Government Monopoly Game Punishes the Poor


Tuesday September 8th, 2015   •   Posted by K. Lloyd Billingsley at 11:49am PDT   •  

Monopoly_200In 2012, California assemblywoman Fiona Ma backed AB 2482, a bill to license, yes, interior designers. Backers of the measure claimed it would protect consumers from unqualified home decorators, but as Dan Walters of the Sacramento Bee notes, “it was quite evidently aimed at limiting who could offer design services to potential clients – in effect, a state-enforced monopoly.”

As Walters saw it, licensure regulation made sense for doctors, dentists, and medical practitioners, but licensing requirements for others “provide, at best, marginal protection to consumers and exist mainly to carve out monopoly markets for those who obtain the licenses.”

Nationwide, “about 25 percent of jobs require state licenses, 5 times as many as in the 1950s.” In California the figure is 20.7 percent. The decision of which occupations are licensed, says Walters, “is essentially an arbitrary, and therefore political, matter, rather than a uniform effort to protect consumers.” The various boards that grant licenses, which belong to the state Department of Consumer Affairs, “are typically dominated by licensees themselves, so they have a built-in interest in dampening competition.” Arbitrary licensure results in “higher costs for consumers,” says Walters, and the requirements “make it much more difficult for those on the lower rungs of the economic ladder – especially women and ethnic minorities – to climb up.”

In a recent appearance on C-SPAN, economist Walter Williams recalled that an Italian immigrant could once buy a used car, paint “Taxi” on the side, and earn a living. With taxi medallions now costing hundreds of thousands of dollars, that is now impossible, and entrenched interests fight new ventures such a Uber. Williams also observed that medical boards are dominated by doctors, who claim they are best qualified to regulate the medical profession. By this standard, said Williams, Al Capone would make the best attorney general. Who better than a criminal to regulate criminals?

Fiona Ma, meanwhile, moved on to California’s Board of Equalization, a tax agency that doesn’t actually equalize anything. In 1990, some drone at this board proposed taxing editorial cartoons, like works of art purchased in a gallery. The “laugh tax” proposal made California a national joke. So does much of what goes on in Sacramento.




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