Progressivism Gave Us Susan Bitter Smith

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Arizona's political world is up in arms about Susan Bitter Smith, and rightly so. At least three complaints have been filed against Susan Bitter Smith due to her clear conflict of interest. She is both employed by Cox and the regulatory body that is supposed to be keeping an eye on utilities like Cox cable. In my Twitter feed, the people most up in arms, though, are the people with the least right to complain: progressives. Progressives have given us the regulatory state. Corruption is the natural consequence.

Regulatory bodies are usually unaccountable to the voters. In this case, Susan Bitter Smith was elected. Admit it, though. You had no idea who she was before she was elected. You might have been aware that she was on the Republican slate. It turns out, she's a stooge of the cable company. But let's say you had done your homework and voted differently. You could have voted for the Democrat slate billing itself as the "Arizona Solar Team." These hucksters wanted to peddle overpriced solar power solutions, which have their own special interest constituency.

We have seen similar dynamics play out in the recent FCC internet takeover. The internet had to be regulated as a utility to guarantee that all content was treated equally. Free speech was at stake, we were told. Meanwhile, the supporters and opponents of Net Neutrality told the real story. Content providers like Facebook want to make sure that they can push their content without having to negotiate with the cable companies. Netflix was in favor of Net Neutrality up until they saw the awful manner in which it was imposed. Verizon and AT&T, meanwhile, opposed Net Neutrality, going so far as to sue to block the new rules. They realize that they will be expected to provide everybody else's free lunch. If this mandate drives up the cost of internet access, then the FCC has the authority under the new rules to mandate that the prices will be lower. No wonder investment in US internet infrastructure is plummeting.

If you think that maybe this is a new phenomenon, you would be wrong. The Bitter Smith controversy prompted me to go through early 20th century Progressive accounts of regulation. It turns out, the drama played out almost exactly the same 100 years ago. Timber producers were angry that railroads were shipping some timber at different rates. The railroad conglomerates also owned timber businesses, and were willing to discount rates to their sister companies. The Interstate Commerce Commission intervened to set rates. Again, the providers of infrastructure were expected to be "fair" to everyone, regardless of the economic realities. The timber companies were able to rely on pliant government regulators to mandate this fairness. Railroad magnates like Cornelius Vanderbilt struck back by buying senators and state legislators to set the rates at more agreeable levels.

This does not excuse what Susan Bitter Smith has done, but it does explain it. Of course Cox wants to control the Corporation Commission, as does Solar City. If these bodies are to be regulated at all, however, the power should lie in our legislature. The Corporation Commission is a juicy target precisely because it is so obscure, and the people with the most incentive to influence it are the people that Arizona can least afford to have setting its cable and power rates. Better yet, let's have real competition. Instead of granting local monopolies, let the free market provide internet, electricity and cable TV. Breaking up Ma Bell did wonders for phone service, so maybe it's time to do the same with other monsters created by the Progressive regulatory state.

Don't expect this to happen any time soon. Progressives never learn from their mistakes. The failure of the regulatory bodies means that it's time to move on to the next step of the revolutionary process: socialization. Turn the utilities into state-owned entities. Ignore the train wreck that is Amtrak. This time will be different. Or else, it will be time for even more extreme measures.

If ever there were an argument for lovers of liberty to find new strategies to dismantle the regulatory state, it can be summed up in three words: Susan Bitter Smith.


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