THE TOBACCO WAR

Anyone who still wonders if there is too much government can look to the tobacco industry for some answers.

Recently one of the major tobacco companies, Liggett Group, caved in to the monumental pressure of class-action lawsuits, states' claims for Medicaid payments and never-ending federal regulations. Liggett settled a class-action lawsuit by agreeing to pay 5 percent of its pretax profits up to $50 million a year for stop-smoking programs. It is settling claims from five states that tobacco companies should help pay Medicaid costs for smoking-related illnesses. And it won't fight a new flurry of federal regulations regarding the advertising and sales of cigarettes.

Meanwhile, the federal government continues to sanction tobacco products by refusing to ban them outright and by subsidizing tobacco growers through farm programs.

Is there any wonder that confusion is the order of the day when it comes to how government deals with the whole tobacco issue? The left hand and the right hand of government present an ambidextrous display of conflicting signals. The tobacco industry, meanwhile, has grown accustomed to receiving threats and incentives from taxpayer-supported bureaucrats.

A recent news report about Liggett's settlement observed that the "tobacco industry has been under assault" in recent years. The assault however, haven't always come in the form of frontal attacks. A choking bundle of new and ever-changing regulations have the effect of stymying what otherwise are legal products.

Another way tobacco -- and other products as well -- has been hit by government at the same time it is permitted to be in the marketplace is through so-called sin taxes. These taxes pile up for consumers of tobacco products. Government views sin taxes as a way to discourage the use of tobacco products while at the same time increasing the revenue stream. That is a pretty slick arrangement for bureaucrats and politicians who like to have it both ways.

It is unlikely that tobacco will ever be banned in this country. But government, without proper restraint, will continue to dog the growers, processors and retailers of tobacco products.