by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The main reason for the stalled economy is overregulation. Today, it is incredibly hard to start or expand a business due to the legions of bureaucrats overlooking an entrepreneur’s every move. Even a business with just one employee has to comply with 10 onerous federal regulations. By the time you reach 100 employees, you have to deal with 20 such regulations for every single employee. Regulatory compliance costs small businesses proportionately more than it does big businesses—more than $10,000 per employee. That’s a huge deterrent to entering the marketplace and offering jobs to people.
For big business, this is probably the most business-hostile administration in living memory. Obama has sought to placate his allies in organized labor by stacking the National Labor Relations Board (NLRB) with union partisans. The result has been the insanity of the NLRB telling Boeing it cannot open a new factory in South Carolina, a right-to-work state.
Over at the Environmental Protection Agency, Obama’s environmentalist allies are working to impose hugely expensive new emissions regulations—which even they admit would bring the economy to a halt if applied strictly to the letter of the law.
In finance, the Dodd-Frank and Sarbanes-Oxley Acts have made it extremely difficult for smaller companies to raise capital, stalling job creation. Provisions of both laws are estimated to cost the economy as much as $1 trillion in direct and indirect costs.
All the stimulus money was supposed to make up for this regulation. Yet that money has been handled by bureaucrats, who, as bureaucrats like to do, have spent it largely on themselves.