Simple Economics

I read <a href="http://burns.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=1046">this press release </a>from our Senator Burns and could not believe what I was reading. According to our Senator the price will drop on beef because packers are taking advantage of the beef producers not due to a loss in our market share. I think Senator Burns needs to take a class in basic economics and learn a little bit about supply and demand.<br />n<!–more–><br />nThe beef industry has lost almost 10% demand right off the bat due to this <acronym title="Bovine Spongiform Encephalopathy">BSE</acronym> outbreak. That loss is from the closing of foreign markets to our beef products. Basic economics tells us that if you lose demand for a product and the supply of it remains constant the price will have to come down to a new equilibrium price where supply does equal demand. This is what happened in Canada. The prices dove way down while the market reestablished itself and it has stabilized at a lower level than before the <acronym title="Bovine Spongiform Encephalopathy">BSE</acronym> outbreak, due to the law of supply and demand working like it should. Even a dumb rancher like me who has no college education can understand this fact. Why can't our brilliant Senator understand this?<br />n<br />n<b>Why are we surprised when politicians play politics? It's not like they are supposed to be real adults… they are, after all, politicians and don't have real jobs and aren't playing around with their money.<br />nMax</b>