Tag: Regulations

Zen Magnets Stands Up to Abusive Government Agency

buckyballs
Image: Ari Armstrong

Shihan Qu, owner of Denver-based Zen Magnets, is a modern-day hero of liberty. The Consumer Product Safety Commission has waged a relentless campaign to put sellers of super-magnet educational products out of business, but Qu is fighting back. He told Brian Doherty of Reason magazine:

[CPSC needs] . . . to be reminded of the standard of liberty in this country. . . .

CPSC is arguing that warnings don’t work, which has incredibly vast policy implications. . . . Warnings are a sort of agreement a customer accepts upon use of a product. And by assuming that people cannot follow . . . instructions to keep magnets away from children and mouths, they are assuming the American Population is not capable of deciding for themselves. They are taking your right to consent, and fleecing your freedom to do as you will.

We’re the last line of defense, and if Zen Magnets doesn’t stand up, the CPSC gains a remarkable amount of power from consumers. . . .

The government has already shut down Buckyballs, another (former) seller of the magnets, and now it is forcing a recall; see the New York Times report. See also my previous posts on the subject for the Objective Standard:

Land-Use Restrictions Set Stage for Mortgage Crisis, O’Toole Argues

Randal O’Toole recently visited the Independence Institute to discuss his new book, American Nightmare: How Government Undermines The Dream of Homeownership.

In an interview, he argues:

I looked at the financial crisis [in the book] and showed that the crisis wasn’t caused by things that people often attribute it to, such as low interest rates, subprime mortgages, or other national features. They really were only housing bubbles in some states: California, Oregon, Washington, Florida. A few other states had housing bubbles, but the other states didn’t have bubbles. And all of the states that had bubbles had one thing in common. They had land-use restrictions that prevented homebuilders from meeting the demand for housing. And that caused housing prices to shoot way up.

My view is that these regional restrictions worked in conjunction with federal policies to create the bubble.

With ‘Cake Bill,’ Have Your Freedom and Eat It, Too

The following article by Linn and Ari Armstrong was originally published February 3 by Grand Junction Free Press.

“Patty cake, patty cake, baker’s man. Bake me a cake just as fast as you can!” But if you’re a Colorado cottage baker: “They’ll stop you and they’ll fine you, and if you don’t pay, they’ll throw you in the pokey, that’s the bureaucrats’ way.”

Thankfully local State Representative Laura Bradford sponsored a bill (1027) to legalize cottage bakeries. By the time you read this, the fate of the bill may have already been decided, so see Ari’s web page FreeColorado.com for updates. (You an also find a video there of Ari performing the opening rhyme.)

We called Mande Gabelson of Ava Sweet Cakes to ask her why she supports the bill. (Ari released most of the interview early online.) She said that working out of a professional kitchen works great for large-scale caterers, but it isn’t cost effective for smaller operations.

Gabelson said that, under current law, you “can’t bake a cake and sell it to your neighbor.” If you’re running a bake sale and “the money goes to a school, that’s okay,” but bakers “can’t put the money in their back pocket.”

“I couldn’t even sell a cake to my mom,” she added; “That would be against the law.”

And why shouldn’t she be able to sell her gorgeous cakes? Gabelson said, “You have to think about the man hours that go into something like that. I’m an artist. The typical wedding cake takes between 15 and 20 hours, and I should be paid for my skills. People come to me because of my abilities, and they want to pay me… and I should be able to take that.”

We asked her how she settled on a name for her business. She replied, “That’s my daughter. When I was 7 months pregnant with her my husband got laid off from Halliburton.” She took baking classes, and “that’s when I discovered I have this talent. When Ava was six months old I decided to name it after her.”

We first learned of the “Cake Bill” from a Republican release, which summarizes: “House Bill 1027 allows cottage industry food producers to directly sell nonpotentially hazardous foods to consumers at off-premise sites—like farmers markets and roadside stands—without being commercially licensed.

“Under the bill’s guidelines, cottage food producers would still need to register with a county or district public health agency for a fee up to $100 and carry home baker liability insurance. Their products would also need to be labeled and include specific information, like the producer’s name, ingredients and a disclaimer.”

We agree with what Bradford said in the release: “This is a common sense bill. Freeing the cottage industry from regulatory burdens intended for large-scale producers helps them grow their businesses and helps their local economy.”

This bill isn’t perfect. People should be able to sell baked goods without registering with the county or paying fees. But on the whole this bill moves us closer to economic liberty and legal sanity.

We suspect that different groups might oppose the reform. Larger-scale bakers who want to forcibly limit their competition may try to keep the law in place. Frankly, we wouldn’t trust any baker who needs to use political force to wipe out the competition. Any baker worth his salt will have enough pride to bake goods that people want to buy voluntarily in a free market.

David K. Williams, Jr., a liberty lobbyist with the Gadsden Society, said, “I think the opposition is going to come from the baker industry that wants to minimize their competition. They want to keep the consumer from buying from somebody else. From a liberty position, if someone bakes a cake, and someone else wants to buy it from them, they should be able to. A regulation preventing that kind of option is harmful to the consumer and the economy.”

Some of the professional kitchens might oppose the reform, as the law would no longer compel small-scale bakers to use their facilities. Again, the law should protect people’s rights, not give some businesses an unfair advantage.

Finally, the Nanny State whiners hate liberty and want to shackle everyone with bureaucratic controls.

Gabelson offered the appropriate answer to them: “If you don’t want to eat cottage food, you don’t have to.”

Williams pointed out that consumers direct the market: “Obviously anybody selling bad cake isn’t going to be in business anymore.”

Today, far too many stupid laws impede entrepreneurs and give politically-connected businesses unfair advantages. Such laws squash economic progress and kill jobs.

The “cake bill” is a bit of welcomed yeast to help leaven the spirit of liberty here in Colorado.

Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits FreeColorado.com from the Denver area.

Update: See also my February 2 note, as well as today’s article on the topic by the Independence Institute’s Krista Kafer.

Also check out my sweet video:

Cake Bill Advances

Update: Read the Grand Junction Free Press column by my dad and me!

Westword‘s Melanie Asmar reports that the Colorado “Cake Bill” (the “Cottage Food Bill”) passed the House yesterday on an anonymous vote. (This was despite the troubles of the bill’s sponsor, Laura Bradford.)

I wrote about the story a few days ago.

The bill was amended, but none of those seem to seriously compromise the bill. Now the bill heads to the Senate.

Asmar even embedded my short video on the matter:

CO Cake Bill 1027: Let Them Eat Cake (No, Seriously)

If the Colorado legislature passes a “cake bill” (1027) to legalize cottage bakers, Mande Gabelson of Ava Sweet Cakes can bake me a cake, just as fast as she can.

Otherwise, she’ll get a $1,500 fine for it.

My dad and I are working up a column for Grand Junction Free Press on the story. However, according to Mande, the bill may be heard as early as next week (it already passed through its first committee), and our column doesn’t pop until Friday. Thus, I asked Mande if I could release her interview early here, and she said I could. (She also said I can release the images seen here, two of which were distributed in a Republican media release.)

Mande said she used to rent space at a commercial kitchen for $100 deposit, $135 monthly rental, and $12 per hour for usage. “I had to leave the commercial kitchen due to the cost.”

But, she said, “I knew the law, I knew I could not sell out of my home, but I knew that other states would allow it with a cottage food law. I wanted to figure out a way to get it done.”

And so she contacted her local legislators. “Rep [Laura] Bradford gave me a call over the summer, and we talked about cottage food bills in other states… and here we are.”

Mande said that, while professional kitchens work great for large-scale caterers, “If you’re someone like me, who just wants to make a cake every once or a while… it just doesn’t work.”

Right now, you “can’t bake a cake and sell it to your neighbor. If the money goes to a school [at a bake sale], that’s okay, but they [bakers] can’t put the money in their back pocket. I couldn’t even sell a cake to my mom. That would be against the law.”

The bill, Mande said, “would let me sell from my home. So I could take orders, and people could pick it up at my home… I could sell at farmers markets and roadside stands.”

I asked whether she could deliver cakes under the bill. “Yes, you can.” But you “cannot sell to say a restaurant, it has to be sold directly to the consumer.”

Under the bill, she said, counties can set up a registration process and charge a fee: “It’s up to each county as to whether they want to enforce licensing. I’m suspecting that each county is going to go ahead and do that, because they get income from it.” However, counties “cannot prohibit individuals from participating in this bill.”

Mande said that the bill applies only to “nonhazardous foods” (as defined federally) “that can be left out at room temperature for several days without harboring any harmful microorganisms.”

Mande opposes attempts to restrict the revenues of cottage bakers: “The reason there is no cap on that, if I make a wedding cake every weekend, a wedding cake typically sells for $2,000. Not that I would bake a wedding cake every weekend, but that’s just an example. You have to think about the man hours that go into something like that. I’m an artist. The typical wedding cake takes between 15 and 20 hours, and I should be paid for my skills. People come to me because of my abilities, and they want to pay me that much, and I should be able to take that. If they put a cap on that, I’d be able to bake only one cake a year? Only two cakes a year? That doesn’t make sense to me.”

Why did she name her business “Ava Sweet Cakes?” “That’s my daughter. When I was 7 months pregnant with her my husband got laid off from Halliburton.” Mande took baking classes, and “that’s when I discovered I have this talent. When Ava was six months old I decided to name it after her.”

From Ava Sweet Cakes
From Ava Sweet Cakes

Update: Check out my 22-second video on the theme, in which I adapt “Patty Cake.”

Update: Westword posted something about this and embedded a nice segment from 11News on it.

Update 8:23 pm: Grand Junction Daily Sentinel explains that there are two “cottage foods” bills in the works. The alternate bill would allow more types of foods but cap sales to $5,000 per year. In other news, Representative Laura Bradford has lost her position as committee chair after getting pulled over on suspicion of drunk driving, reports Fox31.

NRF Blames Banks for Harms of Federal Price Controls on Credit Cards

Surprise, surprise: price controls have harmful economic effects. Unfortunately, rather than condemn price controls, the National Retail Federation is calling for more. In his detailed, informative article for theDenver Post, David Migoya reports that the Dodd-Frank federal price-control law has actually resulted in higher fees for businesses that sell mostly low-cost items, impacting (among others) small restaurants and Redbox.

Following is my letter to NRF:

Dear NRF,

I was shocked to read that one of your employees, Craig Shearman, is blaming the banks for the inevitable harms of federal price controls on credit cards.

Price controls are both immoral and economically destructive because they forcibly prevent people from voluntarily negotiating contracts. Yet, rather than condemn the federal government’s price controls, Shearman called for even stricter controls!

Here is the key section of the Denver Post article:

“They failed to set something specific on small-ticket pricing, so as not to be more than was previously charged,” saidCraig Shearman, vice president of government affairs at the federation. “And banks being banks, there was a loophole, and they’re taking advantage of it. What was intended to be fair to all businesses is now a way to gouge small-ticket merchants.”

Your organization claims to represent retailers. But you cannot ultimately help retailers except by fighting for a free market. If you advocate government controls, those controls will inevitably expand to hurt the very people you claim to represent. I urge you to change course, condemn price controls, and champion economic liberty.

I welcome your reply, which I will cite publicly.

Sincerely,
Ari Armstrong

Update: Mallory Duncan sent me a reply:

Dear Mr. Armstrong – Thanks for your comments. We absolutely agree that transparent and competitive markets are best. It is how retailers operate. It is how we compete to deliver low prices and ever increasing value for our customers.

Unfortunately, until recently, there has not even been the inklings of a competitive market in debit cards. Before the new law took effect, every single bank (all 7,000 of them) and their respective card associations charged exactly the same high schedule of swipe fees to every single merchant, regardless of size or service, and categorically refused to negotiate with any of them. Faced with a dominating price cartel, moving bad actors toward a competitive market requires either litigation or law. Fortunately, those efforts are beginning to work.

Despite some banks’ attempts to create loopholes, in time, even the small ticket fees mentioned in the article will become more transparent and competitive. That will be a good thing.

Best,
Mallory Duncan

Following is my reply:

Dear Mr. Duncan,

I sincerely appreciate you taking the time to reply.

Unfortunately, your reply does not address my concerns. You use the phrase “competitive market” as a euphemism to mean a market in which you force banks to do your bidding. The proper, moral, economically best system is a *free* market, in which parties are free to transact on a strictly voluntary basis. Again, when you advocate the use of force, you inevitably subject your own clients to the same threat.

Certainly anticompetitive banking controls should be repealed, and working toward that end should be your goal. But two wrongs do not make a right, and imposing price controls only further violates people’s rights.

Moreover, price controls are economically destructive by their very nature, and they inevitably produce unintended harms. If you are successful in closing the “loopholes” that concern you, the price controls will only cause harm elsewhere.

I again urge you to rethink your position, stop justifying your advocacy of force with clever euphemisms, and advocate economic liberty.

Sincerely,
Ari Armstrong

Officials Wage War on Colorado Businesses

Colorado bureaucrats and politicians are expanding their war on businesses in the state, threatening the recovery.

Economists with the University of Colorado at Boulder Leeds School of Business thinks Colorado job growth will outpace the rest of the nation next year, the Denver Post reports. Mostly these jobs will be in the service sector, the report predicts. Manufacturers will shed jobs. (Of course this is all just fancy guesswork.) To the extent that jobs depend on “green” subsidies, they are counterproductive and precarious anyway.

Bureaucratic controls tend to stifle capital-heavy businesses disproportionately, which helps explain why the service sector looks relatively appealing. But even the service sector will be hit by anti-business policies. Consider three recent news stories.

The Denver Post reports that the Colorado Department of Labor and Employment is joining up with the federal Department of Labor and the Internal Revenue Service to punish businesses who dare to hire independent contractors. Of course, this is only a “problem” because of all the anti-businesses controls that curtail direct hires, starting with the grotesque payroll tax.

If we actually cared about restoring a strong economy, we’d roll back those employment controls, not expanding them.

The Daily Camera reports that the Boulder city council may stick firms with a “business software tax.” Allegedly this closes a “loophole” (but freedom is not a loophole!).

If we actually cared about restoring a strong economy, we’d eliminate software taxes across the board, not expand them.

Steamboat Daily reports that the Routt County Board of Commissioners is trying to hamper the production of oil and natural gas. (Thanks to theDenver Post for mentioning both those other papers’ stories.)

If we actually cared about restoring a strong economy, we’d eliminate the arbitrary controls hampering the state’s energy industry, preserving only those government actions based on protecting actual property rights from objectively verifiable harms through a legally sound process.

But of course most of Colordo’s bureaucrats and politicians care not a whit about restoring a strong economy. They’re too busy wielding arbitrary power over others.

A Parable of Shoe Stores and Bureaucrats

The following article by Linn and Ari Armstrong originally was published October 14 by Grand Junction Free Press.

The following discussion took place in an alternate universe very much like our own, but different in a few important respects. Any resemblance to real persons in our universe, living or dead, is purely accidental.

The scene is a coffee shop in a town called Great Junction, a town nestled between the Federal Monument, the Bookcliffs, and the Great Mesa. Ralph sits at a table, sipping his brew, sharing a quiet conversation with a few friends.

“Here’s how it went down,” Ralph began. “For three years my son John and I tried to open a shoe store over at the strip mall by Urban Market. We developed a great business plan and lined up our funding, and John finished up his degree in business while working in a shoe store on the side to earn experience in the industry.

“We did all the basic work in the first year. But then John reminded me we had to apply to the state Shoe Utility Commission, or SUC. I guess their job is to ensure that shoes meet their standards of utility, whatever that means. SUC required us to ask permission from the other shoe store in town, Shoe Central, before we could go into business.”

At this point Ralph’s friend Henry barged in, “Now hold on there, Ralph, you mean to tell me SUC wanted you to get the permission of your competitor to go into business? That can’t be right. That’s just insane! When I opened up my burger joint I didn’t have to ask permission from McDoogle’s! What’s next: are they going to make Cameron here ask permission from Orange Cabs to keep his own cab up and running?”

Cameron snorted at the absurdity.

Ralph took a breath, pushed up his shoulders, and continued, “Well, SUC uses pretty fancy language to describe asking permission. SUC says new shoe stores have to ‘show a public convenience and necessity’ before they’ll issue a shoe-store license, all to prevent ‘ruinous competition.’ And SUC was pretty keen on hearing Shoe Central’s claim that it already met the local demand for shoes.”

Henry could not contain himself. “‘Ruinous competition?’ What the hell does that mean? Most businesses compete for customers; that’s part of what makes them work hard to offer good service. Shouldn’t people have a choice about where they buy their shoes?”

After a pause Cameron asked, “So what happened next?”

Ralph continued, “At least SUC let us ask some local residents whether they’d benefit from a new shoe store in town.”

Henry started turning red in the face. “But wait a minute! Doesn’t a customer say he wants to shop at a store every time he walks in and spends some money? People say lots of things, but when they put their money on the counter, that’s what counts, right? How can a bunch of pencil-pushing bureaucrats predict where people want to shop? Isn’t that what the marketplace is for?”

“That’s what I always thought,” Ralph replied.

“So did SUC give you a permit to open a shoe store?” Cameron asked.

“SUC finally signed off on our shoe store, after forcing us to waste tens of thousands of dollars waiting around,” Ralph said.

Henry exhaled sharply.

“Unfortunately, Shoe Central then took the matter to court so a judge could make the decision.”

Henry jumped to his feet, spilling his coffee. “You mean, once you kiss the backsides of SUC bureaucrats for a few years, then you’ve got to start all over with a judge? What country did you say we’re living in, again?”

“Take a seat, Henry, it’s over,” Ralph said. “Amazingly, the judge also signed off on our store. But then SUC got to work again. SUC said we could carry only five types of shoes, and only in three sizes. Also, only people who lived within six blocks of the strip mall could shop at our store. SUC also dictated the prices we could charge for shoes. So we couldn’t charge more for better shoes, and if our stock piled up or dwindled we couldn’t raise or lower our prices. We’ll see if we can make a go of it.”

Henry said nothing. He sat hunched over, a single tear welling in his eye, staring at his cap with the emblem of his military service.

After a few moments of silence, a perky young lady walked up to the table and said, “I couldn’t help but overhearing, but I for one am grateful that SUC protects the consumer from the anarchy of the marketplace. Shoes are just too important to society to let just anybody sell them. Who would protect us from too many shoes and unfair pricing?”

The woman turned up her nose, spun on her Shoe Central high heels, and walked away. Ralph stared into his coffee.

Those of us living on the alternate side of the universe can only thank heaven that nothing as crazy as the SUC exists in our world.

Fuel Controls Violate Liberty

The Objective Standard has published my latest article, “Fuel Controls Violate Rights and Stifle Markets.” I write:

… [T]he federal government’s fuel standards disrupt this forward march of technology, substituting the whims of politicians and bureaucrats for the independent judgment of producers and their customers. As a result, the auto industry becomes more heavily shackled by political directives, and it offers consumers less-desirable vehicles. …

Check out the entire piece!

Leave Breast Pumping to Contracts, Social Pressure

Did the Rocky Mountain Academy of Evergreen, a tax-funded Colorado charter school, decline to renew a teaching contract for Heather Burgbacher because she pumped breast milk at work? That’s the allegation of the ACLU (and a one-sided story from 7News).

Or was Burgbacher let go for an entirely different reason? The Denver Postreports, “Jefferson County school district spokeswoman Lynn Setzer said Burgbacher was a technology teacher who worked under a yearly contract. Setzer said Burgbacher wasn’t retained because her position was transformed into a technology adviser to staffers and the school didn’t think she was a good fit.”

We will never know for sure. The anti-discrimination laws incentivize employees to claim they were let go because of mistreatment, and they incentivize employers to claim the fault lies with the employee.

Another question we will never have answered is whether the ACLU saw the lawsuit as particularly juicy because it targets a charter school, something typically despised by the left.

The only thing crystal clear about the case is that the Colorado and federal laws on which it is based are entirely ambiguous. Consider this description from the Colorado Department of Labor:

An employer shall make reasonable efforts to provide a room or other location in close proximity to the work area, other than a toilet stall, where an employee can express breast milk in privacy.

Reasonable efforts means any effort that would not impose an undue hardship on the operation of the employer’s business.

Undue hardship means any action that requires significant difficulty or expense when considered in relation to factors such as the size of the business, the financial resources of the business, or the nature and structure of its operation, including consideration of the special circumstances of public safety.

And who gets to decide what constitutes “reasonable,” “undue,” and “significant?” You guessed it… lawyers.

Now, I definitely agree that, in most contexts, employers certainly should allow employees time and space to pump breast milk. This is especially true in an educational setting, as it offers children an opportunity to learn something about childbirth, nutrition, and immunity.

But just because something is a good thing doesn’t mean the legislature should get involved. Many jobs already involve an employment contract. (As a tax-funded entity, a charter school properly falls under additional rules not applicable to private businesses.) And most businesses would rapidly cave to social criticisms about lack of accommodation.

For marginal jobs, often the very jobs that poor women need, the additional risk of (perhaps groundless) lawsuits could well mean the elimination of the job. So the real impact of the Colorado law is to protect wealthier yuppie women, who don’t really need protecting anyway, and make it harder for poor women to get any job at all.

***

ziolus posted the following comment on May 11, 2012 at 10:02 AM:
I was fired for pumping milk at work as well under Colorado state law as well. from a company called teletech. I put my story on youtube if it gives you any help. http://www.youtube.com/watch?v=a9IjL8na0UE

Ari Armsmtrong posted the following comment on May 11, 2012 at 10:50 AM:
Please note that I have NOT independently verified the claims made in the previous comment, nor can I attest to their accuracy. -AA