John Stossel: Politicians care about poor people. I know because they always say that. But then why do they make it so hard for the poor to escape poverty?
Outside my office in New York City, I see yellow taxis. It’s intuitive to think that government should license taxis to make sure they’re safe and to limit their number. It’s intuitive to believe that if anyone could just start picking up passengers, we’d have chaos. So to operate a taxi in NYC, you have to buy a license, a “medallion,” from an existing cab company (or at a once-in-a-blue-moon auction). Medallions are so scarce, they now cost hundreds of thousands of dollars.
Licensing prices poor people out of the business.
“Compare New York City, where a license to own and operate a taxi is $603,000, to Washington, D.C.,” George Mason University economist Walter Williams told me. “There are not many black-owned taxis in New York City. But in Washington, most are owned by blacks.” Why? Because in Washington, “it takes $200 to get a license to own and operate one taxi. That makes the difference.”
Regulation hurts the people the politicians claim to help.
People once just went into business. But now, in the name of “consumer protection,” bureaucrats insist on licensing rules. Today, hundreds of occupations require expensive licenses. Tough luck for a poor person getting started.
Ask Jestina Clayton. Ten years ago, she moved from Africa to Utah. She assumed she could support her children with the hair-braiding skills she learned in Sierra Leone. For four years, she braided hair in her home. She made decent money. But then the government shut her down because she doesn’t have an expensive cosmetology license that requires 2,000 hours of classroom time — 50 weeks of useless instruction. The Institute for Justice (IJ), the public-interest law firm that fights such outrages, says “not one of those 2,000 hours teaches African hair-braiding.”
IJ lawyer Paul Avelar explained that “the state passed a really broad law and left it to the cosmetology board to interpret.”
Guess who sits on the cosmetology board. Right: cosmetologists. And they don’t like competition.
One day, Jestina received an email.
“The email threatened to report me to the licensing division if I continued to braid,” she told me.
This came as a shock because she had been told that what she was doing was legal.
“When I called (the commission) in 2005 on two separate occasions, they did tell me that, but then when I called (again) … the cosmetology lady told me that the situation had changed and that I needed to go to school now and get a license.”
No customers complained, but a competitor did.
One cosmetologist claimed that if she didn’t go to school she might make someone bald.
But this is nonsense — hair-braiding is just … braiding. If the braid is too tight, you can undo it.
The cosmetology board told Jestina that if she wanted to braid hair without paying $18,000 to get permission from the board, she should lobby the legislature. Good luck with that. Jestina actually tried, but no luck. How can poor people become entrepreneurs if they must get laws changed first?! Jestina stopped working because she can’t afford the fines.
“The first offense is $1,000,” she said. “The second offense and any subsequent offense is $2,000 each day.”
“It is not unique to Utah,” Avelar added. “There are about 10 states that explicitly require people to go get this expensive, useless license to braid hair.”
Fortunately, IJ’s efforts against such laws have succeeded in seven states. Now it’s in court fighting for Jestina, which, appropriately, means “justice” in her native language.
Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it’s one in three. We lose some freedom every day.
“Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers,” Avelar said. “(Licensing laws) just help entrenched businesses keep out competition.”
This is not what America was supposed to be.
There are a lot of things, large and small, that irk me. One of them is our tendency to evaluate a presidential candidate based on his intelligence or academic credentials. When Obama threw his hat in the ring, people thought he was articulate and smart and hailed his intellectual credentials. Just recently, when Newt Gingrich announced his candidacy, people hailed his intellectual credentials and smartness as well.
By contrast, the intellectual elite and mainstream media people see Sarah Palin as stupid, a loose cannon and not to be trusted with our nuclear arsenal. There was another presidential candidate who was also held to be stupid and not to be trusted with our nuclear arsenal who ultimately became president — Ronald Reagan. I don’t put much stock into whether a political leader is smart or not because, as George Orwell explained, “Some ideas are so stupid that only intellectuals believe them.”
All the evidence that I see is that academics and intellectuals have messed up the world. I challenge anyone to show me a major calamity that was engineered by a stupid, inarticulate person, but those caused by intelligent, articulate persons are too numerous to count, from the likes of Hitler, Stalin and Mao to Woodrow Wilson, FDR and Obama.
My vision of a good presidential candidate is a person with ordinary intelligence but great respect and love for our Constitution. Maybe Palin’s and Reagan’s respect and love for our Constitution qualified them as dumb in the eyes of the mainstream media, intellectuals and academics. (Walter E Williams)
Official motto of the White House economic team: Those who can, do. Those who can’t, fantasize in the classroom, fail in Washington and then return to the Ivy Tower to train the next generation of egghead economic saboteurs. Life is good for left-wing academics. Everyone else pays dearly.
Take Austan Goolsbee, please. President Obama’s “fresh-faced” University of Chicago econ professor arrived in Washington in December 2008 to fill two slots: chief economist/staff director of the president’s Economic Recovery Advisory Board and member of the Council of Economic Advisers. In September 2010, he replaced CEA head and fellow academic Christina Romer, who retreated to the University of California at Berkeley last August when unemployment hit 9.5 percent. (She infamously projected that the Obama stimulus would hold the jobless rate below 8 percent.)
Goolsbee’s primary task: translating all of the administration’s big-government theories for us dummies. As Goolsbee put it to his university’s student newspaper: “We’ve certainly seen in previous crises that it’s quite important to explain things to non-experts. The American people can confront any challenge if they’re comfortable with the approach.”
And what exactly was the nature of Goolsbee’s vaunted expertise? Making money as a business rescue-and-recovery expert without ever having had to meet a payroll.
Goolsbee, the 15th wealthiest member of the Obama administration, has raked in assets valued at between $1,146,000 and $2,715,000. He also pulled in a University of Chicago salary of $465,000 and additional wages and honoraria worth $93,000, according to Washingtonian magazine. As I’ve noted before, the government research fellow and Obama campaign adviser was a champion of extending credit to the un-creditworthy. In a 2007 op-ed for The New York Times, he derided those who called subprime mortgages “irresponsible.” He preferred to describe them as “innovations in the mortgage market” to expand the pool of homebuyers.
Goolsbee’s most recent “innovation”: the “White House White Board,” a weekly video lecture teaching everyone else how to hitch what remains of America’s free-market system to the wagon of the state and how much (or rather, how little) we should make doing it. He illustrated his grand interventionist strategy to pick and choose “Startup America” winners by drawing a trough of broken light bulbs (symbolizing entrepreneurial ideas) piling up in a “Valley of Death” because they lacked government support.
A comical choice of imagery given the Democrats’ enviro-nutty ban on incandescent bulbs. But I digress.
When Goolsbee joined Team Obama, the unemployment rate was at around 6 percent. When he announced his resignation on Monday, the jobless rate stood at 9.1 percent. Romer and Jared Bernstein (former chief economist to Vice President Joe Biden) had predicted unemployment would drop every single month after August 2009 due to the Obama stimulus. Bernstein bailed on the administration in April 2011 for the sanctuary of a liberal think-tank. He’ll also now ply his failed wares as a financial pundit.
These hapless command-and-control ideologues were preceded by Peter Orszag, who hung his “Mission Accomplished” banner over the White House budget office in June 2010 after fewer than two years on the job, and by former National Economic Council head and hedge fund manager Larry Summers, who was caught sleeping on the job — literally — more than once during his brief tenure. Summers packed his bags in September. He was followed by Princeton economics professor and former top Obama Treasury Department official Alan Krueger in October 2010.
White House aides have lamented that the economic team is “exhausted.” Apparently, Obama is tired of hearing from them, too. The Hill newspaper reports that he has stopped receiving daily economic briefings that were once treated with the same emergency status as national security briefings. So, the central planners continue to be paid to fail — while their boss looks the other way at the destruction, whistling into what he calls America’s temporary “head winds.”
Nice non-work if you can get it. (Michelle Malkin)
So is our Dear Leaders solution to economic headwinds?
Give money we don’t have to people who have even less– Greece! 🙂