Tag: Regulatory compliance

As Long As The House Is On Fire …

So Detroit is in bankruptcy, hemorrhaging jobs and businesses. A sensible mayor would say, “Hmm, what can we do to bring businesses back to Detroit?”

Detroit does not have a sensible mayor:

Amidst a bankruptcy and a fast-dwindling population and tax base, the city has prioritized the task of ensuring that all businesses are in compliance with its codes and permitting. To accomplish this, Mayor David Bing announced in January that he’d assembled a task force to execute Operation Compliance.

Operation Compliance began with the stated goal of shutting down 20 businesses a week. Since its inception, Operation Compliance has resulted in the closure of 383 small businesses, with another 536 in the “process of compliance,” according to figures provided to Reason TV by city officials.

But business owners say that Operation Compliance unfairly targets small, struggling businesses in poor areas of town and that the city’s maze of regulations is nearly impossible to navigate, with permit fees that are excessive and damaging to businesses running on thin profit margins.

Emphasis mine.

Does it surprise anyone that Operation Compliance is targeting those without the resources to fight? Does it surprise anyone that they are crushing the competition to larger more powerful businesses? The thing is that the city often does have the law on their side: Detroit’s regulations are such a nightmare that many business owners just say “screw it” and open up rogue businesses. The result is a model to “prosperity” that goes like so:

1) Write excessive and labyrinthine regulation.
2) Wait for businesses to open.
3) Hire a bunch of public employees to shut down businesses for violating those regs.
4) Profit!

This is insane. This is something that could only be thought of by a city government that sees prosperity entirely in terms of the size of power of government. They look at bigger more prosperous cities with large public sectors and think that the large public sector created the big city, not vice versa. They have the stated goal of closing hundreds of businesses a year. They are anti-matter to Hong Kong, one of the most prosperous cities on Earth, where a business could once be opened with a single form (I don’t know if this is still true since China took over).

Detroit is doomed. I see little indication that they even understand what the problem is, let alone are taking steps to solve it.