I’m really dissapointed with the Republican led Congress right now. They’ve wasted their time on Terri Schaivo, judicial nominations, and some angry dude named Bolton. None of these are issues I care about. None of these are issues that help America. Here are some of my thoughts as I explore the domain of Centrist Libertarianism:
Taxes - A necessary evil, but very unfair. I’m not complaining about the rich paying too much, but rather the poor and middle class being unfairly burdened. The commerce of filing and minimizing your taxes is a big industry. Knowing your way around deductions, loopholes, tax shelters and the like takes a degree in accounting or a good accountant, both of which cost money. Estate taxes are hurting middle class Americans who have paid taxes on their income, yet their hard work will be taxed upon their death if they don’t hire a tax advisor to restructure their holdings into Trusts and gifts. The complexity of our tax system is a burden to low and middle class Americans, those that can least shoulder this form of recessive taxation. Congress should spend their effort making the tax code more fair for all people, instead of doling out yet another subsidy to farmers, energy companies, and H&R Block.
Farm Subsidies - A bit of indirect foreign aid or a misdirected waste of money. American farmers and Scottie Pippen (who got almost $100k from subsidies last year) should grow food, raise cattle and compete in an open market. If the market can’t sustain another peanut farmer, then I’m sorry but that’s what the market called for. America has huge trade deficits, and Congress is rewarding farmers to not make too much food, food that could be sold abroad or used to lessen our imports. Subsidies to farmers for empty fields should be stopped. No developing country it going to pull itself up through farming in the 21st century, unless you’re growing coca leaves or beautiful fields of poppies. Instead if America wants to help those developing countries, invest in infficient energy plants abroad and help build factories. South America and Africa should look to the surging productivity of Asian economies as a guide instead of trying to copy the economic growth plan of a hundred years ago.
Med-Mal Awards: Congress could rein in the exploding costs of health care by setting limits on medical malpractice awards. The American Dream isn’t to sue for wealth as seems to be the case. I’m sorry, it may sound harsh, but excessive judgements for medical malpractice (honest mistakes are just mistakes) are just paying off greedy plaintiffs and their sleezy lawyers. Awards should be capped while giving the judge in the case some guidelines and limits to which they can adjust the award as fairness dictates. Juries are not made by willing people as everyone I know tries to get out of serving and thus juries are not your peers. Judges should have the discretion to halve or double the award in special cases after polling the jury in private to get each jurors opinion on the appropriate awards.
Feels good to get this on paper. Thanks for reading Draft 1.
There are a few states that have a 3 strikes and you’re out rule when it comes to suing docs for malpractice. If you lose 3 cases then you’re never allowed to bring another malpractice case in that state. Another system has an expert panel of doctors and lawyers review all cases to throw out the obviously fradulent ones without the hospital and docs having to go through significant expense. The idea being to cut down on the number of settlements made to avoid legal fees. Just some innnovative and interesting ideas. Both are being experimented with at the state level. Are they ready for prime time?
In terms of international trade, the main problem with farm subsidies is that they make it impossible for farmers in poor countries, who enjoy a comparative advantage in land a labor intensive industries such as farming, to compete in the international market with farmers from rich countries. In the United States and other developed countries farming simply no longer makes economic sense. Without farm subsidies, the domestic US farming industry would be far smaller than it is today. If the market had its way, the US would be importing more of its farm goods from abroad. While development through agriculture may seem improbable, I do not see why it would hurt developing countries to grow their agri-industries in the short run.
US farmers have no problem competing in a free market economy. Removing farm subsidies would also remove the excuse that Europe uses to maintain high import tariffs, further opening export opportunities
If by a smaller farming industry, you mean streamlined and efficient, that’s exactly what we expect of the rest of our industries. Somehow the family farmer deserves more protection than the family grocer put out of business by Safeway or the family general store owner under-sold by Wal-Mart. If this is the direction of the market, so be it.
There can be no doubt that in highly industrialised countries farming does not make economic sense, simply because the products farmers produce are much too cheap to compete with manufactured goods and services.
If subsidies were removed, there is no doubt that in many countries all farmers would be forced off the land and agriculture would become concentrated in low-income nations where farm income can buy a reasonable living standard. Countries like Japan and Switzerland, for instance, would see farming disappear completely.
However, on two seemingly opposing grounds it is hard for me to see this as necessarily a desirable outcome.
For one thing, even were food production in developing countries able to provide the world with enough food with little production in developed nations, there is no certainty it would be ecologically sustainable. Though most developing nations (Africa south of the Zambezi excepted) do not possess the extreme ecological fragility of ecosystems in my Australian homeland, soils in poor countries are generally less fertile than those of Europe, North America, New Zealand or East Asia. Many poor nations also have more limited water resources than Europe or North America or New Zealand or East Asia, so that there is more risk (though still nothing compared with what farming has created in Australia) of ecological sustainability being a loser from placing agriculture at the mercy of the market.
Secondly, would products unsuitable for those nations in which farming can remain economic still be produced?? Given that those nations in which agriculture could buy the best living standard generally have relatively similar monsoonal-type climates, I am tempted to say there is no certainty that the present range of foods would remain available.
Another point, as the brilliant demographer Phillip Longman (”The Empty Cradle”, “The Return of Patriarchy”) is that his analysis of the demographic “time bomb” faced by almost all nations in Europe and East Asia, as well as Canada and New Zealand, is that uncontrolled rural depopulation caused by farmers being forced from the land by economic factors is a major factor behind the extremely low fertility rates that in the future could easily prove the undoing of their entire societies.
Thus, even if large agricultural subsidies are undesirable, it is possible that they avoid a worse demographic and ecological fate for the world.
I’m not sure that US farmers can be competitive under free market conditions; why do you think the US government subsidizes farming so heavily? Land and labor, the factors of production most important to farming, are necessarilly more expensive in the US than they are in developing countries. Therefore, the costs to agri-production in the US are naturally higher than they are in Mexico or Chile, for example. Many farmers in the US would go out of business if they were exposed to free market forces; chances are that farms producing commoditized agricultural products, such as staple crops, would be the first to go.
Generally speaking I am a free market kind of guy. However, there is an aspect of this debate that relates to national security. Should the US rely on foreign sources for its most important food staples? Completely opening up the US’s agricultural markets exposes Americans to possible security motivated trade manipulations by other countries less committed to free market ideals. Farm subsidies are disruptive and expensive, but I do not think that they shouuld be completely abolished.
I also could go around throwing out baseless conjectures, or say that I read something in Newsweek to backup my point, but don’t take my word for it. Here are some articles about the efficiency of the American farmer:
…Biotechnology is another factor in the efficiency of American farmers…
…American farmers are the most efficient in the world…
One new market opening for domestic farm goods is bio-diesel as Americans seek to reduce their dependence on foreign oil. Great article in last weeks economist…
I disagree with both of you. The biggest input into the cost of American agriculture is energy and capital investment though labor is not insignificant. The cost of land, however, is completely negligible. The biggest cost to farmers from my understanding is for pumping water up from aquifers (the expense for the electricity implied by a 100m pump is something like half of the revenue). The second inputs are the capital and O+M required for mechanized equipment. Then there’s the energy for fertilizer, most of which is made artificially. The labor costs are not drastically different here than in Mexico since agriculture has the same access to Mexican labor as in Mexico.
As for small farmers getting subsidies the heaviest I thought that the vast majoriy of subsidies go to large agribusiness and not to small farmers. Seems like I’ve read statistic after statistic saying as much. Also seems like tobacco’s small farmers aquisced to that a year ago or so.
Bottom line is that subsidies or no the small american farmer as well as the rural farm village are fast disappearing. Hardly anyone under 30 is staying in a lot of the rural great plains.
As for biodiesel, its almost certainly a net energy loss to grow corn for biodiesel. Soy is a gain and actually I’ll be working on a project with waste vegetable oil and biodiesel this summer.
For a twist- I read one person who suggested that we turn the Great Plains into an ecotourism park. Like the savanna, but with buffalo.