Matt Kibbe and the Beer Freedom Index

 

Wonderful show with special guest Matt Kibbe joining the podcast! Matt is the former President of “FreedomWorks” and current President and Chief Community Organizer of “Free the People“, an economist by training, public policy expert, a best-selling author, and first and foremost craft beer lover!

As a disruptive force in politics, Beer is the perfect microcosm example to discuss problems of top-down central planning and the forces of government planning. Matt, explains the “Beer Freedom Index” (wish I thought of that) and why the less freedom a country has, the less likely it will have a tasty brew…. if at all!

We also dive into the correlations the industry has with technology, the sharing economy, the war on drugs and if we have learned anything from prohibition. Finally, we answer “Is beer the perfect example of liberty in action?”

Be sure to check out “Free The People” and Matt Kibbe on their “Beer Is Freedom” project. Here, Here, and Here.

Follow Matt Kibbe and “Free the People” on Twitter:
@Mkibbe
@FreethePeople

What Does Liquor Reform Look Like?

Bob Dick, Senior Policy Analyst at the Commonwealth Foundation joins the show.

As an expert in liquor Privatization for Pennsylvania Bob explains what the goal of the privatization movement is about and some new bills introduced in the PA General Assembly to slowly accomplish this. Do these bills go far enough or are they just causing new problems down the road?

North Carolina Lawmakers War Against Manufacturing Jobs

While 49 other states are scratching their heads figuring out how to promote manufacturing jobs, North Carolina’s General Assembly’s lack of action on prohibition-era laws may actually be destroying manufacturing growth, turning down the opportunity of a lifetime.

The manufacturing jobs I’m referring to here are provided by brewers and distillers whose only crime is deciding to open up shop in the communities they love, but are now being penalized by the state for becoming too successful.

Craft brewers have succeeded because they embark into new frontiers with their products and processes. Some brewers only serve their product on tap, while others find opportunity in expanding and creating manufacturing lines of bottles, cans, and kegs, reaching wider audiences. These entrepreneurial decisions are creating jobs – manufacturing jobs!

Oddly enough, however, the state is sending mixed signals. It willingly subsidizes out-of-state companies to move into North Carolina, but erects barriers restricting the ability of homegrown companies to expand. In just the last few years, beer manufacturers New Belgium and Sierra Nevada were given millions of dollars in corporate welfare by the state to open manufacturing plants in North Carolina, bringing in hundreds of jobs that arguably were not worth the cost. These jobs were paid for by the taxes imposed on North Carolinians, including the competitors of these subsidized companies, like Red Oak, Olde Mecklenburg and NODA.

Local craft brewers on the other hand are creating opportunity and the only investment they are looking for is for North Carolina to eliminate restrictions holding them back.

Currently, breweries can sell their own beer directly to retailers or self-distribute up to 24,999 barrels of beer a year. These mandates greatly hinder manufacturing growth. When a brewery becomes too successful for North Carolina politicians, producing its 25,000th barrel of beer, it has to fire its distribution team and hand over 100 percent of its distribution and branding rights to a third-party distributor. Should a brewery try to self-distribute its own beer above 24,999 barrels a year, the brewery will be breaking the law, be labeled a criminal, and be punished by the state, thereby coercing the brewery against its will.

Such restrictions impose severe disincentives for craft beer businesses to grow and add jobs.

HB 500 (along with HB 67 and HB 313) doesn’t eliminate the distribution cap like Colorado and California systems, but it does increase the self-distribution limit to 200,000 barrels allowing the brewery to self-distribute if it wants, and voluntarily work with a third-party distributor when the right incentives are available. It’s not perfect but it’s a small step in the right direction.

The craft beer industry is an ever-expanding and productively disruptive market. Entrepreneurs are continually changing their models and ideas to offer the highest value product to benefit consumers. This is all true whether the brewery creates 50 barrels a year, decides to produce a few thousand as a neighborhood pub, or expands to produce and manufacture nearly 1 million annual barrels of beer like New Belgium. All these business models are working and all of them are a result of expanded opportunity and eliminating restrictions on the marketplace.

We are seeing a market grow up in the face of the worst odds against it. Multi billion-dollar beer companies and foreign imports control 96 percent of the North Carolina beer market. In addition, wholesaler associations – well entrenched in lobbying efforts long before the craft beer movement came along – are looking to continue the forced use of their services.

Now these powers are trying to stifle local manufacturing potential on a market that only produces 4 percent of the beer consumed in the state of North Carolina by lobbying to keep the distribution cap in place and harm their smaller upstart competitors and customers.

North Carolina craft brewers are in the fight of their life, forming CraftFreedom.org advocating for reform. What’s disturbing about the battle, is brewers are only trying to keep their private property rights in order to grow their businesses and as a result create opportunity for their communities, but are being stymied by large corporations and lobbyists. Some manufacturing jobs will probably never return to the United States or North Carolina after moving. The state of North Carolina is no stranger to this, with multiple industries having left in recent decades.

Its obvious North Carolina’s elected officials are willing to spend millions of taxpayer dollars on corporate welfare to out-of-state companies for the sake of jobs. So why not pass HB 500 and allow for market-driven manufacturing job growth? These jobs won’t cost taxpayers a dime.

 

First published at the Civitas Institute

Drinks Reform With Moonshine

Kevin Kosar, senior fellow of the R Street Institute joins the show to discuss his new book “Moonshine: A Global History” and Drinksreform.org.

Whether it is beer, spirits, wine……or perhaps fermented Mares Milk alcohol has always been a part of a culture even when regimes try to restrict its consumption. Kevin’s book “Moonshine” discusses the history of DIY distilling as a history of criminality and the human ingenuity that has prevailed out of officials’ sights: from cleverly designed stills to the secret smuggling operations that got the goods to market.

Not to mention we dive into Drinksreform.org and uncover the movements each state is undertaking to reform their antiquated and outdated liquor laws. Whether its abv limits, forced distribution, licensing issues, etc there is bound to be a battle brewing in your state!

Drinksreform.org is the perfect site to stay up to date and figure out where your state stands and what still can be done!

Check out Kevin, R street and Drinks Reform on Twitter!
@KevinRKosar
@RSI
@drinksreform

 

Are Navient Loans Really the Problem?

On face value, in an article from Bloomberg it looks like Navient is the latest Scape goat of the massive nightmare that is the government-subsidized student loan program. I’m not sure how entangled Navient is, and I am not condoning them, but the article is surprising on its conclusions.

  1. It accepts these student loans were beneficial to the consumer, but then it accepts 1/4 are struggling to repay their loans.

At least 1 in 4 of these loans were not beneficial to the student based on the value derived. Don’t confuse me with blaming the student and parents for a chance at a degree. As a culture, the perceived value is far out of scope with the actual value of a degree. If one goes into debt for a better more independent life, but gets the opposite….the investment was not worth it. Blaming the student or parents would be a misguided approach when there is a massive government promoting/subsidizing a degree’s worth alongside companies benefiting from government mandates.

In an actual free market, both lender and the borrower have incentives to ensure the loan is made for the right reasons and amount. A lender won’t lend if they know they will not be re-paid, and the borrower is evaluating how much is the reason worth justifying the loan. The interest rate is to ascertain the amount of risk a lender is willing to take, and if agreed upon, what the borrower is as well. Together, both parties are incentivized to make the optimal decision, to be better off after the loan is repaid.

  1. It blames a former branch of Sallie Mae as not doing its “job” to help former students pay their debt.

What incentives does a company like Navient actually have to help when it is illegal to walk away from student loans? This alone eliminates any downward pressure on price to ensure loans are of a repayable amount. Additionally, any incentive for a company to work with you to ensure payment is lost. By law the borrower has no escape from an ill-advised decision early in their lives.

Many of these student loans on a free market were bad decisions by any company issuing loans, but this isn’t a free market. Ensuring a loan company by law will receive payment eventually incentivizes more ill-advised loans, and less chance of assistance to pay back.

On this one example in a truly voluntary market, the company issuing loans with a fear of bankruptcy will, A) Not issue the loan to begin with if there is no evidence of possible repayment, B) Should a loan be issued and the student is having difficulty, the company would rather see partial or longer repayment options rather than receive pennies from a bankrupt 22 year old that has no assets to their name.

This article shows me there are huge issues way before Navient showed up. The value of a degree is not what our culture or government promote it to be. Based on the debt and money needed for a degree some are arguably worthless. Not all degrees are equal in value.

Problems with Navient will keep happening but with either different companies, or different people unless the root problem is solved.

The solution is not finding more scapegoats, its allowing education to adjust to its actual value, not subsidized and made more expensive by intervention.