Why compete when you can regulate your competition out of business? 

Regulation, the Big Myth goes, is the movement by the government to constrain the excesses of Big Business. Those who oppose regulation are easily tarred as shills for Big Business.

But in real life -- that is, outside the blinkered worldview of Thomas Frank and Frank Rich -- regulation is often the means by which Big Business and their cronies in government kill competitors and thus rob from consumers.

A. Barton Hinkle has a great piece up at Reason on the taxi cab cartel.

Here's the passage about D.C.'s attempt to set up such a government-enforced cartel:

Four members of the D.C. City Council have introduced a bill that would create a medallion system for the nation’s capital. Medallion prices would start at $250 for the most established taxi companies and, for the newer entrants, run as high as $10,000. At least initially. As time wore on, it’s likely that the price of a medallion would go up for everyone. That’s what has happened in places such as New York, where a government permission slip to drive a cab costs about $600,000. In Boston, which initially capped medallions at 1,525 in the 1930s—and more than a half-century later had added only 250 more—a medallion will cost you $400,000.

At present the District has more than 10,000 licensed taxi drivers; the proposed legislation would establish only 4,000 medallions. Needless to say, such artificially imposed scarcity also drives up prices. A study by Natwar Gandhi, the District’s chief financial officer, found that fares in cities with medallion systems are 25 percent higher than in cities with open taxi markets.

By the way: According to The Washington Post, one of the measure’s sponsors is former D.C. mayor Marion Barry, who told the newspaper the bill "was written by John Ray, a former council member representing a coalition of cab owners and drivers."

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Timothy P. Carney

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