Politicians Enrich Farmers, Treat Detroit like Manure
- Emil Nagengast
- Dec 31, 2008
- Huntingdon Daily News and Altoona Mirror
Instead of giving their products names invoking speed and freedom— Impala, Mustang, Cougar—Chrysler, Ford and GM ought to have gone barnyard and called their cars the Cow, the Hog, or the Hen.
Perhaps this high-performance mixture of the agricultural and the automotive would have qualified Detroit for the billions in annual bailout money available to this country’s farmers.
This fall marked the 23rd annual Farm Aid concert, begun in 1985 as a way to help American farmers get through tough economic times. Its 23 concerts have raised millions for the farmers, but apparently John Mellencamp and Willie Nelson don’t care about the crisis facing the millions of Americans whose jobs are linked to the survival of the US car industry.
Unfortunately for these auto workers, car dealers, parts suppliers and many others, our government and charitable celebrities are willing to shower money and pity only on the farmers. Using compelling market logic, Senate Majority Leader Mitch McConnell made sure that the Republican Senators killed the emergency loan to the Detroit automakers, saying “Republicans will not allow taxpayers to subsidize failure. We will not let taxpayers spend their hard-earned money on ailing carmakers.”
Under the Bush administration, the federal government has given more money to farmers than to people getting welfare... Meanwhile, the US car industry is mocked for its inability to survive in a competitive market.
McConnell must be suffering from amnesia. He voted in favor of forcing the taxpayers to pay $700 billion for the failures of the bankers. More shocking, in 2007 he voted against reducing the massive taxpayer handouts to America’s farmers. So, a $15 billion loan to Detroit violates American principles, but handing out between $15 billion and $35 billion per year to U.S. farmers is business as usual in Washington, D.C.
In 2002 President Bush and Congress passed a farm bill that will provide $171 billion in direct payments to farmers over ten years – which comes to $4,400 per household in the U.S.
Under the Bush administration, the federal government has given more money to farmers than to people getting welfare. Largely as a result of this agricultural welfare, farm incomes have doubled in the U.S. since 2002. One of McConnell’s arguments against the Detroit emergency loan is that Big Three autoworkers make more than the U.S. employees of foreign car manufacturers. This concern for equity is puzzling considering that the average income of farm households is 26 percent higher than the average for all American households.
The disdain and the lack of financial assistance for Detroit is the result of the widespread, naïve conviction that our system rewards those who can compete and punishes those who cannot.
In 1980 the Big Three owned 75 percent of the domestic car market, but by 2008 this had fallen to less than 50 percent. This dramatic decline is described as a “natural” consequence of increased competitiveness with foreign car manufacturers. Yet over the past eight years global market forces have stripped away more than 3 million manufacturing jobs from our shores. Our textile industry has been wiped out by foreign competition. The U.S. imports about 1 million cars per year from Mexico. Our total car exports are less than 700,000 per year. We have promoted the deindustrialization of the U.S. economy by forcing U.S. manufacturers to sink or swim in the globalized market.
By contrast, U.S. farmers thrive under the wing of government protectionism. The federal government hasn’t just provided massive welfare handouts to the farmers. Washington has also manipulated the market in a way that shields the agricultural sector from the market forces that have devastated almost all other industries.
Our government limits sugar imports to less than 15 percent of the market. Government protections for the 61,000 Americans working in the sugar industry cost U.S. consumers $2 billion per year. Federal price support programs guarantee that American dairy farmers can charge prices for milk and butter that are far above the world market prices.
Meanwhile, the US car industry is mocked for its inability to survive in a competitive market. Detroit is not asking for anything close to the mountains of cash that are heaped on farmers every year.
The Big Three long ago gave up asking for protection from foreign competition. They have only asked for an emergency loan of $15 billion. Instead of remembering that Chrysler received (and then paid back) a similar loan in 1979, McConnell lectured the American people about the importance of sticking up for market principles.
Maybe we can get Bob Seger and Ted Nugent to put together the first annual Detroit Aid concert this winter. U.S. farmers should be the first to send in their charitable contributions.
Emil Nagengast is professor of politics at Juniata College in Huntingdon, Pa. He worked as a draftsman at General Motors in the 1980s.