Tracing consequences both seen and unseen.
John W. PayneAll Your Property Are Belong to Us
Posted at 1:31 pm on November 17, 2010, by John W. Payne

The Drug Enforcement Agency (DEA) and the Missouri Highway Patrol are attempting to seize a large tract of land in central Missouri known as Camp Zoe. The land is owned by Jimmy Tebeau, front man for The Schwag, the band that gives name to the Schwagstock festivals held on the property several times a year. The DEA and highway patrol allege that Tebeau knowingly allowed people to sell drugs on the property, but Tebeau has not been charged with any crime. Such charges are not necessary, however, because under the rules of civil asset forfeiture, it is the property — not the person, who has all sorts of troublesome rights — that is charged with the crime.

This procedure is rooted in medieval superstition — essentially, people believed that property used to commit a crime was haunted — and it biases the outcome in the government’s favor in a number of ways. First and foremost, in a civil case the government can win with a preponderance of the evidence as opposed to the much higher burden of a reasonable doubt necessary to convict a person of a crime. Also, because there is no person on trial, the owner has no Fifth Amendment right against self-incrimination, and anything he says could be used later if criminal charges are ever brought.

Under Missouri state law, this seizure would be impossible because Missouri requires the owner to be convicted of a related felony before the property can be forfeited to the state. The feds are involved, though, so that minor detail becomes unnecessary. The Missouri Highway Patrol also stands to profit handsomely from pursuing forfeiture at the federal level instead of the state level, should they be successful. That’s because under the rules of equitable sharing, the federal agency will kick back up to 80 percent of the proceeds from the forfeiture, which — assuming Zoe sold at its $600,000 assessed value — would give the highway patrol up to $480,000. Property forfeited through Missouri state law must be given to a state fund for school construction in order to eliminate any incentive for police to enrich themselves by confiscating property, but the federal government has given them an easy way of working around the obvious intent of state forfeiture reforms.

The police allege that Tebeau knowingly allowed people to sell drugs at Camp Zoe. That’s a difficult allegation to prove, because unless they have proof that he was involved in dealing drugs — which seems doubtful, considering the lack of a criminal charge — it would require knowing his mental states. However, according to the official statements of the DEA and the Highway Patrol, the law enforcement agents deliberately allowed and contributed to the sale of drugs on the property. This highlights a contradiction in law enforcement goals caused by asset forfeiture. It seems that the police were pursuing the property instead of trying to prevent crimes. Undercover agents buying drugs could have arrested any dealers that sold to them on the property and made a show of it to deter other people from doing the same, but instead they chose to pursue a forfeiture case, in which they stand to gain over half a million dollars, by allowing people to sell drugs for four years.

Finally, I wonder how much property the feds could seize under the rationale that drugs are sold there by visitors. I think we can safely include every venue ever played by the Grateful Dead, Widespread Panic, the Flaming Lips, Government Mule, Phish, and Moe, among others. Furthermore, even land already owned by the federal government would not seem to be immune. Rainbow gatherings are held regularly on national forest land, and the Black Rock Desert where Burning Man is held is federal property. I don’t think anyone can credibly claim that the government doesn’t know what sorts of illicit activities can occur at these events. Simply put, if these are the legal standards, massive amounts of private property are subject to seizure anytime the DEA, or another federal regulatory agency, decides to investigate.

(Headline reference here for any of you who don’t remember the early 2000s.)

Filed under: Drug Policy, Law Enforcement, Property Rights
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John W. PayneProtecting Us to Death
Posted at 12:51 am on November 16, 2010, by John W. Payne

Many people are complaining bitterly (and rightly, in my opinion) about the new airport body scanners that show TSA screeners the naked bodies of every passenger that goes through them. If you refuse to go through the scanner, the TSA helpfully provides you the alternative of being felt up by a complete stranger. Some people are even pledging not to fly as long as the scanners are in use. Internet polls are obviously not scientific, but 96% of respondents to this Reuters poll say that they are less likely to fly because of the new, invasive procedures. Of course, it’s a lot easier to say you aren’t going to fly than to actually do it, but I think it’s safe to assume that at the margin, the scanners will push people to drive instead of fly (or simply not travel at all), and this means that the scanners might cause more deaths than they prevent.

It’s debatable whether the scanners will even help prevent terrorism.  Security expert Bruce Schneier points out that terrorists can simply switch targets to public locations that don’t have scanners like malls, stadiums, trains, etc. Furthermore, the scanners don’t always catch dangerous items such as when this physicist showed how to sneak bomb components past the devices. But even if the scanners do save some lives through thwarting would-be terrorists, if more people choose to drive than fly, there will be more traffic deaths as a result of the new policies. In 2003, The American Scientist estimated that driving is 65 times riskier than flying the same distance. By making flying intolerable in the name of safety, the government is not only invading people’s privacy, they are making us less safe.

Filed under: Unintended Consequences
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Christine HarbinThe Show-Me State Needs More Snooki*
Posted at 6:32 pm on November 9, 2010, by Christine Harbin

A Saint Louis production company is planning to focus on reality television series, and it is looking into tapping the Missouri film tax credit program to do it. According to an article in the St. Louis Business Journal:

Coolfire Media, the St. Louis production and design studio behind Budweiser, Maybelline and Verizon Wireless ads, has spun off a separate company to develop ideas for reality TV shows and scripted comedies.

The minds behind Coolfire Originals say they will specialize in offering Midwest storylines, characters and actors as a niche — and a cheaper alternative — in a world of coast-centric programs. […]

Coolfire Originals hopes to tap into some of the $3.5 million in Missouri tax credits still available this year for the TV and film industry and the $4.5 million in state tax credits available next year, Breitbach said.

First, there is a fiscal problem. The state government in Missouri is facing historically low revenues, and has to make cuts to services that are arguably more important than reality television — such as education and public safety.

Second, there is a fundamental problem: This program diffuses the cost of reality television production onto the taxpaying population, and concentrates the benefits on reality television producers. Missourians will pay a marginally higher amount of taxes as a direct consequence of this policy.

I have many questions. Will Brett Michaels ever find love, and will he find it in Missouri? How much money in state incentives will it take for the “Rock of Love” bus to park in the Central West End of Saint Louis?

Additionally, what is the economic multiplier on reality television production? I know that contestants on dating shows like “The Bachelor” and the “The Bachelorette” purchase a considerable number of restaurant meals, so I suspect that it may be high. Similarly, if Kate brought her gaggle of Gosselins to Missouri, she’d probably buy a lot of diapers and children’s clothes in state.

Coupled with a lower marginal tax rate on income relative to other states, will this policy incite reality television stars to move to Missouri? Perhaps Snooki would consider moving to Missouri because the top marginal state income tax rate in New Jersey is 8.97 percent, whereas it is only 6.0 percent in Missouri.

Could a producer receive tax credits for making a reality television show about an activity that is also financed by state tax credits? Perhaps “Extreme Home Makeover: NorthSide Saint Louis” could feature a large private development that uses tax credits for historic preservation, low-income housing development, and/or brownfield remediation.

For the purpose of this post, I tried to brainstorm a list of titles of Missouri-specific reality shows that the state could subsidize with its film tax credit program. I encourage our blog readers to leave additional ideas for titles the comments section of this post.

  • Who Wants to Marry a Missourian?
  • Mississippi Shore
  • The Hill**
  • Pimp My Tax-Exempt Yacht
  • The Real World: Chillicothe, Mo.
  • The Real Housewives of Osage County
  • Grundy County’s Got Talent
  • Top Chef: Kansas City Barbecue
  • Iron County Chef
  • Are You Smarter than a Saint Louis Public School Fifth Grader?
  • East Saint Louis High School Musical
  • I’m in the Missouri Bootheel, Get me Out of Here!
  • Poplar Bluff’s Next Top Model
  • Survivor: Lake of the Ozarks Party Cove***
  • Branson Idol

* Title reference here.

** A reality show that follows the personal lives of several Italian-American young adults living in the Hill neighborhood of Saint Louis.

*** David Stokes tells me that a reality show about the Lake of the Ozarks’ Party Cove would make the stars of Jersey Shore look like participants in the Algonquin Round Table, and I concur.

[Cross-posted at Amateur Philosophy.]

Filed under: Culture, Government Spending, Politics, Taxes
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John W. PayneLegalize Federalism
Posted at 1:57 am on November 9, 2010, by John W. Payne

The most disappointing outcome from last Tuesday’s election was the failure of Proposition 19 in California, which would have legalized marijuana in the state. Admittedly, the proposition was flawed. Legalization proponent and Harvard economics professor Jeffrey Miron argues that a provision that would have prevented employers from firing or disciplining employees for marijuana use unless it “actually impairs job performance”  frightened voters with the idea of a half baked labor force (like it isn’t already), and the failure to define how marijuana would be taxed left a fog of uncertainty hanging over the proposition. Furthermore, Attorney General Eric Holder’s announcement that the federal government would continue to enforce federal anti-marijuana laws likely gave many voters the mistaken impression that a Prop 19 victory would not change anything. That (mostly empty) threat just a few weeks prior to the election tracks pretty closely to when the polls turned against legalizing marijuana, and I think it was probably a decisive factor in Prop 19?s demise.

This debacle highlights the need for greater federalism in our political system. If the feds have to sign off on every state law, the drug war will continue forever because Lord knows there are only a handful of politicians at the federal level of either party willing to challenge the status quo. And, for many liberals, that’s just fine.

Take blogger Josh Marshall, for example. Marshall writes that he would have voted against the measure for two reasons: 1) Because he’s over 40 (translation: he doesn’t smoke anymore, and his friends who do are professionals who don’t have to worry much about arrest) and 2) because “unless I’m missing something, it amounts to nullification.”

Marshall is missing something because if Prop 19 amounted to nullification it would have demanded that state officials prevent federal law enforcement from enforcing federal laws. The proposition did no such thing; it simply would have removed state penalties for marijuana and left the DEA to try and enforce federal law as best they could. Regardless, Marshall’s centralist mindset reveals something very disturbing about many modern American liberals: they’d rather have a federal government of nearly unlimited powers rather than one with a defined and limited role, even when, by their own admission, the federal government’s policies harm millions of Americans.

Shortly after Kentucky Senator-elect Rand Paul won the Republican primary back in May, he made a controversial remark about the 1964 Civil Rights Act, essentially saying that the federal government should not prohibit private businesses from engaging in racial discrimination. This was almost immediately followed by a firestorm of liberal criticism that charged Paul with trying to thrust the country back to the Jim Crow South. I’m not interested in defending Paul’s statement at the moment, but I think it’s fair to say that even if that portion of the Civil Rights Act were repealed tomorrow, only a tiny fraction of businesses would attempt to return to racial segregation, and they would almost certainly be subjected to boycotts, protests, and all manner of bad press–and rightfully so.

There are, however, a set of policies known as the drug war, which serve to put literally millions of minorities in cages and turn inner cities into war zones. The best hope to challenge those policies is at the state level with reforms like Prop 19, but many liberal pundits seem more interested in preserving the overwhelming power of the federal government to enact countless utopian schemes than in ending this new Jim Crow.

There may have been a time when federal action was the only remedy for the horrors of segregation, but that danger is by and large in the past. Now the federal government is far more likely to imprison a young black man than to protect his right to vote from the Klan. If we want to destroy the system that is oppressing people in the here and now, we have to abandon the idea that the federal government is the primary protector of our rights, for it is the most powerful enemy any of us could ever know.

Filed under: Drug Policy, Federalism, Politics
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Iris ManhattanThe Lesson Applied: Halloween Edition
Posted at 1:46 pm on November 6, 2010, by Iris Manhattan

When is the best time to buy Christmas presents? Obviously December 28, when stores are desperately trying to move the remaining Christmas merchandise off their shelves, and they combine sales with markdowns from gifts people are returning. The best time to buy a Halloween costume is right now, when Wal*Mart Discount City, herald of efficient commerce, is selling their Halloween stuff for 75% off. This is because the demand for costumes is very high on October 29, while in early November, they don’t even have dedicated aisle space for the many carts of leftover Lady Gaga costumes. So obviously I got a whole bunch.

Normally I wouldn’t even want to pay $8 for some of these prepackaged Halloween costumes–they’re usually not very good. (If they are $8 on sale, it’s because they are the fancy $35 costumes) I find it especially interesting to compare the photo of the model in the costume with the actual garment–often there are telling details that the model isn’t even wearing the product advertised. It is a given that the model’s back is covered with clips pinching back the fabric so that the somewhat shapeless product can hug her body attractively, as though it were a well-made garment. Another trick is that, if it is a “sexy” costume, the model probably has breast implants. This is important, because if the outfit seems supportive enough to hold up your boobs, keep in mind that implants stay up on their own, so if your tits are subject to gravity (and boy, mine sure are!), they are not going to look so perky in that Halloween costume that offers no chestal support.

So one of my new discount treasures is this awesome Supergirl outfit made of stretchy velvet and metallic spandex, the kind used for swimsuits and overpriced dance costumes. The “S” logo is this really thick, sturdy applique` (patch). What does this costume tell me about the state of the world today? It tells me that Capitalism has gotten so efficient at coming up with and efficiently using resources, that the most expensive resource is human effort: in other words, the time of a Mexican child is worth more than specialty fabrics.

When sewing a garment for retail, after you cut out all the pieces, you use a really fast, weak stitch to go around all the edges of the fabric so that they won’t unravel while you are working on the garment. Then later you go back and sew everything together, and you hem (make the edges look pretty) the edges that are exposed. Still with me? Well on the Supergirl skirt, they just left the crappy preparation stitching on the edge, no real hem. On the cape, they didn’t even do the crappy edge stitching, leaving it completely unhemmed, and the edges aren’t even cut out quite right, with snaggles hanging torn at the corners.

It’s not expensive, in terms of materials, to hem a garment. It just uses more thread. My mom used to always tell me to make sure I leave enough extra thread on sewing projects, because you can always cut it off, and “Thread is cheap.” That was her motto. That and, “Don’t talk to boys!” So why would this costume manufacturer spend the money on the expensive fabric and then sell the product half-finished? Because in his shady, exploitive (check out the positive connotations to the word “exploit,” by the way) little factory, what he has to ration is the precious time of his underage, uneducated employees. Sure, they could hem that cape at no cost and in next to no time, but even that would take away from his profit margin. This really makes me wonder what the real cost of the materials could be at the source, since the metallic fabric alone, if purchased at an American fabric store, would certainly cost more than the $8 I paid for the finished, multi-piece outfit that has been transported hundreds of miles for my convenience and entertainment.

I think it also says something about the prosperity of our nation that this fancy garment can’t really be washed (although you could probably sponge it off). This makes it almost disposable, a one-use dress like Marla Singer’s bridesmaid dress. (Side note: Marla, no one intensely loves a bridesmaid dress for one day. Of course, Marla’s probably never been to a wedding, so she wouldn’t know that.)

So put that lesson in your pipe and apply it.

Filed under: Efficiency, Labor, Trade
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Sarah BrodskyHow the FCC Encourages Religious Discrimination
Posted at 1:15 pm on November 1, 2010, by Sarah Brodsky

Radio Station

A friend of mine recently applied for an off-air position at a radio station. The interview went well–until they asked if he were a Christian. When he said he wasn’t, they responded that they were sorry, but they were running a Christian talk station and they could only hire Christians. They said that they had to have this policy in order to comply with FCC regulations.

That seemed pretty bizarre. I could understand a Christian station wanting to hire people with similar beliefs, but what did the FCC have to do with it? Then I looked up the FCC’s Equal Employment Opportunities regulations. The FCC requires stations to do a lot of things to avoid discrimination in recruitment. They have to participate in job fairs, sponsor job fairs, host job fairs, offer internships, or take other actions that have been approved by the FCC. All of those measures impose some costs on stations. However, a religious station need not take these steps to recruit for an open position if it makes religious belief a qualification for the position. So to keep their recruitment costs down, Christian stations bar non-Christians from employment. Rules that were supposed to prevent discrimination are actually causing stations to discriminate.

The religious discrimination might even out, so to speak, if there were equal numbers of stations affiliated with many different creeds. But of course, the vast majority of religious radio stations are Christian. There are very few Muslim stations or Jewish stations; I’ve come across online Buddhist broadcasts, but no brick-and-mortar Buddhist stations. And I haven’t found any atheist radio stations, although there are individual shows dedicated to atheist ideas. A Christian who wants to work in radio likely won’t miss out on any opportunities, but a Muslim or an atheist will be passed over when religious stations are hiring.

Would that happen even if the FCC didn’t impose these regulations? Not necessarily. I’d expect Christian stations to exclusively hire Christian for on-air positions. And probably they would want only Christians to write content for religious shows. But there are other jobs, like board operator or call screener, that people with different beliefs could still perform competently. Religious stations might hire people of other faiths for those roles, if the FCC didn’t give them an incentive to discriminate.

Filed under: Regulation, Religious Freedom, Technology, Unintended Consequences
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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson






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