Recently the Wall Street Journal noted that legendary New York bagel purveyor H&H Bagel closed its doors for good. The reason was tax fraud, but a maze of strangling business regulations will likely doom additional bagel shops, as this microcosm of the hyper-regulatory New York City business environment from Mark Steyn in After America, highlights:
“Ignorantia juris non excusat” is one of the oldest concepts of civilized society: ignorance of the law is no excuse. But today we’re all ignorant of the law, from John Conyers and the guys who make it down to li’l ol’ you on the receiving end. How can you not be? Under the hyper-regulatory state, any one of us is in breach of dozens of laws at any one time without being aware of it. In a New York deli, a bagel with cream cheese is subject to food-preparation tax, but a plain bagel with no filling is not.84 Except that, if the clerk slices the plain bagel for you, the food-preparation tax applies. Just for that one knife cut. As a progressive caring society, New York has advanced from tax cuts to taxed cuts. Oh, and, if he doesn’t slice the plain bagel, but you opt to eat it in the deli, the food preparation tax also applies, even though no preparation was required for the food.
Got that? If you’ve got a deli, you better have, because New York is so broke they need their nine cents per sliced bagel and their bagel inspectors are cracking down. How does the song go? “If I can make it there/I’ll make it anywhere!” If you can make it there, you’re some kind of genius. To open a restaurant in NYC requires dealing with the conflicting demands of at least eleven municipal agencies, plus submitting to twenty-three city inspections, and applying for thirty different permits and certificates. Not including the state liquor license.85 The city conceded that this could all get very complicated. So what did it do to help would-be restaurateurs? It set up a new bureaucratic body to help you negotiate your way through all the other bureaucratic bodies. Great! An Agency of Bureaucratic Expeditiousness! And, if that doesn’t work, they’ll set up an Agency of Bureaucratic Expeditiousness Regulation to keep it up to snuff.
Fortunately, out on the West Coast, sunny, breezy Los Angeles is much more laid back about these sorts of red tape hassles, right?
Not according to Joel Kotkin, who in the middle of a must-read litany of L.A.’s structural woes in City Journal writes:
When criticized for the poor economy, the mayor cites some minor changes in policies favoring business. But Los Angeles remains one of the least hospitable places for business in the country, says consultant Larry Kosmont. Companies need to hire consultants, lawyers, and other fixers to complete even small-scale projects, he says; the system is particularly tough on smaller businesses, and firms without subsidies are unlikely to locate or expand in the region. “It usually takes two to three times more to process anything in L.A., compared even to surrounding cities,” Kosmont says. “It makes a big difference if you are a major Korean airline or AEG or if you are an independent entrepreneur.” If the system doesn’t change, he predicts, “we’re going to end up like a better-looking Detroit.”
As Mark writes in his new book:
Back in the 1990s, Bill Clinton famously said, “The era of Big Government is over.” What we have instead is the era of lots and lots of itsy-bitsy, teensy-weensy morsels of small government that cumulatively add up to something bigger than the Biggest Government of all—a web of micro-tyrannies which, in their overbearing pettiness, ensnare you at every turn.
Which makes the “unexpectedly” sightings in Mayor Bloomberg’s namesake news service all the more poignant.
Related: at Ace of Spades, “‘Not Much Further We Can Cut’ and my neighborhood.”
Ahh, the Americans with Disabilities Act — the gift that keeps on giving (of your money.)
Update: “Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business,” the Wall Street Journal reports. “In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation’s financial institutions, Main Street’s chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.”