Posts Tagged ‘Constitution’

Rescuing the Economy – Proposal #5

April 29, 2011

The US needs a “turn-around artist” to focus on the mission of the country and to reconcile the costs of laws with the benefits those laws provide. Abolish existing laws that fail the hurdles of mission and cost-benefit, and establish those quality hurdles for new laws going forward. Start with an overhaul of our tax code.

Flashback 25 Years

When Rockwell International was selling the Network Transmissions Systems Division in the 1980’s, the Board of Directors dispatched their “turn-around artist” to “polish their apple.” This fellow immediately refocused us all on the “mission” of the company as his first lever to control costs and improve performance – he eliminated products and activities that were not close enough to the mission. Next, he looked at policies and procedures and challenged unnecessary requirements to conduct business by demanding to know the “fully accounted cost” of the policy or procedure he didn’t like so that he could justify changes and improve performance across the board. I am confident that this fellow added more than 10% to the bottom line of the company and enhanced the value of the company and  its image in the industry substantially. This fellow was pretty clever…

It was his mantra: Mission and Cost-Benefit!   Mission and Cost-Benefit!

Back to the “Here and Now”

In the April 11 Newsweek magazine, Mark Cuban is quoted:

Streamline entrepreneurial paperwork

… Today, it’s impossible to start a business without professional help. Between local, county, state, and federal filings, it can easily cost as much time and capital to deal with administrivia as the business itself. Paperwork strangles small businesses before they start—this country’s greatest inhibitor to job growth. That could be fixed with a simplified startup legal structure (understandable in a pamphlet) that would reduce the friction involved in starting a business.

I recently spent thousands of dollars on attorneys and more than one hundred hours of my time to insure that my company organization and standing documents and agreements were sound and satisfied all the legal requirements that I was exposed to. Next stop is my CPA… While I don’t hold Mr. Cuban in especially high regard, he is certainly nobody’s fool. I think he sees this all pretty clearly – his terms “administrivia” and “frictionless” surely resonate with me!

Recently, I phoned the Texas Workforce Commission to be sure I was prepared to display all the legally required signs and notices in office space I was considering.  The TWC responded, “We aren’t sure we know what all the required signs and notices are anymore. We lost track of all that a few years ago. Here is a list of websites where you can find out most of what is required. It is reasonably complete. Good luck!” Administrivia and friction galore.

What is the Mission of the United States Government?

I am no historian; nor am I an activist or subversive. Here is what I believe the core mission of the government is:

To assure our unalienable rights to life, liberty and the pursuit of happiness promoted in the Declaration of Independence and provided for in the Constitution explicitly by the Bill of Rights and the other articles and amendments.

Every law passed by Congress should affirm this mission and satisfy some mission-centric need. If a law fails this test to support the mission, it should be challenged!

What is the Cost of our Laws?

Every law has a cost. It costs time and money to write a law, publish a law, communicate a law to the people, enforce a law, and punish a law breaker. Many laws demand the performance of a function or a require a deliverable, and these laws have a measurable direct cost. Many laws require that compliance is documented in some way – another direct cost. Further, every law has an opportunity cost associated with it – law beakers become less valuable in society and contribute less to further society over their lifetimes through hard work and paid taxes. Every proposed legislation has a cost that should be computed in some way and compared to the benefits that it seeks to provide for before the legislation can be passed by Congress, signed into law by the President, and considered by the Supreme Court.

The Economy is the “Game”

I generally hold the “body of law” in high regard – by that, I mean that I have respect for the law. The more laws there are, though, the less regard each law can muster in the population one-by-one. “Too many rules, and you can’t play the game. When you can no longer play the game, it’s time to tip the board off the table and start over (press the reset button),” and that generally creates an ugly confrontation… Recall my elementary school experience from an earlier post?

In this case, the “game” is participating in the US economy. Mr. Cuban is right on the money. I agree – 100%. Too many laws translate into unproductive administrivia and friction. Perhaps Mr. Cuban deserves more credit from me than he has gotten in the past…

My Proposal #5 to Rescue the Economy

  1. Our Congressional representatives should become activists and challenge established  law and abolish it if there is a misalignment with the country’s mission to assure our rights to life, liberty and the pursuit of happiness and all that entails. Congress should challenge laws with costs that obviously exeed benefits.
  2. Congress should become focused on legislative quality to insure that new law is mission-centric, and that each new law’s benefits exceed its costs by a wide margin.

Where to start?  Well, most of my friction and administrivia is associated with taxes – start right there! This is “Eco-Pillar” #6 from this previous post:

Further Thoughts on the Economy – the China Playbook

I don’t object to paying my fair share of taxes. The less time I spend doing tax admisnistrivia, and the less money I spend on services to do that correctly and cover my _ss properly, the more time and money I have for the mission of my business.  Overhaul the tax code for personal and business taxes to reestablish fairness and dramatically reduce the complexity and the administrative burden – the administrivia and friction – of compliance with the law, and let me get on with the business of my small business.

And after taxes? Intellectual property law – patents, trademarks and copyrights (“Eco-Pillar” #5)…