STOCK MARKET WATCH -- Thursday, 30 May 2013

[Demeter]

7. The new farm bill is an economic disaster

http://www.guardian.co.uk/commentisfree/2013/may/26/farm-bill-economic-disaster

Just when you think Congress can't get any dumber, it crafts a $1tn farm bill that harms the poor and promotes unhealthy food...As members of Congress have negotiated over various amendments and riders to the bill, they've set an impressively consistent trend: they mix good ideas and bad ideas and combine them to create the absolutely worst possible policies. Elements of the farm bill, as it stands, will cut food stamps to the poor and the previously incarcerated, thus increasing poverty and possibly crime; add to the growing obesity crisis by encouraging chemical sugar substitutes; push genetically modified food at the expense of public health with the so-called "Monsanto Protection Act"; and support factory farming at the expense of sustainable food production with abusive crop subsidies. That's quite a lot of damage to wreak with a single law, but this Congress certainly seems up to the challenge.

The farm bill will set US food policy for 2014 to 2023, encompassing everything from agriculture to food stamps. The food stamps show the worst decision-making. Conservatives are apparently annoyed that Americans are using more food stamps. That much is true. Food stamp usage has grown by at least 70% since the financial crisis in 2008, with a record 47.8 million people relying on food stamps in order to afford their weekly grocery bills. This is costing the government $74.6bn. Members of Congress - whose average pay is $174,000 a year are outraged by this. As they enjoy over $4.6bn in subsidized healthcare, travel and other government perks subsidized by taxpayers, these lawmakers bemoan the waste of government spending on the poor. They pledge fiscal discipline – pinching every taxpayer penny – on the backs of people living below the poverty level, as the lawmakers themselves count on up to $1.2bn in retirement benefits. So it is that these beacons to financial restraint, surrounded by a $6bn bubble of government-subsidized comfort, have succeeded in cutting food stamp help to the poor by about $20.5bn in this bill. They've also planned to eliminate food stamps – for life – for anyone who was ever convicted of a crime, which will disproportionately hurt the urban poor (pdf). Some lawmakers argued the SNAP, or food stamp, program should be cut because of the trend of food stamp users buying things like energy drinks – a trend that continues, not incidentally, due to the low availability of fresh and healthy food in poor areas. Ironically, while they cut the government help to the poor, some of these lawmakers are the personal beneficiaries, to the tune of thousands of dollars, of government farm subsidies.

Yet they still ask: why do we need food stamps at all? There is an economic recovery, some lawmakers argue, why aren't more people buying their own food? This is perhaps the most damaging and revealing idea of all. The "recovery" so far consists primarily of vaporous paper money – inflated stock prices and bounding home prices that provide a "wealth effect" but don't actually fatten anyone's bank accounts or pay anyone's bills. In fact, the rise in food stamp use is neither anomalous nor abusive. It makes perfect sense. Poverty goes up in recessions and in weak recoveries like this one. About 12 million people are out of work. Only about 58% of the population is employed, which is around the lows of the early 1980s recession, and which also has not changed appreciably for around three years. Long-term unemployment is a persistent problem, with 40% of all unemployed people out of work for six months or longer – at which point many employers arbitrarily deem them unemployable. Poverty has been rising steadily since 2008 – just like the use of food stamps...

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