17 mile trip in 78 minutes. Cost to rider $5. Cost to taxpayers $22.
Category Archives: Economics
Create Value
From Adam Gurri, via Cafe Hayek.
The point is, our goal should never be to “create jobs”. Our goal should be to enable people to contribute something valued by other people. The value is the point, not the work. If someone finds a way to provide value to hundreds of millions of people and it requires no more effort from them than batting their eyelashes, that would be a win.
It is all about value. Value is why raising the minimum wage does harm, not good, and why we need to put less power in the hands of the likes of SEIU, not more.
Don Boudreaux on Inequality
Specifically, Muscle Inequality.
Really, though, how seriously do I want this outcome? I could build more muscle if I spent not six hours weekly at the gym but, rather, six hours daily. But I choose not to do so. Spending more time at the gym means spending less time working (that is, earning income), less time with family and friends, and less time doing other things that I judge to be worthwhile. The fact that I’d be more buff if being more buff were costless is irrelevant. It’s not costless; therefore, the size of my muscles is largely the result of the way I choose to make trade-offs.
So I resist the temptation to envy men with bigger muscles (men whose muscles, do note, were not built with fiber taken from my muscles). And if muscle redistribution by government were possible, I’d oppose it. Not only would the result be less muscle bulk to ‘redistribute’ (Would you pump weights for hours each day knowing that a large chunk of what you build will be stripped away and given to someone else?) but, more importantly, I’m not entitled to the confiscated fruits of other people’s efforts.
You should read everything he writes.
Economics of Gas Taxes
Peter Franchot, the MD State Comptroller, has floated the idea of a gas tax holiday over one of the upcoming summer long weekends.
While gas prices have dropped about 10 cents per gallon over the last week, the Maryland average is still about $3.85 a gallon — about a dollar more than the same time last year.
A high-ranking state official who has vowed to fight soaring gas prices is floating the idea of a gas tax holiday, according to 11 News reporter David Collins.
Comptroller Peter Franchot plans to pitch a three-day gas tax holiday to the Maryland General Assembly, Collins reported Thursday.
“We think it would put Maryland on the map, and it would more than pay for itself through increased economic activity,” Franchot said. “Most of all, just give Maryland citizens a break.”
The current state gas tax is 23.4 cents per gallon. At one station Collins visited Thursday, a 15-gallon purchase would cost $56.25. With the gas tax lifted, the bill would have been reduced by $3.50.
I heard Franchot on the radio yesterday, explaining that certainly we can’t do it permanently, because of the revenue loss, but over a weekend the loss of $6 Million in revenue would be offset by increased economic activity, and would be a net gain for state tax revenue, as well as good for residents of the state.
How is it possible he understands eliminating the tax for a short period of time would have a net positive benefit, but doesn’t understand that it would have a positive benefit if it were eliminated permanently?
Cribs
The Consumer Product Safety Commission is banning drop side cribs, a product that has been on the market for decades.
Why?
Because 3.2 children per year die in incidents related to the cribs. The CPSC isn’t clear on how many of those 3.2 deaths are also associated with an idiot caretaker who probably would have killed the child anyway.
If the cribs were really that dangerous, wouldn’t people just stop buying them?
The cost to just the day care industry: $550 million. If the life of a crib is 10 years, the cost to just day care centers is more than $17 million per potential life saved, assuming a 10 year lifespan of a crib, and assuming the deaths were actually due to the cribs, and not an idiot operating the crib.
I don’t want to sound harsh, but is that really worth it? Doesn’t the marketplace already solve this problem?
It’s really about getting other people to buy you stuff
Carpe Diem points out the cost of insurance for a young person in Michigan.
It points out what’s been clear to thinking people all along: Passing health care reform was always about using force to make one group of people buy something for another group of people.
If you choose between health insurance and a cell phone (much less an iPhone), that’s your doing. Not mine. I should not have to subsidize your cell phone, or your vacation… which is what these folks really want.
But no one would ever pass a law making me pay for cell phones or vacations. Health care, on the other hand, well not paying for that is just mean.
More Evidence of Failure
According to some Economists, the recession ended in June of last year, before the “stimulus” money started hitting the economy.
So why no recovery? The article points out one big reason: Uncertainty.
How slow? The Organization for Economic Cooperation and Development figures the U.S. economy will grow 2.6 percent this year. It would take growth twice that fast to drive down unemployment by a single percentage point.
Unemployment usually keeps rising well after a recession ends. That’s because it takes time for companies to gain confidence in the economy, know that customer demand will last, and add jobs.
But for the past few recessions, it’s taken longer and longer for unemployment to come down. In 1982, for example, unemployment peaked the same month the recession ended. After the 2001 recession, the gap was 19 months.
This time around, it’s been 15 months, and economists don’t expect unemployment to come down significantly anytime soon.
Companies are always a little uncertain coming out of a recession. Coming out of this one, much like coming out of the recession in the early 30′s that became the Great Depression, government has created additional uncertainty. That will prolong the recovery at a minimum, and might send us back in to another recession.
And the administration and Congress can only think that expanding the role of government and making things even more uncertain is the only answer.
It didn’t work in the 30′s, and it won’t work this time. What will work is eliminating the uncertainty so businesses are confident they can grow again without unexpected government intervention and increased costs.
