Time has a story on the impact of state and local regulations on market innovators like Tesla, Uber and Airbnb. There’s an opportunity here for Republicans, but it’s an opportunity we are unlikely to seize.
From the article:
Airbnb, a website that allows people to rent out everything from vacation homes to spare couches for short-term stays, works great for everyone but conventional hoteliers and cities trying to bilk travelers for tourist taxes. Operating in 192 countries and typically showing hundreds of thousands of offerings, Airbnb has faced stiff regulations in towns supposedly famous for their weirdness and openness to lifestyle experimentation, such as Austin, Texas (which charges hosts an annual licensing fee and limits the number of participants) and Portland, Oregon (which has banned the service in residential neighborhoods). In New York, rent-control advocates are teaming up with hospitality-industry heavyweights to try and shut down Airbnb and similar services.
Look carefully for the hand of the notorious Republican bogey-man in this piece and you will not find it. Sure, the Feds play their part in limiting competition and protecting economic incumbents, but it’s an extremely small part. Washington has nothing to do with the fact that I can’t use Uber to get to O’Hare. It’s not Washington that prevents food trucks from revolutionizing dining in freedom-loving, gun-toting downtown Houston.
Where were the “liberty” advocates of the Tea Party when Houston entrepreneurs were trying to break through stifling local regulations? Probably out protesting at abortion clinics and that gets to the heart of the problem.
It is harder than most people think to use use Federal power to build market protections. It happens, like in oil drilling, television broadcasting, and Internet service providers, but it accounts for a minimal fraction of our overall regulatory burden. Federal regulations are the simplest to track, the easiest to fight, the most practical to mobilize resistance against.
The forces that most complicate efforts to introduce innovation, and the creative destruction that accompanies it, are preferential rules, taxes and fees scattered throughout the more than 10,000 local government entities in our country. The City of Wheaton, a Republican bastion here in the Chicago area, issued regulations in 2010 to control the size and placement of RedBox machines. Why? A councilman described it as a “preventive measure.” What they were looking to prevent he did not say.
These kind of regulations exist everywhere, regardless of party or politics. The simple if cynical fact of the matter is that a local councilman is far cheaper to “influence” than a Congressman. It doesn’t take many of these nuisance regulations to gum up the works for a company trying to move into new markets. Though you hear Republicans rail about government intrusions in the marketplace you don’t see them do anything about this class of regulation for good reason.
It is politically expensive on many levels to tackle local regulations that protect established hotels, taxi services, restaurants, and other interests. On the other hand, it is politically cheap to target homosexuals, immigrants, or abortion clinics. There are no entrenched financial interests to confront and no hard choices to make.
It’s a fine formula. Complain about regulation in the abstract, where it matters little while focusing your real energy on poorly organized or financially weak targets who cannot hurt you (in the short run). Talk about EPA rules or government spending, abstract subjects far removed from the bump and grind of the political ground game. Meanwhile your real legislative attention is directed at under-represented scapegoats with little ability to fight back.
Companies keep their politically purchased market preferences while teen girls lose access to a safe abortion. That’s the political calculus that has made the GOP the party of social conservatism and left the party largely toothless in the real world effort to promote a more dynamic, prosperous economy. That’s why there is no major political force in the US championing the kind of economic dynamism that the Republican Party pretends to support.