Meet Thane Hayhurst, An Apparent Poster Boy for Job Creation Through Deregulation

From John Kramer at the Institute for Justice -- and it's funny, I was just staring down the barrel of my "Litigating for Liberty" hip flask -- comes the story of Dallas tech entrepreneur Thane Hayhurst, the "entrepreneurially driven David," and his battle against heavy-handed innovation-stifling regulations from the "government Goliath."

The suburban D.C.-based law firm and advocate for hands-off government launched its Texas office in 2008 when it took on Hayhurst's federal suit over against a 2007 state law that required computer repair shops -- like his home-based operation Kiwi Computer Services -- to register as private investigators before they can poke around someone else's computer. The result, says the firm: a 2009 law adding an exemption to for computer technicians.

Now, says IJ, Hayhurst "holds the power to create dozens of jobs for others, improve his community through volunteer work, and help other businesses to flourish," and he's doing it all in spite of the government and its inconvenient tendency to regulate.

Hayhurst's tale, as recounted by former Startlegram editorial director Paul Harral, charts his course from his arrival from New Zealand 20 years ago through a few start-ups in Dallas to his current project, the tech job placement firm iTalent. Now, though, says the report, he faces "regulations that are often imposed at the behest of private interests looking to use government power to limit competition. Arbitrary and irrational red tape now threatens thriving enterprises like Thane's, as well as hundreds like them across the state of Texas." Specifically, the report calls out that private investigators' license requirement in the Private Securities Act.

After the jump you can read the whole release -- just out today, though Hayhurst's report looks to have come out last summer -- including mention of a second study, "Houston, We Have a Problem: Space City Regulations Prevent Entrepreneurs from Taking Off," which probably isn't much of a surprise to a few local rocketeers.

Two Texas Reports:
A Key to Creating Jobs is Cutting Red Tape

Dallas Entrepreneur Creates Jobs Despite Jobless Recovery
While Houston Too Often Blocks Entrepreneurial Dreams

Dallas--Even in the face of the current jobless recovery, one entrepreneur holds the power to create dozens of jobs for others, improve his community through volunteer work, and help other businesses to flourish. But too often, government policies--like those in Texas--stifle that success, leaving everyone poorer as a result. These are among the findings of two reports released by the Institute for Justice.

The first report, authored by former Fort Worth Star-Telegram editorial director Paul Harral, is titled "The Power of One Entrepreneur: Thane Hayhurst, High-Tech Entrepreneur." This report documents the many ways in which entrepreneur Hayhurst not only helped put dozens of people to work across Texas and the rest of the nation, but also strengthened his community by volunteering his time and services to various social service organizations. In addition to providing computer consulting and repair, Hayhurst also places skilled high-tech workers from across the nation in hard-to-fill jobs in Texas.

Hayhurst's story, however, also pits this entrepreneurially driven David against the government Goliath. Despite all his good work, the state of Texas threatened to put him out of business under a 2007 law that effectively required anyone who examined third-party computer data to become a licensed private investigator. Sound ridiculous? Well, that's because it is. Legislative changes in 2009 carved out an exemption for computer repair technicians, but only after Hayhurst and other entrepreneurs filed a federal lawsuit seeking to have the law declared unconstitutional. Hayhurst's "Power of One Entrepreneur" report is available at:

Chip Mellor, president and general counsel of the Institute for Justice, which published the report and represents Hayhurst in his constitutional challenge to Texas' anti-competitive regulation for high-tech workers, warned about the opportunity costs created by anti-entrepreneurial policies: "As this report documents, there are so many opportunities and there is such potential for better services than the public has ever known--all bottled up by regulations designed to keep entrepreneurs like Thane from innovating. These regulations do little but protect existing businesses from perfectly fair competition. As a result, consumers spend more than they have to, new services are stifled and the dreams of would-be entrepreneurs are dashed. If Texas would change its laws to welcome entrepreneurs into the marketplace, the state and all its residents would be far better off."

The second report, "Houston, We Have a Problem: Space City Regulations Prevent Entrepreneurs from Taking Off," demonstrates that one of the principal obstacles to creating new jobs and entrepreneurial activity in Houston is the complex maze of regulations the city of Houston and the state of Texas impose on small businesses. The Houston report is one of eight "city studies" released recently by IJ. Each is filled with real-world examples of specific restrictions that often make it impossible for entrepreneurs to create jobs for themselves, let alone for others.

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Patrick Michels
Contact: Patrick Michels