1988 Feb 2 James Savarese reports to the Tobacco Institute on a "brain-storming" meeting with a "core group of economists and lawyers to exchange thoughts and ideas on the Social Cost issue. [The total cost to the economy of smoking: related to health, pollution, cleaning, etc.]. Their goal was to determine project priorities and making assignments for 1988. The meeting was directed at ... [attacking] Anti-smoking activists [who] have distorted the issue of Social Cost. Even though economists ridicule their statistics, [the] politicians and the press believe them.
The core group of economists were:
- Jim Savarese, Bob Tollison, Richard Wagner, Gary Anderson, Bob Ekelund, Richard Higgins, Dwight Lee,
They are supported by staff from a number of law-firms and PR/lobbyist companies:
- Leslie Dawson, Karen Hochberger, Richard Marcus — from Ogilvy & Mather and James Savarese & Associates
- Mike Forscey - lawyer from Wunder and Diefenderfer — working for the TI's Labor Management Committee
- Jeff Ross, Carol Hyrcaj and Paula Duhaime — from the Tobacco Institute
- [Note: This is lobbying pure and simple: The report's conclusions contain outright admissions. They expose the scientific and academic subterfuges being employed. This is not the result of a simple difference in economic opinion: network members were knowingly acting as paid lobbyists.]
- The higher rate of illness of smokers is a 'private cost' not a social cost '[and therefore should be ignored!]
- It is not politically useful for us to argue the primary health statistics.
- Up to this time, ETS has not been translated effectively by the opposition into cost numbers. Rather, it is a regulatory issue.
- We cannot afford to lose the argument among people who think they are being harmed by ETS. If ETS causes harm, it becomes a classic case of real social cost.
- We must make sure that primary costs of smoking be kept out of any social cost calculation. We must separate primary smoking statistics from ETS statistics.
- More research is needed on ETS in order to deny health consequences.
Primary assumptions that need to be countered.
- Insurance and Health Costs:
- Health problems exist for smokers.
- The cost for health care due to excess illness or death of smokers equals smokers' cost to society.
- Insurance premium -- Discounts for non-smoker (not justified?)
- Pension Plans -- Increased mortality rates saves money
- Productivity and Absenteeism:
- Smokers are absent more frequently than non-smokers.
- The time spent by a employee smoking on the job is time spent not working. These factors make the smoker a less productive member of society than a non-smoker.
- The worker bears the cost of absenteeism via fewer raises, less advancement, or termination. Society bears no burden.
- Social Security and Medicare:
- Based on lifetime calculations, smokers should be getting a rebate. We should propose a rebate program, rather than a tax program.
- If non-smokers live longer, when the baby boomers reach retirement age, very high tax rates will be necessary to finance Medicare and Social Security.
- If smoking is banned, it would cause some serious problems in future years.
- Note: see here the infamous Death benefits argument... (paraphrased as...) "When people die young they are less of a burden on society."
- Fires: It is not a social cost for a smoker to burn his house down, just a private cost.
- Social cost only exists if a neighbor's house burns down (a much smaller number).
- ETS: Blanket smoking.restrictions raise costs to private employers.
- If restrictions are cost effective, individual companies will adopt them.
As a result of this meeting, we should devise a specific plan and timetable of implementation with assignments for specific projects.
We need to review and critique existing materials and develop our own core of research.