Economics and Government

I believe that assigning traffic violations to the owner of the vehicle that is involved in the traffic violation is not only a Pareto improvement, but is justifiable according to the current ownership of the roads.

First the simple argument: Pareto improvement. Who hasn’t been waiting at a green light for the opposing left turn vehicles to clear the intersection? And if speed limits are obeyed it is a rarity. The problem is that the current system of ticketing must be done by police officers who witness the offending actions. It would be far less costly to install a system of cameras to document traffic violations than it would be for the police. This would also lead to less traffic violations, and there by, less congestion. For anyone who has been trapped at an intersection (Woodmen & Academy for example) because of traffic violations know all too well of this problem.

The main point I rely upon is that roads are not a public good, nor are roads a private good like hamburgers; thus I believe that roads are club good in nature. The important fact here is that rights to the road don’t exist (at least not as we have defined right), but privileges to use the road system granted by the owner. I’m loathe to even infer that government is its own separate entity (and that is not my contention here), but government (actually a collection of separate government divisions) has come to the position of manager of the club good that is our road network. While some may argue that our current road system is not of a club nature, and that the roads are actually available for use at no charge I think it is odd that if these road truly are of open access why it should be that all vehicles must be licensed.

A vehicle is licensed under certain restrictions, one of which is—while more implicitly stated—is that the owner is responsible for the same use of the vehicle. In fact many states make this more explicit by requiring owners to have insurance covering the operation of their vehicles. For an owner of a vehicle to not be held liable for the operation of any damage that occurred by their vehicle the owner must prove that they we not the one operating the vehicle at the time the damage occurred. While liability is typically talked of in terms of the driver’s liability the fact remains that the rules of the club hold liability at the feet of the owners, or to put it another way the driver is the default person of liability.

In an accident this distinction is of little relevance as the identity of the driver isn’t in dispute (or at least the owner’s status as driver isn’t). From the standpoint of photo ticketing the identity of the driver is difficult (if not impossible) to determine. Yet as the rules of the club go, it is not up to government to prove who was behind the wheel, but for the owner to prove that they weren’t. This is sensible from a Coasean perspective as well. When some one borrows another’s vehicle it is essentially a contract, although be it a rather poorly defined one. Thus, so long as use of the club’s facilities is contingent upon licensed vehicles the use of photo ticketing systems is justified. If this gives incentive for people to be more knowledgeable about how they contract with others then so much the better.

Casey asked me to post links to these. Here are the names of the papers I've looked at if you guys want to take a peek. Just search for them on the library VPN.

The Effects of Open Space on Residential Property Values by Elena G. Itwin

The economics of urban sprawl: Inefficiency as a core feature of metropolitan growth by David H Ciscel

The folly of "smart growth" by Randal O'toole

Political Economy
Prof. Eubanks posted a blog about a man selling his tissues, blood, etc after he died. He's the only guy I've ever heard of that was able to do that, let alone, actually dictated where his "belongings" went. I was talking to a USAFA cadet friend of mine about donating blood. He told me that when the services need blood, they have to pay 250$ per pint for the stuff when it isn't donated by service members. Admittedly, it's shocking that the number is so high, but what is more shocking is that when the government has to buy blood, I can't sell it to them. Being a college student, It might be useful to sell some of the stuff every once in a while.

Really, the idea that my body, when I'm dead isn't the property of my heirs, is preposterous. Doctors, nurses, people who transport organs, the people who receive them, all of them gain in some respect from organs or blood or tissue. It is unconstitutional that I cannot sell pints of blood. The governments punishing me If I do is not a valid use of the police power.

People have to be free to act as they wish to. Liberty alone is a good enough reason considering the "assets" we're talking about for trade in blood and organs to be legal. When people have a clearly defined ownership of their assets, they usually make informed decisions about what to do with those assets. As is, the system encourages people to at most, check a donor box at the DMV, and never consider the issue again. If they understood that they carried tens of thousands of dollars of assets with them everywhere they went, better decisions about them would be made.

One thing that caught my eye while driving to Illinois this past week was the incentives given to drivers to purchase an IPass. I don't take the toll ways due to other routes that are available that I can take without the extra costs. When it does come down to the decision of extra traffic of the toll way, I do tend to give in and cut the extra time off of my commute time. One thing that I hadn't paid any attention to is the discounted rate that drivers get if they have an IPass. In Illinois, it is a 50% savings as opposed to paying cash! When I got to the booth, I noticed that IPass drivers paid 40 cents while cash paying drivers paid 80 cents.

This difference has to do with the added expence the government has with paying the toll workers as well as adding an incentive to drivers to purchase an IPass. The government is adding an extra incentive from the one already gained by the IPass drivers, not sitting in a line to pay the toll.

Thinking about all of the incentives out there to get an IPass, I wonder if the toll rates will increase once the driving population has converted to the new way. Technology is improving and there has to be added costs to the knowledge we are gaining but how long can the government keep the incentives this "cheap". It causes me to think where our money is going and how the government is using incentives to get us to do what they think is best.

Rebecca Skloot:

"Though he died 21 years ago, Slavin is worth keeping track of. Not because his cells produced extremely valuable proteins that were important for scientific research. But because Slavin's relationship to those cells was unique: they weren't just part of his body; they were his business, his property. Slavin was one of the first people in history to decide that contrary to the way things usually work in science, he would maintain complete control over any blood and tissues removed from his body. He would determine who used them for research, how and, most important to Slavin, who made money from them.

This may not sound like a particularly groundbreaking idea, unless you consider it with a little-known fact: blood samples and other excised human tissues have an afterlife. When you go to the doctor for a routine blood test or mole removal, when you have an appendectomy, tonsillectomy or any other kind of ectomy, the stuff you leave behind doesn't always get thrown out. Doctors, hospitals and laboratories keep them. Often indefinitely. Some get consent with admission forms that say something like, I give my doctor permission to dispose of my tissues or use them in research. Others don't."

An article on Foxnews discusses the divisions in the Republican party. With the party encompassing roughly a third of the nation and constantly having to court independents to come up with half the votes on election days, many views have been expressed within the party that differ greatly from one another. It's quite hard to please so many different opinions, and when each person holding those opinions feel the party should represent them (after all, each voted for Republicans), it's a bit hard to find a concensus. Various issues have caused this problem and divided the party against itself, including immigration, foreign coutries buying ports, Harriet Miers' nomination to the Supreme Court, Fiscal responsibility, and even Iraq.

With so many issues dividing the party, it will be interesting to watch Republican primaries across the country as they battle it out to find the median voter in their district. Many Republicans are retiring or running for different offices, including in Colorado. With Joel Hefley's retirement, candidates have begun positioning themselves as reformers, social conservatives, fiscal conservatives, for tougher or more lax immigration laws, etc. The same is being seen in the Governor's race between Bob Beauprez and Marc Holtzman. Tom Tancredo (R-CO 6th district) will be facing a Republican challenger who disagrees with Tancredo's immigration stances.

Democrats have seen a political advantage in the Republican divisions. Senate Democrats have blocked the Senate's bipartisan immigration reform essentially leaving only the House Republican version of reform up for votes. Apparently they view the House bill as being far from the median voter.

Things could get more interesting in 2008 as so many diverse views vie for the party nomination for President. Already many potential contenders are making different guesses as to where the median voter in the party stands. John McCain, Senate Majority Leader Bill Frist, and Representative Tom Tancredo have all expressed interest in running for President and have each taken very different stances on immigration. Other potential but less likely contenders such as Chuck Hagel (R-NE) have also been going very public with their opinions.

With so many different views and issues, and with the Senate immigration bill now stalled, immigration will be an issue to watch over the next few years. While media pundits will show polls telling us how Americans feel about immigration, the real tests are going to come in the primaries in 2006 and 2008. Hopefully voters will have enough options to choose their "median." That is unlikely however, since immigration alone seems to have so many positions. All the other issues dividing the party may end up taking a back seat to just the one issue. Furthermore, it is not yet known whether immigration will be what the median voter is most concerned about. The deciding issues could be any of the others dividing the party. Only time will tell, and even then we may not be sure of what Time actually said.

Vouchers are just food stamps for education. You get a coupon of “government money” which can be used at any kind of school. The biggest risk is that vouchers will destroy private schools. Governments have and will put restrictions upon private schools in order to make them eligible to receive the school stamps.

Tax credits for education are getting your money back. So if you pay $20,000 in taxes and have $20,000 in tuition you get the $20,000 back. Most important, if you are Bank of America and you have $100 million in taxes you can set up a scholarship program and get a $100 million tax credit. Most important is that the tax credits be unlimited.

Of course, the ideal is a totally private education system and no taxes. That doesn’t appear to be on the immediate horizon, but it is what we should be what we are fighting for. Tax credits are a temporary step.

Looks like some are still working for them in a very limited way in some states. But they have not grasped the unlimited part. Let’s think of the children. And some have vouchers and tax credits confused.

I read an interesting article in the March 4, edition of the Economist. It's all about economic nationalism, the idea that countries protect their borders from foreign countries on the grounds that their blocking foreign companies from entering their economy is good for the state. The article is very strongly written, and it's obviously against economic nationalism. Fitting for "The Economist." I thought the article drew some good inferences that parallel our study of public finance. The writer draws pictures of many different countries blocking out other countries and blames the economic nationalism on rent seeking politicians. Rent seeking is always relevant...right? Marx said that ownership as well as the power to exploit, was everything. This is why socialist governments' desire to nationalise the

"commanding heights(Marx)" of their economies (paraphrase). The author proceeds to state that there are no unfavorable effects produced by opening borders to foreign companies. It does state that, "what is affected, however, is the ability of governments and of individual politicians to use patronage at favoured firms to help their friends, to get favours in return, to support special interests such as trade unions, and, in broad political terms, to paint themselves as patriots."

The article begins with a statement from Samuel Johnson that reads, "Patriotism is the last refuge of a scoundrel." Interesting quote. Economically speaking, policies that promote economic nationalism are ultimately bad for the majority of individuals that make up the American economy. Foreign trade allows consumers to reach a further out production possibility fronteir. In regards to policies that are promoted as, "good for the nation," that in essence further rent seeking behavior are bad policies. An economic cost-benefit analysis of such policies would usually (I say usually because I've never seen any. I'm pretty confident it could be always) show that someone did bad policy analyses, or the politician is simply corrupt. Which the writer of this article would argue.