President Obama proposed Tuesday to repeal 500 regulatory rules. The goal is to make it easier for companies to be productive, innovate, and compete globally. These actions are a step in the right direction, but we are facing a journey of many miles to unwind the complex rules and regulations companies must contend with.
Companies as diverse as General Electric to Intel face incredible hurdles as they seek to compete on a global basis. Innovation and drive to succeed is only part of the recipe for success. Massive legal and compliance teams must regularly attempt to decipher the rules and restrictions that burden businesses.
Jamie Dimon of J.P. Morgan has consistently referenced the maze of changing rules and requirements as a massive impediment towards global competitiveness. I couldn't agree more.
In a recent discussion with three brilliant business leaders, they discussed with me the challenges that face corporate America in light of the regulatory maze that must be navigated.
These three entrepreneurs and CEOs wondered out loud in our conversation why government simply did not understand that effective regulation did not mean more regulation.
Dick, Jeff, and John described an environment that was less than business friendly. In fact, they all discussed their disillusionment with governmental agencies seeking to control rather than provide an atmosphere of innovation.
It's my view that an environment without regulation can be dangerous for the public good. We really don't want to head back to the early 20th century when worker safety was an afterthought. As oil and steel barons built their empires, there was a natural push back against less than healthy working conditions and paltry paychecks. I for one have no issue that the government makes sure that my food is safe when I go to a restaurant and I am very supportive of work laws that protect the rights of minors.
No, regulation is not the enemy.
What is the bane of business is the inordinate web of regulations often implemented by differing agencies that stifle American competitiveness. It's no wonder the United States faces challenges as we compete with companies based in countries where anything goes.
Excess regulation is the problem.
United States companies and the American worker can still win with more regulation; I believe this country is not automatically set up to lose despite what many say. But there's a limit that even American business cannot overcome.
Bottom line:we need less regulation.
Eliminating 500 regulations is a great start. Now let's eliminate another 5000 and keep the momentum going. Regulators may be surprised to find that allowing creativity and innovation to run free while reasonably monitoring business behaviors will be embraced by the business community.
Don't kill regulation. But don't let regulation kill business. Protect the public but don't kill American competitiveness. With America at a crossroads, the time is now to set American business loose to compete with the world. Eliminating excess regulation is a great way to help this economy recover and will go a long way towards getting the American worker back to work.
Michael Yoshikami, Ph.D., CFP®, is CEO, Founder and Chairman of YCMNET's Investment Committee at . Founded in 1986, YCMNET is a San Francisco Bay Area-based independent money management firm that provides fee-based wealth management services to institutional investors and individual investors. The firm works with clients around the world. Michael was named by Barron's as one of the Top 100 Independent Financial Advisors for 2009 and 2010. He oversees all investment and research activities of the firm and is actively engaged on a daily basis in the firm's securities analysis activities and determines the macro tactical asset allocation weightings for client portfolios. He works with YCMNET's investment team in integrating behavioral investing strategies with the firm's core fundamental perspective. Michael holds a Ph.D. in education, other advanced degrees, and holds the Certified Financial Planner® (CFP) designation.