Explain to me the logic of bailing out farmers.
MGLICKER
Posts: 7,995 ✭✭✭
Why are the California farmers are getting bailed out to the tune of $160,000,000. Is a farm not a business like yours or mine, where you invest your time and money, work hard and hope that things go well.
If you have a good crop or livestock prices accelerate, you prosper. If you have a lousy year or two you rely on savings or you go bust.
Why do simple laws of economics not apply to this second oldest of professions?
If you have a good crop or livestock prices accelerate, you prosper. If you have a lousy year or two you rely on savings or you go bust.
Why do simple laws of economics not apply to this second oldest of professions?
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Comments
<< <i>I like to eat. >>
So that is the criteria for private businesses to receive handouts from Washington?
One argument to support a farmer bailout would be the need to keep farmers from going under so that there is no threat to the food supply chain. I would support this more than I would support bailing out banks to protect the supply of debt that they provide. I would also support cheap loans more than I would support free taxdollars. Some industries/professions are vital to American society. Food production is on that list.
The best way for government to provide support to any industry is to remove itself as a roadblock in that industry.
Paying farmers not to plant (subsidies) is a completely different story.
There are no longer "simple laws of economics." Economists have complicated them so that we need economists. Sorta like needing a lawyer to figure out the law.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Some industries/professions are vital to American society. Food production is on that list. >>
I agree, but we don't need to federalize them to keep food on the table. Let the least productive go bust and allow the more efficient to take over and prosper.
If we bailed out Grants, Woolworth and Wards, we would might not have Wal-Mart, Home Depot and Costco today.
<< <i>One argument to support a farmer bailout would be the need to keep farmers from going under so that there is no threat to the food supply chain. I would support this more than I would support bailing out banks to protect the supply of debt that they provide. I would also support cheap loans more than I would support free taxdollars. Some industries/professions are vital to American society. Food production is on that list. >>
+1. I would add to that supports for the car industry and other manufacturing. But not a penny for Wall Street.
<< <i>+1. I would add to that supports for the car industry and other manufacturing. But not a penny for Wall Street. >>
All manufacturing or just the guys that donate heavily to the lawmakers?
The apologists for Socialism are more troubling than those that institute it.
I was a weigh master at a cotton gin back then and this one farmer planted five acres more than he should of. He normally planted over 8000 acres in large mile square fields. Apparently he made a few to many rows in a field or two and they (the governing agency) ran his but through the ringer. Stressed the nice hard working old guy so much he passed on before it ended. The farm went under and a few years later was sub-divided residential and sold off. Family became stupid rich, but stayed good folk.
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<< <i>+1. I would add to that supports for the car industry and other manufacturing. But not a penny for Wall Street. >>
All manufacturing or just the guys that donate heavily to the lawmakers?
The apologists for Socialism are more troubling than those that institute it. >>
Philosophically I'm 100% opposed to any kind of bailout by the government.
But when you shackle industry with 1930's labor laws the allow unions to run wild, then yeah, I don't mind the government trying to help out, rather than let GM and Chrysler fail. We don't have a purely free market system anymore.
There's not enough money in the world to start a world-class automaker from scratch. And our industrial base is too important to let it fail. These companies also employ, directly or indirectly, hundreds of thousands of middle class people and are enormously important to many local economies.
Wall Street, on the other hand - they can go pound sand.
<< <i>There's not enough money in the world to start a world-class automaker from scratch. >>
There was certainly enough capital to break up GM into its components and let a Warren Buffet or Kirk Kerkorian (though quite old now) or Elon Musk have a go at it.
The stupid part of the auto bailout was that $14 an hour non union auto workers in Tennessee had their tax dollars go to bailout $50 per hour GM employees. Bailout of any sort only weaken this nation.
"Bailing out' is the way business is done today.
When currency is printed to infinity, why not use it to bail out businesses, banks and governments?
Makes perfect sense to Yellen.
Keep buying PMs folks!!
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
$160M for the farmers in California would be no big deal. Only $1.60 per person. The GM bailout of $50B would be $500 per taxpayer. AIG, $1500 per person. $800B bank bailout, a cool $8000 per head.
We don't do it that way though, we print up the money and pretend that it is free.
<< <i>There was certainly enough capital to break up GM into its components and let a Warren Buffet or Kirk Kerkorian (though quite old now) or Elon Musk have a go at it. >>
It could have been done differently -- and probably better -- no question about it. But to let any of the Big 3 automakers go under -- no way. Absolutely not. The auto industry is almost 5% of the entire American economy. Link. Letting that fail, when you think of all the downstream businesses that also would go under... no way. This is real production, real jobs. And the you know what? They're making great cars now. I'd love to buy a new Cadillac or even one of the Buicks. They did the right thing saving this industry.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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<< <i>There was certainly enough capital to break up GM into its components and let a Warren Buffet or Kirk Kerkorian (though quite old now) or Elon Musk have a go at it. >>
It could have been done differently -- and probably better -- no question about it. But to let any of the Big 3 automakers go under -- no way. Absolutely not. The auto industry is almost 5% of the entire American economy. Link. Letting that fail, when you think of all the downstream businesses that also would go under... no way. This is real production, real jobs. And the you know what? They're making great cars now. I'd love to buy a new Cadillac or even one of the Buicks. They did the right thing saving this industry. >>
We need to note that your linked article is way, way off. The U.S. auto industry is nowhere close to 5% of our economy. The article is kind of like a cheerleading piece for more bail-outs that will likely be needed within 10 years. GM and Chrysler are still saddled with enormous legacy costs and huge overheads and will struggle mightily when(ever) the life support of ZIRP, QE, et al are removed.
All durable good manufacturing in the U.S. (refrigerators, cars, trucks, mobile phones and other electronics, air conditioners, refrigerators, all large and small appliances, heavy equipment, furniture, sports equipment, firearms, toys, building materials, clothing, and everything else expected to last >1 year) represents 6% of our economy. That was $1 trillion in 2013. The UAW is very happy to be sure.
I spent years working as an engineer at two auto suppliers and the amount of waste, mismanagement, and corruption was unreal. Cie la vie. If you can't stop the river then go with the flow?
<< <i>As an example, without subsidies for milk, the price would be close to $10/gallon. >>
Milk as produced today is a truly wretched food choice. Bovine growth hormone along with the antibiotics fed to the livestock make the product a poor nutritional substance. The new pasteurization techniques that make milk shelf stable for several weeks is questionable at best.
Government has failed at everything that they have subsidized. Food production is not the exception.
<< <i>Food production is not the exception. >>
until there is no food
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
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<< <i>Food production is not the exception. >>
until there is no food >>
Why would there be no food? Is profit incentive not enough to fill the grocers shelves?
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<< <i>
<< <i>Food production is not the exception. >>
until there is no food >>
Why would there be no food? Is profit incentive not enough to fill the grocers shelves? >>
Profit is not guaranteed. You are at the whim of the weather and also must make a heavy investment in machinery that sits around mostly unused. You are pretty much forced to sell into a market where you have no control over what price you will get for what you produce. The old saying that "a farmer is one who sells at wholesale, buys at retail and pays freight both ways" pretty much rings true.
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<< <i>
<< <i>
<< <i>Food production is not the exception. >>
until there is no food >>
Why would there be no food? Is profit incentive not enough to fill the grocers shelves? >>
Profit is not guaranteed. You are at the whim of the weather and also must make a heavy investment in machinery that sits around mostly unused. You are pretty much forced to sell into a market where you have no control over what price you will get for what you produce. The old saying that "a farmer is one who sells at wholesale, buys at retail and pays freight both ways" pretty much rings true. >>
Most of those factors are true of any business and I have seen few shortages of any product with the exception of gasoline in the 1970's and ammo since 2009. Farmers have absolute control over what they grow and what the price will be as they can freely hedge their crops on the futures markets. Private crop insurance covers them if the harvest is poor.
That doesn't work, they go broke and the new guy takes over the farm.
The futures market is as rigged as the rest of them. MF global took down a lot of farmers when it blew up .
<< <i>
<< <i>
<< <i>
<< <i>
<< <i>Food production is not the exception. >>
until there is no food >>
Why would there be no food? Is profit incentive not enough to fill the grocers shelves? >>
Profit is not guaranteed. You are at the whim of the weather and also must make a heavy investment in machinery that sits around mostly unused. You are pretty much forced to sell into a market where you have no control over what price you will get for what you produce. The old saying that "a farmer is one who sells at wholesale, buys at retail and pays freight both ways" pretty much rings true. >>
Most of those factors are true of any business and I have seen few shortages of any product with the exception of gasoline in the 1970's and ammo since 2009. Farmers have absolute control over what they grow and what the price will be as they can freely hedge their crops on the futures markets. Private crop insurance covers them if the harvest is poor.
That doesn't work, they go broke and the new guy takes over the farm. >>
If only reality was as simple as some here make it out to be.
<< <i>If only reality was as simple as some here make it out to be. >>
Ricko just explained it better than I did.
"""Strictly speaking, the government does not belong in the economy. It was not established for that purpose, there is no justification for it, and the lack of experience and knowledge is frightening. Their actions never consider the consequences and therefore we are always fighting the next problem caused by the idiots that tried to fix the last one. Cheers, RickO """
<< <i>
<< <i>If only reality was as simple as some here make it out to be. >>
Ricko just explained it better than I did.
"""Strictly speaking, the government does not belong in the economy. It was not established for that purpose, there is no justification for it, and the lack of experience and knowledge is frightening. Their actions never consider the consequences and therefore we are always fighting the next problem caused by the idiots that tried to fix the last one. Cheers, RickO """ >>
I agree that the Government has no business poking their noses into a lot of the things they do. My comment was about the fact that people make comments about which they know little. It isn't as simple as I'm going to go out and buy 1,000 acres of ground and in 2 and a half months I'm going to plant a crop and contract out to sell it as soon as it comes up and make a chitload of money come October.
<< <i>Strictly speaking, the government does not belong in the economy. It was not established for that purpose, there is no justification for it, and the lack of experience and knowledge is frightening. Their actions never consider the consequences and therefore we are always fighting the next problem caused by the idiots that tried to fix the last one. Cheers, RickO >>
+ 1,000 x ...
Strictly speaking, the government does not belong in the economy. It was not established for that purpose, there is no justification for it, and the lack of experience and knowledge is frightening. Their actions never consider the consequences and therefore we are always fighting the next problem caused by the idiots that tried to fix the last one. Cheers, RickO
Write your Congressman. See how far you get.
<< <i>
Strictly speaking, the government does not belong in the economy. It was not established for that purpose, there is no justification for it, and the lack of experience and knowledge is frightening. Their actions never consider the consequences and therefore we are always fighting the next problem caused by the idiots that tried to fix the last one. Cheers, RickO
Write your Congressman. See how far you get. >>
Dear Ricko
Thank you for writing to me about farm price supports. I am glad to have the benefit of your view. Now go take a long walk off a short pier cuz nothing is going to change.
Sincerely
Ubin Hadd
Member of Congress.
We are a society of government teat suckers and I don't see that changing.
<< <i>Write your Congressman. See how far you get. >>
I did that often during the battle over the ACA. My Congresswoman was seemingly on the fence. I received some intelligent responses but of course she folded when Nancy Pelosi told her to.
I think that pretty much sums up the explanation you needed.
Now, break is over boys, get back to the Mines and stop asking questions!
This
It's not easy and I don't relish the life myself. I have many relatives whom are farmers 3 hours away from me. They are very successful, but far from rolling in the cash even in the best of times. Each farmer on average provides enough food to feed 240 people plus YOU. Perhaps some gratitude might be in order, or perhaps you need to load some videos of countries which have far less food production than we do and people are starving to death instead.
This is not to say I am a complete supporter of crop subsidies, but that is another topic outside the scope of disaster area bailouts. But hey, when you have no food, I bet you'll be glad for that extra billions of dollars spent on fighter jets the Air Force doesn't want. Much better use of govt funds than protecting food production in the country, I'm sure.
I get really sick of hearing how bad it is for EVERYTHING the govt does with this idea it would be better with no rules, law, and capitalism to rule all...back to the wild wild west. Everyone thinks they are Wyatt Earp instead of the victim in that situation. I'd suggest you want a good dose of that life, pack your bags and spend a year in Western Sahara or Somalia. They have very little govt. Let us know how you like it at the end of a year.
Gabby Giffords was/is exactly what a Congresswoman should be. Willing to listen but ready to vote her conscience. She was a "blue-dog" who appealed to all except the most extreme.
<< <i>Each farmer on average provides enough food to feed 240 people plus YOU. Perhaps some gratitude might be in order, >>
I shall bow in deep reverence as I eat my lunch of Kippered Herring on Ritz crackers.
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<< <i>Each farmer on average provides enough food to feed 240 people plus YOU. Perhaps some gratitude might be in order, >>
I shall bow in deep reverence as I eat my lunch of Kippered Herring on Ritz crackers. >>
I call your Apple
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<< <i>
<< <i>Food production is not the exception. >>
until there is no food >>
Why would there be no food? Is profit incentive not enough to fill the grocers shelves? >>
If a majority of farmers go under because of unforseen difficulties this year (drought, etc.) they won't be in business the following year. The purpose of assistance should be to get them through a bad season so that they are afloat to plant next year's crop.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>The lack of knowledge demonstrated by many in this thread with regards to a farming profession is astounding. Suffice it to say, bailouts are necessary if you hope to preserve food production in this country. There isn't some long line of people looking to be farmers, and even less if you allow circumstances outside your control to bankrupt you in any one year, regardless of the "I'll just farm" mindset of many SHTF believers whom probably have no experience with trying to raise enough food to feed themselves.
It's not easy and I don't relish the life myself. I have many relatives whom are farmers 3 hours away from me. They are very successful, but far from rolling in the cash even in the best of times. Each farmer on average provides enough food to feed 240 people plus YOU. Perhaps some gratitude might be in order, or perhaps you need to load some videos of countries which have far less food production than we do and people are starving to death instead.
This is not to say I am a complete supporter of crop subsidies, but that is another topic outside the scope of disaster area bailouts. But hey, when you have no food, I bet you'll be glad for that extra billions of dollars spent on fighter jets the Air Force doesn't want. Much better use of govt funds than protecting food production in the country, I'm sure.
I get really sick of hearing how bad it is for EVERYTHING the govt does with this idea it would be better with no rules, law, and capitalism to rule all...back to the wild wild west. Everyone thinks they are Wyatt Earp instead of the victim in that situation. I'd suggest you want a good dose of that life, pack your bags and spend a year in Western Sahara or Somalia. They have very little govt. Let us know how you like it at the end of a year. >>
Bravo!
Many of the posts here make it obvious that some (some others, not you, gentle reader
Liberty: Parent of Science & Industry
<< <i>If a majority of farmers go under because of unforseen difficulties this year (drought, etc.) they won't be in business the following year. >>
Unpredictable difficulties are a risk to every businessman, well at least the non government protected ones.
Why not expand government guarantees to every American business owner and not just the educators, farmers, automakers ,bankers, doctors, insurers and airlines.
When you require one businessman to pay for the misfortune of another, is he not entitled to the same protections.
<< <i>Bravo!
Many of the posts here make it obvious that some (some others, not you, gentle reader
Hey! Those guys in financial services work hard for their $500k annual skimming..............
Box of 20
<< <i> Many of the posts here make it obvious that some (some others, not you, gentle reader
Well said! Awesome post.
<< <i>
<< <i> Many of the posts here make it obvious that some (some others, not you, gentle reader
Well said! Awesome post. >>
It is obvious as well that some here have never started a business, created jobs, sacrificed more than a few of their own paychecks and tried to thrive in a world where the too big to fail and the too lazy to work are rewarded by their labor.
Been in manufacturing btw. Produced some numismatic accessories, until my east coast contractor was eclipsed by the Chinese.
<< <i>Agribusiness (Corporate Farming) has become to big too fail just like the banks putting the nation's food source at risk. >>
It was said the new Farm bill ~aka food stamp/pork bill. Will only benefit 70% of the largest USA landholder farmers.
Big business squeezing out the small family farmer.
<< <i>So MGLICKER isn't even bothering to thinly disguise his political posts as precious-metal related in the PM forum anymore? Why is this post still here? I suggest you go find an appropriate forum to get your answer. You are obviously very naive in the subject. >>
This forum is pretty much self patrolling.
Many here enjoy a lively and civil debate over government actions that affect monetary policy. There is little doubt that precious metals react to these decisions, at least when measured in U.S. Dollars. Those that wish to hold the forum to a more narrow focus hopefully will let me know. Your opinion is appreciated and tallied.
Since I'm a native Iowan and went to Iowa State, and to Iowa U., and since both sides of my family came from farming roots, I feel qualified to comment.
The farm subsidies had a purpose when they were first implemented as a safety net for farming families, during the Depression I believe. These morphed into programs, set-asides and price supports during the 1960's or so. I suspect that these programs helped more than a few farming families.
Growing up, I noticed that lots of "farmers" were becoming quite well-to-do, while others seemed to be in a time-warp, never seeming to prosper or grow, but never really going out of business either. I don't know where I acquired the attitude, but I suspect it was common in the rural Midwest that many people simply didn't let their wealth become visible - (probably a knee-jerk response to government intrusiveness left over from the Depression.) It might still be that way somewhat, but not all farming families have it easy - especially the younger generation just starting out. And we're running out of farmers. Probably because it's real work.
Now the question of bailing out farmers is different. I've seen some farmers go out of business by trying to expand too fast, and then getting hung out to dry by a bad harvest or by making poor financial decisions. It does happen, but sometimes it's not the farmer's fault. But farming involves business decisions every day, and a bit of speculation as well - just like every other business, so where do you draw the line?
In some cases, the government should provide a safety net for farmers, but I'd have to think hard about the circumstances. A drought is something of a special case and it is a good example - nobody can say how long it will last or what the permanent effects will be until it is over. A safety net should be held in reserve for those types of situations.
Jon Corzine should be in prison for stealing from his clients, which included not just a few farming operations & grain silos. They - Corzine's victims - should have been bailed out if the money couldn't be recovered. The MF Global case is a stupendous example of the government's screwed-up priorities and selective enforcement of the law to benefit their own cronies. ugh.
There's another area that affects everyone, and the GMO issue is unresolved, in my opinion. I think that if farmers want to do business with a Monsanto, have at it, but all GMO foods should be clearly labeled. Now there's a job for the FDA. ugh.
Aside from labeling, the government needs to get mostly out of agriculture, and most importantly the government needs to stop letting corporate lobbyists run the little guys out of business with all of the legal intimidation coming from the makers of genetically-engineered and patented seeds. That's the biggest problem I see, and the biggest threat to the food chain, in my opinion. Get the legal intimidators out of it.
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