Government Facilitating High Food Prices
September 2, 2011 by Bob Livingston
Inflation-driven rising food prices, consumers with less discretionary income and alternatives to the hormone- and antibiotic-laden chickens found in grocery stores have caused a drop in the demand for store-bought chicken.
In a true free-market economy, this would force chicken producers to lower costs, streamline their operations and devise a better way of getting chicken to market at prices consumers would be willing (or able) to pay. But as discerning readers know, the United States is not a free-market capitalistic economy.
So rather than let Big Chicken deal with the fact that it erred by raising production 4 percent as demand was decreasing, the United States Department of Agriculture (read the American taxpayer), is bailing out chicken producers to the tune of $40 million.
From a CNNMoney story last week, “The USDA steps in occasionally to buy up food products that are in surplus supply in the market. By doing this, it helps shrink the glut of the product, raise retail prices and support producers that are struggling to cover the cost of production.” (Emphasis added)
So just as we saw with bailouts for the banksters, Wall Street thieves, automakers and union thugs, government is stepping in to reward bad decision-making by bailing out the chicken producers who failed to read the economic tea leaves.
Poor decisions by businesses are supposed to lead to better prices for consumers and opportunities for competitors to step in and do things a better way. But as long as government keeps meddling in the market, businesses will continue making poor decisions and the consumer will suffer with higher prices, fewer choices and inferior products.
And for the bleeding hearts who want to point out how wonderful it is that the purchased chicken products will be donated to Federal food assistance programs; yes, it’s true the food won’t be wasted. But odds are, rather than destroy the excess food, manufacturers would have used it to help the needy if for no other reason than to get a tax break. And better still, if the government would quit interfering in the market, food prices would drop to a point where more people could afford to buy what they needed and fewer people would require government assistance.
Do you see the cycle caused by feel-good government programs? It’s a death-spiral for the economy.