The headline on the Idaho Reporter story said, “Idaho lawmakers mandate car dealership hours,” but that’s only one piece of the tale. The remainder is the portion few Idahoans see but accounts for a lot of the much-despised regulation of industry.
This particular instance arrived February 3 before the House Transportation and Defense Committee, which was reviewing new Idaho Transportation Department rules. One of them required a certain number of hours per week car dealerships must keep their doors open to the public, and report their business hours to state regulators. By a thin margin, the committee approved the rule.
Several committee members argued that this was governmental regulatory overreach – a government agency seeking more power than it ought to have.
But the underlying story emerged when Representative Patrick McDonald, R-Boise, said that “We need to support this because people in the industry support it.”
What? The industry supports this added piece of government regulation?
The motivations may be several. One car dealer warned of shady operators who might be hard to find if things go wrong during a purchase or later. There could also be some motivation to set the bar to entry in the business a little higher, excluding people who might try to start a small dealership working on weekends. Without trying to read minds here, there may be in all a mix of rationales, both public-serving and self-serving. But these motivations come chiefly from the industry. In the case of the car dealer hours rule, you would not have seen such general support from the industry if that industry wasn’t the basic source of the proposal.
The testimony indicated that the department wrote the rule, but it’s a very safe bet that the push for it came from the auto dealers themselves. Remember the governmental rules regulating banking hours? Recall who was pressing for that? Here’s a hint: It wasn’t either bureaucrats or consumer groups.
Anyone who draws a bright line between government and business poorly understands either. Business lobbyists visit the legislature every year for more laws and rules, but that’s only the proverbial iceberg tip. Many of them, or representatives for them, are a regular presence at agencies too. The savvier associations lobby agencies all year long to alter or adopt rules they see as in their benefit (and maybe the public’s as well). Revolving doors between the regulators and the regulated are commonplace at the federal level but show up in the states too.
Regulation of most of the business and professional organizations that are today regulated, from doctors and lawyers to surveyors and truckers, got started in most cases with requests from those industries that they be regulated. When the doctors first sought regulation, they wanted to weed out the quacks and improve professional quality, and raise the bar to entry to limit the number of doctors. It’s an old story.
Not that this is all bad. Government should be responsive, and it should listen to the regulated as well as the rest of the public. It’s called the right of redress.
And there are sometimes public interests to be considered too; in the auto hours case, several legislators argued that steady hours would be clearly a consumer benefit. Maybe so. (more…)