Wanna Start A Business? Good Freakin’ Luck!

Sometime ago, I happened upon Anthony Bourdain on CNN. He was driving through Detroit with a buddy and observing the damage wrought by global trade, short-sighted unions, and decades of inept government.

Detroit’s a mess. Here’s a picture from a blog that uses Google Streetview and Bing Streetview to chronicle the ongoing demise of the once mighty city. And this squalor is not confined to a small area of the city. The destruction is far and wide. It’s as if the city has been turned into a national training center for vandals, arsonists, and scavengers.

detroit

But as Anthony discovered, all is not lost. There are glimmers of hope in the Motor City. In the video below, we see a DIY BBQ stand that Anthony and his buddy stumbled upon.

When I was watching this inspiring example of Detroit-style entrepreneurialism, I remember thinking three things:

  • Damn! That’s the kind of dining experience Mrs. Groovy and I would love to stumble upon. Good food. Good hosts. And a great story to share with family and friends.
  • This DIY BBQ stand can’t be legal. No permits. No food inspections. And I seriously doubt that Greedy Greg’s kitchen is up to code. The only reason it’s around is because Detroit’s authorities have far bigger problems than undocumented BBQ stands operating on residential front lawns.
  • And why can’t this be legal? Why can’t citizens of a supposedly free country sell food on their front lawns? Does every activity under the sun require regulation from the state?

For almost a year, I forgot about Anthony Bourdain’s CNN piece. But I was reminded of it (and my gut reaction to Greedy Greg’s) the other day when I came across a blog post titled…

It takes 890 days to become a barber in Nevada

In this post, author Andy Koenig discusses how occupational licenses are making it increasingly difficult for Americans to become entry-level tradespeople. He believes our occupational licensing laws are “out of control.” And to prove his case, he chronicles some of the more absurd barriers that would-be tradespeople face.

  • Alabama is the only state that doesn’t license barbers.
  • In Nevada, it takes 890 days of education and training to become a barber.
  • Commercial carpenters and cabinet makers are licensed in 29 states.
  • All states license cosmetologists. A cosmetology license costs on average $142 and typically requires a year of education.
  • Tree trimmers require licenses in 7 states.
  • In 3 states and the District of Columbia, you need a license to become an interior designer. The average cost of this license is $400 and it can take up to 6 years to get it.
  • Louisiana requires licenses for 71 entry-level and mid-level trades. Arizona requires licenses for 64 such trades. The least restrictive state is Wyoming. It requires licenses for 24 such trades.

The Myth of Deregulation

Many people believe that a lack of regulation is what ails America. Bernie Sanders, for instance, believes that the Great Recession was the result of deregulating Wall Street. And maybe he’s right. All I know is that Main Street hasn’t been deregulated. It has regulations coming out the ying-yang.

And if you doubt this is the case, and you want to discount everything I introduced above, try to start a business. Try to run a daycare center or a restaurant out of your home. Look at all the trouble Uber and Airbnb have when they enter a new city. And consider the thousands of unemployed and underemployed PhDs in this country. If we are so deregulated, why aren’t new colleges with new business models popping up left and right?

And it’s not just lowly carpenters and barbers who have to overcome the regulatory gauntlet. Why does a public school teacher, for instance, have to go to graduate school to get tenure and a raise? What are graduate schools teaching that teachers can’t learn on their own? And why do would-be lawyers have to get an undergraduate degree before they go to law school? Why can’t an 18-year-old just go to law school? The barriers to economic advancement go on and on. From starting a business to entering a trade, it’s a giant freakin’ hassle in this country.

Who is the Government Protecting?

Why is it so hard to start a business or take up a trade in this country? The pat response is consumer protection. Without all these rules, the consumer will get screwed.

But is consumer protection the real motivation?

Uber, Airbnb, and unlicensed barbers expose their customers to a certain amount of risk. No doubt about that. But how much risk? As much risk as that posed by the typical American college? After all, aren’t our colleges engaged in a fierce struggle to rid their campuses of unconscionable racism and widespread sexual predation? Call me nuts, but if I had a daughter, I think I’d worry more about her going to a frat party than using Uber.

I’ve worked for over twenty years in government. I’ve seen up close and personal how people use money to influence the decision-making of pols. And not once have I seen someone make a political “contribution” for purely selfless reasons. It was always for something that benefited the contributor at the expense of the public. So am I to believe that all these barriers to start a business or take up a trade exist for the benefit of the consumers?

Competition is Opportunity

Our politicians didn’t decide to regulate the hair-cutting industry because they got bad haircuts. Nor are they opposed to Uber because they are offended by consenting adults engaged in ride-sharing. No, they created barriers to becoming a barber and starting a ride-sharing business because existing barbers and cab companies paid them to stifle competition.

Not all regulations are bad, of course. There should be regulations to operate a nuclear power plant or use airplanes to transport people and goods. So I’m all for regulations that concern safety. Regulations that frustrate or eliminate competition, however, are another story.

We complain a lot about income inequality and the lack of social mobility in this country. And many people believe that increasing taxes on the rich and making college free are the solutions. But will more taxes and more welfare make it easier to start a business, become a barber, or drive for Uber? Will more taxes and more welfare save Detroit?

Okay, groovy freedomists, my rant is almost over. I just want you to keep this in mind. Too much of our regulatory state is designed to protect the established players from the up-and-coming. If we want to increase opportunities for the young, the poor, and the unemployed, we need to increase competition. More welfare, more free this and free that, is the equivalent of “giving a man a fish and feeding him for a day.” It’s not a long-term solution. Want a real solution? Get rid of all these freakin’ regulations that thwart competition. Set the little guy free, dammit.

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9 Comments

  1. Whoa man, that’s deep.

    A few weeks ago, I found out that if I wanted to trademark a name for my art business it would be roughly around $500. A lot of entrepreneurial artists like to operate under a trademark for entrepreneurship reasons. Anyway so it will take a few months before I can do that.

    • Mr. Groovy

      Hey, Jaime. I agree with you. This post is deep. And I don’t know if it really fits in a blog dedicated to personal finance. Everyone once in a while, though, I feel the need to vent. Good luck on the trademark. Have you ever considered selling your art on your blog? I would love to see your art work. And who know, Mrs. Groovy may even let me buy some of it. Thanks for stopping by.

  2. Well politics like money affects everything, and there’s a close relationship between politics and money. For example when politicians make rules, it affects how much money goes into your household, and how you can grow your retirement funds, etc. Or like in your example, how fast you can open up a business.

    I used to be one of those people who didn’t care until the Great Recession deeply affected me. I don’t want to care about politics and money, but I care because they both affect my life.

    Yes I’ve thought about selling my art on my website, however it’s not very good right now. I thought about taking my readers on a journey from being a beginner to becoming more advanced. You always see beautiful art but you never see how people got that way. So I’m going to do that and then sell my art eventually.

  3. As someone who had an unbonded tree trimmer run into my house, taking out a panel of siding and the HVAC unit that I then had to pay to repair, I will stand for a bit of regulation. (house is a rental, tree trimmer was contracted by the tenant without our permission.) Just saying sometimes there are good reasons for these regulations.

    • Mr. Groovy

      Hey, Emily. How dare you show the shortcomings in my post! In all seriousness, though, you make an excellent point. I guess my point is that there’s got to be a balance. The majority, for instance, has the right to say you can’t play loud music in your house after 9 pm. It doesn’t have the right to say you must practice a certain religion. So we have to strike a balance between majority rights and minority rights. The same goes for economics. Yes we want people, especially third-parties, to be made whole if a business or tradesperson causes damage. But we also want a robust economy where there are few barriers to entry and the poor and the unschooled still have a shot at success. In your example, maybe the proper balance is no license required to trim trees but insurance required to do tree trimming. Thank you for showing that not all regulation is bad or unnecessary. Damn freedom is hard!

  4. It’s like I’ve said for a long, long time. The game is rigged. Everything is designed to ensure that the average person shuts his/her mouth and gets to work for their employer. People are discouraged from starting a business as you’ve spoken about, they are discouraged from investing (“The stock market is a casino! You’ll lose everything!”), they are discouraged from saving (“The economy suffers if consumer spending drops.”), they are discouraged from frugal living (look at the mainstream media’s rare coverage of Jason Fieber. You’d have thought he was eating dinner out of a dumpster with the way they portrayed his frugality as a circus sideshow).

    I understand the need for safety regulations. I understand why the government would want to make sure that a restaurant’s food isn’t giving people Ebola. But understand that, in the end, the game is rigged to ensure that the average American shuts the f*** up and dedicates their life to making SOMEONE ELSE rich. And we’ve all rolled over and accepted it.

    Sincerely,
    ARB–Angry Retail Banker

    • Mr. Groovy

      Hey, ARB. Thanks for stopping by. I love the way your mind works. You are so right about the discouragement that descends from above. They make it sound as if it’s our patriotic duty to become debt slaves. Just keep buying stuff. Everything will be fine. Pretty soon they’ll be telling us it’s our duty to stay obese! If we lose weight and get healthy, after all, the food and pharmaceutical industries will suffer. Like you pointed out, we’ve made a twisted pact with our betters. In exchange for a filthy bowl of oatmeal, we get to make others rich. And thanks for pointing out Jason Fieber. I wasn’t familiar with him. Hope to hear from you soon. Stay angry, my friend.

  5. And yet the US is one of the countries where entrepreneurship is the easiest to achieve! I’m not saying nothing can be done to improve the situation but consider this:

    I once looked into creating my company in Japan (I used to live there), mostly for tax reasons, and to dissociate my side business’s risk from my family.

    I learned that to create a company in Japan I had to have at least one Japanese full time employee. The business (which really was, and still is, more of a hobby that makes pocket money) did not generate nearly enough to have any full time employee at minimal wage, regardless of nationality. Talking to other foreigners who have created their businesses in Japan, they told me they traveled to the US for a 15 days trip, opened a business there, then created a subsidiary in Japan. That’s how convoluted the rest of the world can be.
    Note: this was 10 years ago, and this is my interpretation of how things were explained to me. Things might have changed, or there might be easier ways to open a business in Japan.

    • Mr. Groovy

      Hey, Stockbeard. Way to put things in context. I remember years ago visiting our naval base in Norfolk, Virginia. When the tour was over, the sailor who was our tour guide mentioned he had been all over the world. He then left us with these parting words: “Thank God for America!” It’s a rough and brutal world out there. And while things are far from perfect in this country, we’re still incredibly fortunate. Thanks for the reminder.

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