Meat on the bone
Spending, spending, spending
IN AN EFFORT to reduce the price you pay at the grocery, the Biden administration has proposed to put more regulations on meatpackers.
If you are confused, join the club. This almost perfectly illustrates the administration’s philosophy on government-industry matters. Perfectly weird.
The administration has accused the meatpacking industry of inflating food bills for the country. And farmers in Arkansas—who pay for their own groceries, see the prices at checkout, and also see what they make each year when they sell steers or chickens—have probably wondered what’s up, too.
But the meat companies say they have the same supply-chain problems that car dealers and toy makers have, and they have the same difficulties hiring folks that fastfood joints and box stores have.
According to an article in The Wall Street Journal, the meat industry says its biggest challenge is labor—the lack of it. And “meat companies can’t operate plants at full capacity because they struggle to employ a long-term stable workforce.” Blame some of that on the pandemic. Blame some of that on the growing economy. Blame some of that on rising wages. Blame some of that on government policies that make it easier not to work.
The meat industry will add to those concerns: With all this inflation, their transportation costs are through the roof (when they can find truckers), the price of feed has increased, and packaging, which few consumers think about, is more expensive. Inflation floats everything, like a flood.
The U.S. Chamber of Commerce says the Biden administration’s proposal will only “further constrain supply and push prices higher.” Because that’s what happens when the government adds regulations to a market.
People inside the government say the administration is trying to “ease inflation,” which comes as a surprise. Because if the Biden administration had been trying to boost inflation as much as possible in its first year, would it have done anything differently? Printing dollars—trillions of them, and promising more—is probably the biggest factor on the supply side of the most recent inflation problem. Which some research says is the worst in 40 years. So what else does the administration plan to do?
Spend more money. Perfectly weird. The White House review of the situation says the government needs to spend $1 billion to expand independent meat processing. “The Biden administration has promoted that money as a way to increase competition for farmers’ livestock and poultry and help make the food system less susceptible to disruption.”
Because more government spending of our tax dollars drives prices down? And let’s ask the obvious question: By the time this $1 billion gets legislated, doled out, and spent— putting up more slaughterhouses and meatpacking factories—will meat prices be on anybody’s mind? Or will the labor market and supply-chain kinks have been worked out by then? But it’s only $1 billion. So maybe nobody will notice. Not with the debt we’re all piling onto our children already. A billion dollars is a rounding error.
THIS IS all part of a piece. The administration has pushed oil companies to produce more oil to get gasoline prices down. And it has asked the FTC to investigate these companies, too, to see if they’re up to no good to artificially keep prices high. The president has accused the meatpacking industry of trying to drive farmers and ranchers out of business. “Capitalism without competition isn’t capitalism,” the president said, “it’s exploitation.” And he’s from the government and here to help.
A friend went to the grocer the other day and bought a package of hamburger meat about as big as your hand. It cost five dollars. So there is something going on here.
It’s called inflation. And putting more handcuffs on the meat industry isn’t likely to reduce costs. Maybe changing government spending policies so that Every. Single. Thing. doesn’t cost more every month would be the best thing for Americans. Or at least those Americans who need to eat.