Written by Richard Butrick   

Too many refs and not enough players. Imagine doubling or tripling the number of referees and rules in a football game. The game would never get underway. Even with the standard number of refs in a football game we have all seen a game ruined by over-zealous refs. It almost seems that the refs think they are the players. And that is exactly the mindset of the Obama team. They think they create the jobs and propel the economy with their oversight and guidance. It is called Statist Capitalism. The government wise men steer the economy into the future. Favored industries get loans and regulatory wavers. Industries out of favor get regulatory strangulation and fines. Here is the VP extolling the wonder of the future under the guiding hands of the government seer regulators:

“Imagine by the time you’re in the position to buy your first home, putting a roof of solar shingles that will cost no more than today’s ordinary shingles, will be able to power your home, heating, cooling, running appliances at a fraction of the cost your parents pay today,”

It is hard not envisage Obama and Biden as swamis staring into their crystal balls and guiding the less clairvoyant captains of industry into the future. Unfortunately, the swamis have the power of our tax dollars to back up their deluded sense of clairvoyant leadership.

But using regulatory power to play the good-the-bad-the-ugly with the economy comes at a huge cost - it sucks capital out of private industry - big time.

According to the Competitive Enterprise Institute (CEI) in Washington DC, in its annual report called, “Ten Thousand Commandments”, the cost to US businesses of complying with US government regulation is 1.75 trillion. That is just under half (48 percent) of the budget of the federal government. It is almost ten times the total of all corporate taxes collected and almost double the total collected from individual income taxes.

But the killer is that it is also one-third higher than the total of all pre-tax corporate profits.

Business run on margins. Total pre-tax profits for US companies in the last couple of years ranged 1-1.5 trillion. In other words regulations cut the profit out of US corporations by over a half. That is capital which could be deployed for research and development and reinvestment in corporate infrastructure and expansion. In other words: jobs. It costs jobs and growth in the private sector.

The government should get out of the venture capital business. Even the best venture capital firms are lucky to bat .500. But they do it with their own money. Stop trying to regulate winners and losers by flooding the playing field with refs. That is not leveling the playing field that is gumming-up the playing field. Fine. Call the obvious fouls but that is it. The rule book is already >34,000 pages most of it spelling out rules. That is great for growing government regulatory agencies - the real growth industry under Bush and Obama. Seems there is an inverse relationship?