Help the poor?

By Dale E. Landrith Sr. | Jun 06, 2019

Who are the poor? I would define the poor as those who must take a disproportionate part of their regular income – wages, food stamps, financial assistance, etc. – to purchase basic necessities for their families. "Basic necessities" would be defined as food, housing and transportation. Politicians love to talk, especially in print or news media, about how much they care about the poor and are trying so very hard to help them. Are they helping?

We recently traveled to South Carolina for a couple of weeks. We tow a travel trailer so that “home” is always with us. Needing to sustain ourselves, we had to do some grocery shopping. There were some eye-opening results. A South Carolina Walmart sold a gallon of milk for $1.52, a box of Post Raisin Bran for $2.78, and a case of bottled water for $1.78. We regularly shop at Walmart here in Thomaston. Milk at that time was about $3.30, same brand and box of cereal was $3.12, and the same case of bottled water was $3 and something. The explanation for cereal and water escapes me, except for the fact that it is well known that the cost of business regulation is much higher in Maine.

There is nothing more basic to feeding a family than milk. How could milk be twice as much in Maine as in South Carolina? The answer is politics. Maine government ensures that the Maine dairy industry receives a minimum amount for the milk it produces. In addition Maine sets a minimum price at which milk can be sold. The Maine dairy industry does not have to be efficient, since government is choosing to support it. In addition to the price supports, government eliminates competition. The net result is that those who need a basic commodity, milk, are forced to pay more than would be necessary. However, what about the poor farmer? Somehow, the dairy farmer in South Carolina is managing to do sufficiently well. I seriously doubt that the South Carolina cows care for and milk themselves. Government should get out of the way and let the market set the price of milk and any other product.

On our trip we also noticed that in Pennsylvania, the price of gasoline was significantly higher than in states before and after. What is the culprit here? A little research shows that Pennsylvania recently raised its gasoline tax so that it is now the highest in the nation. In New Jersey, the price was $2.69/gallon and in Pennsylvania it was $2.99/gallon. On a more recent trip the price of gasoline was $2.43/gallon in Ohio and $2.89/gallon in Pennsylvania. I travel regularly to the Midwest and now do not purchase gasoline in Pennsylvania unless absolutely necessary. What are the consequences of this to businesses in Pennsylvania? There are no restaurant or convenience store purchases at the affected businesses and zero gasoline tax to the state.

How does this relate to Maine? In the last few months we have had proposals to raise the state gasoline tax. There has also been a proposal to circumvent state gasoline tax and instead tax every Mainer for the miles they drive. These proposals from Maine politicians serve to increase the burden on the poor. For most everyone gasoline is integral to transportation for employment, for trips to the grocery store and many other endeavors.

One of the most basic commodities is electricity. With Central Maine Power, we currently pay around 17 cents/kilowatt hour and there have been substantial increases in the last few years. The national average is about 13 cents/kilowatt hour. Do politics affect electricity cost? Most certainly they do. Quebec currently has vastly more electricity available than it can consume. This is the reason for the current “corridor” controversy.

Quebec produces this electricity by hydro-power. Why send cheaper electricity to Massachusetts via the “corridor” and yet have none of that completely renewable, clean, cheap electricity benefit Mainers? The answer is that a few years ago Maine politicians mandated that there be a maximum amount of this clean hydroelectricity that could be brought into Maine from Quebec. This mandated maximum was done to keep rates high enough so that wind energy would be economical. The wind energy folks have made huge amounts of money while the poor have subsidized their efforts. Think Angus King. By encouraging Quebec hydro for Maine, politicians could lower electric rates significantly.

How can politicians truly help the poor as defined above? They must eliminate the programs and regulations that discourage productivity or inhibit business expansion. When business is faced with competition, it either responds with more innovation or fails, and the result more often than not favors the consumer. Why does Walmart create easier shopping online and the ability to pick up your groceries in a drive-through? The answer is called Amazon.

Help the poor? Quit creating artificial costs on commodities, support an economy that gets the most people working, which will result in increased wages as competition for workers increases, and support business through reduced regulation. The federal government could eliminate oil company subsidies and price supports for agriculture. It is doing a good job on job creation and regulation. Maine government needs serious work on all three.

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Comments (4)
Posted by: Francis Mazzeo, Jr. | Jun 09, 2019 14:55

Some of the higher cost in Maine has to do with transportation cost, heating and less people in a bigger state.



Posted by: RALPH WALLACE | Jun 08, 2019 09:59

Capt. Cut & Paste supporting a conservative view.  Mmmmmmm. I know the secret - a Trump-less column.



Posted by: Kenneth W Hall | Jun 07, 2019 13:47

Have to smile at Dale and Ron being in the same book....saying nothing about being on the same page!  LOL



Posted by: Mary A McKeever | Jun 06, 2019 15:41

Price supports for agriculture caught my eye. I remember years ago a farmer I knew put his land on hold for subsidies, as he made more money NOT farming his land. I guess I live by the creed that a good Down East Yankee should earn his living not let the government do it for him/her.



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