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Posts Tagged ‘government’

The “Daughter Test” of Government Prohibitions (And Why I'm so Angry About the U.S. Internet Poker Crackdown)

I was outraged a few weeks back when the U.S. government cracked down on internet poker. It took me a while to figure out why.
One of the most important roles of government is establishing a set of rules under which society will operate. Governments determine property rights and coordinate the provision of public goods. Some frowned upon activities are deemed illegal (e.g. homicide); other favored activities are encouraged through subsidies (e.g. home ownership, education).

Mistrust and the Great Recession

Four years ago, 75% of Americans said that they had confidence in financial institutions or banks. Following the financial crisis, that number has fallen dramatically, to 45%. This well-earned public mistrust may be yet one more factor retarding the recovery of the financial sector, and possibly the broader economy. Survey data also show that trust in government is also currently . . .

A Mandate to Be Inefficient

This week, the United States Supreme Court delivered a decisive blow to Mayor Michael Bloomberg’s plan for New York City taxicabs to go green, to switch to hybrid cars. This all started a few years ago when Bloomberg announced a plan to mandate that the famous New York City taxi fleet go all-hybrid. The classic Crown Victoria gets about 12 miles per gallon, whereas a hybrid taxi gets 30 miles per gallon. Quite a difference! So this is great for the environment.

Giving Back the Tax Cuts: A Guest Post

My colleagues Jacob Hacker and Daniel Markovits have created a cool website called that not only includes a useful tool to let you calculate the size of your tax cut, but suggests that “Americans who have the means should collectively give back our Bush tax cuts, by making donations to organizations that promote fairness, economic growth, and a vibrant middle class.” Here’s a post from the creators themselves that gives more details.

Brother, Can You Spare a Trill?

Economists Mark J. Kamstra and Robert J. Shiller propose a new tool for government financing: “trills” — i.e., shares in U.S. GDP.

Fix Medicare's Bizarre Auction Program

Harry Truman once quipped, “Give me a one-handed economist! All my economists say, ‘On the one hand, on the other'” Often even a lone economist has difficulty making a recommendation. While true on certain matters, there are many issues where economists do agree about the right and wrong course of action. A case in point is competitive bidding for Medicare supplies.

Adverse Selection in Disability Payments

The Great Silence by Juliet Nicolson presents information on disability payments to injured World War I veterans: 16 shillings per week (80 pence to those unfamiliar with older British money) for the loss of a right arm, 15 shillings for the loss of a left arm. Since about 90 percent of people are right-handed, this is more equitable than the reverse. But why not equality?

Isn't It Funny How Governments Loosen Their Morals When Cash Is Short?

From Dan Okrent’s recent Q&A about Prohibition: “No factor played a larger role in the repeal of Prohibition than the government’s desperate need for revenue as the country fell into the grip of the Depression.” In short: governments who hate vice suddenly hate it much less when cash flow is slow. And we are seeing that again today.

More Unintended Trash Consequences

A family in Sharon Township, Ohio (where residents are charged for their trash), left behind a big mess when they moved out of their home.

From Cap and Trade to Carbon Farming

There’s really no need to panic over the prospect of EPA dominance. Instead, industry should take the hint that’s it high time to push hard for climate-change legislation. Sure, the move by the EPA to exercise regulatory authority over carbon — a power granted to it by a 2007 Supreme Court ruling — was designed to give President Obama moral leverage in Denmark. But it also serves as a presidential prod to Congress to pass a climate-change law. No matter how you feel about global warming, greenhouse-gas emissions are not going to go unregulated. I suspect Obama ultimately nudged the EPA because he wants the U.S. Congress to do the regulating. Industry should support him on this.

The Rights to a View

Who owns the rights to an air space and to a view? What are property rights in such cases? An article in our local paper discusses complaints of residents in a luxury condo complex who are insisting that the City Council help pay the $75,000 it would cost an outdoor advertiser to move a billboard that blocks their view and lowers their property values.

Uncertainty and the Fed

There’s a strange view out there that with unemployment above ten percent, and inflation nascent, the Fed should be thinking about raising interest rates. Yesterday Philadelphia Fed President Charles Plosser attempted to explain his view:

"Just Compensation" Can Lead to More Government Takings

We are trapped in a world with far too few IRS audits. Law abiding tax payers hate being audited and their representatives in Congress have heard the message loud and clear – strangling the ability of the IRS to conduct field examinations. The problem with the current state of affairs is that non-law-abiding tax payers find it far too easy to avoid paying their fair share.

Guess What the Initials NADA Stand For

If nothing else, getting an economics Ph.D. should teach someone how to complicate and obfuscate the issue so that it isn’t so obvious to outsiders that the argument makes no sense.

(Lots of) Cash for Clunkers reports that its statistical analysis of the Cash for Clunkers program finds that the program generated only 125,000 extra new vehicle sales, meaning that the cost to the U.S. government was $24,000 for each of those new cars.

Is Nairobi Turning Into Singapore?

Nairobi’s City Council recently made life a little more difficult for the city’s residents by outlawing a wide variety of mundane activities. Things like blowing your noise without a tissue, spitting in the street, crossing the road while talking on the phone, and making loud noises will now result in a fine or jail term.

Things They Say at the U.N.

Muammar el-Qaddafi, the leader of Libya, recently attracted attention for his colorful speech to the United Nations General Assembly. He was hardly the first world leader to go off the reservation while addressing the U.N.

Be Cool, Ditch the Tie

In Bangladesh, a country whose power shortages are particularly severe during its hot summers, it doesn’t make much economic sense to dress up in a stuffy suit and then crank up your office’s AC to stay cool. That’s why, to cut down on air-conditioning use, the prime minister ordered a new dress code for the country’s civil servants: no more ties and suits – just simple, short-sleeved shirts. Casual Fridays every day shouldn’t be too difficult to enforce.

How Much Do Protests Matter? A Freakonomics Quorum

Iran’s citizens take to the streets en masse after a disputed election. Gay men in Salt Lake City hold a kissing protest. Members of the Westboro Baptist Church voice their anti-just-about-everything views to military funerals and elsewhere.
Beyond the media attention they inevitably garner, what do protests actually accomplish?

Cash for the Climate

Edward Glaeser (over at the Economix blog) and I are doing a few posts on the high-speed rail (HSR) component of the economic stimulus package (find the first post here). HSR promises to reduce carbon emissions, but so does the other hot transportation policy at the moment, Cash for Clunkers (CFC). Under CFC the federal government is providing rebates to consumers who trade in their vehicles for new ones that get better gas mileage. Which program is the more effective way to cool down the ice caps while heating up the economy?

Pick Your Apocalypse

Slate’s interactive End of America site presents 144 possible ways the U.S. could meet its demise and lets you choose your favorites. We’ve covered quite a few of them on this blog

Is Somebody Lying About "Cash for Clunkers"?

Congress set aside $1 billion to fund the program. If all of that money was going to pay these subsidies, there would be enough money to pay for 250,000 clunkers.
The program went into place on July 24th. One week later, the program was said to be out of money.
In 2006, before the current ills of the automakers, the average number of new cars sold in a week in the United States was 125,000.

High-Speed Rail and CO2

One of the less-publicized components of the stimulus package was an $8 billion commitment to develop a high-speed rail (HSR) network in America. This is no more than a down payment, given the very large sums needed to build HSR (University of Minnesota transportation scholar David Levinson estimates that the proposed California segment alone will cost $80 billion, or more than $2,000 per Californian; given my state’s financial problems, this is going to require a very large bake sale).

Leap Months and Kings

The Hebrew calendar is lunar, so that a leap-month has to be inserted every once in a while to keep the seasons and holidays at appropriate times. But when to insert the month, and what group should decide?

The Unintended Consequences of Secrecy

Washington, D.C., is underlaced by miles of fiber optic cables that carry information for the nation’s intelligence agencies. The exact locations of these cables are kept secret so that terrorists and other enemy agents can’t snip the lines. The secrecy has indeed kept the cables safe from terrorists. Instead, the danger comes from well-meaning construction crews, who occasionally sever these sensitive conduits during the course of an innocuous building project. That’s when the men in the black SUV’s show up.

Auction Aversion

David Warsh reflects on the advances of auction technology and market design since the first high-tech auction was held by the Federal Communications Commission in 1994. Warsh points out that despite the recent growth of auctions in private markets and the well-established benefits of auctions, industry continues to vigorously oppose government auctions. Auctions of landing slots at New York airports, toxic bank assets, and carbon emission permits have all been opposed by industry groups precisely because of their price-discovering power. Warsh, however, is hopeful about the future. “As principles of market design become more thoroughly articulated and widely understood,” he writes, “the sphere of governmental discretion will shrink.”