The License Raj

I had hoped to check out Shaw’s Tavern roughly in my neighborhood at some point, but apparently instead of staying open the brand new restaurant will be closing since it can’t get a liquor license. Why no license? Well because they soft launched with a couple of charity events before opening without having properly secured the correct special one-day licenses.

That’s all too bad. Walking around Washington, DC it’s difficult not to notice that there are a lot of vacant storefronts in the non-downtown portions of the city. There are also a lot of unemployed working class people, even as the college educated professionals in town enjoy one of the strongest labor markets in the country. It’s a bit of a puzzling situation. Why don’t markets clear? Surely these idle resources—vacant retail spaces, unemployed workers—should be mobilized to some purpose? In most of the country, I think these kind of problems can be attributed primarily to a shortfall of demand. That’s not the case in DC. There’s plenty of demand for bars and restaurants. There’s plenty of space where bars and restaurants could open. There are plenty of people who need jobs. What’s more, there are plenty of people who could use the increased social services that higher tax revenue would provide. Instead, we’re doing this. Not just one restaurant shut down, but a sign to would-be entrepreneurs everywhere that their potential investments are much riskier than a superficial read of market conditions would suggest.