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The Mother of All Santa Clauses

The offense: a dairyman bottling and selling milk for less than the competition “helping to hold down retail prices at supermarkets and warehouse stores.” The penalty: a change in law and regulations preventing his competing on price in the milk market.

At this season of gift giving, Winston turns his attention to those clever folks who view the Code of Federal Regulations as the mother of all Santa Clauses.

Economists use the term “rent seeking” to describe to stakeholder efforts to gain benefits through use of the legislative and regulatory processes “at the expense of taxpayers or consumers or some other rivals.” As The Economist notes, “rent-seeking activities can impose large costs on an economy.”

For example, a recent article in the Washington Post explained how stakeholders were able to prevent an entrepreneurial dairy farmer from cutting his prices. The anti-competitive effort centered on USDA “milk marketing orders” that set the price processors pay for raw milk in federally regulated regions.

The watchdog group Citizens Against Government Waste estimates that the milk marketing orders, originating in the 1930s, cost U.S. consumers about $1.5 billion a year. An additional element of the federal dairy program is known as the Milk Income Loss Contract (MILC) which, according to CAGW, has the effect of the government “paying twice for the same milk.”

Winston can’t keep track of all the government regulations, old and new, that meet the definition of rent seeking. Winston is hoping his readers can help him out by sending him their lists of Rent Seeking Regulations.

Send your list of Rent Seeking Regulations to

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