Mmmm … Cake

Posted on by Dave Roland

With all due respect to my colleague, Sarah, the most ridiculous regulation imposed on the food industry comes from the recent decision by the Los Angeles city government to ban new fast-food restaurants from opening in poor neighborhoods. There was an excellent piece on this regulatory nightmare written by William Saletan at Slate.com, and another for the Los Angeles Times by Joe Hicks, but I want to reiterate several of the reasons why this is such a terrible idea:

  • The fast-food ban assumes that poor people can’t be trusted (and therefore have no right) to make decisions for themselves. This is paternalism at its ugliest, because it says that people’s freedom can and should be stripped from them if the majority believes their choices might prove to be unwise.

  • The ban ignores the realities of these communities. As unhealthy as fast food can be, it is the most convenient, most affordable way for many people to get a meal. Even if someone in a poor community had the time to shop at a grocery store and fashion home-cooked meals, it is far more expensive to purchase fresh foods and the means to prepare them than it is to swing by a local fast-food restaurant. Especially with the escalating cost of food, families worried about day-to-day survival can’t always afford the luxury of securing the most nutritious meals.

  • Fast-food restaurants provide jobs for unskilled workers. While, as Dave Chapelle’s satirical take on this issue points out, these sorts of jobs aren’t likely to end poverty, they do bring money into the community and offer a first step toward more profitable types of employment. The fewer fast-food restaurants in the community, the higher that area’s unemployment level will be.

  • The ban prevents competition in the fast-food market. Los Angeles has only banned new fast food restaurants, insulating the existing businesses from competition. Not only does this alleviate some of the pressure to keep menu prices down, it also allows the existing companies to pay rock-bottom wages because workers have fewer alternative employers.

Unfortunately, as with many ill-advised government schemes, this one seems to be catching on.

Ameren’s Answer to Our Energy Needs

Posted on by David Stokes

Being an environmentalist opposed to nuclear power is like being a vegetarian who is starving but still refuses meat. The solution to all your primary goals and needs is right in front of your face, but you still refuse to alter your mindset to see it. Let’s see here: Fewer carbon emissions? Check. Clearner burning energy? Check. Reduced use of fossil fuels? Check. Add in the benefits of more affordable energy and a decreased use of foreign energy sources, and I have never understood the opposition to nuclear power.

A short time ago I half-jokingly wrote about how the disaster movies of the 1970s helped fuel the safety-obsessed society we now live in. Smarter people than I have already constructed this equation: One overrated movie + one poorly timed, frightening, but ultimately minor accident + an enormous amount of activism from certain types opposed to nuclear power = a halt on expanded nuclear power in America + more dependence on the exact thing (oil) that environmentalists don’t like in the first place + higher energy costs for everyone.

What is the point of all this? AmerenUE wants to expand its nuclear plant in Cab Callaway County. The Fulton Sun has the story here, about a recent public hearing on the proposal. One of my neighbors showed up to oppose it:

Drey claimed that a natural disaster such as an earthquake or a terrorist attack would cause massive ecological and health problems for a very large area.

“Someone could get in with a plastic explosive through a metal detector and drop it into the plant and that would be the end of Callaway County and the rest of us,” she said.

Where to begin? First of all, the plant is already there (thankfully). It’s not like a terrorist is going to say, “Well, now they have two reactors instead of just one, so let’s target it. Why would we have wasted our time trying to detonate just one nuclear reactor? But now that there are two, it is worth our efforts!” The same goes for earthquakes, but I trust that the engineers who built it — and will build it — have, you know, considered that.

Everything has a cost and a risk. The extensive use of nuclear power has shown that it is safe — except, perhaps, when you let it be run by communists. Congressman Todd Akin (definitely not a communist, but an engineer) has proposed major revisions to American’s energy policy that include expanding the use the nuclear power:

“I have always been a supporter of nuclear energy,” Akin said. “The rewards are substantive as far as its low cost energy and its cleaner.” He noted that nuclear power becomes a more attractive energy source in the context of global warming.

I could not agree with him more.

Oldie but Goodie

Posted on by Sarah Brodsky

I frequently run into critics of parental choice in education who oppose tuition tax credits, charter schools, and other alternatives to the traditional public schools. They argue that these alternatives won’t meet expectations, haven’t succeeded in the past, or perhaps that they’ll even have harmful effects on society. For example, a comment on this post I wrote earlier in the month suggests that charter schools shouldn’t be expanded because not all such schools have a proven track record.

Every time I hear these arguments, I’m reminded of a post Megan McArdle wrote last year. She presents 11 of the most common criticisms of parental choice, and debunks them all. Although she refers specifically to voucher programs, I think her reasoning applies to all the other choice initiatives that are on the table. Here’s how she responds to the oft-heard statement, “Vouchers don’t work”:

Vouchers are no panacea, and they may not work at all. But we know that what we’re doing now isn’t working, and moreover, hasn’t worked for going on fifty years. Unless you’ve got compelling evidence that your plan will overcome all the barriers that have doomed urban school reform for decades, and actually succeed in educating more children (rather than enriching the lives of teachers, administrators, and curriculum salesmen, who certainly have been helped by the many failed educational overhauls), why not let a thousand points of light bloom?

Read the whole thing!

Regulating Restaurants

Posted on by Sarah Brodsky

There are myriad proposals out there to create onerous new regulations, but this one takes the cake:

:In New York City this summer, a law kicked in requiring chain restaurants — from Starbucks to Burger King — to display on menus and menu boards the caloric content of the food they serve. In five other cities and counties elsewhere, similar labeling laws will take effect in coming months.

If the regulators’ goal is to help people make healthier choices, these regulations will probably do just the opposite of what they intend. Collecting information on calories is expensive, and the cost of complying with these laws will be most easily borne by the big fast-food chains. Small restaurants with potentially healthier fare will face this huge obstacle to setting up business. So we could end up with a situation where people know exactly how many calories are in each hamburger at McDonald’s but don’t care because that’s the only place to eat out.

(Not that they care so much now. Everybody knows that fast food isn’t good for you, even if they don’t have the exact calorie count in front of them when they order. It sells anyway.)

Fortunately, this concept hasn’t caught on in Missouri. Let’s hope things stay that way.

SMI on the Air

Posted on by David Stokes

We are a little late putting this up, but you can listen in to the second half of our appearance on the Gary Nolan Show in Columbia on August 6. They only have the second hour up online, which featured Dave Roland talking about property rights and then a round robin with all three of us to close it out. I can’t think of a more productive way to spend an hour while you watch the Olympics tonight than to listen to it!

Congrats to Gary on his marriage; we thank him again for inviting us to appear while he was on vacation.

Reason Weighs In on Ethanol; ACC Weighs In on Reason

Posted on by David Stokes

And so goes the circle of life. With all the recent crossover between the Show-Me Institute, Reason, MoDOT rankings, etc., I feel the need to at least point out that Reason has released a new piece about the ethanol industry in America. Now, we didn’t have anything to do with this study, although we did release our own case study two months ago.

Dave over at the Arch City Chronicle was kind enough to note the work we have done with Reason, and the work of ours that they have carried in their 2008 privatization report. But back to ethanol.

The relevant Reason TV episode is very powerful. Please take a few minutes and watch it. The undeniable truth of the ethanol scam is that the entire industry would collapse if not for the subsidies and tariffs that prop it up. And, by the way, with gas prices as high as they are, this is the perfect time to find out: If an unsubsidized and unmandated ethanol product can’t succeed now, then when will it?

Missouri Private School Regulations Make the Grade

Posted on by Sarah Brodsky

The Friedman Foundation has graded all 50 states on how they regulate private schools. The states with the highest grades have clear regulations to protect health and safety, but don’t set up barriers to entry or stifle innovation. Missouri did very well, with a grade of A-.

I’m sure the good regulatory environment in Missouri has contributed to its flourishing market for private education. There are many successful private schools throughout the state; GreatSchools lists 187 in St. Louis, 65 in Kansas City, 14 in Columbia, and 13 in Springfield.

Casinos Stacking the Odds in Their Favor

Posted on by Dave Roland

The Secretary of State recently approved Proposition A for inclusion on the November ballot. While I express no opinion as to whether this measure should pass or fail, I think it is important to point out that one of the effects of this proposition, if passed, would be to impose a cap on the number of casinos in the state, prohibiting the state from issuing permits to any potential competitors in the gaming market.

This is not a new strategy. In many industries, most notably the taxi and limousine industry, entrenched businesses try to block competition by establishing a licensing system that prevents new businesses from cutting in on their action. This sort of anti-competitive action harms consumers by removing all incentives for the companies in the restricted market to keep prices low or focus on providing excellent customer service. It also harms entrepreneurs willing to provide those services in a more affordable, more customer-friendly way because it erects enormous barriers to their entry into the market. The only way these newcomers can pursue their business is to purchase a permit from an existing company, and those permits (which cost their original recipients almost nothing) don’t come cheap. In some cities, the right just to operate a taxi company can cost hundreds of thousands of dollars.

In Missouri, if Proposition A is adopted by voters, it will likely mean that the currently existing casinos are insulated against new competitors, and the existing casinos will gain the right both to choose who will be allowed to replace any failing operations, and to claim millions of dollars in exchange for that right. It is not likely that this will directly affect those who choose not to patronize casinos, but anyone who enjoys gaming needs to be aware of the potential consequences of this proposition.

For Interior Design Protectionism, the Writing Is on the Wall

Posted on by Dan Grana

Recently, the Institute for Justice released a response to criticisms aimed at their ongoing case against the regulation of interior designers. IJ’s original study, Designing Cartels, exposed arguments in favor of certification and licensure as baseless stabs at protectionism by current practitioners. Many objections leveled against the pro-regulation segment of the industry across the nation are identical to those relevant in St. Joseph’s consideration of contractor licensing.

The fact of the matter is, almost any attempt at regulation is orchestrated by industry insiders to address perceived threats to consumer satisfaction or public health. That alone wouldn’t be so troubling if the dangers they warned of were usually substantive. Personally, I see no need to use legislative tools like those that endorse the competency of doctors and nurses as prerequisites to practicing interior design.

In Missouri, interior design certification is handled by the Interior Design Council. Although individuals are still free to make decorating suggestions without the accreditation of a registered interior designer, the regulatory distinctions currently in place deny them the ability to advertise themselves competitively. The differences are akin to the distinction between a bookkeeper and a CPA. In the one case we sacrifice the virtues of a competitive free market to ensure that our bills are handled according to a standard. In the other, we endure higher prices and fewer alternatives in exchange for decorators who have spent superfluous amounts of time fulfilling coursework that is only questionably necessary to their trade.

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