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Tuesday, April 24, 2007
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A Very Conservative Idea

Jessica McBride refers to this as yet another scold tax.  But the reality is that concepts like this are far more conservative than liberal:

Saying that he would not spend his final term in office "pretending that all is fine," Mayor Michael R. Bloomberg made a series of Earth Day proposals this afternoon to improve the environment of New York City, including charging a new congestion fee to drivers who come into parts of Manhattan during peak hours during weekdays.

The $8 congestion fee was one of 127 initiatives included in a sweeping plan by the mayor to help the city of currently 8.2 million people cope with an expected surge in population that he said is sure to put a strain on its transportation, housing and energy systems.

What is Michael Bloomberg proposing here?  Is he punishing people for driving?  That is obviously Jessica's take.  But the reality is that he is asking that people pay a premium to use a finite resource.

There are two ways to manage a finite resource.  Conservatives typically think this should be done by varying the cost.  As the demand for a finite resource increases, the cost does as well.  This forces people to be more frugal with that resource.  People will choose to drive at different times (perhaps going to work earlier and leaving earlier, or going in later and leaving later), or taking alternative routes, or combining trips in order drive less.  This naturally has the effect of using less of the finite resource (bandwidth on the road).  This is done all the time in business.  You pay more to use  your cell phone during peak hours than during off hours.  You pay more for gasoline during the summer when people drive more than in the winter when people drive less.

The typical liberal way to control a finite resource is by varying the time it takes to acquire it.  You should never increase the price gasoline.  Instead the price should be fixed, and people will use less because even though anyone can afford to get as much as they want, they'll wait in long lines and be rationed (hello 1978).  If everyone talked during peak hours as much as possible, then half the time you tried to talk on your cell phone, you'd get that annoying message saying the network was busy.  When the XBox first went on sale, the price was fixed despite incredibly high demand.  The controlling mechanism for who got one in time for Christmas was who was willing to spend the time to wait in line.  When the old Soviet regime was short on food, the price was fixed, but people waited in line for bread.  Those who spent the time got the bread.  Same with traffic.  The liberal way to control the finite resource of roads is to set a fixed price, and forcing people to waste their time by sitting in traffic.

The problem with forcing people to spend their time instead of their money, is that the overall amount of time you have in a day is fixed.  If you need to use that resource and it's controlled with money, you can spend the money and get it easily.  The same can't be said for a resource controlled by time.  Imagine a world where cars cost $100, but you had to wait 5 years to buy one.  You can't get a loan for more time, but you can get a loan for more money and pay it off over time.

Bloomberg's idea is a very conservative, business oriented idea.  I thought you were conservative Jessica.

# Posted at 9:24 AM by Nick  |  Comment Feed Link 2 Comments  |  No Trackbacks

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Tuesday, April 24, 2007 11:28:23 AM (Central Daylight Time, UTC-05:00)
This tax is antithetical to conservatism, no matter how you frame it.
1) Taxes are a liberal proposal. You see, conservatives believe in the free market solving the problems of society through normal, free, means. Liberals believe taxing something to artificially change its price and thereby artificially change its demand is the way to solve things. This tax is by no means fiscally conservative. Your point about time and money is well taken, however, both the manipulation of time and money is a very liberal thing. See: Karl Marx. For conservative? See: Hayek, Friedman, or Adam Smith.
2) You must look at the effects of this tax as well. It will a) reduce the number of people who can afford to live in one part of NYC, work in another, and drive to work (affecting mainly the poor), b) reduce the number of people who can afford to live in NJ and work in NYC (again, affecting mainly poor people), 3) drastically reduce the work force for low wage jobs in NYC, as there is little public transportation into the city that is as convenient and affordable as driving from NJ to NYC, 4) all but force businesses - small and large - to give their employees pay increases to make up for the increased cost of working for them, 5) dramatically decrease tourism in lower Manhattan, and 6) dramatically cause the cost of apartments in NYC to rise (considering this tax will cause demand of those apartments to soar). These are NOT conservative ideals.

Conservatism means that government steps aside, and lets the free market handle things like this. It doesn't mean using taxes to get our way.
Tuesday, April 24, 2007 2:22:02 PM (Central Daylight Time, UTC-05:00)
First of all, Free Market does not imply "free without cost" as you seem to imply. Free market means free from government control. However, the only way to truly due that with roads would be to stop having government pave roads all together, and instead make all roads private roads with tolls required for entry. That is not "free" either.

Since very few people would ever support the idea of private toll roads in New York, the next best option would be to have government mimic the operation of private toll roads.

This "tax" is not manipulation in the classic sense. The typical manipulation would be to artificially increase the cost in order to create an outcome unrelated to the good you're paying for. For instance, taxing cigarettes to pay for health care, or taxing beer to pay for drug abuse programs. Instead, this "fee" is being introduced as a way to directly control the availability of the resource because it is scarce. Roads are scarce, and this is proven by the gridlock we experience every morning.

If it were a private road in a free market system, I GUARANTEE you this would happen as well. Free market systems depend on the ability to increase the price of a good when it becomes scarce.
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