Wednesday, December 9, 2015
So Donald Trump is in the News Again
When fascism comes to America, it will be ̶w̶r̶a̶p̶p̶e̶d̶ ̶i̶n̶ ̶t̶h̶e̶ ̶f̶l̶a̶g̶ ̶a̶n̶d̶ ̶c̶a̶r̶r̶y̶i̶n̶g̶ ̶a̶ ̶c̶r̶o̶s̶s̶ wearing a toupee.
But probably also promoting those other things.
Thursday, October 1, 2015
Does Immigration Make US Healthier?
There are two common barriers cited in discussing what prevents Americans from eating healthier: cost, and convenience. This issue takes an interesting twist in the face of immigration reform and who is allowed to work in the United States. It's possible that migrants play a positive role in the consumption patterns of Americans, and limiting their presence would make us an even larger (waist-wise) nation.
While the statement "they do the jobs Americans won't" is largely correct, it requires an addendum: Americans won't do those jobs at the wages those jobs offer. If picking cherries offered $15/hour and health insurance, college graduates would be sending in their resumes to the orchards of northern Michigan. But that's not what menial farmwork pays. And if it did, the cost of produce would rise. This is a second-level consequence of further constraining immigration we generally recognize.
Low-cost produce obviously doesn't help with the convenience issue - supersodium frozen dinners and fast food meals will always be more convenient than steaming your own vegetables. But as long as those vegetables are affordable, more people will buy them.
Would the Great Trump Wall and tightening of legal immigration actually make the county less healthy? Probably not any more than a marginal degree. It's still an interesting unintended consequence to consider.
While the statement "they do the jobs Americans won't" is largely correct, it requires an addendum: Americans won't do those jobs at the wages those jobs offer. If picking cherries offered $15/hour and health insurance, college graduates would be sending in their resumes to the orchards of northern Michigan. But that's not what menial farmwork pays. And if it did, the cost of produce would rise. This is a second-level consequence of further constraining immigration we generally recognize.
Low-cost produce obviously doesn't help with the convenience issue - supersodium frozen dinners and fast food meals will always be more convenient than steaming your own vegetables. But as long as those vegetables are affordable, more people will buy them.
Would the Great Trump Wall and tightening of legal immigration actually make the county less healthy? Probably not any more than a marginal degree. It's still an interesting unintended consequence to consider.
Sunday, September 20, 2015
Another Health Insurance Market Failure
I remember during the conversations during Obamacare's construction, one of the more obscure issues was how insurance companies don't have clients for that long, so insurance companies do a poor job of encouraging long-term health (I couldn't find the statistic, but I believe the average person has the same company for somewhere in the area of three or four years).
This seemed to be a reasonable criticism of America's state of health affairs, and I could argue it in the abstract. After all, approaches that achieve long-term health benefits are investments that save money in healthcare coverage down the road, but if the insurance company isn't likely to reap the benefits, why should it make the investment? This is obviously a market failure, because the market could operate more efficiently, but providers (justifiably) are acting in their self-interest (in this sense, public health is arguably a tragedy of the commons our system has manufactured). However, I never had an explanation of how this works in practice.
I've now encountered my example, and it's frustrating experiencing how it works. I recently completed the final physical therapy session my insurance company will allow me to partake in, although my ankle has never fully healed. There's a decent chance that with another month of work I'll be much better off, but my policy doesn't allow for it. The hell of it is, spending some extra money now should pay off in the long-term, as the current state of my ankle leaves me in line for arthritis and other issues down the road.
No one refutes this. My physical therapist is the expert saying it will happen, on a logical level I agree with him based on my limited understanding of how joints work, and the insurance company likely understands. But I'm unlikely, statistically, to be with Blue Cross of New York in 20 years when my ankle becomes a real problem, so there's no rational reason to invest in therapy now. It will be someone else's responsibility at that point. Even if future surgery is way more costly than extra PT sessions this year, someone else will foot the bill.
I get the contra - if my insurance company allowed me unlimited visits, my physical therapist would be inclined to continue scheduling sessions even after they were no long necessary in order to make more money. Some providers would resist this temptation, some would be bad actors, and some would schedule unnecessary visits merely for the sake of erring on the side of caution. So even in a system that pays for preventative care, there would still be concerns. Answers may be difficult to definitively determine, but our system is undeniably prejudiced against long-term economic decision-making.
This seemed to be a reasonable criticism of America's state of health affairs, and I could argue it in the abstract. After all, approaches that achieve long-term health benefits are investments that save money in healthcare coverage down the road, but if the insurance company isn't likely to reap the benefits, why should it make the investment? This is obviously a market failure, because the market could operate more efficiently, but providers (justifiably) are acting in their self-interest (in this sense, public health is arguably a tragedy of the commons our system has manufactured). However, I never had an explanation of how this works in practice.
I've now encountered my example, and it's frustrating experiencing how it works. I recently completed the final physical therapy session my insurance company will allow me to partake in, although my ankle has never fully healed. There's a decent chance that with another month of work I'll be much better off, but my policy doesn't allow for it. The hell of it is, spending some extra money now should pay off in the long-term, as the current state of my ankle leaves me in line for arthritis and other issues down the road.
No one refutes this. My physical therapist is the expert saying it will happen, on a logical level I agree with him based on my limited understanding of how joints work, and the insurance company likely understands. But I'm unlikely, statistically, to be with Blue Cross of New York in 20 years when my ankle becomes a real problem, so there's no rational reason to invest in therapy now. It will be someone else's responsibility at that point. Even if future surgery is way more costly than extra PT sessions this year, someone else will foot the bill.
I get the contra - if my insurance company allowed me unlimited visits, my physical therapist would be inclined to continue scheduling sessions even after they were no long necessary in order to make more money. Some providers would resist this temptation, some would be bad actors, and some would schedule unnecessary visits merely for the sake of erring on the side of caution. So even in a system that pays for preventative care, there would still be concerns. Answers may be difficult to definitively determine, but our system is undeniably prejudiced against long-term economic decision-making.
Saturday, September 12, 2015
That Time The New Yorker Incensed Me Into Writing the Editor
While I find John Cassidy’s concerns on the evolving (devolving?) value of higher education largely on point (“College Calculus,” September 7), I question what appear to be potshots aimed at Kansas State University (full disclosure: not an alumnus, but I am native to the State and support the school’s research and extension mission). Cassidy is concerned that colleges are enticing students with specialized degrees that may sound exciting and even offer short-term reward, but fail to provide lifetime value. He then holds up Kansas State’s major in Bakery Science and minor in Unmanned Aircraft Systems as examples. While understanding of drone technology holds obvious value as the robotics become more ubiquitous in society (a fact the article fails to acknowledge), Cassidy condescendingly suggests that the purpose of the Bakery Science major is to “run a bakery.” Were this the purpose of the degree, it would well buttress his argument that students are increasingly taking on student loans to obtain unnecessary degrees. Unfortunately for Cassidy, it’s not. K-State’s Grain Science program has been in operation for over fifty years, suggesting it is far from a fly-by-night scheme to bring in additional tuition dollars. The program enjoys 100 percent placement (a statistic Cassidy may find dubious), and graduates earn the highest starting salary of all College of Agriculture graduates (a more difficult fact to quibble over - K-State’s College of Agriculture is consistently ranked among the top ten in the nation, signaling a semblance of worth in the degree.).
The irony is that the bakery program appears to be imbuing students with specific skills that make them more marketable in the workplace. Graduates are trained to work for Kellog’s, Nestle, and King Arthur Flour – not the local donut shop. As genetic science continues modifying the protein composition and nutritional nuances of grains, this training will only increase in value. We now want sweet foods without the sugar content and savory foods without the cholesterol – who do you think develops these products?
This article is dog-whistling at its finest. Cassidy fears that college degrees may only be used for signaling, thereby failing to provide specific training that makes a graduate worth more. He then purposefully singles out a program that provides specific training that makes students more knowledgeable and marketable, but condescendingly suggests these students are only good for running local bakeries. There are undoubtedly examples of narrowly focused degrees with inherent risk that can be mocked. I like to think an Oxford/Columbia/NYU-educated journalist didn’t simply single out a funny-sounding degree from a seemingly Podunk institution in Kansas and decide this was the perfect example without actually doing any research into the program, because that would be really lazy. I like to think this wasn’t a play to an overly educated East Coast audience readily willing to join the mockery of a public school in Kansas, because that would also be really lazy. Unfortunately, the author appears willing to do exactly that. I’m personally familiar with better examples on the East Coast, but we must apparently consider where our readership lies – in the ivory towers of the original colonies, and not the plains of the Midwest.
What's unfortunate is, I otherwise completely agreed with the article.
What's unfortunate is, I otherwise completely agreed with the article.
Tuesday, July 28, 2015
Why Niche Markets Shouldn't Lobby for Ideology
Politco's Morning Agriculture memo this morning thought it stumbled on something interesting this morning when it led it's daily e-mail with the following:
Whole Foods is not some ideologically pure group seeking to make everyone in the country a hippie, natural-food loving consumer. It's a billion-dollar corporation bilking customers who bought into the organic craze. Its CEO lambasted the Affordable Care Act a couple years ago, clarifying Whole Foods is not some instrument of the left.
The only lobbying Whole Foods should be engaging in is to prevent labeling of GMO foods. As a niche market, it enjoys being able to charge a premium to claim the purity of its products. Once Price Chopper, Wal Mart, and Kroger are forced to similarly label their foodstuffs, consumers may be less likely to patronize Whole Foods as they're comfortable in being able to find non-GMO products anywhere. Lobbying against the Pompeo Bill obviously risks too much backlash from consumers to pursue the strategy, but Whole Foods should be comfortable in sitting back, not throwing millions at the problem, and enjoying its nicheness.
Whole Foods is the chain store that serves up organic food, while Chipotle is the chain fast-food restaurant promising all-natural meat products. So why doesn't Chipotle want everyone to be forced to eat that way? Same reason - as long as all-natural food consumption is held out as some sort of unique product, Chipotle can capitalize on its scarcity. Any bureaucratic move to reduce scarcity denies Chipotle to charge a premium. (FYI, it's interesting that while McDonald's divorced itself from financial interest in the chain about a decade ago, Chipotle has been crushing it while McDonald's is getting hammered.)
I'd never heard of Applegate before the article, but it appears to be a line of meat products in grocery stores such as chicken nuggets and hot dogs. Most of its products are red meat, and the company appears to operate under the guise of healthy because its products are organic while simultaneously clogging your arteries (see product line here). This is the company that stands to lose on a labeling bill for the same reasons - right now the company markets itself as organic, and there are enough customers who care enough to pay a premium for the label. Forcing everyone to label will push more companies to ensure they can meet the same standards. This may be good for consumers, but bad for Applegate because increased supply will lower prices at the checkout aisle. That means more money in your pocket, and less than theirs.
Still not convinced? An analogy is fuel-efficient cars. While people are aware they'll save money on gas purchases if they buy a more fuel-efficient car, some care more than others. A company specializing in making a great fuel-efficient car can target those people that care, but there may not be enough for all auto manufacturers to really target this market (think Toyota v. GM at the turn of the 21st century).
But if Congress requires companies to label the gas mileage a car receives and installs CAFE* requirements, other companies see greater incentive to enter the small-car market. This is good for consumers of small cars because choice equals lower prices, but the niche for efficient cars previously filled by a single company no longer makes that company as much money. It doesn't make sense for Toyota to lobby Congress to increase GM's presence in the small-car market in this example. It similarly doesn't make sense for Whole Foods to lobby Congress to increase competitors in the market.
*Corporate Average Fuel Economy
'GOOD FOOD' INDUSTRY ESCHEWS LOBBYING: "The leaders of the so-called good food sector - including Chipotle, Whole Foods and Applegate - are winning big in the marketplace with health-conscious consumers. But the industry's current lobbying strategy - largely ignoring Capitol Hill - may be a recipe for disaster in the long run, some of its other leaders say," reports Pro Agriculture's Helena Bottemiller Evich.So some healthy food providers are not lobbying Congress to mandate GMO labeling or push other policies enhancing nutrition in America. I don't understand why this should be thought of as surprising - Whole Foods and Chipotle only stand to lose if they do so.
"The inertia already has cost the fast-growing sector: Just last week, the House approved a bill to block any state-level mandatory GMO labeling 275-150, a mostly party-line vote that picked up 45 Democrats. There's a growing list of good food industry leaders who are worried that remaining aloof could mean missing opportunities to fight several hot-button issues in Congress, including the future of federal dietary recommendations and school lunch reform.
"Yet neither Whole Foods nor Chipotle and Applegate, companies that serve up antibiotic-free meats, nor Hain Celestial Group, which owns Arrowhead Mills, Spectrum and Celestial Seasonings, have a single registered lobbyist between them, according to a POLITICO review of disclosure records. Their involvement on Capitol Hill, on issues from the farm bill to nutrition labeling, has ranged from limited to nonexistent."
Whole Foods is not some ideologically pure group seeking to make everyone in the country a hippie, natural-food loving consumer. It's a billion-dollar corporation bilking customers who bought into the organic craze. Its CEO lambasted the Affordable Care Act a couple years ago, clarifying Whole Foods is not some instrument of the left.
The only lobbying Whole Foods should be engaging in is to prevent labeling of GMO foods. As a niche market, it enjoys being able to charge a premium to claim the purity of its products. Once Price Chopper, Wal Mart, and Kroger are forced to similarly label their foodstuffs, consumers may be less likely to patronize Whole Foods as they're comfortable in being able to find non-GMO products anywhere. Lobbying against the Pompeo Bill obviously risks too much backlash from consumers to pursue the strategy, but Whole Foods should be comfortable in sitting back, not throwing millions at the problem, and enjoying its nicheness.
Whole Foods is the chain store that serves up organic food, while Chipotle is the chain fast-food restaurant promising all-natural meat products. So why doesn't Chipotle want everyone to be forced to eat that way? Same reason - as long as all-natural food consumption is held out as some sort of unique product, Chipotle can capitalize on its scarcity. Any bureaucratic move to reduce scarcity denies Chipotle to charge a premium. (FYI, it's interesting that while McDonald's divorced itself from financial interest in the chain about a decade ago, Chipotle has been crushing it while McDonald's is getting hammered.)
I'd never heard of Applegate before the article, but it appears to be a line of meat products in grocery stores such as chicken nuggets and hot dogs. Most of its products are red meat, and the company appears to operate under the guise of healthy because its products are organic while simultaneously clogging your arteries (see product line here). This is the company that stands to lose on a labeling bill for the same reasons - right now the company markets itself as organic, and there are enough customers who care enough to pay a premium for the label. Forcing everyone to label will push more companies to ensure they can meet the same standards. This may be good for consumers, but bad for Applegate because increased supply will lower prices at the checkout aisle. That means more money in your pocket, and less than theirs.
Still not convinced? An analogy is fuel-efficient cars. While people are aware they'll save money on gas purchases if they buy a more fuel-efficient car, some care more than others. A company specializing in making a great fuel-efficient car can target those people that care, but there may not be enough for all auto manufacturers to really target this market (think Toyota v. GM at the turn of the 21st century).
But if Congress requires companies to label the gas mileage a car receives and installs CAFE* requirements, other companies see greater incentive to enter the small-car market. This is good for consumers of small cars because choice equals lower prices, but the niche for efficient cars previously filled by a single company no longer makes that company as much money. It doesn't make sense for Toyota to lobby Congress to increase GM's presence in the small-car market in this example. It similarly doesn't make sense for Whole Foods to lobby Congress to increase competitors in the market.
*Corporate Average Fuel Economy
Monday, July 27, 2015
Which League Increases Pitchers Salaries?
It was announced yesterday that the Royals have acquired Johnny Cueto; a necessary move if they hope to win the World Series this year (that's how the organization felt, and I'm of like opinion). And as an NL pitcher (Cueto played for the Reds) sheds the responsibility of batting in his new AL home, I question which league most impacts the salaries of pitchers.
I used to believe the NL made pitchers marginally cheaper for AL teams. The American League doesn't care if a pitcher can hit. But in the National League, a guy with 92 mph heat who carries a .350 OBP could be more valuable than a slightly harder slinger who strikes out the majority of his at-bats. Obviously the arm is the most important function of a pitcher's value, but batting is a consideration that NL personnel offices must pay attention to. That makes pitchers who can manufacture hits worth more, and those that can't worth less. AL teams then have the opportunity to swoop in and acquire those pitchers that can't hit, because they ascribe a different value to hitting (essentially, zero).
However, the pendulum swings the other way too: AL teams have an opportunity cost NL teams don't concern themselves with in the designated hitter. Using Kansas City as an example, the Royals acquired Kendrys Morales this year to be their designated hitter. Morales should never be playing first base for the Royals - while he's technically the backup to Eric Hosmer, expect a quick call-up from Omaha for Balbino Fuenmayor to play the position.
So what do the Royals pay for the privilege of having Morales on the roster, despite the fact he should never field the ball? His current deal is worth $17 million* over two years, and that's not at the high end of the spectrum. Alex Rodriguez obviously pulls in the most dough (due $21 million cash money in 2015), while David Ortiz will make $16 million, and Nelson Cruz and Nick Swisher will pull down $15 million this year. Only two teams (Houston andAnaheimLA) aren't paying at least $3 million for the position. Morales makes the median salary for DHs in the MLB at $8.5 million.
What does an NL team gain in avoiding the opportunity cost of carrying a designated hitter on the roster? The average NL payroll this year is $124 million (inflated by the insane spending of the Dodger), and the median payroll is $105 million (Milwaukee Brewers). That means if the Brewers were the Royals of the AL, 8.1% of their payroll would be going to Kendrys Morales. In this scenario, Ryan Braun is probably gone from Milwaukee. Unless they can develop one for cheap (doesn't happen), the Brewers would have to make a major decision in whether to be competitive by overpaying for a DH (I consider DH the most overpaid position in the league), or having a guy hitting .210 in the line up.
Or maybe not. If all NL teams are subject to the DH rule, the cost of pitchers would likely decrease. Cruz could command more money because 30 teams want him rather than 15, but all other positions would take a salary hit because NL teams would have less money to spend on non-DH positions. And that includes pitchers. Finite resources and all that jazz. I guess the takeaway is, blame the DH rule for inflated payrolls. And go Johnny Cueto.
*For consistency, all numbers should be in 2015 cash, not payroll hit.
I used to believe the NL made pitchers marginally cheaper for AL teams. The American League doesn't care if a pitcher can hit. But in the National League, a guy with 92 mph heat who carries a .350 OBP could be more valuable than a slightly harder slinger who strikes out the majority of his at-bats. Obviously the arm is the most important function of a pitcher's value, but batting is a consideration that NL personnel offices must pay attention to. That makes pitchers who can manufacture hits worth more, and those that can't worth less. AL teams then have the opportunity to swoop in and acquire those pitchers that can't hit, because they ascribe a different value to hitting (essentially, zero).
However, the pendulum swings the other way too: AL teams have an opportunity cost NL teams don't concern themselves with in the designated hitter. Using Kansas City as an example, the Royals acquired Kendrys Morales this year to be their designated hitter. Morales should never be playing first base for the Royals - while he's technically the backup to Eric Hosmer, expect a quick call-up from Omaha for Balbino Fuenmayor to play the position.
So what do the Royals pay for the privilege of having Morales on the roster, despite the fact he should never field the ball? His current deal is worth $17 million* over two years, and that's not at the high end of the spectrum. Alex Rodriguez obviously pulls in the most dough (due $21 million cash money in 2015), while David Ortiz will make $16 million, and Nelson Cruz and Nick Swisher will pull down $15 million this year. Only two teams (Houston and
What does an NL team gain in avoiding the opportunity cost of carrying a designated hitter on the roster? The average NL payroll this year is $124 million (inflated by the insane spending of the Dodger), and the median payroll is $105 million (Milwaukee Brewers). That means if the Brewers were the Royals of the AL, 8.1% of their payroll would be going to Kendrys Morales. In this scenario, Ryan Braun is probably gone from Milwaukee. Unless they can develop one for cheap (doesn't happen), the Brewers would have to make a major decision in whether to be competitive by overpaying for a DH (I consider DH the most overpaid position in the league), or having a guy hitting .210 in the line up.
Or maybe not. If all NL teams are subject to the DH rule, the cost of pitchers would likely decrease. Cruz could command more money because 30 teams want him rather than 15, but all other positions would take a salary hit because NL teams would have less money to spend on non-DH positions. And that includes pitchers. Finite resources and all that jazz. I guess the takeaway is, blame the DH rule for inflated payrolls. And go Johnny Cueto.
*For consistency, all numbers should be in 2015 cash, not payroll hit.
Friday, July 24, 2015
The Best Polling Spot in the Republican Primary
It's July 2015, and America has already checked out of the Presidential election set to take place November 2016. Or maybe they never check out, because election season never ends. Or maybe they're permanently checked out because election season never ends. I don't know. Here's what I do though: a candidate currently outside the top ten is going to be one of the top finishers in the Republican primary, and there's some game theory that encourages this positioning.
As of the RealClearPolitics polling aggregate published yesterday, the list of candidates outside the top ten includes Rick Perry, Carly Fiorina, Rick Santorum, Bobby Jindal, and Lindsey Graham. Some of these candidates we know will be written off at the end of the day: Santorum might not actually understand how the constitution works and fails to exhibit any critical thinking ability on foreign policy. Jindal probably can't defend the direction he sent Louisiana in over the course of a campaign. I feel like Graham isn't seriously running, he just wants to push the party in a more hawkish direction (and in that is succeeding). But each of these could mount a noticeable campaign along the way, while Perry has worked hard to redefine himself, Fiorina could grab all sorts of suburban soccer moms, and some other candidates such as Chris Christie and Ben Carson may still take flight.
We get it, there are a lot of candidates in the field. So what's the best spot? I'll take #12 (give or take one). That's money.
Being top dog early on carries great peril. During the 2012 primaries, the Republican field systemically destroyed each candidate that took a lead until Romney finally held on. Ignoring Donald Trump, Jeb Bush presently leads all candidates. That puts a target on his back, and he'll be attacked in the coming months by all comers. Yet how does a candidate distinguish themselves to eventually overtake that top spot in the first place?
Our Presidential debates are travesties of democracy that cable news relentlessly covers. The news doesn't cover the issues, it covers the horse race. Who won? Who lost? Who best positioned themselves for the next round? And that's where a #12 distinguishes themselves. Fox and CNN have stated the top ten polling candidates will have one debate, and the leftover candidates get a secondary platform (interestingly, while CNN has clearly established rules for defining top ten, Fox does not, leaving the door open for them to choose which top ten they actually want on stage to a degree. Think the refusal to acknowledge Ron Paul in 2012 from Fox). And the winner of the secondary tier is due for attention and fawning: "Which candidate from tonight could we see on the main stage next time," and "who among the second tier looked like a serious contender?" With the spin cycle of our 24-hour entertainment news industry, that's phenomenal press. I guarantee the media will devote hours to the second tier debate outcome, and if one actor clearly outperforms the others, that's money. Even better, it doesn't carry the target of winning the big boy debate.
I've been chewing on this idea for a couple months, and it just seems right. Candidates polling at #8 or 9 have little chance of distinguishing themselves and will likely drop out. If you're not in the top five, there's one way to hope to win: beat everyone else polling outside the top ten.
Wednesday, July 15, 2015
The Biggest Winners of Last Week's Supreme Court Decisions
Obama may be taking a victory lap over the final determinations of the U.S. Supreme Court this session, but he wasn't the biggest winner. Obama may have been happy, but in keeping an eye toward 2016, Charles and David Koch took home the ultimate prize. A quick look at each decision, and the impact, with a score from 10 to -10 to track the points the Koch Camp scores with each decision:
Lethal Injection (-1)
In a 5-4 decision, SCOTUS ruled that a drug linked to three different botched executions could continue to be used. This didn't favor the Koch Camp, but you can't win them all. Liberals seeking to paint the brothers as pure evil would be surprised (on this and a list of other issues) that there's more agreement than not on criminal justice policies between the two sides. The Kochs have spent millions promoting criminal justice reform - including donations to (GASP!) the ACLU.
The Kochs are much more rational actors than they're given credit for, and disprove of criminal justice as it's practice in America. And while they'd never promote additional services to help the poor, they're opposed to actively punishing them for their socioeconomic status. Sure, they're appalled by the government spending billions to incarcerate people because those prisons are funded via taxes, but they've also been aligning with groups outright opposed to the death penalty.
Do they really care that much about the death penalty itself, or just the system's treatment of minorities committing low-level drug offenses? Hard to say, but the Charles Koch Institute is definitely devoted to reforming the system. Ergo, we rate this a -1, because I've no better score to argue for.
Same Sex Marraige (+7)
This victory is two-fold. The first is that gay marriage initiatives are major wins for Democrats. States putting the issue on the ballot in elections turns out the liberal vote, and colors elections blue. Depriving more States the opportunity to vote on the issue prevents this scenario. Additionally, while Koch Enterprises is headquartered in Kansas, the Kochs are New York City residents. They're not prejudiced people who discriminate based on skin color or sexual orientation.
Health Care Subsidies (+4)
Most people aren't aware of what the ACA decision actually did. The impact was the decision that the federal government may subsidies to individuals in states that opted not to provide marketplaces for insurance coverage (in those instances, the feds came in and set up insurance exchanges sans state support). There are 6.4 million people in 34 states receiving $1.7 billion monthly who would be effected.
On the surface, the Koch Camp hates this decision. It deprived the country of the opportunity to take a nice bite out of Obamacare and makes future reforms to the law more difficult. However, significant writing has been devoted to the pressure such a result would put on officials in swing districts. The biggest conservative fear of Obamacare was that, once you give someone something, it's hard to take it away. Those receiving healthcare assistance now expect to continue receiving it, and if you don't promise to return, they'll vote for someone who will. The ruling Republicans wanted could have very well precipitated a blue wave that actually strengthened the ACA. This ruling, considering everything, may have been the best outcome.
Pollution Limits (+10)
This was the win no one is talking about. The decision wasn't earth-shattering, but did rule the EPA was failing to properly conduct cost-benefit analysis in setting emissions limits. The EPA was headed down a path of requiring more expensive scrubbers and other technology that significantly impacted the bottom line of polluting industries. Given the portfolio of Koch Industries, the brothers' wallets will be larger in future years as a direct result of this outcome.
Lethal Injection (-1)
In a 5-4 decision, SCOTUS ruled that a drug linked to three different botched executions could continue to be used. This didn't favor the Koch Camp, but you can't win them all. Liberals seeking to paint the brothers as pure evil would be surprised (on this and a list of other issues) that there's more agreement than not on criminal justice policies between the two sides. The Kochs have spent millions promoting criminal justice reform - including donations to (GASP!) the ACLU.
The Kochs are much more rational actors than they're given credit for, and disprove of criminal justice as it's practice in America. And while they'd never promote additional services to help the poor, they're opposed to actively punishing them for their socioeconomic status. Sure, they're appalled by the government spending billions to incarcerate people because those prisons are funded via taxes, but they've also been aligning with groups outright opposed to the death penalty.
Do they really care that much about the death penalty itself, or just the system's treatment of minorities committing low-level drug offenses? Hard to say, but the Charles Koch Institute is definitely devoted to reforming the system. Ergo, we rate this a -1, because I've no better score to argue for.
Same Sex Marraige (+7)
This victory is two-fold. The first is that gay marriage initiatives are major wins for Democrats. States putting the issue on the ballot in elections turns out the liberal vote, and colors elections blue. Depriving more States the opportunity to vote on the issue prevents this scenario. Additionally, while Koch Enterprises is headquartered in Kansas, the Kochs are New York City residents. They're not prejudiced people who discriminate based on skin color or sexual orientation.
Health Care Subsidies (+4)
Most people aren't aware of what the ACA decision actually did. The impact was the decision that the federal government may subsidies to individuals in states that opted not to provide marketplaces for insurance coverage (in those instances, the feds came in and set up insurance exchanges sans state support). There are 6.4 million people in 34 states receiving $1.7 billion monthly who would be effected.
On the surface, the Koch Camp hates this decision. It deprived the country of the opportunity to take a nice bite out of Obamacare and makes future reforms to the law more difficult. However, significant writing has been devoted to the pressure such a result would put on officials in swing districts. The biggest conservative fear of Obamacare was that, once you give someone something, it's hard to take it away. Those receiving healthcare assistance now expect to continue receiving it, and if you don't promise to return, they'll vote for someone who will. The ruling Republicans wanted could have very well precipitated a blue wave that actually strengthened the ACA. This ruling, considering everything, may have been the best outcome.
Pollution Limits (+10)
This was the win no one is talking about. The decision wasn't earth-shattering, but did rule the EPA was failing to properly conduct cost-benefit analysis in setting emissions limits. The EPA was headed down a path of requiring more expensive scrubbers and other technology that significantly impacted the bottom line of polluting industries. Given the portfolio of Koch Industries, the brothers' wallets will be larger in future years as a direct result of this outcome.
Wednesday, April 22, 2015
The NFL Still Can't Get Scheduling Right
The Kansas City Chiefs 2015 schedule was released last night (the opponents have been known for some time, but not the dates). Some excitement awaits: a Thursday night home game against Denver (who has NFL Network and wants to let me use it?), Monday Night Football at Green Bay, and a Sunday night game at San Diego. Plus the London game against Detroit (which I still plan on making my first visit to Europe to see). Oh, and the Thursday night game against Denver is the home opener to boot.
Two issues. The first is that the bye (November 8) immediately follows the London trip, as it should. And it falls at an appropriate time - halfway through the season. That's fine, but it's still a load of bull that other teams have their bye in September. All byes should take place after a team has played 7-10 games. Does the NFL lose revenue because it has fewer games to show during these weeks? Possibly. But that's when teams need the time off before the playoff push, not after week four when injuries haven't had as much time to pile up. It just makes sense. From a team's perspective.
The second issue is that the final three games of the season are: at Baltimore, CLEVELAND, OAKLAND. The final game is fine. In fact, that's the way it should be - Kansas City/Oakland and San Diego/Denver to end every season. But where are the Bolts and Broncos? While very plausible that the Chiefs could be jockeying with the Ravens and Browns for a wildcard spot, I guarantee the greater intrigue would reside in a season-ending round robin against the other division opponents. Going into the last three games, the majority of divisions should have three (or even four) teams still in the playoff mix assuming they must still all play each other. That should be the goal for every division, and its disappointing the NFL doesn't make it a higher priority.
Two issues. The first is that the bye (November 8) immediately follows the London trip, as it should. And it falls at an appropriate time - halfway through the season. That's fine, but it's still a load of bull that other teams have their bye in September. All byes should take place after a team has played 7-10 games. Does the NFL lose revenue because it has fewer games to show during these weeks? Possibly. But that's when teams need the time off before the playoff push, not after week four when injuries haven't had as much time to pile up. It just makes sense. From a team's perspective.
The second issue is that the final three games of the season are: at Baltimore, CLEVELAND, OAKLAND. The final game is fine. In fact, that's the way it should be - Kansas City/Oakland and San Diego/Denver to end every season. But where are the Bolts and Broncos? While very plausible that the Chiefs could be jockeying with the Ravens and Browns for a wildcard spot, I guarantee the greater intrigue would reside in a season-ending round robin against the other division opponents. Going into the last three games, the majority of divisions should have three (or even four) teams still in the playoff mix assuming they must still all play each other. That should be the goal for every division, and its disappointing the NFL doesn't make it a higher priority.
Sunday, March 29, 2015
Typing For the Sake of It
It's a noon on Sunday and there's some downtime for me I'm not sure what to do with. Most of my waking hours this past month have been spent preparing budget analyses in my office, arguing over language minutia in the capitol, or shuffling between the two. I've also been eating a lot, because that's what happens when you sit around at work for hours on end. However, with downtime that I feel should be spent doing something, I find myself at a lazy loggerhead. Clean my office? Meh. Catch up on some reading? Maybe next month. Address something else needing a productive eye? I'd really rather not. Yet after a decent time devoted to Netflix, I feel that maybe I can compromise with myself and write. Because that's productive. I think.
I've never been one to assemble an outline before sentences flow - I remember in middle school were were always required to turn in an outline, rough draft, and final version of papers. My outline was often completed after I'd already written what I wanted. I'm too disorganized to plan. Too ADD too.
I started dating someone. It's been an experience I'm still trying to figure out. Have you ever dated someone clearly out of your league? Yet she acts as though it's not the case. I'll sort this out someday.
I've never been one to assemble an outline before sentences flow - I remember in middle school were were always required to turn in an outline, rough draft, and final version of papers. My outline was often completed after I'd already written what I wanted. I'm too disorganized to plan. Too ADD too.
I started dating someone. It's been an experience I'm still trying to figure out. Have you ever dated someone clearly out of your league? Yet she acts as though it's not the case. I'll sort this out someday.
Wednesday, February 18, 2015
Things I Learned My First Winter of Home Ownership in Upstate New York
- You cannot afford to both heat an old, oil-heated house and eat. You'll probably go hungry to save your pipes from freezing. Using your dog for heat at night isn't as weird as it sounds.
- You define the width of your driveway on the first shoveling of the year. The snow will not melt; it simply turns into ice. For every fresh snow, another two inches will be added to your retaining wall of ice bookmarking your driveway. At the point you realize it's becoming difficult to turn into your driveway, it's already game over. That 4-5 feet high frozen entryway that now flanks your driveway isn't shrinking until April.
- Remember when you'd only have to walk five blocks to work and mocked your coworkers whose commutes turned into white-knuckled drives of an hour or more? Karma.
- If a kid offers to shovel your snow, don't let them. Just give them $5. It's not worth the frustration of paying to have a child just push a shovel around for awhile without actually achieving anything.
- Every night your fireplace isn't in use is a wasted night.
- Sometimes the pipes freeze anyway. Broken pipes are best fixed with liquor. Don't bother calling a plumber. Just drink. The problem eventually goes away on its own.
Sunday, February 15, 2015
Running Forever in Kansas
Went for a run today. Six miles. -11º windchill, with gusts of up to 45 mph and snow largely covering over where exposed sidewalk belonged. It's brutal conditions out there. Yet even this experience felt somewhat sanitized, civilized, and benign. Around every bend a car is waiting to drive past to evidence society. Huddled pedestrians waiting for the bus or scurrying from the coffee shop to work are reminders that you're not that impressive - they're doing it without gloves or physical activity to generate warmth. You can run for miles around here and still be surrounded by houses. You can't get alone. Not like home.
Back home is different. There you can run in touch with some primal ancestor who fought the elements for survival. The land has been conquered, yet still feels primitive and untamed. Heading down the driveway and turning left onto 9, there's nothing. No elevation changes, no turns in the road. You just are. So run flat and straight as long as your legs will carry you. That's the most beautiful thing in the world - it doesn't matter if you run two miles before turning around or you run ten, you've run the same difference. You're in the same place. There are no pressures for pace or mileage or performance. Just flat and straight as long as you want - or as long as you can. Two or ten, it's all the same. There is no change, no time.
Every mile is the opportunity to turn. A country mile. Veer left, and too soon the river forces you to turn around. Choose right, and the descension to connecting with a dead ancestry is enhanced. Sometimes the summers are humid - those times you can't cut wheat until 11 or even noon because the plants become tacky and gum up the combine's machinery. Other years it's bone dry and you can cut all night. Those are the times to appreciate. Waking at five to race the sun out the door, there's already no sign of dew on the grass blades. In the middle of July you can already find yourself surrounded by brown as you head down an old dirt road. While other regions of the country are alive and thriving, the corn here is already racing to outrun death. When my ancestors migrated from the lush fields of Iowa, I wonder what they were trying to outrun? What did the death of a Kansas July offer that made them stop? Maybe they tried to run back, but never got anywhere. The trappings of a flat vortex.
Falling into stride with the fading crops can settle your mind into a peace unattainable anywhere else. Each step kicks up a small plume of dust that lingers in the air a minute or two before eventually settling back down onto the road, waiting for a passing pickup to provide the next disturbance. Someone in town says the rains should come soon and calm that dust down. Should inject some life back into the corn too. We'll see. Until it does, you can just keep running as far as your legs will carry you.
Back home is different. There you can run in touch with some primal ancestor who fought the elements for survival. The land has been conquered, yet still feels primitive and untamed. Heading down the driveway and turning left onto 9, there's nothing. No elevation changes, no turns in the road. You just are. So run flat and straight as long as your legs will carry you. That's the most beautiful thing in the world - it doesn't matter if you run two miles before turning around or you run ten, you've run the same difference. You're in the same place. There are no pressures for pace or mileage or performance. Just flat and straight as long as you want - or as long as you can. Two or ten, it's all the same. There is no change, no time.
Every mile is the opportunity to turn. A country mile. Veer left, and too soon the river forces you to turn around. Choose right, and the descension to connecting with a dead ancestry is enhanced. Sometimes the summers are humid - those times you can't cut wheat until 11 or even noon because the plants become tacky and gum up the combine's machinery. Other years it's bone dry and you can cut all night. Those are the times to appreciate. Waking at five to race the sun out the door, there's already no sign of dew on the grass blades. In the middle of July you can already find yourself surrounded by brown as you head down an old dirt road. While other regions of the country are alive and thriving, the corn here is already racing to outrun death. When my ancestors migrated from the lush fields of Iowa, I wonder what they were trying to outrun? What did the death of a Kansas July offer that made them stop? Maybe they tried to run back, but never got anywhere. The trappings of a flat vortex.
Falling into stride with the fading crops can settle your mind into a peace unattainable anywhere else. Each step kicks up a small plume of dust that lingers in the air a minute or two before eventually settling back down onto the road, waiting for a passing pickup to provide the next disturbance. Someone in town says the rains should come soon and calm that dust down. Should inject some life back into the corn too. We'll see. Until it does, you can just keep running as far as your legs will carry you.
Real-Life Chandler Bing Watches Friends to Learn Who Chandler Is
I watched an episode of Friends once in grad school. People seem to reference it, so I thought it would make me part of their inside jokes. The only thing I remembered was that one of the characters was named Joey - and even that was probably because I'd heard his name referenced in conversation before. But then last night I was sent a link to Buzzfeed's list of 44 Reasons Why You're Chandler Bing. It was me. Uncannily me. Except for the blurting things out in public - that's simply a gimmick for laughs the writers use and doesn't actually occur in real life, right? But the fact that apparently all sarcasm is the default response to all uncomfortable social interactions, and he makes all interactions uncomfortable, is spot on.
The next morning I found myself at the grocery store mocking Minute Rice (something to the effect of, "instant rice: for people who want to make food, but not really.") I looked up to see if anyone overheard me, and then realized I fully embodied whatever traits this list described. Including saying things out loud without full realization at the time of pronouncement. Except for #18 (taking bubble baths) - normal-sized adults don't actually fit in bathtubs. Fact.
So I decided to watch an episode of Friends and compare Chandler's life to my own, as this would be a better metric than Buzzfeed's approach of "let's take funny things he says and boil those quips down to an entire personality." Desiring academic rigor, I placed a few parameters on which episode to watch. The show ran ten seasons, so I'd select something from season five; character has been developed and is properly complex, but not so far along the writer's have become stale or the well has begun to run dry on his identity. Episode one is a reasonable place to start, as the show will be reintroducing Chandler for new viewers. For those keeping score at home, it's entitled "The One After Ross Says Rachel."
:25 - Pausing. I let my dog eat some feta cheese and a rawhide this morning. No, I can't explain the feta. One or both just made him throw up. Have to pick this up before he reconsumes. We're off to a good start.
:30 - Pausing again to make sure I know which character I'm watching for. Did you know that Matthew Perry has been in a number of things I've never seen? Quite the illustrious career.
2:15 - Episode starts with an awkward wedding scene with no context. Chandler suggests the exchange of vows could have been worse, as Ross could have shot Emily during the exchange. Truthful, though not particularly insightful.
2:45 - I think. That may have been Joey. They look generically alike so far. Was probably Chandler because the laugh track suggested the observation was witty.
5:45 - Chandler tells a nice-looking woman in a red dress to meet him in the wine cellar downstairs for some hanky panky. Things that I cannot relate to.
Trying to be Buzzfeedy. Here's a random screen capture with a remark. Maybe I'll follow it up with a gif farther down.
5:55 - She appears to be an integral part of the show. Wikipedia suggests Monica is a main character. She sets to downstairs to meet Chandler.
6:45 - Chandler reappears and is heaping food onto a plate at the buffet. Nothing happened. That's fair - in comparing what my outcome would have been, different journey, same result.
8:00 - Just a note that no character was ever properly introduced and that I'm as lost with episode one as I would be with episode 15.
10:00 - There appears to be an extensive plot revolving around Chandler and Monica trying to find a place to have sex. So far there have been three failed attempts.
11:00 - Four. How unresourceful is this man that he can't find a private place in a hotel? It's literally a structure of nothing but private rooms. I could find a room in a hotel.
Chandler and Monica gif a la Buzzfeedy format.
15:00 - Chandler flies first class. Elitist.
16:00 - Chandler was going to meet Monica in the bathroom to join the mile high club, but instead engages in conversation with Joey long enough to drink three shooters of liquor. I respect this decision.
18:00 - Is finally alone with Monica in her apartment. Brief, awkward conversation ensues about what they did (it - they did it) in London. They decide it was nice, and then hug. Chandler follows up hug with... a high five. Starting to relate now.
18:30 - Comes back. Scores girl. No longer relating.
Show ends. My introduction to Chandler consists of him running around trying to get laid and ends in success. And it's not that awkward. I am not Chandler Bing. Buzzfeed lied.
The next morning I found myself at the grocery store mocking Minute Rice (something to the effect of, "instant rice: for people who want to make food, but not really.") I looked up to see if anyone overheard me, and then realized I fully embodied whatever traits this list described. Including saying things out loud without full realization at the time of pronouncement. Except for #18 (taking bubble baths) - normal-sized adults don't actually fit in bathtubs. Fact.
So I decided to watch an episode of Friends and compare Chandler's life to my own, as this would be a better metric than Buzzfeed's approach of "let's take funny things he says and boil those quips down to an entire personality." Desiring academic rigor, I placed a few parameters on which episode to watch. The show ran ten seasons, so I'd select something from season five; character has been developed and is properly complex, but not so far along the writer's have become stale or the well has begun to run dry on his identity. Episode one is a reasonable place to start, as the show will be reintroducing Chandler for new viewers. For those keeping score at home, it's entitled "The One After Ross Says Rachel."
:25 - Pausing. I let my dog eat some feta cheese and a rawhide this morning. No, I can't explain the feta. One or both just made him throw up. Have to pick this up before he reconsumes. We're off to a good start.
:30 - Pausing again to make sure I know which character I'm watching for. Did you know that Matthew Perry has been in a number of things I've never seen? Quite the illustrious career.
2:15 - Episode starts with an awkward wedding scene with no context. Chandler suggests the exchange of vows could have been worse, as Ross could have shot Emily during the exchange. Truthful, though not particularly insightful.
2:45 - I think. That may have been Joey. They look generically alike so far. Was probably Chandler because the laugh track suggested the observation was witty.
5:45 - Chandler tells a nice-looking woman in a red dress to meet him in the wine cellar downstairs for some hanky panky. Things that I cannot relate to.
Chandler always explains his emotions while waving a giant spoon.
Trying to be Buzzfeedy. Here's a random screen capture with a remark. Maybe I'll follow it up with a gif farther down.
5:55 - She appears to be an integral part of the show. Wikipedia suggests Monica is a main character. She sets to downstairs to meet Chandler.
6:45 - Chandler reappears and is heaping food onto a plate at the buffet. Nothing happened. That's fair - in comparing what my outcome would have been, different journey, same result.
8:00 - Just a note that no character was ever properly introduced and that I'm as lost with episode one as I would be with episode 15.
10:00 - There appears to be an extensive plot revolving around Chandler and Monica trying to find a place to have sex. So far there have been three failed attempts.
11:00 - Four. How unresourceful is this man that he can't find a private place in a hotel? It's literally a structure of nothing but private rooms. I could find a room in a hotel.
Chandler and Monica gif a la Buzzfeedy format.
15:00 - Chandler flies first class. Elitist.
16:00 - Chandler was going to meet Monica in the bathroom to join the mile high club, but instead engages in conversation with Joey long enough to drink three shooters of liquor. I respect this decision.
18:00 - Is finally alone with Monica in her apartment. Brief, awkward conversation ensues about what they did (it - they did it) in London. They decide it was nice, and then hug. Chandler follows up hug with... a high five. Starting to relate now.
18:30 - Comes back. Scores girl. No longer relating.
Show ends. My introduction to Chandler consists of him running around trying to get laid and ends in success. And it's not that awkward. I am not Chandler Bing. Buzzfeed lied.
Monday, January 19, 2015
Anti-Vaccine Movement as Class Conflict
A small measles outbreak at Disneyland (for more information, turn to this reporting) could reinject (or provide the first injection of) real talk into the anti-vaccine movement currently sweeping the nation. Maybe. Maybe it changes nothing. What's true is that the movement is racist and classist. Truth.
Two groups of people fail to fully vaccinate their children. According to the New England Journal of Medicine, the first type have kids that are more likely "to be white, to belong to households with higher income, to have a married mother with a college education, and to live with four or more other children." Suburban housewives? A nice portion of the equation. They also cluster, and probably hate science ($5 says if you know an anti-vaccer, they either don't believe in evolution, or know GMO corn causes cancer. Or both). Why should we care? Aside from the child endangerment they're wantonly engaging in, there's a second group of people who don't vaccinate: poor, predominantly minority families.
Aside from Michelle Bachmanns' crazy ramblings (does she have any other kind?), I was largely unaware that there was actually an anti-vaccination movement. Then this winter I started following IMGUR, and noticed a lot of posts seeking to disprove fallacies pushed by this anti-vaccination agenda. So I started looking into it, discovered these enclaves of anti-vaccer mothers in hippie dippie enclaves like Boulder, Portland, and Seattle, and became frightened. And frustrated. Low-income families have traditionally had issues with proper vaccination. There are a list of problems: low information, cost, transportation access, and a lower likelihood to follow up for a missed appointment due to additional life burdens not found in the cul-de-sacs of Boulder.
When someone brings measles onto a playground, two kids are going to get sick. One has anti-vaccer parents screaming, "bring it on!" Then they take their kid to a well-financed hospital and receive appropriate medical care in a sterile environment. The other kid has access to shit medical care, lives in an unhygienic and overcrowded community, and suffers greater harm. Generally speaking, rich people not vaccinating their kids doesn't put other rich kids at risk. Just the poor ones. Class conflict.
Two groups of people fail to fully vaccinate their children. According to the New England Journal of Medicine, the first type have kids that are more likely "to be white, to belong to households with higher income, to have a married mother with a college education, and to live with four or more other children." Suburban housewives? A nice portion of the equation. They also cluster, and probably hate science ($5 says if you know an anti-vaccer, they either don't believe in evolution, or know GMO corn causes cancer. Or both). Why should we care? Aside from the child endangerment they're wantonly engaging in, there's a second group of people who don't vaccinate: poor, predominantly minority families.
Aside from Michelle Bachmanns' crazy ramblings (does she have any other kind?), I was largely unaware that there was actually an anti-vaccination movement. Then this winter I started following IMGUR, and noticed a lot of posts seeking to disprove fallacies pushed by this anti-vaccination agenda. So I started looking into it, discovered these enclaves of anti-vaccer mothers in hippie dippie enclaves like Boulder, Portland, and Seattle, and became frightened. And frustrated. Low-income families have traditionally had issues with proper vaccination. There are a list of problems: low information, cost, transportation access, and a lower likelihood to follow up for a missed appointment due to additional life burdens not found in the cul-de-sacs of Boulder.
When someone brings measles onto a playground, two kids are going to get sick. One has anti-vaccer parents screaming, "bring it on!" Then they take their kid to a well-financed hospital and receive appropriate medical care in a sterile environment. The other kid has access to shit medical care, lives in an unhygienic and overcrowded community, and suffers greater harm. Generally speaking, rich people not vaccinating their kids doesn't put other rich kids at risk. Just the poor ones. Class conflict.
Sunday, January 4, 2015
Tragedy of the Commons in State Tobacco Revenue
Following years of battle that consumed millions of dollars in legal fees, "Big Tobacco" signed an agreement with the states in 1998 that promised money to state governments as compensation for the health care costs associated with smoking. The fascinating aspect of the agreement was that it didn't merely cover costs already incurred and some static agreement about the future. Rather, it promised payments to states in perpetuity. An escrow account currently receives 18.8482 cents per cigarette sold, divided among the signatories to the Master Settlement Agreement. Forever.
Here's where your classic tragedy of the commons kicks in: the more cigarettes sold nationwide, the more money an individual state accrues. Yet states often rely on tobacco taxes to help backfill their general funds. And because cigarettes are easily vilified in the political and media spheres in the 21st century, this is just about the easiest tax lawmakers can impose. These taxes, combined with increased health concerns, legally curtailed advertising avenues, and a general shift in societal attitudes, have greatly reduced the incidence of tobacco use in the United States.
It's impossible to know what impact cigarette taxes alone have played in the decline of active smokers. And some of the tobacco tax revenues are dedicated to anti-smoking campaigns. But peel away everything else, and you're left with a classic bit of game theory:
A state can heighten its tobacco revenue by increasing taxes, but but in doing so reduces cigarette sales. A reduction in cigarette sales decreases overall payments to the national escrow account that pays out to signatories of the Master Settlement Agreement. Of course, reduced escrow payments can be compensated for by further increasing cigarette taxes, which further reduces cigarette sales, which reduces escrow payments...
Some lawmakers truly wish to see the elimination of smoking. This desire has led to the proliferation of smoking bans, advertising restrictions, and commercials with people talking through holes in their throats. Others prefer to use tobacco as a cash cow. For these policymakers, there's a fascinating intellectual exercise out there just waiting to be picked: Is there a cigarette tax that maximizes revenues (escrow account receipts plus individual state remittances)? Variations in smoking rates among the states would complicate such a calculation, but there could be an answer. And if every state signed on to an agreement not to raise taxes by more than this amount, they could all be profit maximizers. Of course, it just takes one financial crunch to make a lawmaker in New Jersey propose a $1/pack increase, and then the tragedy rears its ugly head.
*A fascinating development in the public bond market has rendered this idea mute. Several states immediately went out and sold their future revenues for some upfront cash in agreements that made about as much sense as calling J.G. Wentworth as soon as you win the lottery. They've already spent their escrow payments, and have little concern for what happens in the future. Tobacco bonds truly are fascinating - and ProPublica has done a solid job covering them. Click here if you have even the faintest interest in learning more.
Here's where your classic tragedy of the commons kicks in: the more cigarettes sold nationwide, the more money an individual state accrues. Yet states often rely on tobacco taxes to help backfill their general funds. And because cigarettes are easily vilified in the political and media spheres in the 21st century, this is just about the easiest tax lawmakers can impose. These taxes, combined with increased health concerns, legally curtailed advertising avenues, and a general shift in societal attitudes, have greatly reduced the incidence of tobacco use in the United States.
It's impossible to know what impact cigarette taxes alone have played in the decline of active smokers. And some of the tobacco tax revenues are dedicated to anti-smoking campaigns. But peel away everything else, and you're left with a classic bit of game theory:
A state can heighten its tobacco revenue by increasing taxes, but but in doing so reduces cigarette sales. A reduction in cigarette sales decreases overall payments to the national escrow account that pays out to signatories of the Master Settlement Agreement. Of course, reduced escrow payments can be compensated for by further increasing cigarette taxes, which further reduces cigarette sales, which reduces escrow payments...
Some lawmakers truly wish to see the elimination of smoking. This desire has led to the proliferation of smoking bans, advertising restrictions, and commercials with people talking through holes in their throats. Others prefer to use tobacco as a cash cow. For these policymakers, there's a fascinating intellectual exercise out there just waiting to be picked: Is there a cigarette tax that maximizes revenues (escrow account receipts plus individual state remittances)? Variations in smoking rates among the states would complicate such a calculation, but there could be an answer. And if every state signed on to an agreement not to raise taxes by more than this amount, they could all be profit maximizers. Of course, it just takes one financial crunch to make a lawmaker in New Jersey propose a $1/pack increase, and then the tragedy rears its ugly head.
*A fascinating development in the public bond market has rendered this idea mute. Several states immediately went out and sold their future revenues for some upfront cash in agreements that made about as much sense as calling J.G. Wentworth as soon as you win the lottery. They've already spent their escrow payments, and have little concern for what happens in the future. Tobacco bonds truly are fascinating - and ProPublica has done a solid job covering them. Click here if you have even the faintest interest in learning more.
The prospectus Bear Stearns sent New Jersey to acquire their tobacco settlement funds.
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