Please ensure Javascript is enabled for purposes of website accessibility
Walters: The Darker Side of Regulation
dan_walters
By Dan Walters, CalMatters Commentary
Published 6 years ago on
October 7, 2019

Share

Assembly Bill 1133 would appear to be one of the least important of the 700-plus measures that the Legislature sent to Gov. Gavin Newsom in the final days of its 2019 session.
Sponsored primarily by Anheuser-Busch and the Teamsters Union, AB 1133 would allow brewers to provide, free of charge, up to five cases of branded glassware to individual bars and restaurants each year.


Dan Walters
Opinion
In a larger sense, however, AB 1133 is a prime example of what one might call the darker side of liberal governance, a belief that the public interest is served by regulation of even the most mundane human activities.
Regulatory zeal compels those subject to rule-making to become involved in politics, with all that entails — hiring lobbyists, making campaign contributions and so forth — to protect their interests. It also encourages economic interests to use regulation, backed by the power of the state, to shield themselves from unwanted competition.
Two recent, very important bills illustrate the point.
One, Assembly Bill 5, introduced in response to a state Supreme Court ruling, defines which workers can be independent contractors and which must be payroll employees.
The labor union sponsors of the bill granted exemptions to a few professions and trades via a secretive process, such as barbers and commercial fishermen, but they appear to be arbitrarily chosen, without any underlying principle.

The Second Example Is Senate Bill 10

When the Legislature reconvenes in January, many other occupational groups will try to get exemptions. Meanwhile, the “gig economy” companies such as Uber and Lyft most affected are threatening to place a measure on the 2020 ballot to overturn the law.
The second example is Senate Bill 10, passed in 2018, which would essentially outlaw the cash bail system for criminal defendants. It would, in effect, wipe out California’s bail bond industry and, not surprisingly, bail agents have already qualified a referendum asking voters to repeal the law. Having one’s business regulated out of existence is a great motivator for political action.
Back to AB 1133.
Many decades ago, thanks largely to legendary lobbyist Artie Samish, California enacted so-called “fair trade” laws that were anything but fair. Samish’s liquor industry clients wanted the laws to protect their monopolies.
By and by, most of the laws were voided by the courts, but so-called “tied-house” laws remained on the books, theoretically dividing the liquor trade into three distinct tiers of manufacturer, wholesaler and retailer and prohibiting cross-connections among the three.

Logically, the Laws Should Be Repealed

The rationale behind the laws was to prevent domination of the liquor trade via vertical integration, but their real effect has been to force members of the industry to plead for exceptions to the arcane regulations the laws spawned.
In this case, providing free glassware is deemed to violate the three-level tied-house system because it involves something worth more than 25 cents, the current limit on giveaway trinkets carrying advertising.
Some kind of tied-house exception arises in virtually every legislative session. When, for example, a local grocer purchased Stockton’s minor league hockey team, he had to get a tied-house exception to serve beer at hockey games. When Seagram’s, the Canadian liquor colossus, purchased a theme park in Southern California, it also needed an exception to sell liquor. And so forth.
The Legislature has granted so many exceptions over the years that the tied-house laws are a complete mess, devoid of any real meaning and serving only to maintain the brisk political trade in punching even more loopholes.
Logically, the laws should be repealed because they are pointless. But logic only rarely intrudes upon political decision-making.
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary
[activecampaign form=31]

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

World’s Largest Almond Processor Will Shutter Sacramento Plant. 600 Workers Impacted

DON'T MISS

Trump Eyes Major Funding Cuts for California, Including All Public Universities

DON'T MISS

Farming Regulation Costs Rise 1,300% Since 2006: Cal Poly

DON'T MISS

Southern California Air Regulators Weigh a Plan to Phase Out Gas Furnaces and Water Heaters

DON'T MISS

US Supreme Court Allows DOGE Broad Access to Social Security Data

DON'T MISS

Doctors Were Preparing to Remove Their Organs. Then They Woke Up.

DON'T MISS

Abrego Garcia Is Returned to US From El Salvador

DON'T MISS

Proud Boys Convicted in Jan. 6 Attack Sue Government on Claims of ‘Political Persecution’

DON'T MISS

FDA’s AI Assistant ‘Elsa’ Fails Its First Day on the Job

DON'T MISS

Documentary Series Goes Inside Trump’s Bubble

UP NEXT

We Are Being Governed by the Trump Organization Inc.

UP NEXT

California’s Economy Is Just Limping Along. Why Is Newsom Always Boasting?

UP NEXT

Really, Secretary Rubio? I’m Lying About the Kids Dying Under Trump?

UP NEXT

After Years of Undrinkable Water, Our Rural California Community Finally Has Hope

UP NEXT

Why Trump Is Mad at ‘Sleazebag’ Leonard Leo

UP NEXT

Newsom Tussles With Local Officials Over Homelessness

UP NEXT

California’s War Over Charter Schools Rages On in Court

UP NEXT

Why Did the California Senate Shunt a Cost-Cutting Housing Bill?

UP NEXT

Fresno’s Crime Beat Didn’t Prepare Me for What I Saw on a Ride Along

UP NEXT

The MAGA Revolution Threatens America’s Most Innovative Place

Southern California Air Regulators Weigh a Plan to Phase Out Gas Furnaces and Water Heaters

17 hours ago

US Supreme Court Allows DOGE Broad Access to Social Security Data

17 hours ago

Doctors Were Preparing to Remove Their Organs. Then They Woke Up.

17 hours ago

Abrego Garcia Is Returned to US From El Salvador

17 hours ago

Proud Boys Convicted in Jan. 6 Attack Sue Government on Claims of ‘Political Persecution’

18 hours ago

FDA’s AI Assistant ‘Elsa’ Fails Its First Day on the Job

18 hours ago

Documentary Series Goes Inside Trump’s Bubble

18 hours ago

Tulare County Gang Member Convicted of Trying to a Murder Police Officer

18 hours ago

Newsom Promises Funding to Jump-Start ‘Science of Reading’

19 hours ago

Feds Indict SoCal Hospice CEO for Medicare Fraud in Fresno and Kern Counties

19 hours ago

World’s Largest Almond Processor Will Shutter Sacramento Plant. 600 Workers Impacted

The world’s largest almond processor, Blue Diamond Growers, says it will close its Sacramento processing plant this year The almond co...

15 hours ago

15 hours ago

World’s Largest Almond Processor Will Shutter Sacramento Plant. 600 Workers Impacted

17 hours ago

Trump Eyes Major Funding Cuts for California, Including All Public Universities

17 hours ago

Farming Regulation Costs Rise 1,300% Since 2006: Cal Poly

18 hours ago

Southern California Air Regulators Weigh a Plan to Phase Out Gas Furnaces and Water Heaters

18 hours ago

US Supreme Court Allows DOGE Broad Access to Social Security Data

18 hours ago

Doctors Were Preparing to Remove Their Organs. Then They Woke Up.

18 hours ago

Abrego Garcia Is Returned to US From El Salvador

19 hours ago

Proud Boys Convicted in Jan. 6 Attack Sue Government on Claims of ‘Political Persecution’

Help continue the work that gets you the news that matters most.

Search

Send this to a friend