June 1995

Excessive Government Regulation: It's Not Just for White Guys Any More

by Brian Jones

The Republicans in the House of Representatives have put the lie to the spurious notion that the conservative tide of November 8 was the mere backlash of "angry white males" against minority interests in America. As part of the work of the House Republicans' Minority Issues Task Force, on June 7, the House Small Business Subcommittee on Regulation and Paperwork heard compelling testimony from six witnesses who believe that excessive government regulation is strangling small businesses -- particularly minority-owned businesses -- in their infancy.

Of course, the hearing was not notable for the fact that Jack Kemp, the manically optimistic proponent of tax-cuts and "empowerment zones," led off the testimony. Nor was it remarkable that Rep. Floyd Flake (D-NY), the entrepreneurial minister-congressman, held forth on the dearth of capital in minority communities. No, what enlivened the hearing was the testimony of three extraordinary black entrepreneurs.

Leroy Jones, Taalib-Din Abdul Uqdah, and Art Pearson are three driven, business-minded individuals. But, that is not all they share in common. Sadly, each of these men have seen their dreams of entrepreneurial self-sufficiency hamstrung by the web of red-tape spun by our ever "compassionate" state and federal governments.

Jones spent four years of his life and $85,000 simply to secure the right to start a taxicab business in Colorado. The state had not issued a new taxi license for fifty years before Jones came along.

Uqdah suffered a similar fate in the nation's capital when he sought to open a hair-braiding business. It seems that the bureaucratic apparatus in D.C. was unable to distinguish between cosmetology, which sometimes involves dangerous chemicals, and the "cornrow" braiding that many girls and women perform for each other at home every day.

Pearson, a Washington state contractor on federal projects testified that he cannot even hire unemployed family members at his business, thanks to the onerous union-wage requirements of the racist-inspired Davis-Bacon Act. Davis-Bacon requires union wages be paid to construction workers employed to work on projects contracted by the government. It makes little economic sense to hire workers without union-level skills if the government requires you to pay union wages without regard to skill.

The compelling, sometimes emotional testimony of these remarkable men put a human face on the perverse and stifling impact of paternalistic government regulations. And although that face was indeed an angry one, much to the chagrin of battered liberals, it was surely not white.

Of course regulatory hurdles do not lie only in the path of black entrepreneurs. Small businesses generally are less able than others to absorb the costs of regulatory compliance. But, as liberal Democrats are quick to note, America's urban black neighborhoods face a particularly dire economic circumstance. Congresswoman Nydia Velazquez (D-NY), the ranking member of the House Subcommittee on Regulation and Paperwork, lamented repeatedly the lack of capital in urban communities.

Unfortunately, Ms. Velazquez and her Democratic comrades have a tin ear when it comes to detecting the rhythm of the marketplace. Capital flows to where it can multiply. By continuing to lard the marketplace with excessive regulation and onerous costs, "compassionate" liberals are driving a stake through the economic hearts of energetic and creative entrepreneurs like Messrs. Jones, Uqdah and Pearson.

Instead, Congress and the states need to free urban America. Republicans and Democrats both agree that economic development is one essential ingredient of our cities' salvation. But economic development need not come solely from outside those neighborhoods. There are Joneses, Uqdahs and Pearsons in every urban community. To liberate their entrepreneurial energy, Congress can begin by doing two things suggested by another subcommittee witness, Clint Bolick of the Institute for Justice. First, put a moratorium on regulations that are not essential to public or workplace safety. Second, craft an Economic Civil Rights Act that would, among other things, create a rebuttable presumption that regulations burdening either the creation of a business or its entry into the market are invalid. That would then shift the burden to the government to justify its regulations as reasonably related and narrowly tailored to legitimate health, safety and public welfare interests.

By giving community entrepreneurs the freedom to put at least one foot on the economic ladder we can begin to infuse our cities with the role models, the energetic creativity, and, yes, the capital they so desperately need. We cannot afford to maintain the paternalistic regulatory status quo.

At the conclusion of his testimony before the subcommittee, Mr. Uqdah remarked, "I've never begged or pleaded for anything, but I'm doing it now: please get the government off my back!" Ah, frustration with the cumbersome mandates of an overreaching government. It's not just for white guys any more.

Brian Jones is a member of the national Advisory Council of the black American group Project 21 and is President of the Center for New Black Leadership.

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