Tuesday, November 15, 2011

Government Control, Fukushima and a Butter Shortage (Again) in Japan

You might wonder what Fukushima has to do with butter... Hopefully, not a lot, and I hope we can keep it that way... 

They say in the hey-days of epitome of the old command and control economy, the Soviet Union, the citizens were often in despair because of a wide and common shortage of basic foodstuffs and everyday goods. Whenever meats or bread would be delivered to any store, people would line up to buy whatever it was on hand and, soon, once again the store shelves would be bare.

Ronald Reagan used to make fun of his Russian counterparts with a story that went something like this:

"They say that production is so bad and so slow that it takes ten years to buy a car in the Soviet Union. Once the papers are filled out and the forms all stamped and signed, one still had to pay off the loan for the car before they could take delivery. 

Well, one day, after signing the forms and getting everything stamped and approved, a young fella asked when he'd get the car after the 10 years payment was finished and the government official said, 'On Dec. 12 of 2021.' The young fella then asked the government official at what time on that day would the car would come? The surprised government official replied, 'You have to wait ten years! What difference does it make morning, day or evening?' To which the young fella replied, 'Because the plumber is coming that day!'"

History proves that government control of the economy is a proven failure, yet people will often demand that the government take control of some industry in distress or come to the aid of the public. 

When will people ever learn that the government can't even fix a hole in the road on time and under budget (witness Japan's debt at 225% of GDP for evidence of that) certainly they cannot or could not, nor would we even want them too, take over a disaster or public nuisance like the crippled Fukushima nuclear power plants... Just to name one such example. 

It never ceases to amaze me how, even in what is ostensibly one of the world's most capitalist societies, Japan, the people will ask for more government control or approve of centralized government control and tinkering with the economy... Especially when it comes to Japan's food supply.

At the end of World War Two, the Japanese government vowed that Japan would never again run out of food. They swore to the Japanese people that they'd never go hungry again. Ever. The solutions to Japan's food problems, the government wonks insisted, called for centralized control of several areas of food production.

Odd thing is that, before and during the war, Japan's government had centralized control of the food production then too and Japan went hungry. 

You'd have thought that someone would have pointed this out. But no.

Fast forward to 2011. Yesterday, I went to the grocery store. There, where the butter always is, the shelves were bare. I asked a clerk and he said that there is a shortage so only one per customer and that you had to ask for it at the checkout counter. 

Government idiots! 

We just had a butter shortage a few years ago due to government meddling. 

The butter shortage results from a chain of events. When the country suffered an overproduction of milk in 2006, the government ordered about 1,000 tons of raw milk poured down the drain and dairy cows slaughtered to prop up prices and defend local milk farmers. Dairy prices were then managed to retain their advantage to imported milk and butter, whose prices were inflated by tariffs. (To protect domestic butter, the tax on imported butter went up twice last year. There is a nearly 30% tariff on butter imports.)

But now grain-feed prices have risen as a result of a drought in Australia as well as the accompanying use of corn for ethanol, which has reduced the amount available for feed for Japan's cows. The drought has also cut back on milk that would have been imported to supplement the Japanese market. Combined with competing demand for milk and milk products from emerging markets in China and Russia, the result is a collapse of the local butter production in Japan.

In 2008, when this became a big row, the government said they'd take care of it and that it would never happen again. Here it is 2011 and we have another butter shortage...

Think about this, folks... These clowns in government cannot even take care of our butter production, is there anyone who is still in favor of the Japanese government nationalizing a serious priority problem like Fukushima? 

One would hope that even 2 seconds of consideration of this question most people would say, "Absolutely not!"

We need much less government control of our lives and the economy if we are going to get out of our current malaise.

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