Who's More Evil: Corn Farmers or Goldman Sachs?

[Joanne98]

commenter over at Megan McArdle's blog defended Goldman Sachs' (GS) taking advantage of government programs by arguing that they're just taking advantage of programs available to them -- just like corn growers taking advantage of subsidies.

He was quickly shot down by another commenter, saying that Goldman Sachs had significant power over government policy, while the farm grower was a mere, innocent benficiary.

Except of course this is totally false.

Farmers have excellent political clout, and courtesy of Iowa's first-in-the-nation status, they've hijacked the entire system of electing a President. For John McCain to run in 2008, Mr. Straight Talk Express needed to reverse his position on ethanol and other ag subsidies. It's just how the game is played.

Ok, ok. But they're just farmers, right? And they didn't require a huge bailout in order to avoid collapsing the entire system, so they've got that going for them. But while the financial system flamed out spectacularly last fall, the agriculture industry has been waging a quieter war on America.

First, farmers collected over $175 billion in subsidies over the last 12 years according to the Environmental Working Group's Farm Subsidy Database. That's not ginormous, it's just really, really big. But the costs go beyond that.

As overabundant corn (and corn syrup, and everything else corn) is a major contributor to obesity, we need to include that too. One study from the National Institute of Health estimated that the increased health costs due to obesity were more than $90 billion per year. Over that same 12-year period, we'd guess obesity-related healthcare costs are around $1trillion.

What's more, this $1trillion hasn't eliminated obesity. When we have a financial crisis -- say a systemically important bank winds up with more debt than assets -- at least we know that the money spent will extinguish the problem (for now). Obesity just sticks around, causing ongoing problems and damaging the lives of the obese.

Continued>>>
http://www.businessinsider.com/whos-more-evil-corn-farmers-or-goldman-sachs-2009-7

It's a TIE!

[cyberswede]

1. There's a huge difference between corporate farming and small farmers.

I have a dear friend who is a corn farmer. I'd take him over a Goldman Sachs suit any time.

Oh - and as far as this quote: "...and courtesy of Iowa's first-in-the-nation status, they've hijacked the entire system of electing a President." Horseshit.

[pscot]

2. Somehow I guessed you were from Iowa

Not that there's anything wrong with that. I've had good friends who were from Iowa, and I never held that against them.

[lindisfarne]

5. +1. It's really important to differentiate between small-family & industrial-scale farming.n/t

[whosinpower]

3. Huge difference

At least farmers produce something in exchange for their subsidy - food.
What does Goldman Sachs produce in exchange for their subsidy????
When Goldman Sachs increase their profits - have they improved the quality of anything, or have they gerrymandered the market to manipulate prices to generate more profit?

What is more important to a society - a stable, viable food supply....
or a stable viable supply of money? (of course stability in the market would indicate stagflation - so the market profiteers would not like that at all.....)

Hint - you can't eat money - well I suppose you could, but it would not nourish your body.

[Joanne98]

4. Okay okay I give. GS is more evil.

[handmade34]

6. "farmer' has become a misnomer

for large corporate agribusiness. There are still real farmers working for a living but the two are confused sometimes. So, large corporate agribusinesses are a bane on this economy (and health of our environment and economy) and you may group them in with the likes of other exploiters.

[JohnWxy]

7. Farm subsidies began in the 1930's as a way to help farmers survive through tough times.

But they have come to be mainly a benefit to large corporate farms and also the program seems to have little to no control at the USDA. this is why Pres. Obama has said he wants to impose real limitations on who gets this aid to not include individuals above a certain income level ($1.5 million) and he wants to restrict it to those who are actually farming for a living. http://voices.washingtonpost.com/washingtonpostinvestigations/2008/11/gao_obama_hit_farm_subsidy_abu.html"> GAO, Obama Hit Farm Subsidy Abuse

In the study cited by Obama, the GAO found that 2,702 subsidy recipients had adjusted gross income above $2.5 million and derived less than 75 percent of their income from farming - criteria that should have made them ineligible. The IRS provided the GAO with access to the tax returns of the farmers, on the condition that the names would remain private and not be shared with the USDA.



"There's a report today that, from 2003 to 2006, millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies. Now, if this is true -- and this was just a report this morning -- but if it's true, it is a prime example of the kind of waste that I intend to end as president."

~~

"USDA does not have management controls, such as reviewing an appropriate sample of recipients' tax returns, to verify that payments are made only to individuals who do not exceed income eligibility caps and therefore cannot be assured that millions of dollars in farm program payments it made are proper," GAO concluded.

The recently enacted five-year farm bill sets a tighter means test. It bars farm couples making more than $1.5 million in adjusted gross income from certain farm program payments. Those with more than $1 million in non-farm income could not receive any subsidies. The new farm bill also closed a loophole that had allowed farm families to set up as many as three corporate entities to receive payments.

also see:

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962.html

"Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post."

Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards.

The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade.
~~
~~
When the Republicans took control of Congress in 1995, they brought a new free-market philosophy toward farm policy. In a break with 60 years of farm protections, they promoted the idea that farmers should be allowed to grow crops without restrictions, standing or falling on their own. The result was the 1996 bill, which the Republicans called Freedom to Farm.

Instead of cutting, Congress ended up expanding the program, now known as direct and countercyclical payments. A program intended to cost $36 billion over seven years instead topped $54 billion.

now, here's a list of the top subsidy recipients from 2003 - 2005:
http://farm.ewg.org/sites/farmbill2007/top_recips1614.php?fips=00000&progcode=farmprog&yr=mtotal&enttype=indv

Click on the name and at the next page click on the "EWG Farm Subsidy Database" this will take you to another page with details showing which crops reaped how much subsidy payments. This is the one for the King Ranch: http://farm.ewg.org/farm/persondetail.php?custnumber=009316455&summlevel=summary


NOw, here is a link to a file I put together summarizing the payments to the top 10 recipients of 2007:
http://www.geocities.com/jwalkerxy/Crop_subsidies_EWG.xls

It shows the top ten recipients plus what crops they recieved payments for.

You'll see that one, corn comes in at fourth in payments, among the top 10 recipients. Now, for the entire program corn comes in first with $2,048,116,614 in payments. A lot of money! OH, but what was the market value of all the corn harvested in 2007? $55,211,478,663. As a percentage corn gets less than 4% of it's market value in direct payments. ONe of the lowest of the major commodities. Wheat got over 8% and cotton over 11%.

Now what is the effect of crop subsidies for us the consumers? For payments to farmers it enables the farmer to charge less for his product than he would have otherwise. So what is paid in subsidies should result in the consumer paying LESS for those commodities for which farmers recieved subsidy payments. So this means corn is selling about 4% cheaper than it would be without the subsidies.

Now, whether we should be paying these subsidies is certainly a debatable question. I don't think people who are not farming recieving subsidy payments is debateable at all. It's pretty obvious that is ridiculous.


NOw as far as the bailout money for banks, how much have we gotten for the money provided banks in terms of more available credit? I think we all know the answer to that. Credit is still very tight. But what we did get as benefit is that the banking sector didn't totally collapse.

Now I'm not a farmer, but I do see a difference between someone producing food and a schmuck who lost Trillions of dollars of other people's money and who had to be bailed out to keep from going under. Providing financial services in terms of efficient banking transactions is worth something but I think these Wall street bankers who risked trillions on derivative instruments which they didn't even know the risks and rewards of were really not worth saving. We only bailed them out as their failure would have put the whole economy at risk.

Stiil, I wouldn't call the bankers evil. ... stupid, ...arrogant, ...reckless with other people's money, YES! But of course, the real culprits were the guys who deregulated the financial industry - the GOP.

[JohnWxy]

8. While on the subject of fairness - link to "Most Corporations Pay no Income Taxes"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=67450&mesg_id=67492

[JohnWxy]

9. and then there is "YES! IRS says WE lose about $100 Billion A YEAR to tax evaders!": link

http://journals.democraticunderground.com/JohnWxy/85">IRS says WE lose about $100 Billion A YEAR to tax evaders! 10 years of that = $1 TRILLION