Today’s KC Star is reporting on a hearing in Jefferson City in which sporting event promoters are attempting to get special tax credits to host the events in Missouri. I honestly would have to search around for an idea worse than this. I really love sports, and I have terrific memories of going to the Final Four downtown in 2005. However, if, as the NCAA is apparently claiming, tax dollars must be committed before St. Louis or Kansas City can host more major college events, than we can live without them. From the Star:

St. Louis is hosting the Midwest regional finals in this year’s men’s basketball tournament [...] But St. Louis was left off the list when the NCAA awarded sites for the 2012-2016 Final Four. Those tournaments instead went to New Orleans, Atlanta, Dallas, Indianapolis and Houston.

“Among those communities that were named Final Four hosts during that cycle, all of them had a public support component that significantly facilitated the staging of the event,” [Greg Shaheen, who oversees the NCAA’s Division I men’s basketball tournament,] said in an interview with The Associated Press.

God forbid, what a travesty it would be if St. Louis failed to continue to be American’s number 1 sports city. On another note, isn’t it time we stop calling ourselves that, given that about 10 cities have won that award since we did?

Again from the Star:

Missouri currently is “a first tier sports destination,” said Frank Viverito, president of the St. Louis Sports Commission. But he added: “Without a public component to our efforts, then we will fall significantly behind other states.”

Oh well, tough break. I guess we’ll just have to keep more of our tax dollars in order to provide the services that governments are supposed to provide, rather than giving them away to sports promoters.

This article in the Post-Dispatch identifies a regulatory barrier to opening birth centers in Missouri:

Another challenge in Missouri is the state’s licensing requirements for birth centers, which Henman and others are trying to change[.] Birth centers are licensed as ambulatory surgical centers even though no surgeries take place. Many of the requirements are expensive and unnecessary, says nurse midwife Rachel Williston, 34, who wants to open a birth center in Independence, Mo.

Complying with all the regulations for ambulatory surgical centers is no simple task. The regulations can make the difference between a facility being profitable enough to operate and being forced to close. This was evident in 2007, when Missouri law was changed to impose the ambulatory surgical center regulations on abortion clinics, which challenged the law in court. They argued that imposing such onerous regulations was a ploy to shut them down.

It’s unfair to regulate birth centers the same way as surgery centers, when no one performs surgery in them. Women can legally give birth at home, and their houses need not meet all the code specifications of a surgery center. Births in birth centers should be regulated more like births in homes.

One problem with the debate over payday loan regulation in Missouri and elsewhere is a lack of sustained focus on data. Regrettably, both opponents and proponents of regulatory legislation within the state seem to cling reflexively to familiar, abstract narratives and consequently fail to engage the public with meaningful evidence to support their assumptions. To alleviate this problem, I am compiling this list of literature — both sympathetic and unsympathetic to the payday loan industry — to enrich the public dialogue. If any of you know of more quality literature on the topic, please add to this post in the comments.

1. Payday Holiday: How Households Fare after Payday Credit Bans (ungated), Donald P. Morgan and Michael R. Strain.

   “Compared with households in states where payday lending is permitted, households in Georgia have bounced more checks, complained more to the Federal Trade Commission about lenders and debt collectors, and filed for Chapter 7 bankruptcy protection at a higher rate. North Carolina households have fared about the same. This negative correlation—reduced payday credit supply, increased credit problems—contradicts the debt trap critique of payday lending.”

2. The Economics of Payday Lending (ungated), John P. Caskey, Swarthmore College.

   General overview of payday lending industry and basic issues. Written for a lay audience.

3. Do Payday Loans Cause Bankruptcy? (ungated), Paige Marta Skiba and Jeremy Tobacman.

   “Though the size of the typical payday loan is only $300, we find that loan approval for first-time applicants increases the two-year Chapter 13 bankruptcy filing rate by 2.48 percentage points.”

4. Factors Affecting the Location of Payday Lending and Traditional Banking Services in North Carolina (ungated), Mark L. Burkey and Scott P. Simkins.

   Explores the geography of payday loan institutions. “A key finding is that after controlling for many covariates, race is still a powerful predictor of the locations of both banks and payday lenders.”

5. The Profitability of Payday Loans (ungated), Paige Marta Skiba and Jeremy Tobacman.

   “Despite charging effective annualized rates of many thousand percent, we find lenders’ firm-level returns differ little from typical financial returns. The data are consistent with an interpretation that payday lenders face high per-loan and per-store fixed costs in a competitive market.”

6. Quantifying the Economic Cost of Predatory Payday Lending (ungated), Keith Ernst, John Farris, Uriah King:

   “Our analysis of quantitative data reveals that payday lenders collect the vast majority of their fees from borrowers trapped in a cycle of repeated transactions, where borrowers are forced to pay high fees every two weeks just to keep an existing loan outstanding that they cannot afford to pay off.”

7. A Comparative Analysis of Payday Loan Customers (gated), Edward C. Lawrence and Gregory Elliehausen.

   “By analyzing the data collected in a national survey of payday customers, this research allows policymakers to better understand what type of consumer borrows from payday lenders, for what purpose, and what the true benefits and costs are. The results confirm a strong demand for payday loans that satisfy a real financial need within a certain segment of the population.”

8. Mayday Payday: Can Corporate Social Responsibility Save Payday Lenders (ungated), Carmen M. Butler and Niloufar A. Park.

   “In this article we ask what the best ways are to maximize the wealth of the payday lending industry while limiting the industry’s harmful impact on consumer communities? We assert that payday lenders will likely demonstrate greater corporate social responsibility only after there is a change in the laws that govern the industry coupled with industry-wide reform in corporate governance.”

9. Restricting consumer credit access: Household survey evidence on effects around the Oregon rate cap (ungated), Jon Zinman.

   “Borrowing fell in Oregon [after interest rate caps] relative to Washington, with former payday borrowers shifting partially into plausibly inferior substitutes: bank overdrafts and late bill payment. Additional evidence suggests that restricting access caused deterioration in the overall financial condition of Oregon households. Overall the results are consistent with restricted access harming, not helping, consumers on average.”

10. Consumers’ Use of High-Price Credit Products: Do They Know What They Are Doing? (gated), Gregory Elliehausen:

    This paper asserts that consumers of payday loans are sufficiently rational. A caveat, however, is that rationality is a just a process and does not imply that “good” decisions are made.

Some op-eds include:

• In Defense of Usury (gated), by Dean Karlan and Jonathan Zinman
• Congress Takes Aim at Payday Loans (ungated), by Robert DeYoung
• Payday Loan Reform Bad for Borrowers (ungated), by Justin Hauke

The last of those op-eds was written by a former employee of the Show-Me Institute. Perhaps unsurprisingly, my views on payday loans are fairly similar to his. Taking an economic view, I’m concerned that regulatory reform will be unable to limit payday loan harms effectively without driving the market underground. Taking a political view, I view payday loan consumers as sufficiently rational and believe that a government (at least in this arena) has more of an imperative to maintain free, private contracts than to protect the politically weak.

Here is St. Louis Board of Aldermen Bill No. 337, which would apply current licensing requirements for commercial HVAC work to residential work, as well. Look for almost the exact same thing to be introduced in St. Louis County shortly, too. I understand that these proposed licensing rules and regulations will be introduced in Jefferson County, as well.

Should we expect another fight over this unnecessary, anti-competitive, and simply appalling use of government to restrict competition? Well, given that one of the people who led the fight against this same effort in 2000 — and who was partly successful in that effort — is now a cosigner on the letter requesting the expansion of licensing authority in the county, I don’t have much hope.

My initial post on this HVAC licensing issue last month has all the links you need to find media stories on this subject. I once again recommend the Riverfront Times story from 2000. I basically feel like a boxer who is still standing, but has been hit so many times that he can’t respond. (And, yes, I have boxed and know what it’s like to be hit really hard in the face.) These proposals are coming, they are a perversion of capitalism, and they will raise costs for St. Louis consumers, yet there is absolutely nothing anyone can do to stop it from happening. The capacity to fight back that existed in 2000 just does not appear to be extant right now (as I am sure the licensing proponents are well aware).

I’ve noticed that some journalists assume it’s normal for the government to license occupations and restrict entry to them. When states don’t license an activity, these writers point it out as an aberration. An example of this bias appears in today’s Wall Street Journal article about anger management seminars:

There are no licensing requirements for anger-management trainers—anyone an open a business.

Let’s hope it stays that way. I’d hate to see Missouri create a Board of Anger Management Professionals (which would probably hold very calm, boring meetings).

A judge refused to dismiss the state lawsuit against a family that was caught selling raw milk from its distribution stand in a parking lot. The state claims that it’s illegal for farmers to set up any raw milk pickup locations away from their farms.

In a Springfield News-Leader article, the assistant attorney general explains why selling milk “from a farm,” as state statute requires, should preclude off-site pickup spots:

“A farm is not anywhere defined in Missouri statutes as a vehicle in a parking lot away from the farm premises,” Blome argued.

Of course, no one would define a farm as a vehicle temporarily parked in a lot. But that isn’t a good definition of a food establishment, either — and the state, calling this family’s parked vehicle a food establishment, says it should be subject to the same regulations as a mini-mart or a grocery store.

If you can’t pick up raw milk from a farmer’s vehicle, what can you do with it? You can pick it up yourself at the farm. But suppose you drive your car to a parking lot, meet a friend there, and give him a gallon of the milk. Does your car now become a food establishment? Or maybe you bring your milk home, invite guests over, and serve them milk with dinner. Does your house turn into a restaurant?

Here at the Show-Me Institute, we have been following the North Face / South Butt lawsuit with great interest. Many of us know the father of the South Butt founder’s line of fine clothing, and think the entire lawsuit by North Face to be ridiculous. So, last month on my annual family ski trip to Colorado, I could not resist getting a few pictures taken of me in my South Butt T-shirt. Needless to say, the North Face store in Beaver Creek seemed the perfect location to snap a few photos. Enjoy, and I hope everyone at the South Butt keeps up the fight for truth, justice, and humorous relaxation.

Click to enlarge.

Now that Columbia permits residents to own chickens, it’s a good time for the city to look into the next trend in urban agriculture — miniature goats:

The Carbondale, Ill., Planning Commission was debating this month whether to allow residents to keep chickens when Priscilla Pimentel, a member of the city’s Sustainability Commission, added goats to the mix.

“If you can have a 250-pound dog in town, why not a miniature goat that can produce milk?” she says. “It’s just common sense.”

Miniature goats are about as big as medium-sized dogs, and can be led around on leashes. Like chickens, they’re domesticated animals that don’t threaten anyone. People should be allowed to own them in cities.

As the latest egregious example of economic illiteracy to come out of Washington, Sen. Mike Johanns (R-Neb.) has proposed banning Japanese-made cars. This is a knee-jerk reaction that would be ineffectual at making American drivers safer, and would have many unintended negative consequences.

First, the ban wouldn’t even solve the problem, because all of the Toyotas that were recalled in January for malfunctioning gas pedals weren’t manufactured in Japan. They were manufactured in the United States:

As for banning Japanese-made vehicles: All 2.4 million Toyotas recalled Jan. 21 due to sticky gas pedals, and most of the 5.6 million vehicles recalled because floor mats might jam pedals, were assembled in the USA.

Would this ban have anything to do with the fact that the U.S. government has a large financial stake in GM, a major Toyota competitor?

Banning Toyotas would have many negative consequences. For example, the men and women who work in Toyota dealerships and Toyota manufacturing plants would have to join the ranks of the unemployed. This would have a noticeably negative effect in Missouri, which has a high-enough unemployment rate already — 9.6 percent as of December.

Banning foreign imports like Toyota would hurt consumers because it would limit their choice of cars. When free trade is restricted, a people can only consume what their country is able to produce. In an adapted excerpt from their book Free to Choose: A Personal Statement, Milton and Rose Friedman elucidated what this means to consumers:

We cannot eat, wear, or enjoy the goods we send abroad. We eat bananas from Central America, wear Italian shoes, drive German automobiles, and enjoy programs we see on our Japanese TV sets. Our gain from foreign trade is what we import. Exports are the price we pay to get imports. As Adam Smith saw so clearly, the citizens of a nation benefit from getting as large a volume of imports as possible in return for its exports or, equivalently, from exporting as little as possible to pay for its imports.

The ban would also increase consumer prices on all cars by decreasing the total supply. Domestic car producers do not have the capacity to make up for the shortfall in the short run, which would aggravate this effect. In the aforementioned excerpt, Milton and Rose Friedman explained that “‘Protection’ really means exploiting the consumer” because she has to pay more for goods.

The ban would also decrease the quality of vehicles that are available to American consumers, which is the very problem that this policy is intended to alleviate. When a country attempts to protect certain industries, it removes their incentive to innovate in order to compete in the global market. By banning foreign imports such as Toyota, the United States would do the American car industry and American consumers no favors. GM and Ford have difficulty competing with foreign firms like Toyota and Honda in the status quo world economy because they have “benefited” from American protectionist policies on cars for so long. Furthermore, bans on foreign imports become even more disadvantageous in the future if/when the trade restriction is lifted, because domestic car companies would have lower-tech, lower-quality products than their foreign competitors.

Government intervention in international markets hurts business and discourages economic growth. When a country slaps protective measures on its trade policy, it is probable that other nations will retaliate in kind, leading to increased consumer prices. Impeding free trade is very dangerous policy when international economies are so intertwined. We only have to look to the recent past for evidence of this. Last September, Obama placed a 35-percent tariff on tire imports from China. This was effectively a tax on Americans who drive cars, who were predicted to experience a 20- to 30-percent increase in the cost of tires as a result of the policy. China responded the following Sunday in retaliation by placing its own tariffs on imports of American poultry and automobiles.

I have an alternative suggestion: Instead of banning foreign imports, each U.S. senator should complete a refresher course on macroeconomics before assuming office. Based on Sen. Johanns’ proposal, I see no evidence this the former secretary of agriculture ever took one in the first place.

The U.S. Supreme Court heard arguments today in McDonald v. Chicago, otherwise known as the Chicago gun ban case. The court’s decision in this case will determine whether the Fourteenth Amendment means that the Second Amendment right to bear arms should prevent state and local governments from prohibiting citizens’ possession of functional firearms in their homes.

This is a very, very important case — but maybe not for readily apparent reasons. The central question is not so much the meaning of the Second Amendment — that was largely decided by last year’s D.C. gun ban case. Rather, this case concerns the meaning of the Fourteenth Amendment.

When it was drafted and ratified, the first section of the Fourteenth Amendment was intended to do several things: First, to ensure that United States citizenship would be universal for those born within the country, and that no state could deny state citizenship to someone who is an American citizen; this was a pressing concern given that the recently Confederate states might well have denied citizenship to freed slaves. Second, to ensure that all citizens were assured of a certain baseline of liberty that could not be denied by any state or local government, because some state governments, when left to their own devices, had previously refused to offer the same protections for liberty enshrined in the U.S. Constitution. Under the new amendment, states were required to afford all U.S. citizens the “privileges and immunities” protected under the U.S. Constitution — including a right to travel freely across state lines, a right to earn a living in a common profession, etc. And, finally, the amendment was intended to ensure that all citizens must be treated equally under the law, so that no state could fashion laws that would discriminate against newly freed slaves or other “outsiders.”

Very shortly after the amendment’s ratification, however, the U.S. Supreme Court handed down The Slaughterhouse Cases. At issue was a law in New Orleans that created a butchering cartel controlled by the city, limiting the number of people permitted to practice the profession. The law made it so that citizens could only practice the profession with the city’s permission, and then only at a time and place of the city’s choosing. The city’s butchers sued, claiming that the Fourteenth Amendment prevented a state or local government from infringing upon their right to practice their profession. The Supreme Court responded with a ruling that the vast majority of legal scholars now consider one of the least-defensible in the court’s history (see p. 11 of the brief in the preceding link).

The court couldn’t negate the provision establishing universal citizenship, but its decision in Slaughterhouse completely eviscerated (so to speak) the other provisions of the first section — leaving the states free to limit access to professions, set up sweetheart deals for favored business interests and industries, institute poll taxes or other requirements that disenfranchised targeted segments of the population, and pass the Jim Crow–era segregation laws. Had the Fourteenth Amendment been properly applied from the outset, there might have been no need for a civil rights movement because segregation would never have been permitted in the first place, and freed slaves (as well as new immigrants) would have had easier access to self employment in entry-level professions.

Over time, the Supreme Court realized the evils that states were perpetrating against their citizens and so they came up with the doctrine of “substantive due process” as a way of selectively applying the Bill of Rights to strike down illegitimate state laws. It’s an absolute legal fabrication, but it has allowed the court to address issues of constitutional freedom in the way it has seen fit, without admitting that the court got Slaughterhouse wrong. So, almost the entire Bill of Rights has now been “incorporated” into the idea of substantive due process (meaning that 140 years later, the court has almost completely accomplished the original purpose of the Fourteenth Amendment), but several of the most important “privileges and immunities” — such as the right to earn a living — remain on the outside looking in. For whatever reason, the court has continued to hesitate in taking the final, proper, liberty-respecting step.

Taking that step would mean that federal courts could strike down state laws in violation of the privileges and immunities that have been neglected for all this time – but that is not only what the Constitution requires, it is inherently a good thing for liberty! Getting the history and constitutional theory correct would simply re-anchor the methods of analysis to their historical underpinnings, instead of allowing the unprincipled free-for-all that sometimes becomes apparent in the way the court addresses constitutional freedoms. I can’t help but think it would be a good thing, both at the philosophical and the practical level.

Saint Louis’ only orchestral music station might be changing formats, and it has two area congressmen pretty angry:

U.S. Reps. John Shimkus, R-Collinsville, and Lacy Clay, D-St. Louis, are asking the Federal Communications Commission to weigh the potential negative consequences of selling KFUO (99.1 FM) to a company that broadcasts “Christian contemporary” pop music.

The station is currently owned by the Missouri Synod of the Lutheran Church. Facing a cash crunch, it agreed to sell the station last year for $18 million to Gateway Creative Broadcasting.

The pending sale — which still needs federal approval — has raised a cacophony of dissent from the St. Louis arts community, bemoaning the loss of the only station in the region where listeners can hear full time from Brahms, Bach and others.

As someone who likes orchestral music and listens to KFUO fairly often (it is number five on my car presets) but absolutely hates Christian contemporary, I sincerely hope the station keeps its current format.

That being said, what do Shimkus and Clay expect the Missouri Synod to do if this sale is blocked? The church probably wants to sell the station because it is a drain on the church’s resources, so it might just stop broadcasting even without a sale to save the operating expenses. Barring that, the Missouri Synod will have to cut back on other goods or services that it sees as more vital than the radio station. Such a cutback could include anything from laying off marginal employees to reducing charitable work.

If people are interested in saving KFUO’s current format of Bach, Beethoven, and Brahms, they should organize a fundraiser or a pledge drive for the station.  KDHX 88.1 FM in Saint Louis (number four in my presets) provides a format for numerous different genres of music that are never heard on pop radio, and all without almost any advertising because the DJs and workers are almost all volunteers and listeners give them money for the good work they do. If people truly want a station to play concert music in Saint Louis, they will support it monetarily. If not, then as much as I or anyone else may not like it, the scarce resources used to broadcast it currently should be used for some other kind of programming that people like more.

A committee in the Missouri House has heard a bill to keep the Missouri Gaming Commission from closing the President Casino (or any other casino) on “purely economic grounds.” The testimony makes clear the Kafkaesque bureaucratic nightmare into which the commission has placed the President Casino:

Some House lawmakers said the idea of “inadequate declining performance” seemed subjective and was a hard standard to interpret.

Rep. Vicki Englund, D-St. Louis County, questioned how the commission evaluates casino’s performance and asked lobbyist Jim McNichols, who testified on the commission’s behalf to explain how casinos could be expected to meet standards when they weren’t explicitly provided with standards to comply with.

McNichols said the commission works hard to involve casinos in the rulemaking process.

The Missouri Gaming Commission opposes the bill, but McNichols said he couldn’t speak to the specifics of the President Casino case because there was a pending legal matter.

This may strike some people as a crazy idea, but I think it should be up to the owners of a business to decide whether it lacks sufficient revenue to justify operating, not the decision of a government commission with no set standards by which it must abide. And, of course, if the President is forced to close, it is not only the casino’s owners, employees, and patrons that would suffer, but also gamblers at other casinos. Following the decrease in competition, casinos would be able to pay out a lower amount in winnings at the margin.

Missouri Gaming Commission Executive Director Gene McNary got right to the heart of the matter in his written testimony when he wrote that passing the bill to keep the President Casino open would “neuter the commission and, in effect, take away our ability to regulate Missouri’s gaming industry.” I doubt he shared my view that this would be a positive development, however.

Mr. Combest linked this morning to a story in the Jefferson City News-Tribune about a proposal to reduce the length of the legislative session in Missouri. To this I say, “Amen!” Just like the size of the legislature, the length of time in session is a factor in the logrolling potential that constantly builds pressure for more spending, more laws, more restrictions, etc. (Here is a link to a study demonstrating that professional legislatures — and length of time in session is one of the variables used to determine “professional” status — spend more money per person than citizen legislatures.)

So, I readily agree that Missouri should have a shorter session, because I basically agree with P.J. O’Rourke that preventing a politician from governing is like preventing a pit bull from eating your child. Anything that limits the ability of government to infringe on our freedoms is good by me. You can find a lot more on this subject in my paper about government in Missouri from the perspective of public choice economics.

I do wish someone would have called us to testify about this proposal, though. From the article:

No one spoke for or against the plan during Monday’s hearing.

Nobody ever said public choice economics was exciting. …

The St. Louis Post Dispatch covers both sides of the urban chicken controversy in this article. In the paragraphs that deal with complaints about unwanted chickens, you could replace the word “chicken” with the name of any other pet. When you allow people to keep animals, some owners will be irresponsible and some will abandon their pets. This is no more reason to outlaw urban chickens than the glut of chihuahuas in California animal shelters is reason to forbid chihuahua ownership.

Unwanted chickens will be kept to a minimum if the birds go to people who seek them out of their own volition. Foisting chickens on reluctant citizens will result in abandoned animals. With that in mind, I’m not in favor of the Maplewood-Richmond Heights School District’s plan to encourage chicken ownership. The district has a goal of convincing 50 families to keep chickens. I’m afraid that if it offers too much encouragement, people who aren’t so excited about chickens are going to give in and adopt them, only to abandon them later. A better goal would be to provide information about chickens to anyone who’s interested, without setting a lower bound for the number of chicken owners.

The district’s on-site chicken coop is a good idea; children can learn a lot about animal life cycles from watching chickens. When I was in elementary school, individual classrooms raised chicks. Building one coop for the whole school might allow for more efficient maintenance, and classes could come one at a time to observe the birds. It also could be more practical to keep chickens on a permanent basis than to order new chicks each year and give them away when school’s out.

Yesterday in St. Louis, opponents of the payday loan industry held a hearing, which was covered by the Post-Dispatch and linked to by Combest.

Here is my advice to every person in Missouri: Stay away from the payday loan industry; the vast majority of the time, it is a terrible financial decision to make use of it. Here is my advice to the government: Stay away from the payday loan industry; it is not your role to interfere in private contracts and prevent people from making poor financial decisions.

Then there are the unintended consequences that would result from eliminating, or severely restricting, the industry. It is not as though the people who now use payday loans would suddenly no longer have any need for a loan. Some would move into receiving loan services from the banking system (a good result), some would entirely lose the ability to obtain credit (a mixture of both positive and negative results), and some would turn to the loan shark industry with all of its attendant risks, violence, etc. So, if you want to improve the climate for loan sharking and enforcing collections with baseball bats, then by all means legislate the payday loan industry out of existence.

This set of arguments about payday loans has also been covered by Show-Me Institute op-eds superior to this blog post.

A proposal in Wisconsin would allow dairy farmers to sell raw milk, with a few conditions:

Under the bill, farmers with a grade ‘A’ dairy farm permit would be allowed to buy a permit to sell raw milk.  They would have to meet certain sanitary conditions for bottling milk and have a sign to let consumers know raw milk doesn’t provide the same protection of pasteurized milk.

The proposed change in law would give farmers greater freedom to sell their milk. And consumers would be able to make their own decisions about whether to purchase unpasteurized dairy products. Everybody would win.

The bill’s restrictions should be enough to protect the public. We don’t station a policeman by every cow to prevent farmers from drinking raw milk, and we needn’t impose that level of surveillance on other people, either. Regulators ought to concentrate on stopping fraud and deceptive advertising, like if a farmer were to display a sign saying “Buy pasteurized milk here!” when he’s really selling raw milk.

If Missouri adopted a similarly free milk policy, it would be a welcome end to the bizarre law that says exchanging cash for milk in a barn is legal, but the same transaction in a parking lot is prohibited.

The billions of dollars that the federal government doles out in agricultural subsidies each year — most of which go to a few large corporations, influential politicians, and wealthy landowners — do a lot of damage to the economy. The subsidies insulate businesses from the market forces that would, if left unfettered, force them to innovate and improve. They encourage overproduction and irresponsible farming practices: As farmers try to increase their yields in reaction to artificially high crop prices, they expand their farms into less-fertile land that must be blasted with chemicals if it’s to grow anything at all. And the subsidies make it harder for small farmers to enter the market and compete against the corporations that are propped up by price supports and shielded from risk.

Agricultural subsidies are harmful, no doubt about it. But is there a way to mitigate them? Activists say yes. They contend that new laws would counter the subsidies’ damage. To open the agricultural sector to competition, activists suggest — among other ideas — enacting preferential food policies that require school districts to purchase a set percentage of their cafeteria food from local sources. This, it is argued, would take power away from the corporations and undo some of the subsidies’ bad effects.

As much as I oppose subsidizing corporate agriculture, I can’t support the local food mandates. Ordering schools to buy local food is a poor antidote to corporate subsidies, for these reasons:

• There’s nothing to stop corporations from farming near school districts and touting their produce as “local.” Remember, a farm doesn’t have to be small or unsubsidized to count as local; it only has to be nearby. Just as agricultural corporations have stepped up to claim a large share of direct payments and other kinds of farm aid, they’ll also be eager to sell local food — at a premium, because districts won’t have the option to walk away from the sale and buy from businesses located farther away instead.
• Preferential treatment for local farmers could cause as much environmental damage as traditional subsidies. It would lure farmers to grow food near school districts, whether or not the land is suitable for crops. A district’s closest farmer might not always be the most responsible with pesticides and fertilizers. Even if you look around and see that your local farmers are environmentally conscious today, the situation might change when new businesses move in to be near a school district and have a guaranteed customer.
• Local food mandates place an unfair burden on school districts. District administrators didn’t engineer the mess in the agricultural sector, and fixing it shouldn’t be their job, either. They should be free to focus on their main goal — educating children. Let’s not take money that could go toward teachers’ salaries or building repairs and instead use it to pay a higher price for local food, when healthy food is available at a lesser expense from somewhere else.

Local food mandates, by guaranteeing customers for some farmers through public school policy, are themselves a form of subsidy. Neither the market nor the environment will be well served by adding yet another subsidy to the already over-subsidized farming sector. The real solution is to end government aid for agriculture. When farmers are free to compete on their own merits rather than on their political influence, we may see the market change in favor of farmers who were previously overlooked — including, possibly, farmers near your home or school.

You knew this was going to happen sooner or later. Ten years ago, when HVAC contractors in St. Louis County succeeded in significantly increasing the licensing requirements for HVAC work in a way that would benefit union firms and workers, they focused on the commercial aspect of the work and left out the residential work. The naked power grab for commercial work was enough for them in 2000, and the political price they paid prevented them from reaching for any more, until now.

If you are not familiar with the story of how the pipefitters union and their allied contractors tried to knock non-union contractors out of the HVAC business 10 years ago, then you just have to read this awesome Riverfront Times story about the pipefitters plan. To paraphrase Berkely Breathed’s comment about how Caspar Weinberger’s poetic request to him provided a template for how to “get something from someone who is not inclined to give it to you,” if you are interested in knowing the real reasons that occupational licensing laws are passed, “all you need to know is here.”

Needless to say, the proposal for new restrictions on HVAC contractors is a sick twist on capitalism. It is just a joke to hear that the supporters of licensing requirements for residential work are once again promoting their arguments as increasing “safety.” As my friend, “D” (I’ll err on the side of caution and not use his name — he can claim credit in the comment section if he so chooses), who sent me the link to the Post-Dispatch article, said:

Isn’t the more likely story that the bad economy has created a greater incentive for established contractors to try to protect their territory by establishing barriers to entry?

My friend has hit the true story on the head. It would be shameful if this were passed by the various local governments to which the proposal is being brought. I hope to be a part of the fight against it.

An op-ed in the Daily Iowan refutes some arguments against urban chickens, including one I hadn’t heard before:

Bailey was quoted suggesting that urban chickens undermine local economies, saying, “We have a lot of small farmers around here making chickens and eggs available for sale. My fundamental question is: Why aren’t we supporting the regional economy?”

Here is the op-ed’s excellent response:

I would argue that urban chickens would in fact strengthen Iowa’s economy, especially when we consider unique and important businesses such as the McMurry Hatchery in Webster City, known nationally for its collection of rare chicken breeds. Likewise, I highly doubt Bailey would make such an argument when considering whether citizens ought to be allowed to have vegetable gardens.

City residents are also part of the economy, and they shouldn’t have to pass up opportunities to create value for themselves in order to protect people who are already farming. Transactions in which money changes hands aren’t the only economic activity that matters.

In fact, the freedom to raise your own chickens is an important check on the farmers’ power. When customers can build their own chicken coops, farmers aren’t able to overcharge them for eggs or sell lower-quality eggs than what the market demands. If farmers don’t offer acceptable price and quality, customers will walk away and raise chickens themselves.

While anti-texting laws may be ineffective attempts to deal with a real problem, the most charitable thing I can say about this is that it is a solution in search of a problem:

A bill heard in committee Monday would prohibit felons from commercially using fireworks.

The bill, sponsored by Sen. Brad Lager, R-Maryville, would prohibit anyone guilty of a felony or anyone without proof of liability insurance from getting a permit to sell, make or ship fireworks. It would also allow the state fire marshal to examine sales records to make sure businesses buy and sell only from those with a permit.

I can understand the liability insurance requirement and fire marshal oversight, but is there really a serious problem in Missouri with felons selling fireworks? The article does not mention any reason it should be illegal for felons to sell fireworks. Even if there are a great many felons going into that line of work, that is not in itself cause for alarm. In fact, we should be glad those individuals are reintegrating themselves into productive society. I suppose the concern is that felons are more inclined toward violence and could use the fireworks for that end, but fireworks — although dangerous if mishandled — aren’t terribly effective weapons. They are hard to aim and are usually designed to minimize damage to people and property if they are misused. Let’s not go making it even harder for felons to get jobs outside of crime just because it sounds kind of scary to have them around gunpowder.

Wherever you are in located in Missouri, there is probably a chapter of Liberty on the Rocks near you!

• Saint Louis: tomorrow at 6 p.m. at the Drunken Fish in the Central West End (1 Maryland Plaza, Saint Louis)
• Kansas City: tomorrow from 5:30 to 8:30 p.m. at Coach’s (414 W. 103rd St., Kansas City)
• Columbia: next Thursday, Feb. 18, at The Heidelberg (410 South 9th St., Columbia)

Liberty on the Rocks is about connecting freedom lovers across the country — to encourage more education, more involvement, and a larger demand for liberty! Stop by for some good drinks and good discussion!

These events are not sponsored by the Show-Me Institute, but perhaps some of our blog readers would be interested in attending.

Also, thanks to the Missouri Record for the link!

Readers, commenters, Missourians, lend me your keyboards.

What do you think is the most heavily subsidized lifestyle: urban, suburban, exurban, rural, or small town? Think of subsidies of every level and in every way — so, basically, when you choose to live in one of these five locations types, which is the one the depends most on other people giving you money through involuntary government subsidies?

Let’s briefly define our terms: By “urban,” I mean within major cities; “suburban” should be the mainline suburbs of those cities; “exurban” should be the extended suburbs that came into being about 20 years ago; by “rural,” I mean farming, ranching, etc.; and by “small towns” I mean towns within rural areas, including small cities like Joplin or Cape Girardeau.

Here are my votes, from most heavily subsidized to least subsidized: urban, rural, exurban, suburban, small towns.

I think there would be a big gap between numbers 2 and 3, and a pretty good space between 3 and 4. I’ll try to find some data to get some answers after I have enough responses. Go!

Be sure to check out this article by John Eskew of the Competitive Enterprise Institute, about the unionization of home health care workers in Missouri. It is well worth your time. I recall being part of the 24 percent that voted against this measure. Unfortunately, we were 27 percent short.

Jefferson City has grudgingly lifted its ban on tattoo parlors. They are now legal, but subject to several regulations: The shops can’t open before 9 a.m., and must close by 8 p.m. They can’t display any neon lights. And they can’t stand out:

The Jefferson City News-Tribune reports that another stipulation requires the businesses to aesthetically blend in with their surroundings.

That last requirement is the least reasonable. No store can look just like the establishments surrounding it while simultaneously advertising itself to customers. And the burden of this regulation will only increase over time, for if neighboring businesses come and go, a tattoo shop will have to continually redesign itself to blend in with the changing scene.

I can’t imagine what tattoo shops will look like under this ordinance. Will a tattoo parlor next to an office building have to masquerade as corporate headquarters?

The new policy doesn’t satisfy all tattoo shop critics; some would prefer that tattoo shops stayed out of Jefferson City. One council member explains why he opposed ending the ban:

“Many times these things are done randomly without much forethought and individuals do regret this,” said Pope.

I would expect people who share this opinion to call for waiting periods before anyone can get a tattoo, rather than bans. Completely banning tattoo parlors prevents people who do exercise foresight from getting tattoos — and why should they be punished for someone else’s lack of judgment? This council member should at least be happy with the new policy’s regulation of operating hours, because whoever decides to get a tattoo after 8 p.m. will have all night to reconsider.

The St. Louis Business-Journal has a story about what one government program has recently done. The Business-Journal article is just a news story about the St. Louis development loan program, but it gives a perfect example of a government program that has absolutely no reason to exist and should be eliminated tomorrow. It is nice to be able to get specific once in awhile, rather than just expressing general “cut government” statements, so here I go.

The revolving loan fund of the St. Louis Local Development Corporation serves no need that the private sector cannot meet. It serves no legitimate public purpose, and should be abolished. It should be a market decision whether two restaurateurs can get backing to open more restaurants in St. Louis. Tax dollars have no business being involved in these projects. I am fully aware that this is a loan program, not a gift program, but I don’t care. Even if they get every penny back with interest, the loans serve no legitimate public purpose, the government has no business being involved in things like this, and it still takes tax dollars above and beyond the loan amounts themselves to employ the people who work for the STLDC. The program deserves to be abolished.

Here’s some good news for consumers: Schnucks is dispensing free prenatal vitamins to women with prescriptions. The offer builds on Schnucks’ free antibiotics program, which brought positive publicity and new customers to Schnucks pharmacies.

This is an example of market forces lowering health care costs. Schnucks wants to draw people to its stores, and to do that it has to stand out from its competitors. Other pharmacies will probably follow suit — if not with the same promotions as Schnucks, then with discounts on other medical services or products.

In the policy debate over the cost of care in hospitals, much of the discussion deals with putting medicine under regulatory control. Instead, we should be asking: How can we make hospitals operate more like Schnucks?

It does not get much more exciting than this in government (and I honestly speak here with no hyperbole or sarcasm). The governor’s office has announced plans to eliminate numerous boards and commissions. This is great, for a number of reasons. It will save the state some money, but, more importantly, it will reduce the number of people who have some say — no matter how small — in regulating our lives. Gov. Jay Nixon and the legislative sponsors of this proposal, Sen. Delbert Scott and Reps. Steve Hobbs and J.C. Kuessner, deserve a great deal of credit for doing this. In a small but important way, the freedom of Missourians will take a step forward with this act.

Eliminating the Interior Design Council would mean five fewer people with the potential to direct how we can live and who can be an interior designer, and modifying the Head Injury Advisory Council would reduce by 10 the number of people who have some type of authority to demand that we wear helmets from the moment we wake up until the moment we go to bed. I admit, it may be a small step — but it is a worthy one.

I am so excited about these proposals that, after my son goes to bed tonight (my wife and other son are out of town visiting relatives), I am going to stay in the hot tub for longer than the recommended time period — and I no longer have to give a damn what the state’s Medical and Technical Advisory Committee has to say about it!

In a recent post, I commented on how I supported preventing felons from working as bail bondsman, but stated that I did think, on the whole, that we were being too restrictive about which positions that felons can work in once they serve their sentences. So, I was delighted to read that in Kansas City Councilman John Sharpe has introduced legislation changing the city’s liquor code to allow felons to work in bars. I think that this is a very positive change, and I commend Councilman Sharpe. There is no reason that felons who have done their time should not be able to serve drinks, or work in any of the other assorted jobs that are available in bars. (I, myself, used to be a barback and a bouncer — although no, I am not a felon.) I hope this change goes through, so it can give former convicts a few more opportunities to build back their lives after they serve their punishments.

I was also delighted to read the story first at Tony’s Kansas City, which is always informative and fun to read for a number of reasons — which you will discover as soon as you visit.

The Drudge Report linked to a story from The Hill about the not-surprising admission that the new IRS commissioner does not do his own taxes. I think the law should require whoever holds that job to do their own taxes. It would be like how the Federal Reserve has restrictions on stock ownership for certain board members — just a side rule that people have to abide by if they choose to accept serving in that position position. Maybe whoever heads the IRS would fight harder for tax simplification if they had to deal with their own rules.

I have always done my own taxes, even when I had a small business in the ’90s, but that will end in 2010 because my wife and I decided to go with an accountant for the first time. Our taxes are not particularly complicated, but they are not particularly easy, either, and that is as much detail as I’ll bore you with. I always liked fighting through the details as a matter of pride, but now the benefits of that hard work are losing out to the time costs as the returns get more complicated.

More disturbing in the article is this ugly nugget:

The IRS this month announced it will be scrutinizing the tax preparer industry. Shulman said the IRS is looking to set “a minimal level of competence in the preparer community.”

Terrific. Now we get federal licensing rules for one more profession. That will raise the costs of using H & R Block, etc. I’ll admit that this is one field where more people doing their own work (as in their own tax preparation) might bring the great side benefit of leading more people to be upset about the tax code, but I still don’t want that benefit caused by higher costs imposed by the IRS.

The simple fact is that a lot of people can and should be doing their own taxes. If you have one job where taxes are withheld, you can work through it without too many headaches. The head of the IRS should be one of those people.

Nobody covers the bail bond industry like we do here at the Show-Me Institute. Combest has linked to an AP story in the Springfield News-Leader that details how a state agency is recommending that Missouri tighten its requirements to become a bail bondsmen. Now, I loathe most occupational licensing, but these recommendations (as reported by the article) don’t seem that bad.

I understand the reasoning behind not letting convicted felons serve as bail bondsmen, and that strikes me as a reasonable change. I say this as someone who is very sympathetic to the plight of former convicts getting jobs after serving their time, and I think we have gone too far in limiting the ability of felons to work after their sentences are complete. However, jobs that deal with the court system, like bail bondsmen, seem a reasonable restriction in my opinion. 

The other changes, according to the article, are:

The report also recommends larger fines for violations and requiring that applicants have high school diplomas.

Restricting entry requirements through rules or costs are the biggest economic problem with occupational licensing. Fines levied by regulatory agencies to punish misconduct by those who have done something wrong — after they’ve been licensed — are less of an issue, so I don’t greatly object if such fines are raised for current practitioners.

However, the last rule proposal is just stupid. I realize that getting a high school diploma or GED is very simple and has a low cost, but the main question should be whether performing the job competently requires a high school diploma. I fail to see why the job of bail bondsmen should require a high school diploma. The customers who need you don’t care whether you have a diploma on the wall. They care that you have the money to put up, and they need to know that you are going to find them and harm them (I don’t necessarily mean physical harm; returning them to jail is “harming” them) if they skip out on you and the court. The diploma requirement and the requisite job skills just don’t connect.

This is not in any way an attack on the intelligence of bail bondsman. I don’t think being a policy analyst at a think tank should require any type of diploma if you can do the job without it. (But, yes, the author does have a high school and college diploma, just like I am certain that most bail bondsmen have diplomas.)