Addicted To Favor
By Mitch Berg
George F Will on the other Minneapolis taxi controversy – the one that doesn’t involve Somali Moslems and alcohol:
The campaign to deny Luis Paucar his right to economic liberty illustrates the ingenuity people will invest in concocting perverse arguments for novel entitlements. This city’s taxi cartel is offering an audacious new rationalization for corporate welfare, asserting a right — a constitutional right — to revenues it would have received if the City Council had not ended the cartel that never should have existed.
That’s right – owners of Minneapolis cab licenses, who’ve benefitted immensely from government regulations artificially driving down the supply of cabs in Minneapolis, are sueing on Fifth Amendment grounds to protect a “right” to income that exists only because of government intervention!
Will tells the story of Mr. Paucar…:
Paucar, 37, embodies the best qualities of American immigrants. He is a self-sufficient entrepreneur. And he is wielding American principles against some Americans who, in their decadent addiction to government assistance, are trying to litigate themselves to prosperity at the expense of Paucar and the public.
…who came to the Twin Cities from NYC to try to make his fortune as a cab entrepreneur.
Where he ran into “Minnesota Nice”, in the form of a government-induced scarcity; Minnesotans are apparently happy to pay extra for an artificial scarcity of taxis.
By the time Paucar got here in 1999, 343 taxis were permitted. He wanted to launch a fleet of 15. That would have required him to find 15 license-holders willing to sell for up to $25,000 apiece…[the scarcity of taxis in Minneapolis]– and Paucar’s determination and, eventually, litigiousness; he is a real American — helped persuade the City Council members, liberals all (12 members of the Democratic Farmer-Labor Party, one member of the Green Party), to vote to allow 45 new cabs per year until 2010, at which point the cap will disappear.
Minneapolis’ licensees are addicted to the easy life of the regulatory beneficiary:
In response, the cartel is asking a federal court to say the cartel’s constitutional rights have been violated. It says the cap constituted an entitlement to profits that now are being “taken” by government action.
The danger? Beyond the stupidity of regulating something like the maximum number of cabs in the first place, I mean?
If the licensees win, the precedent will be set; no government regulation that confers a financial benefit can ever be undone, because it’ll be a “taking”.
Will gives well-placed kudos to Mr. Paucar…
By challenging his adopted country to honor its principles of economic liberty and limited government, Paucar, assisted by the local chapter of the libertarian Institute for Justice, is giving a timely demonstration of this fact: Some immigrants, with their acute understanding of why America beckons, refresh our national vigor.
…but betrays provincial ignorance of Minneapolis:
It would be wonderful if every time someone like Paucar came to America, a native-born rent-seeker who has been corrupted by the entitlement mentality would leave.
A good part of Minneapolis would be depopulated.
Hmmm.
May 30th, 2007 at 7:37 am
Beware what you wish for. “Takings” is the justification usually used by corporations to claim they have a constitutional right to get paid to obey the law. I know it’s upsetting to you wingnuts when individuals seek to take advantage of the same laws that protect Exxon and Bechtel, but Angryclown is confident you’ll get over it.
May 30th, 2007 at 3:16 pm
I agree that the cap on cab licenses is a ridiculous thing and I’m glad to see that its going away.
That said, some of the existing license holders do have a legitimate gripe.
Lets say, two or three years ago, you wanted to be a cab driver. You had a choice – pony up a ridiculous amount of money to get one of the existing licenses, only serve suburban clients and stay out of the central city, or go gypsy.
Those who paid the money to become legal Minneapolis cab drivers paid an amount that was made artificially high due to the cap. I’d imagine you’ll find a lot of hard working entrepreneurs who just got screwed by the city’s change in policy.
Frankly, I think a lawsuit is appropriate for this case and I think that these guys should get some sort of compensation. If I were the King-God-Judge of the world, I’d declare that a good part of the money taken in license fees for the next X years to reimburse a portion of the amount people paid to get their license in the last Y years. Basically, the shorter amount of time a person had the ridiculously expensive license, the greater share of what they paid would be reimbursed.
Yeah, the guys who got the license for the original price and sold it years later for a huge margin will have made out well but if someone’s going to lose, it should be the city for creating the situation rather than the more recent license purchasers.
Frankly, I’d rather not see us lose the money but the way it went down just doesn’t feel quite right.