Given the economic burden of regulations and their enforcement deregulation is the path forward.
December 9, 2024
By: Bobby Casey, Managing Director GWP
There’s an adage that says “the devil is in the details”. It refers to everything from the nuance of wording, to implications and unknown/unanticipated consequences.
That’s what regulations are. The devil in the details. You want to start a business? Great! Just fill out this form and you’re all set… but really you’re not all set. Bureaucrats and regulators are waiting to dig their hole and fill it back up on your dime, with their petty rules.
This is why the overturning of Chevron Deference was so important on the Federal level: so unelected bureaucrats aren’t given poetic license to harass private individuals and businesses.
Regulations are prohibitive, and law-makers and bureaucrats have long abandoned public interest in favor of some preemptive law that they supposed to prevent a bad thing. Rather than simply address the bad thing if it happens, they are now addressing the violation of a rule to prevent the bad thing. So more people are getting caught up in the dragnet.
If your regulations aren’t serving any purpose other than to fill a quota and justify bureaucracies, then clearly deregulation is the path forward.
The Pedants vs the Peasants
Some of the regulations are crony driven and protectionist in nature, whereby quelling competition. They rarely have anything to do with public safety and are often written by someone who’s never had to follow a rule in their life much less run a business and make payroll. These rule makers are theoretical business people, not actual business people.
Kevin O’Leary faced off with an Economic Analyst at CNN about tariffs. Whatever your feelings toward tariffs are, she’s reading reports and studies while O’Leary is talking about the direct impact on his multiple businesses in China. If you have the stomach for watching the exchange you can find it here.
This example is more to illustrate the frustration between those who have a book-knowledge understanding of business and those who have real-world understandings of business. They often don’t comport.
The academics will say raising the minimum wage doesn’t drive up the cost of doing business. The business owners are saying, “The cost of labor and the overhead just went up and I don’t know where I’m going to find the money to pay for that other than to raise prices.”
Governments must factor in the real events happening in the market and understand that deregulation is the path forward for any economy to thrive.
A Few Cases
Here are just four of the MANY cases the Institute for Justice has taken up where regulations and the regulators agitated an otherwise peaceful situation.
Katherin Youniacutt and Tammy Thompson Vs. Texas: These two women were once addicts. They were convicted of criminal offenses, but have since turned their lives around. They even went so far as to get Master’s degrees in Social Work and passed their state exams. But because they have a conviction from years ago, they are not qualified to be social workers to help people who are addicts.
One MIGHT think that recovered addicts would offer something valuable in helping others on their path to rehabilitation. Not the state of Texas.
Sarah King v. Oregon Department of Agriculture: This case is about a small dairy farmer in Oregon. The Oregon Department of Agriculture requires a permit for operating a confined animal feeding operation (CAFO), which until recently only applied to larger commercial farms to manage water and waste.
The smaller farms didn’t need the infrastructure the larger ones do because the “waste generated can safely decompose in fields or be composted for other productive use”.
[N]ow Oregon wants to regulate small farms like large commercial dairies. Why? Not because of real environmental concerns, but because large commercial dairies insist that small dairies somehow have a “competitive advantage” over big ones—that is, that they don’t have to install expensive infrastructure to manage waste.
Proctor, et al. v. City of Jacksonville, NC: A shopkeeper in North Carolina wants a couple of food trucks to operate on her property. She owns a general goods store. If she wanted to, she could open a restaurant on her property. But she decided to let food trucks sell food there instead. Unfortunately, the city of Jacksonville has a few regulations in place which preclude that from happening:
- Food trucks can’t operate within 250 feet of certain properties, such as any property with a brick-and-mortar restaurant, where every other type of food vendor is allowed.
- The city also specifically and narrowly restricts signage relating to food trucks while allowing every other kind of food vendor to display more and larger signs on the very same property.
- Finally, the city set the permit fee for food trucks not to pay for the city’s cost to regulate food trucks, but rather to burden food trucks approximately as much as a restaurant’s property taxes.
Thornton v. City of Bullhead City, Arizona: Norma Thornton is a seventy-eight-year-old retired restaurateur who brought home-cooked meals to feed the homeless to the park. She did this for four years unbothered.
As the city attorney clarified, people may freely share food in public parks at “social events, which would include a party.” But be sure your “party” doesn’t include any homeless people, or you might go to jail.
Norma was arrested and criminally charged with violating the city’s ordinance. Norma refused to plead guilty as she felt she’d done nothing wrong; months later (after hearings in criminal court), the city dropped the charge—but only while clarifying that if Norma does it again, the city would throw her in jail.
With no greater good being served in cases like these, it’s obvious the deregulation is the path forward.
Deregulation Will Be the End of Us All… or Not.
Here are a few cases in Ohio, Idaho, and Virginia where regulations were either simplified or eliminated and the world didn’t open up and swallow us up, demonstrating that deregulation is the path forward.
Ohio: Since 2016, Ohio has made tremendous strides in cutting the regulatory fat from their rosters with an ultimate goal of cutting their regulations by 30% by 2025. They are demanding their regulators address any successes or failures directly to the legislative body. Here is what they’ve done so far:
- Occupational license requirements reduced
- Licensure reform to reduce the barrier to entry and maintenance,
- Recent adoption of universal licensing recognition which allow people holding licenses in other states can move to Ohio and their license is still valid and recognized
- Passing of Senate Bill 9 which requires the removal of 2 restrictions for any new one added.
Idaho: Since 2019, Governor Brad Little has razed the regulatory blob of Idaho. He’s cut or reformed nearly 95% of it, beating South Dakota as the least regulated state in the union.
- Similar to Ohio, the regulators have to cut two to add one restriction
- Regulators must provide an impact report that itemizes how any new regulations will affect consumers and small businesses; they must also provide rationale for why they want to keep a regulation, shifting the burden on the regulators rather than the public.
- There are 241 recommendations for improving, modifying, or eliminating licensing requirements or other regulatory burdens.
Virginia: Governor Glenn Youngkin has committed to reducing his state’s regulations by 25%. He set up an Office of Regulatory Management, which will review all regulatory recommendations first.
Regulators must submit their ideas on a form including estimated impacts on families, individuals, and small businesses.
If the regulations they are cutting are anything like the ones the Institute for Justice are litigating, everyone is better off without them. The regulations on the books, especially at the local levels, are like an episode of “Hoarders”. It’s suffocating. Ending cronyism, lifting the burden on small businesses, and saving people money is the way. Deregulation is the path forward.
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