10/13/11 Baltimore, Maryland – “Is this just stupid? Or sinister by design?” We couldn’t help asking the question when confronted by a law that took effect in Louisiana on Aug. 15, 2011.
The short of it: In Louisiana, if you sell clothes or toys that your kids have outgrown for cash — more than once a month — you’re now breaking the law.
And… the why: Over the summer, Louisiana lawmakers decided that mere laws against theft might’ve been good enough for Moses and his people back in the day, but not for the Pelican State.
The state legislature crafted and passed a new law designed to target copper and scrap thieves specifically… but entrapped a host of housewives and flea market aficionados in the process.
Given the tenor of the public debate these days, we’re not sure what to make of the following details. You decide…
“Louisiana,” reports New Orleans CityBusiness, “is among a handful of states and cities to ban junkyards from purchasing scrap with cash as police crack down on copper and metal thefts.”
Unfortunately (perhaps), they’ve done much more than that.
“What sets the Louisiana law apart is its breadth,” CityBusiness goes on. “Louisiana law bans cash purchases for all secondhand goods.”
The letter of the law: “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 in the business of a secondhand dealer.
“A secondhand dealer,” the law continues, “shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property.”
Huh?
[Ed note. One of the questions raised by the film we’re screening in Baltimore this evening: “When, in our culture, did ‘profit’ become a bad thing? When did the nonprofits become the good people… and ‘for profit’ mean that you’re bad?” We’ll let you know how our Reserve audience responds to the themes in the film later…]
“The broad scope of the definition [of the law],” writes a gentleman named Thad Ackel, “can essentially encompass everyone; from your local flea market vendors and buyers to a housewife purchasing goods on eBay or Craigslist, to a group of guys trading baseball cards, they could all be considered secondhand dealers.
“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.”
Mr. Ackel’s article has gone viral in the last 24 hours.
It appears he is a principal in a Louisiana auctioneer and has a vested interest in overturning the law. But in this case, his interest coincides with that of, well, just about anyone except nosy government officials who want a way to track your transactions.
“If you wish to be paid in cash, you’re a criminal,” says attorney Danielle Waterfield of the Institute of Scrap Recycling Industries, representing more than 1,600 scrap dealers nationwide. “We have a problem with that.”
But if Ms. Waterfield hopes to challenge the statute in court, she’ll have an uphill climb. Federal courts have upheld similar statutes in New York, Mississippi and Tennessee. Those laws were more narrowly tailored to scrap metal, but in each case, they were challenged on the grounds that states and cities can’t ban transactions in legal tender, i.e., Federal Reserve Notes.
Each time, the challenges were thrown out.
“States are saying, ‘We have the right to specify the form in which the payments are made, then you can tender the check for any legal tender you want,’” explains Mark Beebe of the New Orleans law firm Adams and Reese. “They’re not saying this is the only medium you can use and that’s where it ends.”
It gets worse.
“For every transaction,” Ackel writes, “a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered.
“They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports.”
Many scrap dealers do this already. Most people selling their odds and ends on Craigslist do not. So not only are cash transactions banned — the better to create a paper trail — the transaction must also be reported to law enforcement in real-time.
Questioned about the breadth of the Louisiana law, its sponsor, State Rep. Clifton Richardson (R-Baton Rouge), says, “I’m always open to improving it, but I don’t want to weaken it.”
Really?
Regards,
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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napoleonic code?
No more Louisiana purchases for me. I’m one of those cash using criminals. Don’t want me to buy, to visit your State,,, no problem.
Too bad I don’t plan on informing the cops on all the cash transactions I’m going to do more than once a month.
When cash is outlawed, only outlaws will use cash.
What they are trying to eliminate is people working to feed their families. If you visit a scrapyard, you will see an endless parade of entrepeneurs, who are hustling for a living. They are locating junk cars and selling them as scrap, getting paid a handsome profit, and then locating more scrap. They are feeding their families, paying their workers, sons and daughters. Its American enterprise at its best but there is no taxes being paid or collected. Nobody banks the money. You can’t expect the people who have been screwed and abused by the system to all of a sudden support it. They’ll take their business to other states. Then the politicians will put up border check points.
Miguel,
The scrap hunters are also helping clean-up blighted areas. People are just dumping these cars and this metal on our rural land because we can’t watch 24/7. I have no problem with the guys who come and take these cars and metal off my land because if they don’t, then more people will begin to dump there despite all the fencing.
America, you simply have to clean out these good-for-nothing politicians and be sure that you replace them with people who have their head screwed on straight.
So in some parts of America they throw you in the clink for not using the Federal Reserve notes……and in others they will throw you in the clink for using federal reserve notes. Can we quit calling it the land of the “free” now? Between tens of thousands of no knock raids, all the tazer deaths, the highest prison population on the planet, the tapping of all phones and reading of all e-mails, molestation and irradiation at the airport, beating of veterans who are at OWS..etc etc etc. Saying you are free does not make it so.
Wake up people- only a fool pays any attention to the “law” when it has long since become arbitrary and tyrannical. They call your right to drive, carry a gun, or breathe a privilege. We’re in the midst of a police state- learn to find your own freedom and don’t pretend the cops are the good guys. Home of the brave indeed…
You are being ‘kettled’, and you are just going to have to like it.
In Pennsylvania you need a sales tax license to sell at a flea market,they consider you competing with other vendors for customers. That is even if you set up one time,you legally must have license. You are allowed fewer than three yard sales(meaning you can have two)or else you need a sales tax license. You can still sell scrap,but you must sign for the funds you receive. Also they now have some kind of certificate that costs $100 a year if you sell to people online. So I would say Loseriana is just catching up with the rest,and evidently intend to outdo the other states in stealing your freedom. BOYCOTT LOUISIANA PRODUCTS.
It would be silly-easy to perform a DDOS paperwork attack on the the idiots who feel that Louisianans haven’t been tracked, taxed, and regulated enough.
Imagine what would happen if the LA authorities were bombarded with reports from citizens who were simply complying with the law. Too much of a “good” thing could turn into an overloaded system which can’t track its intended victims. It might even result in a de jure or de facto repeal of the law after they realize its unwieldy results.
It might be a little work, but freedom usually is…
Just cancelled my fall trip to the state shopping for antiques. Wow, what an ugly law. How do we elect such horrible people?
No problem.
Don’t use cash. Use precious metals.
In one swell foop, the Louisiana state government has seriously damaged its chances for an economic recovery. My concern is when are the Feds going to copy the good ole boys, and start doing this themselves?
I have to agree, Tom V. If an entire flea market of vendors were to show up at the police station with this information on every transaction, they would have to pull every cop from the streets, and bring in those who are off duty. I do not think it would take very long before police departments would start lobbying to repeal this law. In the mean time, as an antique dealer in Texas, I will not be shopping in Louisiana. So much for my trip to New Orleans this year. I would guess that this law will make most Texas dealers avoid Louisiana.
You cant buy a used car, gold, silver, bikes, clothes, books, or furniture that anyone ever owned before you. good luck people.
Bobby Jindal, the gov. of Louisiana, and a once loved “conservative” has joined the New World Order crowd here in the US. He signed and passed this law just a few days ago. He was once thought of as a potential presidential contender.
We are in serious trouble, my fellow Americans. We are being cornered. Federal, state, and local laws are being used to place us in a box where we are highly controlled by government. Just this week alone, DHS to random search cars in Tennessee…TSA law to make it illegal to use satire in reference to that agency…now this from Louisiana.
Our liberties are being stripped away rapidly now. As freedom loving Americans, we had better organize quickly behind the only effective political entity, the Tea Party movement. If we don’t get organized, we are headed for chains and leg irons and not too far from now.
“Legal Tender” is no longer legal. Everybody(that’s not stupid) can see where this is going.