To understand what is wrong with the regulatory culture of the U.S. under President Obama, consider this alarming statistic: Today, according to the World Bank—not exactly a right-wing think tank—the U.S. ranks 46th in the world in terms of ease of starting a business. That is unacceptable. Think what the U.S. could be and the prosperity we could have if we rolled back the overregulation that keeps us from ranking in the top 10.
My goodness. That does sound unacceptable. Still, it never hurts to check up on these presidential candidates, does it? So let’s click the link.
Sure enough, the World Bank ranks the United States 46th in ease of starting a business. But there’s an asterisk next to that. Let’s scroll down and see what it says: “The rankings of economies with populations over 100 million are based on data for 2 cities.” Hmmm. It turns out the World Bank is ranking the United States based on starting up a business in New York City. That seems to tip the scales a wee bit, no?
But let’s soldier on. New Zealand ranks first in starting a new business, so let’s see how they work their magic. Here’s the World Bank’s comparison:
So it takes half a day in New Zealand and four days in New York City. Really? Half a day to start up a new business? Maybe they’re not using the same definition of “starting” that I am. Let’s check out the details for New York City. Here they are:
Now I get it. This isn’t about getting a business up and running. It’s solely about registering a new business. And it’s got nothing to do with any of Obama’s regulations. It’s all about state and local stuff. The only part that’s federal is getting an EIN number, which is free and takes a few minutes. I’m not sure what Jeb Bush thinks he’s going to do to streamline this.
Bottom line: This is completely meaningless. It’s a measure only of how long it takes to register a business, and it’s only for New York City. And even at that, it takes only four days and costs $750. This is not stifling American entrepreneurship.
But wait! There’s more. The World Bank does have a broader “Ease of Doing Business” rank that takes into account the things you need to do to get up and running: construction permits, electricity, credit, paying taxes, enforcing contracts, etc. As it happens, the bulk of this stuff is still state and local, and has nothing to do with Obama or the federal government. Still, let’s take a look since Jeb chose not to share it with us for some reason. Where does the United States rank on this measure?
The World Bank has us in seventh place. We’re already in the top 10 that Jeb is aiming for. Mission accomplished!
POSTSCRIPT: Jeb has many other statistics in his piece, and I’d take them with the same grain of salt as his World Bank numbers. He also promises that in his administration every regulation “will have to satisfy a rigorous White House review process, including a cost-benefit analysis.” Apparently he doesn’t realize that this is already the case. As for the outrageous regulations he promises to repeal on Day One, this would mostly benefit big campaign donors, not the yeoman entrepreneurs he claims to be sticking up for. No big surprise there, I suppose.