Gambling and Indian Tribes

As Shinnecock Indians returned to their reservation on Long Island after World War II, elders warned that their tribe’s long struggle for survival was once again threatened.

Decent jobs were scarce and many Shinnecock veterans were leaving, draining the reservation of needed hands. ...

Now this small tribe on the eastern end of Long Island is on the verge of sketching a new, perhaps more prosperous chapter. The Obama administration’s recent announcement that the Shinnecocks met the criteria for federal recognition finally paves the way for a casino, generating a bounty of jobs and revenue.

The odd fact raised by this story is that the U.S. pays restitution to Indian Tribes by giving them monopoly rights (within a given state or area) to sell casino gambling services. 
 
Here's a different approach: legalize all gambling.  Then have an honest debate about whether, or how much, the U.S. should pay restitution to Native Americans.

Linking the Components of Health Care "Reform"

According to M.I.T. economist Jon Gruber, the Senate's tax on cadillac health plans is good policy because it

would reduce the incentives for employers to provide excessively generous insurance, leading to more cost-conscious use of health care and, ultimately, lower spending.

Gruber is right, and virtually every economist agrees. The ideal reform would combine increased taxation of employer-provided health insurance with offsetting reductions in personal or corporate income taxes.  Both changes would reduce distortions in the tax system and allow government to raise any given amount of tax revenue with a smaller negative impact on the economy.

But that does not mean government should expand spending, on health insurance or anything else. That is a logically separate question.

Trading Sewage for Carp

Libertarians are fond of noting that government projects can have unintended consequences; here's an example:

The reversal of the Chicago River a century ago, to send the city's sewage to the Mississippi River instead of into Lake Michigan, was hailed as an engineering marvel. Now Michigan is suing Illinois to potentially re-reverse the river to prevent the movement of voracious, invasive Asian carp into the lake.

Perhaps the right action now is to re-reverse the river, but perhaps that will have its own unintended consequences.  Any thoughts?

Besides, aren't carp good eating?   My grandmother made wicked-good smoked carp (using carp spear-gunned in Lake Erie by a neighbor at my grandparents' cottage).  Carp is a delicacy in Europe and Asia.

Think I'm kidding? Check out these carp recipes.

Capitalism and Freedom in North Korea

Milton Friedman would not be surprised by this story:

North Korean leader Kim Jong Il moved early this month to wipe out much of the wealth earned in the past decade in his country's private markets. As part of a surprise currency revaluation, the government sharply restricted the amount of old bills that could be traded for new and made it illegal for citizens to have more than $40 worth of local currency.

It was an unexplained decision -- the kind of command that for more than six decades has been obeyed without question in North Korea. But this time ... the markets and the people who depend on them pushed back.

Grass-roots anger and a reported riot in an eastern coastal city pressured the government to amend its confiscatory policy. ...

The currency episode reveals new constraints on Kim's power and may signal a fundamental change in the operation of what is often called the world's most repressive state -- a change driven by private markets that now feed and employ half the country's 23.5 million people, and appear to have grown too big and too important to be crushed, even by a leader who loathes them.

These events do not guarantee that North Korea will soon become a freer state, but they do suggest that economic freedoms help constrain oppressive government, which is precisely the point of Friedman's famous work.

Merry Christmas to Fannie and Freddie

U.S. promises unlimited financial assistance to Fannie Mae, Freddie Mac

Why Have Legal Holidays?

I can think of two possible justifications.

The first is that society wants to promote particular ideas, values, individuals, or the like; think of the 4th of July or President's Day.  I find this defense problematic: the choice of holidays is a vehicle for thought control.

The second justification asserts that legal holidays solve a co-ordination problem by helping people take vacations at the same time as their friends and relatives.  This view has some merit, but a countervailing effect is that promoting specific vacation days generates crowding at airports, beaches, and so on.

So I do not see a convincing justification for government holidays, especially not those associated with religion.

Yes, I know I am a Scrooge.  My family has been telling me this for years.

My Run-In with the Law

While driving last night from Wellesley to Charlottesville, I was stopped for not having a working light over the rear license plate.

My wife said, "It makes sense to have such a rule; otherwise police could not read your license (at night)."

My response was, "Why do the police need to read my license plate (at night or otherwise)?  Why require license plates at all?"

The answer is presumably something like, "It helps police solve crimes." 

But how many?  Is it worth the cost of all those license plates?