Wouldn't it be grand if we all exercised discretion, acted with common sense, and showed complete regard for human life and health a hundred percent of the time? Then we wouldn't need Obamacare, Dodd-Frank, OSHA, EPA or the FDA, FDIC or TSA. So long alphabet soup, hello John Lennon singing, "Imagine all the people living life as one..."
In the real world, one of the reasons America has an ongoing love affair with small business is our belief that a handshake is as good as a contract. It's the type of commitment honored on Main Street every day by responsible small businesses and our customers. But realistically, you don't have to run your own business for very long to realize stuff needs to be written down.
As an architectural woodworker, I could write a proposal for my millwork in a single sentence: "Furnish and install cabinets, wood trim and paneling as indicated on drawings X,Y & Z." But in the real world where I work, every stick of wood is described, along with things like access to the site, terms of payment, and a host of other inclusions and exclusions. Experience teaches us that without these regulating terms, both sides of the transaction are bound to be disappointed, if not misused -- handshake or no handshake.
And here's another thing about the real world: the anti-regulatory rhetoric of our politicians notwithstanding, what creates jobs on Main Street is customer demand. This is something just about any small business owner will tell you: customers pay the bills, customers generate the profits, and customers feed prosperity. Not deregulation, not tax cuts, not massive layoffs of teachers and cops. Those policies don't create jobs. Customer demand creates jobs.
So when politicians -- like Blanche Lincoln (former U.S. Senator from Arkansas, now Chair of the NFIB's campaign against regulations) -- say getting rid of regulations is a top priority for small businesses, it gives me reason to pause. What world is she living in?
Results from a national small business survey commissioned by the Main Street Alliance, Small Business Majority, and the American Sustainable Business Council earlier this year underscore where Main Street's real priorities are. Asked what was the most important problem for their business, 34 percent of small business owners cited weak customer demand; only 14 percent named government regulations. Asked what would do the most to create jobs, reducing regulation ranked fifth on the list, with only 10 percent responding (see the full report here).
There's one easy explanation for the disconnect between small businesses and some political leaders. Gutting rules and standards frees up big corporate players (think too-big-to-fail banks, health insurers, energy giants) to write their own rules and cut corners. These big special interests are also big political spenders, and they'll keep that money pouring in to support candidates they believe will advance their deregulatory agenda.
So what, according to the watchdogs of "government overreach," needs to be done right now? Killing the Affordable Care Act is their first order of business. From the perspective of a small business owner, I'd say there could be no better example of what NOT to do.
Among a host of consumer-friendly rules in the ACA are standards for what constitutes a health insurance policy. That would be one that actually provides coverage. The ACA also says to Big Insurance: "You can compensate your executives any way you like, you can continue to advertise all you like and pay lobbyists all you like, but you can only spend 20 percent of your customers' money doing those things. The rest must be spent on the thing your customers are paying for: health care." It's called the "medical loss ratio" regulation. That's not only a regulation I can live with, it's one I enthusiastically support.
I welcome regulations that help Main Street small businesses. Increasing financial security, lowering insurance premiums, improving efficiency in the delivery of health care, all of these contribute to consumer confidence and that will increase customer traffic on Main Street. And the ACA is just one example of how regulations can be helpful in structuring markets so that everyone is playing by the same rules. That's why I'm suspicious of leaders who simply say, "I'll end regulation as we know it."
Unlike those who believe in Unicorns, Santa Claus and the infallibility of some mythical "Free Market," I understand nothing is perfect. Unlike children who cling to fantasies, we need leaders who have the patience and adult commitment to work at finding the right balance of regulations and standards to make markets work for everyone's benefit.
If only people (and I guess these days that includes corporations) acted as prescribed by the Ten Commandments -- or what I like to call "The First Book of Regulations" -- we wouldn't need a Justice Department, a Supreme Court, heck we could do away with all three branches of Government. But if I suggested we all just "get along," I'd justifiably be called naïve. For us to reach that conservative utopia where regulations -- and indeed government itself -- aren't needed, we'd all have to be getting along so well we'd be sitting around the campfire signing "Kumbaya." I'm not holding my breath.
Which brings us back to John Lennon's song and Sen. Lincoln's anti-regulatory crusade, which could use "Imagine all the people..." as a theme song. Naive or self serving, Senator Lincoln and the NFIB have got it wrong again. Small businesses like mine need regulations to balance our interests against those of powerful special interests -- and there is nothing naive about that.