Thursday, June 25, 2009

The Government is Not Our Friend II

Every once in a while I get on these rants on topics that are near and dear to my vs. government! This is not a partisan article, it is an anti-government article. So if you get offended by those type of article, don't read it!

To continue on my last topic "The Government is Not Our Friend" I want to get into more details of how a larger government means less liberties, more regulations, leading to a less productive business environment; which is EXACTLY what is happening in this country and particular in California.

One important axiom in the business brokerage business, and in any type of transactional business for that "time kills deals." What does this mean? Simple, the longer it takes to close a deal, the higher the chances of the deal failing. When the deal fails, everyone loses, EVERYONE!

So government's role is to help make the process smoother and increase the chance of a successful close, right? NOT! Even though the government is a direct benefactor of getting a deal closed - more fees, more taxes, etc. it makes us transactional brokers crazy with delays and rediculous regulations.

By definition, when government gets bigger, it must justify its existence. How does it do that? It passes more laws and regulations requiring more people to oversee and enforce those new laws and regulations.

Oh sure, you'll hear people say regulations are good, particulary after the financial melt-down in October 2008. Many like to point to the financial melt-down situation as a regulation issue in order to justify all the crazy stuff going on in Washington. Don't be fooled. It was simple greed from all angles (consumers as well as corporations) driving that crisis.

There are plenty of regulations in place to prevent that melt-down, but many were simply ignored for the larger cause "get more American's into homes." That was the driving force! Blinders were on from all sides of the aisle. Republicans turned their heads for corporate America CEO's with sickening bonus programs and Democrats turned their heads for the sake of getting American's into home ownership despite the fact they couldn't afford it.

Ronald Reagan once said "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." I believe we're entering Reagan's third stage for our society. When the government makes decisions for the individual - and that's exactly what regulation do - it is reducing our individual rights to manage our own lifes.

Sure there are some good regulations such as don't dump into our lakes and land...don't shoot down airplanes...don't distroy whole forests...etc. but there are many regulations burdening our personal freedoms to succeed.

We experience those burdonsome regulations in California with business transactions and business ownership. More and more companies have left this once great state because of the over regulation and over taxation. I believe in 1990 there were 120 or so fortune 500 companies headquartered in California. That's a lot of corporate folks with good salaries. Today I believe that number is about 20 or so. That's a lot of great jobs gone. Why? As I said, over regulation and over taxation.

We as a nation should be concerned with getting rid of regulations and laws that don't make sense any longer. It is rare that our legislators actually remove laws from the books. We have government entities overseeing other government entities overseeing other government entities and so on. Or policy makers need to get rid of the California Bulk sale law! Our state needs to get rid of the budersome ABC liquor license process. Our local governments need to get rid of the foolish over prices transfer of business health inspections. Our DRE needs to make it easier to get a real estate license during tough times and harder during good times - can you believe these guys at DRE!

If our industry of business brokerage has all these regulation causing delays and lost income, I can only imagine other industries where simple changes can make a whole lot of differences to making deals happen. But as long as the bureaucrats - mindless officials - have an open check book to tax us to death in order to keep thier jobs and power base, they will do it instead of looking to make business in California easy to do. We should all be pounding our government to make our lives easier, and growing it isn't the answer!

Check us out at

No comments: