Thursday, May 28, 2009

Price Controls And Government Handouts Strike Again

From the WSJ:

Dairy farmers created traffic chaos in Berlin, blocked milk-processing plants in France and protested at the European Union's headquarters in Brussels on Monday, seeking more aid to cope with a drop in milk prices...

...Dairy farmers say price declines of as much as 50% over the past year have forced them to sell milk below cost. EU farm ministers began two days of talks Monday and were expected to discuss ways to increase dairy farmers' incomes. France and Germany have promised to coordinate support action to boost milk prices.

The above is another stellar example of price controls and the ills they bring. Price controls have negative consequences because price ceilings/floors mean a refusal to pay the true costs of a resource. It also illustrates how government, by choosing to subsidize and support one group over others, creates a sense of entitlement and dependence that is ultimately counter productive to the society that ventures down that path.

1 comment:

The Vegas Art Guy said...

Sounds like rent controls here in the US. Sheesh...