Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
Topic: Washington state
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September 5, 2013 at 10:27 AM
When news came that the U.S. Justice Department wouldn’t challenge legalization of marijuana in Washington and Colorado, some wonk tweeted that this could be a “game changer” for state and local tax revenues. For years, NORML, the pro-legalization group, has been arguing that legal pot could produce tax benefits. Let me inhale some skepticism. Good stuff, dude.
There’s no question that U.S. drug laws are insane and have been enforced unfairly. The “war on drugs” was lost long ago — ask any police officer. Washington’s I-502 is probably a sensible path out, although it won’t be without problems. One small unintended consequence already: I pass through clouds of pot smoke downtown (some of it smells like dog urine; obviously the stuff has changed since I was in college; does it smell better to the smoker?). Legalization will cut costs for enforcement. As to tax revenues, the state says estimates range from zero to $2 billion. I’m betting on the lower range. So is a consultant for the state.
Here’s why: For decades, an underground economy infrastructure has been built up to supply marijuana cheaply and easily to customers. Yes, it’s illegal, but it’s there and both efficient and resilient. The more that the states attach regulations and licensing fees to stores, much less tax pot, the less likely people will be to leave their dependable pusher and pay higher costs.
July 17, 2013 at 1:14 PM
A new report from the Cruise Lines International Association says that the state posted a record $764 million in direct spending and cruise-industry employment of 19,000 last year. That ranked Washington sixth among the states in cruise industry economic impact. Seattle was the eighth-largest cruise port in the United States with 464,000 passengers embarking, essentially holding its own compared with the previous year. The No. 1 port is Miami.
“After a strong rebound in 2010 and 2011 from the recession induced impacts of 2009, the North American cruise industry continued to expand in 2012 but at a more moderate pace,” the report stated. In 2010 and 2011, global passengers and capacity grew by 10 percent; last year that growth slowed to 5 percent. Among the causes were recession in Europe, continued weak consumer spending in the United States and “negative publicity” from the grounding of the Costa Concordia, which struck a rock off the coast of Italy and whose captain now faces criminal charges. (Really? Negative publicity ripped a gash in the ship? Really?).
Business Research and Economic Advisers, a marketing research outfit, conducted the study for the trade association. As with most economic impact studies, this one should be examined with care. It can’t tell us, for example, what economic activities might increase if the cruise industry was not using consumer dollars. Still, anybody who has been in downtown Seattle this summer understands the big footprint of the industry here. With the Port of Seattle struggling to make up for lost container business, cruising is more important than ever.
And Don’t Miss: David Brooks wonders why men can’t find jobs; comedy ensues | Matt Taibbi
Today’s Econ Haiku:
Ben, on his way out
Blurts out what’s holding us back
Congress, see mirror
June 27, 2013 at 9:33 AM
Two new graphics from the Federal Reserve Bank of St. Louis show how residential building permits are faring in the slow recovery:
In the aftermath of the housing crash, Washington permits have a long way to go before they reach their old peaks. Note the severity of the falloff during the Great Recession compared with other recessions (marked in grey). For Seattle-Tacoma-Bellevue, the improvement is slightly more pronounced. Even so, it remains weak.