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Survival of the biggest brought to you by big government

Survival of the biggest brought to you by big government

Daniel Blatt at Gay Patriot has a very perceptive observation about how massive regulatory intrustion ostensibly on the side of the little guy actually has the result of helping the biggest corporations who are the only ones able to handle the onslaught, Big government means more chain stores:

Given that big companies have large staffs to help them maneuver through regulatory hoops — and making the cost of compliance (through economies of scale) cheaper per storefront than for an independent operation, it seems that big government makes it easier for the big guys and more challenging for individual entrepreneurs.

Ironic that more often than not, those who lament the increasing presence of chain stores tend to vote for the politicians whose policies serve to give a competitive advantage to those chain stores.

We have touched on an analogous theme before in looking at how large pharmaceutical companies and AARP backed Obamacare.

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Comments

Henry Hawkins | January 30, 2013 at 3:02 pm

This is also the case at the state level here in NC. Occupational licensing, state license required business application fees, taxes, etc. A great deal of it favors big over small business and quite on purpose – after over 140 years of Democrat Party governance (which ended Nov 2012, woo-hoo!), there is an entrenched system as a result of biggies paying off poiticians to make it as difficult as possible for new competitors to emerge.

This is another manifestation of fascist economics, which HATES smaller, more entrepreneurial enterprise.

BIG business is happy to comply, and regulatory capture is their reward.

Consumers lose, because under this regime competition is for lobbying power instead of product innovation, customer satisfaction, etc.

This is so true. Another great irony of the past four years, Obama policies have completely left job seekers at the mercy of employers. I’d bet many employers would prefer massive growth that would leave them chasing valuable employees. Still, there has been nothing positive for the average-Joe job seeker these past four years. Employers have a total buyers market.

    This will be true for at least another four years, too. There is no way the Royal Omperor can ever admit his policy was – what is the word? – w r o n g, so don’t expect change. Except for the worse, of course.

TrooperJohnSmith | January 30, 2013 at 3:21 pm

One only needs to have a friend or family member who is in the family restaurant business. That’s why I will always choose a family restaurant or local chain over a national chain, even if I have to pay more.

Ditto, local businesses or locally-made products.

The simple economics of scale applies to regulatory expenses just as it does to other production costs.

And guess what? fewer large business, easier to threaten and control by the government. Fascist dream.

My suggestion: liberally apply an “equal protection under the law” test and start dumping/not enforcing any law that mentions specific groups and industries, or treats them differently based on size, etc. Those are all against the spirit of the republic anyways.

Henry Hawkins | January 30, 2013 at 3:56 pm

Off topic, but funny stuff for folks who could use a good laugh these days:

http://www.youtube.com/watch?v=47e3vjA_4uc&feature=player_embedded#!

h/t to The Corner

Just like Dodd-Frank has radically increased compliance cost which results in problems for the community banks and a distinct advantage for the TBTF banks. However, I doubt that was an unintended consequence.

A close friend works at a large corporation. She tells me that the largest department in the company is now the one that deals solely with regulatory compliance….complete with two permanent offices for government regulators.

    Crawford in reply to Browndog. | January 30, 2013 at 10:02 pm

    Early on in my current project, until about 18 months in, the most common questions were “what’s the HIPPA/SOX impact on your project”. The project involves NO medical data and NO financial data…

casualobserver | January 30, 2013 at 5:08 pm

What makes the situation for small business so bad is that the increasing regulatory trends have been steady and unchanging for a long, long time. So, for as long as I can remember, it hasn’t gotten better. Only worse. It may have reached critical mass for some, perhaps.

For example, I’ve often wondered if the organic and ‘all natural’ food product business has accelerated as much because it is one of the few opportunities for small start-ups to supply into the food chain. I can remember not so long ago, Mama-this and Mary-that jars and cans were all over the shelves. Now, it seems only the higher premium products are worth a shot for the food entrepreneur, and even then it is very risky (to survive).

“Moats for big business are shovel ready projects !!”

—Barack Obama as quoted by LukeHandCool

And yet big pharma are still laying off people…???

I have an office in Nashville, NC, pop. 5,000. It’s a small office, basically my retirement gig after selling off a number of larger locations, a suite of just three rooms, a hallway, and a bathroom, maybe 800 sq ft total. There are four similarly sized office suites in a row and the landlord, an insurance agency, has the big anchor suite up front. As quaint and small as my office is, when I signed the lease and began the state licensure process (you have to have secured a location BEFORE you start the 6 month licensing process – 6 months of wasted lease payments), I had to fill out an Environmental Impact Study for the state of NC. It’s an outpatient substance abuse clinic! The process of complying cost me about $1,000 in time and effort. Total costs for licensing: $4,000, perhaps $500 of it justifiable in my opinion.

Also, to open a NC licensed DWI/Criminal Justice SA clinic*, you cannot just apply. You have to pay $250 to apply for an application. Yeah, you read that right – apply to apply. If accepted, you then move forward to the actual application, costing another $250. There is a boring but endless list of similar inanities required by the state gov I’ll spare you.

Then there are the local requirements, city ordinances. Here’s just one: the only sign identifying my office is an 18″ x 24″ painted plywood sign that is bolted to the brick wall beside my entrance door. The sign company charged me about $120 for it, installed. The city imposed a sign permit fee on me for it – $150, more than the sign cost. Although I ignored it, tossed it the trash, they also ordered me (their words: “you are hereby ordered”) to provide the architectual drawings for my building, including a drawing showing where the 18 x 24 sign is located, including its proximity to the two nearest signs for the my closest neighbor offices. I’m leasing the place! It’s not my building, I occupy about 5% of the total space in the building, and I have zero access to original architectural drawings. I also suggested they nibble my backside on their ‘order’ that I pay a Business License Fee of $300 annually. No where in the city ordinances is this mentioned – they just made it up, I guess – plus when I asked around, I couldn’t find any other business who had even been asked to pay this.

If you want to get into a new business (God help you) take absolutely nothing for granted. Check every requirement at every level of government, because these thieves will make shit up on you in a heartbeat.

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*Like many states, in NC, if you get convicted for DWI or other substance realted offense (MJ possession, paraphernalia possession, etc.), among other penalties you are ordered to obtain a substance assessment and complete the level of SA program recommended by the assessment. In such a small town, there is not much of this business. I am also licensed to case manage for folks who have a NC DWI conviction, but live in other states, got the DWI while visiting or before moving out. They can take a program in their home state but have to pay someone like me to clear it with the NC DMV. It is every bit as exciting as it sounds. *sigh*

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