Atlas Shrugged: The Mocking

Thursday, May 19, 2016

Regulation is Fascism!

My story begins, to nobody's surprise, in Texas, because it took a lot of idiots to make it happen.

Drake King is the son of an auctioneer. (All this information come from He obtained an associate auctioneer's license so he could worked for his father's company. Eventually he stopped working for his father, no doubt due to his two convictions for burglary and one conviction for making a terroristic threat.

Two years after his latest conviction, King applied for and was denied an auctioneer's license.

"Auctioneers are licensed and regulated because they are in a position of trust that would allow an unethical individual to take advantage of both the buyers and sellers," said William Kuntz, TDLR's executive director. "That's why acting as an auctioneer without a license is a crime. And that's also why we will take whatever steps are necessary to shut down unlicensed auctioneers."
Coincidentally, I recently watched the old Lovejoy tv series. In one episode Lovejoy recognized a very valuable antique while taking a one-off auctioneering job and secretly sent an employee to bid for it. He was charming but most definitely an unethical individual.

The less-charming equally unethical Mr. King decided that he didn't need an auctioneering license and opened up a brick-and-mortar business and two internet businesses. Both his mother and his father turned him in to the TDLR. The Texas Department of Licensing and Regulation warned him repeatedly to get a license but he ignored them, so he was fined $4000 and ordered to stop auctioneering. When he ignored that order he was arrested for "a Class B misdemeanor punishable by up to six months in jail."

I read about Drake King in Texas Gov. Greg Abbott's occupational licensing policy initiative. Abbott is very concerned that it is too difficult to open a business.
Texas is proof that limited government encourages unlimited opportunity for all. We are #1 in so many different categories, from jobs to energy to exports.
But there is more we can do to improve the business climate here in Texas.
That’s why Greg Abbott has proposed new reforms to the regulation of occupational licenses in Texas.
There are currently 150 business activities that currently require a state-issued license before they can be legally performed in Texas. Some of these are necessary for the health and safety of our citizens, like licensing medical doctors. But many are unnecessary or overly burdensome. For example, why do we require a license to be an interior designer? Or a salvage vehicle dealer? Or a “shampoo apprentice”?
We must work with the legislature to remove senseless barriers to growth, because over-regulation results in less competition, fewer choices and higher costs. It discourages those who want to start a business, and limits growth in our job market.
Greg Abbott’s new policy initiative will make it easier to do business in Texas – because the future our children inherit depends on what we do now. Read Greg Abbott’s new policy plan, Occupational Licensing, here. - See more at:
In his policy plan, we are introduced to the poor would-be auctioneer.
However, while licensure is often justified in professions that impact the health, safety, and welfare of the public (e.g. doctors, lawyers, peace officers, and engineers),. it is also frequently imposed on many professions where such concerns are absent professions(e.g. interior designers and auctioneers), imposing fees and state-­‐ administered examinations. Violating licensing regulations or operating without a license often carries criminal and civil penalties.  
Proponents of occupational licensing argue that licensure ensures the safety and reliability of products and services. Such claims are dubious, however. In a competitive and free market, one must always stay ahead of the next competitor or risk losing business. With some exceptions, quality, price, and availability adapt to changing market conditions. Regulation by licensure, on the other hand, results in less competition, fewer choice, higher costs, and the potential to thwart innovation. These effects are not always visible to the consumer, but they are nonetheless built-­‐in costs without justification in most instances.

For instance, auctioneer Drake King was arrested of auctioning without an auctioneer's license. According to the Texas Department of Licensing and regulation, King pled guilty to the Class B Misdemeanor, was fined $500, and spent six days in jail.

Because Texas is the land of fucking morons, the policy goes on to note that King's misdemeanor doesn't deserve to be lumped in with misdemeanors such as terroristic threats.

Abbott's initiative uses information from our old friend the Institute for Justice to back his claims, including quoting them directly. As we already know, the IJ started out as a Koch shop, and the Koches, who have been fined millions of dollars for breaking laws and regulations meant to keep their industrial plants from poisoning us and their businesses from blowing up, are suing all across the US to eliminate those pesky little regulations that don't do anybody any good anyway, and are keeping business from being successful. Any genuinely necessary reforms are used as a wedge to eliminate all regulations that billionaires find inconvenient.

Surely you don't need a license to braid hair, do you? That's silly. Or a high school diploma, one of some licenses' requirements. Why shouldn't a teenage girl be able to drop out of school and open up a business to braid hair? She might need an education and a lot of money to start and run business but hey, maybe not! Or, perhaps, she'll just go to work for someone with lots more money, who now doesn't have to hire graduates anymore, and can pay less money to people with no options in life.

Which brings us full circle, back to our Princess of Poverty, our Free Market Fairy, Megan McArdle.

When my mother retired from selling real estate, she toyed with the idea that she -- a talented cook who had long made her own croissants -- might make a little money on the side by selling homemade baked goods. It’s the sort of business that people have started from time immemorial, letting them share what they love with someone willing to pay for it.

The history of food manufacturing is the history of food adulteration. And if you have seen any bar or restaurant reality shows, you know that regulation is already too spotty.
A quick investigation, however, revealed that the thing was impossible. You can’t just bake a little stuff at home and sell it, for fear that you might poison people. If you want to poison people with your deliciously flaky homemade croissants, it must be done on a strictly ad-hoc, volunteer basis.
You also can't bake a little at home and sell it and expect to make any money. You're paying retail prices for ingredients, or rather your husband is. And you really do need to prove that roaches aren't crawling over your floor or your eggs aren't stored at room temperature or dishwater doesn't splash into the food or the pans aren't washed at a temperature that won't kill germs. (In my youth I obtained a Sanitation Certificate for restaurants and hotels.)
Welcome to the modern economy, where increasingly, everything not compulsory is forbidden.
Message: Occupational licensing is fascism.
We are hedged around with rules to protect us, to protect other people, to protect some theoretical victim who exists only in the minds of regulators and judges. And there’s reason to worry that this red tape is getting wrapped so tight that it risks rendering us immobile.
In 2012, the Institute for Justice -- a public-interest law firm advocating libertarian causes -- looked at the number of occupations that require licensing. Specifically, the institute looked at occupations typically filled by lower- and middle-income workers. These are not your airline pilots, your certified public accountants and your neurosurgeons; they’re the nations interior decorators, auctioneers and florists. (Yes, you read that right: In at least one state, these occupations cannot be practiced without a license.)
Conflict of interest shout out! Although at this point, the Koches have their tentacles into some many organizations that it would be impossible for McArdle to avoid having a conflict of interest. As soon as she decided to take Koch money and Koch jobs and then hide the conflict, she became permanently compromised.

Fortunately, being a lackey to the rich doesn't require either ethics or reputation. Like Abbott, McArdle informs us that while most licenses are just silly, she's fine with anything that she thinks will benefit her--to a point.
... If the entire District of Columbia regulatory apparatus vanished tomorrow, five years hence I would still feel pretty safe walking into Georgetown University Hospital, simply because the institution itself has a reputation to protect that would quickly disappear if it became known as a great place to die during routine procedures.
The Free Market will solve all problems.
But most people get the shakes when you start talking about relaxing medical licensing, so let’s leave that aside. How many of the professions on the Institute for Justice's list really require licensing to protect consumers from disaster?
Not really all that many. Sure, consumers may be at risk that they’ll pay a lot of money to someone who does a bad job, and then have a hard time getting their money back. They might have to go around with an ugly haircut, or live with their imperfectly sanded floors. But as most of us can probably personally testify, licensing does not inoculate the industries against those dangers.1
So what if your teeth whitener ruins your bleaching? You can always go to someone else next time. No harm done!
High street clinics are using teeth whiteners containing more than 200 times the legal level of a dangerous bleach.
The toxic levels of hydrogen peroxide were discovered after trading standards officers swooped on salons promising punters a perfect Hollywood smile.
The shock revelation comes after the Sunday Mirror told how ­unqualified practitioners were cashing in on the £1billion industry, putting customers’ health at risk.
Only dentists – or dental health ­professionals working to a dentist’s prescription – are legally allowed to carry out teeth whitening.
Yet thousands of unregistered­ “technicians” are providing a cut-price service in ­hairdressers, tanning shops, clinics and beauty salons.
Now an official investigation into 40 such outlets has revealed many are using dangerous bleaching gels which can cause blisters and gum damage.
McArdle lets us know that your babysitter really doesn't need that criminal history check. Just think how much money you'll save! She explains that it's really all about income inequality ethics.
What these licenses are really good at is excluding competition. And in an era when we’re worried about mobility, that’s a problem.
Much as I love Silicon Valley, its cultural dominance has disastrously corrupted our sense of what entrepreneurship is. Talking about starting your own business, and too many people think the measure of success is whether you can sell the thing for at least a couple of hundred million dollars. Most entrepreneurship is considerably more humble than that; it is individuals with some talent, or a willingness to work hard, who want to sell their services to the public. They may never employ another person; they may not even work full time themselves. And these people never buy gracious mansions, or endow scholarships, or get buildings named after them. They just make their own lives a little bit better, hopefully, in the process of doing the same for their customers. We are artificially stopping that process, in order to protect insiders who already have the job.
That’s great for the insiders, who get above-average job stability and wages. But it’s terrible for the folks who are outside. And the more industries we put under the control of such regimes, the more the outsiders will show up in our economic data as people permanently stuck at the bottom.
We can do better than that. The problem is that such regimes are politically very stable, because the benefits are highly concentrated, while the costs are diffuse. Every licensed interior designer is passionately interested in shutting out unlicensed competitors, but their potential customers probably have better things to do than phone up their senators to demand to know why they can’t hire this chap they just met who has absolutely splendid taste in early Chippendale.
McArdle warns us that getting rid of licensing will be a long, hard slog but the Institute of Justice is manfully doing the hard work and as God is her witness, one day there will be no more regulation at all, for the benefit of the health, wealth, and happiness of mankind!


Fiddlin Bill said...

By the way, when the Kochs possibly dropped out of National election financing yesterday they made it a point to note that they are not dropping their interests in state politics. And I guess not! ALEC and their other state government oriented seminars and think tanks are already created an American fascist revolution on a state by state basis (see, e.g., Wisconsin, North Carolina, Texas, Mississippi) by exploiting the great structural flaw in the United States--"states rights."

Susan of Texas said...

That's right, their state government work is very successful and it's low-key, which they seem to prefer.

In fact, that might be the key to defeating the Koches. They were raised by a paranoid father and have shown the same tendencies. Any kid raised by a fanatic will have problems unless he is able to choose to overcome them. They're also very old so maybe we just need to be patient. Their work will continue without them but followers need leaders, so many that influence will dissipate in time.

Susan of Texas said...

"maybe" not many

Tengrain said...

I keep coming back to the decorator comment, which came up in California when a street in San Jose became nick-named Bored Housewives Row. I watched in wonder as one of the decorators (notice that she was not a certified designer) took out a load-bearing wall to improve the view from her shop.



Susan of Texas said...


It's like when McArdle put 60 coats of non-food safe polyurethane on her kitchen counter. What could possibly go wrong with that?

Anonymous said...

Nothing could go wrong. Her reputation and the free market will take care of it.

Downpuppy said...

"Salvage vehicle dealers" need licenses?!

What, Texas is afraid of chop shops?

Susan of Texas said...

Texas is a chop shop.

gromet said...

If the entire District of Columbia regulatory apparatus vanished tomorrow, five years hence I would still feel pretty safe walking into Georgetown University Hospital, simply because the institution itself has a reputation to protect

CEO: Damn, we killed another patient? That's, like, 100 this year.
CFO: 186, sir, but it doesn't matter; with the money we save by not meeting regulations, we can afford to keep their survivors tied up in court until they agree to settle for peanuts.
CMO: Sir, if I may? To keep our intake up, we're going to need an aggressive PR campaign, one that really sweeps the corpses under the rug. After all, we have a reputation to protect. [MUGS TO AUDIENCE, PAUSE FOR LAUGHS]
CEO: Great, do it. I'll be on vacation in Cuba with the senator. We're picking out new fellatio slaves, which is legal thanks to deregulation. Bye!

Susan of Texas said...

They'll be in trouble when the Free Market Fairy finds out what they are doing!

Nelson said...

Less licensing? Holy crap, here in upstate NY (a.k.a. the red stain on a blue state) no licensing is required for home improvement contractors. There are counties downstate where they need to be licensed; need to show proof of insurance, etc., but up here it's the wild west.

I'm not particularly "handy" so I've had to negotiate the minefield of handymen. Too many of them are dishonest and incompetent.

Oddly enough, the more conservative they are, the more dishonest and incompetent they seem to be. In contrast, last week I had an electrician replace an outlet, and he's a liberal progressive. He was the first guy that told me to make the check out to the name of his business, rather than the shifty rightwingers who said "Just make it out to my name" to avoid taxes.