I’ve been on the road since last Saturday, and found little time to write blog posts or keep up with my normal reading. I’ll be back in a few days and will resume posting ASAP.

Claire Wolfe, who made the effort to contact the National Christmas Tree Association regarding their ham-handed attempts to impose a new tax on live Christmas trees, published a response from Betty Malone, a wholesale producer of live Christmas trees.

Interested readers may want to begin by reading the full text of Ms. Malone’s response.

As I discussed in my earlier post on this subject, the financial impact is much greater than the $0.15 per tree, and fall disproportionately on the smallest producers. Even those producers who are theoretically exempt from the tax are punished by its existence and the associated expenses, time, and risks involved.

Let me state at the outset that I don’t believe Ms. Malone is some evil villain. I suspect she is a perfectly nice-seeming lady who actually believes much of what she says. But I’m quite certain that a great deal of what she says is factually incorrect. I’m convinced by her own words that Ms. Malone is one of those people who thinks that if she calls a thing by a different name, it changes the thing and the morality of her actions regarding that thing.

That’s not true. A thorn is a thorn, and calling it a flower doesn’t change anything that happens when you get one in your foot. A tax is a tax, and calling it a “check-off” when there is no checking off and no choice in the matter is a damned lie. It’s a pleasant way to tell the lie, but it is still a lie.

I’m tough on Ms. Malone. Some might think I’m too harsh. But the truth of the matter is that I’ve had my fill of the Ms. Malones of the world. I’m sick of industry groups conspiring to deprive me of light bulbs, of congresscritters forcing toilets that don’t flush properly, of do-gooders in general putting their hands in my pocket with the help and encouragement of a vile, overweening, completely out-of-control government. I’m taxed and regulated to death, and my patience for apologists of still more of the same isn’t worn thin, it is worn out.

So while I’ll acknowledge that Ms. Malone may not realize she is repeating lies, I hold her responsible for what she wrote. In the section below, I respond to the many comfortable lies, half-truths, bald assertions, and other risible contents of her missive:

We are primarily wholesalers, but have been retailers and now also have a small choose and cut operation.

Let’s put Ms. Malone’s operation into perspective. According to her website, they have 70 acres of Christmas trees growing in Oregon, the #1 state for Christmas tree farming in the nation. Their farm is seven times the size of the average Oregon Christmas tree farm, as reported by the Oregon State University Extension Service in 2009. At typical planting densities of 1,500 trees per acre, her farm can tend over 100,000 trees. They can probably harvest roughly 10,000 trees in a good year. Most of the trees are probably shipped out of state. They’re a big outfit compared to most and won’t notice the overhead associated with the new tax.

A check-off is a program where commodity groups can help themselves to better their industry.

A soft, comfortable lie, the first of many. A check-off is a government-initiated violent intervention in the marketplace wherein a few larger, well-connected players can coerce smaller firms into paying for services they neither need nor desire. They aren’t “helping themselves,” they are helping themselves to other people’s money in other people’s wallets.

But by working together, the industries such as cotton, could pool their resources and speak with one voice.

By employing government coercion and theft to steal funds from smaller producers, various industries were able to stifle discussion and dissent and enforce the desires of a tiny minority of politically-connected producers. Those producers tend to use the loot to fund lavish national advertising campaigns that they were unwilling to pay for with their own money.

The assessment that is made is self-imposed funding by the industry itself to help itself.

Another comfortable lie. There are over 13,000 Christmas tree operations listed in the latest USDA census. Only about 500 commented on the proposed tax. Many comments were negative. There is no evidence to suggest that this tax was self-imposed. The evidence points to the opposite conclusion: the tax was conceived by a tiny minority of larger producers and politically connected operators and imposed by force on an overwhelming majority of smaller producers.

The monies are collected, the program designed and run by an industry board.

This is a deliberate lie and one that cannot be forgiven even when mouthed by a smiling lady. The statement implies that the monies are collected by an industry board. That is utterly false, and there is no way Malone can think otherwise. The monies are collected as part of tax filings, under the penalties and pains of persecution. All of the tools of government: the club, the cage, the gun, the noose, the midnight raid, the torture devices, the flashbang, the wage garnishment, the bank account freeze, all of them are employed to collect these monies. No industry board members do these dirty deeds of course; they just sit back and wait for the loot to appear in their bank account.

Taxes are monies collected by the government for use by the government. Monies collected by check-offs go directly to the check-off to be used for research and promotion for that industry alone.

This is another comfortable lie. Ms. Malone creates a new definition of taxation in order to evade responsibility for her very personal role in stealing money from unwilling competitors. She cites no source for this self-serving definition.

The Wikipedia entry for tax quotes from Black’s Law Dictionary:

A tax may be defined as a “pecuniary burden laid upon individuals or property owners to support the government [...] a payment exacted by legislative authority.” A tax “is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority” and is “any contribution imposed by government [...] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name.

(bold emphasis added)

“Other name” includes “check-off.”

Monies collected most emphatically do not “go directly to the check-off.” First they are collected by the various taxing authorities. Then they are deposited in accounts held by the US Treasury. Then certain fees for government “services” in handling the loot are imposed. There are checks and audits and bookkeeping along the way. Finally a check is sent to the gang of thieves who got themselves appointed to the “industry board.”

There is nothing direct about it. Ms. Malone and her ilk have neither the courage nor the means to directly enact theft and coercion on the scale of government.

We petitioned the USDA as is our right under the First Amendment to the Constitution.

She did no such thing. As her later testimony demonstrates, she took advantage of an existing law passed years ago. She and a small cabal of morally challenged people spent years studying how well this law had been used to mulct other small producers in other industries. They decided they wanted in on the act. They wanted other people to fund their advertising budgets, and this law looked like the perfect way to screw the rubes.

We asked them to allow us to create a program that they would then provide the oversight, that the industry pays for.

They asked nothing. They followed the example and procedures established by the earlier bands of thieves who had taken advantage of this opportunity to steal.

It is revenue neutral to the government.

I don’t believe you. Prove it. Provide evidence that the government is even capable of tracking the costs associated with collecting your advertising funds via taxation. Prove that they can fully account for the costs of persecuting those who don’t file the right forms, or who make trivial mistakes. Prove that all of the administrators, secretaries, liaisons, accountants, regulators, overseers, auditors, PR specialists, tax collectors, enforcers, investigators, magistrates, bailiffs, deputies, advocates, lawyers, and other parasites charge the full costs of their efforts.

You can’t. I’m willing to bet that you have never even tried. You are merely parroting what some self-interested government bureaucrat told you. If you have any factual evidence showing that I’m wrong about this, please provide it.

The government doesn’t get any of the money, but the industry has to pay for the oversight.

Another outrageous lie, far beyond simple mealy-mouthed dissembling. The government gets ALL the money. Then they give some of it to the small gang of thieves Ms. Malone calls “the industry.” “Pay for the oversight” is how the thieves describe the process of divvying up the loot amongst themselves.

It is a serious thing we were asking.

Theft with coercion is a serious thing indeed. It is a crime and a sin.

The check-off boards must set goals to be met by the program. Every 5 or so years an econometric study must be done that tells whether or not those goals are met. If those goals are not met, the program folds.

Translation: We get others to steal the money for us, we make up some nonsense about what we plan to do with our share of the loot, we set low-ball, nebulous goals that anyone could meet, then every 5 years (or 6, or 7, or 8 if we don’t get around to it) we pay still more stolen money to an “economist” who knows that if they don’t sign off, their gravy train will end.

The USDA makes sure that money is used for what it is supposed to be used for.

“Supposed to be used for” according to whom? The enormous majority of small producers who are the unwilling victims of this theft had plans for their money before Ms. Malone and her co-conspirators decided to steal it. The USDA can at best only try to ensure that the thieves use the loot as they promised. Given how well government is run in every single other instance, taking this statement at face value requires incredible naiveté.

A group of us growers and importers started 3.5 years ago in April of 2008 to study other commodities that have tried these programs. We focused on commodities that were similar in size: blueberries, mangoes, watermelons, sorghum and several others. We conducted facilitated sessions in the four top growing areas of the country. By now there have been at least 100 meetings across the country at state and national Christmas tree meetings discussing the check-off.

The four top growing areas (according to the 2007 figures on tree tax central’s website) are Oregon, Michigan, North Carolina, and Pennsylvania. They represent about half of total Christmas tree acreage. What about the other half? How many of the 13,000+ operations participated in these meetings? What does “facilitated meeting” mean?

In my experience, a facilitated meeting is a carefully scripted bit of theater designed to convince the gullible that a democratic process is being followed. In reality the outcome is pre-determined and the purpose of the facilitator is to stifle dissent and marginalize opposing points of view.

Prove me wrong. Submit the schedule and minutes of these meetings and the roster of attendees. Demonstrate that a majority of the 13,000 producers support this tax. Explain why the concerns of those who don’t want to participate are irrelevant, and why it is just for you to take their money for purposes of which they do not approve.

You asked how we can guarantee that the assessment would not be passed on to the consumer. We can’t guarantee that. Each grower will make that decision.

How gracious of Malone to allow other growers this freedom. If growers are allowed to make that decision, why can’t you allow them to make the decision to contribute or not?

ANSWER THE QUESTION. Why did you feel it necessary to resort to coercion and violence to achieve your goals? Why have you not answered Claire’s initial question?

If this is really something the farmers themselves want, then why don’t they just band together and do it? Why involve the government?

Malone has not addressed Claire’s questions, at least not to my satisfaction. She offers a glimpse of the real answer: they tried, and they didn’t like how it worked. Malone continues:

Farmers know dirt. We know how to grow things. But in this changing world is it not enough to grow a great product. We have to let people know about our product. That takes time, coordination and money.

This is nothing new. It has always been so, and not just for farmers. It’s never sufficient simply to produce. All businesses have to promote their products. Until the National Christmas Tree Association conspired to steal from thousands of small producers, those decisions were left to each farmer. No longer.

Nothing prevents farmers from pooling their resources without the USDA.

So why not do it? As you explain below, it’s too much work, and you don’t like the results.

In the last 20 years there have two very strong voluntary programs initiated by the industry that raised nearly a million dollars each. We have found, as every industry we studied found, that voluntary programs have a life of about 3 years. The volunteers running the program and paying into the program burn out. Everyone in the industry benefits, but only a few carry the burden. These two programs had great impact on our industry’s ability to promote our product.

She invokes the free rider fallacy (some people benefit who did not pay) which I’ve recently de-constructed.

So rather than learn from past experiences and develop new, better programs, you elected to go the easy route: theft and coercion.

We know promotion and research work.

All of the facts in evidence suggests otherwise. Neither Claire nor I had heard of the National Christmas Tree Association until this week. Now I will never forget them. I will make sure than not one thin dime of my money ever goes to any grower connected in any way with this corrupt gang of unrepentant thieves. Thieves so clueless about promotion that they rushed a new tax into being during the worst recession in at least 60 years. People so arrogant that they think they can spout a bunch of bilge about taxes not being taxes and expect people to believe it. People so completely stupid that they can actually give Christmas Trees a bad name.

We have to do it as an industry to survive.

That’s your personal opinion, unsupported by any evidence. I think your theft and your self-serving justification for it will harm your industry. It already has.

A check-off is fair,

a lie; a check-off is pure theft, nothing is fair about stealing.

equitable

a damned lie; see my blog post about the gross disparity of costs for smaller producers.

and can supply sustainable monies.

I just threw up in my mouth. Malone thinks stealing is sustainable. She thinks government is forever. She figures that once that the gravy train is rolling, it will never stop.

“Sustainable” in this context means that Ms. Malone can count on other people to do the dirty work of collecting the loot; there is no longer any need to convince Christmas tree growers that the money will be spent wisely and will benefit their operation. The prior attempts at voluntary transactions failed because most small growers quite correctly understood that national advertising campaigns were unlikely to benefit small operations confined to local sales. “Sustainable” means that these people are silenced and their wallets rifled to benefit larger operators.

;

The blogosphere has exploded over the Christmas Tree Tax, and the ham-handed, tone-deaf, blithely disconnected feds living in la-la land were forced to postpone the new tax (until such time as it can be discretely re-imposed) after only one day. Claire Wolfe has a good summary and thoughts.

As Bastiat taught, economics requires examination of “What is Seen and What is Not Seen.” Most commentators have focused on the $0.15 per tree tax, and assumed that it would result in the average price of a tree going up by $0.15. Since many people pay $35 or more for their trees, it doesn’t seem like a big deal.

But most people aren’t small business owners, and don’t appreciate how these taxes actually work.

The program is supposed to apply only to growers producing over 500 trees annually. But most similar programs require ALL potentially affected businesses to either pay the tax or file for an exemption. In essence you have to prove, every year, that you are small enough to avoid the tax.

As one of the public comments on the proposed tax pointed out, the rule creates an incentive for him to produce 450 trees rather than 500 or 600. So the tax will reduce the total supply of trees, causing the price to rise, almost certainly much more than $0.15.

But that former 600-tree, now 450-tree grower still has to file his forms. Let’s say he spends 4 hours a year getting the forms, checking for any changes in the rules (they always change), filling out the forms, gathering receipts to document the facts of their operation, and filing the forms. Come to think of it, 4 hours is probably optimistic, but let’s stay with it.

The federal office of management and budget (OMB) anticipated 3263 respondents, there were actually 572 public comments. The important point for our analysis is that the OMB used a figure of $33 per hour as the labor cost of various occupations involved in keeping this information.

So our now-diminished small grower will spend 4 x $33 = $132 each year proving that he doesn’t have to pay a tax of 450 x $0.15 = $67.50. You might think it cheaper for him to just pay the tax, but then he’s still out the $132, and he can’t pay the tax on less then 500 trees, and he’d be very foolish indeed to falsify his tax forms, claiming he sold 500 trees when he only sold 450!

So the cost per tree for a small grower not paying the tax is $132/450 = $0.29 per tree, not $0.15 per tree. The small grower’s cost per tree increased nearly twice as much as a large growers, which is exactly what the people behind the new tax wanted.

This analysis ignores the fact that the small grower now has 4 hours less per year to spend tending their trees, and at least $132 less money (since they couldn’t earn anything while filling out the forms) to spend on fertilizers, pruning, investments that could produce better, more valuable trees, etc.

In truth we have no idea how much the cost of Christmas trees will increase because of the new tax, but we know this much:
- The tax will reduce the supply of Christmas trees, which will increase their cost.
- The burden of the tax is very much greater on small producers.
- The tax will shift resources away from the production of trees and into non-productive record keeping and compliance activities.
- The tax will reduce capital available for investments to produce more or better trees.

Whatever the final tally, it’s a LOT more than $0.15.

The Grinches behind this tax, the National Christmas Tree Association, publish annual surveys of the Christmas tree market on their website. According to the linked 2007 survey from the USDA, there were 13,374 Christmas tree operations in 2007, down from 14,477 in 2002.

There was a public comment period on the Christmas Tree tax. 572 comments were entered. Many were not from growers, but from insurance companies, university Ag departments, and others. A vanishingly small fraction of actual growers commented on the tax. Many probably didn’t even know about it; most were probably busy growing Christmas trees and not reading the Federal Register every morning.

Read the comments yourself. The ones below I cherry-picked from the first 20100. Two patterns are already apparent: The early comments (I’m reviewing them in the order in which they were submitted) had a much larger fraction of negative views. Growers producing 10,000 trees a year or more are almost invariably in favor.

Those growers form an increasing fraction of the comments as time goes by. This pattern suggests (but does not prove) an orchestrated campaign to get larger growers to submit comments. I’m not suggesting anything sinister; rather that the various Christmas tree associations exhorted their members to comment. Larger growers are more likely to be members and read the newsletters of such associations.

The National Christmas Tree Association claims that “More than 70% of the growers posting comments, and nearly 90% of the state and multi-state associations that posted comments indicated that they were in favor of the program.” So more than 25% of the growers posting comments opposed the tax, while nearly all bureaucracies support it. Only about 4% of growers commented at all.

I invite interested readers to peruse the 450 comments that I did not, and post choice ones in the comments to this blog post. Merry Christmas!

This is the most ridiculous thing I have ever heard of.

I think the proposed idea of assessing trees is a very bad idea…christmas tree farmers who do this for a living are being taxed while the majority are under the 500 trees are not..plus we do not have the say over where our advertising dollars are spent..believe me it is much more efficient for the farmers to spend there own money advertising….business will always take care of getting the word out on there own… we do not need more government controls or regulations in the christmas tree industry…i’m sick of the few people in control of our christmas tree associations around the country who by far are retired and doing there farming on a small scale having the time to think up ways to penalize those of us doing this for a living….if they spent more time working with there trees and doing a better job ..this is what will help the industry more…

I disagree with the mandatory assessement. I bleieve it should be volunatary. The large growers seem to have the large pull and can monopolize the market due to the number they provide.

The idea of a check off is GREAT, BUT…. 15 cents is absolutely absurd. Right now several companies are only offering growers $7.25 on a Noble that took them 6 years to grow, and you think they can afford another 15 cents off that. You obviously do not grow trees for an attempt at a living. We also market cattle and pay $1 checkoff, but that is for an animal that usually brings a minimum of $500 or .002% of the price we get. The math does not work. Also, PLEASE make a reasonable fee, but charge EVERYONE that buys a seedling the fee. We do business with so many people that do not pay dues or support Christmas tree research etc.,in any way shape or form. Go after everyone, not just the ones that are supporting the industry already. You will force many to lie and cheat. We made no money last 2 years, and could not afford what you are suggesting. Spread the burden on all who could potentially benefit. Thank you

1) The requirement for small operations to apply annually for an exemption to the assessment is onerous. Exemption should be the default condition for producers of less than 500 Christmas trees. 2. This is essentially a tax imposed by those having trouble marketing their trees. I have no problem selling out every year; and this promotion could actually hurt my operation, not only due to the assessment; but, if it is very succerssful, I will have a problem maintaining my inventory. I’ve experienced that situation in the past, resulting in insufficient supply in the years following excessive advertizing.

DEAR SIRS: WE HERE IN T EXAS DO NOT WANT THE CHECK OFF PROGRAM FOR OUR clHRISTMAS TREE INDUSTRY. WE ARE NOT WHOLESALE BUSINESSES. AS ARE GROWERS IN THE NORTH. WE ARE SMALL FARMERS WHO SELL DIRECTLY TO OUR COUSTOMERS WHO COME TO OUR FARM, HAVE A HAY RIDE AND CUT THEIR OWN TREE THE ONLY ONES WHO WILL PROFIT FROM THE CHECK OFF PROGRAM ARE THE LARGE WHOLE SALE FARMS IN THE NORTH. WE DO NOT NEED ANOTHER ROBIN HOOD PROGRAM FORCED ON US BY THE GOVERNMENT OR A NEW TAX UNDER THE NAME OF CHEACK OFF, iT WOULD BE AN UNFAIR BURDEN ON US. SINCERELY. MARILYN LOVE WALLS OWNER: WALLS FAMILY FARM

You will make up my mind for me to only sell 450 trees per year. Let the big farms get this great deal. Why would any of you want to let a government entity get involved in your farms. These things start out alright then they raise the fee then they tell you how much you can charge and so on and so on. Does it sound a little like a union trying to make it even for everyone? I opt out.

Tree prices have dropped 25-50% in the last 3 years. Over production spurred by easy money and imigrant labor has put the small farmer out of another product, or making it tough to hang on. I say put 1.00 per tree on the growers that sell in excess of 10,000. These are the growers that are hurting prices the most, and will benifit the most. Tax the large growers who are handling 10 – 100,000 trees a year, they have the money to pay the ascessment and this will help keep prices competive enough to support the smaller growers. This is a much more fair way to save the industry, especially for the small growers. trees are being sold very near the cost to product them in some areas at this time. It’s hard to sweat all summer working a tree patch while your friends are at the lake and not break even! leave the small farmer alone, cost are killing us slowly as it is.

Dont do it! 1. Christmas Tree growing is far too diverse to call it a commodity. (so much so you cannot adequately insure them) A long term investment driven by peope with different Business plans. (or no plan) Due to climatic differences some can produce a tree in 5 years while some need 10 to 12. Some are wholesale only while others offer choose and cut and mail order. Some farms are close to market while others shudder every time gas prices go up because of shipping costs. And so on. 2. This plan appears well written but not really industry driven. My quess is the plan came out from behind closed doors of the major growers that the NCTA is known for. 3. Dwindling memberships in associations may well have to do with the independents that just dont want intervention in their business. The Vermont Christmas Tree Association is not even recognized nationaly. We sent TIP money a few years ago and were reminded of that fact.(no more tip from us) I firmly believe in marketing and research. I have no problem with diversity between growers and different business plans. But my suggestion is put this out for a vote by all growers and avoid a calamity. Let the Industry come up with a better plan Fred Salo

All we need in this mom and pop industry is more regulation and red tape. Our farm is open only three weekends out of the year, and I feel that we are being treated as year round, three hundred and sixty five days a year commercial business. Fertilizer prices have gone up 300% in the last three years and many other items have gone up as well. As a result of more regulation and more taxes we have listed our farm for sale and we didn’t bother to open this year. How many governmental agencies risk their health trimming trees in one hundred degree plus weather, plant seedlings in freezing cold rain and howling winds. Bamboo trees during 40 to 50 mph winds. I see no rational reason that I should be supportive of a group that tries to figure out the future for us small farmers. Speaking for ourselves and our farm we were doing just fine without more beauracuracy and taxation. We already had more business that we could handle, so don’t give me a reason as to increase marketing. This is just another regulated tax brought down on us by the federal government. I don’t support it and we don’t need someone to tell me how to run our business. We’ve been successful at this for the last fifteen years. So what’s next? A supervisory group watching over your group that we have to support as well!!!

Our farm does NOT support this proposal and we sell enough trees. I am concerned over the idea of government ran marketing program. I would prefer to do my own advertisement in a manor I see appropriate for my farm. The two main issues I have are marketing and export funding to foreign markets. The wording of the document includes promotion and expansion into foreign and domestic markets. I do not want my money being spent on trying to market trees in a foreign market. I have a choose and cut farm and do not wholesale or export trees to other countries. I also have a problem with is how the marketing will be handled. We are not talking big money here for advertisement. If the market continues with the same number of trees harvested there will be about three million dollars collected minus government fee, management fees and small farm that opt out. That is not a lot of money for advertisement on a national level. The money is also going to support development and research. I am also concerned how ads will be presented. I fear that someone could market the CHRISTmas tree as a Holiday tree just because they think it will sell a few more trees. The whole idea of a “Beef, it what’s for dinner” campaign sound great. Have your ever noticed that after you see or hear the Beef Councils commercial it is followed by a major chain stores hook to get you to come the there store. Most farms do not have the advertizing budget to follow the national add but the big box stores do. I am concerned this could affect the Christmas tree business in a negative way by farms closing or undersell just to avoid paying. I think the best way to gain market share is to improve our selling venues. In our area every chain store carries pre-cut trees displayed on hot asphalt in the direct sunlight with out water. I think a good product sells it self and a bad product will go away. What ever happens I will continue sell trees and taking care of my customers the best I know how.

As a small wholesale christmas tree grower I am not in favor of establishing this order. The best way to promote real trees is with local farmers and retailers addressing the needs of their local consumer market. Farm tours with school children, local fairs, public relations in local papers are an effective way to promote local farm products. The primary reasons I object to this order are: 1. A board of 12 member cannot adequately represent over 12000 christmas tree farms/growers. 2. Markets vary widly across the country in effective marketing tactics 3. I make the investment and take the risk in planting, growing, and selling christmas trees. No one has the right to take $0.15 to $.20 of every tree I sell. 4. Additional burden of reporting and administration. Do not enact this order as it does not benefit the majority of christmass tree producers.

We have a small farm in Texas and have sold out of trees in 10 days, we don’t want, nor do we need any Governmental help selling our trees! We don’t want the Government in our Business, it will only lead to the failure of our product and run up cost. This is a tax any way you look at it! I have seen what happens with say the NAP insurance, they send people out to count dead trees, I have no idea what this cost the taxpayers, I am very sure these employees don’t count dead trees for free. This Christmas Tree Promotion will lead to the Government Employees winding up at farms to count tree stumps to ensure that each and every tree is accounted for so that the tax is paid. You are not going to help promote our business with the amount of money that would be collected unless you up the amount of tax. You couldn’t buy even a few TV ads with the money that you would collect. It has never been made clear to me what sort of research is being planned, is it marketing research? or is it research on better quality trees? Hummm… thanks but no thanks. You people better just stick to the beef, pork and poultry industries, I think we are having a bunch of horse hockey shoved down our throats. This smells to me like the recently passed healthcare bill that was passed without it being read, hummm….again, thanks but no thanks.

I just got the notice about the comment for the check off. The people, who came up with this idea are just like the politicians’ we have in office at the present. They think everybody should be force to pay for their ideas. If this is such a great idea why don’t they fund it theirself. This is a tax! The NCTA tried this and it was a total flop. This will probably be run by the same bunch of inepts. Why exempt farms selling 500 or less let everybody get on the wagon. If this idea is so great! This is for the big wholesale growers. They are the reason for the lagging sales. They sell poor quality trees! They sell to big box stores, who do not take care of the trees. This has hurt the sale of real trees more than anything else. I’m a small grower and work very hard for my money! I don’t need a big goverment agency telling me how to increase sales. The choose & cut grower do not need this, we are growing sales. Let the big wholesales growers fund their own advertising! Paul Beavers

I am dead set against any assessment based on the number of trees I sell. It is no ones business (except the IRS) how many trees I produce. No assessment!!!!!!!

My family operates a very small scale “hobby” Christmas tree farming operation typically harvesting approximately 200 to 250 trees per year for market within our local area. The majority of our customers are friends and neighbors and others who have learned of us through word of mouth. It is not our desire to grow our operation significantly beyond its current level. Given these facts, we expect to derive little or no benefit from promotions subsidized by this $.15/tree assessment. Yet the current proposal requires us to take additional extraordinary efforts of specifically applying every year in order to get this small exemption. The benefit of this $30 to $37.50 or so sum from our farm to national promotions is apt to be relatively small. The burden on our small operation, in time as well as monetarily, would be proportionally unfairly large. Please consider removing the requirements that we must actively opt out in such a manner.

If the proposal is to expand the purchase of live Christmas trees then I would support the research. My guess is that the research will be about this piece to a minor degree and will quickly turn into the promotion of growing more trees. Supply and demand is taking care of how many trees to grow right now.So if this is the game plan, I do not agree with the proposal.

Please turn down this rule!!! NYS passed their support without the feedback by their membership. The board alone decided to support it Conversely, The Western New York group voted unanimously in Jan 2010 to reject the rule. Growers do not want to deal with the hassels involved with compliance. Our businesses are good, we don’t need it, we don’t want it. Please do not pass this rule, the vast majority of growers will not want it, particularly after they learn everyone, even those with low volume, will need to file papre work. We don’t need an additional Tax!!!

I am opposed to the proposed Christmas tree checkoff. I believe we already have too many government dictates and regulations. If this were a voluntary program, I might be interested in contributing to the cause, but I am very much against this mandatory checkoff. I also disagree with the 500 tree cutoff for the contribution requirement. If any tree grower must contribute, then everyone should. I don’t believe anyone will benefit, as I believe the money will be lost in bureaucracy, but everyone might as well share the cost.

This proposed regulation is nothing more than a new tax that will only benefit large producers of Christmas trees. I am a small grower of Christmas trees on a family farm and will not see any meaningful impact from this program. My customer base is local families and a national promotional program will not increase my customer base or visibility within the community. The general public is well aware of the availability of fresh Christmas trees and those wishing to obtain one know where to obtain them or search the internet for appropriate locations. The 500 tree limit is very restrictive and will unfairly capture many small growers like me who will not benefit from national advertising or education campaigns. Like any other tax, once this regulation is implemented it will be in place in perpetuity and will simply increase the already ridiculous bureaucratic burden placed on small businesses .

Having been in the Christmas Tree industry for over 25 years, suggesting we allow the goverment to be in charge or have anything to do with our advertising is a very unwise position to put the industry in. When in history has the goverment been able to do anything better than small businees? Anytime we let the goverment do for us, we lose the right to do for ourselves. The goverment involvement will only make sure we don’t have a balanced input from growers, only a few growers that think we need to spread the wealth and allow control to be out of our hands. To make this a law and mandate a .15 TAX per tree, is not the way this should happen.

The debate of whether or not the Texas Christmas Tree Would receive any benefit from the checkoff program, besides having a couple of our members getting to go to Washington and hobnobbing with the powers that be, is ZEOR. EVery TEXAS C.C. GROWER HAS A SMALL FAMILY FARM OR ONLY A FEW ACRES IN TREES. WE MANAGE OUR OWN FARMS AND SELL TO LOCAL PEOPLE WHO COME TO OUR FARMS. WE DO NOT SEND TREES CROSS THE COUNTRY. WE CAN’T GROW THAT QUALITY OF TREE BECAUSE OF THE EXTREME HEAT AND LACK OF LONG WINTER WEATHER. THE GROWERS HERE WOULD ONLY BE TAXED THROUGH THE CHECKOFF PROGRAM TO ASSIST LARGE COMMERCIAL GROWERS IN THE NORTHERN STATES S

I do not support the proposed check-off on Christmas trees. We have been growing and marketing Christmas trees in the Houston area since 1983 in both a retail lot for nine years and currently only at our choose and cut farm. We will be paying the check off tax. Wholesale and choose and cut Christmas trees are two different markets. It is like having one check-off and trying to cover both apple and orange growers. At our farm and many other choose and cut farms, we do not sell Christmas trees. We sell the family experience with a family leaving with a healthy, green, long lasting Christmas tree. We live off of repeat business and routinely survey our customers. As we found over 27 years, cost effective advertising must be targeted, local, flexible and consequently best done by the farm. What worked in previous years, may no longer work today. For us it is not a matter of $0.15 per tree but whether the advertising will work. I hate wasting my advertising money. . In contrast for wholesale farms, it appears to be either no advertising, generic advertising or passing the advertising dollar onto the selling party. Based on comments here, it appears for many their advertising does not work. It is unrealistic to think that generic check-off advertising will change this. If a Christmas tree grower does not see these check-off dollars showing up as additional sales and higher prices, they will assume either it did not work or worse yet it benefitted someone else. This has the potential for placing small growers against larger growers, choose and cut farms against wholesale farms and all against non-paying organic farms Currently, many choose and cut farms in the south are outlets for the wholesaler’s Christmas trees. We have had enough for/against tension already with this check-off. We do not need more with a check-off and a vote in three years..

i beleve that the check off program is a bad idea my thoughts are as follows acording to the dept of ag. there are approxmatly 12000 to 14000 christmas tree growers in the us only about 1000 belong to the national christmas tree association who are trying to pass this tax also you are asking a certain few to carry the load for the rest if you are going to institute a tax it should be on all those who grow not a slect few how will this be policed and everybody pay there share? i feel as though we are puting the decision in a a very small minority of people which will affect alot of people plus ther is no way to police the numbers

I am a very small Choose and Cut grower. I don’t sell trees – I sell experiences, nothing that this EO covers. I am too small to be affected but I am opoessed to it because of it’s far reaching affects. If the large wholesale growers want it – Fine; but they can pay for it without reaching into the small grower’s pockets. I am a pecan grower and a cattle grower also and am required to participate in those programs too. I don’t like them either. I feel that marketing for my products is my responsibility and I chose to rely on my efforts. Robert Childress Retired USDA employee

government involvement will not benefit the tree industry. we are mostly small growers who will over time become more internet literate and access a wider market. we may also attract a larger audience to come to us.

The report sites “inceased competion and changing comsumer habits” for declining sales in the christmas tree indusrty. If passed, I do not think increased promotion at the national or state level will impact tree sales. Results for our farm have come from local promotion, community involvement, and word of mouth (I heard about your farm from a freind, relative,co-worker). Impacting consumer habits will take more than research or information. The resurgence back to the real-tree experience comes from the heart more than the wallet. Family time for this decade is competing against technology and the internet. Each farm or retailer needs to make tree experience: fun, rewarding, and memorable. Can a promotion program convey this type of message?? Each supplier needs to provide a quality product. Research dollars will only help if you implement the research results at your farm. I do not think the check-off program will help Choose and Cut Farms. It’s up to the farm owners to provide an enjoyable experience, a good product and a desire to return to that farm for years to come.

I first saw this post over 2 years ago. It was a good read then, and returning to it today was a good reminder.

When it finally does happen, it could happen very quickly.

The day the dollar died.

“John Galt” has expanded the series considerably over the past 24 months; I’ll report back after I’ve had a chance to read some more.

With only a mobile phone and a promise of money from his uncle, David Obi did something the Nigerian government has been trying to do for decades: He figured out how to bring electricity to the masses in Africa’s most populous country.

It wasn’t a matter of technology. David is not an inventor or an engineer, and his insights into his country’s electrical problems had nothing to do with fancy photovoltaics or turbines to harness the harmattan or any other alternative sources of energy. Instead, 7,000 miles from home, using a language he could hardly speak, he did what traders have always done: made a deal. He contracted with a Chinese firm near Guangzhou to produce small diesel-powered generators under his uncle’s brand name, Aakoo, and shipped them home to Nigeria, where power is often scarce. David’s deal, struck four years ago, was not massive — but it made a solid profit and put him on a strong footing for success as a transnational merchant. Like almost all the transactions between Nigerian traders and Chinese manufacturers, it was also sub rosa: under the radar, outside of the view or control of government, part of the unheralded alternative economic universe of System D.

So begins The Shadow Superpower, an article by Robert Neuwirth published in Foreign Policy magazine.

I had heard of system D, but I haven’t (yet) read Robert Neuwirth’s book Shadow Cities: A Billion Squatters, A New Urban World. System D is the un-official economy. It includes squatter cities, black market merchants, gypsy cabs, anything and everything that defies the omnipresent state to give some of the poorest people in the world access to things they want and need: food, housing, entertainment, medical care, transportation, communication, energy, and more.

System D is not small, and it is growing rapidly. Read the FP exceprt, check out the accompanying slideshow, visit his blog, and definitely watch Neuwirth’s TED talk.

The numbers are eye-popping. Well over a billion people 2005, perhaps as many as 1.8 billion workers in system D today. These people don’t fill out census forms, exact figures are impossible. But 1.8 billion is roughly half of all employed people on the planet. By 2030, the total is expected to rise to 3 billion.

The financial side is even more amazing. The FP article cites the work of Friedrich Schneider, chair of the economics department at Johannes Kepler University in Linz, Austria, who has made a career of estimating the size of system D. He attempts to screen out truly criminal activity, concentrating on off-the-books, unregulated commerce.

The estimate: $10 trillion. Neuwirth compares that to the US GDP of $14 trillion, the largest on the planet, and concludes that

If System D were an independent nation, united in a single political structure — call it the United Street Sellers Republic (USSR) or, perhaps, Bazaaristan — it would be an economic superpower, the second-largest economy in the world (the United States, with a GDP of $14 trillion, is numero uno). The gap is narrowing, though, and if the United States doesn’t snap out of its current funk, the USSR/Bazaaristan could conceivably catch it sometime this century.

Here I’ll take gentle exception to Neuwirth’s analysis. It is always important to compare like to like. The US GDP figure is, in the words of John Williams at Shadowstats.com, “the most-heavily-biased, the most-heavily-guessed-at, the most-heavily politicized and the most-worthless major indicator of domestic business activity.” Unlike the good professor Schneider, who almost certainly strives to produces the most accurate System D numbers he can, the US GDP is a tool of misinformation and manipulation.

But there is an even more fundamental problem. The System D economic activity by definition excludes the taxing and spending of governments. The US GDP counts government spending on $500 hammers as equal to a private entrepreneur spending $500 on a generator to provide (illegal, unregulated) electricity to people who would otherwise have none.

I went to GovernmentSpending.com to get total US government spending. The 2011 estimates:
Federal: $3.6 trillion
State: $1.336 trillion
Local: $1.625 trillion

That’s a total of $6.56 trillion. The US GDP, not including government spending, is $7.44 trillion, about 3/4 of the size of the economy of Bazaaristan. The disparity is even greater when you consider the fact that my crude method doesn’t account for the enormous costs that government regulations, inspections, forms, permits, and other forms of harassment impose on the private economy. It’s quite possible that the actual productive portion of the US economy is closer to $5 trillion, half the size of Bazaaristan.

There are roughly 155 million people in the US workforce. Perhaps 4/5 of them have (official) jobs. There are more than 10 times that many working at jobs in Bazaaristan, if not today, then very soon. They are probably producing twice what the private US economy does today, and absent the incredible drag of government’s violent interventions in the marketplace, they will almost certainly continue to out-grow and out-produce the US and other state-strangled economies.

This is food for thought, especially for those who value freedom. In his TED talk Neuwirth reads a passage from his book about a young resident of a shantytown:

For Armstrong, Southland wasn’t constrained by it’s material conditions. Instead, the human spirit radiated out from the metal walls and garbage heaps to offer something no legal neighborhood could: Freedom.

“This place is very addictive,” Armstong said. “It’s a simple life, but nobody is restricting you. Nobody is controlling what you do. Once you have stayed here, you cannot go back. Once you have stayed here, you can stay for the rest of your life.”

Bill Bonner has written an excellent essay on the popularity of stealing: Everybody Hates Capitalism.

Foundation of our General Theory of Zombieism:

1. All (or almost all) people want wealth, power and status.
2. They want to get it in the easiest way possible.
3. The easiest way to get wealth is to steal it, which is why all groups turn to the government, the only institution which gets to steal lawfully.
4. Over time, more and more groups are able to use the system for their own ends.

Read the full article.

A young man posted this scenario some years ago at TMM:

You live in a small town with five houses. You live in the center of town and four other people live north, south, east and west, completely surrounding you. This is a voluntary community – a gulch, if you will.

At the town hall meeting, the citizen who lives to the north of you brings up the fact that there is a gang of a hundred violent motorcycle nomads who will be raping and pillaging your town in two days.

Your four neighbors each decide independently that they will hire a private security force, and when they all learn of each other’s plans, they choose to go into it together, because they get a discount

You decide you do not want to be involved

Fifty heavily armed and trained mercenaries arrive at the gulch the next morning, and they form a perimeter around the town.

The nomads surround your town and attack the mercenaries. The mercenaries slaughter all of the nomads.

You have just been protected by your neighbors. You did not pay in. You just got something for nothing.

This scenario and its variants is offered as justification for coercive taxation, the theft of money from the unwilling citizen.

The free rider problem is a fallacy employed by people who use violence to obtain their personal goals. As the very construction of the scenario proved, there was no problem. Four out of five people thought the expenditure for defense services worthwhile. The fact that others benefit from their purchase does not change their economic calculation. Either there is enough demand for the defensive services for the consumers to part with their money and buy them, or there isn’t.

Using violence to take money from people who don’t want the good or service in question may lower the cost to the band of thieves who support such immoral behavior, but so does just killing the holdouts and taking their property.

Mises treated this nonsense thoroughly, see pages 650-656 of Human Action (Scholars edition).

If the results of an actor’s action benefit not only himseIf, but also other people, two alternatives are possible:

1. The planning actor considers the advantages which he expects for himself so important that he is prepared to defray all the costs required. The fact that his project also benefits other people will not prevent him from accomplishing what promotes his own well-being.

2. The costs incurred by a project are so great that none of those whom it will benefit is ready to expend them in full. The project can be realized only if a sufficient number of those interested in it share in the costs.

The example given used the second scenario. While no individual could afford the services, four could pool their resources, and did so. There is no problem. The decision of the 5th person that refusing to participate would maximize his personal satisfaction is may prove to be incorrect. His neighbors will remember his refusal to help defend the community. They may shun him or at least reduce their trust and trade with him. But there is no guarantee that free men make the correct choices at all times, only the guarantee that they are free to choose.

Here’s a real-life example of Mises first scenario. I keep bees. My bees fly far and wide, providing pollination services to over 8,000 acres.

As a free man, I decided to keep bees because I judged the benefits TO ME outweighed the costs. The fact that my bees would be providing a valuable service to others did not enter my calculation; I considered only what mattered to me.

Now if I were an amoral person who employed violence to get my way, I could demand money from all those neighbors in payment for the services of my bees. Services that they did not ask for and can not refuse, given the nature of bees.

Since I have renounced the use of violence to satisfy my desires, that isn’t a problem.

The reductio ad absurdum of the free rider fallacy was written by the great Hans Herman Hoppe:

You, dear reader, have never hired me as an economic consultant. You have not taken advantage of this marvelous opportunity open to you. However, whether you know it or not, whether you realize it or not, whether you appreciate it or not, you actually benefit from my economic analysis. You are thus a selfish, chiseling free-rider on these multifaceted benefits I have long provided for you, gratis. But now it is time to stop you from exploiting me regarding these spillover gains you have long enjoyed for free. It is time for you to pay your fair share! Accordingly, I am hereby presenting you with this bill for $100,000, a bargain at the price.

The free rider “problem” is a trivial fallacy. It only appears complex because there are so many cowardly thugs among us, willing to use violence but unwilling to do the dirty deeds themselves. They invent this free rider nonsense, they teach it to defenseless children in state indoctrination camps, and they quote it whenever they sense the opportunity to steal something. These people deserve contempt and disgust, nothing more. The charitable might try to educate the victims of this delusion, but tolerance of this pernicious nonsense is not a virtue.

The Perth Mint has one-upped the Royal Canadian Mint by producing a 2230-lb cast coin of 99.99% pure gold.

The Perth Mint seems to be settling a score with the Royal Canadian Mint, which produced several 100 kg gold coins in 2007 to capture the world record for largest gold coin. The Perth Mint had long held the record with its 10 kg gold and silver coins.

These large coins are really sculptures in pure gold rather than struck coins. They are cast and then cut and polished by hand. This video shows the process of casting and finishing the 100 kg Maple Leaf. The Perth Mint 10 kg gold and silver coins are struck in a press, as shown here. The 2011 production of 10 kg coins is limited to 100 gold and 500 silver coins.

The Canadian 100-kg coin was originally intended as a promotional item only, but after interest by investors additional coins were cast. Although they originally sold at a substantial premium to the price of gold, one of the coins was recently sold for its melt value after the owners went bankrupt.

Sorry for the long hiatus in posting; there have been some issues with the site.  Things are settling down, I’ll have new content up shortly.

I’ve changed the comment policy; you have to register with the site to make comments. The spam was many times the volume of genuine comments, and I didn’t want to accidentally delete a real comment, or make people wait while I waded through dozens of spam comments to approve their remark. Please continue to make comments. Registration is easy and free.

The Fed tried frantically to inflate…, including massive open market purchases and heavy loans to banks. These attempts succeeded in driving interest rates down, but they foundered on the rock of massive distrust of the banks. Furthermore, bank fears of runs as well as bankruptcies by their borrowers led them to pile up excess reserves…

The Fed’s continuing inflation of the money supply… only succeeded in inflating prices without getting the United States out of the Great(er) Depression. The reason for the chronic depression was that, (the federal government) intervened heavily: to force businesses to keep up wage rates; to lend enormous amounts of federal money to try to keep unsound businesses afloat; to provide unemployment relief; to expand public works; to inflate money and credit; to support farm prices; and to engage in federal deficits. This massive government intervention prolonged the recession indefinitely, changing what would have been a short, swift recession into a chronic debilitating depression.

This is from the final chapter of Murray Rothbard’s The Mystery of Banking. Rothbard was discussing the Great Depression, but note how well he describes our plight in the Greater Depression.

That’s why I study Rothbard, Mises, and the Austrian School: they got it right, they predicted the present problems, and they understand what is happening and why.