How to Roll Back Regulations in Virginia

Does the Commonwealth of Virginia really need regulations to govern who gets to blow dry hair for a living ?

Does the Commonwealth of Virginia really need regulations to govern who gets to blow dry hair for a living?

A case study in regulation run amok: To earn a living blow drying customers’ hair in Virginia, one must acquire a license from the Virginia Department of Professional and Occupational Regulation. To acquire such a license, one must attend an accredited cosmetology school, the average cost of which is $14,887 nationally, not counting the time value of 1,500 hours of training. Only after completing the school program and procuring a license can a budding blow drier embark upon a glorious career that pays an average of about $20,000 a year.

That is just one example of how excessive regulation hampers job seekers, restricts labor competition, protects entrenched special interests, and generally hobbles Virginia’s economy, according to Tyler Foote, Virginia state director of Americans for Prosperity, in a Richmond Times-Dispatch op-ed today.

A dynamic economy continually introduces new products and services that get entangled in regulatory red tape. Sometimes the General Assembly wades in and deals with the problem, as it did by removing restrictions on food trucks from operating on Virginia-owned streets and, again, by creating an exemption from liquor laws so bed & breakfast guests can consume alcoholic beverages in shared spaces like living rooms and porches. (Foote also could have cited recent controversies over ride-hailing services like Uber and Lyft, taxation of Air BnB rentals, and retail restrictions on electric-vehicle manufacturer Tesla.)

Changing the law requires time and money, commodities in short supply for many entrepreneurs trying to build a business. But there is a remedy, says Foote. The Red Tape Reduction Act, sponsored by Del. Michael Webert, R-Marshall, and Del. Nick Freitas, R-Culpeper, would require every new regulatory requirement be offset by eliminating two existing regulatory requirements until the regulatory baseline has been reduced 35%. Once that threshold has been met, new regulations would be offset by a one-for-one reduction.

Foote argues that the bill was inspired by a similar measure implemented by the Canadian province of British Columbia, which had labored under economic growth 1.9 percent lower than the Canadian average. Following implementation of the rule-cutting law, growth jumped to 1.1 percent above the average. (That barely sounds like it’s worth the trouble. Perhaps Foote means growth is now 1.1 percentage points higher, which indeed would be impressive.)

Bacon’s bottom line: I have railed for years how excessive regulation hurts entrepreneurship, small business formation and economic growth in Virginia. I like the idea of rolling back regulations, especially those that restrict competition. (I’m open to regulations protecting the public safety and health, as long as they are subject to a rigorous cost-benefit analysis.) However, I worry that the Webert-Freitas approach would be arbitrary and mechanistic.

I understand the logic that we need to create a meta-rule to govern the lesser rules and keep them in check. Without such a law, new regulations will proliferate without let-up. But how do we know the optimal number of regulations for Virginia? How do we know that the sweet spot is 35% fewer rules than what we have now? What if lawmakers encounter a situation that truly justifies new regulations but find themselves stymied by this new law?

The fact is, we live in a complex society that is becoming more complex. Technology creates new opportunities — and challenges — by the day. When the first mobile phones appeared, people thought of them as substitutes for telephones. Wow, you mean you can carry your phone around with you? Awesome! Who imagined that one day mobile phones would become packaged with software that allowed people to send text messages and, even more astonishingly, that many people actually would prefer that form of communication over talking to one another? Further, who imagined that one day “texting” while driving would cause so many accidents, injuries and fatalities that laws and regulations would have to be passed to curtail the behavior?

Texting was not a problem when good ol’ Ma Bell exercised a telephone monopoly. How’s that for irony. Breaking up ATT and freeing the telecommunications industry from suffocating regulations created one of the great surges of innovation in American history…. which in turn created the need to regulate previously unimaginable behavior.

I agree that many regulations are harmful, and I sympathize with Foote’s frustration. But I prefer the old-fashioned way of doing things: legislators rewriting laws one at time, giving careful consideration to each one.

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8 responses to “How to Roll Back Regulations in Virginia

  1. Ya gotta love Bacon and the Richmond Times Dispatch editorial page.

    They never tell you that “Americans for Prosperity” is a right-wing, Koch brothers outfit. OF COURSE, they’ll put out jeremiads about “over regulation” and insult cosmetologists as blonde bimbos in the process.

    For shame!

  2. “Americans for Prosperity” is a right-wing, Koch brothers outfit.

    And that’s all we need to know, folks, that anything the group says is wrong, wrong, wrong! No need to discuss the facts.

    insult cosmetologists as blonde bimbos…

    So, Peter, are you calling the blonde in the photo a bimbo? Who’s being insulting?

    By the way, the blonde is not a cosmetologist. She’s getting her blow-dried. You can tell because someone else is holding her hair and blowing it dry.

    • Geeze – It REALLY is a Koch-funded right wing group who is very political agenda!!!

      Jim – you should at the least give a brief background on groups like this – left and right.. rather that have folks think they are an objective group truly interested in regulation reform.

      these guys are virulent anti-regulation types.

      • If the Sierra Club issued a press release, and I went, “OMG, it’s the Sierra Club, a notorious left-wing environmentalist group, and then dismissed its reports and studies without even looking at them, that would be intellectually bankrupt. I take the Sierra Club very seriously and, despite their personal attacks on me, take their arguments seriously and give them attention on this blog, even if I don’t always reach the same conclusion as they do.

        Try dealing with the facts and arguments presented in Foote’s column rather than going into fainting spells at his connection to the Koch brothers.

  3. The Webert/Freitas bill would create a new bureaucracy to watch over the expansion of bureaucracies and, although I didn’t see an explicit “delete 2 to add 1” rule like your Canadian example, it would crack down on adding new regulations, and offers this definition: “a regulatory requirement [is] any action required to be taken or information required to be provided in accordance with a statute, regulation, or policy in order to access government services or operate and conduct business.”

    Licensing cosmetologists, for example, is a collection of requirements: there’s paying fees, applications, testing, obtaining licenses, inspections, reports, operating rules about the sizes of signs and how often to sweep the floor and how to clean equipment, etc. etc. Think about it: is this “one requirement” or dozens? What is “one regulation”? I’m asking because you see it would not be trivial to administer a “delete two to add one” law and the result could become an administrative nightmare of arbitrariness in itself.

    The best regulation is cost-justified regulation — as judged by someone with the independence, guts and teeth to say no, like OMB at the federal level is supposed to do. That’s a tall order.

  4. It’s very, very hard to calculate ROI for some regs… it ends up being in the eye of the beholder.

    but I don’t trust these think-tank-influenced GOP in the GA for nothing.

    they’re just up to no good and the proof is in the lack of transparency of their proceedings.

    and these are the same fools that won’t release video – that they shot of their own legislative floor actions, committees, and sub-committees and a public interest group has to use their own money to buy CDs to put them online.

    These are the very same folks that pass regulations requiring vaginal probes and other foolishness…

    all this is – is a front-group to gut regs they don’t like – in secret.

    we’ll probably not even know which ones until the final vote.

    what we need is a public commission sans the political fools run like VDOT is running Smart Scale which is a transparent process with defined criteria and processes that everyone can see…

    and be advised.. that when something like Uber or AirBnb or drones come along – you can’t say ” no regulation” or arbitrarily limit it by 2-1 or some inane capricious stupidity.

    Regulation is not evil. It’s necessary. It aint perfect and it needs revisiting and tweaking and yes, some of it done away with… it’s a process.. not some ideological catnip.

  5. Remember that in many cases, with the cosmetologists being a perfect example, it is the practitioners themselves asking the legislature to protect them from competition. Many of the occupational licenses have their basis in that simple goal, to raise the cost of entry and limit supply. Sometimes I wish the General Assembly would be more skeptical when these things are proposed, and more willing to eliminate them when there is no clear need. But when they consider that, the committee room fills up with those who use the regs to limit the free market.

    That said, I want to know that a Class A building or electrical contractor has passed a test, posted a bond, dealt properly with complaints, etc. A libertarian would say that anybody should be allowed to offer those services, and that is one approach I guess. But I will always be asking anybody coming to my door for that state license. Kinda want doctors regulated. I want to be sure if I buy a gallon of gas from the pump I get a full gallon.

    Like Peter and others I don’t think that Americans for Prosperity is really fighting this battle on behalf of the ladies in the beauty parlor or nail salon….

  6. Is this the same Steve Haner that paid for todays edition of VaNews and offered the following wisdom: ” Recalling the warning I had on my desk during my newspaper days: No man’s life, liberty or property are safe while the legislature is in session!”

    http://www.vpap.org/vanews/

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