Small Business

The Government's War on the Little Guy

Magicians included.


Marty the Magician performed magic tricks for kids, including the traditional rabbit-out-of-a-hat. Then one day: "I was signing autographs and taking pictures with children and their parents," he told me. "Suddenly, a badge was thrown into the mix, and an inspector said, 'Let me see your license.'"

In "Harry Potter" books, a creepy Ministry of Magic controls young wizards. Now in the USA, government regulates stage magicians—one of the countless ways it makes life harder for the little guy.

Marty's torment didn't end with a demand for his license. "She said, from now on, you cannot use your rabbit until you fill out paperwork, pay the $40 license fee. We'll have to inspect your home."

Ten times since, regulators showed up unannounced at Marty's house. At one point, an inspector he hadn't seen before appeared. He hoped things had changed for the better.

"I got a new inspector and I said, oh, did my first one retire? She said, 'No, good news! We've increased our budget and we have more inspectors now. So we'll be able to visit you more often.'"

Here are your tax dollars at work.

The inspectors told Marty that the Animal Welfare Act required him to file paperwork demonstrating that he had "a comprehensive written disaster plan detailing everything I would do with my rabbit in the event of a fire, a flood, a tornado, an ice storm."

The federal forms list "common emergencies likely to happen to your facility … not necessarily limited to: structural fire, electrical outage, disruption in clean water or feed supply, disruption in access to facility (e.g., road closures), intentional attack on the facilities … earthquake, landslide/mudslide/avalanche … "

Sadly, this Kafkaesque enforcement of petty rules is not a bizarre exception.

Some regulation is useful. But when we passively accept government regulation of everything, thinking we're protecting people from evil corporations run amok, we're really making life harder for ordinary people. Every profession, from cab driving to floral arrangement, is now burdened with complex rules.

You can't even give tours of Washington, D.C., the city that produces most of these insane rules, without getting a special license. Tour guides must pay about $200 for criminal background checks, provide four personal references, show passport photos and pass a written test—a difficult one.

People who reflexively defend government may feel no pity for businesses that face extra costs: Let businesses pay fees and take tests—we don't want unlicensed tour guides describing famous statues incorrectly! But these costs add up. Often, they make a small, barely profitable business impossible to operate. These rules also violate Americans' right to free speech. They are unnecessary. If tour guides are no good, people can patronize others. The government doesn't need to be gatekeeper.

These rules generally prevail because existing businesses are politically connected. They capture licensing boards and use license rules to crush competition from businesses just getting started.

In some places, you can't open a business like a limo service or moving van company unless you can prove that your business is needed and won't undermine existing businesses in the same field.

But undermining competition is the whole idea. If Starbucks or Home Depot had to prove new coffee shops and hardware stores were "needed," we wouldn't have those companies. Apparently they were needed, since these companies thrived, but no one could have "proven" that beforehand.

Jeff Rowes, an attorney at the Institute for Justice, a civil liberties group that defends many people caught up in regulatory cases, says, "America was conceived as a sea of liberty with islands of government power. We're now a sea of government power with ever-shrinking islands of liberty."

The little guys don't have an army of lawyers to defend those islands of liberty one regulatory battle at a time. We should get rid of most of these regulations—and sail back, together, to a free country.

NEXT: Europeans Form "Drone Club" To Compete With the US and Israel

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. “you have a liesahnze, for the begging?”

    1. The new question is: Do you have a license for that ‘bagging?

  2. Who, Peter Dinklage? I have to say, if they’re going after him, my money is on Dinklage.

    1. He wasn’t much of a badass in the Station Agent.

      1. He was an acting badass in that movie.

      2. I loved that movie.

  3. “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.”

    People like the Rabbit Inspector General were once held in check by the knowledge that even a civilized and law-abiding people would eventually get fed up and take matters into their own hands. If public servants don’t respect the people they serve, then they need to fear them.

    1. People like the Rabbit Inspector General were once held in check by the knowledge that even a civilized and law-abiding people would eventually get fed up and take matters into their own hands.

      Now you get the real interest behind gun control.

    2. Back to the assassination market already?

      To me, those really seem to be more of a danger to petty bureaucrats/inspectors, then to national-level politicians. Smaller reward, but not the massive security detail and infamy.

      1. Gotta start somewhere.

      2. Not smaller reward. The Top. Men. don’t really DO anything anyway, it’s these “front line” folk that are the problem. If they all quit, we’d be golden. The Top. Men. can’t do it all (or any of it, really), they need the flunkies to do the actual stealing and murdering for them. Like the SweatingGin said, the flunkies don’t get body guards. The best they can do would be to move the flunkies onto military bases, and when that happens, the battle is very nearly won.

        1. Exactly. The rank-and-file bureaucrats are the ones who drive this nonsense. And they’re the ones who must be brought to mortal fear of the populace.

  4. Stossel claims he’s representing the “little guy” here.
    He can care less about the little guy.

    He just doesn’t want government regulations. Specifically, the government regulations that he doesn’t like.

    I agree with him and others that regulating magic tricks and tour guides is ridiculous.

    Time and time again, many of us have fought authority in prosecuting petty crime. Time and time again, supreme court gives law enforcement to do things like anal cavity search to find drugs. Really, how much drugs can someone have in their anus?

    If the choice is NO government rules or having to deal with petty rules like this, I don’t know that we have a choice.

    1. Do you have any idea what you just typed?

      1. You know this is a sockpuppet, right? It’s an old handle (that’s also a Cheech and Chong reference) that one of our resident retarded sockpuppeteers has appropriated because it hadn’t posted in a long time. I suggest ignoring the fuck out of it.

        1. Some of us aren’t stoners like you Episiarch.

          1. Well maybe you should start.

        2. “It’s an old handle (that’s also a Cheech and Chong reference)”

          1 – I forgot
          2 – cheech and chong records really were much better than the movies
          3 – Even if the puppet is puppeting… fer the love of god, its no different than the real thing. Which is legion.

        3. I was unaware of the derivation of the name. Thanks, Epi.

        4. Homer Simpson’s greatest fear.

          Marge: “Everyone’s afraid of something.”
          Homer: “Not everyone, Marge.”
          Marge: “Sock puppets.”
          Homer: “Aaaaah! Where?!”

          1. Love that scene! He ran away.

    2. If the choice is NO government rules or having to deal with petty rules like this, I don’t know that we have a choice.

      That’s not the choice.

    3. Alice doesn’t live here any more

    4. He just doesn’t want government regulations. Specifically, the government regulations that he doesn’t like.

      Hey Alice, since you know John Stossel better than he himself does, why don’t you tell me about my motivations while you’re at it? I really would love to know why I think children should be permitted to imbibe alcohol. Is it because I hate regs too?

      1. Because children tend to be loud anyway and drunk children are funnier?

        1. They go to bed earlier when you give them alcohol.

    5. Try to have a point next time.

      1. or use more CAPS and square brackets if you are going to go stream-of-conscienceless

    6. They need to do way instain mother who kill thier babbys. becuse these babby cant frigth back? it was on the news this mroing a mother in ar who had kill her three kids . they are taking the three babby back to new york too lady to rest my pary are with the father who lost his chrilden ; i am truley sorry for your lots

      1. The sad thing is that the above is above average commentary for a CNN article.

        1. It’s been so long since I’ve read any CNN comments that I really don’t remember the sort of gibberish their commenters pump out. Yahoo answers is worse, though. They even vote on the “best” answers, so you can be elected king of the nitwits if you choose to immerse yourself in that cesspool.

      2. I wish I got the the same quality of whatever it is you took/smoked/ate before you posted.

        I would make sure I didn’t post while on it though.

    7. Re: Alice Bowie,

      Stossel claims he’s representing the “little guy” here.
      He can care less about the little guy.

      That’s a pretty good thing. It means he cares a lot.

      He just doesn’t want government regulations. Specifically, the government regulations that he doesn’t like.

      Of course. Who fights regulations that he or she likes?

      Now that we went through your tautological defecation, could you start to make a point? Pretty please?

    8. Stossel never put forth the option of ‘no govt’ and you know that. Unless you didn’t bother to read the article beyond the byline and drew a conclusion based on animus of the author.

      “Some regulation is useful” hardly sounds like the clarion call for anarchy.

      1. “Some regulation is useful” hardly sounds like the clarion call for anarchy.”

        Yeah, but the very use of the expression “some” suggests you intend to take away granny’s medicare and the welfares for the poors and the taxes on the rich because all you wants is to make your rich billionaires friends richer and oppress the masses.


    9. “If the choice is NO government rules or having to deal with petty rules like this, I don’t know that we have a choice.”


      “every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

      Perhaps the choice is better phrased as, “Why do you believe government necessitates endless infringement upon individuals as the cost of its basic mandates?”

      or, “ROADZ!” does not equal “we must ergo also submit to penaltaxed-coercion of legislated behaviors”

      which even then completely ignores whether Teh Roadz needs the Federal leviathan anyway.

      That said = creating a rabbit out of thin air probably falls under some form of capital gains tax. Which can easily be offset by making a few things disappear. I see a potential boom in magician-tax-services @ H&R Block.

      1. We quote Bastiat, and they ignore those quotes.

        1. Bastiat is an old, dead white guy who spoke French. Don’t you know life is more complex now?

    10. “how much drugs can someone have in their anus”

      A lot, actually. The point that Stossel is making is that the little guy gets his anal cavity searched, the big evil corporate guys that you accuse him of supporting don’t get their anal cavities searched.

      When you demands laws and regulations keeping the evil overlords in check, the evil overlords use those laws and regulations against the little people.

      A palatably partisan example for you: you probably wouldn’t deny that George W. Bush engaged in insider trading. Was he punished? Or was his reference to his own incompetence considered a valid excuse?

      In the wake of the scandal, to show his commitment to cracking down on the evil insider trading, he made a great show of bringing down Martha Stewart.

      Was Martha Stewart the great scourge on society that insider trading laws were meant to curtail?

      1. But Martha is the rich republicans

        1. Insider trading is legal for members of Congress I believe.

          They call it forward trading and say it can’t be stopped because of their positions which make them unable to trade otherwise.

  5. Feathers, tar, a stockade… All of this would be easily corrected in a more civilized age.

  6. Have I mentioned I like Stossel?

    1. Not enough times, I’m affraid.

    1. Look, accountability and satisfaction.

    2. Unfortunately the clip is presented to people as an example of the evil and idiotic reactionary behaviors of the mob-mad Tea Party types who simply want to wield violence upon all forms of civilized government and reduce our society to anarchy.

      John Hancock, the ‘smuggler’, is a business owner who hates taxes. Basically, the Koch brothers FTW

      1. Look, when we invoke our tarring and feathering rights, sometimes injustices may occur. However, in our system, government officials are presumed guilty. Is it our fault that some are inept at defending themselves at a legally constituted tarring and feathering hearing?

      2. I cheered when I first watched the scene in the series and every time I’ve seen it since.

        I did know that it was warm pine tar, not burning hot road tar that would have killed the scumbag bureaucrat.

  7. Bitcoin is a case study to what regulation does in this country. Many bitcoin companies have to register with the Treasury and comply with AML regulations. Fine; the registration is free and you pay a finance lawyer for a good AML policy. But…

    Forget for a moment that registration makes banking impossible (the regs ALSO say banks are responsible for their customers’ AML adherence and who wants that trouble?); these companies also may have to license themselves as money transmitters in 48 states because Treasury has arbitrarily labeled them “money transmitters” without regard as to whether that makes sense in the states. The safe thing to do is to, of course, obtain all 48 state MT licenses because not doing so may be a federal felony (look it up: 18 USC 1960). Which will cost millions. And even if you cross all your t’s and dot all your i’s, any regulator in any state can arbitrarily reject one of your 48 applications because he doesn’t like you / your business. Since a rejection will ruin your other states’ applications (because every application asks if you have been rejected elsewhere), you get a chance to withdraw your application before rejection but then you can’t challenge the regulator’s decision because one wasn’t made.

    Who’s protected by all of this? The rich powerful interests in the “transmission” industry that were around before money transmission laws existed: Moneygram, Western Union, etc.

    Can’t you just smell the freedom?

    1. Say it ain’t so!

      That really bites. It means if bitcoin has any future it will be dominated by the few companies that can afford to comply with the regs. Then we end up in a situation where the few companies will have a vested interest in using the force of law to stamp out any newcomers. It’s almost like regulation leads to inequality.

      1. Yep, already happening. Bitcoin is already regulated by FinCEN’s “virtual currency” regs.

        Enforceability and efficacy is of course, another discussion.

        The Winklevoss (not googling their names) twins are already building a structure and group of people to make Bitcoin users “clean”, sort of like the “blood diamond” system suggested by DeBeers.

        They’re building a system where you’re registered and your bitcoins are tracked so they know you’re legit and your Bitcoins are good.

        This is essentially the point that DarkWallet was making: Bitcoin users cozying up with regulators to become legit.

      2. In the States, the bitcoin industry is already dominated by only a few companies because of the regulatory problems and even they are under significant pressure. It’s not hard to see why.

        Bitcoin (at least the concept of it) is not only a direct threat to fee-based banking and even many functions of government. Bitcoin’s ledger is public, verifiable to the very first transaction and distributed in whole across hundreds of thousands of nodes; why would you need a county recorder’s office if you can just upload the necessary information to the ledger for a few cents?

    2. Oh, I forgot to mention other conundrums. If you want to apply for MT licenses, you need banking references. The banks that ARE willing to work with money transmitters (which aren’t many) won’t even talk to you unless you have applied for an MT license.

      On top of that, you’re supposed to describe your business in the applications (some require projected financials, audited financials, marketing plans, etc.). However, your money transmission business is illegal until you get the license. So you should be applying to get a completely-theoretical business licensed. In actuality, you are admitting to running an illegal business when you apply for an MT license because you can’t come up with some of the application’s requirements without actually running the damn business.

      1. Not that I 100% like the laws, but you’re way underselling the complexity of the regulation and way overselling the impossibility of starting a business requiring an MT license.

        It’s peanuts to start an MT or currency exchange in your local neighborhood. It’s relatively straightforward to expand that to an operation that would actually necessitate licensing in all 48 states that require licenses. It’s not so easy to create a multi-national currency from a largely untested virtual currency maintained by a volunteer network overnight.

        There are plenty of logistical and technical caveats that bitcoin has hidden or just shuffled. It’s not as decentralized as you propose, much the same way it’s not as anonymous as originally believed. I’m not calling for more regulation or saying bitcoin is a bad idea or can’t work (I actually think it’s a good idea that can’t work). I’m just saying the novelty, nature, and behavior of bitcoin carries the risk of a lot of individual users being absolutely financially raped (How many early adopters thought their Silk Road transactions were truly anonymous?). I’m also saying that the idea that it should readily replace $$$ is a near-religiously fanatical pipe-dream.

  8. I knew NYC was anti-gun but was still shocked when he shows on the last episode that he paid a 430 dollar application fee to apply for a gun permit. He got denied (not shocked there) but it was never stated if the money is refunded if you are denied. I would suspect no it isn’t, but does anyone know?

  9. Marty the Magician performed magic tricks for kids, including the traditional rabbit-out-of-a-hat. Then one day: “I was signing autographs and taking pictures with children and their parents,” he told me. “Suddenly, a badge was thrown into the mix, and an inspector said, ‘Let me see your license.'”

    If he really was a magician, he would have thrown down a smoke bomb and disappeared, leaving behind a faint and vaguely villainous laugh.

    1. I’m really glad my job doesn’t involve crashing children’s birthday parties and flashing badges at magicians, demanding their papers. At that point, I think I’d have to kill myself.

      Why are you guys ignoring the real victim? This guy with the sorry-ass government job? He should just go on food stamps and public housing. he would find more meaning in existence that way. Unless he’s enjoying it, in which case, he should get punched in the face more at work.

  10. What’s really bad is that bigger businesses are often behind these licensing and regulation schemes in order to squeeze out competition from the little guy. So much for a free market!

  11. My disaster plan for the rabbit would be rabbit stew. Seriously rabbit is like really juicy chicken, it’s awesome.

  12. Won’t someone think of the children who will be exposed to ridicule when they repeat the lies told to them by unlicensed tour guides?

  13. my buddy’s sister-in-law makes $89/hr on the laptop. She has been unemployed for seven months but last month her paycheck was $13360 just working on the laptop for a few hours. visit the website
    Go to website and click Home tab for more details.

  14. I know its late but I’m watching Carl Bernstein perform fellatio retrospectively on Bill Clinton on a CNN gabfest with Stuart Smalley, er Anderson Cooper.

    And now Dr Ruth makes a cameo, segue to the R dude that got busted for coke and mea culpas. He’s seemingly trying to link his coke use to his mother’s passing.

    You can’t make this shit up, it’s the fucking Twilight Zone, I have to laugh, the alternative is self immolation…just kidding I hopefully have many rounds of golf down the road.

  15. I was actually unaware that Dr Ruth was still alive…she doesn’t look alive but these clowns are taking her seriously…hey she just posited that she was a sniper for the Haganah back in the day. Dr Ruth, the short, kick ass palestinian killah…

    Like I said before this is getting surreal but it is amusing in the short run and cheap laughs are good for the soul.

  16. Being the little guy is apparently a subpar occupation.

  17. this situation can be dangerous i think

Please to post comments

Comments are closed.