Taxing Drunk Drivers - What an Idea!

One of the biggest questions about enacting universal health-care is how to pay for it. Ironically, we could have paid for it a several times over if we hadn't had the war with Iraq! But that's not the hand that we are dealt.

Nate Silver has an interesting idea about one way to gain revenue for health-care. His idea is taxing people who are caught driving under the influence a hefty tax of $8,000 per incident.

In 2006, there were 1.1 million arrests for drunk driving in the United States (source), not counting Florida which didn't report its statistics. Fine each of those people $8,000, and you'd have almost about $9 billion more to pay for health care every year. Why $8,000? Because that's the figure, according to a 2001 paper (.pdf) by Steve Levitt (the Freakonomics guy) and Jack Porter, that would be required to internalize the negative externalities associated with driving drunk.* By the way, if you're concerned that this tax might be regressive, you could scale it according to a person's income, as they do for traffic fines in Finland.

Of course, if you were actually to fine people $8K every time they got a drunk driving conviction, you wouldn't raise quite as much as $9 billion. Faced with a choice between an $8,000 fine or a $20 taxi fare, a lot more people would have Yellow Cab on speed dial, and you'd have fewer revenue-producing arrests.** But this is a feature of the policy rather than a bug -- you'd be stopping drunk driving. Moreover, it's exactly the same feature/bug problem you'd run into by raising alcohol taxes in general, or any time you were trying to use tax policy to disincentivize an undesirable behavior.

In some ways this reflects an approach of "liberal paternalism" as advocated by Richard Thaler and Cass Sunstein in their book - "Nudge".

I think this idea has merit!

Books for Oprah's Book Club ?

Today was a day for book deals, as news came out that Nate Silver, the baseball Statistician and pollster extraordinaire, has received a deal for two books:

... one about the art of prediction and the other a Freakonomics-style guide to the mechanics of electoral politics. Mr. Silver's agent, Sydelle Kramer of the Susan Rabiner Agency, told publishers she wanted indications of interest by Tuesday, but evidently the indications came faster than expected (so much for the art of prediction) and Ms. Kramer decided to just hold an auction today. According to several sources, that auction has ended, and Penguin Group USA has prevailed. Which of Penguin's imprint will publish Mr. Silver has not yet been determined, however, as there are at least three within the company that are jockeying for the privilege. The pricetag, we hear, is above $600,000 but below $1 million—a healthy sum even though it's paying for two books rather than just one. Update, 5:00 p.m.: New intelligence says Mr. Silver's advance is in the neighborhood of $700,000, give or take a few grand.

On the other end of the spectrum, we have Joe The Plumber, who is apparently going to have his own book (co-written by a real writer):

But charity isn't Wurzelbacher's sole goal. Sharing the wealth also means helping himself. To that end, he's working with writer Tom Tabback on a book about American values.

"Everyone came at me to write a book. They had dollar signs in their eyes. '101 Things Joe the Plumber Knows' or some stupid s--- like that. Excuse me, I am sorry," he said. "You know I will get behind something solid, but I won't get behind fluff. I won't cash in, and when people do read the book they will figure out that I didn't cash in. At least I hope they figure that out."

The book, called "Joe the Plumber -- Fighting for the American Dream," is to be released by a group called PearlGate Publishing and other small publishing houses.

"I am not going to a conglomerate that way we actually can get the economy jump started. Like there is five publishing companies in Michigan. There's a couple down in Texas. They are small ones that can handle like 10 or 15,000 copies. I can go to a big one that could handle a million or two. But they don't need the help. They are already rich. So that's spreading the wealth to me," he said.

Having just come from a mini holiday in Las Vegas, I'm wondering what the odds are that Joe the Plumber's book ever actually get's published? I'm also curious what the market is for Joe's pearls of wisdom.

Myself, I am looking forward to reading Nate Silver's books, as his website fivethirtyeight.com gave a very interesting statistical analysis on the probabilities of the election, based on the state polls.

Another book got a lot of buzz today, this one has been out for sometime, and that's Doris Kearns Goodwin's "Team of Rivals". Kearns had written about Lincoln's Cabinet:

Lincoln's political genius in this highly original work, as the one-term congressman and prairie lawyer rises from obscurity to prevail over three gifted rivals of national reputation to become president.

Goodwin described the effectiveness of Lincoln's approach:

Sorely underestimated as both an effective orator and leader, Abraham Lincoln surprised both his colleagues and critics as he rose to political prominence. But what's even more surprising was his ability to surround himself with a coalition of supporters made up almost entirely of men who had been both his political enemies and enemies of each other. Lincoln carefully navigated this "team of rivals" to achieve not only political success, but also victory in the Civil War. Could Obama be taking a page out of Lincoln's playbook??

This all came on the rumors of potential candidates for Secretary of State. Both Governor Bill Richardson and Senator Hillary Clinton have traveled to Chicago to meet with President-Elect Obama, officials on both sides have leaked word that they are strong contenders to be appointed SoS.

WASHINGTON (AP) - President-elect Barack Obama is considering primary election rivals Hillary Rodham Clinton and Bill Richardson to be his secretary of state, according to Democratic officials who revealed his secret meetings with both as he weighed the decision on folding former foes into his new administration.

News also came out that John McCain is set to meet with President Elect Obama on Monday - oh to be a fly on the wall of that meeting!