Tobacco companies must pay Pa. growers

Story from the AP and Intelligencer Journal on a court ruling that tobacco companies must pay tobacco farmers for lost revenue (HT to Grassroots PA). The PA Attorney General's office claims this will be a windfall for Lancaster County farmers. It won't -- let me briefly illustrate how foolish this court ruling is (particularly given that it is in response to the effects of a previous court ruling, effects which will repeat themselves.).

Cycle One:
Court orders tobacco companies to pay states ⇒ tobacco companies raise prices to pay cost of court order ⇒ demand for tobacco drops ⇒ tobacco farmers lose revenue

Cycle Two:
Court orders tobacco companies to pay tobacco farmers ⇒ tobacco companies raise prices to pay cost of court order ⇒ demand for tobacco drops ⇒ tobacco farmers lose revenue