[inaudible conversations] good morning president of the majority of Washington Policy Foundation most importantly from our elected officials under here today bp share your service we have a great defense wind everyday with a mission here in dear to our hearts and it is a key part of what we feel very strongly about and to introduce our speaker will bring our vice president. [applause] good morning i would like to welcome did carpenter today how much we have worked over the years at the institute for justice a think the amado is we screwed government and the sounds good to me. [laughter] but as a coauthor of bottleneckers dont miss your opportunity to get a copy of it. Gaming the government for power in a private profit with the assisted justice to define and implement the social Science Research as an experienced researcher and published on a variety from education policy to the dynamics then we will talk about that. In the academic journals including Economic Affairs in the urban live Journal International journal of ethics urban studies and magazines including regulation and the American School board journal and also be quoted in newspapers and all reet journal. Put the research for institute of justice is the unintended consequences of Campaign Finance reform with the and how industry insiders cut out competition. Into victimize the of vulnerable for the Eminent Domain and use. And they have done some excellent work with some of the toughest legislation in georgia so we think you for that. A schoolteacher and principal as an analyst and a faculty member where he is currently a professor. Despite what you think and tells me he is a selfproclaimed musician percussionist and a pilot and he promises he does not do them at the same time. [laughter] dick carpenter. [applause] it is a pleasure artur talk about our book. Chips since his regards as well. He is in retirement in utah that would be quite a trip for him so he sends his regards. I want to begin by introducing you to somebody from our book. Kim owns and operates bridges funeral home in tennessee. But she is not from tennessee. Actually she is from oklahoma started her First Business there but she had to leave oklahoma when she ran afoul of the law and it turns out that kim she had a very dangerous practice of selling caskets without a Funeral Directors license. Before that she was on executive fasttrack she learned the hard work go success and enjoyed a lot of success. And eventually ended up with one of the largest fuel companies and saw this with the dried in business to help people through her work and to be very successful but after a few years she began to note there was a niche to be filled of the classic entrepreneur the merchandise was locked up. They were marched deputy mayor between two 1 5 and 600 so how can i put together a Business Model that enables me to sell the same merchandise that a much lower cost . Eventually she laughed joining up with janet bridges and spent one year that became the content of ashley name applies the Business Plan was to sell everything all of the merchandise of the internet and they would take advantage of the drop shipping so they would have no inventory that enables them to keep their costs low then they pass of the sedate blood negative savings to the consumers did thought they had a winning Business Plan and they did but they ran into a problem Oklahoma State law says that if you want to sell a casket to consumers continue our oklahoma based company he must we licensed as a funeral director and kim was not shaken during that license but require her to go to school for a few years create an internship with 25 embalming is a brick and mortar business preparation room a feeling room and inventory on hand none of which they were interested in. As if that is not irrational enough to get a Funeral Directors license to sell a box because thats what casket is, to have the company you have to be director to sell to consumers in oklahoma but companies outside of the state did not have to have a Funeral Directors license to sell to consumers and oklahoma so she could have taken a business that were computer servers across the state line to kansas and there she could have sold caskets to consumers in the oklahoma all day long that she did not want to do that. She wanted to stay in oklahoma and raise her family and her home town. She thought the law was wrong in not only that but injury is because it enables fuel directors to marco of merchandise to take advantage of people at a difficult time in their life. So she stayed in oklahoma and fought the of law. She was the only one the legislators thought it was wrong beginning in 1999 they instituted a series of bills every year to remove the license requirement kemp testified and every year they lost for one reason alone that the linsed Funeral Directors would lobby aggressively to protect their license so today in oklahoma if you want to sell a casket and your the oklahoma based company metabolize since what they ran into you is that what we call bottleneckers some big advocates perpetuation of a government regulation particularly the operational license to restrict the free throw free flow of workers to join the economic benefit for bottleneckers are throughout the economy our doctors and attorneys have licenses and reno that are barber does but the recent Research Shows the occupation that now require a license and auctioneer for example, you have to nevelsons or sign Language Interpreter or a locksmith or a crane operator or a forest above list goes on and on of occupations that were not but now they are because of the work of bottleneckers we have fought to reform occupational licenses individuals that want nothing more than exercise their right and be represented people from 26 years to be on occupational licensing and economic liberty and we continue to litigate in what we have discovered in all of this is that licenses are created at the request of harm to consumers and citizens. But the truth is legislative licenses have request of those to be licensed. The first it seems absurd why would they seem ask for more government intrusion . The answer is to follow the money will license creates a bottleneck enabling them to artificially inflate the wages as a result of their own benefit it is more than just economic advantage when you hear bottleneckers t language will be we also need to confer a status of our recognition we want to be like those other occupations recognition that comes only with licensure. So as a result when a reform bill is introduced or a licence is challenged in court the bottleneckers have a Ferocious Campaign to protect their license. The funeral industry is one example. In 25 years we have yet to find a single example of a license created protected by any means other than the bottleneckers but yet the myth will persist that day exist for a need for and that is not true. So to dispel the myth we want to quite a new term we wanted a word that would be descriptive and pejorative one word to name and shame so we use the word t11 to draw out of the wellknown metaphor restricting the free flow or Free Movement to take association with a negative rate of the word you know bottleneck of traffic then we are familiar with the effect of that as a result so each industry in our book will recall the bottle making days and those of you that have been active then the legislature were recognized instantly things like coordinated letterwriting campaigns or industry day at the Capitol Campaign contributions in to fill testimony and the antidotes for example, your neighbor to the south several years ago the legislature considered whether to repeal the of licensing bill for interior designers. That bill receiving enormous attention from florida and outside the state to daylewis the state legislature with hours of testimony during which they talk about the importance of their license. Once said that if yo repeals this law it will result in the death of 8,000 people per year. [laughter] 88,000 so we are backward looking examining the perpetuation of licenses throughout the industry about what we described in the book is not a historical artifact it continues today. There is no better example than the American Music therapy association. These two organizations having nationwide campaign so when they make the request the languages always the same that we need to protect from the unlicensed practice every bottleneckers has said the same thing through the advocacy efforts through the state based taskforce they go statebystate talking about mitt music their behalf dozen states have already adopted a license and the fact that they have adopted these is not a consequence of demonstrable means because the music there is have mounted a campaign and there is no better example than here in new york. Georgia in recent years adopted its own music there be licensed for and the bills adoption that upon introduction the team went to Lake Committee and had a hearing at which time the only people to testify were music therapist. From national and state organization. To have letters of support from other therapist and consumers and that no time has anyone testified against the bill at no time was any empirical evidence ever introduced demonstrating a significant threat and at no time did istanbul legislature or anything else ask a challenging question or express any skepticism and now if you want to work as a music therapist you will do the following following, earned a bachelors degree or higher from an approved program it has to be approved by the music Therapist Association the same people who lobbied for the bill, passing National Examination offered only by the music therapist and it takes 3 per complete 1200 hours of internship 18 years of age or older and pass a criminal background check. Research on occupational licensing that consumers then giorgio will pay 15 percent more for their music there be that not a silly t it greater quality and if that later date the legislature tries to reform the music there be licensed there will now be joined by members of the music there keyboard will protect their license. Those of us to advocate redo so to make an economic argument this is the issue to create a just society built in part the right to havent life to make a living without government regulation simply because it introduces to match competition for someone else in 1787 James Madison wrote that protection of Property Rights extended to more than just realestate and covered editing to which a man may attach a value with those objects in which to employ a them his disdain for one group of citizens at the expense of another under the rubric of Property Rights it is not paid a just government where the prop takes this it from one class of citizens for a rest sewed to deny part of the citizens and a free choice of their occupation which not only constitutes the property in the general sense of the word but to condemn those arbitrary seizures madison couldnt been talking about occupational licensing today and bottleneckers today. But to fill the call the first object of government today the elected officials to work to protect Property Rights including free occupational practice. Those of us should support the work tuesday to break open those bottlenecks but we also tell the story of courageous men and women that can work to break open the bottle neck and industry in there millions of other people like them that they represents over 25 years we have had the privilege to do that to represent those witviduals along the way. Sothat i wl stop and open for questns and discussion we have a microphone. What have you seen as a result with the ftc North Carolina dental board and taking measures that i certainly support they think would be helpful but what d. C. Other states doing as a result of that case quick. It is a little early to say the case is fairly recent there in a position to figure out exactly what they need to do so macaulay is spending a lot of time to help the states understand what are the implications but in general to create more oversight with that occupational licensing board and so consequently it is monopoly behavior and they have been able to do so because nobody has paid much attention before. So now the staar how to really t the oversight of these activities . But it is too early to say. The alcohol wholesale business in georgia babylon called a have a lot call this theyre any strangle hold . It is chapter number one in our book and fact in part were the name of the book comes from. The word bottleneck draws on uh alcohol bottle is very common and wholesalers are very powerful special interests though the efforts to open that bottleneck is probably the best example of one of our cases of direct shipping route taken open up the market of direct shipping 4. Before that it was illegal. That was the most pronounced with and that we have had been other efforts are in the area of the microbrewery. So that opens up the market with maurer direct consumer access to cut the dish a bigger out in seoul of microbrewery is where reasserted to see that very small when along the way. Did meg is seems a lot of this licensing requires you to go to college that is a total waste of money if think we have to many people in college. The issue of the role of Higher Education there is no question they make enormous amounts of money. Huge. Cosmetology alone talk about young women who will go to school to pay tens of thousands of dollars to earn a license and the schools are earning the enormous amount of money and they know it. Slices tbills often have testified in in their behalf universities will be bused down to legislative Committee Hearings or against reform effort so Higher Education does make the enormous amount of money there is a license to work we examined the licensing requirements low to moderateincome occupations across the country report came out to go to the policy consortiums of leaders they invited me to go so prepared speefifteen is to the second there were 400 people there with a panel it was my turn and you will not be surprised to learn it was greeted with skepticism. About halfway through my presentation the person who invited me compound to the front end stood in front of me wanting me to stopping and i thought you son of a gun. You invited me your last 8415 minutes will give you 15 minutes so afterwards there was a panel of people they were all to meet an incredibly high style because they recognize the threat of the message that we ought to reform occupational licenses so yes it does make it an enormous amount of money but yeah research as been done in a helpful way so hopefully we can do research on that. Like most things between appropriate and inappropriate to have examples where it is appropriate for lysander . Fertility years we have a by narrow the occupational licenses either nlicensg orull licensing but that is not correct we dont live in a binary world of regulation and regulatory options it could be used and people dont realize this as more people come to realize the university of michigan we coauthored an article a few months ago looking at the ragged edge reaction. So think of a pyramid and at the top this Market Regulation and the market regulates what does that mean . Somebody who provides goods and services by my reputation and consumers behavior. They have the ability to influence what happens. On your phone you now have more information than any time in history than any licensing people so there is regulation is to the markets. If you go down through the pyrads was full licensing. And then the free practice so voluntary certification from a thirdparty organization. Bonding and insurance. Certification these are different forms of regulation that can be introduced to create the same benefit of licensing without imposing on the free practice the first figure out the need to be addressed through regulation is that to overcome asymmetrical information . To make sure you know where somebody is for the litigation what is the need so in answer to your question there are examples between the Market Regulation here is one example floor led deals with hurricanes on a regular basis so to protect consumers against fly by night contractors to come into this state to do dangerous work so consumers can know where they are. So registration accomplishes that need. With doubtful licensing so there may be emples we can match up the regulation of that occupational license. Looking at this in a general way most of us need a license to drive. So the real Public Benefit that requires us to ask and and and Liability Insurance or some sort of ability if we do damage to be compensated. Why dont we simply require to provide a service and forget about the regulation to allow the Insurance Company to decide if that person is qualified. One is the options so what is the need to be met . Think of the treed trimming business. Said to protect consumers from damage and have the trees that needs to be trimmed and defaults on your car. We dont need a full license but a way to make you whole and to make sure to protect against your loss. That is one of the auction options when the need is the externality problem. One of the arguments that we hear is reimbursement they say they need a license and they cannot get reimbursed for Insurance Companies are medicate what gsa about that . This is, but a couple of occasions the first thing is check that and dont take it on face value as an example in indiana a group of their pest had gone to the states to say we need a reason for the reason a license for the reason that you described the Affordable Care act creates a regulation it doesnt say we have to have a license to be reimbursed we have to find out if it is true it doesnt say that but if you will be reimbursed have to be recognized by your state with what ever the state requires if your state says behalf to have a license then you do but if your state says there is no regulation and that is all you need so check the promise first if that is true then there is a way to create special recognition that does not restrict the free flow if you want to be reimbursed through the cns as an example with special recognition 91 you have to earn this recognition but only to be engaged in this type of circumstance. Only those injured in to special contracts that does not restrict the free throw flow. [applause] thankyou. Thanks for all the great word that you do hopefully we can be successful keep an eye on the georgia policy in be will see you next month. We are adjourned. [applause] [inaudible conversations]