Next Time, Kick the Tires
In a recent post, I wrote:
I think progressives would benefit, alongside the rest of us, if their movement put a higher premium on simplifying government, making it transparent, and avoiding the implementation of structures certain to be captured by special interests at some point, no matter how elegant or appealing their initial design.
Now I’ve got an example! It is owed to Conor Clarke, whose blog is a worthwhile daily read. He writes:
One thing you can say about the new “Cash for Clunkers” legislation — approved by the Senate yesterday and heading to Obama for a signature — is that it’s not as bad as it could have been. And yet the project started with such high hopes! You had Alan Blinder calling it a “remarkable” public policy hat trick: We could stimulate the economy, improve the environment and reduce income inequality all in one go! And all by having the government buy and scrap some crappy old vehicles.
The idea sounded nice, but it was not hard to see the problems. If the government artificially raises the price of crappy old cars, it will create market for fixing up crappy old cars no one drives — hardly an efficient public policy goal. (Last year Steven Levitt hypothesized that the program might actually increase the number of Clunkers on the road.) And if the program lasted for any extended period of time, the effects on income distribution would be tiny. Sure, the immediate beneficiaries would be the current owners (Blinder says most Clunker owners are downscale families). But, after the initial round of sales, the price of used cars would go up to reflect the government subsidy. That wouldn’t exactly be a boon to the driving poor.
But, as near as I can tell, the Bill that passed the Senate avoids the big problems. Will Wilkinson and others have pondered some clever schemes for ripping off the federal government and destroying the environment at the same time, but I haven’t seen one that will work. Why can’t Will sell his fuel efficient Civic, buy a smoggy old truck, trade it to the government for $4,500, and buy a brand new car that pollutes more than the original Civic? Because your clunker must be “continuously insured and registered to the same owner for at least one year” to claim a voucher, and the window for the trade-ins only runs from July 1 to November 1, 2009. (On the other hand, the trade-in policy is so narrow and confusing that I’m not sure there’ll be lines running around the block to take advantage of it.)
The main problem with the bill, I think, is one Ryan Avent latched onto last month: It’s poorly targeted. You can trade in an SUV that gets 17 mpg and buy one that gets 19 mpg with a $3,500 helping hand from the federal government. On the other side of the docket, you can scrap your 19-mpg passenger car, buy a 30-mpg one, and get zilch. (Or maybe a thank you.) That’s because the voucher benefits are all or nothing, depending on whether you cross the 18-mpg line.
Maybe there are some net gains for the environment in there. But the structure looks more like a gift to the auto industry than a gift to mother nature.
As the excerpt illustrates, these failures were all too predictable — when a huge well-connected auto industry stands to benefit from a certain piece of legislation, and the other beneficiaries are diffuse poor people and Mother Nature, which way do you think it’s going to skew? When you have to draw complex rules to keep people from gaming the system, how efficient is the policy ultimately going to be?
There are things to admire about the progressive embrace of wonkery, but this example illustrates a shortcoming — legislative schemes that seem targeted and efficient in a white paper are only enacted if they pass through a political process that inevitably corrupts them.
So what would I ask of progressives? That they factor the most predictable ways legislation changes into their wonkery, and occasionally conclude that though the platonic iteration of their clever idea might work, it is nevertheless a foolish idea to pursue, because the actual outcome is likely to be a costly boondoggle.
As the excerpt illustrates, these failures were all too predictable — when a huge well-connected auto industry stands to benefit from a certain piece of legislation, and the other beneficiaries are diffuse poor people and Mother Nature, which way do you think it’s going to skew?
There is huge irony here, and a long history. It’s ironic that “progressives” are the ones who are constantly warning us of the evils of big business, yet it’s progressive policies that have often increased the power of big business at the expense of small business.
There are things to admire about the progressive embrace of wonkery, but this example illustrates a shortcoming — legislative schemes that seem targeted and efficient in a white paper are only enacted if they pass through a political process that inevitably corrupts them.
Then why the hell would you admire their wonkery, and why the hell would they embrace wonkery, if it inevitably corrupts them (and I agree it does)?
So what would I ask of progressives? That they factor the most predictable ways legislation changes into their wonkery, and occasionally conclude that though the platonic iteration of their clever idea might work, it is nevertheless a foolish idea to pursue, because the actual outcome is likely to be a costly boondoggle.
Conor, I can’t tell if you’re being facetious or not. It sounds to me like you’re advising progressives to “occasionally” be smart rather than all the time stupid. If it’s likely to be a boondoggle, then maybe progressives should just learn that it’s better to keep government out of it.
But then, since progressives are smarter than the rest of us, there’s no reason to suppose they will listen to anyone.
— jd · Jun 20, 01:27 PM · #
Yeah, I’d prefer to just raise the gas tax, but we can’t do that because conservatives are big fans of volatile energy markets or something. You make it sound like progressives don’t like simple solutions, when in reality the simple, market-based solutions are the ones conservatives love to demagogue against most.
Neither Avent nor Clarke seemed willing to say that this legislation will be a net harm to the environment. There are some number of people who would have got a more efficient car if they could afford it, and there are some people who were going to get a more efficient car but now instead will get a new SUV instead. Given the shape of the market now, and given impending higher energy prices, I tend to think there are more of the former.
— Consumatopia · Jun 20, 01:55 PM · #
You make it sound like progressives don’t like simple solutions, when in reality the simple, market-based solutions are the ones conservatives love to demagogue against most.
You mean simple market based solutions like a gas tax?
— jd · Jun 20, 02:14 PM · #
Yes. Quit getting your filthy externalities all over my general welfare, bub!
— Consumatopia · Jun 20, 02:25 PM · #
JD seems to be illustrating how this corruption is usually introduced: “sorry, your majority party can’t have the bill you want because I believe the problem it supposedly solves, like global warming, doesn’t even exist.” The way it should work, is that the people who have religious reasons to disbelieve in consensus science shouldn’t even be at the table, but the way it works now, the ideologically obstinate are allowed to dilute the agenda of the party that defeated them.
I mean, can we get our last Senator, please?
— Chet · Jun 20, 02:30 PM · #
Several years ago there was a referendum in my home state of Missouri to finance new highway construction via an increased sales tax. It was shot down. My main reason for voting against it was that I thought a gas sales tax was a better way to finance road construction, since its beneficiaries would be the ones paying for it.
In other words, there are a lot of reasons for a conservative like myself to support gas tax increases. I suspect that a lot of the demagogery Consumatopia observes is not at gas taxes generally, but gas taxes for dubious environmental reasons. It’s anti-environmentalist demagogery, not anti-market demagogery. I don’t have to defend the former to issue that clarification.
Also, Cons., I’m not sure about your defense of gas taxes as market-based. The only way gas taxes could decrease volatility and all the other nice things you hope for is by keeping the cost artificially high, which doesn’t seem very market-based at all.
Don’t externalities only apply when you can identify and compensate an aggrieved third party? Considering how many Americans either drive or ride busses, that might be difficult.
Also, @Chet, you realize you are basically arguing for scientific technocracy, right?
— Blar · Jun 20, 03:02 PM · #
I don’t know what that’s supposed to mean. I’m arguing that our public policy should be based on verifiable reality, and science is how we detect that reality.
Thinking that you’ve got the back page, some kind of cheat, some way of getting to reality that’s simultaneously easier and more effective than science – I don’t know what the word is for that kind of self-gratifying idiocy, but I understand around here it’s called “epistemological modesty.”
— Chet · Jun 20, 04:21 PM · #
I wasn’t sure what you meant by “religious reasons” since GW skepticism isn’t religious, but it sounded like you were saying that those who disagree with scientists don’t have a place making policy that has anything to do with science. Ergo, technocracy.
— Blar · Jun 20, 05:45 PM · #
In other words, there are a lot of reasons for a conservative like myself to support gas tax increases. I suspect that a lot of the demagogery Consumatopia observes is not at gas taxes generally, but gas taxes for dubious environmental reasons.
Here’s the thing—we can’t get a gas tax, but we can get a cash for clunkers program. Those policies are aimed at the same end—decreasing gas consumption. But the conservative finds it easier to demagogue against the comparatively more simple, transparent and market-based solution.
— Consumatopia · Jun 20, 05:53 PM · #
It is, actually. It’s based on the religious belief that God would never let people do something as bad as climate change to His Earth. Just ask the deniers! They’ll tell you that “humans can’t have that kind of power.” What do you think they mean by that claim?
— Chet · Jun 20, 07:04 PM · #
Obviously that all those scary storms and floods are not because man burnt too much carbon, but because we have awakened the wrath of Thor.
This also explains why so many religious conservatives believe that gravity is just God’s way of hugging us closer to the earth.
Are you saying that the cash-for-clunkers program got passed by a Democratic majority Congress because conservatives wouldn’t pass a green tax on gas?
— Blar · Jun 20, 07:53 PM · #
Are you saying that the cash-for-clunkers program got passed by a Democratic majority Congress because conservatives wouldn’t pass a green tax on gas?
No. “finds it easier to demagogue against” not “votes against”.
And, of course, they’d demagogue against the means, not the “dubious” end.
— Consumatopia · Jun 21, 12:10 AM · #
It’s pretty clear that the religious zealotry in the environmental debate resides with the global warming alarmists. No amount of skepticism or skeptical scientists will ever convince them that global warming is either not happening or not going to cause Armageddon or is not preventable by anything we do.
— jd · Jun 21, 02:04 PM · #
Consumatopia wrote:
Neither Avent nor Clarke seemed willing to say that this legislation will be a net harm to the environment.
That’s the key. What will be the actual effect of this bill? If it is in fact a costly boondoggle, Conor F’s point is valid. If not, then not. All I see on either side is pure speculation — a thin reed on which to hang a post like this.
—
Chet wrote:
the way it works now, the ideologically obstinate are allowed to dilute the agenda of the party that defeated them.
Remember a few years ago when the Republicans were considering the “nuclear option,” and the only left-of-center blogger who came out against the filibuster was Yglesias? How times change…
(And it’s not like 60 Democrats is a magic number, as long as Nelson, Landrieu, etc. are among them.)
— dj · Jun 21, 08:00 PM · #
What changed was that Republicans, once a Senate minority, used the threat of filibuster on every single piece of legislation. Every single one.
To the point, now, that the media treats every single Senate bill as requiring a 60-vote supermajority, despite there being no such requirement in Senate bylaws or the constitution. That’s just how accepted it is that Republicans will filibuster – no matter what bill it is.
When the Republicans contemplated the nuclear option, the filibuster was a necessary and rarely-used check on a lock-step, 51-vote ideological cohort enacting an agenda rejected by a majority of voters. Now it’s a tool used to obstruct the agenda democratically supported by the people.
Use and misuse. You can support a tool used properly and oppose its improper use as well. I don’t see the contradiction.
— Chet · Jun 22, 03:18 AM · #
Conor:
The name for this is The Algorithmic Theory of Law. Each of the imperatives you mention can be reduced to problems of algorithms and computation from the System’s perspective.
— Sargent · Jun 22, 03:18 PM · #