Red Tape Disease

Dutch elm disease is one of the world's most serious tree diseases. It is caused by the fungus Ophiostoma novo-ulmi, which invades and blocks the water-conducting systems of trees. This results in the wilting and death of the tree.

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Imagine you've bought a home in the heart of a bustling city. You diligently pay your property taxes, mortgage, and insurance. You enjoy your home because it is yours. 

But there's a catch. If you decide to renovate, to modify this home to make it correspond to your vision for the home, you must first navigate through a maze of city regulations just to get the green light. You're then obligated to hire contractors who are on the city's approved list. After all this, a city inspector shows up to scrutinize every detail of the work done. This scenario hardly screams freedom. Instead, it highlights how even the fundamental right to control your own property is tightly regulated by government oversight. You're tangled in red tape.

Nationally we have a housing crisis not because of a lack of builders, but because nearly every city and state is strangled by red tape. Locally, I met a contractor who said, "I will never build another house in Duluth." Why did he say this? Because it takes so long to get a permit. He said that it took him six months to get a permit to raise someone's garage floor by two feet. "In Hermantown it would have taken 24 hours." 

I read last week that for the unfortunate victims of L.A.'s recent fires, people who lost their homes must file with 14 or 16 different agencies to get approvals to rebuild.

When I spoke to an official in Duluth about why it takes so long to get permits, he said it has to go to the State for approvals also. (This doesn't answer the question as to why Hermantown's building projects can move more quickly than Duluth's.)

If you want to build a factory here in Northern Minnesota (because Midwesterners have strong work ethic) you must not only deal with local, county and state regulators, but also many federal agencies. I've seen multi-million dollar projects get approvals all along the line but shut down by one more agency along the way. One project that would have generated more than 40 new jobs was shut down because an opponent found an endangered species of weed.

Here's an excerpt from a New York Times story I saw yesterday:

Consider clean-energy projects. These are meant to create jobs — in solar, wind, nuclear and so on — and combat climate change. But passing a law that spends money on such projects is only the first step. The companies and agencies involved have to apply for permits and show they meet regulatory standards to start construction. The government takes time to assess those applications.

The process can last months or years before building begins. More than two years after Congress enacted $5 billion to electric vehicle charging stations, just two states — Ohio and New York — had opened any. After three years, the number of stations nationwide numbered in the mere dozens, out of thousands the program could eventually build.

German Lopez, Cutting Red Tape, NYTimes, The Morning, Feb 17, 2025

Our energy demand is growing faster than our energy supply. One reason is because energy suppliers are hamstrung by red tape. Projects that should take less than eight years can take sixteen because of all the regulations and hurdles energy suppliers must navigate. 

Is the red tape industry out of control? Is red tape our economy's Achilles Heel? Is Red Tape our Dutch Elm Disease?