The Bipartisan Hindering of the Entrepreneurial Spirit

“You knew dealing with regulations was part of owning a business. You should just accept it.”

Whenever entrepreneurs and small business owners face new regulatory obstacles, I think of that statement directed at a friend several years ago. More such impediments have popped up recently at all levels of government, instigated by both ends of the political spectrum.

A recent report in The Wall Street Journal described how, in the face of surging tariffs under President Trump, some businesses are being forced to lay off staff. Others are holding off on capital investments, or seeking outside investors to help.

Some store shelves are going bare.

Here in Texas, Lieutenant Governor Dan Patrick spearheaded a drive to ban “all THC products.” That will drastically curtail an $8 billion industry made possible, ironically enough, by a 2019 law loosening up regulations on hemp.

Since then, it has grown to thousands of businesses that employ 50,000 Texans.

Closer to home, while on the one hand promoting “buy local,” the San Antonio City Council doles out taxpayer-funded subsidies to multimillion-dollar corporations from the other hand. They’ve also shown a willingness to seize businesses and arbitrarily shutter whole industries.

Small businesses are important to the economy, but they are also vital to society in general. At their most organic, they are a path to greater independence.

One of my jobs while in college was at a video store (remember those?). The owner had left his prior job because he wanted to be his “own boss.” Probably the easiest part was deciding exactly which industry to jump into.

Every other decision is what should command more respect from our leaders.

First of all, entrepreneurs have to save. In a country where government and media mistake consumption for growth (“consume: to destroy”), saving goes against the grain. Next, they have to sell their idea to potential investors in order to get the venture off the ground.

Then the risk comes into play.

After giving up a regular paycheck in order to make their idea a reality, there’s the pressure to succeed. It essentially becomes a member of the family, one of the children that must be looked after, and nurtured, 24/7.

In addition to the employment opportunities they create in the community, they also serve as laboratories for wealth creation.

When a business starts selling beyond city limits, it grows. More employees are hired, including those who bring their skills and ideas from other cities and towns. It expands capacity. After evolving into a big business, new small businesses sprout out around it. It’s a virtuous cycle.

Larry, the guy I worked for at the video store, came from one of those big businesses.

Government recognizes all this progress with overbearing mandates, high taxes, and reminders that they can shut them down at any time for any reason (see lockdowns). This creates the perverse illusion among politicians and bureaucrats that they can then offer assistance.

According to the WSJ report, lobbying groups are appealing to the federal government to grant exemptions from the tariffs. The Small Business Administration also “has endorsed bipartisan plans to double loan limits.”

Entrepreneurs can be forgiven their skepticism given the experience of the Paycheck Protection Program.

In tandem with the THC ban, the Texas legislature loosened up its medical marijuana program.

Meanwhile, our city council gave the horse-drawn carriage industry five years to close-up shop. Also, to assuage businesses harmed by the lockdowns and construction that “lasts a painfully long time,” they’ve handed out millions of dollars in grants.

Insufficient, obstructive, and counterproductive. The dependence built-in to all this ‘help’ runs against the very streak of independence that drove these entrepreneurs in the first place.

Why does any of this happen at all?

Some of our elected leaders may have struggled to find success in the private sector. They are sometimes lobbied by their counterparts in the business community who are losing out to their competition. We saw this during the paid sick leave debate here several years ago.

Such lobbying is frequently accompanied by campaign donations and their accompanying undue influence.

Policymakers may simply be ignorant about how the market works, how it motivates business owners to deliver the best product or service at the lowest possible price. They may furthermore feel government is an equal partner.

Or, it’s simply a lack of humility.

Texas Governor Greg Abbott tapped the brakes by vetoing the outright THC ban, calling instead for “an approach similar to the way alcohol is regulated.” Hopefully the rest of the governing class takes a cue from that slight course correction, and stops shortchanging us all.