Minimum Waaaaaage! Hyah!

Posted on January 5, 2009 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

Missouri’s minimum wage cranked up last week, as reported in the Columbia Tribune, a welcome relief for struggling workers in our present economic turmoil.

Well, it’s a relief for some of the people who were making less than $7.05 per hour; everyone else has to make do without an automatic, state-mandated raise in pay. Moreover, if our own policy studies of minimum wage are to be believed, statewide unemployment may be even higher in 2009 than this troubling prediction indicates. The standard, simple economic argument against minimum wage can be viewed here.

(The title of this entry is a reference to the TMBG song.)

Categories: Economic Freedom | Leave a comment

Another Productive Legislative Session

Posted on December 22, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

Piling waste upon waste, soon that December 25 holiday already recognized by the state will have a name. According to a post on the KY3 blog, of Missouri’s 12 recognized holidays, only four are officially named by the state, and there is a proposal underway to officially name the December 25 holiday “Christmas.”

This unproductive exercise by our General Assembly, like all its activities, can be tracked on Policy Pulse. I found it by searching the keyword “christmas.”

Categories: Politics | 1 Comment

No Taxation Without Ambulation

Posted on December 12, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

Missouri’s budget crisis is certainly in the news, so some legislators are trying to innovate their way out. According to an article in the St. Louis Business Journal (snippet from the online version), a tax on Internet-based sales will be proposed in the Missouri General Assembly in January.

The bill is called the “Streamlined Sales and Use Tax Agreement Act,” and has already been pre-filed, so it can be found on Policy Pulse in a search with keywords from the bill’s title. Why can’t it be found by searching the keyword “Internet” or “e-commerce?” Well, this bill doesn’t only tax Internet sales. It is a complete overhaul of the Missouri sales tax system, in which tax becomes assessed at the point of delivery, rather than at the point of purchase. As pointed out in the Business Journal‘s article:

Missouri currently has a total of 2,173 local sales taxing jurisdictions. The only other state with a higher number of such bodies is Louisiana.

The article is not too friendly to the idea proposed in the bill, and points out the difficulties of administering such a tax system.

This proposed legislation is also an attempt to bring Missouri in line with a larger movement, the Streamlined Sales and Use Tax Agreement; here’s a list of current participating states. In the Business Journal, Sen. Joan Bray, the bill’s sponsor, said, “Kansas went through the process and Washington state is going through the process.” Here is a decent article that discusses Washington’s recent change, and the SSUTA. From the article:

In 1992, the U.S. Supreme Court ruled states could not force businesses to pay a sales tax unless the company has a physical presence in the state.

This federal ruling means that membership and participation in the SSUTA is voluntary, and 22 states have already joined in at least some capacity.

I am opposed to this proposal for Missouri not only because of the high cost of implementing and enforcing the measure, but also because of the limitation that this represents on the free choice provided by the Internet. It is currently possible to buy many things you need or want on the Internet at prices that are competitive with local stores, even after shipping costs are considered. This is a tremendous boon for people who don’t happen to live near a major metropolitan area, and a nice opportunity to comparison shop from far and wide. A tax on Internet sales is yet one more way that legislatures are attempting to restrict the wonderful boon that Internet commerce represents, for buyers and sellers alike.

Categories: Economic Freedom, Politics, Taxes | 2 Comments

Get Your Law On

Posted on December 4, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

According to an article from the Post-Dispatch, it’s bill-writin’ season! And you know what that means: Missouri legislators are proposing legislation based on every constituent’s letter that begins, “There oughta be a law …”

Here are the highlights:

  1. A ban of beer bongs, Jell-O shots and Mardi Gras beads on Missouri rivers.
  2. A ban of cell phone use while driving, with certain exceptions.
  3. A ban on those political robo-calls that some of the folks who just got elected used to try to sway voters.
  4. A bill that would allow veterans in Missouri to deduct their military retirement income from state income taxes.

The free-market knee-jerk to the first bill is that it’s likely unhelpful. In fairness, these are public areas, so perhaps the government should have purview. It smells a bit like prohibition to me, but that’s certainly overreaction.

What could I say about the second proposal that hasn’t already been said here?

The third proposal has little to do with the market, again. It is, however, an interesting application of public choice theory, I think.

The fourth proposal is one that I can really get behind. I don’t wish to favor former military personnel as such, and am aware that this will create a distortion in the market (incentivizing military service slightly), but I am in favor of reducing taxes in essentially all cases.

Categories: Politics, Regulation, Taxes | 3 Comments

Internet Regulation: We Must Make the Circle Square

Posted on December 2, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

Megan Meier’s sucide happened over two years ago, but the trial of Lori Drew drew to a close just recently, with the jury finding her guilty last Friday of three counts of accessing a computer without authorization, and not guilty of felony conspiracy.

According to an interview with the jury forewoman on STLToday.com (a shortened version of a front-page article from the Post-Dispatch‘s print version) all but four of the jurors wanted to pursue the conspiracy charge “to send a message that Internet sites should be better regulated for fraud.”

First and foremost, this is clearly not the best reason to convict someone of a felony. “To Send a Message” is the reason the mafia does horrible things; not reasoned, civilized people. An example need not be made.

Moreover, the point they were trying to make is explicitly that the Internet needs better fraud regulation. We already have laws and precedents to protect people from deception and harm. If a person is wronged by another person, the victim has civil and criminal recourse. Increasing the depth or scope of regulation only confuses the important system of justice, creating possible victimless crimes and further inundating an already overburdened legal system.

This, of course, does not begin to address the issue of the difficulty (the near impossibility) of regulating the Internet. The free flow of information from place to place has brought with it drastically improved efficiency and productivity. Communication and media freedom are so cheap now that it is easy to take it for granted. At present, and in many ways, the Internet behaves much like a perfectly competitive marketplace, with sufficiently many demanders and sellers of all kinds that those who harm others or do business in a reprehensible way can be easily punished with a simple move to a competitor.

I propose to those who would impose new legislation on the Internet the following: Let the justice system and the marketplace function in their proper roles to deliver their respective products of punishment and all other goods/services.

Categories: Courts, Economic Freedom | 2 Comments

Another Potential Meaningless Victory for the Nanny State: Bike Helmets

Posted on November 25, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

Helmet laws are a popular mechanism by which state and local governments like to insert themselves into the lives of their citizenry, and the recent news out of Saint Louis County is no exception.

Naturally, I oppose this on ideological grounds, but I am willing to consider the case for the sake of argument. A plethora of good links can be found at Wikipedia’s section on the Bicycle Helmet Debate. The conclusion? There is no consensus, but there is also a dearth of reliable data on the efficacy of helmet-wearing. A rather pithy link points out:

  • Children are 2.6 times more likely to suffer head injury through jumping and falling than by cycling. [5]
  • Helmets for motorists are much more effective than those for cyclists and more beneficial than seat belts, interior padding or air bags. Their potential for reducing injury is 17 times greater than that of cycle helmets. [7] [3]

At this point, I am not prepared to say unequivocally that helmets do not improve safety significantly. I think we can all agree that car accidents are a much greater risk to us all, and therefore a helmets-while-driving law would entail much more improved safety, and much more voter outrage.

This proposal is a classic case of legislators lashing out at an “easy fix” that isn’t really that easy (but is unlikely to be unpopular) to a problem that doesn’t really exist. Cost/benefit analysis is out the window, because we must protect our children.

Categories: Regulation | 9 Comments

The Gun Buyback May Not Come Back

Posted on November 20, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

An article from the Post-Dispatch tells us that, despite a request from the police chief to repeat last year’s gun buyback, the Board of Police Commissioners failed to approve funding for the program. The matter failed on a 2-2 tie vote, with the mayor — who would’ve voted for it — absent, because of a prior engagement.

Free-market advocates want to reduce violent crime as much as any other group, perhaps more so. If gun buybacks* reduce crime, I’m officially gung-ho: Let’s do it.

Unfortunately, there appears to be no evidence that gun buybacks actually reduce crime in the slightest measurable way. Here are some links. From the first link:

[A]cademic researchers – often divided by passionate differences over gun control – are in rare agreement in their conclusions.

[…] University of Pennsylvania professor Lawrence Sherman, who headed a wide-ranging assessment of crime prevention programs, called gun buy-backs “the program that is best known to be ineffective” in reducing firearms violence.

From the fourth link:

“The typical person who hands in a gun is not a criminal,” [research director at the Independent Institute, Alex] Tabarrok says. “If they want to reduce crime, they ought to put more police on the streets, something we know works.”

Show-Me Daily has covered this before — mostly last year, when this unfortunate idea took hold of our police. I don’t particularly blame them; if it were my job to deal face-to-face with criminals every day, I’d want to do whatever I could to reduce the chance that they’d wave a gun my way. Unfortunately, gun buybacks simply are not a useful way to accomplish this, and they may have the opposite of their intended result.

For a tangentially related post to which the Peltzman Effect also applies, read this (if you haven’t already).

*The word “buyback” in this case is a particularly euphemistic misnomer, in my opinion. It subtly reinforces the idea that the police are the source of all guns/protection, thus undermining the notion that individuals have the right/responsibility to defend themselves. This is in no way aimed at the StL PD, who I’m sure did not invent or popularize this term, I mean only to call attention to the subtle psychological damage this term may be inflicting.

Categories: Local Government, Media | 4 Comments

In Awe of Freedom

Posted on November 18, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

One of the problems with advocating market solutions and disparaging government solutions is a complaint often uttered by free-market advocates, and it is a version of the broken window problem. Government solutions are imminently visible and localized (in one agency or project), whereas market solutions tend to be spread out among competing innovative firms or individuals. No government told this girl she had to do research to determine how safe her baby brother is — she did it because she wanted to know. This characterizes the kind of individual innovation that is lost when government dictates the arrangement of resources.

It is difficult and unfair to say that this particular girl’s (admittedly dubiously scientific) idea would’ve fallen victim to a government rearrangement of resources, but it’s even harder to say what exactly would fill the void if the government left every part of the economy alone tomorrow. The marvelous thing is how much gets done without government control, and how efficient it all is. There’s a microeconomics textbook co-authored by Robert Frank and the current chairman of the Federal Reserve, in which the first two pages of chapter three tell a short but fantastic story about the difference between the markets for food and housing in NYC. Their conclusion is that the seemingly chaotic power of unfettered markets tends to bring people what they want.

If you start on page 57, you can find what I’m talking about. It’s short and well worth the read for anyone not already sold on the idea that markets are neat and inherently good. (Good at bringing people what they want. It’s a normative utilitarian analysis, admittedly.)

Categories: Economic Freedom | Leave a comment

Every Time I Go to the Pump, It’s Like the Sale of the Century

Posted on November 13, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

The title of this post comes from something I overheard another QT customer commenting to the person next to them at the pump.

I realize I’ve blogged about this recently, but I feel sure that it is an economic issue that hits close to home for virtually every person who reads this blog. Gas prices just keep falling. On Tuesday, USA Today reported that our fair state has the lowest average prices in the country, at $1.93 per gallon. And another article today points out that prices are expected to continue to fall.

Remember the bad news of a few months ago? Remember oil executives getting dragged in front of Congress? I was very happy when someone pointed me to this piece at the time. It served to remind me that not all people see high prices, even of so-called essential commodities, as evidence of corporate abuse. But now the storm is over. Global decline in demand worked through the market to signal the “all clear” to American gas consumers (at least for the time being). Competition keeps oil companies from maintaining $4 a gallon when the price per barrel drops 40 percent. Profits that truly rise above a market level aren’t sustainable in the long term without government-granted monopoly privileges.

I’d love to see a headline just once in the mainstream press to the effect of: “Gas Prices Reasonable Again: Thanks, Laissez-Faire.” Not likely, but the market certainly did more to lower gas prices than any gas-tax holiday. Unless we’re talking about a permanent gas-tax vacation.

Categories: Economic Freedom, Energy | 2 Comments

Won’t Someone Think of the Children?

Posted on October 30, 2008 by Josh Smith

[This post was originally written for my employer’s blog, Show-Me Daily.]

One of the top stories in the Post-Dispatch today reports that registered sex offenders will be closely monitored by increased police presence on Halloween.

There are some problems with sex offender registration as a whole, so it may not be worth the increased police presence. Some states require handgun owners to register with the state; would we want increased police presence outside the homes of registered gun-owners?

If parents worry (they will, and should, worry) for their children’s safety on this most-spooky holiday, perhaps their concern should center around more obvious dangers. The kind you can literally see coming.

Categories: Government Spending, Media | 3 Comments