Ronald Reagan on Economics, 1976: "The Modern Little Red Hen"

[AJ_Skins]

This is a story Ronald Reagan told as a radio commentary back in 1976. I thought some people would find it interesting. It helps to know the original "Little Red Hen" fable, but it can be appreciated whether you know it or not.

November 16, 1976

A modern day little Red Hen may not appear to be a quotable authority on economics but some authorities on economics aren't worth quoting. I'll be right back.

[commercial break]

This is a little treatise on basic economics called "The Modern Little Red Hen".

Once upon a time there was a little red hen who scratched about the barnyard until she uncovered some grains of wheat. She called her neighbors and said 'If we plant this wheat, we shall have bread to eat. Who will help me plant it?'

"Not I, " said the cow.

"Not I," said the duck.

"Not I," said the pig.

"Not I," said the goose.

"Then I will," said the little red hen. And she did. The wheat grew tall and ripened into golden grain. "Who will help me reap my wheat?" asked the little red hen.

"Not I," said the duck.

"Out of my classification," said the pig.

"I'd lose my seniority," said the cow.

"I'd lose my unemployment compensation," said the goose.

"Then I will," said the little red hen, and she did.

At last it came time to bake the bread. "Who will help me bake bread?" asked the little red hen.

"That would be overtime for me," said the cow.

"I'd lose my welfare benefits," said the duck.

"I'm a dropout and never learned how," said the pig.

"If I'm to be the only helper, that's discrimination," said the goose.

"Then I will," said the little red hen.

She baked five loaves and held them up for her neighbors to see.

They all wanted some and, in fact, demanded a share. But the little red hen said, "No, I can eat the five loaves myself."

"Excess profits," cried the cow.

"Capitalist leech," screamed the duck.

"I demand equal rights," yelled the goose.

And the pig just grunted.

And they painted "unfair" picket signs and marched round and round the little red hen, shouting obscenities.

When the government agent came, he said to the little red hen,

"You must not be greedy."

"But I earned the bread," said the little red hen.

"Exactly," said the agent. "That's the wonderful free enterprise system. Anyone in the barnyard can earn as much as he wants. But under our modern government regulations the productive workers must divide their product with the idle."

And they lived happily ever after, including the little red hen, who smiled and clucked, "I am grateful, I am grateful."

But her neighbors wondered why she never again baked any more bread.

This is Ronald Reagan, thanks for listening.

[Thiebear]

why do you hate freedom

[AJ_Skins]

Eh?

.................

[Taylor 36]

That was great!!!! And, more to the point, very true.

[Thiebear]

Eh?

.................

Joke..

I completely agree:

Being divorced with children and buying and selling distressed houses with everything that is involved in blood, sweat and contractors.. and then have the governement and ex-women just hold out their hands makes my eye twitch...

[Destino]

The little red hen's suffering is clearly the work of snowball.

[zoony]

The little red hen's suffering is clearly the work of snowball.

jokes aside, i'm curious your thoughts

[Destino]

jokes aside, i'm curious your thoughts

I was making a reference to Animal Farm. Have you read it?

As for my thoughts I think the story is over simplified and implies a greater "sharing" of wealth then you would likely find in the US. The 5 loaves and 5 animals lead you to the assumption of an even split - which in this case would be a 80% tax rate with no services returned. That would be communism, thus my reference to Animal Farm.

Any attempt to describe capitalism without including economic standing of the individual character paints a false picture. Communism tries to make people evenly poor - capitalism does not yet this story puts the characters on equal footing.

[zoony]

I was making a reference to Animal Farm. Have you read it?

As for my thoughts I think the story is over simplified and implies a greater "sharing" of wealth then you would likely find in the US. The 5 loaves and 5 animals lead you to the assumption of an even split - which in this case would be a 80% tax rate with no services returned. That would be communism, thus my reference to Animal Farm.

Any attempt to describe capitalism without including economic standing of the individual character paints a false picture. Communism tries to make people evenly poor - capitalism does not yet this story puts the characters on equal footing.

Yes I know who trotzky is Destino

Thanks for answering, I was curious what our liberal friends thought of it. I don't entirely disagree.

[DCsportsfan53]

That was great!!!! And, more to the point, very true.

Give me a break. I understand the analogy but I think it's a diversionary tactic. There are PLENTY of hard working Americans who work two and three jobs just to stay afloat and not be on the street. Unfortunately, if you don't manage to get rich, you're a lazy freeloader no matter how hard you work. Where's the analogy of the little red hen who just sits there and tells the other animals what to do and then gives them a half a loaf of bread to split between the 4 of them, after they did the labor, and keeps the other 4 and half for herself?

[AJ_Skins]

I was making a reference to Animal Farm. Have you read it?

As for my thoughts I think the story is over simplified and implies a greater "sharing" of wealth then you would likely find in the US. The 5 loaves and 5 animals lead you to the assumption of an even split - which in this case would be a 80% tax rate with no services returned. That would be communism, thus my reference to Animal Farm.

Any attempt to describe capitalism without including economic standing of the individual character paints a false picture. Communism tries to make people evenly poor - capitalism does not yet this story puts the characters on equal footing.

You can infer from the responses of the animals that they occupy a variety of spots on the "economic ladder". The bottom line is, the hen did all the work, and they demanded that she give them what she produced. The point of the story is that socialism destroys the human spirit (or in this case chicken). The more socialism you have, the more you crush the spirit of the people. It is absolutely true.

[AJ_Skins]

Give me a break. I understand the analogy but I think it's a diversionary tactic. There are PLENTY of hard working Americans who work two and three jobs just to stay afloat and not be on the street. Unfortunately, if you don't manage to get rich, you're a lazy freeloader no matter how hard you work. Where's the analogy of the little red hen who just sits there and tells the other animals what to do and then gives them a half a loaf of bread to split between the 4 of them, after they did the labor, and keeps the other 4 and half for herself?

That's not the point. The point is mindset. If you see someone else who is doing better than you are, and you wish you were doing better yourself, is your instinct to make changes in what you're doing to improve your own position, or is your instinct to demand they give you some of what they earned?

[Thiebear]

Give me a break. I understand the analogy but I think it's a diversionary tactic. There are PLENTY of hard working Americans who work two and three jobs just to stay afloat and not be on the street. Unfortunately, if you don't manage to get rich, you're a lazy freeloader no matter how hard you work. Where's the analogy of the little red hen who just sits there and tells the other animals what to do and then gives them a half a loaf of bread to split between the 4 of them, after they did the labor, and keeps the other 4 and half for herself?

After 5 years of planting, growing, harvesting, baking and marketing the bread the hen hired the other Four to help.. She paid them and gave them medical insurance... Then the same govt came by and said, don't forget us... we provide you roads..

the taxes you paid for the roads 26% was diverted so we need more for the roads..

the taxes you paid for SS for animals was diverted so we need more for the SS..

There are others that don't have medical so we'd like you to spend more on medical than you do for the bread ingrediants..

Then the hen outsourced to India.. and hired illegal roosters to help and remembered back to when she did it herself.. The famer taxed her extra for having 10 employees as the rest of the workers on his farm had 8... He didnt like her ways... she acted as if she owned the farm..

It gets too hard to make it real, but ends up with the same ending...

[DCsportsfan53]

That's not the point. The point is mindset. If you see someone else who is doing better than you are, and you wish you were doing better yourself, is your instinct to make changes in what you're doing to improve your own position, or is your instinct to demand they give you some of what they earned?

I agree, I don't think anyone should be getting handouts but I also don't think the govt (or a party) should work on behalf of those who have the most to help keep and earn more than what they already have as I feel our current administration does. Your story showed how socialism can kill the spirit, mine showed how when unregulated in capitalism, corporations can exploit workers taking much more than their share again sapping the spirit. Both sides have flaws, there needs to be a medium. No one should get handouts but at the same time, almost 30% of our counrty works for near minimum wage and have to work 60 and 80 hours a week to get by. I don't think that's right. Obviously, some jobs should pay more than others but I just think it's insane that CEO and the like need 400 million dollar severance packages. I'm not talking about socialism, I'm talking about adjustements in the pay scale because the people at the top take a lot more than they deserve.

[zoony]

Capitalism in it's purest form doesn't work either. :2cents:

Neither extreme does. The answer, like all things, lies in the middle.

[AJ_Skins]

I agree, I don't think anyone should be getting handouts but I also don't think the govt (or a party) should work on behalf of those who have the most to help keep and earn more than what they already have as I feel our current administration does. Your story showed how socialism can kill the spirit, mine showed how when unregulated in capitalism, corporations can exploit workers taking much more than their share again sapping the spirit. Both sides have flaws, there needs to be a medium. No one should get handouts but at the same time, almost 30% of our counrty works for near minimum wage and have to work 60 and 80 hours a week to get by. I don't think that's right. Obviously, some jobs should pay more than others but I just think it's insane that CEO and the like need 400 million dollar severance packages. I'm not talking about socialism, I'm talking about adjustements in the pay scale because the people at the top take a lot more than they deserve.

You're saying the government should regulate how much people are paid for different jobs?

By the way, I'm not nearly as offended by that kind of pay for a CEO who leads a company from losing money to making billions of dollars in profits, providing goods and services, jobs, and retirement wealth for shareholders as I am by people who make the same kind of money for being a professional athlete or a movie star. Yet somehow, nobody ever seems to complain about them.

[AJ_Skins]

Capitalism in it's purest form doesn't work either. :2cents:

Neither extreme does. The answer, like all things, lies in the middle.

The only thing that lies in the middle is mediocrity.

[DCsportsfan53]

Capitalism in it's purest form doesn't work either. :2cents:

Neither extreme does. The answer, like all things, lies in the middle.

:doh: Why do I have to be so long winded? This is exactly what I was getting at, Zoony.

[DCsportsfan53]

You're saying the government should regulate how much people are paid for different jobs?

By the way, I'm not nearly as offended by that kind of pay for a CEO who leads a company from losing money to making billions of dollars in profits, providing goods and services, jobs, and retirement wealth for shareholders as I am by people who make the same kind of money for being a professional athlete or a movie star. Yet somehow, nobody ever seems to complain about them.

They still make pennies compared to the owners and the only reason they have what they do is because they're in the public spotlight and have more resources as such to bargain with. I still have a problem with a CEO making more in a day than his factory workers, without whom the CEO would nothing, make in a year.

[AJ_Skins]

I still have a problem with a CEO making more in a day than his factory workers, without whom the CEO would nothing, make in a year.

Wait a minute, I misread that. I thought you were saying they should be paid the same. The problem is, you can't go around dictating what people can be paid in a free country.

[DCsportsfan53]

Wait a minute, I misread that. I thought you were saying they should be paid the same. The problem is, you can't go around dictating what people can be paid in a free country.

I never once said they should be paid the same. I specifically stated some jobs should pay more than others and that I'm not talking about socialism. All I'm saying is there's a little to much disparity between the 400 million dollar CEO and $9 an hour factory worker. No one needs as much as the CEO and it's hard for anyone to live in this country at the worker's wage. My hope would be (this is completely idealistic, I know it will never happen) that companies would sacrifice a little in top end profit so that all their employees can at least live comfortably. But it won't happen, the more power and money they have, the more they'll try to take and the more they'll try to exploit their workers, unfortunately, greed is a big part of human nature. Just take Walmart (sams club) vs Costco as an example. Costco pays there workers well, gives good benefits and still turns a nice profit. Walmart shafts their employees, begrudges benefits while the owners become some of the richest men in the world. I'm not saying I want socialism, I just wish more companies would behave like Costco in the example. Unfortunately, I doubt it'll ever happen and it certainly will never happen because of the good will of those at the top.

[AJ_Skins]

You don't have a good understanding of how corporations work. The job of every employee of a publicly held corporation (which all of the biggest ones are) is one thing, and one thing only: to make as much money as possible for the shareholders. Every economic decision made by the company is directed towards that goal.

The bigger the company, typically, the larger number of shareholders there are. I have a small amount of savings (which I hope to increase) in mutual funds. I am, indirectly, a shareholder of Microsoft, Pfizer, and a number of other large corporations. I am far from rich. When they make a profit, their stock price goes up, they pay dividends, and I make money.

[AlexRS]

The only thing that lies in the middle is mediocrity.

Yeah we all heard about "The Wisdom of Extremism"

[AlexRS]

You don't have a good understanding of how corporations work. The job of every employee of a publicly held corporation (which all of the biggest ones are) is one thing, and one thing only: to make as much money as possible for the shareholders. Every economic decision made by the company is directed towards that goal.

Are you familiar with the concept of Ethics?

[AJ_Skins]

Yeah we all heard about "The Wisdom of Extremism"

Let me put it this way: one person says 2+2=4. Another one says 2+2=8. You say 2+2=6. You're in the middle, only one of you is right, and it's not you.