The Feds Have Doled Out Record Farm Subsidies To Save Trump’s Campaign

“The New York Times details the “gush of funds” Trump has promised U.S. farmers—with more on the way. Some say total farm subsidies could top $40 billion this year. The Times says the figure may be as high as $46 billion. Either figure would be a record.”

“Critics have seized on the manner in which the Trump administration is subsidizing farmers—mostly outside of the traditional (though also lousy) programs funded under the five-year Farm Bill.
“[T]he bulk of USDA payments to farmers since 2017 have flowed through stop-gap programs created by the Trump administration, with payment limits far larger than those that apply to the traditional farm program,” Successful Farming reported in August.

The combination of farm subsidies included in the current Farm Bill and subsidies doled out under Trump’s executive order means, the Times reports, that two out of every five dollars American farmers receive this year will come directly from taxpayers.

Critics, including many Democrats, argue the funds are being doled out as political favors. They appear to have a point. Last month, for example, during an election rally in Wisconsin, Trump announced additional payments to farmers totaling $13 billion.

Non-partisan observers have also labeled them political handouts. “The Government Accountability Office found last month that $14.5 billion of farm aid in 2019 had been handed out with politics in mind,” The Week reports. The Times, citing the same GAO report, also highlighted by some Democrats, shows farm subsidies last year appeared to be directed to “big farms in the Midwest and southern states,” mirroring at least some segments of Trump’s farm base.

That same base has been hit hard by tariffs championed by Trump. In 2018, I predicted (as did many others) that Trump’s international trade tariffs would spur retaliatory tariffs and harm U.S. farmers and consumers in the process. They did just that.

But because Trump’s tariffs hurt U.S. farmers, and because he wants them to vote for him again, he’s sending them cash. That cash even has a name. Last year, one farmer NPR food-policy writer Dan Charles spoke with says he and his fellow farmers have taken to referring to the tariff-induced subsidies as “Trump money.”

“The U.S. Department of Agriculture simply sent [the farmer] a check to compensate him for the low prices resulting from the trade war,” Charles explains.

Most of Trump’s subsidies have gone to large producers.

“Despite the record amount of farm welfare payments doled out by this administration, the smaller struggling family farmers get next to nothing while wealthy landowners and massive, highly profitable agribusiness hoover up most of the federal dollars,” says Don Carr, a senior advisor with the Environmental Working Group, in an email to me this week. “I’m old enough to remember when a Minnesota millionaire qualifying for a puny food stamp benefit was a scandal, yet few feathers get ruffled when rich land barons collect million-dollar government welfare checks.””

The Feds Have Doled Out Record Farm Subsidies To Save Trump’s Campaign

“With the presidential election now just over two weeks away, President Donald Trump has mounted a frantic effort to ensure America’s farmers, a key Trump voting bloc, will support his flagging re-election campaign. In short, he’s shoving piles of cash their way.

The New York Times details the “gush of funds” Trump has promised U.S. farmers—with more on the way. Some say total farm subsidies could top $40 billion this year. The Times says the figure may be as high as $46 billion. Either figure would be a record.”

“Non-partisan observers have also labeled them political handouts. “The Government Accountability Office found last month that $14.5 billion of farm aid in 2019 had been handed out with politics in mind,” The Week reports. The Times, citing the same GAO report, also highlighted by some Democrats, shows farm subsidies last year appeared to be directed to “big farms in the Midwest and southern states,” mirroring at least some segments of Trump’s farm base.

That same base has been hit hard by tariffs championed by Trump. In 2018, I predicted (as did many others) that Trump’s international trade tariffs would spur retaliatory tariffs and harm U.S. farmers and consumers in the process. They did just that.

But because Trump’s tariffs hurt U.S. farmers, and because he wants them to vote for him again, he’s sending them cash. That cash even has a name. Last year, one farmer NPR food-policy writer Dan Charles spoke with says he and his fellow farmers have taken to referring to the tariff-induced subsidies as “Trump money.””

$75 billion in Band-Aids won’t cure ailing airlines

“Sadly, as long as demand for air travel remains so deflated, there’s no way to avoid airlines restructuring and slimming down their payroll. Subsidies provided through the cover of payroll programs aren’t necessary to protect an industry that could restructure through bankruptcy. Airline bankruptcies aren’t the equivalent of an airline collapse. They can continue to fly safely during the process where a judge imposes a stay on creditors’ claims and gives the airlines breathing room until consumers are ready to come back.

Importantly, the bankruptcy process is fair. It shifts the cost of this crisis onto those airline investors who make good returns during good times and should shoulder the decreased value of their investments, instead of taxpayers. Without a bailout, airlines won’t just be flying the friendly sky, but the fairer sky—for all taxpayers”

The Export-Import Bank’s China Program Lacks Vision

“Vast research shows that, while subsidies might prop up the direct recipients, governments that subsidize harm their economies overall. That said, in the name of national security or geopolitical concerns, these principles may sometimes be traded off against other concerns.

But this doesn’t mean that all subsidies should get a free pass. There must be a concrete strategy behind the effort to use subsidies in this way. For instance, China mostly operates in lower-income nations. If Ex-Im is serious about competing with China, that’s where its loans should be going, rather than continuing to finance foreign borrowers in rich countries such as Italy, France, or the United Arab Emirates, where they’re served well by a commercial banking market.

Ex-Im’s recent annual conference was full of bold statements about fighting China as mandated by Congress during the agency’s reauthorization process back in December 2019. Unfortunately, despite much bluster from its leadership, there’s been no fundamental change in the way Ex-Im operates or in which companies Ex-Im extends financing to with taxpayer backing.”

“the Export-Import Bank’s failure ultimately lies with the policymakers who believe an agency that has been devoted to serving well-connected companies for so long would actually change.”

Plans for Extended Unemployment Benefits, Wage Subsidies Risk Creating a Zombie Economy

“the states that have reopened have seen anemic economic recoveries at best.

Slate’s Jordan Weissman, using data from the app Open Table, notes that restaurant reservations are down as much as 92 percent from last year in those states that have allowed dining rooms to reopen.

A ranking of state jobless claims released yesterday by the personal finance website Wallethub finds that the number of people applying for unemployment is especially high in Connecticut, which had a bad COVID-19 outbreaks and a strict shutdown order, but also in Georgia and South Dakota. The former is lifting its shutdown order, and the latter never imposed one.

This matches with new research showing that economic activity declined at similar rates regardless of when states issued formal lockdown orders. Individuals, not the government, shut the economy down. They’ll also decide when, or if, it reopens.”

“if we can’t expect much of the pre-pandemic economic activity to return, that dramatically weakens the case for propping up businesses as Jayapal and Hawley want to do, or paying workers to stay jobless like the HEROES Act does. Both policies stymie markets’ ability to adjust to COVID-19 while shifting resources from those parts of the economy that can be productive during a pandemic to those that can’t. If there’s no demand for air travel, we’d be better off seeing baggage handlers shift to being warehouse workers or grocery delivery drivers. We want cooks and cashiers to move to restaurants that can figure out a way to stay profitable without dining service.

That doesn’t mean the government can’t provide relief. Even if we allow those readjustments to happen, we’ll still probably have a less productive economy for a while, and the negative effects of that will be concentrated on people who aren’t in a position to adapt. So there’s a reasonable case for cash transfers targeting the poorest Americans. But they shouldn’t be conditioned on staying at their current jobs, and—unlike unemployment benefits—they shouldn’t be conditioned on staying out of the labor force altogether.”

Most Americans Get ‘Free Stuff’ From The Government

“virtually every American gets some kind of government subsidy, from people who have mortgages or employer-sponsored health care (big tax deductions) to those who work for or invest in big companies (big corporate tax subsidies). Recipients of Social Security and Medicare get back far more in benefits than they paid in taxes.
Benefits to people who are not poor often equal or dwarf the cost of those for the poor. The home mortgage interest deduction, which the Congressional Budget Office found largely benefits the top one-fifth of income earners, cost the federal government about $70 billion in 2013; food stamps cost the government $74 billion last year. The tax break for employers who provide health insurance cost Washington $250 billion in 2013.

Medicare, which is available to all seniors regardless of income level, is more expensive ($587 billion in 2013) than Medicaid ($449 billion), the health care program for the poor, and an average-income couple retiring this year will get back three times more in Medicare benefits than they paid in Medicare taxes.”

“Among the biggest recipients of government generosity are corporations, which receive a multitude of federal and state tax breaks and incentives. These subsidies, sometimes called “corporate welfare,” primarily benefit the shareholders and executives of the nation’s largest companies. As of last year, 96 percent of Fortune 500 CEOs were white, and white investors typically have three times as much money in the stock market as nonwhites. Investors are not direct recipients of corporate welfare, but the value of their holdings is shaped by any federal, state and local funds going to the publicly held corporations.”

Study Says Foxconn Deal Cost Wisconsin $20 Billion in Lost Economic Growth

“In a recent paper on the issue, my Mercatus Center colleagues Matthew Mitchell and Michael Farren did the math and found that “the $3.6 billion in taxes needed to fund the subsidies will likely decrease Wisconsin’s long-run GDP by about $20 billion over the 15-year life of the handout. And this estimate doesn’t include the local utility infrastructure, and federal subsidies that total another $1.4 billion.” These numbers are harder to sell to taxpayers than the la-la land ones we hear about before every big subsidy deal.”

“A new paper in the Journal of Economic Perspectives by Cailin Slattery of Columbia University and Owen Zidar of Princeton University looks at state and local business tax incentives and finds yet again that narrow, firm-specific tax breaks aimed at attracting businesses and boosting employment aren’t the way to go. The study shows that larger, more profitable companies are more likely to get bigger handouts. The largest deals benefit the recipients, according to their research, but not the overall state economy.”

“This study is only one of many on the topic. They all find that these narrowly targeted subsidies don’t work as advertised and are typically counterproductive. Unfortunately, a slogan like “subsidized projects aren’t worth the money you pay for them” doesn’t make for a great sound bite at ribbon-cutting ceremonies.”

The Trump administration just snuck through its most devious coal subsidy yet

“Federal regulators are now actively working to counteract the effects of state-level clean energy policy, despite opposition from virtually everyone except the fossil fuel generators that directly stand to benefit. And by doing so, they will crank up costs on 65 million consumers (as a start).”