How do we shape policy?

 

This weeks thoughts stem from an earlier post.  In this previous post I attempted to make a correlation between our moral character and our spending decisions.  While this previous post focused on us as individuals, there is a bigger thought rattling around in my brain.  That thought focuses on us as an unified electorate.  Simply stated "what effect do our collective decisions have on policy creation"?  When I started looking into this effect I was quickly taken into the world of behavioral economics.  Also a number of these articles used behavioral economics to craft and implement policies.  I am more interested in the initial stages of a policy creation.  How does a representative come up with the basis of a policy and if he or she is motivated to act on it.

A big part of this concept comes from my belief that a lot of what goes on in our world is influenced by our collective behaviors, not by politicians.  One example would be sports.  Sports such as football and baseball and teams such as the Dallas Cowboys and New York Yankees have tremendous followings.  However these followings are not very organized and do not directly lobby politicians.  Yet, billions of public funds are spent building arenas and stadiums.  Would a politician propose a law banning public funds from being used on these sporting facilities?  From a logical perspective banning public funds for professional sports venues appears to be an easily defendable argument.  Athletes have million dollar contracts, owners make millions from ticket prices, food and parking.  I cannot recall a politician presenting a bill banning the use of public funds for arenas or stadiums.  I did look quickly and there seems to be a push in Ohio.  This bill proposes that public funds be used only if the team has a winning record.  Sounds kind of crazy to me.

Before continuing I have to make one assumption clear.  I assume that all things being normal a politicians first priority is to be reelected.  Yes this is an assumption but it does have a bit of a basis for it.  First of all it is a pretty good job and why not hold on to it.  Also the senate and the house of representatives are controlled by very slim majorities that the lose of 2 or 3 seats could swing control to the other party (currently the GOP controls the senate 53 to 47 and the house to 220 to 215).  With a majority this slim the GOP would want to hold on to every seat.  If a representatives first priority is reelection then I would guess that they would tread very carefully around sensitive issues.

So what are these sensitive issues?  Better stated what issues would get a representative in serious trouble with his or her electoral base?  Here in Texas any move toward eliminating High School football would have a congressperson immediately recalled.  I think I need to leave the sport references behind.  There are day to day behaviors that are not "hot button" issues that affect policy decisions.  One that interests me is our consumption and spending behaviors.  Spending is the exchange of funds for goods and services.  Our economy revolves around this very simple concept.  In fact almost 70 percent of our nations GDP is based on this.  Gross Domestic Product (GDP) is:

GDP, or Gross Domestic Product, is a monetary measure of the total market value of all final goods and services produced within a country's borders in a specific time period, typically a year. It's a key indicator of a nation's economic health and is used to compare the size and growth of different economies. 

It appears to be a rather important value.  If a policy maker is going to mess with it they better be quite certain they are not going to damage it.  Even though GDP is an important measure and consumption is almost 70% of GDP it still does accurately reflect how our choices affect policy.  Even if we look at how people spend money.  Here is a graph from 2023 data:

https://www.visualcapitalist.com/how-americans-spend-their-money/

As we can see from the graph almost 50% of household spending is on Housing and transportation.  As Americans struggle to find adequate housing it seems that very little is being done by state and federal governments to alleviates the issue.  Where I am going with this is that I feel there are products within our spending choices that are so sacred to us that most governments would not dare mess with.  Governments would be very hesitant to enact policies that would affect our ability to purchase and use these items.  The best example I can come up with is our phones / social media.

If there ever was a product that could be exploited by governments it would be our phones and social media.  Why have they never been taxed like some of our other enjoyed products?  Governments raise funds through "sin" taxes on alcohol and tobacco.  Phones and social media are not in the same category as these vices.  We argue that they are necessities like our cars.  You ever look at gas taxes?  There is a federal tax of 18.4 cents on every gallon of gas.  Here in Texas the state imposes a 20 cents per gallon tax on top of that.  California's rate is a whooping 68.1 cents per gallon!  Taxes on wireless planes have been slowly inching up in the last decade or so.  The justification for these increases have been to pay for more high speed coverage.  Here is a breakdown of the 2024 increases if you would like to review them.

This "iphone affect" is also playing out in the recent tariff wars.  Most phones are made in China and Vietnam.   I have no idea what President Trump will do tomorrow but this recent article seems to support my hypothesis that we shape policy by our behaviors and decisions.  It seems that phones and other electronics will be exempt from reciprocal tariffs.  Some may argue that this is due to the influence of Companies such as Apple, Samsung and Google.  All of whom manufacture and assemble their phones overseas.  I however think that it is due to our overall influence when we vote with our feet and pocketbooks.

Power to us!!