The Outstater

February 24, 2022

Cronyism: The Republican Malady

HAVE YOU EVER WONDERED what’s wrong with the Indiana Republican Party? No, I don’t mean blithely welcoming large groups of random Afghans that we learn may have included security threats now in hiding. And no, I don’t mean sending the head of the state police to the Statehouse to override the Second Amendment.

My complaint concerns economics, what you would think would be a GOP strong point. It is epitomized in a bill this session that would strip the right to buy property from those whom the Indianapolis Star labels “slumlords.” It was able to attract a couple of GOP sponsors, both Statehouse veterans, committee chairmen even.

You are spared my reading of the role private property plays in Western Civilization. Let us just say that the bill does the opposite of what the sponsors may intend, i.e., improve the lot of low-rent tenants. There is a charitable explanation for that and a cynical one.

The bill applies draconian penalties (the loss of ability to make a living) to those individual operators trying to supply rental housing on the lowest margin. In doing so, it puts the government between landlord and tenant. The results are familiar and predictable: fewer renters, fewer units and higher prices. The legal cost entailed in avoiding or even understanding the bill’s definition of a so-called slumlord (it takes up 42 lines of the legislation) would by itself pressure rents upward, and without improving safety or living conditions for the poorest of the poor.

Economists tells us this is exactly the type of law that Democrats, bureaucrats and mandarins love, one that defines a problem in a way that excludes a private-sector solution and then underfunds it so they are the exalted managers of a scarce resource.

We expect Republicans, though, to recognize that individuals have individual strategies for life. A friend remembers being delighted as a young man to find an unfurnished, unpainted apartment above a frequently robbed liquor store. It allowed him enough left over in his paycheck to maintain a car and a social life. Another was happy being apartment rich but cash poor. 

Good for them. Those are called choices. They support rental properties along a range of price points — or should if government would stay out of the way.

It is possible that our two GOP legislators don’t appreciate the steepness of the slope on which their measure slips. Indeed, neither got above 50 percent on IndianaScorecard.org, an independent rating of votes that trouble private property.

That’s the charitable explanation. Now for the cynical one.

Both GOP sponsors list the Indiana Realtors PAC and the Indiana Multi-Family Housing PAC among their campaign contributors. At risk of assigning obvious motives to the obviously political, could those groups represent interests that would form public-private “partnerships”? The kind that hoovers up government subsidies in the name of “affordable” housing? For precisely the tenants once served by the now denigrated “slumlords”?

And while we’re throwing names around, can you spell “crony capitalist”? — tcl



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