Dear Wall Street: We're Sorry

[Decyferon]

AOD - nothing Margaret Thatcher did was good, yea she gave people the option of buying their council house, houses which were generally substandard and collapsing anyway, all she did was move the debt of maintaining these houses away from the local authorities and into the hands of the (already financially stretched) tenants. She was a disgusting woman who will hopefully be dead soon.

 

(I can't really comment on the whole economics aspect because it is too focussed on theory and not real life and I am not well versed in the theory of it all, just the real life issues)

 

On the environmental issue, surely these people are already putting in their own money if they pay taxes? They are just requesting the usage of tax money to be allocated differently.

[angelofdeath]

AOD - nothing Margaret Thatcher did was good, yea she gave people the option of buying their council house, houses which were generally substandard and collapsing anyway, all she did was move the debt of maintaining these houses away from the local authorities and into the hands of the (already financially stretched) tenants. She was a disgusting woman who will hopefully be dead soon.

 

im not a fan of thatcher, nor do i support giving tax payer funded housing to the tax consumers (i think the stolen funds should of returned to tax payers/rightful owners).... but only mentioned this in passing to show that private ownership gives the incentive to care for something, where as public ownership=tragedy of the commons/no incentive to take care of something.

 

as for tax paying environmentalists wanting to use their confiscated tax money to pay for various projects... why have the taxes then? since the govt is a very very poor allocator of resources, it would be best for the greens/enviro types to fund the projects themselves.

 

i want shooting ranges, 1760 yd lanes and all...but i do not for one second to support tax payer funded shooting ranges.

[Soup]

AOD im not sure what part of your posts, if any, discuss the differences between Keynesian and Austrian economics... AND why one's better, for you and your family, than the other. You seem to just be saying that you think Environmentalists don't know how to debate. Well, you think you're any better?

 

Rural life and natural sustainable world is a thing of the past dude. That's the reality in this economy or the future free market. The day after we use the last tree, breathe our last breath of air, pollute the last drop of water, use up the last bit of sunlight, dig up the last grain of dirt, and eat the last animal/vegetable on earth, the economy will have another "boom" as new problems arise and lead to new industries with new ways to make money. Everything will be synthetic, and people will be fine with that because they wont know anything else.

 

That's why environmentalism isnt an economics debate, because economics is a different animal entirely from environmentalism/a sustainable way of life coexisting with nature. We need to redefine economic growth as something other than its current form.

[Soup]

if this is too conceptual and not analytical enough for you, here's a modern example:

Fishing is a completely unregulated international industry. There will be no more fish in 50 years, so what are fishing companies doing? Slowly getting out of the fishing biz and building the world's largest freezer warehouses so they can control all of our fish. These warehouses are big enough to store about 25 years worth of fish, MORE than enough to move over to farming.

 

What do you think is going to happen when wild fish are extinct? Cant imagine domesticated fish? We've domesticated every other thing we've eaten. You ever seen a wild cow?

[angelofdeath]

AOD im not sure what part of your posts, if any, discuss the differences between Keynesian and Austrian economics... AND why one's better, for you and your family, than the other. You seem to just be saying that you think Environmentalists don't know how to debate. Well, you think you're any better?

 

i never said environmentalists didnt know how to debate... i just dont believe the ideas are totally coherent and logical.

since i support private property rights, which is the austrian view... i think free market 'environmentalism' is a much better approach than a panel of experts acting like the politburo trying to decide what is right for 300 million people in the USA.

 

Rural life and natural sustainable world is a thing of the past dude. That's the reality in this economy or the future free market. The day after we use the last tree, breathe our last breath of air, pollute the last drop of water, use up the last bit of sunlight, dig up the last grain of dirt, and eat the last animal/vegetable on earth, the economy will have another "boom" as new problems arise and lead to new industries with new ways to make money. Everything will be synthetic, and people will be fine with that because they wont know anything else.

 

the thing that you leave out of your argument is prices reflect supply. we will never use up the last tree or ________ because as the supply drops the price goes UP.

since the 1890's people have been saying we only have 10 more years of oil left... not only does this show that a lot of times the 'experts' are wrong, but they also do not take into account the price system, which is the only way to properly allocate resources.

[angelofdeath]

Fishing is a completely unregulated international industry. There will be no more fish in 50 years, so what are fishing companies doing? Slowly getting out of the fishing biz and building the world's largest freezer warehouses so they can control all of our fish. These warehouses are big enough to store about 25 years worth of fish, MORE than enough to move over to farming.

 

What do you think is going to happen when wild fish are extinct? Cant imagine domesticated fish? We've domesticated every other thing we've eaten. You ever seen a wild cow?

 

this proves the point of privatization.

yes, we had wild cows before.... they were called buffalo. there is little difference between a buffalo and a cow. yet the cows never came anywhere near extinction, and the buffalo almost went extinct, yet they are still around since they were privatized. we never had farmers going into their back pasture and mowing down their cattle to cut out their tongues and marrow bones. why? because they were privately owned. they wouldnt have the cow tomorrow. whereas in the case of the buffalo there was no loss involved because they werent owned. whatever you dont get, someone else will, so you grab all you can. its no different than watching people at get togethers taking home plates of food when they dont have to pay for it. over eating, taking home plates, etc. tragedy of the commons.

 

the same situation we had with the buffalo is the same problem we have with fish. the only logical conclusion by using the free market system is to recognize some sort of private property rights in fish.

i do not believe the government is a good steward of the environment. the underlying argument of most environmentalists is that we need socialism and get rid of capitalism. say the opposite. if socialism is great for the environment, why was it forbidden to smoke on some boats on some bodies of water in socialist russian controlled countries? because they were so polluted you would set the lake on fire.

 

property rights need to be upheld come hell or high water. and the environmental problem more or less solves its self.

[Soup]

Uh, logic IS a form of debate.

 

And supply of those things doesnt have to come naturally. Just like most of our dietary sugars are from synthetically manipulated corn, or future petroleum will be from farmed algae, so too will trees, food, and everything else be made from farming and synthetically manipulating dead organisms. NATURE is dead.

[angelofdeath]

have you considered reasons why corn syrup is used instead of sugar? (as if white sugar is any better for you... but that aside...)

the main culprit is protectionism. sugar lobby wants protection in the form of tariffs. which is why sugar in the US is way more expensive than most other parts of the world. cheaper to put corn syrup in coke than sugar.

 

huge corporations like whole foods have catered to the organic holistic type food eaters. so we have consumer choice... genetically modified aspartame type foods and 'whole foods.'

[Soup]

Your points are besides my points, not in contradiction, but to comment on your points: Do you have proof to back that up? I dont doubt corn production is subsidized on some level, but most of the shit we eat is genetically modified corn because we sell a fuckton of corn in america food, drinks, medicines, candy.. everything.. even without subsidy. Cane Sugar doesnt grow here.

[angelofdeath]

i thought everyone knew the tariffs were the reason for use of high fructose corn syrup in the US...

its economics 101... tariffs/taxes that make something more expensive push people to use something less expensive. and most consumers are obviously OK with eating corn syrup instead of paying for more natural sweeteners. but there is, of course, a market for more natural sweeteners, they just cost more.

 

even wiki has it spot on...

 

"HFCS is somewhat cheaper in the United States as a result of a combination of corn subsidies and sugar tariffs/quotas.[16] Since the mid 1990s, the United States federal government has subsidized corn growers by $40 billion."

 

see also:

http://edis.ifas.ufl.edu/sc019

http://www.lewrockwell.com/alston/alston13.html

 

The Great Sugar Shaft

by James Bovard, April 1998

The U.S. government has devotedly jacked up American sugar prices far above world market prices since the close of the War of 1812. The sugar industry is one of America's oldest infant industries — yet it dodders with the same uncompetitiveness that it showed during the second term of James Madison. Few cases better illustrate how trade policy can be completely immune to economic sense.

 

The U.S. imposed high tariffs on sugar in 1816 in order to placate the growers in the newly acquired Louisiana territory. In the 1820s, sugar plantation owners complained that growing sugar in the United States was "warring with nature" because the U.S. climate was unsuited to sugar production. Naturally, the plantation owners believed that all Americans should be conscripted into the "war." Protectionists warned that if sugar tariffs were lifted, then the value of slaves working on the sugar plantations would collapse — thus causing a general fall in slave values throughout the South.

 

In 1934, the U.S. government imposed sugar import quotas to complement high sugar tariffs and direct government subsidies to sugar growers. By the 1950s, the U.S. sugar program was renown for its byzantine, impenetrable regulations. Like most arcane systems, the sugar program vested vast power in the few people who understood and controlled the system. As author Douglas Cater observed in 1964, "In reviewing the sugar quotas, House Agriculture Committee Chairman Cooley has had the habit of receiving the [foreign representatives interested in acquiring sugar quotas] one by one to make their presentations, then summoning each afterward to announce his verdict. By all accounts, he has a zest for this princely power and enjoys the frequent meetings with foreign ambassadors to confer on matters of sugar and state."

 

Sugar quotas have also provided a safety net for former congressmen, many of whom have been hired as lobbyists for foreign sugar producers.

 

Since 1980, the sugar program has cost consumers and taxpayers the equivalent of more than $3 million for each American sugar grower. Some people win the lottery; other people grow sugar. Congressmen justify the sugar program as protecting Americans from the "roller-coaster of international sugar prices," as Rep. Byron Dorgan (D.-N.D.) declared. Unfortunately, Congress protects consumers from the roller-coaster by pegging American sugar prices on a level with the Goodyear blimp floating far above the amusement park. U.S. sugar prices have been as high as or higher than world prices for 44 of the last 45 years.

 

Sugar sold for 21 cents a pound in the United States when the world sugar price was less than 3 cents a pound. Each 1-cent increase in the price of sugar adds between $250 million and $300 million to consumers' food bills. A Commerce Department study estimated that the sugar program was costing American consumers more than $3 billion a year.

 

Congress, in a moment of economic sobriety, abolished sugar quotas in June 1974. But, on May 5, 1982, President Reagan reimposed import quotas. The quotas sought to create an artificial shortage of sugar that would drive up U.S. prices and force consumers to unknowingly support American sugar growers. And by keeping the subsidies covert and off-budget, quotas did not interfere with Reagan's bragging about how he was cutting wasteful government spending.

 

Between May 1982 and November 1984, the U.S. government reduced the sugar import quotas six times as the USDA desperately tried to balance foreign and domestic sugar supplies with domestic demand.

 

While USDA bureaucrats worked overtime to minutely regulate the quantity of sugar allowed into the United States, a bomb went off that destroyed their best-laid plans. On November 6, 1984, both Coca Cola and Pepsi announced plans to stop using sugar in soft drinks, replacing it with high-fructose corn syrup. At the drop of two press releases, U.S. sugar consumption decreased by more than 500,000 tons a year — equal to the entire quotas of 25 of the 42 nations allowed to sell sugar to the United States. The quota program drove sugar prices so high that it wrecked the market for sugar — and thereby destroyed the government's ability to control sugar supply and demand. On January 16, 1985, Agriculture Secretary John Block announced an effective 20 percent cut in the quota for all exporting countries.

 

Sugar quotas made it very profitable to import products with high amounts of sugar. As a USDA report noted, "The incentive to circumvent restrictions had led to creation of new products which had never been traded in the United States and which were designed specifically for the U.S. market." On June 28, 1983, Reagan declared an embargo on imports of certain blends and mixtures of sugar and other ingredients in bulk containers. Naturally, businesses began importing some of the same products in smaller containers. The Economic Report of the President noted, "Entrepreneurs were importing high-sugar content products, such as iced-tea mix, and then sifting their sugar content from them and selling the sugar at the high domestic price." On November 7, 1984, the Customs Service announced new restrictions on sugar- and sweetener-blend imports.

 

Federal restrictions made sugar smuggling immensely profitable. The Justice Department caught 30 companies in a major sting operation named Operation Bittersweet. Federal prosecutors were proud that the crackdown netted $16 million in fines for the government — less than one-tenth of 1 percent of what the sugar program cost American consumers during the 1980s. The Justice Department was more worried about businessmen's bringing in cheap foreign sugar than about the sugar lobby's bribing of congressmen to extort billions of dollars from consumers. (Public Voice for Food and Health Policy, a Washington, D.C., consumer lobby, reported that the sugar lobby donated more than $3 million to congressmen between 1984 and 1989.)

 

A few thousand sugar growers became the tail that wagged the dog of American foreign policy. Early in 1982, Reagan announced the Caribbean Basin Initiative (CBI) to aid Caribbean nations by giving them expanded access to the U.S. market. In his May 5, 1982, announcement, Reagan promised, "The interests of foreign suppliers are also protected, since this system provides such suppliers reasonable access to a stable, higher-priced U.S. market. In arriving at this decision, we have taken fully into account the CBI." But between 1981 and 1988, USDA slashed the amount of sugar that Caribbean nations could ship to the United States by 74 percent. The State Department estimated that the reductions in sugar-import quotas cost Third World nations $800 million a year. The sugar program has indirectly become a full-employment program for the U.S. Drug Enforcement Agency, as many poor Third World farmers who previously grew sugar cane are now harvesting marijuana.

 

The Reagan administration responded to sugar-import cutbacks by creating a new foreign-aid program — the Quota Offset Program — to give free food to countries hurt by reductions. In 1986, the United States. dumped almost $200 million of free food on Caribbean nations and the Philippines. As the Wall Street Journal reported, "By flooding local markets and driving commodity prices down, the U.S. is making it more difficult for local farmers to replace sugar with other crops." Richard Holwill, deputy assistant secretary of state, observed, "It makes us look like damn fools when we go down there and preach free enterprise."

 

The U.S. government's generosity to sugar farmers victimizes other American businesses. Brazil retaliated against the United States for cutting its sugar quota by reducing its purchases of American grain. In the Dominican Republic, former sugar growers are now producing wheat and corn, thereby providing more competition for American farmers. American candy producers are at a disadvantage because foreign companies can buy their sugar at much lower prices. Since 1982, dextrose and confectionery coating imports have risen tenfold and chocolate imports are up fivefold.

 

The sugar program has also decreased soybean exports. In the Red River valley of Minnesota, heavily subsidized sugar growers have bid up the rents on farmland by more than 50 percent. As a result, relatively unsubsidized soybean farmers can no longer find sufficient land to grow soybeans, America's premier export crop. This illustrates how restrictions on imports become restrictions on exports.

 

The sugar program is corporate welfare in its most overt form. The General Accounting Office estimated that only 17 of the nation's largest sugar cane farmers received more than half of all the benefits provided by the sugar cane subsidies. GAO also estimated that the 28 largest Florida sugar cane producers received almost 90 percent of all the benefits enjoyed by Florida sugar producers from federal programs.

 

The number of American jobs destroyed by sugar quotas since 1980 exceeds the total number of sugar farmers in the United States. The Commerce Department estimates that the high price of sugar has destroyed almost 9,000 U.S. jobs in food manufacturing since 1981. In early 1990, the Brach Candy Company announced plans to close its Chicago candy factory and relocate 3,000 jobs to Canada because of the high cost of sugar in the United States. Thanks to the cutback in sugar imports, 10 sugar refineries have closed in recent years and 7,000 refinery jobs have been lost. The United States has only 13,000 sugar farmers.

 

Many observers expected that, with the Republican Revolution in Congress, the sugar program would be abolished when the new farm bill was written in 1996. Instead, the sugar program's survival became one of the starkest symbols of that revolution's collapse. Two-hundred and twenty-three House members cosponsored a bill to get rid of the sugar program; but, when push came to shove, the sugar lobby persuaded several sponsors of the bill (including freshman conservative stalwarts Rep. Steve Stockman [R.-Tex.] and Rep. Sue Myrick [R.-N.C.]) to switch sides. The House voted 217-208 to continue the program.

 

Environmentalists were anxious about the adverse effects of Florida sugar cane production on the Everglades. Congress did not choose the obvious solution — ending subsides that irrationally encourage sugar production in a fragile area — but instead voted $200 million to clean up the Everglades by buying some of the sugar cane fields from farmers.

 

There is no reason why the United States must produce its own sugar cane. Sugar is cheaper in Canada primarily because Canada has almost no sugar growers — and thus no trade restrictions or government support programs. Paying lavish subsidies to produce sugar in Florida makes as much sense as creating a federal subsidy program to grow bananas in Massachusetts. The only thing that could make American sugar cane farmers world-class competitive would be massive global warming.