We’ve mentioned a lot of times on this one of the reasons small businesses aren’t hiring and are growing is because of the wonderful new regulations that Barack Obama is throwing their way. The Small Business Administration recently released a report which said that the total regulatory costs in our economy amount to about $1.75 trillion a year. This means that the costs due to regulation are twice as high as all of the individual income taxes collected every year by our federal government.
I just wanted to share with you an example of absurd, insipid, asinine and altogether idiotic government regulation. This is an example of how totally inflexible and outrageous government can be.
Near my home there’s a part of the Everglades called the Big Cypress Natural Preserve. Even though this is part of the Everglades it is called a natural preserve because there are still individuals who have property rights in the area. Throughout Big Cypress you will find small privately owned hunting cabins. To call these things cabins is a stretch. They really consist of a plywood floor, plywood walls, a plywood roof all sitting on some pilings. These so-called cabins belong to hunters who use them for shelter during their weeklong hunting trips into the preserve. Sometimes, depending on the water level, it takes these people as long as five hours in a swamp buggy to get to their cabin. Not my idea of fun … but whatever floats their boats.
As luck would have it there were some rather nasty and widespread fires in the preserve during the spring and early summer. Many of these cabins were destroyed. The people who own them now want to rebuild them, but the government has other ideas. Now, it seems, if you want to rebuild these cabins you have to do so according to code. The old cabins were grandfathered, so the building codes didn’t matter. But this would be new construction, so all of the applicable building codes would apply. This means that these cabins, that used to consist of nothing but plywood and pilings, will have to have a septic system, a working toilet, a sink with running water, and various other options and luxuries that a hunter could not possibly care less about in the middle of a swamp. The bottom line is that these cabins simply will not be rebuilt.
Now I know this is a pretty small scale when it comes to commerce and jobs, but this also means that there is plywood, fasteners, and various building hardware and materials that will not be sold. If these materials are not sold, they will not have to be produced. And if these materials are not produced, then there is no need to hire people to produce them, to market them, to transport them, or to sell them.
Now as I said, this is on a small scale. But this happens thousands of times a day, every single day across this country. Barely a moment goes by that some small businessman or individual doesn’t make a decision to forgo a building project, a home-improvement idea, or some other business activity simply because they have run into a government regulation and some government regulators that have made the task simply not worthwhile.
Let me ask you, are you dead sure that there is not a cockroach anywhere in your kitchen today. Yeah, I know, you do everything you can to keep those land-based mini-lobsters out of your home, but there’s really no way you can do that. So on the topic of cockroaches I have another little story for you from Southwest Florida. This one concerns a restaurant inspector in the city of Naples. Now I don’t have a problem with restaurant inspections. I got e-coli about two years ago from a bad taco salad. It’s a great weight loss program, but I really wouldn’t recommend it; especially the night before you’re supposed to fly off to join your family and some friends in Las Vegas for New Year’s Eve.
But back to this Naples restaurant inspector: It seemed that if this lady inspector walked into a restaurant and saw a cockroach she would even immediately, on the spot, shut the restaurant down. The kitchen would be closed, the customers told to leave, and the restaurant would be out of business until a subsequent inspection turned up no cockroaches. There again, revenue lost, wages lost, businesses adversely affected by over-zealous government workers — most of whom couldn’t get a job in the private sector no matter how hard they tried.
The point here is that we have gone completely overboard in the area of regulation. If the present level of regulation and with this 50 years ago life in America would not be anything like it is today. My friend Bernie Marcus, one of the founders of Home Depot, has told me many times that the Home Depot miracle simply could not be reproduced today. This is a man who, along with Arthur Blank, created a retail empire that produced almost 4000 millionaires among its investors and employees. That was then, this is now. Now Bernie and Arthur would not be able to reproduce what they have done. Two reasons: government regulations and trial lawyers.
Whenever small business owners are questioned about their failure to expand and hire new people government regulations always get part of the blame. More specifically, the new regulations that are being brought to us by ObamaCare, and the thousands of new regulations that will come with Obama’s consumer finance reform law, are cited as principal culprits. Heritage foundation calculations based on numbers from the US Office of Management and Budget shown that the year 2010 was an all-time champion when it came to the cost of major new government regulations. The total? $26.5 billion.
Scattered about in all of those fancy looking buildings in Washington DC we have tens of thousands of nameless, faceless bureaucrats sitting in cubicles who spend their days writing regulations. These bureaucrats are handed a few pages out of a piece of legislation and are then told to create a set of rules and regulations to enforce that particular section of that particular legislation. Just two or three pages from a piece of legislation can be transformed into hundreds of regulations by just one of these bureaucrats. And for everyone of these bureaucrats in Washington there’s a counterpart at the state level who was worried about whether or not a hunting cabin is going to have a working toilet, or a restaurant inspector at the local level who is going to shut down a business enterprise at the site of one cockroach.
There are certainly a lot of reasons why our economy is not growing. The fear of additional taxes is one. A lack of desire to expand a private business during the reign of a president who has declared the free market to be the “enemy” is another. And then there’s the regulations. And this is how were supposed to grow an economy and employ people?