The Bootlegger/Baptist theory of regulation

Gambling tycoon Sheldon Adelson wants to outlaw online gambling, which threatens his casino industry.  So with the help of Sen. Lindsey Graham (R, SC), he has formed an alliance with Southern Baptists, who also oppose online gambling because they oppose gambling in general, including what goes on in Mr. Adelson’s casinos.  So we have a gambling magnate using gambling opponents  to help him eliminate competition.

But this paradox is not new.  There was also an alliance between bootleggers and (again) Baptists in promoting Prohibition.  In fact, the phenomenon has a name in the field of economics:  The Bootlegger/Baptist theory of regulation. [Read more...]

“Mission Accomplished” on the deficit

President Obama has declared victory in the economic sphere, pointing to decreased budget deficits and slowed growth in the cost of health care.  We may now, he said, dispense with “mindless austerity” when it comes to government spending.  But, as Fred Hiatt points out, such optimism is fine “if your horizon is Jan. 20, 2017.”  However, if you look beyond that, we are in deep trouble. [Read more...]

Alibaba and the 40 Thieves

In China, pretty much everyone buys pretty much everything from the online site Alibaba.  Last week, the company came to the United States, getting listed on the New York Stock Exchange, where it raised over $21 billion, becoming the second-biggest IPO in history.  Alibaba has a market capitalization of nearly $220 billion, making it bigger than Facebook, eBay, Disney, and Amazon.  There are plans to open operations in the United States.

But there might be some dangers in investing in a company that is under the thumb of a government that does not believe in capitalism or private property. [Read more...]

How the government coerced Yahoo

It has come out how the government forced Yahoo to turn over online data to the NSA surveillance program known as PRISM.   A “civil contempt” ruling would have fined the company $250,000 a day.  Every week Yahoo refused to comply the fine would double.  Doing the math, that would come to $25 million after a month, $400 million the second month, $7.2 billion the third month, $9.5 trillion the fifth month, $117 trillion the sixth month, more than the total value of everything on earth the eighth or ninth month, and $7.9 sextillion by the end of the year. [Read more...]

Why corporations move

We blogged about “inversions,” when a corporation moves its official headquarters to another country.  George Will offers an explanation from the corporation’s point of view, going on to criticize liberals for waxing indignant over the consequences of policies they themselves promoted. [Read more...]

Would you trade the income tax for a value added tax?

A former Treasury official in the George H. W.  Bush administration has put forward a new tax reform proposal.  It would eliminate the income tax for households that earn less than $100,000, cutting the rates for those above that threshold to 16% or 25.5%.  Instead, everyone would pay a Value Added Tax (basically a national sales tax) of 12.9%.  Charles Lane explains the proposal after the jump.

What would you think of this? [Read more...]


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