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I’m From the Government and I’m Here to Help

Reagan - Compass DatacentersSo I was going through the mail today and happened to notice that I had a rather thick envelope addressed to me from the State of New York. Since thick envelopes sent on the behalf of an entire state rarely portend good news, I placed it on a rather remote corner of my desk and tried to get on with my day. Unfortunately, it just kept looking at me with that hang dog look that thick envelopes from states always give you—and you know how irresistible that is—and, finally, I succumbed. Upon opening it, I found it contained some paperwork, including the fee check, we had sent to them a few weeks before. Color me surprised. Naturally, I was curious why the State of New York had chosen to take the time and effort to take my paperwork, which we had submitted in duplicate, put it into one of their official state envelopes, type my name on it, run it through their postage machine and send it back to me. Upon closer inspection I found an explanatory form letter that cited the following as the reason my submission was deemed unacceptable in their eyes (see the full text later at the bottom of this post):

“Please be advised that Section 150.1 of Title 19 of the NYCRR provides that any document submitted for filing must have attached a white backer/cover sheet which sets forth the title of the document being submitted and the name and address of the individual to which the receipt for the filing of the document should be mailed. Also, note the entity name must appear exactly in the same manner throughout the document as well as on the backer/cover sheet. A completed backer/cover sheet must be included with your re-submission. A backer/cover sheet is enclosed for your convenience”.

The letter was signed by “Jason”. Apparently Jason has reached a certain level of stature within bureaucratic circles that he is recognized simply by his first name alone. Kind of like Madonna, or Rhianna. In short, my paperwork had been rejected for the lack of two pieces of paper, one of them blank and the other with my name on it, that the fine government officials of New York had deemed essential for submissions such as mine.

This intensely personal experience with government regulation helped me understand just how difficult doing business in this country has become. In our government’s constant quest to save us from ourselves we have created a business climate that rivals only quantum physics for complexity. And at least there are some guys who claim to understand that. The most recent Fraser Institute study on economic freedom ranks the US at number 18 in the world on this ease of doing business metric. Ten years ago we were second. The US Small Business Administration estimates that regulatory compliance now costs businesses over $1.75 trillion dollars annually with the impact on small businesses being 37 times higher than their larger counterparts.

The end result of this this unbridled growth in regulatory obstacles is the throttling of the historical engine of this country’s economic expansion—small business creation. In fact, the Hudson institute has found that the number of jobs created per capita by new businesses has fallen by over 30% in the last four years.

Certainly not all regulation is inherently bad, ten year old kids working in factories isn’t something that we want to go back to for instance, but a good portion of what businesses must contend with on a regular basis serves only to pay the salaries of the Jason’s of the world. For the country that has fueled the world economy since WWII to be ranked 18th in economic freedom borders on the blasphemous. Only through the repeal of impediments to business growth from cover pages to licenses for getting a shave at the barbershop to the insanely complex Dodd-Frank can we expect to see a reversal of the miserable economic state that our country is mired in. More government isn’t the answer to our economic problems. More business is. In the mean time I’ll add my backer/covers and re-submit my paperwork. Hopefully Jason will find it acceptable.

NY State - Compass Datacenters