Small business and big government don’t mix 

My job is basically to report the facts that undermine The Big Myth — the fable that Big Business loves free markets, and that the effect of Big Government is to curb Big Business. In fact, Big Business often lobbies for and profits from Big Government.

A recent Wall Street Journal piece gives us another reason why: dealing with the government requires long waits, many forms, some lawyers, and probably a lobbyist — none of which are in high supply for smaller firms:

When the real-estate market was in free fall nearly two years ago, Mr. Lebolo decided to shave staff, negotiate with his landlord for a lower lease, and begin the long process of becoming certified to bid on federal work opportunities. He finally won his first government contract recently to remodel a courtroom in a Fort Lauderdale, Fla., courthouse. But the job pays just $250,000, not nearly the lucrative amount Mr. Lebolo—who says his Boynton Beach, Fla., firm had a history of multimillion-dollar commercial construction jobs before the downturn—thought he’d land.

Many small businesses are learning that it’s not always easy to get a foot in the government’s door, and the rewards might not always seem worth the hassle. Winning a government contract can require massive amounts of research, long wait times and capital—all difficult investments for a struggling enterprise.

Bigger companies, of course, can afford the waits, they have the capital, and they can pay to have the political connections.

As government gets bigger, more businesses are forced to turn to government as a customer — which gives more of an advantage to big business.

If you want to help small businesses, shrink the government.

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Timothy P. Carney

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