The regulatory economics theory of “Baptists and Bootleggers” predicts that disparate interests may unite to get the government to impose a regulatory regime that benefits both — the true believers seeking morality and justice and the business interests seeking profits and advantage over competitors. The theory of “Baptists and Bootleggers” harkens back to Prohibition, but the modern version is on less-than-edifying display in Maine in the form of the gubernatorial race and energy and climate change policy.
The Baptists are in plain view.
Maine’s environmental left has backed policies to make energy more expensive in Maine for more than 30 years. On climate change policy, they have played the apocalypse card and demeaned opponents as “flat-earthers” and “deniers.” They have backed federal action when stymied at the state level and state action when stymied at the federal level. The Maine Conservation Voters Action Fund spent $350,000 in 2010 trying to defeat Paul LePage; the 2014 total could well be over $1 million, which doesn’t even count what they spent to defeat a not-green-enough rural Democrat in order to secure the 2nd Congressional District nomination for Emily Cain.
The Bootleggers include the alternative energy industry, especially the wind industry. The other name for alternative energy is more expensive energy, propped up by a policy regime that mandates that consumers buy their product (renewable portfolio standard) or gives them generous tax and subsidy advantages. The E2Tech trade group meeting that Gov. Paul LePage refused to participate in last month was, in essence, an open meeting of Bootleggers, and each gubernatorial candidate was invited to showcase his policy wares.
Eliot Cutler, an environmental lawyer, has close ties to both Baptists and Bootleggers. He has been endorsed by Maine’s junior senator, himself a prominent Baptist and now disinvested Bootlegger. A Gov. Cutler would be toasted by Baptists and Bootleggers alike, but he would follow his own counsel.
Mike Michaud, a six-term term Democratic congressman, was not always an ardent environmentalist, and he once voted for hydro power over unsullied Baptismal pools. Like his congressional predecessor, John Baldacci, a Gov. Michaud would likely follow the lead of Baptists and Bootleggers both. But following is not leading.
LePage has no truck with the environmental left or the crony capitalists. He has repeatedly argued for less expensive energy and a market-based approach that eschews tax credits, subsidies and regulatory mandates favoring particular “green” sources.
One of the conclusions of the Baptist and Bootleggers model is that the resulting policy will be sub-optimal — pleasing the Baptists and Bootleggers but leaving the rest of state in a poor position and preventing better alternatives from being considered.
Instead of pushing expensive wind power and advocating for fossil fuel divestment and bans on Canadian oil coming through South Portland, Maine could be encouraging cheaper energy, private development of natural gas and climate engineering research.
Only one Blaine House candidate would pursue such a course in the face of Baptist and Bootlegger objections. That’s Paul LePage.
Jon Reisman teaches environmental policy at the University of Maine at Machias. He can be contacted at email@example.com.