Archive for the ‘Regulation’ Category
David Godow at Reason Foundation reports on D.C.’s sin tax on plastic bags. The 5 cent levy on bags was designed to raise $3.5 million to clean up the Anacostia River. However, Godow scoffs, the levy yielded much less than that mark, apparently due to the tax working too well and persuading consumers to avoid the bags and the tax:
This highlights the silliness of the dual mandate most sin tax’s experience: both reducing consumption and raising revenue. Clearly, success in one of these objectives necessarily means less success on the other. Now, D.C.’s bag tax wasn’t implemented specifically as a revenue raiser; tax proponents can still claim victory due to the potential positive effects the levy has had on pollution in D.C. waters.
I don’t see why this is “silly.” Obviously, the tax was going to have both the effect of raising some revenue and discouraging the use of plastic bags. That people were apparently easily nudged from their use of plastic bags suggests they were probably already poised to kick the habit. So the tax did better than expected in the externality-reducing category, and accordingly worse in the revenue-raising category. So what?
I really don’t have a problem with this kind of modest tax to try to identify and reduce externalities. I do harbor a presumption against paternalistic legislation, but, unlike some libertarians, it’s a rebuttable presumption. I suppose I feel that there is really little reason to keep on using plastic bags, but that because the practice is entrenched, it might take something like a modest tax to help break the habit. Again, I don’t prefer to use the government for this sort of thing, but then maybe I’m also a little depressed about stories like the Great Pacific Garbage Patch and how we have no ideas to fix it. If it takes a couple of nickels to help us identify one of the externalities that contributes to such problems, I will at the very least happily withhold any objections.
Here’s Alex Knapp explaining why government really doesn’t need to be smaller:
Back in my libertarian days, whenever somebody complained about government corruption or abuse of power, my stock libertarian response was always the same: “Well if we made government smaller, we wouldn’t have that problem!”
This was an apprehension that was cured by, you know, reading a few history books. Back in the 19th century, federal and state governments were far more corrupt than they are today–even though they did less!
Knapp traces the end of systemic government corruption with the Civil Service Reform movement, “which marked the beginning of the end of the spoils system and patronage.” For this, we have Chester A. Arthur to thank, “[a] President so good even Mark Twain liked him.”
By ending spoils, creating written examinations for civil service, and other reforms, Arthur and Congress helped create a federal bureaucracy that was more efficient, more professional, and less prone to corruption. I recall studying the Federal bureaucracy as a student and one thing that does leap out is the relative paucity of corruption. Governments from other countries around the world have sent delegations to the United States to learn our institutional controls.
Steven L. Taylor also defends bureaucracy as a good thing.
This all strikes me as an interesting challenge to the conservative/libertarian push that’s gained a lot of traction over the past several years, best symbolized by Ronald Reagan’s great line, “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’” However, I think Knapp is being too narrow by talking only about traditional forms of fraud and corruption. True, most modern western democracies, including our own, have largely ridded themselves of many of the more obvious forms. The abolition of the spoils system is one, as Knapp points out. Strong open meeting requirements, mass media, increases in wealth, and thus more time and access to the political system, were also significant contributors.
But do we really believe patronage, backroom deals, and outright fraud are the only sorts of threats government presents? That, so long as we can rid ourselves of those forms of abuse, we need no longer worry about the government’s size? Certainly not. The blatant fraud and corruption Knapp is referring to are neither the only nor the worst kinds of mischief government engages in. Regulatory agencies are insulated from the political process and yet empowered to both legislate and adjudicate on their own. Just like any other governmental body, capture by special interests is a serious problem in the administrative agency sector. Thus, agencies determine which businesses or industries will receive the benefit of subsidies or other favorable policies, or whether individuals will or will not retain liberty to make certain choices. These unelected bureaucrats have increased the size of federal law exponentially, accounting for the vast majority of the laws to which all Americans are subject. Moreover, challenging these laws requires knowledge of an entire separate body of agency law that makes their actions subject to a much more lenient discretion than other acts of government.
The point is this: Fraud and corruption may be difficult to spot and prove, but they are substantive corruptions that can and have been ameliorated in the ways mentioned above. Bureaucracy, on the other hand, purports to provide procedural cover for substantive injustices. The enlightened criminal robs a bank not wearing a mask and wielding a gun, but wearing a suit and holding a pen. The enlightened statist wields the power of the state not with backroom deals and political favors, but by deluging the public with thousands of federal and state lawmaking bodies. Once the bureaucratic mechanism is in place, the mischief it creates cannot quite be called “fraud.” But there’s something intrinsically unwholesome about the whole damn business that undermines the legitimacy of regulatory lawmaking.
This article at Democracy in America makes a good point. We have the technology to save kids’ lives by preventing the sort of fluke auto accidents—backing over children, such as in driveways, and especially by elderly drivers—that just seem like they ought to be preventable. But implementing that technology would be extremely expensive relative to the number of lives saved: $20 million per life per year. It’s a great example of how our ability to identify externalities, and our desire to stamp them out, has outpaced our ability to mitigate them through sensible, market-driven solutions. Instead, politicians seize on these kinds of issues, making hyperbolic statements like “There is no more tragic accident” than this, and defying anyone to resist any legislation necessary to eradicate it.
Here’s an unusually trivial topic: the volume of television commercials. Kevin Drum thinks they’re too loud and ought to be regulated. I disagree. As usual, he’s all too eager to give the government a new facet of life to regulate, no matter how trivial. And this even though he concedes there are market alternatives that he just wasn’t aware of. (“‘[T]here are various technological solutions from companies like Dolby and SRS that help keep TV volumes on a more even keel.’ Really? I didn’t know that.”) I remember first seeing TV’s with audio leveling technology to address this very problem many years ago.
You’d think if it were important enough to regulate, it would be important enough to have done a minimal amount of poking around to discover there was already a solution to the problem.