In case you haven't noticed, the United States government appears to have foregone governing in favor of perpetual chaos.

And that's not good, for anyone--including business owners, many of whom are eager for meaningful tax reform and a regulatory environment that encourages and rewards entrepreneurship. Having a government that works is critical to a thriving economy, and research shows the damage sustained political chaos and dysfunctional government can do.

In studies conducted during the 1990s in Peru, economist Hernando De Soto found a big reason for the country's chronic poverty was an inefficient and poorly functioning government that made it hard for entrepreneurship to thrive.

De Soto's research became a book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, that helped reinforce the notion that a functional government is critical to a country's economic health. De Soto's work helped advance reform within the country, which has since become one of the world's fastest growing economies.

That importance of functional government isn't just true in Peru.

Harvard's Michael E. Porter, Jan W. Rivkin, and Mihir A. Desai published research last year that argued America's dysfunctional political system is paralyzing our economy.

Political chaos also damages a country's brand.

According to the consulting firm Anholt-GfK, in 2016, the United States still ranked first on the firm's survey of top 10 national brands--but our score experienced the second biggest drop.

The country with the largest decline in the survey?

The recently Brexited United Kingdom.

A well-regarded national brand is enormously important to the national economy.

Entrepreneurs like me benefit from the brand equity the United States has. That brand equity attracts capital and investment, signals that an education at an American institution is a meaningful one, and is a big reason why a country with roughly 5% of the world's population can still be the world's most powerful economy.

Having a functional government is not a partisan issue, and there is enough blame to go around.

As an entrepreneur, there are certain policy issues I feel passionately about, but I also just want a government that works.

That is at least a theoretical possibility. Politicians could:

  • Choose to compromise, rather than demonize
  • Acknowledge that all the good ideas and good people don't belong to one party
  • Consider broad public opinion--rather than narrow special interest groups--when legislating
  • Realize that a government paralyzed by dysfunction can do just as much damage as an overactive government

We need those things to happen, now.

Because while the United States might be a long way from the Peru of Hernando De Soto's book, the Anholt-GfK survey data--and our recent legislative process--shows we're headed down a very risky path.