Thursday, November 11, 2010


Political Mayhem Thursday: The stupidest subsidy of all

Some of you are probably getting tired of me attacking the way the federal government spends taxpayer money on corporate welfare, especially on agricultural subsidies. I thought I had heard the worst of these excesses... and then I heard this report on NPR. In a nutshell:

1) The World Trade Organization (WTO) found that the United States was unfairly subsidizing the American cotton industry.
2) Because these violations hurt Brazilian farmers, the WTO allowed Brazil to retaliate by imposing tariffs on American products.
3) Hurt by these tariffs, other US industries pressured the administration to work things out with Brazil.
4) The administration did, but not by reducing subsidies to US farmers. Instead, we started subsidizing BRAZILIAN cotton farmers with over $140 million of US taxpayer dollars. Mollified, Brazil dropped the tariffs.

So, the end result is that now our tax dollars are subsidizing Brazilian cotton farmers. Sheesh.

Now, why is it that we didn't just reduce the cotton subsidies here? That's simple-Because of the political power of the cotton industry. They used their sway to maintain their place at the government teat and drink deeply from the well-worn trough of taxpayers' money.

This is supposedly a country that values limited government and free enterprise. The truth is that in the area of agriculture we are true to neither ideal. We prop up the cotton industry with billions of federal dollars, rather than let markets work. It's repugnant, it's wasteful, and it's time for this charade to end.

Farm subsidies are among the worst use of tax payer dollars. PJ O'Rourke once said we should take the whole program out behind the barn and shoot it.

I heard this report too. Appalling. But I read somewhere that the incoming GOP Agriculture Committee Chair is addicted to subsidies too.

"They used their sway to maintain their place at the government teat and drink deeply from the well-worn trough of taxpayer's money."

W&M undergraduate degree (today): $90,228

Yale Law Degree (today): $211,350

The ability to employ highly effective "teat" imagery: PRICELESS
We need subsidies to support family farms!
How many family farms are really still operating? And why not subsidies for the family hardware stores or clothing stores or drug stores driven out by Wal-Mart, et al.?

Trouble is, its not the families that get the subsidies. Its ADM, ConAgra and that sort of company.

If any subsidies are maintained, I'd maintain educational subsidies. Yes, the price of W&M is low because its State Supported, and lots of students get federally subsidized loans and grants. I did not and I think the situation has changed, so I cannot comment. I do think colleges cost too much, but don't know why exactly.
Well, if people would just listen to me and nationalize all of those means of production... (hardy har har)

Well, I am not going to be a contrarian here. I agree. Corporate subsidies should end. But those interests have powerful lobbies and buy the national representatives from those states.
Many small rural towns are economically unsustainable and the subsidies are designed to provide trickle down dollars. That's also why we build prisons in the hinterland and provide Byrne grant funds for law enforcement.
I too heard this report on NPR. I wonder why we even grow cotton in this country since all the mills in NC and SC are closed. If they want a subsidy then they should have to keep the product in the US instead of shipping it abroad for processing.

Right now I would like a subsidy for the production of leaves.
I know many cotton (and corn) farmers, but I don't know a single one who has a "place at the government teat" drinking "deeply from the well-worn trough of taxpayer's money." Subsidies are a problem, and a poor use of taxpayer money. This situation you mention with Brazil is truly ridiculous. But that's a grossly unfair characterization of the actual farmers. It is, as IPLawguy states, the larger companies like ADM, ConAgra, Monsanto, etc...who are profiting at the expense of both American taxpayers and American farmers.
AS many have heard me rant before, I think we should rip the band-aid off and just goto a flat tax structure without subsidies and incentives for all industries. But no one would ever vote for that.
I will also point out that we need to keep some production here for our safety and in case other countries try to retaliate by withholding if they disagree with something we did. And I do understand that the other countries have an advantage with cheaper labor, land, chemicals etc and can undercut our producers.
But, because most of this money is siphoned away by the big corporations like Brooke pointed out, I agree that most farmers don't see too much benefit on a day-to-day basis. Thus, I can't say I support the current structure of subsidies. We were at one point the country that undercut the others due to our technilogical advantages and amount produced. I'm sure if given the opportunity and incentive (by ending the tax breaks) there would be a similar result. It would be painful in the short term (politically, financially) but well worth it in the long run. guess I agree with what Osler said.
Subsides for ethanol are just as bad. There's no energy savings so it's not truly "green." If we turned all the corn we grow into ethanol, it still wouldn't make a small dent in our demand for oil. It artificially drives up the demand for corn- making it harder for many impoverished people around the world to afford a basic staple of their diet.

There's only one reason corn ethanol is still around- the Iowa Caucuses.

For some of the reasons ADA states, I would be ok with some measures for actual family farmers-- but that is by no measure what we have. What we have is corporate welfare.
Empowering working farmers to compete with large corporate businesses? Sounds awfully collectivist to me. If those farmers were really good enough to compete, then they would just work harder to surpass agri-business in open competition. Agri-business got that way because government regulations stayed out of the way and let captains of industry rise to the top.

-Lane's Good Twin (sorry, I don't have to work today and my car is in the shop, so this is how I am going to amuse myself while in the waiting room)
Absoluetly, it is corporate. It's not the farmers who are gaining, it's businessmen. But there are still more real farms and farmers out there than most realize, who are hurt by this system as much as, probably more than, anyone. And I hate to see them mis-characterized as greedy, teat-sucklers growing fat off of everyone else's hard-earned money.
I'll say this for family farms (as I eat my breakfast of locally-sourced eggs): their stuff tastes so much better, but I can't buy a dozen local source eggs for the change under my couch cushions like if I go get some Tyson-farmed chicken eggs at Wal-Mart. Subsidies keep prices low at large stores and large eatery chains, which does encourage people to spend more and helps a lot of hard-working people in the service industry stay employed and be able to feed their family on hormone-laden corporate-farmed slop.

So, two solutions: re-work the entire economy to provide jobs and resources to the people based on need, rather than profit, or Soylent Green.
SOYLENT GREEN IS MADE FROM PEOPLE YOU DAMNNED DIRTY APES! - by the way, did you know Moses was an NRA member!?
Mmmm.... soylent green.
Another stupid subsidy: corn. The problem is that anyone who knows a corn farmer seems to thing that guy should get government funding to run his business. Why is agriculture different than anything else?
Yes, IPLG and CTL, I agree that public colleges and need-based financial aid should continue to be subsidized. Actually, many public colleges (including W & M) get fewer and fewer state dollars these days. At least with subsidizing education, we are giving money directly to the students who need it and benefit from it, and to the colleges that teach them.

My mother was single, a secretary, and fully supporting me and my two sisters. Virtually all of my education was paid for by federal & state grants and loans. I couldn't have gone to college otherwise, and now I am out making money and paying taxes on the higher salary I earn because I have a master's degree (also subsidized by loans) . . . anyway, I hope that government support for higher education is relatively non-controversial.

As for why colleges cost so much: for the public ones, it's aging infrastructure that drives a lot of cost increases, plus the need to stay competitive with private colleges' infrastructure and faculty. As for the private ones: they have to compete to stay alive, and competing means 24-hour library access and dorms with single rooms and ensuite bathrooms, and cafeterias with all kinds of menu options, and the best sports facilities money can buy. I've seen a lot of campuses over the last few years and you really see the nature of the competition then. Plus, there's a reverse-snob factor going on, too: if you cost more, you must be better, apparently. It's sad, but there's some truth to it,for the non-Ivies anyway.

Agricultural subsidies that only go to big companies seems not to be defensible, though.
It ain't just cotton, Oz... tobacco, sugar cane, corn (ethanol), you name it.

CTL 12:22 - you must be referring to in-state tuition!

IPLG 12:37 - absolutely correct! It's corporate welfare, just as Oz said at 9:59
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