Borepatch hits one out of the park

Fellow blogger Borepatch has put up an excellent article titled "How Big Business and Big Government get ahead by slowing down the economy".  Here's an excerpt.

... well managed companies excel at managing innovation ... What they don't excel at - because they're well managed - is bringing the next, new [innovation] to the market.  You see, the products in that innovation stream very well might undercut their current cash cow products.

So what do they do?  Enter the Regulatory State.  The Government starts issuing all sorts of regulations about this and that, to protect children and kittens and sunshine.  Where do these regulations come from?  Well, a lot of big businesses are happy to help craft these wise and important protections for children, kittens, and sunshine - I mean, who wouldn't?  And along the way the regulations seem to throw up roadblocks to the next set of disruptive technologies.

These new technologies typically come from small companies.  These companies don't have the money to staff up a building full of compliance managers to ensure that the new disruptive products don't kill children and kittens, or block out the very sun itself.

. . .

It's not the tax rate, it's the regulation rate that's making the economy run down.

This situation is called Regulatory Capture, and is a situation where Big Government and Big Business scratch each other's backs.

There's more at the link.

I urge you to click over to Borepatch's place and read the whole thing.  It's a masterful exposition of much of what's wrong with the US economy today.  Thankfully, one of the first things President Trump did when he took office was to require that for every new government regulation that was introduced, two old ones had to be scrapped.  Having been a businessman, he understood the negative impact of over-regulation on the markets, and took steps to deal with it.  Having been a businessman and company director myself (albeit in a much smaller way, and a much smaller nation and economy), and now being an independent author (and, as such, a "small businessman"), I can only approve.

Peter