A quick Tax Day post

In typical fashion I put off doing my taxes until tonight. That’s a solid 12 hours ahead of when I did them last year. In untypical fashion, I knew where I’d put all the paperwork needed to complete them. It’s almost like I’m becoming a real adult.

This year was also notable for being the first in recent memory in which I’m receiving a refund, though for the regrettable reasons that I did no paid freelance writing in 2009 and took a capital loss on a mutual fund that I had to sell while recovering from my move cross-country. If I’d realized I was getting a refund I’d have filed sooner. While I’m happy to discover I have a check coming my way, Megan McArdle helpfully explains that getting refunds is not a good thing:

Getting a “refund” on your taxes means that you have just made an interest-free loan to the government. Do you relish the opportunity to make interest-free loans to anyone else, just for the sheer joy of eventually getting your own money back? I hope not.

As it happens I generally only give interest-free loans to people with guns and prisons at their disposal.

I wrote last year about my desire to abolish mandatory withholding entirely. Read the whole thing here or just this excerpt from Charlotte Twight about how withholding manipulates taxpayers to increase the size of government:

We have seen that, on many levels, income tax withholding increases transaction costs to the public of understanding the magnitude of the income tax and of opposing it politically. Government officials always have regarded withholding as a seemingly “painless alternative” (U.S. House Hearings 1980: 35). Lacking an understanding of the concept of present value, many taxpayers do not perceive that withholding causes the real burden of their tax liability to be greater. Indeed, the common practice of overwithholding associates the payment of taxes with an apparent financial benefit rather than cost, distorting taxpayers’ assessments of the actual costs and benefits of government activity. Consistent with a transaction-cost-manipulation model, the expected return of such overpayments makes people feel “happier’” about sending in their tax returns on April 15. The very mechanism of withholding deflects blame from the government by requiring employers to initiate and bear the cost of the forcible extraction of people’s income. Piecemeal collection each payday from income the taxpayer never sees obscures the magnitude of the annual tax. And, because it is a forcible extraction, it raises the transaction costs to the public of expressing political resistance to taxes by not paying them.

And on a lighter note, here’s Reason’s Nick Gillespie and Meredith Bragg reminding us that all this tax money is at least going to a good cause:

Links for 4/14/10

How Justice Stevens is like the best strip club in Utah

Against “Asian flair”

What’s the matter with FOX News?

Microloansharking?

The bright side of paying for food on airlines

Rats and the Prisoner’s Dilemma

10 simple Google search tricks

Libertarians and Fair Trade coffee

Henry Farrell asks:

[...] why are so many libertarians opposed to fair trade coffee?

It would seem to me that fair trade coffee is fairly hard to argue with on the principles of consumer sovereignty (i.e. the claim that consumers know their own interests best, and are able to realize them through the market mechanism). If consumers want to pay a premium for coffee that has been produced ‘fairly,’ then this should be no more troubling for libertarians than consumers wanting to pay a premium for e.g. luxury chocolate (which often is made from the same basic material as very-good-but-not-horrendously-expensive chocolate), and arguably less troubling.

Then Jim Henley piles on too:

Where I was going with that when planning out the post is, if one isn’t careful, the appreciation of the ironic power of self-interest to fulfill social needs can slide into, first credulity – there’s got to be an irony in here somewhere! meaning, almost anywhere – and then decadence: mere contrarianism. At worst, contrarianism that isn’t just sloppy but smug: proud of itself for asserting ironical, “politically incorrect” claims that widely recognized beliefs and decencies are actually myths and vices. Tee hee! Look how upset everyone gets when I tell them how wrong they are to hold their comforting nostrums!

They’re both right that Fair Trade is just another form of voluntary free trade and that the hostility some libertarians express toward the idea of paying more for coffee to help poor farmers is distasteful at times. However at the risk of being one of those smug contrarians Henley dislikes so much, I’m going to defend the libertarians on this one. Partially, anyway.

The simplest reason to object to Fair Trade coffee is that it’s just a stupid name. It suggests that all other coffee is unfair and exploitative. As a sign at one coffee shop I visited put it, “Fair or Unfair? It’s that simple.” Well, it’s not that simple. And if, as I do, you think the insights of Adam Smith, David Ricardo, and other economists are hard-won intellectual achievements, then a label that implicitly opposes those ideas is going to rub you the wrong way. This could have been avoided if we labeled Fair Trade as something like “Charity Coffee” instead, which would be more accurate and avoid disparaging any economic theories. But then it might not have caught on as well because buying it wouldn’t let people signal their opposition to globalization, which brings us back to why so many libertarians dislike Fair Trade in the first place.

That’s probably as far as your average capitalist goes in his reasons for disdaining Fair Trade coffee. But if you’re actually into coffee, you know that some of the smartest critiques of Fair Trade are coming from good-hearted liberals working in the industry. They’ll tell you that Fair Trade is out of step with the current market for specialty coffee.

The first complaint you’ll hear about Fair Trade is that it doesn’t do enough to encourage quality. I’ve had some very good Fair Trade coffee and I’ve had some that’s terrible; the label doesn’t promise anything. It sets a price floor without any real link to cultivating better beans or promise that the roaster knows how to handle them. Even worse, by mandating a co-op model of production, Fair Trade can reduce incentives for individual farmers to improve their crops. This may not matter if consumers are buying Fair Trade coffee just for charity, but over the long-term they may not continue paying more for the label if they’re not perceiving higher quality in the cup.

A bigger objection to Fair Trade is that it’s no longer the best deal for farmers. The Fair Trade minimum of $1.26 per green pound is often higher than commodity coffee prices but well below what premium coffee roasters will pay. For example, Counter Culture’s Direct Trade program pays a minimum of $1.60 per green pound with additional incentives for exceptional crops.

There’s much more one could say in criticism of how Fair Trade certification works; there’s no need to repeat them here but see this recent Guardian article or Kerry Howley’s excellent piece from Reason a few years ago if you’re interested.

What’s frustrating about the successful branding of Fair Trade is that it’s used as a cognitive shortcut by consumers for what qualifies as an ethical coffee purchase. I speak from experience selling coffee in Washington’s Georgetown neighborhood. The type of customers some libertarians enjoy mocking would often come in asking for Fair Trade beans. Sometimes I could engage them and explain that what we were offering was better than Fair Trade, that farmers got more money for the beans and the quality of the coffee was outstanding. Other times I couldn’t and they walked out for another shop, likely ending up doing less good for farmers and with a worse cup of coffee. Customers’ loyalty to Fair Trade can be just as uninformed as some libertarians’ knee-jerk opposition to it.

Here’s Jim again on why Fair Trade seems like such a bad idea to people who’ve taken to heart Adam Smith’s lesson that following one’s self-interest is often the best way to do good in the world:

[...]something like Fair Trade will seem like it should be the kind of thing where there must be a catch. Here are people trying to act out of benevolence and still getting dinner! It would make perfect sense – and be a lot of fun! – if these do-gooders were actually doing harm.

But by this point, you can start getting lazy. Like, assuming that fair-traders must be screwing up “price signals” that are the market’s way of telling poor foreign farmers to stop farming.

I’m not convinced that buying Fair Trade actively does harm, though excess production is a legitimate concern. If you’re shopping at Costco and debating between a big bag of Procter and Gamble’s regular coffee or their Fair Trade beans, you’re probably making some farmer marginally better off by choosing the latter. Fair Trade may play a useful role in mass market coffee. However if you want to pass the maximum of your purchase price onto coffee farmers, your best bet is to buy the highest quality coffee you can from roasters like Counter Culture, Intelligentsia, or Stumptown (to name the usual three, though there are many others).

In fact, it doesn’t even matter whether you care about coffee farmers or not. If you selfishly pay for quality in the cup you’re very likely buying beans that brought more revenue to them than Fair Trade would have. Adam Smith was right and so, sometimes, is the libertarian’s ironic intuition.

Links for 4/13/10

Akbar Ganji wins 2010 Milton Friedman Prize for Advancing Liberty

Turley on the need to preserve open courts

Why is the coffee in France so bad?

πr2 — Take it to the limit!

Have we been missing 90% of the universe’s galaxies?

5 arguments against Apple 3.3.1

A Toronto heart miracle!

How to make coffee bitters

Yesterday’s Cocktail Camp event at Portland’s New Deal Distillery was a lot of fun. My presentation was about the use of coffee and tea and cocktails, so I’ve been trying out some interesting experiments that I’ll be posting here later this week. My talk ended up coming in two parts. In the first I gave a quick Coffee 101 lecture, discussed the basics of brewing, and explained why coffee can be a difficult ingredient to work with in a bar setting. Many of us craft bartenders treat it horribly. We’d never serve citrus juice that we’d squeezed a week ago but we essentially do that with coffee by using stale beans, pre-grinding, or just not brewing properly. Many standard coffee cocktails could be improved simply by getting the fundamentals right.

However some bartenders may not have access to good coffee and we may not want to limit coffee cocktails to hot drinks, so in part two we got to the fun part: Actually making cocktails using coffee as an ingredient in other ways. One of these is by making coffee bitters. Lance Mayhew and I started working on our first batch of these in December and are really happy with the recipe we’ve developed since then. It’s fairly simple so we hope others will try them out as well. The ingredients are:

750 ml Lemonhart 151-proof rum
peel from two medium-sized oranges
24 g coffee, coarsely ground with a mortar and pestle
approximately 2.5 g orris root*
1 star anise

Combine all ingredients in a jar and let steep, tasting daily to check their progress; 4 days to a week will probably be enough time. Decant through a fine mesh strainer and transfer to a bitters bottle.

For the coffee we used Stumptown’s Costa Rica Herbazu in each batch for the sake of consistency. I’m curious to see how other coffees might affect the bitters, but I think any Central American coffee that hasn’t been too darkly roasted should be fine.

The above recipe makes a lot of bitters and uses an entire bottle of rum, so feel free to halve or quarter it for a smaller yield. And for a cocktail to use them in, try the Antigua Old-Fashioned featuring English Harbour rum.

* Update 4/18/10: Quick clarification: This is dried, chopped orris root, not powder.

Congratulations to Grape and Bean

Grape and Bean, a great coffee and wine shop in Alexandria, VA where I worked a couple years ago, is the subject of a new video by Caleb Brown:

The video is part of a contest highlighting free enterprise; vote by liking it here, and if you’re in Old Town drop in to visit David and Sheera at Grape and Bean. (Also, I’m glad to see that the Clover is still brewing good coffee!)

Previously:
Minor rebellion
Grape and Bean opens in Alexandria

Links for 4/12/10

The UK’s politicized drinking problem

Happy Tax Freedom Day?

Beware speech with intent to influence!

Asian whiskeys enter the market

Carless in Heathrow

TV psychic on death row for “witchcraft” in Saudi Arabia

Comic Book Cartography

What’s wrong with this picture?

Links for 4/9/10

More air marshals being arrested than making arrests

“Behavior placement” brings in TV ad revenue

Time to lower the drinking age

Americans want to cut government spending, until you get specific

Democrats and pot prohibition

New study shows large secular decline in heart attacks

Do people game MA’s health insurance mandate?

Best passenger complaint letter ever

It wasn’t me

So a day after I announce that I’m a brand ambassador some guy with diplomatic credentials causes a scene by violating a smoking ban:

A Mideast diplomat who grabbed a surreptitious smoke in a jetliner’s bathroom sparked a bomb scare and widespread alert that sent jet fighters scrambling to intercept the Denver-bound flight, officials said.

But no explosives were found and authorities speaking on condition of anonymity said they don’t think he was trying to hurt anyone and he will not be criminally charged. [...]

Two law enforcement officials said investigators were told the man was asked about the smell of smoke in the bathroom and he made a joke that he had been trying to light his shoes – an apparent reference to the 2001 so-called “shoe bomber” Richard Reid.

Why is everyone looking at me? Brand ambassadors don’t even have diplomatic immunity. At least I don’t think they do, but that would be a hell of a perk.

[Via Reason.]

Links for 4/8/10

Obama authorizes assassination of US citizen

Teaching Twitter in Havana

New markets for premium milk

Is junk food the next addiction?

The vegan case for oysters

The lighter side of F. Paul Pacult

How many gadgets does a dog really need?

Genever comes to Portland

razorblade

If you follow my Twitter feed you saw that I posted cryptically last week about having a job interview on April Fool’s Day. It was a real interview and I’m pleased to announce that I’m now working with Lucas Bols as the Portland brand ambassador for Bols Genever, Damrak Gin, Galliano, and the Bols line of liqueurs. I’ve been a fan of their products ever since helping out with the Oregon launch event for their genever at Carlyle a few months ago, so I’m excited to be on board introducing people to this classic spirit that’s been unavailable in the US for a long time.

There’s no better way to kick things off than with a cocktail, so here’s one from Charles Baker that my friend Evan Zimmerman has on the menu at Laurelhurst Market, the Holland Razor Blade:

2 oz Bols Genever
.75 oz simple syrup
.75 oz lemon juice
pinch of cayenne pepper

Shake the first three ingredients with ice, strain into a coupe, and finish with the pinch of pepper. This is a really cool drink and I love the way the spice, sweetness, and citrus balance one another. Stop in soon to try it out.

What I’ve been drinking

Upright Four Play — When I first moved to Portland from DC I missed the latter city’s recent love affair with Belgian beers. Luckily Upright started brewing soon after I got here, producing superb farmhouse-style ales just a few blocks from my apartment. Their first anniversary beer is a sour cherry wheat ale aged in Pinot Noir barrels. It’s one of the best fruit beers I’ve ever tasted, dry and with no hint of the artificial notes you find in some cherry beers and spirits. There are only 80 cases of 750 ml bottles available so this will go fast at the April 9 release party. If you only want to buy it for the label, that’s OK too.

Woodford Reserve Master’s Collection Sonoma-Cutrer Finish — A customer brought this in for me right before Carlyle closed. Finished in Chardonnay barrels, it’s possibly the most unique bourbon I’ve tried. It has a distinct, funky note, and I mean that in a good way. The finish is very smooth. Not for everyone, but definitely worth trying if you can find it. It’s going to be painful when I pour the last of this bottle.

Ledaig 10 YearLance Mayhew turned me on to this Scotch recently. It’s an island whisky from Mull, distilled by Tobermory. It’s fairly light in body and has a very well-balanced dose of peatiness. I like this Scotch a lot and could see it becoming a staple in my home bar, a great option for when you’re not in the mood for a big, assertive Islay. One of my favorite whiskies of the moment.

Deschutes Hop Henge Experimental IPA — At 95 IBUs and with the word “hop” right there in the title I was expecting this to be the sort of bitter hop monster I don’t really go for. However Jeff at Beervana gave it an intriguingly good review so I decided to give it a try. The verdict? This is a seriously good beer. Yes, it’s hoppy, but it somehow manages to extract all the citrusy goodness from the hops without getting too bitter.

Hangar One Vodkas — What, me say nice things about vodka? It doesn’t happen often but these are impressive. Hangar One sent samples of three of their flavors: Kaffir Lime, Buddha’s Hand, and Mandarin Blossom. They all avoid the one-note simplicity of many flavored vodkas. I’m not currently creating any cocktail menus, but if I were I’d consider working one of these onto them.

Links for 4/6/10

Working one’s way up the dim sum ladder

The fate of Hapworth 16, 1924

Our neighbor the brown dwarf

Boaz on the non-existent golden age of liberty

Wet vs. dry aging of beef

Jobs vs. Wozniak

David Weigel’s new blog

Links for 4/4/10

Climatology in crisis

Matt Ridley reviews The Hockey Stick Illusion

Yelp gets more transparent

Northern Virginia police not transparent at all

Preschoolers and branding

Did obesity increase begin earlier than believed?

Why drink? To meet smart women [Link fixed]

More calorie count skepticism

Ryan Sager* is skeptical that the federal calorie label mandate will be effective:

One of the main findings of research into how and why we eat is that we’re very good at coming up with excuses to eat more. Exercised today? You’re entitled to another helping of cake. The food you’re eating is labeled “low fat”? Time to wolf down 10 more of whatever it is. Your favorite fast-food place has introduced a salad? A study last year in the Journal of Consumer Research showed that when you see a salad on the menu, you give yourself license to get something more indulgent.

If you were “good” at Starbucks, in other words, you’ll probably be “bad” later. Our brains find calories rewarding. And we like to do rewarding things.

There’s additional suggestive evidence for this in a Yale study from late last year that found that test subjects who reduced their calories at one meal completely compensated later in the day. The compensation effect disappeared when menus included a disclaimer that the average adult should only consume 2,000 calories per day, which the new law also requires restaurants to post on menus. However this study tracked only one day of consumption and took place in a highly contrived environment. I expect that over repeated visits to real chain restaurants this disclaimer will lose salience, so it will be interesting to see if follow-up studies of actual consumers bear this out.

Also of interest is a video from Hot Air interviewing the owner of a small Minnesota restaurant chain. The editing is overly anti-Obama and Pelosi at times — the calorie labeling aspect of health care reform had bipartisan support — but it does provide some insight into how this law will be an expensive hassle for mid-sized businesses.

[Hat tips to Reason and Bunkerville.]

*Corrected.

Links for 4/4/10

Lunch with The World’s Most Interesting Man

Conflicted existence of a female porn writer

Demotivation and Tiger Woods

Unpaid internships and minimum wage

If I reduce supply, will my price go up?

Not faking it on Facebook

Expansion of the universe still accelerating

Worlds collide!

Mixologist Todd Thrasher joins forces with my friends at Reason.tv to serve a tasty cocktail and discuss the archaic control and safety regulations that inhibit the craft of bartending:

I’m not sure Todd’s right that the acidity in a drink would be enough to kill bacteria in the short time between when it’s shaken and consumed, but in any case the risk of contamination is very low and we’re all adults enjoying these concoctions.

To make your own Melanie’s Pisco Pipe Dream, visit Crispy on the Outside for the recipe.

Previously:
The nanny state vs. egg drinks