Category Archives: Government Waste

Farming in an Equilibrium Trap

JayG wrote something today about how this summers drought is hitting farmers very hard; which is absolutely true. And it’s already having an impact on food prices, and that impact is just going to grow.

The crop that’s being impacted worst is dent corn, which makes up the majority of livestock feed in this country; particularly beef feed. This is exacerbated by the governments ethanol mandates, which take even more of the feed corn crop out of the feed market.

Over the next couple months, we’re going to see beef prices crash, as ranchers and feedlots come to the end of their stored feedstocks and slaughter more steer than normal (so they don’t have to keep feeding them), and then SOAR to highs we haven’t seen in years over the fall and winter.

Jay points out that some are “blaming subisidies” for the state of things… which I think is silly, you can’t blame subsidies for weather (well… usually… Microclimate and regional climate adjustments due to overplanting can sometimes be blamed on subsidies… but that’s not what we’re talking about here).

But honestly, there’s something that no-one wants to admit, no-one wants to say, and no-one wants to hear in this country….

We have too many damn farmers.

By far.

Probably by more than half, at least for some crops.

In particular we have too many grain farmers. In even greater particular, we have far too many corn and wheat farmers.

We have a natural market for corn and wheat that would support… something like half… of the farmers that we have now.

All of those people who are only making money because of subsidies; we really don’t need them growing corn or wheat.

Either they need to grow something else, or they need to sell their land and stop being farmers.

Even the argument that it “keeps our food prices low” is false; because it actually keeps them higher most years. If there were no subsidies, the market would find its natural level of supply, demand, and price; and the resources inefficiently allocated to subsidized crops would simply be allocated elsewhere (and I’m not even going to get into the second order effects of this regime like obesity, HFCS vs. sugar pricing, ethanol etc…).

But we don’t want to hear it.

We are constantly being presented with images of the “struggling family farmer”… And have been for over 100 years.

Shouldn’t that tell you something?

There are plenty of very profitable and prosperous farmers in this country, and plenty of large farming corporations that do quite well…

And who are they?

They’re farmers that grow crops which don’t get subsidies, who have found ways to be economically efficient; or they are farm corporations who have found ways to extract the maximum amount of government benefits.

Again… shouldn’t that tell you something?

When a business is failing, that doesn’t tell you “we need to subsidize it”, it tells you we need to reduce its regulatory and tax burdens and operational restrictions (stop artificially reducing its competitiveness); or we need to let that business die.

Farming is no different from any other business. If it’s not competitive, we shouldn’t be encouraging people to do it (unless it’s of importance to national security, and thus can’t be outsourced or offshored; and even then that’s an iffy one, and we should still be encouraging competitiveness internally ) and we shouldn’t be rescuing or subsidizing it.

Why on earth have we been subsidizing these non-viable crops for 80 years?

Oh wait… I know… it’s because to get elected president, you need to win the majority of Iowa, Kansas, Nebraska, Missouri, Minnesota, Illinois, Indiana, Michigan, and Ohio; and to be elected to congress (outside of a major urban constituency anyway) or win those states in the general election, you have to support subsidies for grain farming.

Right now, these farmers are in an equilibrium trap, where because of government subsidies they can just barely get by; but because of inefficiency, actual market conditions etc… they can’t get ahead

The way to deal with equilibrium traps, is to break out of them completely. You can’t do that by keeping on doing what put you in the trap to begin with; and they’ve been doing that for 80 years.

If we stopped subsidizing these crops, people would take huge losses in the first few years; particularly as their land prices fell dramatically. It would hurt. A few hundred thousand people would take a big hit…

An aside about numbers: there are about 2.3 million “farms” in the united states. 65% of all crops are produced by 9% of all farms (which farm 59% of the agricultural land), and 85% of all crops are produced by 15% of all farms.

Of the appx. 2.3 million “farms”, about 2.1 million are considered “family farms”. About 1.9 million of those farms are considered “small family farms”, which have gross revenues of less than $250,000 per year, and produce less than 15% of all crops. Of those, about 35%, produce about 9% of the total crops in this country and are generally considered viable. 40% are essentially “hobby” or “part time” farms that produce less than 3% of all crops per year. It’s the 25% or so of those 2 million farms, which only produce 3-4% of all crops, and which are basically non-viable, that are the biggest issue.

Oh and 10% of all farms receive 75% of all subsidies, for producing about 25% of all crops. Corn, wheat, cotton, rice, soybeans, dairy, peanuts, and sugar, make up 97% of subsidies. Corn and wheat alone make up 52%, cotton about 14%, rice and soybeans another 23%). The VAST majority of those subsidies go to large corporate feed grain farms in Iowa, Illinois, Nebraska, Kansas, and Ohio, and to Cotton farms in Texas (Texas produces 30% of all cotton in the U.S., with Arkansas, California, Mississippi, and Georgia accounting for another 40%); NOT to small family farmers

And then, we would be better off as a nation; and THEY would be better off as individuals. They, and their children, would no longer be trapped into a just barely livable, just barely getting by, dependent on the government economic condition for decades. They would move to more productive more useful employment. They would be better off eventually, as would the country as a whole.

The problem? Many of them don’t want to. They WANT to be farmers, even though they KNOW it’s a bad business. They love being farmers. They’ve been farmers for generations in their family. It’s all they know, it’s what they’re passionate about, it’s part of their culture and they can’t see ever doing anything else.

Well… I want to be an Aerospace Engineer, and design and build airplanes; or even boats (many boat designers are also aerospace engineers. It’s a very similar field of study). It’s what I trained for, and I love it and am very passionate about it.

But it’s not viable for me.

There are more than enough airplane designers out there for the market as it exists today; so I can’t find employment as an airplane designer. The fact is, very few new airplanes are being designed.

Now, I’m the first to say that we should get the excessive regulatory burden out of the way of the aircraft industry, and if we did that it’s likely that more aircraft would be designed and more aerospace engineers could find jobs…

But would you say that just because I can’t find a job in the field I was educated in, that we should subsidize that field just so I could?

…Well… Sadly, some would… Or at least they would, if the field I was in was politically or socially favored… But anyone with any sense or integrity knows better.

We have romanticized the idea of the “family farmer” in this country for far too long.

The fact is, it is no longer economically viable, nor is it necessary, for many of these people to be farmers, and we should stop enabling the equilibrium trap constantly keep them locked into farming, but always on the edge of failing.

I am a cynically romantic optimistic pessimist. I am neither liberal, nor conservative. I am a (somewhat disgruntled) muscular minarchist… something like a constructive anarchist.

Basically what that means, is that I believe, all things being equal, responsible adults should be able to do whatever the hell they want to do, so long as nobody’s getting hurt, who isn’t paying extra

Gov. Deval Patrick Vetoes Bipartisan Bill that Would Prohibit EBT Card Fraud and Abuse

In Massachusetts people can purchase guns, porn, jewelry, get a manicure, or get a tattoo with an EBT card (i.e. food stamps). Understandably, this upsets some Massachusetts residents and the state legislature passed a bipartisan bill which would prohibit use of EBT cards for these non-food related items. You would think that such a common sense reform embraced by Republicans and Democrats alike would easily be signed into law regardless of the party affiliation of the governor but you would be wrong.

Chris Cassidy for The Boston Globe reports:

In a veto statement yesterday, [Gov. Deval] Patrick slammed his reform-intent rivals for “political grandstanding” with their efforts to ban EBT buys of guns, porn, tattoos, jewelry and manicures, insisting reforms were already on track without the Legislature’s meddling. That drew return fire from irate lawmakers.

“A lot of people in the Legislature, and a lot of taxpayers for that matter, believe there are a lot of problems with our EBT system,” said state Sen. Robert Hedlund (R-Weymouth). “Some of us have worked hard to try to address those problems. Some of us actually take our jobs seriously, and to be accused of political grandstanding, I think it’s irresponsible and immature of the governor to speak that way.”

[…]

Patrick denied he’s opposed to EBT reforms.

“Nobody is more concerned about fraud than we are,” Patrick said at a press conference yesterday.

His veto rejected bans on the use of EBT cards for tattoos, guns, porn, body piercings, jewelry, fines and bail. However, he left standing bans of the use of EBT cards in tattoo parlors, gun shops, casinos, cruise ships, strip clubs and adult entertainment centers, saying the independent EBT Card Commission had ruled out the idea of banning specific products “for reasons of feasibility, enforceability (and) cost.”

For the purpose of this discussion, let’s put aside whether or not government at any level should give food stamps to those who would otherwise have difficulty feeding their families. Can we not all agree, whether your Libertarian, Republican, Democrat, Socialist, Communist, Nihilist, or whatever, that if the state has determined that taxpayers will help the needy via food stamps or EBT cards that at the very least the recipients of these cards buy FOOD with them rather than guns, porn, jewelry, body piercings, manicures, or tattoos?

Gov. Patrick, this shouldn’t be a difficult issue. You say that banning specific products from being purchased with food stamps is problematic but let me suggest one simple answer: limit the purchases to food only.

Really, how hard was that?

Doug Stanhope – Liberty (Re) Defined

Brad has posted a version of this comedy routine by Doug Stanhope before. This version has been edited to include images and video by Fr33 Agent Beau Davis with a more honest than the traditional “pledge of allegiance” at the close.

I thought that since today happens to be Flag Day, this video would be an important reminder about the true meaning of liberty albeit with an (at times) crude, comedic delivery. True liberty has nothing to do with a flag*, much less worship for the government for which it stands.

WARNING: some of the material in the video will be offensive as hell to some of you. Enjoy!

Related: The Un-American Pledge of Allegiance

*Of course the flag can mean different things to different people. I think it’s one thing to show appreciation for the flag with its original intended meaning by the founders and quite another to “pledge allegiance” to its government regardless of how hostile to freedom the government becomes. I seriously doubt that Thomas Jefferson (who advocated separating political bonds with any government that becomes hostile to the rights of life, liberty, and the pursuit of happiness in the Declaration of Independence BTW) or other founders would have ever pledged allegiance to the flag of the federal government.

We’re Here! We’re Gluttons! Get Used To It!

Over at Megan McArdle’s place, she’s on a leave of absence for some as-yet-unnamed project. In her stead, Katherine Mangu-Ward picks up one of Megan’s common refrains about Americans and obesity:

Fat people know they’re fat. They know why they’re fat. And they know that being fat kinda sucks.

This may seem obvious, but think about how many anti-obesity initiatives — federal, state, and local–are aimed at promoting the message that being obese or overweight has terrible consequences and/or warning grazers and gorgers off specific food choices.

Two new papers from Cal Poly San Luis Obispo economist Michael L. Marlow take on this weird gap between the problem government anti-obesity efforts seem to be trying to solve and problems that actually exist. Obesity is an expensive, sticky problem, no doubt about that. But Americans themselves aren’t deluded on that point. The fat=bad message has been sent and received, thank you very much. Yet government interventions like menu labeling requirements, public awareness campaigns about the dangers of sugary soda, zoning regulations to limit the prevalence of fast food restaurants, programs to eliminate “food deserts” and bring supermarkets to poor neighborhoods are multiplying. They fail, writes Marlow in a Mercatus Center working paper out this month, because they are little more than taxpayer-funded sermons to the chubby, chubby choir.

One of Megan’s constant points is that for most people, weight is almost destined by genetics to stay within a certain range. Try to stay outside that range very long, and you have to rely on near-superhuman willpower. And it’s an argument that probably holds a certain amount of weight in an evolutionary biology world. If food is constantly scarce, there’s really no genetic basis to select for overeating or not, as everyone is forced by scarcity and constant activity to remain slim. But in the abundance of modern America, that external scarcity doesn’t exist. Calories are cheap and plentiful, to the point that obesity is a major problem for America’s poor — not something you see in most countries.

I’ve had to fight this battle personally for the last decade, as my weight has risen and fallen. Now, I’m unlucky in the sense that I think my “natural” weight puts me in the overweight category of BMI, but perhaps lucky in the fact that even when I’ve been in the obese category, I don’t look gargantuan. At 6’5″, my body can hide a lot of weight.

Since high school, my weight has fluctuated anywhere from 210 to 275 pounds. I don’t put much stock in BMI, because the best shape I’ve been in my life — exiting high school after 7 years of regular martial arts training — I was 225 lbs. That’s a BMI of 26.7, squarely “overweight”… And I was nothing of the sort. I dropped through college as I shed muscle mass to about 210 leaving college (still at the BMI number of 25), and then got a job where I made enough money to afford a lot more food & beer. Since then, I’ve been up to 260+, down to 230, up to 275, and now down to 240 (and dropping).

How have I reached those weights? Well, it’s not because I didn’t know what I was ingesting. It’s because I didn’t care. I know some people (like my sister-in-law) for whom food isn’t really a driver of life. I don’t understand those people. I love food. I really love beer. And when I say food & beer, I’m not talking about mixed field green salads and Michelob Ultra… I’m talking about deep dish pizza and double IPA. I want to eat, and I want to eat a lot. My name is Brad, and I am a glutton.

Right now, I’m trying to take that weight off. And I’m doing so by the simplest method — counting calories. A few weeks back, I had out-of-town coworkers over for pizza & beer, and overindulged a bit. The next day, when getting into a political debate with one of my coworkers over the drug war, he mentioned that overeating was like an addiction, and how it must carry so much guilt along with it. I interrupted — the previous day I had basically skipped breakfast & lunch to prepare for the evening, and that pizza & beer (& wings & garlic knots… MMMMM!!!!) evening was 3400 calories, one meal being itself 1200 over my new daily allotment. And I had to tell him that there was no guilt involved. I can eat that much and feel normal, not guilty. In fact, it’s the calorie restriction that feels unnatural — every day I’m hungry and dreaming of food. It’s not a fun way to live!

I know I’ve been at unhealthy weights. When I’ve been at the upper end of the range, I haven’t needed government to tell me that I was trending towards unhealthy & disgusting; I have a wife. Government hasn’t done much to make me thinner, either. While I appreciate the fact that so many restaurants here in CA now have to post calorie counts on menus, it’s not like this information was hard to find before. And the calorie counts wouldn’t make any difference to my behavior _unless I already wanted to lose weight_. It’s purely convenience. My brother-in-law is roughly the size I was when I was at my heaviest, and has no desire to change right now — the fact that California mandates restaurants post this information doesn’t change his behavior at all (as it doesn’t change most peoples’ behavior).

Why are so many Americans fat? Because we like to eat — and we can afford to do so. Willpower is hard — we haven’t needed it for most of human history, when food was scarce. And food is delicious. I like salad, but few things are as satisfying as an italian beef sandwich and some nice salty french fries. On the “Right”, we often suggest that everything would be great about socialism except for the fact that it runs absolutely contrary to human nature. As a result, every government that’s tried socialism has failed in spectacular fashion. Well, everything’s great about dieting except that it runs absolutely contrary to human nature. Is it any wonder that government attempts to make us thin have failed?

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