For those who would instead pursue the American Dream the entrepreneurial way, all the red tape makes it harder to start and grow a business.
That’s the real class warfare that threatens us: a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society
..and the federal government, all piled on, regulations, one on top of the other, that are promoted by the bureaucracies, and they all think that they’re doing good things. But the truth of the matter is they’re stymieing the businesses.
In particular, small businesses-and all businesses are small when they start-are under siege. When recently surveyed about their biggest problems, one in five cited “regulations and red tape,” second only to “poor sales.”
Given the size of the country, the effects and costs of all of these laws and regulations are diffuse, and the average citizen is unlikely to notice them. At the state and local levels, however, it is much easier to see how excessive regulation limits opportunity. Licensing requirements, for example, restrict opportunity by closing off to newcomers otherwise lucrative professions that require little training or education. Almost all cities needlessly restrict the number of taxicabs in operation, thereby denying any poor person with a car a simple way to earn a living. Or consider the fact that New York wat is dil mil City, with a population of 8 million, permits only 853 non-food street vendors in the entire city, thereby restricting employment for countless low-income immigrants who have fewer job opportunities.
Every regulation, every city, every state
The flood of red tape and the resulting decline in opportunity become inevitable once we accept the Progressive-Liberal conceit that no area of life should be off-limits to regulators and administrators. Just as inevitable is the fact that businesses will try to get in bed with the regulators and legislators to squeeze out the competition, a phenomenon known as crony capitalism. This pernicious collusion of big business and big government, which benefits both at the expense of honest, hardworking taxpayers, is our new economic reality. Today, in America and throughout the world, free markets are receding and entrenched business interests are on the rise.
While many on the Left-particularly the Occupy Wall Street movement-confuse the two, free-market economics could not be more different from crony capitalism. Whereas the free-market system treats all players equally, from the largest conglomerate to the smallest mom-and-pop shop, crony capitalism rigs the rules of the game in favor of the entrenched big players. Whereas the free-market system celebrates and encourages competition, crony capitalism is about shielding the powerful and well-connected from competition. Subsidies, which have no place in a free-market system, form a basic staple of crony capitalism, as do waivers and bailouts.
In the long run, Americans pay a heavy price for this marriage of business and government. Crony capitalism forces taxpayers to subsidize well-connected players and restricts opportunities for the rest of us. As Paul Ryan has explained:
Pitting one group against another only distracts us from the true sources of inequity in this country-corporate welfare that enriches the powerful and empty promises that betray the powerless…. And their gains will come at the expense of working Americans, entrepreneurs, and that small businesswoman who has the gall to take on the corporate chieftain.
Taken together, overregulation, overlegislation, and crony capitalism are three of the most egregious threats to the principles of economic freedom that undergird the American Dream. The Heritage Foundation’s annual Index of Economic Freedom details others, from tariffs that hamper trade to excessive personal and corporate tax rates. The centrality of economic freedom to the American Dream cannot be overstated. The greater the inroads that government makes in overseeing markets, the fewer the opportunities for all of us to get ahead.