Posts Tagged ‘Politics’

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Transparency and representation in the Waxman-Markey vote

June 29, 2009

Lynne Kiesling

In his usual trenchant way, Jonathan Adler has hit upon the two things to which I object the most in the Waxman-Markey bill and vote. The first is the one about which I wrote in May: despite all of the tooth-gnashing and knicker-twisting about the cap-and-trade portions of the bill, the really egregious aspects of it are its old-school command-and-control characteristics.

The second is the implications of the quick, ramrod process for bringing the bill to vote before any of our so-called representatives could have physically been able to read the bill, or even to have their staff read it and analyze it for them. With so much horse trading and jockeying happening at the last minute, and without any actual physical copies of the actual final version of the bill upon which they were voting, how can the members of Congress really retain any shred of an argument that they are indeed representing their voters, and that there is any room for public involvement or discourse in debate? Sure, they are representing some of their constituents, the ones who have concentrated enough economic interests to engage in the wasteful rent-seeking that leads to things like last-minute 300-page amendments to appease ethanol producers. If you try to tell me that ethanol rent seeking is on balance value-creating, I will guffaw directly in your face. And this is not the first time this Congress has used this ramrod; the energy bill debate back in February had the same type of process, with House members voting on a bill that they clearly had not had time to read and process.

Jonathan notes:

If legislation of this sort, which establishes the first-ever regulatory controls on the most ubiquitous byproduct of modern industrial society, imposes new efficiency requirements on all-manner of appliances and consumer products, could trigger the imposition of tariffs on foreign products (likely in violation of U.S. trade commitments), furthers the federal government’s environmentally destructive love affair with corn-based ethanol, contains numerous provisions drafted or urged by various special interest groups, and (at least in one version) contained provisions designed to create a national housing code, can be adopted by a House of Congress within hours of being written (let alone becoming public), then any claim of transparency in government is a farce.

This is depressing. With this Congress, have we finally met Ben Franklin’s curse?

“Well, Doctor, what have we got—a Republic or a Monarchy?”

“A Republic, if you can keep it.”

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Cap-and-trade and politics

April 9, 2009

Michael Giberson

From Environmental Capital, reports that selling all greenhouse gas emission permits under a cap-and-trade scheme may not be politically attractive:

Europe already saw what happened when it gave away emissions permits—utilities gobbled up more than 100 billion euros in windfall profits.

The pain for the consumer—i.e., the voter–will be the same whether the permits are sold or given away.

Writer Keith Johnson notes that “for the overall emissions-targets to work, prices would have to rise more in other parts of the economy to compensate” (if, that is, giving permits to utilities serves to limit power price increases).

Billions in profits for companies well represented in D.C. versus non-transparent price increases in unspecified other industries? I guess we can work out the political calculus easy enough.

And for readers who think this is a reason to prefer a carbon tax…, well, I’m not convinced that lobbyists or their congressional aides would keep their hands off the tax code, either.

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The continuing relevance of the bootlegger-and-Baptist model

February 23, 2009

Lynne Kiesling

In 1983 Bruce Yandle wrote an influential article in Regulation, “Bootleggers and Baptists: The Education of a Regulatory Economist”. His model explains how two parties with seemingly incongruent values can come together to get a regulation passed that meets the objectives of both parties. In the bootlegger and Baptist case, both parties benefit from restrictions on Sunday alcohol sales, and will therefore lobby politicians in favor of such restrictions. The bootlegger-and-Baptist model even has its own Wikipedia page. It’s a very powerful model for understanding coalition formation and regulation in many situations.

Recently in Newsweek George Will wrote about Yandle’s model in a column striking a cautionary note about the current increase in government regulation and involvement in the economy. To illustrate the dynamics and the incentives, Will discusses two cases: sulfur dioxide emission regulation via technology mandates, and tobacco regulation.

Will’s column is a good introduction to the bootlegger-and-Baptist model, which really is relevant in many settings and robust to a lot of different contexts. I find it particularly relevant when applied to environmental regulation.

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