Regulations protect entrenched businesses — and The New York Times is on it

Taxis by Vacclav / Shutterstock.com

Article Highlights

  • Entrenched interests use regulation to keep out new competitors and protect existing business models.

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  • The @NYTimes is on a streak of good articles noting how big government accrues to the benefits of special interests.

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  • Industry efforts to regulate Uber out of existence demonstrate to urban liberals the true nature of government regulation.

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Entrenched interests use regulation to keep out new competitors and protect existing business models — and the New York Times is on it!

The Gray Lady is on a streak of good articles noting how big government accrues to the benefit of the special interests. After two days of in-depth pieces on state-level subsidies, the Times comes out with an item on how local governments are trying to protect their cabbie industry from the threat of consumer choice.

These two paragraphs capture the heart of the story:

Regulators say new laws are required to protect consumers from being harmed by such apps. But Uber, aside from the hurricane troubles, is generally adored by customers who say they are willing to pay extra to summon a ride without much wait, especially in cities where cabs are scarce….

To Mr. Kalanick, the rules being proposed by Mr. Daus’s committee are a classic example of regulators trying to stifle innovation. He says those making the rules are more interested in protecting the taxi and limousine businesses than in helping consumers. And he says Uber’s strategy of marching into new cities without asking permission is necessary.

As with food truck regulation pushed by brick-and-mortar restaurants, industry efforts to regulate Uber out of existence have the salutary effect of demonstrating to urban liberals the true nature of much government regulation.

As an Examiner editorial put it during a recent fight in DC over Uber regulation:  ”How do you turn a D.C. liberal into a libertarian for a day? Threaten to regulate his limousine service.”

Lest our urban liberal friends leave thinking these are the only cases of regulations that protect incumbent businesses, here are a few more examples:

•Mattel, the world’s largest toymaker, supported strict new federal toy-safety regulations

Philip Morris, the world’s largest tobacco company, supported strict new federal tobacco regulation.

•Wal-Mart, the nation’s largest non-government employer, supported a higher minimum wage and an employer-mandate in health insurance.

H&R Block’s CEO joined Obama’s IRS, and wrote tax-preparer regulations, which H&R Block supports.

GE supported strict efficiency standards on light-bulbs.

Nike supported climate-change rules that crush its smaller competitors who actually make things in the U.S.

Big food producers supported new food-safety regulations.

The financial planning industry group called for more federal regulation of financial planning.

Hedge-fund giant Jim Chanos advocated federal registration of hedge funds.

The American Bankers Association applauded new federal credit-card regulations.

The big trucking companies supported new trucking regulations.

The sugar industry funding PR campaigns against corn syrup and artificial sweeteners.

Red-light-camera makers lobbying for more red-light cameras.

Big milk producers trying to crack down on raw milk.

Existing casinos trying to kill proposed new casinos.

Pot growers favoring pot prohibition.

The guys who make breathalyzer-ignition things, lobbying for more mandates on them.

Liquor stores in Tennessee lobbied to prevent supermarkets from selling liquor.

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About the Author

 

Timothy P.
Carney
  • Timothy P. Carney helps direct AEI’s Culture of Competition Project, which examines barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy.


     


    Follow Timothy Carney on Twitter.

  • Email: timothy.carney@aei.org

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