Trump Provides Another Event Analysis: Pandering to the Farmers

USDA announced some $12 billion of suppport for agriculture today (partly via resurrecting the activities of the Commodity Credit Corporation (CCC). Besides it being potentially WTO-inconsistent (I think it fits into at least the amber box), one characterization of the measure is:

“It would be a band-aid – how do you decide who gets what?”

Immediate response was positive. See (again) soybean futures, for November delivery.

Source: accessed 7/24/2018.

However, one can see the impact in perspective is less than satisfying, at least to soybean farmers.

Source: accessed 7/24/2018.
With prices at $10.50 as recently as May, the (rebounded) price of $8.725 is still a big drop.

All this is pretty ironic (if one can still use that word in these times), given that the first version of the Trump farm bill envisioned cutting back drastically on farm subsidies. But now, we are spending $12 billion to offset the tariffs we’ve placed, and have been placed upon us, as a consequence of Trump’s decision.

Double irony: my paper with Peter Navarro on the conduct of farm policy, dealt with the role of special interests (not cast in a positive light, by the way).

13 thoughts on “Trump Provides Another Event Analysis: Pandering to the Farmers

    1. pgl

      His point was that it was inadequate which is a very different concept than inappropriate. Seriously Peaky – you need to try harder during your preK spelling and basic English lessons.

    2. 2slugbaits

      SOCIALIST!!! PeakTrader, why do you want to turn Iowa and Wisconsin into Venezuela or Zimbabwe with their socialist ways?

        1. pgl

          Like we won that 2003 invasion of Iraq? Starting a war is not socialism. It’s criminal.

  1. pgl

    Didn’t Reagan complain about tax and tax & spend and spend? Of course China collects the taxes and the U.S. government incurs this welfare for rich farmers spending. Oh wait Reagan changed everything to spend&spend and borrow&borrow!

  2. Erik Poole

    MC: Peter Navarro actually co-wrote that piece with you!?!! Impressive.

    Incidentally, why did you sign the paper M. David Chinn and not Menzie D. Chinn? I think I know why but thought I would ask all the same.

    May I add a third irony? Farming, ranching and fishing are lifestyle activities. The non-pecuniary benefits — even for largely absentee owners — appear to be significant. A priori there is no public policy rationale for subsidies.

    It is sad to think of all the Republican politicos who have contributed to wealth-destroying fishery policies over the years let alone the contributions of farming and ranching policies to social wealth destruction. Must be the ‘freedom ideology’ that muddies their thinking. Presumably, social dilemmas are not part of the common usage vocabulary despite the popularity of the prisonners dilemma model to capture nuclear weapons stand-offs.

    1. Menzie Chinn Post author

      Erik Poole: I was tired of explaining “Menzie” so I thought I would try to fit in, by using a more conventional name. Gave up eventually. You will see my entire name in my earliest publications.

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