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Buy Hoosier, Raise Taxes
In Indiana, Governor Joe Kernan canceled a $15.2 million dollar contract with a subsidiary of a Bombay headquartered company. The next lowest bid was $8.2 million dollars higher. Even if we accept (incorrectly!) the notion that trade restrictions create jobs the governor's action will at best create some 50 jobs at an additional cost to Indiana taxpayers of $162,000 per job. Consider, both Indiana taxpayers and workers would be better off if the state government hired the Indians and gave 50 randomly chosen workers $100,000 to spend at their leisure.
See Stuart Anderson's review of state legislation against outsourcing for more examples of Mercantilism in action.
Posted by Alex Tabarrok on February 24, 2004 at 08:07 AM in Economics | Permalink
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(via The Agitator) Alex Tabarrok explains the recent "anti-outsourcing" act by the Indiana governor to intentionally pay $8.2 million more for a contract as essentially paying 50 new workers $162,000 a year from the Indiana tax revenues. Note, of cours... [Read More]
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» Neo-mercantilism vs. direct handouts from Catallarchy.net
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» Neo-mercantilism vs. direct handouts from Catallarchy.net
Alex Tabarrok explains the recent "anti-outsourcing" act by the Indiana governor to intentionally pay $8.2 million more for a contract as essentially paying 50 new workers $162,000 a year from the Indiana tax revenues. Note, of course, that even assumi... [Read More]
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In Indiana, Governor Joe Kernan canceled a $15.2 million dollar contract with a subsidiary of a Bombay headquartered company. The next lowest bid was $8.2 millio... [Read More]
Tracked on Feb 29, 2004 8:38:56 PM
