Why do we even have food stamps and farm support? Here’s a brief, over-simplified history. During the Great Depression, with unemployment at historic levels and mom-and-pop farms failing at a high rate (not enough income from not enough sales of produce to an unemployed population), Franklin Roosevelt pushed through Congress a pair of bills that had negative impacts on the unemployed and on those farms (and that prolonged the Depression, but that’s for a different post).
Those two bills were wage controls in the form of a mandated minimum wage that an employer could pay—or that a prospective employee could accept—and a mandated minimum price at which a farmer was allowed to sell his produce (thus, farm supports). Think about that: in a time of enormous unemployment (Obama’s 10% unemployment in 2009 was full employment, and today’s 7.2% is Phat City compared to Depression levels), Americans were priced out of the labor market. And at the time those Americans couldn’t get work, they had no income from which to pay those artificially inflated farm prices.
Roosevelt thought about that, and the light went off in his head: he pushed through Congress a mechanism for giving subsidies to the poor (read: unemployed) so they could afford to buy food (thus, food stamps). (It didn’t occur to this Progressive to rescind his minimum wage and price support programs so the markets could clear, folks could get work, and they could buy their own food.)
That’s the long and short of it: food stamps and farm supports are Depression-era attempts fix a failing economy. Today, Americans pay over $14 billion annually in the form of farm support tax money transfers, and we pay nearly $80 billion per year in the form of food stamp tax money transfers (to a near-record 47 million Americans).
What to do about this? Much has been made, especially by conservatives and by Conservatives, of States’ Rights—the 10th Amendment, and all that. What too often gets overlooked, though, is the dual of that: States’ Obligations. The States should be taking care of themselves on this, not taking money from the taxpayers of other States’ citizens.
My solution is in two parts. One part is to take all money the Feds currently send to the States for farm support and food stamps and convert the funds to block grants, making the year of conversion the baseline year. Every year after that, reduce the size of each block grant by 10% (let’s say) of the baseline amount until the money being sent to each state for each program is $0. This gradual, but steady, forced reduction gives the States time to break their addiction to OPM and to adapt to relying solely on internal State funds for what are essentially internal State problems. Aside from that, the good citizens of nearly bankrupt New York or nearly bankrupt Illinois have no business being forced to send their tax money to a nearly bankrupt California or a flush Texas.
The other part is to get rid of the ethanol mandates. American refineries are required by the EPA to blend over 18 billion gallons of ethanol into their gasoline. The primary source of that ethanol is corn, and as recently as 2011, 40% of US corn production went to ethanol rather than to food. That elevates the price of a broad range of food, and not just corn-based food, at that. Food that eats corn—beef and chickens, for instance, and the eggs from corn-fed chickens, get elevated prices from that diversion. It spreads further: the prices of corn substitutes, like wheat, soya beans, and so on, are also elevated by this diversion. The States’ problems funding their own food stamp programs (to the extent any of these programs persist when the States discover they can’t fund them with OPM) will be greatly reduced by the increase in food affordability due to the elimination of this pernicious mandate.
“There’s nothing in there about wealth redistribution.”
If the Federal government needed one dollar to run itself, and if, say, South Dakota was twice as rich as the next richest state because of its natural resources, then having South Dakota contribute more than the average of 2 cents per state would seem appropriate. The Federal government then applies that to national defense. This is de facto wealth redistribution. Forty-nine states then share the benefit of that spending that results from South Dakota’s vast natural resources. If Florida could not afford to contribute, would the US say “Too bad if someone wants to invade Florida—they didn’t pay for the collective national defense”?
What you should oppose is wealth redistribution from the poor to the rich. US social policy is now geared toward the transfer of wealth and power to those who already have it, and deliberately so. In more democratic societies, there are more counterveiling forces. That is true to only a remarkably limited extent in the US. The existing doctrine of free markets in the US is this: Market discipline for the poor and defenseless but plenty of protection and subsidy for the rich and powerful. We find different psychological and cultural values, those which were denounced by Adam Smith. We find the vile maxim of the masters of mankind: all for ourselves and none for anyone else. We don’t have an organized society with a countervieling force.
“…government aid must come as a last resort, and not by first default.”
So, should we not take away a single penny from our so-called defense spending (one-half of Federal spending) to helping the starving? Then you’d better put aside some federal money for protecting us from ourselves. Check your local police blotter—stupid crimes (bicycle thefts, purses go missing from cars) are replaced by violent breaking and entering and robberies. Keep taking away basic safety nets for children, keep the playing field so unlevel that CEOs can blow $1,000 on a dinner but the working poor can’t afford to feed their families, keep giving more to the military industrial complex and less to schools, and you’ll see pitchforks and torches in the streets.
“That some states are more corrupt than others imparts no obligation on the responsible to feed that corruption.”
Precisely the opposite motive is at work. The government has a carrot to remove the corruption when governors fail to live up to the public trust. It can say, “Don’t re-elect governor Blagojevich [or Scott Walker, or Nathan Deal, or Rick Perry] or we’ll withhold spending for [pick a favorite project].”
“Those citizens are free to leave the poorer states”
They are hardly “free” to leave. This ignores the reality of search costs and switching costs (selling homes; switching schools; doctors; buying homes; giving up pensions, accumulated benefits and non-transferable on-the-job training skills; moving costs, etc.). After Katrina hit New Orleans, I met a family who had to move from Louisiana to Mississippi to look for work. They lost their jobs and barely had enough cash to stay in a hotel, and certainly didn’t have enough for the first-and-last-months’ rent on an apartment while they looked for work. To callously say, “You’re free to leave when you want” dismisses the difficulties of their plight.
“…inequality of outcomes is an inevitable result of equal opportunity–which is what is guaranteed by our social compact–not equal outcomes”
You’ve created a false dichotomy. I never suggested equal outcomes. The US now has the most inequality, and the least equality of opportunity, among the advanced countries. Furthermore, the gross inequality that now exists was not a result of equal opportunity, but created by a system of managed capitalism, which stifles true capitalism in business and removes safety nets for the poor, and those problems will be global problems under the Trans Pacific Partnership. This has very real costs in our economy, our democracy, and our system of justice. As Joseph Stiglitz, Ph.D., pointed out, “The top 1 percent of Americans gained 93 percent of the additional income created in the country in 2010, as compared with 2009.” So you have a room with 100 people and a big pizza with 100 slices. One guy eats 93 slices and 99 people share 7 slices. Hungry people are desperate people, and desperate people take desperate actions. One person, one vote has been replaced with one dollar, one vote, which, in essence, hands over our government to the wealthiest 1%. Contrast this with Scandinavian model. Sweden has accomplished what the US, Britain and Japan can only dream of: Growing rapidly, creating jobs and gaining a competitive edge. The banks are lending, the housing market booming. The budget is balanced. And the people are consistently ranked among the happiest on the planet.
“Being the top dog on the planet … keeps us safe.”
Consider two tales of “long tails”:
1. Chris Anderson’s Long Tail, a book and blog about businesses selling less of more, explores the Long Tail outside of the business world, too. What the long tail has done for Amazon.com, at the expense of Borders and Barnes and Noble, it will do for our political enemies at the expense of our supposed “safety”. Our enemies are shifting away from easily-identifiable large players with heavy weapons and torward a huge number of niche enemies with ever smaller and more deadly weapons. When we say that we are on a crusade, or our war is with ‘Islamic fundamentalists,’ 1.2 billion people think we mean we ready to fight them. They don’t need the latest multi-million dollar drones; home-built IEDs will do nicely for them. And when we kill a boy’s neighbors, family members and friends, when we keep his country in ruins so we can take its oil, we give him a pretty big incentive to walk into a group of Americans with a bomb strapped to his waist.
2. The ratio of the number of combat troops to support troops is referred to as the tooth-to-tail ratio. Tooth-to-tail ratios have grown as the complexity and resource intensity of modern combat has increased. Modern warfare requires an increasingly long tail (1:10 or more now, not counting local populations whom the US troops support troops rely upon). It is getting longer because of (1), above, with Congress’s affinity for funding our military industrial complex, our irrational fears of terrorism, the metastisization of acts of terror in response to our activities, and because that is the strategy of those whom we’ve abused in the past.
Al Qaeda’s strategy is pretty simple: provoke the US into profligate spending and interminable military engagements, with a vision of the country’s eventual economic collapse. The terrorist network has defined its strategy as bleeding the United States to bankruptcy in a death by a thousand cuts. Remember the October 2010 cargo-bomb plot executed by al Qaeda? Two bombs were disguised as printer cartridges and shipped to the US via UPS and FedEx. Both were intercepted before they could be detonated. The bombers wrote that it cost $4,200 to place those bombs. The plot was called “Operation Hemorrhage” because its goal was to cost Western countries “billions of dollars to inspect each and every package in the world or you do nothing and we keep trying again.”
This Tale of Two Tails shows us how unsustainable the current path is. It benefits only the profit-driven military industrial complex, and the vote-driven politicians, who campaign money and an economic flywheel (military spending) to keep the economy moving in any environment.
“Being the kind of nation we are, that also tends toward global peace.”
Read the report provided by my link (see earlier post) again. We are a lawless imperialist aggressor, a globally intrusive military empire. Our attack on Iraq was about getting “our” oil that was inconveniently located under someone else’s land. We are global pirates, not peacekeepers, and we are as capable of naked aggression as any (see Iraq, Afghanistan, North Vietnam, …), but we also practice a more subtle assault: we set up our citizens to be conned by corporations, whether by stripping the FCC of its ability to regulate advertising to children, to the FDA’s rubber-stamping of GMOs, to the USDA’s promotion of products that it knows are unhealthy, to the privatization of voting machines predominately-owned by companies friendly to one political party, to our military industrial complex, to the privatization of education, and so on. If it’s good for corporate donors…
I worry when ideology and self-interest trump the facts, or even caring about the facts. Ninety-seven percent of climate scientists say that climate change is happening and that humans have made it so, but only four in ten Americans realize it’s true. Neighbors drive around with “Support our troops” bumper stickers for years, but they have no idea what that means. Compulsory patriotism does nothing for soldiers who risk their lives — but props up those who profit from war. Dean Acheson understood the true nature of our government in 1962, when he instructed the American Society of International Law that no legal issue arises when the United States responds to a challenge to its “power, position, and prestige.”
Hendrik Hertzberg’s New Yorker article sums up the cost: “…the casual trashing of habeas corpus and the Geneva conventions; the claim of authority to seize suspects, including American citizens, and imprison them indefinitely and incommunicado, with no right to due process of law; the outright encouragement of “cruel”, “inhuman”, and “degrading” treatment of prisoners; use of undoubted torture, including water boarding, which for a century U.S. has prosecuted as a war crime; and, of course, the bloody, nightmarish Iraq war itself, launched under false pretenses, conducted with stupefying incompetence, then escalated long after public’s of support for it had evaporated, at the cost of scores of thousands of lives, nearly $0.5 trillion, and the crippling of America’s armed forces, which no longer overawe and will take years to rebuild.”
I will have to leave this conversation here. I used to think as you do now, back when I was in my early twenties, full of idealism and self-interest. But I now have other uses for my time besides debating an earlier version of myself. I encourage you—and everyone—to look beyond the headlines, to read news from around the world, to read business press and the press of working families, and to travel. You will find that the world is not at all as the University of Chicago or the University of Texas would have us believe. And our government is nothing like the noble one we read about in classrooms.
“Applying the same treatment to FDR’s unemployment rates runs up his numbers even higher.”
Possibly, although I’ve not seen such data or much less an analysis of it, and those data likely don’t exist since such factors were not recorded at the time (to my knowledge). Nor does that rebut my suggestion that we are not so far from the Great Depression era unemployment, and certainly not as far as you suggested.
Regarding the straw man, that was pre-emptive, following your suggestion that only the unemployed are poor, and I would hope that all would my pre-emptive statement self-evident.
I agree that, as a general rule, the poorer states shouldn’t be sending money to the richer states (putting aside practical difficulties in defining “poorer” and “richer”), outside of extenuating circumstances that require it (e.g., common risks or benefits). But you didn’t respond to the question the way I put it. There are services that are better provided by the Federal government, and the Federal government must take in revenue from the states and redistribute it according to its requirements. Some states are certainly more capable of spending more wisely and efficiently than the Federal government’s spending in that locale. But others are not, and some are certainly more corrupt or more corruptible. As you noted, three leading states are nearly bankrupt. If those states face continuing difficulties, should the rest of the country suffer or pitch in? If they want a functioning country, with functioning interstates, railroads, healthcare, defense, port inspections, disaster assistance, etc., then it is not in their interest to leave all of those responsibilities at the state level.
“The best way to destroy prosperity is to cap the prosperity of the successful by making them give up their prosperity disproportionately.” – No, the best way to destroy prosperity is to put in a system of socialism for the rich and capitalism for the poor, and let inegalitarianism reign. As money increasingly governs access to life’s essentials–decent health care, access to the best education, political voice and influence in campaigns–inequality matters a great deal, with potentially devastating social and civic consequences.
“Our social contract is that of a republic of the several states, not a single, monolithic entity of one state.” Perhaps, but most matters are national matters now. The republic was founded before interstate highways, national health facilities, resource shortages, and other changes our founders did not foresee. We can’t get Congress to agree on much of anything, but that is a largely a function of private money in elections and gerrymandering—two problems that could be fixed with enough public outrage. Can you imagine getting 50 representatives from 50 states together every time an interstate issue comes up? And then disbanding them upon its resolution and forming another for the next issue?
“… we need to be more diligent in getting elected Congressmen who understand their role as our employees.” Good luck with that. Because of finely-tuned gerrymandering, fewer than 10% of the House districts are even remotely in play in any re-election year. Add to that an incumbent’s power to raise massive amounts of cash, and you have a system stacked in favor of the status quo. That’s how more than 95% of incumbents can win re-election when Congress members are viewed as less honest than used-car salespeople. If a candidate wins the primary, s/he is a shoe-in for the general election.
“We achieve peace by being too strong to be seriously challenged … Which makes an efficiently run DoD a Department of Peace.”
That is remarkably, breath-takingly, stupifyingly wrong. We achieve our own aims by being too strong to be seriously challenged, just as any bully can take from the weak in the absence of justice. See here: http://www.fas.org/sgp/crs/natsec/R42738.pdf for a look at the activities of this “Department of Peace” as you put it (a department, incidentally, that George Washington wanted to formally install).
“And, yes, food eats corn.”
No. Live animals (human or nonhuman) are not food. Except in rare circumstances, humans don’t eat live animals (human or nonhuman). Some eat the decaying flesh from dead animals (i.e., necrovores). Food doesn’t eat corn. Carrots, once picked, are food, but I can say with certainty that I’ll never see a carrot eat an ear of corn. Nor is beef an animal. As noted earlier, that mindset leads to their commodification and exploitation.
Nor does that rebut my suggestion that we are not so far from the Great Depression era unemployment….
Say that we are not so far (and I certainly could have been more clear in my statement that the unemployed of that era were poor without implying that only the unemployed were–though in that era they were a significant portion of the poor). It’s irrelevant to my point about the era’s origin of food stamps.
[T]he Federal government must take in revenue from the states and redistribute it according to its requirements.
Not at all. The Federal government has no requirements other than what its employers–We the People–give it. There’s a point of confusion here: every American holds dual citizenship: of the state in which he’s resident and of the nation. When the citizenry allocate a portion of their money property to the Federal government in the form of taxes, they certainly are sending that money from their state as well, but it’s the individual’s money going there, not the state’s. Further, the Federal government’s primary requirements are the national defense, paying the nation’s debts, and seeing to the general welfare–which is defined by the first 16 clauses of Article I, Section 8. There’s nothing in there about wealth redistribution.
Further, as early as the 3rd Congress, James Madison said on the matter of aid to Haitian revolution refugees that he could not undertake to lay his finger on that article in the Federal Constitution which granted a right of Congress of expending, on objects of benevolence, the money of their constituents. His concern was not that these unfortunates deserved no help, but that wealth redistribution by Federal fiat was not the way to go about it. We’re a wealthier nation, now, and we can do more–but government aid must come as a last resort, and not by first default. That applies at the state level, too. Oh, and notice that Madison also had a very clear understanding of just whose money it was that Congress expended: not the government’s.
It’s also plain that when the states’ addiction to Federal money–OPM–is broken, they’ll do better on their own, and their legitimate needs from outside their own resources will be far lower. That some states are more corrupt than others imparts no obligation on the responsible to feed that corruption. That some states have fewer resources than others also imparts no obligation. States consist of citizens. As you point out, lines of communication are much better now than at our beginning. Those citizens are free to leave the poorer states, and the corrupt ones, and relocate to other states more to their liking. This, along with free market exchanges, is how limited resources get allocated the most efficiently. Relocation often is hard to do, but hard means possible.
In the end, inequality of outcomes is an inevitable result of equal opportunity–which is what is guaranteed by our social compact–not equal outcomes. People start with different endowments of talent, skill, work ethic, luck, etc. They’ll do better or not depending on those, and being free to pursue those provides prosperity for everyone, albeit not equally so. Putting an upper bound on the realization of those opportunities removes the incentives to push for those realizations–and reduces prosperity generation. It’s that way for individuals, and it’s that way for their aggregation into states and into the nation.
You’re right that gerrymandering makes things unnecessarily hard, and extraordinarily hard, to get “proper” elections. But, as I said, hard means possible. It’s still on We the People, as the sovereign in our country. Still, were it up to me, I’d redraw the Congressional districts as equal-population squares, with deviations from squares driven only by jurisdictional boundaries–say town or county boundaries.
We achieve our own aims by being too strong to be seriously challenged….
You bet. We do what’s in our national interest first and foremost, just as every other nation does. Being the top dog on the planet makes us a target; we need the best defense establishment on the planet, by the widest margin possible. That’s what keeps us safe. Being the kind of nation we are, that also tends toward global peace.
Think about Russia or the People’s Republic of China having the kind of relative military power we have–and which they’re trying to get. You have only to look at Russia’s invasion and partition of Georgia, or the PRC’s invasion of Viet Nam or its present “land” grabs in the South and East China Seas, to see the naked aggression and wars of conquest that would be common.
There’s no pax Americana, but that’s not for our lack of trying, however clumsily, and things are a lot more peaceful than they would be were another nation to have the strongest defense establishment.
Eric Hines
“Obama’s 10% unemployment in 2009 was full employment, and today’s 7.2% is Phat City compared to Depression levels”
Actually, the US government often changes the definition of unemployment to make the numbers look better to its constituents. Does anyone actually believe that total unemployment in the US is 7.2%?
From ShadowStats (http://www.shadowstats.com/alternate_data/unemployment-charts), you’ll see that it’s closer to 23% when you include both long-term and short-term discouraged job seekers. And it would be scandalously misleading to try to blame nearly one-quarter of the US population for being lazy – this is a problem of too few jobs, resulting from a systematic loss of manufacturing jobs that began with Nixon’s Fast Track (an end-run around Congress’s sole ability to regulate trade, and which has since been used principally to pass bad legislation that would not make it through Congress), not one of people choosing not to work.
“The States should be taking care of themselves on this, not taking money from the taxpayers of other States’ citizens.”
That is an interesting assertion, but what are the grounds for that claim? Why shouldn’t oil-rich Texas contribute more to the Federal government so that its poorer citizens from its poorer neighbors (e.g., Louisiana, Arkansas) can have food on their table and health care when they get sick from that hole in their roof? Isn’t that the purpose of the social contract? Or will Texas build a border fence around the entire state? The inequities are a concern, but the solution does not lie with turning the problem over to the states. Rather, the Federal government must do a better job on the revenue side, and not take more from nearly bankrupt Illinois than from oil-rich Texas or Alaska.
Let’s look at the so-called Department of Defense, which consumes fully one-half of our US tax revenues. Why should we pull the rug out from under the poor (read: poor, as in waiters, waitresses, gas station attendants, car washers, small farmers, maids, secretaries, and virtually every non-executive at Wal-Mart, and not necessarily unemployed) because of inequities in states’ natural resources, while ignoring the elephant in the room (“defense” spending)? Better to ask “Why are we sucking funds out of, as you say, “nearly bankrupt New York or nearly bankrupt Illinois” to build massive aircraft carriers in Virginia or support military bases in Texas (or in any of the 130 countries in which we have them, for that matter), when our military spending outstrips that of every nation on Earth—combined—and when we don’t spend a dime on a Department of Peace?
“Food that eats corn—beef and chickens…”
While I agree with the statement about withdrawing ethanol supports because of the perverse incentives and wasteful outcome (ethanol production consumes more energy than it delivers, making it an energy sink, not source), this sentence fragment cannot stand without comment. Food doesn’t eat corn. Animals (human included) eat corn. Beef is not an animal; cattle are. Beef is the muscle taken from slaughtered cattle. Finally, animals are not objects. Coffee pots and hammers are “things”, plants are “living things”, and animals are “living creatures”. Imagine one mother telling another, “I have a 4-year-old thing. Look, here it comes now!” As the work of Carol J. Adams demonstrates, turning women and non-human animals into objects is an integral part of the mindset that leads to their commodification and exploitation. All animals—including humans and fish—exist on an evolutionary continuum, and our language should reflect this.
From ShadowStats….
Applying the same treatment to FDR’s unemployment rates runs up his numbers even higher. His base rate peeked above 24%, though.
[Basic HTML tags–[i], [b], and so on–work, using angle brackets instead of square brackets, in comments. I just haven’t figured out how to make that capability display at the head of the Comments sections.]
…scandalously misleading to try to blame nearly one-quarter of the US population for being lazy….
That’s your straw man; you’ll have to defend it yourself.
Why shouldn’t oil-rich Texas contribute more to the Federal government so that…poorer neighbors (e.g., Louisiana, Arkansas) can have…?
Turn that around. Why should those poorer neighbors contribute anything to their neighbors? A major problem is the utter inefficiency of the Federal government in…allocating…the funds it receives from the nation’s citizens. Better to leave that money in their hands, and so in the hands of the individual states, IAW each state’s taxing and spending plans–as approved by each state’s citizens. With the Feds out of the way, the money will be allocated more efficiently.
This won’t lead to equality across all the states, but it doesn’t have to–indeed, it should not. The best way to destroy prosperity is to cap the prosperity of the successful by making them give up their prosperity disproportionately. Even the Progressive Theodore Roosevelt professed himself a champion of giving every man the opportunity to show the best that there is in him. So it is with the states, but that’s not possible when he’s (or a state is) prevented from enjoying the fruits of his best efforts.
And no, taking wealth from one state and redistributing it to another isn’t the purpose of our social contract. Our social contract is that of a republic of the several states, not a single, monolithic entity of one state. And each state is free, which is to say the citizens of each state are free, within broad limits, to do what they think appropriate for their own prosperity.
There’s no doubt that DoD’s spending could be–needs to be–done far more efficiently. To your specific example of the aircraft carriers and the nature of basing, these need to be done on sound national defense principles more than on favors and votes–but that part will be a tough nut to crack; it’s the votes of Congressmen that get the programs you or I want enacted. To that last, we need to be more diligent in getting elected Congressmen who understand their role as our employees.
As for the size of DoD’s budget being larger than the rest of the Earth’s combined (were it efficiently spent), that’s a good thing. We achieve peace by being too strong to be seriously challenged–that whole Peace through Strength thing. Which makes an efficiently run DoD a Department of Peace.
And, yes, food eats corn. Tastier food is free range fed, but cheaper food, at least with current technologies, eats corn.
Eric Hines