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Posts Tagged ‘economics’

Marijuana Reform

April 22nd, 2015 No comments

By: Lee Molitoris

Legalizing marijuana would benefit the low-income African American community and the United States’ economy. While the current drugs laws are not on their face discriminatory, in practice they have the effect of discriminating against the low-income African Americans. African Americans make up a disproportionate percentage of those arrested for possession. Many low-income African-American men turn to selling marijuana to support their families, and police departments tend to patrol “high crime” areas where a disproportionate number of these African Americans live. Legalizing marijuana would reduce the number of arrests and racial profiling of African Americans, allowing them to support their families and lessen the numbers sent to prisons.
Legalizing Marijuana would also have a beneficial impact on the economy. The government would save billions of dollars they currently spend on the enforcement, education, and prevention of drugs, including marijuana. The government would also save a proportion of the $22,000 they spend annually per prisoner. By legalizing marijuana, the government would then be able to tax marijuana sales and growers. For example, a proposed California bill, A.B. 390, has been projected to generate $990 million in taxes from the fee imposed on sellers of marijuana and another $349 million generated from the sale of every fifty ounces of marijuana sold. Therefore, legalizing marijuana could have a beneficial impact on African Americans by reducing arrests and incarcerations, and aiding the economy by generating tax revenue.

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It’s Not Easy Being Green, Thank God for God.

November 3rd, 2014 No comments

By: Katherine Snyder

Blog Category: Religion & Race

Predatory lending practices target members of minority races disproportionately, leaving them disproportionately vulnerable.  Ads for cash-now pay check advances that have hefty interest rates and short repayment time periods are conspicuously absent from areas where affluent white people live while opportunities for reasonable interest rates and mortgages with banks as opposed to subprime lenders are harder for people of color to attain.  Different communities have started to fight back against these unfair practices, many centered around faith-based initiatives.

People of Latino/a heritage are familiar with the tradition of lending circles, called tandas or cundinas in Mexico.  African Americans and people from almost every culture have different names for these groups all over the globe.  Churches and faith-based service initiatives can be the foundation for the Latino and Black communities as well as for recent immigrant communities alike.  These lending circles allow people from the community to come together, contribute a set portion of their paycheck to a common fund managed by one member of the group.  In turn each member of the group takes turn receiving the proceeds.  Depending on where your name falls on the list it acts as a loan or a savings account.  People are held accountable by the valuable good will they have established within the community before the transaction and in following through with the payments.

The success of these small community programs is widespread and can provide a person with the shot in the arm they need to make ends meet and keep moving forward while helping them avoid taking on debt and entering an agreement that could trap them in a perpetual cycle of borrowing.  Unfortunately, many laws in this area are unclear on their application to this type of lending leaving these people with their credit in limbo.  Some non-profits have sought to organize these lending circles in order to give the loans and repayment cycle legal credence so that people are building their credit and actually getting credit for their responsible payment plans.  This legitimacy often triggers a licensure requirement and creates more barriers for these people because the non-profits have to require more from the participants and do not have the resources to achieve a lending license.

The Baptist churches as well as Catholic Charities have taken the initiative to combat this issue in several ways.  First, the Baptist churches have come together to create a united front in order to lobby for a change in the laws that are allowing predatory lending.  The Baptist churches are also seeking to work within their own communities to support their congregations and create opportunities for positive lending opportunities as well as education for borrowers.  Catholic Charities has started some domestic microloan projects designed to help people break out of the cycle of borrowing from high-interest payday lenders.  Finally, California Sen. Lou Correa has a really innovative approach to regulating these lending circles: if it ain’t broke don’t fix it.  He sees the wisdom in allowing people to start building their credit with baby steps without requiring them to jump through giant hoops simultaneously.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.  

Sources: 

Aaron Weaver, At Summit, Baptist Leaders Announce Action Covenants on Hunger, Literacy, Predatory Lending, General CBF (April 24, 2014), available at http://cbfblog.com/2013/11/25/at-summit-baptist-leaders-announce-action-covenants-on-hunger-literacy-predatory-lending/.

Anita F. Hill, Women and the Subprime Crunch, Gender Discrimination (April 24, 2014), available at http://72.5.117.181/economica/stories/viewStory?storyId=3696.

Beth Newberry, Multiplying Loaves, Sojourners (April 24, 2014), available at http://sojo.net/magazine/2013/01/multiplying-loaves.

Brian Dakss, Loans To Avoid at All Costs, CBSNews.com (April 24, 2014), available at http://www.cbsnews.com/news/loans-to-avoid-at-all-costs/.

Manny Fernandez, Study Finds Disparities in Mortgages by Race, N.Y./Region (April 25, 2014), available at http://www.nytimes.com/2007/10/15/nyregion/15subprime.html?_r=4&ex=1350187200&en=a9978e04a9864642&ei=5088&partner=rssnyt&emc=rss&.

Tim Logan, Church, Housing Groups Sue Gov. Brown Over Mortgage Settlement Money, Business (April 24, 2014), available at http://www.latimes.com/business/money/la-fi-mo-mortgage-settlement-money-20140314,0,5927040.story#axzz2wBUjSRCL.

Sarah Ennis, CCHD: Catholic Charities of Salina Expands Microloan Project, (April 26, 2014), available at http://www.ncrlc.com/news.aspx?ID=278.

Shereen Marisol Meraji, Lending Circles Help Latinas Pay Bills and Invest, Morning Edition (April 2, 2014), available at http://www.npr.org/blogs/codeswitch/2014/04/01/292580644/lending-circles-help-latinas-pay-bills-and-invest.

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Pennsylvania is Fracking its Most Vulnerable Citizens

October 20th, 2014 No comments

By: Aaron Kostyk

Blog Category: Economics of Environmental Regulation

As of 2012, the Commonwealth of Pennsylvania has been charging companies an “impact fee” to extract natural gas from the Marcellus Shale deposits.[1]  Several States, which have had longer relationships with the natural gas industry, have what are known as severance taxes, which are essentially just set rate percentage taxes.[2]  Pennsylvania could potentially generate $1.2 billion annually by the year 2019-20 with a 4% severance tax, which is three times as much as the current revenue generated by the “impact fee.”[3]  This is hardly some radical, leftist environmental regulation, Texas and West Virginia have had severance taxes for years, and as production increases the revenue gap between these two models increases in favor of a set percentage severance tax.[4]  The obvious question is why does the Commonwealth continue to surrender revenue to private interests while bemoaning budgetary constraints?

As editorials and think tanks coalesce against leaving money on the table with the “impact fee”, Pennsylvania will have to reconsider its tax policy to conform to States that have been dealing with the natural gas industry for decades.  Given Governor Corbett’s very public spat with Philadelphia area activists and education interests, perhaps it is time for the Commonwealth to consider plucking the low hanging fruit of natural gas revenue to ensure that education funding and spending on social services continue to improve.  Obviously the Marcellus Shale deposits bring jobs and opportunity to many long suffering rust belt towns but it does not stand up to scrutiny that  these jobs will dry up if Pennsylvania has the same tax rate as Texas.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race. 

[1] Michael Wood, A Look at Other States Shows Marcellus Impact Fee Shortchanges Pennsylvanians, 2013 Pa. Budget & Pol’y Center, Aug. 08, 2013 at (2013), http://pennbpc.org/look-other-states-shows-marcellus-impact-fee-shortchanges-pennsylvanians (last visited Mar. 17, 2014).

[2] Id.

[3] Id.

[4] Id.

Fire and Ice

September 29th, 2014 No comments

By: Dr. Robert Gorkin

Blog Category: Economics of Environmental Regulation

Robert Frost, in his poem Fire and Ice, wrote:

Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.

So too, do those who believe in catastrophic anthropogenic global warming (CAGW).  For some, there is no debate.  Those who think there is room for further scientific deliberation are derided as being fully equivalent to “holocaust deniers,” and some of the more passionate “true believers” would have that CAGW questioners suffer a similar fate.  Indeed, some have advocated that those who question CAGW dogma should be held legally responsible and have gone so far as to propose Nuremberg-style trials and even execution.

The Precautionary Principle implies that if the world as we know it is to end because of global warming, it becomes obligatory to do everything possible to prevent the impending catastrophe.  An obvious rational corollary needs to be that any danger, no matter how great, ought to be realistically measured against its likelihood of occurring.  For example, the iconic modern day “prophet” with his sandwich board proclaiming “Repent! The World Will End Tomorrow!” asserts a danger that no one is going to take seriously.

Supporters of CAGW contend that mankind’s increasing use of fossil fuels since the Industrial Revolution (particularly since the late 1900s), and the consequent injection of carbon dioxide—a greenhouse gas—into the atmosphere, will cause the runaway destruction of the environment.  Their proposed solution is to dramatically restrict the use of traditional energy sources (e.g., by international treaty, regulation, and “carbon” taxes) and to subsidize the development of alternative energy sources.

Opponents of CAGW, in addition to martialling conflicting evidence, claim that even if global warming were true, the proposed remedial economic disruption and its ramifications are unwarranted. Opponents claim it would be far better to take a wait-and-see approach tempered by adapting to any climate change as it occurs.  They argue that even if there were any thermal abatement, it would amount to mere fractions of a degree achieved at an enormous cost. Among the dangers, they cite the cold weather deaths of the poor and elderly already seen in England due to unaffordable heating costs.  Costs attributable to the skyrocketing price of electricity caused, in part, by the regulatory imposition of costly wind-generated power.  Other concerns include increasing food costs associated with “green” economics favoring using food grains to make biofuels (gasohol), and the diversion of treasure and resources from currently pressing medical and other humanitarian needs.  Furthermore, there may actually be overall benefits, since many plants show increased productivity with higher levels of ambient carbon dioxide, and many people would prefer to live in a temperate climate.

Climate always changes, and has done so over the eons since earth first acquired its modern atmosphere starting about 2.8 billion years ago. Trying to prevent climate change may well be a Sisyphean task as effective as trying to prevent the continental drift that will surely obliterate the world’s geography, as we know it today.

No matter what side of the debate one falls on, one thing can be assured: Time will tell. We are today faced with a choice; a choice we shall recount to our grandchildren. And in the telling of our tale, perhaps we will have the much the same sentiments that Robert Frost poignantly captured in this well-known stanza from The Road Not Taken:

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

Source:

See generally, e.g., Watts Up With That?, available at http://wattsupwiththat.com (last visited Mar. 31, 2014).

Domestic Violence: An Issue Affecting All Communities

August 18th, 2014 No comments

By: Sarah Phillips

Blog Category: Domestic Violence Issues and the Law, Economics, & Race 

Domestic violence is an issue no matter what race or economic class an offender is placed in.   There is a myth that domestic violence only occurs in non-white communities and lower-class levels.  This is not the case.  In fact, domestic violence occurs all levels of people with no bias towards their race or economic level.   The difference between the different sets of communities is the help that they seek.  While affluent more middle to upper-class individuals have the means to find private help, lower class individuals are more likely to utilize the public agencies and police available to the public at large.   The availability of resources and subsequent handling of the circumstances surrounding the domestic violence allows for the public to come to wrong conclusion that domestic violence only affects those that are in lower-class communities and non-white.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.  

Source:

Boston University, BUPD Online, Domestic Violence Myths (Mar. 30, 2014 12:17PM), available at https://www.bu.edu/police/prevention/domestic_violence_myth.htm.

Environmental Regulations Impact on the Bottom Line

August 4th, 2014 No comments

By: Jaclyn Crittenden

Blog Category: Economics of Environmental Regulation
 
Environmental regulations, through compliance costs, cause businesses to raise prices in order to make up for the decrease in their bottom lines. Regulations, such as those promulgated by the EPA, have cost as much as $45 billion over the past 10 years. However, these regulations also contributed to the economy as much as $640 billion. A complete cost-benefit analysis includes more than mere monetary considerations; it also focuses on social policies. While many economic and societal benefits outweigh the costs associated with environmental regulation compliance, this blog only briefly discusses two.

Former Senator Arlen Specter once noted that “[t]here’s nothing more important than our good health – that’s our principal capital asset.” There is no denying that a person’s well-being improves when they are not as heavily exposed to ozone and particle pollutants, such as those that environmental regulations seek to reduce. Such pollutants include gasoline vapors, chemical solvents, and combustion products caused by various fuels. These are often byproducts of large industrial facility processes, gas stations, vehicle exhaust, electric utilities, and small businesses such as dry cleaners, just to name a few. Billions in healthcare costs are spent every year on treatment of pollutant-related illnesses, such as respiratory and cardiovascular diseases, reproductive and developmental ailments, cancer, strokes, diabetes, and many other illnesses that cause premature deaths.  Additionally, a healthier population is a more productive population – a more productive population can earn more money that they can then spend on consumer products in the marketplace rather than medical bills.

Moreover, the economy is stimulated when new environmental compliance jobs are created due to new regulations. One result of environmental regulation is that companies must employ more people to clean up pollution, manage prevention and abatement efforts, and devise new, more environmentally friendly, production processes. While many businesses dislike eco-friendly regulations because they take away from their bottom lines, companies’ failure to respond to regulations by creating these new jobs risk a negative impact on their profit. This is because unemployment benefits are funded heavily through taxes assessed on businesses. So, when the unemployment rate is high, companies pay higher taxes, which then reduces their net-earnings.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.  

Sources:

Am. Lung Ass’n, Particle Pollution, available at  http://www.stateoftheair.org/2013/health-risks/health-risks-particle.html#whatis (last visited March 13, 2014).

Jeff Spross, New Study: The Economic Benefits of EPA Regulations Massively Outweigh the Costs (May 3, 2013, 11:00 AM), available at http://thinkprogress.org/climate/2013/05/03/1955891/new-omb-study-the-economic-benefits-of-epa-regulations-massively-outweigh-the-costs.

Stephen D. Simpson, The Cost of Unemployment to the Economy (Aug. 9, 2011), available at http://www.investopedia.com/financial-edge/0811/the-cost-of-unemployment-to-the-economy.aspx.