to be stymied by strict federal and state regulation. The administration has cut offshore drilling permits by a third while the approval process takes nearly three times longer. At the same time, federal and state agencies have acutely hamstrung developers through excessive regulation in spite of proven safety measures.
Instead of simply more, regulators should strive for more efficient. By partnering with businesses, particularly small businesses, policymakers can create rules that protect our communities, the environment and the economy. In the past five years, the country has edged toward greater government involvement as a cure for our economic woes, and collectively, we’ve seen those efforts fall short. It’s time to re-empower private industry.
America is a country built on individualism, opportunity and innovation. Now is not the time to abandon those values.
Harry C. Alford is president and chief executive officer of the National Black Chamber of Commerce and chairman of the U.S. Chamber’s Government Oversight and Consumer Affairs Committee.