Question

Pros of Government Regulation

• Government regulation cost American $55 billion per year.
• Annual expenditures that U.S. business must comply by cost $700 billion per year, and this only takes into account explicit cost.
• Additional cost could amount to almost $300 billion per year

Aside from the money aspect of government regulation, there are several other vital cost.

• Many people find it difficult to run a successful business with such harsh regulations.
• It can be difficult to follow one government regulation with out breaking another.

• It looks out for the safety of consumers.
• It protects the safety and health of the general public as well as the environment.
• It looks after the stability of the economy.
• Keeps in mind the well being of the people.

Is Government Regulation on the Rise?

Why Cant Chuck Get His Business Off The Ground?

Social: "refers to the broad category of rules governing how any business or individual carries out its activities, with a view to correcting one or more market failures.”

Economic: "refers to rules that limit who can enter a business (entry controls) and what prices they may charge."

Cons of Government Regulation

Types of Government Regulation

• The Securities and Exchange Program
• Federal Reserve
• Office of Comptroller of the Currency
• The Federal Deposit Insurance Corporation
• The National Credit Union Administration
• The Federal Aviation Administration
• Federal Motor Carrier Safety Administration
• The Federal Communication Commission
• Food and Drug Administration
• Environmental Protection Agency

• It creates a huge government bureaucracy that stifles growth.
• It can create huge monopolies that cause consumers to pay more.
• It squashes innovation by over-regulating.
• Is extremely costly to the tax payers

Ex: U.S. tax payers pay nearly $55 billion per year to fund the 300,000 regulatory staff and their various activities.

• Difficult to calculate success of operations.

How Costly is Government Regulation?

Pros and Cons of Government Regulation on the Economy

Recent Government Regulations

Examples of Government Regulation Agencies

• The U.S. Food and Drug Administration is projecting that the food service industry will have to spend an additional 14 million hours every single year just to comply with new federal regulations that mandate that all vending machine operators and chain restaurants must label all products that they sell with a calorie count in a location visible to the consumer.
• In the state of Texas, it doesn't matter how much formal interior design education you have - only individuals with government licenses may refer to themselves as "interior designers" or use the term "interior design" to describe their work.
• Federal agents recently raided an Amish farm at 5 A.M. in the morning because they were selling "unauthorized" raw milk.
• The state of Louisiana says that monks must be fully licensed as funeral directors and actually convert their monasteries into licensed funeral homes before they will be allowed to sell their handmade wooden caskets.

Yes. Over the past 50 years Government Regulation has gone from less than 5 billion dollars a year to over 55 billion. More than 5,000 new federal and state regulations are added each year. It is also predicted that by the end of President Obama's term government regulatory spending could top over 73 billion dollars annually

1. With the "pros" and "cons" outlined in the Prezi in mind, state your general opinion about government regulation of business, particularly small business.

2. Locate an online article discussing an example of overly-restrictive, unduly burdensome, or just plain ridiculous government regulation of a business or industry. Briefly, summarize the article in your post and provide the link to it.

Answer 1

1. Govt. generally regulates any business to correct production, distribution or consumption flaws. It is essential because t will ensure that market practices are not discriminatory. It will also ensure that quality is maintained and customers get right products at right time.

However, it is said that govt. machinery may be corrupt and make laws which are difficult to implement and follow in day to day life. Eg. Displaying calorie count near the counter. Also Govt. machinery may not be efficient.

It is however needed as it is mechanism that keeps control on business practices. They need to make laws and frame policies which are practical.

2. The link is : https://www.livemint.com/Industry/R5OXoHyAYa9l1RXck7fgpK/Blow-to-Flipkart-Amazon-as-govt-tightens-ecommerce-norms.html

This article talks about how Indian govt. is restricting online sellers from giving low price deals. Restricting stock keeping and also not to sell own brands.

This may affect customers negatively as low cost products may not be available. At the same time govt revenue from these online businesses will go down.

Brick and mortar (physical stores) and small retailers in India will benefit.