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3 Real Costs of Regulation Realized This Summer

How many times have you heard how much regulation costs the economy?  How many graphs have you looked at that show the rate of lost GDP due to    (Fill in the blank)    ?   I want to share 3 examples I’ve experienced this summer with clients that illustrate the cost of increased regulation to small businesses.

  1. Growth:  My understanding is that the underlying purpose of regulation is that public officials, who purportedly have the interest of the general public at heart, are there to protect us from individual companies whose interests may or will hurt the general public.  Therefore broad rules are enacted and enforced, which are based on the underlying assumption that ­­all companies within the regulated sector are bad.  I worked with a company in the for-profit education sector who presented better outcomes for their students in every measurement, but because for-profit schools are regulated differently from public, they are unable to expand their services to additional students by rule.
  2. Jobs:  There is a hard cost of legal fees and employees required to ensure you are meeting the regulations, but often overlooked are the opportunities to refocus that capital into jobs that create growth and produce outcomes, rather than analyzing confusing rules.
  3. Litigation:  How many times have you had an argument with your brother/sister/mom/dad that has festered over several weeks and months; to a point where you forget what you’re arguing about?  My view of the litigation surrounding many of the regulations proposed is that it is often like that argument, so far removed from the original intent of the law.




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