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  • Individual Mandate for Cabernet Sauvignon?

    What a difference a few hundred years makes. Throughout most of American history, barriers to commerce were imposed at the state level. States would engage in protectionism by imposing tariffs on other states goods, thereby restricting trade opportunities between the states. In the Constitution, the framers give Congress the power to promote commerce between the states by lifting any restrictions placed upon it. Now, Congress itself creates legislation that hinders commerce. Take, for example, the health insurance market. Under the McCarran–Ferguson Act of 1945, Congress has ceded the regulation of health insurance almost exclusively to the states and thereby prevented interstate health care markets. There are over 1,200 health insurance companies in the United States, but no common market where citizens of one state can purchase a health insurance plan from another state. And we’ve seen how well the health insurance market runs.

    Wouldn’t it be great if other markets worked like that of health insurance? Congress thinks so, because they are considering similar legislation for alcohol.

    A recently introduced bill, the Community Alcohol Regulatory Effectiveness (Care) Act, would cede Congressional authority to the states to regulate alcohol. The Care Act purports to give states and communities more authority to regulate alcohol, but, in actuality, it enables state protectionism. States would be able to prevent out-of-state wine producers from selling directly to consumers around the country. The Care Act would strip alcohol businesses of their Commerce Clause protections and eliminate their ability to sue states in federal court.

    How many years until state protectionism causes the price of alcohol to sky-rocket, prompting Congress to pass a legislative over-haul akin to Obamacare? Will the next individual mandate require citizens to buy cabernet sauvignon or risk a fine?

    The Commerce Clause grants Congress the power to promote commerce, by lifting artificial barriers to competition and economic freedom. When Congress promotes commerce, economic freedom and markets flourish and the nation prospers. When Congress shirks its duty and creates barriers to free trade among the states, the resulting markets resemble those of health insurance.

    Posted in First Principles [slideshow_deploy]

    5 Responses to Individual Mandate for Cabernet Sauvignon?

    1. George Colgrove VA says:

      Again, the dirty truth with this legislation is protectionism. I frequent the vineyards in Virginia and their take is that this is all about transport control to protect the product transportation unions. It is no simpler than that. Constituent buying and maintenance.

    2. West Texan says:

      As long as fair trade practices are observed, states alone should be the sovereign voice overseeing commerce within their respective boundaries. Federal government should only function as mediator for interstate disputes. Compacts between states is another way to offer a broader selection of services and/or goods. Besides, a fine Cabernet is a good choice. Thank goodness it's not the only one.

    3. WineLover Bellevue, says:

      The bill, written by the Wine and Beer Wholesalers Association, is a bald attempt at making their monopoly over the distribution of wine and beer permanent. This penalizes consumers through higher prices (profit margins are guaranteed through the antiquated three tier system put into place at the end of Prohibition) and producers by propping up barriers to access for new markets. The hundreds of thousands of dollars that wholesalers and distributors have spent in lobbying Congress over this issue is nothing more than an investment in strengthening their business model at the expense of tax payers. It is time for Congress to strike down the three tier model and allow for direct access to all 50 states. It is next to impossible for an underage minor to order and receive wine through online purchase; delivery carriers have seen to that. They are much more likely to illegally purchase alcohol at their local store or steal it from their parent's liquor cabinet. This bill is nothing but a play for permanent monopoly over a segment of our economy by a small and wealthy group of people.

    4. Joshua Pedroli says:

      The article is well written and ultimately on the right side of the issue, HR1161 is a disingenuous and misguided bill aimed at restricting consumer freedom and preventing small businesses from competing in the national marketplace. The author's contention that the bill will cause alcohol prices to rise is off point. There is no shortage of supply for alcohol, now or ever so long as there are supplies of sugar, water, and yeast. In fact the protectionist practices of the states does keep many large producers products artificially higher than superior products made by smaller producers by keeping those producers out of the national market place under the thin veil of protecting the public, while preventing one of Americas most successful small business sectors from providing jobs and producing products which increase in value and so provide additional income to investors. It is in the interest of every American that the products made in America are equally accessible to every American dollar holder.

      Joshua Pedroli,



    5. Pingback: Terroirist » Daily Wine News: Interesting Comments

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