R Street: A Little Less Tariff, a Lot More Booze


Politicians from across the ideological spectrum are constantly waxing poetic about the importance of blue-collar manufacturing jobs. In fact, much of the justification for the recent tariff disputes has been a need to protect American manufacturing industries. R Street’s Jarrett Dieterle and Clark Packard argue in National Review that the best path to more manufacturing jobs is to scrap the tariff wars and start deregulating the alcohol industry:

From the earliest moments of his campaign, President Donald Trump has emphasized the importance of domestic manufacturing jobs. He’s negotiated carve-outs to keep factories in America, railed against companies that move jobs overseas, and increased tariffs in an attempt to protect blue-collar workers. Nearly all of the president’s rhetoric, however, has fixated on a handful of sectors traditionally associated with manufacturing, such as the steel industry, automobiles, and construction. This myopic focus has blinded the president to one of the most promising sources of manufacturing jobs in modern America: the alcohol industry.

President Trump is far from the only government official who obsesses over manufacturing jobs, with stories cropping up daily about politicians visiting production plants in Rust Belt states and donning hard hats for well-publicized photo ops…

Lost in all this is the fact that the American drinks industry has some of the best job-growth potential in the country. According to data from the Bureau of Labor Statistics, breweries, wineries, and distilleries created the second-most manufacturing jobs of any industry in 2017. These numbers don’t even include support industries that are tied to drinks, such as barrel manufacturers or bottle producers. With new breweries and distilleries opening every day, the growth seems primed to continue — if policymakers will let it…

Read the whole piece here.

Like a Hurricane: A Trip Into the Heart of the Craft Spirits Boom

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New Orleans, La. -- New Orleans is many things: joyous, indulgent, wild, delicious, eccentric. But every July it also turns into the "the largest cocktail festival in the world" when it plays host to the annual Tales of the Cocktail convention. During Tales, which is now in its 16th year, upwards of 15,000 craft spirits aficionados--from bartenders to distillers to drinks writers to brand representatives--descend upon the Big Easy for a week full of seminars, tastings, parties, tastings, competitions, and ... even more tastings. The festivities conclude with the presentation of the Spirited Awards, which crown yearly winners in categories such as "Best Bartender" and "Best American Cocktail Bar."

In many ways, Tales can be considered the heart of the modern craft cocktail boom, which made it a natural fit for a visit as we near the 100th year anniversary of the beginning of Prohibition. Spending a week at Tales makes it easier to appreciate just how far craft spirits have come over the past hundred years and how, in many ways, we are living in the golden age of booze. It also shows how removing arbitrary government barriers--including the most stringent barrier of all, Prohibition itself--can unleash a wave of entrepreneurial activity and economic growth.

In many ways, New Orleans has always been known for cocktails. The city is widely considered the home of famous drinks such as the Sazerac and the Vieux Carre, not to mention the widely used Peychaud's bitters (and, more ignominiously, the Hurricane). When this rich tradition is combined with the city's modern cocktail bar scene, it creates a literal embarrassment of riches. During Tales week, attendees not only are treated to the endless array of tastings and cocktail competitions that are formally part of the convention, but they can wander the streets of New Orleans from one elite cocktail bar to the next. 

There are the classics, such as the aforementioned Sazerac or Vieux Carre from Hotel Monteleone's legendary Carousel Bar, or a Brandy Crusta from famed bartender Chris Hannah at Arnaud's French 75. Then there's the modern high-end players, like the James Beard award-winning Cure or Cane & Table, not to mention casual--but still elite--joints like Bar Tonique (try their Gin Fizz).

Gin fizz from Bar Tonique

Gin fizz from Bar Tonique

After doing extensive field research in all these establishments during my time at Tales, I wandered over to the Tales exhibit on Smugglers, Bootleggers, & Rum Runners. The exhibit featured a series of front page stories from the Times-Picayune that ran during Prohibition, and which reported on the liquor busts and law enforcement efforts of the era. Notably, the earliest editions of the Times-Picayune featured at the exhibit had surprisingly optimistic takes on Prohibition. For example, one story from January 30, 1921--just a year into Prohibition--was titled "Many Good Results Follow Prohibition" and bragged of "more money for the poor, more money for the businessman, more money for the workman, more money in the banks" as a result of outlawing hooch.

Slowly but surely, however, the coverage turned negative as stories began piling up about expensive--and often ineffective--enforcement efforts geared toward cracking down on illegal rum runners and bootleggers in the region. The June 14, 1925 edition of the paper ran a story by a reporter embedded on a rum running ship in the Gulf, which led off with a memorable line from a rum-runner himself: "The rum law is bunk. Just as long as they want to drink we'll get it to 'em." Perhaps most tellingly, the November 20, 1929 edition of the Times-Picayune ran a front page story titled "Dry Congressman Indicted for Prohibition Law," detailing the story of how Congressman Edward Denison--a Prohibition advocate--was caught with a leaking suitcase of liquor in his Capitol Hill office.

Watching the events of Prohibition unfold in real time across the pages of the Times-Picayune puts into vivid relief the practical enforcement difficulties that resulted from an absolute ban on booze, not to mention the thriving black market it helped ignite (which inevitably extended to some government officials). Rather than leading to "more money" for citizens and businesses, as the early Times-Picayune article suggested, banning access to a product that humans have desired and enjoyed throughout history ultimately led to frustration and violence.

But more fundamentally, modern day New Orleans and the nation's craft spirit boom ultimately provide the best repudiation to the failed policies of the Prohibition era. It is the craft spirit boom itself that has provided "more money" for entrepreneurs, businesspeople, and workers. (The craft spirits movement has generated close to 6,000 jobs in the past year and breweries, wineries, and distilleries have created the second most manufacturing jobs of any industry in the country since 2017.)

This is not to say that the work of deregulating alcohol is complete--in fact, the very mission of is to continue to advocate for reforms to outdated alcohol laws that burden spirit-makers and sellers without providing any discernible public health benefits. While ensuring safe drinking should continue to be an important goal, it's clear that many of the laws and rules governing alcoholic beverages were enacted to protect vested interests rather than to promote the public well-being. From the three-tiered system to retailing restrictions to control states, the alcohol industry still labors under more stringent (and often nonsensical) regulations than nearly any other industry. 

If anything, a trip to New Orleans and Tales of the Cocktails gives us a peak into the booming craft spirits industry, and a reminder of how loosening government barriers can boost entrepreneurial activity and delight consumers in ways never previously imagined.

How the Craft Spirits Boom Is Creating Middle-Class Jobs


R Street's Kevin Kosar has written before about how the craft spirits industry should be recognized as a key source for creating the types of blue collar manufacturing jobs that policymakers often emphasize. Now several other commentators have picked up on the theme, including two Bloomberg View columnists. Noah Smith writes:

[C]raft beer offers one small way in which an enterprising, hard-working individual can bootstrap themselves to the middle- or upper-middle-class and accumulate some capital, without moving to the big city or getting a degree from a top school. It’s one tiny step toward creating an American version of what Germany calls its “mittelstand” -- a network of small businesses that anchors the middle class and spreads economic activity to outlying regions...

More here.

Smith's fellow columnist Justin Fox had a similar piece, as well:

One of the fun things I discovered looking through the jobs data released by the Bureau of Labor Statistics last week was that, during a generally impressive stretch for manufacturing employment growth, "breweries, wineries and distilleries" was among the industries leading the way.

This wasn't a one-year fluke, either. Over the past seven years, the breweries, wineries and distilleries sector has been adding jobs at an 11.1 percent annual rate, compared with 1.7 percent for nonfarm payroll employment as whole...

Read the rest here.