Alcohol taxes and the Overton window

We boozehounds on Twitter were abuzz today about a proposed California ballot initiative that would drastically increase taxes on all forms of potable alcohol:

A new initiative that would increase the tax on alcohol was cleared for signature gathering today by the Secretary of State’s Office. And it’s not a modest tax increase, it’s huge. Tax on a six-pack of beer would increase from 6-cents to $6.08. And say goodbye to two-buck chuck–a tax on a 750 ml bottle of wine would go from 4-cents to $5.11. And the tax on a 750 ml bottle of distilled spirits would increase from from 65-cents to $17.57.

I find it hard to believe that this would pass in a state that has so much riding on its alcohol industry and I think that’s sort of the point. Consider the idea of the Overton window:

The Overton Window is a concept in political theory, named after its originator—Joe Overton—former vice president of the Mackinac Center for Public Policy. It describes a “window” in the range of public reactions to ideas in public discourse, in a spectrum of all possible options on an issue. […]

Overton described a method for moving that window, thereby including previously excluded ideas, while excluding previously acceptable ideas. The technique relies on people promoting ideas even less acceptable than the previous “outer fringe” ideas. That makes those old fringe ideas look less extreme, and thereby acceptable. The idea is that priming the public with fringe ideas intended to be and remain unacceptable, will make the real target ideas seem more acceptable by comparison.

Now it’s possible that the sponsors of this initiative, Josephine and Kent Whitney, truly believe this is a reasonable tax increase. But I doubt that winning the vote is the only goal of this initiative. The aim is to get lots of news coverage for their far-out idea and thereby make smaller tax increases seem reasonable by comparison. So if you don’t want them to succeed, don’t take them too seriously.

Additional note: The Overton window is often described in a very cynical, manipulative context. In contrast, the late Joe Overton’s peers at the libertarian Mackinac Center use it to explain how think tanks can change public policy for the better. They see shifting the window as the noble aim of libertarians working in a world often hostile to free markets and individual liberty. As Nathan Russel wrote for the Center:

A long-term focus on shifting the Overton window allows a think tank to follow its ideals and perform a genuinely positive public service, instead of being constrained to merely advocating those policies that are currently possible. When the window of political possibilities is moved along the political spectrum, the impossible becomes desirable and the simply desirable becomes imperative. This is the true influence of a think tank — shaping the political climate of future legislative and legal debates by researching, educating, involving and inspiring.

[Hat tip to Rumdood, who tweets, “Look, I’m OK with a modest increase in taxes on booze, but from $.65 to $17.57 for a 750mL bottle of rum is insane.” Manipulation of the Overton window in action? See also Jeff Woodhead and Chad Wilcox on the Overton window and health care reform.]


Links for 3/31/10

LHC is up and running!

TN to tax visiting athletes, unless they’re NFL

Food fraud more widespread than imagined

Who will tell the stories of capitalism?

As dirt accumulates online, time to overlook indiscretions

Is there anything that can’t get Energy Star certified?

Margarent Atwood joins Twitter

Evolution of sunk cost bias?

Testing salt in coffee with Tim Wendelboe

It’s true, Tuesdays are a great day to go drinking


One simple idea to improve the mail

I posted this suggestion before and it didn’t get much traction, but with the US Postal Service bleeding money and probably eliminating Saturday delivery it’s worth bringing out once more. The basic idea is to make mail more like e-mail so that postal addresses are easier to remember and don’t have to change when people move.

Here’s how DARPA elegantly expressed the basic way to send information on the internet back in 1981:

A distinction is made between names, addresses, and routes. A name indicates what we seek. An address indicates where it is. A route indicates how to get there.

It’s the distinction between names and addresses that’s important. With email, the name is an email account and the address is a number called an IP address that identifies the server hosting the account. So if you wanted to send a message to me, for example, the name would be “” and the address would be a series of digits like “123.456.789.” You only need the name, not the address. Databases called the DNS registry link the name to the correct IP address so that the message gets to my inbox.

This is great because it allows people to send me messages even if they have no idea where my server is. They don’t have to know what my hard-to-remember IP address is and I don’t have to inform them if I move the site to a new host. I just need to tell the DNS registry that the IP address has changed and it takes care of the matter for everyone.

Physical mail doesn’t work this way. Unlike email servers, the US Postal Service collapses name and address into one unit. If you want to send me a message via USPS you can’t just write my name on an envelope, you also need to know my current physical address. This is a huge inconvenience! It means that every time I move I have to inform everyone who sends me mail that my address has changed and they have to update their address books. It’s a time-consuming and error-prone process.

Does it have to be this way or is the technology cheap enough now that we could make mail more like email? From my original post:

Why should we have to remember cumbersome physical addresses and update all our contacts when we move? It would be a lot easier to simply use the equivalent of a domain name address and associate it in a database with a physical mailing location. Call it a Postal Name System (PNS). Everyone could have their own, easily memorized address to use for life. When people move, they just notify the PNS of the change and their postal name keeps functioning seamlessly, associating their postal address with their new physical location.

In other words, there’s no longer any reason why the physical locations where we live and work should have anything to do with the postal addresses people use to send us stuff.

One’s email address and postal address could even be the same thing. When your server changes you’d tell the DNS, when your home changes you’d tell the PNS. Regardless of whether correspondents wanted to send you an email or a letter, all they’d need to know is one easily remembered name that never needs to change.

The obvious objection is that postal workers still need a physical address printed on the package to make the final delivery, but USPS already deals with this problem for automated mail forwarding. Machines scan an address, match it against a forwarding database, and put on a corrected label if forwarding has been requested. The idea proposed above could use a similar process on a much larger scale.

A second problem is how we transition from our current addressing system to the new one. This seems solvable by the methods discussed in the post and comments on this forum. International shipping would create difficulties, so the system might have to be limited to locations in the US, at least initially.

A benefit would be a new revenue stream for USPS if the service charges to register names. If it’s offered as a premium service I think many people would gladly pay a reasonable amount for it. They might even register multiple names for the same reasons they have multiple email addresses, separating them as personal or work, public or private. A DNS-like system wouldn’t have to replace the current one, it could just work on top of it for people who opt-in.

Is this idea too good to be true? Possibly. I don’t want to feign expertise in an industry I know little about and the fact that it hasn’t already been implemented suggests there must be other obstacles. I’m curious what those are; perhaps printing new labels is too expensive and time consuming? On the other hand, it might be an idea that’s just now becoming technologically feasible. With the Postal Service in such bad shape it’s worth considering. It won’t make up for the fact that email has largely replaced sending physical messages, but it would reduce the transaction cost of using the mail.

Additional notes: There’s one blog devoted to promoting this idea. Unfortunately it stopped after one post. The Intelligent Mail program offers address correction services to some companies. Intriguingly, USPS once sought control of the .us top-level domain. Might they have been considering a similar evolution more than a decade ago?


Authoritarian attitudes at the FDA

Yesterday’s Wall Street Journal featured a good article about the FDA’s renewed crackdown on raw milk sales. In it we get confirmation that the agency may indeed tighten its rule allowing sale of raw milk cheeses after 60 days of aging. It also includes a few quotes from John Sheehan, the media-shy director of dairy food safety:

“Raw milk is inherently dangerous and should not be consumed by anyone, at any time, for any reason,” says John Sheehan, director of the FDA’s division of plant- and dairy-food safety.

This is a completely unscientific statement. What does “inherently dangerous” mean? Pasteurization has been widespread for only about a century. Was the unpasteurized milk that humans drank for thousands of years before that “inherently dangerous” or simply less dangerous than modern pasteurized milk? Should it not even be consumed so a person can discover for himself if the benefits outweigh the costs? Sheehan’s conclusion has no scientific basis and ignores diversity of tastes and risk tolerances.

There’s a lot of hype about the health benefits and safety of raw milk put out by its advocates, much of it not very scientific. The FDA could play a constructive role by informing consumers of the risks involved. But to do so it needs to stop alienating them by driving them into underground markets of true believers. Potential raw milk consumers might be more trusting of the agency if it wasn’t denying them their freedom and seeking to have their suppliers thrown into jail.

[Via ColdMud.]

Update: In the comments, Barzelay says it much better than I did:

This binary way of looking at food as either risky or not risky is never going to work because everything carries a risk, it’s just that risks are greater, or at least different, for different things. Moreover, it’s not as simple as pasteurizing food, because other risk factors can come into play: your pasteurized milk, if stored at improper temperatures, can have a much higher risk than raw milk. We need to embrace a more complex view of food-borne illness risks that puts more of the onus on the consumer. People need to be aware of the risks of what they’re eating.

Instead the FDA wants to be able to proclaim that all the food in the US is safe, or at least all the food available from typical big-business retailers. They should be doing the opposite! All food is risky! Now tell people how to manage those risks.


Transit trade-offs

I enjoyed this column from Steve Duin about the risks of biking in Portland along the streetcar tracks:

“Almost everyone you talk to who has ridden downtown has crashed,” said Jonathan Maus at BikePortland, and that battered list includes his mother, who went down on Northwest Lovejoy and broke her jaw.

“I don’t think people should have to fall to figure it out. If there was a similar issue with any other mode of transportation, with a similar potential for serious injury, do you think it would just be sitting there as an issue, for columnists to write about and cyclists to grumble about at the coffee shop?

“As of now, there is no ongoing design discussion on how to address this.” Urban planners and bike enthusiasts are stuck, Maus said, on, “Be careful.” […]

Warning signs aren’t effective, [city bike coordinator Roger Geller] added, and the city is down on the rubber flange fillers that occasionally pop up in Europe. That rubber — which depresses when streetcars pass, but not bicycles — has a significant failure rate unless it is used on the kind of low-volume lines that don’t exist in Portland.

I learned about this on my first bike trip downtown the way everyone else does in Portland: By turning onto a street with tracks and nearly wiping out. I was lucky enough to avoid falling and skidded into a parking space, but if a car had been parked there it would have been a bad crash indeed.

There doesn’t seem to be a good solution to this other than not building more streetcar lines. Unfortunately Portland is laying tracks in my neighborhood even as we speak thanks to the generous contributions of taxpayers from around the country, so I’m expecting more bike crashes here soon. My skepticism about the benefits of this expansion here and here.


What does it take to open a cigar bar in WA?

There is only one cigar bar in Washington, a state of more than 6 million people. It re-opened recently at El Gaucho in Tacoma years after the state’s extremely strict smoking ban shut it down. The renovations necessary to comply with the law cost $15,000:

“The Washington state law on tobacco is the toughest one in the U.S.,” [owner Paul MacKay] said.

He’s had to jump through a lot of smoke rings to meet code. MacKay created a 25-foot long glassed off airlock walkway separating the restaurant from the VIP lounge. To stay within guidelines, the lounge is operated by owners of a newly created company — not employees and it isn’t open to the public.

“You can’t just come in, you have to be invited,” MacKay said.

That’s not enough for the Health Department. They’ve already served him papers telling him he needs to shut down again.

[Via the Stogie Guys.]


Worse than eminent domain

In the previous post I said that the city’s de facto taking of the “Made in Oregon” sign was “eminent domain by other means.” That’s not quite right. It’s actually worse than that. If the city had taken the sign through eminent domain it would have had to pay Ramsay Signs fair market value for the property, estimated in this Oregonian article at $500,000. Under the new deal Ramsay gets $200,000 to change the sign and a 10 year, 2,000/month contract to maintain it, for a total of just $440,000; with discounting for the present value the actual amount is even less than that. Under eminent domain, Ramsay would have received more money and been free of the sign. With this deal they’re receiving far less and will have to pay for the redesign, electricity, and upkeep for a decade.

For those of you needing a refresher, the Fifth Amendment to the Constitution protects property rights with a clause limiting the power of eminent domain: “nor shall private property be taken for public use, without just compensation.” I think the argument that the sign needed to be protected as a public good was dubious, but even if you disagree you should still want the owners to be fairly compensated for the taking. That so many people are glibly applauding the railroading of a private Portland business is very disappointing.


Made in Oregon, stolen by Portland

The saga of Portland’s “historic” Made in Oregon sign is finally at an end. City Commissioner Randy Leonard announced today on his blog:

The sign formerly known as the “White Satin Sugar” sign, the “White Stag” sign, and the “Made in Oregon” sign, is soon to come under the ownership of the City of Portland through a generous donation being made by Ramsay Signs. Before the City takes ownership of the sign, it will be converted to read “Portland Oregon” in the styling of its predecessors, as shown below:


This is a “generous donation” in the same way that protection money paid to the Mafia is money spent on “security services.” If you’ll recall, Ramsay Signs, who owns the neon giant, was no longer being paid by the Made in Oregon chain store advertised in the current design. Ramsay found a willing buyer in the Eugene-based University of Oregon, whose Portland campus lies beneath the sign. The university understandably wanted to change the text to promote the school in exchange for lighting it, all while keeping the basic design intact.

Randy Leonard and the Portland Historic Landmark Commission stepped in to stop the deal, claiming that the current text, which was only changed in 1997 and previously hawked sugar and sports apparel, suddenly qualified as a historic landmark. Specifically the Commission wrote that “The loss of the quirky, historic upper-case ‘E’ and cut-off ‘g’ in the text are not in keeping with the landmark character of the sign,” two typographical oddities this Portlander confesses not to have noticed until they took on such importance despite crossing the Burnside Bridge at least a couple times a week. Connoisseurs of font will presumably be happy to see that the new design retains these quirky letters.

Thus the sign was only “generously donated” to the city after the city violated Ramsay’s property rights by blocking its sale and making it worthless to any private buyer. This is eminent domain by other means. The city gets the sign and Randy Leonard gets the credit. And who will pay to light the sign? The new owners, i.e. us:

The maintenance of the sign, electricity, and the costs of conversion to read “Portland Oregon” will be paid for with revenues from a newly established City-owned parking lot under the Burnside Bridge.

So instead of using these parking funds for city services we’re using them to light a sign that the U of O would have lit for free. Brilliant.

Hat tip to Patrick Emerson, a.k.a. the Oregon Economist. Patrick supports the taking and thanks Leonard specifically, which can be read either as evidence that the sign really is a legitimate public good or that even savvy economists sometimes let their own preferences trump respect for property rights.

Update: Complete details of the deal here.

Update 3/26/10: Patrick has updated to say that he meant his “Thanks Randy” comment to be taken ironically and that he concerns about city ownership of the sign.


Health care reform’s tanning tax

To minimize the penalties you may suffer under health care reform, withdraw from your HSA now and spend the money on some indoor tanning. From this helpful timeline [.pdf] detailing what’s in the reform bill:

Indoor Tanning Services Tax. Imposes a ten percent tax on amounts paid for indoor tanning services in lieu of the tax on cosmetic surgery. Indoor tanning services are services that use an electronic product with one or more ultraviolet lamps to induce skin tanning. The tax would be effective for services on or after July 1 , 2010.

I dislike indoor tanning as much as anyone who’s had “Jersey Shore” intrude into their cultural lexicon but I don’t know why taxing it should be part of health care reform, why this is a logical substitute for taxing cosmetic surgery, or why we were thinking about taxing cosmetic surgery in the first place. Thankfully I tan the natural way, from the glow of my computer monitor.

[Link via Arnold Kling.]


Health care reform’s unseen costs

Chad Wilcox nicely sums up why many libertarians lament the passage of the health care reform bill:

A libertarian professor I know once said he believed that libertarianism’s greatest intellectual contribution is a recognition of the unseen. We’ll never see what open competition could have done to health costs in markets for health care left free of government interference. We’ll never see how the voluntarily uninsured would have spent the money they’re now required to spend on plans. We’ll never see how many lives could have been saved or how much healthier we could be in a world with technological innovations that are more costly and burdensome to develop as a result of government. I’m not saying there will be no technology and no innovation, I’m saying when we make these choices “as a society ” we sacrifice the unseen what-could-have-been for a “bird in the hand is worth two in the bush” philosophy that defies the most basic tenets of economics.

Like many libertarians, I think it takes a remarkably credulous faith in government to think that this bill is fiscally responsible. But what really disappoints me about it is that it fundamentally rejects the sort of reforms I’d favor and puts up new barriers to their enactment. Specifically, I’d like to see us move away from insurance as the primary means of paying for routine health care. This bill takes the opposite approach with its individual mandate that everyone purchase insurance, immediately inviting aggressive lobbying on behalf of providers to expand minimum levels of coverage. It additionally weakens Health Savings Accounts first by increasing the penalty for making non-health care related withdrawals, then by further limiting the amount people can contribute to them. One of the few nods in the direction of penalizing excessive insurance is the so-called “Cadillac tax” and it doesn’t even go into effect until 2018 so who knows if that will survive.

The seen costs of this health care bill will become all too apparent in the deficits to come. It’s the unseen costs of making it much harder to try out the market-oriented ideas of people like Milton Friedman, Michael Cannon, Arnold Kling, and yes, John McCain, that are most depressing.

Bartenders for McCain?


Menu labeling goes national

Jacob Sullum reminds us that among the many provisions in the heath care bill passed yesterday is a federal rule requiring calorie counts on chain restaurant menus nationwide. Obviously this is small potatoes compared to other aspects of the bill, but it’s still a bad idea. As I’ve explained in The Washington Examiner and on this blog, the empirical case that these labels will have any effect on obesity remains very weak. Labeling should have been examined further in the jurisdictions that require it before taking it national. If it worked, we could have debated a federal law separately. Instead we’re stuck complying with it before the idea has been proven, and when results fail to materialize we won’t see Congress rushing to repeal their error.