I was surprised recently to learn about an ad put out by a group called “Farmers for Free Trade,” a 501(c)(4) non-profit “dedicated to supporting and expanding export opportunities for American farms and ranches”
apparently it is being run on FOX and MSNBC in the morning, during “Fox & Friends” and “Morning Joe,” respectively, so the “Farmers for Free Trade” must be doing pretty well for themselves; the group was co-founded by former Sen. Max Baucus (D-MT), and is supported by agricultural lobbies like the Farm Bureau, the National Corn Growers Association, the National Association of Wheat Growers, and the National Pork Producers Council.
On March 1st, the executive director of Farmers for Free Trade (FFT), Brian Kuehl, issued a press release on the prospective metal tariffs which read, in part: “Everyone agrees we need to hold our trading partners accountable, but taking unilateral action to raise tariffs carries harmful unintended consequences. The agriculture sector knows from experience that our ag exports are the first to be hit by retaliation. Whether it’s our chickens in retaliation for tariffs on Chinese tires, or U.S. apples and wine exports as a result of a Mexican trucking dispute, historically, agriculture always has the biggest target on its back.” On March 8th, the organization released a shorter statement, which concluded: “In the weeks and months ahead, Farmers for Free Trade will be leading the fight to show the harmful impacts of these tariffs for our farmers and rural communities.” Perhaps no one will begrudge them their activity; lobbying organizations exist to promote their own interests, after all, not the common weal.
The ad features a woman named Michelle Erickson-Jones, from Broadview, MT, who identifies herself as “a fourth-generation Montana farmer”; she is not otherwise identified in the ad—perhaps from a desire to portray her as a typical farmer—, but she currently serves as the president of the Montana Grain Growers Association. Ms. Erickson-Jones, speaking almost as rapidly as one of President Trump’s sons, states: “We depend on free-trade policies to maintain our export markets. Crops that we grow here on this farm are exported across the globe. Policies that restrict trade would be devastating for farms like ours”; the ad ends with her pleading “Mr. President, protect free trade and keep our agriculture economy strong.”
That is the same thing as asking the President to protect the “unicorn in the garden,” to employ the memorable phrase used by Commerce Secretary Wilbur Ross last January at a roundtable in Davos; he referred to a study of more than 20 products which showed that the Chinese had higher tariffs on all but two, and the EU on all but four: “Before we get into sticks and stones about free trade we ought to first talk about, is there really free trade or is it a unicorn in the garden?” It is also worth noting that the EU and China have been wrangling at the WTO over the recognition of China as a market economy (which would restrict recourse to anti-dumping measures), and that U.S. Trade Representative Robert Lighthizer has weighed in on the side of the EU. If the group really wanted to support free trade, they would be running the ad in China or the EU; it is obvious that its members don’t care about free trade, but only about their own export markets; it would certainly be more honest if they billed themselves as “farmers for ag exports.”
We all see things from our own point of view. Ms. Erickson-Jones is a farmer, and sees things from the farmer’s point of view; she is probably not more self-centered or selfish than the average person; she’s a mother of two kids, and could be a nice enough individual. And you won’t find me saying that it is wrong to look out for No. 1. Nevertheless, the federal government takes such extensive action on behalf of farmers that any farmer depicted arguing against government action to protect domestic manufacturing is bound to look deeply hypocritical. Ms. Erickson-Jones herself seems to have collected a total of $36,877 in commodity subsidies through 2016 ($12,719 in 2013, $4,544 in 2015, and $19,614 in 2016); by crop she received a total of $23,009 in wheat subsidies, $10,803 in corn subsidies, and $3,065 in barley subsidies. Now, most people, I think, will not fault her for getting hers while others were getting theirs, and that leniency will be especially pronounced among those who realize that some of those getting theirs got substantially more, since federal subsidies go disproportionately to the largest farms; to my way of thinking, however, she crosses the line and becomes a hypocrite when she opposes government action to combat illegal practices harming the aluminum and steel industries. And the sort of help in question is objectively superior to some of what is done to help farmers: unlike agricultural subsidies, which of course add to the deficit, the tariffs don’t cost the government a dime; quite the opposite, they add to government revenue, to the extent that metal subject to them is still imported. To be clear: farmers have to operate within the system as it exists, and I don’t criticize them for taking advantage of the help which is available to them, but I do criticize their self-absorption if they sit around a banquet table, trying to elbow everyone else out, and start squawking when they notice that a couple of scraps for the steel worker and aluminum worker have fallen to the floor.
Last October, Agriculture Secretary Sonny Perdue announced more than $9.6 billion in payments under Agriculture Risk Coverage, Price Loss Coverage, and the Conservation Reserve Program (about $8 billion under ARC and PLC, about $1.6 billion under CRP). We have grown so accustomed to heavy government support for the agriculture sector, and to complete government neglect of metal production, that the very slightest effort by the government to foster the latter eclipses the former. There is no “steel insurance” or “aluminum insurance,” like “crop insurance,” whereby the government cuts checks to the owners of or the workers in the mills; I’m sure the steel and aluminum executives scratch their heads in wonder at the success of farmers in getting their losses socialized. And consider for a moment the Renewable Fuel Standard, which requires refineries to blend conventional ethanol and other biofuels into gasoline and diesel supplies; just imagine if there were something comparable to shore up prices in the metals sector: a law mandating that manufacturers of certain products replace 10% of their carbon fiber, fiberglass or even wood or glass with steel or aluminum! Then they might have a right to complain; as it is, manufacturers already using steel or aluminum are only being asked to stop profiteering on subsidized and dumped Chinese metal.
Neither the press releases nor the 30-second ad of the FFT addresses the issue of national security, although the steel and aluminum tariffs are being implemented under Section 232 of the Trade Expansion Act of 1962, which gives the President authority to restrict imports which pose a threat to national security; in fact, the ad does not explicitly use either the word “steel” or the word “aluminum,” nor even the word “tariffs,” contenting itself instead with the vague observation “we’re very concerned about the trade policies from Washington”; perhaps the group thought it would be less confrontational if the ad does not seem to be attacking workers in the steel and aluminum industries, or perhaps they simply wanted an all-purpose ad which could be run in opposition to other attempts by the Trump Administration to remedy abusive trade practices.
The President, though, cannot risk the closure of aluminum and steel mills where military equipment is produced, so the tariffs are here to stay, at least as long as needed to increase capacity in each industry to 80%, regardless how much money the agricultural lobby sinks into the ad; they will apply to Chinese metal, even when it is transshipped by “good friends” like Mexico and Canada, provided that it can be identified; although they might be used as a negotiating tactic in the cases of NAFTA and the EU, the rates applied to other countries could increase, if exemptions of countries or companies are so numerous that the goal of reaching 80% of capacity in the domestic industries is endangered. The President knows that U.S. agricultural exports totaled $140.5 billion in FY 2017, with a trade surplus of $21.3 billion, and that that level of exports supports over 1.1 million jobs, if the USDA is right to estimate that every $1 billion in exports supports 8,000 jobs, but you cannot put a price tag on national security; therefore, if the steel and aluminum tariffs were to have a negative impact on agricultural exports, that would be a price which Ms. Erickson-Jones and the rest of the country would have to pay.
The implicit assumption of the farm lobbies is that any attempt to protect good-paying manufacturing jobs will hurt ag exports, and their conclusion is that blue-collar workers should suffer so that their members can prosper. Put another way: the farm lobbies don’t believe that “there’s enough for all people to share,” in the words of the song co-written by Sen. Huey P. Long (D-LA), “Every Man a King”
Why weep or slumber, America,
Land of brave and true?
With castles, clothing and food for all—
All belongs to you.
Ev’ry man a king, ev’ry man a king—
For you can be a millionaire.
But there’s something belonging to others—
There’s enough for all people to share.
When it’s sunny June, and December, too,
Or in the winter time or spring,
There’ll be peace without end,
Ev’ry neighbor a friend—
With ev’ry man a king.
The problem with the efforts of Huey Long was one which still vitiates most of the thinking about wealth and poverty on the left; he was, as it is, upset by disparities of wealth, and his solution, like theirs, was to redistribute wealth, which was conceived of as fixed or static. The farm lobbies are not upset by disparities of wealth, as long as the disparity is in their favor, since their members assume that there really isn’t “enough for all people to share,” and therefore, like the left, that it is necessary for someone else to do worse in order for themselves to do better; for Huey Long, however, demagogue though he was, it can at least be said that he planned to rob from the rich and give to the poor, whereas the farm lobby, less compassionately, wants to keep poorer groups (steel and aluminum workers) from prospering in order that richer groups (farmers and landowners) might to continue to prosper.
President Trump, on the other hand, seems to believe that distressed segments of the economy should be helped by creating new wealth, not by redistributing old wealth; to use an analogy: while liberals are focused on more evenly dividing an existing pie (the current economy or national wealth) in the name of “fairness,” the President is taking a conservative approach by focusing on getting a bigger pie (growing the economy), so that everyone can have a bigger slice. In terms of international trade, he is simply not accepting the notion that the price we have to pay as a country for good-paying manufacturing jobs is a decrease in ag exports; other politicians, Democrat and Republican, could be bullied in such a fashion, but Donald Trump is not going to be bullied; he is going to use our economic power and make it clear to miscreants that the price they have to pay for access to our market is access to their markets; they will either import the same amount of agricultural goods as before, or even more, despite the steel and aluminum tariffs, and they will import an increasing amount of American manufactured goods as well, so that our trade deficit with other countries—whether unfriendly or friendly—either decreases or is eliminated. It is simply not true that it is necessary for us to sacrifice steel and aluminum workers in order to keep ag exports steady, and for the United States of America to have the trade profile of a Third-World country, exporting agricultural products and importing manufactured goods. Previous Presidents have not leveraged our economic power; the entire world wants access to our market, and under President Trump, the entire world will continue to have it, but on our terms, not on theirs. That the President knows what he is doing—knows how to leverage our economic power to get better results—has already been demonstrated: he put in prospect for China better trade terms if they leaned on North Korea to denuclearize, and now those talks are scheduled to take place before the end of May; any of his three immediate predecessors (Bill Clinton, George W. Bush, Barack Obama) could have done the same thing, if they had had the brains and the guts which Trump has.
Finally we have someone in the White House who is not beholden to the multinational banks and multinational corporations who have run this country into the ground for decades; the cheap, timeserving politicians of both parties in the Congress, if they cannot think of any constructive action which they might take to enlarge the discretion of the President in this regard, should at the very least stay out of his way while he negotiates to bring our trade back into balance. It’s time to start singing a new song:
Ev’ry man can win, ev’ry man can win—
For you can be a millionaire.
But there’s something belonging to others—
There’s enough for all people to share.
Trump has the farmer’s back, and the worker’s, too,
Whate’er the odds, through thick and thin,
Prosperity without end,
Ev’ry neighbor a friend—
Yes, ev’ry man can win!
