Tuesday, August 28, 2018

Trump Takes Another Step Toward Hooverian Economics

By Robert Wenzel

I warned this would happen.

The Trump administration has just pledged to pay farmers $4.7 billion to offset losses from trade disputes with foreign buyers of U.S. agricultural products, reports The Wall Street Journal.

Agriculture Secretary Sonny Perdue said the payments would help protect farmers from “unjustified
tariffs” some nations have applied in response to President Trump’s trade war. China, Mexico, the European Union and other trade partners have levied tariffs on U.S. farm goods from soybeans to pork to apples.

Expect more such payments to be announced.

Farmers have been awaiting the details of the up to $12 billion in aid the U.S. Department of Agriculture promised to provide them in July.

The current announcement is mostly about soybeans.

The National Corn Growers Association estimated lower prices as a result of tariffs will cost growers more than $6 billion this year. The direct payment program allocated $96 million for corn growers.

“This plan provides virtually no relief to corn farmers,” said Kevin Skunes, the association’s president and a North Dakota farmer.

Soybean farmers are in line to get roughly three-fourths of the direct payments, or $3.6 billion, followed by producers of pork, cotton, sorghum, dairy and wheat.

Pork products will benefit the most from a second form of assistance, which will buy up excess commodities—$558 million out of an estimated $1.2 billion. The USDA will also purchase roughly $90 million each of apples, dairy products and pistachios among the more than two dozen products targeted.

I wrote in June:
Prediction: Trump is going to get more Hooverian.

As Secretary of Commerce, Hoover was involved in introducing subsidies for farmers. I expect Trump to initiate subsidies for farmers and other groups hurt by retaliatory tariffs.

...and so the Trumpian planned economy will continue to accelerate.

"Every step which leads from capitalism toward planning is necessarily nearer to absolutism and dictatorship."- Ludwig von Mises, Omnipotent Government.
Robert Wenzel is Editor & Publisher of
EconomicPolicyJournal.com and Target Liberty. 

More about Wenzel here. 

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