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Why Corporations Love State-Level Regulation, Part the Millionth



Corporations and their lackey politicians love state-level regulation. They usually frame this as hating federal regulation, but that’s not quite true. They do have federal regulation because the federal government is large enough to be relatively protected from corporate pressure, at least compared to the states. The effectiveness of agencies like OSHA and the EPA can be rolled back, but it is slow and entrenched cultures, professional expertise, and the sheer size of the government, makes the immediate gains demanded of corporations difficult to enact. But they also hate local government because the cities are small enough that while many may be happy to accede to right-wing agendas, progressive cities, who may well have minority-majority populations thanks to decades of white flight, they may well enact quite progressive policies. That’s why you have conservatives complain against federal regulation of wages while also acting to squash municipal minimum wages higher than the state or federal minimum wage, stating the state is the constitutional place for this sort of regulation. That’s not a state issue, but rather the place corporations have determined they can most influence legislation. This isn’t new either–the timber industry argued the same points in the 1930s against an increasingly proactive U.S. Forest Service in regulating forest policy (which did not last long and by the late 40s the USFS was back in the pockets of the timber industry and the desire for state-level regulation faded for awhile).

On the local level, this is why you’ve seen states like Oklahoma and Rhode Island act against municipal minimum wages. But it’s not on wages. Here’s an example of the Koch-owned Tennessee legislature acted against a public transportation system desired by the mayor of Nashville, a city with rapidly worsening traffic problems.

Indeed, Nashville had become a sort of ground zero for a series of local brawls infused by an “all politics is national” trend, as some have put it, inverting the mantra of former House speaker Thomas P. “Tip” O’Neill Jr.

A city ordinance designed to stop discrimination against gays and lesbians was undone by the state. An effort to ban guns in Nashville’s parks was overturned by the state. A plan by the Republican governor to expand Medicaid, providing health insurance for 179,000 Tennesseans, with Nashville the greatest beneficiary, was defeated because it was linked to “Obamacare.”

Then came the battle over the 7-mile high-speed bus line, lyrically dubbed the “Amp,” that was supposed bring together the disparate sides of Music City. Instead, it tore Nashville apart.

Zeroing in on this sort of local battle has become a key to success for groups such as Americans for Prosperity, the Koch-backed organization that counts its Tennessee chapter among its most effective.

The billionaire brothers Charles G. and David H. Koch have received enormous publicity for their announcement that they plan to spend $900 million to influence the 2016 elections. But with far less fanfare, they are having a clearer impact on local matters, right down to a fight over a bus line.

“The return on investment in time is much greater at the state than the federal level,” said Andrew Ogles, head of Tennessee’s Americans for Prosperity chapter, which played a key role in the fight against the Amp and Medicaid expansion. “If you have a rogue mayor or governor, our greatest influence is to talk to our state representative and senator. They are much more accessible to us than, say, a governor.”

In many ways, the effect of unregulated cash on the state level is even greater than on the federal because of the sheer and almost tyrannical power groups like Americans for Prosperity can hold over states like Tennessee. The legislators in that state are so in the Koch pockets that a mere phone call sets them in motion. When you can play on racial strife and fears of wealthy whites about having black people enter their neighborhoods, as was the case with this public transit project, it gets even easier.

But at the core, It’s never about local control or devolution or other conservative buzzwords. It’s about power and squashing anything that disagrees with the ideological orientation of the uber-wealthy. And in the New Gilded Age, that power is far easier for corporate titans to use than it was 50 years ago.

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