There's a very good reason why there are NO Onion Futures, and an awesome story as to why Congress banned that particular future, with it's own named Act:
The onion market today is vertically integrated....due to government regulation. Simplot owns the potato market and the onion market. Ironically, onions are a huge part of Indian cooking and their diet is very price sensitive to onions. I'd also point out that the futures markets of the 1950s and early 1960s were very different than markets of today. Back then, no audit trails and it was much easier to manipulate them. Thanks to Leo Melamed and his reforms, and today's technology, it's really easy to have a transparent and regulated futures market.
I didn't have Prof. Weil for financial accounting at Booth in the mid-'90s. Classmates did, however, and loved him. He was legendary. Not only old school, but joyful and friendly. He enjoyed fine wine, as I recall. A bon vivant and a towering figure in his profession.
I took that first-term accounting class 28 years ago last fall. I still remember incredibly arcane details form the 800-page textbook that he wrote (with a colleague) and that we had to master in ten weeks. It still sits on my bookshelf, tabbed and annotated. I summoned some details, long-memorized, from that course just last week preparing a lecture for a class I teach. I marvel every time that occurs.
RIP, Prof. Weil, and thank you. Chicago Booth was a remarkable place to learn economics and finance.
I want to ask a question that I've never been able to get answered, to Mr. Carter and anyone else who cares: Why do Democrats and socialists not believe in free markets?
It's not a loaded question, and I really don't know the answer. I know there are multiple answers, but I can't figure out why they universally do not like free markets and are so distrusting of them.
One of the reasons they don't believe in free markets is that they don't think they are fair. Socialists don't see any value in competition. They view it as binary -- winners and losers, and they think they are champions of the losers defending them against the evil rich winners. The socialists don't understand that it is not binary. If you compete even if you do not reach the very top, you can still do quite well for yourself and your family. In individual terms, if a kid wants to be an MD but is a victim of inner city schools or not quite good enough academically, but still willing to work hard, he can fail the competition for MD but still wind up an RN, a high paid tech, a mid-level manager, or if financially motivated a dreaded pharma salesman. The problem Jeff is describing with eggs is what's going on with everything right now. Markets have been captured by one or a combination of big companies (tyson, perdue and about six others) that limit competition often through unfair, but legal, means. Same with big banks and funds that decide they won't loan money for petro or won't process credit purchases of guns.
Great point. I've also noted that socialists/Democrats believe that our economy and markets are a zero sum game, as you suggest. Earning a piece of pie just simply takes it from someone else, as opposed to making the pie bigger for all. They believe that wealth is transferred, not created. I guess if you believe that money is wealth then you might believe that. But money is only the medium of exchange -- wealth can be created by anyone at anytime with a simple transaction that could only exist by two voluntary participants.
And your other point that wealth/success is progressive, rather than binary is excellent! You don't skip from point A to Z in life, you move incrementally. Those increments can be tough, but they also can be very satisfying. I believe that we have a lot of young people who don't understand that, and instantly want to be "mega-rich CEO's." It's not a privilege -- it's a sacrifice, and too many don't understand it.
Simple reason, because they have no control over free markets. Dems default is "gotta fix it, even if it ain't broke." Socs take it a step further in order to bring equal outcomes, which history has shown the outcome usually makes everyone worse off, except those at the top making the decisions impacting everyone else.
I'm a big believer in the theory that the main difference between Democrats and Conservatives is control, so I would agree.
There isn't a thing that Democrats don't want to control, whereas conservatives have much more of a "hands off" approach to letting people live.
This is why I believe that most Democrats have a disorder ranging from minor control tics to raging control tantrums driven by narcissism and paranoia.
But this thinking that you can centrally plan or "control" something as massive as a market is so flawed, and easily shown to be hugely problematic.
Is this really it, just the desire to control everything?
If you believe, generally speaking, that Dems (and Socs) always have solutions "in search of problems", then yes. Hence the creation of problems in order to apply their solutions.
Hayek said that he believed some people just wanted to control others. I wish I had his direct quote, but I’ve never been able to find it after reading it initially.
This is fantastic. Thanks for taking the time to give it the treatment it deserves. This article should be in major media outlets.
My one critique is that you failed to address the most obvious question: Which came first, the chicken, or the egg?
Ask God.
Evolutionally, the egg-laying dinosaur.
Thus, chicken raisers saying "I Raise Tiny Dinosaurs!"
My favorite Chicago joke:
It was so cold in Chicago the other day, I saw a politician with his hands in his own pockets.
This is why I read your stuff. Thanks much. I didn't realize there was no futures market for eggs, nor for onions. The line chart was eye-opening.
There's a very good reason why there are NO Onion Futures, and an awesome story as to why Congress banned that particular future, with it's own named Act:
https://en.wikipedia.org/wiki/Onion_Futures_Act
Enjoy, probably cleaned up the river a bit at that point in time.
The onion market today is vertically integrated....due to government regulation. Simplot owns the potato market and the onion market. Ironically, onions are a huge part of Indian cooking and their diet is very price sensitive to onions. I'd also point out that the futures markets of the 1950s and early 1960s were very different than markets of today. Back then, no audit trails and it was much easier to manipulate them. Thanks to Leo Melamed and his reforms, and today's technology, it's really easy to have a transparent and regulated futures market.
As a former floor "desk jockey", I'm very familiar with the process, up to and including knowing just why Refco's trading jackets were grey.
Ha. Most people do not know either! I wouldn't have cleared Refco with your money.
Big Food has positives, but it has negatives too: https://www.theepochtimes.com/over-400-products-including-breakfast-sandwiches-fruits-recalled-amid-potential-listeria-contamination_5036319.html?utm_source=Morningbrief&src_src=Morningbrief&utm_campaign=mb-2023-02-07&src_cmp=mb-2023-02-07&utm_medium=email&est=3m%2B%2F0Ql4oUcnwXgIylZ%2BsOfqtMSGwjhJQXdw0UxzDZTdw3va2XlcILKpodU%3D Listeria at scale....salmonella at scale.....
I didn't have Prof. Weil for financial accounting at Booth in the mid-'90s. Classmates did, however, and loved him. He was legendary. Not only old school, but joyful and friendly. He enjoyed fine wine, as I recall. A bon vivant and a towering figure in his profession.
I took that first-term accounting class 28 years ago last fall. I still remember incredibly arcane details form the 800-page textbook that he wrote (with a colleague) and that we had to master in ten weeks. It still sits on my bookshelf, tabbed and annotated. I summoned some details, long-memorized, from that course just last week preparing a lecture for a class I teach. I marvel every time that occurs.
RIP, Prof. Weil, and thank you. Chicago Booth was a remarkable place to learn economics and finance.
I want to ask a question that I've never been able to get answered, to Mr. Carter and anyone else who cares: Why do Democrats and socialists not believe in free markets?
It's not a loaded question, and I really don't know the answer. I know there are multiple answers, but I can't figure out why they universally do not like free markets and are so distrusting of them.
One of the reasons they don't believe in free markets is that they don't think they are fair. Socialists don't see any value in competition. They view it as binary -- winners and losers, and they think they are champions of the losers defending them against the evil rich winners. The socialists don't understand that it is not binary. If you compete even if you do not reach the very top, you can still do quite well for yourself and your family. In individual terms, if a kid wants to be an MD but is a victim of inner city schools or not quite good enough academically, but still willing to work hard, he can fail the competition for MD but still wind up an RN, a high paid tech, a mid-level manager, or if financially motivated a dreaded pharma salesman. The problem Jeff is describing with eggs is what's going on with everything right now. Markets have been captured by one or a combination of big companies (tyson, perdue and about six others) that limit competition often through unfair, but legal, means. Same with big banks and funds that decide they won't loan money for petro or won't process credit purchases of guns.
Great point. I've also noted that socialists/Democrats believe that our economy and markets are a zero sum game, as you suggest. Earning a piece of pie just simply takes it from someone else, as opposed to making the pie bigger for all. They believe that wealth is transferred, not created. I guess if you believe that money is wealth then you might believe that. But money is only the medium of exchange -- wealth can be created by anyone at anytime with a simple transaction that could only exist by two voluntary participants.
And your other point that wealth/success is progressive, rather than binary is excellent! You don't skip from point A to Z in life, you move incrementally. Those increments can be tough, but they also can be very satisfying. I believe that we have a lot of young people who don't understand that, and instantly want to be "mega-rich CEO's." It's not a privilege -- it's a sacrifice, and too many don't understand it.
Thanks for sharing your perspective.
Simple reason, because they have no control over free markets. Dems default is "gotta fix it, even if it ain't broke." Socs take it a step further in order to bring equal outcomes, which history has shown the outcome usually makes everyone worse off, except those at the top making the decisions impacting everyone else.
I'm a big believer in the theory that the main difference between Democrats and Conservatives is control, so I would agree.
There isn't a thing that Democrats don't want to control, whereas conservatives have much more of a "hands off" approach to letting people live.
This is why I believe that most Democrats have a disorder ranging from minor control tics to raging control tantrums driven by narcissism and paranoia.
But this thinking that you can centrally plan or "control" something as massive as a market is so flawed, and easily shown to be hugely problematic.
Is this really it, just the desire to control everything?
If you believe, generally speaking, that Dems (and Socs) always have solutions "in search of problems", then yes. Hence the creation of problems in order to apply their solutions.
Hayek said that he believed some people just wanted to control others. I wish I had his direct quote, but I’ve never been able to find it after reading it initially.