By Chip Rogers, AAHOA President & CEO
President Barack Obama’s departure from the White House has garnered a collective sigh of relief from the business owners who shouldered a staggering regulatory burden for the eight years of his administration. And while it’s still too early to speculate on the Trump Administration’s long-term plans for economic growth, the executive order issued in January to eliminate two regulations for every new one adopted certainly bodes well for an entrepreneurial community long beset by costly and time-consuming red tape.
Despite the obvious partisan differences between presidents Obama and Trump, however, business regulations themselves are not necessarily either Democratic or Republican. They are instead too often the product of government officials who lack a fundamental understanding of the hows and whys behind running a business, leading to widespread frustration among entrepreneurs who view these officials as out-of-touch dilettantes with no business (pun intended) creating them.
And it doesn’t stop there. Once a regulation is adopted, businesses must bear the onus of compliance or risk punitive action. Documents must be created and reviewed. Applications must be filled out. Forms must be submitted and approved. The result is that measures presumably intended to spur growth and encourage fair dealing instead dampen productivity and slow job creation as business owners struggle to keep up.
The idea has broad support. In a 2011 edition of U.S. News and World Report, for example, author and founder of Campbell Wealth Management Kelly Campbell argued that, like a business, government should spend less than it makes; rein in spending; establish a merit-based employee-evaluation system; and withdraw from areas of operation in which its participation does not make financial sense.It is a wholly unsustainable exercise in inefficiency that has led to repeated calls for government to scrap its layers of bureaucracy and run itself like a business.
Unfortunately, none of those eminently appealing ideas are feasible for an entity that exists to serve and must answer to its people. Businesses exist to turn a profit; a government does not and never will have any money of its own.
“Businesses seek maximum efficiency; governments seek sufficient efficiency,” wrote Mickey Edwards, a 16-year congressman (R, Okla.) and former chair of the House Republican leadership’s policy committee. “Business and government are not opposites, but they are distinct; the mindset is necessarily different; the understandings are different; the obligations are different.”
That is not to suggest that government is condemned to inefficiency or to say that it is impossible to apply business principles in government. Satisfactorily reconciling the limitations of government with the needs and realities of the business world is a complex undertaking that calls not for an abrupt decision-making paradigm shift, but freer-flowing communication and better relationships between individuals from both worlds.
Rather than give in to frustration or focus only on the needs of one’s particular enterprise, business leaders have a responsibility to set an example of sincere cooperation – to engage the government by offering their expertise, modeling practices that produce optimal results and demonstrating a willingness to collaborate for the economic benefit of all Americans.