This past Friday I was a guest on WGBH’s TV program Basic Black, a show that seeks to give the Black perspective of social issues and current events. During the show the point was made that the Republican Party does not believe in government. I, of course, counter that viewpoint and stated what the GOP in fact stands for is not “no government”, but government that is smaller, leaner, and most importantly smarter.
My friends on the left (yes, I have many friends on the left!) will say there is nothing wrong with government growing; after all, when government grows it does so out of necessity, the necessity of helping people. Therefore if you are against big government you are against helping people who need help. In other words you are an uncaring, selfish, brute of a human being. However the reality is republicans do not like big government because it does the opposite of helping people; it in facts limits opportunities. It does this mostly through its drive to fund its ever growing self.
I often point out to my left of center friends that I believe it is the government’s job to make life easier for its law abiding citizens and harder for the law breakers amongst us. However if you wish to open up a legitimate business in any major city, the permitting and licensing requirements alone will most like keep you from opening your business anywhere from 8 months to a year. Meanwhile a drug dealer, a pimp, or car theft ring can open for business immediately. With all of the talk about our economy and high unemployment, one might think government might look to make things a little easier for entrepreneurs.
A real easy one should be for anyone who wants to start a cab company. After all, it does not require any advance degrees in education; all one needs is a driver’s license and reliable car and liability insurance, right? WRONG! Taxi licenses, called medallions, that are given out by city government in order for an individual to “legally” own a taxi are outrageous! In 2011 New York City broke all records by selling two medallions for a million dollars apiece! Here in Boston the medallion cost $285,000 apiece and the numbers are like this in big city after big city.
How about this for irony? The IRS recently imposed a sweeping new licensing program that forces tax preparers to get IRS permission before they can work. The IRS by the way, in doing this, is exercising a power never granted to them by congress. The burden of compliance will, of course, be hardest for all the independent operators and the Mom and Pop shops. Of course the H & R Blocks of the tax world, the big boys support the new program whole-heartedly. Why not, as the Wall Street Journal explained, “Cheering the new regulations are big tax preparers like H&R Block, who are only too happy to see the feds swoop in to put their mom-and-pop competitors out of business”.
Another big government tool that chokes business is the “Certificate of necessity”, CONs. CONs’ laws were first used in Massachusetts to regulate railroads and public utilities. From Massachusetts, they have spread across the country. Basically what these laws do is allow potential competitors who already operate business in the particular area you are seeking a license to operate in to object to you obtaining said license, therefore blocking you from even starting your business. All your competitors need to say at your hearing is that your services are not needed; after all they are already offering them. And you are denied the certificate of necessity you need to operate your business. If this sounds too farfetched look up the case of St. Louis businessman Michael Munie in the article by Timothy Sandefur “CON Job” published by the Cato Institute (Summer 2011). Mr. Munie decided he wanted to expand his moving business to operate throughout Missouri. He had a federal license to ship from state to state already. But when he filed his application he ran headfirst into a CON law. The Missouri Department of Transportation was required to notify all the other moving companies in the state and allow them the opportunity to object to the application. Four of them did indeed object, at which point he had two choices: withdraw his application or go to a public hearing and prove there was a public need for his business. If he did manage to prove need he was told it may still take six months to a year for a final decision.
Just think there used to be a time in this country when a business would open and the public would decide if there was a need for it by either shopping there or not. Maybe, just maybe, if we want to start fixing our economy, we should go back to that model.