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Some parts of the federal government should stay shut down

We are entering the third week of the federal government shut down and, as yet, American society has not devolved to the level of Fury Road. The fact that the United States has continued to function more or less as it did before with something like 25% of the federal government shut down demonstrates that federal government is at least 25% too big.

But when I saw an article titled ‘The government shutdown is holding new craft beers hostage‘, even I began to worry. Then I read on.

The government shutdown is threatening to halt new beer releases from breweries across the US.

The Alcohol and Tobacco Tax and Trade Bureau approves labels and, in some cases, recipes for new concoctions of beer, wine, and spirits. The federal agency has been closed as a result of the shutdown, which is now in its 13th day.

Brooklyn, New York-based Interboro Spirits and Ales is already feeling the impact of the agency’s closure.

“We release new beers every other week,” said Laura Dierks, CEO and founder of Interboro. “Right now, we’re looking at not being to sell certain beer in February because of this.”

Dierks can continue selling new beers within New York state, but in order to sell across state lines, she needs federal approval.

“We’re dependent on that revenue,” she said.

The shutdown is also delaying the permitting process for breweries that have applied to open new locations.

Even if the shutdown ends soon, delays could persist for weeks.

“It’s almost certain there will be a backlog when the shutdown ends,” said Bart Watson, chief economist for the Brewers’ Association, a trade group representing breweries.

Breweries can continue submitting their requests for approval on new labels, recipes, and locations during the shutdown. But none of them will be processed until the shutdown ends.

You will often hear it said that an excess of ‘regulation’ is bad for the economy. This might sound a little abstract. And if these regulations are there to protect us, surely we can trade off a little economic growth for that?

But much regulation serves no useful purpose at all. It either serves to protect politically connected (mostly larger) producers from competition, or it is just a pointless waste of everyone’s time and effort (except for those paid to enforce it). The beer label approval functions of the Alcohol and Tobacco Tax and Trade Bureau are a good example of the latter. The Bureau should stay shut down. How many other federal bodies are there like this?

John Phelan is an economist at the Center of the American Experiment. 




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