Tuesday, September 15, 2009

A pox on both your houses

The Statesman has a story up about a lawsuit filed by Daniel Fuchs of Twin Falls. His allegation is that he was denied due process when he was removed from the waiting list for liquor licenses in several cities. The point of the suit is more probably to keep himself on those lists so he can continue to profit from Idaho's ridiculous government-granted monopoly.

Apparently, the State is trying to prevent folks from milking the system and profiting from it. I guess another reason is that it tends to run up the cost of the liquor license for folks trying to open up a business. The high cost of a liquor license deters innovation and new businesses, bars and restaurants primarily, I guess, from opening up.

The article reports that Fuchs sold a license to Market Limone for $60,000, and another to Fiesta of Nampa for the same price.

Fuchs was deleted 16 times from waiting lists for various cities, and reimbursed $5,175 for the fees he paid. Did you catch that? He paid $5,175 to get lined up for 16 licenses. Those things sell for $60,000 each, in Nampa. One can only imagine what they sell for in Sun Valley, Ketchum, Hailey, Idaho Falls and Bellevue, the cities from whose waiting lists he was removed.

The guy is trying to make a legal buck, but it seems pretty predatory, especially when it drives up the price, so I don't see him as a victim or as a sympathetic character.

The chief culprit is the State's stupid system of limiting the number of licenses. C'mon all you free market Republicans, let the free market limit the number of liquor licenses instead of an arbitrary cap. Let the free market determine whether a new restaurant will open up.

Some license holders complained that if the monopoly system is lifted, they will suffer a drastic decline in the value of the liquor license. For the vultures like Fuchs, that complaint rings hollow. It does carry a bit more heft when offered by a person who had to buy the overpriced license.

Let's hope the issue comes up again this year in the legislature, and gets a more sensible outcome.

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