The Slicing And Dicing of Alcohol Wholesalers
If you regularly read Timothy P. Carney, the reporter who covers the murky and twisted world that is the realm of lobbyists, then you recently witnessed the smug and dirty hypocrisy of alcohol wholesalers and their disingenuous calls for protection of state authority spilled out upon their shiny shoes as Carney drew is pen directly through their gut in a simple, straight-forward article in the Washington Examiner about the motivations behind H.R. 5034.
"Congressmen in both parties are rallying behind alcohol legislation
they say is needed to protect our youth from binge drinking and public
drunkenness. They call it the CARE Act.
Any time politicians start talking this way, it's time to ask:
"Who's getting rich off of this regulation?"
The answer in this case: beer, wine and liquor wholesalers."
Carney is a Conservative. He's the Lobbying Editor for the Washington Examiner. He is the chief reporter for the Evans-Novak Political Report, He's a contributor to numerous journals. He is the author of "Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists and Union Boss" as well as "The Big Ripoff: How Big Business and Government Steal Your Money.
I mention his credentials not to suggest his more Conservative leanings match mine or that opposition to hypocrisy and greed is a conservative value. I mention them to reiterate that Carney is in the business of drawn fat, straight lines from motivations to actions to consequences. And he's good at it:
"Liquor control laws provide the setting for an explanatory fable,
created by economist Bruce Yandle, about regulatory robbery. It's
called "The Baptist and the Bootlegger." The bootlegger's business
depends on strict alcohol regulation that creates demand for illegal
booze. While the bootlegger funds the prohibitionist politician's
election, the local Baptist minister goes on stage for campaign
rallies. Regulation protects special-interest profit, but it's touted
as a public good.
Today, with the CARE Act [H.R. 5034], the "bootleggers" are the wholesalers."
"Regulated Robbery". That's not exactly what the three tier system has become. Today, it's more "Regulated Wholesaler Protectionism". Carney Explains:
In other industries, wholesalers need to make sure they are delivering
real value, because if they're not, they'll be discarded as unnecessary
middlemen….Unless, of course, circumventing wholesalers is illegal. Then the
middleman's cut can grow without fear of being frozen out. It's
regulatory robbery by the wholesalers.You can see why the NBWA [National Beer Wholesalers Association] and the WSWA [Wine & Spirit Wholesalers of America] go to the mat defending the
laws that mandate this three-tier system."
The problem, of course, is that a system that once served the needs of the states and allowed for efficient market access has devolved into a system that can't serve the contemporary alcohol marketplace, punishes consumers, deprives states of needed tax revenue, retards the growth of small businesses, but, critical "middleman economics," props up and protects unearned Wholesaler profits.
Carney concludes the slicing and dicing of the wholesalers' hypocrisy on H.R. 5034 with this:
"It's another case of big business using big government for profit.
Carney's "Liquor Wholesalers Cash In on Sobriety Rules" is a must read