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What’s So Bad About Occupational Licensing?
Why does accepting payment for a service make an otherwise-benign activity suddenly illegal? Accepting money is what distinguishes cutting a friend’s hair for free from a criminal mastermind who takes money for illegally performing cosmetology or barbering without a license. Have you ever paid for a bad haircut? Did the cosmetology license prevent it? Have you ever had a bad meal in a restaurant (which is, by law, highly regulated)? Have you ever had an outstanding home cooked meal prepared by someone without a license? So how much do licensing and regulation do to ensure high standards? Occupational licensing is something of a pet peeve for us here at the 1889 Institute. We devote a whole section of our website to it. Why do we care so much? The Institute for Justice estimates that occupational licensing costs consumes an average of $203 billion per year nationally. Licensing undeniably hurts the economy through deadweight loss - when the labor market is distorted leading to inefficiencies such as people being in suboptimal jobs. But there is a simpler case against licensing, and it doesn’t involve complicated math or economic reasoning. It’s simply wrong. One of our...
Toward a Judiciary That Promotes the Rule of Law
As I have been writing and speaking about the need to reform Oklahoma’s judiciary, I have been asked several times to explain what it is, exactly, that we should be looking for in a judge. More specifically, what should we look for in a state supreme court justice? The primary job of a supreme court justice is to interpret and apply the state’s constitution. Though the Oklahoma Constitution differs in significant ways from the U.S. Constitution, a justice’s approach to interpreting the two documents--or any legal text--should be largely the same. To know what kind of judge we are looking for, we first must answer a more basic question: what is the purpose of courts in the American system? Stated differently, how do we know if we have a properly functioning court system? How do we ensure courts that support, protect, and promote the objectives of the American project—things like individual freedom, fairness before the law, property rights, and representative government. Courts exist to promote the Rule of Law. I capitalize that term because it is not some throw away phrase (“truth, justice, and the American way!”), but actually has a specific meaning in the American context. The...
Thankful for Real Community: A Thanksgiving Lesson
What follows is a true story – actually, two true stories, or the same story that occurred in two different places in very different times and circumstances. Read on to find out where. They had been discussing amongst themselves in pairs and small groups for months, concerned with their poverty and lack of progress in improving crop yields, so important to feeding themselves and building a thriving community. What they’d been doing, it seemed, should have succeeded. They all worked the same fields together – clearing, tilling, sowing, weeding, and reaping – everyone in the same fields at the same time. Anyone who might be weak in one skill should have had that weakness made up by others working beside them, with everyone benefitting from everyone else’s unique abilities. They all had a common purpose. But for the occasional troublemaker, present in every community, they liked each other, helped each other, and took care of each other when some among them fell ill. And, everybody got an equal share of the yearly harvest, accounting for family size. But something was amiss. Their harvests were meager, more meager than the farmers knew they should be. So they were finally all...
Gratitude for Restrained Government, and Restraints on Government
We at the 1889 Institute spend a lot of time critiquing government. I mean a lot. It’s what we do: we want to make government the best it can be, and that starts with identifying its flaws. But it is important, from time to time, to acknowledge that on the whole, Americans have it pretty good when it comes to governance. Here’s what I’m thankful for in government this year: National defense. We live in perhaps the freest society that has ever existed. That would assuredly not be so if it were not for our strong commitment to deterring every foreign threat to our national sovereignty. What use is restrained government if a country is not safe from foreign invaders? Courts. Courts not only determine who is guilty of a crime and who is not, they also provide a forum to resolve sometimes vicious disputes without violence. If free trade is the bridge to human flourishing, then a legal system that upholds property rights, enforces contracts, and deters crime forms the truss of that bridge. Police. They are the enforcement arm of the courts (eventually, if you continue to defy the courts, these are the men and women with guns who ensure you do what you are told or escort you to...
Oklahoma Is OK, but Seriously, That’s Not OK
The Americans at the table, negotiating a business deal, ask one of their number, “You can speak Dutch?” He replies, “I’m OK.” With his fellow Americans looking doubtful, he proceeds to mistranslate what they want him to say to their Dutch counterparts. The “OK” translator tells the Dutch that the Americans really need a hug, when he was supposed to tell them they really need the deal. With that, the AT&T commercial ends as one of the Dutch negotiators gives an American a hug with the announcer saying, “When just OK is not OK.” There are several of these commercials, each with a different scenario, in which, indeed, just OK is not OK. And every time I see one of these commercials I think of the license plates that were once so common – “Oklahoma is OK.” As someone who works to develop policy suggestions intended to make Oklahoma better, and hopefully, the best that Oklahoma can be, it often seems that slogan – Oklahoma is OK – gets in the way. The fact is, in most respects Oklahoma IS OK. We don’t have the best tax system in the land, but it’s not the worst, either. We don’t have the lowest taxes, but they’re not nearly the highest. Our roads seem pretty terrible compared to...
What Do You Mean the Oklahoma Supreme Court Doesn’t Publish a Docket?
One of the most routine things any court does is to publish its “docket.” This public calendar announces the cases the court will hear and when they will be heard. The docket doesn’t just keep the court on schedule and notify the parties in litigation when to show up for court, it puts the public on notice as to what is going on in the legal system. This allows for a very basic level of public monitoring of what is (mostly) supposed to be a public process, and at the appellate level allows anyone who may have a personal or business interest in the interpretations of law the court is considering to follow, or sometimes influence the process. Court dockets are routinely published all across the United States and at every level, from the lowest traffic court to the United States Supreme Court. But, incredibly, not at the Oklahoma Supreme Court. No, really. Earlier this year I called the office of the Clerk of the Oklahoma Supreme Court and asked for a copy of the Court’s docket. The voice on the other end of the line did not seem to understand what I was asking for. I clarified that I was trying to obtain a schedule of upcoming sessions where the Court would hear oral argument (the...
Insider Dealing: Car Dealer Protectionism Run Amuck
Imagine you wanted to open a restaurant. Imagine you were allowed to cook the food yourself, but you were prohibited by law from serving it to customers yourself; instead, you were forced to hire a waiter. Next, imagine that the waiter wasn’t pulling his weight, but you weren’t allowed to fire him unless you could prove you had good cause, and the people you had to prove it to were the waiters friends, who also happened to be employed as waiters. Finally, imagine that you had to get permission from the waiter before you could hire another waiter. If he refused, you could appeal his decision… to that same group of his waiter friends. Each of these imaginary scenarios is a close analogy to the very real laws that hinder the distribution of new cars. Car manufacturers are not allowed to sell directly to consumers. They can make the vehicle, but then must hire dealers (a.k.a. waiters) to interact with consumers. These state-mandated middlemen will surely want a cut of each sale, making the price consumers pay higher than it might otherwise be. Car dealers have powerful protections to keep themselves inserted firmly between makers and consumers. Once a dealer selects a franchisee...
Lessons from a Soviet MIG Pilot about Public Education
On September 6, 1976, a fighter pilot from the Soviet Union named Viktor Belenko flew a MIG-25 fighter jet to Japan and defected. At the time, the U.S. and the Soviet Union were fully engaged in the Cold War. The MIG-25 was a super top-secret aircraft about which the Pentagon knew only enough to be frightened. Consequently, the MIG-25 impacted the development of the F-15 Eagle. Thus, Belenko’s defection had major implications for America’s national defense, allowing a better look into the true capabilities of the Soviet Air Force. But Viktor Belenko’s story is much richer than the fact of his defection. Belenko had some telling experiences, described in his biography, MIG Pilot. He related how, while he was stationed at a remote military base, his superiors were told that a dignitary high in the Communist Party was to visit. In response, large trees were transplanted to line the road between the air strip and the base’s living quarters and offices in order to make the base more attractive. The trees died because it was the wrong time of year for transplanting. More trees were transplanted. They died. So, it was decided that the trees would be quickly spray-painted green when the...
Past Performance Is Not Indicative of Future Results, Unless Government Props You Up
One January, a farmer decided to invest in the stock market. He’d had a bumper crop, and he wanted to shore up his financial future, planning for the time when providence would not be so kind. Knowing he wouldn’t have time to watch the market during the growing season, he did some research and invested heavily in a nice safe company: one that had a growth trend and had been named Fortune’s “Most Innovative Company” for six years. That same January, a day trader wanted to make some long-term investments that he could keep on the back burner. He knew the experts were all abuzz regarding an industry-changing technology with huge growth potential. He invested in several up-and-coming companies based around this technology, certain he’d have a nice nest egg, should he ever fall on hard times. Finally, a seasoned investor decided to divide his portfolio among dozens of strong companies. Wanting to keep his portfolio diverse, he also bought stocks in several small and struggling companies, hoping that one or more would grow or rebound. The year was 2001. The company the farmer invested in was Enron. His stock went from more than $80 a share down to $0.63 in a single year. The...
In the Midst of a Concussion Crisis, Why Does Oklahoma Artificially Limit the Number of Athletic Trainers?
Several Oklahoma news outlets have recently taken a deep dive into the problem of concussions in high school football. Stories have examined the inadequate data tracking of the Oklahoma State Schools Activity Association (OSSAA), an effort to legally require schools to keep an ambulance on site at football games, and even the differences in rules between high school and college ball that encourage quarterbacks to take additional hits rather than throw the ball away. Notably absent from the coverage has been mention of the overly restrictive licensing regime the state has set up for athletic trainers, which artificially restricts the supply of athletic trainers when they are apparently sorely needed. My research on the subject found that half of Oklahoma’s counties (38 of 77) do not have a single licensed athletic trainer. Others present an even more dire situation, reporting that only 13% of schools have a full time athletic trainer and only 32% even have a part time trainer. Of those counties that do have practicing athletic trainers, 10 have only 1 in the entire county. This dearth of athletic trainers is unsurprising given the relatively cumbersome process of obtaining...
Played for Chumps: The Waste and the Trap that Is MAPS 4
If you own a business and an employee constantly shows incompetence, are you likely to give that incompetent a raise, or promote him to a management position? Obviously, there’s no way. Yet, this is what Oklahoma City’s residents are being asked to do, by passing a 1-cent sales tax for a fourth round of Metropolitan Area Projects (MAPS). These are projects that have a history of being seen, but not really making much of a positive difference in most Oklahoma City residents’ lives. Oklahoma City’s voters should politely decline the “opportunity.” Oklahoma City’s government often demonstrates incompetence in providing basic city services. Take traffic management, for example. There was a period of time when my own commute on Northwest Expressway was interrupted repeatedly – three times in one week at one point – by malfunctioning traffic lights. The flashing lights turned a controlled intersection into a 4-way stop and traffic on the Expressway backed up for almost a mile, unexpectedly adding to commute times. Not once did I see a police officer direct traffic at one of these malfunctions. I’ve lived in two other large cities in my life and I guarantee there would have been...
Measure Government Success by Effectiveness and Efficiency, not Effort
If Oklahoma wants to be a top 10 state, it is critical that its goals be clearly defined. Metrics used to measure that status must be selected carefully, and reasonably calculated to measure those things that actually make a state a good place to live. A state might pride itself on being first in the nation in hummingbirds per capita, but that is unlikely to appeal to any but the most avid birdwatchers. It is also important for a government to focus on those things it can control. The waterfalls of Yosemite, the majesty of the Grand Canyon, and the sands of Daytona Beach all make their home states attractive, but the governments of those states have nothing to do with the appeal, other than making them accessible. The methods used must also be appropriate to the ends sought. Even being the healthiest state in the country would be unattractive, if it were accomplished through a rigid be-healthy-or-be-jailed regime. Oklahoma should strive to maximize economic opportunity, create a neutral playing ground that does not favor entrenched interests over new entrants to the field, and spend effectively and efficiently for essential, core services. Every program ought to have a clearly...
To Save the Oklahoma Judiciary, We Must Reform It
Last month, 1889 Institute published my study on the unfortunate state of the separation of powers in Oklahoma government, describing a state Supreme Court that too often acts as though it is a super legislature, in the business of enacting legislation rather than what it is supposed to do. The court should be a neutral arbiter, applying the laws passed by the actual Legislature to cases that come before it. Instead, the Court appears to first determine the policy result it seeks and then dream up the arbitrary legal reasoning necessary to justify that result. The Oklahoma Legislature is not required to sit idly while the Oklahoma Supreme Court usurps the Legislature’s constitutional authority. It can—and should—act to rein in the Supreme Court. In fact, legislators have a responsibility to jealously guard their own institutional power. After all, we sent them to the Capitol as our representatives. Legislators can no more shrink from their responsibility to exercise their constitutional authority than a lawyer can refuse to argue his client’s case in court. It is what we hired them to do, and they have a duty to do it. Today, in Taming Judicial Overreach: 12 Actions the...
Why I Am Not Pro-Business
Most who consider themselves conservative, even many with libertarian leanings, are comfortable with describing themselves as pro-business. Not me. Don’t get me wrong. Just because I’m not pro-business doesn’t mean I’m anti-business. I’m pro-free enterprise, but that’s different from being pro-business. Chambers of Commerce across the nation are pro-business. They are established to represent their various business members, with large corporations usually the most influential amongst their numbers. Chambers of Commerce almost always favor measures that subsidize businesses, give special tax breaks to businesses, or exempt businesses from regulation, even when these measures favor only specific industries. Here is one example. Pro-business interests favor special discretionary funds at the state and local levels that are used to pay businesses to locate within the government’s jurisdiction. Often called “closing funds,” they allow the ruling class to take credit for creating jobs. Businesses that benefit from these payoffs rarely change their plans as a result of the payoffs. But, because different jurisdictions simultaneously bid for the same business projects, big corporations...
The Problem of Diffuse Costs and Concentrated Benefits
Do you ever find yourself observing a seemingly illogical government program, spending decision, or other strange practice and ask “how is it that no one has fixed that?” If you are like me, you encounter this phenomenon regularly. This often takes the form of a curious headline (Save Federal Funding for the Cowboy Poets!) that most people see and can’t believe is real. I would like to suggest that this phenomenon often results from the problem of diffuse costs and concentrated benefits. To understand this concept, consider a hypothetical law that assessed a $1 tax on everyone in the United States with the proceeds to be given to one individual for unrestricted use as he sees fit. The people harmed by such a law—the individual taxpayers—will not be very motivated to spend the time and effort to convince Congress to change the law. They might resent the dollar taken from them for a silly cause they don’t support, but the lost dollar isn’t worth the trouble of doing something about it. On the other hand, it’s hard to imagine something that would motivate the recipient more than the prospect of receiving an easy $350 million. He would fight hard to keep such a law in place, hiring...
Spending It Like They Stole It
When does government have the right to spend taxpayer money? Or perhaps, more pressingly, when should the government be forbidden from spending taxpayer money? 1889 Institute has previously written on the issue - developing five questions that should be asked before any government entity spends a single dime. These questions are: 1. Is a program or agency consistent with the mission of Oklahoma’s state government? This purpose was spelled out in our state constitution: “Invoking the guidance of Almighty God, in order to secure and perpetuate the blessing of liberty; to secure just and rightful government; to promote our mutual welfare and happiness, we, the people of the State of Oklahoma, do ordain and establish this Constitution.” Secure and perpetuate liberty (notice this is the first order of business). Secure just and rightful government (not any government, not the domino of the majority over the minority - just and rightful). Promote (not provide, ordain or establish) mutual welfare and happiness. 2. Is the program or agency fulfilling a need only government can effectively fill? Since government is funded through threat of force (if you continually refuse to pay...
School Teachers Begging for Basics
What if a hospital’s administrators regularly told surgeons to make do without bandages, with dull scalpels, and little to no anesthetic while claiming tight finances? With all the money hospitals have, there would be questions about the administrators’ competence and possibly audits to look for malfeasance. Something like this needs to happen at Oklahoma City Public Schools. My wife is a teacher working in the Oklahoma City Public Schools (OKCPS) system. Last year, she came home telling me how there was no paper available for the notoriously few and regularly broken, undersupplied duplicating machines at her school. What’s more, there was no plan for the district to provide any. In the past, she was told, a parent had donated paper to that particular campus, but that parent had transferred his child to a private school. The school had surplus paper from previous years, but that was gone. There were no plans for the district to provide more. Now, I am well aware that education funding has suffered an actual setback in this state (as opposed to a mere slow-down in the more normal regular increases in funding decade over decade). I would expect school districts to curb their...
A Waste of Talent; A Loss of Opportunity: Mandating Excessive Credentials
Governor Stitt recently had a second candidate he wanted to appoint to an administrative position hit a statutory road block. His candidate to head the Oklahoma State Department of Health doesn’t have at least a master’s degree in science. This, and another a mandate requiring an advanced degree for anybody acting as secretary of the Commissioners of the Land Office, were placed in law by the legislature (and, of course, a governor signed the law). Governor Stitt’s candidates for these offices are well-qualified in experience and temperament, but the law dismisses them outright. Thus, the question to ask is not why Governor Stitt isn’t finding people with advanced degrees to head agencies. The right question is, “Why did a law with degree requirements get passed in the first place?” The answer is that we, as a society, have come to think university-granted degrees are far more valuable than they actually are. The consequence is that college degrees are often demanded in order to qualify for a job when the degrees are not necessary. Indeed, degree requirements might even cause us to think someone is qualified when they are anything but. Once, while I was in graduate school...
About Those Roads in Texas
As Sooner fans head south for the OU-Texas game next week, they will encounter a phenomenon most of us are familiar with: as you cruise across the Red River suddenly the road gets noticeably smoother. The painted lane stripes get a little brighter and the roadside “Welcome to Texas” visitors’ center gleams in the sunlight, a modern and well-maintained reminder of how much more money the Lonestar State spends on public infrastructure than little old Oklahoma. Or does it? Why are the roads so much, well… better in Texas? Turns out, it isn’t the amount of money spent, at least not when compared to the overall size of the state’s economy and personal income of its inhabitants. Research conducted by 1889 Institute’s Byron Schlomach reveals that Oklahoma actually spends significantly more on roads than Texas as a percentage of both state GDP and personal income. And that was data from 2016, before Oklahoma’s tax and spending increases of recent years. The gap is likely greater today. Here are the numbers: Oklahoma spends 1.5% of its citizens’ personal income on highways (adjusted for cost of living); Texas spends 0.99%. This means that, as a percentage of its taxpayers’ income,...
Religious Freedom and School Choice in the Nation’s High Court
When the Supreme Court of the United States (SCOTUS) begins its term next week, one of the many important cases it will consider is that of Espinoza v. Montana Department of Revenue, which addresses Montana’s Tax Credit Scholarship program, and gives the high court an opportunity to decide whether Blaine Amendments (which generally prohibit any state money from going to a “sectarian” purpose) violate the establishment and free exercise clauses of the first amendment, as well as the and equal protection clause of the 14th Amendment. At the very least, the justices should rule on whether Blaine Amendments (like Section II-5 of the Oklahoma Constitution) can be used to exclude religious schools from school choice programs which insulate the state from direct subsidy of religious organizations through the “genuine, independent choice of private individuals.” The question presented to the court is “Whether it violates the religion clauses or the equal protection clause of the United States Constitution to invalidate a generally available and religiously neutral student-aid program simply because the program affords students the choice of attending religious schools.” In light of a...