Washington

Chipotle boasts that it offers “food with integrity,” but the popular restaurant chain may want to consider an addendum in light of its recent actions: “so long as the federal government doesn’t get involved.”

The chain was forced to fire over 600 employees from its 50 Minnesota restaurants last month — about half of its employees in the state — in light of an audit conducted by U.S. Immigration and Customs Enforcement (ICE). Says one Minnesota paper,

The investigation of Chipotle began several months ago, [Chipotle communications director Chris Arnold] said, when ICE asked to see work eligibility documents. The company was not told why it was singled out for review. ICE then provided Chipotle with a list of employees whose documents might be invalid, he said.

Chipotle tries to screen new employees, but some provide false documents showing they are eligible workers, Arnold said. In cases where employees insist they have the proper documents, Chipotle has sought to give them extra time to produce the identification, he said.

“We have asked ICE whether they would allow a 90-day period to resolve discrepancies, and they have told us that they absolutely would not,” Arnold said.

Not only is ICE denying Chipotle the 90-day period to clear up documentation issues with its employees — an allowance that is “standard practice,” according to the Service Employees International Union (SEIU) — but it is actively increasing the size and scope of its investigation of the restaurant chain. Earlier this month, ICE announced that it would also be auditing the 60 Chipotle locations in Virginia and Washington, D.C.

Robert McGoey, a co-coordinator of the rights-based organization Denver Fair Food, suspects that Chipotle will eventually be audited in every state due to its 80 percent Latino employment. Similarly, a February 11 article in The Nation reveals that John Morton, the head of ICE, says it “plans many more mass firings.” This tactic fails to meet the organization’s goals, made explicit in the same article:

The ICE website says it targets employers “who are using illegal workers to drive down wages … [those] likely to pay illegal workers substandard wages or force them to endure intolerable working conditions.”

At Chipotle, however, as in every other sanctions target, ICE never improved conditions. Wages remain the same. In fact, although Morton boasts ICE collected $7 million in employer fines during 2,740 audits, those who cooperated in firing workers were given immunity. The only people penalized were workers.

It seems that Chipotle is being targeted on the basis of its largely Latino demographics, rather than any abuse of undocumented workers in the workplace. While wages are unlikely to improve in a market in which “there are nearly five unemployed workers competing for each available job,” ICE’s failure to leave improvements in its wake was virtually guaranteed when it targeted a fast-food chain with above-minimum wages across the board. According to a report from the Immigration Policy Center published on February 9,

[Concerning] Chipotle, labor leaders who criticized the firm for the way it handled layoffs in the wake of the ICE audit say the company is “definitely above the bottom tier” in its overall treatment of workers. Even though the chain is non-union, the SEIU’s Nammacher said Chipotle pays above the minimum wage and offers some basic benefits. “They’re an above-board corporate player,” he stated.

Not only is Chipotle a poor target for an organization seeking to root out “intolerable working conditions” (Chipotle is even known for its practice of paying higher food costs in order to better the compensation of supply-chain employees), but ICE’s impacts harm the very individuals whose interests the organization purports to be acting in. According to a 2009-2010 report from the Human Rights Immigrant Community Action Network,

ICE’s new workplace enforcement strategy of auditing employment files, allowing employers to fire undocumented workers en masse – also dubbed “silent raids” – has deepened the economic and humanitarian crisis in many communities across the country, making workers further vulnerable to labor rights violations and other forms of abuse.

The study details several cases in 2009 and 2010 in which ICE audits — intended to publish “bad apple” employers — did anything but.  ”In each of these cases, rather than hold the employer accountable for existing labor law violations and abuses, ICE’s I-9 audits triggered massive layoffs leaving thousands of families in crisis and more vulnerable to abuse.”

SEIU president Javier Morillo described the effects of this practice on undocumented workers, stating that “They are pushed out of jobs where they are being paid above the table.” He added, “They pay taxes, Social Security taxes, etc. They are being moved, many of them, to precisely the bad employers that pay cash, that pay less than minimum wage.”

The deeper that one delves into ICE’s actions, the more that the government organization’s actions seem inconsistent. According to the organization’s website, “ICE’s primary mission is to promote homeland security and public safety through the criminal and civil enforcement of federal laws governing border control, customs, trade, and immigration.”

It’s unclear, however, how the organization’s recent moves against the employees of Chipotle are in any way consistent with its stated ends of promoting security and safety. It is similarly unclear that Chipotle was abusive  in its dealings with the undocumented workers that it unknowingly employed.

What is clear, however, is that ICE’s actions threaten the very employees whose working conditions it claims to defend.

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.

Washington, DC city law states that “No loose herd or flock shall be driven or conducted in the District, except with a permit issued by the Chief of Police.” (See District of Columbia Municipal Regulations, Title 24, Chapter 9, Sec. 906.10.)

Many, many years ago, Washington was a pretty rural place. There were even farms in the Northwest and Southeast quadrants of the city. This was before the automobile, and well before the federal workforce climbed into the millions. But a lot of these old laws are still on the books. Nobody seems to have thought to get rid of them.

Other animal herding laws in DC include:

-No droves of mules or horses larger than six animals are allowed. (906.6)

-However, “Horned cattle may be led singly by a rope or halter through any of the streets in the District.” (906.8). That includes K Street, Constitution Avenue, and every other street in the District, great or small (Note to self: this might be worth trying someday).

-As with cars, the driving age for herds is 16. (906.12)

-A drove of sheep crossing a bridge must have at least six drovers. (906.4)

-It is illegal to “water, feed, or clean any horse, mule, cow, or other animal” within 15 feet of a fire hydrant. The same rule apples to cars.(906.13)

(Hat tip: Marc Scribner)

From yesterday’s WSJ.com Political Diary (subscription required):

The same day President Obama called for another $50 billion to $100 billion stimulus plan (and concomitant increase in the deficit), he also appointed the chairmen of his Deficit Reduction Commission. It says a lot about Washington that almost no one got the irony of those paired announcements.

Indeed it does. Fortunately, the Commission’s job is pretty simple. There are only two ways to cut the deficit. One is to cut spending. The other is to raise taxes. Cutting spending is the right thing to do. But it is also politically difficult. There is a lot of fat to trim from the budget. But government has little incentive to put itself on a diet.

That’s why the Commission is expected to recommend a tax increase, probably in the form of a VAT. A prestigious bipartisan Commission can provide the political cover that Congress and the administration need to avoid the embarrassment of backtracking on their policies.

Wayne Crews and I recently warned why a VAT is a bad idea in Investors’ Business Daily. Hopefully some of the arguments will find themselves into the debate.

At The Spectator, Alex Massie refers to snow to illustrate how over-reliance on government can hinder incentives for social cooperation.

Once upon a time and not so very long ago the general public would have cleared the pavements themselves. Indeed, it used to be thought only good manners and a mark of proper, considerate neighbourliness to clear your own patch of pavement. Alas, no longer. It seems as though we now expect councils to do that for us too.

The result? Pavements are not being cleared. This is less a mark of government failure than a collective, unfortunate, decision to rely on government well past the point at which councils can actually deliver a service. Consequently, this dependency demonstrates both a triumph of statism and its failure.

They do things differently in America. When I lived in Washington it was expected that you’d clear your own** bit of sidewalk. Result? The pavements were in better condition than seems to be the case in much, perhaps most, of Britain.

**And not just because the DC council is famously inept.

I’m also happy to note that here in D.C., snow removal has improved considerably over the last decade.

And then there was Mayor Marion S. Barry Jr. of Washington, who somehow survived his mishaps with bad weather. In 1987, Mr. Barry was in southern California attending the Super Bowl — getting a manicure and playing tennis at the Beverly Hills Hilton — when a winter storm buried the District of Columbia. The nation’s capital became the butt of ridicule. In 1996, Mr. Barry — who was elected to a fourth, nonconsecutive term in 1994 after serving a federal sentence on cocaine possession charges — was excoriated by residents after it took nearly a week to clear the streets of snow.

Retailers have traditionally provided free shopping bags to their customers as a courtesy. Washington, DC’s city government – known for being less than courteous – is now requiring stores to charge customers five cents for each plastic bag they use at checkout.

The tax is environmentally motivated. Since the city is acting so urgently on shopping bags, that implies that they must be the most urgent environmental threat facing DC. If that’s the case, then DC must be a veritable ecological paradise, or else its priorities are misplaced. One or the other must be true.

There were 84 unsolved murders in DC in 2009, by the way.

In lieu of plastic bags, the city is urging people to buy reusable cloth bags. But those have an environmental footprint nearly 100 times larger than a plastic bag, according to Sierra Club data. They have to be used many, many times before they cause any savings. They are also a haven for bacteria if not regularly washed. And washing them adds to their footprint.

Washington, DC has a lot of problems. Expensive but inferior schools, crime, violence, high taxes and spending – the list is long. The epidemic of plastic bags littering the streets is right at the bottom of that list. It should be prioritized accordingly. The regressive plastic bag tax should be repealed.

[youtube:http://www.youtube.com/watch?v=wrErshmvP0M 285 234]

Russ Roberts’ testimony in front of the House Committee on Oversight and Government Reform is superb. Read it (it’s short). Wall Street deserves plenty of blame for the financial crisis. But Washington deserves more:

When your teenager drives drunk and wrecks the car, and you keep giving him a do-over—
repairing the car and handing him back the keys—he’s going to keep driving
drunk. Washington keeps giving the bad banks and Wall Street firms a do-over. Here are
the keys. Keep driving. The story always ends with a crash.

I’m mad at Wall Street. But I’m a lot madder at the people who gave them the keys to
drive our economy off the cliff.

Having lived in the Washington, D.C., area for a decade, I’ve found following the goings-on of former D.C. Mayor and current city council member Marion Barry both fascinating and confusing. A skilled politician of dubious achievements, Barry oversaw what many consider one of the worst city administrations in American history, yet he remainis highly popular among his constituents.

Appropriately, Matt Labash’s profile of Marion Barry in The Weekly Standard shows a somewhat more complex figure than the now all-too-familiar caricature of Barry as a corrupt demagogue.

Barry-bashing has been a near ubiquitous sport, and approaching him in order to find holes in his stories is about as sporting as taking candy from a quadriplegic preemie. Rather, I was curious to take his measure as a human being, which many forget he still is, despite the caricatures and self-parodies. For 73 years, over 40 of them in public life, Barry has kept rearing up like a plastic varmint in a Whac-a-Mole game. No matter how many times he’s batted about the head with a mallet, he relentlessly reappears.

Labash shows the good:

Barry threw the city open to development the likes of which D.C. hadn’t seen before. He was so proactive that old staffers tell how, early in his mayoral tenure, he used to have weekly brainstorming brown-bag lunches with architects and developers and would fast-track formerly glacial construction-approval processes with Post-it notes saying “Good idea, do it!” When he assumed office in 1979, whole quadrants of the city were ghost towns, and there were streets untouched since they were torched in the ’68 riots.

During Barry’s first term, 70 new buildings were either started or completed, and millions of new square feet of downtown office space were added. Even Republicans, after rolling through their mental rolodex of Chris Rock crack-smoking jokes or using Barry as a handy excuse to deny D.C. statehood, sometimes recall the ’80s-era Barry with fondness. Even if there were accusations of untoward cronyism, he was a mayor you could do business with. “The one thing Barry fundamentally understood is that nobody–not the city, not the private sector–profits off a weed-strewn lot. In that way, he was a supply-sider,” says one.

And the bad.

In other ways, though, he was a raging redistributionist. “Some call it socialistic, some call it democratic,” Barry tells me. “I don’t go by labels, they don’t mean s– to me.” Figuring if the Poles and Italians could feather nests in Chicago and the Irish could dominate Boston, Barry ruthlessly insisted that all of his departments meet minority set-aside contracting quotas, up to 30 percent. At the same time, his knack for creating patronage jobs would’ve left Huey Long gaping in awe. At one point in the late ’80s, the city didn’t even know how many employees it had on its own payroll (an independent commission estimated there was one city worker for every 13 residents). By the end of Barry’s third term, shortly before the Vista bust, the size of the municipal payroll had swelled to 52,000– that’s 14,000 more taxpayer-funded jobs than Los Angeles, a city five times the size of D.C.

Barry, always intent on buffing the scratches out of his legacy, tells me that he didn’t just foster a black middle class in D.C., but also in neighboring Prince George’s County. He’s more right than he’d like to be. For much of the newly created black wealth fled the city, as they had a much better chance of enjoying their spoils without getting shot in the suburbs.

Labash interviewed Barry and people who know him extensively. He succeeds in getting to know Barry on his own terms. A great read; whole thing here.

For supporters of freedom and markets, the Year of Our Lord 2008 has been close to a disaster. As D:Ream used to sing, things can only get better, surely? Ah, if only…

This was the year that saw two Presidential candidates vying with each other to see who could make the most ridiculous statements on global warming and the financial system (it may be the less ridiculous won). It was a year when one bunch of free-spending economic know-nothings gained complete control of Congress over another bunch of free-spending economic know-nothings. This was the year the American polity compromised and became both stupid and evil.

2008 was a year when America lost its mind over energy. As energy prices spiked thanks to (as we now know) artificially inflated demand, politicians mostly discussed ways to make them higher still. No energy idea was too stupid for someone to be praised as a genius or visionary for proposing it. Oil companies fell over themselves to make adverts telling people not to use their main product. Congress told American car makers they weren’t making the cars people wanted to buy, so they were going to make them do it or fine them into closure. Car makers responded by demanding money from the taxpayer. Congress agreed. The invisible hand was thereby nailed to a Congressional table. For one brief, shining moment, it looked like even this Congress would be forced to relax idiotic restrictions on oil exploration, but “Drill, baby, drill” was retired as the oil price collapsed and so we will have to go through the whole thing again on the next oil price spike, when we will be told it is too late to explore and drill (again).

This was the year when every energy-snake-oil salesman realized that “green jobs” was the magic phrase that unlocked taxpayer wallets. A vast army of careers in the compact-light-bulb-changing industry awaits America’s youth. The progression from trainee light-bulb-changer to assistant-light-bulb-changer to certified-light-bulb-changer to lightbulb-changing-supervisor to lightbulb-changing-regional-manager to lightbulb-changing-firm-CEO to lightbulb-changing-Czar will tempt the most ambitious young people (even if most of the actual changing will be done by recent immigrants from Mexico). The 500,000 extra unemployed as a result of the “green jobs” scam will at least be able to pat themselves on the back that, by losing their jobs, they have reduced global emissions infinitesimally.

2008 was the year when the housing-market-of-cards erected on the shifting sands of decades of congressional and administration pressure to lend fell down spectacularly. The market that had reacted to government signals got all the blame, when it only deserved some of it. The guilty parties in Washington not only got away scott free, but are now writing the rules for another iteration of the manifestly-failed Mixed Economy. As for a free market in finance, that has been completely ruled out even though it’s never actually been tried.

This Annus Horribilis also saw the rise of Bailout Nation. With asset values collapsed, the investors who had speculated and lost knew they had one way to keep their pockets full – by getting their cronies in the Administration and Congress to take money out of the pockets of taxpayers and give it to them. A Congress full of people supposedly friendly to the middle class agreed. Trebles and bonuses all round! With Wall Street the most despised thoroughfare in America, one Wall Street Panhandler masquerading as a Treasury Secretary is to be replaced by another. That’s change I can believe in.

In my native Britain, the 55th year of the Queen’s reign saw the Conservative Party reap the rewards of acquiescing to New Labour’s mixed-economy economic policy. When British banks collapsed, and a sterling crisis deepened the trouble, they were left with nothing to say. Gordon Brown, the man who promised he had put an end to “boom and bust,” blamed the bust that followed his housing boom on America and Margaret Thatcher and thereby managed to improve his opinion poll rating to the level where people were speculating he might call a General Election. The British voter, after all, knows he is a safe pair of hands with the economy. At least some over there, however, know what the real story is.

As 2008 draws to a close it has proven to be the coldest year in a decade and it seems that tropospheric temperatures are beginning a downward cycle again. Never, however, has the political establishment been so united in deciding that urgent action is needed to save us from ever-rising temperatures.

2008, you were a rotten year. No-one likes you. Go away!