Georgia’s other power of incumbency
The power of incumbency shows up twice in the Georgia political cycle: when we vote for legislators, and when legislators vote on bills.
And if you think elected officials have a strong advantage when they seek re-election, consider the power wielded by market incumbents as they try to push or quash legislation that affects their interests.
- A measure to allow local breweries, brewpubs and distilleries to sell their products on-site to visitors was watered down to the point it was practically "near beer." Breweries and distilleries may only offer limited quantities of "free" take-home samples to those who pay for a facility tour. Brewpubs were cut out of the deal altogether. Barely budging in the negotiations were the wholesalers and retailers under Georgia's antiquated "three-tier system" governing alcohol sales.
- Two bills governing ride-sharing services finally cleared the Legislature, dragging firms like Uber and Lyft toward the regulations placed on taxi and limousine companies that opposed the new entrants to their market. At least the limitations, to which the newcomers mostly agreed, don't outlaw the services, as has been tried in other jurisdictions. But whereas Uber and Lyft grew large enough prior to this regulatory regime that they can afford the costs it now imposes, even reasonable new laws could have the effect of foreclosing competition from future start-ups that lack such means.
- In an even more stark example of closing the gate behind oneself, Tesla struck a deal with incumbent automobile dealers to allow the electric-car maker to operate five dealerships within the state. The dealers had long fought to kick Tesla and its direct-to-consumers model out of Georgia, but they found this compromise preferable to more costly litigation. The key to the deal seems to have been a clause limiting this opening of the market to automakers with sales "at an established place of business in this state as of Jan. 1, 2015." No prizes for guessing which company is the only one that qualifies. Call it a last-mover advantage.
The factors underpinning this tendency toward incumbency-protection aren’t uniform. Booze distributors are big campaign donors; cab companies aren’t. Tesla may cater to a niche market, but ride-sharing services have a broader appeal. The auto-dealers lobby may have deep roots under the Gold Dome, but the brewers and Uber, in particular, hired well-established lobbyists of their own.
We might chalk up some of this legislative hesitance to a small-C conservatism that is generally skeptical of rapid change. That’s often a good thing. Lawmakers act within the constraints of a 40-day legislative calendar — also not a bad thing on the whole — which amplifies their tendency to take things slow.
But at some point, the ruling Republicans ought to remember voters expect them to act on all that campaign rhetoric about free markets, competition, jobs, economic growth and small business. Otherwise they might lose a little of their own advantage of incumbency.
