Drop in commodity prices hurts farmers and economy
The Iowa caucuses are behind us, but analysis lingers on. That is what interests me. I always analyze economic news through my belief in the important part agriculture plays in the economy. Secretary of Agriculture Henry Wallace stated in the 1921 Yearbook of Agriculture that farmers produced without knowing if they could make a profit. But it was profit from agriculture that helped employ non-farmers. Prices of commodities dropped drastically after World War I and Iowa farmers were victims. Mistrust of government built.
The Constitution is held as something sacred, but it was written for a nation that was small and 90 percent agrarian. A major change occurred in 1914 when the Federal Reserve Act passed, giving private banks control of our money rather than Congress. The national debt was still in the billions when I first wrote to my congressman warning him that the economy would suffer because of the drop in commodity prices. That was 35 years ago. Now the national debt is over $18 trillion.
In a recent op-ed, George Will displayed the general ignorance concerning agriculture when he wrote that within six years of 1978, when collective agriculture was disbanded in China, grain production increased 34 percent, freeing people to move to more productive employment. In the 1990s, free trade agreements and off-shoring jobs took off with a vengeance in the United States. Big business was happy to employ the displaced farmers for 50 cents an hour. The erosion of the U.S. middle class had begun.
We’ve heard about the effect of lower oil prices on world economies, but there has been near silence about the 40 percent drop in payment to the nation’s dairy farmers. Farmers were the first capitalists. Socialist policies have become necessary to keep the peace when the 1 percent scheme to have it all.