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Smoking Out Legislative Nonsense

Naveen Sunkavally

With tobacco companies virtually prostrate before Congress, Republicans and Democrats are seizing the opportunity to draft legislation that would fine the companies and limit their future actions. Unfortunately, the solutions proposed often are no better than the central problem legislators supposedly seek to cure: the alarming rise in teenage smoking over the last few years.

For example, Democrat Senator Kent Conrad of North Dakota, the head of a tobacco task force, proposed raising the price of cigarettes by $1.50 and imposing huge fines on companies if teen smoking levels are not reduced in the next few years. He has gained great popularity among Democrats with these measures.

Members of Congress are also considering strengthening an agreement signed by tobacco companies and about forty state attorney generals last June. Among other things, the agreement bars companies from the usage of cartoon characters and celebrities in advertising, billboard advertising, and the sponsorship of sports events.

All these options seem well intentioned, but common sense tells us they can't work. High school level microeconomics tells us that a tax on cigarettes will fall more heavily on consumers than companies since the demand curve for cigarettes is inelastic (meaning that an increase in the price of cigarettes will not significantly decrease the quantity of cigarettes purchased). In addition, microeconomics also dictates that increasing the price of an inelastic good will actually increase - not decrease - revenues for tobacco companies.

But politicians don't seem to want to consider the laws of economics. In his State of the Union address, President Clinton said that some of the funding for his newly proposed measures would come from taxes imposed on cigarette purchases. Who is paying these taxes? Tobacco companies or consumers? Clearly, all this tax does is provide another vehicle to condemn and ostracize a class of people with no control over their habits: smokers.

And even if Congress can condemn the lifestyle of smokers, can we be assured that a tax on cigarettes will prevent teenagers from smoking?How many teenagers do we think will actually resist the temptation of buying their first pack of cigarettes because of an extra $1.50 charge?

Unless smoking becomes illegal, I doubt that teenage smoking will decrease over the next few years. I think it tends to follow cycles of crests and troughs depending on the prevalent social conditions. Penalizing tobacco companies on the pretext of failing to curb teenage smoking - something over which they employ little control - is like ordering a giant to cut off his own limbs and then eat them to survive. If we are to penalize big tobacco, we might as well do it overtly and take responsibility for its slaying.

Furthermore, legislators are using a double-standard in trying to limit the advertising powers of cigarette companies. While thousands of teenagers across the country have memorized the clever Bud-wei-ser mantra croaked by frogs, Joe Camel has been banished. How much more harmful to society are the apparently innocent Budweiser frogs than the cool, slick Joe Camel?

I have little doubt that teenagers will experiment and are influenced by advertising, but to ban the advertising of one addictive product and not the advertising of another equally, if not more, addictive product is plainly unjust. And besides, a bold-faced label on all cigarette packages virtually declares to all literate teenagers, "Smoking can kill you." How much more warning do cigarette companies need to give their consumers?

In the phantasmagoric scene of politics, insanity is one constant, but recently proposed legislation brings it to new heights. Bearing little concern for economics, the welfare of smokers, and the real factors behind teenage smoking, members of Congress seem more ardent in their desire to gain fame and popularity than solve the problem.