Crony Socialism: Governments All Over the World Are Messing Up a Free Trade Market
The Government Subsidies Pile Up - And So Do the Products Subsidized |
To quote the White Stripes, “I said it once before but it bears repeating”:
If peoples are trading freely, there isn’t a “War” – there’s commerce. The “Wars” only happen when governments get involved, placing tariffs, regulations and subsidies in the way of the flow.
It becomes a regulatory arms race. A government imposes another subsidy or tax. So several others in response impose new subsidies and taxes of their own. Lather, rinse, repeat.
Other produce-producing nations saw our lattice-work panoply of tariffs and subsidies – and felt compelled to match them. And then exceed them….
So what we now have is a global lattice-work panoply of tariffs and subsidies. A thicket that grows ever thicker – as each next government tries to outdo the last.
Take tiny Thailand. A nation with a tiny 2013 Gross Domestic Product (GDP) of $387.25 billion – whose government plowed $1.3 billion into subsidizing its sugar. Just sugar.
Which leads to yet another battle in these incredibly stupid and unnecessary Trade Wars.
Brazil, the world’s largest sugar exporter, has brought questions about incentives for Thai and Indian sugarcane producers to the Agricultural Committee of the World Trade Organization (WTO).
Where is Thailand getting all of this sugar subsidy coin? Likely from the incredible excesses of the rice subsidies with which they screwed up that global market.
The price that the government offered to farmers who pledged rice was higher than the market price by almost 50%.
The critics claimed that for the scheme to succeed, the government would need to provide subsidies amounting to approximately 300 billion Baht (about US $9.375 billion) for pledging rice within two years.
The subsidies are gone – but the egregious damage to the rice market remains.
Unfortunately, Thailand hasn’t learned. They are just shifting the entirety of the bad thinking and policy to sugar.
We need to translate Reagan’s axiom to Thai. And Portuguese. And Hindi. And….
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Seton Motley is the President of Less Government and he contributes to ARRA News Service. Please feel free to follow him him on Twitter / Facebook.
Tags: Seton Motley, Less Government, Crony Socialism, world, governments, messing up, free trade market To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. and "Like" Facebook Page - Thanks!
2 Comments:
Corruption defined by political manipulation.
This is not free trade capitalism.
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