Should your tax dollars pay for Christmas tree ads?

Maybe you were too distracted last week by trivia — like the changing control of the Virginia State Senate,

A federal program almost paid for their advertising.

the Commonwealth Attorney election upset in Henrico, the accident that killed three people and tied up traffic all day on I-85, or the UN report confirming that, yes, Iran has been working on the bomb all along — to notice a horrendous right-wing plot to victimize a deprived minority, namely America’s beleaguered and discriminated-against Christmas tree growers.

But don’t worry. Kerem Ozkam, of Advertising Age, wasn’t.

An American tragedy

Last week, November 8 to be specific, the US Department of Agriculture announced the formation of a federal Christmas Tree Promotion Board, whose function would be

to run a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace; maintain and expand existing markets for Christmas trees; and to carry out programs, plans, and projects designed to provide maximum benefits to the Christmas tree industry” (7 CFR 1214.46(n)).  And the program of “information” is to include efforts to “enhance the image of Christmas trees and the Christmas tree industry in the United States” (7 CFR 1214.10)

as the Heritage Foundation’s David Addington reported the same day.  To pay for this program of “image enhancement,” he added,

the Department of Agriculture imposed a 15-cent fee on all sales of fresh Christmas trees by sellers of more than 500 trees per year (7 CFR 1214.52).  And, of course, the Christmas tree sellers are free to pass along the 15-cent Federal fee to consumers who buy their Christmas trees.

Within hours, the news was up on Drudge Report and the Atlantic blog and broadcast on Fox News. And within hours of that, Ozkam laments,

By the end of the day, the White House had caved, telling reporters the Department of Agriculture will “delay implementation and revisit this action”

to the detriment of the National Christmas Tree Association, whose members grow fresh Christmas trees and have been losing market share to members of the American Christmas Tree Association, who manufacture artificial ones.

In his righteous indignation, Ozkan makes several claims about this dastardly, underhanded sabotage, most of which are belied by facts he himself reports toward the end of his article.

Claim 1: The tax wasn’t a tax.

It was, says Ozkan, “a commodity checkoff program.” This “checkoff would require, under USDA regulation, that all sellers of more than 500 Christmas trees a year” kick in the fee. This includes the 30% of the fresh Christmas tree industry that doesn’t want to pay for an ad campaign voluntarily. I don’t know what Ozkan’s or the USDA’s dictionary says, but mine says that “a compulsory contribution…levied by government” is a tax.

Claim 2: “It has little to do with the Obama administration.”

Last time I checked the Constitution, the Department of Agriculture was part of the executive branch.

And even though the NCTA started lobbying for this program some three-and-a-half years ago, a look at the calendar suggests that while it may have sat with the Bush administration for all of eight months, the Obama administration’s been dealing with it for two years and ten months. So, as Obama finally admitted about the economy, his administration now owns it.

Besides, whether it’s Bush profigacy or Obama profligacy, it’s still profligacy — and at a time the nation can least afford it.

Claim 3: Everybody does it.

“Familiar campaigns such as ‘Got Milk?’…are the result of similar programs,” notes Ozkan. Only they aren’t. The classic milk campaign that broke in 1993, for example, was funded under a  California state program, not a federal one.

Claim 4: Programs like this automatically pay for themselves.

Though milk sales in California increased by 7% from 1993 to 1994, the following year, when it was licensed to the National Milk Processors Board and rolled out nationally, it failed to increase sales nationwide.

Claim 5: Hey, $2 million is only chump change.

The tree growers’ association is looking for what Ozkan calls “a modest $2 million.” This is a sum the federal government probably blows through in a nanomicrosecond. It’s even peanuts compared to what the Obama administration has flushed down the toilet on failed green-energy schemes. But supposedly trivial expenditures like that have a nasty way of adding up. As Senator Everett Dirksen said, “A billion here, a billion there, and pretty soon you’re talking real money.”

Of course, the “modest $2 million” fails to include the dollar value of bureaucrat-hours and overhead to select the Board, draft regulatuions for collecting the 15% per tree fee, doling it out for advertising, and administering the program overall.

The federal government is not, moreover, known as a paradigm of cost-effectiveness, so why isn’t the association running such a program itself? In 2004, Ozkan reports, “the industry managed to raise roughly $1 million…[T]hey ran a cost-effective campaign…The results? A 40% increase in sales over the next five years.” But I guess that was without using federal power to coerce voluntary contributions from that unwilling 30%.

Claim 6: You solve problems by throwing money at them.

According to three industry officials — who, apparently in the interest of balance, Ozkan says are the only outside sources he spoke to — the $2 million they wanted was “still miles behind what [the articifical tree industry] spent annually.”

Funny you should say that. As Ozkam himself admits,

according to tax returns of The American Christmas Tree Association, the trade group for the artificial-tree industry, the group had 2009 revenue of just $93,000 and spent only $600 on advertising and promotion.

So if the artificial-tree industry can clean their clocks in the marketplace on a $600 budget — supplemented, admittedly, by retailer advertising that the fresh tree growers haven’t succeeded, or maybe even tried, getting — what do they need the $2 million for?

Who’s victimizing who?

Some of the commentors to Ozkam’s article took his line of thinking even further. One Mary Schumacher of — surprise, surprise — Seattle claims that not setting up this government-regulated tree fee program somehow deprives the fresh tree industry of its right to advertise and has de facto put the government in the position of picking winners and losers.

But there’s a difference between the right to advertise and a subsidy for advertising. Seven years ago, the tree growers exercised the former without any recourse to the latter. Nobody’s stopping them from doing it again. And if the National Christmas Tree Association had gotten $2 million under federal auspices to pit against the American Christmas Tree Association’s $600, who are the winners someone’s picking here?

As H. L. Mencken famously said, “When A annoys or injures B on the pretense of saving or improving X, A is a scoundrel.” In this case, B is consumers, taxpayers and the Americian Christmas Tree Association. X is the National Christmas Tree Association. And A is the federal government and its cheerleader, Ad Age‘s own Kerem Ozkam.