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Louisiana Monks Strike a Blow Against Economic Idiocy
Real Clear Markets
By Bill Frezza
July 25, 2011

You might think that discouraging innovation, stomping on competition, reducing consumer choice, and strangling economic growth is the last thing a state government would want to do in these challenging times. But perhaps you have not been to Louisiana.

What is even more fascinating, it took a bunch of communal Benedictine monks to drag the state into U.S. District Court to make lawmakers say Uncle. To top it off, in order to prevail these monks had to defeat the pernicious rational basis test, a New-Deal inspired get-out-of-jail-free card that deems a law constitutional regardless of what fundamental rights it tramples as long as the government can concoct nearly any conceivable justification.

The fact that they could not says there may be hope for this country yet.

The trouble all started, as it did for much of Louisiana, when Hurricane Katrina blew through. Until then the monks of Saint Joseph Abbey supported themselves harvesting lumber from abbey lands. Applying some old fashioned Yankee ingenuity along with a couple of hundred thousand dollars in risk capital they built a professional woodworking shop and started turning those downed trees into simple caskets. Next thing you know they were being threatened with jail time.

Anyone that has ever shopped for a casket in the midst of grieving for a loved one knows how horrific the process is. There stands the dour undertaker displaying his 8,000 dollar pieces of exotic furniture, many marked up four times wholesale. Behind the undertaker stands an industry cartel supported by a State Board of Embalmers and Funeral Directors dominated by owners and executives of said funeral homes whose mission is to protect those margins. And behind this board stands a law originally passed to prevent the spread of contagious diseases that has metastasized into a regulatory monstrosity requiring a year of embalming apprenticeship, a layout parlor that can seat 30 people, a display room for half a dozen caskets, and a host of embalming equipment as a precondition to being allowed to sell caskets.

Our national economy may be going down the tubes but metastatic regulations springing from well-intentioned laws captured by industry insiders remains the most recession proof growth market. The rational basis test is its engine and campaign donations funneled back to legislators through lobbyist working at behest of crony cartels is the fuel. President Obamas recent directive to root out regulations that conflict, are not worth the cost, or that are just plain dumb, has done absolutely nothing to disturb this iron triangle. Give the man credit, though, like most of his predecessors he has mastered the art of doing nothing while sounding presidential.

Turning this dystopia around is where the Institute for Justice comes in.

This highly effective alternative to the left-leaning American Civil Liberties Union should really be called the Institute for Economic Sanity[sic]. Its mission is to find mediagenic plaintiffs like our humble monks whose right to make a living are being threatened by insane regulations. IJ lawyers them up with a combination of the best legal minds in the business, a brash young staff of committed ideologues, and a war chest funded by donors trying to rescue what is left of free enterprise. If they have to, they march right on to the Supreme Court, which is where this casket case may end up.

We can only hope that Louisiana is stupid enough to appeal. Let us also hope Louisiana sticks with its efforts to defend the law based on the argument that protecting a discrete interest group from economic competition constitutes a sufficient legitimate government purpose. If there has ever been a more bald-faced argument in support of crony capitalism, I have not heard it.

FDR planted the seeds for this theory of government over half a century ago, creating a bipartisan machine that sells access to the expanding powers of government as it hunts for new portions of the economy to shake down. The regulatory weeds that sprouted now clog every channel of commerce in the land, not just destroying jobs while discouraging innovation but burdening all of us with higher prices and dead-weight compliance costs. Wily corporations that can afford to play the game treat this as the cost of keeping competitors out of their business.

Burying the funeral cartel may seem like a modest place to start. But just as it took fifty years to construct such a massive edifice of overweening regulations it may take that long to wear it down. One casket at a time.
Bill Frezza is a Boston-based writer and venture capitalist. He can be reached at [e-mail]. If you would like to subscribe to his weekly column, drop a note to [e-mail] or follow him on Twitter @BillFrezza.

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