The Right Coast

April 16, 2004
More Mad Bureaucrats
By Mike Rappaport

Marginal Revolution notes the perversity of the Department of Agriculture:
    The market is often accused of under-providing safety. Consider, however, that the Department of Agriculture is refusing to let a Kansas beef producer test its cattle for mad cow disease. Yes, you read that right. The producer, Creekstone Farms, is losing $40,000 a day because it exports its beef to Japan where such tests are required. The testing of individual cattle, however, runs contrary to the DOA/industry message that American beef is perfectly safe without expensive testing. Don't be surprised if the DOA requires such testing in the near future.
It is an old libertarian principle that many market failures are actually the result of government prohibitions that prevent the market from solving the problem, which then allows the government to step in to "provide" the solution. I uncovered one example several years ago, in which the states prohibited private insurance companies from providing unemployment insurance, thereby leading the federal government to step in to address this market failure.