Lack of demand is the problem not regulations

Politico
Letter to the Editor
November 9, 2011

Former Sen. Blanche Lincoln, in her Opinion piece “Why Small Businesses Matter” (POLITICO, Nov. 1), insists that too much regulation is “the roadblock that many small businesses cite as their greatest impediment to growth.”

But Lincoln, who is now the chairwoman of an anti-regulation organization created and funded by the National Federation of Independent Business, provides no hard data to prove her — and the NFIB’s — claims about the imperative of regulation reform. And for good reason. Regulations aren’t standing in the way of small businesses creating jobs.
During the first half of 2011, the Bureau of Labor Statistics reports that less than one-quarter of 1 percent (0.0023) of U.S. job layoffs were due to regulations, according to the businesses themselves. About 30 percent of layoffs were in fact due to poor “business demand.”

This data is confirmed by every credible recent survey of owners of small businesses — lack of consumer demand and economic uncertainty are the most important reasons small businesses aren’t adding jobs. It was found by surveys for the Small Business Majority, McClatchy News Service, National Association for Business Economics, U.S. Chamber of Commerce and even the NFIB.

Without the hard data to prove their case, NFIB President Dan Danner has launched personal attacks on small-business organizations that oppose their anti-regulation proposals. “Some of the administration’s friends say that regulation isn’t actually hurting small businesses,” Danner says in the latest radio ads, “I’m not sure if these regulation deniers have ever met a small-business owner.”

As vice chairman of the American Sustainable Business Council (representing over 100,000 small and midsize U.S. businesses), president and chief executive officer of the South Carolina Small Business Chamber of Commerce (with more than 5,000 members) and owner of several small businesses, I have met plenty of small-business owners. To a person, they tell me that what they really need to grow is more customers.

That doesn’t make us regulation deniers or even friends of the administration. It makes us realistic business people without a partisan agenda.

Frank Knapp, Jr.
Vice Chairman
American Sustainable Business Council