KamranatUCLA (29.71)

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The Root of Our Economical Problems in the U.S.

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November 25, 2009 – Comments (11) | RELATED TICKERS: BLTI , ACI , GTE

OK. I think this is going to be one of my best blogs, not only because I have actually studied what I am going to talk about at UCLA, but because I had a real life experience with this.

I like to get some feedback from others on this too. I believe that we have all these economical, social, and other problems in the U.S. because we make everything difficult for ourselves. I think most people in this country are Alpha-Type people, people who want to be leaders and that's why we complicate everything we do.

As an example: it used to be easy to start a business in this country, now it's soooo hard. I want to start a simple driving school. I have been working as an instructor for years, have a BA from UCLA and because of the paperwork it is still hard for me to start such a simple business like this. Now if it is difficult to realize such easy, simple business, no wonder we are a nation of hopeless people. We have made everything difficult for us. What's next? you need a permit to be a cleaning lady?..oh wait you already do in California.

What do you all think?

This is what I think. My major at UCLA was International Development Studies, a Joke for a major but I think some stuff will become handy here.

When I studied why some countries are backwards and economically weak and why some countries are economic powers I came across many many different theories: Pure Luck; Guns,Germs, Steal (book by Jared Diamond who was one of my teachers); and 100s of other theories.

There was one theory in particular and one book written by De Soto (and I am shocked at myself for remembering that Author's name 'cause I never remember names). He basically stated that in most difficult countries the amount of paperwork to start something legal is soooooooooo much that people just give up and live in an shaddow world ( I don't remeber his exact term), basically people would live in places with no deeds, construction without any permits, black market businesses and so on. As an example, if I remeber correctly he had Phillippins and many other 3rd world countries. In Phillipins for example he found out that to be perfectly legal it takes over 600 permits and it would take 12 years to have a 100% legal clothing store ( maybe I remeber this because I used to have a clothing store in L.A.).

Now it has come to my attention that things are not much better in this country. Like I said earlier I found out to have a driving school with just 1 car, you need to have an office in a public place that should be visible from street (WTF), you have to have an operator license, owners license, instructor license, insurance of course, bond, city license, board of equalization license, police permit license (in case your alarm goes off) and the list goes on and on and on and on and on.

And for each of those licenses the list of requirments and paperwork is almost un-doable!

This is just for one guy who wants to make like 20 bucks/hour by himself with one car to teach others how to drive!!!

It has become ridiclous in this country, people are over educated and make things more and more difficult for others and themselves.

It's really frustrating to live in this country right now.

That's maybe why India and China are getting better and better everyday. They have reduced the amount of paperwork for business and just in case you can't get those papers you can do business without all those papers just by little bribing.

I really think the system is coming to a stop. What's next? you need a permit to be a cleaning lady....oh wait...you already do in California.

I guess the only thing one does not need a permit for and it's still not illegal is being a homeless person, and maybe that's why we see more and more of them on the street.

With our jails full with gangsters, killers, drug dealers, rapists, and now people like Madoff, I don't think we can illegalize being homeless for a while.

So go ahead America...Enjoy the big freedoms you have. The freedoms that you want to export to other countries....The Freedom of being a homeless, nameless, alienated, and sifranchised.

At least in India or Iran you get a free funeral with all your families around your body. Here...not really:

This is LA times reporting:

More bodies go unclaimed as families can't afford funeral costsThe weak economy is taking its toll, with an increasing number of bodies in Los Angeles County being cremated at taxpayers' expense.July 21, 2009|Molly Hennessy-Fiske

The poor economy is taking a toll even on the dead, with an increasing number of bodies in Los Angeles County going unclaimed by families who cannot afford to bury or cremate their loved ones.

At the county coroner's office -- which handles homicides and other suspicious deaths -- 36% more cremations were done at taxpayers' expense in the last fiscal year over the previous year.

And once those "tax-payers" money go out. WHat then? Dump them on the street???

Hmmm wait..it is already going on in some counties.

I think who ever is in charge needs to give us some air...loosen up the paperpork crap and just let us go on with our lives.

Many great inventions and businesses would have not come to fruition if we had the same amount of paper crap we have going on right now.

A business man in the U.S. should be able to open a business in 1 day. 1 license. and that's it.

This amount of paperwork is killing the dreams of our young generation. Who is going to pay for your healthcare bills when you are old and our young generation was unable to make money???

11 Comments – Post Your Own

#1) On November 25, 2009 at 7:59 AM, Gemini846 (97.02) wrote:

I agree. You're best blog yet. Big government IS a problem.

Licences and paperwork have two purposes. They are supposed to protect people from shady dealings by registering business owners and the fee is supposed to fund the agency who does the oversight.

-Permit to hire a maid? Even for CA that's dumb. They probably passed that to keep from missing out on tax money from illegals. (But it's still dumb).
-My dad had to buy a permit to put sprinklers on his own yard. Dumb.
-You need a permit to replace a hot water heater. Dumb.

There is no good reason that you should have to do more than take 1 test to prove you drive well enough to be an instructor, pay a fee and put a sign on your car and your # in the phone book then call it a day.

This problem is further complicated by our education system that doesn't teach people how to network and start a business on the cheep, but rather teaches people that businesses are too complicated and that people should just get a job from someone else. Then when those businesses fail for whatever reason the owner has to go start a new business while all the employee's suffer because instead of going out on thier own, they have to wait until they can be re-hired.

It's the kind of mental slavery that I fight against every day.

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#2) On November 25, 2009 at 9:21 AM, russiangambit (29.92) wrote:

Yet you can set up a corporation in one day on a web. As long as you stick to the virtual world, you are fine. This is why mostly non-productive activities flourish, no need for permits if you don't make anything , just resell things.

I would say there has to be criminal and background checks done if you want to set up a business where you interact with people. Then pay the fees and that should be it. Everything else only feeds the parasitic bureaucracy.

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#3) On November 25, 2009 at 10:58 AM, ChrisGraley (99.66) wrote:

Congratulations Kamarant! You are officially a conservative. ;)

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#4) On November 25, 2009 at 12:37 PM, drgroup (66.47) wrote:

Greart blog... it is a shame you had to waste all that time at ucla to find this out.

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#5) On November 25, 2009 at 1:09 PM, whereaminow (91.14) wrote:

This is your best blog yet. +1 rec.

Turkey has a similar story. They had something like 4 agriculture bureaucrats for every chicken farmer at one point, then hyperinflation hit (they had to print money to pay for all these parasites) and game over. Now it's a little more reasonable, but they still haven't figured out why they went bankrupt in the first place. Sad.

David in Qatar

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#6) On November 25, 2009 at 3:04 PM, starbucks4ever (99.57) wrote:

"I guess the only thing one does not need a permit for and it's still not illegal is being a homeless person'

You underestimate the creativity of LA bureaucrats. It's not illegal to be homeless in LA, but it's illegal to sleep outside of a house.

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#7) On November 25, 2009 at 9:00 PM, whereaminow (91.14) wrote:

You underestimate the creativity of LA bureaucrats. It's not illegal to be homeless in LA, but it's illegal to sleep outside of a house.

ROFL! You have got to be kidding me!

David in Qatar

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#8) On November 26, 2009 at 1:22 AM, RainierMan (95.43) wrote:

I hate to spoil the mutual admiration society, but paper work is not the "root of our 'economical' problems". And since the U.S. is considered a fairly entrepreneurial society, I'm not even buying that it's some huge problem either. A pain yes. A big "economical" problem, no.

China, Brazil, India, etc, aren't high growth economies because they have less paper work. In fact, I'm not even convinced they have LESS paper work. What are they teaching at UCLA?

Anyway, where's the entrepreneurial drive? Just bite the bullet and do the paper work. I'm pretty sure Bill Gates never said, "I was going to start a software company but there was too much paper work".

Alternatively, move. California is probably one of the regulated states in the nation.

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#9) On November 26, 2009 at 2:19 AM, starbucks4ever (99.57) wrote:

MichaelinWA,

I think Kamran has a point here. If you have an extra 100K to lose, it's not that difficult to bite the bullet and do the paper work. But for someone starting a small business whose point is to earn $20 an hour so that he can buy his hamburger, absorbing these start-up costs is not an option. Maybe the business will become phenomenally successful and the enterpreneur will then want to buy the office visible from the street, but as a beginning enterpreneur who has no idea if that business is right for him, he clearly can't afford to put his last few thousand bucks on the line. So the business will not be started. Ten years later some big businessman who can buy an office without noticing it will "bite the bullet and do the paperwork", and we'll get the driving school and it will change $40 an hour because every potential competitor is intimidated by the start-up costs. It's much easier to do business in BRIC countries. They have as much and maybe even more regulation, but after a few necessary bribes regulation stops being an issue.

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#10) On November 27, 2009 at 1:26 AM, KamranatUCLA (29.71) wrote:

MichaelinWA,

you are missing my point. According to my research I have to sign about 400 pages of documents and forms to get started.

Think about it. This is not a big project, no rocket science, no doctor, no lawyer, no health related stuff, no brain surgery, no complicated business...this is just a simple simple driving school.

I admit that ignorance is a bliss. When I came to this country I started my own clothing company being clueless about all the permits and taxes I needed to pay. Eventuallly those taxes and paperwork drove me out of business.

It's very ironic that I think it's easier to get on wellfare than starting a business, I mean paperwork-wise.

I know that in Hong Kong a business can be established in 1 day, and banks give you loans easily to start your business. That's a good system if you think about it.

More businesses mean more competition, means lower prices and survival of quality and price. This way the markets will be efficient. Right now the paperwork in this country is killing businesses, don't even get me started with taxes.

When you think about it logically and rationally, you will see that this is currently the root of our problems. And the people who already did the paperwork are abusing the system to their advantage...how?

Once you pass through the paperwork obsticle you make it more difficult for others to pass through. This is what driving schools are doing right now and who knows how big corporations are doing this too.

There is like an association of driving schools and they have just suggested to DMV that an instructor should have a minmum of 7000 hours of instruction experience (It is now 2000, which I already have) . And to make things worst, they just added a mandetory college course in order to get the opertor license!!!!

I don't live forever...so I am giving up! I feel like I am a slave and each time I want to get rid of my chains the system comes with new chains. First you need experience..OK got it. Then they said you need a BA degree...OK got it. And now I hear more and more that in order to make a living one needs a masters degree or higher and more experience.

Meanwhile people with money don't have any of those, yet they create more obsticles for us.

I am not a pessimistic person at all. If you knew me you would have known this (I am Iranian, at 14 moved to Germany by myself, leanred German and English and French, graduated HS in Germany, moved here). But honestly I am now 100% sure that upward mobility in society in this country is almost non-existence.

Bad things can happen when you kill the dreams of young people. I am talking about crime, drugs, violence, gangs and so on.

I don't want to live in a country with all these problems, and I don't know how to change things. I am powerless.

So I don't know what to do and I am debating with myself to go back to Iran.

I think it's sad that an educated guy like me who loves this country and wants to give something back to this country is absolutly powerless. Now I can see why some Americans go to Afghanistan and become terrorist, not that I would ever do stuff like that...but I see why they do stuff like that. They feel powerless.

If a guy who has a BA from UCLA, is 38 years old, has no family, has tons of experience in many trades can not open a simple, retarded driving school...i don't know how uneducated people would feel like.

I understand that some of you just want to argue with my points just to argue. But I really didn't post this for arguments' sake. I want to know if anyone has a solution.

I have absolutly no idea how I can reduce the amount of paperwork...maybe we need a new government, a revolution....i have no idea!

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#11) On January 27, 2010 at 11:23 AM, miclane05 (90.28) wrote:

I don't think I have a solution but I disagree with the premise that places with more corruption (i.e. where a bribe can suffice instead of the legal paperwork) is a better solution. Mexico, most south american countries and many african countries have such pervasive political and economical corruption that it stifles their economies because bribes are horribly inefficient and unstable. By-products of corruption, such as drugs and crime, also become larger problems and, becomes the bribes become an economic barrier, there exists less class mobility in these countries. So reverting to a less lawful and orderly society cannot be the answer.

Not being a bureaucrat, I don't know how some of the paperwork and other processes could be better streamlined, but I actually think that some things should be rather difficult. The entreprenuer who goes the extra mile in paperwork is more likely to succeed than someone who made a business decision on a whim but was deterred by the amount of paperwork needed to start.

Obviously if banks lent money to anyone who had a business idea, more of those loans would fail, and banks would charge higher rates to everyone, possibly pricing out some of the better ideas that would be successful. Just as some of the best colleges weed out applicants by having a longer application process or not accepting the "common application", our society has always made it harder to be the CEO than a day laborer. I think thats a good thing.

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