Drunken Beanie Babies
Once upon a time, in a world not-so-very-far-away, there was a short-lived craze to “invest” in Beanie Babies. Several local people actually put their retirement account money into plush toys as an investment.
People were paying premium prices for “rare” toys, or the one that was currently in popular demand. While the manufacturer was selling them at the normal retail price of less-than-ten-bucks, people were going insane and paying out premium prices as an “investment” in the “rare” toys. The maker of the toys did not get any part of these high prices that were being paid by speculators.
These were an item currently being made. Now, Picasso paintings can command a premium price as an investment because the world contains a finite number of them, but an item still being produced can always be produced in increased quantities.
Which brings me to the “drunken” part of my tale…
The city of Minot sells a liquor license for $3,125 per year. That is what everybody should be able to pay to purchase a liquor license from the city of Minot. There should not be any limit on the number of liquor licenses issued in the city – just let the market determine how many places can turn a profit by selling liquor. If I want to buy a liquor license and hold dollar-per-cup keggers in my garage, that license should be available for me to purchase. If a club wants to sell beer at their club meetings, they should be able to buy the license to do so.
Current license holders are screaming objections to issuing more licenses. They claim if the city opens the doors to competition, it will cheat them out of all the money they spent on their investment.
Ummmmmm – no. Just like the people that paid a premium price for real estate after the flood, they paid the “going rate.”
Much like those gamblers that speculated a purchase of Beanie Baby “collectibles” would increase in value, they have discovered that not all investments will retain the same value we pay for them originally.
Adding a huge “application fee” for new license holders is wrong. Minot already has a reputation of being the “good ol’ boys club” and working hard at keeping out new people. Don’t add more fuel to that fire.
Not to mention with depreciation the license owners have already received some (or all) of their money back.
Depreciation has allowed them to reduce their income tax liability by a percentage of the cost of the liquor license each year.
In essence current license holders are trying to have their cake and eat it too.
City should up the cost from 3125 to 5-10k per year to handle perceived cost of extra law enforcement and let the market weed itself out.
side note: Licensing out of your garage would be a horrible idea. Along with owning a license you allow inspections etc. Do you want the govt in your house all the time? Not to mention your homeowners insurance or lending institution (assuming your house isn’t free and clear) probably wouldn’t allow it.