Coase Colored Glasses

http://www.ksl.com/index.php?nid=148&sid=10225979

Another interesting bill signed in to law in the state of Utah.  The law gives private property owners the right to restrict access to rivers and streams that cross their property unless that area has been open to the public for over 10 years.  Sportsmen that like to use these areas for recreation are upset because it is likely that some property owners whose hands were tied from blocking access now have that right.  The window to exercise a right that they once had will now be reopened for some property owners.

Even though the governor signed the bill, he has urged property owners to be generous in allowing access.

http://www.nytimes.com/2010/03/31/science/earth/31energy.html?th&emc=th

Today it was announced that the Obama Administration is to propose opening large parts of the Atlantic coast and the northern coast of Alaska for off-shore oil drilling.  This proposal, while having been contemplated by the Bush Administration, would seem out of place being proposed by President Obama- a man representative of the will of a party who has been opposed to opening these areas for drilling since the 70’s.  After our discussion yesterday about contracts it struck me how similar this action mirrors a contract breach.  If no official contract of mutual support exists between the democratic party and environmental groups that have fought against off-shore drilling the similar interest of the two parties, the overlap in membership between the two, and the financial aide that the two have lent to each other would almost amount into a de-facto social contract to support each other.  The proposal by the Obama Administration would then be a clear breach of said contract, a political move that would seem rather puzzling.

Economics and Game theory would infer that the Obama Administration would need the benefits of proposing to allow off-shore oil drilling to outweigh the costs of the political backlash that would ensue.  This is a smart trade off for the Administration because by making this proposal the democrats will hopefully be able to gain some support from moderates and oil companies, something increasingly necessary, as key climate legislation is now set to be considered and midterm elections to follow shortly after.  The relative costs would also be quite low because the democratic party would still, despite this proposal, be the more environmentally conscious party and lose few votes due to this action.  Even more so because the actual effects of the proposal would mean that it would still take years for any actual drilling to commence.  This leaves them enough time to back out of the proposal after the midterm elections and save face with the democratic core.

This article in the health section of the New York Times addresses the issue of healthy people being forced to pay for the medical care of those who engage in bad health habits. Count me in as someone who is not too keen on the idea of having my taxes raised so we can keep smokers with lung cancer alive longer. One possible solution is to simply force irresponsible people, such as smokers, to pay more for health insurance. Yet the author of the column, Dr. Sandeep Jauhar, claims that such punitive measures have proven to be ineffective and do not promote healthier behaviors. His/her (I don’t know if Dr. Sandeep Jauhar is male or female) solution is to instead focus on public health campaigns encouraging exercise and discouraging smoking and other bad habits.  Really? The solution is to dump millions of tax dollars into public campaigns about exercise and smoking? Do people still need to be told that exercise is good and smoking is bad?  Also, Dr. Jauhar claims that since other factors such as socioeconomic status, education, and genetics also play significant roles in health, we should not be so quick to place blame on individuals who have poor health.  He/she then goes on to compare those who do not care about their health to those of us who, even though we may be responsible with our health, sometimes text while driving. This, the doctor claims, is no different since it, too, is socially irresponsible. The problem with that argument is that if I choose to text while driving, I assume a significant amount of risk, whether it’s a fine, getting in an accident, or even dying. People who don’t take care of their health on the other hand have much less risk because they know that their medical expenses will be partly covered by someone else.

The doctor essentially proposes that we just let bygones be bygones, continue to equally bear all the costs, and live happily ever after. Personally, I prefer a more efficient way where we scrap the pointless campaigns, make health-irresponsible people assume more of the costs, and if they refuse let them die early, thus eliminating sources of excess cost and risk. To me, this would be putting the incentive where it does the most good.

Recently Secretary of State, Hilary Clinton, travelled to Mexico in hopes of repairing relations with Mexico’s President, Felipe Calderon, regarding America’s resolve toward fighting the drug war. This meeting’s purpose was intended to direct support of national security assets toward their Mexican counterparts in an effort to curb the swelling violence in Mexico. To date this year 555 people have been killed in the city of Juarez alone, up from last year’s quarter mark of 449. To put this in perspective, the casualties from both the Iraq and Afghanistan conflicts totaled 465[1] for 2009. In that same year Mexico saw 6,600 drug related killings throughout the country. This too was an increase from the previous year’s totals.

It is thus blatantly obvious that the drug war in Mexico is just that, a war fought out over terrain bordering our nation, based upon an insatiable demand for a product deemed illegal by the U.S. federal system. Our answer to solving the problem has been to more heavily arm our borders and provide direct financial aid to Mexican authorities. The aid comes in the form of the Merida Initiative[2], a $1.3 billion dollar package aimed at providing hardware and training directly to Mexico. Comparing figures once again, drug gangs in the U.S. are reported to be sending anywhere from $18 billion - $39 billion in revenue south of our borders every year. See the issue?

So what then is a real solution to fighting America’s demand for drugs and the ensuing conflicts that arise at our borders? Hilary Clinton directed a large portion of her speech toward extinguishing America’s drug abuse, but no real specifics were given as to how this would be accomplished. How do you reverse an endemic drug use that is heralded by the country’s most prominent figures? The media today reveals the truth behind widespread drug use in Hollywood and oft times glorify its outcomes. The argument against drugs today revolves around not who is doing them, but around which drugs should be consumed. This then seems to be the real question and possible solution to stopping border related conflicts.

The purposed legalization of marijuana in California addresses the very issue of which drugs are to be consumed without penalization by the federal government. This measure is important for many reasons. First, marijuana is viewed by many as being no more harmful then alcohol or cigarettes and yet both of those substances are legal. Second, by making marijuana a legal substance the association with gangs as a means of distribution will cease to exist.  Third, the potential revenue gained by California legalizing marijuana is estimated to be in the ballpark of $1 billion[3]. Given California’s $20 billion dollar debt, the legalization of marijuana seems to offer some promising offsets with little negative impact. This solution would then point to a potential gain for the U.S. government given its sizable debt as of late.

The real solution then, to the drug wars in Mexico and the insatiable desire for drugs in the U.S., may not be curbing its use, but merely levying its use for the common good of others through taxation.

Yesterday’s discussion of property rights, specifically intellectual property begs the question, “how far does the idea of intellectual property extend?” According to Utah-based Myriad Genetics and the U.S. Patent and Trademark Office, strands of human DNA, in this case those corresponding to high breast cancer risk, are eligible for patent as long as the strand of DNA is isolated from the rest of the organism. The ACLU and multiple medical organizations challenged the patent, fearing monopoly control in medical treatment of conditions identifiable on a genetic level. The patent was eventually overturned by Judge Robert Sweet but will likely be appealed by Myriad. This case raises multiple questions. Will research corporations such as Myriad have incentives to continue work on genetics-based medicine if they are unable to legally protect their right to their discoveries? Is the ACLU correct in arguing that withholding said discoveries from other treatment facilities and medical professionals unfair to those with the treatable conditions? Are there viable alternatives to patenting the genes that will incentivize private research in related fields?