Why We Fight

I attended a Federalist Society luncheon today -- with the pleasant side benefit of sitting next to Seventh Circuit Court of Appeals Judge Diane Sykes, who has often been touted as a future Supreme Court nominee.   Judge Sykes is very charming, judicious, and intelligent.  

Anyway, the topic of the lecture was the barriers to entrepreneurship created by Milwaukee's byzantine City government and City code.   The young man giving the talk -- a very young (too young) lawyer with the free-market public-interest law firm, Institute for Justice, out of Arlington, VA -- gave a number of examples, but this one stuck out to me as the epitome of what we are fighting about when we say we want smaller government: 

If vendors want to set up a stand on the sidewalk, or be stationary on the street for longer than one hour, they may as well not bother. The barriers are almost insurmountable. First, prospective vendors must get a state seller's permit (anyone who sells anything in Wisconsin has to get one of these so the state can collect its share of taxes). Then, they must apply for a direct seller's license, which carries a $129 annual fee.  A prospective vendor will also want to check to make sure the product she is selling does not require a separate city license (e.g., gem dealer, secondhand dealer, etc).

Street vendors who wish to remain stationary must also file an application for a "special privilege" to do so from the Milwaukee Common Council. It requires another $250 application fee, filing a surety bond in an amount ranging from $1,000 to $10,000, and a public liability insurance policy with a significant amount of coverage.  It also requires a plan or sketch of the proposed vending station, the exact location when the vendor wishes to set up shop, and a description of what is to be sold. According to one city official who handles these requests, the process will suck months of one's life away. When asked about what it takes to become a prospective vendor, she discouraged this writer from even bothering to file, but was very helpful explaining how the process worked, and forwarded along the special-privilege permit application.

Once the special-privilege petition is filed with the Common Council, it is introduced into its Public Improvements Committee. It then gets referred to the Department of Public works ("DPW"). DPW then reviews the application, while getting input from DNS (which tends not to favor these because street vending is typically inconsistent with the zoning ordinances). It then submits its recommendation to either grant or deny the special privilege back to the Public Improvements Committee.  The committee then considers the request, votes on it, and then submits its recommendation to the full Common Council for a vote. Along the way, vendors will have to tussle with their alderman and gain his or her support, as well as be in the good graces of the adjacent property owner, either of whom can effectively kill a vendor's application.

Even if the special privilege were granted, vendors would be limited to a three-foot-by-seven-foot stand, and saddled with an annual sliding-scale fee based on the value of the adjacent property. That fee can range from as small as $10 per square foot of space, to $250 per square foot. It is no wonder that there are only two active special privileges: one to a sunglass vendor, and another to a flower stand.

This is an Orwellian nightmare.   We apparently have in Milwaukee a city bureaucracy dedicated to dissuading people from opening small businesses.   Insanity.

I have often commented to people that the legal-government-regulatory morasse is particularly sad, and should be galling for liberals, because it tends to create barriers to entry to the lowest-rung of the economic ladder.   If you were an immigrant, struggling with English, or you were a relatively less-educated American, looking to start a non-technical, service-oriented business like a food stand, the amount of paperwork -- which by definition is hard for you, or else you'd be doing something else -- is going to be daunting.  If, by contrast, you are an educated white suburbanite, well, you'll just hire lawyers to navigate the regulatory jungle for you.

Is it any wonder that the poor in the inner-city despair?