One Bad Policy Leads to Another

It is a truism that the negative effect of government intervention is inevitably more government intervention. Take the minimum wage as an example. Minimum wages are set to attempt to combat low wage jobs, but what really happens is that employers end up hiring fewer workers and decrease many from full-time to part-time. This contributes heavily to unemployment. But what do local governments do in response? Raise minimum wages, thus continuing the cycle.

The latest example of this relentless cycle is President Trump’s trade wars with major trading partners—including the European Union and China. In response to the President’s tariffs on imports, many countries are raising tariffs targeting American agricultural exports. This is hurting America’s farmers, who rely on exports for 20% of their income on average. The White House’s response? President Trump announced a $12 billion-dollar bailout program to mitigate the heavy blow being dealt to farmers in this trade war.

The program consists of direct payments to farmers, government buying and distribution of surplus crops to food banks and other nutrition programs (a fine thing, but not the role of the government and certainly not something that should be done to compensate for lost revenue from bad government policy), and a new federal trade promotion program. Yes, the government is going to spend more of your money to promote trade overseas.

Fortunately, reactions to the bailout program from Capitol Hill and the majority of the farm community have been uniformly negative. For example, Senator Rand Paul said, “Tariffs are taxes that punish American consumers and producers. If tariffs punish farmers, the answer is not welfare for farmers — the answer is remove the tariffs.”

Farmer coalitions have also been vocal in their opposition to the plans for a bailout. Here is the statement of Brain Kuehl, Executive Director of Farmers for Free Trade:

"Most farmers in Trump country don’t think tariffs are “the greatest.” Crops don’t grow overnight. Farmers and producers need time and long-term certainty to do their jobs, not constant chaos created by haphazard trade policy. Despite what President Trump tweets, his harmful trade policies are hurting farmers and families across the country."

Anyone who has worked on agriculture policy would not be shocked by the lack of enthusiasm from farmers. When I worked as Campaign for Liberty Chairman Ron Paul’s legislative director, one of the issues I handled was agriculture. Despite voting against all farm subsidies, Dr. Paul was popular with many individual farmers because they wanted free trade, low taxes, and protection of property rights more than they wanted a government check.

So, it is not surprising that so many farmers agree with Wisconsin soybean farmer Janet Roberts that “As a soybean farmer, I don’t want a bailout. I want a market, and we had one until those stupid tariffs took it away.”

Hopefully, the backlash resulting from the bailout proposal will stop the Administration from following the advice of AFL-CIO President Richard Trumpka  and bailing out industries suffering from the tariffs and instead President Trump can stop this insane trade war before it hurts farmers even more.

But until they do, Campaign for Liberty members should contact their senators and ask them to pass legislation requiring the President to obtain congressional approval before inflicting new tariffs on American businesses, consumers, and taxpayers.

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