×

Farms shortchanged in Trump deals

Weekend voices: Thomas A. Regelski

Farmers, often supporters of Mr. Trump, are relying more and more on government subsidies — otherwise known as “welfare.” Trump Tweeted (on 2/22/20): “IF OUR FORMALLY TARGETED FARMERS NEED ADDITIONAL AID UNTIL SUCH TIME AS THE TRADE DEALS WITH CHINA, MEXICO, CANADA AND OTHERS FULLY KICK IN, THAT AID WILL BE PROVIDED BY THE FEDERAL GOVERNMENT.” (His capital letters!)

However, the U.S. Department of Agriculture (USDA) is predicting that the trade deal with China, even before the coronavirus, will buy only $14 billion in U.S. farm products through the end of September. Trump had advertised $40 billion!

Commodity prices, then, have not risen as Trump predicated from his “big, beautiful” trade deals. The promised farming boom, with Trump telling farmers to buy more land and get a “bigger tractor,” has turned out to be a bust. From boom, to bust, to bailout! Fear the same from reelection promises.

Farm debt was already at an all-time high of $425 billion, leading to 595 family farm bankruptcies in 2019, nearly 100 more than the previous year (which was also bad). The $16 billion bailout, according to an USDA study, will go mainly to already rich farming corporations. The big corporate farms get richer and the small family farms get Chapter 12 bankruptcies. GOP plutocracy serves the 1%!

Thomas Jefferson, the Democrats’ founding-father, argued that farming should be the foundation of U.S. prosperity not the federal government. Now his argument is turned on its head with the federal government keeping farmers afloat.

To date, the billions in aid Trump has showered on farms has cost several times more than Obama’s auto bailout that Republicans condemned as “welfare” and “crony capitalism.” It is likely that Republican hypocrisy on this will go unnoticed by farmers and taxpayers, and MAGA true-believers will continue their own hypocrisy of supporting under Trump what they denounced under Obama. But Trump’s tax cuts also failed to put more money in the hands of middle class consumers-their stated purpose.

Under Obama, Republicans threatened to shut down the government and create financial havoc by refusing to raise the national debt limit so Obama could stimulate the 2008 economic depression he inherited from Bush. “Austerity” was their ideological answer at the time. But with a Republican now President, the $600 billion deficit that Trump inherited has “passed 22 trillion” with nary a murmur from previously austerity-minded Republican ideologues. “The landmark came just over two years after President Donald Trump, who once promised to eliminate the federal debt in eight years, took over the Oval Office.” (www.businessinsider.com).

The tax cut accounted for much of that deficit. But the taxes saved by corporations went to buying back their own stock (thus increasing the worth of managers’ stock holdings) rather than to expanding businesses, hiring more workers (i.e., creating jobs), or raising wages. Meanwhile, despite campaign rhetoric, the Trump administration and the GOP have not addressed much needed spending on infrastructure.

Worse, the trade war Trump started with China and our allies was supposed to help pay for the bailout of farmers, which has not happened. The tariffs do not cover the cost of the bailout or close the deficit. Yet MAGA supporters seem unware that higher tariffs are in effect taxes on US consumers; higher prices paid by importers typically get passed on to consumers as higher prices.

Sen. Kevin Cramer (R-N.D.), a Trump supporter from a farm state, acknowledges farmers’ frustration and their preference for relying on the market rather than federal subsidies. “What happens with subsidies is that it [sic] distorts market price. If there’s no market, then having the security of an income is better than not, but it is still not the preferred outcome.” Thus farmers, sometimes critics of government hand-outs to other welfare recipients, now find themselves having to accept that same social welfare from the big government they may denounce. Just like a social democracy.

Turning to the government as the Band-Aid of last resort is another example of GOP hypocrisy! Republican silence about the startling rise of the national debt is particularly notable given that shrinking the debt (or guarding against its rise) has over the years been a significant part of the GOP’s DNA. How can Republicans in this congressional district (and Representative Reed) rationalize away their sudden ideological hypocrisy in favor of government subsidies for farmers that have helped raise the national debt so dramatically?

Many economists argue that the national debt benefits the economy during lean years-if paid back during economically strong years.

Trump brags about the strong economy as though it is his doing (it started in 2008 under Obama and continued until the recent coronavirus downturn). Thus, he should have been paying down the national debt, not causing it to skyrocket. Do Republicans no longer care?

Thomas Regelski is an emeritus distinguished professor at the State University of New York at Fredonia.

Newsletter

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper? *
   

Starting at $4.62/week.

Subscribe Today