Regulation of the Day

Not too long ago, I told Marty Hahne’s story. He is a long-time children’s magician who got in trouble with the USDA for using an unlicensed rabbit in his shows. Among other things, he also had to give the agency proof that he was making regular vet visits, and submit to random inspections of his home. The topper was that he had to submit a 28-page disaster plan covering how he would care for his rabbit under at least 21 different calamities.

The publicity surrounding the story caused a bit of a blow to the USDA’s self-esteem. In today’s Federal Register, the USDA’s Animal and Plant Health Inspection Service announced that it is temporarily suspending the relevant regulations. It is doing this “in order that we may undertake a review of their requirements.”

Time will tell what comes out of this review, but hopefully magicians won’t have to apply for federal license if they want to pull a rabbit out of a hat.

Post image for Regulation of the Day 232: Pulling a Rabbit Out of a Hat

Marty Hahne is a magician in Missouri. He has been putting on magic shows for kids for almost 30 years under the nom de guerre Marty the Magician. Back in 2005, he got in trouble with the USDA. Turns out he was using an unlicensed rabbit for his grand finale of pulling a rabbit out of a hat. Hahne quickly found out that the USDA’s regulations for magicians’ rabbits, in force since 1966, are both strict and extensive.

Eight years later, the agency is still harassing him. Here are some of the indignities the USDA is inflicting on Hahne and his animal assistant:

Hahne has an official USDA license, No. 43-C-0269, for Casey — a three-pound Netherland dwarf rabbit with a look of near-fatal boredom. The rules require Hahne to pay $40 a year, take Casey to the vet and submit to surprise inspections of his home.

Also, if Hahne plans to take the rabbit out of town for an extended period, he must submit an itinerary to the USDA. The 1966 law that started all of this was four pages long. Now, the USDA has 14 pages of regulations just for rabbits.

Now, under new regulations, “animal exhibitors” such as Hahne are required to file written disaster plans to the USDA covering at least 21 types of disaster, from broken air conditioners to hurricanes. Hahne’s disaster plan for Casey is 28 pages long, and is considered short for its genre. An attorney was kind enough to draft it for him pro bono.

When the Washington Post picked up on Hahne’s story, it spread like wildfire on weird news sites, and the Internet had a collective belly laugh at the USDA’s expense. After this blow to its pride, the agency reluctantly announced that Secretary Tom Vilsack has ordered a review of the regulations, insisting that “common sense be applied.”

This is not the same as saying the agency will use liberalize its strict magicians’ rabbit policy. But the phrase “common sense” does imply it.

I recently posted that new EU regulations would require restaurants to use factory packaged and sealed bottles of olive oil. This would put small artisanal producers out of business, and reduce consumer choice. Fortunately, the Telegraph is reporting that the EU is dropping the olive oil rules due to a public outcry (hat tip Walter Olson):

In a humiliating U-turn, Dacian Ciolos, the European commissioner for agriculture, admitted that the proposed ban on traditional olive oil jugs, had provoked popular loathing, or “misunderstanding”, from the people that he said wanted to protect for their own good.

This is why regulatory transparency is so important. The more people learn about regulation, the less they tend to like it. And when a whopper such as this one comes down the pike, it won’t get repealed unless people find out about it. Mr. Ciolos appears not to have learned his lesson, but results are what matter. He lost. More importantly, consumers and small olive oil producers won.

When you sit down at a Mediterranean restaurant, your server will typically set down some bread on the table, then pour some olive oil into a saucer or small bowl for dipping. Many restaurants also keep small jugs of olive oil as part of their table setting for general use. It’s a delicious way to begin a meal.

New European Union regulations are set to change this centuries-long practice. Starting January 1, 2014, any olive oil served at table “must be in pre-packaged, factory bottles with a tamper-proof dispensing nozzle and labelling in line with tight EU standards.” That means no more saucers of oil for dipping, and no more refillable jugs at the table.

Most complaints about the rule have been directed at the EU’s micromanagerial tendencies, and there is certainly something to it. But there is also a public choice angle that’s worth looking at.

Many restaurants buy their olive oil from small family farms that aren’t able to comply with the new labeling and sealing standards. Restaurants buy from them because many diners prefer their olive oil to the more homogeneous product put out by larger firms. These larger firms are also precisely the people who will benefit from the new rules. A public choice theorist would point out that the big producers very likely had something to do with pushing for their passage, and their added business comes at the expense of smaller farms — and consumers’ palettes.

This kind of rent-seeking behavior is all too common. And the more regulations there are, the more rent-seeking one sees. These olive oil rules are only the latest example. Most supporters of the rule might be motivated by health and safety, but certain other supporters are more concerned with securing an artificial competitive advantage for themselves.

Post image for Regulation of the Day 230: The Temperature of Beer

The state of Indiana regulates the temperature at which convenience stores may sell beer. Specifically, they must sell it at room temperature. Cold beer is forbidden. The law, unique to Indiana, is presumably motivated by temperance concerns. People can’t buy beer on the spur of the moment and it drink it cold right away. They have to take it home and refrigerate it first. Instead of instant gratification, people have to plan ahead. This promotes more responsible drinking habits, the thinking goes.

Then again, the law exempts wine sales. Any Indianan who wants to can buy a chilled bottle of wine from the local 7-11 and drink it immediately. Instead of keeping people sober, the law amounts in practice to discrimination against beer. Wine producers might not mind that so much, but nearly everyone else does.

Even so, a push to overturn the law in the legislature failed earlier this year. That’s why three convenience store chains are suing to overturn the law. The case is currently moving through federal court. An employee of one chain told WISH, a local television station:

“Thorton’s has not built a convenience store in Indiana since 2006,” said David Bridgers of Thorton’s convenience stores, “for the sole reason of its antiquated alcohol laws.”

So not only does Indiana’s warm beer law fail to promote temperance, it is directly hampering job creation in the state.

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Post image for Regulation Of The Day 228: Peyton Manning’s Jersey

When the Indianapolis Colts released star quarterback Peyton Manning this spring after 14 years of faithful service (and a Super Bowl victory), the Denver Broncos eagerly picked him up. Coloradoans rejoiced, and have made Manning’s number 18 jersey the best-selling in the NFL since April.

Konnor Vanatta, 8, of Greeley, Colorado, owns one of the new jerseys. He can’t wait for Manning to make his Denver debut this Sunday against the Pittsburgh Steelers. Like many football fans his age, Konnor was eager to show his allegiance by wearing his Manning jersey to school. The trouble is that he is not allowed to. His jersey has what local school officials call a “gang number” on it, with possible ties to a gang in Los Angeles.

Greeley and Los Angeles are 1,069 miles apart.

I’d never heard of gang numbers before, so I went to the FBI’s website and ran a few searches for terms like “Peyton Manning gang affiliation,” “Denver Broncos,” “gang numbers,” and the like. About all I found out was that the FBI does not consider the Broncos a gang, nor is Peyton a suspected gang member. Neither is Konnor, who is a third grader.

Still, zero tolerance means zero tolerance. Any clothing with the number 18 on it is verboten in Weld County’s public school system. Other suspected gang numbers are 13 and 14, along with all three numbers in reverse – 31, 41, and 81.

Which means Peyton isn’t the only Bronco who isn’t welcome in Greeley, Colorado schools. Young fans of wide receivers Tyler Grisham (13) and Brandon Stokley (14), cornerback Omar Bolden (31), and tight end Joel Dreessen (81) will also have to leave their jerseys at home. And baseball fans shouldn’t even think about wearing their Drew Pomeranz (13) Rockies jerseys come springtime.

Unlike school officials, Konnor’s mother appears to have some common sense. She told a local CBS affiliate:

“I knew that Greeley had a gang problem but I didn’t think in any event it should affect someone that’s in third grade,” Vanatta said.

Vanatta said she appreciates that school leaders want to be cautious, but she worries maybe they are just “giving the gangs what they want.”

“When they are counting and when they’re learning their numbers, are they going to make them skip 14, 13, 41, 81, 18 when they are counting? It’s getting ridiculous,” she said.

Good points all. Even the NFL weighed in, with NFL.com editor Gregg Rosenthal writing, correctly describing the policy as “idiocy.”

Neil Armstrong died last weekend at the age of 82. He was an inspirational figure for a lot of reasons besides the obvious one of being the first man to walk on the Moon. He took great pride in being a nerdy, pocket-protector wearing engineer. In so doing, he inspired a lot of nerdy kids to keep their chins up, work hard, and accomplish great things. His stoic example made the world a better place.

Armstrong also handled his fame well.  He always maintained a calm, quiet dignity. His steady demeanor presented a sharp contrast with his no-less heroic colleague Buzz Aldrin, who is something of a showman at heart. Armstrong didn’t much care for the spotlight, and happily lived a quiet life in his native Ohio.

Which brings us to today’s Regulation of the Day. It turns out that when Armstrong, Aldrin, and Michael Collins returned to Earth after the Apollo 11 mission, they actually filled out a customs form. The Atlantic recently unearthed the document. It’s hard to tell if the form was an exercise in dry humor or the crew really was required to fill it out.

It’s worth a read. The “Departure from” field is filled in with simply, “moon.” The flight routing proceeds: Cape Kennedy; moon; Honolulu, Hawaii, U.S.A. The cargo manifest includes “moon rock and moon dust samples.” An ominous note sounds in the “Any other condition on board which lead to the spread of disease” field: a typewritten, all-caps “TO BE DETERMINED.”

One wonders if today’s astronauts still fill out customs forms when they return home.

Post image for Regulation Of The Day 226: Hot Dog Carts

Nathan Duszynski is 13 years old and lives in Holland, Michigan. His stepfather has multiple sclerosis. His mother has epilepsy. Neither is able to work.

To help out with his family’s expenses, Nathan started mowing lawns and soon saved up the $1,200 or so that he needed to buy a hot dog cart. That way he could make even more money.

The owner of a local sporting goods store was even kind enough to allow Nathan to set up shop in his store’s parking lot. But regulators shut Nathan down ten minutes after opening up shop for the first time. He had yet to sell his first hot dog. Turns out that food carts are illegal in Holland unless they’re connected to a brick-and-mortar restaurant.

Seeing as many cities across the country have unaffiliated food carts and no evidence of consumer harm, there can only be one explanation for Holland’s hot dog cart ban: rent-seeking. Restaurants don’t want to deal with the competition, so they convinced the government to do their dirty work for them.

Because of this rent-seeking, Nathan and his family are now homeless.

Our friends at the Mackinac Center have spoken with the family:

“Nate and I are now in a shelter,” Lynette Johnson said. “Doug can’t stay with us because he takes prescription narcotics to deal with his pain and the shelter does not allow him with those kinds of drugs.”

She said the situation has been stressful on the family. Lynette is afraid to be away from her husband in case she has a seizure.

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Kern County, California’s government takes morality very seriously. Chapter 9.12.010 of the County Code states that “No vendor shall vend stuffed articles depicting the female breasts (sold as “boobie pillows”) within one thousand (1,000) feet of any county highway.” The punishment for each offense is a fine of up to $500 and/or up to 90 days in jail. Worse, “Each day of violation shall constitute a separate offense.”

The purpose of the boobie pillow ban, according to the Finding of Fact Leading to Enactment that accompanies the text, is to prevent children on their way to church from seeing such adult-themed merchandise.

Strangely, boobie pillows are the only adult-themed merchandise subject to the ban. So, according to the law, purveyors of smut can still set up shop almost anywhere they please. They just can’t sell “stuffed articles depicting the female breasts.”

In other news, Kern County is currently running a budget deficit in the $25-30 million range. If the county liberalized its strict boobie pillow policy, it could increase its sales tax revenue and tame its deficit.

A cool startup company called Uber operates in about half a dozen cities in the U.S. and Canada, and is growing fast. Think of them as an on-demand cab service. Using their smartphone application, you request a car, and a few minutes later a professional driver in a black Lincoln Town Car will pick you up where you stand and take you where you need to go. Their system even sends you a text message to let you know when your driver is about to arrive.

Customers who don’t like Town Cars can request an SUV instead. Since Uber keeps your credit card information on file, payment is both cashless and automatic, and you do not tip your driver.

It’s an innovative business model, and customers rave about the service. No wonder the local taxi industry in Washington, D.C., sees Uber as a threat. There are two ways they can deal with it. One is to compete. The other is to use regulation to drive it out of business. Guess which option they chose?

Back in January, a shady sting operation led by Taxi Commissioner Ron Linton nearly put Uber out of business in D.C., even though it failed to find any rules violations.

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