Planet Money (Rerun 21 May 2021): Big Government Cheese
In the 70s, Carter wanted to increase the retail price of milk by 6¢/gal, a decent amount. The point being that if the USA isn’t self-sufficient for food that’s a national security thing, so it’s worth overpaying to keep your farmers local. Then congress outdid him and wanted the price to raise every six months?
But you can’t just say “the price will be this now”, you have to do something concrete which will have that effect, either lower supply or raise demand. Lowering supply means telling people not to make milk, not the kind of thing one does in America. (Plus seems like it would defeat the national security thing?) Raising demand means the government buying milk.
That’s what it does with wheat and corn, and dumps them in silos. But those keep well, milk doesn’t. So instead it decides to buy milk products that do keep well: cheddar cheese, butter, and “nonfat dry milk”? We only follow the cheese story.
Since the government is buying as much as you can produce, obviously farmers are going to want to sell their shittiest cheese. So they hire cheese graders to take core samples, taste them, and check they’re good quality. Cheese hack: it’s stored in barrels, so you can put good cheese on top and crap cheese on bottom, the grader mentioned that as a thing people did but didn’t say how he’d find out or whatever.
And having bought the cheese, it basically just dumps it all in a set of caves in Kansas City. (Private caves that they’re renting.) But the stockpile keeps growing and eventually growing mold. And it’s hard to get rid of. They can’t really sell it, that would compete with the farmers, not at all what they want. Normally they’d give it in foreign aid, but cheese doesn’t travel well. The military takes some but not enough. They settle on food banks, the idea being that food bank recipients aren’t buying cheese anyway.
It’s awkward because it comes in way bigger barrels than the food banks want, but they cut it up and give it out, and government cheese becomes a whole thing in the public consciousness.
Some discussion of unintended consequences and the dangers of meddling in markets, but if there was a “this was clearly bad in hindsight because...” I missed it.
Planet Money (Rerun 21 May 2021): Big Government Cheese
In the 70s, Carter wanted to increase the retail price of milk by 6¢/gal, a decent amount. The point being that if the USA isn’t self-sufficient for food that’s a national security thing, so it’s worth overpaying to keep your farmers local. Then congress outdid him and wanted the price to raise every six months?
But you can’t just say “the price will be this now”, you have to do something concrete which will have that effect, either lower supply or raise demand. Lowering supply means telling people not to make milk, not the kind of thing one does in America. (Plus seems like it would defeat the national security thing?) Raising demand means the government buying milk.
That’s what it does with wheat and corn, and dumps them in silos. But those keep well, milk doesn’t. So instead it decides to buy milk products that do keep well: cheddar cheese, butter, and “nonfat dry milk”? We only follow the cheese story.
Since the government is buying as much as you can produce, obviously farmers are going to want to sell their shittiest cheese. So they hire cheese graders to take core samples, taste them, and check they’re good quality. Cheese hack: it’s stored in barrels, so you can put good cheese on top and crap cheese on bottom, the grader mentioned that as a thing people did but didn’t say how he’d find out or whatever.
And having bought the cheese, it basically just dumps it all in a set of caves in Kansas City. (Private caves that they’re renting.) But the stockpile keeps growing and eventually growing mold. And it’s hard to get rid of. They can’t really sell it, that would compete with the farmers, not at all what they want. Normally they’d give it in foreign aid, but cheese doesn’t travel well. The military takes some but not enough. They settle on food banks, the idea being that food bank recipients aren’t buying cheese anyway.
It’s awkward because it comes in way bigger barrels than the food banks want, but they cut it up and give it out, and government cheese becomes a whole thing in the public consciousness.
Some discussion of unintended consequences and the dangers of meddling in markets, but if there was a “this was clearly bad in hindsight because...” I missed it.