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Local Lessons In Overregulation

 May 14, 2012 05:55 PM


(By Fisher Investments) Some regulation is necessary. Runaway overregulating, however, can easily impair consumer choice and economic growth—adding costs, complexity and overall barriers to entry, preventing free-flowing competition. And it seems we have plenty of overregulation in the US, from multiple sources—regulation impeding competition and, ultimately, harming consumers and producers.

Most would likely think first of Federal rules and regulations in this regard. And it seems both parties agree, considering both President Obama's administration and Republicans have talked up simplifying rules to cut redundancies and unnecessary regulation. And last year, it seems the government took action, slashing fully 171 pages of rules from the Federal Register, reducing its volume by a whopping … 0.2%. After this huge reduction, the code is only 82,419 pages.

[Related -Initial Jobless Claims Rose Unexpectedly]

It's a … start? The inkling of a start? But state and local governments add plenty more on top. While there should be little doubt some rules are both necessary and sensible, there are plenty that aren't.

In most states, barbers and others who cut hair must be licensed by the state. For example, the state of Maryland (among many others) would like you to turn state's evidence and rat out unlicensed offenders with the gall to offer under-the-table trimmings. Why? The state suggests it's to promote health and safety and ensure professionalism. Whether these hard-to-tally benefits are attained or not is anyone's guess. In fact, Maryland's State Board of Barbers offers a great deal of information on its webpage, but studies showing licensing's huge societal benefits are conspicuously absent. However, it's easy to find licensing standards, including passage of a theoretical hair-cutting exam (that's right)—which requires completion of 1,200 hours of barber training before taking. (A measure of training implying the state believes a bad haircut is 30 times as risky as piloting a private plane, since the FAA requires only 40 hours of flight time.) And this isn't limited to barbers—some studies indicate roughly one in three American jobs requires an occupational license today.


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