Tuesday, November 18, 2014

George McGovern's brush with regulation

Do yourself a favor and read Marc Andreessen's excellent interview with New York Magazine. That's excellent in term of the answers, not the questions per se, which got rather tedious and were bogged down with Rousseaun opinionated counters.

The Netscape co-founder turned venture capitalist mentioned a decades-old Wall Street Journal piece written by former Democrat congressman George McGovern that is worth reading. Andressen's summary is more pointed and straightforward than the actual piece, so first here's his summary:

In 1992 he wrote a column for The Wall Street Journal which told the story of his life after he left politics, when he bought an inn in Connecticut. And he said, “Oh my God, I didn’t realize.” And the “Oh my God, I didn’t realize” was: I did not realize what a layered impact 50 or 100 years of regulations and laws applied on small-­business owners actually meant.

The article is still available online. Here's a snippet:

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: "Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape." It is a simple concern that is nonetheless often ignored by legislators...

Today, despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite these injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident. And while the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening.

Our Connecticut hotel, along with many others, went bankrupt for a variety of reasons, the general economy in the Northeast being a significant cause. But that reason masks the variety of other challenges we faced that drive operating costs and financing charges beyond what a small business can handle.

There's always a market for political traitors, people who fought for years for one side and then lamented it all. Lee Atwater comes to mind, as does Alan Greenspan. Keep in mind, McGovern, Atwater and Greenspan did not shift entirely to the other party, but did provide their opposition ammunition to pound one issue that they had worked for.

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