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Once upon a time I worked for a huge company, providing communications for their global IT department. I was gathering a team to work on a big project and asked a couple of the more skilled employees to join.
“Sorry, Jon, but we’ve been moved to socks. That’s all we do now.” Not hip to the vernacular of the kids, I wondered when our technology firm started selling hosiery. “No, not the socks on your feet. S-O-X. You know, Sarbanes-Oxley?”
Congress passed the Sarbanes-Oxley Act of 2002 to protect shareholders and the public from the types of accounting errors and fraud that led to the collapse of public companies like Enron and WorldCom. Sounds good, right?
Well, the legislation not only affected the financial side, but also the IT department whose job it was to store the corporation's electronic records. In our company, the bosses shifted some of the best and brightest to SOX, lest it risk steep fines and even imprisonment.
That group slowly grew as federal rules and regulations grew ever more demanding. Being a global company, the executives eventually offset this massive expense by shipping most of the regular IT jobs overseas.
In an effort to help Americans, Congress made life for the average business drastically more complicated and ended up killing thousands of American jobs.The more complicated the rules, the more expensive they are to follow. Prices go up for consumers while their jobs go to Bangalore.
We’re relearning this lesson in common sense with the slow-motion train wreck of Obamacare. In Sacramento, politicians praised federal health care reform as the best way to help the underinsured. Instead, it will drastically increase premiums in the Golden State for millions.
For 25-year-old and 40-year-olds, Californians under Obamacare who buy insurance for themselves will see their insurance premiums double. As Forbes’ Avik Roy notes, “one of the most serious flaws with Obamacare is that its blizzard of regulations and mandates drives up the cost of insurance for people who buy it on their own."
Complicated government isn’t hurting only the “demand” side of the health care market. Earlier this week, we saw a Maine physician drop the acceptance of health insurance completely. Once he dumped the time-consuming mountain of regulations and associated paperwork, he was able to drastically lower the amount he charges his patients and improve his services. (He even does house calls!)
There used to be a lot of television ads in which discount retailers bragged, “we’ve cut out the middleman and passed the savings to you!” Now the “middleman” isn’t a small business transferring a product from the manufacturer to the market. Today, the government is the middleman, adding unnecessary busywork and expense to the once-free market.
Every new regulation—no matter how well intentioned—has a cost in time, money and work hours. The best way for the government to help Americans is to reduce and remove these expensive complications that empty our wallets and drive jobs overseas.
Follow Jon on Twitter at @ExJon.