Uncertainty is the economy killer

Live Blog
Stephen L. Carter has a doubly revealing profile of a small business owner’s struggles with government. The business owner says regulations make the cost of doing business, or selling a business, too uncertain to make plans.

I argue a bit. Surely government isn’t all bad. It protects property, the environment, civil rights …

My seat-mate seems to think that I’m missing the point. He’s not anti-government. He’s not anti-regulation. He just needs to know as he makes his plans that the rules aren’t going to change radically. Big businesses don’t face the same problem, he says. They have lots of customers to spread costs over. They have “installed base.”

For medium-sized firms like his, however, there is little wiggle room to absorb the costs of regulatory change. Because he possesses neither lobbyists nor clout, he says, Washington doesn’t care whether he hires more workers or closes up shop.

I ask him what, precisely, he thinks is the proper role of government as it relates to business. “Invisible,” he says. “I know there are things the government has to do. But they need to find a way to do them without people like me having to bump into a new regulation every time we turn a corner.”

This is the problem with government intervention that those who seek more regulations miss. The regulations hurt small businesses and individuals. In health insurance, large employers don’t have to deal with cost of mandated benefits the rest of us pay. Only big business can deal effectively with big government, yet the Progressive Left keeps making government bigger and complaining about the power of big business.

As revealing as the business owner’s explanation of his problems is – and there is a lot more about government-imposed uncertainty – it is Carter’s description of his own thinking that is most telling.

As an academic with an interest in policy, I tend to see businesses as abstractions, fitting into a theory or a data set. Most policy makers do the same. We rarely encounter the simple human face of the less- than-giant businesses we constantly extol. And when they refuse to hire, we would often rather go on television and call them greedy than sit and talk to them about their challenges.

Recessions have complex causes, but, as the man on the aisle reminded me, we do nothing to make things better when the companies on which we rely see Washington as adversary rather than partner.

Carter admits guilt but then quickly absolves himself and those like him who demonize business. It is not that the policies they advocate or the words they say are adversarial, it’s only that companies “see Washington as adversary.” Carter wants government to hobble business in the same way some of us wanted Coyote to catch Roadrunner, but not really, because successful crippling would end the show. Carter’s seatmate shows how close we are to that point.

Joseph Coletti / Senior Fellow

Joe Coletti is a senior fellow at the John Locke Foundation focused on fiscal policy issues. He previously headed the North Carolina Government Efficiency and Reform initiativ...

Reader Comments