Baptists and Bootleggers: The Depressing Reality of Politics in Action

Baptists and Bootleggers: The Depressing Reality of Politics in Action

It’s apparent to anyone willing to look that a wide gap has grown between a Washington/Wall Street political class and the nation they want to rule. Less clear to many is the reason why.

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Much of the governmental dysfunction is explained by a concept known as Baptists and Bootleggers. Essentially, major government laws and regulations are passed by a combination of true believers and those who can profit from supporting that belief.

So, Prohibition came about because Baptists really wanted people to stop drinking. However, their efforts were supported by Bootleggers who would make money from the sale of illegal alcohol. The two groups didn’t have to work together or like each other. Many of the Baptists probably didn’t even know that their idea of reform was financially supported by people who were in it only for the money.

But for political actors, this combination was powerful indeed. They could self-righteously claim to be standing against the evils of drink to please the Baptists while pocketing cash from the Bootleggers.

The theory was first proposed by Bruce Yandle more than 30 years ago in Reason magazine. Now, Yandle and Adam Smith have teamed up to expand the theory in a full-length book: “Bootleggers and Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics.” It’s a must-read if you want to understand how politics really work. Because it so accurately describes the unholy alliance between Washington and Wall Street, it’s also very depressing.

It’s important to note that those playing the role of Baptists don’t have to be religious; they just have to believe passionately in their cause. Currently, as the book documents, fervent environmentalists play the Baptist role clamoring for more regulations to support the cause. All of their passion ends up paving the way for corporate bootleggers to line their pockets.

This approach also explains one of the oddest characteristics of President Obama’s health care law. When the president was promoting it, he attacked the nation’s insurance companies and health care corporations in very strong terms. Now, however, those same companies are among the biggest defenders of the president’s law. They even filed briefs urging the Supreme Court to protect it.

The reason for this bait-and-switch is that the law sends a lot of cash to these corporations by requiring everyone to buy insurance and providing billions in subsidies. So, working with the president and Democrats in Congress, these corporations twisted the genuine public desire for reform into a vehicle that keeps prices high for consumers and profits high for the companies.

As Yandle and Smith note, “Lobbying for pork often pays a whole lot better than struggling to bring new and better goods to the market.”

The authors take care to point out that this is nothing new — “Bootlegger and Baptist activity is as old as recorded history.” But it’s becoming an ever-bigger problem in America today because 95 percent of our new “laws” each year are not passed by Congress; they are mandated by regulators. Rather than protect consumers and taxpayers, these arrangements generally enrich well-connected Bootleggers at the expense of everybody else.

Yandle and Smith see little hope for fixing this institutionalized corruption. I’m a bit more optimistic and will explain why in a future column.

Also see,

Supreme Court Will Never Decide Obamacare’s Fate

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