The dead hand of government at work again:
The French government has announced it is to set aside €200m to fund the destruction of surplus wine production in an attempt to support struggling producers and shore up prices…
…An initial EU fund of €160m for wine destruction has been topped up to €200m by the French government, the agriculture minister, Marc Fesneau, told reporters on Friday.
The economics of supply and demand don’t seem to be working anymore 
If only they spent €200m on reducing government bureaucracy…
What is
The Captain
smoking?
Ahem. This is not “The Government.” This is The Free Market and profits. Mr Property Rights.
PS: Could they thin out bureaucracy? Yeah, I’m for that, too.
Of course it is: “JCs” demand the government solve their problem for them, and the government supplies the solution. The US government, for decades, bought up surplus ag products, to support prices. As discussed in another thread, the food that was served in the school cafeteria was surplus stuff the government bought up. The “government cheese” that was given away in the early 80s, was made from surplus dairy products the government bought.
When Chryser was demanding the government supply them with a $1B gift, in the late 70s, I suggested two scenarios to solve Chrysler’s problem:
1: the socialistical “big gummit” way: buy up all the unwanted Chryslers that were sitting in storage lots, load them on to WWII surplus cargo ships, tow the ships to mid-ocean, and scuttle them.
2: the “free enterprise” way: impose a tax on existing cars, that escalated as the car aged. The tax would be structured so that, by the time a car was 6 or 8 years old, the annual tax was more than the car was worth. Impose a limit on the number of cars that could be imported. The effect of the tax and import limit would drive customers to big three dealers. Ford and GM, alone, would be unable to meet demand, so some people would resort to buying Chrysler products, solving Chrysler’s inventory overhang. Everyone would hail “free enterprise” as the savior of Chrysler.
Steve
The French are catching onto supply side economics quickly.
The French winemakers need a tax cut. Dont ya know? Let the winemakers now propose a tax cut. All will be right with the universe.
Meanwhile French worker pay? Far too high. Don’t let their struggles fool you.
Why not let all the seniors have a quota of wine. Like seniors in the US get cheese. It will tide them over in their bad times.
You could try to improve your economy by randomly breaking 20% of your windows every few weeks. Window sales will be through the roof. Glass workers will be in high demand. Painters will be needed to touch everything up. People to manage the whole thing. Financiers to supply capital. Etc. Huge boon to the economy.
The Broken Window Fallacy: Definition and Examples in Economics.
If the replacement window lobby had more juice than the insurance lobby, that would happen, or, more likely, “big gummit” would be “incentivized” to enact energy efficiency legislation that would require, at government expense, every single pane window in the country to be replaced by a double pane. Then, 5 years later, also at government expense, double pane windows would be required to be replaced by triple pane windows. Think of it as “cash for clunkers” for the window industry.
Steve
That is possibly coming over the next 20-30 years–if the new, realistically “unbreakable”, glass can be made cost-effectively. Based on what I have seen thus far, it is likely to be “no more than” current glass costs–so it would almost certainly be spec’d in for all new construction PLUS any replacement glass. I can see it being used in places where current glass would not be used–so lots of potential new uses as well.
As the unbreakable becomes available, it would be a very good idea to incentivize dual paned glass installation. The screams would match that of ending incandescent light bulbs and the long term benefits would be in the same big ball park.
david fb
The Russian broken window lobby group is working over time. The insurers…not so much…but I am sure in Russian life insurance policies “acts of the state” are excluded from coverage.
No need to incentivize the new glass. Given a comparable price to the old glass, architects and builders will use the new glass for ALL new and/or replacement construction. Because of lower temps needed to make it, the new glass will likely cost LESS because it is cheaper to make. Plus, most lost due to accidental breakage disappears (savings !!). Then there are all the new uses for the new glass–because it has properties that make it suitable for those uses AND is cost-effective compared to existing alternatives. Clearly, if the product is able to perform, it is investible for the long term.
Yes, but my point is that most construction, even in Phoenix and the like, do NOT use dual pane because of the significant short term added expense, especially when facing the possibility of glass breakage. With this much stronger glass it really makes sense to provide incentive for dual paning to gain the huge long term cost savings.
david fb
If “everyone” switches to the new glass, it will remain expensive for some time. That’s how supply and demand works. Factory can build 100,000 windows/month, builders need 200,000 a month, and start outbidding each other for the new “good windows”.
Doubtful.
The new/better glass costs less to produce, so the incentive is to buy more eqpt to be able to produce more of it. Existing eqpt can be used, but getting eqpt designed and built to make the better glass can also mean a faster way to produce glass than previously–so costs go down, as do prices. Been there, done that. I was told of a really nice new order “just received”. Something that had never been built by the company because no customer had previously wanted it. No drawings, no parts list, nothing for me to work with–until I asked the right question. The answer to that question meant I immediately knew I had the solution to build the new part in the desired quantity very quickly (days to a week). Took two phone calls–and the division head said I had salvaged that order because otherwise it would have been a significant wait to make the new part.
The glass eqpt mfg companies will be on top of this development as it moves through the development stages. Why? Because the glass eqpt mfg companies KNOW there will be significant demand for the new glass, so they will want to get the new production machinery orders completed so they can ship them ASAP. That new eqpt will likely be more efficient than the old eqpt because it is designed to produce the new glass–not the old glass. New glass uses lower temps, so production times are shorter. Because the new glass does not require as hot an oven/kiln means each batch can be heated AND cooled/poured more quickly, which equals less time for each batch to be made. So higher volume at lower total of production (fuel or electric savings AND quicker overall mfg process = lower price).You can bet the car companies will be all over this glass, so their suppliers will be camped at the doorsteps of the eqpt mfrs and wanting to know WHEN the new toys will be delivered !!!