Regulations and Taxes Aren't What Is Killing Small Business

As members and demagogues of the GOP endeavor to turn back the clock to the days of the robber barons when regulations and unions were far and few between one of the mantra's is that taxes and government regulations are the principal obstacles to small business success. Like so much coming out of GOP demagogues like Eric Cantor, et. al, it's a lie. A new survey of small business owners underscores the disingenuousness of the GOP's story line. And not surprisingly, one of the biggest drains on small business after the depressed economy is the sky rocketing costs of insurance of all kinds (for my firm, malpractice insurance and health insurance are big ticket items). Here are highlights from McClatchy on the findings:

Politicians and business groups often blame excessive regulation and fear of higher taxes for tepid hiring in the economy. However, little evidence of that emerged when McClatchy canvassed a random sample of small business owners across the nation.

McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business. Their response was surprising.

None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath.

"Higher taxes are not good for business, but some of the loopholes and deductions should be looked at," he said. The answer from Rick Douglas — the owner of Minit Maids, a cleaning service with 17 employees in Charlotte, N.C. — was more blunt. "I think the rich have to be taxed, sorry," Douglas said. He added that he isn't facing a sea of new regulations but that he does struggle with an old issue, workers' compensation claims.

Then there's Rip Daniels. He owns four businesses in Gulfport, Miss.: real estate ventures, a radio station and a boutique hotel/bistro. He said his problem wasn't regulation. "Absolutely, positively not. What is choking my business is insurance. What's choking all business is insurance. You cannot go into business, any business — small business or large business — unless you can afford insurance," he told Biloxi's Sun Herald.

"I think the business climate is so shaky that I would not want to undergo any expansion or outlay capital," said Andy Weingarten, who owns Almar Auto Repair in Charlotte. He's thinking about hiring one more mechanic.

Added Barry Grant, the regional president of Meritage Homes Corp., in California, "It starts with jobs. ... There's an awful lot of people sitting on the fence; they're waiting for a sign." One reason hiring remains dampened is the prolonged slump in the housing sector, a driver of the pre-crisis economy.

Jobs - something that the GOP is doing NOTHING to foster is one key to recovery. To that I'd add a return to realistic mortgage and business loan approval procedures (currently, many good borrowers cannot get financing)and a stabilization of the housing market. The later, of course is not on the radar of the GOP.