Editore"s Note
Tilting at Windmills

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November 3, 2007
By: Kevin Drum

MAKING MONEY THE OLD FASHIONED WAY....Big Sugar™ spends $1.5 million to gain $100 million per year in federal subsidies. That's an ROI of 6,700%. Ken Lay would be envious.

Kevin Drum 2:01 AM Permalink | Trackbacks | Comments (28)

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Sweet!

...unless you aren't part of big sugar (or big corn sweetener); then its more of a sh*tburger.

Posted by: F. Frederson on November 3, 2007 at 2:37 AM | PERMALINK

This is how a VAT would be enacted.

Posted by: Brojo on November 3, 2007 at 3:33 AM | PERMALINK

I thought marrying up was "making money the old fashioned way." I guess the sugar industry's courtship of politicians is kind of like that.

The politicians and industry leaders get all the money from this marriage. It's the rest of us who get screwed.

Posted by: pj in jesusland on November 3, 2007 at 4:16 AM | PERMALINK

Ironically, they're one of the best sources for current-tech ethanol.

Posted by: Crissa on November 3, 2007 at 4:37 AM | PERMALINK

I've been saying for years now that for-profit corporations should be excluded from the protections of the First Amendment, and this is why.

For us, speech is something that is a public good, but costs us time and money that we will never see again. Most of us have pretty tight limits on how much public speech we can engage in, because our money and time are limited, and we've got lives to live: we've got jobs, spouses, children, and friends, and that's what our lives are about. When we engage in political speech, we're giving away some of that, and we're not getting it back.

For corporations, it's an investment. It doesn't always pay a return, but often enough that their speech pays for itself, and finances further speech. It doesn't take time away from their other pursuits, because they can simply hire more people to handle their lobbying and ad campaigns and the like.

It's an overwhelmingly unbalanced competition, an extremely tilted playing field.

I can't see any way to balance it, except by excluding the corporate players from the game.

If the corporations need a voice, let their executives, their stockholders, their workers speak on their behalf on their own time, out of their own pockets, just like we do.

For-profit corporations should not be protected by the First Amendment. Period.

Posted by: low-tech cyclist on November 3, 2007 at 6:13 AM | PERMALINK

The post misses the enormity of the crime!

Yes, the Sugar industry gets outright subsidies. But the real point of the lobbying is the protection. Sugar protection (I think it is in the form of import quotas) costs US consumers $2 billion a year. The protection allows the industry to "earn" an extra $1.5 billion. This is clearly a loss for the country as a whole.

It is the $2 billion that is the object of the lobbying. But since the average American pays only $7 extra, it is not worth doing anything about.

Ecomomists have a saying that rational actors know when the return to farming a crop is lower than the return to farming subsidies.

Posted by: Dan on November 3, 2007 at 6:28 AM | PERMALINK

And that's not all! (of the enormity of the crime). Because of the import quotas, soft drink manufacturers have turned to high-fructose corn syrup instead of sugar; thie syrup is a) thought to be more fattening (I'm not sue how strong the evidence is for this), and b) doesn't taste as good.

Posted by: Invigilator on November 3, 2007 at 7:08 AM | PERMALINK

Dan,

Maybe we should take away 4th and 5th amendment protections from corporations, too. Let the government search their properties without warrants and seize their assets without paying just compensation. Why not?

Seriously, the problem is not lobbying, it's the size and scope of government. If the government were not in the business of subsidizing businesses, this wouldn't happen.

Posted by: DBL on November 3, 2007 at 8:07 AM | PERMALINK
This is how a VAT would be enacted.
Posted by: Brojo on November 3, 2007 at 3:33 AM
Bull's-eye. Posted by: Gary Sugar on November 3, 2007 at 8:43 AM | PERMALINK

This isn't exactly the full accounting. I am sure there are dozens of voters in western Palm Beach County that are down with this program. They may vote in Vail or the Upper East Side, but they do vote.

Posted by: wren on November 3, 2007 at 8:51 AM | PERMALINK

At least some "conservatives" are honest and self-consistent enough to be against corporate subsidies, but the Republican party continues to support them while being stingy to everyone else.

Posted by: Neil B. on November 3, 2007 at 9:22 AM | PERMALINK

low-tech cyclist:

Corporations are artificial persons created by the State (the irony for conservatives!), and don't really *have* any rights at all - only (provisionally) what the people want to grant them. We can "charge" them as we please for that privilege, such as so-called double taxation, no right to donate politically, or to sue over libel, etc.

tyrannogenius

Posted by: Neil B. on November 3, 2007 at 9:24 AM | PERMALINK

Sugar is raised and harvested mainly by slaves. DON’T BUY IT! Honey is a better alternative.

Posted by: The Conservative Deflator on November 3, 2007 at 9:44 AM | PERMALINK

Kevin –
I believe that the ROI calculation is ROI = [(Payback - Investment)/Investment)]*100...your number is a little high...

Posted by: eho on November 3, 2007 at 10:46 AM | PERMALINK

Another sterling example of private industry making the payroll all on its own without any gummint involvement. Right up there with Halliburton and the mega-defense contractors and big pharma, the occasional megabillion bailouts for the airlines etc etc. Government is the problem--I seem to have heard that somewhere.

Posted by: DrBB on November 3, 2007 at 10:47 AM | PERMALINK

"honey is a better alternative"

So, is Agave and Stevia - But, this sugar subsidy does help the manufacturers of Metformin for diabetics.

Posted by: bert on November 3, 2007 at 11:17 AM | PERMALINK

Gov't is not the problem moron. The problem is who's running the gov't. Mindless platitudes about big gov't shows that you couldn't be any less aware of reality. It would take to long to explain but the cliff notes are I would trust big gov't over big business in all situations.

Posted by: Gandaalf on November 3, 2007 at 1:26 PM | PERMALINK

This is an example of what is wrong with suppy-side economics. The supply siders claim that the more money you put in the pockets of rich people, the more they will invest in the economy and make it grow.

But rich people don't care about the economy, they care about making themselves richer. And often the most efficient way of investing their money is to buy politicians who will get the government to funnel ten times as much cash into their pockets.

Posted by: bobo the chimp on November 3, 2007 at 3:16 PM | PERMALINK

Maybe Ken Lay is envious. I really wonder just whose stiff was in that coffin.

Posted by: Peter on November 3, 2007 at 3:22 PM | PERMALINK

A spoonful of subsidy, makes the medicine go down, the medicine go down.......

Posted by: bert on November 3, 2007 at 3:47 PM | PERMALINK

on a more upbeat note, here is this:

http://www.scientificblogging.com/newswire/khosla_ventures_and_bioecon_form_kior_inc

Catalysis-created biodiesel from cellulosic/lignitic biomass. Just in time for all that excess stover from the recent injudicious planting for corn ethanol.

Since I live in Ramona, San Diego County, CA (in the news because of the Witch fire in 2007 and the Cedar fire in 2003), I'd like to see this implemented all over the county. It's a good use for the "fuel" that accumulates between fires.

Their catalyst is "intellectual property". We'll need to follow the story to see whether it really works. Good thing that venture capitalists are backing it, don't you agree?

Posted by: MatthewRmarler on November 3, 2007 at 4:15 PM | PERMALINK

This is why governments shouldn't be in the business of propping of businesses.

Posted by: Sebastian Holsclaw on November 3, 2007 at 4:55 PM | PERMALINK

Credit where credit is due: ADM, Monsanto and their ilk spend that much and more promoting the same policies.

Posted by: heedless on November 3, 2007 at 4:55 PM | PERMALINK

Just been waiting for post like this to come out, Making money the old fashioned way? I guess we could take lessons from Bush and steal it like he does only he is a Pro at it.

Posted by: Al on November 4, 2007 at 9:28 AM | PERMALINK

Lobbying must come to an end.

Posted by: Ya Know... on November 4, 2007 at 12:28 PM | PERMALINK

If one really believes in free trade, Cuba, Brazil, or any number of other tropical countries can grow sugar cheaper than we can. If we imported sugar from Cuba and Brazil, than American farmers would be forced to shift their acreage form sugar beats, which aren’t really viable in a free market, to crops like Soya Beans which could actually be exported. Face it, in commodity crops we have socialized agriculture, centered right in all those red states. Hypocrites.

Posted by: fafner1 on November 4, 2007 at 9:18 PM | PERMALINK

Seriously, the problem is not lobbying, it's the size and scope of government. If the government were not in the business of subsidizing businesses, this wouldn't happen. Posted by: DBL

The size of the government has nothing to do with it. In fact, shrink the military budget down to a defense budget and quit subsidizing large corporations, and if you otherwise left the structure of the bureaucracy the same, departments like education, health and human services and energy might actually have decent amounts of money to work with.

Posted by: JeffII on November 4, 2007 at 11:52 PM | PERMALINK

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Posted by: wgzs ksbivn on January 16, 2008 at 1:38 AM | PERMALINK




 

 

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