There's some truly nutty stuff going on with subsidies. One example is cotton subsidies. Right now we're subsidizing cotton by direct payments and crop insurance. In 2004, the WTO ruled these subsidies to be unfair in a dispute brought by Brazil. To reconcile the dispute, the US started paying Brazil about $150 million per year, instead of ending the subsidies. So now we're paying twice for cotton subsidies.<p><a href="http://en.wikipedia.org/wiki/Brazil%E2%80%93United_States_cotton_dispute" rel="nofollow">http://en.wikipedia.org/wiki/Brazil%E2%80%93United_States_co...</a>
One of the amazing things about our food subsidies is that they skew towards subsidizing things like row crops: wheat and corn, and indirectly subsidize grain-fed meat.<p>And they don't subsidize things like vegetables.<p>Now, what do Americans not eat enough of? And it's partly because they're too expensive compared to cheap grains and cheap grain-fed meat?
Look what happened with corn subsidies. Now corn is in EVERYTHING we eat. Literally everything. The beef, chicken, and pork you eat has all been fed corn. Every processed food has corn starch or corn syrup or some other product of corn. Most of the words you can't pronounce in the ingredients list are derivatives of corn. And it's all because of ridiculous bills and subsidies and money getting thrown around in big agro. Recommended Read: Omnivores Dilemma
Stiglitz makes a good point about how farm subsidies made sense in the '30s when most farms were small and family owned. They were an antipoverty program then, and only since then were their rules exploited by ever-larger farms.<p>This kind of rent seeking should not surprise anyone. The market moves a lot more quickly than government. Today's reasonable policy is tomorrow's corporate welfare.<p>The lesson I take from this: other things being equal, err on the side of fewer programs and regulations instead of more. If you want to help the needy, it's better to use broad-based direct assistance (like food stamps or the EITC) than a more complicated program that singles out some sub-group like farmers.
It makes sense when you understand how DC works, and how corrupt the government is .How many representatives have "farms" and get subsidies? There is no insanity here, it's by design.<p>Saying that things are "illogic" is insulting.Things make perfect sense, journalists just dont want to admit that US politicians are rotten to the core.
Honestly, I was expecting to read some sort of defense of this corruption here in the comments.<p>There's a certain part of HN that is totally all about rent-seeking. It's what startups do when they create platforms that are only a slight twist on things in order to get everyone to use them, and then if they get enough market share, they can take in rents disproportionate to any value they add.<p>Sure, there's a lot of productive and ethical startup stuff too. But there's just the undercurrent that if someone is making good money in the marketplace, it's because they are a success and should be emulated. Many people fail to question whether the business is really founded in ethical practices.<p>I guess, so far anyway, when something is <i>that</i> corrupt and unethical as the U.S. food policy, then even those who knee-jerk to defend anyone rich are not gonna be defending this nonsense. Everyone has a limit to their ability to be in denial about the corruption in our economy…
It's helpful to realize that questions of price supports (or import tariffs) on agricultural products go pretty much to the very birth of modern economic thought. Smith discusses them in his <i>Wealth of Nations</i>, and one of David Ricardo's first economic essays concerned the Corn Laws (restrictions on grain imports to Great Britain).<p><a href="http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/ricardo/profits.txt" rel="nofollow">http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/ricardo/p...</a><p>All that's old is new again.
Virtually no one in Congress has ever been hungry because they had little or no money and couldn't buy any. But they have lots of experience having people give them money to obtain more for the giver. So you wind up with feed the rich and starve the poor as good politics.