In his rundown of the Republicans’ egregiously flawed alternative to the CLEAR Act, Jamelle notes the legislation involves a potentially massive subsidy to the nuclear power industry. Also today, one of the main Republican objections to the CLEAR Act is its elimination of the current $75 million cap on the liability oil producers face due to damages from any spills. Both are examples of “putting your thumb on the scale,” or “picking winners and losers” or whatever other stale cliche you want to throw out for interference in the free market — something Republicans are resolutely opposed to as a matter of principle, except when they want to do it.
Nuclear power is often difficult to get off the ground simply because, by its nature, it involves enormous up-front costs in plant construction. It also involves certain inherent risks which, if you’re really serious about relying on the free market, need to be priced into the cost of that power. You do that either by imposing the necessary regulations, or by making sure the company is on the hook for 100 percent of the damages from any accidents that may occur. Both ensure that companies have financial incentives to operate as safely as possible, but both also raise the cost of that energy — the latter through increased insurance prices. So a lot less nuclear plants get built, and Republicans object.
The same effect is occurring with the oil liability cap. If oil producers are fully financially responsible for their spills, then their insurance rates will increase, and a lot of offshore drilling will become prohibitively expensive. Less production in that sector will occur, and Republicans will caterwaul. (A particular irony here is that liability insurance is a much more “free-market-friendly” way of pricing in the cost of risks than is top-down government regulation.)
But the thing is, what Republicans are objecting to in both instances is the free market doing what it’s supposed to do — which is weigh competing values through the use of price signals, and thus drive economic actors towards the behavior that best accounts for those costs and benefits. Once you’ve got dangers of a reactor meltdown, for instance, properly priced into the cost of nuclear energy — or the dangers of global warming and environmental damage properly priced into the cost of offshore oil drilling — then if those sources of energy become prohibitively expensive, that’s just the free market telling you you probably shouldn’t be doing those things in the first place. If you believe in the free market, you get the price signals right and then you get out of the way. If the market then winds up “killing your baby,” so be it.
Granted, this is a rather Colbert-esque rendering of conservatives’ philosophic reliance on the market. But the basic take-away is pretty straightforward: Republicans aren’t pushing nuclear power — or expanded offshore drilling — because it’s economically smart, or in keeping with free market principles to do so. Rather, they’re pushing these sectors out of a combination of political self interest (the oil and nuclear industries have a lot of money to donate to campaigns) and ideological tribalism (hippies hate nuclear, so it must be a good idea).