TCS Daily


Time to Burn the Heretic

By Radley Balko - November 4, 2004 12:00 AM

Over at National Review online ("Heresy Time", Oct. 21, 2004), David Frum writes:

"I know it will make our friends at the Cato Institute choke, but with a new study suggesting that more than one-fourth of the rise in health costs can be attributed to obesity, would somebody explain slowly to me why a federal tax of say a penny an ounce on calorific sodas would not be a good idea?

"A personal observation: I spend a month or so out of the year in a small town in rural Canada. Perhaps the most striking visual difference between this town and its American counterparts in rural Ohio or New York is the shape of the population: It is an unusual to see an adult who is more than 10 or 15 pounds overweight, exceedingly rare to see one who is more than 50 pounds, and freakish to see an overweight child.

"What accounts for this difference? Perhaps many things, but here is one that surely has a lot to do with it: food portions. Incomes are generally lower in Canada and costs and taxes are higher. Food vendors respond by offering smaller sizes in order to hold prices down. The market is still dominated by 10 ounce aluminum cans of soda, not 20 ounce plastic bottles. A "small" coffee contains six ounces not eight. At Canada's best-known chain of sit-down family restaurants, the standard dinner is a quarter piece of roast chicken and about as many French fries as would comfortably fit inside a wine glass.

"Canadians are underpaid and overcharged - and that is a severe shame. But this shame offers an unintended health benefit as recompense.

"And as Americans struggle with an epidemic of obesity - and the ensuing costs to the taxpayer - conservatives who favor (as almost all conservatives do favor) Medicare and Medicaid need to ask themselves whether their easy libertarian attitude to the worst practices of the fast food industry retains its relevance. Big Gulp drinks and super-sized fries are making America sick - and you are paying the bill. A little moderation would cure a lot of medical and fiscal ills; and a little incentive might induce that moderation.

Given that I wrote the article he links to, perhaps I guess I'll step up and be the one to slowly explain to Frum -- a conservative -- why using the tax code to manipulate consumer behavior is a bad idea.

I'll address Frum's points one by one. But first, let me offer a more general objection to his post. What's most troubling about Frum's position is not only that he assumes a top-down government tax remedy to a perceived social problem will work, but that it's okay in principle. Desirable even.

It's neither. You have to wonder: If it's okay to invite the federal government onto our dinner plates, our kitchens, and into our mouths, what sphere of life is still safe from politicians and bureaucrats?

But there's something else at work here, too. The nonchalance with which Frum assures readers that "almost all conservatives" accept the premise of Medicare and Medicaid -- or the very idea that some people should be forced to pay for other people's medical expenses -- speaks volumes about the state of 21st century conservatism. There was a time when such a position would have been abominable in conservative circles. Come to think of it, there was a time when David Frum and National Review would have been among those doing the abominating.

But we live in post-prescription-drug-benefit, post-W, post-compassionate-conservative America, where the principles of personal responsibility and limited government have given way to the "principle" that assigning a government program to remedy society's every ill is just fine, so long as said government program is administered in an adequately conservative manner (which, from what I gather over the last four years, means first filtering it through a faith-based organization, or subjecting it to national testing).

So when it comes to health care, the new conservatism apparently means that instead of advocating reforms that would apply consumer-driven pressure to drive down medical costs, we should just accept -- even cheer -- the socialization of modern medicine. Forget markets. On the contrary, we should harness the power of nationalized health care, embrace the state, and employ the tax code to manipulating people into making the choice we want to make -- choices in line with good, clean, conservative living.

That said, let's move from objections to the philosophical underpinnings of Frum's position to the actual substance of it. So as not to offend with bulky, "super-sized" servings of logic, perhaps it's best to break Frum's proposal into easily digestible bites -- a sentence or two at a time.

Frum writes:

"I know it will make our friends at the Cato Institute choke, but with a new study suggesting that more than one-fourth of the rise in health costs can be attributed to obesity, would somebody explain slowly to me why a federal tax of say a penny an ounce on calorific sodas would not be a good idea?"

Skip the introductory pokes at Cato and myself and the general plea, and focus on the study Frum cites.

That Robert Wood Johnson Foundation-funded study made waves last week, and gave the nutrition nannies of the world ample opportunity to tout the kinds of tax and regulatory schemes Frum entertains. But there are a couple of problems with using the results of the Thorpe, et. al. study to call for government programs aimed at reducing demand for "calorific" foods.

The first is that the study makes no attempt to separate "fitness" from "fatness." That's not surprising. But it is worth noting. Because among the handful of studies that have made the distinction, the results have been eye opening. The Journal of the American Medical Association recently published a study warning that fitness is a far better indicator of illness like heart disease than weight, and that nearly all studies of obesity and overweight put too much focus on the Body Mass Index scale, and too little on physical activity and fitness.

A recent report for the President's Council on Physical Fitness and sports quoted the Cooper Institute researcher Steven Blair, who summarized, "active obese individuals actually have lower morbidity and mortality than normal weight individuals who are sedentary."

In fact, according to Blair's research, a sedentary person of normal weight is twice as likely to die early than an obese man who's active. The relative mortality risk of an obese but active man rises only to 1.1 times that of a normal weight, active man. In other words, activity is much more indicative of good health than weight.

The point of all of this is that suggestions like Frum's and numerous others who want to use government to control the diet side of the obesity's-making-us-sick debate miss the point, particularly when you consider that diets almost always fail. There's no reason to think that government-sponsored diet incentives such as excise taxes on calories are going to make them any more successful.

The other problem with the study and Frum's interpretation of it is that it implies that confined, non-contagious health ailments like obesity are health problems for society at large. That's only true if you believe in socialized medicine. Maybe obese people do pay more in medical bills. So what? Instead of punishing soda companies, non-obese soda drinkers, and those people not on public health assistance for the lifestyles the low-income obese, why not work to restore personal responsibility to the health care system? Why not work to confine the costs of obesity to obese people and obese people only?

But let's get to Frum's actual proposal -- a tax on soda. Principles aside, why is it a bad idea logistically?

Because it won't work. To add to the "fat" and "fit" figures above, overall average caloric intake among children is virtually unchanged over the last thirty years, and overall fat intake has actually decreased. Looking at soda specifically, there's simply no link between soda consumption and the rise in obesity. Non-diet soda consumption has remained stable for the last 15 years. One study from Frum's idealized Canada showed that poor Canadian kids are twice as likely to be obese as rich Canadian kids, even when they eat the same general diet, a pretty clear indicator that our kids today aren't fat because of evil soda and fast food companies, but because they're spending too much time in front of the computer/TV/video game screen.

I'd jokingly suggest Frum should be calling for taxes on video games, Blockbuster, and America Online, but I fear he'd take the suggestion seriously.

"A personal observation: I spend a month or so out of the year in a small town in rural Canada. Perhaps the most striking visual difference between this town and its American counterparts in rural Ohio or New York is the shape of the population: It is an unusual to see an adult who is more than 10 or 15 pounds overweight, exceedingly rare to see one who is more than 50 pounds, and freakish to see an overweight child."

That's a fine anecdote. But it's only an anecdote. I just spoke on obesity at a conference in Canada. Canadians are no more svelte than their American counterparts. Sixty-two percent of Canadians are either overweight or obese by BMI standards. That's statistically indistinguishable from the 64.5 percent of Americans in the same condition. According to the Canadian Medical Association, overweight and obesity rates in Canadian children mirror the rises among American children. The prevalence of obesity and overweight in Canada has doubled in the last 15 years. Frum's cozy hamlet aside, there's very little difference between American and Canadian waistlines.

"What accounts for this difference?"

Nothing. There is no difference. Frum, a policy guy, ought to know better than to extrapolate quaint, anecdotal observations to make broad, sweeping generalizations. Especially when advocating a particular public policy.

"Perhaps many things, but here is one that surely has a lot to do with it: food portions."

That isn't true either, and I'll explain why in a moment. But even if it were, so what? Why should we complaining about -- and bringing government into address and correct -- the fact that we're getting more food for less money? Isn't that a good thing?

"Incomes are generally lower in Canada and costs and taxes are higher. Food vendors respond by offering smaller sizes in order to hold prices down."

Again, the idea that portion sizes in Canada are smaller just doesn't hold up, as I'll show in a minute.

But odder still, Frum's implication here seems to be that low-incomes equate to slimmer figures. That doesn't hold

The real relationship between income and obesity is complicated. The developed world is certainly on par heftier than the developing world. But that's because we have more food and less back-breaking labor -- certainly two advancements we should be celebrating, not lamenting.

But within the developing world, the data are all over the place. Yes, Canada is slightly poorer and (very) slightly more slender than the U.S. But Australia is the second-fattest country in the developed world, yet ranks twentieth in per capita income. Switzerland and Norway are both wealthier and skinnier than the U.S.

And within a developed country, we see the opposite effect of Frum's explanation. Poor people have significantly higher obesity rates than wealthy people. That's true in Canada, too, which shoots a mile-wide hole in Frum's theory that poor people can't afford bigger portion sizes.

"The market is still dominated by 10-ounce aluminum cans of soda, not 20 ounce plastic bottles."

I talked to representatives of the two largest soda bottlers in Canada, which happen to be Coca-Cola and Pepsi, as well as reps from two soft drink trade associations. All assured me that there's no significant difference in average serving sizes of soda between the U.S. and Canada. Consumers in both countries can choose from a wide variety of options with respect to size and packaging. In both countries, cans dominate take-home sales (soda you buy at a grocery store), and bottles have a growing edge in single-serving sales (soda you buy at a convenience store, for example). Incidentally, cans are sold in 12-ounce servings, not ten. And in Canada the measurement is in milliliters, not ounces. Finally, according to Statistics Canada, Canadians are drinking twice the amount of soda they were thirty years ago. So even if Frum's right, and 12-ounce cans do still dominate the Canadian market, Canadians are compensating by drinking more of them.

"A "small" coffee contains six ounces not eight."

The largest coffee retailer in Canada is the Second Cup chain. I called and asked what their smallest coffee size was. It's eight ounces. The second largest coffee retailer in Canada is Starbucks. It's smallest size is also eight ounces, just as it is in its U.S. stores. The third largest chain is Tim Horton's (owned by Wendy's). Smallest size: Eight ounces.

I'm not sure where Frum's getting his coffee while he's in Canada.

Coffee's also almost completely devoid of calories. If Frum's referring to specialty coffee drinks -- lattes, mochas and the like -- they're all significantly higher in calories than a regular cup of coffee. But if consumers are swapping double white chocolate mochas for black coffee, the issue isn't serving size.

"At Canada's best-known chain of sit-down family restaurants, the standard dinner is a quarter piece of roast chicken and about as many French fries as would comfortably fit inside a wine glass."

Another anecdotal example with no real analytical value. I assume Frum's talking about Swiss Chalet, a rotisserie chicken outfit. But Americans hungry for rotisserie chicken can choose from chains with healthy, low-calorie options too, most notably Chicken Out and Boston Market. And Canadians can still choose from a panoply of fast food options of Canadian and American origin, all with super-size potential. Swiss Chalet's menu also includes prorogues, "garlic cheese loaf," and chicken wings -- meaning that Canadians who want high-calorie, high-fat foodstuffs while sitting down to eat can still opt for them, even at Canada's best known chain of sit-down family restaurants.

"Canadians are underpaid and overcharged - and that is a severe shame. But this shame offers an unintended health benefit as recompense."

That's just not true. Canadians may be underpaid and overtaxed, but it isn't making them healthier. And as noted above, they're not any skinnier. And nearly every measure of health -- life expectancy, infant mortality, incidence and survival rates of cancer and heart disease, etc. -- increases with wealth. The idea that if we were poorer or if food were less abundant we'd be better off is absurd, even more so when the idea comes from the pen of someone well-versed in the way markets work.

"And as Americans struggle with an epidemic of obesity - and the ensuing costs to the taxpayer - conservatives who favor (as almost all conservatives do favor) Medicare and Medicaid need to ask themselves whether their easy libertarian attitude to the worst practices of the fast food industry retains its relevance."

"Worst practices" is a loaded buzz phrase employed by anti-corporate Naderites. It's surprising to hear it invoked by a conservative. The "worst practices" Frum alludes to here include giving customers what they want, and continually tweaking and streamlining business models to give us more product for less money. Why, again, is that so undesirable?

And even accepting Frum's premise -- that obesity is looming public health catastrophe that will wreck Medicare and Medicaid -- his solution wouldn't do much to correct it. A one-cent per ounce tax on soda certainly isn't enough to forestall any pending crisis, real or imaginary. Taxes on cigarettes don't noticeably depreciate the number of smokers until they hit several dollars per pack. If, as we're often told, America is on the verge of an obesity-fueled healthcare meltdown, we'd need a much more aggressive, revolutionary approach to overhauling the way food is served and sold in this country than a light tax on soda.

If that's what Frum wants to try, he should say so.


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