Not Motivated by Goodwill

by Don Boudreaux on October 25, 2011

in Regulation

My dear old friend Kerry Dugas in New Orleans sent to me today notice of a truly bizarre piece of legislation recently enacted by the solons in Louisiana’s legislature – a piece of legislation explained by Common Sense’s Paul Jacob.

I have no idea what special-interest group is behind this obnoxious statute (although I could guess).  But rather than me guess, I invite commenters to offer their best guesses.  Or, of course, if any commenters have genuine information on the history of this legislation, do please share it with us.

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{ 112 comments }

Rob October 25, 2011 at 5:11 pm

Would seem to make perfect Keynesian sense. Transactions in second hand merchandise are no way to stimulate aggregate demand for new goods and services.

SmoledMan October 25, 2011 at 7:28 pm

People who buy second hand goods are evil and must be punished by aggregate demanders!

Jon October 25, 2011 at 5:11 pm

I’d bet you’d see some lobbying from banks behind this legislation (they get a cut of debit/credit card transactions and any resulting fees).

But is this legislation really Constitutional? I mean, can one state rule that legal tender as issued by the Federal Government is no longer legal? Any one know of any judicial precedent for this?

Methinks1776 October 25, 2011 at 5:15 pm

Yes, Jon, I’m curious about that as well.

And…Uh… pawn shops are exempt? Isn’t that where hot goods usually end up? And isn’t this legislation “designed to…” prevent trade in stolen goods.

Golly, I think there might be other motives for this fine piece of BS.

J. W. October 25, 2011 at 5:36 pm

I read elsewhere (see the last line of the article linked below) that Louisiana already requires pawn shops to keep records, so perhaps pawn shops are excluded from the new law because the police can, in theory, already trace purchases through pawn shops.

http://www.klfy.com/story/15717759/second-hand-dealer-law

Methinks1776 October 25, 2011 at 5:41 pm

I see. Thanks for the link, J.W.

Of course, I expect those records are 100% accurate. ;)

J. W. October 25, 2011 at 8:01 pm

No problem.

“Of course, I expect those records are 100% accurate. ;)

Yeah, my thoughts exactly.

PrometheeFeu October 25, 2011 at 11:19 pm

My guess is that pawnshops have legal reporting requirements which makes their cash transactions traceable…

LowcountryJoe October 26, 2011 at 12:47 am

That’s correct. That portion was spelled out in an article in the AJC a few days back. In that article the claim made for the reason behind the legislation was to prevent thieves from stealing items and selling them to businesses who otherwise wouldn’t trace the transaction. Businesses are now required to do any business like this with purchase orders, credit purchases, money orders, and checks from a bank account.

Greg Webb October 25, 2011 at 6:53 pm

No, it is not Constitutional. But, it will take time and money to fight this issue in the courts. And, the ones most likely to be affected are unlikely to contest the legislation. So, unless a public interest group takes up the cause (or there is enough public outcry over the legislature’s stupidity), then the law will stand (though my guess is that it really cannot be enforced).

Michael October 25, 2011 at 5:17 pm

Somewhat inexplicably, pawn shops are exempted from the prohibition.

Pawn shop owners, would be my guess.

Don Boudreaux October 25, 2011 at 5:20 pm

All good suggestions so far. It wouldn’t surprise me even to find the likes of Wal-Mart and Target, or Dollar General, behind this legislation. But that is indeed only speculation. Too few businesses will refrain from using the state to rip-off the general public if the state is willing to be a party to such shenanigans.

Michael October 25, 2011 at 5:24 pm

I can’t imagine a big box store targeting one specific state–had one them been behind it, it would be a national measure.

It’s probably a special interest local to LA.

HaywoodU October 25, 2011 at 5:33 pm

While it may be a local special interest, don’t think that big-box only thinks on the national level. They have local advertising, local prices, local sales and local offices. What makes you think they wouldn’t use local favor, too?

Michael October 25, 2011 at 5:37 pm

Economies of scale. You get more bang for you buck buying off the national legislature than you do buying a state legislature.

Chris Bowyer October 25, 2011 at 5:49 pm

Aye. And while the benefits would be local, the scandal can easily go national.

vidyohs October 25, 2011 at 9:08 pm

There could be some Texas history that could be read into that law.

Here in Texas back in the early 1990s any man could take a check to the check writer’s bank and cash it as long as the individual had adequate identification.

Man writes check, recipient takes check to bank, presents check with proper ID, receives money.

Banks notice that the vast majority of those bringing in checks to cash in that manner have dusky skin and speak poor English with a Spanish accent, and these folks do not have any bank account. Banks realize that they aren’t making any money off those transactions, and that isn’t right in the estimation of the bankers in Texas.

Bankers bribe Texas congressmen to pass a law that allows banks to charge a “cashing fee” on those people who present checks and who have no bank account. Law is passed and signed by democrapic governor Anne Richards.

Now the situation in Louisiana may be that there is a large market in second hand items (there is here in Texas to be sure), so large that it made it worthwhile for the bankers along with interested retailers to bribe Louisiana congressmen to pass a law against using cash, which would force those who need those inexpensive second hand items to live to open an account and procure plastic so that they can buy cheap stuff.

Or, as those of us who pay attention, there has been a huge market in second hand American clothes over seas in Eastern Europe and in Africa, perhaps people who have large amounts of cash have been using the second hand clothes business to laundry money.

Just a couple of thoughts on what seems to be another bizarre law.

Greg G October 25, 2011 at 9:53 pm

vidyohs

The bank cashing the check for the non-customer is providing a service and incurring some risk. If it turns out the person cashing the check is not really who he claims to be they could take a loss. Are you saying the state should tell them they can’t charge for that?

vidyohs October 26, 2011 at 7:13 am

As usual, you have no idea what you’re talking about, but as with all looney lefties, not knowing anything doesn’t slow your fingers down a bit. Here I would have assumed that a looney so technically knowledgeable and skilled would be aware of how check cashing is handled by banks today, before jumping in and letting fingers run loose.

#1. the owner of the bank account upon which the check is written is already being charged. Any risk is negligible in today’s world of instant identification, access to any account balance on any holder in the known universe. No bank cashes a check without accessing the account to see if there is balance sufficient to cover the check. They all require two forms of ID, and a thumb print. This is a positive fact.

#2. Some banks charge the fee religiously and some do not charge it at all. Of the banks that do, most are intra-national at least and I also know for a fact that one can take a check written on an account they hold, to any branch bank in any state contiguous to the state of Texas, and no fee is charged. I have even taken Wells Fargo checks to Colorado and Utah, and cashed them without the fee being charged. I have cashed those checks in Louisiana and Oklahoma with no fee.

What the action of the banks bribery has done is caused growth in the opening of check cashing for fee outlets, that actually do assume some risk, even Walmart has joined in on the opportunity.

Since I live without a bank account and plastic, I know whereof I speak, though I don’t have a particularly dusky skin.

AU03 October 26, 2011 at 2:23 pm

The fact that you didn’t get charged a fee doesn’t mean the transaction is costless. It just means the bank chose not recoup that cost directly from your cashing of those checks.

AU03 October 26, 2011 at 2:48 pm

My objection is not the same as greg’s. Even giving you the benefit of the doubt of avoiding fraud being costless, bank tellers do not work for free, and on days on which many checks are cashed, an extra teller or two is often a necessity to accomodate non-banking customers, not to mention the fact that by cashing a check, that bank is losing liquidity.

vidyohs October 26, 2011 at 6:34 pm

AU03,
Your objections and comparing the situation brought about by the Dodd/Frank bill are irrelevant to the situation I described. They aren’t even close to the same.

First every bank is electronically connected to every other bank, and upon receipt of a check someone has to manually insert it into the stream of processing. It might be in a back room when an account holder deposits it or it might be at the counter when a teller cashes it.

The bank does not charge a fee to an account holder for the processing of a check written on another bank when it is deposited by an account holder even though manual teller time is required. In Texas they do charge a fee when a person presents a check to be cashed. The fee is as I described simply theft, as the account holder on which the check is written is also paying for the privilege of writing that check for processing.

Yes, I avoid it by going to a private check cashing outfit and that is a choice that is available to anyone who chooses not to move into the system with an account and use of plastic or checks.

Is it so difficult for you to understand that the check must be processed regardless of how it is presented for processing. So, when one method of processing is cost free to the recipient of the check, where the other method is done at a fee, the only conclusion is the one I draw. The fee was created by banks who couldn’t stand the thought of those many brownskinned people cashing checks and they weren’t making any money on the deal, but here in Texas they had to have lawful permission to charge the fee, voila, bribe the congressmen in Austin, get the law.

I have had bank tellers and bank managers try to advance the same argument you did, but they, like you, have no answer for why, if they have the right of it, I can take the check they are charging a fee to cash using their (and your) justification, across the border to any contiguous state and cash it without a fee.

Concentrate on that AU03, if the fee is justified in Texas, why isn’t it justified in every branch of the bank in America?

Now every thing I have just said is a repeat of what I said very clearly above, and you’re still having a problem? Gimme a break.

AU03 October 26, 2011 at 7:01 am

vidyos-

Your stance seems akin to the reasoning retailers and Dick Durbin used to defend his amendment to Dodd-Frank- the reason why most every major bank is (or soon will) charge a monthly fee for using a debit card.

Durbin & friends called the fee that banks charge to process transactions paid by cards (which completely takes the retailer off the hook for any fraud, among other things- see GMU law professor Todd Zywicki’s paper titled “The Economics Of Payment Card InterchangeFees and The Limits of Regulation” for a detailed explanation) a “handout”- as if operating a card payment network is a costless transaction.

By saying that banks should not be able to charge someone for cashing a check, you seem to be saying that doing such is also a costless transaction, which it is not.

I believe one or both of the two industries involved in the war over swipe fees (retailers, banks) might be involved here. Both have much to gain- the retailers, in that people with cash would have to go to their stores, banks, in that if people who only use cash would likely have to get checking accounts to continue to shop at thrift stores.

The fact that this is only happening in Louisiana does seem to contradict my guess, but Louisiana also may be the place these groups thought it had the best chance of passing, which could lead to similar pushes in other states.

Greg G October 26, 2011 at 7:12 am

I am starting to worry he might be a closet looney lefty. Vidyohs, come to the dark side.

vidyohs October 26, 2011 at 7:18 am

AU03,

Wrong assumption, see reply to Greg C. above. They aren’t the same at all.

AU03 October 27, 2011 at 6:40 am

vidyhos

(It won’t let me respond to your comment above, though your density leads me to wonder why I am even bothering to respond)

The comparison with the Durbin Amendment is minor, and I think you are reading too much into it. All I am saying is your mentality is similar to defenders of that amendment in that your are acting as if the fee being charged is unjustifiable in the first place.

What I am saying is that processing in-branch transactions to non-customers causes the bank to incur costs. It costs money for that bank to employ that teller to cash your check, and if you have ever worked as a teller around the 1st or 15th of the month (as I have) one is cashing a whole bunch of checks, and often, extra tellers are employed just to compensate for that fact, as fewer and fewer customers these days need to visit branches for transactions involving tellers. By giving you the proceeds of that check you cashed, the bank loses cash, also a cost.

If a customer from bank A cashes a check drawn on bank B at a branch of bank A, then yes, bank A is also incurring a cost, but since the customer is, in fact, a customer, the cost is reimbursed due to the fact the customer holds (an) account(s) there, that have balances. Additionally, many (most) banks will not allow a customer to cash a check >$100 that is drawn on another bank unless the customers’ balance(s) exceed the amount of the check, since they have no way of immediately verifying the funds of the account where the check is drawn.

“The fee was created by banks who couldn’t stand the thought of those many brownskinned people cashing checks and they weren’t making any money on the deal…”

It’s not just that they were not making money, it was that they were LOSING money, due to added in-branch teller transactions and the very act of cashing checks causes money to leave the bank in the form of lower demand deposit balances.

It may be that Texas is the only place where it is LEGAL for a bank to charge in this manner, but it hardly makes it “theft” (and you are calling people “left-wing,” LOL). If it is, in fact, illegal to charge such a fee to cash a check, then customers are essentially subsidizing your cashing of the check, since the bank cannot recoup costs of cashing that check directly from the person causing cash to leave the bank, you- your welcome, BTW.

Might the fee being charges in Texas be in excess of the costs of visits by non-bank customers and the lost demand deposit balances? Maybe, for some checks probably so, others probably not, but again, it costs money for them to serve non-customers in such a manner.

vidyohs October 27, 2011 at 11:19 pm

You gotta be shitting me, man (I think), I am dense. I just told you that my knowledge, research and facts all show that there is no additional labor cost incurred by any of those banks as compared to merely depositing the check in an account and letting that bank run the check through the system.

Plus, I just told you that if there were additional costs here, then one would expect to see those same additional costs reflected in all the branches of the same bank in states contiguous to Texas…..and there isn’t.

You are right about one thing, one of us is talking to a wall, and it ain’t you.

Rick Hull October 25, 2011 at 5:28 pm

I’m baffled as to how this intersects with legal tender laws. “All debts public and private” sure seems to have this base covered.

Josh S October 25, 2011 at 5:35 pm

I heard about this on the WSJ report this morning on my drive to work. It’s a ham-fisted overreaction to copper thieves. Basically, it works like this:

a) Copper thieves steal copper coils, wire, etc.
b) Thieves sell metal to salvage yards for cash.
c) Thieves use cash to buy meth

So the lawmakers got the bright idea that if they banned making secondhand purchases in cash, they could stop the copper thieves. This is one of those moments that is probably more adequately explained by stupidity than by evil.

Methinks1776 October 25, 2011 at 5:39 pm

You know, that’s a brilliant, foolproof plan. These people should really be running our lives.

Josh S October 25, 2011 at 5:51 pm

Clearly, this is the fault of those wacky, anarchist Republicans who don’t have faith in government.

Methinks1776 October 25, 2011 at 6:22 pm

Can’t be them. They’re “do nothing”, remember? Gotta be good Democrap legislation bastardized by the Koch brothers. That’s it. Say, which branch of the government party has a majority in the LA legislature anyway?

Ken October 26, 2011 at 12:18 pm

The Incumbency Party, same as everywhere else.

Methinks1776 October 25, 2011 at 6:25 pm

Can’t be them. Our very own Nobel Peace Prize winner, fresh from killing QaDaffy, is now telling us they’re “do nothing”, remember? Gotta be good Democrap legislation bastardized by the Koch brothers. That’s it. Say, which branch of the government party has a majority in the LA legislature anyway?

Methinks1776 October 25, 2011 at 6:26 pm

I seem to have lost control of my domestic technology!

Darren October 25, 2011 at 5:42 pm

I’m surprised they didn’t just outlaw copper.

Methinks1776 October 25, 2011 at 5:47 pm

Give them time, Darren. They’re only human.

brotio October 26, 2011 at 2:54 am

Well, they have outlawed gold in the past.

Greg Webb October 25, 2011 at 5:43 pm

And, in the Louisiana Legislature, as in every legislature or Congress, you will find lots of stupidity. I vote for stupidity as well. The typical case of well intentioned legislators crafting a law without considering its unintended effects.

Craig October 25, 2011 at 8:01 pm

“It’s a ham-fisted overreaction to copper thieves.”

I agree; I don’t think it’s any more complicated than that.

I can only hope that pressure on Bobby Jindal (who must have signed it into law) will work to see it repealed. Jindal has been a rising star in the small-government wing of the GOP.

This isn’t that. Sounds more like something Romney would propose.

Automatic October 25, 2011 at 8:27 pm

This plan seems so foolproof. I can’t imagine why they didn’t also ban buying meth in cash.

SheetWise October 25, 2011 at 9:48 pm

AZ legislature passed a law requiring scrap metal dealers to take ID. That makes some sense, as pawn dealers have the same requirement. My guess is that the police asked for this law — they would like all transactions to be recorded simply because it makes their job easier. Once all transactions are recorded, the tax collectors job gets a lot easier as well. Only criminals use cash, right?

Dan H October 26, 2011 at 9:08 am

Legalize drugs and people wouldn’t have to engage in crime to feed their addiction.

Brad Hutchings October 25, 2011 at 6:03 pm

Radley Balko linked to this recently. Even the pawn shops have to keep detailed records and give them to law enforcement. The linked article notes that the law was motivated by an increase in copper thefts, among other things.

So if I had to bet on a bootlegger, it would be software developers who are gonna make serious bank on data processing contracts for law enforcement.

PrometheeFeu October 25, 2011 at 11:25 pm

Meh… We’re too busy picking between sweet offers from dozens of companies…

Brad October 25, 2011 at 6:06 pm

One does have to appreciate the kind hearted criminals of Lousiana. Where else do the crooks steal stuff and then donate it to Goodwill.

SheetWise October 25, 2011 at 9:49 pm

Sherwood Forest.

John Dewey October 25, 2011 at 6:32 pm

Would lobbyists for big-box retailers waste time on this legislation? The cash sales revenue earned by second-hand stores has got to be a tiny fraction of Wal-Mart or Target revenue. In 2010, Walmart’s U.S. retail sales were 100 times the total sales of the nation’s largest secondhand chain, Goodwill. Walmart will gain far more if its lobbyists are influencing zoning, guiding infrastructure assistance, gaining tax abatements, negotiating job training funds, etc.

Don Boudreaux October 25, 2011 at 6:45 pm

Good point.

John Dewey October 26, 2011 at 9:11 am

I’m not sure my point is as good as I first thought. Certainly lobbying for government direct subsidies and infrastructure must be a major function for Walmart’s lobbyists. But my other argument – that secondhand stores represent no competition for Walmart – is probably wrong.

Becky Hargrove’s comment below helped me realize that Goodwill’s clothing revenue might be much higher than 1% of Walmart’s clothing revenue. Clothing likely makes up 80% of Goodwill’s sales, but less than 25% of Walmart’s. Furthermore, Goodwill sells no underwear and few shoes. Given the price differences, it’s possible secondhand stores are selling as much as 20 percent of the number of pants and shirts that Walmart sells. That represent some serious competition in those lines.

Bill K. October 25, 2011 at 6:57 pm

Could it be that Louisiana is a bit short of cash and this is politician-sponsored, not corporate-sponsored, to cut down on bartering, lest they lose sales taxes?
I once did a vasectomy on a metal fabrication company owner – we agreed he’d build me a home incinerator in exchange, but to be fair on the different prices, we’d make up the difference in cash. This would seem to outlaw that kind of arrangment, no?

John Dewey October 25, 2011 at 7:28 pm

“I once did a vasectomy on a metal fabrication company owner – we agreed he’d build me a home incinerator in exchange”

Not sure if this is real or tongue-in-cheek. But it is amusing to think such a barter exchange would occur.

J. W. October 25, 2011 at 8:00 pm

I was about to say “no,” because the law only deals with “junk or used or secondhand property,” but then I read this from the act itself (page 2, lines 20 and 21):

(5) For the purposes of this Part, “junk” shall include any property or material commonly known as “junk”.

By performing a vasectomy, you were indeed dealing with another man’s “junk” in a transaction that involved cash.

veritasrex October 25, 2011 at 8:35 pm

Brilliant.

yet another Dave October 25, 2011 at 8:35 pm

LMAO!

Methinks1776 October 25, 2011 at 8:58 pm

I miss the “like” button. That’s hilarious.

Bill K. October 25, 2011 at 11:18 pm

Laugh all you want folks :)
But it was real.
Out here in flyover country, I now get rid of my junk the old-fashioned way – I shut my stainless steel trap and cauterize it.

W.E. Heasley October 25, 2011 at 6:57 pm

“…what special-interest group is behind this obnoxious statute
this obnoxious statute..”.

“…commenters to offer their best guesses.” – Don Boudreaux

Very close to solving the puzzle regarding what special-interest group is behind this statute, but need to buy a vowel, and only have cash! Darn!

Don Boudreaux October 25, 2011 at 7:06 pm

:-)

SmoledMan October 25, 2011 at 7:30 pm

Honestly why are you wingnuts against this? I only use cash when I’m forced to(vending machines and whatnot), otherwise it’s credit cards for everything. I have nothing to hide from the state.

Big Brother is Watching You.

Jon Murphy October 25, 2011 at 8:12 pm

I use cash for most purchases because it is simpler. I don’t have to worry about reconciling my back account or paying a bill and the end of the month. Why take that option away from me? It’s illogical.

“Let him live in freedom if he lives like me.”

Chris Bowyer October 26, 2011 at 12:15 pm

Isn’t this really, really similar to “you don’t have to worry about this law unless you’re a criminal”?

House of Cards October 25, 2011 at 8:10 pm

Did governor Bobby Jindal actually sign that into law? Surprising if he did. He’s usually pro free market.

SaulOhio October 26, 2011 at 6:04 am

Most politicians who talk free markets are what I call “free market buts”. They are all for free markets, but…

And the but is followed by all sorts of damaging interventions into the market which an econ 101 student should be able to explain will be counterproductive. But when such policies are enacted, and the harmful results rear their ugly heads, the political left will blame free markets because a right wing, free market politician was in charge.

For instance, W Bush contributed to the housing bubble by signing the American Dream Downpayment Act. All sorts of words he uttered in favor of free markets were cited to blame the bubble on the free market.

Becky Hargrove October 25, 2011 at 8:18 pm

I did hear that this was a coalition of left and right, evenly split. Even so, the idea of backing by stores such as WalMart makes sense, in that prices of second hand clothing – for instance – actually compete with new clothing prices. The discrepancy readily shows up in a clothes item such as underwear which people mostly only buy new. That fact alone has caused the price of underwear to skyrocket while the price of other clothing has leveled off.

DeVille Wyeth October 29, 2011 at 7:26 am

I don’t agree w/ your claim that used and new clothes are relatively the same price. I don’t know of any clothing that holds it’s price other than vintage designer apparel.
Anything using cotton(underwear,robes,loungewear,etc.) has increased dramatically in price because of worldwide increased usage/demand of products made w/ cotton and severe weather patterns affecting crops.

Jon Murphy October 25, 2011 at 8:19 pm

I wonder if this is an effort to boost manufacturing. I mean, by making second-hand purchases more difficult, consumers would turn to newer goods, which would have to be manufactured.

Another thought, going back to the big-box store angle, I wonder if Wal-Mart et. al. wouldn’t spend time and money on this legislation. I mean, let’s say that they want a similar law passed at the national level. To try something now would be hard, what with Congress deadlocked on most issues. By focusing on states, they can focus efforts. It would also allow for a low-risk test-case; if the law is determined to be unconstitutional, the lobby would only be out a few bucks as opposed to a high-cost national lobby. Thoughts?

Becky Hargrove October 25, 2011 at 8:28 pm

The paradox for me was that I’d gotten into a discussion the day before with someone, where I worried that certain portions of left and right would like to abandon money. The other party protested, ‘no way!’ Yes, way.

Nikolai Luzhin, Eastern Promises October 25, 2011 at 9:49 pm

there is a very simple reason for this law. The theft of copper, iron, aluminum, stain glass windows, bricks, etc. is a cottage industry.

In South Carolina someone just drove down the interstate highways stealing all the storm drains.

COLUMBIA, S.C. (AP) — The South Carolina Department of Transportation says thieves have stolen more than 100 storm drain grates along Interstate 85 and U.S. 276 in the Upstate.

State maintenance engineer David Cook says the thefts and the holes left behind create serious hazards to drivers. He says replacing them will cost taxpayers money and tie up traffic as workers close lanes to put in new ones.

Cook says the heavy cast iron grates likely required two people to lift.

The agency says 68 two-piece grates were stolen from I-85′s median next in Anderson County. Officials believe they were taken last weekend.

In Greenville County, about 35 storm drain grates were stolen from U.S. 276 this week. An additional 22 grates were taken from other routes in Greenville County, including on I-85.

Jon Murphy October 25, 2011 at 9:59 pm

Ok, but how does banning cash transactions with Goodwill and others prevent such an act from occurring? It seems like an awfully large leap to go from stolen drain covers to buying items at Godwill

Gil October 25, 2011 at 11:03 pm

They probably thought that they pay taxes for public goods so in essence they owned the storm drain gates and were merely taking possession of them.

khodge October 26, 2011 at 11:33 am

Oh yeah. That makes sense. Ban legal tender in New Orleans so that copper thieves in South Carolina will have to barter storm drain covers for clothes at Goodwill.

It would take a Keynesian to come up with such a simple and elegant explanation.

Mcwop October 25, 2011 at 9:51 pm

It all makes sense after listening to Howard Stern interview OWS folks:

http://www.belch.com/blog/2011/10/17/howard-stern-laughs-at-the-ows-idiots/

This is what is behind these types of regs.

Jack-o'-lantern October 25, 2011 at 10:26 pm

ROTFLMAO! Howard Stern’s interviews of OWS Protesters is hilarious. OWS is not a political movement. It is a group of idiots. No wonder Muirdiot identifies with them.

House of Cards October 26, 2011 at 2:04 am

That’s a riot.

It’s not surprising that Invisible Backhand and Muirgeo like the OWS demonstrators so much.

Invisible Backhand October 26, 2011 at 10:46 am
ChrisN October 26, 2011 at 11:28 am

Don’t forget on the OWS side….

Has $500K in the same banks they are protesting. Crapping on police cars, ranting about the Jews, etc.

Occutards

Invisible Backhand October 26, 2011 at 11:42 am

Has it occurred to you they are not protesting banks, but corruption? Why would they protest putting money in a bank? That’s like protesting oxygen.

Don’t forget November 5 is move your money day

“The Move Your Money project is a nonprofit campaign that encourages individuals and institutions to divest from the nation’s largest Wall Street banks and move to local financial institutions.”

http://moveyourmoneyproject.org/

Jon October 26, 2011 at 11:59 am

Nov 5th is also Guy Fawkes Day. I’m guessing the choice of date is not coincident.

Invisible Backhand October 26, 2011 at 12:24 pm

“Remember, remember,
the fifth of November,
Gunpowder, treason and plot.
We see no reason
why Gunpowder treason
Should ever be forgot!”

Jon October 26, 2011 at 12:26 pm

See, that’s one thing about a protest that has many liberal arts people involved: they are really good at symbolism. It makes it so much more entertaining to observe!

Bastiat Smith October 26, 2011 at 12:58 am

I can’t tell you how many times I have stolen stuff and taken it to Goodwill for that big cash payout. They never give me money though. They keep saying that they only take donations. Oh well. I guess I’ll just keep stealing stuff. Good thing too, because from what I hear, the cash in my pocket isn’t good anymore.

James Strong October 26, 2011 at 1:25 am

The legislator watches a lot of Pawn Stars and wnated to protect the show by limiing competitors.

James Strong October 26, 2011 at 1:27 am

I seriously have no idea what is going on with my keyboard tonight. Forgive me for the embarrassing typos.

Kristoffer G. October 26, 2011 at 6:43 am

You guys are a bunch of whining “yes men”. This piece of legislation is only very important to people who spend to much time browsing “infowars.com”. Get some perspective…. jeez.

david nh October 26, 2011 at 11:06 am

Hi Kristoffer. I think it can be best explained by noting that some of us are naturally submissive and trusting of authority and some of us are not.

Jon Murphy October 26, 2011 at 7:26 am

No one has given any reason why this legislation is necessary. I can only conclude, therefore, that even those in favor of this legislation cannot give a good reason for it.

Ken October 26, 2011 at 12:49 pm

The State did what it does best.

Something. Badly.

Fred October 26, 2011 at 8:07 am

How can Big Brother keep track of what you buy if you’re allowed to buy it with cash?

Observer October 26, 2011 at 8:18 am

Let them ask me like any other civilized person would.

Jon October 26, 2011 at 9:07 am

Ok, so a co-worker of mine who spent many a day in LA explained the law to me:

According to him, what these people will do is steal copper (or other scrap metals) and sell them to dealers for cash. These transactions are recorded. They would then turn around and buy from Goodwill and others with cash (these transactions are not recorded). Anything left over is used for drugs, etc. By tracking the course of the money, they can determine the legitimacy of the money. That’s not to say the law is a good, sound law, but at least there is some logic behind it.

Methinks1776 October 26, 2011 at 9:17 am

Then, this is not unlike the new “big trader” rule that tries to force every Tom, Dick and Harry with a decent sized portfolio to register with the SEC so that that Big Brother can monitor them. That’s always logical. It’s also frightening. Why not just bug everyone’s house and pay informants to rat out dissenters (the way Obama encouraged people to do during the healthcare deform debate)?

I predict a lot of non-compliance with both rules. When there are too many stupid laws, people start to ignore them. We’ll see how heavy handed Big Brother will get – but, more people are starting to plan to watch from abroad.

david nh October 26, 2011 at 11:21 am

I’ve heard that bank robbers sometimes use cars to flee the scene. Should we ban the use of cars by everyone as a means to cut down on bank robbery?

Lots of otherwise legal activities are implicated in the commission of crimes (owning & driving cars, using cash, phones, etc.).

Does any of this justify, in effect, making garage sales illegal?

Ultimately, there is only one purpose to such laws – to demonstrate that the state has the power and will to make and enforce arbitrary and intrusive laws.

Fred October 26, 2011 at 11:36 am

They’ve been trying to ban garage sales for a long time since money is changing hands without any taxes being collected.

Captain Profit October 26, 2011 at 11:29 am

Wait. They already track the copper sale? Why doesn’t it stop there?
Maybe they’re less interested in the copper thief than in the drug arrest that he can lead them to. Something like that might bring some federal funding to the local drug task force, whereas there’s no similar incentive for catching the common thief.

Dan H October 26, 2011 at 11:32 am

Identity thieves often use social security numbers to assume the identity of someone else. Let’s ban social security numbers!

Methinks1776 October 26, 2011 at 12:09 pm

Just ban private property. Then all transactions will be considered criminal and prosecuted at the whim of the ruling elite.

DeVille Wyeth October 29, 2011 at 7:38 am

Sound logic? I doubt any drug abuser/crackhead is going to worry about Goodwill purchases. They’re going to steal the copper, then sell it and go straight to the drug dealer.
Not all buyers of scrap metals follow the law.
That co-worker must have spent a little too much time on Bourbon St. and imbibed a few hurricanes.

david nh October 26, 2011 at 11:02 am

” I have no idea what special-interest group is behind this obnoxious statute”

I would have thought the special interest group was the state itself wishing to a) remove any black (i.e., free) market discipline on sales taxes, and b) get the populace increasingly used to the exercise of arbitrary and intrusive power. I mean, what’s the use of having power if it can’t be used arbitrarily?

cmprostreet October 26, 2011 at 1:21 pm

“what’s the use of having power if it can’t be used arbitrarily?”

Snipping this and claiming it as the next slogan for Obama 2012.

Becky Hargrove October 26, 2011 at 11:13 am

There are possibly credit card processing companies that would have incentive for legislation such as this, for most any small business that can’t take cash transactions would be forced to use their services. Not only are those contracts often non-negotiable, but the transaction does not pay off at all on small purchases less than a couple of dollars. That is a higher percentage of purchases by low income individuals than some may realize, so the pain goes both ways.

John Kenny October 26, 2011 at 11:29 am

So, did Gov. Bobby Jindal sign this ?

Jon October 26, 2011 at 12:01 pm

I’m pretty sure he did, as the bill is being described as “passed.”

Ken October 26, 2011 at 12:51 pm

Yes, he did. The drawing of conclusions is left as an exercise for the reader.

Mike October 26, 2011 at 4:10 pm

This is from a blog that Paul Jacob cites:

http://ackelandassociates.com/cash-transactions-banned-by-louisiana/

“Motivating the introduction of this legislation was an increase in criminal activity, necessitating law enforcement to develop additional tools in tracking potential criminals. Thefts of copper and other precious metals have risen recently with higher commodity prices and mounting pressures from the economic downturn. The added restrictions under this recent legislation have come about under the pretense of cracking down on crime and helping the government take care of you, all at the cost of your individual privacy, economic, civil liberty and freedom.”

So, it could be that the police want this because it makes it easier for them to track criminals. It’s akin to the way many states regulate pawn shops. However, pawn shops are still allowed to accept cash, and are exempted from this law. Payback for regulating Pawnshop’s transactions? Or are there many other interests like discount retailers that could be involved as well?

Bob October 26, 2011 at 4:33 pm

Pure and simple. Unconstitutional!

Appo Agbamu October 26, 2011 at 5:27 pm

GenAppo is a blog that gives insight to our generation on economic issues that will impact us. These decision are being made whether or not we get involved. Lets Reclaim Our Future.

John Galt October 26, 2011 at 7:25 pm

This bill was introduced May 11th, and signed by Jindal on July 1st and became law that day. It had 9 Republican and 6 Democrat sponsors. I know 6 Megacorps control U.S. television & movies, it appears they also control the newspapers and internet.
There is zero coverage of this law by any newspapers or even websites except a dozen tiny Science & Libertarian Blogs?
Non-profits are exempt from it and citizens can legally hold one garage sale per month where they accept cash.
Our government has become a juggernaut of trolls whose words and actions must be ignored, disregarded, and resisted as much as possible.

I have had tens of thousands worth of appliances and metal stripped from vacant rental properties, and the worst part of it is being forced for insurance reasons to file a police report.

If you’ve ever seen the movie District 9, you’ve sees the real lunatics with guns and clipboards a property owner deals with. These are the real deviants that protect and serve the shantytowns that America has become.

Through their noble sacrifice and dedication they tirelessly work to make them even shantier.

J. W. October 27, 2011 at 4:53 pm

“Non-profits are exempt from it and citizens can legally hold one garage sale per month where they accept cash.”

Not true. Read the act (and the relevant statutes) more closely.

I’ll refer to lines in the act (parts of which were already on the books and some of which were new) to make my point.

This section seems to exempt nonprofits such as Goodwill and your typical garage/yard sale: “Anyone, other than a nonprofit entity, who buys, sells, trades in, or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a nonprofit entity, shall be deemed as being engaged in the business of a secondhand dealer.” (page 2, lines 15 through 18)

But just before the quoted passage above, the act defines a “secondhand dealer” as “[e]very person in this state engaged in the business of buying, selling, trading in, or otherwise acquiring or disposing of junk or used or secondhand property, including but not limited to [insert big list here].” (page 2, lines 4 through 15)

So someone working at Goodwill or running a garage sale, though he is not “engaged in the business of a secondhand dealer,” is nevertheless a “secondhand dealer.”

The problem is that the no-cash restriction refers to a “secondhand dealer,” not one “engaged in the business of a secondhand dealer”: “A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order [etc.].” (page 6, lines 11 through 16)

J. W. November 8, 2011 at 1:21 am

I left a comment on Oct. 27 correcting my earlier one, but since it contained two links (to sites containing the block quotations) the site tells me, “Your comment is awaiting moderation.” Since this message is still here I assume that no one can read my comment except me.

So I’ll just post that same comment without the links:

Oh, sorry everyone, I think I misread the law. I apologize specifically to John Galt; it is I who should read more carefully.

§1861. “Secondhand dealer” defined [...]

B. Except as provided for in R.S. 37:1864.3 and 1869.1, the provisions of this Part shall not apply to: [...]

(3) Private residential sales commonly known as “garage sales” or “yard sales” as long as such sales take place at a residential address.

(4) Any bona fide charity possessing a valid exemption under Section 501(c)(3) of the Internal Revenue Code.

R.S. 37:1864.3 reads:

§1864.3. Payment by check or money order required

A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property and made payable to the name and address of the seller. All payments made by check, electronic transfers, or money order shall be reported separately in the daily reports required by R.S. 37:1866.

I misread “shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property” as meaning that the dealer can’t sell secondhand property for cash, but it clearly says “in payment for” so it only applies to cash purchases of secondhand property. Sorry. So Goodwill is safe. So are garage sales, if we assume that “more frequently than once per month” refers to the frequency of the garage sale and not the frequency of any given sale.

Jake October 27, 2011 at 6:44 am

Isn’t the simple answer that the interest group is the tax man?

Becky Hargrove October 27, 2011 at 2:43 pm

There was some discussion on the blog Uneasy Money, and that was where I heard the vote was divided down the middle, I forget now where the commenter got that information.

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