Sunday, May 13, 2012

Let Freedom Ring!

Something odd is happening out in the country that gives a glimmer of hope that freedom is not totally gone.The almost bizarre thing, is the reason why this is happening, simply put, we are broke. In a country that for years has been busy trying to legislate every possible outcome upon its people we may finally see government back off, not because they trust the people or it is the right thing to do, but because government needs the money. Sadly this trend is not the result of a sudden rejection of paternalism by state governments. Rather, it stems from the states’ dire fiscal straits in the aftermath of the recession.

“States are looking for a source of revenue beyond directly taxing their residents,” says Holly Wetzel of the American Gaming Association, which represents gambling interests. To put it more bluntly, states have been so desperate for revenue over the last few years that they’re looking at everything. Officials in Massachusetts, for example, have suggested that the three casinos to be built there could bring in as much as $400m a year, plus $300m in initial licensing fees.

Soon the state of Washington will be out of the liquor business altogether, freeing private businesses to sell spirits in the state for the first time since Prohibition. Last year, despite dire warnings about corporate profiteers, drunk drivers and surging policing costs, voters in the state approved the privatization in a referendum. Something similar happened in Georgia, voters lifted the ban on sales of alcohol on Sundays in an overwhelming number of the cities and counties. Last year in Texas, attempts to turn “dry” localities “wet” succeeded on 57 out of 64 occasions. In West Virginia  the state legislature has just passed a bill allowing liquor stores to hold tasting sessions.

“The world is getting wetter,” says Frank Coleman of the Distilled Spirits Council of the United States (DISCUS), an industry group. It is not just drinkers who are benefiting from a loosening of puritanical regulations around America. Massachusetts last year became the 24th state to allow casinos in some form. Ohio did the same in 2009, and Maryland did in 2008. Maine has just issued its first casino license, and also lifted a ban on fireworks at the beginning of the year. Rhode Island legalized fireworks in 2010, and will soon hold a referendum about expanding gambling.

By the same token, local governments hope that lifting bans on booze or fireworks will bring in a huge amount of sales and excise tax. When Michigan approved the sale of new types of fireworks at the beginning of last year, the legislature estimated the change would bring in an extra $5.5m a year in taxes and fees. A similar argument is made for extending licensing hours, or allowing tastings, states hope that they will boost sales and bring in extra tax dollars. Dannel Malloy, the governor of Connecticut, who in January proposed lifting price controls and allowing Sunday sales among other reforms, argues that they will yield millions in new revenue by returning as much as $570 million in sales now lost to neighboring states.

But despite all these initiatives, many parts of America are still lumbered with a bizarre and complex array of restrictions on drinking, gambling and the like that seem entirely out of keeping with a country that proudly calls itself the land of the free. Even after Washington leaves the club, 17 states will still maintain a government monopoly on either the sale or distribution of spirits, or both. In Maryland it is actually certain counties that run their own liquor stores, monopolizing sales of even wine and beer.

Many states, especially in the South, remain a confusing patchwork of wet, dry and “moist” counties, the latter being those that allow sales of only certain forms of alcohol at certain types of establishment. There are over 4,000 state and federal laws concerning alcohol, says Mr Coleman of DISCUS, and another 1,900 were proposed in 2008 alone. Rules about gambling are an equally perverse mix. Only 12 states have no casinos of any sort. But several more allow them only on boats or at racetracks. Another 12 limit gambling to Indian reservations. And four states still ban fireworks of all kinds.

Not all attempts to liberalize these regimes succeed. Republican governors in Virginia and Pennsylvania have failed to push through promised privatization of state liquor stores. In Kentucky, the Republican-controlled Senate squelched the newly re-elected Democratic governor’s plans to hold a referendum on bringing casinos to the state. Andrew Cuomo, New York’s Democratic governor, vetoed a bill that would have permitted only the most innocuous forms of fireworks, such as sparklers. Each easing of the rules makes the next one more likely, by demonstrating that disaster does not occur. Despite the steady deregulation of alcohol, for example, drunk driving and underage drinking are at record lows. And even as fireworks become more widely available, they are causing fewer injuries.

Most strikingly, lobbyists and politicians seem to shy away from the notion that regulation should be trimmed simply in the name of personal freedom, rather than on practical grounds. The legislature in New Hampshire (motto: “Live free or die”) recently considered a bill that would have allowed shops that already had licenses to sell beer and wine to buy spirits in bulk from the state monopoly and resell them. The sponsor told his fellow lawmakers that by approving the proposal they would be “promoting limited government” and “enhancing freedoms”. The state House of Representatives, which is controlled by Republicans, sent the measure down to defeat, 179-123. When will government begin to realize you can not legislate decency and personal responsibility by limiting freedom.

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