Archive for December, 2014

Will a Divided Government Work for Millennials?

Monday, December 8th, 2014

Originally published at Townhall

As defeated politicians clear out their offices and prepare to trek home permanently, there’s a lot to consider about what the midterm elections meant and how the incoming Congress will behave. Requisite attempts at partisan excuse-making aside, there’s a wide consensus surrounding the fact that the left simply couldn’t motivate its base this year. Notably, Democrats even lost their once-tight grip on the cohort that swept Obama into office: young people. In many key Senate races, Republicans won the youth vote outright. Even where conservatives didn’t capture the full 18-29 demographic, there were significant swings in the GOP’s direction almost universally.

Although Republicans experienced a major victory this election, they ought to recognize that voter rejection of Democrats doesn’t constitute a full-throated embrace of their party—especially as it pertains to young voters. If conservative legislators want to keep and expand upon the support of Millennials that they earned this year, they’ll need to pressure the President into accomplishing goals that will benefit our generation. If, as he claims, Obama is interested in bipartisan compromise and helping those still suffering due to our poor economy, he and the new Republican Congress have their work cut out for them.

Luckily, there are places where the President and Congress can in fact work together. One area that has begun to foster promising across-the-aisle cooperation is criminal justice reform. Senators Cory Booker (D-NJ) and Rand Paul (R-KY) have put forth a noteworthy piece of legislation called the REDEEM Act. If passed, this law would make it easier for juvenile delinquents to get their lives back on track, with a specific focus on non-violent offenders. Another bipartisan bill co-authored by Senators Mike Lee (R-UT) and Dick Durbin (D-IL) called the Smarter Sentencing Act, would reduce mandatory minimum sentencing for drug offenses and give more discretion to judges who believe such harsh penalties may not fit specific, non-violent crimes.

An additional arena of interest to young people is higher education reform. The average Millennial now graduates with over $30,000 in student loan debt. Proposals that beat around the bush by tinkering with interest rates only serve to exacerbate underlying problems with the system. The fundamental issue is the federal government’s death-grip both on student loans and the university accreditation process. Government monopolies in these spaces strangle the kind of freedom necessary to foster innovation and competition. The HERO Act, introduced by Senator Mike Lee (R-UT) and Representative Ron DeSantis (R-FL), is a good first step toward breaking the government control that has led to both stagnation and out-of-control costs in an industry so crucial to the future of our nation.

Happily, there’s already one piece of good news that’s materialized for Millennials since the election. Speaker Boehner has said the House won’t be taking the misnamed “Marketplace Fairness Act” up this year. This is fantastic, because the legislation is actually an Internet sales tax in disguise. Sadly, this disastrous bill that targets Millennial entrepreneurs has won bipartisan support in the past. If you agree that forcing small online retailers to comply with over 10,000 tax codes is a ridiculous, job-killing proposition, make sure to hold your elected officials’ feet to the fire if this awful legislation materializes again.

An area that’s also crucially important to young Americans is healthcare. While it’s unlikely that the President will provide any leeway as it pertains to his signature law, Republicans need to make it clear that they’re fighting for our generation. Obamacare stacks the deck against Millennials in a profound way. It more than doubles costs for a high share of those under thirty. To make matters worse, its employer mandate and endless red tape have contributed to America’s troubling transition to a part-time economy of underemployed young people. It’s clear that Millennials desperately need compromise from the White House in this area. A good place to start looking is the new reforms suggested by health care policy analyst Avik Roy .

Ultimately, one of the biggest takeaways from this election ought to be that young Americans aren’t loyal to any particular party, or even political ideology. Time and again, we have made it clear to politicians that we want results that work for our generation. We’re fed up with Washington’s rampant cronyism and blatant disregard for us. We may have trended Republican this election, but make no mistake, conservative legislators are going to have to earn our trust moving forward. The road to 2016 is long, and the next two years will be a trial run. Our generation is in a position to be part of a major swing vote—and we’re sick of being disappointed.


Free the Markets, Free the Brews

Friday, December 5th, 2014

Originally published at Red Alert Politics

Eighty-one years ago today, a long national nightmare was put to rest. Thirteen chaotic years of alcohol prohibition ended when the 21st amendment to the Constitution was ratified, making the sale of liquor legal throughout the United States once again.

There hasn’t been a nationwide ban on alcohol in nearly a lifetime, but prohibition-era regulatory relics still manage to put a damper on what could be an even more thriving industry: Craft beer.

Each state, county, city, and even some towns have their own alcohol regulations — most of which are left over from the days immediately following prohibition. In Virginia, research from the Mercatus Center found that an entrepreneur looking to enter the brewing market “must complete at least five procedures at the federal level, five procedures at the state level, and — depending on the locality — multiple procedures at the local level.”

Another remnant of the prohibition era are “sin taxes” on alcohol. On average, 40 percent of the cost of every beer is going into federal or state coffers, partially to dissuade you from enjoying your favorite craft brew. These taxes are even higher on both spirits and wine.

Perhaps most damaging are the prohibition-era distribution laws known as the “three-tier” system. Under this regime, suppliers, wholesalers, and retailers must remain entirely separate entities. In a classic example of a government-created monopoly, this scheme forces brewers to sign contracts with one distributor, who then has exclusive rights to sell their product to stores and restaurants in a given area.

Overall, the regulatory landscape makes it difficult for small craft breweries to build their business by saddling them with unnecessary compliance costs, taxes, and barriers to new markets outside of their local region.

On the flip side, this regulatory labyrinth has done a lot to protect big, established brewers who can easily foot the expenses. But thankfully, better taste and an evolving freer market are beginning to prevail.

As the New York Post recently reported, there were only 200 small breweries in the U.S. in 1980. Today, there are over 2,000, and as a result, Budweiser is no longer the “King of Beers.” Interestingly enough, this outcome has a lot to do with the evolving palate of young consumers.

As the article states, “Craft beers — despite their tiny marketing budgets — account for 15 percent of the beer budget of the youngest legal drinkers. Bud’s market share, despite that gargantuan [$449 million] advertising spend, is down to 7.6 percent, nearly a 50 percent drop in just the last decade.” In fact, according to Budweiser’s own research, 44 percent of drinkers between the ages of 21 and 27 have never even tasted the product.

It should come as no surprise that millennials, who have come of age in an era where technology has allowed us to tailor so much of our lives to our preferences, appreciate the growing diversity the beer industry has to offer. While unnecessary regulations do restrict our access to craft beer (and are undoubtedly keeping new entrants from the marketplace, as research demonstrates), the rise of small brewers represents a significant triumph of small businesses over bureaucratic largess in an era rampant with cronyism.

We can only hope that politicians will take notice of this trend and work to reduce the undue regulatory burden that entrepreneurs face in this industry. The truth is, however, that this is unlikely to happen without organized pressure from those who both partake in craft beer and care about enacting fair standards that don’t unduly favor incumbent firms.

As we raise our glasses in celebration of prohibition’s demise today, let us be mindful of the fact that a free market is what will ultimately allow us to free the brews.

More delicious choices and less red tape? That’s something worth drinking to. Cheers!