Thursday, August 17, 2006

Subsidies

Subsidies granted to farmers make the U.S competitive seems to be the theme of all farmers who receive these taxpayer funded grants. In a letter to the editor in today’s JS an Eleanor Zimmerlein writes that the farmers aren’t receiving any more subsides than TIF programs, water and sewer upgrades, prevailing and minimum wages, unemployment compensation, mass transit, and Amtrak use that we city dwellers receive. She asks “Aren’t these subsidies that farmers don’t receive?” She says that farmers pay more to support the local school district than the non-farmer. If subsidies are to be eliminated, so should subsidies to all other segments of our economy. (I probably would agree to that) She is replying to an article written by Jonah Goldberg titled “Biggest welfare kings ride farm tractors”.

Hmmm. Being on the County Board I dispute that farmers pay more of their income to school districts than city dwellers. Approximately 30% of the people living in Peoria I read, are retired folks, many with incomes derived mainly thru Social Security. I agree with her on TIF’s especially when TIF money goes to large corporations like Walmart and Cub Foods. Walmart land got to be a TIF because it was in a “depressed” area. Depressed, the TIF granters said because it was only $13,000 an acre farmland. Or if we don’t give them a TIF they might locate in Dunlap. As far as Amtrak, I believe the modern farmer travels about as much if not more than city folks. I see that farmers are asking city folks to extend sewers and public water out to their farmland so that they can sell their land for private development. So they use sewers and public water too. Since many small farmers hold two jobs, I believe they can collect some of the same benefits as city folks.

I’ll turn now to what Author John Stossel he of 20/20) says about subsidies. “Myth: Farm subsidies guarantee us an ample food supply. Truth: Food would be just as plentiful without giving subsidies.” John continues “Farm subsidies are popular with politicians because Big Agriculture lobbies hard, and many farm votes swing states. In addition, farms are romantic; no one wants to lose the family farm. And people believe that without subsidies, we wouldn’t have a reliable food supply. What a totally insane myth that is. Hundreds (should be thousands) of the “farmers” that get your tax money thru farm subsidies live in New York (or Miami). Once government handouts start, they rarely stop, no matter how ridiculous they get. Ted Turner has gotten $491,179, David Rockefeller $524,167, and Enron’s ken Lay (now dead of a heart attack?) got $22,486. Fred and Larry Starrh grow cotton in California. Over seven years, they had collected $.5 million of your money. All these people believe in limited government but they believe they need these subsidies for their special farm needs. They say without them, they can’t make a profit.”

Stossel also says “So what, not making a profit doesn’t entitle them to our money. Most businesses that don’t make a profit go out of business. About 20,000 restaurants go out of business each year. It is the freedom to fail that’s helped make America as prosperous as it is, because it frees people to do more productive things.” My old company couldn’t make a profit on office supplies, machines and budget furniture after Office Depot and Office Max located in the area. No government person had any intention of giving Widmer’s’ a subsidy to stay profitable. Widmer’s just moved into a more innovative segment of the industry and do quite well.

The worry seems to be that without subsidies for certain products, customers would go elsewhere. Correct, if you can’t compete with others in the market, then others fill the void just like the textile industry and many other. The benefit to all taxpayers is that products cost less money which leaves more money to spend on something else like a better education.

Stossel points out “Around 1900, America had 6 million farms and the Agriculture Dept. employed 3,000 people. Today there are 2 million farms and the Agriculture Dept. employs over 100,000 people. At this rate someday their will be more bureaucrats than farmers.

The lament is “every other government is doing it”. Probably correct but we are not supposed to be a socialist country. At least not yet. One of the things that keeps most of Africa in poverty, is that there is no market for the food they produce other than for their own use. What they grow is their major source of income. But it is cheaper to import the very things they grow themselves.

I am a believer in a “level playing field”. So far, I’m having some trouble understanding what “level” is. Giving subsidies to Walmart and Cub Foods who by size eliminate their competition, is does not create a “level playing field” in my opinion. On the other hand if government giving out handouts is lawful I guess I take them also. I believe the only “subsidy” I’ve ever taken was the GI Bill and Social Security. Probably makes me a Socialist just like the people I’m talking about.

Then maybe, probably not.

2 comments:

ben said...

Finally, back to a topic on which we agree. :)

BTW, just want to say that your 'documentary' (as you put it recently) style of blogging is a nice change of pace from most of the other Peoria-area blogs I've found.

Merle Widmer said...

Thanks, Ben.

Sometimes playing the devils advocate makes me unpopular even to myself.