Sunday, July 14, 2013

What happens when a nation of small family farms becomes a nation of large corporate agri-businesses?

Rep. Tim Walberg (R-MI7) states that, “20% of the farm bill for the past several farm bills has been ‘production agriculture’ and 80% has been ‘welfare food assistance’.”[1]

Those who forget history are doomed to repeat it.” ~ George Santayana

It isn’t just the Republicans in Congress like Tim Walberg that have forgotten history, it is our farming population which was once demographically composed of many low-income, working class people but has become composed of a much smaller number of solid, upper and upper middle class, owners of large family, very large family and very-very-large non-family corporate farms.

Modern Americans don’t understand why food assistance programs for low income families are included in the farm bill. We do not understand because we have forgotten our history.

Farm assistance programs were instituted in 1933 when over 20% of our population worked on farms. [2] Farm assistance was essential support for an industry that employed one person in five.

Our farmers were growing more food than our consumers could afford to purchase and the price of agricultural commodities fell through the floor. A money supply problem was misidentified as an excess production problem and farmers were literally paid to reduce production.

Today, less than 1% are farmers and less than half of them rely on farming as a primary income source.[3]

Farm assistance programs have evolved to meet various needs of farmers and to ensure that farming is profitable. For example, the current farm bill will subsidize between 38% and 80% of the cost of crop insurance premiums costing taxpayers more than $84 billion.[4]

The same farm bill will pay farmers more than $61.5 billion to let land rest between crops and another $58.7 billion in direct payment to provide farmers with a “safety net” and offset risks such as market price fluctuation and low yields due to weather.[5]

In 1938 our first food assistance bill was passed and food stamps came into existence.

Food stamps were money! Recall that the reason prices of agricultural commodities had fallen through the floor had nothing to do with demand for food and everything to do with an insufficient quantity of money available to those who wanted and needed food.

Food assistance programs have always been about making sure that a market exists for farm commodities.

Some readers may see this as a cynical view of human motivation, but I believe that it is a pragmatic view. In fact almost every form of assistance for low-income individuals and households is at its root and core a kind of subsidy for business interests to ensure that business is profitable for a few owners in a marketplace largely populated low-income workers.

As an example, the Affordable Care Act subsidizes health insurance premiums for low and moderate income families. This is not substantially different that the farm bill subsidies for crop insurance. The subsidy itself is not for the low income individual or family or for the farmer; it is for the insurance company that could not sell its insurance profitably without a subsidy.

Food assistance programs for low-income individuals and families are the largest portion of the farm bill and will cost more than $764 billion.[6] Opponents of food assistance are quick to point out that this program would make up 78.5% of the appropriation as passed with bipartisan support by Senate;[7] the entire food assistance programs was stripped out by Republicans in the House.[8]

Food assistance helped 47 million low-income Americans in 2012; other farm assistance helped about 2.2 million farms. In other words, the farm bill spends about $1,600 for each person receiving food assistance and about $94,750 on assistance for each farm.


You never hear Republicans complaining about how farmers should do a better job of managing their farm business so that they can earn a reasonable profit without government subsidies. And, I have never heard a Republicans complain that crop insurance companies should manage their business better so that farmers can afford insurance without subsidies from the government. Isn’t it odd that you never hear about how farmers should budget better for good and bad growing years or how a competitive marketplace for commodities needs no subsidies from the government?

For the most part food assistance recipients don’t choose to be low-income individual and householders, they simply aren’t paid enough by the business owners that employ them or the so-called job creators haven’t created enough jobs to employ them all at a living wage.

And low-income individuals and households are not wasting food assistance either.

According to a recent survey, 25% of Americans spend less that $100 per week on food; a third of them spending less than $50 per week. These are for the most part the low-income individuals and households who receive food assistance and they are getting by on amazingly little food.

The same survey reports that 10% of Americans spend $300 or more per week on food.[9] Let me reemphasize the phrase “or more”; the more an individual or family earns the more they tend to spend. And $300 is six times as much as many low-income earners spend!

A 2009 study indicated that households with incomes of $150,000 and over spent on average almost three times as much on food as households with less than $70,000 incomes.[10] And $70,000 isn’t low-income!

My point is that there is no defense for the position of Republicans like Tim Walberg who call assistance for farmers, companies that insures crops, various programs for commodity pricing or programs that lend to farmers or guarantee farm loans calling them “productive” when they are just “subsidies” or “welfare” for people in the farm business.

Also, it is dishonest to point out that food assistance makes up 78.5% of the farm bill without also pointing out that the average recipient of food assistance only realizes about $1,600 in benefits annually compared to the average benefit per farm which is roughly $94,750.

The farm bill that emerged from the Senate with bipartisan support was a pathetic! It continued to prop up the agribusiness sectors with money for farmers, insurers, market makers and lenders but it pulled the rug right off from under low income individuals and households.

The farm bill that emerged from the House was so socially unjust that it should have brought the people into the streets! What will it take to bring working class people to the point of outrage? How much indignity must America’s low-income individuals and households have to suffer before they are move to action?

We talk about expanding programs like Medicaid or food assistance; we talk about raising the minimum wage; we talk about extending unemployment; we talk about better education for the unemployed or underemployed; but we don’t strike the root or the core of the problem … the money system and the flight of money from the bottom where human labor earns it to the top where a privileged class collects interest by lending us all of the money in circulation while avoiding their duty to pay for labor, materials, technology or taxes.

Working class people should not have to beg for subsidies and the owners should be able to earn their way without subsidies. Ironic that we deny welfare to those who need it most and grant welfare to those who insist that there is no need for it?

[1] WIN 98.5 (Interview), Congressman Walberg answers Stabenow's criticism on House Farm Bill passage, Friday, July 12, 2013, 2:27 PM EDT. See <  >.
[2] Source: Growing A Nation: The Story of American Agriculture, "Historical Timeline — Farmers & the Land", extracted July 14, 2013. See <  >.
[3] Source: U.S. Environmental Protection Agency > Agriculture > Ag 101 > Demographics, extracted July 14, 2013. See < >.
[4] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[5] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[6] Source: Congressional Research Service, "What Is the Farm Bill?" June 21, 2013. See < >.
[7] S. 954: Agriculture Reform, Food, and Jobs Act of 2013. See < >.
[8] H.R. 2642: Federal Agriculture Reform and Risk Management Act of 2013. See < >.
[9] Source: Gallup Wellbeing, "Americans Spend $151 a Week on Food; the High-Income, $180", August 2, 2012. See < >.
[10] Source: U.S. Census Bureau, Statistical Abstract of the United States: 2012, "Income, Expenditures, Poverty, and Wealth", page 451, Table 688, "Average Annual Expenditures of All Consumer Units by

Friday, July 12, 2013

Why do conservative small business owners support Medicaid expansion/reform?

I just watched a short video featuring Rob Fowler, President & CEO of the Small Business Association of Michigan asking us to urge our State Senators to pass Medicaid reform now.


Fowler described House Bill 4714, the "Social Welfare Act", as “conservative, sensible Medicaid reform”. None of these words were chosen without a great deal of hand wringing and head shaking.

It was Confucius who said, “The beginning of wisdom is to call things by their proper names.”

Expansion or Reform?

Why do we call it “Medicaid expansion” while they call it “Medicaid reform”?

They do this because it is almost impossible for politicians who daily recite their dogmatic pledge to reduce the scope of government programs like Medicaid to admit that they personally benefit from expanding Medicaid.

Reforming Medicaid almost sounds like reducing it.


Why do they think it is “sensible” to expand Medicaid? They expect it to reduce the state budget by $200 million annually and to reduce their personal and business tax liability.


And yes, this is a “conservative” bill, but I will set that aside for the moment.


Fowler said that the expansion reform would “increase personal responsibility”. Visuals in the video suggested that this would be accomplished by “co-pays and incentives”.

The “co-pays” mentioned are for enrollees who earn between 100% and 133% of federal poverty and range from 2% to 5% of annual earnings. The “incentives” are behavior modifications that are called for to be eligible for enrollment, to remain enrolled or to qualify for reduced co-pays.

In other words, the same government that should intrude less on the personal matters of middle and upper income small business owners is called upon to intrude more upon the personal matters of their underpaid employees.

Another way of looking at this is to say that underpaid employees are being called upon to be personally responsible by paying more for the healthcare they receive and modifying their behavior, but the their employers are not being called upon to be personally responsible to pay more for the labor they receive from their employees or modify their employment practices so that employees are better able to be healthier or afford healthcare.

Cost Shifting

Fowler goes on, “while holding down healthcare costs for Michigan taxpayers and businesses. The visual informs us that Medicaid expansion reform will “reduce cost shifting”.

The cost of providing healthcare is incurred as labor, materials and technology employed in the delivery of the service. Surely the cost of delivering healthcare will not go down?

The question is always, “Who will pay the price?”

Rephrased, “How much will it cost Michigan taxpayers?”

And more importantly, “How much will it cost small business owners?”

Michigan taxpayers are not paying for these services now and will not pay for these services if Medicaid is expanded reformed. Michigan’s small business owners are not paying for these services now and will not pay for these services if Medicaid is expanded reformed.

It is ironic, but not surprising, that Medicaid expansion reform will NOT reduce the cost of delivering healthcare services or the price paid by Michigan taxpayers and small business owners, instead it will “shift” the cost.

Avoiding Federal Tax Penalties

So how will Michigan’s small business owners benefit from Medicaid expansion reform? The answer was in one of the visuals, “Avoids federal tax penalties.”

The Affordable Care Act penalizes employers for failing to provide healthcare coverage to low income families (those earning less that 133% of federal poverty level) who do NOT have access to Medicaid. Providing these families with access to Medicaid helps small business owners “avoid federal tax penalties”.

It is just like Emperor Palpatine said in Return of the Jedi, “Fool … only now, at the end, do you understand.”


Earlier I stated that Medicaid expansion (by any name and in any form) is conservative; now I will defend that statement.

Not all small business owners are conservative, but those who are have an agenda that goes beyond merely avoiding their social responsibility to pay taxes while also avoiding their moral responsibility to pay a fair price for the labor they receive from those they employ.

To be conservative is to defend a class system where some are owners and others are their servants. The Latin root for both words is serv us ). From their perspective, we are nothing more than serfs, another word related to serv us ). They, as conservative small business owners, imagine that they have a morally justifiable right to own the means of production and exchange and to benefit from the labor of their servants without distributing to them a fair share of the revenue derived from the labor.

Ironically, having deprived their servants of fair pay, they also feel no particular duty to pay for the physical infrastructure or social services that make it possible for them to be small business owners, such as the roads they use for business or the education system that provides them with skilled workers.

Like all other social welfare programs, Medicaid exists for the benefit of the ownership class. Without these social welfare programs, the owners would have to pay fair prices for labor or the laborers would revolt.


The progressive position is healthcare for all; everyone in and no one out!

Social progressives recognize healthcare as a fundamental human right and recognize it as a collective duty to ensure that everyone who experiences illness or injury receives the healthcare they need.

We don’t care that some people suffer illness or injury as a natural consequence of their own behavior. We recognize that some people will contribute more to pay for healthcare of others and some will pay less. We don’t care that a few will pay little of nothing or that a small percentage of people will incur most of the expense.

Conservatives regard Medicaid expansion as a progressive position and those who are calling for Medicaid expansion as uncompromising. I am a progressive and I regard Medicaid expansion as a conservative position and my support for it is a compromise.

Human Dignity

Medicaid is a program that robs human beings of their dignity and makes them beggars. Medicaid expansion simply expands the number of people who must be beggars from the very poorest who are often unemployed and sometimes unemployable to include those who are very much employed and very employable but whose hard work is so poorly compensated that they can be described as living in poverty or on the edge of poverty.

Insurance or Welfare?

I wish I was able to stop here, but Fowler final statement needs just a bit more analysis. He informs us that Medicaid expansion reform will “provide health insurance to thousands of low income Michigan workers”. The visual indicates, “Health coverage for 450,000 uninsured workers”.

Insurance is “coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract” in exchange for the payment of regular premiums.

Medicaid is not insurance, it is welfare; it is “financial or other assistance to an individual or family from a city, state or national government”.

The Affordable Care Act does two things that are frequently mislabeled. The first thing it does is subsidize the payment of insurance premiums to private, for-profit, insurance companies. The second thing it does is expand financial assistance for low income individuals and families in need of medical care. The first pays the subsidy to the insurance company boosting their sales and profits and the second pays the subsidy to the healthcare providers boosting their profits.

But Medicaid does not pay the subsidy directly to the healthcare provider; payment is made through a payment processor who is an insurance company. Medicaid has been successfully privatized; it is a public service, at public expense, for private profit.

Soothing Words

Calling Medicaid insurance instead of welfare makes it more socially acceptable. This is important both from the perspective of progressives who are concerned about the dignity of those who enroll in Medicaid and from the perspective of the crony-capitalists who profit from it.

It’s Time to Finish the Job!

Fowler called upon us to urge our State Senators to pass Medicaid reform now, telling us, “It's time to finish the job.”

I’m sure he did not mean it, but it is time to finish the job, it is time to recognize that healthcare is a human right that must be paid for from the general fund by those who are in the best position to do so.  And programs like Medicaid and Obamacare are little more than subsidies for insurance companies, healthcare providers and business owners that occasionally benefits the low income workers at the expense of their dignity.

Yes, it is time to finish the job, it is time to provide healthcare to everyone at no private expense to anyone; it is time to dismantle the for-profit insurance companies and pay for healthcare directly from general taxes. Nobody should earn a profit from the illness or injury of another human being, everybody should help pay for the tragedy of human illness or injury.

Yes, expand Medicaid now! But, don’t imagine that the job is finished.

Wednesday, July 10, 2013

Government of the People, by the People, for the People

Doug Spade (with Lucky)
Tomorrow I am expecting someone that I have come to call a friend to formally announce that he will be a candidate for State Senate District 17. 

I met Doug Spade (D-Adrian) for the first time several months ago and from then until now the one thing about him that has impressed me the most is that he is a “nice guy”. 

I am also expecting another candidate that I know and like to announce soon for the same seat. 

I met Dale Zorn (R-Ida) a few years ago in Lansing while I was lobbying with the teachers. Like Doug Spade, my first and ongoing impression of him is that he is a “nice guy”. 

As important as the quality of being “nice” is, we don’t elect people to represent us just because they are “nice”. 

Doug Spade was recently quoted in a news article, "I think people have to come before politics and I just don't see that happening, and it really frustrates me." The interests and welfare of the People come first! 

The problem with Dale Zorn is that he wants to be a nice guy but he votes wrong. He occasionally makes a tough vote in the interests of the People, but usually votes along Party lines against us; he only votes for us when he is pressured to do so. 

I don’t want to be represented by someone who only does the right thing when they are pressured to do so.

I recently met Dale Zorn in Lansing and he greeted me in the genuinely friendly manner that I have come to expect; I believe that he is a genuinely friendly person. But I was there to confront him on a very unfriendly bill that he recently cosponsored. 

Dale Zorn is a Republican; his Party platform states that “the most effective, responsible and responsive government is government closest to the people.” So, I wanted to know why he wanted to restrict a local unit of government’s power to require employers to provide employees with paid or unpaid leave when they were sick or injured. 

Dale Zorn told me that if small business owners like him had to give people time off because they were sick or injured, paid or unpaid, it would put them out of business. He put his own business interests and the business interests of his most enthusiastic political supporters ahead of the People he was elected to represent.

I called my friend Doug Spade and asked him what he thought of this bill. Ironically, he supported the Republican platform position that local units of government could and should be trusted to do the right thing for the people they represent; a position that Republicans like Dale Zorn don’t seem to support. 

Doug Spade continued to tell me that he didn’t understand why the interest of the People should be viewed by small business owners like Dale Zorn as being anything other than complimentary. 
In this specific example, small businesses might not choose to give their sick or injured employees time off, but doing so would benefit the business. 

When sick employees stay home, they don’t pass on their sickness to others; when injured employees are given time off to heal they return to work later saving the business the cost of training new employees and keeping the experiences of that employee in the business. 

Small business owners understand this, even if some of them won’t admit it. I asked Dale Zorn if he or one of his family members where sick or injured would they take time off? Would they continue to draw pay while they where sick or injured so that they could pay their bills? Of course they would! But Dale Zorn didn’t answer the question, he gave me a funny look that I took to mean, “I don’t understand.”
 Dale Zorn is genuinely friendly and wants to be a nice guy but he doesn’t understand that genuinely nice people don’t have to be pressured to do the right thing, they know that what is good for themselves as small business owners is also good for their employees, and know that local units of government can be trusted to do the right thing and that the interests of the People come ahead of personal business interests or the business interests of a few people who are your best supporters.
 Doug Spade doesn’t have to be told any of these things; he is a genuinely nice guy who can be trusted to do the right thing always. We will not have to lobby him to do the right thing, he will trust local units of government to do the right thing, and he will not put business interests of himself or a few supporters ahead of the People he represents.

Tomorrow you will find me at Loranger Square in downtown Monroe from noon until 12:30 PM where I am hoping to hear Doug Spade formally announce that he will be a candidate for State Senate District 17 after which you will find me working from now until Tuesday, November 4th, 2014, to make sure that he becomes our next State Senator.

Doug Spade for State Senate