Nothing for Everybody

It is for another time to discuss how on earth professional economists got associated with George McGovern’s “economics.” Enough for the moment to remark again the oft-remarked chasm between economic reality and economic theory.

Look at McGovern on agriculture. He is duly upset with the despair in the farm sector. But McGovern’s suggested programs will do nothing to alleviate the problem he is seeking to solve. His proposals, however, should net him substantial financial support from large farming corporations. The Senator would like stricter enforcement of import limitations on meat, honey and dairy products. He would like 100 per cent parity on wheat. He would like coverage of agricultural workers by minimum wage laws. The list goes on. The proposals are not meant to help the consumer of food, that is for sure. A severe limitation on imports of food leads, without question, to higher food prices. An increase in the parity on wheat leads, without question, to higher wheat product prices. The latter will also lead to an increased production of wheat and a subsequent “surplus” problem that has plagued the U.S. Government since the beginning of the price support program. Farmers are not stupid. At a higher price they will produce more. Look, for example, at what happened when the Johnson Administration raised the price support of soybeans from $2.25 per bushel to $2.50. By 1968 the government had been forced to buy 300 million bushels of surplus soybeans at $2.50 a bushel. The same again would occur if McGovern were successful in raising the support price for wheat.

RM

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Roger LeRoy Miller

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Presidential Election

It is for another time to discuss how on earth professional economists got associated with George McGovern’s “economics.” Enough for the moment to remark again the oft-remarked chasm between economic reality and economic theory.

Look at McGovern on agriculture. He is duly upset with the despair in the farm sector. But McGovern’s suggested programs will do nothing to alleviate the problem he is seeking to solve. His proposals, however, should net him substantial financial support from large farming corporations. The Senator would like stricter enforcement of import limitations on meat, honey and dairy products. He would like 100 per cent parity on wheat. He would like coverage of agricultural workers by minimum wage laws. The list goes on. The proposals are not meant to help the consumer of food, that is for sure. A severe limitation on imports of food leads, without question, to higher food prices. An increase in the parity on wheat leads, without question, to higher wheat product prices. The latter will also lead to an increased production of wheat and a subsequent “surplus” problem that has plagued the U.S. Government since the beginning of the price support program. Farmers are not stupid. At a higher price they will produce more. Look, for example, at what happened when the Johnson Administration raised the price support of soybeans from $2.25 per bushel to $2.50. By 1968 the government had been forced to buy 300 million bushels of surplus soybeans at $2.50 a bushel. The same again would occur if McGovern were successful in raising the support price for wheat.