Elizabeth Warren on food and agriculture

That is the topic of my latest Bloomberg column, here is on excerpt:

The most striking feature of her team’s plan, called “Leveling the Playing Field for America’s Family Farmers,” is what it doesn’t call for: namely, an abolition of farm subsidies, a reform favored by virtually all economists. Those payments often run more than $20 billion a year, and are typically considered an inefficient form of crony capitalism.

And:

Warren’s document asserts that “food prices aren’t going down.” That’s true but misleading. When the Federal Reserve is targeting near 2 percent inflation, most prices in the economy will rise steadily over time. The link behind that claim, to a U.S. Department of Agriculture report, offers some recent data, but it is hardly damning: In 2018, it notes, retail food prices rose 0.4 percent. “This was the first increase in 3 years, but the rate was still below the 20-year historical annual average of 2.0 percent.” Or how terrible are these numbers, from the same report: “In 2019, price growth may continue to remain low at the grocery store. Food-at-home prices are expected to rise between 0.5 and 1.5 percent, as potentially the fourth year in a row with deflating or lower-than-average inflating retail food prices.”

A look at the longer-term historical data also shows slow, steady inflation in the food and beverage sector, rather than a recent crisis of price spikes. Food price inflation does become higher after 1973, but that is probably due to higher energy prices and the more general productivity slowdown that has plagued the U.S. economy.

In this context, Warren’s lengthy complaints about monopoly and market power in the food sector just don’t seem that persuasive. Furthermore, America’s food sector has been remarkably innovative in terms of product choice and rising diversity of options.

Warren also calls for greater agricultural protectionism and the banning of foreign investment in American farmland.  And she is supposed to be the leading policy thinker in the race?  People, this is not good, and furthermore it is the same tiresome “tested by social media let’s bash the corporate villains” set of cliches.  My close:

If American voters want to be inspired, then opposing seed-company mergers won’t be nearly enough.

Comments

Wouldn't we expect the relative price of food to rise if technological progress mainly occurs in other sectors of the economy?

"if technological progress mainly occurs in other sectors of the economy?" Why are you assuming technological progress is not occurring in the agriculture/food sector? That's probably one of the sectors technological progress has been most robust.

Count me in as in favor of banning of foreign investment in American farmland. It is crazy to give up that critical national asset.

+1

FO slaver. It's not yours; it's not a 'national asset'. It's not like foreign investment makes it dissapear.

Given the $867 Billion farm bill, I am not sure this is true. Perhaps not a national asset, but a hand in the nations pocket.

https://en.wikipedia.org/wiki/2018_United_States_farm_bill

No it isn't only the government is. Giving is not a license for taking.

On the plus side if there are lots of foreign owned farms that will decrease the incentive to subsidize farming. Maybe we should encourage this.

"Libertarianism - Freely chow down at suckle at the trough, then claiming your resulting property is the sweat of your brow, not to be dispossessed from you by 'slavers' '

A few year back when I lived in California, Japan owned a citrus orchard. They brought in their own workers, they shipped the produce to Japan on their own shipping lines. They paid only property taxes and at a reduced rate because it was a farm. They paid no incpome taxes, no employee taxes, nothing. As far as I know they are still doing it. Almost like stealing.

Saudi Arabia does something similar. They have a large farm in Arizona where they grow hay. They use most of the ground water in the county to do this. They ship the hay directly to Saudi Arabia. They too pay no taxes except a reduced property tax. Yet they have a huge impact on the community whose wells are running dry.

How would they avoid paying US Federal & CA State income taxes?

They use foreign nationals, i.e. their own citizens, who do not get paid (at least not within the U.S. and not officially). They don't sell the produce they own it and simply ship it out of the country. There is no income.

While pretty much everything Saudi Arabia does is malevolent, I find it extremely hard to believe pampered and spoiled Saudi nationals are farming in Arizona, or anywhere else for that matter.

I doubt seriously they evaded income tax. The taxable income would be subject to California state and Federal income tax. If the goods were sold below market price, then the IRS could reallocate that income under IRC Section 482 back to the US Source. If they owned the land, they would have been risking a lien by state and federal tax authorities on the land to recover taxes. In addition, there are a number of criminal penalties for failure to withhold payroll taxes and underpay state or federal income taxes. Japanese, based on my experience, are conspicuously compliant with tax laws to the point that they deliberately overpay income tax in Japan. Also, they would have been risking the generous farming subsidies provided to farmers. If you knew about their failure to pay tax, there are finders fees that allow an individual to recover a portion of the unpaid tax. My guess is this is all xenophobic hearsay about a "foreigner taking all my money". In all probability, the Japanese were probably more compliant than your typical US farmer.

The real complaint we should have is that our federal government provides subsidies to farmers from taxpayer dollars. Since the farmer was probably a US corporation owned by Japanese for the stated purpose of export to Japan, effectively we were paying the farmer to subsidize oranges for the Japanese people. We do the same thing for corn and just about any agriculture product, including meat, which requires vast amounts of pollution and other natural resources. To make matters worse, we were using scarce irrigation water resources in a state that is experiencing drought for this purpose. Why in the Hell we would do such a thing is beyond comprehension. That was the real crime, folks. Not income tax evasion.

I’m wondering where you lived in California. I reside in Japan now and notice that a couple of biggest supermarkets and the likes are owned by major US retailers.

That's right. I worked for Wal-Mart when they entered Japan and purchased a large grocery chain. Wal-Mart also has grocery/ retail chains in Europe, China, South America and Central America. US companies have large investments in retail and other distribution all over the world. Why anyone would be worried about an investment in the US by a foreign company is xenophobic nonsense IMO.

How does selling farmland "give up that critical national asset"? Are the foreign owners going to ship the land overseas?

For a small, weak country, vulnerable to a great power coming over and enforcing the property rights of the great power's citizenry, worrying about foreign owners being able to resist the national government because of the possibility of military intervention by the foreign owners' state is a valid concern.

For a country with the most powerful navy and air force on Earth and no land borders with anyone able to invade, the only thing foreign ownership of land does is allow collection of higher property taxes with the burden falling on foreigners.

If the foreigners are Germany, it's perhaps no big deal.

If the foreigners are China or Russia, then them using it to put the screws on you to create some economic trouble when you try to resist their practices elsewhere is risk a worth considering. Maybe you decide the risk of it is worth the gain in "market efficiencies" but it's worth thinking about and not obviously totally ridiculous.

Same arguments that are pretty mainstream against Russian oligarchs buying up swathes of urban land in NYC, the Bay, etc. You're inviting that corrupt money and its political ties (who could use it as leverage) into the heart of your politics. They're never going to "invade" and "occupy" the land, but there are things that foreign powers could do with it that stop well short of that while still mattering.

Complaining about foreign investment in the US because we can't enforce our own laws is lame. Any investment in the US drives prices of land and real estate higher which should be welcome by most people. Once they are here, we have control over their finances through income tax and banking. If they are money laundering, which would generally be done outside the US, then they would be subject to criminal conviction just like the US. You're really making the case that we need to enforce our laws more carefully and invite as many investors into the US as possible.

Separately, once they are in the US and own real estate, their willingness to "create some economic trouble" reduces since we have control through income tax and other laws on their assets and other income producing property. We also collect taxes on those assets for our schools and other civic services. The key is just to enforce our laws and make them comply just like we would any American. We need to make America the most attractive choice of investment possible for our own good, not foreigners. They will pay taxes for roads, schools and other infrastructure just like anyone else.

I KNOW. if we ever get in a war with China, they could use that farmland as military bases or something. What WOULD WE DO???

They say the Russians grow aluminum cucumbers.

LOL! The whole "prevent foreigners" from investing diatribe in this thread is amazing in what should be a group of well-informed economist minded people. We should be doing everything possible to improve our country's attractiveness as an investment. What we need to do is stop providing subsidies to farmers which waste our natural resources to ship to people outside the US. Animal products, in particular, waste vast amounts of water and create vast amounts of pollution. We are effectively paying farmers to pollute ourselves to feed other countries. It's nuts.

Ah... I remember a great John Stossel ABC video segment on farm subsidies. It starts out showing a gaggle of big city politicians, who wouldn't know a cow if they ran over it, at primary season in Idaho waxing eloquent like : " we lose the family farm we lose the heart of America!!!!"

I think foreign investment or property in agricultural business should banned. As President Captain Bolsonaro says, China can buy from Brazil, not buy Brazil. Food security should be a permanent goal of any government as it is a necessary condition for real national independence. As Napoleon is famously supposed to have said, an Army marches on its stomach.

Your argument against foreign agricultural investment is everything I would have argued in its favor.

By allowing foreigners to control the flow of food, America comes dangerously close to become a colony surrendering its hard-won freedom.

So a foreign country would buy all the land in America, suddenly stop producing food and after a couple of weeks invade the country and US soldiers won't be able to fight back because they are hungry?

While that is absurd (such a scenario is solved by expropriation), the concern is that a foreign country may buy the land in America, and then control the types of crops grown in order to benefit that country's markets. Or slowly decrease the amount of land being used for food production, so that America becomes gradually more dependent on foreign food imports.

(I'm not advocating for this position, just stating it)

We’d be much better off financially and healthier if we would adopt the food produced and diet of virtually any other country of the world. Americans are the most unhealthy humans on the planet with over 70% overweight or obese. Heart attack rates kill 600K annually. The savings in healthcare alone of adopting the diet of foreigners would be well worth the change. There’s too much money in killing us with the chronic disease our system creates, though, so you don’t have to worry about too much support for a change. The animal food, drug and medical systems will form a mercenary defense system if they have to in order to keep this gravy train of disease and death going.

Thiago Ribeiro- You want "food security" in the US? If so, then start by telling US politicians to stop subsidizing farmers to produce animal products. These foods require about 10X the amount of water, pollution and energy as producing that same amount of calories from plant food for direct human consumption. The health costs for the heart disease, high blood pressure, cancer and other chronic disease these foods create is staggering and will bankrupt our health care system. Instead, we are producing those plants to feed to animals then recover 1/10th the calories we could by consuming their carcasses. Simple math.

Want to destabilize a foreign country? I can't think of a better way than to export our standard American diet (SAD) via McDonald's and other fast food retailers to that country. Case in point: China. We've somehow managed to export our disease ridden SAD there and they now have about 50% of their population in a pre-diabetic condition. Their rates of other food-borne and preventable chronic diseases have skyrocketed since The China Study (by T. Colin Campbell) in the early 1980s documented in excruciating detail how the Chinese who ate mostly plants did not suffer from those same diseases. So, the US has, with very little effort and much profit for the fast food retailers, created an unsustainable and disease ridden food system for our competitor and much of the rest of the world. Like Chinese handcuffs and heroin, though, once we've adopted the addictive qualities of the SAD, the addicts will do anything to maintain their supply and getting back to a sustainable form of agriculture is next to impossible in our generation. The profiteers in Big Agri, Big Pharma and Big Government will force us with our own addiction to go down with the same ship of burned rainforests and widespread pollution to quench our thirst for animal products, albeit along with the Chinese. The big difference, though, is China has many more mouths to feed these unsustainable products, so the accelerated pace of global environmental disaster unfolding will come much sooner than if we had kept the "secret" to ourselves.

The real loser, though, is the next generation. We'll probably manage to die "normal" tragic preventable deaths in a nursing home with heart disease, cancer, diabetes and a tube up our rear end. My guess is the next generation will be building sea barriers and evacuating coastal cities which will be submerged from global warming, much of which is created by our energy inefficient, pollution generating SAD.

Corrupt ignoramuses like Warren and her ilk will do little to stem the tide. You can do more for the next generation than they will by simply switching from a beef burger to a bean burger.

We should note everything Brazil does, then do the opposite. Consider the salario minimo (UBI). Let's not do that. Brazil has been protecting domestic manufacturing forever, which has resulted in shoddy and overpriced manufactured goods, then it bends over and holds it's ankles for the Chinese. How did that happen? Did someone higher up take a big bribe?

Let's hope Bolsanaro can turn it around. I don't think he can. He might have some impact on violent crime - the dead don't kill.

MBGA!

"Let's not do that. Brazil has been protecting domestic manufacturing forever, which has resulted in shoddy and overpriced manufactured goods, then it bends over and holds it's ankles for the Chinese."

You know who also protects the domestic markets? Asians. You know who is eating America's lunch? Asians. And, of course, a salário mínimo is, as the name says, a minimun wage, which Americans also have, not, even by the wildest stretch of fevered imagination, UBI. You may be mistaking it for the Bolsa Família, which, as the name says, is for families and it is not different from America's own plethora of welfare schemes for children's well-being, except for being cheaper and better run.
President Captain has created a scheme to arm Brazilian citizens to discourage violent crime and to soread the wealth by slashing taxes, cuttingbpensions, rising welfare expenditures, eliminating red tape and controlling the inflation.

"You know who also protects the domestic markets? Asians."

Less and less. There's more and more opening up.

"You know who is eating America's lunch? Asians. "

Not yet. They are still far poorer.

They are destroying American companies and stealing American jobs. American companies can not compete with IP stealing, collusion between business and state, protectionism, etc. While American standards of living are stagnating, the Asian regimes get richer and richer. It is a time for action.

Thiago please provide the sources for your allegations about " IP stealing, collusion between business and state, protectionism, etc"

Have you ever heard of Red China or Japan Inc.? The latter one was praised in the 80s by Vogel et al. for forcing their own citizens to use less efficient Japanese dialysis machines instead of American ones even if it meant more hours wasted by the patients. Everyone knows foreign competitors are never given an even break. The Asian goal since Genghis Khan is world conquest.

You condone the stripping of Brazil's non-renewable mineral resources at the hands of its oligarchs, but not a foreign P/E company buying a basket case and making it healthy again? Why is that?

Let us be blunt: experience shows us that foreigners hardly have Brazil's best intersts in mind when they do nusiness with Brazil. Government control and supervision is necessary to make sure those bpdeals will not hurt Brazil's permanent interests. Allowing foreigners to control Brazil's food-producing resources would be detrimental to Brazil's stability.

This to you did not directlt address Yo's question " You condone the stripping of Brazil's non-renewable mineral resources at the hands of its oligarchs, but not a foreign P/E company buying a basket case and making it healthy again? Why is that?"

"Foreigners hardly have Brazil's best intersts in mind when they do nusiness with Brazil." A strange observation. Why should they? Will Brazil have China's interests in mind when trading with it?

We are not here to indulge in fantasy, but in political and economic reality. Asian econo ies are based in exploring other countries. IP is stolen, competiros are banned or forced to share their technology with the rulers' cronies, protectionism is used as a stick. Red China has already enslaved Tibet and tried to conquer Vietnam, the Soviet Union and India. It is goal is the enslavement of mankind. Its minions are infiltrating and undermining Western socieites. Allow them to invest in agriculture in the West is just another Munich.

Thiago can you direct me to any source which provides more specific details for the allegations you make. I am not saying you are wrong but some data to back up your claims will be helpful

Hmmm... That seems the same old story that so often prevented Brazil from following the path of development. Brazil suffers from a chronic lack of competition in several different areas.

President Bolsonaro seems to always have believed the "foreigners will loot Brazil" line. During the campaign he came closer to people with very liberal ideas, mainly Minister Guedes. But that now looks like vain hope for those of us who want to see Brazil grow. If he continues backtracking on his reform and openness promises, his government will be doomed and Brazil with it.

It all starts with that belief that foreigners will loot Brazil and that the government has to protect us.

For instance, how exactly did the damn Yankees cause this dam to fail?

https://m.youtube.com/watch%3Fv%3DsKZUZQytads

Oh, but opposing seed company mergers is good, but not for the reasons the leftist narrative expects. The results of a certain recent seed company and chemical company merger have, for all intent and purposes, slowed ag tech progress to a crawl in the resulting organization. It's not just large cuts in administration, but cuts to scientists. In practice, the resources maintained aren't any bigger than one of the two sides. My understanding is that there were no retention bonuses, and that the best proxy for which exec was retained was 'pick the person that knows the least about agriculture and their department's domain'. The winners are those that don't want any agriculture innovation, the former CEO of one of the merged companies, and his law team, which got extremely well paid for their services.

So really, on that point anyone that cares about growth should look at this kind of mergers with suspicion, although not at all for the reasons Warren does.

Your narrative cries out for data. It's like me saying better patent laws will bring a nirvana. It's entirely possible that's the case, but the data is sparse. I doubt you can back your narrative with large sample data.

Bonus trivia: should I buy ADM (Archer Daniels Midland)? A commodity middleman, they typically do well at the end of a business cycle and even in a recession. Terrible return on capital however, the ag business has razor thin margins.

I'm surprised at you Tyler, impugning the gaia-focused earth-knowledge of tribal elder Elizabeth "Wompom for Whopper" Warren. She has hereditarily inherited deep genetic knowledge of the ways of the indian corn and 3-sisters planting method, as well as the modern variation on the holistic and organic buffalo hunt by shopping at Whole Foods. She did not eliminate farm subsidies from her plan because she comes from a tradition where you can't 'own' a farm and 'the' farm is the 'tribe's' farm.

She is protective of 'our' farms and wishes to keep the Pawnee, Ottowa, and Abenaki of our land and out of our hunting grounds. She has thought about this a great deal with other 'tribal' members in the sweat lodge, and they have done numerous calculations using all the tribe's members fingers and toes.

Excellent demonstration of tribalism, as you pretend to chastise it.

Whoa who me!?!? "Pretend"? I thought we were talking about Warren here?

"Pretend"....that is so damn rich it's wealthy!

Poor girl, believed grandma's stories.

Let's hate her for that.

Or perhaps because the belief was "an abandonment of her race?" I've heard, and it makes a bit of sense, that what really gets under the skin of Trump and Trumpies is that anyone would aspire to anything other than white, pure as the driven snow. Why can't we all come from Norway, right?

Looking for evidence in your dna that you might represent a union, rather than a displacement, of natives? White genocide!

Mouse!

Don't tell us you actually believe Pocahontas's narrative! Lol! Really? Or is this just a knee jerk defense of a lefty warrior?

I'm setting up a GoFundMe account to finance the search for the MAGAs who assaulted poor Mr. Smollet. I sure hope he wins the NAACP thingy because, you know, racism. Anyway, dig deep, we need your help.

I believed my family stories. It turns out that I am less Danish and more Belgian, if current consumer dna tests are to be believed.

So sure, if I loved and believed my grandma, why shouldn't you? Or she?

“what really gets under the skin of Trump and Trumpies is that anyone would aspire to anything other than white, pure as the driven snow.”

No, what’s offensive about her is that she — a blue eyed blonde — gamed a system designed to help the disadvantaged by checking a box that placed her at the head of the lineup. She’s a cheater and a fraud. And apparently right of centre types score high in terms of aversion to cheating. It’s got nothing to do with her being a racial apostate or whatever you are saying.

People don't like her because she's a fraud. I don't think race has anything to do with it.

Pfft. A fraud wouldn't have taken and published the dna test, particularly in that tone deaf way.

She's a nerd, that's all.

She's a fraud at being a nerd, too. Megan McArdle has done some nice work on this score:

https://www.theatlantic.com/business/archive/2009/06/elizabeth-warren-and-the-terrible-horrible-no-good-very-bad-utterly-misleading-bankruptcy-study/18826/

A nerd? She has no problem opening her mouth about anything she doesn't understand. She's an anti-nerd.

You are being very mean! Don't you realize how hard it is for a woman of color, especially the progeny of the victims of white genocide, to make it at Harvard? That poor woman has had a tough go of it. You should be more generous.

Try again.

- I 'hate' her because she - like the rest of her 'tribe' - are grievance hucksters. I do not want disunity. They do. Because they can't win elections without it.
- I 'hate' her because she assumes an erudition and an acumen that she does not possess and - if that point is ceded - she does not deserve.
- I 'hate' her because she would like Americans (of all races) to be on the hook financially and ethically for a slave-holding past (long since corrected) and slave-holders (long since dead) regardless of any actual or perceived responsibility for that history.
- I 'hate' her because none of this had to happen - her making herself 'ripe for parody' - but she did it anyway and actually has the nerve to continue to acting completely seriously in light of her revelation as a total fraud.

...but 'hate' is a strong word maybe...it's hard to 'hate' something pathetic like Warren. I and millions of others will just make fun of her instead.

So point taken. Let's make fun of her for that!!!

If you can't see the screaming tribalism in that, I can't help you.

This is simply more identity politics and more promising more free stuff for voting blocs' votes.

You know she's lying. Her lips are moving.

De Mortuis nil nisi bonum.

She ordered and released a DNA test. One in 1,024 for Che's sake.

Fauxcahontas is apparently again lying when she impugns her grandmother for herself too lying about being an Indian.

Hilarious, that Elizabeth Warren is probably one of the whitest founding stock Americans alive even with being born in Oklahoma.

Republicans are more "aggrieved" as a group than any other identity group appears to be these days. You cannot avoid their incessant whining about how everyone is against them, day in and day out, all over the internet. If you listen to Fox you get to hear how people are being big meanies to Trump, and the liberal elites are all orchestrating a massive plot to replace the US population with inferior brown immigrants they can control with their mind control powers.

Eh. Most of them are just plain folks who think it's really funny that she invented for herself a romantic genealogy built around the oppression of her noble native ancestor that was somewhat punctured by the ancestry being pretty far back and pretty minimal.

She invented exactly the kind of story for her background that a muddle-headed, low common sense romantic left winger would invent (full of the romanticized struggles of the dignified oppressed against the oppressor! the noble heart-sick yearning for liberation!), and it getting punctured and skewered the way those things always do is then... actually pretty funny.

It's just a punchline that represents, in miniature, all the reasons why she'd be fundamentally unsound to make any sort of decisions about the lives of ordinary people.

The obsession with producer profits logically ends with the government destroying food supplies to raise prices. Just like hey did during the original New Deal.

+1

I swear to God that future historian will call the post Post Cold War years the Seinfeld Era: no hugs, and nobody learned anything.

I can't wait for the new New Deal! It's gonna be green, in more than one way. We really need it because climate change.

Maybe the NPCs can get Kermit to run for President - it’s not easy being a green puppet!

We should vote for the candidate which survives either party primary while calling for an end to farm subsidies!

There, we gave at the office, so to speak. Now it's up to them.

(A more serious attack on subsidies would call on Congress, wouldn't it?)

I thought seed mergers were called germinations...

I often ask people who say health care is a right and fundamental need and therefore must be under the total control of government why the same could not be said of food. I point out that America's food providers do a pretty good job without much government intervention, offering enormous choice, effective price competition, even free handouts in many cases to those in need via ubiquitous pantries. You would think that we want to adjust our health care system in ways that emulate the success of the food industry, but, alas, we have progressives arguing for the opposite, with the result being that our food will become increasingly as difficult to get and pay for as our health care.

Good point. Why not get the government out of healthcare and let people buy it they way they do food, water, energy, clothing, transportation, and housing. They can use the real insurance principle - absorb small losses and buy insurance for catastrophes.

Somehow the free market can provide - for $200 - a supercomputer smaller than a half-sandwhich and as thin as a cookie, but the same forces cannot be allowed to work their magic on medical treatment.

It's a fine mess we are in.

EdR- I'm all for getting the government our of healthcare. The problem I see is that the government's food policy of subsidizing animal food producers increases the chronic disease that benefits the medical and drug industries. So, the government forces chronic disease on the population through subsidies and incentivizes the medical and drug companies through subsidized health care to clean up the whole mess. The animal food producers and medical and drug industries should be forced to provide services without government incentives that make everyone sicker and poorer except those industries.

The problem I see is that the government's food policy of subsidizing animal food producers increases the chronic disease that benefits the medical and drug industries.

Is there some government program that requires the consumption of meat? Are vegetarians discriminated against in some way? Is there actual empirical evidence that eating meat causes sickness and disease?

Chuck Martel- Here my separate response to each of your questions:
Question: "Is there some government program that requires the consumption of meat?"
Response: Yes. The school lunch programs are required to provide meat and dairy products to children. The USDA goes so far as to count "pizza" in its nutrition requirements as "a vegetable". Beyond that, the government actually provides advertising to the animal food industry through the "check off" program. The "It's What's for Dinner", "It Does a Body Good" and "The Other White Meat (Pork)" advertising was developed through this program. So, you're paying for the advertising for foods that will give you a heart attack and chronic disease.
Question: "Are vegetarians discriminated against in some way?"
Response: Yes. "Moreover, government subsidies are heavily skewed toward animal food producers, who receive more than thirty times the financial aid that fruit and vegetable growers do.*
*Physicians Committee for Responsible Medicine, “Agriculture and Health Policies in Conflict” (2011), accessed October 23, 2011, http://www.pcrm.org."
Source: Simon, David Robinson. Meatonomics (p. 78). Red Wheel Weiser. Kindle Edition.
Question: Yes. The standard American diet (SAD) which is heavily laden with meat and dairy products is among the most unhealthy, if not the most, in the world. Over 70% of Americans are overweight or obese, in large part (though subsidized sugar and processed plant food also plays a role) due to excessive animal food consumption. Most discouraging is this statistic: "One in three US teenagers is obese or overweight, triple the rate in 1963, and a growing number have diabetes or high blood pressure—diseases directly linked to meat and dairy consumption and formerly seen only rarely before adulthood.*
*American Heart Association, “Overweight in Children,” accessed January 26, 2012, http://www.heart.org.

Simon, David Robinson. Meatonomics (p. 232). Red Wheel Weiser. Kindle Edition.

So, bottom line, our government is forcing us to pay for our room and treatment at a hospital we pay for to treat chronic diseases that they mandate and subsidize through our tax dollars. See my other posts on this thread that outline the total costs associated with animal food production, most of which are hidden and would greatly increase the cost of those foods at the cash register if paid directly by consumers. Simple supply and demand models would easily cause the consumption of animal products to drastically decline if we just got the government out of the food subsidy and promotion business and forced business to pay all the costs associated with their products instead of paying for those through the smoke-filled rooms of animal agriculture lobbyists and congressmen. If that bacon & cheese Quarter Pounder and Supersize fries and Coke was paid for at the counter, it would cost at least 4 times as much. Needless to say, most people would think twice before they bellied up to the counter and paid that much for their heart attack, diabetes, cancer, high blood pressure, etc. and drugs to treat those diseases.

Beyond the rampant chronic disease caused by our government subsidized and supported agriculture policies, the medical and drug industries are now incentivized to support chronic disease since they are paid through Obamacare and insurance policies to treat the disease symptoms instead of prevention. These hidden costs of government support of the animal food industry make change extremely difficult because so many jobs now rely on the treatment of preventable disease. Therefore, there will be no outpouring of support from these industries for change because they are drinking from the same collective government supported teet.

Price supports are another subsidy that needs to be banned. Beet farmers riding around in new vehicles from these is just another way to ski the consumer. Here’s another take:https://www.marketwatch.com/amp/story/guid/C6D43858-7641-11E8-B832-C69733F0E6B1

One of the most irresponsible policies of the US government is the mandate for ethanol in gasoline. The ethanol is from corn, of course, which requires more energy to produce than energy obtained from the ethanol. The corn subsidies also enable the high-fructose corn syrup (HFCS) industry to market their addictive wares in just about every soft drink and processed food item in the country. HFCS is a major cause for obesity in the USA.

So true, and for this we can thank the Iowa caucuses. Still waiting for one candidate, of either party, to talk straight at an event in Des Moines.

As a strategy to defeat Warren: Do you think we can get Donald Trump to run against farm price supports and agricultural quotas in the Midwest as part of his battle against government regulation?

I think the only way you are going to be able to cut back on some of the allotment and price support programs is to exclude large farm enterprises from those programs or kill the entire program and substitute welfare checks to small farmers. People have tried to limit some of these programs by excluding large corporate farms from their coverage, but determined Republican opposition, particularly in the South with respect to cotton, has killed it.

At this point, cuts to farm subsidies have to come from the left, because the right is too dependent on the votes of rural Americans in midwestern states. So it is disappointing, but not unsurprising that Warren continues to side with generous farm subsidies. Of coruse, philosophically the D's are big government lovers, but budget constraints being what they are at some point they might have to sacrifice the votes of midwestern farmers in favor of other, D-voting constituents. I think we are still a generation away from that equation working itself out though.

And yet Tyler seems to think it's all on Warren.

Strange.

....

He’s commenting on the policy platform of one of the leading candidates for president.

You buffoon.

You’re literally in the position of criticizing an academic for commenting on the technocratic merits of a policy proposal, made by one of the few likely democrat nominees for POTUS.

Your fake pragmatist shtick didn’t last too long eh?

Do you think we can get Donald Trump to run against farm price supports and agricultural quotas in the Midwest as part of his battle against government regulation?

While we're at it, maybe we can get him to run against trade protectionism for us automakers!

Don't forget the Steelworkers, and the foreign companies that now own US steel companies.

"While we're at it, maybe we can get him to run against trade protectionism for us automakers!"

You mean the automakers that are vociferously opposed to tariffs?
https://www.bloomberg.com/news/articles/2019-03-28/bickersome-auto-industry-uniting-to-oppose-trump-import-tariffs
From the story:
The U.S. auto industry is escalating a lobbying push to keep President Donald Trump from imposing steep new tariffs on imported cars and parts that executives warn could cripple a sector already facing a slowdown.
Groups representing many arms of the industry -- automakers, dealers, parts suppliers and aftermarket companies alike -- are in lockstep in their opposition of new levies being considered by the White House, a rarity for an industry that often disagrees on major policies.

That's just one example. I can give you more.

I should say, new tariffs. They still the chicken tax.

I guess I should have said autoworkers. The Republican party is rapidly shifting to being the warty of the white working class, which means standing up against those capitalist pigs that want to outsource their production to Mexico.

Anyone who thinks there are monopoly profits being earned in meat packing is, of course, completely free to set up their own slaughterhouse.

NB for you creeps out there: Being a "one-man slaughterhouse" is not the same thing as having a monopoly in the slaughtering business.

I never said "one man". If there are monopoly profits being made, you should be able to raise funds for an economically sized slaughterhouse - maybe do it as a co-operative owned by the farmers who are expecting to get better prices.

This is not unexpected, apparently Warren is really a boring establishment Democrat disguised as a radical.

Exactly. A former Republican who has perfect policies for Iowa for either party. Sad, but thankfully ag is so small that almost every Western country has bad policies yet it doesn't matter.

+1bloombergcolumn!

I'm no fan of Sen. Warren, but Cowen seems to assess everything these days based on his affinity and defense of bigness and monopoly. Thus, he credits big agriculture with being innovative. Well, big agriculture has been innovative when it comes to processed food, the health risks from which produce a slow death not a dramatic death like when an aircraft crashes. As for the latter, Boeing is the dominant (only) American company in the large jet airliner market, its principal competitor the European company Airbus. It's a market that libertarians argue requires little or no regulation since the consequences of building a defective product would be death not only for the passengers but the company as well. Thus, the Boeing 737 Max.

For those who haven't kept up, Boeing blames a computer software glitch for the recent crashes of the 737 Max. No, the fault isn't some software glitch but an aircraft design defect known to Boeing and for which Boeing installed the software to correct the defect only to have the software over-correct and send the aircraft plunging to the ground. What's the design defect? The 737 Max has new, more fuel efficient engines that are much larger than the engines they replaced. Rather than redesign the 737 to accommodate the larger engines, Boeing took a shortcut and moved the engines to a different place on the wings and raised the landing gear. The problem with this configuration is that it changes the way the aircraft flies, causing the nose of the aircraft to rise, potentially stalling the aircraft. To offset this design defect, Boeing installed the computer software that would automatically cause the aircraft's nose to turn down in order to avoid a stall. Unfortunately, the software often over-corrects, sending the aircraft into a rapid descent from which the pilots are unable to avert.

Why did Boeing do it? Because Boeing was in a race with Airbus to get the new, more fuel-efficient aircraft in service, the first in service likely to get the dominant share of new orders. So Boeing took a short-cut, and it proved catastrophic. Boeing claims to have fixed the problem. No, Boeing didn't redesign the 737 for the larger engines, Boeing added a light to warn the pilots that the nose of the aircraft is about to make a sharp turn down and to take corrective action immediately. Would one feel safe flying in one of these aircraft? Would Cowen? This is how monopoly power can threaten public safety. My recommendation? Don't fly in a 737 Max and don't eat processed food.

"the software often over-corrects"

If this is so, why have only two crashed?

And why have 0 crashed from an actual stall condition? The defect is clearly not actually the aircraft engine placement, as Rayward states, because that has caused 0 crashes. The defect is the software (and hardware limitation of one AOA vane) that turns MCAS on when it shouldn't be.

@rayward - "This is how monopoly power can threaten public safety. My recommendation? Don't fly in a 737 Max and don't eat processed food." - lol, only on a 'libertarian' blog like this one will somebody give such a detailed critique of why Boeing failed in our mixed economy and then as a recommended solution say that it's up to the individual to avoid the alleged dangers! If this was the Daily Kos you'd have cries to nationalize Boeing.

Boeing will crash just like the 767 Max - it's already lost $40 billion in value. No, it's not up to the individual, it's up to the monopolies that Cowen praises to produce safe products. Let's see, only two aircraft filled with passengers have crashed, leaving no survivors. How safe is that? And the defect is in the corrective (to a defectively designed aircraft) software because no aircraft stalled. That's right, blame the guys in computer engineering, not the engineers who designed a defective aircraft. By the way, Boeing intentionally did not alert the airlines or the pilots about the design defect or the need for special training because Boeing was selling the 737 Max as a new aircraft that would require no special training by the pilots. Bankruptcy is the least of Boeing's worries; prison for some of the executives seems the greater risk.

"Well, big agriculture has been innovative when it comes to processed food, the health risks from which produce a slow death not a dramatic death "

That's paranoid.

I dunno. Water is like food, and the water here was supposed to have enough arsenic to kill me in about 500 years. We spent billions to fix it.

The big aircraft oligopoly you complain about has produced by far the cheapest and safest means of travel in all history.

Warren’s comments about monopoly power are so out of touch it makes me wonder if she ever buys groceries? There is way more variety and competition today than ever before. In my city, 20 years ago basically the only options were the regional chain grocery or a convenience store. Today, we have that regional chain (which has greatly diversified its offerings), plus national chains and international chains like Whole Foods and Aldi, farmer’s markets, ethnic stores, and not to mention online shopping letting you order all kinds of super-niche dried foods and spices. And product variety has also vastly improved. I used to think of grocery shopping as a chore but now I quite enjoy seeing and trying all the new products coming out constantly.

It's all fake however, a function of science and product differentiation the richer a country becomes. All of the stuff you eat in a First World country is a function of complex supply chains and science, for example, the "orange juice" that's so "natural" it tastes like it was fresh squeezed is the product of something like 2 km of tubes and food processing. Real organic would mean you only eat the foods in season, and in wintertime in the northern hemisphere it would mean root crops. Just saying (I myself enjoy the diversity of food in the DC area, where I'm at now, compared to the Philippines where it's a 3rd World, but I understand how artificial my choices here in DC are). Bon appetite! I suppose you'd not mind if you were connected to a machine that simulates VR aka Robin Hansen and those sci-fi dystopia novels too? If it feels good, it must be good...

Warren is an idiot who was a poor lawyer and sucks intelligence out of the room when she talks about economics. Your column, while completely correct, gives her views more respect than they deserve. They are based on nothing.

But they are based on something. They are based on the same thing her genetic test and “native” background are, namely the need to get a narrative out there. Preferably one with a villain. “That bad x is bad, but now I’m here from the governm—, er the tribal authority, to save the day.”

She make no sense to me. She is one f eight or none Dem senators running, and they seemed to divie up the spacial interests among them. Collectively they are promising something close to $400 billion in net new spending. But only one can be president.

Yes, divide and conquer with the Dems is a good strategy to keep them at bay. I hate Trump, especially his anti-immigration policies which is keeping my hot Filipina from joining me here in the USA where I am at the moment, but as a member of the 1% I hate the Democrats even more. I might even vote for Trump (yuk). I wish the Republicans would tax a bit more however, as their "borrow-and-spend" is long-term unsustainable, albeit I can see the USA going above GM K. Rogoff's alleged 120% Debt-to-GDP redline in a few years, like Japan already has. Probably it won't hurt the USA since the dollar is perceived to be de facto the world's currency, but it's not good long term.

Warren's economic views are terrible. They don't deserve respect. They do deserve fear and opposition. That's a small amount of what Tyler Cowen was expressing. Tyler should loudly condemn Warren's views and loudly endorse Trump as the more reasonable option.

Remarkable - she supports policies that are popular with voters, rather than policies popular with economists?

Yes. She's also a law professor who designed the (eventually to be found unconstitutional) structure for the CFPB.

She's annoying sometimes, but I find it hard to take anything she says seriously.

"She doesn’t want foreign beef to be eligible for a U.S. label if it was processed here but not made from animals in this country."

Now a bit of context via de the WP from 2013:

"The meat labeling dispute dates back to March 2009, when the United States required that meat be labeled with its country of origin — without specifying, as the new rules do, where the animal was born, raised and slaughtered. Canada and Mexico objected to those rules, arguing that the hassles of tracking each animal’s nationality prompted slaughterhouses to prefer animals that had been born and raised in the United States. This created a bias against foreign livestock, they argued. Canada and Mexico took their concerns to the World Trade Organization, which ruled against the United States in June (2013)."

https://www.washingtonpost.com/business/economy/us-meat-labels-to-detail-animals-origin-canada-mexico-raise-concern/2013/05/24/ca1091c0-c47f-11e2-914f-a7aba60512a7_story.html?noredirect=on&utm_term=.fc20883441e0

My troll side tells me to frame the situation as the "WTO imposing Mexican and Canadian rules on the American consumer", then go make some popcorn =)

I'm still waiting for Argentinian steaks to be sold here. I guess I'll just drive to Toronto for them.

Axa, Good for you. You understand framing.

Am enjoying your popcorn and how pointing this stuff out makes you and others more rational persons in a debate.

Tyler is correct about the effect subsidies and the absence of eliminating these from Warren's paper. Tyler significantly understates the amount ("$20B") in terms of the overall direct and indirect (hidden and external) subsidies/ costs provided to the animal food industry. Politicians are natural cowards and, like Michelle Obama's retreat from reducing sugar consumption in schools, will attack any industry other than the food industry due to the votes throughout the midwest where food is grown. Here are more accurate direct and indirect subsidies from David Simon's book, "Meatonomics":

"$314 billion in health-care costs. $38 billion in subsidies.* $37 billion in environmental costs. $21 billion in cruelty costs. $4 billion in fishing-related costs."

*While a subsidy is not technically a hidden, or externalized, cost, farm subsidies are included for measurement purposes because, like externalities, they impose costs on—but provide little actual benefit to—taxpayers.

Simon, David Robinson. Meatonomics . Red Wheel Weiser. Kindle Edition.

And she made an anti-science tweet about glyphosate https://twitter.com/ewarren/status/1110283379201724421

This sort of stupid shit is exactly why she's going to win the nomination.
In private, she's an establishment Democrat. In public, she's an even stupider version of Alexandria Occasio-Cortez. She goes right for the idiot constituency of the far left.

To the surprise of who? It's what Warren thinks about the government and the economy, applied to agriculture, no more, no less. Assign a class of smart undergraduates to write a paper on what Warren's farm policy would look like (without showing them her actual policy statements) and you'd get this.

> And she is supposed to be the leading policy thinker in the race? People, this is not good...

If Elizabeth Warren is this bad, which I agree with, then promote the alternatives. Trump's economic policies are rather moderate and free-market friendly. Cowen is motivated to avoid endorsing Trump for non-economic factors.

Cowen favorably cites economists like Brad DeLong who are motivated to exact this furious angry vengeance on Trump supporters rather than advocating reasonable economic policy. That mindset should be a giant red flag. Reasonable economists should strongly advocate for reasonable economic policy, and see DeLong's raging anger and vengeance as a red flag.

"Warren arguably has been the most policy-obsessed Democratic candidate"

Um, Hello .... Andrew Yang?

... Hence the word "arguably". Also, while we're on the topic, I have to say: even though I own a bright pink Yang 2020 snapback that I wear occasionally to prompt discussion of UBI, I have to admit that he's not so much obsessed with policy as obsessed with bold, futuristic ideas for policies. He might be described as a policy wonk, but he's not a wonk, he's a serial entrepreneur who kicked in the door of the political arena to show off his pitch deck. I don't know what kind of president that means he would become if elected, but at least what he's doing now is pretty damn cool.

Government farm subsidies keep marginal operators alive for no reason. Also, price per package may be stable but price per ounce is going up as quantity is reduced.

The subsidy of animal products, in particular, results in huge external costs to the environment, healthcare (heart disease, etc.). According to data collected by the author of "Meatonomics"*, "For every dollar in retail sales of meat, fish, eggs, or dairy, the animal food industry imposes $1.70 of external costs on society. If these external numbers were added to the grocery-store prices of animal foods, they would nearly triple the cost of these items. A gallon of milk would jump from $3.50 to $9, and a store-bought, two-pound package of pork ribs would run $32 instead of $12.18".

So, effectively, the government subsidizes encouraging consumers to kill, injure and pollute themselves with their own resources. The real travesty is the collateral damage from these subsidies.

*-Simon, David Robinson. Meatonomics . Red Wheel Weiser. Kindle Edition.

Agree. My real problem with subsidies is that the government is dictating our taste and diet preferences through subsidies by keeping the real cost of the favored foods (primarily animal products) hidden. If everyone paid the real higher cost directly, consumption of animal foods would decline. Plant foods require 75%-90% less energy than animal foods to produce per calorie directly for humans. This reduction per calorie in energy costs would lead to overall lower prices for foods consumed with less hunger, less pollution and a healthier population with lower healthcare costs. At the same time, there would be more efficient farming based on the actual preferences of consumers under economic reality, not politicians aligned with animal food producers to game the system in their favor and our expense. Under the current system that's created the standard American diet (SAD), 70% of the population is obese or overweight. Chronic diseases like diabetes, cancer, heart disease require 17% of GNP in healthcare costs to treat, up from 5% in the 1960s. Eliminating farm subsidies and exacting all the direct and indirect costs on the foods that create that statistic should be a priority for everyone.

The Warren plan outlines the following policy measures:

1) Anti-consolidation: Deny mergers that violate principles of anti-trust and break-up the vertically integrated control of major agribusinesses
2) Establish right-to-repair laws to prevent machinery companies from gouging farmers with exclusive repair services
3) Greater oversight on the checkoff programs, including making participation in them voluntary
4) Prohibit abusive contract farming (this proposal lacks detail)
5) Reinstate country-of-origin rules that prohibit the labeling of products as American even if they were merely processed in America rather than grown/raised there.
6) Restrict foreign ownership of farm companies and farmland. The justification given for doing so is vague and unconvincing ("jeopardizes food security" -- how?)

Cohen's column disagrees with 1, but only on that basis that lower income for farmers and Americans leaving the industry is a good thing, because increased economic development coincides with less reliance on agriculture. But Tyler, if real revenue in american agribusiness is increasing, while farm workers' wages are decreasing (both of these are true), wouldn't this suggest a different sort of problem? Is there no other reason the vertical integration and oligopolization of agribusiness could be bad?

Cohen goes on to criticize proposals 5 and 6, which is mostly fair. I am not convinced of the benefits of these protectionist policies either. But I haven't heard great arguments on either side. Proposal 2 is characterized as potentially good by Cohen, while proposals 3 and 4 are ignored entirely (fair in the case of 4, which lacked detail). But the major crux of the Warren plan is proposal 1, which Cohen unconvincingly rebukes.

Further, I'm disappointed by the headline and subheadline of the Bloomberg article. Proposing a number of specific policy changes to a particular sector, two of which are protectionist, is not "stealing a page from Trump". Trump did not invent protectionism. Any protectionist policy is not automatically Trumpian. "Stealing a page from Trump" would be something like announcing an impossible/unconstitutional/insane policy over Twitter without consulting anyone about it first. Finally, that's not what "tone-deaf" means.

As for removing subsidies: yes, obviously we'd be better off if we didn't have to spend billions of dollars in industry handouts each year. But isn't the reason we do that to keep our industries competitive with other countries, which also subsidize their industries? Wouldn't the success of a policy to remove subsidies be dependent on other countries following suit, i.e. some sort of massive multilateral trade agreement? Like I'm no economist here but there's no way the solution is as simple as "get rid of all the subsidies and prosperity will follow".

But doesn't the USA need its best farms to be models for the world and sources of new ideas? Oh, just cities. Got it.

Greg Mankiw was quoted the other day to the effect that economists don't understand the constraints that politicians operate under. Tyler provides a good example of this.

US agricultural support is nowhere near as high as it is many other places. See: https://data.oecd.org/agrpolicy/agricultural-support.htm
If the US was the last country on Earth subsidizing agriculture that might be a sign of something, but leave it to economists to completely ignore the reality that there are reasons nearly every country on earth protects its agricultural producers.

The most curious thing though is that Tyler doesn't mention the WTO ruling against China, choosing to rail against the US instead. GMU's Confucius Institute money talking? Amazing how every GMU economics professor sounds like General Secretary Xi personally writes their talking points.

edgar
March 29, 2019 at 7:20 pm

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"But doesn't the USA need its best farms to be models for the world and sources of new ideas? Oh, just cities. Got it.

Greg Mankiw was quoted the other day to the effect that economists don't understand the constraints that politicians operate under. Tyler provides a good example of this."

The "constraints that politicians are under" should be the vote of the people, not the back alley political deals with and campaign funds of the animal food producers. The vast majority of subsidies go to corporations and are used to reduce costs of feed grain and other costs of the animal food industry to keep prices low and consumption high. On a level playing field, all food producers would compete with actual costs of their product. This is what I would describe as the USA having the "best farms to be models for the world and sources for new ideas?" you describe. At that point, food costs would decline dramatically because the real costs of plant foods per calorie for humans are far less and consumption of those foods would increase relative to animal foods. This would cascade into a healthier population free of the corruption of the animal food industry. Continuing the guise that our current system is anything other than a means to line the pockets of the animal food manufacturers is not sustainable environmentally or from a health care cost perspective.

The purpose of a party is to get its candidates elected. The purpose of a politician is to get elected. Duh. Truthiness and factuality are not the points. Don't dwell on what they say, it isn't meant to be true or factual (that being the definition of bullshit). Focus on how voters will take it. Donald Trump didn't go from reality show star to POTUS by accident.

But then, the purpose of what a blogger says is pretty much similar, substitute click/views for votes.

Elizabeth Warren, like the government of which she's a member, regards all members of a class as identical in respect to the law. All fifteen year-old people are too young to drink a beer or drive a car on public highways. Farmers are looked at in the same manner, each farmer has identical talents, motivations and habits so government policy toward them is of necessity the same. Unfortunately, farmers are not equal in their abilities and devotion to work. Some drink the afternoons away, gamble and sleep until noon. Others are simply dim. Assuming that each and every agriculturalist is a deserving recipient of largesse from the rest of the population is a ridiculous notion based entirely on socialism rather than the free market, where inferiors are allowed to fail. US farm policy is a sad and expensive joke.

Completely agree. The whole system is supported by the false premise that paying farmers to produce food with subsidies or price supports is necessary to avoid starvation. Today, the entire system is corrupted with politicians trading votes for campaign funds. It’s producing enormous dislocation and perversions in the food supply that’s creating massive direct and indirect costs on the healthcare system and chronic disease for millions. It’s a total disaster that’s now become part of the political and cultural fabric and a norm for powerful interests that yield vast profits from the death and destruction. Sadly, it’s going to stay the same or get worse for the foreseeable future.

'Furthermore, America’s food sector has been remarkably innovative in terms of product choice and rising diversity of options.'

Most of which, to judge by the ever-rising rates of obesity and type II diabetes, are unhealthy. But still, I'm quite grateful to have 40,000 different kinds of junk food at my disposal.

"Updated September 2018: According to the most recent Behavioral Risk Factor Surveillance System (BRFSS) data, adult obesity rates now exceed 35% in seven states, 30% in 29 states and 25% in 48 states. West Virginia has the highest adult obesity rate at 38.1% and Colorado has the lowest at 22.6%. The adult obesity rate increased in Iowa, Massachusetts, Ohio, Oklahoma, Rhode Island and South Carolina between 2016 and 2017, and remained stable in the rest of states."

https://www.stateofobesity.org/adult-obesity/

jdm--The food processing companies make a science of creating foods that are addictive. In fact, the government is aware of this fact and promotes the addictive consumption of cheese in its "checkoff" promotion campaigns with pizza and fast food companies. Cheese contains casomorphin which is an addictive substance that acts on the same dopamine pleasure receptors as morphine. Over 70% of Americans are overweight or obese. At some point, it seems the level of fitness becomes a serious national security issue given that youth are now acquiring diabetes. "One in three US teenagers is obese or overweight, triple the rate in 1963, and a growing number have diabetes or high blood pressure—diseases directly linked to meat and dairy consumption and formerly seen only rarely before adulthood.*
*American Heart Association, “Overweight in Children,” accessed January 26, 2012, http://www.heart.org.

James - I agree with your comment. The "remarkable food sector innovations" that Tyler refers to are in large part innovations to hook people on calorie dense, addictive, unhealthy foods. Foods which I suspect Tyler himself does not eat, and for good reason.

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