Externalities and long lines at airports

Photo: Flikr Creative Commons Yesterday I published a piece in MinnPost, "Why you shouldn’t feel too grateful to Delta for hiring people to help with the TSA security-line crunch."  The takeaway: airlines are creating a negative externality by charging high fees for checked baggage. A better solution to long lines at the airport would be to adjust the relative price of checking a bag versus … [Read more...]

Why Governor Dayton should veto the spending and tax bills

Source: Flikr Creative Commons Session implodes at midnight over roads and public works That headline pretty much sums up the legislative session in general from an economics perspective. The Legislature made no progress on long-run issues such as infrastructure spending and pre-K education and probably worsened the medium-term budget outlook. I am especially disturbed by the tax and spending … [Read more...]

Don’t do it: Manufacturing budget problems in St. Paul

Source: Flikr Creative Commons Stop me if you've heard this one: a state has a budget surplus, so the legislature and the governor strike a deal to cut tax rates permanently and increase spending permanently.  Things don't turn out as well as the forecasts predict and the state finds itself with large budget deficits in a few short years. These are the outlines of the budget deal starting to … [Read more...]