Government officials violate the public trust – in this case by, well, let the New York Times tell the tale of how the ballyhooed-at-its-birth 1998 Tobacco Master Settlement isn’t quite working out as planned:
Only a small fraction of the money has gone to tobacco prevention. Instead, the states have used the windfall for various and unrelated expenditures. In Alaska, $3.5 million in settlement money was spent on shipping docks. In Niagara County, N.Y., $700,000 went for a public golf course’s sprinkler system, and $24 million for a county jail and an office building. And in North Carolina, in the ultimate irony, $42 million of the settlement funds actually went to tobacco farmers for modernization and marketing.
But that’s not all: Nine states — Alaska, California, Iowa, Michigan, New Jersey, New York, Ohio, Rhode Island and West Virginia — and Washington, D.C., Puerto Rico and Guam decided to get as much of those annual payments as fast as they could by mortgaging any future payments as collateral and issuing bonds. They traded their future lifetime income for cash today — at only pennies on the dollar.
Shocker. Fine pronouncements and loud boasts from 16 years ago about irresponsible tobacco companies finally being held accountable by responsible (!) government officials are proven false – all up in smoke – and in ways that yet further reveal the explanatory power of public-choice economics. Isn’t the miracle in the government-intervention formula supposed to prevent such shenanigans? Maybe next time the miracle will finally work! Or is government incurably cancerous?
(I thank Peter Minowitz for the pointer to this NYT report.)