Steve Zelnak is a member of the Job Creators Alliance, a nonprofit committed to the defense of the free enterprise system. He is also the chairman of the Board of Directors and former CEO of Martin Marietta Materials, Inc., and chairman and majority owner of ZP Enterprises.
When things happen gradually, we tend not to notice. Just 12,300 years ago, Niagara Falls was about seven miles further downstream. It has slowly eroded and no one noticed along the way.
It's the same with our free enterprise system.
Since the 1930s, the federal government has seized more authority and imposed masses of new laws, rules, and regulations on all of us. Some of it was much needed. For example, the Environment Protection Agency did a great job of cleaning up our dirty air and contaminated water over a period of 30 years. Then, like all bureaucracies, they just couldn't stop being "helpful."
[See a collection of political cartoons on the economy.]
The result today is increasingly complex rules and regulations that are applied at levels that are well below where they have any value-adding impact. They simply drive up cost: cost to understand the rules (the average person can't understand the rules and regulations because they are written in a special language called bureaucratese--you must hire an expert who is fluent in the language for an explanation), cost to comply, and then added cost to the products or services you are selling.
Storm water regulations are a great example. If you built a house or a small office building, you are ultimately familiar with the requirements that cause you to hire an environmental engineer to assess the property, and then various measures you must take to limit storm water runoff, including detention ponds. I recently lost a sale on a residential lot that I own because the young couple could not afford to build a house and handle the $80,000-plus cost of complying with the storm water regulations on a seven acre lot that was nowhere close to a stream or other waterway.
[On Energy: The Illogic of EPA Carbon Regulations]
If it is a large property with significant impermeable surfaces, such as parking lots, the rules probably make sense, but not for a small residential lot. That is one home not built that would create business for carpenters, plumbers, material suppliers, lawyers, and many more. There is no question that the impact of excessive regulation is that it stifles job creation. The real strength of America is its middle class, many of whom are small business owners or self employed and who are most impacted by these regulations.
Our government is killing off their opportunities with inappropriate regulation that penalizes these important people with high cost and high stress. Big business may complain, but generally they like heavy regulation because it drives out smaller competitors. Smaller competitors tend to be more aggressive and therefore help drive prices down. The upshot is prices for the average consumer go up, small businesses are hurt, and only big corporations reap any benefit.
It is time to help the bureaucrats and the politicians understand we have had enough.
- Read the U.S. News debate: Should the Dodd-Frank Act Be Repealed?
- Check out Economic Intelligence on Twitter at @EconomicIntel.
- Check out U.S. News Weekly: an insider's guide to politics and policy.
Reader Comments Read all comments (1)
JonLeft of FL 9:12PM April 13, 2012