Free Market Mojo

“Sin Tax” Revenues Climb

Who is Left-Wing, and Who Just Thinks They Are?

Deportations Up Under Obama, ctd

Anger Helps Negotiations in Some Cultures, Hurts in Others

Behold! Engineering porn!

Posted: 27 Jul 2010 05:07 AM PDT

I don’t know how or why I missed this, so my apologies to my readers who I know will appreciate this little nugget: The Treasury Department’s Alcohol and Tobacco Trade and Tax Bureau has released its Fiscal Year 2009 Annual Report, showing a 41% increase (to $20.6 billion) in the amount of “sin taxes” on alcohol, tobacco, firearms, and ammunition collected by the federal government.

The bulk of the $6 billion revenue increase is the result of higher tobacco taxes coming from the Children’s Health Insurance Reauthorization Act of 2009. Firearms and ammunition excise tax collection increased 45%, the largest yearly increase in the agency’s history.

Who is Left-Wing, and Who Just Thinks They Are?

Posted: 27 Jul 2010 04:07 AM PDT

A new study published by the University of Leicester Department of Economic suggests that highly educated people assume that they are left wing when they are more likely to actually be conservative. Interestingly, the study shows that some people may end up voting for more left leaning parties because they believe they are left wing, even though they are not.

“The most startling result is that the more educated tend to believe that they are more left-wing than they are measured as being,” said Dr. James Rockey, the author of the study. “That is, well-educated individuals are more likely to think that they are quite left-wing but actually believe things that compared to the rest of the population would make them comparatively right-wing.

“The analysis suggests that the cause of this is different to the effect of gender, income, or job type. Other results suggest that men and those with higher-incomes are more likely to both think that they are rightwing and to be measured as such.”

Dr. Rockey said that one reason for this result may be that people believe they maintain their left leaning views despite the fact that changing circumstances and social networks may push their opinions rightward over time. This could be because these people compare themselves to their immediate social and work network rather than to the population at large.

“The broad conclusion of the paper must be that individuals either choose not to, or are unable to, locate their ideological positions reliably compared to those of the positions of their compatriots.

“This is further evidence not just that voters are far from fully informed, but that somehow voters consistently misperceive where they lie on the ideological spectrum.”

Deportations Up Under Obama, ctd

Posted: 27 Jul 2010 03:07 AM PDT

I posted the chart below earlier this month showing that deportations under the Obama administration have been higher than at any time during the Bush administration:

Below is an excerpt from a new Washington Post article on the surge of deportations under the current administration:

The Immigration and Customs Enforcement agency expects to deport about 400,000 people this fiscal year, nearly 10 percent above the Bush administration's 2008 total and 25 percent more than were deported in 2007. The pace of company audits has roughly quadrupled since President George W. Bush's final year in office.

The effort is part of President Obama's larger project "to make our national laws actually work," as he put it in a speech this month at American University. Partly designed to entice Republicans to support comprehensive immigration reform, the mission is proving difficult and politically perilous.

I highly doubt that many Obama supporters are aware of this. I am equally sure that most Obama critics are unaware of this.

Anger Helps Negotiations in Some Cultures, Hurts in Others

Posted: 27 Jul 2010 02:16 AM PDT

When negotiating with Europeans or Americans, anger may help your cause. The same is not true when negotiation with East Asians, according to a study on how people from different cultures react to anger during negotiations.

Behold! Engineering porn!

Posted: 27 Jul 2010 02:00 AM PDT

The left may look at this and say, “My God, how many jobs has this horrid machine destroyed!” I will leave Henry Hazlitt to defend the right:

Among the most persistent of all economic delusions is the belief that machines on net balance create unemployment.

The belief that machines cause unemployment leads to preposterous conclusions. Every technological improvement must cause unemployment. The logical conclusion would be that the way to maximize jobs is to make all labor as inefficient and unproductive as possible.

Let us see exactly what happens when technological and labor-saving machinery is introduced.

Example: a clothing manufacturer learns of a machine that will make men's and women's overcoats for half as much labor as previously. He installs the machines and drops half his labor force.

This looks at first glance like a clear loss of employment. But the machine itself required labor to make it; so here, as one offset, are jobs that would not otherwise have existed.

It is likely the labor employed to build the machines is less than the labor cut by the manufacturer. So there is still a net loss of employment to be accounted for.

The machine was a large investment, so it takes several years for the machine to pay for itself. After the machine has produced economies sufficient to offset its cost, the clothing manufacturer has more profits than before.

The manufacturer must use these extra profits in at least one of three ways:

He will use the extra profits to expand his operations by buying more machines to make more overcoats; or

He will invest the extra profits in some other industry; or

He will spend the extra profits on buying things for himself, e.g. buy a new house or a new car.

Whichever of these three courses he takes, he will increase employment.

The manufacturer, as a result of improved production has profits that he did not have before. Every dollar of the amount he has saved in direct wages to former overcoat-makers, he now is able to pay out in indirect wages to the makers of the new machines, or workers in another industry, or to the makers of a new house or car. In any case, he gives indirectly as many jobs as he ceased to give directly.

But the matter does not rest at this stage. The manufacturer competes with others. Due to competition the price of overcoats drops. The savings are passed along to the consumers. The consumers now have more money to spend on other things, which results in more employment.

In brief, on net balance machines, technological improvements, automation, economies and efficiency do not throw men out of work.

The central lesson is that we should try to see all the consequences of any economic policy – the immediate effects on special groups, and the long-run effects on all groups.