patrick.net

control point says

Why is it a significant contributing factor? What about "regulation" harms business?

I assume you mean "small business" and not just "business," and let's avoid getting caught up in more emotionally loaded terms like "harm." Regulation often serves as a barrier to entry for small business, or makes it more difficult for small businesses to compete due to the cost of compliance in terms of both time and money.

Sometimes the regulation is reasonable: For simple example, a state may require contractors get a license, and a prerequisite of the license is liability insurance. Whether one thinks this is reasonable or not, it is indisputable that it has raised the cost and created a barrier to entry for individuals who want to get into home improvement on their own. Maybe most of those it crowds out should never get started in the first place, and maybe the benefit is worth the cost of keeping out a handful of people who would otherwise do well for their customers. But it's beyond dispute that this creates a barrier, no matter how reasonable in this circumstance.

And other times, large corporations or unions are the very ones supporting regulation: A large global shipping company might be fully behind an environmental regulation not because they love the environment, but because they know they can easily absorb the cost of compliance while their smaller competitors cannot.... A union drive behind the licensing requirements of a particular trade or occupation that make it exceptionally difficult to get a license unless one gets them through the union... A banking finance law after the financial crisis that doesn't make TBTF's any less TBTF, but forces smaller banks who were not the root of the problem to close, consolidate, or get bought out by the TBTFs because of the cost of compliance, and of course under those conditions, who could start a bank? Even campaign finance reform ... a very small organization (e.g., Citizens United) is committing a felony if they put out a brochure or video criticizing a politician by name within X days of an election ... But if they happened to be big and wealthy enough to afford the compliance costs of a PAC, or if they are the media arm of a major non-media company, then no problem.

Thunderlips has more examples... These examples are all over the place. One can agree or disagree with whether specific regulations are useful, reasonable, worth the cost, etc., but one cannot reasonably argue that regulation in general does not impact small business formation and survival.

Paralithodes says

Is it your hypothesis that regulation is (a) not a factor at all or (b) only an insignificant factor? And on what do you base your hypothesis?

My hypothesis is that regulation is a small factor. I base that on the OP's assertion that small business formation has had a "steep drop" since 2006. I think business conditions are a much larger factor than regulations.

control point says

Why is it a significant contributing factor? What about "regulation" harms business?

You can dismiss the link here because it is related to "Fox" but no matter ... There are articles about this very issue in this industry from other sources:

http://smallbusiness.foxbusiness.com/entrepreneurs/2014/03/24/entrepreneur-arrested-for-braiding-hair/

tatupu70 says

My hypothesis is that regulation is a small factor. I base that on the OP's assertion that small business formation has had a "steep drop" since 2006. I think business conditions are a much larger factor than regulations.

Yes, we went through this before, too.... When you argued that there is less regulation and that new regulation doesn't impact smalll business. I asked you specifically: What about new (post 2006) regulations charging medical device manufacturers with an annual fee for each type of medical device that they sold, and how does this impact a small manufacturer with $100K revenue vs. GE, and you simply refused to answer (apparently real-world examples are just clever traps if they interfere with your theoretical word).... Just one more tiny example among a sea of them.

tatupu70 says

And, as predicted, you continue to spew the market clearing BS even after I showed you how illogical that thesis is....

When did you "show" this? In another recent thread you responded to someone how you "explained" something many times in the past. I never see you "show" or "explain" anything. Repeating your argument time and again is simply not the same thing as showing or explaining something.

Paralithodes says

What about new (post 2006) regulations charging medical device manufacturers with an annual fee for each type of medical device that they sold, and how does this impact a small manufacturer with $100K revenue vs. GE, and you simply refused to answer (apparently real-world examples are just clever traps if they interfere with your theoretical word).... Just one more tiny example among a sea of them.

OK--let's do real world examples. Please provide details on the exact regulation to which you refer. When did it take effect? How are these fees implemeted?

Paralithodes says

When did you "show" this? In another recent thread you responded to someone how you "explained" something many times in the past. I never see you "show" or "explain" anything. Repeating your argument time and again is simply not the same thing as showing or explaining something.

Obviously you didn't read the thread to which I refer. It's not that complicated. If business were starved for capital and that is what is holding back new formation and growth, interest rates wouldn't be near all time lows.

I put tat on ignore I can't stand anymore of his drivel.

The regulations are a harm in 3 ways one is the direct cost of the regulation, someone like osha (especially since they are self funded), then there is the cost of the money taken out of the market that would otherwise be spent in the market, 3rd is the onerous burden drives business out of the state. E.G. the only reason tesla is here is because they get subsidies for being here their battery factory however is going to be built out of state. Maybe in the same state Toyota moved to from Calif.

But the main problem is investment, there hasn't been any since the crash.

The NSA... because bitches be crazy.

Paralithodes says

I assume you mean "small business" and not just "business,"

No. In the macroeconomy, size does not matter. There are some advantages to size, ie "the economy of scale," while there are advantages to "small" business, ie ability to quickly react to market conditions.

Paralithodes says

Regulation often serves as a barrier to entry for small business

You've addressed this later, here:
Paralithodes says

Maybe most of those it crowds out should never get started in the first place

What you mean to say is the marketplace crowds out non-competitive firms. Making the argument that regulation is anti-competitive is suspect. In the absence of any regulation, there would still exist market factors that would make certain participants non-competitive. Regulations are like rules of a game. Anyone can win at chess if they don't adhere to the rules.

Paralithodes says

makes it more difficult for small businesses to compete due to the cost of compliance in terms of both time and money.

Again, these are market factors, or "rules" by which all participants must play. However, my argument is simply this - regulations are but one "tax" levied by the government on doing business. There is a regulation that corporations are only allowed to use legal labor in the production of their goods and services. This regulation certainly increases their labor cost above would it would be if they were permitted to hire anyone off the street, regardless of work status. There are other rules that have been changed over the last 35 years as well - "right to work," union breakup, income taxes themselves, minimum wages, etc., etc., etc...

All of these "rules" affect profit margins. My argument is in sum total - all "regulations" or "rules" of business have fallen over the past 35 years. This is not debatable; after tax corporate profits as a percentage of GDP have increased consistently over the past 35 years or so.

This is the quantifiable data to determine the "cost" of business regulation, in total.

In short, yes - while it may cost corporations more for licensing (as an example) today than it did 30 years ago, the business owner pays a lower cost of capital and labor that more than offset this increased cost of this regulation.

There is one way to increase corporate profit margins: increase revenues relative to cost. (Can be accomplished by holding revenues constant while lowering cost as well, fwiw)

This implies our markets are MORE FREE in totality than 35 years ago.

Paralithodes says

I asked you specifically: What about new (post 2006) regulations charging medical device manufacturers with an annual fee for each type of medical device that they sold, and how does this impact a small manufacturer with $100K revenue vs. GE

Are you are referring to the Medical Device User Fee and Modernizaiton act of 2002? If so it specifically has a waiver for small business. Small being defined as less than 30 million. http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/MedicalDeviceUserFeeandModernizationActMDUFMA/ucm109105.htm The act only generates 25 million (increasing for inflation) a year to pay for testing of medical devices. No one can seriously make the case that 25 million a year is holding back the 250 billion dollar a year medical device industry in the US.

If you are referring to ACA it's an excise tax that affects all manufacturers foreign an domestic exactly the same. Exports are exempt from the tax.

It's pretty ironic that an industry that makes such huge profits mostly because of government regulations protecting them from competition is complaining so loudly about government regulation.

The Professor says

Is AF Brilliant? Demented? Or just sarcastic?

I pity the fool at NSA assigned to watch him.

The guy assigned to watch him would have the thrills of his life.

Homeboy says

People still shop at stores?

Atleast they pretend to. I need to go to Best Buy about 6 times to check out a gadget before I can convince myself I need it. Then I buy it from Amazon.

Call it Crazy says

At the end of 2009, Office Depot and OfficeMax combined had about 2,085 stores in North America, which will drop to about 1,500 stores in the United States by 2016 after the closures.

By 2025 they will be down to 500 stores. They will be victims of technology and go the way of Kodak. Remember Kodak, guys? Those under 20 wont.

It's all Obama's fault!!!

Call it Crazy says

It's really hard not to go back up in this thread and delete all his comments... As usual, he provides nothing of value, is a total fucking Troll, and all he does in a thread is argue WITHOUT providing and substance, data, facts, etc.....

Did you find the proof of snopes bias yet?

U.S. businesses are being destroyed faster than theyre being created

It's all Obama's fault!!!

Home prices were up in March
Focus on what is important

Its part of the creative recovery

Facebooksux says

I don't mean to stop the circle jerk here, but She-Man cannot claim to have 5.5 million in assets. That's horseshit since he's levered multiple times over and better pray that this laughable 0.1% rise in GDP isn't a harbinger of things to come(which it is).

I'm biased because I assume nameless faceless people on the internet are all talk. In addition, even if the $5.5 million number even resembles reality, I sort of see it as how Donald Trump is claimed to be a billionaire. His actual net worth is not nearly as impressive as he projects (and his people sue any time they think the estimate given by the media is too low) because he has billion dollar properties that are leveraged to the hilt.

There's a big difference between having 5.5 million 'worth' in assets versus being actually worth 5.5 million bucks. Nevertheless, different people have different things they invest in because they feel they are either safer, better, or more likely to generate income. ALL are risks. Real Estate is perhaps a bigger risk since its value is heavily tied to the overall job market and in particular the success of the middle class. Seeing as how the middle class has been stagnate for years with little evidence in any meaningful change, that is a consideration.

Prices there are ridiculous compared to online sometimes. I was looking at a replacement toner cartridge, and the price was more than 50% higher than typical internet retail price for it at Raples or Office Despot.

Unless you absolutely have to have that toner cartridge today, why would you buy it from these two stores? Better to keep a spare one around and replace it when necessary. These stores exist nowadays for the "I need it today" customer, and those are disappearing.

It's also partially because there's little competition for any of this stuff at bricks & mortar these days. Something like Best Buy only carries very limited stock of toner cartridges/inkjet cartridges, and there aren't a lot of other stores around that'd sell some of this stuff any more (no CompUSA or Circuit City, and Fry's only carries cheap Chinese knock-offs {sorry, that was redundant}, and the local stores didn't even have those in stock).

It'd make more sense to close more of their retail stores and only do catalog delivery for businesses and online for everyone else. Big businesses tend to pay these ridiculously high prices without complaining for some reason.

Now I've got that Prince song in my head... tonight were gonna party like it's 1929!

tatupu70 says

OK--let's do real world examples. Please provide details on the exact regulation to which you refer. When did it take effect? How are these fees implemeted?

OK, let's do real world back up of assertions... Please provide evidence that there is actually less regulation now than in the past, and that new regulation does not impact small businesses. These were your very specific assertions. Please provide some exact evidence for your refutations in this thread above.

We both know your request for the "exact" regulation and details is nothing more than to waste time because you are unable to provide any details (ever) about your own assertions and cannot refute anyone else's arguments. And we both know that you have absolutely no idea, though anyone in this forum who might be involved on the business end of medical device manufacturing knows what I'm talking about. You can Google it yourself.

Paralithodes says

OK, let's do real world back up of assertions... Please provide evidence that there is actually less regulation now than in the past, and that new regulation does not impact small businesses. These were your very specific assertions. Please provide some exact evidence for your refutations in this thread above.

Wow--so you can't even tell me which regulation you were referencing? That's pretty weak.

Paralithodes says

Please provide evidence that there is actually less regulation now than in the past, and that new regulation does not impact small businesses. These were your very specific assertions

I challenge you to show me where I made that "very specific" assertion. Because I would never have said that new regulation does not impact small business. Of course some of it does--much is exempted for small business--but certainly not all.

bob2356 says

Are you are referring to the Medical Device User Fee and Modernizaiton act of 2002? If so it specifically has a waiver for small business. Small being defined as less than 30 million. http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/MedicalDeviceUserFeeandModernizationActMDUFMA/ucm109105.htm

Thanks for the information... Here is the information on the "waiver" and "fee", from your link:

Small business fees and waivers. In order to avoid creating governmental barriers to entry into the device marketplace, the MDUFMA user fee program contains a provision to protect small businesses. If you qualify as a small business, you may pay reduced user fees and may obtain a one-time waiver of the fee for your first premarket application.

So it is a "one time waiver." And yes, I am aware that the fees are reduced. Now tell us, if GE Medical pays 100% of the fee, and a $100K business pays 38% of the fee, who proportionately pays much more or less as a % of their business revenue, the major large business or the small business?

bob2356 says

The act only generates 25 million (increasing for inflation) a year to pay for testing of medical devices. No one can seriously make the case that 25 million a year is holding back the 250 billion dollar a year medical device industry in the US.

And no one is arguing that at all in this thread. On the contrary, hypothetically fees could be raised substantially higher on all of them, and all startups/small business are wiped out entirely, and the $250B industry could still grow even larger. Are you, like control point, trying to shift the conversation away from what it is really about: Impact of regulation on small business?

bob2356 says

It's pretty ironic that an industry that makes such huge profits mostly because of government regulations protecting them from competition is complaining so loudly about government regulation.

Perhaps it's not ironic at all that many of those in this forum refuse to acknowledge the distinction between the size and power of large business, and small business, or the impact of regulation on small business. Apparently small businesses should have no voice to speak about regulations that protect the large businesses and their huge profits from competition. It seems that you are directly supporting corporatism...

control point says

No. In the macroeconomy, size does not matter.

Then you're looking to have a different conversation from the one in the OP.

control point says

What you mean to say is the marketplace crowds out non-competitive firms. Making the argument that regulation is anti-competitive is suspect.

Perhaps the word "crowds out" was the wrong word to use in a pedantic sense, but let's not try to twist my point into something different: In this case I was describing a regulation that I believe is reasonable, even if it may "crowd out" some entrepreneurs who would otherwise be fine because on the balance it probably keeps way more potentially bad actors out.

But in any case, this is an example of a government regulation that creates a barrier (cost and time for insurance and licensing) that will keep at least some competitors from entering the market. It is simply indisputable that by definition, this regulation which reduces competition whether justified or not.

The marketplace cannot crowd out competition that never enters the marketplace to begin with.

Are you arguing that no regulation is anti-competitive? That increasing compliance costs (time and expense) on small businesses has no impact on their competitiveness at all?

control point says

In the absence of any regulation, there would still exist market factors that would make certain participants non-competitive.

Completely irrelevant to the conversation. control point says

All of these "rules" affect profit margins. My argument is in sum total - all "regulations" or "rules" of business have fallen over the past 35 years. This is not debatable; after tax corporate profits as a percentage of GDP have increased consistently over the past 35 years or so.

This is the quantifiable data to determine the "cost" of business regulation, in total.

Yes, in total... Which again is not the topic of this discussion.

control point says

In short, yes - while it may cost corporations more for licensing (as an example) today than it did 30 years ago, the business owner pays a lower cost of capital and labor that more than offset this increased cost of this regulation.

Right, the "business owner" in general, ignoring any distinction whatsoever on the relative impact of compliance costs on small vs. large business.

control point says

This implies our markets are MORE FREE in totality than 35 years ago.

Sure.... And therefore, even more regulation might make things even more free, especially if we pretend that there is no distinction whatsoever between large vs. small businesses, and compliance costs are meaningless because if a sole proprieter has 5 extra days of compliance time and cost, so what, he/she can just increase revenue by selling more goods or services.

tatupu70 says

Wow--so you can't even tell me which regulation you were referencing? That's pretty weak.

Sure I could have told you... But why bother? We both know you didn't ask out of sincerity and instead asked out of diversion and a means to criticize. Otherwise you could have let it go after Bob provided the info and I responded. As far as it being "weak." No matter... Is there ever anything you provide as evidence for your own positions, that is stronger? I think we both know the answer to that one!

tatupu70 says

I challenge you to show me where I made that "very specific" assertion. Because I would never have said that new regulation does not impact small business. Of course some of it does--much is exempted for small business--but certainly not all.

You specifically asserted that in general there was literally LESS regulation today than decades ago. You made a blanket claim very similar to above regarding "much is exempted for small business" but then as now, provide ZERO evidence for your positions.

Sure, you agree that some regulation impacts small business and "not all" is exempt. So we disagree only to the matter of the degree on a scale. If that's the case, what's your issue: that I say it's "significant" and you disagree and think it's not significant? OK, for once, provide some type of evidence or logical explanation, based on the real world, for why you think it's not. Time for you to actually provide some info of value beyond your simple (and often obviously inexperienced) opinion.

Paralithodes says

So it is a "one time waiver." And yes, I am aware that the fees are reduced. Now tell us, if GE Medical pays 100% of the fee, and a $100K business pays 38% of the fee, who proportionately pays much more or less as a % of their business revenue, the major large business or the small business?

You are being disingenuous. There are no 100k medical device makers or anywhere even close. I doubt there are very many if any less than 10 million dollar medical device makers. A 90k fee isn't holding anyone back from entering the field.

. Paralithodes says

Are you, like control point, trying to shift the conversation away from what it is really about: Impact of regulation on small business?

Your point is big corporations use taxes and regulations to restrict competition. Very true. My point is you picked a very bad example where there is a legitimate reason for the fees. Industry should pay for fees for government services needed in order conduct their business. Surely you are not going to say that medical devices should be self regulated and will be safe because of the high levels of civic responsiblity of medical device makers?

Increasing compliance costs affect small business more than large corporations, as do increasing rents, labor costs, material costs, transportation costs, etc. etc etc.. Small business are more nimble and are free from large amounts of organizational overhead. It's all part of the game. Large business have used government to stifle competition since the dawn of time. You haven't discovered anything new here.

Business formation fell off a cliff in the 1930's, yet there wasn't any huge amount of new regulations holding it back. I don't think a lack of business formation in a poor economy is some kind of surprise, except to the washington post.

Wouldn't another tax cut promote small business growth?

Everybody I talk to agrees that it's the president's job to steer the economy.

But we're not socialists.

Yeah everyone wants to drive on the roads, nobody wants to pay for them. Same person will gladly bitch about potholes and "why didn't they build another bypass so I can get to Walmart faster!!!"

Gas taxes are something close to half of the funding for roads. If you cut that stream drastically by driving hybrids or electrics, then you'll need to choose between either less roads kept open & maintained, or some other way to fund it.

Vicente says

Gas taxes are something close to half of the funding for roads. If you cut that stream drastically by driving hybrids or electrics, then you'll need to choose between either less roads kept open & maintained, or some other way to fund it.

Meanwhile CA is the welfare capital of America. Why not cut payments to bums and pay for roads??

Vicente says

Gas taxes are something close to half of the funding for roads.

They would fund more than half if they would do away with requirements for union labor.

Currently the gas tax is at an astronomical value of $.59/gallon. My wife and I are small range drivers, about 12k each with our vehicles, avg between us of 20mpg. So that's 24,000/20=1200 gallons, at $0.59 is $708 dollars in gas tax we pay each year.
If we switch to a mileage tax, at $0.05/mile, that's $1200 in tax.
If this is a "replacement" tax, why is it almost double the already high gas tax?

Two commuter families are totally hosed, figure twice that in tax for $2400/year.
All this to cover up the fact that Sacramento raids road funds every time their liberal budget doesn't match incoming tax money. That's why our roads are shitty and the transportation is always underfunded.

Dear Governor Brown,
You said we need to reduce pollution, reduce the trade deficit, reduce asthma and respiratory illnesses due to pollution, and save the environment. You said I should buy a Prius, so I did.
Now you say I should get charged by the mile because the Prius is not consuming enough gas. Are you now saying I should not have got my Prius?
Thanks
Citizen

"It's the economy, stupid!"
- Some random democrat

Quigley says

"It's the economy, stupid!"

- Some random democrat

Not denying it.

That's what's interesting: every news anchor, everyone I work with, everyone in my family, all my friends would deny they're socialists (2-3 exceptions), but all believe the president is the captain of the ship who manages the economy. That is, there is an absolute embrace of the principle that the head of state is there to guide the economy - it's embedded to near-lizard-brain depth.

SoftShell says

When a small business owner is told "you didn't build that", they tend to fall
into an "Ok, I don't get credit for building the business, fuck you I don't give
a fuck anymore" state, and their business fails.

Really? Anyone with this kind of mindset doesn't have the mettle to be a business owner, or even much of an employee. It sounds like a rich man's wife, whining about running her heavily-subsidized-by-hubby hobby business.

The POTUS may or may not be the economic captain, but he certainly can be the rock upon which all economic legislation runs aground. If Obama doesn't like something like, say, the pipeline from Montana to Texas, it's going to make that almost impossible to get done. Obama has a proven record of being the spanner in the works of economic recovery, vetoing legislation that would add good jobs and money.