Wednesday, April 1, 2020

#TXLEGE: Springer Laying Foundation for Beef Shortages

"A fruitful land into barrenness,
For the wickedness of those who dwell in it."
Psalm 107:34

What could POSSIBLY go wrong?!?

One of the iron laws of economics is that price controls beget shortages.  This is true regardless of whether or not said controls are in response to alleged "gouging."  We've already seen this happen with surgical masks in Houston.

[Note: It's actually worse than that...the Houston case shows that just the regulatory uncertainty around these sorts of investigations produces shortages.]

To be fair to Springer, he did respond when we made a similar point of Facebook:

Springer hinges his argument around the idea that there are too few meatpackers in the country.  This gives them the opportunity to exploit the current situation.  Springer's not actually wrong about that point.

But here's the thing: Meatpacking has been a hot mess of protectionist regulation at the Federal level for the past 120 years.  That's the root cause of any practical problems we're having with meatpacker consolidation today.  Had Springer used the current challenges in the beef market to write a letter to his Congressman calling for the repeal of the underlying statutes, that would have been awesome.

But Springer didn't write to his Congressman.  Springer wrote to the Texas Attorney General.  At best, he's misdiagnosing.

Springer's observing a problem caused by too much government, and attempting to "fix" it by calling for even more government.

Nothing good happens when politicians do that.

It's the equivalent of trying to "fix" a knee injury by amputating your leg.

Bottom Line:  Springer's proposal is a great way to turn a short-term challenge into a long-term structural problem.

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