Why Is Economic Freedom Being Strangled by Government Over-Regulation?

Why Is America in Decline? There are of course many reasons – but one in particular is government over-regulation. It is strangling the American Prosperity Machine – competitive, free-market, Constitutional, free-enterprise.  This is particularly true for small businesses and small, entrepreneurial start-ups.

There was a time when a housewife could supplement the family income by baking cookies and cake in her home oven and selling them at local grocery stores.  Today, that’s not so easy – as a list of food and tax regulations must be honored.  Recently, the news reported a child’s lemonade stand was shut down as illegal.  Over the Christmas holidays, an innovative young girl was prohibited from selling mistletoe on the street, while at the same time a beggar was tolerated a few feet away.

The regulation-required paperwork alone is discouraging small business start-ups and innovation, which has been a significant, job-creating force in the growth of American entrepreneurial, free enterprise. That’s no longer the case.  Big government, in cahoots with big business, welcomes regulations because it discourages competition from small, low-overhead, innovative operators and entrepreneurs. Big businesses can afford a team of lawyers, accountants and consultants to help them cut through the government red tape. The little guys can’t afford that.

If America wants to restore its entrepreneurial, job-creating days, government regulations must be minimized.  At the very least, small enterprises should be exempted from most regulations and taxation for the first five years of operation. Also, any business with sales below $10,000,000 a year should be exempt from federal, state and local taxation. This would enable a new enterprise to become financially secure before encountering government disincentives.

If a guy wants to buy a truck and enter into the transportation business, he should be able to do so without an avalanche of regulations and restrictions. If a housewife wants to make and sell her favorite recipe, she should be able to do it without government permission and interference. If a guy wants to start a machine shop, he should be able to do it unencumbered by government.

My Belgian father came to America in 1920, and went to work as a machine apprentice at the age of fifteen. By twenty five he was an expert in the metal forging business. Subsequently, he and his brother participated in the start up of three metal working enterprises, including a forging facility that employed up to four hundred skilled workers. In today’s regulation-intensive environment, he never would have been able to accomplish any of this. No new businesses, no jobs created.

Most people don’t realize the extent to which over-regulation of small and entrepreneurial enterprises is stifling America’s prosperity, employment, growth, competitiveness, innovation, excellence, etc. However, just try to open a business and you’ll find out how difficult and expensive it is to stay legal. The lawyers, of course, love it, as do the tax-accountants, but the American-Way – the American Prosperity Machine– the American people – suffer the undesirable consequences.

Why in heaven’s name doesn’t America error on the side of success, prosperity, innovation, entrepreneurship – and abandon its irrational obsession with solving every conceivable problem with a new government regulation affecting the general public. There must be a better way – and I sense it is the old way – the traditional American-Way – that once made America the greatest country in human history.

Marxist/Fabian-Socialists/big-government leftists want to control every aspect of American life.  The ObamaCare fiasco is a typical example of government ineptitude.  Look at the Post Office – a mess. Look at Amtrak – another financial disaster. Look at the ever increasing bureaucracy in Washington – trying to justify its position of ineptitude by passing more and more regulations to solve smaller and smaller problems.  It’s time to put an end of this nonsense – to return America to economic freedom – to free enterprise – to minimal regulations – to the traditional American-Way.

Image: Courtesy of: http://ap7.wikispaces.com/Frankenstein’s+Monster

About the author: William Pauwels

William A. Pauwels, Sr. was born in Jackson Michigan to a Belgian, immigrant, entrepreneurial family. Bill is a graduate of the University of Notre Dame and served in executive and/or leadership positions at Thomson Industries, Inc., Dow Corning, Loctite and Sherwin-Williams. He is currently CIO of Pauwels Private Investment Practice. He's been commenting on matters political/economic/philosophical since 1980.

View all articles by William Pauwels

  • Croco Dile

    “It’s time to put an end of this nonsense – to return America to economic freedom – to free enterprise – to minimal regulations – to the traditional American-Way.”

    Very true, William !
    Do you already know what to do ?
    I gave you the link short time ago…… have you read ?


    • WAP1102

      The eBook you recommended is on my “to read” list — after I finish “The Creature . . . ” , which is an awesome task, but interesting. The author obviously doesn’t like fiat currency and/or the Fed. I’m not sure I agree with him, but he offers a contrarian perspective, which is usually thought provoking. Understanding the modern-day science of money creation and economics is a mental challenge, indeed. In any case, I appreciate your input and critique of my thinking and commentaries. . . . All the best – and Happy New Year! J

      • Croco Dile

        A prosperous 2014 for you too, William !

  • AG Dot Com!

    Many of these so-called laws and regulations, the greater majority of which were why America came to be in the first place, are not even enforced “as-is”; skillful lawyers and complicit judges manipulate facts, circumstances, and huge amounts of money (see “settlements”) to create “precedents”, or de facto interpretations of the law, which then become the “accepted law” or “case law”. This Rube Goldberg miasma is a deliberate construct. Who benefits? Lawyers, judges, and those with pockets deep enough and morals lacking enough.

    Do we have the backbone, America, to stand in a courtroom as one voice, and when the sneering lawyers and cowardly judges intone “well, the law says X, but we have decided arbitrarily and in our beneficent wisdom, that when the authors wrote it, they really meant Y”, do we have the strength to seize them, strip them of their facade, and send them into the street as the frauds they really are?

    • WAP1102

      Good points. . . . Judicial appointments for life are a problem. We need term limits for judges and politicians. . . . Thanks for your perspective. And Happy New Year!

  • Fresh Mountain Air

    Reject the despot’s designs for desolation and tyranny: http://www.amazon.com/dp/B0094KY878

  • Mike the cowboy

    Its in someones interest to put the country into Third world status, we all know who it is.

  • yaki534

    The main agency that screws manufacturing in this country is the Environmental Protection Agency. They need to be done away with.

  • CharlieFromMass

    A good enough column for me to seriously consider using next time I have a business or economics class to teach.

    Very well written.

  • KeninTexas

    This article makes some excellent points, then ends with a paragraph jumping on everybody’s kicking horses: the Post Office and Amtrak.

    There are a lot of things the Post Office could do better, if they weren’t required to provide six-day-a-week delivery to virtually every urban, suburban and rural address. Here’s a suggestion to deal with just one cost issue: instead of individual rural delivery and operation of thousands of branch post offices, why not contract on a cost sharing basis with the mom and pop businesses found scattered throughout the countryside? Let the “customers” come to the mom and pop to receive and send mail.

    As for Amtrak, many people today don’t remember the days when the railroads operated their own passenger trains. Because they were losing big bucks on passengers, government created the National Railroad Passenger Corporation to take over the service. Of course, politicians hoped the service would die, but passenger trains remained popular enough with the public that Amtrak (as NPRC came to be known) held on. It never had sufficient funding to modernize and update the system and hopefully make it self sufficient, but it held on, despite the odds. Amtrak carried nearly 31 million passengers in 2013, the most since it’s inception in 1971. Here’s an uncomfortable fact: passenger transportation (including air, rail and road) does NOT make money. It only survives because the taxpayers provide support. Airlines depend on federal air traffic and safety support and local facility support. Bus companies rely on public roads and highways. Passenger trains mostly operate on freight railroads, but they must pay for use of those lines. Bottom line: there is no free lunch. Amtrak’s piece of the transportation spending pie is a paltry part of overall transportation spending. So you continue to single the railroad out! That’s just sloppy journalism!

    • WAP1102

      I appreciate your critique. The point I was trying to make is that private companies, in a competitive business environment, provide more and better services and products, at lower prices (in constant dollars) than public, government-subsidized monopolies. . . . As a youthful, UAW worker in the late ’50s, making $2.20 per hour, I had to work 1000 hours to pay for my first car. Today 1000 hours will get a similar worker a far better car. My first black and white TV in 1960 cost $550 – 10% of my take-home pay as a recently graduated electrical engineer. Today, a far smaller percentage of a graduate engineer’s income will buy a significantly better TV. . . . These are, of course, obvious examples of how better stuff, at lower real-prices, are being produced today in the private, competitive economy. That cannot be said for government monopolies. Most operate at a loss and survive only via government or charitable subsidies. . . . Frankly, the same can be said of so-called nonprofit companies. If they do not make a surplus – really a nontaxable profit – they must rely on charitable or government subsidies to survive. And where does that money come from? From taxes generated by profitable companies and their workers. . . . Unfortunately, liberal-leftist progressives and their friends in the mainstream media do not want to face up to these realities. They keep pushing for more and more de facto Marxist/Fabian-Socialistic government regulated enterprises – by promoting inter-class warfare as explained in my article. . . . In any case, thanks for your perspective. And Happy New Year!

  • CherryAnn1000

    As the owners of a small business, my husband and I say a hearty “Amen” to this article. He is now 60 and we are trying to hold on for a few more years until he can retire, but being a transportation consultant, and with more disasterous regs appearing every day (there are some now regarding hours of service that congress passed, and now have to eat crow because they don’t work, and they now acknowledge this, but refuse to change them), more of my husband’s clients are going out of business. And if all the truckers go under, how, oh how, are our products going to be delivered to the store?

    • don oesau

      Simple;the govt takes over the trucking business. The road to a communist america.

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