THE VALUE OF NOTHING - THE HIGH PRICE OF SUBSIDIES

"Cows by the Lake"
24X36
Oil on Canvas
©Cheryl A. Pass

The tea partiers have made loud noises of late about "earmarks," those cute, but expensive, add-ons that buy votes for members of Congress. Earmarks are sort of like trinkets for constituencies. Throw an earmark into a defense bill for greenways in Tuscaloosa, Al here, and another one for an art museum in anytown, USA, placed ever so cleverly into an appropriations bill. It's business as usual in DC, but earmarks are just part of the story. The tea partiers are missing, or not addressing, the elephant in the room. The bigger culprit is subsidies, which are just bigger earmarks, that adorn the campaign coffers of the politicians. And I wonder why tea partiers are not just as fuming mad over those.

Subsidies are usually in the form of tax breaks and price fixing, or started out that way. Now subsidies are tax breaks and price fixing and directing government money into industries to prop them up. The tax system we have is so cumbersome, the government so bloated and out of control, that it creates an opportunity for congress to bestow favors on lobbyists and voting blocs looking for goodies. Fix the tax system and/or stop the subsidies and earmarks? Which comes first? The chicken or the egg? Can you fix the tax system before you stop the subsidies? Or does fixing the subsidy problem automatically fix the tax system??

Arguments for and against subsidies makes strange bedfellows. Pick your friends. The left argues against oil subsidies, but loves those subsidies for solar panels and windmills. The right argues against subsidized housing, but loves tax breaks for home mortgages. The left wants foreign aid subsidies and the right wants to subsidize big business. Excuse me? How does this work really??

Milk subsidies? Appliance rebates? Cotton subsidies, corn subsidies, Alpaca subsidies, beef subsidies, energy subsidies, on and on. We live in a sea of twisted pricing and costs manipulated by government that no one, even with the brains of Einstein and Milton Friedman, could wrap their minds around. The only thing the consumer is left with is playing a search and find game with the available goods. It's kind of like "Where's Waldo", where you know something is there, but you are not sure how to find it. The 'something' is a reasonable price for a commodity, 'reasonable' being the operative word there. How to find it means hours of eye straining research and shopping until you drop. Today, a reasonable price is completely relative to how much government intervention went into the production of the item in question. Whatever price you pay is either propped up or undermined by government regulations and interference. And whatever price you are paying has little or nothing to do with supply and demand. If the prices are lower due to government subsidies, you turn around and pay more in taxes to make up the difference, i.e. you buy a gallon of milk at X price, then turn around and pay Y to the government for the privilege of buying the milk at the cheaper price. Is the milk really any cheaper using that subsidized method?? I guess it is cheaper for you if you are in the no-tax brackets. Those of us paying taxes are covering the difference. Yes, you get the cheaper price at the store, but the real price can be found missing from your paycheck, or on April 15th. If the item is not subsidized, you might be able to find a 'real' price, meaning production cost plus mark-up for the seller. The trick is trying to find anything that is not being subsidized or manipulated in some way. And non-subsidized items are harder to find than trying to find something for sale in America that was not made in China. And how cheap is product X, Y, or Z, if you then turn around and pay boatloads more in taxes to support the unemployed in America??

The point is that market forces are no where to be found. Supply today is created by synthetic rules that have little to do with actual resources, resources being manipulated by so many government agencies your head would spin trying to count them all. Demand is often manufactured by the unholy marriage between corporations and government and their twisted relationship with the media. Retail price factors are now encumbered with regulations by bureaucrats all added into the final price. Those who handle production, availability, warehousing, transportation, and storefronts are either in bed with government, or regulated so heavily by government, that what you are seeing in stores to buy at a certain price is almost pure fiction.

Over the holiday I watched a film called Food, Inc. It is a small, but worthy, exposé of the meat industry and the corn industry in the U.S. While it did not focus as such on subsidized farm operations, it discussed the manipulation of farmers by big agra (Monsanto, Tyson, Cargill, etc. ) which, led me to do some research on Monsanto again...which also led me down the rabbit hole into that recently passed disaster called the Food Safety Modernization Act. Homeland Security is now in charge of our food safety??? Yeah, those same cutesy folks who dreamed up groping methods at airports. But I digress.

Like most Americans I think of our country as magnanimous and charitable through giving foreign aid to so many underdeveloped nations across the globe. Recently however, after hours of eye straining reading, I am more and more aware of the damage our supposed charity is doing to those foreign countries receiving U.S. aid. You see, subsidies are not just hurting our own citizens, but subsidies are ruining the life sustaining independence of other countries' citizens as well as our own. And we are doing it through propping up mega global corporations through our subsidies. Why? Greed, I assume. Campaign corruption, I assume. Malfeasance in government power, exactly. I do wonder how politicians sleep at night. Maybe they don't, being blood thirsty vampires pretending to be saints.

hat tip to: MarketWatch.com

For a more global viewpoint on the damage our subsidies are doing off shore, take a look at this article regarding Haiti: How the U.S. is putting Haitians out of business and out of food

Excerpts here: "The U.S. government and agricultural corporations, which have been undermining Haitian peasant agriculture for three decades, today threaten higher levels of unemployment for farmers and an aggravated food crisis among the hemisphere’s hungriest population."

"It didn’t used to be this way. In the early 1980s, Haiti was largely self-sufficient in food consumption and was even an exporter nation. The destruction of agriculture and food security came through policy choices. In 1986 and again in 1995, the International Monetary Fund (IMF) gave loans to Haiti with the condition that the government reduce tariffs on goods imported into the country. While previous tariffs on some staple foods had been as high as 150%, by 1995 the Haitian government, under pressure primarily from the IMF and U.S. government, cut import tariffs on food basics to as low as 3%.[4]

Unable to compete with imported goods and thus unable to survive, Haitian farmers have flocked into the overcrowded capital in search of a living."

" Rice is among the five most heavily subsidized crops in the U.S., with rice growers receiving $12.5 billion in subsidies between 1995 and 2009.[5] Thesubsidized production and the industrial scale, on top of the lowering of import tariffs in Haiti, combined to become a money maker: beginning in the early 1980s, rice grown in such places as Arkansas and California and shipped by boat to Haiti could be sold cheaper than rice grown in a neighboring field in the Artibonite Valley."

So while our local churches are sending missionaries down to Haiti to try to help the poverty crisis and post earthquake disaster there, our government is busy putting the Haitians on the permanently poor list with no hope of recovery. Why, you might be asking? Money for Monsanto and the American owned rice producers. Money in the pockets of Senator Richard Burr, for one, who took money from Monsanto to co-sponsor the Food Modernization Act. Now, no longer satisfied with manipulating the American marketplace for the past 80 years, our leaders and the mega corporations they represent, are taking down other countries as fast as you can say Corn Pops.

And you wonder why people in other parts of the world aren't too fond of America. Our leaders know the value of nothing, but they sure do love subsidizing their own bank accounts. We're busy listening to Joe Biden give mind-numbing rhetorical speeches about how we are supporting Democracy in other countries, when, in fact, we are very busy undermining those countries' abilities to survive, being manipulated and undermined by the global conglomerates and the WTO, WHO, IMF, U.N., U.S. etc. Who is kidding who? What democracy? What sovereignty?

Our Republic is in great peril. What I just described is one huge part of the problems we face. Tea Partiers need to get after this issue and start vetting candidates that will stop the insane subsidizing of commodities and begin to get the world back to a state of reality.

Hat Tip to Food, Inc. Movie Site

And, oh by the way, to the person who once told me that her charity is her taxes to our wise and wonderful government....I'd like to say, "maybe you ought to give that some more thought."