Wednesday, July 6, 2011

The Shadow Economy in California and New York

The New York Times had two recent articles highlighting the creativity of the informal economy. The first, which appeared in the July 5 edition, pointed out the existence of thriving 'pop-up' used car lots in Southern California. OK: so they're not exactly lots. But the idea is that entrepreneurs are parking cars on streets where parking is allowed on the weekends and putting price tags in the windows. Merchants complain that the unofficial sales outlets are stealing parking spaces their customers should be able to use. Los Angeles County officials apparently agree, and have proposed an ordinance making it illegal to put a for-sale notice on any parked car on certain streets. "This attempt to use the street as a place of business creates a hazard for businesses and residents," LA supervisor Gloria Molina told the paper.

The second Times article, which ran in the dining section on July 6th, was a profile of Cooking Channel host Ben Sargent. The paper reported that Sargent, now the star of 'Hook, Line, and Dinner' on the cable outlet, recently "hawked samizdat lobster rolls out of his apartment," using the alter-ego "Dr. Claw, a Beantown-accented seafood gangsta." Sargent operated an unofficial lobster restaurant and home delivery service from his Brooklyn apartment, but ended his stint as Dr. Claw after being challenged by the fire department and receiving a cease-and-desist letter from the NYC health department.

So, let's try to get this straight: you can sell a car if you put a sign in your driveway but if you're an apartment dweller without an off-street slot, you can't pop a sign in your car window. Similarly, you can make and serve lobster rolls to 100 friends without a license but can't sell the same lobster rolls to 100 customers.

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