How to Stop Worrying and Love the Infrastructure Disaster
This too shall pass.
1. Getting to Zen
I have not written a ton about the infrastructure/reconciliation Mexican standoff for a few reasons:
Every big legislative push looks like it’s falling apart.
Either a bill (or bills) will pass, or they won’t.
Process doesn’t matter.
Look at the last two decades of American government and go through the list of major attempts at legislation:
Bush: tax cuts, immigration, Medicare expansion, EESA, NCLB
Obama: the ARRA stimulus, Obamacare, immigration
Trump: tax cuts
Every one of these pushes looked like they might fail. (Some did—immigration). At no point did any of these big legislative fights look like they were riding on rails.
And that’s because the very nature of legislating encourages brinksmanship. If Person A wants to pass a bill more than Person B, then Person A has leverage. Leverage is valuable. The way to extract that value is to exercise the leverage.
So passing legislation is two-step exercise in which the negotiating parties need to (1) identify who wants what, more; and (2) figure out how much value the leveraged party can then extract.
Biden, funnily enough, understands this. On Friday, Biden was asked by reporters if he was “frustrated” with the process of trying to get these bills passed. His response:
“Everybody’s frustrated, it’s part of being in government, being frustrated.”
Put that on a pillow. These processes are always a rambling wreck.
This isn’t to say that the legislation will ultimately pass. Most times it does. Sometimes it doesn’t.
My point is that we’ll get an outcome and after we reach the outcome, none of this will turn out to matter.
Because it’s process. And voters do not care about process. Ever.
Only two things will matter to voters:
Did the legislation pass?
Can they be convinced after the fact that the legislation made their own lives better in some tangible way?
Everything else is moot.
2. Are Pyramid Schemes Capitalism?
I do a couple of non-Bulwark podcasts and last week on one of them we talked about the Amazon docuseries LuLaRich,1 which is about the MLM leggings company LuLaRoe.
In the course of our discussion my cohosts—who are a good deal more conservative than I am—took the position that there’s really nothing wrong with Multi-Level Marketing companies and that “pyramid schemes” aren’t so bad. Some people work hard and make money! The MLM company isn’t forcing anyone to do anything they don’t want to do! There are winners and losers!
I found this to be an interesting view because it’s a nice distillation of the conservative mindset what it comes to the free market:
Free markets are superior to all other markets.
Therefore, any outcome that the market arrives at is, by definition, good.
And the corollary, for the purposes of our LuLaRoe discussion, boiled down to:
A “pyramid scheme” is really just capitalism, only more so.
By the by, I agree. A pyramid scheme really is just capitalism, only more so.
And because of that, pyramid schemes are a case study in why capitalism must be tempered by regulation.
I’m often surprised at how committed some conservatives are to the idea of a totally “free market,” without really thinking through the practicalities.
For instance: Should fraud be a crime?
Let’s say I’m selling magic beans and I advertise that my beans will grow into stalks ten miles high. I sell them to people who freely buy them. Should my claims be regulated so as to give buyers some recourse if they are fraudulent?
After all, this sort of sale isn’t a binding legal contract. So I’m not breaking a contractual obligation to buyers when the beans turn out not to be magic.
But it turns out that society has an interest in making commerce reliable. One of the mechanisms for this is the creation of laws and regulations concerning fraudulent representations.
And when you get out of the realm of magic beans and into a commodity such as pharmaceuticals, then the onus of government laws and regulations becomes really burdensome.
Why? Because there’s a societal interest in it that trumps the outcome of a truly “free” market.
We could could tick down a long list of issues that fit this general description:
Why is insider trading illegal?
Why is securities fraud illegal?
Why are intellectual property rights guaranteed?
The answer in every case is that a truly free market would produce outcomes much worse for society. So society must manage the market through a legal regime which attempts to get the maximum benefits from capitalism while mitigating capitalism’s largest downsides.
Which brings us to LuLaRoe. Why should society have regulations concerning pyramid schemes? They’re just capitalism!
Well, sure. Except that pyramid schemes are not “business” in the sense of being engines of economic production. Instead, they are primarily wealth transfers: The movement of money from a large group up a chain to a very small group. (With a few people in the middle capturing some of the runoff.)
What differentiates a pyramid scheme from a traditional business is that the pyramid scheme is an enterprise in which the employees/customers would likely not participate if they fully understood the functioning of the “business.”
And society has an interest in curtailing wealth transfer operations that depend on an asymmetrical availability of information among the involved parties.
Which is why yes, pyramid schemes are just another form of capitalism and yes, they ought to be regulated.2
In lieu of a longread I want to share some video of Ryan Zimmerman in what might have been his MLB curtain call last night.
Zimmerman is the rarest of creatures in baseball: A solid, non-star player who spent his entire career—16 seasons!—with the team that drafted him. Which means that while he’s not going to Cooperstown, he’ll be part of Washington sports lore 50 years from now. The kind of hyper-local sports legend who has HoF status in his home town.
The guy is 37 years old. He has never been anything but class. He still gets it done on the field. And on Sunday he might have been playing in his final home game.
In Zimmerman’s first at-bat, the crowd went nuts and even though Zimmerman was in batter’s box, ready to play, Boston’s catcher hung back on the infield grass to let him soak up the love.
In the top of the 8th inning, Nationals skipper Dave Martinez sent Zimmerman out to play first base and then pulled him out of the game. So that that this could happen:
If you look to the left side of the frame, you’ll see the Red Sox come out of their dugout to join the standing ovation—and this is in the middle of a tight game on which the fate of their entire season hung.
I hope Zimmerman comes back—this Nationals club is bad enough and young enough that he could help them next year. But if he doesn’t, this is the valediction he deserved.
Baseball is very good at this sort of thing.
Sorry, these shows are close-hold secrets. I try to keep the audience to them very small.