Once again, like his predecessor former President Trump, President Biden seeks to limit the availability of steel and aluminum. Whatever the administration or its Republican predecessors believe, this is another policy that will raise prices for American consumers and make life more comfortable for union members. To be sure, union workers, like almost everyone else, find their wages eroded by inflation. Every bit as relevant is the fact that these workers could be strategically important as swing voters in the 2024 election.
Indeed, this is not just about blue-collar jobs. An appeal that says “help your local union member by paying more for automobiles, refrigerators and pots and pans” might be accurate, but it won’t persuade many Americans, especially with inflated prices a top consumer concern. It’s going to take quite a bit more than that. And there is more. This time, it’s union-made environmentalism: tariffs based on how much greenhouse gases are emitted by foreign producers who seek to export their metals to America.
The union-made green label is becoming a standard part of Biden’s regulatory actions. For example, special tax breaks provided under the Inflation Reduction Act of 2022 for domestic solar panels and wind-generated electricity require employing union labor or paying equivalent union wages for the first five years of production.
Union-made environmentalism seems to be the flavor of our time. But it is fundamentally an old story.
The story goes something like this: Local politicians who have historically shut down liquor stores on Sundays to please their Baptist brethren have often done so with the support of local bootleggers. After all, bootleggers flourish when legitimate sellers are shut down, at least if there is no prohibition on Sunday drinking.
Time and time again, politicians offer similarly lofty moral justifications for policies that, oh by the way, benefit someone else’s bottom line. With his proposed steel and aluminum tariffs, Biden may be able to satisfy a vocal constituency of environmentalists as well as a less-obvious group of producers and unions.
Some happy bootleggers and Baptists are now at large in the White House.
In 2018, when then-President Trump imposed heavy tariffs on world aluminum and steel products making their way to America, he had a bootlegger-Baptist story, too. His move was to assure the United States that it would help to win the next war. Trump even bragged about the tariff revenue he brought to the country as if they were paid by people on another planet. He refused to recognize that the tariffs were paid by American consumers.
Confusing matters further is that the Biden tariffs are a tax on foreign-produced greenhouse gases, an action the president is apparently not willing to take on U.S. emitters. The fact that emission taxes are good when imposed on others but bad when levied against domestic producers supports the argument that the politics behind the matter weigh heavily.
The bootlegger-Baptist theory of government action performs especially well when the “Baptist” element can be seen, rightly or wrongly, as fundamental to human well-being or the continued survival of our civilization. Obviously, winning the next war and limiting climate change make the cut. The question we should be asking is not whether these are important matters — that’s not in doubt here — but whether the best policies are being put in place.
We have not seen the last of the bootleggers and Baptists. Take the raging debate about artificial intelligence (AI) and the implications that the world might become affected or infected by unguided thought or evil forces. This offers perhaps the ultimate “Baptist” justification for burgeoning bootleggers in the tech sector, who can seek federal regulation of their industry to limit competition from upstarts and prolong profits from early AI efforts.
Whenever government intervenes — even with the support of White House-occupying bootleggers and Baptists — we can be sure of one thing: Consumers and citizens will bear the cost.
Bruce Yandle is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University’s College of Business and Behavioral Sciences.