Free Markets, Free People

Monthly Archives: February 2012


The call to control sugar sure sounds familiar, doesn’t it?

I’ve been writing about attempts like this for over 20 years.  Each time I do I remind people that much of the road to totalitarianism is paved with good intentions – well, at least sometimes.  This would be one of those times.

In this case I’m talking about a study claiming sugar is toxic and should be controlled by government.

I thought immediately of the climate debate (complete with modeling).  This is just a variation of the same sort of argument and solution.

More importantly, I thought of the saying above and reminded myself that since I began writing about these sorts of attempts 20 years ago a lot more paving stones have been laid in that road. 

Like ObamaCare. 

20 years ago an attempt such as this would have, for the most part, been laughed away.  Oh sure, some people have been pushing to have government control many things over the years.  But for the most part, the structure to justify and/or facilitate such grabs really wasn’t in place.  Much more of a totalitarian infrastructure now exists than did back then.

In the case of things like this, ObamaCare changed that game.  Because government has now passed a law which puts it in charge of controlling health care costs and requiring insurance of all Americans, it also is in the position to act to do what this law allows it to do legally – exert more control over our everyday lives.

What would have essentially been laughed away 20 years ago now has to be taken seriously.  We have to remind ourselves that the game has changed to the point that it isn’t at all inconceivable that something like controlling sugar and its intake through government aren’t at all as far-fetched as it once was.

To the details:

Lustig has written and talked extensively about the role he believes sugar has played in driving up rates of chronic illness such as heart disease and diabetes. Excessive sugar, he argues, alters people’s biochemistry, making them more vulnerable to metabolic conditions that lead to illness, while at the same time making people crave sweets even more.

It’s sugar, not obesity, that is the real health threat, Lustig and his co-authors – public health experts Laura Schmidt and Claire Brindis – say in their paper. They note that studies show 20 percent of obese people have normal metabolism and no ill health effects resulting from their weight, while 40 percent of normal-weight people have metabolic problems that can lead to diabetes and heart disease. They contend that sugar consumption is the cause.

In other words, not everyone gains a lot of weight from over-indulging in sugar, but a large proportion of the U.S. population is eating enough of it that it’s having devastating health effects, they say.

"The gestalt shift is maybe obesity is just a marker for the rise in chronic disease worldwide, and in fact metabolic syndrome, caused by excessive sugar consumption, is the real culprit," said Schmidt, a health policy professor who focuses on alcohol and addiction research.

Obesity is bad.  Sugar causes obesity.  Control sugar. (Global warming is bad.  CO2 causes global warming.  Control CO2)

Think through that formulation.  Does anyone actually believe that if we “control sugar like alcohol and tobacco” that we’ll suddenly solve the obesity problem?

Is it really obesity or is it more of a rich, indulgent and sedentary lifestyle where many eat well beyond the recommended daily calorie intake each and every day?

The solution?  Well, back again casting a glance at global warming, the same:

But while individuals certainly can make small changes to their diets to eat more nutritiously, that alone is not going to effect major public health improvements, Lustig and his co-authors said.

In their paper, they argue for taxes on heavily sweetened foods and beverages, restricting advertising to children and teenagers, and removing sugar-ladened products from schools, or even from being sold near schools. They suggest banning the sale of sugary beverages to children.

Since these “scientists” are sure you can’t manage your own health or that of your children and since they’re convinced that you have to be controlled, they’ll just use the tax system for what it should never be used for – to control behavior, force change, and penalize you if you don’t comply.  Sound familiar?

Who gets to decide what is “sugar-laden”?  Why?  Who the hell are they to make such a decision for you?

By the way, banning junk food at school simply has no effect on obesity per one study.

Now obviously this is in the beginning stages, the stage where this would have mostly been waved away 20 years ago.  But no more.  You have to take all of these attempts at removing choice, freedom and liberty seriously.   There are forever do-gooders out there who see no problem whatsoever in using the power of government to control your life for your own good (a variation of “for the children”) or at least their definition of “good”.

Laura Schmidt, one of the authors of the study which recommends controlling sugar uses those battles of 20 years ago, and the losses to good effect in her plea to us to voluntarily give up more choice and freedom:

We need to remember that many of our most basic public health protections once stood on the same battleground of American politics as sugar policy does today.

Simple things like requiring a seat belt and having an airbag in your car to save you in a crash were once huge political battles. Now, we take these things for granted as simple ways to protect the health and well-being of our communities.

Pretty straight forward plea, no?  And she has precedent with which to justify it.  While you may agree that seatbelts and airbags are good things, you may not agree that a government mandate for each is.

That’s where we are on this.  Her solutions seem benign and certainly a product of good intentions:

First, we think that the public needs to be better informed about the science of how sugar impacts our health.

Second, we need to take what we know about protecting societies from the health harms of alcohol and apply it to sugar.

What doesn’t work is all-out prohibition — that’s very old-school and often creates more problems than it solves.

What does work are gentle "supply side" controls, such as taxing products, setting age limits and promoting healthier versions of the product — like making it cheaper for a person to drink light beer rather than schnapps.

After the “light beer rather than schnapps” remark she says:

The reality is that unfettered corporate marketing actually limits our choices about the products we consume. If what’s mostly available is junk food and soda, then we actually have to go out of our way to find an apple or a drinking fountain. What we want is to actually increase people’s choices by making a wider range of healthy foods easier and cheaper to get.

Corporate marketing “limits our choices”?   Really?  I must have missed it then.  When I enter the local Kroger, the first section I walk into is produce – apples abound.  Its not hidden away somewhere with very few choices.  It’s a cornucopia of good stuff. 

In reality, there’s no limiting of choice by corporate marketing.  This is a false assertion.  But she knows the language of freedom and tries very hard to spin this attempt to limit yours.

And after that she gets to what she really wants.  “Gentle supply side controls?”

– Contact the U.S. Department of Agriculture and Congress to encourage them to take sugar off the Generally Regarded as Safe (GRAS) list. This is what allows food producers to add as much sugar as they want to the products we eat.

– Support our local, state and federal officials in placing a substantial tax on products that are loaded with sugar. Ask them to use the proceeds to support a wider range of food options in supermarkets and farmer’s markets.

– Help protect our kids by getting sports drinks and junk food out of our schools. Ask our school boards to replace those vending machines with good old-fashioned drinking fountains. Ask local officials to control the opening hours and marketing tactics of the junk food outlets surrounding our schools. That way, kids can walk to school without being barraged by advertising for sugary products that taste good but harm their health.

Again, follow the pattern set by the global warming crowd.  Get a normal respiratory gas which is naturally occurring declared a pollutant and then tax the crap out of it while mandating all sorts of controls on its emission.  Some pattern here.

Rick Moran wonders:

Why do liberals insist they are the only ones smart enough to not run out and buy everything being advertised on TV and the rest of us are just sheep being led to the slaughter by evil corporate marketers?

It is the premise under which much of this attempt to control founds itself.  There seems to be an innate belief that government must do much more than it does in order to protect the poor, dumb proles from themselves and their urges.

If you listen to the liberal side of the house, the Puritan ethic of self-discipline, delayed-gratification and hard work seem to have somehow died in the early 20th century to be replace by a self-indulgent, live-for-today bunch of slackers who need a controlling hand from above (it occurs to me that this study will probably be used to justify the sugar tariff).

Unfortunately there are always those ready to oblige. 

The real answer is the same as it has always been.  Again, Moran:

The answer is better parenting. Don’t indulge your children’s natural desire for everything to be sweet. The answer is balance – giving your kids healthy food while recognizing that kids adore sweets and, in moderation, are actually good for them. Keep an eye on processed foods and the sugar content. If you don’t know how to read a list of ingredients, learn.

People taking responsibility for their own health and the health of their families is what is needed. Not some draconian regimen that puts sugar in the same class as whiskey.

Unlike 20 years ago, you’d better take this seriously.  Again, it’s a fairly simple formula – freedom equals choice.  Limiting choice means limiting your freedom. As odd as this may sound, it’s an important principle:  Freedom means the right to make stupid mistakes or do stupid things of which other may disapprove.  Freedom means the right to fail.  As long as your stupidity and failure don’t violate the rights of others, then it is really none of their business.

This and all other attempts like it are designed to make this the business of others.  And, as usual, their solution is to limit freedom.

Fight it with everything you have.

~McQ

Twitter: @McQandO


Economic Statistics for 2 Feb 12

Today’s economic statistical releases:

Chain store sales are coming in mixed today, with no identifiable spending or consumer trends. It’s looking like there’ll be little change to the upcoming retail sales report this month, which was disappointingly unchanged in December.

The Challenger Job Cut Report indicates that layoff announcements rose to 53,486 in January from 41,785 in December. That’s a big monthly jump, and raises warning signs about employment.

The Bloomberg Consumer Comfort Index rose to -44.8 from last month’s -46.4.

Initial claims for unemployment fell 12,000 to a lower-than-expected 367,000. the 4-week moving average posted a a 2,000 decline to 375,750.

Productivity growth in the 4th quarter slowed to a lower than expected 0.7% from 2.3% in the previous quarter. Unit labor costs rose 1.2%, compared to the previous quarter’s drop of -2.5%.

~
Dale Franks
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Why protectionism equals crony capitalism

The invaluable Warren Meyer at Coyote blog (one of my all time favs) has a great article up on protectionism and why its something we should be avoiding.

President Obama used a lot of his state of the union address again teeing up what sounded to me like a new round of protectionism.  Protectionism is the worst form of crony capitalism, generally benefiting a handful of producers and their employee to the detriment of 300 million US consumers and any number of companies that use the protected product as an input.

The example he uses?  Sugar.  What industry does it protect and subsidize in the end?  The producers of high fructose corn syrup (HFCS).   And what does the government tell us about HFCS?

It’s bad for us.  Sugar would be preferable.

So why do we continue to use it in place of sugar?  Protectionism.  Look at the chart he includes:

 

sugar-500x400

The chart says it all.  With the tariff added, look at the average US cost of sugar vs. the world’s average cost.

As Meyer points out though, that’s not how this gets spun:

Food activists on the Left often point to the use of High Fructose Corn Syrup (HFCS) as one of those failures of capitalism, where rapacious capitalists make money serving an inferior product.  But HFCS resulted from a scramble by food and beverage companies to find some reasonable alternative to sugar as the government has driven up sugar prices through a crazy tariff system that benefits just a tiny handful of Americans, and costs everyone else money.

Yup, the usual, convenient and usually wrong whipping boy – “market failure”.

When a tariff is involved, you’ve just moved out of the realm of real capitalism and into the realm of crony capitalism.  This has nothing to do with markets failing.  This has to do with the usual – government intrusion using their monopoly power of force which then distorts a market and causes users of the product whose price they chose to artificially inflate with a tariff to seek lower cost alternatives.

Remember, the same government that is claiming HFCS isn’t good for you is the one that’s also made it impossible to use a product that it claims is better for you (in relative terms of course):

Meyer:

For the last 10 years or so, HFCS-42 has actually traded at a price higher than the world market price for sugar, but lower than the US price for sugar.   There is a lot complexity to prices, but this seems to imply that HFCS would not be nearly as attractive a substitute for sugar if US sugar tariffs did not exist (not to mention subsidies of corn which support HFCS).  This can also be seen in the fact that HFCS has not been used nearly so often as a sugar substitute in markets outside of the US, even by the same manufacturers (like Coke) that pioneered its use in the US.

Or, if markets had been left alone, all indications are we’d be using lower cost sugar right now.

Meanwhile the government protects and subsidizes an industry that makes a product it says is worse for you .

Make sense?

~McQ

Twitter: @McQandO


Salon v McKeon: When is an investigative reporter not an investigative reporter

When most people think of an investigative reporter, they think of someone who pursues a story in depth, gathers all the facts and then, using those facts, connects the dots to a then fairly obvious conclusion.   Of course that means that ethically, the same reporter would be required to write an objective investigative article or series based on those facts even if the conclusion is contrary to what was expected.  That is, the target of the story could possibly be exonerated rather than condemned based on the reporters work.

What most people don’t consider investigative reporting is the use of selective facts that support an ideology and agenda in an attack on someone to reach a preordained conclusion.  An example of that sort of reporting was recently found in a Rolling Stone hit piece on LTG William Caldwell.  The author had enjoyed success in being instrumental in the removal of another general (Gen. Stanley McChrystal) based on an article he’d written.  His later piece on LTG William Caldwell, however, was a classic example of the genre of “investigative reporting” that is becoming more and more common – selective facts, poor research, an agenda all working toward a particular conclusion. 

The article was roundly panned as atrocious work as the blogosphere took it apart piece by piece and trashed it.

Another example of that genre has popped up on the radar screen in a Salon hit piece on Rep. Buck McKeon.  Why a hit piece and not, as Salon tries to characterize it, an investigative report?  Several reasons.   First, the “investigative reporter” is hardly someone who fits the definition of an objective reporter as outlined above. 

When you read the Salon article here, you’ll see the author of the article’s bio at the bottom. 

Lee Fang is an investigative journalist in the Bay Area.

Is he? Again, the implication of the short bio is he’s an objective reporter who has pursued a story lead and what you read in the article above is an objective assessment of the gathered facts leading in connect the dot fashion to a logical conclusion.

But as it turns out that’s not at all who Lee Fang is.

However, unfortunately, you have to leave Salon and go elsewhere to make that determination.  Salon certainly isn’t forthcoming with the details. 

We find the truth in an interview with a Santa Clarita CA radio station, KHTS, where the host introduces Fang thusly:

Lee Fang (pronounced Fong, pictured at left) is a freelance journalist and the senior investigator for United Republic, a nonpartisan group dedicated to ending the corrupting influence of special interest money in American politics.

Nonpartisan?

United Republic?

While you may sympathize and even agree with the premise of the group, calling something founded by MSNBC’s Dylan Ratigan, Huffingto Post’s Paul Blumenthal and former Free Press founder Josh Silver a nonparitsan group is like calling James Carville an independent.  There is a definite ideological agenda at work there and in essence, Lee Fang is the opposition research guy.  And this isn’t his first stop on the "advocacy journalism" side of things.

That’s not quite a “freelance journalism” is it?

Another tidbit from the radio interview:

 Lee Fang: Right now we’re just looking at Chairmen of important committees in Congress so we’ve looked at Armed Services, we’ve looked at Energy and Commerce and on the Senate side we’ve looked at Banking and Finance.

Really?  Just the “Chairmen”?  The ranking members on the House committees, who are essentially the opposition co-chairs and still wield enormous power on  the committees, don’t merit a look?  Of course, in the House, those ranking members are all Democrats.  Only on the Senate side have has he claimed to have looked at a Democrat. 

As to the facts, here’s the basic claim of the article:

Recent disclosures reveal that a federal lobbyist with ties to Rep. Howard “Buck” McKeon, R-Calif., the senior member of the committee overseeing the Pentagon, provided financial support to McKeon’s wife, who is seeking a seat in the California Assembly this year. As defense industry lobbyists scramble to head off looming cuts in the Pentagon budget, they are looking for new ways to ingratiate themselves with McKeon.

The contribution, reported here for the first time, appears to be an effort to circumvent federal campaign limits. Federal campaign disclosures show that Valente has already maxed out in donations to Rep. McKeon this cycle, having given $2,500 to his campaign for Congress. And the contribution came within a day of Valente’s donation to Patricia’s campaign for the California Assembly.

Valente’s lobbying firm, Valente and Associates, reported over $1.4 million in fees last year. The firm represented at least one company, 3Leaf Group, a government contractor specializing in human resources, that sought help from Valente on issues relating to the Defense Authorization bill. McKeon, as chairman of the Armed Services Committee, was the principal author of that legislation.

Valente did not respond to a request for comment. But his so-called 527 campaign entity, the Fund for American Opportunity, gave only one contribution to a state politician in all of 2011: Patricia McKeon.

Craig Holman, a lobbying expert with Public Citizen, says that the donation to McKeon is part of a larger pattern of influence peddling in Washington: “The objective is to throw as much money as possible at the feet of the lawmaker; that includes at the feet of his family as well.”

McKeon’s staff, specifically Alissa McCurley, responded to a request for comment from KHTS:

First, contrary to Mr. Fang’s inaccurate assertion, Patricia was not the only state candidate to receive a donation from the Fund for American Opportunity. If you click on the link in the article, you will see several state candidates listed on the group’s 6-month contribution report. Secondly, again contrary to Fang’s false assertion, Mr. Valente has not maxed out to Congressman McKeon. In fact, Mr. Valente has not contributed to Congressman McKeon’s “McKeon for Congress” campaign committee at all."

“Investigative reporter?”  Two of the most basic and supposedly damning “facts” are incorrect? Those two “facts” are the main support for Fang’s implication that McKeon is rotten.  McCurley correctly labels the piece as more one of “opinion” than fact.  And given the above, it certainly seems to be assertion masquerading as factual reporting.  If the author can’t get those two basic facts correct, then why should anyone believe anything else written?

The attempt to smear is clear.  In fact, again in the radio interview, Fang has to admit that there’s nothing illegal in any of McKeon’s activity:

KHTS: I’m reading the article and I’m saying to myself is there anything illegal or just inappropriate?

LF: I talked to some McCain-Feingold experts, that’s the campaign finance law on the books, and they said in this case there’s no evidence of illegal conduct.

So why all the innuendo, inaccuracies and implications?  Because there’s an agenda at play here and this is how ideological advocacy works. Spin something to appear in the best light which advances your cause, whether the facts supporting it are there or not.  But this is certainly not “investigative reporting”.

Again, you may agree with the United Republic goal, but when a major publication hides the fact that someone it bills as an “investigative reporter” works for an ideologically driven activist group and that the article is an extension of that group’s activist focus, then you are doing your readers a disservice.   This isn’t “investigative reporting”.  This is advocacy “journalism” in its purist form.  You’d think the editors of Salon would have known that and put a disclaimer in Fang’s bio.

Instead, they either chose to deceive by omission even while questioning the ethics of others or they didn’t do their job.

~McQ

Twitter: @McQandO


Economic Statistics for 1 Feb 12 (Update)

Today’s economic statistical releases:

The Mortgage Bankers Association reports that home purchase applications fell -1.7% and re-fis fell -3.6%, bringing the composite down -2.9%.

The ADP Employment Report largely met expectations, showing an increase of 170,000 new jobs for January.

UPDATE: Motor vehicle sales were released this afternoon. Vehicle sales jumped to a 14.2 million annual rate in January for a 5% gain over last month. For the first time in 9 months car sales outpaced truck sales, and were up 13% to a 7.4 million annual rate. Truck sales fell -4% to an annual 6.8 million annual rate.

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Dale Franks
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CBO forecast for 2012– another trillion dollar deficit and 8.9% unemployment

Speaking of the record compiled under the Obama administration, the CBO provides plenty of ammo for the GOP:

The Congressional Budget Office on Tuesday predicted the deficit will rise to $1.08 trillion in 2012.

The office also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.

That’s because it has revised its previous estimate as the GDP growth numbers for last year were revised down.

Additionally, and reading between the lines, it also means that the administration and Congress has yet to even begin to get a handle on the main problem – spending.

Of course part of that stands to reason when you take into consideration the Democratic controlled Senate hasn’t passed a budget in over 1,000 days.

The Hill, ever the master of understatement, gives you a peek at what should be obvious:

A rising deficit and unemployment rate would hamper President Obama’s reelection effort, which in recent weeks has seemed to be on stronger footing.

“Hamper"?”   It should put it in the crapper.  Or so you would think.  But then there’s the GOP primary going on, huh?

CBO Director Doug Elmendorf told reporters that Congress will have to make important choices this year regarding the supercommittee trigger and tax policy that will have huge effects on the deficit.

While unable to recommend choices, Elmendorf said that addressing the deficit sooner rather than later is easier.

The deficit was $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011. The largest deficit recorded before that was $458 billion in 2008.

Well, of course addressing the deficit sooner rather than later is a lot easier.  Haven’t we been saying that for years?  Decades?

Anyone think it will be addressed in this next year?  Consider what the CBO recommends:

The deficit will be much higher if Congress takes several actions that many expect.

If the Bush tax rates are extended, for example, the deficit would rise.

It would rise if Congress patches the Alternative Minimum Tax, which lawmakers have routinely done to prevent higher taxes from being imposed on middle class taxpayers.

It would also rise if Congress continues to pass the “doc fix” that prevents a cut to Medicare payments to doctors, something that Congress has done on a near-annual basis.

Finally, if Congress does not follow through on cuts mandated by the failure of the supercommittee, the deficit will grow. Lawmakers are already talking about canceling scheduled cuts to the Pentagon’s budget.

So, let’s see – raise taxes, lower taxes, subsidize and cut spending. Or is that last one, cut projected spending?

*sigh*

The “doc fix”, unless passed, will see Doctors leave Medicare in droves.   I certainly would if I were in their shoes.  Any guesses how that turns out?

And while the Democrats only want the “rich” to pay higher taxes, if the current tax rates (also known as the “Bush tax cut”) are allowed to revert to their prior percentages, taxes will increase 30% on everyone by 2014.  Catch 22?

The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.

At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.

You don’t say?  Stupid if you do, damned if you don’t?  Nice position we’ve gotten ourselves in, no?

And finally, sequestration will “cut” 10% across the board, to include defense which has already taken that sort of a cut.  Dangerous.

However, for the rest of the government, I expect the usual accounting tricks with no real cuts in spending if sequestration is enacted.

As for taxes increasing, the increase is fairly dramatic at a time the economy can’t absorb such increases:

The anticipated percentage increase in federal tax revenue is not only large when calculated in dollar terms but also when calculated as a share of GDP. The jump from 15.4 percent of GDP in fiscal 2011 to 20.0 percent of GDP in fiscal 2014 equals an increase of 29.8 percent. The jump from 16.3 percent in fiscal 2012 to 20.0 percent in fiscal 2014 equals an increase over two years of 22.7 percent.

Federal tax revenues have averaged “about 18 percent of GDP for the past 40 years,” according to CBO. So, in the next two years federal tax revenues will rise from a level that is below the modern historical average to a level that is above it.

Again I’m reduced to saying “what a freakin’ mess”.  When I say over and over again, “we’ve been ill served by our political class for decades”, it is this to which I point.

Yes, all of this and the never mentioned additional 200 plus trillion in unfunded future mandated liabilities that have been amassed.

~McQ

Twitter: @McQandO


Romney wins Florida primary

Does that mean a rapid closure of the Republican nomination process (i.e. will Santorum and Gingrich finally call it a day) or will this continue to drag on interminably?

Frankly, the FL primary wasn’t even close despite many of the pre-primary polls claiming it was a tight race.

Romney received 46 percent of the Florida vote. Gingrich had 32 percent, followed by Rick Santorum with 13 percent and Ron Paul with 7 percent.

Romney won all 50 of Florida’s convention delegates.

Fairly definitive, I’d say.

Ironically, it was Santorum who voiced what many GOP voters feel:

Santorum decried the tone of the campaign Tuesday night, urging the party to focus on the "real issue, which is defeating Barack Obama."

"Republicans can do better," Santorum said. "Really, this campaign went downhill. … the American public does not want to see two or three candidates get into a mud-wrestling match where everybody walks away dirty."

The guy they should all be focusing their fire on is Barack Obama.  Politically he provides a target rich environment.  It is time to start tuning up to address the real problem – the guy in the White House and his record.

One bit of irony as far as I was concerned:

In a positive sign for Gingrich, exit polls showed evangelical voters trending for the former House speaker. The exit polls showed Gingrich with 40 percent among that group, and Romney with 36 percent.

Gingrich?  Evangelicals?  Really?

~McQ

Twitter: @McQandO

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