America’s economic freedom has declined considerably since 2000, when America ranked second highest in the world. We now rank seventeenth. Part of the decline has come from a worsening regulatory environment, including business and credit market regulations. Details on America’s score can be found here, and the entire report by the Fraser Institute can be found here.
Diane Bartz from Yahoo News has recently reported about the new regulatory goals that Microsoft is trying to promote. Microsoft filed a motion in a U.S. court asking the U.S. Bureau of Customs and Border Protection to enforce and apply trade restrictions on importing phones manufactured by Google Inc. subsidiaries overseas; inhibiting broader possibilities to American consumers.
The U.S. International Trade Commission, which hears a long list of high-tech patent complaints, said in May 2012 that Google’s Motorola Mobility infringed a Microsoft patent for generating and synchronizing calendar items. It barred any infringing Motorola Mobility device from being imported into the United States.
“U.S. Customs appropriately rejected Microsoft’s effort to broaden its patent claims to block Americans from using a wide range of legitimate calendar functions, like scheduling meetings, on their mobile phones,” said Matt Kallman, a Google spokesman.
Mark W. Frankena writes in Cato’s Regulation magazine about some cronyism occurring in Nashville, where regulations are preventing competition in the transportation sector.
For years, black-car service was free of municipal regulation. Nashville residents and visitors requested black-car service when they preferred its combination of service and fares to the available alternatives. Then, in 2010, Nashville’s elected Metro County
Council voted 38–0 to impose regulations on black cars. Some of the regulations make it impossible for them to compete for roughly half the trips they were providing and would have continued to provide absent the regulations.
The anti-competitive regulations harm Nashville’s residents and visitors alike, and enable taxi and limousine companies to earn higher profits. Black-car companies filed a lawsuit in federal court in an attempt to eliminate the worst of the regulations, based on constitutional protections for economic liberty. Unfortunately, in January 2013 a jury voted 8–0 to uphold the regulations. This article tells the story behind those events, and why Nashville is worse off because of them.
Jeff Reynolds from Freedomworks.org discusses the American Legislative Exchange Council’s report on the growth of sweetheart deals for the EPA in recent years. EPA’s actions trade state sovereignty for the interests of environmental groups.
Forty percent of the EPA’s regulatory takeovers … were derivative of “sue and settle,” a legal strategy by which the agency effectively replaces state participation with that of environmentalist groups like the Sierra Club. Since 2009, the EPA has imposed at least $13 billion in annual regulatory costs that resulted from sue-and-settle litigation.
A Reuters article describes how the French government was looking to restrict Amazon from providing their customers with free delivery or other discounts, because they wish to protect the existing market.
Guillaume Husson, spokesman for the SLF book retailers’ union, said Amazon’s practice of bundling a 5 percent discount with free delivery amounted to selling books at a loss, which was impossible for traditional book sellers of any size.
“Today, the competition is unfair… No other book retailer, whether a small or large book or even a chain, can allow itself to lose that much money,” he said, referring to Amazon’s alleged losses on free delivery.
Andre Francisco at POGO writes about the new rules being create to regulate banks – written by lobbyists for the banks!
Industry lobbyists have their work cut out for them after the passage of Dodd-Frank in 2010, which introduced volumes of new regulations in an effort to overhaul the financial system after the collapse. In addition to helping to write regulations, lobbyists are stepping up their political contributions to both sides of the aisle.
Small companies are disproportionately affected by regulatory compliance costs. So it’s not really surprising that large companies often favor regulations that will also impact their small-business competitors. Consider Amazon (from The Foundry):
A few years back, Amazon was waging a scorched-earth campaign against states that attempted to collect sales taxes from internet businesses,” blogger Megan McArdle reminds us. Now the company is actually lobbying in favor of federal legislation that would force companies to collect sales taxes for the buyer’s home state.
In a cronyism twist, new regulations from 2010′s Dodd-Frank legislation will set aside certain businesses for special government oversight because they are too big to fail. (The official term is Systemically Important Financial Institution). This arrangement may devolve into a special benefit for the designated businesses because it will tell the public that the corporation has the government’s backing. From the American Enterprise Institute blog:
Now think about that when you hear the great hew and cry of the folks who purport to be worried that the big banks are too-big-to-fail (TBTF). They denounce the funding advantages these banks get because of the markets’ belief that the government will not allow them to fail… Who could resist buying insurance from a firm the government will not allow to fail?
Benjamin R. Freed at the DCist writes about a food truck that is going out of business because of proposed regulations:
Another D.C. food truck is leaving the road over the District government’s proposed regulations over the growing industry. Cori Bryant, the owner of the Pinup Panini sandwich truck, announced that today would be her last day serving pressed sandwiches out of the window of her light blue truck painted with the image of a 1940s-style pinup girl.
“The new regs are to much for this little startup,” Bryant wrote from her truck’s Twitter account this morning. And after serving today’s lunch crowd in Chinatown, Pinup Panini packed it up for good.