July 23, 2014
By Edwin J. Feulner, Ph.D.
I’ll admit it. I enjoy an occasional cigar.
So do a lot of other Americans. Some like to indulge in a pricier smoke, while others opt for a less-expensive brand. The ones made by the J.C. Newman Cigar Co. of Tampa, Fla., which retail for less than $10 apiece, fall into the latter category.
J.C. Newman, which was founded by a Hungarian immigrant in 1895, uses 1930s vintage equipment to roll its cigars. “It takes us four months to teach a cigar maker how to use our hand-operated machines,” company president Eric Newman says. “We’re making cigars the same way my grandfather made them in the 1930s.”
I’ve never had a J.C. Newman cigar, but thanks to the federal government, it doesn’t look like I ever will. A new 67-page rule published in April is threatening to undo more than a century of hard work and family tradition — and send the business up in smoke.
Not by design, but that’s the effect of this rule. It’s been five years since Congress gave the Food and Drug Administration (FDA) the power to regulate the tobacco industry. The agency went after cigarettes first. Now it’s moving on to other tobacco products.
In typical ham-handed bureaucratic fashion, it’s doing so in a way that’s needlessly killing jobs. The only reason J.C. Newman’s 130-man shop is endangered is because of the government’s one-size-fits-all approach to regulation.
“Despite the quality of tobacco and the factory’s traditional methods,” William Patrick writes on Watchdog.org, “the company’s cigars are simply too inexpensive for government approval, and its machines don’t meet the technical definition of producing a handmade product.”
Yes, “too inexpensive.” If J.C. Newman made a costlier product, it could qualify for a “premium cigar” regulatory exemption. And even though its cigars are handmade, its methods don’t fit the government’s rules.
Once this new rule is finalized, the FDA will have the tobacco products of J.C. Newman and other companies under a microscope. They’ll be subjected to lengthy scientific reviews and have to jump through other hoops. And they’ll pay thousands of dollars in user fees.
At least, the ones who can afford it will. Some, like J.C. Newman, apparently will just go out of business, taking jobs with them and hurting the economy.
Of course, the tobacco industry isn’t the only one being hit by federal regulators. I’ve focused on J.C. Newman as an example, but other companies — and industries — are suffering death by a thousand regulations as well.
Take the peach orchards at Mitcham Farms in Louisiana. It’s the state’s largest, a family-owned business that first set up shop in 1946 and today serves as a tourist destination. But that will soon change, according to owner Joe Mitcham.
Why? Because the Environmental Protection Agency (EPA) is phasing out a pesticide known as methyl bromide. Mr. Mitcham considers this a death sentence for his business. Most of his trees, he says, won’t survive without methyl bromide.
Regulations have also caused Mitcham Farms to dwindle from 60 employees to 20. A company that, according to Mr. Mitcham, had the potential to be “a million-dollar business” has trouble covering its business expenses. Mr. Mitcham, who inherited the business from his father, is ready to retire, but thanks to the EPA, that business isn’t proving very attractive to his children, or any potential buyers.
Another industry targeted by the EPA is coal, which helps generate about 40 percent of our nation’s electricity. The agency’s climate-change regulations are slowing the construction of new coal-fired power plants and effectively forcing existing ones out of business. Goodbye, jobs. Hello, higher energy prices.
So no matter how government officials like to sell regulations — whether it’s to save the children or save the planet — remember they have real-world effects. And it’s costing all of us.
- Ed Feulner is founder of the Heritage Foundation.
Originally appeared in The Washington Times
Edwin J. Feulner, Ph.D.
Founder, Chairman of the Asian Studies Center, and Chung Ju-yung Fellow
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