The Business of America Is Business

There’s an interesting story at the Wall Street Journal about how taxes and regulations drove a budding entrepeneur from the United States to Switzerland to Austria and, finally, to Hong Kong, looking for a home for his fledgling business. It’s a cautionary tale.

I’m sure that the governments of the United States, Switzerland, and Austria all had very good reasons for harassing the man as they did. Ultimately, it doesn’t matter. The bottom line is that we’re making it harder to start businesses. Mr. Pirker’s experience isn’t an isolated one. I’ve heard dozens of similar stories.

As the rate of formation of new businesses declines, I certainly hope that those who favor higher taxes and regulations have an alternative. Those new businesses they’re turning away are precisely the ones most likely to create new jobs.

15 comments… add one

  • ...

    Chasing away business, reducing employment and lowering wages and well-being of the citizens isn’t a bug, it’s one of the primary features.

  • ...

    In his presidential campaign in 2008, Obama stated that he wanted to destroy the coal industry and that he wanted much higher gas prices. Both ideas would be job killers. That is entirely the point. Unfortunately the only difference with the other party is that the Republicans do want more jobs, but only for third world peasants working for a pittance. If Steve Verdon were still commenting I would apologize to him for having voted at all.

  • jan

    Ice,

    It’s a matter of “picking your poison.” When it comes to elections, you can pick one of the two major parties to vote for, put your mark on a minority party having no possibility of winning, or abstain from voting altogether. The last two are more symbolic than anything else. No matter whether you vote or not, though, a choice has been made, and life will proceed ahead under the ideological banner of the ‘winner.’

  • ...

    jan, the two parties pretty much agree on everything that truly matters _AND_ about which government can have an impact. Both parties support international trade at the expense of American workers. Sometimes it is for profit motives, and sometimes for aesthetic reasons. (That would be the difference between “increasing shareholder value” and whining about a clean environment.)

    Both sides favor finance over everything else. They’re just now starting to end the bailout for financial companies, and they’re whining like stuck pigs over the matter. Obama was a supposed leftist radical and he has done as much or more for the financial wizards as W ever did.

    Both sides favor the US meddling in the affairs of every other country on the planet. Republicans tend to like boots on the ground, and Dems tend to like destroying countries from the air, but it amounts to the same thing in the end.

    Both sides favor an intrusive police state.

    Both sides favor importing tens of millions of workers from the Third World to drive down wages and increase unemployment.

    Both sides favor an ever increasing government. See the policies of George W Bush or the budget of Paul Ryan if you don’t believe me.

    Real differences on governance are largely a matter of how the spoils get spent.

    There are a few examples where that isn’t true. But most of those issues can be seen as arguments over who profits, how profits are generated, and aesthetics. To build coal-fired p[ower plants or to put them out of business? Those that want them out of business mostly just want to export our pollution elsewhere. Those that want them IN business mostly get money from the coal lobby or come from states where coal matters to the local economy too much to be ignored.

    We get lots of smoke and mirrors about things that don’t matter that much from a governance stand point. Think abortion is really a pertinent issue? If you want to lower the number of abortions you need to change youth culture in particular. Government isn’t a very good instrument for that purpose.

    Gay marriage? More bullshit, though I suspect the proponents either don’t know or will be ecstatic over any “unforeseen” negative consequences. But again, if the culture supports it, it won’t be stopped. (Or rather, if enough of the culture supports it. The judges are going to ram it through regardless of whether the population supports it or not, and their isn’t enough popular opposition to stop the dictatorial little shits in the black robes. If a revolution comes, every6 current federal judge ought to get the full drawn and quartered treatment.)

    Look at our elections. We get nonsense foisted on us every election cycle that doesn’t mean shit. Binders full of women? Where was Obama’s mother when she gave birth to The Little (Half-)Black Jesus? Whether or not some disc jockey somewhere called some whiny slut a whiny slut on air? Utter nonsense.

    Elections are just about who gets ahead this time, not about the direction of the country’s governance. THAT has been safely established far above the pay grade of lowly voters, who ultimately no longer matter.

  • jan

    Ice,

    I agree with you on almost, but not all, of what you said. However, the bottom line is what does a person do about it? Does not voting solve the problem? Do you want to continue augmenting the social progressive agenda by voting democratic? Does voting Libertarian, or for some other third party, change our country’s direction? Or, do you vote for the ‘obstructive,’ often timid republican party who at least eschews policies of smaller government and less regulations, whether or not they actually practice them?

    How I look at it is, I’m tired of the last 5 years! Like you said, Obama has only ratcheted up policies I didn’t like under GWB, and then thought of and contributed even more confining ones to growth during his time in office. So, like a political see-saw, I would rather commit a vote to the ‘other’ out-of-power party, and see what they have to offer during the next 4 years. You know, all that good stuff about ‘hope and change’ — well, I’m now applying it to the next POTUS in hope of change for the better…unless the dems can come up with a genuine centrist candidate — not HRC.

  • steve

    I will confess that I have trouble making the BDS site work well. That said, this appears to be a long term problem, and has especially been affecting firms of a very small size. The 200-500 employee “small business” numbers have held their own. I think that if this has held true (need newer data), that should tell us where we should be putting efforts to increase this. That said, I think a lot of this is cultural. Too many kids being brought up to be risk averse. Taxes and regulations wont change that.

    https://www.ces.census.gov/docs/bds/BDS_Jobs_Created_ces.pdf

    Steve

  • michael reynolds

    So a guy who wants to fly drones around populated areas ran into regulation? I hope so. Outdated regulations? Well, gee, sorry the government didn’t drop everything else it was doing in order to clear the way for this one dude to fly drones around.

    His story tells us just about nothing, and I have to say the whiff of bullshit is strong. I’d bet a nickel that if anyone looked into it further they’d find it falls apart like the anti-Obamacare horror stories do with such regularity.

  • Guarneri

    I’d suggest, ice, that you think about separating the corporatist wing and the conservative wing of the Republican party. And since the post was about jobs let’s leave the social agenda out of it. yes, the conservatives need to get their heads out of their asses there.

    steve – as someone who has spent 20 years in that 50 – 300 employee world I will tell you there is no shortage of risk taking desire, and ample problems with taxes and regulation. Michael is forced to deny because his guy’s economic performance is awful and he must deny, deny, deny or draw up horrific straw men. Ive been commenting about the effects of taxes and regulation on Obama’s economy for 5 years. The statistics bear me out. only false or convoluted “arguments” remain for the denyers.

  • Our system of law and government is one in which regulatory authority must be explicitly authorized and narrowly tailored. If you want one in which regulatory authority is broad and assumed, fine. Such a system will necessarily have slower growth than a system structured as ours, at least, did. The burden of the system you prefer will fall on those with the fewest skills, racial minorities, and so on.

    Advocates for a system of sweeping regulatory authority need to produce their plans for replacing the growth they want to suppress.

  • steve

    Guarneri- As I noted, the numbers have not dropped in the 50-300 group. Taxes and regulations dont seem to be making much of a difference, though I guess you could propose the counterfactual of more growth if there were less of both. The real drop is in very small businesses, the true start ups. It looks like people are willing to join groups of 100 or so if they are new, but not willing to take the risk of going solo or working with just 3 or 4 others to start something. Or, maybe they just cant afford to do so since they have a pre-existing health problem, or all of our capital is held by so few people.

    Steve

  • Michael Reynolds

    Guarneri.

    I’d suggest big business has more of a dampening effect on small entrepreneurs than anything else. Want to open a restaurant? You’re fighting huge chains with deep pockets that already have the prime real estate. Ditto coffee shops, clothing retailers and on and on. In tech you have the Googles and Apples. Who’s killing the small entrepreneur? The big corporations.

    And if you want to play counter factual let’s ask what effect eliminating regulations on food, cars and pharmaceuticals will have. You think another round of Thalidomide would be good for business?

  • Michael Reynolds

    A great deal of regulation is just about keeping corporations from exporting costs to society. They don’t want to clean up effluents so cities get stuck paying when the water supply is poisoned. They don’t like pesky workplace safety rules so they hand their crippled employees off to taxpayers. How’s the air in Beijing lately, with all their pro-business lack of regulation? They have growth in certain sectors that not only kills people but other businesses like tourism.

  • jan

    As usual Michael, you go on a bender when applying regulation to business. In your mind every business is nothing but a big, rampant polluter, capable of nothing but ripping the public off in their greedy escapades to make the almighty buck.

    Somehow, it never occurs to you, nor enters your vocabulary, that there are people who merely want to start a modest business, aimed at some kind of retail, service, tech, or small cottage, manufacturing industry, who can’t get off the ground because of government’s increasingly dense wall of regulations.

    Maybe, it’s because you are a writer, and not involved with all those ‘pesky’ licensing requirements entrepreneurs, dreamers must comply with before even opening their doors to test the market. It’s not all about big, cigar-smoking, corrupt businessmen, Michael. It’s more about the little guy, who makes far less than you do, who is trying to get a foot into the doorway of commerce, but can’t because government complexity keeps raising the height of boxes to check before they can even get started!

  • michael reynolds

    Jan:

    I have a business. I am incorporated. I had no choice but to incorporate since under the pre-Obamacare system you seem to think was perfection itself I couldn’t get health insurance. Had OBamacare arrived earlier I could have not only saved on my 2400 a month family premiums, but avoided thousands of dollars in legal and accounting fees. Had Obamacare arrived earlier I’d have at least $20,000 I don’t have now.

    But hey, why be distracted by mere reality?

    I don’t believe all business is bad, but that’s a silly argument. We pass laws against murder to deal with the tiny percentage of people who wish to commit murder. Doing so does not imply that everyone is a murderer. Duh.

  • jan

    Michael,

    How many employees do you have? What are your business hours? Do you have a payroll to meet every month? What about workman’s comp insurance? Business licences? Do you have inspections on your property or business? I’m not distracted by reality. It is you, Michael, who is a high rolling, liberal living in a white bread community calling the shots for everyone else!

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