Not-so-subtle theme: Government exerts pervasive influence

There’s a not-so-subtle theme in many of the stories published in this issue of the Business Times. While the result was unintentional, it’s no less clear or surprising: For better or worse, the federal government exerts tremendous influence over business.

Even as Western Slope officials and business leaders worry about the economic effects of proposed management plans intended to keep the greater sage grouse off the endangered species list, they’re equally alarmed about the potential effects of proposed rules from the Environmental Protection agency reducing carbon emissions from power plants.

U.S. Rep. Scott Tipton, the Republican who represents the Western Slope, heard an earful from business leaders during a recent roundtable meeting in Grand Junction. A lot of the complaints had to do with what Tipton calls “regulation strangulation.” In addition to the effects of federal regulations on businesses, there’s also the increasing uncertainty over what regulations will be enacted and how they’ll affect operations.

The influence of the federal government on business continues even when the federal government shuts down. An index tracking business conditions in Colorado slumped to lowest level in more than four years, reflecting in part the aftermath of a 16-day government shutdown in October. A monthly measure of consumer confidence also dropped sharply after the government shutdown damped the outlook for business and labor conditions.

On the other hand, capital investment and job growth in the renewable energy sector is expected to increase under federal legislation that would establish a national renewable energy standard and require utilities to generate a fourth of their electricity from renewable sources by 2025. Of course, that’s not considering the effects of the standard on other industries that produce other forms of energy.

Clearly, the federal government has an important role to play in regulating business — assuring that products are safe and maintaining an even playing field, for example. Private property rights, intellectual property rights, the rule of law, efficient transportation and access to capital all are critical in promoting business development.

Just as clearly, government regulations also can hurt businesses, especially in imposing additional costs or limiting access to needed resources. Too frequently, the consequences are unintended. Moreover, the government generally performs poorly in picking winners and losers in the marketplace.

At a time when economic growth in the United States remains slow and job growth even slower, it’s more important than ever that lawmakers and bureaucrats carefully consider the ramifications of legislation and regulation on business. Actions speak far louder than the usual words that come out of Washington.

To be sure, the federal government exerts tremendous influence over business. But in generating the profits that pay a bevy of taxes and employing the people who also pay taxes, business influences government, too. The question is whether the relationship is a symbiotic one that’s mutually beneficial or a parasitic one in which government wields unnecessary control while sucking the very life out of its host.