I am not a lawyer, so I am going to keep this all very simple. As one legal blog explained it:

Under the Chevron doctrine, if Congress had not directly addressed the question at the center of a dispute, a court was required to uphold the agency’s interpretation of the statute as long as it was reasonable.

This obviously puts a great deal of power into the hands of regulatory agencies. All they had to do in interpreting federal rules for regulatory purposes was not be insanely crazy, and courts would be required to defer to the agency’s judgement. These were glorious days for regulators. Unlike, say, now.

If you believe, like I do, that regulatory powers have expanded too far, then overturning Chevron was a strong move for individual liberty and is something to be celebrated.

But it is a federal case. We have our own regulatory issues in Missouri. That is why legislation has been introduced to apply these same changes to Missouri laws. As the summary of Senate Bill (SB) 221 explains:

This act modifies the standard for review for a state agency’s interpretation of statutes, rules, regulations, and other subregulatory documents. Specifically, a court or administrative hearing officer shall interpret the meaning and effect of such statutes, rules, regulations, and documents de novo, rather than de novo upon motion by a party if the action only involves the agency’s application of the law to the facts and does not involve administrative discretion. Further, after applying customary tools of interpretation, the court or officer shall exercise any remaining doubt in favor of a reasonable interpretation that limits agency power and maximizes individual liberty. [emphasis mine]

Right now, a state agency is suing a woman in St. Louis for practicing dentistry without a license. The question is whether installing tooth jewelry should require a dental license (which is, obviously, not easy to get). If Missouri’s Chevron legislation passes, the regulators in this instance would have to act more strictly under the law as written by the legislature and rely less on various interpretations of that law by the Missouri Dental Board, which, believe it or not, may be a bit biased. If this case goes to court, the judges will no longer have to just assume the dental board is correct.

I don’t know whether the person in question is practicing dentistry or not. I do know that a Missouri where the courts don’t automatically assume the regulatory agency is always correct is a freer Missouri, and that is something I want.

The post The Chevron Debate Comes to Missouri appeared first on Show-Me Institute.

The Current State of Occupational Licensing in Missouri

In 2020, Missouri adopted a form of universal licensing reciprocity, allowing most professionals (there are some exceptions) who have held a valid license issued by another state for at least one year to practice in Missouri at the same occupation or level, and have all Missouri licensing requirements waived.

However, this policy has a little-known exception, known as the “compact exception,” which states:

[Reciprocity] Shall not apply to an oversight body that has entered into a licensing compact with another state for the regulation of practice under the oversight body’s jurisdiction.

A licensing compact is an agreement between multiple states to recognize each other’s licenses, but it is governed by its own set of rules and oversight. One reason that licensing boards like to join compacts is because it makes it easier to process new licensure applications. These compacts act as a central hub with all the information needed for processing the application.

However, due to the “compact exception,” joining certain compacts can increase the regulatory burden in Missouri.  This is because the compact exception overrides universal reciprocity, and boards can limit eligibility to only its member states and those following the compact’s rules. In such cases, licensing reciprocity only extends to workers from other states in the compact, instead of any qualified and licensed person who wants to move to Missouri and begin working. Yet, some compacts explicitly preserve reciprocity and state regulations, and allow the compact to serve as a voluntary option for licensing. Given this, officials must carefully evaluate how each compact would treat our universal licensing regime if passed.

Different Missouri Compacts

Senate Bill (SB) 109 is one compact that may not fall into the trap of increasing the regulatory burden in Missouri. While this compact only has 10 member states, it appears that this compact is voluntary and serves as one option to streamline the transition for dentists and dental hygienists across state lines. It states:

Allows each state to continue to regulate the practice of dentistry and dental hygiene within its borders;”

“Eligibility or ineligibility to receive a Compact License Privilege shall not limit the ability of a Licensee to seek a state license through the regular process outside of the Compact.

Since this compact does not appear to supersede Missouri’s licensing reciprocity, it wouldn’t negatively affect people moving to Missouri.

Always Read the Fine Print on Licensing Compacts

In theory, compacts should make it easier for Americans to move all around the country, but some act as a pathway for asserting regulatory control. A compact can be used by interested industries to raise licensing requirements in states that cut back on regulation, increasing costs for both consumers and potential entrants alike. It is important to read the fine print to ensure that our universal licensing reciprocity is not superseded.

The post Why Does Missouri Want to Keep Joining Compacts? appeared first on Show-Me Institute.

Both reports warn against uncritical reliance on NGOs. The Buckeye Institute’s report highlights how groups like the National Association of Insurance Commissioners (NAIC) and the International Code Council (ICC) provide prepackaged regulations that states often adopt with minimal changes. This might simplify rulemaking but risks surrendering control over policies meant to serve unique state interests.

Similarly, the Texas Public Policy Foundation stresses that NGOs wield significant influence due to their specialized knowledge. However, when this expertise is accepted without scrutiny, state leaders may find themselves locked into policies shaped by national or even global agendas, often misaligned with local priorities.

Transparency emerges as a key recommendation from both reports. The Buckeye Institute calls for opening up the entire regulatory process, urging state governments to publicly disclose all interactions with NGOs, including drafts, meetings, and financial agreements. This would allow taxpayers to see who’s behind the policies affecting their lives.

The Texas Public Policy Foundation also emphasizes transparency but frames it as a cautionary principle: state leaders must “exercise extra caution and deliberation” when adopting NGO-driven proposals. Their point is simple—just because NGOs offer expertise doesn’t mean their rules are the best fit for every state.

The Buckeye Institute goes further by offering specific policy solutions:

• Legislative Oversight: Every NGO-driven regulation should face legislative review before adoption.
• Public Input: Create forums for broader public participation in the rulemaking process to counterbalance NGO influence.
• Tailored Standards: States should adapt model rules to fit local contexts rather than adopting them wholesale.

The Texas Public Policy Foundation takes a broader approach, focusing more on raising awareness about the issue. The message: recognize the influence NGOs wield and remain vigilant.

Missouri’s policymakers should take these warnings seriously. Kansas City’s adoption of the 2021 International Energy Conservation Code (IECC) serves as a cautionary tale​. The city’s unmodified adoption of the more costly standards stalled new home construction.

Missouri must balance benefiting from NGO expertise with preserving state sovereignty. Public transparency, legislative oversight, and tailored regulations are essential safeguards.

As the Buckeye report warns, if policymakers fail to inspect every policy offer carefully, they risk inviting a Trojan Horse into state rulemaking—complete with hidden costs and unintended consequences. In an era of growing regulatory complexity, vigilance is necessary.

The post When NGOs Make the Rules: Safeguarding State Sovereignty appeared first on Show-Me Institute.

Every English city uses this basic framework, ensuring all elements of city life are working together to benefit everyone’s well-being. [emphasis added]

If New York City and Houston do not have a comprehensive plan, then our Missouri municipalities don’t need one either. As Jane Jacobs said about urban planning, “The pseudoscience of planning seems almost neurotic in its determination to imitate empiric failure and ignore empiric success . . .”

There is general agreement that some type of infrastructure planning is required by municipalities. As cities grow or change, there need to be plans in place for the installation of sewers, gas and water pipes, electrical lines, sidewalks, and roads. But urban planners rarely maintain focus on those needs. Planners frequently and disappointingly mandate the mundane. The growing sameness of so many American communities is a direct result of municipal plans requiring a consistent look in a community. When you realize that most zoning codes were copied (the literal cut-and-paste prior to computers and copy machines) from other cities, that most cities use the same (or very similar) building codes, and that zoning codes limit the options available for many lots, nobody should be surprised by the loss of distinct urban aesthetics across the nation. As Cody Lefkowitz wrote about the depressing sameness of urban areas now:

Before the rise of zoning and consolidation of development, the country was full of special places with wonderful vernacular architecture. These were cities and towns built by many hands. Cities and towns that aged gracefully through generations of stewards iteratively building from the foundations of their predecessors. New Orleans, that much-loved city, is one of the most exceptionally beautiful places one can imagine, with an identity as unique as it is mystifying. When you’re there, you could never mistake yourself for being anywhere else.

Municipal planning commissions are empowered to establish comprehensive plans for their cities and to approve changes, amendments, and variances to the current plans or zoning codes. They are largely advisory. The city council can easily approve a change the planning commission rejects, like in Kansas City when the council unfortunately approved building height limitations for the Country Club Plaza. In Creve Coeur in 2013, the city council approved changes to allow a new grocery store that the planning commission had rejected. City councils can also reject changes the planning commission approves.

The point is not that elected officials should be subservient to the planning commission members; far from it. The point is to overcome the idea that planning is some kind of urban science with a large public benefit. The planning process is wholly subject to the same political aims, interest group pressures, and regulatory capture that all of government is. Furthermore, the process institutionalizes and legislates the bias toward uniformity and present-day assumptions. Counties and municipalities should limit their use of planning to necessary infrastructure issues and refuse to engage in it otherwise.

The post The Last Thing Missouri Needs Is More Urban Planning appeared first on Show-Me Institute.

In the Progressive Era of the United States (the late 1890s to the late 1910s), an increasing number of “barber’s itch” (a contagious skin infection spread by using unclean razors) outbreaks led to the creation of barber licensures to ensure the implementation of sanitation efforts to prevent the spread of this ailment. One health column from that time noted that “90 percent of the justification for licensure was Barber’s Itch.”

It didn’t take long for the justification for regulation to evolve as motivations became increasingly self-interested. Unionized barbers began advocating for regulations in order to bar discount barbers from driving down prices. Lobbying included restricting barbers from working on Sunday (which affected discount barbers who worked part-time on the weekends), not allowing some barbers to offer free shoeshines with their haircut, and unique to Missouri, requiring “conversational ability.”

Most of us enjoy a barber who can carry on a conversation, but is this something that needs to be regulated by the state? It seems silly, but we still see the remnants of this type of requirement today where barbers in training have to spend 10 hours on “professional image” and another 10 hours of training on “salesmanship and shop management.”

Though public safety and “barber’s itch” were the impetus for licensing barbers, today only 5.5 percent of the required 2,000 hours for the Missouri barber’s apprenticeship relate to sanitation and sterilization procedures.

The fact is licensing creates an incentive for incumbents in an industry to use these licenses to drive down the number of competitors. This is often known as regulatory capture.

Smith’s analysis found that occupational licensing led to a 45% increase in haircut prices and a 55% increase in shaving prices, but there was no evidence that barber’s itch declined. This aligns with a Florida State meta-analysis, which observes that only 16 percent of occupational licensing studies show a positive relationship between product quality and licensing.

Today we rarely worry about barber’s itch, yet we require even more laborious licensing requirements. Policymakers should review these requirements for all professions to ensure the licensure process is providing a legitimate, beneficial service and not just helping pad the wallets of those already in the profession.

The post A Cut Below: Lessons from the History of Barber Licensure appeared first on Show-Me Institute.

The arguments in favor of this effort are clear to see. From the press release:

The study [a study issued last October by St. Louis REALTORS] found there are at least 42 building code books used across 89 jurisdictions in St. Louis County. Together, the codes that were counted had a whopping 809 chapters, totaling about 17,000 pages.

42 different codes governing the work of plumbers, electricians, contractors and other professions is a lot. A contractor can be working on projects in neighboring cities and have different codes to follow. Admittedly, those codes are usually very similar. But there are differences between codes, and those differences undoubtedly lead to confusion and higher costs in construction in St. Louis County.

While the benefits of this change are obvious, the concerns are more nuanced. Interest groups use codes to advance their goals, which in most cases is profitability and higher pay. Unions use codes to limit competition. Industries use codes to require people to use items that are profitable to sell. In 1999, the Pipefitters Union tried to dramatically tighten the St. Louis County mechanical code for the benefit of its members by excluding competing unions and non-union workers. It failed the first time but succeeded in 2010 at getting those laws changed. More recently, the sprinkler industry has unsuccessfully attempted to use codes to mandate sprinklers in new homes. There is now a ban on such a requirement in Missouri. A sprinkler requirement would be great for the sprinkler industry, but it would increase the price of new homes. These kinds of decisions should be up to the home buyer, not the sprinkler industry.

Those are just a few examples. My concern is not that we would have fewer codes in the county. Some type of simplification could be beneficial. My concern is that a comprehensive code system would be used by interest groups for their own benefit at the expense of taxpayers and consumers. It is easier for an industry to capture one code than many codes.

Hopefully, the beneficial aspects of this proposal can be accentuated, and the risks reduced, because there are parts of this proposal that are genuinely needed. If codes are consolidated in St. Louis County, it would be imperative to have the boards that oversee the codes represent the public and not interest groups.

The post Should Building Codes Be Unified in St. Louis County? appeared first on Show-Me Institute.

Regulatory capture occurs when special interests gain control of regulatory agencies governing their own industries—regulators making the rules for themselves. You may think that a captured licensing board would have lenient regulations (who wants to subject themselves to strict rules?) but it’s much more common to see stricter rules with a captured licensing board. This is because the licensed board members directly benefit from punishing competitors and making it harder for newcomers to enter the market.

According to the report, cosmetology is licensed in all 50 states and the District of Columbia. Cosmetology boards typically consist of members who currently hold a license (incumbent members), members who represent cosmetology schools, and members of the public. Boards that are dominated by members who currently hold a license are more captured than boards dominated by members of the public. Missouri’s cosmetology license board has 11 members: 7 incumbent members, 2 school owners or instructors, and 2 public members. It’s clear where the balance of power is on the Missouri board.

Regulatory capture is one reason lawmakers should implement a five-year sunset provision on occupational licenses and licensing boards. With this provision, legislators would review each board every five years, and legislators could implement changes to fix problems (such as regulatory capture).

Unfortunately, regulatory capture doesn’t only affect those in (or who want to be in) the industry. Limiting competition lowers the supply of cosmetologists and raises the cost of your haircut. Everyone loses—except those already holding the occupational license, of course.

The post Regulatory Capture in Cosmetology Licensing Boards appeared first on Show-Me Institute.

Missouri’s Cosmetology and Barber Licensing Board is designed to consist of 11 members (though there are only 9 currently): 7 members who hold either a cosmetology or barber license (only 5 currently), 2 members who own accredited cosmetology or barber schools, and 2 members of the public. With these numbers, this board is dominated by license holders, and they have the influence to make one of two things happen: They could relax regulations and make things easier for themselves as licensed workers, or they could make regulations stricter and make it harder for others to enter into the industry. More often, we see the latter occurring because license holders don’t want more licensed workers in the market—that’s just more people competing with them for customers. And stricter regulations can translate into fewer options and higher prices for consumers.

Of course, those in the industry have specific knowledge, which could be helpful in creating rules and regulations for a given industry. However, it’s difficult to reconcile this with the fact that those in the industry have direct self-interest in keeping the barriers to entry high.

If regulators are creating and enforcing regulations based on their interest and not the interest of the public, we have a problem. This isn’t to say that this is definitively happening with the Cosmetology and Barber Licensing Board, but the incentive is there. Occupational licensing puts a burden on workers and consumers, and if there are additional problems such as regulatory capture, Missourians may be burdened even more. It may be time to rethink some aspects of occupational licensing, such as the structure of the boards or if these occupations need to be licensed at all.

The post The Problem with Regulatory Capture appeared first on Show-Me Institute.

With Super Sunday just around corner, we will cite the Apple commercial that introduced the Apple Macintosh personal computer in January 1984. It had the punch line: “You’ll see why 1984 won’t be like Nineteen Eighty-Four.”

That was an allusion to the dystopian future described in George Orwell’s book, 1984. The ad opens with a lone woman on the run. She bursts into an auditorium, where Big Brother—speaking not in person, but from a towering television screen—is haranguing a frightened mass of people. Then, spinning like a top, she hurls a sledgehammer at the figure on the screen. It flies high and right. Big Brother is silenced. The voice-over followed.

In this 60-second spot that aired during Super Bowl XVIII, the first Macintosh ad captured the one thing that an all-powerful or monolithic state cannot easily afford to tolerate. That is, any real expression of individual freedom and initiative.

We believe that is a timely message not just on the eve of another Super Bowl, but still more in the context of the current debate over economic and public policies.

Following a long period of stagnation, the U.S. economy has come roaring back to life. We now have full employment, a booming stock market, and rising wages for most workers, including the lowest paid.

How did that happen? Fast answer: Over the past three years, the free market became a whole lot freer.

In its first year in office, the current administration delivered on its promise of sweeping regulatory relief. Suddenly, the regulatory state, which had expanded by leaps and bounds during the previous administration, began to contract . . . and that has continued, as a result of major changes in policy and direction at the Environmental Protection Agency, the Labor Department, the Department of Health and Human Services, and other arms of government.

Then came the biggest tax cuts and tax reforms since the Reagan era. With the passage of the Tax Cuts and Jobs Act of 2017, the administration lowered income taxes across the board and left more money in the pockets of individuals and business entities alike.

So, we are now living in the best of times economically. How could anyone argue otherwise? But they can—and are. Never mind what the numbers say.

Among leaders on the Left, there is a broad consensus that we are living not in the best of times, but in the most desperate of times—almost as if we were back in the early years of the Great Depression, when industrial production plunged, unemployment soared, and more than a quarter of the population was without any income at all.

In the badly mistaken belief that capitalism and free enterprise have run amok, they are promoting economic policies and ideas that are diametrically opposed to those that got us where we are today.

With little disagreement between them, these same leaders want free college, free health care for all, universal child care, and the banning of fossil fuels as part of a many-splendored Green New Deal—and they don’t appear to care what anything costs or what the adverse impact may be on ordinary people.

Apart from the astronomically high price tags associated with all of these programs—which would quickly bring the economy to a shuddering halt if any serious attempt were made to implement them—it is worth thinking about the underlying message that the leaders who are espousing this great agglomeration of multi-trillion-dollar programs want to send to the American people.

The real take-away message comes down to this:

·         “If you or any of your children want to go to college, don’t worry about being able to afford the college tuition. We’ll take care of the problem for you.”

·         “If you’re worried about health care, don’t think you have to buy health insurance or do anything else. We’ll take care of you.”

·         “Got young children at home and want to go to work? We’ll take care of the kids, too.”

If all that sounds too good to be true, it’s because it is too good to be true. Someone has to pay for college tuition—and all the other freebies—and that can only mean higher taxes on working people at all levels of income.

As George Orwell, the author of 1984, understood very well, a free people who stop taking care of themselves and rely on the state to do everything for them make a very bad bargain. It is one of the insights you find on almost every page of his book.

When people cease to make their own plans—and trust government to make decisions for them in more and more areas of their lives—they commit the error of failing to make full use of their capacities as individual human beings. In failing to make the most of their own gifts and talents, and their own dreams and aspirations, they sell themselves short . . . and lead less-fulfilling lives.

How prophetic was Orwell’s book? Not that this was the author’s intention, but how well did the book foretell the future of socialism in his native country—this being Britain in the first few years after World War II?

The British elections in mid-1945 marked a major turning point—not only sweeping Winston Churchill and a Tory-led government out of office, but also standing as an unquestioned affirmation of the desire of most of the British electorate to bring a new government to power that was fully committed to socialism.

So how did things work out in Britain during the three and a half decades when socialism, as opposed to free-market capitalism, was the prevailing mode of government—a period lasting from 1945 to 1979, when Margaret Thatcher came to power?

Socialist Britain did not become a police state. But it did undergo a metamorphosis. It changed from a powerful and dynamic country into the perennial “sick man of Europe,” reeling from one financial crisis to another in a sustained period of economic stagnation and decline. It became a country obsessed with issues of job security and income redistribution as different groups competed with one another in trying to wring more favors out of an increasingly improvident state. There was little or no new business formation—none of the spark provided by people like Steve Jobs and products like the first Macintosh computer.

Even the Labor Party could see the futility of its centralized, interventionist approach. Jim Callaghan, the last Labor prime minister before Thatcher, admitted in Parliament: “Let me say that of course there has been a fall in peoples’ standard of life. It has fallen this year and will fall again next year.”

Fortunately, Thatcher supplied the leadership that was necessary to pull Britain out of the decades-long decline that began with the wrong turn that it took at the end of World War II.

Is there any possibility that we as a country could make the same mistake that Britain made in 1945?

The danger is there. It is time to throw another hammer—or sledge-hammer—into the works of another historic wrong turn—this time involving the United States.

This does not require heroic action on the part of a solitary individual. But it does require a willingness on the part of many people to play the same kind of role within their own group of friends and relatives that Thatcher played in Britain—in stressing the paramount importance of individual freedom and initiative in securing the future we want for ourselves and future generations.

The post Is There a 1984 in Our Future? A Super Bowl Reflection appeared first on Show-Me Institute.

The problem is that in the absence of state action, local governments have imposed their own licensing regimes on their respective electricians, effectively requiring already-qualified electricians to re-license if they want to practice in, say, Springfield, if they aren’t already licensed there. In that respect, the plight of Missouri electricians parallels that of doctors who can’t easily practice across state lines: Onerous licensing requirements create barriers to entry that negatively impact practitioners and also reduce options (and increase prices) for local customers who would benefit from greater access to these services.

That regulatory tension may be relieved if a Senate bill currently before the House becomes law. SB 240 would allow local municipalities to continue licensing electricians, but it would also require them to accept a statewide electrician license without also requiring the local licensing requirements be fulfilled. Moreover, the bill would grandfather many electricians operating already under a local license into the statewide licensing framework. That means that a longtime electrician with a local license could access a statewide license, and with that statewide license, she could access other municipalities—whether a city had its own licensing regime or not. Also worth noting: the bill passed the Senate unanimously. Given the slow pace of other legislation through that chamber this session, unanimous passage of this bill is amazing in its own right. 

Whether the bill passes the House remains to be seen, but electrician licensure reform certainly deserves consideration. Our ongoing skepticism of state licensing remains in effect, and as time goes by, regular audits of the effect of electrician licensure would be necessary to ensure it does not fall victim to regulatory capture. Future legisuatures should also consider national reciprocity measures for these licenses so that Missouri electricians and customers are able to work where they want, and hire who they want at the best price. That said, the proposed reform—which ultimately simplifies life for Missouri electricians and customers alike—would be an improvement over the current licensing system in effect in the state.

The post Statewide Electrician License Advancing in the House appeared first on Show-Me Institute.

In the past, when companies or individuals violated MTC policies, police in Saint Louis City and County enforced the commission’s rulings by ticketing drivers. That is, after all, how the region responded to Lyft in 2014. However, Saint Louis City has flatly refused to use its police to block Uber, and police in Saint Louis County haven’t done much either. While the MTC could have used its very limited law enforcement capacity to attack Uber in 2015, the commission found itself in the midst of a public relations nightmare, with the state legislature seemingly ready to step in and completely overhaul the MTC. As a result, Uber now operates in Saint Louis, the police do nothing, and the MTC (while reiterating that Uber is acting illegally) keeps its head down.

 Now that the state legislature has failed either to reform the MTC or implement statewide ridesharing regulations, and with the unprofessionalism of MTC commissioners fading into memory, the taxi commission is reportedly planning to remind everyone who runs this town. As the Riverfront Times reports, the commission will begin seeking out UberX drivers and citing them for operating without a commission license. If such an act does not prompt Uber to shut down its services in the region altogether, it may seriously diminish the number of people willing drive for the company.

Whether or not the MTC will follow through on its threats is an open question. But what Saint Louisans should recognize by this time is that Uber, operating outside the regulatory framework of the MTC, has provided an innovative new service for all Saint Louis residents for almost a year. Where is the evidence that Uber is dangerous? Where are the market failures that the MTC needs to correct? From what we’ve seen so far, it seems that the ridesharing market operates just fine without the MTC.       

The post Uber Under Threat in Saint Louis appeared first on Show-Me Institute.

“…allow individuals to rent a home, apartment or even just a single bedroom for short-duration stays, usually just a few days at a time, using Web-based platforms that advertise to travelers.”

The most prominent example of this type of company is Airbnb. Much like ridesharing, short-term rental services are a prominent example of the “sharing economy,” where technology allows individuals (and not just well capitalized businesses) to make money renting out the things they already own. A major problem with the expansion of the sharing economy is local regulations, which straight-jacket industries into forms city officials and existing businesses are used to, and benefit from. The good news is that most of the cities the recent survey looked at, likely seeing an opportunity to encourage new business and attract more visitors, are making reforms to allow short-term rental services to operate easily.

                But not Kansas City. The city of fountains got an “F” for its regulations, because, as the report states:

“Kansas City has a tightly regulated short-term rental market that benefits special interests at consumers' expense. Both hosted and non-hosted stays are permissible only in commercial districts, such as a boarding house. No additional deductions are made for the city's legal framework, taxation, enforcement or licensing.”

The fact that Kansas City has made so little effort to reform its short-term rental regulations directly contradicts messaging from city officials about how they are all about attracting business and “millennials.” If creating growth and attracting young people is anything more than a rhetorical prop, city policy will have to actually create a welcoming environment for new types of services, services millennials demonstrably like to use.  Right now, it appears that city hall thinks handing out tax breaks to large companies is enough to qualify as business-friendly, and building a streetcar is the essence of cool. 

The post Kansas City Gets “F” Grade for Rental Regulations appeared first on Show-Me Institute.

Now, I’m a big fan of the Pledge of Allegiance. If I had my druthers, American schoolchildren would recite the Pledge of Allegiance at the beginning of every school day. In fact, I wouldn’t mind hearing a rousing rendition of God Bless America every Monday morning, now that I think about it. But as the debate wore on, I started to question the wisdom of whether or not we should have a state law requiring it. I started to see this requirement less as a reasonable request from our elected officials and more as a part of a broader trend of regulatory creep.

Most regulations and requirements make sense when they’re looked at in isolation, but they add up. By my count, members of the Missouri legislature filed almost 300 bills related to education this session, all probably reasonable to the folks who drafted them. But if all were enacted, think of the new burdens they would place on teachers and administrators.

As my old friend Rick Hess often tells eager young policy wonks hoping to remake the American education system through new laws and regulation: Government can make schools do things, but it can’t make them do them well. At best, the state legislature can require that the Pledge be part of the schedule, and the state department of education can create a reporting form that requires all 520 of Missouri’s school districts to affirm to the appropriate functionary that they’ve provided time for it, and during audits maybe some bean counter will double check the form. But that’s about it. They certainly can’t make sure the kids hold their hands over their hearts and say the Pledge with pride.

That said, maybe saying the Pledge is so important that even with the limited power that the state legislature has to actually get schools to do what they want, they should still make the requirement and direct the state department of education to do their level best to make sure it is followed. If that is the case, though, how does it compare to all of the other things that the legislature wants schools to do? If there is some conflict between varying requirements, how should schools weigh them against each other?

Our Tory compatriots across the pond offer a way forward. In 2010, the Conservative government of the United Kingdom implemented what they called “one in, one out” (later revised to “one in, two out”) that required government to remove a regulation of equivalent compliance cost for every new regulation that they proposed. Want to require a new form to be submitted to the Department of Business, Innovation, and Skills tracking how businesses recruit new employees? Lovely, not a bother at all. You simply must find another form that takes the same amount of effort or another requirement that takes the same amount of time and eliminate it.

The same logic could be applied to government regulation of schools. If the legislature wants to require the Pledge of Allegiance, or extra time for reading, or for teachers to have CPR training, they simply have to remove a requirement that takes up the same amount of time or costs the same. The hope would be that this would make lawmakers think before adding new regulations, because for every new idea they have, they and their staff will have to dig around to find something to jettison. It would also give them the opportunity to revisit regulations that still exist in the education code but have outlived their usefulness. Rather than adding on a kludge with every new directive, new requirements that are worthwhile are made doubly so as they also help remove an unneeded requirement. It’s addition by subtraction, and a win-win.

The post Making Regulations Count appeared first on Show-Me Institute.

We’ve written about this commission many times before, but to sum things up:

·         At least four of the nine commission members are taxi industry representatives.

·         The body used its regulatory discretion to pass pointless rules and freeze market entry for new companies. The MTC felt it had the ability to discern taxicab demand in the region, as well as the right to control taxi supply and industry practices.

·         The MTC dragged its feet over the entry of Uber and other ridesharing services, with regularly evolving justifications. While most other large cities initiated reforms to welcome these types of companies, the MTC still fights to block Uber from Saint Louis.

·         The commission itself devolved into bickering and infighting, with some members disgracing themselves and the region as a whole in the public arena.

The story of the MTC is a story of regulatory failure. A body designed to protect consumer interests was captured by industry representatives. The body then made competition very difficult or impossible, and essentially regulated out market innovation. If it were not for the disruptive effects of Uber, Lyft, and companies like them, does anyone doubt that it would have been business as usual at the MTC?

The for-hire vehicle market, and Saint Louis, are changing. The MTC, often using state enabling statutes as a shield, has shown itself incapable of dealing with this reality. Maybe Saint Louis would be better off without this taxicab commission. 

The post Missouri Legislature Considers Disbanding Saint Louis Taxi Commission appeared first on Show-Me Institute.

Well, things are not working exactly has insurers had planned. Just ask United Healthcare.

United Healthcare is the largest U.S. insurer by enrollment, and the company is warning that it may withdraw from Obamacare in 2017. The insurer has already suspended advertising for its Obamacare coverage and stopped paying commissions to insurance brokers for signing people up. It literally doesn’t want consumers to buy its products.

On a United Healthcare call Thursday with Wall Street analysts, Josh Raskin of Barclays asked, “Simply, how long are you willing to lose money in exchanges?” and then followed up, “Are you willing to lose money again in 2017, Steve?” United Healthcare CEO Stephen Hemsley replied: “No, we cannot sustain these losses. We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself,” adding that “we saw no indication of anything actually improving.”

Not only are enrollees in the insurance market sicker than expected, but thanks to budgetary language passed last year, the insurance companies' shortfalls are no longer the taxpayers' problem. Obamacare's "risk corridors" were designed to transfer some money from profitable insurers to less profitable insurers as a way to shield less successful insurers from the deep losses that could force them to leave the marketplace. Under the original plan, taxpayers would pick up the remainder of the shortfall—a bailout for insurers, negotiated by insurers, and financed by taxpayers. Today, the insurers will bear that risk alone, and appropriately so.

Of course, whether these taxpayer protections will endure in the years to come may depend on the pull of insurance industry cronies— not only in the private sector, but also those cronies who are currently part of the adminstration. The Washington Examiner's Timothy Carney vividly captures the current, and appalling, health care scene:

This is where the intimate network of the Obamacare insiders comes in. The Centers for Medicare and Medicaid Services (CMS) — which issued the pledge to fully bail out United Healthcare and its cohorts — is run by acting administrator Andy Slavitt. Slavitt is the former CEO of United Healthcare (while he held that position he contributed to Obama's 2008 election)….

Meanwhile, the insurance lobbyist leading the industry's push for more Obamacare bailout money is Marilyn Tavenner, Obama's previous chief of CMS, now head of America's Health Insurance Plans (AHIP). AHIP says risk corridors aren't the group's top focus, but Tavenner is speaking out on it.

In summary: Tavenner helped build the risk corridor program, and then went to the industry that would get the money. Slavitt left the insurer with the biggest losses, and now is the government official promising to bail out his former employer.

You can call it regulatory capture or you can call it a revolving door, but it is cronyism all the same. And it's of a kind that is especially troubling: the kind where cronies don't just try to regulate their own industry, but also try to loot the Treasury while they're in power. The question now is whether Congress will accommodate these cronies by explicitly removing last year's taxpayer protections or will stand by if Obamacare's bureaucracy tries to sidestep the law and hand out money to insurers anyway. We should find out one way or another in the next month or so; stay tuned.

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Just not legally.

On 10:00 A.M., Uber, a prominent national ridesharing company, simultaneously filed an anti-trust lawsuit against the Saint Louis Metropolitan Taxicab Commission (MTC) and launched UberX in defiance of that commission. This move followed the breakdown of negotiations between the MTC, Uber, and local government officials over new ridesharing regulations. Some MTC commissioners claim they have made all the concessions they can, and that they are simply enforcing state statutes on fingerprinting and background checks. However, Uber and other local officials claim that remaining regulatory barriers are unnecessary and will prevent Uber from serving the metropolitan area.

In addition to its inability to end Saint Louis’s status as the largest city in the United States without cheap ridesharing, the MTC continues to embarrass the city in its spare time. The latest incident came when a local resident submitted a sunshine request asking for comments and complaints received by the MTC in the last 18 months. One might expect a body whose core mission is to ensure quality cab service to have readily accessible complaint data, but that couldn’t be further from the truth. According to the MTC, complaints are not “readily kept in the ordinary course of our record keeping.” They charged the resident nearly $500 dollars, an amazing sum for files that most governmental organizations would have aggregated and digitized. Those who have read about the MTC’s reaction to a  Show-Me Institute sunshine request will be unsurprised by the MTC’s lack of professionalism.

It is exactly one year and seven months since Lyft, another ridesharing company, attempted to enter the Saint Louis market. Since that time, the MTC has constantly resisted reform, treated requests for information with contempt, insulted the public, and engaged in offensive infighting. How can a commission that cannot regulate its own behavior be expected to regulate the taxi market? How long must residents put up with this self-serving commission? As we’ve suggested before, it may be time for the state to disband the taxicab commission altogether. 

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MTC representatives, along with other opponents of ridesharing, criticize Uber and Lyft as being unsafe, unprofessional, and discriminatory. They argue that these companies need to be regulated so these problems can be addressed. But is the MTC really effective at protecting the consumer? Let’s ask some questions:

1. The MTC, unlike Uber or Lyft, specially requires cabs to pick up any customer and take them wherever they want to go. So taxis never refuse fares or avoid going to certain neighborhoods?   
2. The MTC has rules on insurance that they claim are more comprehensive than Uber and Lyft’s policies. So cabs never operate without proper insurance?
3. The MTC has a myriad of rules to ensure cab drivers dress and act professionally. So all cab drivers provide good service?

The answer to all these is an emphatic no. Cabs have ways to refuse fares and avoid certain neighborhoods. Drivers sometimes act unprofessionally and, as an editorial in the Post-Dispatch claims, even operate without proper insurance.

The presumption that creating a regulatory commission and writing regulations will result in intended outcomes, and only intended outcomes, is an example of the “Unicorn Governance” fallacy; it’s magical thinking. In reality, even when regulators are competent, impartial, and have the public interest in mind, regulation can fail to be effective or even make matters worse. But with a regulatory body like the MTC, which has taxi company representatives as commissioners, impartiality is an unreasonable assumption. And after recent outbursts from the MTC’s chairman, competence is in question as well. Given the incentives at play, it should not come as a surprise the MTC is more effective at blocking competition than protecting consumer safety.

Market competition and open information, not regulation, are the best ways to ensure customers get a safe, comfortable ride when they want. Unfortunately, the MTC still wants to prevent that competition from coming to Saint Louis, to the continued embarrassment of the city. Saint Louisans should consider whether the MTC now does more harm than good. 

The post The Metropolitan Taxicab Commission and the Myth of Effective Regulation appeared first on Show-Me Institute.

Earlier this week, Uber announced that it would provide free UberX rides in Saint Louis for the Fourth of July weekend. That seemed like a huge benefit for the city, as the holiday week is notorious for drunk driving accidents. Free ridesharing has been a promotion many other cities, including Kansas City, allowed while policymakers worked out regulatory hurdles. But despite support from just about everyone, including Mayor Slay, the MTC said thanks but no thanks.

That action was bad enough, but subsequent statements by the MTC’s chair are downright embarrassing for that commission and the Saint Louis region as a whole. The chair of the commission wrote that complaints about Uber were down to “white privilege,” despite all the evidence that the entire Saint Louis community would benefit from ridesharing. The commissioner also openly insulted Chris Sommers, a more pro-ridesharing commissioner, for criticizing the MTC’s decision. Aside from calling on Sommers to resign and “work 4Uber,” the chair used extremely inappropriate language to disparage Sommers over twitter, completely unbecoming of a public official.

To sum things up, we have a commission with a chairman who is publicly insulting another commissioner and using race-baiting language to attack Uber. We have another commissioner who, last week, intonated that we should regulate just about every job that exists and said that Uber is a want, not a need in Saint Louis. Worse yet, those two individuals are among those commissioners who don’t represent the taxi industry. How can we expect this body to come up with efficient, modern for-hire vehicle regulations? Might it be better at this point just to dissolve the commission and start fresh? 

The post It’s Time to Disband the Metropolitan Taxicab Commission appeared first on Show-Me Institute.

The Metropolitan Taxicab Commission (MTC), that’s who.

The MTC regulates all for-hire vehicle services in the city of Saint Louis, including ridesharing. Problematically, half of its members represent the existing taxi industry, with vested interests in keeping out new competitors and new business models. As we’ve written before, their onerous and outdated taxi regulations are the reason Saint Louis has fallen behind the rest of the nation in getting ridesharing companies to set up in the city. In response to Uber’s petition to allow free rides in Saint Louis on the Fourth, the MTC said they would only allow it if all Uber drivers had gone through the MTC’s background checks (including finger printing) and drug tests. That stipulation effectively scuttles the promotion.

There is some question as to whether the MTC has any legal authority to ban free Uber rides, as the company is not technically offering a paid service. But the commission believes it does have the authority, and it has decided to use it to the detriment of Saint Louis. Moreover, the commission’s decision is in direct opposition to the position of Mayor Slay, who tweeted out on the promotion:

Uber has offered a free trial of its X service for the long holiday weekend. It is a positive gesture that we welcome.

With the MTC now swimming against both the tide of public opinion and the Mayor’s Office (which has hinted that they would not pressure police to enforce the MTC’s decision), it may be time to ask whom exactly this regulatory commission works for, Saint Louis residents or itself? 

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However, despite the public enthusiasm, the commissioners themselves were more critical and directed their criticism mainly at Uber’s business model. They doubted whether Uber’s background checks were up to their standards, they discussed at length the need for initial drug testing, and they questioned Uber’s insurance requirements. As is usual, they claimed that their concerns were only about customer safety.

In their nitpicking about which background check was most thorough, the MTC continued to ignore the fact that most of its for-hire vehicle regulations have nothing to do with safety. How does limiting the number of licensed cabs protect safety? How do pricing regulations determine whether a cab is road worthy? What consumer breathes a sigh of relief knowing that the MTC controls what drivers may wear?

Unfortunately, rather than take an open attitude toward innovation, a regulatory reflex reigns at the MTC. When the commission was asked to reconsider the necessity of its regulations, one commissioner asked, and I’m paraphrasing, “Would you get your hair cut at an unlicensed barber?” (Barbers require licenses in Saint Louis.) He was incredulous to the idea that, yes, many residents would feel perfectly comfortable choosing a barber that did not have the city’s seal of approval, if that barber did a good job. That same commissioner ended the meeting by saying that ridesharing companies were a want, but customer safety was a need. Customer safety as defined by the MTC, not customers themselves.

The MTC would best serve Saint Louis if it takes the demands of its residents seriously and gives up on its instinct to delay and control ridesharing companies. More than anything, Saint Louis needs a welcoming business environment; no one wants the MTC to hold the region back.

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