Old McDonald Had A Subsidy

Like many of you, I get all sorts of newsletters, from a variety of sources. A recent report about farm incomes, from this issue of Axios Markets, made me take a deep breath, because I’m old enough to remember the Republican Party that no longer exists.

That iteration of the GOP would have screamed bloody murder had a President imposed tariffs; defense of free trade was (forgive the pun) a party trademark. Those Republicans would have pointed to all the readily-available evidence of the negative effects of tariffs, including but not limited to the fact that they are paid for by consumers in the nation that levies them.

That GOP was also a champion of genuine capitalism, and an (admittedly selective)  opponent of corporate welfare.

That GOP did scream bloody murder when President Barack Obama “bailed out” American auto companies. Never mind that we were just coming off the “Great Recession,” or that thousands of American jobs were at stake, or that the funds were structured as loans, not giveaways. They continued to criticize the decision even after it was clear that the intervention had worked, and even after the companies completely repaid the loans.

But I haven’t heard a peep from any of today’s Republicans about the mounting subsidies to farmers–subsidies meant to compensate them for losses entirely caused by Trump’s tariffs. Those subsidies are now larger than the amounts lent to automakers.

Here’s the information from Axios Markets that set me off:

What’s happening: U.S. farmers have been suffering this year. Chapter 12 bankruptcies have risen 24% over the previous year and farm debt is projected to hit a record high $416 billion.

While farm income is expected to reach its highest total since 2014, 40% of that income will come from trade assistance, disaster assistance, the farm bill and insurance indemnities, according to the American Farm Bureau Federation.

What we’re hearing: That’s “definitely not the normal,” Farm Bureau chief economist John Newton tells Axios. The $28 billion bailout package for farmers that President Trump signed earlier this year has “increased the percentage to a level we’ve not seen in a while.”

So let’s see.  The party that believes in capitalism and markets–the party that counsels poor folks to suck it up and avoid ” welfare dependency”–is perfectly fine with government dollars supplying 40% of farm income.

The party of free trade has no problem with disruptive tariffs that interrupted farmers’ existing markets (many of which are unlikely to come back once this episode is over–other countries grow soybeans) so that their “leader” could look like the “tough guy” he clearly isn’t, and they’re hunky-dory with using billions of taxpayer dollars to compensate the people their idiocy injured.

Chinese imports of U.S. agricultural products totaled $24 billion in 2017 and peaked at $29 billion in 2013, according to U.S. government data. Imports fell to $9 billion last year as a result of the trade war.

Trump insists that he’ll make a new deal under which China will buy “40 to 50 billion”  dollars of American farm products annually. As the Axios report notes, we’ve heard that song about an impending “great deal” before–and each time, Trump has had to pull back.  Peterson Institute senior fellow Jeffrey Schott has opined that, even  if a deal is signed, it’s unlikely that either side could deliver on its bloated promises to sharply increase US farm exports to China to $50 billion annually, “or anywhere near that total.”

Of course not.

Sentient Americans understand that virtually all of Trump’s pronouncements are untethered to reality–that they come straight from the fantasy universe he inhabits. What we don’t understand is where all those free-trade, fiscally-conservative, pro-market Republicans have gone.

I guess those policy preferences were less important than supporting a “leader” who promised them the continued dominance of straight white Christian males….


  1. here in NoDak they still wear his maga hats. its a farm and ranch economy,first. the ag producers have always had some sort of welfare.this time its because of the trade policies. living next to minnesota,i have friends who fram there,some fields are still, under water,literally. mnuchin came to visit, forecloseure king himself, i wonder what his scam is in this land mess?. wisconsin is being singled out as number one in foreclosures,maybe the banks are now mad at gov scotts lose? though the welfare will somewhat help the big producers,the one getting hit here are small farms,family run check to check operations. average age of farmers today,67.. banks do not,loan for start ups,unless you have complete capitol to back the loans..banks here are not,equal opertunity lenders,and the policy is strictly to do that to avaoid new buisness,and support take overs by established farms. hense,we have the high age group,and family members have no desire to farm anymore with all the pitfalls.many,just wait out dad passing on so they can fight over who gets what,be here,and see it for yourself,ive witnessed families breaking up over a will,because all they want is the land sold,and money in the pockets of heirs. farming now is a time and expense table, you either plant and use,the seed,owned by corps,,fertilizer by oil companies,,and buy green,red,blue yellow,,only..or you fail.very little really stays on main street. its all high profits to the corps who have sewn up a way to farm,or go and damn you of you step outside the box of their profits..recent discussion,,, im mwaiting for the john deere mechanic to come out and fix my combine,im not allowed to work on it,its being watched via satellite,and they know and contacted me i have maintence issue.,,your charged to have them come out,,try moving a combine on a truck, permits,schedule,wait time to get it back..,…..really, ya buy a half million dollar machine,and they watch you? and tell you,via net,you cant work on it..gotta have our techs, look at it…big brother my ass, big corps,in your pocket after the sale.. trump hasnt a clue,and the republicans dont care,its all profits to wall street,and screw you,and its been this way since reagan…whos fooling who?,and ya know whos still wearing maga hats…ya gotta wonder..

  2. I will insert the Jimi Hendrix quote at this point; “Only when the power of love is stronger than the love of power, we will have peace.”

    “I guess those policy preferences were less important than supporting a “leader” who promised them the continued dominance of straight white Christian males….”

    I will add one word to Sheila’s quote; “…WEALTHY straight white Christian males…” Their wealth IS their source of power. Love of money is the source of evil and we are living in evil times in this country like we haven’t seen since the Civil War which was the wealth of southern states provided by slavery of an entire race of people.

  3. that meat packer is JBS why doesnt someone say who,its is?.now check out who they own here in America..that big time angus meat,a scam to overprice beef after cutting Canadian imports out and others cuts massed to the likes for fast food.now ya get high profit beef,or find your deciding on being a vegan.now back when i seen a MIT study on if the fish you order is what your getting,48% was not,what you ordered, maybe some study here is needed to see if its really so called angus..id rather have any other myself. my land lord has a cow feed out operation,the profit margin is so thin,after sale,at auction,he barely makes enough to say its a profit. try a local plan to co-op with other local producers to beat the corps profits,aberdeen s,d, tried this years ago, they built the plant,and never got enough beef from the market to operate it.hense its been a total failure… you can not start a meat packing operation in America any more,its run by JBS,(brazil ,where they are now burning down the rain forest to support JBS)period..(trump,bolsonaro,a fine knit money buddies,that anti trust forgot)

  4. All those free-trade, fiscally-conservative, pro-market Republicans have sold their souls to the billionaires and multi-millionaires that got them elected and keep them in Congress as long as they are willing to continue giving them every tax loophole or corporate subsidy or access to world markets that they want.

    Those republicans are hell bent on forcing the middle class taxpayers to pay for all of these giveaways as long as they gain power and wealth for themselves and their families. They refuse to hold town halls anymore because they know that they are raping the voters and they don’t even have the backbone to tell their constituents to their faces that they never had any intention of doing what is in the best interests of our country or its citizens.

    They are weasels that have prostituted themselves out to whomever pays the highest bid with the most perks.

  5. Trumps not a Republican. He’s a Democrat with an R beside his name. Republicans are more worried about socialism so beating him is going to take a Biden or Bloomberg.
    Warren will probably win and it will be a tough race.
    Right now unemployment’s low in all areas and we’re bringing in the most revenue period. If Demscwould have passed legislation to help the common man instead of trying to make this more socialist then we would probably have a chance to derail the Trump train.

  6. A few notes > The automakers received 12 billion dollars for bailouts that saved the industry, but were loans that were repaid; the 28 billion dollars (so far) of our tax money for farm subsidies does not call for repayment, which means that it is inaccurate to say that we the people are paying over twice as much for farm subsidies as we did for Obama’s automaker bailout. The real comparison is 28 billion (so far) to nothing, and that does not include the billions in higher costs of goods to American consumers occasioned by Trump’s tariffs or the loss of, for instance, our soybean market in China, currently supplied by Brazil, Russia and Argentina, not to mention that our farmers did not get bailed out – quite the contrary. Thanks, Don.

    It is not just Brazilians who are recipients of Trump’s largesse. American corporate farmers are sharing in the trove as well as foreign investors who (via shell corporations and other such devices) are buying up American farmland at an accelerating rate. Likewise, not only Chapter 12 bankruptcies are cresting among American farmers; suicide rates are increasing as well. Thanks again, Don.

    So who is paying for this market mayhem, these tariffs and trade propaganda? You and I, not big business and their financiers, who instead spend their (literally) trillions propagandizing us peasants with “free trade” and Adam Smith bologna and putting down the evils of (what they call) “socialism,” but I here note that Big Brotherism can show up in any economic system, and is clearly present today in what we call our “mixed” capitalist-socialist system, which isn’t working for the vast majority, and which is any event is a bifurcated system of socialism for the rich and brutal capitalism for the rest of us. Those who warn of the evils of socialism have chosen to be blind to the evils of capitalism as currently practiced while knee deep in socialism themselves.

    From the foregoing one could infer that I am a socialist in every sense of the word. Wrong. I still cling to the faint hope that capitalism can work if big business and its financiers join the rest of us in ending wage inequality and yield to more regulation of their activities in the marketplace (which is ours, not theirs) with a view toward fair play for all of us stakeholders in this economic enterprise (not just shareholders but consumers, workers, environmentalists et al).

    So am I a dreamer who (sans evidence) discounts the terminal greed of present day capitalists? I hope not, because as I see it, present day capitalists are either going to recognize the rest of us as participants and not mere ciphers in this enterprise or, alternatively, be forced to share their socialist stance with the rest of us in a messy marriage destined for divorce – and then what?

  7. While are the comments are aimed at the GOP, where are all the DEMs screaming against this obvious socialist mechanism to prop up corporate farms?

    Most of the farming bankruptcies are smaller, individually owned farms that don’t have the resources like their larger corporate farmers.

    This comment, “The party that believes in capitalism and markets–the party that counsels poor folks to suck it up and avoid ” welfare dependency”–is perfectly fine with government dollars supplying 40% of farm income.”

    It’s called socialism.

    And as taxpayers, what do we receive for pumping trillions into industry?


    Since we have an Oligarchy, and the Oligarchs have politicians on their payroll, they have adopted socialism for the Oligarchs while the working class suffers under austerity practices.

    “We cannot afford to pay you $25.00 an hour because we have stockholders and bankers who insist we cannot pay more than $12.00.”

    And voters in Indiana keep voting red en masse.

    Shall we refer back to the blog post about ignorance??

    Ronald Reagan and Margaret Thatcher accelerated the extraction of wealth and income from the working class to the 1%. It’s been labeled Neoliberalism and regardless of the political party — both ascribe to it.

    The saddest thing to watch is blue-collar working stiffs voting for Republicans who are working diligently to screw the working stiffs from wages and benefits.

    It requires massive propaganda to convince people to vote and advocate for policies that cause them personal harm. The propaganda is coming from the media owned and operated by the Oligarchs.

    Ignorance isn’t part of the equation — it’s called oppression.

    “Washing one’s hands of the conflict between the powerful and the powerless means to side with the powerful, not to be neutral. ” ~ Paulo Freire, Pedagogy of the Oppressed

  8. 40%? That is definitely NOT the amount of subsidy that has benefitted my farm. I was astounded when I read your post and checked not only my family farm income relative to USDA payments but that of some of my clients who I advise on legal matters related to ag. The highest percent of subsidy relative to overall farm income was 12% and the lowest was 6%. That is a far cry from 40%. Where are they getting that information?

    There may be some disaster bailouts in the midwest, where flooding, late planting, more flooding, and early snow has wiped out some farm operations and removed thousands of acres from production for the next few years (or forever, according to some reports). Those bailouts (if that is such a thing) benefit not only the farmer, but the banker who loans funds for the farm operations, the local and state vendors who supply seed, fertilizer, fuel, and machinery, the employees that work for the farmer, and the local businesses where the farmer’s family and the family of the farm employees shop. A local economy cannot absorb the effect of the loss of multiple farmers in a community – and that’s what some of the farms in the midwest are facing.

    Also note that – at least in my county, which is primarily agriculture – property taxes from farms and ag-related businesses supply 30% of the property tax income to the county and local government. In our county, farmers think of the farm subsidies as roughly equivalent to those property taxes, to give you an idea of proportionality. So, in a sense (and I admit this is a very sketchy correlation), farm subsidies are funding local government that provides services to all its citizens.

    Yes, I’m sure there are abuses – whenever there is a perception of “free money” there is always an angle to try to maximize that benefit. But to suggest that all farmers are making enormous profits at the expense of the rest of the population is incorrect, and certainly does not reflect the expectation or desire of any of the farmers I know – myself included.

  9. Well I can’t think of a time in my life time my views would have aligned with the Republican Party you sometimes wax fondly about.

    Surely wasn’t the crook and liar Nixon or Reagan Iran contra dumb-dumb, or Iraq invader and buffoon W.

    The Democratic Party on the other hand has always stood for labor, poor, women, civil rights, education, African Americans, immigrants, and the oppressed. And the social and governmental programs that embody a Great Society.

    When was the Republican Part great?

  10. Republicans are for wealthy Republicans as evidenced by Trump, Pence, their cabinet and McConnell. All got wealthy from stealing from workers including farmers. They are merely finishing off the wealth redistribution that they have devoted their lives to.

    We all know that. The only question is how they fooled all those who are not rich Republicans who support them. The answer was invented by the Romans a couple of millenia ago. They threw them to the lions for entertainment to divert the attention of those who weren’t by telling them that they were oh so slightly different from those who were.

    That was the birth of Christianity that is still with us.

    There is no news in the world. Only reruns of history.

  11. John, @ 10:56 am, I would agree I cannot recall a time when the Republican Party was ever the party of main street or the proles. The GOP was always anti-union. The party of Lincoln sat on their collective hands during Jim Crow with out a peep. Ike, did enforce school desegregation, that is about it.

    I look at the so-called Centrists in the Democratic Party, who want Biden, Mayor Pete or now Bloomberg as the old Republican Party in all but name. The McMega-Media and the Corporately owned DNC want anyone besides Warren or Bernie.

    Oddly enough Rural America that has benefited so greatly from grain or milk subsidies, a modern transportation system, get a case of the ass, about “Socialism”.

    Anyway, just to prove how totally pathetic the Republican Party has become. Jeff Sessions after being verbally bludgeoned by President Agent Orange for months has bought a TV ad praising President Agent Orange.

    Sessions grovelling is explained by an article in the Guardian:
    At least in party primaries, to depart from the Donald is still to sign one’s own death warrant.
    Trump also had Sessions’ strong support in February 2016, when the rightwing senator and immigration hawk was the first member of that august body to endorse the billionaire’s run for the Republican nomination.

    The Washington Post said the former attorney general spoke “with the strained cheerfulness of a convict addressing a parole board”.

  12. The cry for capitalism to clean up its act results not only from a plethora of abuses by capitalists, but from structural anomalies that doom the system from within. Among the most prominent are:

    Income Inequality – Despite more jobs and some wage increases, this gap continues to its 40-year record of growth.
    Endless Growth – This is a precondition to the on-going success of capitalism, yet it is logically impossible to sustain.
    Environmental Degradation – Is not part of a typical planning session for large corporations.
    Instability – Is it wise to perpetuate a system that fails at regular intervals called “recessions” and “depressions”?
    Cutting Workers (most new CEOs’ initial tactic) – Making the marketplace smaller has a direct effect on the operation of the market that many corporations are serving (what if Henry Ford had taken a position that auto workers should never make enough to afford a car?)
    Criminality and Corruption – Names like Wells Fargo and Lehman Brothers and Enron and Arthur Anderson and Anadarko Petroleum reverberate. The list is very long and growing.
    Short-Term Goals – Judging a CEO based on his 3-month performance? How can it make sense to build companies around driving up stock prices rather than enhancing brands and targeting long term sustainability? This is one of capitalism’s most glaring flaws.
    Externalities – the $4.8 billion floods in Louisiana last summer were “100% caused by global warming.” Yet the companies that knowingly drive global warming are working on expansion plans while not contributing to the cleanup.
    Free Market – this myth would be laughable if it were not for the harm it does. The smartest and wealthiest people in America hire lobbyists to assure that the market is tilted to enhance their bottom line; they are not and were never intended to be “free”.
    Social Conscience – Desolate towns neglected by those with the wealth and power to address civic problems would not result from an economic system that cared for the people living under it.
    Wars – Rare indeed is the war that must be fought to defend ourselves. Far more common are the wars that are undertaken in support of an industry or to support a set of economic objectives. Is that an acceptable reason for killing our kids?
    Problem Response – Since capitalism cares about those with money – the greater the wealth the more the concern – it ignores the plight of workers who can no longer find jobs that support a decent lifestyle. Shouldn’t fairness be a component of a global financial system?

    Until these fundamental structural flaws are fixed, there is no opportunity to turn capitalism into a system that works for a majority of society. Such imperfections may not be repairable, and they are comprise a highly abbreviated version of capitalism’s existential problems.

    Sadly, many people perceive no problems (or deny obvious ones) in 21st century capitalism. That will make it exceedingly difficult to save. Rescue requires a consensus.

  13. Terry, your conclusions in re capitalism may be accurate, and if so, I’m beating a dead horse (which is not my favorite form of exercise). Perhaps with the specter of socialism hanging over their collective heads (pun intended with “collective”) the capitalists, if grudgingly, will yield on such matters as wage inequality, higher taxes on the rich etc. in order to have their financier take all economic system survive a St. Petersburg street scene, speaking of which, I note that young people today are not fearful of the term socialist and that increasing numbers claim to endorse that ism, something CEOs and big banks may be advised to consider if they wish to survive.

  14. Terry Munson,

    Given the length of your list and the depth of the problems, the only thing I would disagree with is calling them “anomalies”.


  15. John Neal:
    “Well I can’t think of a time in my life time my views would have aligned with the Republican Party you sometimes wax fondly about.”

    Yes. Consider General Robert E. Lee, who was a gentleman for show but a warrior for evil in real life, and then tell me how a republican party that once pretended to be gentlemanly while being always a warrior for robber-baron trickle-down economic theory is a political model worth pining for.

    If I were a former republican but now a democrat, the first thing I would do is ROBUSTLY apologize not for those republicans now lost but for my former acceptance of and support for trickle-down economic policy. And, as long as I hoped to be a democrat in good standing, I would repeat that apology continuously…and add an ongoing and thorough rebuttal of trickle-down policy.

  16. Pete:
    Cool; we should make CNN and other “news” channels change their bulletin zingers from BREAKING NEWS to BREAKING REPLAYS OF HISTORY.

  17. The party that believes in capitalism and markets believes much, much more in hanging onto the White House — no matter how much damage they do to the nation in the interim.

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