In today’s Washington Examiner, Tim Carney has an excellent column on how the bill to place tobacco under FDA regulation would reduce competition in the tobacco industry and enrich the biggest company — Philip Morris — at the expense of consumers and competitors alike. Although the bill is supported by leading anti-smoking groups (which indirectly receive money from Big Tobacco through the $246 billion Master Settlement Agreement), the bill’s “most important ally” is “Philip Morris, the largest cigarette maker in the world.” As Carney notes,
“There’s a metaphor popularized by economist Bruce Yandle that is useful in explaining efforts to regulate anything from energy to toy safety. Call it the Tale of the Baptist and the Bootlegger.
“Picture a small-town Southern politician after Prohibition’s repeal. Call him Jones. Jones’ campaign needs both cash and a winning issue. The state’s most prolific bootlegger comes and offers Jones both. ‘I can bankroll your entire campaign. You just need to outlaw alcohol in the county. If you close down the bars and clear the liquor out of the corner stores, the men will all have to come to me for their fix.’
“Jones, with newly heavy pockets, walks down to the Lady’s Temperance Hall and declares, ‘Ladies, I’m running to end the scourge of alcohol in this town, and I’m asking for your support.’ At his campaign kickoff the next week, Jones has the entire Temperance Union and the local preacher onstage endorsing him, and of course, he’s got the pipeline of alcohol cash from the rumrunner who will get even richer when the county goes dry again.
“Philip Morris is the ‘bootlegger’ today — the undisputed giant of the industry. The company controls more than half of the U.S. cigarette market. . .Parent company Altria has hired three new lobbying firms so far this year, bringing its army to 19 different lobbying firms plus a powerful in-house shop. . .
“Philip Morris stands to benefit from this regulation in many ways. First, all regulation adds to overhead, and thus falls more heavily on smaller firms. Second, restrictions on advertising help Philip Morris’ Marlboro, a brand everyone already knows, by keeping lesser-known brands in the shadows. (Existing restrictions on advertising have already helped Philip Morris in this regard, with an added benefit spelled out in Altria’s annual report: ‘Marketing and selling expenses were lower, reflecting regulatory restrictions on advertising and promotion activities. … ‘) Finally, if the bill passes and the FDA gets added control over the industry, Philip Morris, more than any of its competitors, will have access to those bureaucrats and agency heads making the decisions.”
Federal regulation often backfires. A classic example is the 2007 child-safety law, the CPSIA, which was based on junk science. It shut down countless thrift stores and entire industries, resulting in children’s books being thrown out and pulled from library shelves by the thousands. It harmed poor people and special-needs kids. It rendered many ordinary bicycles illegal and made motorcycles more dangerous to children.
But it is now being used by Congress as a blueprint for a misguided law, the Food Safety Modernization Act of 2009, that would put small food producers and farmers’ markets out of business in the name of food safety.
Speaking of Baptists and bootleggers, a large coalition of religious leaders who know nothing about how regulation works in the real world have endorsed FDA tobacco regulation. Most of them are from liberal religious denominations, like the Unitarian Universalists and Religious Action Center of Reform Judaism, but the signatories also include Dr. Richard Land of the Southern Baptist Convention.
I wrote earlier about the Religious Left, including its claims that Sarah Palin is not really a woman (because she’s a Republican), that Ronald Reagan was “Pontius Pilate,” and its rants about the “Taliban-like American male,” who should “shut up for a milennium.” The Religious Left also believes that God hates secret ballots in the workplace, and falsely accused former Interior Secretary James Watt of publicly stating that all trees should be cut down in light of the imminent return of Jesus Christ.