The months leading up to a presidential primary, presidential candidates always spend about half their time crisscrossing Iowa to promise every Iowan in every meeting hall that they will continue to support the federal government mandate that forces oil companies to buy billions of dollars worth of corn-based ethanol. The ethanol mandate costs the taxpayers a bundle, hurts the environment, and raises food prices worldwide, as various studies have shown. So why do we still have it?
The ethanol mandate is a good example of Fuller’s Law: When government controls something, the decisions are made politically.
Politicians don’t impose this burden on fuel companies because it is good for the environment, or because it makes economic sense, or because it’s good for the country in any way. It’s none of these things. The mandate is, however, popular with Iowa’s corn farmers, and the other Iowa businesses that make their money from the corn industry. And Iowa’s three million residents carry more weight in politics than the other three-hundred-odd million Americans because they have the nation’s first primary every presidential election year, and give the winner a boost toward the most coveted political office in the land.
Other examples of Fuller’s Law abound.
Take the various kinds therapies that state governments force health insurance companies to include in their insurance plans. Massachusetts, for example, requires every health plan offered by every insurer to cover in-vitro fertilization. If a Massachusetts resident would rather save a few bucks in premiums by choosing a health insurance plan that doesn’t cover this item, tough luck. The providers of in-vitro fertilization have prevailed upon the state’s politicians to make this a mandate. The politicians get campaign contributions and other emoluments, and most voters don’t pay enough attention to the issue to make the politicians pay a price for their cozy relationship with the fertilization lobbyists.
The Cato Institute has taken a look at how various state governments define the “Minimum Benefits Packge.” Many states force the insurers to cover contraceptives, a thing most insurance buyers over the age of sixty would probably rather not pay for. Some states even require the inclusion of hair replacement therapy. Behind each of these mandates is a team of lobbyists greasing the palms and other body parts of politicians.
The decisions, in other words, are made politically.
Early in 2011 there was a scandal of sorts when it was reported in the press that General Electric paid no taxes for 2010, but that fact shouldn’t have surprised anyone. Democrats controlled the White House, House, and Senate in 2010; and GE has a very strong relationship with politicians of that party. GE CEO and Chairman Jeffrey Immelt even has a quasi-government job as head of President Obama’s bogus “Council on Jobs and Competitiveness.” Exempting his company from taxes was just good politics.
In fact, you can get a pretty good idea of how politically connected various companies are by looking at the corporate taxes companies pay.
It’s well known that black Democrats in Congress consistently oppose school choice of any kind, even though allowing black kids better options than the dysfunctional public schools that have been failing to teach them would be the best thing anyone could do for the next generation of black Americans. Once again we see Fuller’s Law at work. The important factors are politics, not children. The public school teacher’s unions can get Democrats to do anything they want, and they clearly don’t want competition. Black children, on the other hand, don’t have an effective lobby.
In the early 90’s federal law forbade condom companies like Trojan to advertise their products on television, but at the same time the government spent tons of taxpayers’ money on TV ads to promote the use of condoms as a “public health” issue. This actually makes sense, if you understand the political forces involved.
For many decades the government gave subsidies to tobacco growers while taxing the living daylights out of cigarette companies. This too makes sense from a political perspective.
Deficit spending, of course, is a classic example of how government decisions are made politically. The unborn don’t have a lobby, or at least not a very effective one. It makes perfect sense for politicians to pay trillions of dollars buying votes from those of us who are old enough to vote, just as it makes perfect sense to impose about a third of the cost of these spending programs on generations not yet born.
Yes, this amounts to taxation without representation, but that’s the whole point. From a political perspective it makes perfect sense.