Thursday, June 16, 2011

The Economy Choking Effects of Government Regulation.

I am not one for anecdotal stories used for the purposes of debate. As a matter of fact, I find that particular tactic for swaying opinion particularly offensive. so, for that purpose I wish to address the issues raised in this Stossel video to their broader points.

The first star of our video, Jestina Clayton was shut down for not obtaining a license for cosmetology. What is even funnier still, is the fact that not a single one of the approved State Programs for cosmetology in her state offered the service she was providing as a course of study. At this point, all argumentation of protecting the public from unworthy practitioners of her craft breaks down completely. These regulations do nothing to promote transparency and competency, and they do even less to prevent fraud. What they are, for the most part is an added layer of taxation for a bloated government, and a means to stifle competition in order to protect the chosen winners in the government's game of crony capitalism. Who pays the ultimate price for this? Two parties are screwed. Ms. Clayton has been robbed of the opportunity to pursue her happiness and share of the American Dream. Our nation was founded on the belief that every individual citizen would be able to determine their own destiny by participating in the free society. This nickle dime regulatory happy society is not just a federal or state problem either. I am sure there are dozens of local forms of bribes licensing that our braider has to put up with as well. The consumers also have to bear the burden for this. By limiting competition, due to the constraints of supply and demand, the prices will be higher than if the regulations weren't there. Add to that, the costs of obtaining and administering the regulations, all paid for by the consumer eventually, and suddenly, getting a hair cut costs slightly more than going to visit a doctor. Please don't misunderstand my point here, I do believe that some regulations are necessary. Those that promote transparency and prevent fraud. I also believe that a certain amount of insuring competency is necessary. Certainly though, there is a difference between insuring a doctor's competency and that of a hair dresser. At 2000 hours of class room instruction, our hair dressers and nail technicians are receiving a greater degree of education than our medical practitioners.

I had heard recently the argument that regulation somehow serves the public by lowering the amount of law suits which now clog our courts. If this is indeed true, I would love for someone to explain how. Our justice system has become a parasitic lottery system decades ago. I can not help but correlate the exponential boom in the instances of people suing other people with the exponential increase in overbearing regulation. Any time a new law is added to the books, our legal system becomes even more complicated. With each new complication, comes an opportunity to run afoul of the code which as of now, requires three years beyond college just to prepare oneself to take the test necessary to be legally allowed to explain that system to others.

Bad public policy has another effect. Bad laws, those the people in general find offensive, lead to virtuous acts becoming illegal. This leads to a breakdown in the morality of our society as a whole.

Our heroine, Jestina Clayton, without a lawyer willing to take her case for free would have been saddled with a choice between to rotten paths. She could either have accepted public assistance, and become, along with her two kids, a ward of the State of Utah. She could have opted to violate the law, and open a black market hair braiding salon to support her family, without becoming a burden to the rest of society. There is no question which is the more virtuous choice, and it was not the path that obeyed the laws as written. If Ms. Clayton were not qualified to braid hair, she would not have been able to support her family for 4 years by doing it. The free market system would have shut her down almost immediately, and no one would return, no referral customers would have hired her the first time. Jestina lost her income, and the neighborhood lost a valuable skill. The only winners here are the State's coffers, and those afraid of competition.

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