I’ve previously commented (and I can’t find the post anywhere, but I know it’s around) about the addictive nature of tobacco. Not it’s habit-forming consumption, but rather on the addiction it seems to spur in legislators everywhere. They see the inelastic demand as a source of constant tax revenue, and in doing so, they become as dependent (if not moreso) on the revenues thereby generated than the actual smokers are on the product itself. The source of the revenues, apparently, is inconsequential. Typically I considered a “sin tax,” but the Detroit Free Press reports similar addictions due to the Master Settlement revenue. It seems some provisions of the agreement allow for the monies due to be reduced according to sales. This of course, causes problems for politicians, who have already spent the money.

“We’re working diligently to ensure that all the money [from the big tobacco settlement agreement] earmarked for Michigan comes to Michigan,” said Nate Bailey, a spokesman for Attorney General Mike Cox

Of course you are, Mike. Because you need it, you’ve come to depend on the Master Settlement Agreement allowance like the debutantes on “Sweet Sixteen” depend on their parents to support their Prada and Fendi addictions. Only bureaucrats are addicted not to designer labels, but to promising entitlements to interest groups who keep them empowered. The state now stands to lose a substantial sum ($30M) due to the terms of the MSA. Not to say, however, that they’ve been using it in a manner which might be called “responsible,”

When former Gov. John Engler proposed the program, 75% of the tobacco settlement cash was for scholarships — enough to set up an endowment to keep the program going indefinitely.

When the state’s economy faltered, the Legislature took the $132 million that had built up in the endowment fund and used it for other programs

Ahhh, yes: Fiscal Responsibility! The Freep article also suggests that Michigan would like to use the money to attract business investment, although does not give any specifics of how this might be accomplished.

I will not delve into the details of using the ill-gotten money to “encourage high-tech investment,” and what effects such policy might have on the business cycle, although Friedrich August von Hayek, who is by the way a badass, might have something to add. I’d suggest “Prices & Production,” although admittedly I’ve only read excerpts of it, it is on my list at Amazon…