Tuesday, May 30, 2006

Pork against...pork!

Every month, the Tennessee Center for Policy Research comes out with a Monthly Misuse, a reader-submitted example of legislative inefficiency. They're usually good for a chuckle and a sigh. This month's topic is the Respect Your Health! campaign. (Love the exclamation mark there.)

Some highlights:

- $8,000 for 25,000 green rubber band style bracelets reading "Respect Your Health!"

- $9,326 for 24,500 refrigerator magnets with the Tennessee Department of Health's logo and web address.

- $5,118,000 for marketing and advertising related to the campaign.

- And what's the result of the expenditure? Since the introduction of the program, Tennessee has remained as the country's 38th healthiest state.

Says Drew Johnson, president of the Tennessee Center for Policy Research: "Tennesseans may be getting fatter, but their wallets sure are a lot thinner..."

Thursday, May 25, 2006

What's wrong with a blowout here and there?

When it comes to unintended consequences of a rule, this one has to be at or near the top of the list. Let's count the ways:

1) The idea is to avoid the embarrassment of a large loss. Admittedly, losing by a large margin is not an enjoyable experience. But ask anyone who has played or coached sports, and they will tell you that it is a far greater embarrassment to play another team and have them reach the point where they stop competing out of pity. That's exactly what this rule forces the winning teams to do-- stop playing football. Out of fear of finishing the game by actually playing football and scoring too many points, the other team has to mail it in early or fear punishment.

2) What if the team getting blown out gets upset and, knowing the law, decides to throw the rest of the game so that the score differential ends up greater than 50? How can you punish the winning team in this instance? I suppose the winning team could recognize this and try themselves to throw the game harder, but then we're reduced to a competition of losing. (Not unlike the South Park episode where every Little League team is trying to lose so they don't have to play baseball for the rest of the summer.)

3) A buddy of mine mentioned this one to me-- what about the backup players? The article mentions that there is a fear of cutting into their playing time, but I'm not sure if that would necessarily be true. What it does do is prevent the backup players from playing as hard as they can and running the score beyond 50 points. So imagine the role of the backup football player now: I only get into the game when the score is lopsided, and I want to play more, but I can't fully prove myself on the field because if I play too hard I'll end up suspending the person who decides how much I play in the first place. Tough job, that of the backup high school football player in Connecticut.

Wednesday, May 24, 2006

Food for oil? How about markets for oil?

Everyone's read plenty about the oil issues affecting the world. Evidently, everyone is producing as much as current capacity will allow, and prices at the pumps keep marching higher and higher. No one's explanation seems to fit the entire world story.

The Federal Reserve Bank of Dallas provides as interesting an explanation as I've seen. Only three of the thirty countries that supply the world with oil rely on private, market-based means of distributing oil. And, using the Heritage Foundation's Freedom Index, over 44% of the world's oil production occurs in countries that are either "mostly unfree" or "repressed."

It begs the question-- how can oil prices be expected to follow market adjustment mechanisms when markets play such a small role in oil production?

Monday, May 22, 2006

Housing the Big Apple

In honor of a recent trip to New York for a friend's graduation, I thought I'd add some highlights of the New York housing market.

1) New York is avid in providing apartments for all strata in their society, so they incorporate rent controls. Of course, all this does is allocate government mandated affordable living space to the lucky few who win the sweepstakes; the rest are out of luck given the new shortage of housing. Prospective housing builders view rent controls as a damper on future profits, so less units get built. And current housing owners search for ways to circumvent the law so as to derive fair market value from their properties. The only people that win are the chosen few that get awarded cheaper housing by the State, and happen to pair with an owner that can not find his way around the system to pass along costs to the tenant. Of course, I'm sure those awarded those coveted apartments were free from any sort of political manipulations, right?

2) New York also prevents current owners from charging exorbitant prices when subletting; I've come to understand that the ceiling is 10%. Again, this takes emphasis away from the efficient allocation of units and places it instead on being in the right place at the right time. The reality of the situation, though, is that this law doesn't have much of an impact at all; current lesees simply choose to sublet their abodes to those wishing to engage in side deals, such as renting the apartment's furniture for the duration of the sublet.

3) A personal favorite of mine: Every time an apartment is vacated and then filled by a new tenant, it is city law that said apartment must receive a fresh coat of paint on all its walls. Every time, every apartment. Consumer choice be damned-- you're going to have freshly painted walls. I think my officemate said it best: "All that's going to do is make people mess up their walls before they move out."

Thursday, May 18, 2006

Forced Full-Service?

From USA Today:

In New Jersey, motorists who need to fill 'er up haven't pumped their own gas in 57 years. But in the face of soaring gas prices, Gov. Jon Corzine came up with a novel plan last month to try to ease the pain: allow self-service at some stations along the New Jersey Turnpike and see if prices dip. He believed prices could drop 5 to 7 cents a gallon.
This is absurdity on several different levels.

1. Apparently, the government knows the desires of these residents better than anyone. This contrasts F.A. Hayek's argument that says competition is the only discovery process by which people's preferences can be seen.

2. The proposed law change wouldn't make full-service illegal; rather, it would just make it legal to pump your own gas. Profit-seeking gas stations could still offer full service to those who wanted it. Wouldn't it better to offer people both choices and see which one they pick?

3. Justification for full-service is based on the danger and difficulty of individuals pumping their own gas. Bill Dressler, executive director of the New Jersey Gasoline Retailers Association and Allied Trades, fears that "[Gas] could be put in the wrong container...[or] somebody getting out and smoking and they didn't turn the engine off." Funny, this doesn't seem to be a major problem in any of the other 48 states.

Thursday, May 11, 2006

Skin Deep Freedom

In a move that shows that West Virginia does have some company at the bottom of the U.S. (freedom-pursuing company, but company nonetheless), Oklahoma has now become the last state to legalize tattoos. My favorite line: "Regardless of one's personal views about tattoos, the plain fact is that tattooing is prevalent," Gov. Brad Henry said.

Fantastic. Not that tattoos should be outlawed, but should the fact that everyone disobeys the law be reason to repeal it? Maybe this is just an example of a particularly ill-suited law; disobeying this one doesn't impede upon anyone else's rights. If theft became popular, you'd have some private uproar for the upholding of the rules.

(The article doesn't make it clear, but I believe it was illegal to give a tattoo, as opposed to having one. After all, I'd put good money on the odds of one University of Oklahoma athlete having a tattoo on the playing surface in Norman in the last 40 years.)