There has been a lot of political talk about fairness lately, with the notion that businesses and consumers are often on opposite sides.  Really?  There are steps Missouri lawmakers can take that would be fair and beneficial to both, and maybe a boost to the faltering state economy.

In its effort to change the business climate in Missouri, the Missouri Chamber of Commerce and Industry has identified three broad policy initiatives for the current legislative session. According to Chamber president Daniel Mehan:

“Among the list are issues left unresolved last legislative session that will be advocatied (sic) by Missouri’s top business associations and employers: workers’ compensation reform, employment law, and tort reform,” Mehan says.

Within the context of these broader policy initiatives, the following topics are among the most important issues the Chamber addressed. As briefly discussed below, each deserves careful consideration as a reform measure that can foster economic growth in Missouri.

1. Making Missouri employment discrimination law consistent with federal law. Businesses face confusing and parallel obligations under federal and state laws. Making Missouri law consistent with federal law reduces confusion and lowers compliance costs for businesses, which in turn lowers the cost of doing business in Missouri. Consumers and businesses then share the benefits of lower costs.
2. Capping damages in employment discrimination cases. Caps make future business costs more certain and predictable. Although the plaintiffs’ bar does not favor this idea, no one is closing the doors to the courthouse. Policymakers should carefully weigh the benefits and costs and make the decision that best advances business competitiveness and the administration of justice.
3. Exempting co-employees from liability for injuries sustained in workers’ compensation cases. Currently, employees injured by co-employees at work may sue the latter for damages outside the workers’ compensation system. This gives rise to costly disputes among employees, disruptions in the workplace, and an increase in employer costs (not always monetary). Also, multiple lawsuits for the same injury may occur as the injured employee sues both his employer in workers’ comp and his co-employee in circuit court. Time, money, and effort may be economized by requiring injured employees to maintain a single suit in a workers’ comp venue.

Again, these are but a sample of current issues impacting the business climate in Missouri. These issues are important in that each imposes additional costs on businesses in Missouri. As a result, consumers and households may suffer because they will face higher prices, fewer goods, and lower employment. Remember, we are all in this together, despite what some others may say or imply. Isn’t it possible that sometimes what is good for business is good for the people?

Just in time for holiday travel, the National Transportation Safety Board (NTSB) recommended banning the use of cell phones while driving. The news came when the NTSB completed its investigation of a tragic accident that occurred in Missouri in which two people died and another 38 were injured.

This provides the perfect narrative for what some might consider to be very compelling and policy-minded journalism: A tragedy has occurred and a cell phone was involved. Shouldn’t there be a law against that?

Consider this line from the New York Times’ series of articles on the subject: “With virtually every American owning a cellphone, distracted driving has become a threat on the nation’s roads.” Indeed, in September 2009, the newspaper wrote that it was time to crack down, saying that “…texting at the wheel is a national hazard that calls for a firm federal response.”

This weekend, I heard an interview on National Public Radio with Matt Richtel, the author of several Times articles regarding the dangers of cell phone use while driving, discussing whether he considered himself to be an advocate. Richtel provided the standard journalist line, saying that he just thinks it is important to ask tough questions.

Well, here are two more.

1. Traffic fatalities, crashes, accidents, etc. have declined dramatically. If driving is safer than ever, why is there such concern?

The argument I hear again and again (most recently when I sat in on Donnybrook) is that banning cell phones while driving is about safety. However, Missourinet reports that this year, traffic fatalities are headed for a 62-year low. The same trend is seen on the national level. Fatality, injury, and crash rates have all declined substantially since 1990.

If fatalities, crashes, and injuries are down, then I hardly think that we are experiencing a “national hazard” that warrants an outright ban on cell phone use while driving. Of course, there have been accidents where cell phones were clearly the cause. However, with traffic accidents and fatalities down during the same time period that cell phones became popular, cell phone use is clearly not as dangerous as some fear.

And, even if an action comes with a small amount of risk, that does not mean we should pass a law to ban it. In fact, driving with children in the car may be more distracting than those pesky cell phones. Should we ban driving with children? Are we in the midst of a national driving-with-children epidemic?

2. How could this possibly be enforced? And, do we really want to create another vague reason to stop and question citizens?

How on earth could a ban on cell phone use be enforced? Would a police officer be able to pull you over if you look down briefly while driving? How could the officer discern whether you are talking on a hands-free phone or merely singing along to the radio?

The New York Times should know better than to advocate for additional vague ways for police to stop and question individuals. After all, the Times did an excellent study of a “stop, question, and frisk” policing policy. The newspaper found that after a drastic decline in violent crimes in New York City, the number of stops the police made increased dramatically.

Knowing that police officers can sometimes abuse their ability to stop, question, search, and detain individuals, why would anyone advocate for more vague reasons to stop and question people? Driving dangerously is already illegal. What more do cell phone ban advocates need?

Indeed, the last thing I want to see after the passage of federal legislation that allows for the indefinite detention of U.S. citizens on U.S. soil is another vague reason that police can use to stop and search citizens.

The solution is not to ban cell phones.

I do not condone texting while driving. I also am not a fan of eating while driving, or letting your adorable pet distract you while driving. Though it would make an excellent point and is legal, I do not recommend that you hold a banana to your ear and pretend to talk to it while driving.

I was in a nearly fatal car accident when my family first moved to Michigan. The culprit? Ice. Should driving in Michigan be banned from October through April? Obviously not. Instead, I support independent groups working to inform drivers about dangerous winter driving conditions. Similarly, efforts to educate drivers about the dangers of distracted driving may end up saving lives.

But an outright ban? It is an overreaction to a tragedy.

Occupy Saint Louis is in full effect, and my co-worker Patrick Ishmael and I dropped by last Friday for the group’s afternoon march. I can only claim superficial exposure to the pulse of this particular group at that particular time, because I was in the crowd but not of it, and I didn’t take the time to talk to anyone while I was there. Most of the signs I saw and chants I heard involved “jobs,” though there was also a call-and-response that got a lot of play: Call: “Whose streets?” Response: “Our streets!” I’m not really sure what that one meant.

I have been reading quite a bit about the protests going on in New York City, in the rest of the country (my cousin participated in Occupy Omaha, he’s the one in the suit near the center) and even around the world. The protests and the protesters are not totally united in their goals or their beliefs, but there are certain common threads that bind the movement and represent a shared objective. One of the most common complaints you’ll hear is anything along the lines of “get Wall Street out of Washington.” This is an expression of the idea that business and government should not have such cozy relationships. The word for this concept in popular usage is “corporatism,” and although the protesters may not realize that a free-market think tank represents an ally in their fight, we have published countless studies and commentaries asserting that government should not be in the business of picking winners and losers in the marketplace.

We oppose tax credits such as the Aerotropolis subsidy package, film tax credits, and other publicly-funded business incentives. Indeed, so strong is our stance against corporate welfare that it’s one of our six main policy areas.

The Occupy protests and the people calling themselves the 99% are fired up and out on the streets for a reason. H.L. Mencken said “Every decent man is ashamed of the government he lives under,” but when left and right are aligned in opposition to pervasive policy that hurts all but a very few well-connected people, and when thousands take to the streets to voice their disillusion, there’s a glimmer of hope for real change to the status quo.

Imagine you wake early one morning with severe sinus congestion and a throbbing headache. You wobble down to the local Walgreens for some medicinal relief, only to be denied your Sudafed by the pharmacist for lack of a doctor’s prescription. What do you do? Lug your bloated, throbbing head to the next county where prescriptions are not required? Or schedule a doctor’s appointment for next week? That is hardly timely relief. What will St. Charles County residents do?

The St. Charles County Council voted on July 25 to require a doctor’s prescription when purchasing cold and allergy medications that contain pseudophedrine. Unfortunately, the ordinance imprudently inserts doctors into meth makers’ raw material supply chains. It is difficult to imagine, much less believe, that this ordinance will effectively diminish meth production in Missouri. With a sufficient profit motive, meth makers will seek out alternative arrangements for the procurement of pseudophedrine, perhaps by recruiting doctors as critical prescription suppliers.

In essence, the ordinance will turn otherwise law-abiding doctors into accessories to crime, unwittingly or not. Some will no doubt embrace the temptation to write fraudulent prescriptions, thereby corrupting the practice of medicine.

But this is only the tip of the iceberg. With the resulting increase in the demand for prescriptions, the ordinance further taxes an already over-burdened medical reimbursement insurance system. In an era when concerns for healthcare costs predominate, why should St. Charles County compound the problem by dumping a multitude of cold and allergy sufferers onto the bloated calendars of busy doctors?

And what about consumers? Certainly, the monetary and inconvenience costs of traveling to — and paying for — doctor’s visits and the time exhausted circumventing the ordinance by purchasing medications in non-regulated jurisdictions are substantial. The St. Charles County Council has voted, in effect, to shift meth-related law enforcement costs onto the backs of innocent cold and allergy sufferers.

This cost shift acts much like a tax on the purchase and consumption of cold and allergy medications. As with a tax, the “effective” price for these medications rises for consumers. Similar to a tax, the result is a deadweight loss as consumers ultimately consume less than the optimal amount of medications.

Seriously, is the real purpose of the “prescription mandate” to engineer a local law enforcement database to better monitor the activities of private citizens? If so, shouldn’t someone conduct a detailed cost-benefit analysis comparing the expected benefits with the known costs? After all, pharmacists are already required to request and to enter personal information into a database tracking consumers of pseudophedrine-based medications.

And what can be done to alleviate the competitive disadvantages and inherent inequities dogging those pharmacies who happen to be located wholly within a prescription mandate jurisdiction? They will certainly lose business to competitors fortunate enough to be situated in non-mandate counties and municipalities. Although a statewide mandate would address this latter concern, it nevertheless would still give rise to the corruption of medicine and tax-imposed deadweight losses, as discussed above.

The war against meth is not a free task. The costs associated must ultimately be borne by taxpayers. The issue is whether the selected means for conducting that war are wise and efficient, implying that all costs and benefits have been carefully weighed and compared.

When I was a freshman in high school, I read Kurt Vonnegut’s classic novel Slaughterhouse Five. I didn’t fully understand the book at the time, but it introduced me to non-linear narrative and opened me up creatively to more innovative fiction. Pretty soon, I was devouring Catch-22, On the Road, and One Flew over the Cuckoo’s Nest (among others), and it was Vonnegut who first set me on the path to my favorite writers, without whom I doubt I would be where I am today.

So I was distressed to hear that the school board of Republic R-III in Republic, Missouri voted unanimously to remove Slaughterhouse Five from its curriculum. According to the Christian Science Monitor, the decision was “based on the complaints of Republic resident Wesley Scroggins, a professor of management at Missouri State University, and the father of several home-schooled children,” who “complained that the books advocate principles contrary to the Bible.”

This is paradoxical. Scroggins home-schools his children, presumably because his values conflict with those he believes the public school instills. He is exercising his right to choose how his children are educated. I’m sure he would object if the state board of education told him what books were suitable for his children to read. How then can he justify restricting what other students can study in school?

The real solution to this problem is more choice, not less. If we had a real market in education, parents who disapprove of Vonnegut and other authors like him could send their children to schools that don’t teach their works, while other schools could offer a more contemporary curriculum.

The district model for schooling is outdated. If it was ever a sensible model for educating students (I have my doubts), it was when the country was primarily rural and the technology to deliver the world’s information to every household did not exist. We have long since progressed past the need for these archaic bureaucracies that limit parental, student, and teacher choice. One district removing a single book from its curriculum may seem insignificant, but it illustrates how the current educational system limits rather than facilitates access to knowledge.

For any Republic High School students who want to understand the headline — or just spite their board of education — click here.

Working at the Show-Me Institute, located in the highly walkable Central West End, my colleagues and I often take short walks to lunch. Recently, food trucks have entered the competition for our dining dollars.

Given the large crowds that form around these trucks, they seem to be a hit, but apparently this is not the case for everyone. This week, police have cracked down on food trucks in the area — allegedly in response to a complaint.

A regulation in the city code forbids street vending within the Central West End, but until recently the restriction had not been enforced. Earlier this week, officers and inspectors issued warnings to multiple food trucks asking them to leave the area or face fines for violating vending regulations.

Christine Harbin, a former SMI policy analyst, wrote numerous times on these restrictions on private enterprise. First spotting food trucks in the Central West End back in March, she later followed up on the issue in a video interviewing both food truck owners and their customers. The verdict is still clear: there exists a strong consumer demand for these food trucks. Why should government inhibit healthy competition and growth of consumer choices?

Some people worry about the safety and health concerns associated with food trucks, but like any other restaurant or food provider, they must undergo government health and safety inspections to obtain permits for legally selling their goods.

Another common concern is the potential increase in street congestion. In Dr. Donald Shoup’s book, The High Cost of Free Parking, he explains the best way to manage street traffic is to introduce market determined parking fees.  Parking is not a free good, and should not be treated as one. Busy streets with more traffic and higher demand would have higher parking fees, while quiet less crowded streets with lower demand would cost less. This would force food trucks to internalize the externality of over consuming street parking.  If the trucks wanted prime location they would have to pay extra for it.

These trucks may be “technically illegal” in the area, but clearly there is a demand here that the government is barring. Originally, the downtown area had this same restriction, but now it benefits from many popular street vendors and food trucks. Why should the Central West End or any other area be treated differently?

Consumers would benefit if this restrictive ordinance was repealed throughout St. Louis, allowing their preferences — not the preferences of bureaucrats — to dictate food trucks’ placement and success.

To follow this issue further, watch Christine’s other video on the subject in which food truck owner Jeff Pupillo and a number of customers weigh in on food trucks and the unwanted competition they provide for some local restaurants.

During the past few weeks, this sound has become familiar to many Missourians, particularly those who live on or south of Interstate 70. That’s because the Great Southern Brood of cicadas has emerged to reproduce and fulfill its 13-year life cycle. The creative minds at Sparky’s Homemade Ice Cream, a local institution in Columbia, thought they could use this as an opportunity to experiment with a new ingredient:

Yum. Despite many people’s instant aversion to the insects, people have eaten cicadas for decades — but typically grilled, and never before in ice cream, to my knowledge. Nonetheless, the concoction proved a hit — so much so that Sparky’s sold out of it before it even officially debuted. Unfortunately, the health department warned Sparky’s against making more, likely ensuring that this will be the only batch of cicada ice cream ever sold there:

Sparky’s approached the Columbia/Boone County Department of Public Health and Human Services and asked about the use of cicadas in the ice cream, Gerry Worley, environmental health manager for the department, said.

“The food code doesn’t directly address cicadas,” Worley said. “We advised against it.”

Despite the fact that people are free to eat cicadas on their own and frequently do so, the city has recommended that food service professionals avoid using this highly demanded ingredient. Everyone loses in this situation. Sparky’s loses business and publicity. Consumers lose an exotic experience. The only winner is a climate of senseless regulation.

My father founded and ran several area gas stations until his death. At first, he embraced the use of oil and gas mandates like those that regulate the ethanol industry — he saw ethanol as a possible revenue stream. However, optimism dwindled as each fall’s harvest brought bushels of despair, not what others had promised. He would one day realize the strife that comes with perverse government regulations.

Many have regarded ethanol to be the proverbial “fuel of the future,” claiming that it reduces the cost of gasoline at the pump while also emitting less pollution. Although ethanol can replace gasoline in some ways, it is less beneficial than many expect.

The Department of Energy began releasing data in 1997 determining that some of the benefits derived from ethanol don’t outweigh the costs, as researchers had previously believed. Ethanol may emit less pollution when burned in place of gasoline, but the Environmental Protection Agency reports that it releases carcinogens at far higher levels than they predicted when it’s created.

Despite the abundance of new testimonies and information, however, both the federal and state government continue to support ethanol ardently, as our country’s energy messiah.

Pointing to often-circulated claims of environmental friendliness and cost-effectiveness, Rep. John Shimkus from Illinois recently introduced new legislation that would impose further government mandates for the production of ethanol. Amid another distressing year for Detroit, this governmental decree would require that 50 percent of all new automobiles be capable of running on ethanol and other non-petroleum fuels by 2014. That number would stiffly rise to 95 percent just three years later.

So, do the advantages of ethanol outweigh the costs? The answer, simply, is no. Aside from its counterproductive environmental effects and proven efficiency loss for each mile to the gallon, ethanol is a precarious investment for the government to force on us for several reasons:

• First, it has been shown that increases in ethanol production are correlated with an increase in food prices. These effects can be felt not only statewide, but also nationally and internationally.
• Second, and as a direct result of government mandates, a cloud of pseudo–market demand now hangs heavily above the heartland. Simply put, the current supply/demand ratio did not arise naturally from the decisions of producers and consumers, interacting voluntarily in the market. Instead, the ethanol industry is artificially bolstered by government sanctions.
• Finally, both this mandate and others like it point to the essence of how government controls harm the economy. There are too many hands in the cookie jar, and, as a result, everyone’s hand gets stuck; the cookie crumbles. Automakers should not be burdened with absurd requirements such as this from legislators who seek to alter the free market for the sole benefit of their constituents, and at the expense of everyone else.

Don’t get me wrong, I support the development of renewable energies and green solutions. Markets reward efficiency. However, as both a Missouri resident and an owner of my father’s businesses, I find that legislation like our own E-10 mandate and the proposal advanced by Rep. Shimkus in Illinois are harmful — especially in the long run.

Neither supply nor demand would exist at anywhere near current levels without both federal and state mandates, both of which have propelled ethanol into the forefront of the American auto and oil industries. As it stands, the eagerly pushed supply of ethanol more than satisfies current market demand. And that, folks, is just basic economic principle.

Today is my last day at the Show-Me Institute. Beginning next month, I will work at the Center for Fiscal Reform at the American Legislative Exchange Council (ALEC) in Washington, D.C. I am thrilled about my new role, but I will miss working at the Show-Me Institute.

Missouri public policy has its problems. Lawmakers have a terrible habit of trying to pick winners and losers in the market, even though they have such a bad track record of doing so. We’re relying on government to make the choices that individuals should be making for themselves in the private sector. Lawmakers are addicted to targeted tax credits and tax-increment financing (TIF) — even though these programs repeatedly fail to deliver on their promises.

Despite this state’s problems, Missourians have a lot to celebrate in public policy. Many great things are going on here. Missouri has fewer occupational license requirements than other states, which means that Missourians are more free to earn a living. Plus, Missouri has low state taxes on booze, cigarettes, and gasoline. It also has the Hancock Amendment, which limits state spending and requires that voters have the final say on tax hikes. (Wouldn’t it be great if the Hancock Amendment existed at the federal level?)

We’re taking many steps in the right direction toward limiting government and protecting individual liberty. For example, Missourians were among the first to oppose the federal takeover of their health care, and we haven’t given up. As another thing I find promising, the Saint Louis Land Reutilization Authority (LRA) is accepting more offers to buy vacant property (thanks largely to the efforts of my colleague Audrey Spalding).

I’m confident that Missouri, and other midwestern states, will be leaders in limiting government and getting the economy back on track. This change will be driven by individuals acting entrepreneurially in the private sector, however — not by the hand of government.

See you later, Show-Me State.

It was sunny and in the 70s yesterday — I couldn’t picture a better day to grab a cupcake and a taco from a food truck. Thankfully, my office is in Saint Louis city, which is friendlier to food trucks than other municipalities in the region.

Rick, Josh, and I trekked down to the busy intersection of Euclid and Forest Park Parkway to visit two food trucks, Sarah’s Cake Stop and Cha Cha Chow. We brought a video camera and a field recorder, and interviewed some of the other customers. I learned that they are excited about having a variety of lunch choices, and they are excited see more food trucks in the Saint Louis region.

As we have highlighted before on Show-Me Daily, local governments often get in the way of this very activity. Because cities place restrictions on food trucks, many hungry consumers cannot enjoy a freshly baked cupcake on their lunch break, despite being willing and able to pay.

We’ll get the video up onto our website in the next week or so. Stay tuned!

Now that I have my eyes open for food trucks, I see them nearly everywhere I go! While I was eating yesterday at Rasoi, an Indian restaurant in the Central West End, a food truck selling cupcakes parked literally outside the restaurant window. A long line of hungry customers appeared — it strikes me that there is a lot of demand for cupcakes from a food truck.

I have highlighted before on Show-Me Daily how Washington, D.C., and Saint Louis city place fewer restrictions on food trucks than certain municipalities in the broader Saint Louis area. This results in a lot of benefits, such as more food trucks, more choices for consumers, and more economic freedom.

Indian food and cupcakes are complementary goods (i.e., not subsititutes), so it’s more likely that both businesses are benefiting from their arrangement instead of one stealing business from the other. As I discussed recently, both businesses likely benefit from economies of agglomeration. Despite this, bricks-and-mortar restaurants are typically the biggest supporters of increasing restrictions. Instead of competing with food trucks on a level playing field, they attempt to convince the government to kick them out.

When I was in Washington, D.C., recently, I saw two food trucks as soon as I hopped off the Metro and emerged from the station. One sold cupcakes, and another sold cheesy food. Right away, I noticed that the two food trucks were parked side by side. We see this in Saint Louis, too — the cupcake and taco trucks often park next to each other.

What makes food trucks do this? Wouldn’t they want to park far away from each other? From the perspective of economics, parking together makes sense.

When they locate near each other, businesses experience benefits. Economists call this shopping agglomeration. Consider a shopping mall. Stores in a mall offer customers a broad array of products, and they likely have more foot traffic and higher sales than if they stood alone.

When food trucks park next to each other, they show the same kind of shopping agglomeration. The nuance here is that although each is a food store, the food may not be substitutes. They could, however, be viewed as complements. Quite likely, the benefits of locating near a busy Metro stop where there a lot of pedestrians outweigh the disadvantages of locating near a competitor. Plus, it’s likely that food trucks catch the attention of more customers when they are parked next to each other than a lone truck would. Look at the photo of the food trucks above — they certainly stick out from the background.

Brick-and-mortar restaurants typically oppose the existence of food trucks, but I suspect that they can benefit from agglomeration, too. This is because many of these food products are complimentary goods, not substitutes. Notice how these trucks are located outside of a brick-and-mortar restaurant. A person could buy a sandwich from the Cosi, and a cupcake for dessert from the food truck without having to travel very far. Instead of one stealing business from the other, it’s very likely that both businesses are benefiting from their arrangement. Local government officials should keep this in mind when they are considering policies that restrict mobile food vending.