Regulators Gone Wild: Two lessons in how to kill an economy and ruin enterprise
posted at 3:25 pm on August 26, 2011 by Ed Morrissey
Earlier today, I wrote about Ben Bernanke’s punt back to Washington on job creation and the need to roll back regulatory regimes in the US to spark real economic growth. We have two small but trenchant examples of how overregulation hurts businesses and people and destroys wealth. The first comes to us from the Wall Street Journal’s report on how federal regulators came to conduct a raid on a world-class manufacturer of musical instruments:
Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson’s chairman and CEO, Henry Juszkiewicz, defended his company’s manufacturing policies, accusing the Justice Department of bullying the company. “The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier,” he said, suggesting the Feds are using the aggressive enforcement of overly broad laws to make the company cry uncle.
It isn’t the first time that agents of the Fish and Wildlife Service have come knocking at the storied maker of such iconic instruments as the Les Paul electric guitar, the J-160E acoustic-electric John Lennon played, and essential jazz-boxes such as Charlie Christian’s ES-150. In 2009 the Feds seized several guitars and pallets of wood from a Gibson factory, and both sides have been wrangling over the goods in a case with the delightful name “United States of America v. Ebony Wood in Various Forms.”
The question in the first raid seemed to be whether Gibson had been buying illegally harvested hardwoods from protected forests, such as the Madagascar ebony that makes for such lovely fretboards. And if Gibson did knowingly import illegally harvested ebony from Madagascar, that wouldn’t be a negligible offense. Peter Lowry, ebony and rosewood expert at the Missouri Botanical Garden, calls the Madagascar wood trade the “equivalent of Africa’s blood diamonds.” But with the new raid, the government seems to be questioning whether some wood sourced from India met every regulatory jot and tittle.
It’s not the only question when it comes to these regulations. Thanks to an overeager regulatory environment, musicians are now afraid to travel with instruments built before any of the restrictions on wood products were put into place. It’s no longer enough to just not buy wood from sanctioned sources, but to prove your innocence repeatedly against a presumption of guilt:
It’s not enough to know that the body of your old guitar is made of spruce and maple: What’s the bridge made of? If it’s ebony, do you have the paperwork to show when and where that wood was harvested and when and where it was made into a bridge? Is the nut holding the strings at the guitar’s headstock bone, or could it be ivory? “Even if you have no knowledge—despite Herculean efforts to obtain it—that some piece of your guitar, no matter how small, was obtained illegally, you lose your guitar forever,” Prof. Thomas has written. “Oh, and you’ll be fined $250 for that false (or missing) information in your Lacey Act Import Declaration.”
Consider the recent experience of Pascal Vieillard, whose Atlanta-area company, A-440 Pianos, imported several antique Bösendorfers. Mr. Vieillard asked officials at the Convention on International Trade in Endangered Species how to fill out the correct paperwork—which simply encouraged them to alert U.S. Customs to give his shipment added scrutiny.
There was never any question that the instruments were old enough to have grandfathered ivory keys. But Mr. Vieillard didn’t have his paperwork straight when two-dozen federal agents came calling.
Facing criminal charges that might have put him in prison for years, Mr. Vieillard pleaded guilty to a misdemeanor count of violating the Lacey Act, and was handed a $17,500 fine and three years probation.
The WSJ’s Eric Felten ends with a nod to the hypocrisy of the artists’ community complaining about overactive regulation, but that perhaps the revelation that art can compete with environmental agendas will be a wake-up call. If art has the standing to compete, then what about making a living? What about being able to live on your own property? Reason TV looks at the regulatory war being fought against residents of Antelope Valley, where the county of Los Angeles appears to be making a concerted effort to push residents out of their homes through harrassment — and armed raids:
The Antelope Valley is a vast patch of desert on the outskirts of Los Angeles County, and a segment of the few rugged individualists who live out there increasingly are finding themselves the targets of armed raids from local code enforcement agents, who’ve assembled into task forces called Nuisance Abatement Teams (NATs).
The plight of the Valley’s desert dwellers made regional headlines when county officials ordered the destruction of Phonehenge: a towering, colorful castle constructed out of telephone poles by retired phone technician Kim Fahey. Fahey was imprisoned and charged with several misdemeanors.
But Fahey is just one of many who’ve been targeted by the NATs, which were assembled at the request of County Supervisor Mike Antonovich in 2006. LA Weekly reporter Mars Melnicoff wrote an in-depth article in which she exposed the county’s tactic of badgering residents with minor, but costly, code violations until they face little choice but to vacate the land altogether.
“They’re picking on the the people who are the most defenseless and have the least resources,” says Melnicoff.
Reason.tv collaborated with Melnicoff to talk with some of the NAT’s targets, such as retired veteran Joey Gallo, who might face homelessness if he’s forced to leave his house, and local pastor Oscar Castaneda, who says he’s already given up the fight and is in the process of moving off the land he and his wife have lived on for 22 years. And, while Antonovich declined an interview, we did catch up with him at a public meeting in order to ask the big question at the center of all this: Why the sudden enforcement of these codes against people living in the middle of the desert, who seemingly are affecting no one?
I’d say that it’s either a case of the county (or its leaders) having a financial interest in the property, or simply a decision by the politicians that they don’t like the houses and want to get rid of them. It might be interesting to discover which it really is.