58 -- midnight eastern time.

[inaudible conversations]

>> good morning i with light to welcome everyone to our february breakfast. most importantly with our officials that are here today we have a great event that is near and dear to our hearts and to introduce our speaker in vice president. >> [applause] >> good morning.

i would like to will, in did carpenter to daybed first highly have worked over the years for the institute of justice their model is we sue government and that sounds good to me. [laughter] but he is co-author of the bottle necker's don't miss your opportunity to get a copy of this. is excellent and shocking. in director of strategic research to define and implement with social science research with the experience researcher and published on a variety of topics ranging from education policy to the

dynamics of the presidential election. with the economic affairs the international journal urban studies regulation of government and magazines including regulation. in the america s school board journal the results of the research have been quoted in the washington post and "wall street journal." in requires reports such as disclosure cost the unintended consequences of campaign finance reform

private choice public programs to design cartels hell industry insiders cut out competition and the demographics of the met domain you know, they have done excellent work that has the toughest legislation in georgia. as a schoolteacher m principal and a faculty member or --- member for use currently a professor with the phd from the university of colorado despite you may think he does have spare typhus that he is a classically trained musician

and a pilot he promises he does not do them at the same time we would like to welcome dr. carpenter. [applause] good morning. it is a pleasure to be with you this morning. chip is in no retirement in did you talk. he does then disregard said this morning i will begin by introducing you to kim powers bridges she owns and operates bridges funeral home in tennessee but she is not from tennessee but actually oklahoma she started her first business there but had to leave oklahoma when she ran afoul

of the law it turns out that kim was a gauge in a very dangerous practice of selling casket's without a funeral director's license. before that she was on the executive fast-track growing up in a family of entrepreneurs and after she left college she enjoyed a lot of success in number of different businesses and ended up the one of the nation's largest funeral companies and saw this as the way to people through her work in this very successful in that business but after a few years there laissez a niche to be filled she saw in the funeral industry the merchandise was

marked up a significant amount in trump 2536 and dispersant -- of two 1/5 the and 300 -- 600% so she eventually left the business and a hook up with bridges and forming their company their business plan was to sell everything all merchandise over the internet particularly caskets to take advantage of a drop shifting -- shipping to not have any inventory to keep the cost very low and to pass on the savings to the consumers. they thought they had a winning business plan and they did with the problem

was oklahoma state law said if you want to sell a casket to a consumer senior oklahoma based you must we licensed as a funeral director and kim was not. she could have comeback to earn a license but she has to go to school to years incomplete in internship to a ball 25 bodies, brick and mortar business with the selection room, preparation room, a viewing room, and inventory they were not interested in that. as if not irrational enough to require a funeral director's license to sell an empty box the law created a circumstance where the

company's outside of the state to sold to those in oklahoma did not have to have a funeral director's license. said she couldn't take in her business to move across the state line to kansas and soul caskets to consumers and oklahoma all day long but did not want to do that. she wanted to stay in oklahoma and raise her family in her home town she thought it was wrong and in jury is because it enabled funeral directors to marco of merchandise to take advantage of those who were for the rubble so she stayed and fought the law. she was not the only one. legislators did as well so beginning 1999 the began to introduce a series of bills

every year to remove the licensing requirements for cauchy testified on behalf of several of these and every year they've lost for one reason alone that the licensed funeral directors, the industry would lobby aggressively to protect their license. pdf every year they succeeded so today in oklahoma he must have a funeral director's license. let the legislators ran into is the of bottled necker's someone who advocates for the perpetuation of government regulation particular with an occupational license to restrict the free flow of workers to and enjoy the economic benefit as a result.

the bottled liquors are evident. we know doctors and attorneys have licenses but recent research that we publish indicates those that require a license may surprise you said to be an option year you have to beat places or simon which interpreter or locksmith or a forest or crane operator that for years were never licensed but now or because of the work of the bottle necker's. and those that fought to reform those licensing as

the law firm represents people over the past 26 years the very first case was on the issue of occupational licensing and we have continued to mitigate. what we have discovered that there is an miff -- a myth that licenses are created at the request of the harm to consumers and citizens but the truth is legislators creates it at the request of those in the industry to be licensed for christ's first inseams the absurd when they ask for more intrusion? but the answer is to follow the of money.

fear recognize it creates a bottleneck to exclude competitors so they can inflate prices and wages for their own benefit. the that pushes more than an economic advantage we also needed to canfor recognition want to be licensed to be like those other occupations that are already licensed so as a result with the reform bill is introduced or if of licensing is challenging core of the bottle necker's will have a ferocious campaign to protect their license and a funeral industry is just one example . in 25 years we have yet to

find a single example of a license that is created by any means or protected but it persist for a demonstrable reason or indeed that is out there that is not true. so we wrote the book to dispelled the myth but also to coin a new term to create a word that is descriptive into useful and accessible and pejorative with the word to be used to name and shame with a bottle necker's we know that restricts free flow or free movement to take advantage of the negative associated with the

word the bottleneck of traffic and the effect of that that the to our morning commute that comes as a result. we wanted to take advantage of that so each industry to exhibit classic interests behavior on behalf of their license. or those that coordinated letter writing campaigns or crowding out committee hearings or industry day at the capitol campaign contributions to have testimony full of unsubstantiated facts for

example, if your native to the south the legislature considered whether to repeal the licensing bill for interior designers. that bill reseat enormous attention interior designers from florida and outside the state debuts the state legislature hours of testimony during which they talked about the importance of their license and one said if the repeal bill liable result in the death of 88,000 people laugh laugh per year. our book is backward looking that we are examining the creation of protection through different industries but it is not a historical artifact there is no better

example than the american music therapy association these organizations have mounted a nationwide campaign to make that request is the same as what bottleneckers had used for decades protecting public health and safety from the unlicensed practice of music there be. every bottleneckers says the same thing. 30s advocates harry -- adversary efforts they go state by state today more than half a dozen states have already adopted such a license.

it is not part of the demonstrable need but the therapist have mounted this campaign. there is no better example than here in georgia. in recent years adopted its own music therapy license bill. classic bottleneckers. upon introduction they would to make committee, had a hearing, the lead people to testify on behalf in support were music therapist from national and state organization. legislators received a packet of informations consumers, a professor as a faculty member but at no time did anyone testify

against the bill. or was any empirical evidence introduced demonstrating a significant threat to public health and safety or did this single legislator or anyone else asked challenging question or express skepticism about the bill now to work as a music therapist you will earn a bachelor's degree or higher from an approved program it has to be approved by the music therapist association the same people who lobbied for the bill, pass a national examination offered only by the music therapist who pay more than $300 for that privilege and 1200 hours of clinical internship, 18 years of age or older, paid the fees to the state, passe criminal background check.

research on occupational licensing indicate as a result consumers and georgia will pay 15 percent more for the news that there be services but not necessarily get a greater service for the data later date dry to reform the license they will be overrun but now been joined by members of the state music therapy board for also seeks to protect their license. those of us that advocate we do so by making economic arguments. this is also an issue of a just society built in part to preserve their right to earn an honest living free

from unnecessary regulation. friends, there is nothing just telling somebody he cannot work in the occupation of his choice simply because it introduces to much competition for someone else who was more politically savvy. 1787 madison wrote the protection of property rights is the first object of government and for madison property rights extended to more than just real-estate. or personal property a meeting to which they would have right including opinions of the free communication his disdain for government over the

other was unequivocal but under the rubric of property rights madison said that is not a just government boris property secured and is violated by seizures of one class or arbitrary restrictions and exemptions and monopolies that the free choice of their occupations that not only constitute the property in the general sense of of word but to condemn those seizures madison could have been talk about occupational licensing today so to fill a just

government to execute the first object of government elected officials today should work to protect property rights including the right of free occupational practice in those few should prod the of legislators and support the work of those who seek open to break open the bottle neck of the also talk about courageous men and women who have worked to break open bottle necks in their industry for 25 years had of privilege to do that along away. so i will stop in the open for questions and discussion

and we have a microphone that needs to be used. >> what have you seen around the country as a result of the supreme court decision of ftc with the north carolina untoward i know we have taken measures but what are they doing as a result. >> is a little early to say it is fairly recent in a position to figure out what they need to do. sa macaulay has been spending a lot of time going to different states to help them understand what the case is about, the implications but in general they're looking to create systems with much more

oversight but for decades have been operating without any oversight. this anti-competitive behavior and they have been able to do so because nobody has paid attention so how can recreate systems but it is too early to say. >> the alcohol wholesale business and are there any successful initiatives to break that stranglehold of the wholesalers'?

to make catches chapter number one of the book that is part or the name comes from. so the efforts to break open the bottle neck is one of our cases have a direct shipping of wine rica open the market. before that it was illegal in most dates. and other efforts around micro breweries so the popularity has started to open up that market access

for shipping essentially cutting the distributor out so the microbrew is where we see most of the movement is very small window along the way. >> your part of the higher education imparted this licensing requires you to go to college it could be a total waste of money in my opinion. [laughter] and the role of higher education bitches' huge budding cosmetology alone

looking at those programs around the country with young women or seven men but mostly women who go to school and pay tens of thousands of dollars to earn a license. and the schools are earning the enormous amount of money and they know it. . . .... ....

>> you invited me and asked me for 15 minutes and you are going to get 15 minutes so i kept going. afterwards, the questions were all to me and were incredibly hostile because they recognized the threat of that message that we what to reform occupational education. higher education makes an enormous amount of money off it. unfortunately, the research on that topic is yet to be done in a very helpful way. hopefully, we in the near future

will do research on that. it just makes sense. sure. >> like most things, i can see a continuum between appropriate and inappropriate. do you have some examples where it is appropriate to have strong licensure? >> for too many years we have lived in a binary world of licensing. there is no license or full license. that is not correct. we don't live in a binary world of regulations of occupations. there is a menu of regulatory options that can be used. people don't realize this. this is something my colleague is hoping more people come to realize. a colleague of mine at the university of michigan, we ar

co-authored an article about this. think of the bird pyramid. at the top is licensing and the market regulates. what does that mean? it means that as somebody who provides goods and services i am being regulated by my reputation and consume's behavior. so consumers have the ability to influence what happens within the markets for goods and services. on your phone, you now have more information about goods and services providers than at any time in history. it has more information than any licensing scheme will have. it is regulation through the market. as you go down through the

pyramid, there are lawyers of other top. the bottom is full license and in between is different types of licenses that don't impose on the free practice of an occupation. voluntary certification from a third party, bonding and insurance, registration, certification through the government or another organization. these are different forms of regulation that can be intr deuced short of full licensing and they can create the aim benefits of licensing without imposing upon free practice. we say first, figure out what is the need to be addressed through regulation. is the need to overcome asymetrical location? the need to know where they are

so we can bring litigation against them? what is the need were the regulation and match up the regulation to the need. so in answer to your question, we would say there are examples in between licensing and no licensing or market regulations where there may be need. here is one example. florida obviously deals with hurricanes on a fairly regular basis. they have an interest in protecting consumers against fly by night contractors who come into the state and may do shotty or dangerous work. so the state has an interest to happen who these people are and where they can access them. and registration meets that need without full licensing. there may be need of examples of

a need that needs to be met and we can watch up regulation with that short of occupational licensing. sure? >> i look at this in a very general way. most of us need to have a license to drive. drive on automobile. now, the real benefit comes requiring us to have insurance. liability insurance. some sort of ability if we do damage to be compensated. my general question is why don't we simply require that there be insurance in providing a service

and forget thubt regulation and allow the insurance company to decide whether that person is qualified >> that is one of the options in our menu of regulatory options. what is the need to be met? going back to what i just said. think of the tree trimming business. what we care about is protecting consumers from some damage. i have a tree that needs to be trimmed, i hire a company, they saw off a limb and it falls on your car. the externality problem. we need to make sure sh company has a way of making you whole. bonding and insurance can meet that need. we don't need to restrict entry into the occupation but make sure we can protect you against

your loss. we advocate for that rather than for licensing when the need is extern externality. >> one last question. one of the arguments we hear is not just public health and safety. but reimbursement like physical therapy. you heard us say we need to be licens licensed or we cannot get reb rebim -- reimbursed without the license. >> this has come up on various occasions from states and practitioners. the first thing is check that print. in indiana, there were a group of therapist went to the state saying we need a license for the reason you described. we looked into it and the affordable care act creates this regulation.

the regulations say we have to have a license to be reimbursed. so we thought we have to find out if this is true. we discovered it doesn't actually say that. it says if you are going to be reimbursed under the cms, you have to be recognized by your state with whatever the state requires. if you your state says you must have a license, you have to have a license. but if your state says you don't need regulation or the regulation is less than a license that is all you need. the first thing is check the premise. after that, if it is in fact true, we say there is a way to create a form of special recognition that does not restrict the free flow of workers into an occupation. if you want to be reimbursed and enter into contracts with the government or be reimbursed for the cms. it will create a speciality

license for those people so if you are the type of person that wants to be reimbursed you would have to earn this special recognition. but only if you want to be engaged in that type of circumstances. everyone else can enter. it is only who want to be reimbursed or enter into special contracts. special interest can be created just for them without restricting free flow. all right. thank you. [applause] >> thank you, dick carpenter and the work you to do here. hopefully week be success getting these policies proved. we will see you next month. we are adjourned.