Saturday, May 15, 2010


I was reading the comments at this Victor Davis Hanson piece and came across an interesting set of observations on the state of the economy.

14. Foobarista

As for the “gray market” in California, I’m convinced that regulators – and politicians – are well aware of its existence and don’t want to touch it. My wife sells small businesses and pretty much never sees a little, cash-heavy business that doesn’t pocket most or all of the cash – even in otherwise regulated areas like restaurants and dry cleaners.

The sad thing is that my wife occasionally runs into American-born blacks or whites who want to buy a business and whose heads explode when they realize that nearly everything is under the table, and that operating a completely legit business would mean you simply wouldn’t make enough money to operate because the market prices in the “grayness” of the market players. Immigrants of all sorts are far more comfortable with these arrangements and often prefer it.

And any business involving lots of manual labor? They’re completely under the table, not because the owners are paying sub-minimum wages – the workers are often decently paid – but because regulations and taxes make it impossible to operate legally. And since few American-born people are willing to work under the table, illegals are pretty much the only ones hired.

April 11, 2010 - 10:06 pm
Which explains the title of this post. When the government hand becomes too heavy people no longer use it. And it is not just the people who sell labor. It is also the people who buy it.
15. tryingtodorightthing

I work in law in the San Fernando Valley and can tell you from personal experience that the Los Angeles County Building Code Enforcement does not inspect nor enforce laws such as illegal converted garages or the related building codes. The inspectors will act as if they are going to inspect and then just refuse to do so. I have made complaints of very serious conditions such as exposed wires, gas lines illegally re-routed and the such with no action by the city.

April 11, 2010 - 10:11 pm
That is how you make a third world country. You regulate everything with a heavy hand. If you want to be profitable in such an environment you have some choices. Bribery is one. Ignoring the rules is another. The next comment makes that point.

You’re my neighbor. (In a general sense – I live also in the SFV) and you’re talking about MY neighbors. (In the specific sense! The house to my right has two illegal ‘apartments’ in the back yard – the one to the left has a ‘converted’ garage.) I look at houses and they all have unliscensed contruction. No one cares. The law is a joke. No – worse – the law is predatory. You would actually be in legal trouble if you tried to OBEY the written laws.

April 12, 2010 - 1:47 pm
So who is bypassing the state? Some very nice people.
20. Les Hardie

Dr. Hansen: I and my upscale neighbors are all scofflaws. We live in a village in the Santa Monica mountains just west of Topanga. Most of us are professionals,others academics, scientists, businessmen, some cops and firemen. RE prices are high, but the area is semi-rural—a lot of horses, atvs, trucks, chainsaws. People here are well educated but pride then=mselves on being tougher than city people. Most are still Democrats. But everybody tries to avoid any gov’t permitting. The view is that between the county and coastal, nobody can build a dog house, much less a room addition, so f***them and do it anyway. Judges and lawyers do major remodels without permits; pools and spas, sheds and barns, these projects are regularly done subrosa. More than a complete lack of trust that the government will be fair and reasonable, is a belief that govt has no right to tell us what we can and cant do on our property (at least on a small scale). It seems to be a version of “don’t tread on me!” It may be the salvation of Ca when those who espouse the regulatory state realize how bad it is in practice, and take real steps to get it off our backs.

April 11, 2010 - 10:39 pm
The next commenter is not so optimistic about the situation in terms of people believing in the regulatory state on the one hand and avoiding it at all costs on the other.

The problem is that those who espouse the regulatory state will never realize how bad it is in practice. When liberal social theories don’t work its always because they weren’t executed correctly or because of some outside influence. It’s never because the theories were wrong-headed or flawed from the outset.

April 12, 2010 - 10:30 am
And of course every one who has watched Star Wars knows the final outcome:
Princess Leia: The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.
Conventional wisdom at its finest.

There are over 170 comments to that post so I'm sure there is more information along the above lines. Not to mention thread drift and thread jacking. I leave it to the reader to ferret out more useful stuff.

Now about the Drug War Black Market.....

Cross Posted at Classical Values


J Carlton said...

Wow, good stuff there. From the across the counter talk at work it's not just happening in CA

LarryD said...

I speculate that this is why California's economy hasn't completely collapsed.

Now contemplate the consequences of ObamaCares' requirement of filing a 1099 for everyone you do $600+ business with per year.