Regulation

"The milk man cometh, and the Constitution goeth."

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At Liberty & Power, historian Paul Moreno has a great post tracing the American dairy industry's long and unsavory role as corporate welfare recipients and "pioneers in interest group politics." As Moreno notes, it all started with margarine (known in the 19th century as oleomargarine):

Dairy farmers organized to drive oleo from the market. They claimed that oleo was harmful—manufactured, they claimed, from "dead dogs, mad dogs, and drowned sheep." They alleged that an "oleo trust" was not only driving dairy farmers to the wall, but also impairing the marriage market, because "women are no longer a necessary adjunct to the farmer lads to help them create wealth, owing to the oleo-cotton-oil-soap-fat combine."

Failing here, they accused oleo manufacturers of coloring their product and selling it fraudulently as butter. This was despite the fact that dairymen had long colored winter butter yellow to resemble the best "June butter." They also routinely "renovated" rancid butter to bring it to market. The dairymen finally got Congress to enact a two-cent per pound excise tax on oleo in 1886.

This was the first time that Congress had used its internal taxing power for regulatory purposes, rather than to raise revenue….

Perhaps the most egregious exercise of dairy power was a New York law of 1933 that declared that milk was a business "affected with a public interest" and allowed the state to set dairy prices. The New York board set 9 cents per quart as the minimum retail price of milk. A Rochester grocer, Leo Nebbia, was prosecuted for selling two quarts of milk and a loaf of bread for 18 cents. Why, in the midst of the distress and privation of the early 1930s, did New York want to raise the price of milk? The idea was that it would raise the income of dairy farmers, who would then purchase more industrial goods, thus stimulating the economy. The Supreme Court accepted it, again giving state governments virtually unlimited power to regulate the economy. Such counterintuitive trickle-up economic theory helped to turn the 1929 recession into the prolonged Great Depression.

Read the whole thing here.

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  1. damon:

    This seems like old news. I think you’re “milking” it. LOL

    Nah I just said that to “butter” you up.

    Some may think my puns are “cheesey”

    HEYOOOOOOOO

    1. Don’t give up your day job, kid.

  2. There was me, that is, Alex, and me three droogs…

    Thanks for the photo flashback.

  3. At least oleo gave us one hell of a jazz standard. Well, oleo and Sunny Rollins, I suppose…

    1. I am old enough to recall when oleomargarine was called oleomargarine.

      It came in a clear plastic bag. oleomargarine was white, but there was a color dot in the bag. In order to get the product butter-colored, you squeezed the bag, working the color throughout. I was no more than for but remembered thinking it odd when I was told that oleomargarine had to be sold white, so as not to be confused with butter.

      1. Yes, and after squeezing the bag for a while I got to put it into a small bowl and write my initials in it before it went into the ice box.

  4. The idea was that it would raise the income of dairy farmers, who would then purchase more industrial goods, thus stimulating the economy.

    Breaking windows wasn’t good enough?

    1. They had to chill the butter too long for it to actually break the window. No good.

  5. Question #1. During whose administration did the signature of an African-American first appear on U.S. currency? During that of a Republican or a Democrat President?

    Question #2. Was the first African-American diplomat appointed by a Republican or a Democrat President?

    Question #3. Was the first African-American popularly elected U.S. Senator a Republican or a Democrat?

    Question #4. During the late 1950’s, William Monroe “Willie” Rainach, Sr., a Louisiana state legislator, led the “Massive Resistance” to desegregation in his state. Was Willie a Republican, or a Democrat?

    Question #5. In 1957, nine African-American students attempted to enroll in Little Rock’s Central High School. When they were barred entry by Arkansas Governor Orval Faubus, the President of the United States ordered federal troops to the school to assure their access to an education. Was Faubus a Republican, or a Democrat? Was that President a Republican or a Democrat?

    Question #6. In September 1962, U.S. Air Force veteran James H. Meredith enrolled as the first African-American student at the University of Mississippi. Governor Ross Barnett strongly opposed his entry into the school. Was Barnett a Democrat or a Republican?

    Question #7. In 1965, the nation’s eyes were focused on the Selma Voting Rights Movement and three Selma-to-Montgomery marches. Marchers were opposed by the White Citizens’ Council and the Ku Klux Klan. On “Bloody Sunday,” March 7, 1965, about 600 civil rights marchers left Selma and walked east. At the Edmund Pettus Bridge they were confronted and attacked by state troopers and sheriff’s deputies. During this time, Theophilus Eugene “Bull” Connor, Alabama Public Safety Commissioner, became infamous for his brutal tactics against Civil Rights activists. Was “Bull” a Republican or a Democrat?

    Question #8. A sitting U.S. Senator once held the position of Exalted Cyclops in the Klu Klux Klan. Although he never served in the Armed Forces, he once wrote, “I shall never fight in the armed forces with a Negro by my side.” Of which party is he a member? Republican or Democrat?

    Question #9: In the U.S. Senate’s passage of the landmark Civil Rights Act of 1964, which political party had the highest percentage of its Senators vote for the Act? Republicans or Democrats?

    Question #10. Was the first female African-American Cabinet member appointed by a Republican or a Democrat President? (Trick question.)

    Question #11. When you compare the makeup of the Cabinet members who served under Democrat President Jimmy Carter with the Cabinet members appointed by Republican President George W. Bush, which President appointed the highest percentage of African-Americans to his Cabinet?

    Question #12. Was the first African-American popularly elected Governor a Republican, or a Democrat?

    Question #13. When was the race barrier broken with regard to the position of Secretary of State of the United States? Under a Republican or Democratic administration?

    Question #14. When was the race barrier broken with regard to the position of Chair of the Joint Chiefs of Staff of the United States Armed Forces? During a Republican or Democrat President’s administration?

    Question #15. When the first African-American member of the U.S. Armed Forces engaged in action for which he was awarded the Congressional Medal of Honor, was the President at the time a Democrat or a Republican?

    1. Answer #1. In 1881, Republican President James A. Garfield appointed Blanche Bruce as Register of the Treasurer, making him the first African-American whose signature appeared on U.S. paper currency. In 1880, at the Republican National Convention in Chicago, when he received 8 votes for nomination as the party’s vice presidential candidate, Bruce became the first African-American to win any votes at a major party’s nominating convention.

      Answer #2. In 1869, Republican President U.S. Grant appointed Ebenezer D. Bassett (1833?1908) as the first African- American ambassador representing the United States. He was Ambassador to Haiti.

      Answer #3. In 1966, Edward Brooke was the first African-American elected by popular vote to the U.S. Senate. He was a Republican Senator from Massachusetts.

      Answer #4. “Willie” Rainach was a Democrat.

      Answer #5. Orval Faubus was a Democrat. President Dwight D. Eisenhower was a Republican.

      Answer #6. Ross Barnett was a Democrat.

      Answer #7. “Bull” Connor was a Democrat.

      Answer #8. Robert Byrd, Democrat Senator from West Virginia, is the longest serving Senator in U.S. history. Once upon a time he wore the white sheet and hood, but has since repented.

      Answer #9. 82% of the Republican Senators voted for the Civil Rights Act of 1964, while 69% of the Democrat Senators voted “Yes.”

      Answer #10. Patricia Roberts Harris, Secretary of Housing and Urban Development (HUD) and then Secretary of Education, was appointed to Democrat President Carter’s Cabinet.

      Answer #11. Just 1 of the 21 persons Carter chose for his Cabinet, Patricia Harris, was an African-American, or 4.7% of his appointees. Of the 33 persons appointed by Bush to his Cabinet, 4 were African-Americans, or 12.1%. Bush’s cabinet also included several other persons of color.

      Answer #12. Democrat Lawrence Douglas Wilder was the first African-American popularly elected as governor of a U.S. state. Wilder served as the 66th Governor of Virginia from 1990 to 1994. (Fair is fair.)

      Answer #13. During the Republican administration of George W. Bush, Colin Powell became the first African-American Secretary of State. He was followed by Dr. Condoleezza Rice, also appointed by Bush, who was the first female African-American Secretary of State.

      Answer #14. Republican President George H. W. Bush appointed General Colin Powell as Chair of the Joint Chiefs of Staff in 1991. Earlier, Republican President Ronald Reagan appointed Powell as his National Security Advisor.

      Answer #15. Sergeant William Harvey Carney (1840-1908) of the 54th Massachusetts Colored Infantry received the Medal of Honor for his actions during the Civil War Battle of Fort Wagner on July 18, 1863. The action of the 54th that day was depicted in the movie Glory. The citation for his medal read,

      When the color sergeant was shot down, this soldier grasped the flag, led the way to the parapet, and planted the colors thereon. When the troops fell back he brought off the flag, under a fierce fire in which he was twice severely wounded. The President was a Republican named Abraham Lincoln.

      1. What childishness. The Republican Party and the Democratic Party are two parties ideologically set in stone for you. It’s like the Democrats were’nt the party of Bryan and the religious right or that the Republican Party wasn’t the party of protectionism.

        These things change. 9 out of 10 blacks consistently support the Democratic Party because of what they’ve done for them recently, meaning in the last few decades.

        1. Over 95% as I recall. You seem to think being human interchangeable parts is some sort of good idea? Group think is good for Democrats.

          1. The problem with monolithic voting blocs is that they don’t effectively put pressure on anyone. :::cough:::

    2. Trying to get Tony to do your black-history-month assignment for you, very slick.

      1. I provided the answers.

        1. Shoulda waited a few hours, to see if he’d actually answer (and get most of them wrong).

    3. I am reminded of a report that I heard on NPR shortly before the last presidential election. It was about how union leaders were undertaking massive efforts to convince their members that it was OK to vote for a black guy.

      Are union members usually Republicans or Democrats?

  6. I’m old enough to remember when it was called “oleo” and I remember it used to come uncolored and you had to mix in the yellow color.

    1. I was just reading about the “War on Margarine” the other day. It’s a good example of market forces overcoming hamhanded attempts at regulation — states banned colored margarine, so the margarine producers sold food coloring packets along with the margarine.

      In fact, while almost all the state laws against coloring have been repealed now (except Missouri’s), the Food and Drug Act still prohibits selling margarine in packages of more than one pound at retail stores.

  7. When i read the wiki article about margarine a while back, this was the part that i found most fucked-up:

    “In several states, legislatures enacted laws to require margarine manufacturers to add pink colorings to make the product look unpalatable…”

    Pink Margarine. Good god.

    1. As if the taste wasn’t bad enough…

      1. It works for grilled-cheese sammiches. I’m no good at setting out some butter so that its spreadable BEFORE i want to eat. When it’s not a matter of spreading onto untoasted bread, i go with butter or olive oil.

        But c’mon, even grilled-cheese (white bread and singles style, mmmmm) would be unappetizing if you had to use a pink fat spread.

    2. But that would make it look like raw bone marrow, and hence backfire.

    3. I wonder, would the 2nd Amendment prohibit a federal law requiring that all guns be pink-colored? I don’t think so.

      1. Apparently Ruger 10/22s w/ pink stocks are the new daddy-daughter bonding accessory. Maybe we should ban pink guns… For the children.

  8. And “the oleo-cotton-oil-soap-fat combine” is the best conspiracy name ever.

    1. If only it made a better acronym, it’d be perfect.

      OCOSFC isn’t sinister enough though. You need something like CHOAM.

      1. Or NOAMCHOMSKI*.

        (* Which, of course stands for Neutralis Organizational Abba Mercantile Condominium Havatampa Orthonovum Minnehaha Shostakovich Kategorial Imperative)

  9. My Congressman*, Scott Murphy, introduced a bill to cull all the dairy herds in the US so milk prices would be higher. I don’t know if it’s been voted on yet or added to some other bill.

    *I didn’t vote for him. I wrote in fellow libertarian Eric Sundwall, known here as ESun67…I think.

  10. Bertha Lewis Departs From WFP, Perjury Charges Possible In Staten Island Case
    With national scrutiny on ACORN and local scrutiny on the Working Families Party, ACORN CEO Bertha Lewis quietly departed as state co-chair of the Working Families Party.

    Lewis was a founding co-chair of the Party. According to Working Families spokesman Dan Levitan, Lewis stopped serving as co-chair “about a year ago,” though many people familiar with the Party were unaware of that change and Lewis was identified as a current co-chair in an interview on WNYC’s The Brian Lehrer Showas recently as September.

    The change in leadership comes as the Working Families Party and many of its endorsed candidates are providing extensive email and other documentation in response to December subpoenas from the United States Attorney’s office in New York. Lawyers are also preparing to return to Staten Island Supreme Court on Feb. 23 for the lawsuit being brought against the WFP’s company, Data & Field Services, and the campaign of now-Council Member Debi Rose by Randy Mastro on behalf of five Republican-connected residents of her Staten Island district.

    The lawsuit, however, may not be the only legal action on the horizon. The trial was stopped short in January by Judge Anthony Giacobbe after Rose’s treasurer, David Thomas testified that he had neither written nor was familiar with the information provided in affidavits to the Campaign Finance Board. That may result in attention from Staten Island District Attorney Dan Donovan?”there’s a very strong possibility of a perjury case here,” according to local legal sources.

  11. This story is a nice Rorschach test.

    Crypto-Marxist lefties will see it as a story of evul corporate interests seducing and capturing the state for their evul corporate purposes.

    Libertarians will see it as a story of state abuse of power to benefit rent-seeking parasites.

    YMMV.

  12. This story is a nice Rorschach test. […]

    Is there some reason it can’t be both?

    The real test is what you propose to do about it.

  13. Wow, a hundred and twenty year old story to bitch about. I heard in the 1870s there was wide spread corruption in the political parties. Can you get on that? I smell a story.

  14. Perhaps the most egregious exercise of dairy power was a New York law of 1933 that declared that milk was a business “affected with a public interest” and allowed the state to set dairy prices.

    That was because everybody knew back then that Milk can only be produced under a natural monopoly, thus falling under the purview of the State.

    Such counterintuitive trickle-up economic theory helped to turn the 1929 recession into the prolonged Great Depression.

    Among other things that also helped . . . like the NIRA and the Wagner Act.

    1. And Smoot-Hawley. Never forget!

    2. “Such counterintuitive trickle-up economic theory helped to turn the 1929 recession into the prolonged Great Depression.”

      Which then ended at a time where such “counter-intuitive economic programs” were more prevalent…

      1. Re: MNG,

        Which then ended at a time where such “counter-intuitive economic programs” were more prevalent…

        Really? Which ones? Because the Great Depression ended after 1945, after the US Gov massively reduced their intervention in the market.

        1. And after most of the rest of the world’s production capacity was destroyed.

          1. Re: Jordan,

            And after most of the rest of the world’s production capacity was destroyed.

            How quaint – the Broken Windows Fallacy.

            No, Jordan. It was after the US government stopped intervening in an economy that was NOT destroyed during WWII. The fact that Europe and Japan were destroyed only meant years of privation for those countries while they were rebuilding.

            1. I think you misunderstood me. The aftermath of WWII was great for U.S. industry because they were the only game in town. Of course everybody involved (including U.S. industry) would have been better off if the war had never happened.

            2. In other words, instead of the government getting out of the way, as you and I agree would have been best, they chose to engage in 2 decades of wealth destruction first.

          2. And after most of the rest of the world’s production capacity was destroyed.

            And governments went Commie, thus insuring that production capacity would stay destroyed.

            American hubris won’t allow us to admit our post-war wealth was created not by any notion of liberty, or wise regulation, or education, or work ethic, but by Eurasian stupidity.

  15. The idea was that it would raise the income of dairy farmers, who would then purchase more industrial goods, thus stimulating the economy.

    This sounds strangely familiar. I had no idea Krugman was that old.

  16. Thankfully the dairy industry, along with other corporations, can spend without limit in campaigns to get more rent-seeking agreements from government. Thanks SCOTUS!

    1. Yes, things were much better when the only corporations allowed to advertise for their favorite party in the last days before an election were the ones who could buy ink by the barrel.

    2. Activist government > civil liberties

    3. All of the reasons that view is simply nuts constitutionally aside, do you really think that those with influence have less or more influence since the end of most of McCain-Feingold?

  17. My Congressman*, Scott Murphy, introduced a bill to cull all the dairy herds in the US so milk prices would be higher. I don’t know if it’s been voted on yet or added to some other bill.

    This is a recurring phenomenon.

  18. I thought all special interests were bad, but abolishing margarine would be of tremendous benefit to humanity. Nasty.

  19. With me, it’s generally olive oil or butter. No margarine.

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