by Pat Heyman | Jan 17, 2010 | Uncategorized
It May Be Financially Irresponsible to Pay Your Mortgage
by Karen De Coster
Recently by Karen De Coster: Revisiting the Swine Flu Lies and Hysteria
Roger Lowenstein has written one of the best articles I have read on the topic: walking away from your house. The prominent author and journalist published a January 7, 2010 article in the New York Times with the headline, “Walk Away From Your Mortgage!” Lowenstein acknowledges that it may be financially careless for homeowners who are upside down on their mortgage to keep paying it in order to hang onto a fantasy of ownership and avoid the shame of default. In this article, Lowenstein’s subject is the borrower who can afford to pay the mortgage but considers opting out for reasons of financial benefit and survival. This is referred to as a strategic default.
Lowenstein’s thesis is exactly what I have been preaching to family, friends, and acquaintances for some time now. Many Americans are, by nature, very meticulous about paying off their debts and honoring contracts. Nevertheless, when they are stuck with a home that is worth far less than what they owe, the home becomes a noose around their neck, a pecuniary black hole, and a drag on household cash flow. It becomes what I call exorbitant rent. If the difference between the mortgage balance and the current market value is substantial, the homeowner is throwing away money on a home when it may take him years of mortgage payments to recover enough value to revert to a state where equity crops up. Thus the homeowner is essentially throwing money into an unpredictable black hole. If the mortgage payment is higher than a rent payment would be on a similar home, that adds the burden of overpayment for the “privilege” of being a quasi-homeowner paying high rent on a house you may never own, unless you plan to stay put in the house for a long time. If the mortgage is lower than an equivalent rental, there may be some advantage to hanging on for the short term, but that would depend on the condition of the house and various maintenance factors, as well as the additional costs of ownership.
After all, ownership requires payment for taxes, higher insurance (higher than renter’s insurance), and maintenance/replacement costs. I have gone over household budget/cash flow analyses with a few friends and family, and I have shown them the astounding cost differential between ownership of their “underwater” mortgage and renting a similar home. Yet people still aren’t willing to give up the cash-eating arrangement. Though I can spot the financial detriment, as a Certified Public Accountant I am very wary about giving direct professional advice, except to family – they know, perhaps too well, that I am never short of “pointers” for their financial situations. I refrain from telling people they “should” do this or do that because I don’t want to be blamed for someone’s unhappiness or other quality of life issues that may be the result of complex decisions. But I do try to make clear the alternatives to standing on the deck of a sinking financial ship. As Lowenstein remarks:
And given that nearly a quarter of mortgages are underwater, and that 10 percent of mortgages are delinquent, White, of the University of Arizona, is surprised that more people haven’t walked. He thinks the desire to avoid shame is a factor, as are overblown fears of harm to credit ratings. Probably, homeowners also labor under a delusion that their homes will quickly return to value.
I agree on the second point – almost all people are delusional and think the post-bubble housing crash is the aberration, and that the housing market will return to normal one day in the (near) future. They do not understand that the bubble was the aberration, and those days are over and dead. They thought the bubble prices were the new norm. And the strange thing is that they liked it. They delighted in receiving a high price for their home, and never seemed to be able to factor in the reality that they would also pay a higher price for another home. Not understanding the bubble is a principal part of the problem in getting those people to understand the whole of their financial problem. Also, people do indeed desire to avoid default and they fear the effect that a poor credit rating will have on their future. I agree with Lowenstein that most credit rating fears are a bit overblown, and besides, it is far less problematic to absorb the short-term trauma from a shoddy credit rating and radically improve your long-term financial prospects while shedding the iron monkey on your back.
The other snag is that most individuals, no matter how "educated" they may be in the college sense, are financially ignorant and cannot conduct basic analyses of their own financial matters, let alone weigh the costs and benefits of a complicated scenario. There are plenty of talented and smart people who don’t have the skills to sort out budgets, expenses, debt, and investments. That is not a criticism – it is just a fact. Furthermore, add to that the fact that the boom years produced rabid consumerism, and keeping up with the Joneses become a core family value for so many debt-worshipping Americans. The gotta-have mentality destroyed what common sense that would have otherwise emerged.
Enter the typical, boom-period mortgage representative, a guy who also knows nothing about business, finances, or accounting. He was most likely hired as a short-termer, with no experience in the business – he was hired for his sales ability and arm-twisting skills. Or he may have a college degree in finance, accounting, or economics, but washed out trying to make it those competitive fields. He was hired to help the mortgage company keep up with the demand generated by the housing bubble, and he knows nothing more than what he was taught in his introductory training that focused mostly on seduction skills and reaching sales goals. Those people sense the gotta-have desperation and they pounce on the vulnerable would-be borrower. ARMs and interest-only loans became a new middle-class norm, which amounted to certain disaster for the person who became a homeowner during the bubble. The natural human instinct for handling undesirable affliction is to get rid of the offending parasite and make things right as quickly as possible. This is your moral duty to yourself, your family, and your future. Moreover, Lowenstein makes this point:
Former Treasury Secretary Henry M. Paulson Jr. declared that "any homeowner who can afford his mortgage payment but chooses to walk away from an underwater property is simply a speculator — and one who is not honoring his obligation." (Paulson presumably was not so censorious of speculation during his 32-year career at Goldman Sachs.)
Federal officials like Paulson, along with others who have in interest in keeping you hogtied to the sinking housing market, are trying to depict struggling Americans as irresponsible scoundrels who are rashly walking away from their commitments. Various political special interest promoters and academics that pontificate from outside of the real world that the rest of us live in are reflecting that view. George Brenkert, a business ethics Professor at Georgetown on the Potomac, was quoted in the Wall Street Journal as saying "borrowers who can pay – and weren’t deceived by the lender about the nature of the loan – have a moral responsibility to keep paying." A follow-up quote from the article states this:
A standard mortgage-loan document reads, “I promise to pay” the amount borrowed plus interest, and some people say that promise should remain good even if it is no longer convenient.
But, like Lowenstein says, the borrower signs a promissory note and "the contract explicitly details the penalty for nonpayment — surrender of the property. The borrower isn’t escaping the consequences; he is suffering them." Lowenstein also places some blame, as he should, on those folks in the mortgage industry who took full advantage when government-created bubbles made their businesses bloom, and now they are on the defensive when debtors are looking to escape the wrath of the bloody aftermath.
But to put the onus for restraint on ordinary homeowners seems rather strange. If the Mortgage Bankers Association is against defaults, its members, presumably the experts in such matters, might take better care not to lend people more than their homes are worth.
In the same Wall Street Journal article noted above, John Courson, Chief Executive of the Mortgage Banker’s Association, lowers the boom on the bogged-down buyer and asserts the guilt game:
But it isn’t just a matter of the borrower’s personal interest, says John Courson, chief executive of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: “What about the message they will send to their family and their kids and their friends?”
This is the same corporate state-special interest slimebag who lobbies feverishly for favors from the feds so his mortgage industry clientele can profit handsomely and the taxpayers can foot the bill by bailing out companies that fund his industry, such as Fannie Mae and Freddie Mac.
Then there’s Megan McArdle over at The Atlantic – someone who has the financial wherewithal of a lobotomized cadaver. Megan rants about deadbeats who don’t pay their debts and instead choose bankruptcy as an easy way out of an accumulation of bad decisions. Indeed, my article and blog archives are loaded with invectives on this very same topic – few people have written as much criticism as I have about how hare-brained, high time preference Americans have gone wild on consumer spending and debt, thanks to the Federal Reserve’s funding of the credit bubble and other economic factors that all trace back to Big Government and its corporate state compadres. I have never absolved these impetuous debtors from their role in perpetuating their own problems because they could have chosen to abstain from the spending frenzy mentality.
However, Megan cites the same Wall Street Journal article, and she is confused because she doesn’t draw the distinction between those who go on a reckless debt-o-rama spree and walk away from the financial carnage, and mortgage debtors who are underwater due to the breakdown of a completely unsustainable economic system. If McArdle had any business sense, she would understand that strategic defaults are a conventional business practice. Throwing good money after bad just isn’t an option, either for a corporation trying to maintain a brisk bottom line or an individual who needs to keep his financial house in order. Daniel Gross recently wrote an article in Newsweek titled "Default Nation," where he discusses this very fact, including the mention of recent strategic defaults by Stanley Morgan, KKR, and Six Flags, a company where Bill Gates has 11% ownership. Mr. Gross writes that it is surprising that, given market conditions, there aren’t more consumer defaults.
Let’s return to Roger Lowenstein, where he reveals, "We are all economic pinballs, insensibly colliding for better or worse." What Lowenstein doesn’t say is that individual mortgagers are not responsible for the credit bubble, the housing bubble, or the unsustainable and corrupt federal policies that encouraged and fueled the speculative boom and bubbles. The economic meltdown and ensuing fallout in housing values has been a recipe for financial disaster for many households, and each individual or family must commence a course of action that is sensible, sustainable, and provides for long-term financial security and growth. It is not unethical or immoral to relinquish a strangling and injurious debt load on a house that ties you down in favor of mobility and a healthier household financial plan. In fact, it is state worship and economic ignorance that fuels the notion that you, as a victim of the state and its corporate state special interests, have some obligation to ruin your life and bend over to "take one for the team."
If all factors point to your best option being a default, then walk away guilt-free and boost your cash flow and future prospects, because ultimately, you are responsible for you, and none of these babbling naysayers are going to bail you out or come by to help clean up the mess. Walk away, free yourself from unnecessary bondage, and let the giant banks sort out the mess that they helped to perpetuate and swell.
January 11, 2010
Karen DeCoster, CPA [send her mail] is a libertarian accounting/finance professional and writer. She was writing about rabid consumerism and debt, the housing bubble, corporate bankruptcies, boom-period business malinvestments, and the economic crack-up long before it was fashionable. She likes to occasionally look through the piles of hate mails from those times while sipping on an Oregon Pinot Noir. This is her LewRockwell.com archive, her Taki’s Magazine archive, and her Mises.org archive. Check out her website and blog.
Copyright © 2010 Karen DeCoster
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by Pat Heyman | Jan 17, 2010 | Uncategorized
Can the Government Keep Us Safe?
by Andrew P. Napolitano
Recently by Andrew P. Napolitano: What Is a Right?
What a week we have all just endured! While the Democrats were re-writing the federal takeover of healthcare behind closed doors, the public face of the federal government was fixated on denying and then explaining all the gaps in its intelligence gathering. The Obama administration has been finger-pointing over who in the government let a murderous thug on a plane in Amsterdam that he tried to explode over Detroit. First, the government said that the system worked. Then the President said it didn’t. Then he announced that the intelligence communities and security people would start to talk to each other so the bad guys could be kept out. Weren’t they supposed to be doing this all along?
At Newark Liberty Airport last Sunday, a TSA agent left his post, and a young man walked past it to kiss his girlfriend good-bye. Then the young man turned and left the secured area and left the airport. So far no harm, no foul. But because the government’s surveillance cameras in the airport didn’t work, the feds panicked and ordered over 10,000 passengers to leave the terminal, go out into the 15-degree Newark, NJ cold at night, and then re-enter the airport. Flights were delayed and missed, kids did not get to school on Monday morning, and soldiers were listed as AWOL. All because the government overreacted to a kiss. This humiliated the feds: New Jersey’s 86-year-old senior Senator Frank Lautenberg demanded that the guy who kissed his gal be hunted down and prosecuted because of the chaos he caused. He caused? Let’s see; the government has cameras that watch us every time we scratch our noses, and when those cameras don’t work, the government blames the person whose picture it was supposed to be taking? Come on.
All this, of course, brings out the false argument of liberty versus security. And we hear it from the Progressives that the government must take our freedoms in order to keep us safe. That’s hogwash. Freedom is our birthright. It doesn’t come from the government; it is part of our humanity. America is the only country in the history of the world dedicated to the truism that we are endowed by our Creator, as Jefferson wrote, with certain inalienable rights, and among these are life, liberty, and the pursuit of happiness. The government has forgotten basic civics: “Endowed by our Creator” means that our rights come from God and not from the feds. “Inalienable” means that we and our freedoms cannot be separated, unless and until we are convicted by a jury of violating someone else’s rights. What is the value of being safe if we are not free? Did our forefathers flee the kings and despots of Europe and come here to be safe? Did Patrick Henry say "Give me safety or give me death?" Here is the mistake that the Big Government crowd wants to thrust upon us: They want to balance liberty and safety. There is no such thing as balance when it comes to freedom. We will not trade freedom for anything, or balance it against anything, and we certainly won’t give it up to the TSA.
Can the government keep us safe? I don’t think so. Airline travel is safer today because pilots have guns, cockpit doors are like bank vaults, and the passengers have become courageous. All this was done by individuals in the private sector, not by the government. I’ve said it before and I’ll say it again, if the feds had not stripped us of our natural rights to keep ourselves safe – by keeping and bearing arms – 9/11 would never have happened. How about letting the airlines decide who gets on the planes, rather than a TSA worker who leaves his post? When industry competes for your business, you fly where you want to go, you get there in comfort and safety, and you do all this at a competitive cost. When the government runs the show, you stand in the cold night air for six hours because of a kiss. The government can’t deliver the mail, it can’t operate surveillance cameras at an airport; it can’t pay back its debts; it can’t tell the truth. That would be the same government that wants to manage your healthcare.
America, do you see what happens when we rely on the government too much? It gets authoritarian and we get weak. Our children grow to expect from the government what we once did for ourselves. Government is a fearful master. It is not faithful to us; it is not truthful to us; it can’t produce for us. It doesn’t obey its own laws; it doesn’t keep us safe; and it won’t leave us alone. It is mortgaging our futures, raising our taxes, and treating us all like children.
What to do? Challenge it at every turn. Expose it to friend and foe. Educate all you know about what you see and hear every day on this show. And return no one to the government who has stolen your freedom.
And one other thing: The God who gave us life also gave us liberty. He loves us. Praise Him from the roof tops, and ask Him to save us from a government that is out of control.
January 11, 2010
Andrew P. Napolitano [send him mail], a former judge of the Superior Court of New Jersey, is the senior judicial analyst at the Fox News Channel. His next book is Lies the Government Told You: Myth, Power, and Deception in American History, (Nelson, 2010).
Copyright © 2010 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit is given.
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by Pat Heyman | Jan 16, 2010 | Uncategorized
by Pat Heyman | Jan 3, 2010 | Uncategorized
Just Stop Teaching Reading
Written by Linda Schrock Taylor
Monday, 28 December 2009 08:54
Hear ye, hear ye! The 2009 award for the most Stupid Educational Fad goes to… all schools where spelling is no longer being taught; with special “Fickle Finger of Failure” prizes to administrators, school boards, state school boards, departments of education, and all others who believe that teachers should officially “stop teaching spelling”… as if trashing of the last vestige of actual academic instruction in America should be celebrated.
I suggest that in the last 50 years, American public schools have not taught enough spelling to even make a “stoppage” worthy of media coverage. Instead of making announcements, these criminals should sign confessions down at their local police departments. Frankly, schools have long been attempting to hide their educational crimes of omission, and of teacher inefficiency, by forcing students to memorize lists of spelling words for Friday tests.
The schools should put an end to the counterproductive foolishness that passes for “reading instruction” and use their time instead to only teach spelling. My mother (who taught school until she was 72 years old) is accurate when she states that “those children, who do learn to read in today’s schools, learn in spite of the instruction.” Nothing else accounts for the few children who escape, actually literate, from the ever-deepening rot that has taken over academics in this nation. Massachusetts had a literacy rate of 98 percent until … they opened public schools. Their literacy rates have been in freefall since then, and the other 49 states blindly leaped for the band wagon … but to their academic deaths, as well.
Teacher-training (LOL) professors; school administrators; local school boards; state school boards; state and federal Departments of Education, I need your attention. The language of America — English, for those who have forgotten — is written in a CODE and the only way to learn how to read and write anything written in that CODE is to first learn how to SPELL. Musical performers and creators learn to read and write the Code in which music is written. Dancers and choreographers learn to read and write the Code in which movement can be recorded. Stenographers used to learn to read and write shorthand notation which also is a Code. When schools lost the teachers who understood the importance of, and how to teach spelling — real education came to a standstill. Schools no longer are capable of teaching students how to Encode, or how to Decode, the Code In Which English is Recorded.
A moment, please, to defend young teachers because they have lost out twice—once in the K-12 schools of their youth, and again with the nothingness that they learned in teacher-training programs. They paid tuition to be trained as effective teachers. (Can anyone imagine an accountant who cannot account receiving a college degree?) Unfortunately, college professors are usually so busy theorizing or developing new fads to foist upon the mis-education culture, that they have little to teach; and almost no focus from which to teach. Furthermore, they have little-to-no-effective teaching experience of their own because, frankly, teachers learn more in the first three to five years of teaching than they get taught to their students. To “train” future teachers, one only is expected to have a research PhD and 3-4 years of teaching. (Remember, those first teaching years are only partially effective.)
For teachers who have taught more than five ineffective years but still carry on as usual; refusing to acknowledge and learn missing skills; ignoring blatant failure and suffering students — shame on you. There are libraries. There is the Internet. There is Spalding International. There are my articles. There is no excuse for stubbornness and laziness. Such teachers spend their days NOT teaching children to read, spell, and learn, but happily collect unearned paychecks and ask for raises. They are destroying lives with each day of fraudulent instruction.
Our jails and prisons are filled with 1st-3rd grade readers. Our welfare rolls are filled with the same. How can we expect adults to be fully self-sufficient and lead families with wisdom, in a technical culture, if our schools cannot and will not teach them to read, write, spell, and learn knowledge? If America’s educational mess is not cleaned up ASAP, there will be no future for our nation; for our people; for our Rights and Freedoms. We must start changing local policies today. My mission is to teach Michigan to read; to again retake the leadership position that it held back when I was in school in the Sixties; back when Michigan and California led the nation. Please join me.
Learn to teach systematic, methodical encoding of the English language. The term for that is “Spelling.” If schools must drop anything, they should drop reading lessons in order to more perfectly teach spelling lessons. Buy The Writing Road to Reading by Romalda Spalding. Order a set of the Spalding phono/gram (Greek for sound/write) cards. Learn how to carefully teach students of all ages to Encode (put into code = Spell) and Decode (take from code = Read) English. Use precise pronunciation and expect the same from your students of all ages.
Why are Hispanic and black children failing to learn to read and spell? They lack precision with their pronunciation of English! There is too much of a breakdown — a disconnect—when a child says “baf roo” while trying to write or read the word “bathroom.” We do children great harm when we accept dialects and slang as a substitute for Standard English. The Code for English is based upon Standard English. I explain to my students that in my home we call whipped cream, “creama-whippa” because that was how my very deaf brother pronounced the name for that product. However … never do we go to the grocery store and ask for Creama-Whippa! Never do we expect the people of America to accept our mis-speak as real English. Dialect is fine for use within family circles and subcultures but when teachers, parents, and the nation allow dialect and slang to take the place of properly-spoken English, educational failure is the Expected Outcome! Politically Correct has turned schools into crime-filled places. PC > CP — Crimes against Pupils, Parents, Public.
Toss out textbooks that fail to teach children to read, spell, write. Replace them with the $5.40 readers from Spalding. Think about this: of all businesses, only textbook publishers get rich by selling products that fail. Why does America tolerate such an anti-economically-sensible and educationally-destructive situation? Textbook sales representative to school official: “We know that our 103rd edition failed to teach your students to read, but if your district will only buy our new, bigger, more expensive, flashier 104th edition, your students might learn to read this time. Oh, btw, we sell failing fuzzy math books, also. Crashing math scores, anyone?”
Demand that your districts invest in products that work, like those from non-profit Spalding International. Demand that your districts hire Spalding trainers to do what the colleges failed to accomplish — train teachers to effectively instruct. I promise, teachers will learn more in two weeks of Spalding training than they would learn in years spent at most of today’s university teacher-training programs.
School decision makers — if you are unwilling to follow my advice to teach spelling, and then just stop teaching reading, also. You are wasting everyone’s time and money while you turn America into a mass of illiterates. Instead, direct your teachers to spend every day reading aloud to the classes. Students can use their auditory skills and so learn a wealth of vocabulary, concepts, and facts in order to develop a wide general knowledge base. For fulltime oral reading of increasingly more challenging texts, the public would finally gain from the money spent on teachers’ salaries. Students would exit school as educated individuals; as complete, whole human beings. America owes our children at least that much.
Linda Schrock Taylor, M.A., taught special education for 35 years in public schools. Now retired from teaching, she is finishing her book for reclaiming lives, “Rapid Reading Remediation;” and is running for Governor of Michigan on a platform for A Constitutional & Literate Michigan. (U.S. Taxpayers Party of Michigan, a branch of The Constitution Party) Michigan residents who are interested in being trained to teach reading as volunteers in Linda’s “Literacy for Michigan” campaign can contact her at readinglessons@hotmail.com.
by Pat Heyman | Jan 1, 2010 | Uncategorized
You Are What You Grow
April 22, 2007
A few years ago, an obesity researcher at the University of Washington named Adam Drewnowski ventured into the supermarket to solve a mystery. He wanted to figure out why it is that the most reliable predictor of obesity in America today is a person’s wealth. For most of history, after all, the poor have typically suffered from a shortage of calories, not a surfeit. So how is it that today the people with the least amount of money to spend on food are the ones most likely to be overweight?
Drewnowski gave himself a hypothetical dollar to spend, using it to purchase as many calories as he possibly could. He discovered that he could buy the most calories per dollar in the middle aisles of the supermarket, among the towering canyons of processed food and soft drink. (In the typical American supermarket, the fresh foods–dairy, meat, fish and produce–line the perimeter walls, while the imperishable packaged goods dominate the center.) Drewnowski found that a dollar could buy 1,200 calories of cookies or potato chips but only 250 calories of carrots. Looking for something to wash down those chips, he discovered that his dollar bought 875 calories of soda but only 170 calories of orange juice.
As a rule, processed foods are more “energy dense” than fresh foods: they contain less water and fiber but more added fat and sugar, which makes them both less filling and more fattening. These particular calories also happen to be the least healthful ones in the marketplace, which is why we call the foods that contain them “junk.” Drewnowski concluded that the rules of the food game in America are organized in such a way that if you are eating on a budget, the most rational economic strategy is to eat badly–and get fat.
This perverse state of affairs is not, as you might think, the inevitable result of the free market. Compared with a bunch of carrots, a package of Twinkies, to take one iconic processed foodlike substance as an example, is a highly complicated, high-tech piece of manufacture, involving no fewer than 39 ingredients, many themselves elaborately manufactured, as well as the packaging and a hefty marketing budget. So how can the supermarket possibly sell a pair of these synthetic cream-filled pseudocakes for less than a bunch of roots?
For the answer, you need look no farther than the farm bill. This resolutely unglamorous and head-hurtingly complicated piece of legislation, which comes around roughly every five years and is about to do so again, sets the rules for the American food system–indeed, to a considerable extent, for the world’s food system. Among other things, it determines which crops will be subsidized and which will not, and in the case of the carrot and the Twinkie, the farm bill as currently written offers a lot more support to the cake than to the root. Like most processed foods, the Twinkie is basically a clever arrangement of carbohydrates and fats teased out of corn, soybeans and wheat–three of the five commodity crops that the farm bill supports, to the tune of some $25 billion a year. (Rice and cotton are the others.) For the last several decades–indeed, for about as long as the American waistline has been ballooning–U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy.
That’s because the current farm bill helps commodity farmers by cutting them a check based on how many bushels they can grow, rather than, say, by supporting prices and limiting production, as farm bills once did. The result? A food system awash in added sugars (derived from corn) and added fats (derived mainly from soy), as well as dirt-cheap meat and milk (derived from both). By comparison, the farm bill does almost nothing to support farmers growing fresh produce. A result of these policy choices is on stark display in your supermarket, where the real price of fruits and vegetables between 1985 and 2000 increased by nearly 40 percent while the real price of soft drinks (a k a liquid corn) declined by 23 percent. The reason the least healthful calories in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow.
A public-health researcher from Mars might legitimately wonder why a nation faced with what its surgeon general has called “an epidemic” of obesity would at the same time be in the business of subsidizing the production of high-fructose corn syrup. But such is the perversity of the farm bill: the nation’s agricultural policies operate at cross-purposes with its public-health objectives. And the subsidies are only part of the problem. The farm bill helps determine what sort of food your children will have for lunch in school tomorrow. The school-lunch program began at a time when the public-health problem of America’s children was undernourishment, so feeding surplus agricultural commodities to kids seemed like a win-win strategy. Today the problem is overnutrition, but a school lunch lady trying to prepare healthful fresh food is apt to get dinged by U.S.D.A. inspectors for failing to serve enough calories; if she dishes up a lunch that includes chicken nuggets and Tater Tots, however, the inspector smiles and the reimbursements flow. The farm bill essentially treats our children as a human Disposall for all the unhealthful calories that the farm bill has encouraged American farmers to overproduce.
To speak of the farm bill’s influence on the American food system does not begin to describe its full impact–on the environment, on global poverty, even on immigration. By making it possible for American farmers to sell their crops abroad for considerably less than it costs to grow them, the farm bill helps determine the price of corn in Mexico and the price of cotton in Nigeria and therefore whether farmers in those places will survive or be forced off the land, to migrate to the cities–or to the United States. The flow of immigrants north from Mexico since Nafta is inextricably linked to the flow of American corn in the opposite direction, a flood of subsidized grain that the Mexican government estimates has thrown two million Mexican farmers and other agricultural workers off the land since the mid-90s. (More recently, the ethanol boom has led to a spike in corn prices that has left that country reeling from soaring tortilla prices; linking its corn economy to ours has been an unalloyed disaster for Mexico’s eaters as well as its farmers.) You can’t fully comprehend the pressures driving immigration without comprehending what U.S. agricultural policy is doing to rural agriculture in Mexico.
And though we don’t ordinarily think of the farm bill in these terms, few pieces of legislation have as profound an impact on the American landscape and environment. Americans may tell themselves they don’t have a national land-use policy, that the market by and large decides what happens on private property in America, but that’s not exactly true. The smorgasbord of incentives and disincentives built into the farm bill helps decide what happens on nearly half of the private land in America: whether it will be farmed or left wild, whether it will be managed to maximize productivity (and therefore doused with chemicals) or to promote environmental stewardship. The health of the American soil, the purity of its water, the biodiversity and the very look of its landscape owe in no small part to impenetrable titles, programs and formulae buried deep in the farm bill.
Given all this, you would think the farm-bill debate would engage the nation’s political passions every five years, but that hasn’t been the case. If the quintennial antidrama of the “farm bill debate” holds true to form this year, a handful of farm-state legislators will thrash out the mind-numbing details behind closed doors, with virtually nobody else, either in Congress or in the media, paying much attention. Why? Because most of us assume that, true to its name, the farm bill is about “farming,” an increasingly quaint activity that involves no one we know and in which few of us think we have a stake. This leaves our own representatives free to ignore the farm bill, to treat it as a parochial piece of legislation affecting a handful of their Midwestern colleagues. Since we aren’t paying attention, they pay no political price for trading, or even selling, their farm-bill votes. The fact that the bill is deeply encrusted with incomprehensible jargon and prehensile programs dating back to the 1930s makes it almost impossible for the average legislator to understand the bill should he or she try to, much less the average citizen. It’s doubtful this is an accident.
But there are signs this year will be different. The public-health community has come to recognize it can’t hope to address obesity and diabetes without addressing the farm bill. The environmental community recognizes that as long as we have a farm bill that promotes chemical and feedlot agriculture, clean water will remain a pipe dream. The development community has woken up to the fact that global poverty can’t be fought without confronting the ways the farm bill depresses world crop prices. They got a boost from a 2004 ruling by the World Trade Organization that U.S. cotton subsidies are illegal; most observers think that challenges to similar subsidies for corn, soy, wheat or rice would also prevail.
And then there are the eaters, people like you and me, increasingly concerned, if not restive, about the quality of the food on offer in America. A grass-roots social movement is gathering around food issues today, and while it is still somewhat inchoate, the manifestations are everywhere: in local efforts to get vending machines out of the schools and to improve school lunch; in local campaigns to fight feedlots and to force food companies to better the lives of animals in agriculture; in the spectacular growth of the market for organic food and the revival of local food systems. In great and growing numbers, people are voting with their forks for a different sort of food system. But as powerful as the food consumer is–it was that consumer, after all, who built a $15 billion organic-food industry and more than doubled the number of farmer’s markets in the last few years–voting with our forks can advance reform only so far. It can’t, for example, change the fact that the system is rigged to make the most unhealthful calories in the marketplace the only ones the poor can afford. To change that, people will have to vote with their votes as well–which is to say, they will have to wade into the muddy political waters of agricultural policy.
Doing so starts with the recognition that the “farm bill” is a misnomer; in truth, it is a food bill and so needs to be rewritten with the interests of eaters placed first. Yes, there are eaters who think it in their interest that food just be as cheap as possible, no matter how poor the quality. But there are many more who recognize the real cost of artificially cheap food–to their health, to the land, to the animals, to the public purse. At a minimum, these eaters want a bill that aligns agricultural policy with our public-health and environmental values, one with incentives to produce food cleanly, sustainably and humanely. Eaters want a bill that makes the most healthful calories in the supermarket competitive with the least healthful ones. Eaters want a bill that feeds schoolchildren fresh food from local farms rather than processed surplus commodities from far away. Enlightened eaters also recognize their dependence on farmers, which is why they would support a bill that guarantees the people who raise our food not subsidies but fair prices. Why? Because they prefer to live in a country that can still produce its own food and doesn’t hurt the world’s farmers by dumping its surplus crops on their markets.
The devil is in the details, no doubt. Simply eliminating support for farmers won’t solve these problems; overproduction has afflicted agriculture since long before modern subsidies. It will take some imaginative policy making to figure out how to encourage farmers to focus on taking care of the land rather than all-out production, on growing real food for eaters rather than industrial raw materials for food processors and on rebuilding local food economies, which the current farm bill hobbles. But the guiding principle behind an eater’s farm bill could not be more straightforward: it’s one that changes the rules of the game so as to promote the quality of our food (and farming) over and above its quantity.
Such changes are radical only by the standards of past farm bills, which have faithfully reflected the priorities of the agribusiness interests that wrote them. One of these years, the eaters of America are going to demand a place at the table, and we will have the political debate over food policy we need and deserve. This could prove to be that year: the year when the farm bill became a food bill, and the eaters at last had their say.
Copyright © Michael Pollan
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