The Liberty of Risk
Ben Casselman penned a thoughtful piece last week in the WSJ which documented the decline of risk-taking in business ventures. Hard data show that both the number of new companies and the use of venture capital is waning. And this downward trend is a major contributor to the fact that the recovery from the recent recession is so painfully slow and anemic.
Casselman goes on to explain that economists aren’t entirely sure what is behind the decline and gave some potential causes: health care costs, licensing requirements, an aging population, and an increase in large corporations are among some of the suggestions. While these factors do contribute, Casselman missed the glaring elephant in the room. The government, and her anti-business policies, do more to stifle free business activity than any other than any other single mitigating circumstance.
This administration has been exceedingly heavy-handed in its efforts to demonize businesses, while promising that businesses will be highly taxed and regulated. Whether it is labor regulation by the NRLB or environmental regulation by the EPA, government interference is overreaching and restrictive.
Additionally there have been huge increases in both criminal rules and regulations about what businesses are allowed and not allowed to do — from nitpicky labor rules to dictating employee minutiae to minimum wage requirements which restrict business hiring.
More importantly, Obama has provided the background for a litigation-friendly environment. If a larger, more financially stable company wants to steal something from a smaller company, they can sue them or just threaten with a costly legal battle. Or, if labor doesn’t like them, they can force them to shut them down as an alternative to litigation.
Finally, Obama has taken the stuffing out of entrepreneurship by telling people “you didn’t build that” — meaning it’s not yours and it belongs to everyone else. He delivered the further blows that if you are successful, we’re going to take your success away from you by taxing you to death with higher rates and surtaxes.
Of course, there will be some successes. It just now takes a higher level of skill, ideas, and money to exercise your entrepreneurial spirit. It’s not like there won’t be the Jeffrey Bezo or the Bill Gates or the Steve Jobs. They’ll still come through everything despite the immense impediments. The problem is that it is the middle entrepreneurs who will have a hard time getting started, and even when they do, they will likely get discouraged in the mess. But it is this middle group, the bread-and-butter of small businesses, that have made this country great. That future is threatened, as we are seeing now in subtle shifts within the realm of business making.
The future of this country will continue to decline if the anti-business sentiment that Obama has unleashed is allowed to continue. The middle entrepreneurs, the mom-and-pops, the family businesses are the ones that make up the difference between the very tepid growth that we are seeing and the strong growth and recovery that could be better if businesses actually had better opportunity.
Businesses go into business not to comply with government dictates, but to provide a product, a service, to make things. The very liberty for Americans to have the opportunity to succeed and fail, to take risk, to survive, and to thrive is under siege.
Crossposted at alanjoelny.com