Jamie Dimon Sees Serious Problems With US Regulation of Small Business
Dimon specifically stated that bureaucracy is holding small businesses in the US back. He believes the massive amounts of paperwork and requirements are limiting the ability of small businesses to grow. "We have a litigation and regulatory system that is costly, crippling small businesses with red tape and bureaucracy," he wrote.
He went as far as to say that American capitalism is "bogged down in a maze" of red tape. US litigation accounts for 1.6 percent of gross domestic product, which Dimon cites as 1 percent more than the average country in the Organization for Economic Co-operation and Development.
"Take 10 small business owners out to lunch and ask them what they need to do to meet local, state and federal regulations, and you will understand the problem," he said.
Small businesses are bombarded with licensing, paperwork, employment laws, and insurance laws. All of these can prevent a business from focusing on core business models and hiring new employees in the pivotal months.
"Very often local regulations are simply a form of low-level corruption in which bureaucrats are paid to slowly … move … paper … around," said Dimon. Bad regulation "stifles competition." He wants a review of current regulations.
"Smart regulation includes continual improvement, constant cost-benefit analysis and a review of purpose and objectives, which are reported honestly," he said. He hopes for "good regulations and good guardrails."
Small businesses are the backbone of the US economy and help prevent monopolization of industries.