October 6, 2011
October 6, 2011
By Patrick Emerson,
Oregon Economics Blog
have been underwhelmed by the current crop of candidates for the Mayor of Portland: Hales has come across as a crass opportunist; Smith seems far to eager to be a politician and thus do stuff to make a name for himself regardless of whether stuff needs to be done; and Brady has played the businessperson card which always makes me suspicious that they don’t get the difference between markets and market failures.
What I mean by that last statement is that running a business that operates in a private goods markets is all about understanding how free markets work, appreciating the discipline of the market and so on. And, indeed, early on Brady made a statement about understanding the hard realities of the market as an attribute that would make her a good Mayor. But government is all about what economics calls market failures: instances in which the free market does not reach an efficient outcome because of things like public goods, asymmetric information and externalities. In these situations government has a role to play so that efficiency can be achieved, think providing police for example.
So it is not at all clear to me why having been a businessperson is such a positive trait for a Mayoral candidate in my view. It also seems there are as many examples of businesspeople-turned-politicians failing as succeeding. Though I will say that Portland’s crazy system of government with the stove-piped bureaus causes residents and businesses fits and any reform would probably be a positive thing. And it may be that a former businessperson would be more likely to push for reform. Though the other crazy thing about the governance of Portland is that the Mayor has almost no power to achieve meaningful reform. Still I would rather a Mayor pined for reform than embraced the current system.
When asked recently by The Oregonian about Portland’s new leaf removal fee, however, Brady nailed it and in so doing revealed an understanding of market failures and incentives that trumped the other candidates:
“Leaf collection is a basic city service that should be funded through existing revenue streams,” Brady wrote in an email. “And frankly, I want citizens to have incentives – not disincentives – for planting trees. As mayor, I will put an end to the leaf collection fee.”
Wow, I couldn’t have said it much better myself. In fact, I did. City streets are a public good and the maintenance of them is, rightly, a public problem. Once you start to carve out private responsibility you distort incentives and cause new problems.
Disappointingly, Hales responded thusly:
“The goal is to have storm drains free from clogs, not filling the city’s coffers from homeowners who already pay a lot in property taxes. That being said, I think that the city has done a good job in trying to work the kinks out as they gear up for this year’s collections. A streamlined opt-out system and the new addition of being able to rake all your leaves into the street seem like a good thing to try. Again, the goal is a public safety one, not a revenue-production one — if this new system doesn’t work then we need to explore other options.”
Yes the goal is to have safe and navigable city streets: a public good. But no, the proper response is not to make the provision of such streets a private responsibility. Economics 101.
The worst response is Smith’s non-response. This gives the impression at least that he wanted to know what the best political answer was before responding. Boo.
And good call by the O, by the way, for getting a response to this specific policy. It is in the details that we begin to really learn about candidates. Just reporting on their campaign rhetoric does no one any good.
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