Tuesday, August 30, 2011

Really?! Paperclips? REALLY!?!

So the Onion glories in mocking the behavior of our government...but it's really hard to keep up with reality. Tyler Cowen in Marginal Revolution reports that the US paperclip market is dominated by domestic producers because the US has a comparative advantage in producing small, bent-wire, office supplies...hold on...no, domestic US paperclip producers have the advantage of huge protective import tariffs. Yes, on paperclips. Frickin' paperclips.

This makes for a nice essay question about the effects of such a policy; and Matt Yglesias does a nice stab at working some of it out. He hits on an issue that has long bothered me: the preference for government policies that have no budgetary fingerprints (i.e. minimum wage, conscription, regulation), even though their implicit costs may be much greater than an equivalent tax-and-spending system.

I do wish that one of them had given a hat tip to Mancur Olsen's idea of "concentrated benefits and dispersed costs" to explain how this sort of thing gets started and continues.

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