Agricultural markets have price inelasticity. They lack “price responsiveness” on both supply and demand sides. This is understood by agricultural economists. Search “Daryll E. Ray,” “Price Respons,” Wallace. In the New Deal farm bill government stepped in in a limited way to make up for the supply and demand failures of the Great Depression. (So too with the National Family Farm Coalition today.) They managed supply and used price floor loans to bring prices up above costs. They used strategic reserves and price ceilings to protect processors, livestock production and consumers. The programs made millions for the government on interest, and …
All 2 comments by...
Brad Wilson
-
-
To change from a system where, a. government pays subsidies to substitute for the market, to one where, b. government uses price floors, strategic reserves and price ceilings, and manages supply and demand so they work, as before, might be considered a smaller government. At least the government would make money off the programs, instead of paying out tens and hundreds of billions to programs designed to export America's wealth. But government must not get out, since, as I've said, farm commodities lack "price responsiveness." That would be anti business and anti American. It would mean usually losing money, (ie. under …
Posted to Let Them Eat Free Markets
Return to Brad Wilson's profile
- Joined July 26, 2008
- Last Visit July 26, 2008
Other Profiles
IN THESE TIMES COMMUNITY MEMBERS
- 1.
- 2.
- 3.
- 4.
- 5.
- 6.
- 7.
- 8.
Ignoring Outrage, Obama Set to Expand Pentagon Presence in Colombia
- 9.
- 10.
RSS Feed