Asymmetrical Information - Megan McArdle

11.08.12

DC Government vs. Market Competition, Round 7,894

First car services, now the food trucks.

I think that DC needs a new regulation.  All current councilmembers should have to register--and run--as Republicans in 2014.  This would encourage political diversity in DC, creating a space for Republicans as well as Democrats to compete in our elections.  It's is a pro-competition initiative that would empower a currently disenfranchised minority and help the DC government build new ties to a party from which it is currently somewhat alienated.

What's that you say?  This regulation would effectively cause all current council members to lose their seats?  Well, I don't think I agree with that. A revitalized DC Republican party ticket might sweep the current polls.  Just because Barack Obama carries 90% of the vote in DC doesn't mean that a Republican can't be competitive in our city.  But even if you were right, I don't think that's a reason to oppose this legislation.  I mean, sure, it's sad for current council members who might like to serve another term, and, I dunno, run on the ticket of the party they actually vote like better.  But isn't that really a small price to pay for a more fair and transparent system that's more finely tuned to the needs of DC voters?  

Stop snorting.  I don't see why council members would oppose such a sensible rule, since after all, that's how they think business should be regulated.  Whether it's car services or food trucks, the city likes to hamstring upstart competitors by enacting ostensibly neutral "sensible regulation" which just happens--who knew!--to have the side effect of putting those new entrants out of business.   This is always done in the name of the consumer, even though the consumer has expressed no desire for many of the "benefits" provided by the new legislation, like . . . paper receipts, or taxis that are all the same color.  

So far, the consumers have managed to beat back most of the proposals by inundating the city council with complaints every time they proffer another anti-competitive boondoggle.  Yet it's like fighting a hydra: slap down one stupid anti-competitive regulation, and two more grow in its place.  This is the DC City Council's latest brainstorm:  

The language in question from the District's proposed vending regulations sounds innocuous enough: Food trucks may not vend from a parking spot adjacent to an “unobstructed sidewalk” that’s “less than ten feet (10 ft.) wide in the Central Business District.”

But since the proposed regulations were published in October, members of the D.C. Food Truck Association have been trying to determine what those words could mean for their businesses, and what they’ve learned has unnerved them: Eight of the 10 most popular food-truck destinations downtown do not technically comply with the proposed rules as written, according to research done by the association.  

In response to complaints, the city has responded that, y'know, they could issue waivers.  But why enact a rule that requires waivers for almost all of the most popular spots?  One suspects that it's so that later, they can decide not to issue the waivers after all.  Or use the threat of withholding waivers to extract all sorts of other concessions from vendors.  Pro-tip for well-meaning regulators: if your new law requires that you issue waivers to 80% of the people who would be affected, then it's not a very good law.

Government regulation definitely has a place when it comes to food safety, traffic control, and pollution.  The problem is, it rarely stops there.  Government bureaucrats use it to keep things tidy for the regulators by suppressing competition that might pose new problems--and incumbent firms reward them with financial and political support.