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First Things First

...But not necessarily in that order.

Posts tagged with "consumerism"

Thirst for Tax Revenues Drives Tennessee Mad

Friday, 28. September 2007, 16:19:23

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Like New Jersey and various other states, Tennessee figured it had a source of free money when it hiked cigarette taxes. It hiked them so high -- from 20 cents per pack to 62 cents -- that Tennessee's citizens living near its borders have begun buying their butts in other states.

Unlike any other state of which I'm aware, though, Tennessee has instituted a "cigarette surveillance program" under which citizens can be charged with a crime -- or even have their cars seized -- for legally buying a legal product:

...state Department of Revenue agents will begin stopping Tennessee motorists spotted buying large quantities of cigarettes in border states, then charging them with a crime and, in some cases, seizing their cars.

Critics say the new "cigarette surveillance program" amounts to the use of "police state" tactics and wrongfully interferes with interstate commerce. But state Revenue Commissioner Reagan Farr says his department is simply doing its job, enforcing a valid state law while protecting Tennessee retailers who properly pay state taxes. [...]

The idea is for the monitoring agent to spot a person buying cigarettes in volume at an out-of-state market, then departing in a vehicle with Tennessee license tags. Starting today, monitoring agents spotting such a suspect will call an arresting agent who will stop the car when it enters Tennessee, he said.



I'm curious where, exactly, Tennessee invented the authority to conduct surveillance of innocent people in another state. But wait -- it gets better:

Under state law, bringing more than two cartons of cigarettes into the state without paying Tennessee taxes is a "Class B" misdemeanor, carrying punishment of up to six months in jail and/or a $500 fine. Bringing 25 or more cartons is a "Class E" felony, with minimum penalty of one year in prison and a maximum of six years plus a fine of up to $3,000.

In addition, the specific state statute dealing with untaxed cigarettes provides that vehicles used to transport more than two cartons "are considered contraband and are subject to seizure," says a Department of Revenue statement.

Farr said that agents have been instructed to seize any vehicle carrying more than 25 cartons of cigarettes without Tennessee tax stamps. In cases where three to 24 cartons are involved, he said vehicle seizure is "at the officer's discretion."



So let's see how this works: you buy a legal product -- we're not talking fireworks or plutonium here -- out of state, and when you bring it home, you're arrested for possession of "contraband."

I can foresee a competition among Tennessee's lawyer set to see who can be the first to challenge this in court, because this turkey of a law will go down hard. I guess Tennessee never heard of the Fourth Amendment.

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As if we didn't get enough junk calls

Friday, 25. May 2007, 19:22:23

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Remember when you could, like, go on the World Wide Web, and it wasn't the case when every helpful website wasn't trying to glean your personal info so they could dun you with sales calls?

You do? Man, you're old.

The latest assault on our privacy is called "trigger leads." If you're unwise enough to go to an "aggregator" website that promises the lowest mortgage rate! or the best car loan! and actually 'apply' for a loan, watch out -- your name (and whatever other info you volunteered) will soon be sold, and sold, and sold some more to anyone who wants to sell you a loan. (This isn't the case when you apply online to an actual lender, since they aren't about to compete against themselves.)

That's the bad news. It gets worse: when a lender gets your info, he'll pull your credit report -- and then those same credit bureaus will turn around and sell your info some more.

Well, at least they've (been forced to?) set up a site where you can get out from under: OptOutPrescreen joins the ranks of the Do-Not-Call website and, no doubt, others will have to follow as everyone gets access to our personal info.

As I was doing research for an article on this, I followed an old bookmark to AntiTelemarketer.com -- and found this (to see this full size -- which you gotta do to appreciate the humor -- click here):

"Look! You fools! You're in danger! Can't you see? They're after you! They're after all of us! Our wives...our children...they're here already! You're next!"
-- Dr. Miles Bennell, Invasion of the Body Snatchers

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Reduce junk mail - and junk phone calls

Tuesday, 15. May 2007, 16:07:56

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I've been able to cut down enormously on the amount of junk mail my family receives. It's easy enough to do. The EcoCycle blog lists five easy steps:

Remove your name from mailing lists; Know the Magic Words to keep from being added to more lists; 1-800 No Thanks (to get off still more lists); End Credit Card Solicitations (although if you're trying to establish a credit history, you may wish to skip this step); and Stop Junk Promo Products to stop receiving free samples, AOL disks, and such.

In most cases, all it takes is a trip to a handy website. Stubborn cases may require an actual letter (remember snail mail?) or a phone call.

It's easier to stop most telemarketers from calling you incessantly. Before Uncle Sam set up their Do Not Call website, it was at the point where my wife and I just stopped answering the phone altogether. We'd let the answering machine pick up, because literally eight of 10 calls were telemarketers. I'm not a big fan of government interference in the marketplace, but I applauded this effort, because it works. (Be sure to add your cell phones, too -- it can't hurt.)

But be sure to read more about this in this EcoCycle post, because you might actually make some money from a telemarketer:

Finally, be sure to take advantage of the Telephone Consumer Protection Act. It requires that telemarketers who call or fax you must put you on a "do not call" list– IF you ask. Keep a record of your request. If they call again within one year you can sue them in small claims court. One lawsuit netted an irate customer over $1,500 in damages.


Also, there are exceptions to that list -- politicians and tax-exempt non-profit organizations, for example.

Look, I like and support select charities, but here's the thing that fries me: the moment you donate to one, your name and address are instantaneously transmitted to every other charity in the known universe. And then they all call you. All the time. Or so it seems. It's got to the point that we've once again stopped answering the phone. So now we also politely request that they, too, add us to their own do-not-call list. I don't know if that will work, but it's worth a try.

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When the government sets prices...

Wednesday, 9. May 2007, 18:38:49

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...The result is always the same -- the consumer pays more:

MERRILL, Wis. -- A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.

But the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.


In a capitalist free-market society, why, exactly, is a vendor required to have a certain markup? Doesn't a free-market society imply, well, competition? Why, it's almost as though the politically connected can get Uncle Sam to pick our wallets.

You may or may not know that there are price controls on milk -- that is, your local store is forbidden from selling milk below a certain price. A paper titled Milk Pricing in the United States (PDF) attempts to explain why:

All the various government and private institutions making up the system are expected to work together to ensure that the public gets the milk it wants, while dairy farmers get the economic returns needed to provide the milk. The major institutions are the Federal milk price support program and milk marketing orders, the Northeast Interstate Dairy Compact, State regulations, dairy cooperatives, and milk and dairy product futures and options markets.


That's a lot of government (and government-backed) muscle to help out "dairy farmers," a term which evokes a nostalgic image of Farmer Brown milking his cows in the dawn's early light. There are still a fair number of such small businesses out there, but most milk is produced by large corporations these days. Regardless, this doesn't tell us why dairy farmers should be guaranteed "the economic returns needed to provide the milk". The paper's authors gamely attempt to do so:

Economic theory posits that the milk pricing system must balance the supply of milk with the demand for milk. [But] The physical uniqueness of milk complicates many of the pricing arrangements that are available for other products or commodities.
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Milk is produced every day and must move to market at least every other day -- thus it is a flow commodity. [...] In the short run (day to day), milk supply is not attuned to milk demand. The cows produce every day and the milk must go to market, even if the demand on a particular day is low.


That's true; you can't shut off (or even slow down) a cow like you would, say, a gasoline refining plant. The only way to get a cow to stop producing milk is to slaughter it.

But supply-and-demand issues aren't unique to dairy farmers. If the supply of gasoline exceeds the demand, the refiners end up with a lot of unsold petrol. So what do they do? They cut prices to stimulate demand. That's what businesses are supposed to do.

But not if you're in the dairy business, where you live by the government's rules whether you like them or not. Case in point: last year, a dairy farmer tried to leave the price-fixing reservation, only to be amazed at how fast the government slapped him down (hat tip: Mises Economic Blog):


On Tuesday, President George W. Bush quietly signed into law S. 2120, the so-called Milk Regulatory Equity Act of 2005, a carefully crafted piece of legislation which was aimed squarely at preventing Hettinga's dairy farm from offering milk at lower prices than Dean Foods and other large milk distributors such as the Dairy Farmers of America.

"Basically, I'm a pebble in the shoe of DFA and Dean Foods," Hettinga said. "The only reason I'm a success is they are a milk monopoly and they have raised the price too high. The consumer is getting ripped off."

So the days of buying two gallons of Hettinga's Sarah Farms milk for $3.99 are over.

The bill, passed in both the House and Senate with almost no debate, amends the Agricultural Adjustment Act, part of the Agricultural Marketing Agreement Act of 1937, and will require Hettinga to participate in federal milk marketing order requirements, effective May 1.

The federal milk marketing program requires most milk producers and handlers to set minimum prices on their products and to pool their revenues. It also tries to balance the supply and demand of milk and milk products, which can vary widely from day to day.

Whether that's actually true, or the milk marketing program is even needed, is debatable, as Hettinga's success shows. The new law would, in effect, require Hettinga to pay his competitors to stay in business.


And, of course, it's a direct transfer of money from we, the people, to another politically-connected industry.

It's absurd that the state of Wisconsin is threatening to sue a gas station for the crime of giving consumers a break on the price of gas. Evidently, the law refers to protecting businesses rather not consumers.

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