The Entrepreneurial Mind

Some of you may have noticed that I have been rather silent about the election this time around. Now that it is over I will explain why. It really does not seem to matter.

What are the public policy issues that matter most to small business owners and the entrepreneurial economy they are sustaining? If we look at the research on entrepreneurial development and the opinion polls of small business owners it all boils down to three things: regulation, taxes, and property rights.

In the twelve years of Republican control, we have seen little progress.

While they cut taxes, which does support new business development, they never really tackled the underlying problem of the tax code itself. With its 60,000 pages and over 600 forms it is a system that is beyond repair. It is also based on a system of taxation, the income tax, that encourages politicians and bureaucrats from both sides of the aisle to use it as a tool to shape narrow agendas and to curry favor to special interests.

There has been some progress on regulation with the fight to pass legislation at the federal and state level to create regulatory flexibility for small business. Sadly, there is little evidence so far to show that these efforts have had a significant impact on the economic cost of regulation on small business.

On the property rights front we had arguably the biggest single blow to small business owners: the Kelo decision from the Supreme Court that greatly expanded the government's power of eminent domain. While there was a strong initial backlash due to pubic outrage, the public has moved on to more pressing issues such as Sara Evans' sudden departure from Dancing with the Stars. We are already seeing the quiet back-tracking on many of the initial efforts that had been made to stem the impact of this ruling. While the party in power was not responsible for the Kelo decision, they did not do enough to counteract its potentially devastating consequences for small business owners and home owners across the county.

Neither party seems to understand where we are in our economic history. We are now in a period of economic transformation: unlike any we have seen in over a century. As Carl Schramm of the Kauffman Foundation writes in his new book, The Entrepreneurial Imperative (which, ironically, I was reading while standing in line to vote last evening):

For the United States to survive and continue its economic and political leadership in the world, we must see entrepreneurship as our central competitive advantage. Nothing else can give us the necessary leverage to remain an economic superpower. Nothing else will allow us to continue to enjoy our standard of living. We either support and nurture increasingly entrepreneurial activities in all aspects of our society and around the globe, or run the very real risk that we will become progressively irrelevant on the world stage and suffer economically at home.

We must keep our attention on the issues that matter for entrepreneurs, as argued by Todd Stottlemyer, president and CEO of the National Federation of Independent Business, in his comments after the results were in last evening:

While the composition of the Congress has changed, the obstacles that threaten small-business owners, employees and their families have not. Small businesses still face the lack of affordable health care, the threat of frivolous lawsuits, the burdens of over-regulation and a complex tax code. These issues don't have partisan labels, and NFIB looks forward to continuing the fight on behalf of its members on Capitol Hill.

Neither party seems to be willing to embrace the new economy -- the entrepreneurial economy. This puts our economic future in real danger.