Professor David Brophy Weighs-in on Obama’s Call to Review Federal Regulations

On the surface, President Obama’s call to scale back current regulations impacting the business community is encouraging.  Yet, with reports saying it will likely be at least six months before the first regulations are subjected to review, just how effective will this rallying cry be for small businesses yearning to see results?

David Brophy, Professor at the Ross School of Business and Director of the Center for Venture Capital & Private Equity Finance at the Zell Lurie Institute, formerly the principal investigator on “Prospects for Small Business and Entrepreneurship in the 21st Century,” a White House Conference on Small Business, shares his insights with us:

Q: What is your initial take on Obama’s call to review federal regulations impacting small businesses?

A: Periodic review of the impact of federal regulations on small, entrepreneurial businesses is necessary, and really should be done on a continuous basis.  It should also be comprehensive, that is, applied to all federal and state entities that create and implement public policy.   If the currently proposed federal initiative is coordinated with the recently announced Startup America program launched by the federal government, its effect holds promise for entrepreneurial small business and the economy in general.  This double-barreled Federal call to action is significantly different from what we’ve seen before, e.g., the White House Conferences on Small Business, particularly with respect to the involvement and stated commitment of effort and money by private sector entities through Startup America. In the past, effective change was limited by the efforts of larger organizations who lobbied in support of keeping certain regulations for their benefit.  A number of states (including Michigan) are now undertaking programs to ease regulatory burdens on small businesses

Q: What businesses will potentially be impacted?

A: If the federal regulatory review and Startup America are coordinated it is likely that a broad set of small businesses – from technology-based startups to “Main Street” product and service companies – will benefit.  Coordinating these two initiatives will make it difficult for policy-makers to ignore regulatory entities not now included in the announced regulatory review program, e.g., banking and financial regulations, business taxation, immigration and anti-trust policy.

Q: What regulations should be at the top of the list in order for the business owner to see change?

A: The big things need to be at the top of the list, like freeing up bank credit, eliminating the negative effects of the country’s immigration policy on small business, reducing the debilitating effects of the FDA on medical and bio-tech growth companies, and the effects of  energy costs, safety precautions and a host of manufacturing issues.  In the past, the Federal government has eliminated egregious things like red-lining mortgage credit, and the same decisive action should be taken in currently important areas.  In addition to reducing the negative effects of regulation, the administration should also look to positive ways to help the small business owner, including business taxation.

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