One Reason to Cheer Wolfowitz as World Bank Chief

Wolfowitz said on Tuesday the key to helping Africa's poor cotton growers was to cut the subsidies paid to U.S. and European agriculture producers.

On a tour of a cotton-processing factory in Burkina Faso, Wolfowtiz said the World Bank would have a "strong voice" at the Doha trade talks to make a case for wealthy nations to reduce agricultural subsidies worldwide.

Story here; link via Sploid.

Comments

[Mo]

Excellent. The question is, will this change anything?

[Akira MacKenzie]

I can imagine what the anti-globalizers, Lou Dobbs, and Pat Buchanan would say.

"Them no good foreigners! Theytooker SUBSIDIES!!!"

[Randolph Carter]

Akira, I believe it's pronounced "furriners"

[phocion]

Akira,

Don't you understand how much richer we'd all be if we stopped all imports and exports? It makes me sick to see all those greenbacks flowing into brown... I mean foreigner hands! That should be our money!

[Ruthless]

Was the 40 billion bad debt write-offs like a housewarming gift from Shrub to Wolfie?

[Lou Dobbs]

Don't you people understand? The way to maintain America's economic dominance is not through innovation and hard work, but with protectionist trade barriers that punish brownskins and reward us true 'Merkans.

Because, after all, everyone knows that principles, morality, and plain old humanity all take a backseat to the quality of life of some midwestern auto factory worker! After all, he ain't one of them ferrners talkin that gibberish, he's a true merkan patriot!

[drf]

just imagine the CAP for Swazi-pot.

check out this month's print about subsidies and per capita of Sub S. Africa...

thanks, lou. now go hump your noam chomsky blow up doll. but clean it up before returning it, this time... okay?

grin. (was that you, thoreau?)

[Evan Williams]

nah, twas my doing. sorry, couldn't help myself.

[saw-whet]

Good news but keep your pants on. From the story: "But on his first visit to the continent since taking the reins of the development lender two weeks ago, Wolfowitz did not indicate if he would personally weigh in on the matter as a former influential insider of the Bush administration and the Pentagon's second-ranking official."

Redemption could be yours, Wolfie. Just do the right thing and don't get all pig-heady like you came across in the Atlantic article.

[Brian]

So much for my plan to get a llama to put in the back yard so I could get some llama subsidies.

[none]

Urging an end to such subsidizes will hurt American cotton producers, for instance, but will DEFINITELY hurt French farmers far worse. Could this be Wolfowitz's way of getting back at the French via the Common Agricultural Policy?

[thoreau]

Well, if the World Bank opposes subsidies then I guess I have to change my stance and support subsidies, in order to protect our sovereignty!

[Edward Price]

I don't know about the rest of you, but I hate thinking about saving money when I go shopping for clothes. I would rather spend 100 Yankee Dollars on a "wife-beater" knowing that the money went to a non-thinking union-monkey in middle-america.

Down with cheap prices! Up with wages for obsolete jobs!!!

[theCoach]

For a best estimate of how this will play out see the implementation of post-war Iraq.

[s.m. koppelman]

I guess the US cotton industry doesn't give as much to GOP campaigns as the US sugar industry does.

For good measure, the US cotton growers should work on getting people named Bush into their respective states' governors' mansions while they're at it.

[drf]

hey Evan! grin.

[Yaron]

Hm... can anyone here explain how cotton subsidies hurt Africa? I'm against all government subsidies, but this looks like poor reasoning, and I'm surprised at Wolfie for phrasing it in this way. Of course, flooding African markets with cheap cotton hurts their farmers, but in the meantime it helps African consumers even more, and it helps ease the transition from an agricultural to a manufacturing economy, by enabling, say, easier production of fabrics and clothes from cotton. Essentially the U.S. is subsidizing cheaper goods for the rest of the world, and that sounds like a net good as far as the rest of the world is concerned. For American taxpayers it's bad, but that's a different story.

[theCoach]

Yaron,
I think you have some points in the standard simplified model. That said, I doubt the countries we are talking about are buying a lot of US made clothes, and that textiles is one area where they are able to progress, where manufacturing is too big of a jump at this point.

[joe]

Yaron,

Subsidzing domestic cotton allows allows domestic producers to sell their product at an artificially low price, eating up a share of the American, European, and East Asian cotton consumer markets that would otherwise be filled by cotton produced in the developing world.

It's not so much that farmers from Ghana are getting beat in the Ghanan market - how big do you think the Ghanan market is? - but that they're getting beat in the export market.

[joe]

drf,

Lou Dobbs hates leftists and intellectuals like Noam Chomsky.

Noam Chomsky opposes agricultural subsidies.

I don't get it.

[drf]

good call, joe.

that's why it was the blow-up doll. 🙂

[Lou Gramm]

"It makes me sick to see all those greenbacks flowing into brown... I mean foreigner hands!"

Then how come I haven't seen any yet?

[kwais]

Wow Joe,
Your answer to Yaron was...right.

Right on, how did that happen. Awesome.

[Subsidies Illustrated]

Yaron:

There's the notion of comparative advantage. Some countries (or individuals) or better suited for certain industries than other countries (or individuals). That America must subsidize cotton says America is no longer suited to cotton production. Conversely, supplying cheap cotton to Africa doesn't mean their former cotton farmers will make great manufacturers at this time.

To make it more personal, Michael Jordan the basketball player had a comparative advantage against other basketball players. Michael Jordan the baseball player couldn't get past AA minor league. The cotton subsidy is like automatically putting MJ on base in his first at-bat of each game. It distorts his natural value and disadvantages other ballplayers. Further, it keeps him from basketball, where he had a natural comparative advantage.

[Jadagul]

And it just occurred to me--cotton subsidies supply other nations with cheaper cotton, but deny them the cheaper widgets we'd be producing if we weren't wasting those resources growing cotton.

[Pat Buchanan]

You hurt my feelings. 🙁

[Yaron]

Well, the first two arguments are convincing, but the second two not really. SI, manufacturing is a stage that every economy goes through during industrialization. They'd better be able to do it, or they'll be stuck in an agrarian society for a long time.

Jadagul - so an effective "anti-subsidy" of widgets is also bad? Surely a subsidy and an anti-subsidy can't both be bad at the same time. (For the Africans, that is - for us they can, since they're both paid for with tax dollars).