bureaucrats

Washington State Ballot: Cracking Open the Wine and Spirits Market

by Angela Logomasini on October 29, 2010 · 2 comments

in Nanny State, Personal Liberty

This election day, Washington State voters will have to decide on two different ballot initiatives dealing with alcohol regulation (#1100 and #1105). The first will open the market to competition at all levels — allowing competition necessary to reduce prices, make shopping more convenient, and increase consumer choice. The second goes halfway, forgoing many benefits offered by the first. (A helpful chart comparing the two initiatives can be found in this Washington Policy Center study.)

Both initiatives would essentially privatize spirit sales, but 1100 would also eliminate government pricing schemes for all alcohol that currently bar retailers from offering discounts. In addition, it breaks the state-imposed three-tier system by eliminating regulations that keep retailers from buying wine directly from wineries around the world rather than buying it all through wholesalers. Initiative #1105 would privatize spirits (which is good!) but  keeps three-tier mandates intact and also includes harsh taxes and regulations that will keep prices high.

Tackling three-tier mandates–as 1100 would do — is critically important.  Three-tier mandates serve wholesalers and bureaucrats well — at the expense of everyone else. They ensure that retailers cannot simply buy direct from wineries and then pass savings onto consumers. It also means, if wholesalers don’t want to carry certain wines, retailers can’t offer them.

Initiative 1100 was originally developed and promoted by Costco, which wants to buy direct and offer steep discounts to consumers. Opponents suggest that means the initiative is designed to undermine small retailers and wineries to benefit “big box” stores. That’s ridiculous. Costco isn’t asking for special privileges. It’s asking for opportunity to compete.

Voluntary contracts and competition drives market players toward arrangements that ultimately benefit consumers, and that’s what 1100 is all about. This system gives everyone a fair-and-equal shot, whereas government regulations favor the politically organized. If Costco wins in an open market, it will win because it meets consumer demands.

Costco won’t be the only business that wins. A more open marketplace will raise the best businesses to the top. It will help wineries and retailers — large and small — explore new opportunities for marketing products.

And an open marketplace won’t destroy wholesalers or the three-tier system; it would simply base that system on voluntary contracts rather than mandates. Competition for contracts will reward those wholesalers that provide the best service and eliminate those dependent on governmental guarantees. California and D.C., for example, do not have three-tier mandates, yet wholesalers play a critical role based on voluntary market arrangements.

Still, opponents of both initiatives–a good portion of which includes wholesalers–have suggested that privatization and rational market arrangements will undermine public health and promote alcohol abuse. Concerns about alcohol misuse are certainly important they have no bearing on economic organization of the marketplace, nor could they ever justify government-created monopolies. Social problems should continue to be addressed by other means, such as checking identification and private social services to help abusers.

In fact, the data shows that states with more open economic arrangements do not suffer from more alcohol-related problems. For example, a study published by the Virginia Public Policy Institute compares data from 18 “control states” (where at least some kinds of alcohol is sold only in government stores) and 32 “license states” (states where all alcohol is sold in private shops). The researchers found no difference between the two approaches in terms of alcohol-related health and social problems.

Specifically, they found that between 2001-2005 the number of per-capital alcohol-related deaths, binge drinking incidents, and drunk-driving cases were roughly the same among the states, regardless of where the alcohol was sold. In other words, government ownership of any portion of the industry does not improve public health and safety. The Commonwealth Foundation drew similar conclusions in an analysis of the data that produced in 2009.

This Reason Foundation study underscores some of the other fallacies associated with “temperance”-based arguments favoring regulation. In addition, check out Tom Wark’s blog, Fermentation, for helpful information on the initiatives and problems associated with three-tier mandates.

Image: Wine at California Costco Store, by Willscrlt’s photostream on Flickr.

Supreme Court Dooms Chicago Gun Ban; Obama Judicial Nominees Oppose Gun Rights; Religious Clubs Lose First Amendment Case; Removal of High-Ranking Bureaucrats Made Easier

by Hans Bader on June 30, 2010

in Intellectual Property, International, Labor, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

The Supreme Court doomed Chicago’s handgun ban Monday by ruling 5-to-4 that the Second Amendment applies to state and local governments like Chicago, not merely the federal government.  (Most guarantees in the Bill of Rights are deemed so fundamental that they apply to both state and federal governments, but a few rights deemed trivial, like the right to a jury trial in lawsuits seeking over $20, only are applied by the Courts to the federal government, not the states.)  In 2008, the Supreme Court ruled that the Second Amendment protects the individual right to possess a handgun in a federal enclave, in striking down a handgun ban in Washington, D.C., in District of Columbia v. Heller.  Chicago’s ban is quite similar to the one found unconstitutional in Washington, D.C., so the Supreme Court’s ruling Monday in McDonald v. City of Chicago dooms Chicago’s gun ban.

In 2009, President Obama’s first Supreme Court nominee, Sonia Sotomayor, claimed before her confirmation to accept the Supreme Court’s ruling in Heller as binding precedent.  But on Monday, she joined a dissent by the Supreme Court’s four liberal justices calling for the Heller decision to be overruled.  Second Amendment scholar David Kopel says that Sotomayor was not candid, noting that her opinion “contradicted” what she told the Senate before the Senate confirmed her to the Supreme Court.  It is likely that future liberal Supreme Court nominees will pretend to support gun rights until they are confirmed, then vote against such rights once on the Court.

Obama’s current Supreme Court nominee, Elena Kagan, lumped the NRA together with the KKK as “bad guy orgs” while serving in the Clinton administration, suggesting that she will consistently rule against gun owners if her nomination is approved by the Senate.  Kagan failed to defend federal laws protecting crime victims while serving as Solicitor General.

As a Harvard dean, Kagan blocked the military from recruiting, in defiance of a federal law requiring access for military recruiters.  Kagan claimed her opposition was based on the military’s exclusion of openly-gay soldiers, not hostility to the military in general, but this is hard to square with the fact that she had no problem letting the Saudis sponsor an Islamic studies program at Harvard Law School, even though the Saudis flog and execute gay people, and she had no problem serving in the Clinton administration, even though Clinton signed into law both the restrictions on gays in the military she claimed to object to (the Don’t Ask, Don’t Tell policy), and the ban on federal recognition of gay marriages contained in DOMA.

The Supreme Court Monday also ruled that religious clubs can be forced by colleges to admit atheists and others who disagree with the club’s religious perspective as members, as long as the college requires this as part of a general policy of banning clubs from discriminating based on any characteristic.  The Supreme Court’s four “conservative” justices dissented against this ruling limiting the First Amendment’s freedom of association, while moderate Anthony Kennedy joined the Supreme Court’s liberal bloc in ruling against the religious clubs in Christian Legal Society v. Martinez.

In Free Enterprise Fund v. PCAOB, the Supreme Court, in a 5-to-4 ruling, cut back on restrictions on the ability to remove high-ranking bureaucrats, ruling that provisions of the Sarbanes-Oxley law that kept anyone from removing members of the Public Company Accounting Oversight Board except for willful misconduct unconstitutionally infringed on the constitutional separation of powers, which requires that important government employees be subject to some degree of accountability to higher-ups in the executive branch.  However, the Supreme Court left intact the bulk of the Sarbanes-Oxley law.  The red tape adopted by bureaucrats under Sarbanes-Oxley has driven many IPOs and American jobs overseas.  The red tape costs the economy $35 billion a year, according to the American Electronics Association, and it did nothing to prevent the mortgage meltdown, Bernard Madoff’s $50 billion fraud, or the faulty valuation of sub-prime mortgage-backed securities that helped spawn the financial crisis.

The Supreme Court overturned a ruling that allowed business methods to be treated as exclusive property under the patent laws, but did not definitively rule out the patenting of business methods, in Bilski v. Kappos.

Sometimes I Think They’re Just Messing with Us

by Ryan Young on May 16, 2010 · 1 comment

in Politics as Usual, Regulation, Zeitgeist

Here’s an excerpt from an early 1980s Office of Management and Budget report:

An agency subject to the provisions of the Federal Reports Act may enter into an arrangement with an organization not subject to the Act whereby the organization not subject to the Act collects information on behalf of the agency subject to the Act. The reverse also occurs.

Overpaid Bureaucrats Expand in Number and Pay

by Hans Bader on September 30, 2009

in Labor, Politics as Usual, Stimulus to Nowhere, Trade

Thanks to the $800 billion stimulus package, and other huge government spending increases, the number of federal and state employees is projected to increase massively. The federal government’s payroll may grow by more than 200,000, and perhaps as much as 600,000, over the course of the Obama administration. Obama’s budgets, which would result in record deficit spending of $9.3 trillion, would add at least 100,000 additional bureaucrats during just his first budget, and perhaps as many as 250,000.

This is going to be enormously costly, because federal employees are paid much better than private-sector employees, especially for unskilled jobs and jobs requiring only a liberal arts degree. (On the other hand, there are a few highly-skilled professional jobs that are paid lower in the federal government than in the private sector, but that’s rare).

State and local government employees are even more overpaid.  “More than 40% of city employees In Vallejo, California, had salaries greater than $100,000 in 2008. In May 2008, Vallejo filed for bankruptcy. Taxpayers support some hefty teacher salaries in Illinois. For example: a physical education teacher earning $163,000 (more than 400 earn in excess of $100,000); an English teacher earning $164,000 (more than 300 earn in excess of $100,000); a driver education teacher earning $170,000 (94 earn in excess of $100,000). In New York, state agency workers collected more than $459 million in overtime, with one aide clocking in 2,455 extra hours, nearly tripling her base salary from $38,500 to $110,841.”

Government employees have radically better benefits and pensions than private sector workers. “When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the amount of $59,909 which workers in the private sector averaged for wages/benefits. The value of benefits for federal civilian workers averaged $40,000/year, four times the value of benefits that the average private sector employee receives. Only 12% of retirees from the private sector have defined benefit pensions to supplement Social Security. Their average annual pension is $13,083, and they are not eligible for full Social Security benefits until their late 60s. But the majority of public sector workers have pension plans that allow them to retire 10-25 years earlier with benefits many times the retirement payout that Social Security would provide. In San Jose, California, 256 retired officers and firefighters and 34 other city workers collect $100,000+ pensions, and all city retirees get free healthcare.”

Pay in the public sector rises faster than in the private sector even during Republican administrations. Pay for federal workers rose 53.7% between 2000 and 2008, compared to 28.5% for private sector workers.

Many of the new bureaucrats are being hired as a result of Obama’s welfare-filled stimulus package, which largely repealed welfare reform.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

Earlier this year, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

The stimulus package also imposes on states racial set-asides and prevailing-wage requirements, which increase the cost to taxpayers of government contracts. The prevailing-wage requirements will increase states’ costs by at least $17 billion. Racial set-asides also are very costly.

The Democratic Party is closely tied to the government employee unions, which consistently endorse its candidates.  This poses a political risk, since the Democrats are already viewed by some “working-class voters” as “the party of the undeserving rich.”

The $9.3 trillion in deficits under Obama’s budgets is twice the $4.4 trillion baseline left behind by Bush, despite at least $1.9 trillion in tax increases projected under Obama.

Regulating Our Way to Recovery

by Jonathan Tolman on January 22, 2009

in Bailout Watch, Deregulate to Stimulate, Economy, Politics as Usual, Stimulus to Nowhere, Zeitgeist

Normal 0 false false false MicrosoftInternetExplorer4  Tucked in the massive stimulus bill passed by the House Appropriation Committee is a $4.5 billion appropriation for the Army Corps of Engineers. While the vast majority of the appropriation is for the construction of new water resource projects and for the backlog of maintenance of existing water resource projects, there is also a $25 million appropriation for the Corps of Engineers regulatory program. The Corps regulatory program is the cadre of bureaucrats responsible for processing permits under Section 404 of the Clean Water Act, in other words wetlands permits.

Presumably, the Corps is justifying the increase in their regulatory budget by claiming a backlog in processing permits. But if Congress were serious about creating jobs, a more effective approach would be for Congress to force the Corps to follow their own permitting regulations. Corps regulations specify that a permit is supposed to be processed within 60 days of receiving a completed application. Forcing the Corps to actually process the permits in the required 60 days would be a far more effective approach than pouring more money down a regulatory rat hole.