Author Archive | Todd Zywicki

OH CRIMINY (AGAIN):

What’s with ESPN these days? First, the Scrabble meltdown, now this–“Browns Quarterback Jeff Garcia says a comment made by ex-teammate Terrell Owens implying that he is gay is ridiculous and untrue.” I just hope it doesn’t disrupt Garcia’s performance for my fantasy football team (I had injury-prone underachieving TO last year). [...]

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WINE WARS, PART 3–THE DORMANT COMMERCE CLAUSE:

As noted in Wine Wars, Part 2, nothing in the text of the 21st Amendment specifically repeals the dormant Commerce Clause, nor does it specifically repeal only the dormant Commerce Clause and no other provision of the Constitution. Nonetheless, some conservatives have argued that the dormant Commerce Clause is not “in” the Constitution but is rather a figment of the judicial imagination made up by the Supreme Court. So as a result, all the 21st Amendment supposedly does is make this judicial gloss inapplicable in the context of the 21st Amendment. This view is hinted at in the opening line of Judge Easterbrook’s opinion in Bridenbaugh v. Freeman-Wilson, “This case pits the twenty-first amendment, which appears in the Constitution, against the `dormant commerce clause,’ which does not.”



Moreover, I have heard many conservatives insist that Justices Scalia and Thomas do not believe in the dormant commerce clause, so that all the 21st Amendment supposedly does is repeal this illegitimate judicial usurpation of state authority. This view is incorrect on many grounds. First, it proves too much, in that it would repeal any supposedly nontextual right or power, regardless of its history or foundation in the structure of the Constitution. Second, it conflates two different prongs of the dormant Commerce Clause, the well-established nondiscrimination principle and more controversial balancing test of Pike v. Bruce Church.



First, a primary purpose of the Constitution was prohibit the states from engaging in the type of protectionism and economic warfare the prevailed under the Articles of Confederation. “If there was any one object riding over every other in the adoption of the constitution, it was to keep the commercial intercourse among the States free from all invidious and partial restraints.” Gibbons v. Ogden, 22 U.S. 1 (1824) (Johnson, J., concurring). Indeed, concerns about state [...]

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WINE WARS, PART 2–21ST AMENDMENT TEXT:

As noted in Wine Wars, Part 1 there is no persuasive policy goal to justify discriminatory bans that permit direct shipment by in-state wineries but prohibit out-of-state wineries. New York, for instance, has 200 farm wineries shipping directly to consumers and has not proffered any evidence that consumers can only get drunk on California wines but not New York wines. Given the absence of any reasonable justification for these laws, the next question is whether the 21st Amendment nonetheless permits states to engage in this arbitrary discrimination, notwithstanding the dormant commerce clause.



An essential purpose of the Commerce Clause was to eliminate the protectionist barriers erected by the states under the Articles of Confederation. As Justice Johnson wrote in Gibbons, “If there was any one object riding over every other in the adoption of the constitution, it was to keep the commercial intercourse among the States free from all invidious and partial restraints.” Gibbons v. Ogden, 22 U.S. 1 (1824) (Johnson, J., concurring). The 21st Amendment, as we will see, was intended to deal with the narrow but difficult problem of transitioning from the federal prohibition regime under the 18th Amendment to the post-Prohibition world after the 21st Amendment repealed prohibition. The 21st Amendment restored the constitutional balance that had been upset by the 18th Amendment, but was not intended to give the states power to engage in economic warfare against each others’ products. Indeed, the reciprocal protectionist barriers and economic Balkanization that the states have erected in recent years is exactly the behavior that the Commerce Clause was intended to prevent. Hughes v. Oklahoma, 441 U.S. 322, 325 (1979).



But what of the 21st Amendment? Section 1 of the 21st Amendment repealed the 18th Amendment, therey ending Prohibition. Section 2 of the 21st Amendment provides, Section 2 of the [...]

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FREE TRADE UNDER FIRE:

Douglas Irwin, Professor at my alma mater Dartmouth, has a brilliant dissection of modern-day protectionists in today’s Wall Street Journal. His concluding paragraph is a home run, “As it stands now, free trade-critics bring nothing to the table. They do not have a constructive agenda to remedy the problems they see. Free-trade critics are long on complaints and short on solutions. Instead of carping about free trade, they should direct their energies toward coming up with concrete suggestions about how to make the economy stronger.” [...]

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LISTEN MA, I’M ON CATO AUDIO!

I was honored to make the cut for the July Cato Audio program for my speech on the folly of proposed bans on advertising food products to children in order to combat obesity in children. Children’s obesity is a serious and growing problem, but fad policies like advertising bans are going to be no more effective than fad diets in fighting America’s battle against the bulge. For those who would prefer to see your truly, rather than just hear me, you can watch the event in Real Video. I just became aware of Cato Audio, but its a very clever innovation, especially for those of you who listen to books on tape in the car. They even edit the presentations and punch them up with good intros and music to make them even more entertaining. [...]

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WINE WARS 1–EFFECTS OF DIRECT SHIPPING:

According to empirical study, the benefits to consumers from direct wine shipment can be substantial, both in terms of variety and price. A study by the FTC http://www.ftc.gov/opa/2003/07/wine.htm

published during my tenure found that found that 15 percent of a sample of popular wines available online were not available from retail wine stores within 10 miles of McLean. Moreover, because this was a study of the “Top 50” most popular wines the Wine and Spirits annual poll, these were not obscure wines. For smaller wineries, availability in traditional outlets would be even smaller.



In addition, depending on the wine’s price, the quantity purchased, and the method of delivery, consumers can save money by purchasing wine online. Because shipping costs do not vary with the wine’s price, consumers experience the greatest savings on expensive wines, while brick-and-mortar stores may offer better prices on less expensive wines. The McLean study suggests that, if consumers use the least expensive shipping method, they could save an average of 8-13 percent on wines costing more than $20 per bottle, and an average of 20-21 percent on wines costing more than $40 per bottle. In a recent working paper, the authors of the original paper update their research and find essentially the same findings:

http://www.mercatus.org/regulatorystudies/article.php/790.html



What about underage drinking? This may come as a shock to Conspiracy readers (who certainly would never have done such a thing in their younger days), but apparently some kids these days are able to buy beer and wine at the local 7-11, notwithstanding the vigilent efforts of the sleepy, hourly-wage sales clerk behind the counter at 11:00 p.m. Friday night. In fact, studies show that minors can fairly routinely purchase alcohol from traditional bricks-and-mortar sellers.



Does this mean that minors will be buying Pinor Noir over the Internet? Probably not. [...]

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WINE WARS

Over the next several entries, I will lay out my personal views on issues related to the interstate direct shipment of wine. As readers are probably aware, the Supreme Court will hear oral argument this term in two cases involving discriminatory bans to interstate direct shipping. In both the Michigan and New York cases, the states permit intrastate direct shipment from in-state wineries, but effectively prohibit direct shipping by out-of-state wineries. Over the next several days I will discuss the empirical evidence on the costs and benefits of direct shipment, explore whether the 21st Amendment saves these discriminatory laws, and then will address the 2d Circuit’s holding in the New York case that the New York regime was not in fact discriminatory. [...]

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