Monday, December 22, 2008

easy/mediocre vs. difficult/valuable policy choices

At least three great points by Jim Waters with BIPPS on easy/mediocre vs. difficult/valuable policy choices-- in Kentucky by Gov. Beshear.

Of course, Beshear's choice/dilemma is modeled every day by all levels of government-- and is made far more likely by what Public Choice economists call "rational ignorance and apathy" on the part of voters. Because the costs of bad policies are often larger, they are also relatively subtle and small-per-person. So, people who are busy mowing their lawns and raising their kids are likely to be unaware of the bad policies-- and rationally so.

A great opening question, then an important observation (about KY being the only non-"right-to-work" state in the South; I hadn't thought of that before!), and finally, a nice comparison between alcohol and tobacco...

Which seems easier for a governor: Pick on smokers or lead the charge for a right-to-work law in Kentucky? If you chose “pick on smokers,” you win a stuffed politician!


I can’t give you a number on how much our state’s antiquated labor policies costs. But I can tell you this: Kentucky stands alone as the only Southern state that forces people to join and pay dues to a union if one exists in their workplace. And I can tell you this: No policy sends a clearer signal that Kentucky remains an unfriendly state when it comes to company startups and relocations.


But making Kentucky a right-to-work state poses a much tougher task than picking on smokers, most of whom have lower incomes and even less political clout. Leading the charge for such a job-friendly policy change would prove tough for Kentucky’s governor and his big-spending political allies who cling to union votes like a tick on a dog’s ear....


Politicians in 82 percent of states that raised cigarette taxes overestimated how much revenue such tax hikes would raise — some by as much as 70 percent more than what the tax actually delivered....Besides, 50 percent of the cost of a pack of cigarettes already goes to government. This amounted to $34.4 billion in 2007 alone — more than twice the amount raised by alcohol taxes.


But of course, we know what would happen if the politicians tried to raise taxes on Kentucky bourbon to numb the sting of the state’s financial challenge — even though twice as many kids use alcohol as use cigarettes. Lawmakers would swim in lobbyist-provided liquor and drown in donations – just from another political interest group, that’s all.


Instead of trying to figure out how they can get revenue while offending the groups least able to strike back, I challenge political leaders to do the right thing instead of taking the easy way out....

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