Â
There's a pretty well-known psychology experiment in which dogs were given a series of electrical shocks, with some of them able to stop the shocks by pushing a button and others unable to. The ones who couldn't, in the words of the researchers, “learned helplessness.” I'm usually skittish about any parenting ideas that come out of a university psychology department, but this one actually says something to Penelope and me. If you want to raise kids to fight for their rights, to believe that they will be able to determine their fates, and to have faith that the future is theirsâand we doâthen you can't teach them to be helpless. That's what
any
nanny state is teaching, and it doesn't matter whether the nanniesâthe elitesâhave the best interests of the nursery at heart.
And America is not a nursery. In his farewell speech to the nation in April 1989, my political idol, Ronald Reagan, gave his vision of America as a “city on a hill . . . a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here.” Almost exactly twenty years later, in April 2009, President Obama said, “I believe in American exceptionalism, just as I suspect the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism.”
The contrast is dizzying. Someone once defined capitalism as what people do if you leave them alone, and it works pretty well as a description of the United States of America. The European Community (and America's Europe-envying Progressives) is what elites do if you leave them alone. That's what the Tea Partiers have against the age of Obama. Me, too.
CHAPTER 7
June 2010: 99.985 Percent Pure: The Price of Regulation
In June 2010, the Kernen family went to see a game played by the Cincinnati Reds at the team's home on the banks of the Ohio River. The Great American Ballpark, as it is known, is a replacement for Riverfront Stadium, which was a replacement for Crosley Field, which was part of the deal for keeping the Reds in Cincinnati in the 1960sâand if you think my free-market principles are in conflict with the way public funds were spent on a baseball stadium, I can only say: Get over it. Baseball is baseball.
It's also a good place to start thinking about the costs of regulation.
Â
The Cincinnati Reds are my hometown baseball team, and I have been a fan as long as I can remember. The first World Series I remember was the 1961 Reds-versus-Yankees disappointment, which was nothing compared to the disaster of trading Frank Robinson for Milt Pappas (and the immortal Jack Baldschun) when I was nine. I grew up with Jim Maloney and Pete Rose and Tony Perez and Lee May and sweated out the threatened move to San Diego in 1967. And of course I firmly believe that the Big Red Machine of the mid-1970s was the greatest team ever. In fact, I feel sorry for anyone who doesn't realize this.
I'm aware that the years since haven't always been so glorious (and if I forget, my
Squawk Box
colleague Carl Quintanilla is always happy to remind me how the Phillies swept Cincinnati in the 2010 Division Series, only to lose to the Giants in the League Championship Series, which was at least some comfort).
Getting tickets to see the Reds has generally been pretty easy: Johnny Bench, the Reds' Hall of Fame catcher, is an old friend. However, in 2008 a series of screwups (mine; I had asked for tickets for the game being played the following day) left us without tickets for a Pirates-Reds game and no choice but to visit the entrepreneurs strolling along what used to be called Main Street (and is now Joe Nuxhall Way) in order to pay three times face value for the seats.
A lot of people, even those who end up buying scalped tickets, find this unfair. Blake isn't one of them. She had no problem with paying a lot for the tickets, not because of what economists call price inelasticityâthis is the phenomenon that keeps demand from falling for certain categories of stuff, even when their prices rise; we don't buy less Halloween candy just because the price goes up, not in the Kernen household, anywayâbut because
her
cost for the tickets is the same whether we pay list price or five times list price: zero.
However, “price gouging” at sporting events, plays, and concerts is subject to a dizzying amount of regulation and prohibition. The last time anyone checked, twenty-six states and dozens of municipalities representing three-quarters of the U.S. populationâand including virtually every city with an MLB, NFL, or NBA franchiseâhave some kind of antiscalping regulation. Ninety years ago such laws were sold to the public as, essentially, antinuisance laws, like a requirement to clean up after your dog. What happened was that one nuisanceâscalpers cluttering the sidewalk in front of baseball stadiums and concert arenasâwas replaced by an even bigger one: the inability to buy a ticket to the event. As always with good intentions, the results were nothing like the original intent.
Welcome to the wide and wonderful world of regulation.
The desire to regulate economic life might be
the
defining characteristic of Progressive philosophy. It combines a mistrust of the free market in allocating resources; an appeal to a vague and indefinable virtue (“fairness”); a desire to achieve perfection in economic outcomes; a deference to experts over the judgment of ordinary folks; and, best of all, a chance to tell other people what to do. Oh, heck, let's just say it: Regulation
is
progressivism.
It is also the perfect way to illustrate just how much Progressive thinking depends on treating adults like kids. Because kids
love
regulation.
Â
“Blake?”
“Yes, Dad?”
“You know cigarettes are bad for you, right?”
Eyes roll upward.
“And you know that people aren't allowed to smoke in restaurants or lots of other places, right?”
“They shouldn't be allowed to smoke
anywhere
.”
“Why not?”
“Because it's
bad
!”
Â
The usual argument offered by Progressives who want to ban indoor smoking is that secondhand smoke is so dangerous that it presents a clear and present danger to nonsmokers as well. Then, when restaurants and bars proposed segregating smokers and nonsmokers, the Progressive response was to leap to the defense of bartenders and waiters, who presumably had no choice but to work in places that permitted a tinge of tobacco smoke. New York City is currently considering banning smoking in the new “pedestrian islands” in Midtown streets that have been partly blocked from automobile traffic, evidently so that nonsmokers can safely sip their drinks without any tobacco smoke added to the exhaust of a thousand cabs and buses.
Ninety years ago, reform-minded Progressives wouldn't have felt any need to hide their real reasons any more than Blake did: The logic behind the movement to prohibit alcohol consumption by amending the Constitutionâa movement led by Progressivesâwas simply that people need to be forbidden things that are bad for them.
Unfortunately, it's hard to know when to stop.
Â
“What about McDonald's, Blake?”
“What about it?”
“You know that fast-food burgers aren't real good for people either, right?”
“So?”
“So . . . should people be allowed to eat food that's bad for them?” Blake thought about this for a minute.
“I have it: People who are fat shouldn't be allowed to go to McDonald's.”
“You want to put a scale in every fast-food restaurant?”
“Uh-huh. Though . . .”
“What?”
“Maybe if they weren't too fat, they could eat at McDonald's once a month.”
Â
In November 2010, the city of San Francisco did Blake one better: The city's board of supervisors voted to forbid any restaurant from giving away toys with “unhealthy” meals, thus protecting children from the peril of Happy Meals. What's unhealthy? Any meal of more than six hundred calories with more than 35 percent of them from fat (toys can still accompany meals below that thresholdâso long as they have both fruits and vegetables as well). This is a reminder, if you really need one, that regulations get complicated really fast. They demand rules. Lots and lots of rules. Which is one of the reasons a regulatory response to pretty much anything is comforting to a ten-year-old: Blake's entire lifeâand Scott'sâconsists of rules: things that are either forbidden or required.
I'm just worried that we're headed into a future in which that will be true when they're adults, as well. Partly, this is because the Obama administration has the urge to regulate in its most virulent form. The Office of Information and Regulatory Affairs, under Obama nominee Cass Sunstein (according to conservative writer David Frum, who originally supported Sunstein's appointment), has approved literally hundreds of new mandates and prohibitions, including a ban on the sale of oysters in months without an
R
(actually just the summer, but you get the idea); regulation of the refrigeration temperature of eggs; and imposition of a $27,500 fine on airlines for every passenger stuck on the tarmac for more than three hours. No one has any idea how this number was arrived at, since even the lawyers who will be hired to fight the lawsuits that will be the regulation's inevitable result don't charge $9,167 dollars an hour.
This doesn't mean that all regulations, or even most, are intended to protect Americans from harm, or even inconvenience. For every construction building code that is required to guarantee that a new structure is (mostly) fire safe or that its plumbing won't spew raw sewage into a public catch basin, for every regulation that requires a restaurant to maintain a clean kitchen or a rancher to test cattle for disease, there are a dozenâprobably a hundredâother regulations written to protect one group of Americans from another.
In the Obama era, the group that gets regulatory protection is, most often, a labor union.
26
But there are plenty of other folks who owe their prosperity to regulation. Not all crony regulations are national in scope or written to help out million-member unions. Just as ridiculous are the thousands of licensing laws written to protect, ahem, special interests.
Consider, for example, the tour guides who will be happy to show you where the First Family lives. You might think that the risk to public health of an unlicensed tour guide explaining when the Capitol dome was constructed is minimal. But that doesn't stop the city of Washington, DC, from requiring that anyone doing so must have a special license costing a couple of hundred dollars in fees just for the application. And don't forget the test: a passing grade on the District of Columbia Sightseeing Tour Guide Professional Licensing Examâso unless you know that the Smithsonian National Zoological Park (the “National Zoo”) isn't technically a Smithsonian Museum but a Smithsonian Research Center, well, you're out of luck.
Don't plan on traveling to DC anytime soon? How about getting your hair cut? Cosmetology licensesâwhich can cost $15,000 to acquire, a big chunk of which is paid for by government-insured student loansâare usually justified on safety grounds: People who use razor blades or caustic chemicals around the face are easy targets for fearmongering. And thank the regulatory gods that someone makes sure that no one is going blind from having bleach sprayed into her eyesâexcept that the risk, once again, seems modest. The United Kingdom, which doesn't have a lot of hostility to regulation in general, doesn't require
any
license to cut or style hair and hasn't required one since 1964âwithout, so far as I can tell, any epidemic in infection, hair loss, or lost ears.
One reason that licenses are so pervasive is that states and municipalities make money issuing them (as do the schools and trainers who make a living preparing people to take the tests required to earn them). But the real support for such licenses, inevitably, comes from the people who have them and are understandably peeved at the prospect of competitors who haven't spent the same amount of time and money to join the club. As Matthew Yglesias points out, on the South Side of Chicago, where a significant number of African American women like their hair braided, licensed cosmetologists got in the habit of calling in the police to raid the shops of hair braiders, who learned their skill as apprentices because most cosmetology schools don't even teach it.
The Institute for Justice, based in Arlington, Virginia, documents hundreds of similar licensing scams, which make for entertaining reading so long as you can forget their economic costs. If you want to be a used-book seller in the city of Los Angeles, for example, you may be required not only to get a police permit but also to fingerprint a customer trying to sell you a collection. The District of Columbia protects not only tourists from unlicensed tour guides but also homeowners from interior designers who have failed to pass a thirteenhour test. And it isn't just Chicago looking out for barbershop customers: In Newark, New Jersey, cutting hair means working for a fully licensed barber for three years before doing it on your own.
Anytime the government regulates entry to a profession, the result is protectionist, no matter what the original impulse, and the people who are protected tend to like it that way. New York City, for example, forbids any cab without a licenseâa “medallion”âfrom picking up passengers at airports or on streets, and because the city didn't issue a new medallion for more than fifty years, the only way to get one was to buy one from an existing owner, at a cost that eventually reached several hundred thousand dollarsâten times the cost of the cab itself. Not very surprising, then, that medallion owners
love
that particular regulationâor that tens of thousands of New Yorkers can't find a cab during rush hour.