"Paying" Farmers for Votes

Even though no politician would actually endorse this tag-line, it is essentially what increased subsidies to farmers means. The new Farm Bill that is being finalized in congress now aims to do just that.

Both Democratic candidates support this bill in light of its inherent economic problems. Government subsidies would only distort efficient pricing of goods by deflating costs of production. However, the cost of production doesn't magically disappear. It would be financed by the government and, in turn, the American public. Essentially, domestic consumers are still paying higher costs for farm goods. Why not let the American public directly face the higher costs? The indirect nature of this policy takes away the consumer's ability to correctly maximize consumption choices because they are given incorrect prices.

Letting the market resolve the underpricing of farm goods would be the most efficient way of shaping up our highly pampered farming sector. This would allow the best farms to continue while trimming the fat of bad farms. A subsidies program would hinder this "survival of the fittest" idea of efficiency for the dynamic future because farms would have little incentive to change and improve. Basically, the burden of sustaining inefficient farmers is carried by the public when a subsidy is in place.

Subsidies are the fast-food equivalents of solving the problem of the farm industry - instant gratification that hides its long term harms. Obviously, the government does not have the finances to extend subsidies forever. Then, why are politicians so keen on these irresponsible policies that would negatively distort long run stability by rewarding a lack of innovation for improvements? So, how will the fundamental problems of the farm industries be solved?

Perhaps our political system is to blame for this lack of long sight. The short terms of office incentivize politicians to solve short-run problems with slapdash solutions without given much thought to long-run stability.

Still worse, a big chunk of this Farm Bill, "around two-thirds of the bill's cost, would pay for food stamps and other nutrition programs." This coupling of a bad subsidies policy with a stronger social welfare project seems like it is a strictly political move to boost support. These instances cause me to be very disillusioned with our political system and its penchant for confusing the general public. It's essentially equivalent to tagging a "baby protection act" to a bill that allows human torture. To me, it is disgustingly outrageous. However, this blog is to discuss economic issues, not problems of our political system.

I'm interested to see what will happen to bill when it is placed up for vote.