Endorsing Eric Greitens

Last Monday, I met with Eric Greitens, a likely candidate for governor. Eric is a Navy SEAL, Rhodes Scholar, author, and a leader of philanthropic organizations helping veterans. I was still skeptical going into the meeting.  I’ve grown a bit cynical serving in the legislature.

Eric and I discussed general governing philosophies, the keys to good decision-making, and policy ideas. Over the course of a campaign, Eric’s philosophy of leadership and government will be laid out, and it’s not my place to discuss them here. Nevertheless, with direct and thoughtful answers to my questions, Eric chipped my cynicism away. In my decade or so in Missouri politics, Eric Greitens is the most impressive candidate I’ve met. The other potential Republican candidates’ resumes, albeit impressive, cannot compare to Eric’s history of leadership. Like Tom Schweich in the Auditor’s office, he may even be overqualified for the office. But he’s chosen to serve his entire life, and he has my support for governor. 

Medicaid Modernization, Senior Savings, and Employment Discrimination

This was moving week in the Missouri House. With only five weeks left in session, bills are nearing the de facto deadline whereby they must pass the House to have a chance to clear the finish line. If a bill has not passed through the sponsor’s chamber by the end of next week, it’s nearly dead. Two bills I sponsored passed the House this week.

Medicaid Modernization Act

House Bill 319, the Medicaid Modernization Act, was sent to the Senate by a vote of 152 to 2. Private sector health care providers have long used tele-health and store-and-forward technology to improve access to care and save money. In the oldest example, the results of a diagnostic test like an MRI can be digitized then forwarded to a specialist for review.

Medicaid has been slow to adopt these practices. House Bill 319 specifically directs the Department of Social to Services to adopt tele-health and store-and-forward technology for appropriate medical practices in Medicaid. This will increase access to health care services in rural Missouri and in schools. After necessary upfront expenditures for technology, I anticipate it will save significant taxpayer money in the long run.

A similar bill passed the Senate this week, which I hope to handle in the House.

Senior Savings Protection Act

The House also perfected House Bill 606, the Senior Savings Protection Act. This bill would allow financial industry professional to place a temporary hold on transactions for which they have a good faith belief involve fraud or financial exploitation.

Employment Discrimination and Whistleblower

For the fifth consecutive year, I voted no on efforts to change Missouri’s law on employment discrimination and the protection of whistleblowers. Under current law, Missouri has a zero tolerance policy for employment discrimination on the basis of race, gender, age, disability, or religion. Indeed, we have the strongest anti-discrimination law in the entire country.

I don’t believe this was an accident. In researching this bill, I discovered that Missouri has had a mixed bag of fame and shame in the Civil Rights movement. From the 1820s until the 1850s, Missouri law essentially said that once a slave set foot on free soil, that he was free forever. Once free, always free. Unfortunately, due to political pressures on the Missouri Supreme Court, two activist judges in 1852 declared that Dred Scott was not free even though he had lived on free soil.

Missouri’s next big legal precedent on racial discrimination was Lloyd Gaines v. University of Missouri. Gaines was a high school valedictorian and an honors graduate from Lincoln University in 1936. With those credentials, he wanted to go to Mizzou law school but was denied because he was black. He took his case to the United States Supreme Court, and won. The university was told it either had to admit him or provide an equivalent education somewhere else in the state. Tragically, Gaines never got the chance. He was murdered before he set foot on the Mizzou campus.

Against this backdrop, the General Assembly first took up and passed the Missouri Human Rights Act in 1959 – several years before the federal government passed the Civil Rights Act of 1964.  The men and women in Missouri government in 1959 knew the history of our state’s legal system, and chose to adopt a zero tolerance policy for discrimination in our state.

House Bill 1019 would weaken this standard. Rather than attempting to change it, I believe we should hold it up as an example for other states. We should be proud of the fact that our state has the strongest anti-discrimination law in the country. 

The other major change in House Bill 1019 concerns whistleblowers. Under current law, whistleblowers receive protected status. The reason is simple: we do not want to discourage Missourians from reporting criminal activity, particularly fraud against taxpayers.

HB 1019 exempts middle and upper-management employees from whistleblower protections where the unlawful act reported “concerns matters upon which the person is employed to report or provide professional opinion.” In the real-world what this means is that a middle manager for a health care provider committing massive Medicaid fraud has no legal protection if they report the fraud to either a government agency, law enforcement officer, or just their own supervisor.  

I believe that’s the exact opposite of the approach we should take for those willing to report fraud against taxpayers. Instead of removing protections for them, to help protect taxpayers, we should pass state legislation similar to the False Claims Act signed by President Ronald Reagan in 1986, which provides financial compensation to whistleblowers who save taxpayers money.

Religious Freedom; the Fatal Conceit, and My DIY Shed Project

Protecting Religious Freedom on College Campuses

Recently, I’ve read several Letters to the Editor in the News Tribune debating the source of rights. Some have argued that government grants us our rights. Others have opined that our rights are gifts from God.  This debate goes to the heart of the American identity. For proof that our Founders believed rights were natural and not subject to bureaucratic or political whim, look to the second sentence of the Declaration of Independence.

“We hold these truths to be self-evident, that all men … are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” The Declaration does not say that we are “afforded” certain rights by government. Those who believe that fundamental “rights” are like government entitlements put government before God. But our country was founded on the belief that there are some areas into which government must not intrude.

On Thursday, the House passed legislation regarding the fundamental right to religious freedom. House Bill 104 creates the Student Freedom of Association Act, which would prohibit state colleges and universities from discriminating against student religious groups based on the group’s insistence that leadership or members comply with their “sincerely held religious beliefs.”

For two days, the opposition twisted its talking points and pretzeled the debate to make the bill about repulsive or objectionable beliefs. The opponents completely miss the point. For example, the ACLU has often assigned black or Jewish lawyers to defend the KKK in First Amendment lawsuits. Does that mean those lawyers support the KKK’s repulsive beliefs? Of course not.

Our First Amendment rights to religion, speech, assembly, and association, endowed by our Creator, are not subject to government approval. The First Amendment is designed not just to protect popular or politically correct religious beliefs or speech. It is designed to protect all religious beliefs and speech – even repulsive ones.

Voting to further protect students’ rights to freedom of religious association is not an endorsement of any particular religion. Instead, it’s a vote to provide further support to a fundamental right. Whether Catholic, Protestant, Muslim, Jewish, Pentecostal, atheist, or any other religious persuasion, no Missourian should be discriminated against for exercising their rights to religious association.

Seeking a Better Path on Tax Policy

On Thursday, the House also passed Senate Bill 149, which creates a narrow new tax exemption for data storage and processing facilities in the state. I voted no because the bill takes the wrong approach to economic development in our state.

On tax policy, we have two potential paths.

The first is the path of tax credits and exemptions. Here, government plays central-planner where politicians pick and bureaucrats track the businesses they deem worthy of special tax status. Those businesses and industries savvy enough to hire lobbyists and lawyers know how to reduce their tax liability through this process.

A bi-partisan cast of politicians stroll down this path, where they are positions to disperse taxpayer money to favored groups.  The first path appeals to the “fatal conceit” that politicians are smart enough to predict growth industries and plan the economy.

This path also involves the alleged creation of jobs you can see and things you can touch. You can see the new data center being built. You can hold an Internet server in your hands. And when businesses take advantage of the special tax breaks, you can almost always find a politician ready to take credit regardless of whether the credit made any difference in the decision.

The second choice is the path of lower tax rates for all Missourians. But the second path has drawbacks for politicians. It does not afford the possibility of claiming credit with the opening of a new factory. Nor does it allow them to make the doling out decisions. It requires the humility to recognize that a person does not gain economic omniscience just by winning an election.

Last year, the legislature took a large step down this path with the passage of a broad-based tax cut for every single Missourian. The bill also had the unintended but beneficial consequence of encouraging fiscal discipline because last year’s tax cut does not take effect unless state general revenue grows by at least $125 million. Against that backdrop, every bill that  diminishes general revenue now directly competes with the broad-based tax cut we worked so hard to pass.

Senate Bill 149 has a relatively modest fiscal estimate. The Department of Economic Development predicts it will cost more than $750,000, but is not specific. There are some who believe this “modest” impact is worth the risk. But even modest impacts add up. SB 149 is not alone. It is one of dozens of bills working their way through the legislature which would adversely impact general revenue and make broad-based tax cuts less likely. For that reason, I voted no and will continue to do so on similar bills as session proceeds.

Taking a Break – The legislature has its annual break next week and I’ll be taking a break from this column as well. Unfortunately, it won’t be all R&R. There’s work to do at the law office and there’s a partially-built DIY shed sitting on our back driveway that I’ve procrastinated on for two months with the thought that I’d finish it over spring break. Now that it’s in this column, it’s a public pledge. There’s also a good chance my better half will have this printed and placed on our fridge until it’s finished.

The Purpose of Our Criminal Justice System

It is rare to report in-depth on the same topic more than once in this space. But sometimes things happen to illustrate a point in ways not previously discussed. This week, on Wednesday, the House Committee on Civil and Criminal Proceedings heard House Bill 332, a bill I sponsored that reduced from 30 to 10 percent the amount of general revenue that local governments can derive from traffic fines and court costs. 

In November, I wrote that there were some small municipalities in St. Louis County that “more closely resembled organized troll guilds than legitimate government” because their revenues rely more on traffic tickets extracted from residents and passers-by than a stable tax base. Around the same time, I went on the radio and identified Edmundson as an offender-city. 

On Wednesday, Mayor John Gwaltney of Edmundson decided to enlighten the committee of the bill’s flaws.. Mayor Gwaltney told the committee his municipality only enforced traffic laws for the right reasons, and his city was “not dependent” on fines and fees to operate. He then claimed HB 332 was “stepping into lawlessness, which leads to anarchy.” 

Mayor Gwaltney’s comments suggest he never bothered to read the bill. Otherwise, he would have seen that the bill in no way constrains law enforcement’s ability to enforce the law. Officers remain free to write tickets for any offense. The bill, instead, merely limits government power to use their criminal justice system for the purpose of raising revenue. 

Mayor Gwaltney’s willful ignorance of the bill is simply another installment in his troubled history with the truth. He may have testified that he does not run his city like an organized troll guild, but his own words betray him. Last spring, Gwaltney perceived a problem with his police force. In his mind, they weren’t writing enough tickets. So, before the public paid attention, Gwaltney decided to fix this “problem.” 

On April 18, Gwaltney sent a memo to every Edmundson police officer. It was delivered with the officer’s pay checks. Gwaltney informed officers that he had “noticed a marked downturn in traffic and other tickets.” While denying a quota system out of one side of his mouth, he added from the other, “I wish to take this opportunity to remind you that the tickets that you write do add to the revenue on which the P.D. budget is established and will directly affect pay adjustments at budget time.” Gwaltney continued, “As budget time approaches, please make a self-evaluation of your work habits and motivations, then make the changes that you see will be fair to yourself and the city.” 

When questioned about his memo, Gwaltney admitted that he judged officers not by the quality of their work but the quantity of tickets they wrote. “How do you quantify whether an officer is doing his job without counting tickets?,” he asked committee members on multiple occasions. 

Gwaltney unwittingly made the case for why House Bill 332 is necessary. Edmundson absolutely uses its police department and municipal court for revenue purposes, not just enforcing the law. In 2013, 35 percent of its budget came from traffic tickets. (Jefferson City, by comparison, was around three percent.) 

While Gwaltney and other municipal officials fight the bill, police officers have been neutral or, in some cases, supportive. The Senate bill has been endorsed by the St. Louis Police Officer’s Association. That’s because, as Gwaltney’s memo and testimony illustrate, police officers are not the problem. Instead, the problem is small-time politicians like Mayor Gwaltney who pressure good police officers with unwritten ticket quotas. 

A few representatives asked insightful questions about whether 10 percent was the appropriate threshold. Despite sponsoring this bill, I don’t believe that it is. The appropriate number is zero. Consider the opposing argument for a moment.. First, they claim their chief interest is public safety. Next they suggest that law enforcement will stop enforcing the law unless the city’s politicians are allowed to use the proceeds for more than 10 percent of their budget. Sorry, but if law enforcement is a priority,  they will find a way to fund their budget with something other than their court system – just as the overwhelming majority of municipalities in the state already do. 

Evidence of abuse of municipal court systems is rampant in St. Louis. Some cities have even budgeted for dramatic increases in traffic fines. For example, Dellwood adopted a budget which predicted a nearly 40 percent increase in traffic fines. In Ferguson, the city council refrained from predict-the-future budgeting, but traffic fine revenue increased by nearly 50 percent from 2011 to 2012, and another 15 percent the following year.

The purpose of our criminal justice system is three-fold: to punish, deter, and rehabilitate.

We don’t have criminal or traffic laws to raise revenue. This fundamental philosophy of limited government is present in our state constitution, Article IX, section 7 of which requires that the “clear proceeds of all penalties, forfeitures, and fines” for breach of the “penal laws” of state must be distributed to schools – not municipal, county, or state budgets. House Bill 332 doesn’t reach the philosophically optimum number, but it does improve the law.

“One Doesn’t Trust or Distrust a Raccoon.” Who Said It?

Reading old newspaper reports on the Rams stadium and ran across this awesome quote from a name you will know if you’re active in Mo. politics.

Quiz: Who said it?

“It would be like trusting a raccoon,” said QUOTABLE QUIPSTER, in a recent interview. “One doesn’t trust or distrust a raccoon.  The concept of trust and major sports entrepreneurs is inconsistent.

“They’re always going to be those sort of guys – showmen, salesmen, hustlers. Almost every great entrepreneur is some sort of con man. To build a stadium and get a football team, you don’t want an incredibly stable accountant.”

What to Do About Nastiness in Politics

It was a week of soul-searching in the Capitol. On Tuesday, I attended Auditor Tom Schweich’s funeral, where former Senate Jack Danforth’s eulogy focused on nastiness in politics. While I disagree with the venue, I agree with most of Danforth’s sentiments.   

Sen. Danforth said that public servants should strive “always to take the high ground and never give it up.” He lamented that “politics has gone so hideously wrong” that we risk it becoming a place “only for the tough and the crude and the calloused,” and that, when politics becomes a place where those who serve face personal attacks at every turn, “what decent person would want to get into it?”

Our state capitol is festooned with pithy quotes. My favorite is on the main floor in the rotunda. It says, “Ideas rule the world.” Ideas, not the politics of personal destruction. In the House, we have rules to keep the focus on ideas, not personalities.

One rule prohibits members from making derogatory comments about other members. Another rule prohibits us from referring to another member by name. Instead, we call each other by our county. I am not Jay Barnes. Instead, I am the “Gentleman from Cole.” This rule also reminds us that we represent a constituency, not ourselves.

These House debate rules do not, of course, govern our broader political culture. Political campaigns are messy, like life, and all too often devolve into personal attacks. Ironically, the nastiest campaigns are typically where the candidates are most alike.

This is nothing new. American politics have always been rough. In the election of 1800, Thomas Jefferson’s campaign called John Adams a “hideous hermaphroditical character which has neither the force nor the firmness of a man, nor the gentleness and sensibility of a woman.” Adams’ campaign responded by calling Jefferson “amean-spirited, low-lived fellow, the son of a half-breed Indian squaw, sired by a Virginia mulatto father.”

These quotes suggest that politics is actually less nasty now than it was then. Seen any “hideous hermaphrodite” ads lately?  And yet, it’s also worse. They didn’t have Facebook, Twitter, 24 hour news channels, and attack web-sites in 1800. Nor did they have a 15 minute news cycle. Less than twenty years ago elected officials enjoyed a bubble of privacy that social media has forever pierced; and from that spigot, negativity endlessly spews.

 But politics isn’t all negative energy: politicians are often surrounded by sycophants seeking favor by flattery. Today, they want to be your best friend; tomorrow, depending on your vote, they’re plotting your overthrow. It’s the prudent politician’s prerogative to find balance between these competing forces – and to be able to leave office with the same personal dignity and morality possessed when they enter office.   

The fact that politics has always been nasty doesn’t mean we should simply accept it as “politics as usual.” Just because something is does not mean it’s right. We should always strive to improve government. Sen. Danforth is absolutely correct that nastiness drives good people out of politics.

Still, there is no legislative solution to this problem. More government is not the solution. It cannot solve all the world’s ills. In this realm, making our state a better place starts and ends in each of our own homes. In this, I agree with the editors of the Jefferson City News-Tribune: “Attack ads will not end until they become synonymous with defeat at the polls.”

Remembering Tom Schweich

Thursday was surreal. Just before noon, rumors swirled that Auditor Tom Schweich had been shot and was in the hospital. Not long after, the Senate and House adjourned. At 1:30, we re-convened for a prayer service.

Schweich was a detail-oriented lawyer with a flair for the dramatic. From 1999 to 2008, he served government in a series of low-profile but highly important jobs. He helped former Sen. Jack Danforth lead investigations into Waco. He was chief of staff to three U.S. Ambassadors to the United Nations. He was a Deputy Assistant to the real Secretary of State. And, he was an ambassador to Afghanistan charged with fighting opium production and helping set up a judicial system that respected the rule of law. In his spare time, he wrote three books.

State Auditor was not Tom Schweich’s goal. Look at that resume again. He worked to clean up the Star Wars bar that doubles as the United Nations – and fought opium-producing war-lords in Afghanistan. Most people with that resume would turn to international “consulting” and make millions of dollars. Not Schweich. I’d dare say Tom Schweich was the most qualified state auditor in the history not just of Missouri, but our country. Schweich loved to cite the fact that he’d caught over 30 public officials in Missouri embezzling money. They were easy compared to Afghanistan or the UN.

Schweich did not set out to be State Auditor. He first wanted to be a United States Senator. It was only after that plan was thwarted that he settled for Auditor. A lesser person may have run on auto-pilot until the election for the job they were really seeking. Not Tom Schweich. From his actions, it was obvious that he believed, whatever you do, do it well, and put everything you’ve got into it.

It was obvious to anyone who ever saw Schweich operate in the capitol or speak on the stump that he longed and loved to be Roosevelt’s “Man in the Arena.” And was he ever. Schweich’s willingness to fight did not always make him popular in the capitol. To put it mildly, he could be a little prickly. In retrospect, it’s also what made him great at every professional endeavor he tried.

Generally, people like their politicians to be gregarious. And good politicians and policy-makers like their staff members to be bulldogs. Often, the most successful politicians are those who persuade with sugar. They can convince others to do things they don’t really want to do, but find a way to rationalize it. Tom Schweich never made that transition.

I will keep two memories of Schweich. The first is a perfect example of his bulldog-style that served him well and poorly. In the spring of 2012, Tom hitched a short ride with me returning to the Capitol from an event in Jefferson City. We had a disagreement over a relatively minor policy issue, and he wanted to talk about it. We started talking and it was clear that neither of us was going to budge. The closed-car meeting did not end well for either of us. He was now viscerally angry and I was as dug-in as ever.

The second memory is personal. Last spring, Auditor Schweich invited me and two other representatives to lunch in his office at the capitol. I had never spent time with him that did not involve either a formal meeting about public policy or was at a political event with dozens or hundreds of other people. I was looking forward to it, but, based on previous interactions, did not expect to have a great time.

I could not have been more wrong. With no policy and no politicking, we saw a side of Tom Schweich that the public never saw. He was warm, affable, and hilarious. I left the room with a completely different view of him. Behind the public persona was a real person who was interesting and genuinely interested in others. That was the Tom Schweich I’m sure his family knew and loved.

Today, it appears it was all too much. Missouri has lost a true public servant in tragic circumstances.  It still has not quite sunk in. The facts surrounding his death are incomprehensible to me. I cannot imagine the loss felt by his family. My prayers are with them and his soul. Rest in peace, Tom Schweich.

Defending Your Right to Medical Privacy

To what extent should government invade the privacy of law-abiding Missourians to protect drug abusers from themselves? That’s the question at the heart of House Bill 130, which creates a statewide prescription drug database program to monitor nearly every prescription drug purchase made in Missouri. This database would be accessible to state public health officials, pharmacists, doctors, pharmacies, and, in some circumstances, law enforcement.  I voted no for both technical and philosophical reasons.

First, the technical problems: the bill as currently drafted would permit big-box store pharmacies to use the prescription drug database for their internal marketing purposes. I know this is not the sponsor’s intent or the bill’s other supporters and hope they close this loophole before the bill progresses.

The bill also would allow the Department of Health and Senior Services to share the contents of the database with third-parties for “research” after it “anonymizes” the data. That sounds good in theory. In reality, once a dataset reaches a certain level, “anonymous” data doesn’t exist. For example, in a study published this month in Science, an MIT scientist demonstrated how to reverse-engineer credit card databases to identify individual purchasers even after all personally-identifiable information had been removed from the database.

More important than these technical concerns, I voted no because the bill would invade the privacy rights of millions of Missourians who have done nothing wrong. 

Prescription drug abuse is an epidemic. According to the National Institute on Drug Abuse, more Americans report non-medical use of prescription drugs than those who use cocaine, heroin, hallucinogens, and inhalants combined. When the House debated the bill this week, we heard several tragic stories from legislators about family members, friends, or constituents who had become addicted to prescription pain-killers. My heart goes out to those affected by drug abuse. That’s why I’ve worked to increase drug courts for veterans and to expand access to health care for substance abusers.

But House Bill 130 takes the wrong approach. Anti-drug programs should be focused on drug abusers, and not cast a dragnet on all of society. No matter how serious prescription drug abuse is, we cannot justifiably ransack the medicine cabinets of everyone to protect the relatively tiny minority who abuse prescription drugs.  The 99.9 percent of Missourians who have committed no crime, are not addicted to drugs, and are merely following doctor’s orders in treatment of a painful medical condition, should not have their medical records tracked by government.

Some proponents of House Bill 130 belittled these privacy concerns, arguing that we had a moral imperative to take sweeping governmental action to protect Missourians addicted to drugs from themselves. I disagree. As I’ve written previously in this space, the right to privacy is central to the American identity. Unlike other countries, ours has always recognized that there are certain realms into which the government has no rightful authority to intrude. This is one of those areas. Government should not track or monitor our reading, traveling, sleeping, thinking, or writing. Nor should it track the list of legal medications we purchase at a pharmacy to treat health ailments.

Other proponents argued that, under this bill, Missourians would grow to have a reasonable understanding that their prescriptions for painkillers were not private, but instead would be shared with medical providers and government. This argument, however, says nothing about the justice of requiring Missourians to have their medical information shared with government officials without their explicit individual consent. You shouldn’t have to agree to send the government information just to get medical treatment paid for with your own money.

Finally, some proponents argued that, essentially, privacy is already dead, so at least this bill would help save some lives by protecting Missourians from themselves. I reject this logic as well. Privacy is only as dead as Americans and their elected officials will allow.

There’s no doubt that new technologies have changed Americans’ thoughts on privacy. With the Big Data revolution, things that were unthinkable ten years ago are routine today. Business and government have the ability to track your daily movements, thoughts, and plans from the moment you wake up until the moment you go to sleep. Your data is bought and sold by hundreds of companies (large and small) that you’ve never heard of. In most cases, your data is only collected if you’ve given your tacit or explicit consent.

The data revolution has been incremental. In many ways, Americans are like frogs sitting in the proverbial pot. Over the past decade, Big Data companies and government have slowly been using new technologies to turn up the heat. However, when given an actual choice, Missourians (and Americans) chose to jump out of the pot. Last year, 75 percent of Missourians voted to extend Fourth Amendment privacy protections to electronic communications.  Still, there remain dozens of hands on the knob – and I refuse to join those who would turn up the heat. 

How Government Regulation Kills Innovation – Uber Edition

Government works best when it determines the rules of the road, not the composition of the traffic. That’s the pithy libertarian case for less regulation, first formulated by law professor Richard Epstein. Government should make simple rules that apply to everyone  – not micro-manage industries or pick winners and losers.

When most people hear of “over-regulation,” they tend to think of the EPA or another federal agency strangling an industry with red tape. In this critical view of regulation, it’s bureaucrats versus businesses.  But in reality, some of regulation’s most insidious effects arise from entrenched business interests that use the regulatory process to stifle competition.

For example, entrenched businesses may benefit from expensive new regulations precisely because the cost makes it more difficult for upstarts or smaller companies to compete. Dodd-Frank is the best recent example. Passed in the wake of the financial meltdown to allegedly crackdown on Wall Street, the law has instead helped big Wall Street banks consolidate market-share.

According to Marshall Lux and Robert Greene of Harvard’s Kennedy School of Government, since Dodd-Frank, the market-share held by community banks has declined rapidly. Between 2006 and 2010, community banks shrank by six percent. Since Dodd-Frank passed in 2010, community banks have declined by more than 12 percent. The authors explain that Dodd-Frank gutted small banks by “piling up regulatory costs on institutions that neither pose systemic risks nor have the diversified businesses to support such costs.” As one North Carolina banker quoted by the authors explained, “When they created ‘too big to fail,’ they also created ‘too small to succeed.’”

This phenomenon is perhaps even more prevalent at the state and local level. At these lower levels of government, thousands of regulatory licensing boards both police industries and act as a roadblock to new competition or new business models.

Take upstart Uber as an example. Uber is an app-based transportation company that allows consumers around the world to find drivers willing to give them a ride. Uber users download an app. When you’re ready for a ride, you ask the app to find the nearest Uber-approved driver. Your driver shows up and off you go.

Uber is easier and often less expensive than hailing a cab. No surprise then – consumers love it and traditional cab companies don’t. So, like any other industry facing an existential threat to its existing business model, cab companies and drivers are fighting back. In Illinois, they convinced the legislature to enact more expensive standards for cab companies. In Portland, city officials sued to prevent Uber from operating until it acquired expensive permits for every driver. In Nevada, Uber was forced to shut-down. 

The anti-competitive fever may be highest in St. Louis, where a Metropolitan Taxicab Commission controlled by existing operators has the power to disapprove of new competitors for any reason it deems fit – including unwanted competition. Three members of this Cab Cabal own companies that are supposed to be regulated by the commission. Worse, in a rule that would be more appropriate for Chinese-style capitalism, new operators in St. Louis must first apply to the Cabal for a “certificate of convenience and necessity.” In turn, the Cabal has the “power to issue or refuse any Certificate as the public welfare, convenience or necessity may require.” The Cabal can even turn down an application because it doesn’t like the color scheme of the applicant’s vehicles.

If Uber had not tried to enter the market in St. Louis, this ridiculous cabal might have continued without significant challenge. But now that it has – and been denied, people are taking notice. Thousands of would-be small business owners have requested information from Uber on how to become a driver in Missouri, only to be thwarted by the taxi cab cabal. Even more consumers have sent Uber inquiries asking when the app will be available for use in the 19th largest metropolitan market in the country.

The St. Louis taxi cabal won’t budge, so state legislators are taking action. Along with State Senator Kurt Schaefer (R-Columbia), I filed legislation to bypass the cabal by creating a state-wide licensing process for companies like Uber. House Bill 792 would require “transportation network companies” to conduct background checks on drivers and carry adequate insurance.

Missouri consumers and entrepreneurs shouldn’t have to kiss the rings of the Metropolitan Taxicab Commission to freely engage in a simple market transaction.  Existing cab companies should not have the legal authority to kill new competition for any reason – let alone color scheme or a requirement that the new competitor show a “need” for a new company. Instead, any licensing regime should prescribe simple rules of the road, but not seek to determine or limit the composition of the traffic. 

Ethics Bills Moving

On Monday, the House Committee on Oversight and Accountability will hear seven ethics bills, including four of my own. In addition, I expect that the Senate will move quickly on a broad ethics bill sponsored by Sen. Ron Richard. These are just the latest in a series of action that have begun to improve the ethics climate in the capitol. When we adopted our Rules, we put an end to “issues” committee which were often used so legislators could eat for free without being individually reported. On Wednesday, Speaker John Diehl appropriately banned off-site committee meetings during session. It’s my hope that these are just the first in several changes on the way.