Posts tagged with: regulation

Blog author: dpahman
Wednesday, September 10, 2014
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I have spoken in the past in favor of net neutrality, writing,

Whoever is responsible for and best at enforcing it, net neutrality had this going for it: it was a relatively stable, relatively open playing-field for competition…. [T]he fact that companies tried to get around it via copyright protection privileges shows that it was, in fact, doing something to enforce freedom of competition. Now, without it, there is an opportunity for concentration of power…. As [Walter] Eucken illustrated, concentration can lead to instability, and instability leads to popular calls for state regulation, which tend in practice toward cronyism. Certainly, such a trajectory is not inevitable, but it is now more likely, giving good reason for pause at the idea that we do not need net neutrality — or something like it — in the future.

This week, House minority leader Nancy Pelosi voiced her support for net neutrality as well. So why would I object? Because the measures that Pelosi proposes give much more power to the government, following the trajectory outlined above in the direction of over-regulation. (more…)

“Politics makes strange bedfellows,” said Charles Dudley Warner. And nowhere is that more true than in the political alliances that form around regulation.

In a 1983 paper, regulatory economist Bruce Yandle coined the catch-phrase “Bootleggers and Baptists” for the observation that regulations are often supported by peculiar alliances who have very different end-goals in mind.

Yandle explains the Bootleggers and Baptists theory of regulation in this video by LearnLiberty.

(Via: Art Carden)

facebook_ad_large_1On-demand ride-sharing services such as Uber and Lyft are on the rise, allowing smartphone users to request cab drivers with the touch of a button. But though the services are popular with consumers and drivers alike, they’re finding less favor among their taxi-company competitors and the unions and government bureaucrats who protect them.

Calling for increased regulation, entrance fees, and insurance requirements, competitors are grappling to retain their privileged, insulated status. In Miami-Dade County, an area with particularly onerous restrictions and regulations, Diego Feliciano, president of the South Florida Taxicab Association, argues that the change is bound to “ruin the very thing it’s trying to improve,” all because it threatens the fat cats who pay his salary, and who can afford to jump through the regulatory hoops. “When looking at new technologies,” he writes, “we must also be sure people’s basic civil rights and the safety of the riding public are protected.”

Bringing these petty municipal battles into the limelight, actor Ashton Kutcher, an early investor in Uber, recently appeared on Jimmy Kimmel Live, decrying “antiquated legislation,” “old-school monopolies,” and “old-school governments” who continue to stand in the way of innovation and consumer demand. In areas like Miami, Kutcher says, there is a “Mafioso mentality” against letting the “new guys” in.

Indeed, as Miami’s Feliciano aptly demonstrates, the protectionist mindset only sees what is, viewing economic activity in static and self-centered terms, and failing to recognize or value the type of opportunity and possibility that comes with increased freedom and ownership. Feliciano claims that he’s interested in “safety” and “basic civil rights,” but the only folks being protected are those with power and pocketbooks. (more…)

Brian Burrough has a mostly enjoyable New York Times review of a book that’s mostly positive about my native state’s mostly small-government formula for economic growth. Some excerpts:

Ms. Grieder, a onetime correspondent for The Economist who now works at Texas Monthly, and a Texan herself, has written a smart little book that … explains why the Texas economy is thriving. It’s called “Big, Hot, Cheap and Right: What America Can Learn from the Strange Genius of Texas”….

What might be copied, Ms. Grieder indicates, is the so-called Texas model — that is, a weak state government with few taxes and fewer regulations and services. It would be far harder to replicate the state’s civic DNA, which features traits that can be traced to its decade, beginning in 1836, as a stand-alone nation (independent, suspicious of Washington), the late-1800s cowboy era (self-reliant, fraternal) and the 20th-century introduction of oil and entrepreneurialism (pro-business, skeptical of government)….

Outside writers have been regularly caricaturing the state since the novelist Edna Ferber introduced America to postwar Texas with “Giant” in 1952. The canon ranges from “The Super-Americans,” by John Bainbridge (1961), to “As Texas Goes … : How the Lone Star State Hijacked the American Agenda,” by Gail Collins, a New York Times columnist (2012). Ms. Grieder’s is the rare book that takes stock of the Texas model without ridiculing many of its traditions and politicians.

My one concern is that the book’s author seems enamored of Gov. Rick Perry’s crony capitalist strategy of using subsidies to attract companies to the Lone Star State, a habit that is anything but small government and likely to come back to bite. On the whole, though, the book and the book review appear to give far more props to low taxes and limited government than I thought possible for a work endorsed in the pages of The New York Times. Maybe there’s hope for those city slickers after all.

New York Post illustration

New York Post illustration

In the New York Post, Acton Research Director Samuel Gregg looks at “the spread throughout America of economic expectations and arrangements directly at odds with our republic’s founding” and asks what the slow walk to “Europeanization” means for the long term. Gregg:

Unfortunately there’s a great deal of evidence suggesting America is slouching down the path to Western Europe. In practical terms, that means social-democratic economic policies: the same policies that have turned many Western European nations into a byword for persistently high unemployment, rigid labor markets, low-to-zero economic growth, out-of-control debt and welfare states, absurdly high tax levels, growing numbers of well-paid government workers, a near-obsession with economic equality at any cost and, above all, a stubborn refusal to accept that things simply can’t go on like this.

It’s very hard to deny similar trends are becoming part of America’s economic landscape. States like California are already there — just ask the thousands of Californians and businesses who have fled the land of Nancy Pelosi.

Europeanization is also reflected in the refusal of so many Americans to take our nation’s debt crisis seriously. Likewise, virtually every index of economic freedom and competitiveness shows that, like most Western European nations, America’s position vis-à-vis other countries is in decline.

Is there a way out, even as the “fiscal cliff” negotiations vividly illustrate the inability of Washington’s political elites to take spending and tax problems seriously? Gregg holds out hope: (more…)

At least Obamacare comes at us head on. The greater legislative threat may be the one that most Americans have never heard of. Economist Scott Powell and Acton friend Jay Richards explain in a new piece in Barron’s:

While Obamacare received more attention, the Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank after its Senate and House sponsors, … unleashed a new regulatory body, the Consumer Financial Protection Bureau, to operate with unprecedented power.

Dodd-Frank became law in 2010 and is supposed to avert the next financial crisis. Yet banks are still too big to fail and Fannie Mae and Freddie Mac remain wards of the state, while the CFPB has been given sweeping authority over consumer credit and other financial products and services that played no significant role in the crisis of 2008.

Powell and Richards then offer some specifics:
(more…)

Earlier this month, India experienced the worst blackout in global history. Over 600 million people—more than double the number of people in the U.S. and nearly one in 10 people in the world—were left without power.

The crisis highlights the fact that corrupt governance and lawless institutions can keep even an entrepreneurial people in the dark:

Along with a lack of investment in infrastructure, the crisis also had roots in many of India’s familiar failings: the populist tone of much of its politics, rampant corruption and poor management in its government and public sector, weak law enforcement, and a maze of regulations that restrict many industries.

Officials said they did not know what caused the blackout Tuesday, although a similar failure Monday was blamed on individual states drawing too much power from the grid, in defiance of regulations.

“It is open lawbreaking that goes on all the time in India,” said a Power Ministry official, who spoke on the condition of anonymity because of the sensitive nature of the subject. “This time, it went beyond limits.”

Read more . . .

A Holland, Mich., teenager is being stopped from opening a hotdog cart due to city zoning laws. It’s really disheartening when you consider the fact that this young person was trying to be responsible and work to help his family and build up savings for his future.

In Work: The Meaning of Your Life, Lester DeKoster writes that work is a way in which we provide service to others—a service this teenager has been denied the chance to provide.

The Mackinac Center has a video up about this story.

(more…)

It’s hard to think of anything more onerous than preventing enterprising people from entering the market. To do so is to interfere with their ability to serve others and engage in their vocation. It keeps people poor by preventing them from improving their lives. And one of the worst barriers of this kind is a type of law known as occupational licensing.

And that’s exactly what a group of monks in Louisiana ran into in 2010 when the state government tried to prohibit them from selling handmade caskets to their fellow Louisianians. Kevin Schmiesing wrote on that issue in 2010 on the PowerBlog.

It’s the coffin business that got St. Joseph’s in trouble. By selling its pine boxes without a funeral director’s license, the monastery violates state law. So the abbey is suing the State of Louisiana in federal court.

It’s a classic case of what economists call “barriers to entry”: regulations put in place by existing businesses or professionals to limit competition and thereby drive up prices and compensation. Usually the vested interest posits some rationale concerning the public good (e.g., not just anybody should be allowed to practice medicine…), but frequently enough the reasoning is pretty thin (e.g., should you really need a license to cut hair or drive a taxi?).

The monks are represented by the libertarian public-interest group, Institute for Justice. They won their case in 2011 and appeared last month before a Federal Appeals Court. A decision won’t be out for several months.

This all started when the Benedictine monks at Saint Joseph Abbey started receiving several requests from their community to sell caskets that the monks had constructed for their own deceased members for many years. In a hard hit post-Katrina Louisiana, this seemed like a reasonable way for them to serve their community and bring in some money to the abbey. Unfortunately, they ran into occupational licensing laws, which forbid non-funeral homes from selling caskets. The Institute for Justice argued that such laws could only serve to reduce competition and drive up the prices of caskets. The BBC has a good video on their troubles with the state. (more…)

I saw Joe Carter’s post on Entrepreneurship and Poverty earlier today, and it got me thinking back to a subject that has been nagging at me for quite a while. It seems to me that starting a business is simply too hard these days, and for rather artificial reasons. But perhaps I’m just biased, and it’s not as hard as I thought? Seeking the truth, I did what any millennial would do and consulted google.

What I found was a fascinating article from John Stossel. In it, he details all the regulatory hoops he would have to jump through in order to engage in the most basic from of entrepreneurship in Americana: the lemonade stand. (more…)