| Show r 1 r t l t ia tr R J gew M v n a Y t t hi M M itI t i i I. I I TE YOKE VOICE OF BUSINESS Why the Steaks Are High By Arch Booth Executive vies president of the Chamber Cham be her ber of Commerce of the United Stele States Suppose you are a farmer and you raise both corn and cattle You have a choice to make Feed the corn to the cattle and sell more beef bed or sell the corn directly and raise less beef beet How would you decide which course of ot action to follow IF IP YOU swore a smart farmer you'd compare the selling BellinI price of 01 corn with the selling price of beef less the cost to you of raising each In the case of 01 beet beef of 01 course you'd have to guess what the price will be in three years or so since that's how long it takes to raise a calf calt to marketable size Having to make such guesses is one of ot the toughest problems the farmer larmer faces laces In a free tree market you'll get the best price for tor the commodity that Is In greatest greatest great est demand By choosing to sell Rell for lor forthe forthe the best return to you you would therefore there fore lore be supplying what consumers want the most Other farmers farmers- would make similar decisions for the same Rame reason and the supply of 01 that commodity be beIt beit beit it corn beef or whatever would in in- crease crease When the supply increases enough the price will come down That's th the purpose of 01 high prices to give producers an incentive to increase pro The TIM Price of o Control Controls Now suppose the price of 01 everything is is' is going up because of 01 inflation the price you get for your corn and beef as well as the thee price you have to pay for lor your tractor your fertilizer and all else you buy What will happen if it the puts government a a ceiling telling on the price of 01 beef beel but not the price of 01 corn Which what Is the government has in fact laet don done WH WHAT T I IF the price of corn like the price of other things thing continues to torise torise rise rise- w while e the price of beef cannot rise Under these Ules circumstances which Would you choose to rio no 0 sell the corn or feed leed it to the Cattle I t thing you'd decide to sell the corn But nut what happens to beet beef production if It farmers everywhere make the decision de do cislon That's not hard to figure ligure out Beef Beet production will decline And instead in in- st stead ad of ot getting gelling more beef beel at a lower price consumers would soon have much less beef at the controlled price Remember ber her for tor beef it takes three years cars for the effects to show up WELL THEN what happens if II we control the price of ot corn as well as beef beel Then the farmer larmer goes broke unless we also control the price of ot tractors oct And if It we freeze the price of 01 everything every thing Then producers would no longer be able to tell what consumers want more of ot because they would not have price changes to guide them Eventually supplies of 01 popular products would run out The government would have to try rationing them would develop de do to get around the rationing Is that really the kind of 01 world the meat boycotters want A Legitimate Beef Bf I sympathize greatly with the panic many Americans feel today in the face of 01 sharply rising prices But inflation is the cause of ot that not anybody's greed The inflation has been caused by an excessive increase in the quantity of money money In circulation The quantity of 01 money was increased to help the Trea Trea- surey finance the federal deficit The federal deficit increased because Congress Con gress gross authorized more government programs programs pro pro- grams than it has the money to pay for CONTROLS ARE not the answer They can create a temporary success success suc suc- cess but the term long-term dangers are in in- escapable We can halt inflation by cutting federal federal fede fede- ral rat spending or increasing federal taxes You might tell your congressman which you favor lavor |
