Jewish World Review Jan. 5, 2005 / 24 Teves, 5765
Why is this any of the government's business?
A sign of the diminished spirit of liberty is how rarely the question is
asked: Why is this any of the government's business?
Take the issue of cell phones on airplanes.
The Federal Communications Commission has been widely condemned for
considering the elimination of its ban on the in-flight use of cell phones.
None of the outcry, however, seems to be about safety. No one is asserting
that planes will start falling from the sky.
Moreover, the FCC won't be making the safety determination anyway. That
will be made by the Federal Aviation Administration. The FCC is just trying
to get out of the way in case the FAA decides there is no safety concern.
Instead of safety, the condemnation of the FCC is rooted in concerns about
etiquette and customer comity. Simply put, the critics find cell phones
annoying and don't want to be seated next to their use on a flight.
In our flaccid age, perhaps there should be a federal Department of
Etiquette and Customer Comity, with a Division of Anti-Annoyance.
But a government in the business of protecting people against annoying
social behavior isn't in the business of protecting liberty.
From the reaction, you'd think the FCC was contemplating a regulation
requiring the use of cell phones on airplanes. Instead, it's only thinking
about getting out of the regulation business.
Whether in-flight cell phone use were permitted would be up to the
airlines. Some might permit it, others might not.
Airlines that permitted use might come up with their own rules of
engagement. Or that might be left to evolving social customs.
Whatever the rules, formal or informal, some would violate them, and some
would find what is permitted to be annoying.
But unless there is a safety issue, it's none of the government's business.
Annoying social behavior is something a free people control or cope with on
Closer to home, Arizona has discovered, along with many other states, that
some retail gift cards come with fees, expiration dates, or balances that
decline over time even if not used.
Initially, Democratic Attorney General Terry Goddard, who has put this
issue on the public agenda, seemed respectful of private markets and the
appropriate role for government. He told the Arizona Republic editorial
board he would push for legislation requiring disclosure of any such
conditions on gift cards.
Economic libertarians would argue that even this is unnecessary. Cards
without such conditions, which are most of them, have an obvious advantage
over those with them. Retailers without restrictions have an incentive to
make consumers aware of this advantage, thus no need for government
But a case compatible with liberty can be made in favor of such disclosure
requirements. Government is simply accelerating and facilitating the
exercise of informed consumer preferences.
The problem is that regulatory mission creep is almost inevitable. Sure
enough, Barbara Leff, the incoming Republican chairwoman of the state
Senate's Commerce and Economic Development Committee, promptly wanted to
ban gift card fees and expiration dates upon learning about them.
Democrats don't like to be outflanked by Republicans on consumer
protection. So, not much later, Goddard's legislative lobbyist, Richard
Travis, was beating on his chest in favor of a ban to the Phoenix Business
Journal, describing disclosure requirements as only a fallback position.
Travis asserted that retailers make a great deal of profit on the float
from gift cards.
Of course, there are also increased inventory carrying costs associated
with such deferred purchases. And then there are the accounting issues.
Gift cards illustrate the inanity that has become corporate accounting.
Although retailers receive the cash upfront, they cannot book the income
until the gift cards are redeemed. The cash, however, is reflected on their
balance sheets, with a corresponding liability for the purchases yet to be
made. Tracking large volumes of such small liabilities is, at a minimum, a
In a free society, the judgment of politicians shouldn't be substituted for
that of retailers trying to make it in a competitive marketplace about what
sort of conditions to attach to gift cards.
And surely no one, even in this indolent era, would argue that gift cards
are a necessity, requiring government to dictate the terms and conditions
under which they are offered.
If some retailers want to recover costs associated with gift cards, or
simply make more money on them, it's none of the government's business.
So, what are consumers to do without the protection of government, at least
beyond disclosure requirements?
Here's a suggestion: If you find fees and expiration dates on gift cards
objectionable, don't buy one with them.
JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.
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