Don’t Want No Sugar in My Coffee

I was wandering through the blogosphere this morning. Clicking on a link here and a blogroll there, just reading about what was on people’s minds. This garden of forking paths led me to Eric Dondero’s site, “Libertarian Republican”.

His top post concerned the newest legislative scheme -- a “sugar tax” that would be imposed by Congress on soft drinks as a way to raise money for health care.

Here’s how the Wall Street Journal sees it:

Senate leaders are considering new federal taxes on soda and other sugary drinks to help pay for an overhaul of the nation’s health-care system.

[…]

…Early estimates put the cost of the plan at around $1.2 trillion. The administration has so far only earmarked funds for about half of that amount.

[…]

The Congressional Budget Office…estimated that adding a tax of three cents per 12-ounce serving to these types of sweetened drinks would generate $24 billion over the next four years.

Hmm…$24 bn isn’t going to cover the shortfall for this unhealthy idea about medical coverage for everyone.

Mr. Dondero calls his post on this tax the “NANNY-STATE UPDATE”. For back-up he cites Kent McManigal of the Albuquerque Libertarian Examiner:
- - - - - - - - -

If the mobsters of the federal government get their way and start stealing even more money, every time I buy a Dr Pepper, Mountain Dew, or Coke, with their “soda tax”, I see a market niche for unsweetened soft drinks. That’s right: no sweeteners whatsoever.

I know where the sugar and Karo syrup are in the grocery store and would be happy to sweeten my own soft-drinks “to taste” in order to avoid “paying” even more money. Money that will be used to finance the further destruction of my liberty. I’d be willing to be I am not the only one.

Are you listening, soft drink manufacturers?

I started thinking about this idea and realized how oppressed we truly are by Congress’ ever-increasing bloat. As I said to Mr. Dondero in the comments:

If you want to get really ticked off about the gangsta gummint’s intrusiveness, read up on the sugar subsidies. As you walk over to get that sugar to put in your drink, contemplate the larceny already being committed via the taxes you pay right now to subsidize that corn syrup and sugar you're going to buy to get around the problem.

Running into his post was synchronicity. Earlier in the day, I’d done some research on Mark Groombridge, the policy analyst who appears on the video in the post preceding this one.

Mr. Groombridge knows the sugar industry well. While a fellow at the Cato Institute he’d written a twelve page paper on the problem, “America’s Bittersweet Sugar Policy”. Even though Groombridge wrote it back in 2001, it’s still relevant. Here’s a snip of the summary:

Nowhere is there a larger gap between the U.S. government’s free-trade rhetoric and its protectionist practices than in the sugar program. Through preferential loan agreements and tariff-rate quotas, the U.S. government thwarts price competition to maintain an artificially high domestic price for sugar--a price that can be twice the world market price or higher.

The program benefits a small number of sugar producers, but virtually every governmental and non-governmental survey concludes that the program results in a net loss of welfare for the U.S. economy, with U.S. consumers suffering the most. Direct costs to consumers due to higher prices could be as much as $1.9 billion a year and the net welfare loss to the U.S. economy nearly $1 billion. Moreover, the U.S. government spends close to $1.68 billion a year buying and storing excess sugar to maintain those artificially high domestic prices[…].

So where does that lead us? Well, guess which senators from which states are up in arms about this sugar tax? You got it: the corn states. Man, are they mad. I’ll bet they quash this one, and here’s why, in three words: Archer Daniels Midland.

To get this sugar legislation passed, the corrupt and imperial Congress will have to cross swords with Archer Daniels Midland. In that fight, the deck is stacked because ADM is bigger and meaner. Again, from the Cato Institute:

[You know for certain that when a Cato paper ends up quoting “Mother Jones” magazine that this is a BIG problem. The paper is from 1995, but even if the names have changed, the sad reality of ADM’s reach has only grown. Notice how both papers -- the one on sugar subsidies and this one on ADM -- remain relevant despite their age. In other words, no matter what politicians say, government's slice of your pie continues to increase. Funny how that works.]

ADM: A Case Study in Corporate Welfare

Executive Summary
The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM’s annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM’s corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30

One of the most politically charged debates in Washington revolves around business subsidies known as “corporate welfare.” A number of policy organizations have published studies examining the corporate welfare phenomenon: what qualifies as corporate welfare, how much it costs taxpayers, and how much it damages the economy. This study examines the dynamics of corporate welfare somewhat differently by investigating ADM as a classic case study of how those subsidies are obtained, how the welfare state encourages such “rent seeking,” and how such practices fundamentally corrupt the political life of a nation. Congress’s expressed desire to foster a free marketplace cannot be taken seriously until ADM’s corporate hand is removed from the federal till.

Introduction
ADM is certainly the nation’s most arrogant welfare recipient. And it is one of the few welfare recipients that spend millions of dollars each year advertising on Sunday morning television shows populated and watched by politicians. Chairman Dwayne Andreas’s and ADM’s success in farming Washington represents the rational result of contemporary government policies that turn elections into “an advanced auction of stolen goods,” as H. L. Mencken quipped. Thanks to its multi-million-dollar hustling in Washington, a company that lives and dies on the generosity of the American taxpayer has managed to get itself revered as a great public servant. Although ADM is not the only corporation with its hand out in Washington, it is easily one of the most successful beggars on the block.

Andreas recently told a reporter for Mother Jones, “There isn’t one grain of anything in the world that is sold in a free market. Not one! The only place you see a free market is in the speeches of politicians. People who are not in the Midwest do not understand that this is a socialist country.” Andreas’s comment about “no free markets” is like the old joke about the son who murdered his parents and then asked for the court’s mercy because he was an orphan. ADM champions political control over markets and then invokes that control as an excuse for its continued political manipulation. Andreas has exerted his influence in Washington to ensure that the U.S. form of “socialism” resembles 1930s’ Italian corporate statism: the government plunders the citizenry for the benefit of politically connected corporations. And, though Andreas does not like to admit it, there are many markets in the world for agricultural products that are not controlled by politicians.

My points to Mr. Dondero were these:

• This new sugar tax is just the frosting on the huge lumps we already take for sugar anyway -- and have for years.
  
  
• Robber barons in ADM are not going to permit this one to pass. They don’t care about the other “sin taxes”-- e.g., the one on tobacco, but sugar is theirs and no mere legislative body is going to interfere.
  
  
• ADM has already bought most of them anyway. This sugar tax nonsense is just a kabuki dance for our entertainment.

That’s why you and I are libertarians, Mr. Dondero. We’re trying to beat back the slimy ocean of government with our brooms. But no matter how hard we sweep, that tide is bound to wash us all out to sea.

I suppose if you wanted to really make a dent, you could give up sugar, but if you start reading the labels on your food you'll quickly realize it's in about ninety per cent of processed foods so escaping it would take some thought and work.

Maybe we could grow our own sugar cane. I wonder if that's legal? Seems like the things our benevolent uncle permits us to do legally shrink a little more every year.


Remember the old blues tune, “Don't Want No Sugar in My Coffee”?

I don’t want no sugar in my coffee
Makes me mean, it makes me mean
I don’t want no sugar in my coffee
Makes me mean, makes me mean