Tuesday, December 11, 2007

Hey, there are two of us...

I was gladdened to see somebody else boggled at President Carter's glib op-ed statement that since our cotton farmers have such high costs we must protect them in marketplace.
Now wait a second. This is a very curious statement. If cotton production is so much cheaper in West Africa than in the United States, then more production should happen there and less should happen here. If Carter is really interested in the well-being of West African farmers, “whose scant livelihood depends on cotton production,” he should advocate free trade in cotton. Why instead does he advocate that U.S. farmers be protected in the international market place? West African incomes will continue to suffer if U.S. subsidy programs are replaced by U.S. tariffs, which is what Carter seems to be advocating. How does it help Malian farmers lift themselves out of poverty if they can’t effectively compete on their advantages? Higher U.S. tariffs would only drive down the world price (as subsidies do) and likely compel other importer nations to raise tariffs to protect their own producers, shrinking the market further for Malian farmers.

Meanwhile, does Carter have any empathy for America’s lower income families? Apparently, not enough. Protection of U.S. cotton farmers artificially raises the prices of textiles, which means that clothing and shoes are more expensive than they would be otherwise. Expenditures on necessities, like clothing and food, account for a higher proportion of the budgets of lower income families. Thus, artificially raising the prices of those products is akin to a regressive tax – it burdens those with less income disproportionately. [More]
It is the farmer's reflexive assumption of the right to the public purse that continues to flabbergast me. Virtually all farmers I know are honorable, decent people, but it seems they have embraced completely a divine right to be supported by others. That they do this with perfect amity and lack of shame makes their egocentrism all the more remarkable.

3 comments:

milofarmer said...

Agree 100% with last paragraph.

It makes me think of old people going to the nursinghome and thinking they shouldn't have to pay for the care they receive. You mean they give you shelter, and baths, and food and 24 hour staff support, but you can "hide" your assets and just let J. Q. Taxpayer pick up the tab?

Anonymous said...

Its still less than 1/2 of 1%, of the federal budget. How many barrels of crude would that buy?

John Phipps said...

Anon:

I suggest your statement is a total non sequitur. .5% of a $1.4T budget is still a heck of a lot of money, and the question you do not address is why those recipients should get it and not others who perhaps want even less.

This is the rational of street hustlers, not entrepreneurs: "Spare change, mister?"

The $5B in cotton subsidies would buy about 50M bbls. by my rough guess. And your point is?...