By David Henderson
One of the conclusions that emerges from “thinking on the margin,” one of the Ten Pillars of Economic Wisdom that I teach my students, is that just as you shouldn’t underinvest in something, so also you shouldn’t overinvest. In fighting Measure J, the measure on the Pacific Grove ballot that went down to defeat last night, I optimized.
The measure required a two-thirds vote and received 65.23%. Therefore it failed. Because October was the busiest month of my year, I did very little to fight the measure besides helping write the rebuttal in the voter’s handbook and going with lawyer Carl Mounteer to make our case to the Monterey County Herald. I didn’t do what I normally do, which is write a couple of letters to the editor. Nor did I set up a table in front of the Post Office, one of the things people traditionally do in my town. Nor did I spend money on signs: had I done so, my expenditure in money (excluding time to distribute signs) would have been about 1/4 of the present value of my stream of savings from defeating the tax increase.
This 65 to 35 outcome was a little too close for comfort; my gut feel had been that the final tally would be about 62 to 38. A swing of just 24 votes from No to Yes would have pushed the other way. Next time, I would invest a little more time in making arguments for how to extend library hours without the tax increase. Nevertheless, ex post, I optimized.