The regulating this Congress won’t do just pushes impossible tasks onto other governments and corporations

by Mike Shatzkin

As the cost of the tax cut — the GOP Congress’s one great “accomplishment” — is now calculated as a $488 billion deficit for just the first quarter, it is time to call attention to what Congress has NOT done. It is shirking two of the most obvious responsibilities it has, two things we need them to do because they must be done by the federal government.

In one case they’re effectively pushing what should be their responsibilities to states and localities. And in the other they’re asking private enterprise to do what really should be done by the government.

What they’re pushing to localities is the job of curbing America’s burning of fossil fuels, contributing to increasingly rapid global warming which will swamp us with sea level rise and starve us with food shortages as weather and climate become increasingly unpredictable and unusual. What they’re pushing onto private enterprise is the responsibility to make the rules for managing the data of individuals as we leave more and more digital footprints.

We have a consensus among the scientifically-literate that the loading of our ecosystem with CO2 that is the result of burning fossil fuels is responsible for persistent warming, with all sorts of dire consequences: sea level rise, more intense storms, and changes in weather patterns that increasingly confound farmers. The most powerful remedy for this would be a tax on fossil fuels, which must be applied nationally to be sufficient and effective. It just isn’t practical for states and localities to manage the energy transition, although they’re definitely trying. We have a host of cap-and-trade schemes covering different fuels in different parts of the country.

But localities just can’t do this work effectively. Taxing fossil fuels raises the cost of energy and serves as a goad to make people get their energy from a cheaper place. That can mean crossing the state line to buy gasoline. It can mean sourcing some of the components of what you assemble or manufacture from a lower-tax state or country. It can even lower real estate values. In short, it asks a state or locality to pay a competitive price for doing the right thing for all of us.

That is why an important component of lobbying all state and local government officials on climate must include an “ask” that these public officials demand Federal action. (My preference would be urging Congress to pass the Baker-Shultz proposal, but there are a many ways for the Federal government to do this effectively. That’s just the best one.) It seems obvious that a letter to a Congressperson from a City Council member or a Mayor demanding a Federal response is likely to carry more weight than one from you or me.

The same principle arises in the highly fraught area of personal privacy and online freemium services like Facebook and Twitter and Google that make their money by selling data that some people feel violates their privacy. The outrage that has been directed at Mark Zuckerberg and the tech companies is not usefully aimed. The culprit is Congress, not the tech companies. The tech companies are in precisely the same pickle the states and localities are: competitive pressures make it hard for them to solve this problem.

Let’s say you want to digitally market to people who are interested in both horticulture and knitting. Facebook can help you find those people. Google can help you find those people. Yahoo can help you find those people. Various digital marketing companies that “scrape” or otherwise find data online can help you find those people.

So Facebook voluntarily hobbling its own ability to use its data faces the same challenge that New York or Ohio would raising its fossil fuel taxes. With no federal regulation, you’d simply get what you wanted from a Facebook competitor, just as a sane New Yorker living near a lower-tax state would drive across the border to fill the car up with gas.

What Google and Facebook should be saying to Congress is, “sure we need rules. YOU make ‘em!” It is hardly obvious where the lines should be drawn on what data uses are acceptable and which aren’t. In fact, it is often a judgment call. So let Congress be the ones to canvass the defenders of privacy and create the regulations. Facebook and Google should certainly express themselves through testimony in this effort, but it is crazy to think that Internet privacy is effectively protected and policed by each individual company making up its own way to do it.

Part of the problem is the loony libertarian concepts that have become accepted as reasonable governing principles, when they make about as much sense in the real world as Communism. Government regulation is not only good, it is essential. We need it to curtail CO2 emissions in a functioning economy and we need it to provide clear rules of the road for privacy in an era where keeping one’s information to one’s self apparently requires refraining from what have become the most common forms of communication.

These are not problems to be solved by free markets. And they aren’t solved by a Congress that uses a slavish devotion to “free markets” as an excuse to avoid doing its job. Democrats are going to have a lot of work to do when they take over on Capitol Hill.