Tuesday, March 31, 2009

Franklin Delano Roosevelt...

The Great Price-Goucher.

First came FDR’s National Industrial Recovery Act, considered the flagship of the New Deal. FDR signed that in June 1933, climaxing his heroic Hundred Days of legislative mania. Back then, the economic situation was considered so urgent that members of Congress didn’t have time to seriously debate FDR’s proposals. The members probably didn’t have time to read the bills, either, before the voting began. Possibly, the Hundred Days began the American tradition of having members of Congress vote on bills they haven’t read. In any case, The National Industrial Recovery Act authorized the president to establish cartels via executive orders. He established some 500 cartels, and one of the things they did was fix prices above market levels.

The Agricultural Adjustment Act (1933), another triumph of the Hundred Days, aimed to raise prices of agricultural commodities above market levels, in an effort to raise farm incomes. Apparently the authors of the Agricultural Adjustment Act weren’t particularly concerned about the three-quarters of the U.S. population who weren’t farmers and had to pay more for food.

The Robinson-Patman Act, amending the Clayton Antitrust Act in 1936, aimed to protect small grocery stores from price competition offered by A&P, King Kullen (“World’s Greatest Price Wrecker”), and other chain stores. Because they bought goods in large volume, they obtained quantity discounts and passed savings to consumers. Less efficient small stores wanted to maintain high prices. Accordingly, the Grocery Manufacturers Association lobbied for and did much of the work drafting Robinson-Patman. Often referred to as the Anti-Chain-Store Act, it benefited wholesalers as well as small retailers, because wholesalers didn’t want chain stores buying directly from manufacturers. The bottom line was that the law made it illegal for big stores to cut prices. If private stores had conspired among themselves to maintain high prices, they would have invited prosecution under the antitrust laws.

Will the Slumlord's Buddy, President Barack Mussobama, try to outFDR FDR?

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