The steamboat conveying Andrew Jackson up the Ohio River toward his tumultuous 1829 inauguration had brooms lashed to its bow, symbolizing Old Hickory’s vow to clean up Washington. But sweeping out Washington’s Augean stables is steady work, so steady it never ends. Neither do the policies that cosset sugar producers.
These immortal measures just received the Senate’s benediction because they illustrate the only law Washington can be counted on to respect. It is the law of dispersed costs but concentrated benefits.
The provisions by which Washington transfers wealth from 316 million American consumers to a few thousand sugar producers are part of a “temporary” commodity support program created during the Great Depression. Not even the New Deal could prolong the Depression forever. It ended. But sugar protectionism is forever. The Senate recently voted 54 to 45 against even mild reforms of the baroque architecture of protections for producers of sugar cane and sugar beets.
The government guarantees up to 85 percent of the U.S. sugar market for U.S.-produced sugar. The remaining portion is allocated for imports from particular countries at a preferential tariff rate. Minimum prices are guaranteed for sugar from cane and beets. Surplus sugar is bought by the government and sold at a loss to producers of ethanol, another program whose irrationalities are ubiquitous.
All this probably means $3.7 billion in higher sugar costs. It also means scores of thousands of lost jobs as manufacturers of candy and products with significant sugar content move jobs to countries where they can pay the much-lower world price for sugar. The big companies like Mars and Hershey can locate plants around the world. The hundreds of family-owned American candy companies cannot. In the last four years, the U.S. sugar price has averaged between 64 percent to 92 percent higher than the world price. The costs are dispersed to hundreds of millions. The benefits accrue primarily to 4,700 sugar beet and sugar cane farms.
Sugar protectionism is government planning. It is industrial policy — government picking winners and losers — applied to agriculture. It is politics supplanting the market in allocating wealth and opportunity. And it is perfectly all right with 20 of the 45 Republican senators.
That many voted against modest reforms, thereby rendering themselves forever ineligible to speak the language of limited government. One of them is known as tea-party-favorite (this compound word is his first name, judging by the way he is constantly identified by the media) Marco Rubio. He is fluent in that language but he represents Florida. Actually, he represents the state’s sugar cane growers better than he does its 19.3 million sugar consumers, or his own tea party expostulations.
President Abraham Lincoln’s biggest blunder was creating the Agriculture Department. Since 1995, 75 percent of all agriculture subsidies have gone to the largest and wealthiest 10 percent of farms. Largely because of steadily loosened eligibility criteria — loosened at the collaborative behest of agriculture interests and the “caring class” (i.e., welfare workers) — food stamps are now used by 48 million Americans. The stamps buy less than they would were sugar quotas not raising the price of every edible thing, from ketchup to bread to yogurt, that contains sugar. But, then, big government always is most caring about the strong, the articulate and the organized.
About 6,700 generations (200,000 years of 30-year generations) ago, the human race arrived. About 400 generations ago, agriculture began. Seven generations ago (1800), it took five American farmers to feed one non-farmer. Until four generations ago, a majority of American workers were in agriculture. Today, less than 2 percent of the workforce are farmers, and one farmworker feeds 300 people. But 6,700 generations from now, there will still be today’s web of policies — not a safety net but a hammock — woven for the comfort of sugar producers.