U.S. economy is ‘eating seed corn’


American humorist Will Rogers once joked that “there’s no trick” in coming up with political wisecracks “when you have the whole government working for you.”

That insight was confirmed again March 14 when President George W. Bush addressed the Economic Club of New York. The U.S. economy, the president finally acknowledged, was sputtering.

But, he confidently told the crowd of billionaires, bond clippers and trust-fund babies, “In the long run … our economy will continue to grow because the foundation is solid.”

Cracking up

Two days later, a large part of that foundation, Wall Street titan Bear Stearns, cracked up and taxpayers supplied a $30 billion patch to keep other giant investment banks from falling into the resulting abyss.

Later in the same speech, the president said “it makes no sense to deny” oil state sheiks, Russian autocrats and Chinese government banks from pouring their “sovereign” wealth back into the U.S.

After all, he explained in a conversation-ending non sequitur, “It’s our money to begin with. It seems like we ought to let it back.”

Ah, not exactly, Mr. President; it’s their money. Moreover, the American assets purchased by these re-imported dollars are no longer American. They’re Russian, Middle Eastern and Chinese.

Farmers have a blunt description of this form of economic folly; they call it eating the seed corn. You can survive for a while on it, they note, but when it’s gone, you’re gone.

Free trade

On April 7, the president pushed more of our seed corn onto the global market when he formally asked Congress to approve the long-pending U.S.-Columbia Free Trade Agreement. His announcement started the statutory, 90-legislative-days clock for Congress to vote the deal up or down.

Farm and ranch voices are not singing the same tune on the Columbian Free Trade Agreement. Powerhouse ag lobbies like the American Farm Bureau Federation — which rarely disagrees with free-market theology, Republican orthodoxy and the biggest benefactor of both, agbiz — endorses the deal.

Indeed, the U.S. Trade Rep’s supporting documents for the Columbian deal quotes American Farm Bureau Federation estimates that show “U.S. farm exports to Peru, Colombia, and Panama will increase by nearly $1.7 billion per year under the agreements, with gains spread among all sectors of U.S. agriculture.”

Pending agreements

Gee, is the United States Trade Representative hoping American farmers and ranchers won’t notice that pending trade agreements with Peru and Panama must be added to the Columbian deal to get even a paltry-by-any-measure $1.7 billion “increase” in U.S. ag exports out the White House’s election-year free-trade push?

If so, the sleight of hand didn’t work with grassroots ag upstarts like R-CALF USA. Within minutes of the White House’s free trade agreement announcement, R-CALF replied with a press release that labeled the deal “essentially an extension of the North American Free Trade Agreement (NAFTA).”

The comparison is important, explained the cattle group, because the conventional analysis of NAFTA in 1993, like that of the Columbian Free Trade Agreement today, predicted it will “have no impact on the U.S. cattle industry because (trade) duties at that time were already considered small.”

Not true

Even if true then, R-CALF pointed, it’s not true now. In 2005, noted the group, the beef trade deficit between the U.S. and its two NAFTA neighbors was $613 million, or about $50 million greater than the average annual ag trade benefit assigned to Peru, Panama and Columbia by American Farm Bureau Federation.

But hard facts and bad faith mean little in free trade agreement fights: Congress always approves the deals regardless of either.

As such, the president’s probably right to lobby for the return of all, er, “our money” — it’s the only way we’re ever going to see it again. Besides, we’ll never run out of seed corn, right?

Get our Top Stories in Your Inbox

Next step: Check your inbox to confirm your subscription.



We are glad you have chosen to leave a comment. Please keep in mind that comments are moderated according to our comment policy.

Receive emails as this discussion progresses.