Quotulatiousness

October 30, 2012

Pushing for “medical marijuana” makes full legalization less likely

Filed under: Health, Law, Liberty, USA — Tags: , , , , , , , — Nicholas @ 09:05

L. Neil Smith makes the point that supporters of medical marijuana may be missing:

What I do mind — and perhaps I am alone in this, who knows? — is weak and disingenuous politics with regard to drugs. It was the issue of “medical marijuana” that first got my goat this way. I don’t doubt for a microsecond that the weed makes life easier and longer for those suffering certain diseases, and I believe that those who would deny them that relief are little better than scavengers on the misery of others.

But observation — and my knowledge of history and human nature — suggests that the majority of those who advocate the legalization of pot “purely for medicinal purposes” do not require it for that reason. They simply want to slip the nose of their personal camel under the edge of the tent, and I find that approach sneaky, dishonest, and cowardly.

I believe that if they had spent the past fifty years pushing the Ninth Amendment right to roll up and smoke whatever frigging vegetable you wish, marijuana would be legal now, and there would not have been a “War On Drugs” handy for the psychopathetic enemies of liberty to transform into a War on Everything, including the American Productive Class.

I think we’ve seen the high point for medical marijuana. The proof of that lies in a current initiative to “Regulate Marijuana Like Alcohol”, on the ballot in my home state of Colorado this year. The title says it all, although the details could be gruesome, ending in a mess found in some states and all military bases, where the government runs the liquor stores (about as well as they run everything else). In the Air Force, when I was growing up, some officious snoops regularly examined the records of the store and your commanding officer would get a tattletale letter if they thought that you were buying too much booze.

Whatever that amounts to.

This is not a kind of progress any that real libertarian would recognize. The fact that advocates of the measure make a major selling point of taxing the stuff only makes it worse, both in principle and practice. First, by what right does anybody steal money from me when I choose to spend it on some things and not on others. Furthermore, when I was just entering college, a smoker could buy a pack of Marlboros out of a machine for 35 cents. Today, the price per pack is nudging five dollars, and only a small fraction of that is attributable to inflation.

Exactly the same thing will happen with marijuana.

October 21, 2012

QotD: Environmental externalities

Filed under: Economics, Environment, Quotations — Tags: , , , , — Nicholas @ 11:12

That other people place different values upon the environment than I do worries me not in the slightest. It is precisely such differences of opinions about value that make a market. What does annoy me intensely is that almost all of the environmental problems that are currently being complained about have indeed been studied by economists. And they’ve found solutions to them as well. Just about any and every environmental problem is either about externalities or common access to a resource. In many ways these are just the flip side of exactly the same problem. But we do indeed know how to solve each of them and both of them. Hardin on ownership or regulation, Pigou on tax or regulation, both mediated through Coase on transactions costs (with a decent assit from Ostrom on communal ownership). There, that’s it: far from economics ignoring matters environmental economics has solved the damn problems.

So why won’t the environmentalists listen?

Tim Worstall, “Why won’t the environmentalists learn any economics?”, Adam Smith Institute blog, 2012-10-21.

October 15, 2012

A “violence tax” that would only fall on the non-violent

Filed under: Law, USA — Tags: , , , , — Nicholas @ 10:40

Steve Chapman on a recent proposal that will penalize the non-violent for violence in their community:

For urban politicians, gun control is like the bar in Cheers — a place of refuge they can seek out whenever things aren’t going well. Things aren’t going well on the crime front in Chicago, with homicides up 25 percent this year. So what else can our elected leaders do but promise action against guns?

Action against the possession and use of guns by violent felons would be a good idea, but the proposal offered by Cook County Board President Toni Preckwinkle is something else: a penalty on nonviolent citizens who bear no blame for the carnage.

Preckwinkle suggested a tax on sales of firearms and ammunition, with the goal of defraying the costs that gunshots create for the county hospital and jail. Her spokesperson couldn’t say what the tax rate would be or how much revenue it would yield but said the fee would be “consistent with our commitment to pursuing violence reduction in the city and in the county.”

[. . .]

The levy was dubbed a “violence tax,” which is exactly what it isn’t. It would not target criminals who have malice in mind, but would fall entirely on the law-abiding.

Anyone convicted of a felony, after all, is ineligible for an Illinois Firearm Owner’s Card, which is legally required to buy guns or bullets. Under federal law, felons are barred from owning guns. So ex-con gang members would not pay the tax, because they make all their purchases in the illegal market. It would hit only those gun owners who have used their firearms responsibly.

October 9, 2012

Politics and economics: election-style

Filed under: Economics, Politics, USA — Tags: , , , , , , — Nicholas @ 09:32

At the Hit and Run blog, Tim Cavanaugh bewails economic illiteracy:

It’s “very hard to fine-tune an economy” using any tools. That seemed to be a clear lesson of the twentieth century workers’ paradises, and it is implicit when politicians claim (usually following up with a “but”) that the free market is the least-bad system for creating wealth. Spending and taxes can, however, have very destructive effects, and the best way for government to further an enterprise is by the alacrity with which it gets out of its way. As the Clinton-era example shows, you can have a boom even if you just slightly reduce the rate of spending growth. That’s not fine-tuning, it’s slightly easing the heavy hand of the state. The Post’s rhetorical question leaves out such options as “Did they screw it up?” or “Did they do too much?”

You get to this level of fantasy not by knowing too little economics but by knowing too much, by being persuaded that the same math you use when you shop around for bargains or balance your checkbook does not apply at the level of the macroeconomy. Unfortunately, Keynesian logic is like Videodrome: Once exposed to it you can never get rid of it, no matter how much trouble it causes. Nobel Laureate Paul Krugman recently claimed that brisk sales of the iPhone 5 will spur economic growth, thus proving the broken-window theory of economics. In fact, it’s the opposite: People who buy the new phone think it will add value to their lives, not replace an equal amount of value that has been destroyed. As the Apple maps fiasco, the purple glare controversy, and this Jimmy Kimmel video suggest, they may be wrong about that. But that Krugman (who last year called for a hoax invasion by space aliens to spur spending) is down to such a transparently absurd argument suggests the time has never been riper to jettison both the new and old Keynesianism.

Just don’t look for either presidential candidate to do that. Right now the big question is whether Mitt Romney or Barack Obama will use his presidential job-creating powers to create more jobs. Mitt Romney is promising to create 12 million jobs, which strikes me as a strategic error. All Obama has to do is promise to create 13 million jobs and he’ll obviously be the better candidate, because that’s a lot more jobs.

October 4, 2012

Why EU politicians love the idea of a Financial Transaction Tax

Filed under: Economics, Europe — Tags: , , , — Nicholas @ 10:31

Tim Worstall explains why politicians love the notion of an FTT, and why all the benefits claimed for imposing an FTT are not going to happen:

Large numbers of people have convinced themselves that a Financial Transactions Tax (FTT) would be a really very good idea indeed. It would make the banks pay for the problems they’ve caused, it would lower speculation and thus lower volatility, it would raise a lovely large amount of money that can be spent on good causes and anyway, there are a number of FTTs around and they’ve not caused any problems, have they?

Politically this is of course quite wonderful. Lots of money to pay for things and it’s the banks that have to cough up? We’ll get tens, no hundreds of billions and none of us will really have to pay any of it? Let’s tax the other guy usually does gain public support after all.

The thing is, all of the stated joys of this tax are in fact untrue. I’m rather involved in this as I prepared evidence for the House of Lords on the point (evidence which I’m glad to say heavily influenced their final report). Other submissions also pointed to posts on this very blog here at Forbes in support of various points. Finally, this formed the basis of my one and only peer reviewed paper to date. You might say that I’m more involved in this story than I am in most.

The thing is, those four things which campaigners for the FTT say are the good things about it all turn out to be untrue. Firstly and most obviously, banks are companies and companies never pay tax. It’s always some combination of customers, workers and shareholders who do: for only a real human being can bear the burden of a tax. As to speculation, more speculation lowers price volatility so reducing speculation will increase volatility, not reduce it. An FTT would crimp economic growth and thus would reduce total tax revenue, not increase it and finally, we do indeed have several FTTs currently and also know that they crimp economic growth and thus reduce total tax revenue.

All of these things have been explained by all of the serious people (plus me, who you can regard as serious or not as you wish) who have looked at the question. And yet governments continue to sign up for what they keep being told is a seriously bad idea. They’ve even been told this in terms simple enough for a politician to understand.

September 29, 2012

Regulating the size of soft drinks won’t solve the obesity problem, but will infringe on individual rights

Filed under: Food, Health, Law, Liberty, USA — Tags: , , , , , — Nicholas @ 10:41

At Reason, Baylen Linnekin explains that even if all the claims about the nutritional evils of sweetened soft drinks are completely true, regulations will not actually make much difference:

As an opponent of increased regulations, I find these latter scientific points noteworthy. But I also believe that even if sugar-sweetened drinks turn out to be virtually everything their opponents claim, people still have a right to buy and drink these beverages — just as much, as I argued in a recent Bloggingheads debate, as they have a right to buy a Big Mac. After all, we don’t have a right to free speech or to travel from one state to another because speech or travel has been proven by the scientific community to promote good health.

But suppose, for the sake of argument, I was to take at face value the assertions of those who claim the NEJM studies justify some combination of sugary drink taxes and bans.

There is still this problem: The solutions these advocates propose won’t likely solve the problem of obesity. For example, studies have suggested taxes will have little or no impact on obesity. And not one person has (to the best of my knowledge) even attempted to argue that soda bans would have any specific impact, either — unless one counts “sending a message” or “creating a debate” as conditions precedent to weight loss.

There is also the issue of a genetic predisposition, which again is one finding of the studies. Many people are genetically predisposed to certain food allergies — including soy, dairy, gluten, nuts, and seafood — and food intolerances. I have never seen a researcher or AP journalist like Marchione argue seriously that the widespread impact of food allergies “adds weight to the push for taxes” on wheat, tofu, and shrimp. Yet if one were to buy the argument of those calling for taxes and bans to combat consumption of sugary drinks in light of the NEJM studies, one would have to accept the idea of taxing society writ large based largely on the outcomes of what these researchers argue is a genetic condition.

September 22, 2012

Mismeasuring inequality

Filed under: Economics, Media, Politics, USA — Tags: , , , , — Nicholas @ 10:20

If you haven’t encountered a journalist or an activist going on about the Gini Coefficient, you certainly will soon, as it’s become a common tool to promote certain kinds of political or economic action. It is also useful for pushing certain agendas because while the numbers appear to show one thing clearly (the relative income inequality of a population), it hides nearly as much as it reveals:

The figures they use for a comparison are here. Looking at those you might think, well, if the US is at 0.475, Sweden is at 0.23 (yes, the number of 23.0 for Sweden is the same as 0.23 in this sense) then given that a lower number indicates less inequality then Sweden is a less unequal place than the US. You would of course be correct in your assumption: but not because of these numbers.

For the US number is before taxes and before benefits. The Swedish number is after all taxes and all benefits. So, the US number is what we call “market income”, or before all the things we do to shift money around from rich to poor and the Swedish number (in, fact, the numbers for all other countries) are after all the things we do to reduce inequality.

[. . .]

The US is reporting market inequality, before the effects of taxes and benefits, the Europeans are reporting the inequality after the effect of taxes and benefits.

[. . .]

Which brings us to the 300 million people in the US. Is it really fair to be comparing income inequality among 300 million people with inequality among the 9 million of Sweden? Quite possibly a more interesting comparison would be between the 300 million of the US and the 500 million of the European Union. Or the smaller number in the EU 15, thus leaving out the ex-communist states with their own special problems. Not that it matters all that much as the two numbers for the Gini are the same: 0.3*. Note again that this is post tax and post benefit. On this measure the US is at 0.38. So, yes, the US is indeed more unequal than Europe. But by a lot smaller margin than people generally recognise: or than by he numbers that are generally bandied about.

Which brings us to the second point. Even here the US number is (marginally) over-stated. For even in the post-tax and post-benefit numbers the US is still an outlier in the statistical methods used. In looking at inequality, poverty, in the US we include the cash that poor people are given to alleviate their poverty. But we do not include the things that people are given in kind: the Medicaid, SNAP, Section 8 and so on. It’s possible (I’m not sure I’m afraid) that we don’t include the EITC either. We certainly don’t in the poverty statistics but might in the inequality. All of the other countries do include the effects of such policies. Largely because they don’t offer benefits in kind they just give the poor more money and tell them to buy it themselves. This obviously turns up in figures of how much money the poor have.

September 21, 2012

California’s “wall of debt” actually a very high cliff of debt

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 09:21

Mary Williams Walsh on the so-much-worse than estimated debt of California:

Gov. Jerry Brown of California announced when he came into office last year that he had found an alarming $28 billion “wall of debt” looming over the state, which had to be dismantled.

Since then, he has slowed the issuance of municipal bonds, called for spending cuts and tried to persuade the state’s famously antitax voters to approve a tax increase this fall.

On Thursday, an independent group of fiscal experts said Mr. Brown’s efforts were all well and good, but in fact, the “wall of debt” was several times as big as the governor thought.

[. . .]

The task force estimated that the burden of debt totaled at least $167 billion and as much as $335 billion. Its members warned that the off-the-books debts tended to grow over time, so that even if Mr. Brown should succeed in pushing through his tax increase, gaining an additional $50 billion over the next seven years, the wall of debt would still be there, casting its shadow over the state.

August 27, 2012

Finland and the dangers of being a company town

Filed under: Business, Economics, Europe — Tags: , , , , , — Nicholas @ 09:09

I had no idea that Finland’s economy was so tightly tied to the fortunes of Nokia:

Nokia contributed a quarter of Finnish growth from 1998 to 2007, according to figures from the Research Institute of the Finnish Economy (ETLA). Over the same period, the mobile-phone manufacturer’s spending on research and development made up 30% of the country’s total, and it generated nearly a fifth of Finland’s exports. In the decade to 2007, Nokia was sometimes paying as much as 23% of all Finnish corporation tax. No wonder that a decline in its fortunes — Nokia’s share price has fallen by 90% since 2007, thanks partly to Apple’s ascent — has clouded Finland’s outlook.

[. . .]

Strip these sorts of firms from the list and only one resembles Nokia: Taiwan’s Hon Hai, an electronics manufacturer. Yet Nokia made 27% of Finnish patent applications last year; the corresponding figure for Hon Hai was 8%. Although numbers are falling, Finland is home to the greatest number of Nokia employees; Hon Hai’s staff is mostly in China. It is a similar story with other firms. Sales of Nestlé, a consumer-goods company, weigh in at 15% of Swiss GDP but its share of Swiss jobs is punier than Nokia’s in Finland. Samsung, whose revenues are twice Nokia’s, has half its clout as a share of GDP: South Korea’s economy is more diversified. The importance of Nokia to Finland looks like a one-off.

August 9, 2012

QotD: “No one is patriotic about taxes”

Filed under: Britain, Bureaucracy, Government, Quotations, WW2 — Tags: , , , — Nicholas @ 08:54

The money situation is becoming completely unbearable. . . . Wrote a long letter to the Income Tax people pointing out that the war had practically put an end to my livelihood while at the same time the government refused to give me any kind of a job. The fact which is really relevant to a writer’s position, the impossibility of writing books with this nightmare going on, would have no weight officially. . . . Towards the government I feel no scruples and would dodge paying the tax if I could. Yet I would give my life for England readily enough, if I thought it necessary. No one is patriotic about taxes.

George Orwell, diary entry for 9 August, 1940.

August 8, 2012

“In the real world, cleaning a driveway costs $15. In politics, it costs $175,000”

Filed under: Bureaucracy, Cancon, Government — Tags: , , — Nicholas @ 09:17

In the National Post, Kelly McParland on the difference between real world costs and government costs:

In other words, the town is prevented by bureaucratic realities from doing the job at a reasonable price. A contractor can just show up with a snow blower and clear the drive. The town, however, would have to send two workers – one to run the plow and the other to stand around and watch act as a flagperson. They’d have to be paid the going rate of $47 an hour, plus benefits. And there’s the cost of the plow.

If Mr. Williams was to get his windrows cleared, everyone in Iroquois Falls would have to have their windrows cleared, which the town estimates would bump the price to about $175,000 a winter.

So, in the real world, cleaning a driveway costs $15. In politics, it costs $175,000.

That’s why we have deficits, dear readers. And why government costs so much. And why civil servants grow accustomed to treating ludicrous costs as normal expenditures. And why taxes are far higher than they need be.

August 3, 2012

How “you didn’t build that” strikes at “Bourgeois Dignity”

Filed under: Books, Business, Economics, Liberty, Politics — Tags: , , , — Nicholas @ 00:05

Virginia Postrel explains why President Obama’s “you didn’t build that” gaffe has lasted so long when usually politicians’ gaffes barely last a single news cycle, by outlining the arguments of a recent book by Dierdre N. McCloskey:

The president’s sermon struck a nerve in part because it marked a sharp departure from the traditional Democratic criticism of financiers and big corporations, instead hectoring the people who own dry cleaners and nail salons, car repair shops and restaurants — Main Street, not Wall Street. (Obama did work in a swipe at Internet businesses.) The president didn’t simply argue for higher taxes as a measure of fiscal responsibility or egalitarian fairness. He went after bourgeois dignity.

“Bourgeois Dignity” is both the title of a recent book by the economic historian Deirdre N. McCloskey and, she argues, the attitude that accounts for the biggest story in economic history: the explosion of growth that took northern Europeans and eventually the world from living on about $3 a day, give or take a dollar or two (in today’s buying power), to the current global average of $30 — and much higher in developed nations. (McCloskey’s touchstone is Norway’s $137 a day, second only to tiny Luxembourg’s.)

That change, she argues, is way too big to be explained by normal economic behavior, however rational, disciplined or efficient. Hence the book’s subtitle: “Why Economics Can’t Explain the Modern World.”

[. . .]

McCloskey’s explanation is that people changed the way they thought, wrote and spoke about economic activity. “In the eighteenth and nineteenth centuries,” she writes, “a great shift occurred in what Alexis de Tocqueville called ‘habits of the mind’ — or more exactly, habits of the lip. People stopped sneering at market innovativeness and other bourgeois virtues.” As attitudes changed, so did behavior, leading to more than two centuries of constant innovation and rising living standards.

I’ve read McCloskey’s book and plan on reading the next one too. Earlier mentions of Bourgeois Dignity are here and here.

July 18, 2012

Who Exploits You More: Capitalists or Cronies?

Filed under: Business, Government, Liberty, Politics — Tags: , , , , — Nicholas @ 09:48

What is the best way to demonstrate care for the future?

Filed under: Economics, Environment, Government — Tags: , , , — Nicholas @ 08:29

According to Steven Landsburg, the answer is to cut capital taxes, and he makes a good case:

There are only three things you and I can do to make the future world a better place. First, we can consume less, leaving more resources behind. Second, we can work harder, planting trees, building factories and writing poems that will live on after we’re gone. Third, we can innovate, advancing science and technology so that our children’s children’s children can make better use of the resources they inherit.

As it happens, there’s one key policy variable that drives all three of these things, and that’s the tax rate on capital income (which includes interest, dividends, corporate income and capital gains). Capital taxes are a disincentive to save, and when people don’t save they consume instead. Capital taxes are a disincentive to work and a disincentive to innovate.

This is not a plea for lowering taxes in general, and it’s not a plea for making the tax system either more or less progressive. (If you want to soak the rich, there are plenty of things to tax besides capital.) As a matter of fact, this isn’t even a plea for lowering taxes on capital. It’s simply an observation that if your goal is to leave a better world for our descendants, then your best bet is to support lower capital taxes.

H/T to Tim Harford for the link.

July 17, 2012

FATCA “may end up killing more U.S. jobs than all the call centers in India combined”

Filed under: Economics, Government, Law, USA — Tags: , , , , — Nicholas @ 09:52

Matt Welch on the worst bit of legislation for US workers so far:

That’s a line from this commendable Wall Street Journal column by William McGurn about the oft-lamented-around-these-parts Foreign Account Tax Compliant Act of 2010, or FATCA (rimshot). While President Barack Obama keeps hitting presumptive Republican presidential nominee Mitt Romney over offshoring and jobs, one of Obama’s most economically deleterious laws continues inflicting damage largely off the journalistic radar screen.

“Within the United States,” McGurn writes, “almost no American has heard of it. Save for the occasional article, it’s gone largely uncovered. And just like ObamaCare, the nastiest, job-killing aspects will not hit until after this November’s election.”

McGurn points out that FATCA was the revenue-generating side of the Hiring Incentives to Restore Employment Act of 2010 (HIRE! God, I hate these people….) — “a jobs bill dominated by tax breaks designed to get businesses to hire unemployed Americans.” So once again, government is “paying” for the economically dubious and morally spurious act of granting targeted tax breaks to favored corporations by screwing over the middle class.

« Newer Posts — Older Posts »

Powered by WordPress