A Stitch in Haste

If it's so damned good, then why does it need a subsidy?

The French government is to hand its struggling wine industry 70m euros ($91m) in aid to help it battle falling sales and damaging overproduction. The financial package is aimed at assisting vintners in financial trouble and improving how its wine is marketed.

The French wine industry, the world's second largest, has been hit by declining consumption at home and the growing popularity of New World wines.

Wine makers, however, claimed the support did not go far enough.
...
France fell behind the "New World" producers of Australia, Chile and the United States for the first time in 2003 in terms of exports.

Be sure to ship all that wine over here in those new Airbus 380's that the Eurocrats are also subsidizing.

Notice also that there is no mention of the "Don't Buy French" movement in the U.S. Maybe it had an impact, maybe not. I'm not a wine drinker and don't follow such things.

And, yes, let the record also reflect that the U.S. isn't much better with our own atrocious farm subsidies.

While the whole world gets fat -- and drunk -- we still cling to the notion that, somehow, "food is different" when it comes to basic economics.

Sacré bleu!

Related Posts:
Franken-Wine's Monster
GM Foods: Hunting the Farmers
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"It Is Large. Very Large, In Fact."

I guess White Castle doesn't count:

America's wine producers have finally been rumbled, thanks to a lack of castles in the US.

From 2008 US vineyards will no longer be able to boast that a wine hails from a château unless they can prove its grapes are grown within sight of a castle.

Other European "traditional expressions", such as vintage, noble and classic, will also be banned unless they are true.

The new rules are part of an EU/US deal to police the transatlantic wine trade. Existing US wines can still be given European names, such as burgundy, champagne and claret, but new wines will have to be given a US name.

I can understand that it's sorta kinda obnoxious to call sparkling wine "champagne" unless it actually comes from the Champagne region of France, or labeling a food "natural" when it contains preservatives.

But not being able to call a wine "Château Le Kip" unless I can see a castle from my vineyard? What exactly does that accomplish except to create a false language differential?

What the Eurocrats really want is for American vintners not to use European words at all. Which suggests to me that the Eurocrats think Europeans are mind-bogglingly stupid. So stupid that they can't figure out where their wine comes from.

Interesting also that there is no mention of wines from Australia, New Zealand, Chile, etc.

I hope some eccentric vintner in Napa builds a castle just to stick it to Europe. I would like that very much.

One of my favorite targets for ridicule is the European wine cartel. If their wine is so good, then why does it require multi-billion-euro subsidies and flagrantly protectionist regulations?

Well, it turns out that some eurocrats are, sorta kinda, asking the same question:

The EU plan foresees an end to restrictive and often confusing labeling rules for wines and wine-making practices to make it simpler for consumers to see what they are buying. It calls for winemakers to put on their label the grapes used in the wine, a labeling practice used by non-European producers, which has appealed to consumers.

The reform also recommends simplification of national vintner quality systems replacing them with just two EU-wide classes of wine: wine with Geographical Indication and wines without.

That's the good news; here's the better news:

[EU Agriculture Commissioner Mariann Fischer Boel] said EU governments had to realize that decades-old practices of generous subsidies -- which total some 1.2 billion euros ($1.5 billion) a year, 63 percent of which was used to prop up prices -- had made wine producers complacent and out of touch with trends and were flooding the market with too much wine that no one wants to buy.

There is a special vineyard in Hell for people who advocate agriculture subsidies of the type given to European vintners: First the government taxes people -- regardless of whether they even drink wine -- to pay the vintners not to grow grapes (which by definition decreases Europe's GDP -- Salut!). Restricted supply means higher prices, so the taxpayers get, not cheaper wine but more expensive wine (and let's not forget sales, value-added, and "sin" taxes). Cheers! And, in the end, there still winds up being a wine glut because the vintners -- stripped of the profit motive -- have no incentive to produce wine anyone actually wants to drink. Prost!

But these pernicious subsidies are going to end, right?

[Boel] ... said billions of dollars in new aid would be made available to salvage the wine sector.

Sigh. Subsidies to correct the subsidies? Isn't that like throwing good wine after bad? Bottoms up!

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For what it's worth, we're no better. See also here.

The French government is considering subsidizing wine education in schools:

"To hold a forceful position in the world, French wine must first assume a strong position at home," the report said, calling for education programs to inform young people about the origins, history and characteristics of French wines.
...
The wine industry, a cornerstone of French life that employs about 75,000 people, has suffered as the country has become more health conscious.

Because you can never have too much alcohol consumption by children, so long as it's the proper kind of alcohol. "Please don't drink too much -- but if you do, then be sure to drink French!"

Could you imagine the U.S. government telling kids, "Don't drink under 21 -- but if you do, then be sure to drink only domestic beer!"

It's well understood (to libertarians, that is) that a subsidy (or tariff or quota or any other interventionist maneuver by the government) that is proclaimed to "help the economy" or "preserve jobs" does nothing of the kind -- it only helps the subsidized industry at the expense of the rest of the economy (through higher prices, lower quality, less variety, higher taxes -- or all of the above).

But France is taking it a step further -- actually compromising the best interests of children, or at the very least using them as pawns and props, for the sake of vintners (and remember -- "France" and "the French wine industry" are not the same thing).

The report of course pays lip service to the need to emphasize responsible drinking, but the underlying policy goal is a clear as it is corrupt: Get 'em while they're young.

Plus ça change, plus c’est la même chose...

Perhaps someday I'll see my dream of all truthful commercial advertising enjoying full First Amendment protection actually come true.

In the meantime, I'll just be glad this isn't Europe.

An extraordinary row, involving major European and US industries, is blowing up over the European Commission's determination to make it illegal, in three years' time, for any products made in or imported into the EU to carry any reference to non-metric measures. Not only will this cost industries on both sides of the Atlantic billions of dollars and euros, but it is in direct breach of US federal law.

The Commission is so set on stamping out the hated non-metric system that, as of January 1, 2010, it is imposing a total ban on what it calls "supplementary indications" — ie any mention of inches, pounds or other non-metric units in advertising, labelling, catalogues, manuals and the like.

I am on record as an "English only" advocate: I believe that all government activity should, to the maximum extent possible, be conducted exclusively in English. English is our de facto national language, and it is not unreasonable to expect people to use it for official business, or to find translators at their own expense in most circumstances.

But that does not mean that I get uppity when I buy groceries and see labels printed in both English and Spanish (or, just as likely in New York State, English and French). And I especially couldn't care less about dual-units on the packages. Having uniform packaging that can serve markets across borders keeps costs, and therefore pricing, down for all. Everyone wins.

And then there's Europe, where "non-metric hatred" is considered a legitimate government interest and where higher costs (not to mention restricted economy liberty) are considered an acceptable price to pay to accommodate that hatred.

Madness. Sheer madness.

(Via Reason's Brickbats.)

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Meanwhile, behold "greedy" American capitalism's view of the "correct units":

A Dallas-based pizza chain which caters to the Hispanic community is accepting the Mexican currency at all of its 59 U.S. stores starting on Monday, giving the greenback some unusual competition at the cash register.
...
But against the backdrop of rising anti-Hispanic tensions as America grapples with an estimated 10 to 12 million illegal immigrants, there are some who do not regard it as a harmless marketing gimmick.

"This is America, We speak English and our currency is the U.S. dollar. I will no longer visit your restaurant due to your demonstrated inability to assimilate into the culture of this country," said one irate former customer in an e-mail sent to Pizza Patron on Monday morning.

There's a saying that capitalism doesn't see white, black or brown — only green. And yet so many of the same people who claim to loathe racism also loathe capitalism, while many people who are indeed racists pretend to love capitalism (and therefore try to "protect" it via quotas, tariffs, fences — and perhaps "no peso" laws someday).

Go figure (with metric and currency converters, if necessary).

(Via Liberty Papers.) More thoughts at PoliBlog.

All tastes and preferences are subjective. That's even true in tax policy: Politicians' preferences for targeted taxes or subsidies distort the market toward whatever outcome the politicians happen, for whatever arbitrary reason, to prefer. Sometimes it's the result of rent-seeking (lobbying) from the industries (i.e., the politicians are merely selling favorable treatment to whichever firms are willing to pay for it); sometimes it's simply whatever industries politicians happen to like or dislike.

A perfect example comes from our favorite anti-market politicians, the French.

S'il vous plaît —

The United States could face possible European carbon taxes on its exports if it does not sign global climate accords, French President Jacques Chirac was quoted as saying in an interview published Thursday.
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France has pushed in the past for a carbon tax on industrial goods from countries that refuse to sign the Kyoto accord, meant mainly to target the United States and China. Some lawyers say it would violate international trade rules.

Et voilà!

France is to offer tax credits to encourage local companies to develop video games, the Ministry of Culture said on Thursday.

Parliament has approved a measure that will offer tax credits to producers of video games "with a cultural dimension" to finance 20 percent of a company's production costs to a maximum of 3 million euros ($3.91 million) a year, the ministry said in a statement.

Somehow I suspect they're not subsidizing Call of Duty 3 (or, for that matter, Dead Rising) on "cultural dimension" grounds.

As for the carbon tax: Say what you will about global warming, there is no logic in having Europe serve as the collector of penalties for refusing to sign a treaty (which, recall, happens to be a nation's sovereign prerogative). The real agenda, besides scoring political points with France's anti-American masses, is naked extortion: an attempt to squeeze some unearned money from other nations — apparently for the purpose of making sure French kids have enough video games to play.

The French already engage in anti-capitalist protectionism of their wine industry, among others. To do it on the backs of other nations' industries is nothing more than state-sanctioned piracy. And they then call themselves "model global citizens" and "wise custodians of their economy" for doing so. Go figure.

LATE ADDITION: In case the kids get bored of the video games --

French authorities will give out 175,000 USB memory sticks loaded with open-source software to Parisian high-school students at the start of the next school year.

The sticks will give the students, aged 15 and 16, the freedom to access their e-mail, browser bookmarks and other documents on computers at school, home, a friend's house or in an Internet café -- but at a much lower cost than providing notebook computers for all, a spokesman for the Greater Paris Regional Council said Friday.

As if it had to be one or the other -- notebooks or sticks. And of course there couldn't possibly be an anti-Microsoft ulterior motive here. None at all