On Friday I attended an informative business roundtable meeting of Chicago-area small businessmen who came together to discuss how government intervention and its avalanche of regulations are killing jobs and businesses not only in Illinois, but nation wide. Some of the stories were chilling, to say the least. These trials go to show how anti-business the most famously capitalist country in the world has become. No wonder we can’t get out of this second great depression!
The event was held at the headquarters of The Rabine Group in Schaumburg, Illinois. The Rabine Group is a group of nationwide companies that specialize in driveway paving, roofing, and other contracting work. The company is headed by owner and CEO Gary Rabine. Filling out the panel was moderator, Brian Kelly of Bulk Lift International; Gary Rabine, The Rabine Group; Garrett Patten, Patten Industries; Randy Truckenbrodt, Randall Industries, Inc, and Former State Senator Steve Rauschenberger, Rauschenberger Partners.
The panel began with some of the regulatory horror stories experienced by the panel. Each story illustrated how government stands in the way of job creation, small business, and expansion, and how government is not working hand-in-hand with small business but actually fosters an inimical relationship. The panel showed how the oppressiveness of these regulations actually tempts business to break laws just to be able to carry on with business.
Gary Rabine began with his story of how the Illinois Environmental Protection Agency (IEPA) is all too often senseless in its rules. Rabine deals with construction and the waste materials from that work and as a building contractor he brought to the discussion one of these rules that simply makes no sense. Once a construction site is deemed “clean” by the IEPA — that the soil is not contaminated by any chemicals, etc. — there is a rule that all soil carted off a site (for instance from driveways or building foundations) must be tested for contaminants upon leaving the site. Then, that same load must be tested again when it is deposited wherever it ends up being dumped. Remember, this is soil that was already declared “clean” in the first place. So, the IEPA is requiring a contractor to perform expensive environmental tests on the same spoil THREE times! Rabine estimated that it costs upwards to $800 for every load to satisfy this particular regulation.
Rabine agreed that some regulations are good and proper, but another problem is that government writes these rules, passes legislation, and then leaves it to business to somehow find out about it all on their own. This costs another constant sum of money as businesses have to hire lawyers and employees whose sole job is to track legislative and regulatory changes — changes that seem to happen with alarming regularity.
Worse, Rabine says that dealing with the government offices on these regulations is difficult because often officials have no clue how to answer questions leaving companies in fear of violating regulations despite having made monumental efforts to avoid breaking the law.
Next up was Randy Truckenbrodt of Randall Industries. Randy told us of a facility he purchased in the 1980s that had two small gasoline tanks buried on the property by previous owners. He wanted to dig up the old ones and replace them with one that would better serve his needs for his fleet of trucks.
Truckenbrodt contacted the government, secured permits, hired a contractor and dug up the two aging gasoline tanks. Then the nightmare began. The IEPA and other agencies began a long, drawn out game of questioning, demanding, and stalling Truckenbrodt’s work resulting in almost two decades of obstruction. A 50-some-foot hole was left open in the ground in the middle of his property for 17 years as government officials dallied on giving him permission to complete his construction. 17 years!
All during this time, Truckenbrodt’s property was in a purgatory unable to be sold, improved, or used easily by his company. Worse, all financial avenues were closed to him for the property. He could not refinance or get loans as the IEPA had the property on its trouble list.
Truckenbrodt noted that the environmental testing game is a major scam more often than not because the state encourages testing, and testing, and testing ’til the cows come home racking up costs the whole time. It’s so bad, Truckenbrodt said, that many contractors have told him they quietly urge clients to just go ahead and build their buildings, lay their driveways, or do other things without notifying the IEPA at all and cross fingers that the government will never find out about the work being done. The system, Truckenbrodt says, is so bad that it encourages people to break the law and cheat in order to avoid the jobs-killing regulatory nightmare that can sometimes take decades to get through.
Garrett Patten and his Patten Industries is a dealer for Caterpillar equipments and his story was about one of his clients. The federal EPA has created what it calls “tier four” engine requirements, new standards for gas mileage and emissions that will begin next year (I also discussed that in Sept). Patten’s customer had older vehicles with older engines and found out that because of these new EPA regulations he’d have to spend $5 million more than his entire current fleet is even worth to upgrade to meet the new standards. Now this customer is either going to have to nearly go bankrupt to satisfy the new regulations, or just quit business altogether.
Talk about a jobs killer.
Former Senator Rauschenberger then noted that these problems have arisen in state (and federal) legislatures because our politicians no longer write bills and regulations themselves. They have lobbyists do it, or they have staffers do it, or they rely on regulators to tell them what to do. This closes the door on actual political debate because no one in elected government is debating these rules and regulations. They are merely getting already written bills that they never read and then just pass in toto without the slightest idea what is in them.
I asked Rauschenberger how often environmentalists and lobbyists from anti-business non-governmental organizations write legislation for our politicians. He said it happens quite a lot, though he demurred from trying to put a percentage on it. But I say that it happens at all is a crime.
Finally the panel offered several solutions, but the main point was that none of this can be solved unless businesses gather together and lobby government. The sad thing is, despite what many folks in the public imagine, small businesses don’t really have much representation in the halls of government. Sure the giant, mega-corporations have armies of lobbyists to push politicians to listen to their needs, but most small businessmen are too busy running their businesses and living their lives to talk to legislators and their needs often go unnoticed by government.
In fact, government ends up being an enemy to the jobs creators in the small business community. So, that was one of the purposes for the meeting.
The event was sponsored by Patriots United and United to Restore Freedom (see bios below) in the hopes that small businesses could join together to stop government from running roughshod over them.
Following this, another short meeting took place held by a new small business organization called Job Creators Alliance (JCA) — also see bio below.
Calling in to address those that remained for this part of the meeting was Bernie Marcus, founder of The Home Depot. Marcus, 80, has been retired from Home Depot for a while, but he said he joined JCA because today no one that wants to start the next Home Depot could do so because of the restrictions imposed by obscene government regulations.
“They’ve maligned the word capitalism so bad,” Marcus said, “that no one has any touch with business.”
He said he “feels guilty” because after his great success of creating Home Depot others can no longer do anything like what he did. “It can’t be done any more, “he said, “because environmental regulations and constant lawsuits” make creating new businesses almost impossible.
A lot of people are saying that companies won’t expand in this dismal climate because of the “uncertainty” of government. But Marcus insists this is wrong. Rather its the certainty of it all. “It’s the certainty that government is going to cost jobs and raise the cost of doing business. With Obamacare, EPA regulations, other government rules and lawsuit abuse business are shutting down not expanding,” he stated.
It’s so bad that banks and lenders are so afraid to move that now they are simply allowing government regulators to determine who gets loans to grow their business. It is no long the market deciding but government picking winners and losers, Marcus said disgustedly.
The new head man of JCA, David Park, then spoke about the group he heads. But he gave this one startling statistic. He said that initial public offerings (IPOs) of companies that have business of under a million dollars have dropped 77% since the implementation of the SarbanesOxley Act.
Because of this overweening government interference in the small business community thousands of small companies have been stymied or destroyed. This is the anti-business atmosphere that this nation is suffering.
The upshot of all this was that Illinois is the worst of all worlds for regulations. Other states are beginning to see the sense of working with their business communities, but Illinois treats its business community as an enemy. Then pile obstreperous federal agencies on top of that from Illinois and it is no wonder that the Land of Lincoln is at the bottom of the barrel having one of the most un-favorable business climates and worst legal climates, most troublesome unions and sports some of the worst unemployment in the country.
These were warnings that need to be heard by the regular voters so that they understand why our economy has not healed and why it is harder for it to do so. It isn’t “greedy businessmen” screwing that nation. It is government.
Thanks to Patriots United for inviting me to cover this timely and important little event.
About Patriots United:
Patriots United is a conservative organization founded on five pillars: pro-family, limited government, free market economy, national defense, and choice in education. Dedicated to educating the public on public policy that reflects our conservative Pillars and values, uniting all like-minded citizens, and encouraging individuals to use this knowledge to hold those in the public sector accountable.
About United to Restore Freedom:
United to Restore Freedom (URF) is a 501c3 not-for-profit organization dedicated to advancing conservative thought and ideas by educating and engaging policy makers, opinion leaders, and citizens on the URF LIFT principles of limited government, individual liberty, free markets, and traditional values.
About Job Creators Alliance
Job Creators Alliance (JCA) is a nonprofit, nonpartisan 501(c)3 organization. Our goal is to defend and preserve the system of free enterprise in the United States for future generations so entrepreneurship can flourish, resulting in job creation. JCA has a core membership group of retired CEOs and entrepreneurs who are the spokespeople for a marketing campaign to defend and preserve free enterprise. JCA also accepts members who wish to support its mission and goal financially through a tax-deductible donation, joining hundreds of other members who receive our e-newsletter and are kept informed on the job creators issues of the day and on the progress of our marketing campaign.