Why Republicans are bad for the economy
Republicans seemingly want to divert our attention from their complicity in the Jan. 6 insurrection by raising again their claim that they are good for the economy. When we look more closely at this claim, however, we see that Republicans are actually bad for the economy. Let’s look briefly at two sectors of the economy that are very important to Adams County and Pennsylvania.
Agriculture. Agriculture is one of two drivers of the Adams County economy. (The other is tourism.) According to the 2017 Census of Agriculture, a little more than half of the 1,146 farms in the county grow crops, and the other half provide livestock and poultry products. The major crop is fruit. Indeed, the county has more than 20,000 acres of fruit orchards and accounts for about 70% of the total apple production in the entire state of Pennsylvania. I estimate from published U.S. government data that approximately 15% of the 51,000 people employed in Adams County work in some aspect of the agricultural economy, either as farm workers or in the production plants, transportation, management, or administration.
Here is the problem, though: agricultural production is rapidly turning into a monopsony, a market in which there is only one buyer for the product the farmers are selling. A monopsony is one form of a monopoly; it allows the buyer (instead of the seller) to set the price they are willing to pay, leaving the seller (the farmer in this case) little choice but to accept that price or not sell the crop at all. The exploitation of monopoly power leads to lower earnings for farmers, lower wages for workers, and higher prices for consumers. The monopoly power of big agribusinesses has been brought to us by long-standing Republican opposition to anti-monopoly laws and to the rules to enforce these laws formulated by the Federal Trade Commission.
Just two companies dominate food production in Adams County: Knouse Foods and Motts, third and fourth largest employers in the county (after Gettysburg College and Gettysburg Hospital). The situation is way worse in the meat and poultry industry, where just four companies control more than 80% of the nation’s meat production, and four companies control 54% of poultry production. The Biden administration has been trying to get rule changes passed to strengthen the anti-monopoly provisions of the Packers and Stockyards Act, but enormous push back from Republicans has so far frustrated this effort. If Pennsylvanians elect Republican Mehmet Oz to the U.S. Senate instead of Democrat John Fetterman, the long-term future for food production, a mainstay of the Adams County economy, will look very bleak indeed as the monopoly power of large agribusinesses continues to grow unchecked.
Energy. Pennsylvania is a major producer and exporter of energy. Pennsylvania is also the only oil- and gas-producing state that does not have a severance tax. This severely limits the state’s ability to cover the necessary costs of infrastructure development that must accompany any new business development. A severance tax is a tax imposed on an energy company for the natural resource that the company extracts, or severs, from the ground.
Within Pennsylvania’s borders is the largest fraction of the Marcellus Shale Basin, a huge stretch of sedimentary rock several thousand feet underground that was laid down about 400 million years ago during the Devonian Period. Within the rock are fossilized and decayed organic matter, a huge source of natural gas and oil, trapped in the rock during the tectonic plate collisions that raised the Appalachian Mountain chain. The Marcellus Shale stretches from New York state through Pennsylvania and south through western Maryland and into West Virginia, and to the west into far eastern Ohio, Kentucky, and Tennessee. It more or less follows the spine of the Appalachian Mountains. Pennsylvania has about 7,788 active natural gas extraction wells in 34 counties. The most efficient process for extracting the gas from the rock is a process called hydraulic fracturing (or “fracking”), in which a high-pressure stream of water is injected into the well to fracture the rock and release the trapped gas. Not one of these fracking wells pays a severance tax to the state.
The reason they do not is unyielding Republican opposition. The main reason for this opposition is the general Republican anathema towards government “interference” (including taxation) of business. One perhaps unintended consequence of this Republican attitude is that Pennsylvania is a high property tax state, as I have explained elsewhere (Gettysburg Connection, Feb. 18, 2021). Pennsylvania also needlessly struggles to raise the funds to cover the really important spending priorities, like public education, public health, and public safety.
If Adam’s County voters return Republican Dan Moul to the state legislature and elect Republican Doug Mastriano as governor, there is absolutely no hope for needed tax reform in Pennsylvania. On the other hand, electing Democrats Marty Qually to the state legislature and Josh Shapiro as governor opens up the possibility that we can begin to shift the tax burden off you, the taxpayer, and get the highly profitable energy companies to start paying their fair share. The economy of the whole state would be better off with Democrats in charge.
Jeff Colvin is a research physicist and resident of Gettysburg. He is co-chair of Gettysburg DFA and chair of its Government Accountability Task Force. The views expressed are his own.
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This post originally appeared in the Gettysburg Times