Free Markets, Free People

David Sirota


Liberals Don’t Understand How Agricultural Subsidies Work

To be fair, they don’t understand how most things work, especially when there’s math involved, but this particular quirk is quite annoying.

I remember the first time I came across this general ignorance (see the comments), in a West Wing episode:

Actual dialog from a recent West Wing rerun:

Josh: What do I say to people who ask why we subsidize farmers when we don’t subsidize plumbers?
Farmer’s daughter 1: Tell ’em they can pay seven dollars for a potato.

Yes, I know it’s a TV show, but do people actually think like this? I always assumed that the reason we couldn’t get rid of farm subsidies was rent seeking by the farmers, but if people actually believe this, that could be part of the problem.

Yes, people actually do believe this. Indeed, here is David Sirota spouting the same ignorance:

GOP meat eaters aren’t free market – they want everyone to subsidize their eating via taxes that fund meat subsidies.

Among best ways to reduce meat consumption is to end ag subsidies so that the cost of meat is a true free market price – think: $9 burgers

David also makes the correct point that some GOP congressmen vote to keep these subsidies in place (particularly those in states with farms that benefit the most from them), but that doesn’t alleviate the complete misunderstanding of what these subsidies do.

In short: agricultural subsidies don’t reduce consumer prices, but instead raise them.

In fact, the entire point of these subsidies is to set minimum price levels (often called “price supports”) or trade barriers that create an artificial monopoly. The entire milk industry, as an example, is propped up with such subsidies. Why else do you think it costs about as much for a gallon of milk as does for a gallon of gas?

Although there had been several different forms of subsidies in the U.S. prior to the 1930′s, most were simple tariffs. When the Great Depression began, the Roosevelt Administration sought to prop up the nation’s farmers by raising their incomes. How did they propose to do that? Mainly by setting minimum prices and production quotas (remember Wickard v. Filburn?):

When Franklin D. Roosevelt was inaugurated president in 1933, he called Congress into special session to introduce a record number of legislative proposals under what he dubbed the New Deal. One of the first to be introduced and enacted was the Agricultural Adjustment Act. The intent of the AAA was to restore the purchasing power of American farmers to pre-World War I levels. The money to pay the farmers for cutting back production by about 30 percent was raised by a tax on companies that bought farm products and processed them into food and clothing.

The AAA evened the balance of supply and demand for farm commodities so that prices would support a decent purchasing power for farmers. This concept was known as “parity.”

AAA controlled the supply of seven “basic crops” — corn, wheat, cotton, rice, peanuts, tobacco, and milk — by offering payments to farmers in return for farmers not planting those crops.

The AAA also became involved in assisting farmers ruined by the advent of the Dust Bowl in 1934.

In 1936 the Supreme Court, ruling in United States v. Butler, declared the AAA unconstitutional. Writing for the majority, Justice Owen Roberts stated that by regulating agriculture, the federal government was invading areas of jurisdiction reserved by the constitution to the states, and thus violated the Tenth Amendment. Judge Harlan Stone responded for the minority that, “Courts are not the only agency of government that must be assumed to have capacity to govern.”

Further legislation by Congress restored some of the act`s provisions, encouraging conservation, maintaining balanced prices, and establishing food reserves for periods of shortages.

Congress also adopted the Soil Conservation and Domestic Allotment Act, which encouraged conservation by paying benefits for planting soil-building crops instead of staple crops. The rewritten statutes were declared constitutional by the Supreme Court in Mulford v. Smith (1939) and Wickard v. Filburn (1942).

During World War II, the AAA turned its attention to increasing food production to meet war needs. The AAA did not end the Great Depression and drought, but the legislation remained the basis for all farm programs in the following 70 years.

The entire point of these subsidies is to increase the incomes of farmers. It has never had anything to do with making the price of a potato or a hamburger cheaper for consumers. By design, these programs intend to raise the price for agricultural products, as well as to transfer dollars from taxpayers to farmers.

How liberals like David Sirota and Aaron Sorkin came to think the exact opposite is puzzling. As Ronald Reagan said: “It isn’t so much that liberals are ignorant. It’s just that they know so many things that aren’t so.”


Van Jones – An Afterword

The rise and fall of Van Jones has been a rather interesting situation to watch for a number of reasons.

One is the effect it has had on what David Sirotta calls “movement progressives”. Any one else would call them radical leftists. For those needing a definition, a “movement progressive” is one who comes from the grassroots of leftdom and has earned his or her way up through activism. That’s not to be confused with the “Team of Corporate Zombies”, per Sirota, with which Obama has surrounded himself. “Zombies” like Rahm Emanuel, Larry Summers and Tim Geithner.

So what was the value of Van Jones and his position? Per Sirota he was the only movement progressive in a real position to actually influence policy rather than being shuffled off into a “political/tactical job”. Sirota believes progressives have been badly dissed by the administration’s decision to throw Jones under the proverbial bus. And, of course, Sirota can’t imagine anything but racism being the motivator for those who went after Jones.

Jane Hamsher goes into it even further with a real “movement progressive” blast at the entire Obama administration. She’s of the opinion that the only groups under attack (and being compromised) right now by the White House are progressive groups. Likening them to a calf in a veal pen she writes:

And so the groups in the DC veal pen stay silent. They leadership gets gets bought off by cocktail parties at the White House while the interests of their members get sold out. How many have openly pushed back against the Administration on Don’t Ask, Don’t Tell or DOMA? Well, not many. Most tried to satisfy their LGBT members by outsourcing activism to other organizations, or proving their bona fides by getting involved in the Prop 8 battle that is not directly toxic to the White House. It’s a chickensh*t sidestep that betrays their members in the interest of personal gain, which they justify with feeble self-serving palliatives about the importance of “maintaining a seat at the table.”

I think the phrase “not happy” is an understatement. And the Van Jones debacle just further aggravates the situation.

However not every voice from every liberal area is in synch with the “movement progressive” crowd. What I’m sure some of the grassroots liberals would consider to be the voice of the corporate media, papers like the San Francisco Chronicle still dutifully carry water for the administration and a little lecture for the Hamshers and Sirotas of the world:

For all those on the left who are expressing frustrations that the Obama administration did not choose to “fight” the forces who are determined to discredit Jones because of his past, we say: There was a time for that fight. It was before Jones assumed his high-level position in the administration.

Since Jones was never vetted publicly, that moment passed without note. And that, of course is the problem with such appointments. When finally vetted by public scrutiny, problems like Jones are bound to surface. Expect more.

The Chronicle also makes an interesting point about regional politics vs. national politics that seems to be lost on progressives:

Those of us who have observed Van Jones’ work over the years know him as a dedicated activist whose once polemic and confrontational style on matters such as police misconduct has been redirected and transformed into a more polished and inclusive advocacy of the environment. In the politics of the San Francisco Bay Area, a fiery radical past is almost a rite of passage.

On the national stage, it requires explanation, context and a touch of contrition – just as the past writings and statements of conservatives from other parts of the country seem so offensive and inexplicable here.

The fact that Jones’ activism, ideology and statements were obviously not acceptable on a national level should tell progressives something about why their ideology isn’t translating into what they expected when they signed on to the “hope and change” express.

The Wall Street Journal provides a little more insight for the progressives:

No President is responsible for all of the views of his appointees, but the rise and fall of Mr. Jones is one more warning that Mr. Obama can’t succeed on his current course of governing from the left. He is running into political trouble not because his own message is unclear, or because his opposition is better organized. Mr. Obama is falling in the polls because last year he didn’t tell the American people that the “change” they were asked to believe in included trillions of dollars in new spending, deferring to the most liberal Members of Congress, a government takeover of health care, and appointees with the views of Van Jones.

The “reality-based community” is having to face political reality for the first time and they don’t like it one bit.

Finally, any discussion of the Jones story has to include the shameful handling of it by much of the mainstream media. Or should I say the non-handling of it – for the most part, with obvious exceptions, they chose to ignore it. Consequently, when it broke, they were caught flatfooted and trying to catch up. They did their readers and viewers a great disservice and delivered yet another self-inflicted blow to their waning credibility.

~McQ

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