Matt Yglesias

Deregulation I Can Believe In

Here’s a sad-but-typical tale of life in the big city:

The owners of Columbia Heights Coffee, located on 11th Street between Park and Monroe, informed me this weekend that they will not be expanding after all. I feel really bad for them because they told me they had paid two years rent for nothing. It seems that the permitting process was just way too cumbersome. Oh well, at least the original spot will remain. For those curious the for rent sign says $1K per month.

I’m someone who believes that regulation is necessary in a variety of fields to protect public health, public safety, the environment, etc. But it’s unquestionably my experience that the volume of regulation on retail establishments—especially in urban areas—is completely beyond any reason. A city has a strong interest in making it possible for people to open businesses. Huge numbers of DC neighborhoods, including Columbia Heights, are plagued with a bizarre situation in which existing establishments are unpleasantly crowded and yet there are plenty of vacant storefronts. Life would be much better if those storefronts were filled with shops, cafes, bars, and restaurants offering people some goods and services.

Regulation that Doesn’t Work

Ross Douthat is appropriately skeptical of the idea that running on a platform of opposition to broadly shared prosperity will bring electoral success to conservatives. Look back on Ronald Reagan’s key political successes, and I think you’ll find that explicit advocacy of concentrating wealth more tightly in the hands of the few was not a big part of his political appeal. What’s slightly maddening about this, to me, is that the right-wing keeps stumbling around a much better conservative argument in the neighborhood of Joe the Plumber — namely that there are some solid free market measures we could take that would have the effect of spreading the wealth around. The fact that Joe is not a licensed plumber would be a great opportunity for an enterprising politician to try to make an issue out of the growth of occupational licensing requirements in the United States and the barriers to economic growth and opportunity they create.

And occupational licensing is hardly the only such example. Lots of America’s land use and business licensing regulations are, likewise, measures that do much more to entrench existing privilege than to promote any kind of public interest. Most of this, yes, is not strictly under the purview of federal policy. But state and local politics is where the promising leaders of tomorrow come from. And a President could probably do a lot of good simply by giving a prominent speech about these issues and doing something like appointing a commission of well-respected individuals from across ideological lines to try to take stock of the overall state of play, outline some recommendations and best practices, etc. Your typical city or country government in the United States doesn’t come close to having the resources necessary to do a rigorous study of the impact of its various licensing rules — a federal role in simply creating and sharing information could do a lot of good.

The original wave of deregulation was promoted by conservatives, but also liberals like Ted Kennedy, Steven Breyer, and Ralph Nader. I think we see now that that wave went too far in some respects, but in other areas it hasn’t gone nearly far enough. This is a good cause for progressives to pick up, but also one that would be completely open for a conservatism that was interested in helping the little guy rather than mocking efforts to help him as the second coming of Josef Stalin.