The GOP is supposed to be the party that “gets” economics. Republicans pride themselves on fiscal responsibility and censure Democrats for wasteful spending. But, when it comes to farming, many Republicans fail Econ 101.
Renowned economist Henry Hazlitt writes in Economics in One Lesson: “The most frequent [economic] fallacy by far today … is to concentrate on the short-run effects of policies on special groups and to ignore or belittle the long-run effects on the community as a whole.” He continues: “In the eyes of most congressmen the farmers simply cannot get enough credit.” But this ends up hurting the society as a whole because the government’s lenders have looser standards than private lenders (who either lend with their own money or are accountable to clients).
Whether a farmer is qualified to farm or not is irrelevant to a government lender. Because bad farmers and unnecessary crops have a nearly equal chance of getting funding as good farmers and marketable crops, taxpayers will not fully capitalize on their investment. Hazlitt explains: “…the recipients of government credit will get their farms and tractors at the expense of those who otherwise would have been the recipients of private credit. Because B has a farm, A will be deprived of a farm.”
Politicians can blame the weather for drought. But they cannot blame the weather for government mandates that led farmers to overplant corn this spring for ethanol production, which monopolizes 40 percent of America’s corn yield.
Miles of useless corn fields are boosting the price of corn (almost 23 percent). Restaurateurs, consumers and livestock farmers will suffer while the many of the farmers who planted the corn have subsidized insurance and, so, despite overplanting, will not feel pain.
As Hazlitt points out, politicians who pass farm subsidies tend to overlook the fact that by helping one group (such as corn farmers) they hurt other groups like hog and cattle ranchers. Today, many livestock producers are unable to afford feed and are desperately selling their animals.
Because our government favors farmers who produce corn, sugarcane and beets(the latter two crops have enjoyed 80 years of special treatment), other groups like horse owners who need inexpensive hay are artificially hard-hit during a drought that theoretically should impact all crops equally. The New York Times reports: “…thousands of the nation’s horses are being left to fend for themselves on the dried range, abandoned by people who can no longer afford to feed them. … [up to] 170,000 to 180,000 [horses] nationwide…”
Rather than forcing taxpayers to bail out corn farmers for crops that will never yield one drop of ethanol, I think Republicans should be dismantling the unconstitutional EPA and opening up drilling and fracking opportunities.
Farming Turns Good Republicans into RINOS
Republicans like Sen. Roy D. Blunt (MO), Sen. Pat Roberts (KS), Sen. Susan Collins (ME), Rep. Tom Latham (IA), Rep. Tom Cole (OK), Rep. Frank D. Lucas (OK) and House Speaker John Boehner (OH) have run to the people and the press with their reasons for why the taxpayers must bail out farmers.
Senate Republican leader Mitch McConnell lauded a five-year farm bill that the Senate passed in June (which allocates a half-trillion-dollars to food stamp programs and subsidies for select crops like sugar) as: “one of the finest moments in the Senate in recent times in terms of how you pass a bill.”
I could spend an entire year sipping poolside Mai Tais while reading comic books and assert that I “got something done.” I would have done something, but accomplished nothing. This is effectively what Republicans are doing (not accomplishing) in Washington when they ram through farm subsidies that damage our economy.
Most economists predict that we will notice increases in food prices by next year. When people cannot afford food, their natural instincts kick in and social norms fly out the window. Chaos and depravity surge as starving men, women and children compete against their friends and neighbors for limited resources.
TIME Magazine warns: “A reduction in the American harvest translates to higher prices overseas. Global food prices have slowly but steadily increased since 2004, with sharp spikes in 2007 and 2010. It’s likely not a coincidence that social unrest in places like Latin America and the Middle East followed those spikes.”
Americans are not yet rioting in the streets. But they are abandoning or selling their animals. And food prices are just beginning to rise.
Many Republicans need to pull the plug on their FarmVille accounts and open a copy of Economics in One Lesson. For, if Republicans do not lead us on fiscal policy, who will?