Long ago in the Land of the Free, if you wanted to start a saloon, you rented a space and started serving booze.
You didn’t have to go through years of petitioning a bunch of bureaucrats for permits and licenses.
If you weren’t qualified or good enough at your job, your reputation would suffer and you’d go out of business.
This is the way it used to be for just about every industry and profession.
It wasn’t until 1889 that the US Supreme Court ruled in Dent v. West Virginia that states had the right to impose “reasonable” certifications or licenses for various professions.
At first, most states only licensed physicians, dentists, and lawyers.
In fact, by 1920, only about 30 occupations in the US required any sort of licensing.
By the 1950s, about 5% of US workers required a license to perform his/her job.
Today that number has risen to 30%, and climbing.
Some of our modern examples are completely insane.
According to the Brookings Institute, the state of Nevada requires 733 days of training and a $1,500 fee for a license… just to become a tour guide.
Over in Michigan, it takes 1,460 days of education to become an athletic trainer.
45 other states have license or certification requirements for athletic trainers. All fifty states have licenses for barbers and cosmetologists.
36 states require licenses for make-up artists. 34 states license milk samplers. And a mere 33 states license auctioneers.
These license requirements continue to grow, along with the overall level of rules and regulations in the Land of the Free.
Just this morning the US government published an extra 227 pages of rules, regulations, and proposals.
This happens every single business day in America.
Last week the government published over 2,000 pages of new rules, many of which border on absurdity.
To give you an idea, USDA’s Agricultural Marketing Service proposed a rule about minimum and maximum diameters of potatoes that are sold in the State of Colorado.
Yes I’m serious.
This is the sort of madness that government bureaucrats churn out on a daily basis: more rules, more licenses.
Needless to say, the more of these rules they create, the more difficult it becomes for people and businesses to produce.
So it wasn’t exactly a big surprise when the US Labor Department released statistics a few days ago showing that, for the third straight quarter in a row, productivity in the Land of the Free declined.
In other words, US workers are producing less than they did before.
We haven’t seen this trend since 1979. And it’s the exact opposite of what’s supposed to happen.
As workers get more experienced and technologically advanced, productivity should grow.
But it’s not. US production is buried under countless pages of regulations and licensing requirements. And the trend has been negative for quite some time.
From 2000 through 2007, US productivity was about 2.6%.
Between 2007 and 2015, it shrank by half to about 1.3%, barely keeping up with population growth.
Now productivity is actually shrinking. America is going backward.
But there’s another side to this story.
Because while US economic growth has practically halted and productivity is shrinking, DEBT CONSUMPTION is up. Way up.
Americans are once again indebting themselves, often to buy useless things they don’t really need.
Auto loans and credit card debt are just two categories registering significant upticks.
(Not to be left out, the US government is leading with way with an absolute explosion in federal debt…)
So what we’re basically seeing now in the Land of the Free is people going into debt to consume more, while simultaneously producing less.
This is a pretty dangerous trend.
Human beings realized 10,000 years ago that if they wanted to survive, they had to produce more than they consumed.
During the Agricultural Revolution our early ancestors learned that, instead of constantly hunting for game, they could plant seeds in the ground and produce more food than they could possibly eat.
You and I wouldn’t be here if they hadn’t figured out this simple principle.
I call it the Universal Law of Prosperity, and it applies to governments, businesses, and individuals alike.
Any nation that fails to produce more than it consumes is in for serious trouble. And the government’s own data is showing that this is happening.
They create countless rules, regulations, and licensing requirements to make it more difficult to produce… and we can already see the results with (lack of) GDP growth.
Meanwhile they’ve slashed interest rates down to zero to incentivize people to consume.
It’s not hard to see where this trend is going.