Friday, August 20, 2010

Political Power



(click on image to enlarge)

In 1961 John F Kennedy was in office, in spite of the fact that many people thought there would never be a Catholic President. Hope seemed to be in the air and milk prices transmitted efficiently from farm to the public.

In the above graph, I have once again combined the categories of dairy products published by the Bureau of Economic Analysis as "Personal Consumption Expenditures" (PCE). Then I took the "All Milk" price times the farm milk production. The results are a graphic representation of market failing to efficiently transmit price signals.

The difference, in the time period from 1961 through 2008, between farm and consumer value changed by just over 600%.

2 comments:

  1. Whats the solution John? How does this trend at least be stopped or stabilized? Does the Government need more regulation or less? Is that the difference between now and the late 60s?

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  2. The problem is both simple and complex. It is hard to summarize in just a few words. But, first we need a discussion. Obviously, simply coming up with a simple solution will get us no where.

    I'll try to put a couple thoughts together and maybe others can comment.

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