TABLE D'HOTE: What hath Chicken Little wrought?
My experience with classroom economics was harsh and scathing. I was forced to drop my first and only course like a hot potato.
After waiting two weeks before attending a lecture, I learned with dismay that the class was a third of the way finished with a huge textbook that I had yet to even purchase.
Plus, I kept dozing off in my first and only class.
If I had stuck with macroeconomics, would I be more economically astute today?
Somehow, I doubt it.
No economics class can explain how Republican Presidential candidate John McCain feels comfortable claiming that Barrack Obama and the Democratic Party will lead American down the road to Socialism when Republican President George Bush has already done it. Bush’s Treasury Secretary Henry Paulson last week gave nine of America’s biggest banks huge transfusions of cash with a caveat - the U.S. government now owns a healthy chunk of each bank.
For McCain to deny that the current administration has opened the Socialism floodgate in America and accuse Obama of planning to do it is most peculiar. A good class to learn about this mysterious development in the campaign might be Philosophy 101 - in the chapter which discusses Human Folly.
Nor do I think staying awake in economics class would help me explain a very strange business merger planned on Wall Street. General Motors, easily the most greedy and myopic auto manufacturer in the world, is trying to buy Chrysler, a company resurrected by Lee Iacoca that has once again sunk down into its deathbed.
This potential deal is too phantasmagoric to digest. Both companies are flirting with bankruptcy. GM’s stock is hovering at levels not seen since the 1950’s. Average Americans are hard pressed to name a popular Chrysler vehicle.
If the merger goes through, the ridicule heaped on GM will rival the New Coke debacle. Who in their right mind wants to buy a Chrysler from General Motors? Maybe the answer lies in Marketing 101 - under the heading Selling Green Catsup.
One thing about economics is as certain now as it was at the dawn of civilization. All the world over, people have to eat. Today, many people eat chicken because it tastes good, is cheap, and you can find it in virtually any restaurant and fast food outlet in America.
So how does a company like Pilgrim’s Pride, the world’s biggest chicken company, stand by and let its stock value drop from $33 this time last year to $3.23 last week? Things are so bad at the Texas foul producer that the company has hired a bankruptcy counsel to help save its skin.
The company’s failure may be partially rooted in economics, the high price of corn, consumer cutbacks in dining out, etc. But, the real reason Pilgrim’s Pride lost its feathers can be found in a Religion 101 class - under the chapter on Greed.
Two years ago, Pilgrim’s Pride owner Lonnie Pilgrim went into the marketplace on what he said was a mission from God. He structured a plan to purchase a top competitor in the lucrative chicken market for $1.1 billion. Soon, Lonnie Pilgrim owned Gold Kist Inc., and top pecking rights at the largest chicken company in the world.
To pull the deal off, Pilgrim acted as many did before the economy tanked. The company and its owner borrowed like the bank was a little piece of heaven.
Today, Americans watch in dismay while a top food provider crumbles to the ground. At Pilgrim’s Pride, the sky is falling, and no one is laughing at Chicken Little.
Wade McIntyre is a reporter for The Gonzales Weekly Citizen. He can be reached at email@example.com.