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John Stossel
John Stossel
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The Cancer of Regulation


Politicians care about poor people. I know because they always say that. But then why do they make it so hard for the poor to escape poverty?

Outside my office in New York City, I see yellow taxis. It's intuitive to think that government should license taxis to make sure they're safe and to limit their number. It's intuitive to believe that if anyone could just start picking up passengers, we'd have chaos. So to operate a taxi in NYC, you have to buy a license, a "medallion," from an existing cab company (or at a once-in-a-blue-moon auction). Medallions are so scarce, they now cost hundreds of thousands of dollars.

Licensing prices poor people out of the business.

"Compare New York City, where a license to own and operate a taxi is $603,000, to Washington, D.C.," George Mason University economist Walter Williams told me. "There are not many black-owned taxis in New York City. But in Washington, most are owned by blacks." Why? Because in Washington, "it takes $200 to get a license to own and operate one taxi. That makes the difference."

Regulation hurts the people the politicians claim to help.

People once just went into business. But now, in the name of "consumer protection," bureaucrats insist on licensing rules. Today, hundreds of occupations require expensive licenses. Tough luck for a poor person getting started.

Ask Jestina Clayton. Ten years ago, she moved from Africa to Utah. She assumed she could support her children with the hair-braiding skills she learned in Sierra Leone. For four years, she braided hair in her home. She made decent money. But then the government shut her down because she doesn't have an expensive cosmetology license that requires 2,000 hours of classroom time — 50 weeks of useless instruction. The Institute for Justice (IJ), the public-interest law firm that fights such outrages, says "not one of those 2,000 hours teaches African hair-braiding."

IJ lawyer Paul Avelar explained that "the state passed a really broad law and left it to the cosmetology board to interpret."

Guess who sits on the cosmetology board. Right: cosmetologists.

And they don't like competition.

One day, Jestina received an email.

"The email threatened to report me to the licensing division if I continued to braid," she told me.

This came as a shock because she had been told that what she was doing was legal.

"When I called (the commission) in 2005 on two separate occasions, they did tell me that, but then when I called (again) ... the cosmetology lady told me that the situation had changed and that I needed to go to school now and get a license."

No customers complained, but a competitor did.

One cosmetologist claimed that if she didn't go to school she might make someone bald.

But this is nonsense — hair-braiding is just ... braiding. If the braid is too tight, you can undo it.

The cosmetology board told Jestina that if she wanted to braid hair without paying $18,000 to get permission from the board, she should lobby the legislature. Good luck with that. Jestina actually tried, but no luck. How can poor people become entrepreneurs if they must get laws changed first?! Jestina stopped working because she can't afford the fines.

"The first offense is $1,000," she said. "The second offense and any subsequent offense is $2,000 each day."

"It is not unique to Utah," Avelar added. "There are about 10 states that explicitly require people to go get this expensive, useless license to braid hair."

Fortunately, IJ's efforts against such laws have succeeded in seven states. Now it's in court fighting for Jestina, which, appropriately, means "justice" in her native language.

Once upon a time, one in 20 workers needed government permission to work in their occupation. Today, it's one in three. We lose some freedom every day.

"Occupational licensing laws fall hardest on minorities, on poor, on elderly workers who want to start a new career or change careers," Avelar said. "(Licensing laws) just help entrenched businesses keep out competition."

This is not what America was supposed to be.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="" <>></a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at




16 Comments | Post Comment
Why isn't my comment posted?
Comment: #1
Posted by: Oracle
Tue Jun 7, 2011 11:15 PM
I did comment and it wasn't posted.
I want to know why not!
Comment: #2
Posted by: Oracle
Tue Jun 7, 2011 11:27 PM
Your title is the "Cancer of Regulation"...but your essay says nothing about regulations. You only complain about the cost of a taxi licenses.
Do you actually get paid for writing this drivel?

What about the evil of regulation...Let''s cut the license fee to 15 bucks, and let anybody with any rust-bucket license to vehicle license plates.. or speed limits... (those are regulations) a taxi service so the poor people can make a living.

I think this is just part of the Republicans' stupid mindless "your government is your enemy" mantra.

I've been listening to you for years Stossel and it is truly astonishing how anyone could be so absolutely wrong about absolutely everything all of the time. It's even more amazing that you get paid a lot of money. It leaves me in utter awe why the "liberal" media would sustain a guy like you.

It might might even be “good politics” ..but it is dishonest and wrong....and its appalling that people like you get paid for disseminating it in such an awkward and ignorant manner.
You have zero credibility in my book.
You don't know or care any more about poor people and taxis than you do anything else.

Comment: #3
Posted by: Oracle
Wed Jun 8, 2011 2:18 AM
Re: Oracle said: "...and let anybody with any rust-bucket license to vehicle license plates.. or speed limits... (those are regulations) a taxi service..."
Why not let them? Obviously, just because there is a taxi sign on the vehicle means you must use their service. You still have the freedom to not ride in that taxi. That is the free market deciding that that type of business is not desired nor sustainable and the taxi owner will need to upgrade to compete with those that are acceptable.
Oh! Stossel part of the liberal media. Wow!
Comment: #4
Posted by: nealtime
Wed Jun 8, 2011 6:06 AM
Oracle: Your lack of education on this subject is so appallingly evident that trying to hold a civil discussion is about as likely as you navigating space to find Uranus. Whining like a little child in your first two posts is transparent and helps your argument not: "Aw, my post didn't go up immediately. I am being suppressed because I disagree." Oh puh-leze. Given the apparent comprehension level, might I suggest watching the movie "Tucker" or download "Atlas Shrugged" to your Kindle. For a more recent situation, review the recently propsoed rules on beef as put forth by the EPA (October, 2010). Try understanding fact instead of reacting emotionally.
Comment: #5
Posted by: zombiehunter
Wed Jun 8, 2011 6:10 AM
Government policies go hand-in-hand with Unions. How many of the remaining 2 out of 3 who do not require a government-sanctioned license for their profession instead have to pay union dues (and be held to all union policies) to work in their job instead?

If it hadn't been the cosmetology licensing organization in Utah, poor Jestina probably would have been bullied by the local hair-braiders union instead. "This is a union town, see, no ones braids hair what ain't paid their dues yet." Jestina probably would have been forced to only braid hair during very specific hours, and union regulations would have prevented her from taking on too many clients in a week (to keep her from exploiting herself of course)

I just really don't understand a cosmetology board in general. I mean, as a kid, I went to plenty of hair cutters who would mess-up my hair. You know what, we just never went back there. We didn't complain that they did it wrong and "By golly, why doesn't the government impose some sort of education and licensing program, so that, the next time some underpaid hair-dresser cuts my bangs crooked, I'll have some higher authority to complain too, so I can waste hundreds of dollars of tax payer money having this person investigated." Licensing doctors and lawyers, where lives and freedom are at stake, yes, of course that makes sense, but licensing someone to cut your hair? Good to see politicians can be bought so cheaply these days.
Comment: #6
Posted by: Nathan H.
Wed Jun 8, 2011 12:10 PM
Oracle, if Stossel is so bad, why do you read him?
Comment: #7
Posted by: KC
Wed Jun 8, 2011 1:09 PM
Re: nealtime

That's heading right for 3rd world status.

How about food carts in New York City selling dog meat as beef.

How far do you want to take the no regulations. How about you can just shoot somebody on the street and take what money and possessions they are carrying....and go happily on your way?

How about that?

Where do you draw the line?... the movie Road Warrior?
Comment: #8
Posted by: Oracle
Wed Jun 8, 2011 3:18 PM
Re: zombiehunter

What subject?

The moron Stossel names a subject in his title an never addresses it.

As for you, you didn't say one rational thing that addressed the content of my post, instead went on some tirade about my first post...which you never got to read btw... That's because you have nothing to say in rational rebuttal.

My conclusion is that you should seek probably seek medical attention, as you have "lost it".
You can make no rational response to the fact that Stossel said Regulation is a Cancer...and never addressed you have a temper tantrum like kids do.

Try reproaching the veracity of my statements.
Comment: #9
Posted by: Oracle
Wed Jun 8, 2011 3:31 PM
Re: KC

Because I want to know what propaganda the Red-state Gomers are being fed.

I live in hope that you ignorant and clueless gun-slinging libertarian anarchist tea-bagger Gomer-dopes can learn to be human.
Comment: #10
Posted by: Oracle
Wed Jun 8, 2011 3:35 PM
"What about the evil of regulation...Let''s cut the license fee to 15 bucks, and let anybody with any rust-bucket license to vehicle license plates.. or speed limits... (those are regulations) a taxi service so the poor people can make a living."

You sound INTENSELY foolish. So by your standard, it is good that only the rich can start a cab company then? $603K sounds like a reasonable amount of money to have to pony up to operate a cab? (that is even before you buy a car and metering equipment.)

Furthermore, a rust bucket with no belts etc probably wouldn't get much business wouldn't you agree? I'm pretty sure I hail cabs and skip out on them now when they pull up and smell like a toilet. It's called using your brain. A cab that wants customers attempts to retain a professional clear air about it.
Also, why force someone to have insurance? It doesn't help anyway. I'm sure most people would still carry it for when/if they did need it. However, as I'm sure you already know ::cough cough:: having insurance is no financial guarantee of any kind. Court settlements that are supposed to be paid out by insurance are routinely never paid because the insurance company bankrupts the smaller company underwriting your policy so the debt doesn't have to be paid. Individuals do that all the time as well. Needless to say that many times when a settlement catches the headlines, the person rarely gets all/any of that money and there is no obligation for anyone to pay it out once they declare bankruptcy anyway. It's more symbolic than anything else.

Finally, your example about being able to gun someone down for money is just laughably silly. That would be a crime we call malum in se in that it is evil in and of itself. No one of any political persuasion believes that you should be able to just openly gun an innocent person down and rob them. That is just a boisterous and asinine red herring that can't be taken seriously on its face and makes any part of your arguments that may have been half serious sound like total nonsense.
Comment: #11
Posted by: The_Eye
Wed Jun 8, 2011 4:20 PM
furthermore Oracle to your constant assertion that he never addresses regulations in the article...

HE DID. Requiring someone to have a license to provide a service IS a REGULATION. So the veracity of your assertion has been dutifully torn asunder. You're welcome.
Comment: #12
Posted by: The_Eye
Wed Jun 8, 2011 4:24 PM
Hey Oracle,
Instead of your pointless school yard attack on Stossel why not addresss the actual points he makes?
Do you think taxi licesnses should cost $100,000s ? Why not $200 per license?
Do you think hair braiders need 2000 hours of instruction?
Please let us all know what you think of these two specific instances Stossel brings up.
Comment: #13
Posted by: BCanuck
Fri Jun 10, 2011 5:33 PM
Liberals (alternatively, statists) despise risk. Perhaps that is what sets them apart from libertarians and free market advocates. We understand risk, and know that only by taking risks do we have the opportunities for success.

Every aspect of the liberal program is designed to mitigate, avoid, and eliminate risk, even if it means stifling innovation and growth. Welfare programs keep people in poverty, but with very little risk. It's guaranteed. Unions are about spreading the risks of poor job performance across thew entire workforce.

Risk is one of those things that scares most people, that's why liberals win elections. But when folks are shown the benefits of systematic risk-taking, they wise up. Let's hope they wise up in greater numbers soon.
Comment: #14
Posted by: Rich Stowell
Sat Jun 11, 2011 9:23 PM
Re: Oracle

Speaking of zero credibility .... More and more I fear our country is history. When people can't see the truth of Stossel's plain-speaking explanations, what hope is there?
Comment: #15
Posted by: Hank
Mon Jun 13, 2011 6:09 AM
ron simmons.DAMN
Comment: #16
Posted by: dave
Mon Jun 20, 2011 1:42 AM
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