Oil, Imperialism, and the Real Causes of WWI

       

            This post is the Cat’s rather long book review of A Century of War, by Wm. Engdahl:            Engdahl, a German historian, makes a persuasive case that all wars of the Twentieth Century were about oil.   He explains that the British and Americans have never been told the truth about why WWI was fought.  We are told that it was all some kind of silly mistake.  But the real struggle was over oil, and the military and industrial dominance that flows from control of that oil.  Although the fields of France and Russia were where most of the killing took place, the real prize was the oil fields of Iraq, and whether England or Germany would control those oil fields.  Forget about the Red Baron—it was Laurence of Arabia who grabbed the real estate that mattered.

            But to explain the conflicts of the 20^th century,  Engdahl needs to explain the economic order of the 19^th and how that order came into being.  So he begins his narrative with The Congress of Vienna, in 1814, at the end of the Napoleonic wars. The outcome of this congress was that Britain got what she wanted—the right to dominate the seas and with it, world trade. The concessions she granted to Austria were actually self-serving, in that it divided Europe in such a way that no one power would be large enough to rival Britain in trade or war.

  FREE TRADE-- THE ULTIMATE CAUSE OF WAR.            

            In 1815, Britain began moving toward a free trade strategy, with the adoption of the gold standard.  At that time, British industry was far superior to anything in Europe.  But to maximize that advantage, Britain had to pry open foreign markets. So Britain talked Europe into free trade agreements.  The culmination of this free trade strategy was the repeal of the Corn Laws in 1846.            Most people think that the repeal of the Corn Laws was a victory for workers at the expense of landowners.  Actually, workers lost.  Allowing duty-free importation of grain lowered the price of bread, but welfare payments were pegged to the price of bread, and so were most working class wages.  When the price dropped to half, so did income.  Also, farm laborers forced off the land had to compete for urban jobs, which depressed wages even further.  And that was the whole idea—to make British industry competitive by depressing wages.

            The worst victims of the Corn Law repeal were the Irish tenant farmers.  Irish farmers grew potatoes, but they mainly grew wheat. They had used half the wheat crop to pay rent, and lived off the other half, plus they had the potatoes.  But when the grain price dropped to half, they had to use the entire wheat crop to pay rent.  So when the potato crop failed, they starved to death.  During the worst year of the famine, they had a bumper crop of wheat, which could easily have fed everyone in Ireland.  But it was all confiscated by the landlords for rent, and millions were left to starve.            Free trade radically lowered the standard of living of every worker in England and Ireland.  But factory owners grew rich, and so did bankers and shippers.

  FREE TRADE’S SHORT-LIVED ADVANTAGE

            In the mid-nineteenth-century, free trade worked very well for British factory owners, bankers, and ship owners.  But it did not work well for British workers, nor did it work well for the countries Britain was trading with.  By 1850, some countries had begun to notice that.  So the German states had united into a customs union, or “Zollverein,” and had begun to follow the protectionist policies of Frederich List.            The Germans complained that the British free trade argument had always been a fraud.  In 1815, the British had said, in effect, “We have the most efficient industry in the world, and we have a free trade economy; so imitate us and you too will prosper.”    But Britain hadn’t always been a leader in industry, and they hadn’t always had free trade.  As late as 1690, they had trailed far behind Europe in every technology. Yet in the 18^th century, they caught up with Europe and surpassed them. But they did so by creating the most absolutely protectionist economy in history.

            During this time, with imports severely restricted, local industries had a good potential for profit, so it became profitable to invest capital in them.  British wealth was eagerly invested and re-invested in British industry, and innovation of every kind was fully financed.  It was in this protectionist environment the British industry surpassed Europe.  Then, England did an about-face and abruptly opened her markets, as a way of inducing Europe to open its markets, so as to gain maximum leverage from the technological lead they had then gained. But by the 1850s, Europeans had decided that they would gain nothing from this arrangement. Since their own factories lagged far behind the British, they would be unable to compete and would fall even further behind and eventually cease to exist.  So the Europeans opted for the protectionist strategies of Frederich List.

   THE FREE TRADE PARADOX.

            There was, from the beginning, a paradox to the British plan. It contained the seeds of its own destruction.  Through a century of extreme protectionism, they had gained a tremendous technical lead.  But to make any use of this lead, they needed open markets, and the open markets in themselves would eventually erode that technical lead. You can’t induce other countries to open their markets to you unless you open yours.  But as soon as you do this, capital investment can flow to other countries, rather than be invested locally. If some other country, i.e. India, has wages even lower than Britain, then it will be more profitable to build new factories in India, rather than in Britain.   Even if a new British factory could manage to stay in business, the wage cost would always be higher, so profit would be lower. There would always be a strong disincentive to re-investing British profits in Britain.  And there would be little interest in trying to have a better trained workforce as a way of remaining competitive, since education would require tax expenditure, and taxes would cut into profit.  But as British industry was stagnating and British workers were reduced to serfdom, banks still made profit and no one in power saw any need to change anything.

   A BOOM IN EUROPE.

            As Britain headed downward, Germany was booming.  Under the Zollverein, imports were restricted and capital flows were tightly controlled.  Any outside investment in Germany required government permission, as did German investment abroad.  German investment was directed toward improvement of German industries, and these investments were profitable, due to a protected markets price for the products of those industries.   

            German consumers paid a high initial cost for this. They paid higher prices for everything they bought, but only for one generation.  As German industrial output doubled every decade, innovation flourished, productivity increased, and wages rose sharply. The German plan also called for heavy investment in education.  The first push was for universal literacy, quickly achieved through a nationwide system of tax-supported primary schools.  They then built technical high schools and polytechnical colleges.  By the end of the 19^th century, Germany had the best trained work force in the world.  German agriculture had also improved, so that as Germany became self-sufficient in food, their workers were better fed than the English.

  And  German colleges were turning out scientists and engineers by the tens of thousands—some of them world-class.    

            In the 1870s, Britain went into a depression that lasted over 20 years.  But Germany continued to boom.  In 1850, when Germany began to shift away from free trade, they produced only insignificant amounts of iron.  By 1900 they passed Britain, and by 1910 their output was 50% higher than Britain, at 15 million tons. Between 1880 and 1900, their steel output rose over 1000%.  The situation was the same for coal, textiles, electric power, and especially for chemicals.  In fact, Germany practically invented the modern chemical industry, with the huge Bayer and BASF plants leading the way. They also took the lead in chemical research, inventing aniline dye, aspirin, and several plastics.  And the German merchant fleet went from half a million tons in 1870, to 13 million in 1909.  (And, though Engdahl doesn’t mention it, in 1903, Fritz Haber, a chemist at BASF, developed a process for extracting nitrogen from the air.   This discovery alone radically altered the balance of power.   Germany had poor soil that was never very productive without added nitrates.  Munitions also require nitrates. The only available source had been bat guano from Bolivia. This was very expensive, and Germany could never have afforded enough for high output agriculture and high munitions production at the same time.  Besides, the Bolivian shipments had to get past the British Navy.  So war between Britain and Germany would not have been a possibility.  But Haber changed all that.)

            Besides falling behind in gross output, Britain was also no longer the leader in technical innovation.  When internal combustion engines began to replace steam, it was the Germans who won the race to develop the first practical IC engine, first with the Otto engine, and then with the Diesel.  (Engdahl could also have mentioned that in 1840, Britain was producing the finest steam engines on earth. But by the 1880s, the American made Corliss Engine was so superior that British manufacturers were paying American patent royalties for the privilege of building it. )

            While all this was happening, British bankers just collected the money and re-invested it everywhere except in England, and did nothing as their country went to hell in a hand-basket.  That’s the paradox.  The only reason Britain had pressed for free trade was to take full advantage of their technical lead. But in just over half a century, free trade itself had evaporated that lead.  By the end of the century, British bankers had noticed what was happening in Germany, and it scarred them. Privately, they agreed that something would have to be done about Germany.            Using monopolistic trade practices, Britain nearly ran the whole world during the 19^th century.  And they were still firmly in charge at the end of that century.  But by then the top leaders realized that British dominance would not continue much longer if Britain continued to stagnate, while other countries, particularly Germany, continued to advance.  Yet they failed to see the problem as a British failure, wrought by their own greed and short-sightedness.  They saw it as “the German problem,” and began looking for a way to “do something about Germany.” 

                                    THREE PILLORS OF THE BRITISH EMPIRE

            Engdahl says the British Empire was based on three things:  a monopoly of gold, a monopoly of shipping, and a monopoly of certain raw materials.             To have these monopolies, you need gold, shipping, and raw materials for yourself--but you also need a practical way to deny these things to all potential competitors.  And that’s what the Boer War was about.

            When gold was discovered in the Transvaal, the British seized the area, not out of greed for gold, but to keep any other country from having it. Nearly all of the gold from the California Gold Rush was bought up by British banks to keep it off the market.  For shipping, you need a large merchant marine. But to maintain a shipping monopoly, you also need the world’s largest navy, so that you can deny shipping to any competitor, should it suit your convenience to do so.  And to maintain a monopoly on raw materials----is what the empire was for.  During the Nineteenth Century, using these three monopolies, Britain was able to dominate world trade and dominate the world
INFORMAL EMPIRE

            The Boer War was very nasty and very expensive.  So in the 1890s, the ruling class in England began talking about an “informal empire”---where they would still dominate the world, but use less military leverage, and more financial leverage.  Don’t send in the Army--send in the bankers--and threaten to cut off their credit.  The informal empire relied on a partnership between the British banks, the leaders in Parliament, the leaders of key industries, the military, and the foreign intelligence service, but with the bankers clearly in charge.  These were separate entities, but in dealing with foreign countries, they worked like five fingers of the same fist. If a foreign company applied for a loan at a branch of a British bank, any information disclosed to the loan officer would be immediately forwarded to a foreign intelligence officer, unless the bank employee was a foreign intelligence officer, which he might easily have been. 

             In many countries, if a local political leader caused problems for a British bank, the British Army would be sent in. And any time the British Army had problems gaining cooperation from political leaders, the bankers would be sent in---to cut off credit and topple the regime. Engdahl points out that this tactic, which the U.S. now uses through the IMF, was learned from the British. The whole system was glued together by control of information, gathered by the foreign intelligence service.  And a pliant parliament passed whatever laws were needed to make it work. Countries that Britain dealt with never fully appreciated what they were up against. When the so-called Anglo-Persian Oil Company was formed, the government of Iran had no idea that the company they were dealing with was wholly owned by the British government. Even Royal Dutch Petroleum was a British operation, even though they maintained the fiction of a corporate hdqrs in Holland and employed mostly Dutch workers and management.

   OIL COMES ON THE SCENE

            In the 1890s, a navy captain named Fischer released a study comparing the strategic advantage of oil-powered warships to coal-powered.  The data showed that in any war fought between coal-powered and oil-powered ships, the coal-powered warships would always lose. A steamship with an oil-fired boiler would have only slightly higher speed. But it would have twice the range.  It would also produce little or no smoke, whereas a coal burner would have a plume visible for forty miles.   A coal burner took two days to re-fuel vs. two hours for an oil burner.  And when firing up a cold boiler, a coal burner took 11 hours to come up to full steam, and took four hours to get enough steam just to move the ship.  An oil burner could be at full steam in four hours, and could have enough steam to move the ship in 30 minutes. This was not good news for England--which, as Churchill said, was “an island made of coal”---but had no oil.

            In 1904 Captain Fischer had become First Admiral Lord Fischer, and he began converting England’s fleet to oil. He also convened a committee to study how England might obtain that oil.   Since that moment, oil has been a strategic material.  From that time, British policy has focused on not only obtaining oil, but denying it to any potential competitor wherever possible. As early as 1892, Lord Curzon, later viceroy of India, had written that. “The concession of a port on the Persian Gulf to Russia would be a provocation to war.”

            In 1905, acting through a covert agent, Britain obtained a franchise on the development of     Iranian oil from an engineer named D’Arcy. This franchise had been granted to D’Arcy in 1901 by the Shah.  It happened that D’Arcy was a pious Christian. So the British agent, disguised as a priest, convinced D’Arcy that the new Anglo-Persian Oil Company was a private company run by good conscientious Christians.

   IRAQI OIL, AND THE GERMANS:

            In 1889 some German businessmen formed a plan to build a railway from Berlin to Constantinople. By 1896 1,000 km had been built, and the Turkish government had agreed to allow the line to continue to Baghdad, with plans to extend it eventually to Kuwait and the Persian Gulf.  Such a line would open to Germany a vast West Asian interior market. It would also allow German goods a short cut to India, one that did not need the Suez Canal. The British bankers, who were already extremely concerned about Germany, now became nearly apoplectic. There was only room for one great trading power. If Germany was in, Britain would be out.            But the last straw was when Germany was awarded the full mineral rights to a 20 km corridor on either side of the proposed railway, right through Mosul, which is now at the heart of the Iraqi oil region. Over the next 15 years, Britain did everything possible to stall or prevent the construction of this railway.
      BALKAN WARS

             The route would have to go through Germany, Austro-Hungary, Serbia, Bulgaria, and Turkey. One obvious thing that might obstruct the project would be any kind of destabilizing little war in the Balkans. Conveniently for the British, in the decade leading up to 1914, a series of such wars just happened to occur:  first the Bulgarian war and then the Turkish war.

             Another device for delaying the project was for England to pretend to be interested in jointly financing the project, then canceling at the last minute. The Germans had continually begged Britain to join in the endeavor, as it would be extremely expensive to finance alone. Finally, in 1913, they realized that the British had no good faith intent of ever financing the project, so a bill was introduced in the Reichstag to have the German government fully fund the Berlin to Baghdad Railway. This was the bill being debated when war broke out in 1914.

   THE FINAL SOLUTION

            Obviously, the causes of the First World War are complex.  And some historians argue that the outbreak of war was simply a mistake--a series of unfortunate diplomatic blunders.  But Engdahl claims that a full decade before the war, British government leaders had already concluded that English trade dominance could not be preserved much longer unless a way could be found to wreck the German economy, and that this would probably require a war. The secret three-way alliance between Britain, Russia, and France was in no way a defensive strategy.   If you wanted a defensive pact, it would make no sense to keep it a secret. Instead, it was more like a mouse trap.  If any one ally was attacked, it would spring the trap. The idea was to trick Germany into a war that she couldn’t possibly win, and which would cripple her economy, and then impose post-war conditions that would keep it crippled forever.   Would the British really start a war that would kill 20 million people just to maintain trade supremacy?  Well, they probably didn’t know it would kill 20 million people. They probably thought it would be one of those minor European wars that no one even remembers. With a tiny country like Germany up against Russia, France, and Britain, how could the war possibly last more than a few months?  There were many factors that convinced British bankers that the German economy would have to be destroyed if Britain were to survive. The fact that German industry and shipping would soon eclipse Britain was one factor. And the fact that the Germans were building a huge navy to protect their shipping was another.  And the Berlin to Baghdad Rail route, with a German short cut to the Far East, was perhaps the main factor. According to Engdahl, even with that, the peace might have been saved. But when the rail corridor included access to Iraqi oil--that was it. The battle lines were drawn.

            Once the war started, Britain pulled most of its troops out of the front lines in France and seized the Arabian Peninsula.  They told the Arabs that they were liberating them from the Ottoman Empire. But a secret agreement, the Sykes-Picot accord, had carved up the whole Middle East between Britain, France, and Russia, with Britain getting most of the oil. After the Bolshevik revolution, the Leninist government in 1917 found a copy of this accord and made it public. The Arabs realized they’d been duped.  T.E. Lawrence was aware of the fraud, and he wasn’t happy about it.  But he felt if it was a choice between betraying the Arabs and losing the war, he’d rather win the war.  The French were outraged that the British would leave them to fight the western front mostly alone, but they could do little but accept it.  And when the war was over, Britain already had troops on the ground over the whole Middle East, so the French accepted whatever crumbs the British chose to leave them.

            After the war, The British and French insisted on imposing crushing reparations payments, which was the final blow to a German economy already weakened by war. Wilson had objected, arguing that the German economy could never be rebuilt under such a heavy burden. Most of us have been taught that it was out of French and British ignorance that these reparations were imposed--that the incompetent French and British politicians simply did not understand what they were doing. Engdahl says they knew exactly what they were doing--crushing Germany! That had been the whole purpose of the war----to destroy the German economy.           

            How did the U.S. come to intervene?  American banks, through J. P. Morgan, had loaned tens of billions of dollars to Britain to finance the war. If Britain lost, these loans would never be repaid and all large American banks would become insolvent.  And such a bank failure would have taken down the entire American economy, along with the economy of the entire world.

Engdahl goes on to explain:

1. Why the British bankers originally backed Hitler.
2. How Britain made “debt vassals” of third world countries, as a way of controlling them, and why Kissinger used the same strategy, though it nearly wrecked the U.S. economy.
3. Why British banks backed the establishment of the state of Israel
4. Why the U.S. set up conditions to start a war in Kosovo, and sent the Army in to stop it.
5. Which former Soviet states now have U.S. air bases---and which of these states have oil.
6. Which political and corporate leaders were probably assassinated by British MI5 units.

A Keynesian Error

      A Keynesian Error, (and Why Unions are Still Needed. )           
When most people think of Keynesian economics, they think of deliberate deficit spending used to stimulate a sluggish economy and prevent the country from sliding into a recession.  That was indeed a part of the theory of John Maynard Keynes. Another part was deliberately running a surplus to slow down an overheated economy and prevent runaway inflation.  When a country runs a surplus, it removes money from the economy through taxation faster than it injects money into the economy through government spending.  Running a fiscal deficit does the opposite.

            According to Keynes, at any point in time, there should be exactly enough money circulating in the economy to purchase all of the goods which is produced.  If this situation does not occur naturally, then Keynes believed that it is the obligation of government to create such a situation, because if government does not do this—then no one will do it.  And any deficiency in circulating cash will result in some of the goods being unsold.  As unsold goods accumulates, this leads to layoffs and eventually a depression.  But if there is too much cash, that is, too many dollars chasing too few goods, the result will be increasing prices, and eventually runaway inflation.  Yet, at some point in between, there must exist a fiscal policy which would be neutral.  To most people, It seems natural to assume that this point would occur when the budget is balanced.  Originally, even Keynes assumed this.  But this would be a serious error.  The stable, neutral point does not seem to occur with the budget in balance--it occurs with a slight deficit.  But why?  For years, I have struggled to find an answer. I think I now have one.
           The first answer I saw was related to population increase.  A neutral economy might keep everyone working if the number of workers remained constant. But if the number of young people entering the workforce were to exceed the number of old workers retiring, then some expansion of the economy would be required so that the increase in the total number of workers did not radically exceed the number of jobs. So an expansionary fiscal policy, at least a slight one, might always be required.

            You may point out that our population is not expanding much anymore, so this argument has little to say about today, even though it may explain the need for expansion in the 50s and 60s.   But there are ways that an economy can be swamped with new workers without any population expansion at all.  During the 50s, most married women were “stay at home” housewives.  But between 1965 and 1980, millions sought work outside the home.  The increase in female workforce participation in the U.S. in this time period amounted to about 19 million women.   This deluge of excess labor in itself could have caused a severe depression, but since the Johnson administration tried to fight the Viet Nam War without raising taxes to pay for it, we had a wildly expansionary fiscal policy, and so we had runaway inflation instead.

            But today, the number of women working outside the home is probably as high as it’s likely to get, so why is the expansion still needed?   Well, it’s like this:  Just when the supply of labor and the demand for labor is in perfect balance, some no good bastard, (like me) will install a piece of labor saving machinery, which will cause layoffs in that industry.

             Mind you, the specific company where the layoffs will occur will probably not be the firm where the labor saving equipment was installed.  More likely, the firm with the new equipment will lower its labor cost enough to expand its share of the market, and layoffs or plant closings will occur at the firm of a competitor who could not afford to buy such equipment.  But for the industry as a whole, more labor saving equipment equals fewer workers, unless total demand increases.   And what increases total demand?  An expansionary fiscal policy, of course!

            So what is the exact relationship between increased labor productivity, and the deficit required to keep the country out of severe depression?  It depends.  What it depends on is the strength of labor unions.   During the 40s, 50s, and 60s, we had rapid increases in productivity, but we also had tough, effective unions.  So whenever a firm installed equipment which decreased the hours required for a unit of production, the unions demanded, and usually got, a raise in hourly wage.  They were simply demanding that some of the benefit of the increased productivity per worker be shared with the workers who made it possible.  Because the average wage per hour increased as the hours per unit of production decreased, there was little or no net depressive effect on aggregate demand.  Put another way, if the workers in the firm with the new equipment were paid a high enough increase in wages, this would help compensate for the reductions in national buying power caused by the layoffs from the firm which closed its doors. In fact, this increase in spending power given to workers as a group could cause the economy as a whole to expand enough to provide jobs for all of the workers who were squeezed out.  So only a very modest deficit was required to keep the economy humming along. 

            But today, industrial unions do not usually have the power to force corporations to share the benefits of productivity increases with workers.  So those workers who are squeezed out will not be rescued by the boom caused by the increased buying power of other workers.  Either the boom to provide the required jobs will be produced by substantial deficit spending, or else we will have a depression.  I know there are many conservatives who do not much care for big unions--or for big deficits either.  And they will not be happy to learn that, over the long run, they may have to choose one or the other. But remember, when you have a real depression, it isn’t just workers who go broke. 

The Car Sales Boom of 2015

                  According to an article in the Aug 5, 2012 issue of The New York Times Magazine, auto makers are betting that 2015 will be an all time record sales year.  According to Adam Davidson’s article, 2015 IS GONNA BE THE YEAR, Volkswagen just opened a new plant in Chattanooga, Honda is expanding production in Indiana, Kia in Georgia, and Hyundai in Alabama.  Why do they think a boom is coming? Do they suspect that we will all be rolling in money then?  No, they just think that income and consumer confidence are slowly improving and will continue to improve.  But mainly, they think that most of the current fleet of American cars will be un-repairable by 2015.   Today, the average American car is 11 years old.  That’s an all time record. And if 11 years is the average age, then millions of cars must be much, much older than 11 years--and sooner or later, all things die. 

                  Right now, there is enough cash and unused credit in the economy to support a much higher level of consumer spending than we are seeing.  While 10% of the work force is still unemployed and another 10% is underemployed, we can assume that 80% are still earning a paycheck--but aren’t spending much of it.   For the last three years, they have been paying down their credit card debt, making payments on their houses (so that they now have equity), and some of them are saving cash.  Most of them now have good enough credit so that they could drive home a new car at any time—but they are too scared to do it.  But when their old junker finally dies, they will certainly have to buy something.  So, can’t they just buy another old car?   From whom?  This time, when your old junker bites the dust, most of the other old cars will be ready to junk too. 

                  For those who would never consider buying a brand new vehicle, the demand  in 2015 will be for used, low mileage cars. In order to fill that future demand, auto makers are now offering attractive rental deals, figuring that in three years, there will be a strong market for the rentals being returned at that time.  

                  To me, the really amazing thing is that the average American car has been on the road for 11 years.  In the 1950s, people who bought new cars traded every two or three years. Those who bought used cars bought these trade-ins and kept them for another two or three years. When I got out of high school in 1957 and got my first job, I immediately bought my first car.  It was a 1950 Plymouth Business Coupe.  It was 7 years old, had 40,000 miles on the clock, and the body was in flawless condition.  I paid $160 for it.   A dollar then was worth a lot more than a dollar today, but that still wasn’t a lot of money.  It was about two weeks pay.  I remember marveling that it was possible to buy a car that still looked and drove like a new car--for only two weeks pay.  Someone replied, “Yes, but who would want to be seen driving a 7 year old car?”

When the GI Bill Ended

            This week, as political rhetoric, misinformation, and political cowardice climb to previously unimagined heights, it might be useful to step back and inspect the cowardice of an earlier, simpler era.   In the mid-fifties, with Eisenhower in the White House and Republicans in Congress, they ended the GI Bill.  It expired on Jun 30, 1956. 

            A few of you may be old enough to remember this program from personal experience, and most of you will have read about it.   This is the bill which allowed millions of working class veterans to obtain a college education.  This one government program doubled the percent of the population with college degrees, and the engineers, scientists, and teachers produced by this bill helped fuel the post war boom of the 50s and 60s.  We beat the Soviets in the space race with GI bill engineers.   The sheer economic benefit of this program per tax dollar spent far exceeded anyone’s expectations.  It was the most efficient investment of tax dollars in our history.  Yet in 1956, they quickly and quietly ended it. 

            For me, this was particularly disastrous.  All through high school, I had expected to go into the service for two years and then spend four years in college, just as my brother had done.  But the program ended in June of ’56, and I did not graduate till June of ’57.  Deprived of this chance at an education, I really had no “plan B.”  My father was a packing house worker with four children, and we were a one income family, as my mother stayed at home caring for my youngest brother, who was totally disabled from polio.   Though we never lacked the necessities, there was no money whatsoever for higher education.

            I began working my way through college by working a semester, then attending school for a semester. I was physics major with a minor in economics, and my goal was to become a high school science teacher or an engineer.    By the time I had two years of college, I was twenty-two, the age at which people were then being drafted.  So when I quit school to take another job, I got a letter from my draft board.  My country’s government not only failed to assist me in obtaining an education, but by ending the GI Bill without ending the draft, they actively prevented me from doing it on my own.

            I enlisted for three years to avoid being drafted for two years, because by serving an extra year, I qualified to attend a better school and serve in some kind of technical capacity. I felt it was better to be a technician for three years than a ground-pounder for two.   When I got out of the Army, I was an electronics technician, and was about 26 years old.  There was still no GI Bill, and I had no more money than when I enlisted.  To re-enter college would mean going back to working every other semester, meaning it would take till I was 30 just to get a BA, which was a little absurd.   I took the training which the Army had given me and became an industrial electrician. Mainly because of my Army experience, I was able to become an IBEW journeyman without serving an apprenticeship.   They finally re-instituted the GI Bill in 1968, and made it retroactive to August ’64, so I would have been covered. But by that time, the life choices I had made in another direction were pretty irrevocable.

            I made a better wage as a skilled building tradesman than I would have ever made as a high school science teacher.  And I was treated with more respect, and had a more interesting and creative job than I would have had as an engineer. (I draw these comparisons advisedly—I worked with engineers for forty years, and have spent forty years married to a teacher.)  But the abrupt ending of the GI Bill still pulled the rug out from under me, and I have always resented it bitterly, even though this action did not deprive me of a remunerative, rewarding, and socially useful career.  I resented it because I understood why they did it.

            By the mid-fifties, the more affluent middle classes figured out that if the GI Bill were to continue indefinitely, we would reach a point where having a BA or BS did not automatically guarantee a comfortable white collar job.  Families who had always been able to afford college realized that, at some point, their kids would have to compete with college educated blue-collar kids.  As my daughter once remarked, “No one so distrusts meritocracy as the affluent parent of a mediocre child.”  So these privileged families, mostly a Republican constituency, began writing to their congressmen, demanding that we stop educating “those factory workers’ kids.” And Congress obliged. It’s easy to see why the Republicans in Congress would do such a thing.  Screwing the working class is their “raison d’être”.   But why would the Democrats quietly go along with it?  Even with a Republican majority in both houses (and I don’t remember for certain if there was), there would surely have been enough Democrats in the Senate to mount a filibuster, at least for long enough to make the public aware of what was happening.  While the majority of Republicans may have approved of this change, the majority of American workers did not.  If you were a blue collar parent then, the GI Bill was your only hope that any of your children would ever see the inside of a college classroom.  The Democrats could have easily stopped this, but they let it quietly slip through.  Why?   Probably because these congressional Democrats knew that their own kids would be in college with or without government help—and they weren’t very happy to see their kids competing with factory workers’ kids either.  It was the most outrageous sellout of the working class in my lifetime—and it was a bi-partisan sellout.

            I have been bitter about this for 50 years, but no more.  After five decades of re-evaluation, I have decided that although the decision to end the GI Bill was undertaken for the most base and cowardly of reasons, the result may have been less disastrous than the alternative.  Untill now, I had assumed that the result of continuing the GI Bill education benefit would merely be a little increased competition for the good jobs that would accrue to those with college degrees.   But I now believe that this is a little naïve.  What would really have happened is that there would have been no good jobs—none whatsoever.  With an extreme oversupply of baccalaureate applicants for every professional position, wages for teachers would have declined to the minimum wage, and the same would have been true for engineers, scientists, and white collar professionals of all sorts.  We can be sure that this would have been the outcome, because that is precisely what is starting to happen right now.  According to an online article by Debra Leigh Scott, How the American University Was Killed, in Five Easy Steps, two thirds of all college classes are now taught by adjunct instructors, mostly PhDs, who work full time, often 80 hours a week, for wages as low as $20,000 a year.  The PhD job market has become a train wreck.  And a large and growing percentage of those with baccalaureate degrees now accept low wage jobs that could easily be done by high school graduates, yet they have a $50,000 student loan debt.  But the train wreck which we are now having would have begun 50 years ago if they had continued the GI bill.  Although it may have been necessary to artificially restrict access to higher education, I still think that the way they went about it was a bit tacky.  It was as though we were trying to get seats aboard a lifeboat.  For ten years, they let anyone on board who was a veteran.  But when the supply of lifeboats started to run out, they said, “Hold it.  First class passengers only—steerage to the rear.”   As a member of the steerage class who spent a few years clinging to a piece of flotsam, I have spent my life thinking how comfortable it might have been to be in the life boat. I now know that if they had let me on board—they would also have let millions of others on board—and the damn boat would have sunk.  It’s stupid to regret having missed a chance to drown.

            Is it preferable to be having this train wreck in the professional market happen now, instead of 50 years ago? I believe that it is.  Because, although the percentage of jobs which actually require a college education is less than the percentage of people we now send to college, it is still about twice the percentage that required these skills in 1962.  So while there are millions who do not ever use their college specific skills on the job, there are millions more who do. 

            The real problem is that we still sell higher education as job training.  One of my last electrical apprentices was a philosophy graduate.  He did not regret having spent four years as a philosophy major.  He explained that a real education must teach you how to make a living—and also how to make a life.  His college studies had taught him how to make a life, and now his apprenticeship would teach him how to make a living.    That was 15 years ago.  Since then, he has made a pretty good living—and a very good life.  And at no point have I ever regretted any of the time I spent in college, even though none of it was really a requirement for the electrical trade.  (In fact, when I applied for membership to an IBEW local union, I deliberately neglected to mention that I had ever attended college, for fear that there might be, in the minds of some members, an active discrimination against college trained people.)  But while the physics was obviously useful to me in the trade, what I valued most was the humanities, the macro-economics, and the sociology.

During the 1980s, Iowa was hit by a severe depression that lasted the whole decade. This was called The Farm Crisis of the 80s, and it wrecked all sectors of the regional economy. The number of IBEW electricians with full time jobs in Waterloo went from 300 to half a dozen.   And since the rest of the country was having a recession, although much less severe, there was really no place to go where an out of town job seeker would have a chance at a job.  Nearly half the marriages among local union members ended in divorce, and two members committed suicide.  The stress on families was severe, both financially, and emotionally.  At that time, the Reagan administration was claiming that if you did not have a job, it was your own fault—you just weren’t trying hard enough.   This was, of course, a cruel hoax, but many believed it—which only increased their suffering and desperation.  We all were destroyed financially—but not all of us were destroyed emotionally.  The handful of us who had been exposed, even briefly, to a college liberal arts curriculum rejected the Reagan hoax for the nonsense that it was.  We understood enough macro-economics enough to see that our plight was due entirely to a regional depression which we did not cause and could not cure.  We knew that our only option was to be patient, hunker down, and wait it out--and above all, not to begin blaming ourselves.  We lost ten of what should have been the most productive years of our lives—but we never lost our self respect. No matter what you do for a living, a liberal arts experience broadens your perspective in ways that can give you a better life. I have written more in these pages on this subject.  You may wish to read, Should Education be Sold as Job Training?

             I have never been to a dog track, but I have been told that the pack of dogs runs in pursuit of a mechanical rabbit which runs along a track and which is operated to stay just ahead of the dogs—close enough so that the dogs think they are going to catch it—but not close enough so that there is any chance that they actually do.  I have also been told, by a friend who raised racing dogs, that is very important that the dogs never catch the phony rabbit.  Because if any of them ever do, and they find out that the “rabbit” is just a bunch of gears and springs covered with a little rabbit fur, they won’t ever chase it again.  For four generations, Americans have been struggling to get as much education as possible, in the belief that if they could ever get the right amount, the elusive rabbit of a higher socio-economic status would be theirs.  And until now, enough have actually achieved this goal to keep the others interested.  But the pack of hounds is closing in on the phony rabbit quickly, and if they catch it, the racetrack of higher education will be deserted for a generation.   I think it’s time people be given a better rabbit to chase—a better reason to run round the track of higher education.

How Ancient Builders Moved Things

               On the cover of the July 2012 issue of National Geographic Magazine is a drawing of one of the Easter Island statues being moved.  There are ropes attached to the top of the head, being tugged at by gangs of brightly painted natives.  The caption reads:  The Riddle of the Moving Statues.   In the article, they explain that the statues might have been moved without recourse to rollers, or wheels, or draft animals.  If ropes attached to the top were used to rock the statue from side to side, and if with each stroke, the side which was momentarily off the ground were pried forward an inch or two, then over time, the statue could be moved for miles.   Well Duh!  The only riddle is why anyone would imagine that this is a riddle.  On any industrial construction job, this is precisely how a lot of heavy objects are moved today.   Barrels, transformers, tall narrow switchgear cabinets, crates--anything that is significantly taller than it is wide can be “walked” in this way.  But this article is just the last in an endless series of articles which ask, “Gosh, how could those primitive people have moved such big things without modern equipment?”  Some fools have even adduced this as evidence of assistance from space aliens.    Whether its stones from the pyramids, from Stonehenge, or Mayan temples, we seem puzzled that pre-industrial peoples could move them.

            But having spent forty years on heavy construction jobs, I can tell you that large and heavy objects can be easily moved, and still are often moved, using no technology that would be unfamiliar to any Egyptian construction worker. With levers, rollers, ropes, and a little muscle, you can move almost anything.  And once you understand how to use leverage, the amount of muscle required is trivial.

            Whenever I have tried to explain this to those outside the skilled trades, they usually protest, “But don’t you guys use cranes, and forklifts, and other heavy equipment?”   Well, of course we do--when we have that option.  We’re not insane, you know.   But such machines usually won’t fit inside a building.  And even if we are working in the open, there might not be such machines on the job site—and even if such equipment is present, it might not belong to the sub-contractor who needs to have the stuff moved.  But when all else fails, we just go back to bars and rollers and ropes, or some other late Neolithic strategy, and it works just fine.  And if these methods work for us today, I’m sure they worked equally well 5,000 years ago.

What They Won't Tell You About Farm Bills

        On August 1, Froma Harrop, in her syndicated column, discussed the Farm Bill.  I usually read her column, recommend it, and frequently agree with it. I agreed with the Aug 1 piece, and am sending her a fan letter, which is something I very, very rarely do.   And I will also provide a link to her piece.  We have had a farm program since the 30s, but at no point has your gov't  disclosed its real purpose.  I hope to remedy that oversight.
        This is a long post.  But if you don't know what the real purpose of the farm program is,  (and you probably don't, because both parties have spared no expense to conceal it from you) then it's about time you found out.
An open letter to Froma Harrop:

                                                                                                           

Dear Ms. Harrop,

                  This is a fan letter.  I rarely write fan letters, but if we are to complain about those things we object to, then it’s only fair that we should occasionally communicate our approval to those voices with which we agree.  I have read your column for years and usually agree with it. I hope that you have time to read this letter, and perhaps respond to it.  But if not, no matter.  Since I would like to encourage more people to read your column, I will post this opus as an “open letter to Froma Harrop” on my blog, along with a link to your original article.  The number of people who read it there may be far fewer than originally read your article, but it’ll be a bunch. Today you wrote about the farm program, and I agree with most of what you say—but there is so much more you could have said that I would have agreed with even more strongly.

                  I live in rural Iowa, I am a 73 year old liberal Democrat, and I’m not a farmer. (My branch of the family got squeezed out of farming even before the great Depression.) But my uncles farmed till they died twenty years ago, my wife was raised on a farm, and many of my friends and neighbors farm.  Living in Iowa, everyone I know is in some way dependent on agriculture, whether they farm or not. You mentioned that you are not happy with the farm program. You are in good company.  I have never met a person who liked the farm program. Some of my friends are Democrats, and some are Republicans. Some are liberals, and some are conservatives, some are old, and some are young.  Some farm, some work in the city.  Some are uneducated, and some have PhDs.  But none of them like the farm program.  In fact, none of them have particularly liked any farm program we have ever had since 1936.  Which is amazing, because since then, we have tried almost every possible permutation of farm policy.  And no American, rural or urban, has ever approved of any of it, except as a temporary stop-gap measure till something better could be devised.  Yet no American, if old enough to remember the Great Depression and the farm crisis which caused it, wants to go back to the totally chaotic farm markets of the Coolidge years. Contrary to myth, the depression did not begin in 1929—that was merely the year that a severe depression of the farm sector which had been growing since 1924 finally spilled over into the wider economy.  Roosevelt fully understood this, and his first project was to try to put a floor under farm prices.

                  Also amazing is the fact that the very programs which our own agriculture department has felt required to apologize for would have been judged a resounding success by the agriculture ministers in any other country. This is a long letter, but if you will bear with me, I will explain why almost every farm program we have ever had has actually achieved the objectives of experts who designed it.  The trouble is that our agricultural bureaucrats have never disclosed to the public just what our objectives actually were.  In order to gain political support, both from farmers and city dwellers alike, we have had to pretend that the farm bill had something to do with “saving small family farms.” This was never the real intent—such an outcome was never a serious possibility, nor would it have been desirable.

                  There are three things about farm policy that no one will ever tell you:

1.      1. What the real objectives of all farm programs were and why most of them were a brilliant success, but a success that we can never publically acknowledge.

2.     2.      Why the production of corn, wheat, soybeans, and cotton does not respond to free market forces, even though production of fruits and vegetables does, (and even though the families involved in grain production still have more faith in free markets and less faith in government than you do.)

3.    3. Who the intended beneficiaries of farm programs were.  (It wasn’t the farmers.)

                  First:  The original objective of the first farm program was to help end the depression by reducing the oversupply of food that had caused the collapse of farm prices and the tragic bankruptcy of farmers. This was done not just out of compassion for farmers, but because about one fourth of all goods produced in the country were produced for the farm population, because a quarter of us still lived on farms. If all farm income stopped, then all these goods would go unsold.  This fact alone could be expected to produce 25% unemployment—which it did.  And this disaster would be compounded by the legions of destitute ex-farmers flooding into cities and swamping the labor market.

                  Roosevelt understood that unless farming could be made at least minimally profitable, there would be no hope in fixing the depression.  At first the government bought up commodities and stored them.  It set up a program for limiting the number of acres planted in certain commodities. And it also tried to reduce production of pork by buying baby pigs and selling them for slaughter, thereby insuring that next year’s crop of hogs would be smaller.  (I remember a story told by my mother, of hauling the last hog to market, a 300 pound sow, and receiving only three dollars for it.)   Another central part of the New Deal farm program was the establishment of a commodity loan program.  The problem was that no matter how low the price of grain went, the farmer had to sell his crop immediately to pay his debts, and to have money to live on. But the commodity loan program worked like a big pawn shop.  The farmer, instead of selling his grain, could simply surrender possession of it, just put it in a bin with a government lock on it,  and borrow money against it at a rate set by Congress.  If, later in the year, the price climbed higher than what he owed against it, he could pay back the loan, redeem his grain, and sell it on the market.  If the price did not recover, he could just let the government keep the grain. 

                  But just as a pawn shop owner eventually ends up owning a lot of guitars, the government began to amass a lot of grain.  At first, this was not seen as a problem.  The country had just seen the dust bowl, and the idea of a general crop failure did not seem farfetched.  And going into WWII with a little stored grain was not all bad.  But by the late 1950s, it had been many years since the last really disastrous crop failure, and we had so much stored grain that we could have endured a multi-year crop failure with no ill effect. Any other country would have seen this situation as the crowning achievement of a perfect farm program. But Americans, rural and urban alike, saw it as a problem and began complaining about it.  They asked, “If we already have more grain than we could ever eat, why do we keep spending taxpayers’ money to buy more of it?” Mostly, people complained because it appeared that production and distribution of grain had become totally detached from the market.

                  Second:  Why is it that the production of corn, wheat, soybeans and cotton, has not, since WWI, responded to normal market forces of supply and demand?  When I was at University of Northern Iowa  in the late 50s, any professor in the economics department could have answered this question.  But these people were all old leftists who had gotten their degrees during the depression and did not feel obligated to prove that free markets always worked. But in the late 60s, conservative politicians who control funding for public colleges and conservative donors who control funding for private collages all felt that colleges had come under the influence of communists, and they demanded that no professor of economics ever be hired or given tenure except those who were ideologically pure, free-market conservatives.  Since then, economics, as taught in our major universities, has become more of a religion than a science. Asking a professor why the free market has not successfully controlled corn price is like asking a bishop why God has not answered your prayer. In both cases, you’ll get an answer, but it comes more from the realm of faith than science.  But I left college before this change occurred, so I can tell you the answer.

                  If you were growing lettuce, or strawberries, or celery, or any other table vegetable,  and if the price of what you were growing dropped too low, you could simply switch to growing less of that item, and more of something else.  If the price of Romaine lettuce gets too low, some of the producers switch to something else and there is less production, and the shortage forces the price up a bit. But if the price gets too high, this attracts others producers into the market--and the price goes down a bit.  This is what we think of as a normal free market process.  The market is “dynamically stable.”  Every time the price gets too high, the market itself causes more production to occur, which lowers the price. And every time the price gets too low, the market itself causes less to be produced, which raises the price.  But the market for major grains is different.

                  What makes the vegetable market stable is that producers have a choice. Anyone who can grow romaine lettuce can grow at least 50 other things instead.   But a wheat producer can grow only wheat.  In wheat country, no other useful plant can be grown, except perhaps grain sorghum.    And if you have acres that can grow corn and soybeans, that’s really about all you can grow.  Oh, it’s true that corn/soybean acres can also grow oats or hay, but these crops do not yield the massive return per acre needed to pay the interest on the bank loan that bought these acres, or pay the rent on any acres you may be renting.  Yet growing corn on top of corn, year after year is not very good for the soil.  This increases the rootworm problem, so that more pesticide is required.  And it also requires more nitrogen than if the corn crop were rotated with a legume.   So any responsible farmer (and most of them are)  will try to rotate away from corn once every few years, if he can afford the short term loss that growing an unprofitable crop entails.  Also, most farms include some marginal land that shouldn’t be in corn at all, but could be pressed into service growing corn occasionally, if that corn were badly needed. Farmers do switch between corn and soybeans in response to market price, but for that reason, the price of these two commodities usually moves in tandem, so from a financial standpoint, it doesn’t really help much.

                  But a farmer has fixed costs.  Few large farmers own their land free and clear. Generally, a farmer has a large bank loan.  His wealth is measured in terms of equity position—the present market value of the land minus what is owed against it.  In good years, the principle is paid down a bit. In bad years, more is borrowed.  It goes on like that for generations.  But the interest must be paid every year.  Since he has a specific number of dollars he must generate every year, if the price per bushel of grain drops, a farmer must then produce more bushels to generate that same number of dollars.  But if the  price of grain rises, he can then slack off and take some of his more fragile land out of corn and put it into hay, and he can rotate from corn to beans for much of his land. In short, instead of maximizing short term grain production, he can concentrate on trying to preserve the long term health of the land.   But then if the price of grain drops again, then the only way he can make the interest payment is to plow up every acre, clear up to his screen door, and put it all in corn, regardless of the consequences.  So we have the absurd situation of a higher price not causing an increase in production, but actually causing a  decrease—and a lower price causing an increase in production.  The grain market is dynamically unstable, in that the market not only fails to correct price problems, it immediately makes them worse.

                  In most businesses, when prices fall below the cost of production, some producers go bankrupt and are forced out of business.  This lowers production, which improves prices for those producers still left.  But this does not occur with grain producers.  When times are tough, farmers do indeed go bankrupt.  So many have been forced out of business that I now have a neighbor who farms 6,000 acres. But these bankruptcies did not in any way reduce the supply of grain.  Why?  Because farmers don’t produce corn—acres of dirt produce corn!  Farmers go broke and go out of business, but the acres of dirt do not.  At a farm bankruptcy sale, one of the neighbors buys the land and all the equipment, and continues planting the same amount of corn, often with the same equipment.   So if grain markets cannot ever be self stabilizing, then some kind of a scheme will always be needed to stabilize them. But what kind?  The kind of scheme you would choose will depend of what your objectives are.  Let’s look at the structure of some of the programs we tried to use—and see if that sheds any light on what we really wanted to accomplish.

                  When we set up the acreage allotment program, each participating farm reported how many acres of each commodity they grew. Then each farm agreed to plant only a specific percentage of that base in any year, with the Dept of Agriculture determining what percentage would be allotted in any given year. If you are going to have a commodity loan program, then you have to have some control on production, because once you guarantee that the government will buy grain at a set price, then there will be a natural tendency for all producers to maximize production and exacerbate the glut which the farm program was supposed to eliminate. Yet without such a guarantee, farmers would continue to go bankrupt.  The answer they chose was to say, “Yes, we will be the buyer of last resort and buy your grain at a price above your cost of production—and, no, you cannot produce all you want.”  Therein lies the reason farmers always complained about the farm bill.  The farmers wanted it both ways.  They demanded a price floor, but chafed under production controls, even though one necessitates the other.  But every snide remark you have ever read about the government “paying farmers not to grow food” comes from one fact:  There is no way the government can simultaneously guarantee a fair price for every ton produced without placing some kind of limit on the number of tons.   By limiting production, the government could usually force the price high enough that the cost of maintaining the commodity loan program was not really excessive.   But the devil is in the details.  Let’s look at exactly how they curtailed excess production.  There was no limit on the total amount of grain any one individual could market.  If a farm could squeeze more bushels per acre out the acres which that farm was allotted, that was allowed.  The government went out of their way to avoid retarding the annual increases in yield per acre that were then occurring, and still occur today. By using hybrid seed corn, farmers had already increased their yield from 25 to 40 bushels per acre, and that was one of the causes of the problem. Today, yields of over 200 are not uncommon.   By limiting acres but not limiting total production, you actually encourage investments that will increase yield per acre. Also, there was no limit on the number of farms one individual could own.  If you owned 160 corn acres and  were allowed to plant 140 acres of it,  and if you bought out your neighbor who had a similar acreage, then you could plant not 140 but 280 acres of corn.  So the farm bill went out of its way to avoid interfering with the consolidation of small units into large units.

                    The farmer today whose grandfather tilled 80 acres with horses may be using a tractor the size of a locomotive to till 8,000 acres.  With a labor saving advantage of 100:1, it is conceivable that 99% of the families still farming in the1930s will ultimately become redundant.  Yet, at the time the first farm bill was drafted, our planners fully understood that this change would eventually happen.   And they made no attempt to stop it, nor were they convinced that stopping it was a benefit to the broad national interest, nor did they believe it was even possible to stop it.   What they did attempt to do is ensure that this transition occurred in a gradual, controlled manner.  It is one thing for a family farm to be sold at a sheriff sale and its family reduced to instant poverty.  It is quite another for that family to voluntarily sell out and use the money to put all the kids through college and pay for ma and pa’s retirement. 

                  Third:  Who were the intended beneficiaries?  If the objective is to stimulate an increase in production per acre, and also stimulate consolidation that will result in more production per hour of human labor (more production from fewer farmers), then who is the intended beneficiary?  It is you, dear consumer.    If there is one word that describes our farm policy goals, consistently for 75 years, it is a “cheap food policy.”  Today, a median income American family spends less than 15 % of its gross income on food.  That’s a third of what our grandparents spent, and half of what any European would expect to pay. Even when the taxes paid to support our farm program are factored in, we buy the cheapest food of any industrialized country on earth.   In the post WWII years, this excess spending power, the money not needed for food, paid for much of the post war boom—for the cars, washing machines, TV sets, tract houses, and eventually higher education.  The one group that gained nothing from the increase in food production efficiency was the farm sector itself.   (Unless being herded off the farm and into a better life in town is in itself an improvement.)  But if you are a typical non-farm taxpayer-consumer, you have probably spent your entire adult life complaining about every farm bill you’ve ever heard of, because your government has never chosen to explain any of this to you, nor are they likely to in the future.

                   Are there things you really should complain about?  Should you complain about the fact that the government crop insurance payouts may exceed 30 billion bucks this year?  No, not really.   That’s a lot of money, but we are now in the middle of the worst drought since 1936. Over half the counties in the U.S. have been declared disaster areas.  Natural disasters are usually expensive, and compared to the 900 billion spent to save the banks, 30 billion spent on saving the food sector is chump change. If you really want to complain, you might complain about the amount of surplus food commodities which the government now hoards. So how much is that?   None!  Not one kernel of corn, grain of wheat, or ounce of cheese.  In the fifties, we had bulging grain bins from coast to coast, enough to weather any catastrophe.  But the taxpaying public bitched about it incessantly, and eventually Congress got tired of listening to it. So they gradually sold it all off, and never bought any more.  Could we ever get these grain reserves back?   Could we ever rebuild this stockpile?   Not at $8.00 a bushel.   It may take another generation before we have another chance to rebuild these stocks. Of course, part of our surplus strategy is the ethanol program.  If you wish to support the price of grain without the expense of government grain-buying programs, you do it by encouraging people to burn off 40% of our corn in their engines.  This has the effect of creating a surplus.  How so? Well, if we ever have a really severe grain shortfall, we can just shut down the production and use of ethanol.  Then the corn that had been planted and intended for ethanol, and is under contract to be delivered to ethanol plants, can simply be diverted to other uses.  This would, under most circumstances, have the same effect as a surplus.  (And under other circumstances, it would not.) 

                  But much has been sacrificed on the altar of cheap food.  If you want to complain about food policy, complain about the hundreds of chemicals that can be legally added to our food.  None of this stuff has ever been tested for long term health effects,  and a lot of it probably isn’t very good for you. Yet we gobble it down every day and feed it to our children.  Is it a coincidence that the point where the curve of American obesity really takes off, the mid 80s, is exactly the time they began adding significant amounts of high fructose corn syrup to our food supply?  And that’s just one substance.  Read the label on any package of processed food.  You’ll find a long paragraph of chemical terms you can’t even pronounce unless you have a PhD in chemistry.  My rule is: “If I can’t pronounce it, I don’t eat it.”  Forget about the GMOs; if you want to complain, complain about the chemicals.  And then there is the issue of stewardship of the land.  Many of the farm programs in recent years have contained conservation requirements that worked, and the Conservation Reserve Program was an excellent program.  But Tea Party Republicans in the U.S. House would prefer a bill stripped of any conservation elements whatsoever.  If you want to get involved, here’s a good place to start.