Business Ethics, or…

John Stossel has an interesting column this morning, Keeping Business Honest. The theme of his column is that “business” desire for profits is a good thing.

Instinctively, we look for people’s motives. We need to know whom we can trust and whom we can’t. We’re especially skeptical of business because we know business wants our money.

It took me too long to understand that business’s desire for profit is a good thing. To get our money, businesses — if they can’t look to the government for favors — need to give us what we want. Then they must make continuous improvements and do it better than the competition does.That competition is enough to protect consumers. But that’s not intuitive. It’s intuitive to assume that competition isn’t really consumer protection and that experts at the FDA, FTC, DEA, FCC, CPSC, OSHA and so on must protect us. These experts consult “responsible” businessmen for advice on creating rules to make sure businesses meets minimum “standards.” — Washington Examiner.

The down side is that regulations, created by local, state and federal agencies, intended to “level the playing field” stifle innovation. Under the camouflage of consumer protectionism, licensing and other business restrictions have a tendency to make innovation, business startups and competition difficult. The result is protectionism. the question is, what is being protected.  Stossel provides some examples.

Las Vegas regulators require anyone who wants to start a limousine business to prove his new business is needed and, worse, will not “adversely affect other carriers.” But every new business intends to beat its competitors. That’s the point. Competition is good for us. Las Vegas’ anticompetitive licensing rules mean limo customers pay more.

In Nashville, Tenn., regulators ruled it illegal for a limo to charge less than $45 a ride. One entrepreneur had won customers by charging half that, but the new regulations mean the established car service businesses no longer have to worry about him.

Perhaps Nashville’s and Vegas’ regulators really believe “this is an area where the free market doesn’t work,” as the manager of the Nevada Transportation Services Authority put it. But it’s fishy that charging big fees for licenses just happens to be a very effective shakedown operation. Vegas cab and limousine businesses give “substantial” donations to Vegas-area political candidates, according to the Las Vegas Sun. — Washington Examiner.

Stossel makes an interesting point in that last paragraph.  It has parallels locally.

Up until a month or so ago, my home town had a tax on businesses. It was a one time tax on new businesses who constructed a building for their business or expanded their existing place of business.  Supposedly the tax was to pay for increased use…at that location…of city resources such as street maintenance, water, sewer and power usage.  Basically, infrastructure costs. The tax was not levied if a business moved into an existing structure and did not alter the building beyond the usual interior make-over. No, it was targeted towards new or growing businesses.

The tax created a reluctance of new businesses to come to our city.  From the statement of a former councilman, who was not re-elected to the council after saying, “We don’t need more burger-flipping jobs here.” 

I was present when that statement was made. Shortly thereafter the council repealed the tax.

Was the purpose of the tax to discourage businesses, business startups without the capitalization of a large company, from doing business here? “We want good jobs!” was one reasoning. I would submit that to one without a job, ANY job is a good one, burger-flipping or not. Perhaps the exposure of one purpose of the tax was sufficient to overcome the reluctance of other members on the council who had previously supported the business tax.

That local tax was repealed just before our local city elections. Since then we’ve already seen fruit of the repeal.  Our local Micky-Ds has renovated their building.  Did it add new jobs? Probably not.  Would the tax have applied to the renovation if it had still existed? I don’t know.  But we have other evidence that the lack of the tax is bringing new jobs to town.  Next week we’ll have a ground-breaking on a new Steak ‘n Shake.  The tax would have applied to them because they are building a new presence on an empty lot.

Yep, a new business and a half-dozen or more new jobs. Minimum wage? Probably, but to someone without a job, minimum wage is attractive.  Remember the original purpose of minimum wage: a starting wage to gain experience to allow the worker to build skills useful for acquiring a better job.  It may be those skills are simply coming to work on-time, every-time, and putting in a full-shift.  You’d be amazed how many job-seekers lack those basic skills.

So let’s ask ourselves, what is the purpose of these regulations, these taxes? Are they for consumer protection? Are they to preserve city resources? Or, are they to protect favored cronies or simply to make doing business more difficult?

The economic recovery of our country…post Obama, will be difficult enough without our adding to those difficulties through the imposition of anti-business taxes and regulations. Remember, juvenile unemployment is above 50% in some areas. We need to be pro-business, especially to startups. That is where jobs are created. And burger-flipping frequently is an eye-opener to our young folks just starting or approaching adult life. They need jobs and experience, too.

A beam of light in a world of gloom and doom

Here’s a bit of news that I expect you didn’t know.  The US domestic production of oil has been increasing over the last several years despite reports from government and the state media.

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.
Didn’t expect that now, did ya? Well, I’ve done a bit of research and found that it appears to be true. If—it isn’t killed by the dems, libs and eco-wackos.

The UK and Norway have the North Sea fields. The production in those fields have been severely limited due to eco-wackos in the UK and Europe. Where once oil platforms dotted that shallow sea, there are less now and will be fewer tomorrow. North Sea oil production peaked in 2000. It has declined every year since.

But why does the UK Telegraph think the US will be in the ascendancy?

Telegraph readers already know about the “shale gas revolution” that has turned America into the world’s number one producer of natural gas, ahead of Russia.

Less known is that the technology of hydraulic fracturing – breaking rocks with jets of water – will also bring a quantum leap in shale oil supply, mostly from the Bakken fields in North Dakota, Eagle Ford in Texas, and other reserves across the Mid-West.

“The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d),” said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.
Total US shale output is “set to expand dramatically” as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.

Surprising, isn’t it.  Yet we’ve heard little of this here at home. Why? Federal regulations and environmental NIMBYs.  The Rand Corporation did a study last year and,  if you read between the lines, the issues that face shale oil production are not technical, but are regulatory with the major opposition being the EPA and environmental groups.

Critical Policy Issues

Resolving environmental, socioeconomic, and key governance issues will determine whether there will be an oil shale industry in the western United States and how fast and how large that industry will grow.
  • All known technical approaches will have land-use and ecological impacts, with impacts being especially severe for mining and surface retorting versus in-situ retorting using electric heating.
  • Oil shale production will result in airborne emissions that could affect regional air quality, leading to a potentially stringent limitation on oil production levels. It may also lead to higher greenhouse gas emissions than conventional oil operations.
  • Because all resources lie in the Colorado River drainage basin, water quality is an important issue. At present, not enough is known about how to prevent water contamination from surface and in-situ operations.
  • Large-scale oil shale development will have socioeconomic impacts, stimulating significant regional population growth and likely stretching the financial abilities of local communities to provide needed public services.
  • The richest, most abundant deposits are concentrated on federal lands, requiring that leasing be conducted using a strategic approach that balances environmental and land-use impacts against the benefits of strategically significant oil production levels.

There are more bullets to this list but I trimmed them to conserve space here.

As usual, the US has the resources to work our way out of the democrat created mess we are in.  The main obstacle for our progress is the federal government. If we can remove those road-blocks, the US can and will be the leader in the world, not only in energy production but also in manufacturing and technology.  If you review governmental actions over the last fifty years or more, every impediment to progress had come from government—specifically from the agencies created by democrats.

It’s time for those agencies, like the EPA, to go and take with them all the regulations created purposely to limit our growth and productivity.