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The Market's Fine Print
September 01, 2011
If you still call them "food stamps," count yourself among the few blinded by the dazzling speed of government innovation. There will be no need to share a white cane with Michele Bachmann. The name of the nation's main feeding program was changed in 2008, just in time for the worst economic downturn since the Great Depression, not to mention the ballooning of millions of unemployed and hungry families. The former food stamp program now answers to SNAP, a happy sounding acronym (i.e. standing for "Supplemental Nutrition Assistance Program") that somehow tries to soften the messy realities of growling stomachs and poverty. It would have been amusing to be a fly on the Washington wall, buzzing around the thoughtful bureaucrats and congressional aids as they hashed through the process of food stamp re-branding. You can bet that both "supplemental" and "nutrition" were hot topics. On the one hand, it's always been expedient for office seekers to insist that government handouts should be no more than piecemeal and temporary, certainly nothing cushy enough to distract recipients (no matter how needy) from the satisfying pull of their own bootstraps. Although the political correctness of nutrition is relatively new to the game, I'm sure it caused policymakers to underscore how tax dollars were funding not just calories and energy, but also health and general well-being. The ongoing epidemic of obesity among all classes in this country has only fed the widespread assumption the too many food-stampers are junk-food addicts who shouldn't be allowed to eat that way on Uncle Sam's dime (unlike those lucky enough to finance their own malnutrition). If any of this conniving offends the purists in the room, those tender but naive hearts who think a feeding program should be designed around silly basics like hunger and poverty, they need to recall USDA's stormy ebb-and-flow in this regard over the last 70 years. When the food stamp program began in May 1939, an unemployed factory worker named Mabel McFiggin was the first to collect stamps to buy surplus butter, eggs and prunes in Rochester, N.Y. This initial pilot project required the purchasing of orange stamps in order to qualify for a certain number of free blue stamps. In this way, food was discounted, but not given away. Historians of the Depression agree that early supporters applauded the trial effort for addressing twin problems: widespread hunger across the country and price-pressuring commodity surpluses. Yet interpreters of the era are divided over the question of which of the two had more political clout. While I would concur that the goals of feeding poor people and supporting farm prices have often worked in tandem over the years, the latter strikes me as more of a driving force than the former. When commodity surpluses started to go away during World War II, so did any interest in national feeding programs. Indeed, food stamps were pretty lost in the political mail between Pearl Harbor and the election of John F. Kennedy in 1960. Was hunger and poverty abolished over that period? Of course not. The post-war economy was relatively robust, to be sure. But poverty was hardly sent packing. It was simply easier to overlook now that excessively depressed farm prices did not beg a government-sponsored solution. Accordingly, it is not surprising that the Food Stamp Act of 1964 (for the first time making food stamp distribution a permanent program) was passed at a time of building commodity stocks and weak farm prices. Over the next several decades, the alliance between advocates of the poor per se and farm market promoters became stronger and stronger. Although there's been any number of heated skirmishes (e.g., dialing up and down qualifying income levels), food stamps eventually morphed into a mutually beneficial safety net. Hold that thought for just a minute. I hope my selective retelling of the food stamp story doesn't sound too jaded. I certainly don't believe that our nation state is only interested in feeding hungry people if the effort helps support agricultural markets. Yet surely the necessary monster of government is at its best when compassion and practicality find a workable balance. "Government" and "workable" don't often appear in the same sentence these days. In search of that mutual safety net, maybe we should harken back to 1977 when Senators Bob Dole and George McGovern successfully crafted the food stamp program as we know it today, ensuring landmark legislation that expanded participation and eliminated the necessity of purchasing stamps. At the time, these two farm-boy legislators seem to represent the entire breadth of the political spectrum. Yet they could see how diverse parties could work to man the safety net for one another. It was an impressive moment of visionary cooperation. SNAP continues to serve the least fortunate among us as well as the general health of agricultural markets. Indeed, recent data suggests that the symbiotic relationship is more intense than ever before. There are now almost 46 million people in the United States on food stamps, roughly 15% of the population. That's an increase of 74% since 2007, just before the financial crisis and a deep recession led to mass job losses. As food stamp rolls have exploded along with the ranks of the unemployed, so have record-high prices for cattle, beef, hogs and pork. Even though impressive foreign demand for U.S. meat has clearly helped fuel the remarkable strength of livestock markets in 2011, domestic consumer spending would be a train wreck without the critical funding of SNAP. So the next time you're tempted to complain about the cost of the government's safety net, it might be smart to consider the direction of your own potential fall. For more Harrington comments, check out www.feelofthemarket.com John A. Harrington can be reached at john.harrington@telventdtn.com (AG) © Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.
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