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Monday, June 22, 2009

First They Came for the Cheerios

Last week, there was a fairly obscure story that was treated mostly with amusement.

President Obama isn't just rewriting rules regulating the environment and the financial markets -- he is also going after the food industry.

Target and example No. 1: Cheerios.

"Based on claims made on your product's label," the FDA said in a letter to manufacturer General Mills, "we have determined (Cheerios) is promoted for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation and treatment of disease."

If the government's enforcement action against Cheerios were to hold up, the cereal would be pulled from grocery shelves and consumers would need a prescription to buy a box of those little oats.


I suppose it's a bit humorous to think of the government trying to bully a cereal by calling it a drug. Then again, any government willing to go to this extreme is likely willing to go to all sorts of extremes. Today, he signed landmark legislation making regulations on tobacco tougher.


Calling it “a victory for bipartisanship” and “a victory for health care reform,” President Baracl Obama signed the tobacco regulation measure into law this afternoon during a Rose Garden ceremony attended by anti-smoking groups and members of Congress.

Obama used the stage at the signing ceremony to argue that his administration’s governing philosophy of getting things done without the influence of special interests is working.

“When I ran for president, I did so because I believed that, despite the power of the status quo and the influence of special interests, it was possible for us to bring change to Washington,” Obama said. “And the progress we’ve made these past five months has only reinforced my faith in this belief.”


I'm no fan of the tobacco industry but there's not really any evidence that weakening the potency of the cigarette will ultimately save lives. Ultimately, putting tar in your body will kill you whether you are smoking potent cigarettes or so called weak ones. It's just as dubious to think that teen agers begin smoking because of advertising that is targeted toward them in some sort of Machiavellian way.

All of this is just the begining of an era of stiffer regulatory standards all over the place. He's raised CAFE standards so that in eight years our emissions standards will mean miles per gallon averages will be nearly twice as much as they are today.

Financial regulatory reform also promises to be heavy handed. The president has created the Consumer Financial Protection Agency which will have broad powers to regulate any financial consumer product. He's also given the Federal Reserve new power to regulate businesses deemed too big to fail. Furthermore, along with Treasury, the Fed will also now manage the concept of "systemic risk".

Cap and trade would limit the amount that we emit of green house gases. Finally, credit cards are now facing the long arm of the government regulator. There's nearly nothing that the president doesn't believe needs to be controlled, managed, and regulated. The problem, soon enough, is that we create a government that's out of control, drunk on power, and so ultimately policing just about everything. If Cheerios are any indication, we are in for tyranny of regulations.

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