Thursday, January 27, 2011
No, that's not what it is at all.
Sort of a minor point, but Polistra always feels the need to defend FDR's policies from modern misunderstanding.
Radio talker Lars Larson was discussing farm subsidies tonight. Larson is a good independent and a pretty good thinker, no party hack ... but he missed this one badly. He assumed farm subsidies were put in place solely for competitive matching, because other countries subsidized their farmers.
Dead wrong.
Farm subsidies were created in 1933 by the Ag Adjustment Act, which was found to be both unconstitutional and badly designed, and was replaced by a better system in 1938.
The purpose is simple. Farming is critically important. You can't have a country without food.
Farmers operating in a totally free market will grow crops based on current prices, leading to wild swings in price and then leading to bankruptcy for some farmers. They will also misuse the land, failing to rotate or fallow when needed, because they can't afford to skip a year. Both of these situations had run wild in the 1920's, assisted of course by speculators, leading to the Dust Bowl. Land that might have remained useful became desert, and the acquired skills of farmers also went to waste.
The Ag Adjustment Act paid farmers of important crops at a baseline level, freeing them from the desperate need to have maximum yield every year until the soil blows away. In return it required the farmers to practice better methods, and other New Deal programs helped to train them.
None of this was related to foreign trade, but it did strengthen American agriculture so we could become a mighty and reliable exporter. ¶ 8:44 PM
Radio talker Lars Larson was discussing farm subsidies tonight. Larson is a good independent and a pretty good thinker, no party hack ... but he missed this one badly. He assumed farm subsidies were put in place solely for competitive matching, because other countries subsidized their farmers.
Dead wrong.
Farm subsidies were created in 1933 by the Ag Adjustment Act, which was found to be both unconstitutional and badly designed, and was replaced by a better system in 1938.
The purpose is simple. Farming is critically important. You can't have a country without food.
Farmers operating in a totally free market will grow crops based on current prices, leading to wild swings in price and then leading to bankruptcy for some farmers. They will also misuse the land, failing to rotate or fallow when needed, because they can't afford to skip a year. Both of these situations had run wild in the 1920's, assisted of course by speculators, leading to the Dust Bowl. Land that might have remained useful became desert, and the acquired skills of farmers also went to waste.
The Ag Adjustment Act paid farmers of important crops at a baseline level, freeing them from the desperate need to have maximum yield every year until the soil blows away. In return it required the farmers to practice better methods, and other New Deal programs helped to train them.
None of this was related to foreign trade, but it did strengthen American agriculture so we could become a mighty and reliable exporter. ¶ 8:44 PM
