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High Food Prices or Low Food Prices: What Do We Want?
The WSJ should be asking this question in its analysis of the progress of the new farm bill in Congress. It reports that complaints of White House spokesman Tony Fratto that the bill would be raising food prices when we actually want lower food prices.
Actually, much of the effect of the bill would be to lower food prices. By providing subsides to people engaged in a wide range of farming activities, it is encouraging people to enter farming. This leads to more output in general. On the other hand, the subsidy to ethanol, does directly pull land out of food production and shifts it into the production of biofuels.
The restrictions of importing sugar has the effect of raising sugar prices in the United States, but lowering them for the rest of the world. From the vantage point of people outside the United States, these barriers might be viewed as positive (except in the case of sugar producers).
It would be helpful if the analysis sought to assess the the goals of U.S. agricultural policy and whether this bill was helping to meet them.
--Dean Baker
COMMENTS (3)
Mr. Baker,
I was wondering what you thought of Senator Clinton’s criticism of both you and other economists who oppose removing the gas tax.
“I’m not going to put my lot in with economists. . . We’ve got to get out of this mind-set where somehow elite opinion is always on the side of doing things that really disadvantage the vast majority of Americans.”
Do you consider yourself, as an economist, to be an elitist who supports policies that disadvantage the majority of Americans? If not, can you speak to your motivations, and to what you think of the rhetoric being used by Senator Clinton?
Posted by: olav | May 6, 2008 11:34 AM
I just love it when someone sitting on tens of millions of dollars starts calling people elitists because they believe in arithmetic.
I am willing to bet that Senator Clinton KNOWS that her plan will get "hard-working" Americans little or nothing. By all accounts she is a very intelligent person. She is just hoping that she can fool enough of them to get their votes today. It is close to being the most politically cynical act that i've seen in my lifetime.
Posted by: Dean Baker | May 6, 2008 11:50 AM
No, the most politically-cynical act I've seen lately is Sen. Clinton telling voters in Guam that, as President, she'd see to their gaining full voting rights. Which is not, of course, in the President's power to give.
Posted by: JB | May 6, 2008 5:25 PM