It is tough for the hometown political class in the District of Columbia. When it comes to adopting a business-conducive attitude, they sometimes seem to know what they need to do – but resist it every step of the way.
In a medical context it would be diagnosed as schizophrenia. The prevailing ailment of city officials is inconsistent and contradictory behavior resulting in fragmented public actions and bouts of self-delusion.
That’s on a good day. When they succumb to a strict regimen of “we really can be better” meds. There are lots of bad days and big setbacks on the pathway to maintaining fiscal health and allowing entrepreneurial wellbeing.
Despite earnest promises about wanting and needing to create a business-friendly environment, most of the time D.C. Council members are clueless to discerning the appropriate prescription. And once the fever subsides, it’s a quick and disappointing regression back to the same old bad habits.
Quick to spread like an airborne disease across the dais, the latest trendy big-government requirement, restriction, regulation, fee or tax from some other should-be-in-treatment jurisdiction is inflicted upon community businesses. New counter-productive regulatory mandates, employment-reducing low-skill wage requirements, hiring protocols certain to backfire, and a range of market manipulations with unintended consequences are only a few obstacles to philosophical recovery.
Reality has now become more serious under the harsh lighting of critical care examination. As the local number crunchers and policy thinkers at the Economic Growth DC organization point out, the District has been diagnosed with a troublesome bout of declining productivity. Measuring downward in a year-to-year comparison with the prior annual period, and with the District’s output loss factored against historic financial performance over the past decade, the dip is more than $2.5 billion, or 2.4 percent of total GDP. If D.C. were a country, it would be classified in recession.
Knowing that there is a problem and admitting it is key to the hope for restorative progress. That, however, doesn’t exactly qualify as a breakthrough – the District has long suffered from a well-established and widely infamous notoriety for being one of the worst regulatory and tax environments in the country.
The surprising certitude with which the D.C. Council last month adopted a meager measure of corporate tax relief, albeit phased in over five years and dependent on sensible spending restraint to guarantee implementation, was a good start and a good sign that legislative self-healing is possible. Not a reduction in expenditures, as dollar doctors would proscribe, but a modest slowdown in spending growth with a return to taxpayers of the excess.
Those gathered around the patient’s sick bed in sympathy often protest that new businesses – particularly bars and restaurants – are opening every week and flourishing. This, however, is despite enacted policies and political proclivities. Local government can’t easily shake a misguided belief that obstacles and roadblocks to economic progress are a requisite price to be paid to insure that operators are sufficiently committed to conduct commerce.
The District must rely less on diminishing federal spending and decreasing government employment – trends unlikely to reverse. D.C. politicians have failed, however, to treat operating businesses better and extend encouragement toward new enterprises.
The D.C. CFO announced this week that nearly 6,000 net federal jobs disappeared in the past 12 months. The worst private-sector downturn was an additional loss of 1,300 oft-related non-profit positions. Total jobs dropped 3,000 between April and May alone. If local officials want to encourage job creation and reduce unemployment, it’s time to allow business to do well and well serve all.
If the “boomtown” meme of social media is to extend to all quadrants of the city, it will be business that enables it. Accepting that government is not the provider of all solutions for all situations and embracing a much less constrained business circumstance is critical.
The District is dependent on the private sector for future economic growth. It’s time D.C. Council members swallow that medicine.