Can You Imagine If Oil Companies Did This?

I remember in the 1970s the sight of oil company executives getting dragged before Scoop Jackson's committee in Congress, forced to defend themselves against charges they were holding tankers offshore to drive prices up.  Hilariously, this was at the exact same time oil company executives were testifying in front of a Congress begging legislators to allow them to build the Alaska pipeline.  But demonizing oil companies simultaneously for both decreasing and increasing the supply of oil has been a tradition for decades.

Anyway, I have always found it intriguing how behavior in one industry made unsympathetic by the media can be treated so differently from identical behavior in a more media-cherished industry.  Check this out:

U.S. dairies will remove 86,710 cows from their herds to be sold to slaughterhouses as part of an industry-funded program intended to boost milk prices by curbing output.

The buyout is the third such cull in nine months, the Arlington, Virginia-based National Milk Producers Federation said today in a statement. The most recent buyout completed last month involved 101,000 cows, the most ever for the groups so- called Cooperatives Working Together program, which began in 2003.

Note further that this appears to be acceptable behavior in milk but not in oil, despite the fact that milk is heavily subsidized and the beneficiary of government price supports while oil companies simply pay a whole boatload of taxes.

It turns out there is one other such example in the news, where an industry is destroying hundreds of thousands of units of inventory, with the inevitable result of raising prices (particularly to the poor), all with the facilitation and in fact funding from the Obama Administration.  Can you guess what that is?

  • LoneSnark

    I suspect it is not despite government involvement in the milk industry, but because of it. If by some twist of fate all government price controls and subsidies disappeared from the milk industry then it will go right back on the list of potential targets and politicians would very quickly be found on the news condemning agri-corporations whatever the current price happens to be: either too high and hurting the poor or too low and hurting small farmers.

  • txjim

    Coyote this post wont be of much use to you since I can't find the link to an old Meet The Press show where oil company execs are grilled. I may have it on hardrive from way back so it may not be online. Circa: way back in 1972 when the eveeeel arabs were jacking us on gasoline. The nut reply: prices in oil are only going up because of the uncertainty in the purchasing power of the dollar which makes long term investments (pipelines, refineries) more of a gamble.

    I know you spent good money on that Ivy League paper where this type of thinking was ridiculed. Read this anyway:

    http://www.gold-eagle.com/editorials_00/wanniski061900.html

  • MJ

    Call it 'stimulus'.

  • DrTorch

    This is truly evil. Because it won't be long before we're presented with high milk prices as a primary reason we need to up welfare and foodstamp benefits. We'll be told how the poor, especially children, are suffering under high prices for the basic, essential necessities of life.

    Then we'll be told that it is greedy profiteers (oil, insurance, investment banks, etc.) who have done this to the country.

    Farmers have my respect, they work damn hard for a marginal ROI. But this tack is a big problem.

  • DrTorch

    BTW isn't,
    "The most recent buyout completed last month involved 101,000 cows, the most ever for the groups so- called Cooperatives Working Together program"

    the definition of collusion?

  • the other coyote

    Back when I first started practicing law, this was known as price-fixing and considered a violation of the Sherman Anti-Trust Act. Of course that was a long time ago, back when we were a nation of laws. Go ahead coyote and report me to the commissar.

    On the up side, the price of pet food might go down. You know that's where the "real beef" in your canned dog food comes from, right? Old dairy cows?

  • dr kill

    Absolutely correct. Farmers are the largest welfare bloc in the States. They sicken me with their behavior.

    Wake me up when food becomes expensive.

  • EdSki

    Oh this one is easy, cow farts are destroying the world.

  • TakeFive

    Somethings going on with milk. Here in California the stuff is practically being given away - 2 gallons for $4.00! On top of that, state law requires additional milk solids to be added, so maybe it's more like 2.5 gallons for $4.

  • steep

    Honesty and independence (refusing dairy buyouts) put my father-in-law's dairy farm out of business years ago. Luckily, he's much happier as a bank officer now.

  • skh.pcola

    @DrTorch

    That's exactly what I was thinking. If this isn't a textbook definition of collusion, what is?

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