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Where’s the Cheap Beef?

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Grocery prices are rising. Meat prices are rising more than most other grocery prices. Beef prices are rising more than most other meat prices.

But on the ranch, these are not prosperous times. Even as ground chuck costs more than $5 a pound at Walmart, ranchers complain that they are receiving less for their animals than it costs to feed them.

Rising food prices are likely depressing President Joe Biden’s softening approval numbers. The U.S. economy has added almost 5 million non-farm jobs since Inauguration Day. Yet Biden’s approval rating has dropped into the mid-40s. In a recent Fox News poll, 82 percent of respondents described themselves as “extremely” or “very” concerned about the cost of living. More than scenes of chaos in Afghanistan, the numbers at the supermarket checkout may be weighing Biden down.

On September 8, the White House unveiled an analysis of the problem—and an ambitious plan for action: $500 million in loan guarantees to smaller and regional beef processors.

Annie Lowrey: The inflation gap

What’s going on here is bigger than beef. It’s a test of a theory about the U.S. economy—and about a philosophy of government. The theory, expressed most powerfully in a 2019 book by Thomas Philippon, The Great Reversal, is that the U.S. economy is in thrall to a few dominant corporations. In industry after industry, Philippon argued, a few companies have gained the power to keep prices high, wages low, and competitors out. The philosophy of government that follows from this theory is that the government should vigorously police competition, not only by means of traditional antitrust enforcement but also through a broader program of market regulation and intervention.

Market regulation went out of style in the 1970s, a victim of its internal contradictions. As academic critics such as Robert Bork argued back then: If, say, a supermarket gains market share from its mom-and-pop competitors by offering a wider selection at lower prices, you can understand why Mom and Pop don’t like it. But how is it “pro-competition” if the government intervenes to protect Mom and Pop from competitors who are doing a better job of meeting customer needs?

That argument prevailed for most of the past half century. The Biden administration is seeking to change course—and beef is where it’s starting.

To understand the choices facing the Biden administration, here are the two warring explanations of what’s going on with beef.

Read: Bidenomics really is something new

The first........

© The Atlantic

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