Sen. David Holt details ‘Black Friday’ reform struggle
Story by Patrick B. McGuigan on June 18, 2013 . Click on author name to view all articles by this author. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
By Patrick B. McGuigan
In the 2013 legislative session, State Sen. David Holt, R-Oklahoma City, shepherded into the statute books a major economic policy reform. He says it was not easy, despite the overwhelming majorities Republicans have in both Houses of the Legislature.
In fact, the first-term legislator told The City Sentinel, his drive to change state law to allow steep retail price discounting might have been the toughest “sell” he has had to make to his colleagues in the Legislature.
Holt co-sponsored Senate Bill 550 with state Rep. Tom Newell, R-Seminole. The new law, signed by Gov. Mary Fallin and taking effect on Nov. 1, repeals provisions that had required (since 1941) retailers in most cases to sell products for at least six percent more than they paid for them.
In an interview with The City Sentinel, Holt said, “Current law created a statutory price floor, forcing consumers to pay higher prices for no other reason than the government said they had to. That is essentially a tax, payable directly to retailers. If you placed a full repeal of such a thing on a statewide ballot, it would pass 90 to 10, and the ten percent would just be confused.
“But at the Capitol, things get weird, and that’s why this statutory price floor has been untouchable for 70 years. Efforts have been attempted for decades to repeal or amend this law, and they all failed. To make the significant changes we did, we had to be extremely persistent and we had to overcome at least two major forces.”
For decades, state law had the practical effect of limiting the positive impact of “Black Friday” (the day after Thanksgiving) for Oklahoma’s consumers.
Holt said the first major force opposed to change was “a populism that, counter-intuitively comes at the expense of the populace. Despite our reputation as a ‘red state,’ any expansion of the free market meets resistance from the populism that spawned this law in the first place.”
He continued, “I would argue that ‘populism’ should prioritize the many consumers paying higher prices above the few business owners who want a profit guarantee. But the dominant populist argument in this debate held that the price floor was necessary to protect small business from a larger retailer’s ability to charge a lower price.”
Holt argues that price floors “are a means not justified by the end, that other statutes protect against predatory pricing, and that most states have no price floor, but still have small business.”
However, he continued, “In the end, we had to compromise with the populist view. We didn’t get to repeal this bad law like we wanted, but we amended it in a way that will deliver lower prices and the free market on most products most of the time. It’s certainly a vast improvement over the current law.”
So, what was the other anti-reform impediment?
Holt, who was elected in the historic Republican surge of 2010, said that was “the reality that not much gets done at the Capitol until all the special interests have been satisfied. That’s why you see the exceptions we had to write into the bill.”
Those exceptions include maintenance of the six percent “margin” for groceries, drugs, gas, and lumber products. Holt explained his motivation for balancing a pure reform with a possible reform: “We had to be persistent, diligent, and open to compromise, or else the bill would have died a dozen times. As a result, the final product was less than ideal but it’s still a vast improvement over the current law.”
The discussion with Holt broadened to include a response to commentaries by this writer, and others, who have wondered why fiscal and free market conservative reforms have not moved faster since Republicans took complete control of state government in 2010.
Holt reflected, “One explanation I subscribe to is that even with large Republican majorities, classic conservatism has had to compromise with Oklahoma populism. That populism seeks certain outcomes, such as plentiful and high-paying government jobs, guaranteed profits for small business, and robust protections for the populace.
“Meanwhile, Oklahoma populism isn’t terribly concerned that the means to attain those outcomes — such as a high income tax, strong local government unions, bloated and numerous agencies, generous pensions, price floors, and regulation — violate basic tenets of classic conservatism.”
In 2012, Sen. Holt was one of Oklahoma’s Presidential Electors. He represents parts of northwest Oklahoma City, and the towns of Bethany, Warr Acres and the Village.
A decade ago, he worked in the nation’s capital for President George W. Bush, served on the staffs of U.S. Sen. James Inhofe, R-OK, and then-Lt. Gov. Mary Fallin and, for four years, as chief of staff for Oklahoma City Mayor Mick Cornett. Also last year, he finished work on “Big League City: Oklahoma City’s Rise to the NBA,” an insider’s account of the successful effort to bring the Thunder franchise to the Sooner State’s capital city.