Tag: deregulation

Free-Market Beer

The new issue of Mid-Atlantic Brewing News has a nice article about the District of Columbia’s laissez-faire rules for beer distribution. (See page 8 in the “digital edition”).

Columnist George Rivers explains that the D.C. rules encourage entrepreneurship, bring jobs and economic activity to the city, and are a big plus for consumers:

While most jurisdictions in the U.S. erect regulatory barriers to limit the sale and consumption of alcohol, DC’s legal framework encourages retailers and wholesalers to compete for consumers’ dollars through increased selection and lower prices.

Rivers notes that beer consumers flee Maryland’s red tape and higher tax burden to enjoy the lower prices in D.C. At the same time, entrepreneurial beer retailers choose D.C. to do business because they don’t have to deal with a burdensome and monopolistic wholesaling industry.

Perhaps the most celebrated beneficiary of DC’s liberal liquor laws was the legendary Brickskeller, once holder of the Guiness World Record for the largest selection of beer.

D.C.’s free-market beer environment also stimulates broader economic activity.

The District’s flexible liquor laws have helped facilitate the logistical challenges behind the pairing of 144 craft beers and food at SAVOR, the nation’s premier beer-and-food event, now in its fourth year.

So up with deregulation, up with jobs and investment, and down the chute with the beer!

Obama as Reluctant Deregulator: Four Months Later

When President Obama, following his midterm “shellacking” at the polls, announced his belated conversion to the cause of regulatory relief, I was skeptical. I noted that, despite the reputation of OIRA chief Cass Sunstein as a brilliant scholar with an openness to cost-benefit analysis rare on the Left, the first two years of the Obama administration had been marked by a tremendous ramping up of regulatory burdens on the economy, both in areas of new legislation (ObamaCare, Dodd-Frank) and in new agency rulemakings gearing up from the “ultras” — ardently pro-regulatory appointees like Margaret Hamburg at FDA, Lisa Jackson at EPA, and David Michaels at OSHA. I also observed that in boasting of its deregulatory accomplishments, the administration chose an exceedingly minor example (saccharin’s reclassification as not being a hazardous waste) in which no one important seemed to have been pushing on the opposite side. That suggested that the Obama White House might lack the stomach to press deregulation when doing so might actually offend pro-regulation constituencies.

Yesterday the administration announced the results of its comprehensive review in which more than two dozen agencies looked at existing regulations to identify areas where burdens could be reduced [WaPo, AEI Enterprise, Wayne Crews/CEI]. As Cary Coglianese notes at the Penn Program on Regulation’s RegBlog,

[M]any of the initial rules agencies have proposed to put under the microscope seem underwhelming. Frequently they are what might be considered “paperwork” rules, with agencies hoping to find ways to streamline reporting and make more information available online. The Treasury Department, for example, plans to review an Internal Revenue Service regulation so as to correct instructions about where to file for a tax refund or credit. The Commerce Department’s plan identifies, among other things, the rule governing the “application number” and “filing date” for patents.

There’s nothing wrong with streamlining paperwork, of course, but it’s a cause that even “ultras” can get behind. Indeed, one of the largest line-item claims of savings comes from an OSHA plan “to finalize a proposed rule that would harmonize U.S. hazard classifications and labels with those used by other nations, which is expected to result in an annualized $585 million in estimated savings for employers.” As Coglianese notes, “few of the rules listed in the plans as targets for review are the salient regulatory issues of the day.” Tellingly, one of the most significant retreats on a regulatory issue in recent weeks — the EPA’s decision to pull back expensive new regulations on boiler emissions — is not boasted about, perhaps because the retreat is intended to be only temporary.

I do note with a ripple of “great minds think alike” satisfaction that Sunstein did advance, as one of his central examples of a new administration accomplishment, the EPA’s very belated recognition that spills of milk on dairy farms are not “oil spills” requiring elaborate containment and remediation measures. I had been writing about that one in this space for a while, and had specifically cited it in January as an example of the sort of craziness the Obamanauts should be trying to address if they want to be taken seriously on the issue of deregulation.

Tuesday Links

Monday Links

  • Burnt rubber: Obama’s decision to slap a 35 percent tariff on Chinese tires whiffs of senseless protectionism.

British Economic Suicide

A Bloomberg story on one cause of the ongoing British economic disaster under Prime Minister Gordon Brown:

Andrew Wesbecher moved to London from New York in 2006 to sell software to banks and hedge funds. This month he joined the exodus of American expatriates fleeing high taxes and the city’s shrinking financial industry … Americans are heading home as Britain plans a 50 percent tax rate for those who earn more than 150,000 pounds ($248,000) a year and employers cut benefits for workers living abroad, reducing the allure of London. That comes a year after the U.K. said foreigners who have lived in the country for more than seven years must pay 30,000 pounds annually or give up the special status that shields overseas income from British taxes.

Since the 1980s, London has boomed as an international city open to the world’s entrepreneurs and their wealth, and perhaps home to more billionaires than any other city. The British economy as a whole has done quite well, pulled ahead by London and driven by a new free-market spirit in the wake of Margaret Thatcher’s privatization, deregulation, and tax cuts. Thatcher rightly argued that her cuts to income tax rates “provided a huge boost to incentives, particularly for those talented, internationally mobile people so essential to economic success.”  High tax rates at the top end were a “symbol of socialism” that she wanted to scrap.

Brown is killing the free-market goose that laid the golden eggs of Britain’s success. I really don’t understand the vision of such politicians – don’t they know what they are doing? I want people to be successful. I want entrepreneurs to create wealth. I love growing, vibrant cities.  Why do some people want to destroy all that?

A Deregulation That Could Reduce Foreclosures

One of the obstacles to reducing mortgage foreclosures is that so many of the homes being foreclosured upon are not occupied by their owners.  Approximately 20 percent of homes are vacant investor-held properties, while according to the National Low Income Housing Coalition another 20 percent are occupied by renters.

Addressing the issue of renter occupied foreclosures has been one of the harder nuts to crack.  We should have no sympathy for vacant homes purchased purely for speculative gain - the best course of action for those homes is foreclosure, or even better, speculators should be expected to continue paying those mortgages even in the face of losses.   Where homes are currently rented however, it may be in the interest of both the bank and the renter to continue that relationship.  Unfortunately, there is one larger barrier:  the very same bank regulators who are pushing lenders not to foreclose.

As banks are not in the business of property management, their regulators strongly discourage banks from keeping foreclosured properties on their books.  In fact bank regulations generally prohibit lenders from entering into long-term leases with tenants.  Legislation (HR 2529) introduced by Republican Gary Miller and Democrat Joe Donnelly would allow banks to do so for up to five years.  While the bill is sure to have some flaws - it merits a closer look.

Although most banks are unlikely to want to become property managers, allowing some to do so, even on an interim basis could reduce both the unnecessary eviction of renters and foreclosures on rental properties.   And unlike proposals that would force banks to make uneconomical modifications, or prohibit lenders from taking ownership of a renter-occupied home, relaxing regulations governing bank management of foreclosured properties could keep some families in their homes without having to violate contracts or re-distribute wealth.