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Date: November, 1976 Subject: Basic Economics and Regulations My Comment: The whinners from the left do sort of sound like barn yard animals... don't they? Commentary: A modern day little Red Hen may not appear to be a quotable authority on economics but then some authorities on economics aren't worth quoting. I'll be right back. About a year ago I imposed a little poetry on you. It was called "The Incredible Bread Machine" and made a lot of sense with reference to matters of economic. You didn't object too much so having gotten away with it once, I'm going to try again. This is a little treatise on basic economics called "The Modern Little Red Hen" Once upon a time there was a little red hen who scratched about the barn yard until she uncovered some grains of wheat. She called her neighbors and said "If we plant this wheat, we shall have bread to eat. Who will help me plant it?" "Not I," said the cow. "Not I," said the duck. "Not I," said the pig. "Not I," said the goose. "Then I will," said the little red hen. And she did. The wheat grew tall and ripened into golden grain. "Who will help me reap my wheat?" asked the little red hen. "Not I," said the goose. "Out of my classification," said the pig. "I'd lose my seniority," said the cow. "I'd lose my unemployment compensation," said the goose. "Then I will," said the little red hen. And she did. At last it came time to bake the bread. "Who will help me bake bread?" asked the little red hen. "That would be overtime for me," said the cow "I'd lose my welfare benefits," said the duck "I'm a drop out and never learned how," said the pig "If I am to be the only helper, that's discrimination," said the goose "Then I will," said the little red hen. She baked five loaves and held them up for the neighbors to see. They all wanted some and, in fact demanded a share. But the little red hen said, "No, I can eat the five loaves myself." "Excess profits," cried the cow "Capitalist leech," screamed the duck "I demand equal rights," yelled the duck And the pig just grunted. And they painted "unfair" picket signs and marched round and round the little red hen, shouting obscenities. When the government agent came, he said to the little red hen, "You must not be greedy." "But I earned the bread," said the little red hen. "Exactly" said the agent. "That is the wonderful free enterprise system. Anyone in the barnyard can earn as much as he wants. But under out modern government regulations, the productive workers must divide their product with the idle." And they lived happily every after, including the little red hen, who smiled and clucked, "I am grateful, I am grateful." But her neighbors wondered why she never again baked any more bread. This is Ronald Reagan. Thanks for listening. |
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Date: March, 1978 Subject: Economics and Taxes My Comment: Think about this every time you hear the word regulation from any politician. Even if it is for the children! Commentary: We the people need more common sense economics and a lot less demagogery if we are to make or support decisions affecting our welfare. Early in July the leadership of the California AFL-CIO met in convention and made a few decision that will affect the livelihood of the workers they represent. These leaders of organized labor were more than a little upset about the passage of Proposition 13. Meaning no disrespect, I feel compelled to say the remedies they proposed reveal that they believe too many of the economic fairly tales widespread in our land today. In the first place they must be out of step with their own rank and file members because those members voted for Proposition 13 in large and enthusiastic numbers. But where economic fairy tales shows up is in the convention's decision to battle for re-imposing the property tax Proposition 13 cancelled back on business and industry. They said it was a 3.5 billion dollar break for business and therefore by their reasoning bad for the individual citizen. If they have their way 3.5 billion dollars will end up being paid by the very individual citizens they claim they want to help. Whether it be corporation or corner store , taxes are part of business costs and must be recovered in the price of the product. Meaning that all of us as consumers pay those taxes. Let's take the case of a corner grocer in a nice middle class neighborhood. The store keeper rents the building. Everyone who shops there can understand that he must charge enough to cover the wholesale cost of the things he sells, wages to helpers and his rent plus a fair return for himself so he can make a living. But now supposing he buys the building? There is no more rent, but there is interest on the mortgage and property tax instead of rent. Obviously he can't stay in business if those costs can't be recovered in the price of the things he sells. And just like his wage earning customers (many of them union members) he has to make enough gross income to pay his living costs - after he has paid his income tax. What this all adds up to is that government can't tax things like business or corporations, its can only tax people. When it says it's going to "make business pay" it is really saying it is going to make business help it collect taxes. Into our corner store comes a regular customer to pick up a load of bread on his way home. We've already covered the fact that the grocers mark up includes a share of the property tax on the store. But the truth is the wholesale price the store keeper paid to the bakery includes it's taxes and more than 150 others going all the way back to the farmer who raised the wheat. If he can't get a price for this wheat that will cover the real estate tax on his farm, he can't stay in business either. If the trucker who hauled the wheat can't charge enough to cover his license fee and gasoline tax, he can't stay in business. Union leaders will serve the men and women they represent a lot better if they'll drop the demogogery and take a simple course in economics. This is Ronald Reagan. Thanks for listening. |
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Date: January, 1975 Subject: Regulation and Inflation My Comment: You pay every time a liberal cares Commentary: Inflation is high prices. Anything that lowers prices legitimately without hurting someone helps reduce inflation. Right now small businessmen - meaning those with fewer than 500 employees spend an estimated 130 million man hours a year first doing government required paper work. This adds about $50 billion a year to the cost of doing business. That's $50 billion added to the cost of the things you buy. Then government spends about 15 to 20 billion dollars finding places to store all that paper and you pick up the tab for that in your taxes. Government has grown so big in these last four decades that not even the office of management and budget in Washington knows how many boards, agencies, bureaus and commissions there are. But all of them have the power to adopt regulations having all the authority of law. As a matter of fact they have more power in a way. If you are charged with breaking a law you have your day in court and you are considered innocent unless and until you are proven guilty beyond a reasonable doubt. Breaking a regulation is another matter. The agency enforcing the regulation is judge, jury and executioner and you are guilty as charged unless you can prove your innocence. Breaking a regulation isn't the hardest thing in the world to do. The Federal registry which lists all the regulations has almost as many pages as the Encyclopedia Brittanica - which is quite a shelf of books. One small businessman in our state ran afoul of one of those regulations. He was ordered to install separate mens and womens washrooms for his employees. - He only has one employee. - And she's his wife. At home they sleep in the same bed and use the same bathroom. A baker in Illinois says even if he understood the forms he was supposed to fill out he couldn't do it. He wouldn't have time to bake the bread. In Connecticut a chemical researcher has five employees , files 37 different reports for 12 Federal agencies, 26 sets of data for 9 state agencies, 25 for city departments and now he's just learned he has to make out an environmental impact statement. Probably on why he used so much paper. The president of a small investment house in Indiana spends more than half his time in unproductive minutiae that didn't even exist a few years ago but which now is labeled consumer protection. A druggist in another state reports it takes more time to do the paper work in connection with a prescription than it does to make up the prescription. And speaking of drugs and paper work - a few years ago a leading drug firm had to submit about 70 pages of data to the Federal Drug Administration to get a drug licensed. Recently the same firm made application for a new drug and sent a truck loaded with 72,000 pages of data to support that application. If penicillin were discovered today it's doubtful if it could get approval. The story is the same for every kind of business and even worse for the larger corporations. We pay higher prices growing even higher because government continues to spend more than it takes in and because too much money is chasing too few goods and services. There could be more goods and services available for us to buy if government would lift some of the paper burden from the back of our industrial system. Just a 3% reduction would also save about 12 billion dollars in government costs and that too would serve to slow down inflation. |