One reason we have high unemployment is that state, local, and federal agencies create barriers to business formation. Increasingly draconian license requirements, mandated benefits that drive up the cost of labor, and costly regulations are classic features of crony capitalism. Established, politically connected businesses love these things, because they prevent smaller, more nimble competitors from entering the market.
Want a little taste of how overweening government shuts down business creation? How about a sip of lemonade? You won’t be getting that lemonade from the Marriott and Augustine families of Bethesda, Maryland, because they were just slapped with a five hundred dollar fine because their kids were operating a lemonade stand without a permit.
Wait, it gets better. According to a report from local television station WUSA, the county director of permitting said “it’s technically illegal to run even the smallest lemonade stand in the county, but inspectors usually don’t go looking for them.” They went looking for this one because the U.S. Open is being held nearby, and the locals are selling their lawns as parking to golf fans at highway-robbery prices, running as high as $60 per day. An area homeowner claimed he made enough charging for parking at big golf events to pay off his kid’s college tuition.
The county sells parking permits at $300 a pop, and those kids built a huge lemonade stand on ground that could be used for parking cars. Of course the Lemonade Police swung into action. It’s good to know Bethesda has nothing else to worry about, beyond cracking down on little kids following the time-honored American path to entrepreneurship. They’re probably lucky their stand wasn’t declared a biohazard zone.
When the absurdity of dropping a $500 fine on kids selling home-made beverages was pointed out to a county inspector, he snarled, “Cute little kids making five or ten dollars is a little bit different than making hundreds. You’ve got coolers and coolers here.” Thank God our heroic government agents risked their lives to shut down this nefarious operation! Once “hundreds” of dollars are involved, you’re talking about racketeering. As our high-functioning President memorably remarked, “I do think at a certain point you’ve made enough money.”
A reader recently remarked in an email that Barack Obama couldn’t run a lemonade stand. Oh, yes he could. He’d pick a lemonade stand that supported his political ambitions, collect sizable campaign donations from its operators, declare himself to be a “partner” in the endeavor, and then provide them with huge subsidies for exploring alternative methods of creating lemonade, while regulating the other stands in the neighborhood out of existence. The resulting beverage would cost a hundred dollars per glass, taste like Alka-Seltzer, and quite possibly be poisonous. Meanwhile, a million dollars in “stimulus” funding would be allocated to create make-work jobs for the kids who used to run the other lemonade stands.
The story gets better still. What were these little lemon-squeezing scofflaws going to do with the obscene profits from their unregulated business venture? Oh, they were just planning to donate the money to a pediatric cancer charity.
Carrie Marriott, whose kids were taken down in the bust, grumbled that “the message to kids is, there’s no American dream.” Her predicament provides a chilling snapshot of the red tape choking that dream to death. On a larger scale, a great many people are out of work today because the government killed or aborted the businesses that would have hired them. Keep that in mind the next time some nincompoop tells you ATMs cause unemployment. As far as I know, ATMs can’t write regulations, or fine kids for running a lemonade stand without a license.