Welcome to the latest installment of the continuing series here ("How The Minimum Wage Ruined Dessert," "How Regulation Ruined Peking Duck," "Wine Store Regulations," "Ramen and Bagels") about how the New York Times food section is willing to acknowledge and report on economic realities that the rest of the paper steadfastly denies. Today's Times food section reports:
Small craft distillers across the country have been on a spending spree since the turn of the new year.
St. George Spirits, in Alameda, Calif., recently invested in more efficient pumps, new lab equipment and an automated bottling line. House Spirits Distillery, in Portland, Ore., has laid down many more barrels of its Westward single-malt whiskey to meet anticipated future demand.
Few Spirits, in Evanston, Ill., has hired two new people, plans to hire more, and is in the process of finding an American glass manufacturer to replace its overseas subcontractor. J. Rieger & Co., of Kansas City, Mo., also hired two new salespeople, a move that afforded a co-founder, Ryan Maybee, the time to introduce the brand in California. Copper & Kings, which makes brandy and gin in Louisville, Ky., has taken on more staff and is investing in new warehousing.
The reason for all the spending isn't a sales spurt or newly opened markets. It's the Craft Beverage Modernization and Tax Reform Act, an amendment that quietly found its way into the omnibus tax bill that President Trump signed into law in December. The measure lowers the federal excise tax that producers pay to $2.70 per proof gallon (a gallon of spirits that is 50 percent alcohol), from $13.50, for the first 100,000 gallons of distilled spirits produced or imported annually.
That's a reduction of 80 percent....
New York Distilling Company, in Brooklyn, has done something just as unusual: lowering prices.
Contrast that reality with the prediction the Times made in its non-food-section coverage about the tax cut. "Republicans claim their big corporate tax cut will turbocharge the economy by encouraging businesses to invest, create jobs and give raises. Not even business chieftains believe this trickle-down argument," said the Times editorial headlined "A Tax-Cut Bill To Make Scrooge McDuck Proud." Times columnist Paul Krugman predicted, "corporations with monopoly power won't see lower taxes as a reason to invest more; they'll just take the money." A Times news article reported, "economists are divided over whether the plan is likely to revitalize the economy or merely bestow a windfall on the wealthiest investors." In fairness to the Times, the food section article focuses on a competitive industry — spirits — and on an excise tax cut rather than the corporate income tax cut. Even so, though, the Times food section article provides plenty of anecdotal evidence to support the idea that rather than just increasing owner profits by the amount of the tax cut (not a bad thing either in my view), the business owners are reacting by cutting prices for consumers, hiring staff, and otherwise investing in trying to grow their businesses.
It used to be said of the Wall Street Journal, with its liberal news columns and conservative editorial pages, that subscribers were getting two newspapers for the price of one. It's almost getting to the point where the same can be said of the New York Times, with its liberal news columns and editorial pages and its mildly conservative-to-libertarian, or at least reality-based, food section.