Thursday, November 29, 2012

Meet the man that was run over by his own car

Good morning economists. Are you familiar with the term "preemptive fines"? These are fines (penalties) that people have to pay if they demonstrate indifferent behavior which may result to a crime. For example, recently a woman had her car stolen outside a newspaper kiosk where she stopped to buy a newspaper but left the car running. She was hit with a police fine because her behavior caused the thief to steal her car.

Yesterday, police were shocked to find Brian Reynolds laying injured after he attempted to stop a car with his bare feet, in other words he tried to pull a Flintstone. This was after the brakes on his 1987 Chevy failed. The otherwise victim in this case was given a $35 fine for handling defective equipment.

As we find ourselves in the midst of a recession, are these preemptive fines effective? A brake change can cost up to several hundreds of dollars. A $35 fine is unlikely to deter putting off the brake change up to the point of failure. Should fines be revised in periods of recession and if so in what way?

Have a "fine" day!

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