Tag Archives: Regulation of the Day

Regulation of the Day 57: Minimum Price Agreements

A new Maryland law makes it illegal for manufacturers to set a minimum retail price for their products in sales contracts. The law is meant to increase competition. Unfortunately, it will have the opposite effect.

As Wayne Crews and I explain in the The American Spectator, it could prevent retailers from competing with each other on non-price grounds, such as customer service, product demonstrations, and advertising.

Some products, such as televisions or cars, have high information costs. Customers want to know a lot about these products before they commit to a purchase. They want to know what they’re getting. Try before they buy.

By forcing retailers to compete against each other to give customers more and better information and service, minimum price agreements can help consumers get what they want and boost sales at the same time.

Regulation of the Day 56: Kahlua in Ohio

Kahlua contains 20% alcohol in 49 states. But in Ohio, it is 21.5%. Weird, huh?

Turns out regulations are the reason. My friend Jacob Grier pointed me to an article showing that Ohio groups alcoholic beverages into two categories: wine/beer and spirits. Any beverage below 20% alcohol is in the wine/beer category and can be sold in grocery stores. Anything above 20% is classed as a spirit and can only be sold in state-run liquor stores.

Drinkers often mix Kahlua with spirits such as vodka. So the company actually changed its recipe in Ohio to ensure that Kahlua would appear in stores next to its complementary products. The benefit to consumers from this regulatory scheme is unclear.

Regulation of the Day 55: Home Environmental Inspections

In today’s Politico, I take a look at one of the 397 new regulations in the House version of cap and trade legislation. If the bill passes, almost all homes for sale would be required to undergo an environmental inspection. The home cannot be sold until it is up to code.

One unintended consequence could be the end of fixer-upper homes.

Another would be lower home ownership rates. Which, of course, directly contradicts of decades of federal policy.

UPDATE: A coworker informs me that Fox News is linking to the article in the opinion section of their website.

Regulation of the Day 54: Shovelnose Sturgeon

Shovelnose sturgeon population figures are healthy. Why does the Fish and Wildlife Service want to list it as a threatened species, then? Because it looks like the pallid sturgeon, which is currently listed as endangered.

Regulation of the Day 53: Y2K

The case for regulatory sunset provisions is inadvertently made by an entire chapter in the Code of Federal Regulations devoted to lawsuit rules for the Y2K computer bug from nearly a decade ago.

Regulation of the Day 51: Mandatory Hand Sanitizing

In Jersey City, New Jersey, the school district is requiring students to “sanitize their hands when they walk into the class in the morning, before and after lunch, and after each restroom visit.” That’s a requirement. As in, not optional. The district will be providing hand sanitizers at a cost of about $100,000.

Regulation of the Day 50: Tires from China

Consumers have been buying a lot of tires made in China lately. Naturally, U.S.-based tire manufacturers are upset at their competitors’ success. Fortunately, there are two ways for the aggrieved American firms to ease their troubled minds:

1: Make better tires for less money. Give consumers a reason to buy American tires rather than Chinese. Compete, in other words.

2: Don’t compete. Too much hard work. Instead, persuade some politicians to place a 35 percent protective tariff on competitors’ tires. Price them out of the market. Then keep making the same old tires that people don’t want. If the tariff is large enough, you may even be able to raise your prices, even without raising quality.

This is a choice between raising the bar and lowering it. Unfortunately, U.S. tire firms and allied politicians have chosen to lower it. China, by putting up its own barriers to retaliate, is lowering the bar even further.

The really audacious part is that tire tariff supporters think they are really helping the economy. Raising that bar. Saving American jobs!

There is something very unsettling about the notion that an American job is intrinsically more valuable than a Chinese job. We are all human beings, are we not?

This is an ugly, ugly mindset. And it is one that politicians and tire companies have explicitly adopted. The burden is on them to explain why they think people who live in one country are more deserving of economic opportunity than people who live in another.

Regulation of the Day 49: Political Speech

The First Amendment famously reads, “Congress shall pass no law… abridging the freedom of speech, or of the press.”

Congress, ever sneaky, has looked very closely at the First Amendment’s wording. If they can’t pass laws abridging the freedom of speech or of the press, maybe they can pass laws abridging the freedom of speech and of the press.

I kid, of course. No lawyer in their right mind would use that argument in court. The real justifications for most speech and press-abridging laws — collectively known as campaign finance regulations — are actually much flimsier.

They mainly have to do with protecting politicians from criticism. For example, a group called Citizens United released a partisan documentary last year called Hillary: The Movie. Basically a feature-length missive against then-Sen. Hillary Clinton and her presidential candidacy, the FEC blocked the movie from pay-per-view television during the 2008 primary season.

The movie was effectively censored because corporations (and unions) are not allowed to engage in certain types of political speech when an election is near. Citizens United lists some corporations among its donors, and thus was not allowed to show the movie as widely as they would have liked.

Citizens United got upset about all this, naturally. So they sued. Their case made it to the Supreme Court last year. Unwilling to make too hasty a decision, the Court re-heard oral arguments yesterday. The early bets are that Citizens United will win a partial victory, though one never knows until the decision is actually handed down.

Had the movie not been about politics, it would have faced no such obstacles. Political speech is treated very differently from other types of speech these days. This is a troubling trend. At heart, campaign finance regulations are a roundabout way of saying: no criticizing candidates!

Perhaps the First Amendment is a bit wordy. “Congress shall pass no law” is quite enough.

Regulation of the Day 48: Barbers in Nevada

Want to be a barber in Nevada? You’ll need to get a license first. One of the requirements is a chest X-ray, of all things. And a blood test.

More onerous is the 18-month apprenticeship under a licensed barber, which requires its own license – plus another chest X-ray and blood test.

Occupational licensing regulations are rarely in place to benefit consumers. Their primary purpose is often to limit competition by putting up barriers to entry. Why do this? Because keeping the supply of barbers artificially low means that existing barbers can keep their prices artificially high.

Three of the four licensing board members must be licensed barbers. They write the apprenticeship rules and the license examination. They decide who gets in, and who gets left out. They have plenty of excuses built into the rules for excluding potential competitors.

Owing child support payments, for example, is by itself grounds for exclusion. What this has to do with cutting hair is beyond me. And getting a job cutting hair is one way to be able to make those payments. But there it is, encoded in state law. The board can legally keep you from being a barber if you owe child support.

A sure sign of an anti-competitive practice is using the force of law to prevent competitors from entering the marketplace. Where is the antitrust investigation into Nevada’s barber licensing?

Regulation of the Day 47: Irish Potatoes

Until last Friday, it was illegal for certain producers to sell or import U.S. No. 1 grade “Creamer size” (long and skinny) Irish potatoes. Creamer size potatoes are identical in taste, texture, and weight to their stouter, rounder counterparts.

In the Idaho-Eastern Oregon growing region, this led to over $7 million worth of potatoes to go unsold. That’s a lot of uneaten meals. Hopefully the USDA will repeal similar aesthetic restrictions on other types of food. It is bad policy to keep perfectly good food off the market, especially during times of recession and high food prices.