Regulating your food choices vs. retailers' food choices

Suppose the government made it illegal for you to buy sugared soda.  What would be your reaction?  How would you feel?  

Now, suppose instead that the government made it illegal for grocery stores and other vendors to sell sugared soda.  Is your reaction to the second law less visceral than the first?  

I suspect so.  But, here's the key: both laws impose the same restriction on your freedom - the outcomes are precisely the same.

Writing at Forbes, John Goodman notes this dichotomy in the case of California eggs (HT David Henderson)

“California has a new law that requires all eggs sold in the state to come from chickens that are housed in roomier cages. Specifically, the hens “must be able to lie down, stand up and fully spread their wings.”

So how many Californians have been arrested for eating the wrong kind of egg? Zero. Not even one? Not one. Actually, the law doesn’t take effect until January, but even then egg eaters will have nothing to fear. The reason: the law doesn’t apply to people who eat eggs. It only applies to people who sell eggs.

When you stop to think about it, that’s not unusual. Almost all government restrictions on our freedom are indirect. They are imposed on us by way of some business. In fact, laws that directly restrict the freedom of the individual are rare and almost always controversial.”

After discussing various reasons for the differences in the way we respond to individual vs. business restrictions, Goodman concludes:

“Finally, the idea being proposed here seems consistent with history. Over the past two hundred years, we have had a steady migration of people from agriculture to the cities, where they became employees of firms. Over the same period of time we have had a parallel increase in the intrusiveness of government.

Bottom line: if there were no firms, taxes would be much lower, there would be far fewer regulations and government would be a much less important institution in our lives.”

GMO and Soda Votes

I have been keeping an eye on several ballot initiatives in yesterday's election.  Not all results are finalized, but here's what we know so far:

In Colorado, mandatory GMO labeling was defeated by a wide margin, 66% to 34%, with 93% of precincts reporting.

In Oregon, mandatory GMO labeling is very close and still up in the air.  With 88% of the votes counted, the "No's" are ahead by about 26,000 votes (659,404 to 633,132), giving the "No's" a current 51% to 49% margin. 

A vote in Maui, HI to ban cultivation of GMOs is too close to call

Berkeley, CA passed a soda tax (75% in favor vs. 25% opposed)

The majority of voters in San Francisco, CA favored a soda tax (55% in favor), but the initiative required a 2/3 majority to pass. Thus, the soda tax failed in San Francisco.  

Country of Origin Labeling

The WTO recently ruled against the US in the latest dispute over mandatory country of origin labeling (MCOOL).  Their latest ruling cites work I've conducted with Glynn Tosnor, Ted Schroeder, and Mykel Taylor at Kansas State, among others (not necessarily in an uncritical light).

In any event, I was skeptical of the way the US chose to respond to the original finding that they were out of compliance with the WTO, and the latest finding seems to only reinforce those views.

Darren Hudson had a few thoughts on the issue, with which I largely agree: 

“Overall, Lusk and Anderson found that modest increases in total beef demand (2-3%) would offset any producer costs [Lusk note: subsequent research by Taylor and Tonsor have found no demand response to MCOOL]. But are we focused too myopically on U.S. beef/meat? If we step back and truly think about consumers and the functioning of markets, we have a highly integrated North American livestock complex. Does it help the consumer more to be able to identify which cattle are born in the U.S., or to have an efficient, lower cost movement of livestock to production and processing areas with comparative advantage to do those functions? That includes things like harmonized health and safety inspections and transport rules. Does COOL put a wedge between us and our North American partners so that we do not get those benefits simply for the possible benefit that someone out there would buy a rib-eye steak over another because it was born in the U.S.

The COOL ruling gives us a moment to step back and take stock of what is really important in this argument. I know there are those that value the information provided by the label, and I know there are those that are harmed by it. But we need to think big, strategically, and long-term if we are to remain competitive globally.”

Paternalism - Immigration Edition

A lot of policies involve group A trying to pass laws that they perceive to improve group B's well-being.  But, how often do we ask group B what they really want?

This new paper by Grace Melo, Gregory Colson and Octavio Ramirez shows how such paternalism can might lead to policies that group B doesn't actually prefer.

“This study presents evidence from a survey and choice experiment on the preferences of Hispanic immigrants who entered the United States illegally for different immigration reform proposal attributes. Key components of the current competing US Senate and House immigration reform bills are considered including pathways to legal permanent residence, temporary work visas, family visitation rights, and access to medical care. The results quantify the value Hispanic immigrants place on different policy attributes and suggest that longer-term work visas are highly valued. Ability to legally work in the United States and a pathway to citizenship are substantially more valued than social services such as medical care and social security benefits.”

Should the government regulate unhealthy foods?

That was the question asked in a long piece by the Congressional Quarterly Researcher a few days ago.  I had several nice conversations with Robert Kiener, the author of the piece, and was pleased he included a few of my thoughts.  

The article had a page (pg. 833) with alternative viewpoints responding to the question: "should the government tax sugary soda?"  Writing in favor was Michael Jacobson with the Center for Science in the Public Interest.  Writing in opposition was yours truly.  Jacobson repeatedly refers to "big soda's" talking points, but my views are my own and I have no financial ties to the soda or sugar industries.  I began by writing:

“Should the government tax sugared soda? It already does. Farm policies make U.S. sugar prices two to three times higher than elsewhere. Moreover, ethanol policies have led to a more than doubling of the price of high fructose corn syrup since 2005. Its no wonder that per capita sugar consumption has fallen precipitously over the last decade.”

You can read the rest for my other thoughts.  

On the sugar policy issue, I'll note this paper just released by Beghin and Elobeid in the journal Applied Economic Perspectives and Policy on the effects of sugar policy.  They write on the effects of the removal of US sugar policy.  They estimate the removal of the sugar program would lead to a roughly 30% reduction in the US price of refined sugar.  They write: 

“The removal of the sugar program would increase U.S. consumers’ welfare by $2.9 to $3.5 billion each year and generate a modest job creation of 17,000 to 20,000 new jobs in food manufacturing and related industries. Imports of sugar containing products would fall dramatically, especially confectioneries substituting for domestic inputs under the sugar program. Sugar imports would rise substantially to 5–6 million short tons raw sugar equivalent. World sugar price increases would be minor, equivalent to about 1 cent per pound.”

The interesting dichotomy (dare I say, irony) is that the ~$3 billion in consumer benefits estimated from the above study come about because of lower sugar prices that would arise if US sugar policy were eliminated. But, it seems sugar price advocates think just the opposite: rising sugar prices will somehow benefit consumers.  We can't have it both ways.  Either falling sugar prices help or hurt consumers.  I don't know about you, but I prefer paying lower prices.