Not From the Onion: The Christmas Tree War

Illustration by Mark Alan Stamaty. Click image to expand.
From Slate

The war between artificial and natural Christmas trees has been going on for years and the artificial trees are winning. The National Christmas Tree Association, the association of natural trees, has been trying to fight back with “information” campaigns like What You Might Not Know About Fake Christmas Trees. Some samples: they are made in China, by exploited workers, with lead!  And my favorite:

…fake trees were invented by a company who made toilet bowl brushes…regardless of how far the technology has come, it’s still interesting to know the first fake Christmas trees were really just big green toilet bowl brushes.

The National Christmas Tree Association, however, has a problem. Christmas trees are produced in a competitive industry with many small firms so there’s no big firm willing to bear the costs of a national ad campaign. (The artificial tree lobby group, The American Christmas Tree Association has a noticeably more professional website and a better name.)  Thus, following the lead of milk, cotton and California raisin producers, the natural Christmas tree industry lobbied the Dept. of Agriculture to create the Christmas Tree Promotion Board. The DOA agreed and authorized the board to create a “program of promotion, research, evaluation, and information designed to strengthen the Christmas tree industry’s position in the marketplace,” to be financed by a tax on Christmas tree producers (=>500 sales) of 15 cents per tree.

The Christmas tree tax outraged conservatives such as David Addington, formerly Cheney’s chief of staff and once called “the most powerful man you’ve never heard of.” Addington argued:

The economy is barely growing and nine percent of the American people have no jobs.  Is a new tax on Christmas trees the best President Obama can do?

Not surprisingly other conservatives labeled this a Grinch tax and a tax on Christmas. Other people (liberals?) attacked the tax as promoting Christianity which I find strange since I always thought of the Christmas tree as a pagan symbol. Oh well.

Finally, the Obama administration put the program on hold. (Amateurs – don’t they know taxes are raised after elections not before?). So there you have it, American politics in a nutshell.

Hat tip: Joshua Hedlund.

Addendum: Here is Rush, The Trees, just because.


better name.

Better name? American vs. National? Seems a traditional sort of rivalry to me.

Ironically, the controversy over the Christmas-tree-tax will fuel untold television segments and op-eds, directly stimulating economic activity in the media (seriously, the folks in charge of figuring out what the front is in the War on Christmas for Bill O'Reilly this year have it made) and increasing interest in buying real christmas trees; far more than traditional advertising purchased with what little revenue results from the tiny tax. If I were hired by this new XMas Tree Promotion board to figure out an unconventional advertising strategy, ginning up some war-on-Christmas nonsense would be a top priority.

Now, the members of the XMas Tree Association will benefit more than they would have if they'd collected and spent the tax as planned.

Broken Tree Fallacy?

budda dump

I saw Rush this year and was the best concert I'd ever been to, probably due to the smaller venue. They've got another good 20 years in them!

The natural Christmas tree lobbyists failed with the rent-seeking on this one... you're supposed to tax your competition to fund your free federal marketing, not your own products...

Christmas trees come from 15th/16th century Germany, and have always been Christian as far as I know. Are you thinking of Yule Logs and/or decorating with holly?

No, we are celebrating cutting down the pagan tree, decorting it with christian motifs, then symbollicy burning it later.


Christmas trees being replaced by artificial trees.

There goes my plan for a degree in forestry.

A degree in forestry has been a bad idea since Clinton, there are no jobs at alll except in the deep south pine industry. If you ever want to meet a depressed and morose bunch, go to a forestry convention. They can't even afford beer.

Incredibly, Obama has figured out a way to specifically tax both white people (tanning salon surtax) and now Christians (Christmas trees).

You gotta hand it to him -- the guy is good.

Incredibly, this was actually a Republican idea, which Obama is now at least delaying implementing.

Don't believe me? Ask those commies over at Cato.

You think there are no black Christians? No Hispanic Christians? Do you live in America?

That does not address his point at all. Nor would pointing out that atheists go to tanning salons.

The part I choose to take way too seriously is "You gotta hand it to him": I refuse to do so! I don't even know what I am supposed to hand over. Is this some new government takeover that I haven't heard about yet?

Nor should we bring up the fact that there are actually Asians, Hispanics and African-Americans who go to tanning salons. Bizarre, yet true. I know readers of this blog would be SHOCKED to find out that people behave irrationally.

Just put it on hold? Doesn't he know that if you choose not to decide you still have made a choice?

That is the greatest comment in the history of Marginal Revolution.

Wait, this is from a guy named Neil? Could it.... be???

Wow, thanks! (and if this is THE Neil as Jim suggests, add 100 more exclamation marks)

No, no, no. Bush was The Decider. Obama brought Change by deciding and then changing his mind to not decide.

:-) the comments have been red hot so far with great one liners...

Interesting to read the reactions to the post.

Let me ask a question: what if the cost of the program increased the sales of christmas trees and total revenue, and, after deducting the tax, both more Christmans trees were sold and farmers made more profit.

Would your reaction be the same?

Do you know that for this kind of a program, more than 50% of the farmers have to vote for it. Is it then fair to call it an Obama tax?

It doesn't matter. It's still an attempt to distort the market and restrict competition by one industry that's losing market share to another industry (the artificial Christmas tree industry). Why doesn't every industry lobby to get their own federal board, and we can all pay 15 more cents on everything to get the federal boards to promote everything! (Maybe we need a Federal Candle Wax Board to charge more for candles and promote candle sales that are being lost to light bulbs. It might even increase total revenues for the candle industry!) Or, you know, we could just let customers decide whether they want to buy real trees or artificial ones based on the marketings done by both industries on their own.

Besides, if this 15 cent program would increase net revenues for the farmers, why don't the farmers just charge 15 cents more for their trees and spend the money on their own marketing?

This is a classic collective action problem. In theory, all farmers could be made better off if advertising were to increase demand for their product. However, individual farmers would have an incentive to free-ride on any advertising campaign, so it only works if all farmers are taxed to pay for the campaign. It's quite possible that demand will not increase enough to pay for the campaign, but that is not a distortion. It is only distortionary if some subset of farmers will extract more than their share of the rents or if you believe that advertising distorts outcomes by coercing people into buying things they would be better off without. If you believe the latter, then you have much bigger targets than Christmas trees.

Think of it this way: these are small producers trying to solve a problem that each could not solve individually because if one advertised the others would free ride and therefore no one will advertise even though collectively they would all like to.

Ask yourself: how is this different than a trade association sponsoring generic advertisements for their products?

As to this aspect, it isn't--industries compete with each other industries all the time using trade association sponsored generic ads.

The only real issue is this: that if there is an assessment because 51% voted in the assessment, someone who didn't want the program will also pay--but, that person, first, had the right to vote, and second, gets a benefit. Otherwise, he would be a free rider.

I look at this and think something else: the opponents hired a good PR firm: they framed this as a tax, rather than an assessment for services provided to the industry.

And, if you call something a tax, then they will stop thinking and reactively oppose something (in my view).

There's something terribly wrong when 51% of the people in any group can force the other 49% to pay money for something they don't want because of a "collective action problem". 51% of orange juice drinkers think we need to spend money to encourage orange juice producers to grow organic! $500 juice tax!

51% percent of the Congress forces me to pay for needless defense spending.

As for oranges, I don't know, but I suspect the program that promotes Florida Orange juice is funded by a state assesment to promote their juice.

Bill, not exactly. But yes, this is a big problem in our country. The tyranny of the majority was a huge issue for the founders for a good reason.

If this is a collective action problem that needs government involvement, how did they manage to form The National Christmas Tree Association? Maybe it doesn't have many members. Maybe it's dues are too small to be able to conduct a national advertising campaign.

But even if it is a collective action problem, the question remains: why should the public care enough for government to get involved to solve their collective action problem? Should it be the business of government to solve all collective action problems for small businesses? Josh's point about candle makers vs. light bulb makers (assuming candle makers were small businesses with a free rider problem) is still valid.

Well, there are statutes that permit federal market orders which do this.

Ever seen Got Milk commercials--that's right, same program. Programs promoting other dried fruits and nuts as well.

My reaction is there shouldn't be Christmas Tree associations at all. It is also excludable by sending ad money to locales where the tree farmers sign up. This is kind of like political party advertising, so they should be able to understand that.

I know the Got Milk commercials. Wasn't that started because government dairy subsidies created overproduction, so then they started the ad campaign to try to increase demand?

Regardless, I'll pose the same question: what's the compelling interest for the government to be involved in advertising milk? If it were for fruits, vegetables, and whole grains, one could at least argue that it's for public health. I suppose milk is better than Kool-Aid and soda.

guess this is why they call california the land of the fruits and nuts

The difference is that the government is collecting the money. If I don't pay my dues to the National Christmas Tree Association they can kick me out of the organization. If I don't pay my taxes to the government they can throw me in jail.

Have you watched any of the Republican debates? There's no "there" there. Of course it's not fair. That's exactly the opposite of the point. Rick Perry just had an election for constitutional amendments required to balance his "balanced" budget that allowed huge numbers of agencies to fund themselves through bonds. Bonds which are apparently repaid by magical fairy dollars and are definitely NOT a tax hike.

This post is really funny :D

How come the same sellers of natural trees didn't diversify into artificials? Seems like a natural progression.

The natural tree producers are invested in growing trees. Almost no part of their present operating assets can be applied to the artificial business. You might as well ask why corn farmers don't diversify into candy corn.

The marketing and advertising infrastructure is the same. The distribution channels, retail stores and consumers are similar. They already have a good understanding of consumer behavior, price points etc. and (hopefully) some existing goodwill an brand equity. It's like being able to buy wood and plastic chairs at the same store.

No, it really isn't. You don't grow chairs from the ground. The distribution channels and retail stores are not remotely similar. Actual trees do not have retail stores, they have lots.

Actually it's much more like being able to buy a plastic chair and a real Christmas tree at the same store.

Given the amount of hfcs in candy corn, I would think that such diversification would be more like vertical integration.... :P

I'm amazed that the DOA didn't anticipate (or at least underestimated) the backlash.

Because this sort of rent seeking is the main activity of the DOA.

Ah yes, another opportunity for fake outrage to try to score political points.

Regardless, let's get rid of the Department of Agriculture.

If you care about Christmas trees, you will love this video about them: - Funny!

Please stop using the headline that things aren't from the Onion. They don't sound like they're from the Onion.

They don't?!? This beats anything I've ever seen on The Onion.

The whole point of half of Alex's posts is to incite 50 readers to comment "AAAARRRGGHHH!!!!!!" and a few thousand more to think it.

My favorite line from this one: "Other people (liberals?) attacked the tax as promoting Christianity which I find strange since I always thought of the Christmas tree as a pagan symbol. Oh well." Wouldn't it be Jews, or Muslims, or Sikhs who would attack it on these grounds? Must be liberals. Wait, no, they're against the tax. It can't be liberals, because they love taxes. I'm all confused!

You are *very* wrong. It is mostly liberals as opposed to people from other religions that protest against Christianity.

So are you saying those who support a secular state are by definition liberals? And I don't think secularists are particularly anti-Christianity in particular. It just happens to usually be the religion involved when there are violations of the separation of church and state.

I do like the ring of it: the anti-tax, god-hating liberals.

"So are you saying those who support a secular state are by definition liberals?"

No, this sentence of yours is so full of very naive misreadings. Here is a sampler :

1. One may disagree with a certain act of the Government, and yet one may not consider that a very pressing problem to raise. So it is not a dichotomy of "support" vs "not support". While other religious groups, such as Muslims, may not like Government giving any kind of support for Christian organizations, they find that issue about as painful as a fly sitting momentarily on their hand, and are much more concerned with other issues, such as Palestine, for instance.

I will give you another example - I think those who make much noise on evolution are all stupid - not because I don't consider evolution to be scientific (since you seem to have difficulty with reading comprehension I should write explicitly : I consider evolution to be scientific and creationism to be unscientific), but because text books have too much unscientific material anyway and just getting one issue of evolution straight is not going to get you anywhere.

2. We are not talking about whether liberals have a particular policy or not. We are talking about whether those who proactively advocate/oppose a policy are liberal or not (in elementary terms A => B does not imply B => A). So my statement is perfectly compatible with the existence of Christian-friendly liberals and secularists. You are thinking only in the "us vs them" route, so find it compelling to phrase your arguments in terms of policies of an entire political spectrum.

3. Of course, the "definition" of a liberal was never brought into the picture.

BTW just FYI I am not even remotely a Christian, and I didn't bring in the notion of God-hating at all. Shows how much your reading of others is based on stereotyped views you have of conservatives. Now, *that* is typically liberal.

Rush Limbaugh has scientifically proven it by saying it repeatedly on his show.

Jan, This is Christmas tree farmers agreeing among themselves to fund natural Christmas tree promotions. The tax is spent on the industry, for and by the industry. The government doesn't make a penny. Nada.

Ok, I think I get what you're saying, but I strongly disagree that the government needs to be involved. If the farmers are already agreeing among themselves, why doesn't the association itself do the taxing and marketing, and kick out any member who tries to free ride? If the association can't do that, then doesn't that imply that enough farmers in the association aren't really agreeing to it? And if the farmers in the association are trying to force farmers not in the association to pay the tax, how is that just? It might raise total revenues, but it might not.

"why doesn't..." Free rider problem--the nonmembers get the benefit of the expenditures on ads without paying. A voluntary association usually doesn't have the clout to cause its members pain in the pocketbook. And the benefits members derive from the association are rather small and diffuse so the cost of leaving the association is small.

As Bill says, this sort of activity has a longish history. According to the discussion here there's 18 different commodities under research and promotion, including milk, cotton, wool, beef, pork ("the other white meat"), etc. It's been challenged in the courts but so far the challenges have fallen short.

Enraged Commenter Objects to Implied Meaning of Blog Headline

Sandusky, OH--"Mike", a regular reader of the Marginal Revolution blog, which provides him with content at no charge, and which he is in no way obligated to read, nevertheless strenuously criticized the headline of a Wednesday afternoon blog post. The blog post title began "Not from the Onion". Even though the blog post did, indeed consist of content from sources other than the popular online parody newspaper, making the headline completely accurate, Mike felt the implication of the statement--that the blog post sounded like something from The Onion--was false. "It makes me so angry," Mike explained "that this free, high-quality economics commentary, which a few years ago would have required the payment of a large sum of money to obtain, had a technically accurate but slightly misleading heading. If leading economists are going to give me unfettered, direct access to their expertise, they could at least label it accurately. Instead, they wasted five minutes of my time as I read content that I expected to be funny but was not." Alex Tabarrok, the author of the offending post, could not be reached for comment. However, Tyler Cowen, who runs the blog, issued a statement in response: "I offer my sincere apologies to anyone who was offended by our November 9 post, 'Not from the Onion: The Christmas Tree War'. Normally, in between teaching classes, doing research, and reading every book in the known universe, I find time to proofread Alex's posts at least six or seven times. That did not happen in this case, which was a clear oversight. We pledge to return Marginal Revolution to the high standards that all of our non-paying customers expect." When asked about the statement, Mike said he was too busy writing "fart" on a dirty car window to read it.

+1. Well done!

"...just because" +1

And double+1 to bjartur for further riffing.

Of course, much more than 9% have no jobs. U3 = 9%. /pedantry

If addington is for it i'm against it. Hes a terrible ignorant human being.

In our nearest supermarket the "reindeer" they sell are made of chocolate. Has no-one invented chocolate Christmas trees?

Hats off, sir!

Whatever you can think of has already been made in Chocolate.

An alternative universe?

Yes, they are still amateurs. They are a city machine trying to run a country with the help of some academic advisors.

If they really are made with lead, maybe the CPSIA can be invoked. I'm sure the inspectors will allow us to pick up our trees sometime next April or May, after paying ten times their value in inspection fees.

I don't care what you call it. This has nothing to do with interstate commerce, it is pure rent seeking by some members of an industry. They are faced with a Hobson's choice, to be sure, but it's not my responsibility to do anything about it. (The choice is to either be slowly driven out of business by the artificials, or to roll up sufficiently to be able to run the sort of campaign necessary to hold their ground.

I can't say that I like that they are in this position. I _can_ say that the govt has absolutely no role in fixing their situation.

As for Bob Dole filing the bill, what can I say? He was from Kansas, and a big supporter of govt intervention in the ag industry. Lots of Rs aren't real conservative, especially if you go issue by issue. I believe Newt called him "the tax collector for the welfare state".

RW, These are farmers who use a market order to collect money from their sales to fund an industry advertising program. This is not a tax program with money going to the government.

Ever see the Got Milk commercials.

Same program.

I just got done saying that I don't care what it is called. It's government intervention that goes way beyond "regulating".

But, since you seem so focused on the question of whether or not any of the money "goes" to the govt, I suppose I should ask the question of who administers the program? Who collects the tax? Who audits the collection to ensures that everyone pays their "fair share"? Who fines or jails those who haven't paid? Where does the money to pay for these individuals come from? And what is the organization on whose funds their paychecks are drawn?

Collected by the govT and administered by farmers.

At least the Got Milk program has the fig leaf of promoting an objective public good. Still none of the government's business.

"Still none of the government’s business." * citation needed.

"promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity," seems like it encompasses pretty much anything the populace could care to dream up as being the government's business.

The preamble has value solely as an aide in the interpretation of the enabling clauses of the constitution proper. Otherwise, you are quite correct. Use it and have a one-sentence constitution.

"The preamble has value solely as an aide in the interpretation of the enabling clauses of the constitution proper"

Funny. I can't find that in the constitution. It's as though your constitutional views were just an opinion based upon a completely subjective (and oftentimes fancifully impractical) reading of the document in question.

The constitution has specific limitations on what is the federal government's business. It is extremely obtuse to ignore this and argue that a general, introductory statement enables "pretty much anything".

Then again, you're in good company. This might qualify you for a Supreme Court nomination.

15 cents a tree
Compared to the lies about WMDs that led to spending a trillion dollars, more or less, on a war in Iraq, 15 cents doesn't seem like a whole lot, but I guess I don't grasp the importance of the principle.
Compared to the dem/gop conspiracy to role back financial regulations, that led to the 2008 debacle, trillions lost, 15cents doesn't seem like a whole lot, but you know, when you go to pay 20 or 30 bucks or whatever, that 15cents is gonna stick in your craw and just ruin xmas

So what if I killed one person? Hitler killed like 6 million! Compared to that one person doesn't seem like a whole lot.

Godwin Saves Christmas!

A flawed analogy,Cliff, and you know it. Fifteen cents is not the same concept as a life of a person. And the poor taste of bring the Holocaust into a debate about this is, at least, sad.

How is it flawed? It's the exact same concept. Just because there is a big wrong (which by the way is in the past) doesn't mean we shouldn't worry about small wrongs.

what i tried to say, poorly, is that 15cents is a small problem, so you shouldn't waste energy on it; you and i have so much time and energy, and if we waste it on 15 cent problems, who will fix the large problems ?
this is a conservative econ approach: time and energy are limited resources, so you get the best marginal return attacking the biggest problems

ps: I note that you don't dispute my characterization of iraqwar and financial debacle

ezra, I disagree with your characterizations, but I'm not going into it, as there are bigger problems to worry about.

Cliff, while your analogy is certainly technically valid, I would point out that Ezra & Abram were two rather famous Jews, suggesting strongly that this poster is himself Jewish. Use Ted Bundy, use Mao, use Pol Pot.

The Trees 2: Rise of the Machine Trees

The Judean People's Front? National Christmas Tree, American Christmas Tree? Who. Cares. Oh, wait, I remember all those Bible verses now about Jesus and Christmas Trees...

Christmas trees for me was always more than just having one. The act of going out with my family to pick out the tree was almost always a Christmas tradition. It should not be an argument at all wether artificial trees compare with real trees, because they do not. If it were up to me all people would have real trees( that are worshipping the holiday).

Can't we beat this down with a separation of church and state non sequitur?

i think the christmas trees are planted in rows between the secular and non

Can you answer this question:

Which member of the US Supreme Court represented and defended the federal market order program which assessed Ag producers to support advertising expenditures for his product?

Answer: Chief Justice Roberts while he was in private practice.

Answer this question: who do lawyers sometimes represent?

Answer: parties who hold positions they don't actually agree with. Also, murderers, terrorists, etc.

So you don't think we should have defense lawyers for serial killers?

I have been in this natural Christmas tree business for over 30 years and I am furious about the proposed tax. The National Christmas Tree Association has been at this for well over 20 years. About 15 years they had a vote among the Christmas tree farmers and retailers whether to impose a 15 cent per tree tax for a Christmas Tree Promotion Board and it was soundly defeated. I thought that would be the end of it.
What the bozos at the NCTA do not understand is that Xmas trees are not sold nationally, ever, never. They are sold locally. The only thing a national campaign can do is increase the awareness of Xmas trees and boy do we have a problem with a lack of awareness of Xmas trees. As you well know NOBODY knows that Xmas is coming. So we really need a national campaign, righjt!! You are right they and the advertsing agency with whom they are working are looking at a kitty of $3.5 million to celebrate their personal Xmas in the future. To convince the Dept. of Agriculture this time they did a study that indicates that Xmas tree sales increased from 2001 to 2007 when they spent heavily on advertising and then from 2008 to 2010 when sales dropped when they did not spend as much because voluntary contributions decreased. Well, what a surprise! It could not have been a recession or something right? It must to be the drop in advertising. So why do not make the hitherto voluntary contributions to the "REAL TREE" campaign mandatory.
People buy more artificial trees because the population is ageing, we have fewer kids, smaller families, the Christmas observing population is declining and the market looks for more convenience. You cannot overcome that with advertising for crying out loud. Live Christmas trees are a hassle, but for a large number of families they are worth the hassle. They are about tradition and kids and grandkids and a great smell, a connection to nature and growing a beautiful product that has only a poor substitute in the artificial trees. This year the industry will sell about 27 million trees, 99% of which are grown in the US, mostly on marginal soils not useable for anything but connifers and the entire industry has probably about 450 million seedlings and trees in the ground which are providing much needed oxygene and CO2 reduction. If you live in the Washington DC area come visit us after Thanksgiving and get your tree from a rebel!

And one more thing, as far as I know there was NO vote on the 15 cent tax among Christmas tree growers and retailers. At least I was never contacted and I am well known to the NCTA association although I am not a member, I resigned my membership long ago ONLY because of this 15 cent per tree sillyness. The Federal Register does not mention a vote, it just mentions the bogus market study of the NCTA as a justification. The Administration deserves credit for killing this thing. I hope it is permanent. This issue predates this Administration all the way back to 1980. You get a bunch of bozos smelling money and they just do not let up, ever. All those boards should be abolished, Milk, Peanuts, Cotton you name them, but they are so entrenched now that it is all but impossible to do that.

But wait! Bill "knows" that this not-a-tax would be GOOD for your business. Just like he "knows" that "your" association is a faithful representative of your industry, and that your industry "wants" this not-a-penny-of-government-money program. See, Bill just wants to help!

Calling it a tax is probably a stretch, but it is really dumb that the federal government should empower the NCTA to collect a fee from all the participants in the industry for the benefit of a few advertising executives and industry reps to feather their nest. We have learned over the last 80 years that all these marketing and research boards are abusive and accomplish next to nothing for the industry they are supposedly promoting. So I say abolish that system. Bill is representing the original theory behind those boards when the system was established in the 1930s, we now know a lot more and one thing we know is that they do more damage than good. I am sure the original intent was honorable and well meant, even though none of these boards ever worked very well and over the years they have invariably been embroiled in scandals. You would have thought that the NCTA over the years would have hired an independent marketing professor of a respectable business school to ask him whether they could actually make a difference by spending $3 million a year on radio advertising with Scott Willard as the spokesman. The answer would have been a resounding NO. The NCTA actually used Scott Willard for that purpose and the fact that no one has ever heard Scott Willard on the radio talking about Christmas trees gives you a good sense of the effectivenss of the NCTA's campaign.

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