Or was it?
For sure the Republican tax increases (tariffs) cut off farmers’ access to China’s ginormous market and as a consequence commodity prices remained in the tank. Nevertheless, the largess of the Market Facilitation Program - the farm bailout – strengthened the already badly-flawed agricultural welfare state.
Without Republican welfare payments farm income last year would have fallen about $5 billion from its already-low 2018 level. As a consequence of the $16 billion in bailout funding 2019 actually wasn’t as bad as it seemed. Most farmers benefited from the relief assistance; nevertheless, it is instructive to know that the government subsidy payments are not needs-based. Instead, payments are based on acreage. The result was about half of the money (47 percent) being paid to the largest 10 percent of farm operators. Amazingly, these payments were three to four times larger than actual farm losses. Sweet deal if you have the acreage!
Having trouble keeping this craziness straight? Republican tariffs (tax increases) result in trade losses. The Republican response is a government subsidy (welfare) to ameliorate the economic pain resulting from their tariffs (tax increases). Cluster fuck ensues. Contemporary Republican farm policy has raised the art of picking winners and losers (Soviet central planning) to an art form.
It sure ain’t your daddy’s GOP anymore. Donald Trump is a transformational swamp-dweller. And Ronald Reagan is likely spinning in his grave.
Don’t take my word for it – you can learn more about it here.
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At this point I start wondering if would be better if Trump were reelected so the fallout of all this ridiculous policy is placed squarely at his feet.
ReplyDeleteA 25% market contraction in late November will certainly be all of the Democrats' fault if they win.
The continued postponement of a market correction by the Fed is infuriating. No price discovery at all any more.