Two New York City taxi medallions were sold last month for $1 million apiece. That’s the highest price ever paid for the right to operate a car as a taxicab in The City That Never Sleeps. It’s also an expensive lesson in the harm caused to consumers and would-be entrepreneurs by overregulation and the strangling of competition.

By law, every cab in New York has to have an official medallion — the numbered metal plate nailed to the hood — but the number of medallions is fixed at 13,237. When the city first issued taxi medallions in the 1930s, they cost $10 each. But before long the demand for taxi ownership had outstripped the limited supply of medallions. Since City Hall wasn’t issuing new ones, the only way to get a medallion was to buy one from an existing owner. Over time the value of those metal tags went through the stratosphere. …

In a rational market, [this secondary industry of selling taxi medallions] wouldn’t even exist. A taxi medallion, after all, has no intrinsic value — it is merely the government’s permission to use a car to transport passengers for a fee. Acquiring a medallion isn’t like acquiring a dental practice or some other going concern: It doesn’t come with a built-in customer base or first dibs on popular routes. It doesn’t include the price of gas or insurance, let alone a car. A medallion represents nothing but official approval to be in the cab business. No one has to invest a fortune to get the government’s OK to sell tacos or put out a newspaper or practice podiatry. Why should anyone have to invest a fortune — or hire a “taxi financing specialist” — to get the government’s OK to own a cab?

The medallion system is a classic illustration of what economists call “rent-seeking” — manipulating the political system to gain economic benefits without providing any additional value to society in exchange. Imposing caps on the number of taxis enriches existing owners with windfall profits. But by making the cost of cab ownership obscenely high, it prevents countless would-be cabbies from going into business for themselves. And by stifling competition, it drives fares through the roof while lowering the quality and availability of service.

I don’t see how anyone could defend this, and for that matter I don’t see how anyone can defend govt intervention

(Source: laliberty)

Gathering information about government officials in a form that can readily be disseminated to others serves a cardinal First Amendment interest in protecting and promoting “the free discussion of governmental affairs.” Moreover, as the Court has noted, “[f]reedom of expression has particular significance with respect to government because ‘[i]t is here that the state has a special incentive to repress opposition and often wields a more effective power of suppression.’” This is particularly true of law enforcement officials, who are granted substantial discretion that may be misused to deprive individuals of their liberties. Ensuring the public’s right to gather information about their officials not only aids in the uncovering of abuses, but also may have a salutary effect on the functioning of government more generally.

We can now record cops doing dickish stuff without getting reprimanded!

(Source: laliberty)