Biden EO Will Greatly Harm Competition and Economic Vibrancy, Not Promote It

By SBE Council at 9 July, 2021, 10:07 am

Government-Wide Edict Advances Government Control, Not Competition

FOR IMMEDIATE RELEASE

July 9, 2021

Washington, D.C. – Today, President Biden is issuing an Executive Order (EO) on “Promoting Competition in the American Economy” and the Small Business & Entrepreneurship Council (SBE Council) issued the following response to the sweeping regulatory drive across the federal government being orchestrated by the White House.

SBE Council president & CEO Karen Kerrigan said:

“First, the premise that new business creation has been harmed by big players, consolidation and lack of opportunity is flawed. The downward trend – which reversed itself in a big way in 2020 – is a result of bad government policy such as tax and regulatory barriers, which are particularly severe in states and cities that people are actually fleeing from. President Biden’s executive order includes a few bright spots that address these barriers, like occupational licensing reform, but then drowns out these positive efforts with a whole range of backward-thinking actions that work to intensify government control over entire industries. This executive order is a recipe for economic decline and stagnation, and less entrepreneurship, opportunity and innovation. Our global competitors are having a very good day today.

“The order resurrects many bad ideas that will harm investment and innovation – from net neutrality rules to drug importation – along with regulatory actions that could potentially ban small businesses from accessing marketplaces, and preventing promising startups from getting the capital they need to scale. This executive order will serve as a drag on the economic recovery, and economic opportunity and growth in the future.”

Raymond Keating, SBE Council chief economist, added:

“There are several basic economic facts that President Biden and his administration apparently are missing with this strange executive order.

“First, competition is alive and well in our economy, and ironically, it only suffers when government chooses to impose onerous tax and regulatory burdens on entrepreneurs, businesses and investors, as is the case with efforts from this same Biden administration. And thanks to an economy that promotes competition and innovation, consumers are enjoying a vast array of products, more innovation, and lower prices.

“Second, the U.S. economy overwhelmingly is a small business economy. Consider that, according to the latest Census Bureau data, there are more than 32 million businesses in America, and 98 percent have fewer than 20 employees. Meanwhile, there are only a little over 20,000 that have 500 or more employees. Our economy is brimming with opportunity for entrepreneurs and small businesses across all industries, again, as long as government doesn’t inflict unnecessary burdens.

“Third, the Biden administration seems to miss the basic point that ‘big business’ does not equate with some kind of negative. While the president and administration appointees assume this to be the case, all large businesses today started out as small businesses. That is the case with all of the industries being targeted for hyper-regulation and government controls via this executive order, including pharmaceutical; technology like broadband providers and social media; manufacturing; transportation like freight railroads; financial; and health care businesses.  Large businesses became large by serving consumers well in the marketplace. One would think that a U.S. presidential administration would celebrate such leading companies, often global leaders, but instead, the Biden administration chooses to attack them.

“Fourth, small businesses are partners with and customers of large businesses, such as, for example, Amazon.com and Facebook, and when the government decides to interfere with how such companies do business – like dictating their business models and operations, and overruling the decisions made by consumers in the marketplace – small businesses suffer right along with the large firms. Likewise, employees at such firms and those seeking work wind up being hurt.

“Indeed, this executive order amounts to a bizarre declaration against American businesses, from the largest to the smallest. It’s hard to understand why a White House would go down such a path, especially as the economy is digging out from the COVID-19 disaster. It certainly is not based on economics. Instead, it has the whiff of radical politics. Again, it’s an especially bizarre time to engage in such attacks given that the U.S. economy is struggling to recover from the pandemic, and we need robust entrepreneurship, investment and business growth and hiring to get back on a path of economic growth that will truly help all Americans.”

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org
Raymond J. Keating, rkeating@sbecouncil.org  

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth.

Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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