America’s system of free enterprise is the greatest engine of prosperity ever known on earth.
A key component of that system, and a major reason for its success, has been a tradition and a legal environment that gives American businesses freedom from unnecessary rules and regulations.
That said, the last eight years have seen a downturn in the freedom Americans enjoy when engaged in business activities. The Heritage Foundation’s 2017 Index of Economic Freedom—an annual global study that compares countries’ entrepreneurial environments—highlights the urgent need for the U.S. to change course.
For the ninth time in the past 10 years, America has lost ground compared to other countries. And in the Business Freedom subcomponent of the index, which measures the regulatory burden, the U.S. registered its lowest score ever.
Each year of Barack Obama’s eight-year presidency, businesses in the U.S. faced more and more costly regulations.
The Heritage Foundation’s “Red Tape Rising” report documents the excessive rule-making during that period. As our colleague Diane Katz reports in a recent article, over $122 billion in new annual regulatory compliance costs were levelled on businesses during that time.
The Trump administration has vowed to roll back restrictive regulations and has been credited with improving the business climate. For instance, a recent CNBC poll of chief financial officers found that 74 percent cite deregulation as the Trump administration’s achievement that has had the most positive impact on their company.
The move toward deregulation is good news, because when business owners have to hire lawyers and accountants to navigate confusing regulations, it is the small businesses responsible for most employment growth in the U.S. that suffer the most.
Compliance costs that may be relatively easy for large companies to absorb may be overwhelming to aspiring entrepreneurs. Restrictive regulations are thus a barrier to entry for “the little guy,” and can perversely help the biggest corporations face less competition.
No wonder that many believe the system is “rigged” in favor of the well-off and well-connected, and against everyday Americans.
If we are to preserve our nation’s greatest economic advantages and to fend off the left’s ever-increasing efforts to redistribute the fruits of other people’s labor, we must strive to be an economy in which everyone can have a place, and we need answers for those now struggling to join in American prosperity.
Regulatory reform is one of those answers.
The free enterprise system has lifted more people out of poverty than any other set of ideas in history, and certainly more than government interventions ever have, or ever can. Economic freedom is what made America the thriving country she is.
Reforming the regulatory environment allows those who have had opportunities closed off to them by big government to finally join in that prosperity.