James M. Hohman and Michael Van Beek, Mackinac Center for Public Policy
The Department of Government Efficiency is poring over the federal books to find government waste. The office taps into a populist impulse that says that the government is not on your side but on the side of some special interest. Waste is only one of the ways governments get captured for someone else’s benefit, however. There is a target-rich environment for policies that stick it to the little guy. Governments at all levels have them.
The populist impulse is correct, and the country would be better off if elected officials worked across state lines and partisan divides to go after the policies that hurt the regular citizen. Here are state laws that benefit the few and cost the public:
• Occupational licensing rules create barriers to getting a job without improving safety. They increase costs to consumers and protect those who can afford the extra schooling, training and fees.
• State alcohol regulation enriches existing businesses for no public safety benefit.
• Certificate of Need laws require medical providers to get permission from their would-be competitors to open or expand. This increases costs to consumers and limits their options.
Here are some federal policies that harm the little guy and enrich the politically powerful.
• The Jones Act raises costs for the public in order to protect an uncompetitive shipbuilding industry.
• The Great Lakes Restoration Initiative provides Congress a way to hand out taxpayer money to politically approved causes and organizations. It is just one example of a nice-sounding government program that amounts to little else than funneling money from the many to the favored few.
• Federal student loans are designed to transfer money to universities instead of helping students gain credentials to get good-paying jobs. This can be fixed.
Governments pay wealthy people and businesses, sometimes for no good reason at all.
• Professional sports team owners get taxpayers to pay for their stadiums.
• Selective business subsidies are the classic case of handing out money to the politically powerful. States should stop writing big checks to big companies.
• Hollywood producers shift 20% to 35% of the costs of shooting a movie onto taxpayers.
Unions are powerful political interests that have tilted the law to benefit themselves (rather than their members).
• Teachers unions convinced politicians to keep schools closed long after it was clear that Covid-19 posed no threat to children. Parents were left in the lurch, and students are still scrambling to make up the lost learning.
• Home health care workers have their Medicaid payments skimmed by unions, despite not needing or wanting union representation.
• In non-right-to-work states, workers are forced to give unions money as a condition of employment.
Too much of government has been captured by special interests.
• State utility regulation too often delivers expensive and unreliable electricity to ratepayers, despite its stated intent to do the opposite.
• The incumbent government school monopoly throttles attempts to give parents better options and cares more about getting public money than about educating children.
• Green subsidies force people to pay for products that they don’t want to buy in the first place. The market is unsustainable because people don’t want to buy the products without subsidies.
There are plenty of favors that governments hand out. The recipients aren’t normal Americans. They are politically potent interest groups.
One multiclient lobbyist agency advertised its services this way: “If you’re not at the table, you’re on the menu.” Interest groups tend to hire lobbyists. Regular voters don’t.
It often makes sense for people with a special interest to band together to lobby for policies that give them advantages. It’s less compelling for regular people to join together to fight something that costs each of them only a small amount.
It would be good if the American public focused its cynicism toward the government on these policies. Populist politicians, despite often claiming to help the little guy, hardly seem to notice these unfair policies. Take tariffs: Populists claim to be protecting Americans from foreign trade, but tariffs are just another policy that benefits the few at the expense of the many. Economist Scott Lincicome summed it up well: “Tariffs not only impose immense economic costs but also fail to achieve their primary policy aims and foster political dysfunction along the way.”
American government earns people’s cynicism when lawmakers side with special interest groups and ignore the costs they impose on the rest of us.
If populists persuaded policymakers to get rid of these favors, we’d all be better off.
—————
James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy. Michael Van Beek is director of research for the Mackinac Center for Public Policy.
The populist impulse is correct, and the country would be better off if elected officials worked across state lines and partisan divides to go after the policies that hurt the regular citizen. Here are state laws that benefit the few and cost the public:
• Occupational licensing rules create barriers to getting a job without improving safety. They increase costs to consumers and protect those who can afford the extra schooling, training and fees.
• State alcohol regulation enriches existing businesses for no public safety benefit.
• Certificate of Need laws require medical providers to get permission from their would-be competitors to open or expand. This increases costs to consumers and limits their options.
Here are some federal policies that harm the little guy and enrich the politically powerful.
• The Jones Act raises costs for the public in order to protect an uncompetitive shipbuilding industry.
• The Great Lakes Restoration Initiative provides Congress a way to hand out taxpayer money to politically approved causes and organizations. It is just one example of a nice-sounding government program that amounts to little else than funneling money from the many to the favored few.
• Federal student loans are designed to transfer money to universities instead of helping students gain credentials to get good-paying jobs. This can be fixed.
Governments pay wealthy people and businesses, sometimes for no good reason at all.
• Professional sports team owners get taxpayers to pay for their stadiums.
• Selective business subsidies are the classic case of handing out money to the politically powerful. States should stop writing big checks to big companies.
• Hollywood producers shift 20% to 35% of the costs of shooting a movie onto taxpayers.
Unions are powerful political interests that have tilted the law to benefit themselves (rather than their members).
• Teachers unions convinced politicians to keep schools closed long after it was clear that Covid-19 posed no threat to children. Parents were left in the lurch, and students are still scrambling to make up the lost learning.
• Home health care workers have their Medicaid payments skimmed by unions, despite not needing or wanting union representation.
• In non-right-to-work states, workers are forced to give unions money as a condition of employment.
Too much of government has been captured by special interests.
• State utility regulation too often delivers expensive and unreliable electricity to ratepayers, despite its stated intent to do the opposite.
• The incumbent government school monopoly throttles attempts to give parents better options and cares more about getting public money than about educating children.
• Green subsidies force people to pay for products that they don’t want to buy in the first place. The market is unsustainable because people don’t want to buy the products without subsidies.
There are plenty of favors that governments hand out. The recipients aren’t normal Americans. They are politically potent interest groups.
One multiclient lobbyist agency advertised its services this way: “If you’re not at the table, you’re on the menu.” Interest groups tend to hire lobbyists. Regular voters don’t.
It often makes sense for people with a special interest to band together to lobby for policies that give them advantages. It’s less compelling for regular people to join together to fight something that costs each of them only a small amount.
It would be good if the American public focused its cynicism toward the government on these policies. Populist politicians, despite often claiming to help the little guy, hardly seem to notice these unfair policies. Take tariffs: Populists claim to be protecting Americans from foreign trade, but tariffs are just another policy that benefits the few at the expense of the many. Economist Scott Lincicome summed it up well: “Tariffs not only impose immense economic costs but also fail to achieve their primary policy aims and foster political dysfunction along the way.”
American government earns people’s cynicism when lawmakers side with special interest groups and ignore the costs they impose on the rest of us.
If populists persuaded policymakers to get rid of these favors, we’d all be better off.
—————
James M. Hohman is the director of fiscal policy at the Mackinac Center for Public Policy. Michael Van Beek is director of research for the Mackinac Center for Public Policy.
