One thing that government officials do well is establish barriers to market innovation and erect hurdles for entrepreneurs to clear. The Show-Me Institute is committed to showing how burdensome regulations stand in the way of economic growth and individual prosperity. Market solutions lose their strength when bound by red tape.
David Stokes, a policy analyst with the Show-Me Institute, testifies before the Saint Louis County Council Committee of the Whole in opposition to new licensing requirements for HVAC contractors and workers in Saint Louis County. Stokes discusses how licensing rules like those proposed in this code amendment are used to limit competition and increase costs for consumers.
Measures to impose severe licensing restrictions on HVAC work in Saint Louis–area homes would limit competition and drive up prices, benefiting current HVAC workers at the expense of future competitors and the public. The new regulations would do nothing to improve safety. Rather, they are a transparent attempt at what economists call “rent seeking.”
Payday loans are far from a perfect source of credit, and the desire to protect people from the high interest rates that typically accompany such loans is well-intentioned. However, studies show that banning or imposing caps on high interest rates leads former payday loan borrowers to rely on even more damaging options, like utility shutdowns and overdrafts.
Saint Louis city Alderman Antonio French, who represents the 21st ward, and Missouri Sen. Jim Lembke, who represents part of south Saint Louis city and south Saint Louis County, answered questions from moderator Martha King, Show-Me Institute intern, and attendees. This event took place at the Show-Me Institute office in Saint Louis on June 9, 2010.
SWAT raids have received deserved attention in the news lately, but similar raids take place many times every day, often with tragic results and little public scrutiny. Missouri should require police to keep public video recordings of SWAT raids, and limit the use of SWAT teams to situations where they are more likely to defuse danger than create it.
Missouri’s oral health is among the worst in the nation, partly because of the state’s shortage of dentists. Programs in Alaska, England, Australia, and Canada have had success with dental therapists, who can provide a wide range of dental services at a low cost. Missouri could also benefit from dental therapists if the state’s professional licensing law did not stand in the way.
The U.S. Supreme Court has struck down most of the federal restrictions on campaign financing. Missourians who believe that moneyed interests carry too much sway with political candidates can try to change the incentive structure by forming a voting block dedicated to casting ballots for candidates whose campaigns spend less money.
Lawrence W. Reed, president of the Foundation for Economic Education, explains the causes of the Great Depression of 1929–1941 and outlines the clear lessons that historical episode provides for modern economic crises.
This year, the Saint Louis City Recorder of Deeds office, which oversees real estate licenses, has collected $20,729 in copy charges from people who printed documents from the privacy of their own home or business. The copies didn't involve the use of any of the city's paper or staff time, things for which governments usually charge copy costs.
On Monday, a joint legislative committee tasked with planning out a 25-year-long, statewide strategy for Missouri's electricity production and consumption met to consider the cost and availability of alternative forms of energy.
Kansas City officials deserve credit for wanting to update and revamp the city's business and occupational licensing system. Economic activity benefits the city whenever it occurs, whether directly or indirectly. Many of the changes proposed here will positively benefit Kansas City's economy by simplifying many parts of the system.
Advocates of a nationwide public option for health insurance claim the plan would increase competition. Before layering the market with new bureaucracy, however, it’s important to consider how regulatory barriers already hamper competition in health insurance markets. Removing barriers is much more efficient than creating new ones.
Although Kansas City officials deserve credit for wanting to update and revamp the city’s business and occupational licensing system, the city would be better served by rescinding as many license requirements as possible. This would consistently encourage business development and economic growth, rather than artificially constricting it.
A current proposal to increase the Federal Reserve’s level of regulatory oversight would have negative consequences. The Fed’s own track record during events leading up to the recent economic crisis indicate that it is a poor watchdog, failing to provide information when it would have helped, and later fostering uncertainty through market intervention.
Metro transit cuts have left many disabled individuals in the Saint Louis area without affordable transportation options. Stretcher vans could provide an alternative, but a few unnecessary government-mandated licensure provisions, such as EMT or paramedic training requirements, increase the cost of service without providing an essential benefit.
One of the reasons that America has long been known as the “land of opportunity” is that its citizens are understood to have the freedom to make decisions for themselves. Rather than having their lives dictated to them, as is the case in so many nations across the world, Americans engage in the pursuit of happiness by cultivating an extremely broad array of tastes and interests. For many, this includes the choice to smoke.
It’s currently illegal for public utilities to fund expansions through charges to current customers, but AmerenUE insists this type of funding structure is necessary in order to build another nuclear power reactor. Attitudes toward nuclear energy have changed over the years, and anti-CWIP laws should be repealed as relics of another era.
Payday loans carry extremely high interest rates, leading some Saint Louis officials to seek a regulatory fix limiting new stores. However, the suggested limits would not change the underlying need for emergency funds faced by many without access to traditional forms of credit. Limiting competition would leave them more vulnerable.
Out of all 50 states, Missouri requires licenses for the least number of occupations. This benefits Missouri residents in many ways, but the number of licenses is still too high; many studies document the harm that occupational licensing can do. People should not have to seek the permission of the government before they choose an occupation.
The licensing of occupations in Missouri could be could be costing consumers more for some services. Although a nationwide survey by the Reason Foundation last year listed Missouri as the state with the fewest statewide occupational licensing requirements, many occupations are still subject to unnecessary restrictions on who may enter the profession. This drives up prices and can, in many cases, spur business owners to locate elsewhere. This case study focuses in particular on massage therapists. It compares the prices of massage therapy in Missouri, which licenses therapists statewide, and Kansas, which doesn’t. It looks at price comparisons in the metropolitan Kansas City market and compares Springfield to Wichita. The study documents how massage therapist licensing in Missouri leads to higher costs for consumers in Springfield, and leads to more businesses locating in on the Kansas side of the state line in Kansas City.
The “Missouri Clean Energy Initiative” requires utilities to produce higher percentages of power through renewable sources. The mandate has obvious visible benefits, but the costs aren’t as easy to see. The initiative gives utilities the incentive to circumvent the spirit of the law while providing an eco-friendly public relations shield.
Saint Joseph is considering licensing contractors who work within the city. However, occupational licensing adds costs and decreases competition without improving quality or safety. The free market is best served by competition, not by restricting how somebody can make a living.
Although Missouri’s Textbook Transparency Act is intended to lower the costs of higher education, the actual provisions of this bill will not achieve that purpose. Informational mandates and regulation of the ways that textbooks can be sold would decrease marginal producer profits, in many cases passing those costs on to students.
Counties in Missouri have for decades had the power to levy annual license fees on any public establishment that hosts a pool table. A holdover from earlier times when pool halls were seen as social ills, the tax remains in many areas today. This amounts to an endorsement of some types of recreational activities, and a punishment of others.
Stop the ceaseless moves toward greater regulation of occupations in Missouri. Stop allowing existing businesses to limit their own competition and call it safety or consumer protection. Realize the harm that is done to our economy by occupational licensing requirements, and the barriers it can place on entry-level workers who are meeting service needs within their community, the essence of the free market.
Many of us who have elderly family members living in nursing homes feel a natural urge to protect them through government regulation. But before passing new legislation, it’s important to determine whether the proposed regulations will actually have the desired effect of protecting Missouri’s elderly citizens.
Natural disasters and terrible weather inevitably lead to warnings about price gouging. But high prices during emergencies are simply a measurement of supply and demand. If prices aren’t allowed to rise, people who don’t really need scarce goods tend to buy more than they should, and businesses tend to produce less than they should, leading to shortages.
Those calling to reform the payday loan industry are misguided in their attempt to help consumers. Interest rates for such loans are exorbitantly high, it’s true, but that’s because the borrowers tend to be high credit risks. Capping those rates would likely drive some desperate consumers to even more odious sources of credit. Programs to increase financial literacy would be a much more effective solution.
Most industries are open to all firms willing to make the necessary initial investments to enter the market. If I want to open a bar in my neighborhood, can clear the zoning restrictions, and have the necessary capital to rent a space, fill it with booze, and market it to my prospective customers, then that bar will open, with me as its proprietor. This open process creates an environment in which businesses compete for customers, encouraging the innovation that leads to higher quality and lower prices. Requiring a prospective bar owner to obtain a permission slip showing a need for another bar in their neighborhood would obviously be ridiculous. Unfortunately, this is exactly the requirement made by the state of any entrepreneur looking to offer health care services.
Imagine if the law required every restaurant to serve its customers a four-course meal. Cafeterias and fast-food chains would be out of business. Eating out would become more expensive. There would be fewer restaurants to choose from, and a lot of people might just stay home for dinner. The only people who would benefit from such a law are the owners of upscale restaurants. They’d make out like bandits as the law put their competition out of business.
