September 08, 2011

Reality regulation: Small biz needs MORE regulation of big biz

Small businesses do NOT, NOT, NOT need President Barack Obama promising to roll back regulations of big businesses. Rather, as this McClatchy story shows, small businesses need more regulation of big business, and in most cases, knows it! (In some of the cases below, it's the failure of state, not federal regulations, but, then, in some of the cases, federal regulation is needed, period.)

First, government regulations make for GOOD business:
"Government regulations are not 'choking' our business, the hospitality business," Bernard Wolfson, the president of Hospitality Operations in Miami, told The Miami Herald. "In order to do business in today's environment, government regulations are necessary and we must deal with them. The health and safety of our guests depend on regulations. It is the government regulations that help keep things in order."
That's why big biz, like Big Ag that supplies "hospitality" folks their food, hate regulation. If you can trace bad meat, the government can fine companies and citizens can sue. Less regulation makes that harder; big biz gets to operate in the shadows.

Small businesses in general know what Wolfson said:

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it.
And know what I just said about big business:
Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.
 Small biz knows the post-crash lending freeze-up is what screwed it.

Small businessman Rip Daniels mentions another problem:
"Absolutely, positively not. What is choking my business is insurance. What's choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance," he told Biloxi's Sun Herald.
 And state insurance regulation departments are a piece of crap. We actually need a federal agency that does nothing but regulate insurers. Daniels also, contrary to the U.S. Chamber of Commerce, which claims to represent small businesses but doesn't, says Obama's stimulus plan helped small businesses like his.

That would be this lying U.S. Chamber:

The U.S. Chamber of Commerce is among the most vocal critics of the Obama administration, blaming excessive regulation and the administration's overhaul of health care laws for creating an environment of uncertainty that's hampering job creation. 

When it's asked what specific regulations harm small businesses _which account for about 65 percent of U.S. jobs — the Chamber of Commerce points to health care, banking and national labor. Yet all these issues weigh much more heavily on big corporations than on small business.
Beyond that, most of Obamacare isn't yet in effect, banking needs even more regulation, and organized labor hasn't gotten consistent presidential support from either party since Truman's time.

Meanwhile, playing off the rack, music store owner Lynn Swager sees something entirely different hurting small businesses:

"The thing that chokes us, believe or not, is the Internet. There are so many things that are accessible on the Internet that they can purchase for less than I can purchase from my distributor," Swager told McClatchy. 

"Everybody thinks the Internet is this great thing that is happening to the world, but it is really, I think, killing a lot of small business. People that we talk to that are no longer in business say the same thing exactly."
 But, as Amazon's attempt to dodge state sales taxes shows, this, too is a regulatory issue.

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