Labor Politics, Government Paternalism and Tobacco Profits

Labor unions push to establish “binding arbitration” in contract negotiations.

The nomination of law professor Cass Sunstein to oversee new federal regulations moves forward.

Cigarette maker Altria reports an 8.6%  rise in profits thanks to higher retail prices.

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1. BUSINESS 

Labor unions push to establish “binding arbitration” in contract negotiations.

CEI Expert Available to Comment: Editorial Director Ivan Osorio on the progress of the legislative fight

“The Employee Free Choice Act’s card check provision, which would allow unions to circumvent secret ballots in organizing elections, met considerable public opposition. But organized labor is not giving up on binding arbitration, which would allow unions bosses to corral more companies into paying into some severely underfunded pension funds.” 

 

2. POLITICS

The nomination of law professor Cass Sunstein to oversee new federal regulations moves forward.

CEI Expert Available to Comment: Vice President for Policy Wayne Crews on Sunstein’s most recent book

“In Sunstein’s latest book Nudge: Improving Decisions About Health, Wealth, and Happiness, he makes the case that people often make bad decisions, and a slight ‘nudge’ can set things right and lead to better policy outcomes. Note the smuggling in of the idea that individual choices are properly classified as public policy questions. As the concept of ‘nudging’ implies, there’s little regulators can cook up that they won’t regard as net-beneficial, and worthy of imposing on others. That’s the downside of cost-benefit analysis; it’s all to easy to claim benefits outweigh the costs of the program you champion if you’re the architect of it, or are the agency in charge.” 

 

3. LEGAL

Cigarette maker Altria reports an 8.6%  rise in profits thanks to higher retail prices.

CEI Expert Available to Comment: General Counsel Sam Kazman on how today’s tobacco company profits are tied to their 1998 legal settlement with the states: 

“Overnight, the wholesale price of a pack of cigarettes rose from $1.25 to $1.70. But the industry signatories to the Master Settlement Agreement, the four major cigarette producers, would face a problem in maintaining this increase, because higher prices would open the door to discount producers who did not sign the agreement. In order to prevent this, the states, as part of their agreement, made it incredibly expensive for new discount producers to enter the market. In effect, you had not just a cartel being formed—you had a state-sponsored cartel.” 

 

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