Tuesday, April 14, 2015

Republicans Support Big Government and Wealth Redistribution

This just keeps on coming up again and again, so I'm going to list some strange instances where so-called "conservatives" and even libertarians are opposed to free market principles. Let's start with perhaps the most justifiable meddling:

A lot of conservatives (libertarians at least) are opposed to eminent domain. This basically gives government (or possibly private companies) the ability to force landowners to sell their property. It seems onerous and unfair, but can be necessary for large infrastructure projects that may cross many different parcels. Eminent domain requires fair compensation (and this takes into account opportunity cost in possibly developing or selling the land for higher value). A Texas bill has recently advanced that would eliminate eminent domain. Fair enough if you are principally opposed to it. The problem is that the bill literally singles out a proposed privately built high speed rail line: https://www.texastribune.org/2015/04/08/bill-targeting-bullet-train-project-moves-senate-f/.

"Currently, hundreds of private firms have eminent domain authority in Texas, including pipeline companies, utility companies and telecommunication firms. More than a dozen private railroad companies also have that authority, according to an unofficial list maintained by the state comptroller."

An earlier bill opposing rail would require that any county that is along the route would have to approve of HSR in a referendum: http://www.bizjournals.com/dallas/news/2015/03/11/rural-lawmaker-files-a-bill-that-could-kill-texas.html?page=all .

Will Metcalf: “We need more roads for citizens to travel to ease our existing roadways. We do not need a High Speed Railway in Texas that will only benefit a few, while at the same time disturbing thousands of citizens within its path.”

Interesting considering that the train will be privately funded (no federal subsidies) while few roads are directly paid for by user fees. The exception to this is toll roads (which can also double as congestion pricing), but these have fallen out of favor among Republicans http://transportationblog.dallasnews.com/2015/03/texans-lawmakers-rally-for-anti-toll-road-legislation.html/. Conservatives are not unanimously opposed to toll roads though-the libertarian think tanks CATO and Reason are strongly support of tolls and congestion pricing.

Moving further along in transportation, many conservatives are opposed to any sort of free market with regards to urban policy. This means they support segregated zoning, minimum parking requirements, free on-street parking, density limits, and basically anything that could be perceived as smart growth even if involves removing onerous regulations. If you are interested in more, read Market Urbanism. Again I will point out that this isn't true for all conservative groups, as Reason is pretty consistent against regulation (CATO not so much). Ed Glaeser, a Chicago-school mostly conservative  economist, has written several books in defense of cities and density.

Back to local issues for a minute, Arizona's governor has just signed a bill banning cities from imposing any fees (or banning) any containers or Styrofoam boxes. I'm not supportive of bans but would support charging disposal fees, especially if there is evidence of significant presence. But even if this were only restricted towards bans, it is quite against small-government principles to prevent localities from making rules that have no harm outside their jurisdiction. 

It gets better though. Conservatives are opposed to high-speed rail, even when it is fully privately funded. Understandable when most HSR systems are government-backed, a less so when private Texans (likely backed by Japan's government though) are keen to build a profit-driven system. But what about other big infrastructure projects? You've already seen that many Republican politicians are fine with building more roads that aren't funded by user fees, but it doesn't end there. As I'm sure you know, California is in the midst of a massive drought. A free-market approach to this issue would be to establish clear property rights for farmers, allow for water markets, and set a high enough price for urban water to prevent massive shortages. Yet many Republicans want more supply, economics be damned. A water bond passed in California and Republicans complained that it wasn't expansive enough. Also some "conservatives" are complaining that California isn't doing enough to support desalination, even though it is usually the most expensive option for water supply.

For some contradictory statements, have a look at the current California Republican platform:
"Agriculture, California’s leading industry, exemplifies the free market at work... We support making cuts in wasteful state government spending in order to support state infrastructure investment in above-ground storage using general fund dollars." Lost is the irony in using general tax dollars to subsidize special interests.

Note that Republican apathy (at best) towards market-oriented solutions to water (and other natural resource issues) is long-standing, demonstrated in this WSJ op-ed from 19 years ago: http://www.wsj.com/articles/SB843602743228131500 (Google this page to view it without being a subscriber).

"Similarly, Republican leaders could have followed the lead of the Environmental Defense Fund and embraced water markets as a better way to govern the nation's water use. Or they could have turned power over local water issues to citizen groups such as Idaho's Henry's Fork Watershed Council. Instead, the House passed a Clean Water Act sculpted by special interests, designed to shield them from responsibility for pollution. And the Senate approved $700 million for the Animas-La Plata water project in Colorado--a classic pork-barrel project that will give farmers a $517 million irrigation system at a cost of only $20 million."

I will note again that the conservative ambivalence or outright opposition to free markets is not unanimous: see Reason, Greg Mankiw, and Econlib for some more sensible discussion.

You can see through all these examples that "conservatives" love free markets-except for when they don't, they are all for local control-except for when it conflicts with their social prerogatives, and are all for limited government-except for when it supports their idea of the "right" infrastructure. There are plenty of other issues where Republicans are generally supportive of increased government, most notably in military spending, but this is at least justified by their outlook on foreign policy. There also seems to be a tendency of conservatives to make hated (by them) welfare programs less economically efficient by limiting choice. Similarly, Republicans cry out about market-based environmental policies that are less distortionary (eg more market-friendly) than regulations they have little real power to stop.

I have noted that the conservative support for big government is not unanimous, but economists and policy wonks are usually drowned out by political rhetoric. I have been careful here to not give too much attention to environmental externalities aside from the bag pricing, as there can be significant room for disagreement as to the "true" cost of these issues. Purely from an economically free market perspective, conservative politicians are quite often on the wrong side of things. So why is this? In my opinion, a lot of it has to do with culture. Consider this graphic from Pew:
Conservatives Attracted to Small Towns, Rural Areas; Liberals Prefer Cities
Note that many of the issues I brought up have a very large urban and rural divide with respect to the distribution of costs and benefits. High speed rail is almost solely for the benefit of cities, and will likely serve no purpose for rural farmers unless there is somehow a provision for freight train usage of the tracks (unlikely). "Free market" policies in high-demand already-urbanized areas may result in greater densities and less driving, pushing the area closer to a liberal-friendly city. Congestion pricing may impose greater costs on dense urban areas, but it also would make driving more expensive and make carpooling (which means less "freedom"), telecommuting, mode shifting, and moving closer to work more attractive. Similarly, a market approach to water management will hurt conservative farmers and water-thirsty suburbanites, while making city living (with much lower per-capita urban water consumption) more economically attractive. 

In the end, it seems that Republicans, even Tea Party Republicans are not stalwart defenders of free markets and limited governments when it conflicts with ideal communities. They prioritize freedom to make conservative-friendly lifestyle choices, even when those choices are not economically sound. They are opposed to wealth redistribution-except when wealth is transferred to conservative communities. Of course, the Democratic party has plenty of flawed and contradictory economic positions as well, but its philosophy is less dogmatic and less homogeneous. Next time a conservative rants about burdensome regulations and big government, tell them to look in the mirror.

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