Small firms say regulation is fastest-growing concern
It’s been exactly three and a half years since Barack Obama was inaugurated, and here are two things that folks on the left have been saying about the economy every day since then: It’s Bush’s fault, and the problem is a lack of aggregate demand.
Here’s what small businesses have to say about the situation:
Chart by Dan Clifton at Strategas Research, via the AEIdeas blog
Keeping in mind that these are what small firms are “most concerned” about, meaning many likely have concerns to varying degrees about all three, a few things jump out at me:
1. In 2005, these three concerns accounted for a little more than one-third of small firms’ biggest worries. Today, they combine for about 60 percent. That suggests to me that these firms have less time and energy to devote to specific concerns about growing their business.
2. After shooting to the top in the second half of 2008, concerns about sales plateaued for about two years. Those concerns have been falling pretty steadily for the past year and a half.
3. Concerns about regulation, which more or less mirrored those about sales from 2005 to the start of 2008, began a steady ascent in 2009 and have almost doubled since then.
4. Concerns about taxes have remained fairly steady over these years.
5. At the beginning of 2009, the sum of concerns about regulation and those about sales was in the neighborhood of 40 percent — pretty much the same as today. But the division between them is starkly different: Whereas there were three small firms concerned about sales for every one worried about regulation then, now the two are dead even. In other words, worries about sales have been gradually replaced by worries about regulation.
6. If current trend lines continue, both taxes and regulation will soon rank higher among small firms’ concerns than sales.
Even if one wants to credit Obama’s “stimulus” package with the decrease in worries about sales — totally ignoring the effects of the Federal Reserve’s ultra-loose monetary policy — this graph clearly shows why improved demand hasn’t shifted the economy out of neutral: Increased regulation has stifled the recovery we might have had.
Small firms are generally credited with the bulk of job creation in this country. So the question this information puts to voters is: Which candidate do you expect to do more about the most pressing problems faced by small firms — Barack Obama or Mitt Romney?
– By Kyle Wingfield
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575 comments Add your comment
Artful Observer...
July 20th, 2012
4:53 pm
Tiberius, Again, you are off base…..
Comply….Speaks for itself….
Find away around the regulation……
To the point someone made earlier about being fined $1200.00 for having a lamp plugged into and extension cord…. How about you removed teh extension cord and go right to the outlet. Or the one aout having a pond and needing the COE to come out and approve it…… Why not choose a location that DOES NOT HAVE A POND!!!!
And my third point….. Well starting and running a business is not easy and it is not supposed to be… If you do not have the will and or teh smarts to figure out how to do it and make a profit, then shutting your doors and going to work for the next guy might not be such a bad idea……
md
July 20th, 2012
4:56 pm
“So what would you say to all the small business owners who finance their start-ups with debt. Isn’t that money they don’t have/”
And that my friend is where Bain comes in
Some people are stupid
July 20th, 2012
4:57 pm
Dusty-
1. HUH??
2. When you purchase groceries, is that not an expense to you, is that not revenue to the grocery store. I’m pretty sure there are some errors in the second sentence that I don’t want to misinterpret so I will let you reword it so I can respond if you feel like it.
MD-
the regulation demanded that the corp increase it’s expenses to comply..
Ok, then if the work wasn’t shipped somewhere else or given to someone new, what is the expense?? This whole post was about financial so unless you are about to say time, you are completly off topic.
Some people are stupid
July 20th, 2012
4:58 pm
MD- LOL @ the Bain comment
Tiberius - pulling the tail of the left AND right when needed
July 20th, 2012
4:58 pm
“I see your point, my counter-point is money out whether from you or a company is still money out that goes to someone or something else.”
My final point is that the money out was taken by FORCE.
If you think that is a good thing, then heaven help this nation.
Some people are stupid
July 20th, 2012
4:59 pm
Tiberius-
Didn’t say it was a good thing.
md
July 20th, 2012
5:02 pm
“Why not choose a location that DOES NOT HAVE A POND!!!! ”
Ever been to south Ga?
And pond was never mentioned………we are talking “puddles”…..real honest to goodness puddles. In Atlanta, one wouldn’t think twice about it, in south Ga, it depends on what is growing in that puddle (atl too, but not as frequent). And the corp has to verify that the plants in the puddle aren’t the special ones or there aren’t enough special ones to worry about it…….bureaucracy at it’s finest…..
md
July 20th, 2012
5:04 pm
“Ok, then if the work wasn’t shipped somewhere else or given to someone new, what is the expense?? This whole post was about financial so unless you are about to say time, you are completly off topic.”
Of course it’s time……..the increased expense of paying for employees.
How Inciteful Is That!
July 20th, 2012
5:05 pm
In 2010, 25 of its [NFIB's] members, all Republican, were elected to the 112th Congress. A number of them, such as Rand Paul, Jeff Duncan, Paul Gosar and Kristi Noem, are affiliated with or endorsed by the Tea Party movement. The same year, the NFIB opposed the Patient Protection and Affordable Care Act health care reform legislation while some other small business advocates supported the measure.
Get real, Kyle.
Hillbilly D
July 20th, 2012
5:10 pm
In most cases, running a fan off an extension cord isn’t a good idea, regulation or not.
Thulsa Doom
July 20th, 2012
5:23 pm
“I thought our whole discussion was regulations can create jobs. Since you seem to have conceded that point…”
Perhaps regulations do create jobs- jobs that deal with pushing paperwork to comply with some bureaucrats fancy dictates. But in the end it comes back to basic economics 101. Spending money to comply with regulatory costs is an inefficient allocation of resources and economic progress is enhanced by higher and higher levels of worker productivity and the efficient allocation of scarce resources. Regulatory costs inhibit both. The problem is that most liberals lack basic economics knowledge and can’t understand this most basic tenet of economics.
Dusty
July 20th, 2012
5:24 pm
Err Mr. Stupid,
You were talking about a company hiring more people, not buying groceries. Hiring new employees adds another COST to the company, especially if the hiring is due to regulation,and not a need because of increased business.
Buying groceries puts money into an established business already set up to sell food products. Their prices are set for a small profit margin. If they hire some extras just because of regulations (AND NOT MORE CUSTOMERS) then they have lost money with no way to offset it. Just hiring new “help” at the store will not help unless you have MORE customers. When the small profit margin is gone, then the business will fail eventually.
I saw another small business announce its closing today. I don’t know what caused it but their profit margin is gone for sure and you cannot run very long without it..
saywhat?
July 20th, 2012
5:29 pm
@ 5:05- exactly. Its an easy and generally a bogus argument to berate information simply because of the source without looking at it in depth. In this case however, looking at it closely clearly shows multiple sources of bias, rendering the results useless for anything other than propaganda.
Just as useful would be a poll among known wife beaters asking what they perceive to be the biggest problem facing American women. Do they A) Talk too much, B) Think they know too much, or C)Not do what they are told fast enough?
Kyle Wingfield
July 20th, 2012
5:29 pm
Many of you seem convinced the NFIB members’ beliefs simply reflect their partisan leanings (I’m not sure it’s fair to describe all NFIB members as Republicans anymore than to describe all AARP members as Democrats, but let’s ignore that point for argument’s sake). But why would it not instead be that their partisan leanings reflect their beliefs?
If small-business owners really care about things like taxes and regulation, why wouldn’t they support the party that at least talks about doing things to help them in those areas (and sometimes follows through)? Why in the world would you expect an association of small-business owners who care about such things to be even-handed politically, when Democrats at the federal level show no signs of wanting to address their concerns in a meaningful way?
And if any of you know an equivalent association of small-business owners who tend to support Democratic policies, and want to cite a similar poll by them, then by all means, please do.
How Inciteful Is That!
July 20th, 2012
5:29 pm
EPA Boiler MACT
There are more than 1.5 million boilers in the U.S.
• For 86 percent of all boilers in the United States, these rules would not apply,
because these boilers burn clean natural gas at area source facilities and emit
little pollution.
• For almost 13 percent of all boilers in the United States, EPA’s standards would
continue to rely on practical, cost-effective work practice standards to reduce
emissions.
• For the highest emitting 0.4 percent of all boilers in the United States, including
boilers located at refineries, chemical plants, and other industrial facilities, EPA is
proposing more targeted revised emissions limits that provide industry practical,
protective, cost-effective options to meet the standards.
• Existing boilers would have three years to comply with these standards and can
obtain an additional year beyond that, if technology cannot be installed in time.
• Existing incinerators would need to comply no later than three years after EPA
approves a state plan or five years after the publication date, whichever is earlier.
• The proposed changes would cut emission of pollutants such as mercury,
particle pollution, sulfur dioxide, dioxin, lead, and nitrogen dioxide.
• These pollutants can cause a range of dangerous health effects – from
developmental disabilities in children to cancer, heart disease and premature
death.
• The proposed standards would have direct benefits to many communities where
people live very close to these units.
• Together, the standards will avoid up to 8,100 premature deaths, 5,100 heart
attacks, and 52,000 asthma attacks.
• EPA estimates that Americans would receive 12 to 30 dollars in health benefits
for every dollar spent to meet the proposed standards.
Those mean nasty wegulations are just killing our small businesses. Oh Woe is me.
Not So Casual Observer
July 20th, 2012
5:31 pm
The IRS offered tax preparers a tax preparer identification number sometime in the 1980’s or 90’s to allow them to replace thier social security numbers on the returns they prepared. A great idea I would say and at the same cost as a federal identification number for all businesses – nothing, nada, zero.
Along comes the “Patient Protection and Affordable Care Act” and suddenly there is now a renewal fee currently set at $62.50 per year but, as in all things of government, this will rise as the cost of ObamaCare continues to increase. What, pray tell, does the id number have to do with health care? And this is simply one example of the many HIDDEN taxes imposed on the businesses to pay for this abomination of a bill.
The Democrats could not conceive of a bill that was an honest HEALTH CARE act that would pass without the imposition of reconciliation in the Congress.
There is not one problem in this country that is not the result of liberalism.
saywhat?
July 20th, 2012
5:34 pm
“Perhaps regulations do create jobs- jobs that deal with pushing paperwork to comply with some bureaucrats fancy dictates”
____________________________________________________________
Tell that to the engineers who designed and people who manufacture automobile seatbelts and airbags, or the equipment which help create healty food processing, etc. not to mention the benefits of not suffering the economic losses which result from irresponsible business behavior in the first place.
Kyle Wingfield
July 20th, 2012
5:34 pm
LOL. Inciteful chides me for citing a survey of small-business owners about what concerns small-business owners, because many of them are Republicans — and then uses talking points from an EPA press release to defend an EPA policy, even though it’s currently run by Democrats.
Tell you what: I’ll concede the folks at EPA really think they’re doing the right thing, if you’ll concede the NFIB members really believe what they say.
Thulsa Doom
July 20th, 2012
5:35 pm
saywhat?
NFIB has 350,000 thousand members according to wiki. And if so then the opinions of 25 Republicans out of 350,000 members who also happen to be NFIB members is negligible.
How Inciteful Is That!
July 20th, 2012
5:38 pm
Kyle,
Why don’t you try digging a little deeper into these regulations that you claim are of such concern to small businesses (whatever their definition of small business happens to be, amongst other things). I just gave you a little information on the boiler MACT that the partisan hack in the video on the NFIB website whined about as a starter. She also moaned and groaned about the horrid things that the Obama administration was doing to small businesses as a result of having to deal with tighter regulations for cement plants and for coal ash and greenhouse gases. Maybe you just don’t live downstream of a coal ash retention pond or downwind of an antiquated coal-fired boiler or cement plant so what concern should they be to you, huh.
Kyle Wingfield
July 20th, 2012
5:39 pm
The regulations-create-jobs crowd really needs to brush up on their Bastiat.
Thulsa Doom
July 20th, 2012
5:40 pm
saywhat,
Sure. You can find a handful of examples to bolster your argument and certainly some common sense regulations such as seat belts are a dang good thing. But burdensome regulations that add nothing to the particular good or service but which do incur a cost are simply an added cost or drag on economic output. Not all regulation is bad. But regulations that do nothing to enhance safety at a reasonable cost do nothing but add to the overall cost of a product or service.
saywhat?
July 20th, 2012
5:45 pm
Kyle- “And if any of you know an equivalent association of small-business owners who tend to support Democratic policies, and want to cite a similar poll by them, then by all means, please do.”
http://economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/
This opinion column( by a Republican no less) holds an opinion different than your own, and cites many other surveys and data. It even cites the NFIB poll you started with, though with a far different interpretation, including one provided by the Economic Policy Institute (which though it calls itself non-partisan, appears to be more liberal in its core ideology).
How Inciteful Is That!
July 20th, 2012
5:50 pm
What Republican could possibly support a regulation that requires 0.4% of those worst of the worst coal fired boilers to cut back on emissions of mercury and dioxin. After all, those things cannot possibly be harmful enough to warrant some poor small business expending money to clean up their act. Why don’t you pump those emissions straight into your own homes just to show us just how harmless those things are.
And as for your chart of concerned small businesses, it might be more believable if it included source data. You guys are into source data given all the “lies” and “deceit” that you have uncovered in the hacked e-mails from climate scientists, right.
Kyle Wingfield
July 20th, 2012
5:50 pm
Inciteful @ 5:38: Yes, you provided “information” — information that is rife with EPA’s opinion of its own new rule and its effects: “practical,” “cost-effective,” etc.
First, let me point out that 0.4 percent of 1.5 million is 6,000 — or 120 per state, on average. That’s 120 “refineries, chemical plants and other industrial facilities” in the average state whose boilers will probably have to be overhauled, replaced or retired; that’s not an insignificant number. EPA also estimates 1% of national electricity-generation capacity will be retired due to the rule, and that the average electricity bill will rise by 3.7%. EPA itself has estimated the rule’s total cost at about $11 billion per year. Your mileage on whether this is “practical” and “cost-effective” may vary.
How Inciteful Is That!
July 20th, 2012
5:52 pm
Y’all enjoy your weekend.
Not So Casual Observer
July 20th, 2012
5:53 pm
How…,
Would I be correct that you agree with the stated goal of Obama to crush the coal industry in this country?
How interesting that you chide small businesses for their “moaning and groaning” yet you imply that you live, or lived, downstream of a coal ash retention pond or downwind of an antiquated coal-fired boiler or cement plant, as if these businesses had an impact on your quality of life.
So was your home there when the businesses moved upstream or upwind of you, or did you move in without investigating the area?
Airports are not pleasant neighbors so would you then propose closing all of the airports?
Hospitals have emergency vehicles, with their lights and sirens, arriving at all hours of the day and night. Would you propose closing all of the hospitals out of respect for their residential neighbors?
Schools with hundreds of screaming children are a nuisance to some. Close those as well?
Liberals live in a dream world where everyting should be perfect for all and all of the time. In every good little liberal’s mind the government is the answer when in fact government is the problem. Government has an unquenchable thirst for money and liberals do not see this as a problem when, in fact, this thirst is the most crushing of problems for the citizens.
Thulsa Doom
July 20th, 2012
5:55 pm
saywhat,
You’re still not getting it. Regs that only add costs to a product or svc with no tangible net benefit such as a seatbelt regulation do not also raise economic output. All that is happening is that the cost of goods and services are being raised with no corresponding increase in economic output.
Not So Casual Observer
July 20th, 2012
5:59 pm
Seat belts are an excellent idea, however the imposition by government into the private lives of citizens through a law requiring seat belt use is a bad idea. Sure they save lives but we should seek freedom not surfdom.
I use my seat belt every time I drive and require those who ride with me to do the same. Those who ride with me have the option of an alternative ride. Government as your nanny is a bad idea.
saywhat?
July 20th, 2012
6:04 pm
TD, “tangible net benefit” seems to be a little subjective. Just because YOU fail to see the benefit of a specific regulation does not mean the benefit does not exist.(I admit that it doesn’t necessarrily mean a benefit DOES exist either). Read the Bartlett column from my 5:45
Dusty
July 20th, 2012
6:05 pm
How Inciteful 5:29
I wouldn’t know a boiler from a broiler. Nevertheless, we all want to live with fresh air, safe environment and clean water. Most of us know that getting that 100% is impossible.
It is good to try to improve such conditions but considering the cost of such regulations shows the impossibility for one thing. “Boilers” are but a drop in the bucket for “green” regulations. We need filters on every river, on every “smoke stack”, on every chemical plant or any that use chemicals. on every farm production, every medicine, every gas & oil producer, all building material, all machinery and automotives, and every drop of ocean water should be purified.
The government is not good at giving costs as they usually under estimate. I would say double any government estimate and start from there.
We have to limit the amount of money spent on unhealthy but interminable expenses, We must do the best we can with limited amounts. Too many problems, too many people, and not enough money.
Our government was made to govern a free people, not produce impossible miracles or sink a country with debt..Right now it seems government has forgotten its definition .
Hillbilly D
July 20th, 2012
6:06 pm
Having worked in the car business for years, I can tell you that seat belts, and air bags especially, drove up the price of a car. Not saying they are bad ideas but airbags are expensive. They are also have a 10 year life, which few people know but how many folks are going to spend $3-4K to change out airbags on a 10 year old car?
Lil' Barry Bailout - Vote American
July 20th, 2012
6:09 pm
Since we bloggers haven’t been able to satisfy the libtards by providing chapter and verse on the reasons small businesses are doing poorly during the Obozo regime, perhaps someone should take a poll of small businessmen.
Oh, wait, someone already did…
F. Sinkwich
July 20th, 2012
6:10 pm
“If you’ve got a business — you didn’t build that. Somebody else made that happen.”
–O’bozo, July 13.
I waited for Somebody all day today to set me up. Didn’t happen.
I’ll still wait tomorrow!
saywhat?
July 20th, 2012
6:11 pm
You think airbags and seatbelts are expensive? Price out a funeral, or multiply that by a factor of 10 to 50 for a closed head injury.
Thulsa Doom
July 20th, 2012
6:12 pm
saywhat,
I read the Bartlett column. His own column contradicts him because he states that only 13.9% of small businesses considered it a serious concern. Well 13.9% is a pretty good number and was the third biggest concern. We’re not talking peanuts here.
As I said there are some regs which are good and some which are just plain wasteful- some bureaucrat thinking up stuff to do to justify his job. Personally I would rather have some regulatory activity increased in beneficial areas and decreased in others. 2 quick examples- only 1 % of our seafood is inspected coming into the country. I would be all for increasing the number of inspectors to raise it to 5% or more of our seafood being inspected. On the other side I’ve seen the stacks and stacks of books waist high that govern banks. So much of it that even the regulators don’t understand it all. Didn’t stop the housing meltdown though.
Conversely you look at the Cayman islands where the regs to open a hedge fund is something like 30 pages and the regs for opening and running a bank are something like 100 pages. Simple- straightforward. And when’s the last time you heard of a Cayman island bank failing? They had no bank failures to my knowledge in the wake of the housing meltdown and wordwide recession of 07-08.
Hillbilly D
July 20th, 2012
6:14 pm
saywhat?
You missed my point. I didn’t say they weren’t regulations that we should have, I said they increased the cost of a car, which they did.
Lil' Barry Bailout - Vote American
July 20th, 2012
6:16 pm
You don’t compare the cost of an airbag directly to the cost of a funeral or the value of a human life. You compare it to the cost of a funeral or the value of a life multiplied by the chance of needing the airbag.
That calculation is not so clear cut.
Thulsa Doom
July 20th, 2012
6:18 pm
Hillbilly D,
Dang. I didn’t know they added that much to the price of a car. I’m a very defensive driver and have never had an accident. Come to think of it I would have passed on the airbags but not on the seatbelts. But I didn’t have the choice.
Hillbilly D
July 20th, 2012
6:21 pm
Thulsa
Yeah they are expensive and a lot of times they go off, when you really didn’t need them but I’ve seen them save people, too. You’ll still probably get hurt but much less severely. The airbag would be must less effective without the seatbelt, though. They’re designed to work together.
Thulsa Doom
July 20th, 2012
6:22 pm
saywhat,
For what its worth the 3 or 4 k saved on an airbag would be lots of money left over to buy an insurance premium that exceeds the cost of a funeral 10 to 50 fold depending on the insured. For example that 4 k saved over 8 years would amount to $500 a year or roughly $50 a month. $50 a month for someone in their 30s or 40s could buy a half million in life insurance.
Old Timer
July 20th, 2012
6:23 pm
Regulations increase “government” employment and stymie private investment.. Regulations are too costly for any business. The country functioned pretty well until along came the EPA, EPD and the mulitude of alphabet government regulations born in the 1960-70’s and later. Curently Obama is taking a page of Roosevelts administration which basically was a failure. The only thng tha t saved Roosevelt was World War II. Hopefully we won’t have a war to save Obama.
Lil' Barry Bailout - Vote American
July 20th, 2012
6:26 pm
Old Timer, if Romney had a lead on October 1, we’ll be bombing Iran.
Thulsa Doom
July 20th, 2012
6:27 pm
Lil Barry,
I think we could calulate it out. 45,000 of us each year die in accidents out of 300 million. Of course about 20k of those are alcohol related deaths that are preventable. So the odds of risk sound pretty easy to figure out. What I don’t know is how many more would have died without seat belts/airbags which I am guessing would be another 50,000 people at the minimum. Math probably isn’t that hard to do.
Hillbilly,
I forgot that they were designed to work together. I guess my cheapass probably would have just gone and ahead and splurged and got both anyway. Still woulda liked to have had the choice though as opposed to having it forced on me.
Lil' Barry Bailout - Vote American
July 20th, 2012
6:30 pm
Boston mayor vows to keep Chick-fil-A out of city
The Associated Press
—————————————
The Catholic church is next, no doubt.
Moon Mullins
July 20th, 2012
6:31 pm
“First get all the facts, then you can distort them as you please.”
~Mark Twain
Filter
July 20th, 2012
6:33 pm
SIX hours and not one of the brilliant posters here have taken up my challenge to put forth a list of ten small business/economy strangling regulations promulgated by the Obama Administration.
Not one.
Until next time
Thulsa Doom
July 20th, 2012
6:34 pm
One last thing on the harm that regulations can do that is unseen before its too late. Back in the 20s and 30s regulators did not allow for multi branch across states banking. Why? Because pols wanted to protect local banks from competition and didn’t want banks being run by big conglomerates from NY. So what happened in the 30s and during other times also? These small banks that were tied to the local economy such as a local bank in cotton country during the invasion of the boll weevil couldn’t withstand the depression or crop failings in local economies. Why? Obviously because they weren’t diversified. So during the 30s we had hundreds of not a few thousand bank failures. How many bank failures did Canada have during the same depression? None. Cause they had 10 large banks with 3,000 branches that were well diversified through many different local economies. So right there you have an example of well intended govt regulation that resulted in unmitigated disaster.
@@
July 20th, 2012
6:34 pm
BW:
You were being sarcastic? My bad. And please, NEVER learn to use those emoticon thingies. Hate those things.
AmVet:
Poor Boy, thanks for that info. I will look at it when I get a chance.
And please share your “thoughts” with us once you have.
schnirt
F. Sinkwich
July 20th, 2012
6:34 pm
“As I said there are some regs which are good and some which are just plain wasteful- some bureaucrat thinking up stuff to do to justify his job.”
Therein lies the problem.
Let’s say, for example, someone gets hired into the federal government as a “regulator.” Let’s further postulate that said new-hire, after a year, had concluded that no additional regulations were necessary, and therefore had proposed none.
Any of you lib ilks like to predict the outcome of this individual’s performance review?
Solution: Fire half of the regulator head count. Then, only the regs that were truly important would be debated.