Playing the "regulatory uncertainty" card

Original Reporting | By James Lardner |

The political polling and framing firm Lake Research has been studying the views of Americans, including business managers and owners, about regulation. Small business owners, according to Daniel Gotoff, a Lake partner, generally view regulation as heavy-handed and laid down by people lacking knowledge of particular business realities. By and large, though, they do not bring up uncertainty as a concern, Gotoff said.

Buschur’s company is down to 18 employees from 30 two years ago. Even if business improves markedly, Buschur said he would refuse on principle to go over the 50-employee threshold that would make him subject to the employer mandate of the new health care law; even though he has provided health insurance for more than thirty years, he explained, he objected to the idea of the government telling him what kind of plan was acceptable.

As a general rule, Buschur continued, small businesses would be better off  “if they [the government] just got out of our lives.” On further questioning, though, Buschur made it clear that the main reason for his current, lower volume of business is the economic downturn, not regulation. “That was huge — no question about it,” Buschur said.


Yearning for the “good old days”

William Nash runs a commercial-soundproofing company in San Marcos, California. In a letter to the House Oversight and Government Reform Committee, Nash said that “uncertainty” had led him to consider downsizing his business. But a follow-up interview suggested that his fundamental complaint, like Buschur’s, is with the nature and amount of regulation that his company faces — and with the attitude of an increasing number of workers who, he said, are “taught that you’re owed this and you’re owed that.” That message, Nash went on to say, seems to come “from the government schools, what they teach in the schools now.”

The owner of a commerical-soundproofing company contrasted his current vexations with the less-regulated “old days” when his company had been more of a “happy family.”

By way of illustration, he told a story about a warehouse worker coming to work recently with a letter from his chiropractor saying that he shouldn’t lift more than sixty pounds. Nash had hired this employee because “he’s a big brute of a guy…like a horse, and he works out,” making him ideal for lifting and moving heavy rolls of material. But who will lift them now? “We’ve got two ladies. Then there’s me — I’m 73,” Nash said. “And two other guys, one of which is 68, the other guy just had a hernia operation for a double hernia. He was in the hospital for a week and a half. So who’s going to help this dude, you know? So this is the uncertainty that you get into.”

Although his employee has not yet identified his injury as work-related, Nash said he is braced for that. Then, he said, he will be required to report the incident to the state labor board. Ninety percent of his employees leave with a disability, added Nash, contrasting his current vexations with the less-regulated “old days” when his company had been more of a “happy family.”


Uncertainty versus American business savvy

The evidence may be sketchy, but the claim lives on. Last week, for example, in a press release entitled “Regulation is Killing Jobs and the American Dream,” Rep. Tom Latham (R-IA) described a pattern of “businesses wait[ing] to find out how they will be impacted by new rules before making decisions to hire new workers or buy new equipment.”

But businesspeople “live with uncertainty all the time,” said Rena Steinzor, professor of law at the University of Maryland and a leading critic of what she regards as reckless deregulation. “Uncertainty about global energy costs, labor costs, natural events, the stock market, the future of investment. [There’s] a long list of things that seem to me to be more uncertain and more significant than regulation.”

Generally speaking, business leaders don’t complain about uncertainty, said David Arkush of Congress Watch: “You don’t usually get answers like this — you know, people standing around, scratching their heads, saying ‘We don’t know what to do, so we’re not going to do anything.’ That’s not how you build a successful business, [or compete] with others in the marketplace.”

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