GIPSA and Checkoff Arguments Stink

Beefs and Beliefs

Is there really no solution to the struggles over market reform and regulation?

Published on: July 7, 2011

As I watch the struggles over and arguments surrounding the proposed GIPSA rules and the Beef Checkoff program I keep thinking about the government breakup of AT&T back in the early 1980s.

If you're old enough, perhaps you remember how the regulators and the congressmen/congresswomen kept telling us the mandated breakup of this regulated monopoly would create competition and we'd end up with better products and better service?

Instead, everything was a huge hassle as we tried to get long distance service from new providers and buy phones that would work and find the providers of the services we needed (good luck there, eh?).

About the time any one problem was solved it seemed another cropped up for us, the users of the system.

Then consolidation started as the "baby bells" overtook one another. Cell companies flourished and consolidated, too, as that new technology matured.

Eventually, just about everything went back to AT&T, including nearly half the cell phone service in the nation.

When I moved back to Newkirk last year and was trying to contact AT&T for telephone service I began to think no human actually works there anymore. I couldn't find a person to speak to. Now we have monopoly again in the telephone industry, but an unregulated monopoly. Better or worse?

In fact, the entire telephone industry has been a microcosm of classic theory of business evolution with the flourishing of new providers in a new field, then consolidation to the point of oligopoly (a few large firms controlling the market) and finally to monopoly.

If you consider the history of the meat packing industry, it was the same.

We just go in circles it seems, despite government meddling and outright control.

For 20-plus years I watched the government regulators primarily measure the impact of consolidation on consumer beef prices and seemingly put little effort into measuring the effects on cattle feeders and stocker operators and cow-calf producers.

Now that the horses are out of the barn we're apparently going to do something to correct it. Bah!

I think the truth of this matter is actually pretty complex. But I'm getting to the point I suspect the business forces of this world are far too powerful to actually be controlled by any government or any business, even a huge conglomerate. Meddling with the system always stinks of fishy political payoffs and/or of do-good, smarter-than-everyone-else overseers.

Despite my ability to sympathize with both sides of these issues of today, I'm about to decide we're on a marketplace roller coaster with no brakes and no control of the speed.