Get government out of flood insurance. | Are post-punishment restrictions making rehabilitation harder? | Also: Minimum wages, cigarette taxes, a contest, and a prize.

September 16, 2017
If car insurance worked like flood insurance, we'd see a lot more expensive cars driven a lot less carefully—and taxpayers would pay to have them repaired. Non-violent drug offenders face 641 post-conviction restrictions—497 of of which may apply for life. Is that making it harder to achieve rehabilitation? Higher minimum wages are making restaurants dirty! Cigarette taxes are creating new markets for unbranded cigarettes—and possibly funding terrorist groups. Do you have a good idea for advancing liberty? Do you know of someone who has made a significant contribution toward advancing liberty?
How flood insurance works, and how it ought to work: Barry Brownstein writes "If you have a history of drunk driving, that increases the chances you'll make an insurance claim on your car — so your premiums will be higher, and that encourages you not to drive in the future (or to drive sober in the first place). "If you bought a fancy sports car, that would increase the loss to the company if your vehicle gets damaged — so your premiums would be higher. That might encourage you to buy a less-expensive vehicle. "If governments subsidized car-insurance policies the way they do with flood insurance, we'd see more drunks driving Ferraris around, at the expense of taxpayers. "Getting the government out of the flood insurance business and having insurance companies determine actuarially sound premiums is the only way for homeowners, businesses, and builders to know the real risk they are assuming. If the risk is high, premiums will be prohibitive, and building will migrate to areas less prone to flooding." [Learn Liberty]   Are federal restrictions making rehabilitation harder? John-Michael Siebler comments on a new study from the Government Accountability Office: "The report from the Government Accountability Office, published last week, contains the results of a yearlong study of what are called federal 'collateral consequences': civil restrictions on the rights and entitlements of individuals with criminal convictions. "The GAO found that 641 of those little-known rules could apply to individuals convicted of a nonviolent drug offense, defined as any federal drug offense that didn't involve the attempted, threatened, or actual use of physical force—or a substantial risk that force might be used. "And those rules cover so many parts of a person's life—from employment and housing to the constitutional rights to vote and carry a firearm—that if administered arbitrarily, some may needlessly frustrate reintegration into society and encourage a return to crime. […] "According to the GAO report, of those 641 federal collateral consequences for nonviolent drug offenders, 497 may be effective for life. Only 131 allow individuals to earn relief in meritorious cases—for example, by completing rehabilitation—without a pardon. […] "Consider one example from the GAO report: A federal statute, 23 U.S.C. § 159, withdraws certain federal funds from states that fail to revoke or suspend the driver's license of a person convicted of 'any drug offense.' That sanction applies whether or not the person used a car in the course of breaking the law. "Why should government take away the driver's license of a person who may need to drive to work or take his or her children to school, and who poses no extraordinary risk behind the wheel?" [The Daily Signal]   The wages are high, but the cleanliness is low! A new study, writes Erin Shannon, finds that higher minimum wages are associated with less sanitary restaurants:   "The study, conducted by economics professors from Indiana University, Ball State University, and Villanova University, found each dollar increase in the minimum wage resulted in a 6.4% increase in overall health violations, with a 7.3% increase in critical 'red' violations and a 15.3% increase in less severe 'blue' violations in the city's restaurants.   "'Red' violations are high risk factors that could lead to dangerous food borne illness, such as contamination by hands, cross contamination among food items, improper handling of chemicals used in food preparation and noncompliance with approved procedures.  These are the kinds of violations that could cause salmonella or E. coli breakouts which sometimes kill or hospitalize people. "'Blue' violations are lower-risk factors that encompass things like improper food temperature control, inadequate maintenance of physical facilities (such as garbage disposal, toilet cleanliness, etc.) and evidence of food contamination from rodents and insects, employee hygiene and other sanitary conditions.  These violations likely won't send anyone to the hospital, but they could result in a nasty case of food poisoning.  At the very least they are just plain gross. "The indisputable fact is employers will always figure out ways to economize on artificially high-priced labor.  That is basic economics.  It is especially true in the restaurant industry, where the average profit margin is just 4%.  In the case of Seattle, it has already been established one way employers have economized has been to reduce the number of employees or the number of hours those employees work.  "If those work-force reductions aren't paired with a reduction in services (for example, a restaurant reducing the hours it is open), then something has to give.  In the case of Seattle's restaurants, that something seems to be cleanliness and hygiene." [Washington Policy Center]   Higher cigarette taxes are fueling the illicit trade in non-brand cigarettes—and possibly terrorism. Roger Bate: "As authorities around the world have increased taxes on tobacco products in order to reduce smoking, illicit (untaxed) tobacco use has increased. Organized criminals have moved from smuggling brands into making their own products, known as illicit whites. They make them legally in jurisdictions like Dubai or Paraguay and then smuggle them into markets where they have paid no tax, and may not contain any of the important warning labels. Some of the criminal groups behind illicit tobacco are implicated in terror financing as well. "We conducted a variety of empirical studies on availability of illicit whites, the legality of discarded packs, and smoker attitudes toward illicit products. We found that tax rates drive the illicit market, that smokers are annoyed by high taxes, and a minority are happy to buy illicit products." [American Enterprise Institute]   A contest and prize: Do you have an idea for advancing the ideas of a free society? Enter the William F. Buckley, Jr. Ideas Forum and contest (deadline: November 12): http://www.buckleyprogram.com/buckley-ideas-forum--contest. Do you know of someone who has made a significant contribution to advance human freedom? Nominate them for the Milton Friedman Prize for Advancing Liberty (deadline: December 1): https://www.cato.org/friedman-prize.
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