I’ve done a lot of travelling this summer with my family. Besides now knowing that spending seventeen hours in a car with my wife and two kids is a bit too long for us to all spend in a car together in one shot, I saw state lines galore especially as my daughter really loved to see the “Welcome to XXXX” signs so we looked for them so that her parents could seem someone omniscience for another couple of minutes of her life. Unless we were in the high plains where no one lived, the state line was clustered with stores engaged in regulatory and taxation arbitarage. In New Hampshire, the fireworks store was twelve feet away from the Massachusetts border. In Ohio, the liquor store was a good projectile vomit distance from the Kentucky bridges. In New Jersey, the gas station was the first thing seen when we left New York. In Wisconsin, they offered corn and cheese.
With the exception of the Wisconsin cheese, all of these stores were engaged in very minor/low level regulator arbitage. They counted on taking advantage of their home state’s looser regulations (fireworks in New Hampshire) or lower taxes (gas in New Jersey) to export goods and services to residents of the neighboring state. The home states would occassionally park a police cruiser at the state line to observe the parking lot and pull cars once they crossed state lines to confiscate fireworks but it was a low level trade with a fairly narrow reach as most people won’t drive thirty miles to avoid an extra four cents a gallon in gas taxes (time and gas is too valuable).
However we have a very good example of national regulatory arbitrage in the credit card industry. South Dakota has minimal regulations and they can set the default credit card policies for the entire country. The proposal to allow insurance to be sold across state lines without state approval falls under the credit card example rather than the cheap(ish) New Jersey gas example.
The Incidental Economist sums it up in a very non-IE style post:
Very bad. Go read Margot Sanger-Katz for the evidence-based details. For all the reasons she explains, and others, I never understood the appeal of this idea. It only makes sense if you don’t know what you’re talking about.
There is a way to make it make some sense while knowing what you are talking about. States could engage in reciprocity agreements among other states whose regulatory climate is similar to their own. Massachusetts could engage in an interstate compact with Rhode Island and Connecticutt without giving up too much actual autonomy or authority while Texas and Oklahoma could decide that each other’s lack of regulation is close enough to the home state lack of regulation and require only a single filing instead of two stacks of paper. The interstate compact route could make sense so there is no race to the bottom, but that is not what is being proposed.
kindness
‘It only makes sense if you don’t know what you are talking about’.
What Republican policy doesn’t this cover?
Kay
You may be surprised at how your kids remember it, though. My two oldest have a whole comedy routine on a trip to Vermont which they describe as “the worst vacation ever” but with real affection. It was really bad.
gene108
“Selling across state line makes sense” when you consider the alternative is to, at the least, embrace something like Obamacare and at the worst single payer or an entirely government run healthcare system, like Britain’s NHS.
In other words, you’d have to accept the fact the DFH’s are right.
WereBear
And we got Wingnut in a nutshell.
WereBear
@Kay: Funny how torment without real damage to life and limb almost immediately becomes hilarious in retrospect.
Seventeen hours with two small children? Dude, before consumer electronics, it would not be even survivable.
In my day, it was the ABC game, Slug Bug, and arguing.
OzarkHillbilly
@Kay: My little brother, myself, and my 2 sons took a trip to the 4 Corners area when my little sis still lived there. IIRC it was a 20+ hr drive we did in 1 day. Bro was expecting child hell (the boys were 8 & 10). Did not get it. They spent their time reading books, playing video games, looking out the windows, sleeping, and even conversing. Of course, it helped that I had been dragging them all over the midwest and even to TAG a couple times for caving. They had become quite used to drives of 5-6 hrs, and the 12 hrs to TAG was OK so I had them well trained for the AZ drive.
Craig
The regulatory arbitrate is absolutely a part of the Republican plan. Why else, when drafting their bills, would they include lines like “for the purposes of this bill, ‘State” is defined as the 50 US states plus Guam and the Northern Marianas Islands”. That line was in one of the recent GOP bills I read. They are clearly trying to set up a situation where some poor Pacific island nation can undercut all the actual states on insurance regulations and have companies set up their headquarters there.
ET
After I saw the Frontline special on the credit card industry – doing the same thing with insurance at least on a national level, is a bad idea. It may work with states that are similar – geographically or legally – but otherwise I can’t help but feel on a larger scale would only be good for some and very bad for others.
OzarkHillbilly
@WereBear: I was one of 6. My parents dragged us all over Dog’s creation on 3 week marathons every summer. I’m still not sure how it is we all survived. It got interesting when my sisters were teenagers, every time we’d pull into a campground, teenage boys sprouted out of the earth in all directions. Not that my old man minded much. He barely had to lift a finger setting up camp with all these able bodied young men ready and willing to do anything they could to impress the winsome young lasses. My older brother and I didn’t mind much either for the same reason.
JGabriel
Richard Mayhew @ Top:
Of course not. To the GOP, the race to the bottom isn’t just a feature, not a bug – it’s the whole point of the proposal.
WereBear
@OzarkHillbilly: There were four of us and we used to do a lot of visiting obscure relatives for the free lodging. Which was totally normal back in the day, but for we children it made for a lot of awkward conversation over board games missing half their pieces.
(I was shocked and appalled. We took care of our toys at home.)
Matt McIrvin
@WereBear: We just had a trip home from Colorado that involved a missed flight, a day of trying to get a standby seat out of Denver, and sleeping overnight in the frigid terminal at Chicago Midway. My daughter was in tears more than once during the ordeal, but afterward it turned into a story rivaling the story of our actual vacation.
WereBear
@Matt McIrvin: My classic example was a group canoe trip down the Delaware. In a driving rainstorm that started about an hour in and did not let up for about ten hours.
JGabriel
@WereBear:
That should be one of the rotating taglines.
low-tech cyclist
@JGabriel:
You nailed it, sad to say.
The larger goal is to fuck up good things so that they work poorly or even detrimentally for actual people, while helping to rake money into corporate coffers. That way conservative legislators can simultaneously enrich their friends while creating one more piece of ‘evidence’ that ‘government’ can’t do anything right.
And a ‘race to the bottom’ is an excellent way to achieve that goal. So yeah, it’s the point, not even just a ‘feature, not a bug’ situation.
And it’s definitely NOT something that “only makes sense if you don’t know what you’re talking about.” That might be true if the GOP actually wanted government programs to work. They don’t.
Duke of Clay
@kindness: My first thought!
cmorenc
@Richard Mayhew:
The entire underlying premise of the idea of “selling health-care insurance across state lines” is that the central cause of the unavailability of affordable health insurance is the extent to which it is a regulated industry. And so (as with credit-card regulation) let insurance companies be run from the least-regulated states, and market forces will result in affordable insurance policies being available from companies in those areas.
So what if people purchasing such policies run into difficulties actually getting them to provide much in the way of useful coverage or to stave off financial disaster – the free market will somehow provide the magic beans to correct that, and if it doesn’t – well those are tough social Darwinian beans, and they’re good for the population as a whole.
MazeDancer
In areas where lots of states come together, not being able to go to the nearest hospital, or the closest doctor, because that’s in another state is very difficult. Move five miles and you have to leave your doctor. And use a hospital 30 miles away.
Where MA, CT, and NY meet, there is a nice hospital near the border in both MA and CT, so some people who live in NY are much closer to those than the NY ones, also nice, one less so, which might be 20-40 miles away.
The CT hospital, which is minutes from the NY border, did some reciprocity agreements with NY, so if, heaven forbid, you have an accident, you can go there, so less likely to die. But the bills from the docs not in the agreement could add up depending on the “emergency” coverage of your policy.
Anyone who lives in this kind of geo situation longs for single payer, of course, but would welcome non-state bound, free market solutions.
gene108
Somewhat related. From LGM on the push to go back to the Gilded Age.
http://www.lawyersgunsmoneyblog.com/2015/09/creeping-lochnerism
Punchy
Yup, until said states inexplicably vote in a RWNJ (looking at you, Maine) and then decide to compact with the Southern states. I’m guessing un-compacting would be really hard, so it’s probably a one-way move. Eventually, all 50 states would get South Dakota’d.
Eric U.
@OzarkHillbilly: my mother used to go to TAG, she even dragged me there once. She made caving clothing
RSA
@OzarkHillbilly:
My tween and teenaged years were similar, after a move to Baltimore, with the family driving back to San Francisco for the summers. Yes, I have been through a lot of states and seen a lot of sights–at least, those that were not too far from an interstate.
Paul in KY
One thing I found out when I toured thru Wisconsin is that a lot of their very best cheese never gets out of the state.
RSA
@WereBear:
Oh, yeah. And by this standard, wingnuts make sense all the time.
japa21
@MazeDancer: What you are describing has nothing to do with state regulations and everything to do with the insurance companies and their policies towards out of area coverage. Many insurance companies, even those based within a certain geographic area with policiy holders only in that area, contract with providers outside that area so that situations like you describe are not a problem.
Some states have very strict policies, such as Minnesota, about only non-profit insurance companies selling policies in the state and contracting with providers. Many companies from outside the state who have policy holders in that state (employee based insurance) renatl networks so coverage is provided.
The free market solution does not have anything to do with easing your problem.
Richard Mayhew
@MazeDancer: Insurers can contract for providers over the state line with no state regulatory inteference. Mayhew Insurance does that all the time (give me a second here … we have direct hospital contracts for HMO, PPO, Exchange, Medicare Advantage, Medicaid, and CHIP for six states right now). We do that because we cover companies based in our home state, but there are segments of the boonies where it is far easier for members to hop over a state line for care 20 minutes away than to take an hour long drive to the next town with an in-state hospital.
The limitation is whether or not we as a local insurer licensed in State X can sell to an employer group that is headquartered in State Y and who has most of their employees live in State Y or Z. That is where the state regulation comes into play.
boatboy_srq
@cmorenc:
That’s the entire GOTea platform, no?
Libraryist
Your remark about the cheese and sweet corn vendors at the Wisconsin state line reminded me that there used to be a thriving commerce in regulatory arbitrage of margarine at the Wisconsin state line. Beginning in 1895, it was against the law for anyone in the Dairy State to sell colored margarine (the plain lardy-looking stuff came with a little packet of annatto so you could color it yourself if you wanted the authentic artificial butter look). So of course this led to a lot of our grannies who had a yen for low-cost butter substitutes making surreptitious runs to the Illinois border and filling a car trunk with properly colored margarine for distribution to family and friends. A whiff of illicit activity no doubt seemed to improve the taste of the stuff. And of course this bootlegging led to the State Police staking out the parking lots of Illinois margarine emporiums and then stopping the smugglers once they crossed into Wisconsin and ticketing them for illegal possession of colored fats. The ban was finally lifted in 1967.
low-tech cyclist
@OzarkHillbilly: I’m an ex-caver, even been to an NSS convention back in the day, but what’s TAG?
Matt McIrvin
@RSA: Our yearly family road trip was more modest, to drive from NoVa up to the Poconos to visit my mother’s relatives. Every five years or so, we’d go out to western Nebraska to visit my dad’s family (which itself involved either a substantial drive or a puddle-jumper flight from the Denver airport).
But in 1982, when I was about to enter high school and my sister was a few years younger, we did the whole Virginia-to-Nebraska trip by road (visiting other relatives en route), and continued on up to the Black Hills of SD. On the way back we went to the World’s Fair in Knoxville. There was the usual amount of sibling fighting, vomiting and crap hotels along the way, and it all turned into stories.
That was the most ambitious one we ever did as a family, though. When I was in grad school I did take a more insane coast-to-coast van trip one summer, starting with a 48-hour drive from Massachusetts to Flagstaff, Arizona, with people driving in shifts.
Richard mayhew
@Matt McIrvin: my worst drive was Boston to Denver with a girlfriend where we each knew the relationship was slowly dying but neither of us were willing to admit it yet. We left on January 2nd and had to arrive by the 5th while getting through a 1000 mild blizzard. We debated between going around the Great Lakes or heading to Atlanta to avoid the worst. Canada it was.
Eric U.
@low-tech cyclist: it’s a regional caving convention in the Alabama region (Tennessee, Alabama, Georga). They call it a cave-in.
RSA
@Matt McIrvin:
That’s great. My family has such stories too. Maybe those trips account for my fondness for station wagons.
The Pale Scot
Never have so few words described so many Americans so succinctly
Paul in KY
@Libraryist: Interesting.