By Sean Colvin Staff writer
On April 10, the political science department hosted a talk from Florida State’s Joe Calhoun called “Consumer Protection and other Economic Fallacies.” Calhoun co-authored the book, “Common Sense Economics.”
When most people think about consumer protection, Calhoun said, they think about government programs like the Food and Drug Administration or the Federal Trade Commission, which operate to make our products safer for consumers.
The first consumer protection program in the U.S. was the Interstate Commerce Commission, which was created to satisfy consumer demand for safer railroads, which were notoriously dangerous in the late 19th century.
When one railroad owner complained to Richard Holt, one of the creators of the ICC, Holt wrote back that the organization could actually be used for the benefit of railroad owners.
Calhoun also argued that this same symbiotic benefit exists for different regulatory institutions like the Consumer Product Safety Commission, to which the U.S. government allocates $140 million per-year to test products before they go to market.
Calhoun pointed out that many of the products tested by the FTC are seemingly harmless—products like wallets, carpeting, etc.— suggesting that some of that $140 million of government money might be better used elsewhere.
Calhoun also stressed that the intent of his talk was not to provide answers to these complex economic questions but rather to encourage students to ask questions about these institutions, their purposes, intent and actual function.
Using the example of an automobile factory, Calhoun said that technology displaces labor from unskilled assembly-line type work, to jobs involved in the engineering, construction and maintenance of robots that are now assembling vehicles.
Another economic fallacy, according to Calhoun, is that corporations pay taxes—we know that on paper, corporations are taxed highly, that is 35 percent of their earnings. Calhoun said that every time we purchase goods we are paying the taxes of a corporation, in that the corporation has increased its prices to account for this tax, so that these taxes are actually coming out of the pockets of consumers.
Calhoun also illustrated that the rhetoric used in the naming of certain bills like the Affordable Care Act, or the Child Protection Act, are effective in swaying citizens in favor of them, just because of their title alone and not based on their full contents.
“Who would go on record saying no to a bill called the Child Protection Act?” Calhoun asked. His point was that it is important for citizens to look past the titles of bills, which aren’t always totally revealing of what is inside.
