Why regulations are bad for business

As the stock market took a leap up in November and December 2016, there was a lot of talk about optimism that the new administration would cut regulations.

There are a lot of them. According to BusinessInsider.com, the Federal Register is the main source of regulations for U.S. government agencies. In 1936, the number of pages in the Federal Register was about 2,600. Today, the Federal Register is over 80,000 pages long.

And that is just the federal government. The state governments is full of regulations too.

Some of them are mystifying.
One example: In Texas, a computer repair technician has to obtain a private investigator’s license. To get the private investigator’s license, the computer repair technician must have a degree in criminal justice or a three-year apprenticeship with a licensed private investigator.

The state of Philadelphia requires bloggers to have a $300 ‘privilege license.’ The state actually does go after offenders.

A fisherman who freed a giant whale from his nets, was given a $500 fee because he didn’t call state authorities and wait for them to free the whale.

Regulations cost businesses (and consumers) money because it costs more to do business. The money that might have been spend on a new product or employee goes to meet a regulation.

On the other hand, regulatory authorities opened up wireless networks to allow the development of wireless phone with apps. This might not have been possible because the two companies controlling the networks didn’t want the technology.

Still, business fears regulations. As the number of regulations exploded in 2012, business publications fretted over the effect on commerce. A new administration that promises less regulation took those fears away and sparked a stock market rally.