How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too

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by Brian M. Riedl

Click here for a chart showing Top 10 Urban ‘Farmers’

This year’s expiration of federal agriculture policies gives Congress an important opportunity to take a fresh look at the $25 billion spent annually on farm subsidies. Current farm policies are so poorly designed that they actually worsen the conditions they claim to solve. For example:

  • Farm subsidies are intended to alleviate farmer poverty, but the majority of subsidies go to com­mercial farms with average incomes of $200,000 and net worths of nearly $2 million.
  • Farm subsidies are intended to raise farmer incomes by remedying low crop prices. Instead, they promote overproduction and therefore lower prices further.
  • Farm subsidies are intended to help struggling family farmers. Instead, they harm them by exclud­ing them from most subsidies, financing the con­solidation of family farms, and raising land values to levels that prevent young people from entering farming.
  • Farm subsidies are intended to be consumer-friendly and taxpayer-friendly. Instead, they cost Americans billions each year in higher taxes and higher food costs.

Lawmakers would be hard-pressed to enact a set of policies that are more destructive to farmers, taxpay­ers, and consumers than the current farm policies. For these and other reasons, organizations represent­ing taxpayers, consumers, environmentalists, inter­national trade, Third World countries, and even farmers themselves have united around the shared conclusion that the current farm subsidy system is failing and in dire need of reform during this year’s reauthorization.

A Solution Seeking a Problem

Before delving into the minutiae of farm policy, lawmakers should first determine what subsidies are intended to accomplish. When President Frank­lin D. Roosevelt introduced farm subsidies in the 1930s, Secretary of Agriculture Henry Wallace called them “a temporary solution to deal with an emergency.”[1] That emergency was the collapsing farm incomes that afflicted the 25 percent of the population living on farms.

Today, farmers account for just 1 percent of the population, and farm household incomes are well above the national average, making the orig­inal justification irrelevant. What modern market failure or social problem is solved by farm pro­grams today? Subsidy advocates offer five flawed justifications.

Myth #1: Farmer poverty.

This is the most common-and provably incor­rect-justification. The average farm household earns $81,420 annually (29 percent above the national average); has a net worth of $838,875 (more than eight times the national average); and is located in a rural area with a low cost of living.[2] The farm industry’s current 11.4 percent debt-to-asset ratio is the lowest ever measured and helps to explain why farms fail at only one-sixth the rate of non-farm businesses.[3]

Overall, net farm income totaled $279 billion between 2003 and 2006-the highest four-year total ever.[4] The farm economy is thriving, and farmer incomes are soaring.


Furthermore, farm subsidy formulas are designed to benefit large agribusinesses rather than family farmers. Most farm subsidies are distributed to commercial farmers, who have an average income of $199,975 and an average net worth of just under $2 million.[5] If farm subsidies were really about alleviating farmer poverty, lawmakers could guarantee every full-time farmer an income of 185 percent of the federal level ($38,203 for a family of four) for just over $4 billion annually-one-sixth of the current cost of farm subsidies.[6]

Myth #2: Crop disaster compensation.

While farming can be very profitable, farmers are always one weather disaster away from losing their crops, but this risk can be handled with basic crop insurance rather than with expensive annual gov­ernment subsidies. Washington does not address homeowners’ risks by writing each family an annual check regardless of whether or not their homes have been damaged.

Giving farmers $25 billion in annual subsidies regardless of whether or not their crops have been damaged is no more logical. Crop insurance mar­kets, as well as futures and options markets, can bal­ance good and bad years in a way that is cost-neutral over the long run.

Myth #3: Maintaining a cheap and stable food supply.

Some contend that food markets would fluctu­ate wildly without farm subsidies. In reality, food prices of both subsidized and unsubsidized crops are relatively stable. Given that the percentage of family budgets spent on food has dropped from 25 percent to 10 percent since 1933, any potential price instability would have an increasingly small impact on family budgets.[7] Even if price stabiliza­tion was necessary, price support programs have largely been replaced by commodity subsidies that stimulate overproduction rather than stabi­lize prices.

Nor do farm subsidies contribute to lower food costs. Two-thirds of food production is unsubsi­dized and thus relatively unaffected by subsidies. Of the remaining one-third, price reductions caused by crop subsidies are balanced by conservation pro­grams that raise prices. Furthermore, food prices are based not only on crop prices, but also on food processing, transportation, and marketing costs. Bruce Babcock, professor of economics at Iowa State University, has calculated that eliminating farm subsidies would have virtually no effect on food prices.[8]

Myth #4: National security.

Proponents contend that without subsidies, American farm products would be replaced by imports, leaving the United States dangerously dependent on foreigners for food. However, the United States currently grows more food than it needs to feed itself and exports a quarter of its pro­duction.[9] The lack of subsidies has not driven all beef, poultry, pork, fruit, and vegetable production out of America, nor would it drive away production of currently subsidized crops.

Myth #5: Other countries’ agricultural policies.

Europe and Japan’s farm subsidies bring Ameri­can consumers food at below-market prices. Rather than enact trade barriers to prevent this, Americans should welcome the cheap imports and allow farm­ers to focus on producing the crops in which the United States has a comparative advantage. Responding with U.S. subsidies and trade barriers has the net effect of raising prices for American con­sumers and thereby limiting any progress in free-trade negotiations. Australia largely eliminated its farm subsidies in the 1970s, and after a brief adjust­ment, its farm economy flourished. New Zealand implemented a similar policy in the 1980s with the same result.[10]

Two-thirds of all farm production-including fruit, vegetables, beef, and poultry-thrives despite being ineligible for farm subsidies.[11] If any of the five justifications were valid, these farmers would be impoverished, near bankruptcy, or replaced by imports, and both the supplies and prices of fruit, vegetables, beef, and poultry would fluctuate wildly. Clearly, this has not happened. In this controlled experiment comparing subsidized and unsubsi­dized crops, the doomsday scenarios described above have not occurred for unsubsidized crops.

The most logical explanation for the persistence of farm subsidies is simple politics. Eliminating a government program is nearly impossible because recipients form interest groups that relentlessly defend their handouts. The public paying the costs is too busy going about their lives to challenge each wasteful program. Furthermore, supporters of farm subsidies often repeat the five justifications, espe­cially the myth that these policies aid struggling family farmers. The difference between perception and reality in farm policy is large.

How Farm Subsidies Lack Economic Sense

Farm subsidies serve no legitimate public pur­pose. Worse, they harm the farm economy. This section explains both how farm subsidies work and the economic incoherence embedded in U.S. farm policy. (See also the accompanying text box, “How Farm Subsidies Are Calculated.”)

The Main Commodity Programs. Farm policy is extraordinarily complex. This complexity conve­niently insulates the farm policymaking process within a small group of lawmakers and interest groups who specialize in the details.

Subsidy eligibility is based on the crop. More than 90 percent of all subsidies go to just five crops-wheat, cotton, corn, soybeans, and rice- while the vast majority of crops are ineligible for subsidies. Once eligibility is established, subsidies are paid per amount of the crop produced, so the largest farms automatically receive the largest checks.

Subsidies are also quite duplicative. The names of the three different commodity subsidies do not adequately describe their purposes:

  • Marketing loan program. Despite being called a “loan,” this program has the net effect of reim­bursing farmers for the difference between a crop’s market price and the minimum level that Congress sets every five to six years.[12]
  • Fixed payments. Fixed payments are given to farmers based on their farms’ historical produc­tion and are unrelated to actual production.
  • Countercyclical payments. This program func­tions somewhat similarly to the marketing loan program by subsidizing farmers up to a govern­ment-set target price. This rate is higher than the marketing loan rate and therefore represents an additional subsidy.

For farmers who grow the subsidized crop, these policies have the net effect of subsidizing them up from their crop’s market price to its countercyclical price rate, or even higher when the market price is above the countercyclical rate and they receive fixed payments.

Remedying Low Prices with Lower Prices. Farm policy is supposed to help farmers recover income lost because of low crop prices. However, farmers can increase their subsidies by planting additional acres, which increases production and drives prices down further, thereby spurring demands for even greater subsidies. In other words, subsidies merely lower prices. This is the policy equivalent of trying to use gasoline to extin­guish a fire.

When the 1996 farm bill increased the market­ing loan rate of soybeans from $4.92 to $5.26 per bushel (which meant larger subsidies), farmers responded by planting an additional 8 million acres of soybeans, which contributed to the 33 percent decline in soybean prices over the next two years.[13] Instead of alleviating low soybean prices, the new subsidies accelerated their fall at considerable tax­payer expense. Even the U.S. Department of Agri­culture (USDA) admits that subsidy increases have induced farmers to plant millions of new acres of wheat, soybeans, cotton, and corn.[14]

In a free market, low prices serve as an important signal that supply has exceeded consumer demand and that production should shift accordingly. By shielding farmers from low market prices, farm sub­sidies induce farmers to grow whatever government will subsidize, not what consumers really want. Stephen Houston Jr., a Georgia cotton farmer, recently told The Atlanta Journal-Constitution, “We’re just playing a game. [Market] prices don’t have anything to do with what we’re doing. We’re just looking at the government payments.”[15]

Contradictory Policies. After handing out com­modity subsidies that pay farmers to plant more crops, Washington then turns around and pays other farmers not to farm 40 million acres of crop­land each year-the equivalent of idling every farm in Wisconsin, Michigan, Indiana, and Ohio. The Conservation Reserve Program, which pays farmers to sign 10-year contracts pledging not to farm their land, is often promoted as supporting environmen­tal stewardship. In reality, removing farmland to raise crop prices has been the program’s central long-term justification. Paying some farmers to plant more crops and others to plant fewer crops simply makes no sense.

Ignoring Yields. The illogic does not end there. Businesses calculate their revenues by multiplying the product’s price by the quantity sold. Similarly, farmers calculate per-acre revenues by multiplying the crop price by the yield (crop volume per acre). However, farm subsidy formulas focus only on crop prices and simply plug in a historical yield measure for the quantity.

This makes little sense. Revenues depend as much on the quantity sold as on the price, and these two variables often move in opposite direc­tions. In agriculture, this leads to one of two com­mon scenarios:

  • Surging yields flood the market with crops and cause prices to drop. Total revenues may increase, yet farmers still receive large subsidies simply because the price fell.
  • Falling yields lead to crop shortages, pushing up prices. Total revenues may decline sharply, but farmers do not receive subsidies because Wash­ington focuses only on the price increase and assumes that farmers are thriving.

These scenarios are not merely theoretical. The American Farmland Trust has observed that a large drought in 2002 cut many Midwest corn farmers’ yields in half, but many farmers did not receive sub­sidies because prices did not fall. The opposite situ­ation occurred in 2005 when very large corn yields flooded the market, driving down corn prices and inducing large corn subsidies despite healthy farm revenues.[16] Consequently, Washington often wastes taxpayer dollars by subsidizing farmers when they need it the least.

Subsidizing Both Crop Insurance and Disaster Aid. In 2000, Washington tripled crop insurance subsidies in an effort to eliminate the need for farm disaster payments. The budget-busting 2002 farm bill was also promoted as being large enough to reduce the need for disaster payments.

Yet even with generous farm programs and sub­sidized crop insurance, Congress has passed a disas­ter aid bill every year since 2000 at a total cost of $40 billion.[17] Congress has even drafted legislation offering disaster aid to farmers who refuse to pur­chase crop insurance at taxpayer-financed dis­counts. With Congress continuing to pass large disaster aid packages, what crop insurance subsi­dies are really funding is unclear.

The federal crop insurance program currently subsidizes 60 percent of all premiums for the 242 million acres that farmers have enrolled in the pro­gram. It is run by 16 private firms that accept fed­eral subsidies but must charge the prices set by Washington. Recently, an insurer that dared to offer farmers a discount was upbraided at a congressional hearing, and Representative Jack Kingston (R-GA) successfully authored legislation to prohibit federal subsidies for that plan.[18]

The program seems to have been designed to aid insurance companies and harm taxpayers. Insurers are allowed to pass high-risk policies on to the gov­ernment while keeping for themselves the low-risk policies that are likely to be profitable. Conse­quently, since 1998, the participating companies have earned $3.1 billion in profits, while Washing­ton has lost $1.5 billion. Additionally, since 1998, Washington has paid nearly $20 billion in premium subsidies and more than $6 billion to cover the insurance companies’ administrative costs.

All in all, the crop insurance program spends $3.34 for every $1 in paid claims-and it still has not prevented $40 billion in disaster aid.[19]

Driving Small Farmers out of Business. Farm subsidies are promoted as assistance to family farm­ers. In reality, they finance the demise of family farms and prevent young people from entering farming. Economists estimate that subsidies inflate the value of farmland by 30 percent. High farmland prices make starting a farm prohibitively expensive for younger people, who would also have other expenses, including buying expensive equipment, seeds, and pesticides. With young farmers unable to enter the industry, the average age of farmers has increased to 55.[20]

Because agribusinesses are already the most profitable, they often use their enormous farm sub­sidies to buy out smaller family farms. In what has been called the “plantation effect,” family farms with less than 100 acres are being bought out by larger agribusinesses, which then convert them into tenant farms. Three-quarters of rice farms have already become tenant farms, and other types of farms are trending in that same direction.[21] Since 1945, the number of farms has dropped by two-thirds, and the average farm size has more than doubled to 441 acres.[22]

This consolidation is not necessarily harmful and may improve efficiency. Large agribusinesses are not villainous. They often succeed because they can produce large quantities of food at low prices. Fur­thermore, the blame for the tilted distribution of farm subsidies lies with Congress, which writes the laws, rather than with the agribusinesses that cash the checks that they receive because of those laws.

Nevertheless, taxpayers should not be required to finance this consolidation through farm subsi­dies. By raising land values and financing consolida­tion, farm subsidies drive out existing small farmers and prevent new farmers from entering the industry.

The Scandalous Distribution of Farm Subsidies

One can imagine the result if Washington tried to solve poverty by creating a welfare program that applied only to workers in the fast food, cleaning, and retail industries. Everyone in those occupations would receive a government check, with the richest executives receiving the largest checks and the poorest workers receiving the smallest. Workers in other industries would receive nothing, no matter how poor they were.

Obviously, such a policy would be nonsense, yet this exemplifies how farm subsidies are distributed. The government’s solution to alleged farmer poverty is to subsidize growers of wheat, cotton, corn, soy­beans, and rice while giving no subsidies to produc­ers of fruit, vegetables, beef, poultry, and livestock. Because subsidies are paid per acre, the largest and most profitable farms receive the largest subsidies, while family farms receive next to nothing.

Thus, a large, profitable rice corporation can receive millions while a family vegetable farmer receives nothing. Overall, farm subsidies are distrib­uted with little regard to merit or need.

Corporate Welfare. Farm subsidies are pro­moted as helping struggling farmers, but Washing­ton could guarantee every full-time farmer an income of nearly $40,000 for just $4 billion annu­ally. Instead, farm policy is designed to aid corpo­rate agribusinesses. Among farmers eligible for subsidies, just 10 percent of recipients collect 73 percent of the subsidies-an average of $91,000 per farm. (See Chart 3.) By contrast, the average subsidy granted to the bottom 80 percent of recipients is less than $3,000 annually.[23]

According to the USDA, the majority of farm subsidies are distributed to commercial farms, which have an average household income of $199,975 and a net worth of just under $2 mil­lion.[24] Commercial farms are also among those that need subsidies the least because they are the most efficient. Former U.S. Farm Bureau President Dean Kleckner writes that the top quarter of corn farmers (usually agribusinesses with economies of scale) can produce a bushel of corn 68 percent cheaper than the bottom quarter of farms can.[25]

Multiplying this larger profit margin by their substantially larger production volume shows how large agribusinesses can be enormously profitable. Yet these agribusinesses, not small family farms, receive most of the subsidies, making farm subsi­dies America’s largest corporate welfare program. (See Table 1.)

That is not all. Farm subsidies over the past decade have also been distributed to:

  • Fortune 500 companies, such as John Hancock Life Insurance ($2,849,799); International Paper ($1,183,893); Westvaco ($534,210); and ChevronTexaco ($446,914).
  • Celebrity “hobby farmers” such as David Rock­efeller ($553,782); Ted Turner ($206,948); and Scottie Pippen ($210,520).
  • Members of Congress, who vote on farm subsidies, such as Senator Charles Grassley (R- IA, $225,041); Senator Gordon Smith (R-OR, $45,400, plus a 25 percent ownership in three firms that received $2,114,622); and Represen­tative John Salazar (D-CO, $161,084).[26]


Payment limits do exist on paper. Subsidies are restricted to farmers with incomes below $2.5 mil­lion, and an individual’s subsidy may not exceed $180,000 per farm or $360,000 for up to three farms. However, an entire industry of lawyers exploits loop­holes, rendering these limits meaningless.

Farmers can simply divide their farms into numerous separate entities and then collect subsi­dies for each farm. For example, Tyler Farms in Arkansas has collected $37 million in farm subsi­dies since 1996 by dividing itself into 66 legally separate corporations to maximize its farm subsidies.[27] Other farmers evade payment limits by sign­ing up family members, such as the Georgia farmer who reportedly col­lected thousands in additional subsi­dies by signing up his two-year-old daughter as an additional farmer, making her eligible for up to $180,000. As Chuck Hassebrook of the Center for Rural Affairs has con­cluded, “We have no [payment] limits today.”[28]

Eligibility Restricted to a Few Crops. Only one-third of the $240 billion in annual farm production is eligible for farm subsidies. Five crops-wheat, cotton, corn, soy­beans, and rice-receive more than 90 percent of all farm subsidies. Fruits, vegetables, livestock, and poultry, which comprise two-thirds of all farm pro­duction, are generally not subsidized at all.[29] This is important for two reasons.

First, those who assert that the absence of farm subsidies would cause massive poverty, rapid price fluctuations, and the eventual demise of the agricul­tural industry have not persuasively explained why the two-thirds of the industry that operates without subsidies has experienced none of these problems.

Second, those who assert that farm subsidies are necessary to alleviate farmer poverty have not explained why Washington should favor one crop over another.

Farm Subsidies for Suburban Backyards. In 1996, lawmakers noticed that farm subsidies were only encouraging more planting and thereby fur­ther lowering prices, so they created a fixed pay­ments subsidy that would pay farmers based on what had been grown on the land historically with­out obligating them to continue planting that crop. While designed with positive intentions to reduce market distortions, these fixed payments have ended up subsidizing land that is no longer used for farming. In fact, some homeowners are now collect­ing subsidies for the grass in their backyards.

A recent Washington Post investigation discovered 75 acres of Texas farmland that had been converted into a housing development. Today, the homeown­ers on these properties (which are worth well over $300,000 each) are eligible for fixed payments for the lawn in their backyards because of its “historical rice production.” Residents never asked for these subsidies and have even stated that as non-farmers they do not want the government mailing them checks.[30] Over the past 25 years, rice plantings in Texas have plummeted from 600,000 acres to 200,000, in part because people can now collect generous rice subsidies without planting rice. If Washington insists on subsidizing farming, subsi­dizing actual farmland rather than residential neigh­borhoods that were once farmland would make more sense.

Compensation Not Based on Actual Sale Prices. As explained in the text box, the marketing loan program (despite the “loan” misnomer) effec­tively pays farmers whenever crop prices fall below a government-set minimum. Amazingly, farmers are not compensated for the actual price at which they sell their crops. Instead, they can pick the market price on any day of the year and, even if they do not sell their crops at that market price, receive a sub­sidy based on it.

For example, in 2005, the marketing loan rate for corn in DeKalb County, Illinois, was $1.98 per bushel. In September, the market price fell to $1.52 per bushel, and local farmers walked into the local USDA field office and received a payment of $0.46 per bushel. The following January, when they finally sold their corn, the price had risen to $2.60 per bushel, well above the government-set minimum. The federal policy allowed farmers to keep the sub­sidies as compensation for a low market price at which they never actually sold their crops. The amounts can be substantial: DeKalb County farmer Roger Richardson received an extra $75,000 sub­sidy for crops that grossed $500,000.[31]

These are not isolated incidents. In 2006, national corn prices were only $0.05 below the $1.95 marketing loan rate. Nonetheless, corn farm­ers received an average marketing loan subsidy of $0.44 per bushel.[32] President Bush has proposed addressing this loophole by requiring that monthly average crop prices-rather than daily prices- become the basis for determining marketing loan subsidies. This would prevent a one-day drop in crop prices from causing a year-long surge in farm subsidies. Unless Congress acts, farmers will con­tinue to be compensated for low prices that never affect them.

Aid for Questionable Disasters. Lawmakers often supplement generous farm subsidies and sub­sidized crop insurance with annual disaster assis­tance packages. The Washington Post discovered that the USDA encourages disaster declarations for coun­ties without disasters and distributes disaster aid to farmers without requiring proof of any disaster.

Specifically, when the Livestock Compensation Program operated in 2002 and 2003 to compensate farmers for a drought, the majority of payments went to farmers in areas with either moderate drought or none at all. The USDA reportedly urged state and county officials to find anything that could be interpreted as a disaster and use it to qualify the county’s farmers for disaster aid. Consequently, more than 2,000 of the nation’s 3,141 counties were declared agriculture “disasters,” including:

  • Whatcom County, Washington, for a distant earthquake that registered only 3 on the local Richter scale and caused no reported damage.
  • All 254 counties in Texas for “farm disasters,” such as a storm two years earlier and the Space Shuttle Columbia explosion. This prompted a local farmer to tell reporters, “the livestock pro­gram is a joke, we had no losses, I don’t know what Congress is thinking sometimes.”
  • Fifty-three of Wisconsin’s 72 counties, many for a small storm that occurred two years earlier. This prompted local farmers to call the disaster aid an unjustified “waste of money.”

Nor were the individual farmers required to prove any losses. Washington simply sent them disaster assistance checks based on the number of livestock that they owned. In other words, disaster aid was almost completely disconnected from actual disasters.[33]

Livestock disaster assistance is not the only example of misdirected disaster aid. When sweet potatoes became eligible for crop insurance, plant­ing quadrupled, but crop failures surged. Farmers were purposely growing sweet potato crops on unsuited land and skimping on all production costs simply to collect generous crop insurance and disas­ter aid-a practice known as “farming your insur­ance.” Accordingly, the sweet potato insurance program was paying out $16 in insurance claims for every $1 paid in premiums before Congress fixed it in 2005.[34] It is reasonable to assume that this prac­tice continues to some degree in other crops.

The Overall Impact of Farm Policy

Although farm policies serve no legitimate pur­pose, they have profoundly negative effects on tax­payers, consumers, and small farmers, including:

  • Higher prices. James Bovard once wrote, “For almost every farm program, there is another equal but opposite farm program or provi­sion.”[35] Commodity subsidies encourage over­production and therefore lower prices. The Conservation Reserve Program encourages underproduction and thereby raises prices. Tar­iffs raise import prices. Export subsidies lower export prices. Price supports triple the price of sugar and raise the price of milk. Calculating the net effect of these contradictory programs, the Organisation for Economic Co-operation and Development estimates that U.S. farm policy raises food prices enough to cost consumers an extra $12 billion annually-in effect, an average annual food tax of $104 per household.[36]
  • High taxes. As the farm economy booms, Con­gress is expanding farm subsidies. After averag­ing less than $14 billion per year during the 1990s, annual farm subsidies have topped $25 billion in the current decade since passage of the 2002 farm bill, the most expensive farm bill in American history. All federal spending must eventually be funded by taxes. Thus, these sub­sidies cost the average household $216 in annual taxes in addition to $104 in higher food prices.
  • No added rural economic growth. A study by the Federal Reserve Bank of Kansas City con­cluded that farm subsidies do not promote rural economic growth. Between 1992 and 2002, the vast majority of the 783 “farm dependent” coun­ties experienced job growth below the national average. In fact, more of these counties suffered outright job losses than experienced job growth exceeding the national average.[37] While critics can argue that growth would have been worse without subsidies, these policies are clearly not creating new growth centers. Farm subsidies are likely funding farm consolidations, which in turn are reducing employment on farms and in related industries.
  • Small farmers driven out of business. Small family farmers are generally not eligible for sig­nificant levels of farm subsidies. Furthermore, subsidies to large commercial farms harm small farmers by (1) reducing crop prices[38] and, there­fore, farmer incomes; (2) raising the prices of farmland, thereby preventing family farmers from expanding; and (3) subsidizing agribusi­ness buyouts of family farms. Small farmers receive virtually none of the subsidies, but they must endure the market distortions and financial pain caused by these policies.
  • Less trade. Federal Reserve Chairman Ben Ber­nanke has stated that “the increase in trade since World War II has boosted U.S. annual incomes on the order of $10,000 per household” and that “removing all remaining barriers to trade would raise U.S. incomes anywhere from $4,000 to $12,000 per household.” Yet massive tariffs and import restrictions raise food prices and make the American economy less productive. Bring­ing free trade to agriculture would also make free-trade agreements in other industries much more likely.[39]


Conclusion

If Congress takes the path of least resistance and extends current farm policies for another five years, it will have surrendered an enormous opportunity for reform. Most debates over federal programs force lawmakers to balance a program’s social bene­fits with the costs of financing it, but current U.S. farm policies serve no legitimate purpose. They bur­den American families with higher taxes and higher food prices. They harm small farmers by excluding them from subsidies, raising land prices, and financing farm consolidation. They increase trade barriers that reduce incomes in America and in lesser-developed countries. They are falsely pro­moted as saving the family farm and protecting the food supply. In reality, they are America’s largest cor­porate welfare program.

This year’s farm bill debate will test whether Congress is serious about reform or will continue business as usual by pandering to special-interest groups that are working to protect their federal lar­gesse. Congress and President Bush should take a more sensible approach to farm policy this year. Instead of rubberstamping the status quo, they should return to the market-based approach embodied in the 1996 Freedom to Farm Act.

Click here for other charts (Powerpoint)

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. Ian Hinsdale, a former Heritage Foundation intern, contributed to this paper.


[1] Henry Wallace, cited in Oxfam America, “A Vision for the 2007 Farm Bill,” 2007, at www.oxfamamerica.org/resources/files/OA-Fairness_in_the_Fields.pdf (June 4, 2007).

[2 ]Ted Covey et al., “Agriculture Income and Finance Outlook,” AIS-84, U.S. Department of Agriculture, Economic Research Service, November 2006, pp. 40 and 48, at http://usda.mannlib.cornell.edu/usda/current/AIS/
AIS-11-30-2006.pdf
(June 4, 2007).

[3] Jerome M. Stam, Daniel L. Milkove, and George B. Wallace, “Indicators of Financial Stress in Agriculture Reported by Agri­cultural Banks, 1982-99,” AIS-74, U.S. Department of Agriculture, Economic Research Service, February 2000, p. 48, and Covey et al., “Agriculture Income and Finance Outlook,” p. 38.

[4] Council of Economic Advisers, Economic Report of the President (Washington, D.C.: U.S. Government Printing Office, 2007), p. 342, Table B-97, at www.gpoaccess.gov/eop/2007/2007_erp.pdf (June 4, 2007).

[5] Covey et al., “Agriculture Income and Finance Outlook,” pp. 40, 48, and 63. Net worth data consist of weighted averages of large and very large farms’ net worths.

[6] U.S. Department of Agriculture, “A Safety Net for Farm Households,” Agriculture Outlook, January-February 2000, pp. 19-24. The authors estimated a cost of $7.8 billion when including everyone who reports any farm income, including “hobby farmers” who have other full-time jobs. Restricting their data to full-time farmers, defined as those working on lower-sales, higher-sales, and large family farms and the fraction of limited-resource farms that are also full-time, the total cost adds up to approximately $4 billion. The eligibility threshold for several federal income-assistance programs, such as the Women, Infants and Children (WIC) program, is 185 percent of the federal poverty level.

[7] U.S. Department of Agriculture, Economic Research Service, “Food Expenditures by Families and Individuals as a Share of Disposable Personal Income data,” Table 7, at www.ers.usda.gov/Briefing/CPIFoodAndExpenditures/Data/table7.htm (June 4, 2007).

[8] Bruce Babcock, “Money for Nothing: Acreage and Price Impacts of U.S. Commodity Policy for Corn, Soybeans, Wheat, Cotton, and Rice,” in American Enterprise Institute, The 2007 Farm Bill and Beyond (Washington, D.C.: AEI Press, 2007), pp. 41-45, at www.aei.org/docLib/20070516_Summary.pdf (June 4, 2007).

[9] The U.S. runs a trade surplus in agriculture. See Economic Research Service, “Value of U.S. Trade-Agricultural, Nonagricultural, and Total-and Trade Balance, by Fiscal Year,” May 2007, at www.ers.usda.gov/Data/FATUS/DATA/fynonag.xls (June 4, 2007).

[10] Julian Alston, “Lessons from Agricultural Policy Reform in Other Countries,” in American Enterprise Institute, The 2007 Farm Bill and Beyond, pp. 83-86.

[11] Economic Research Service, “Farm Income and Costs: Farm Sector Income Forecast,” February 14, 2007, at www.ers.usda.gov/briefing/farmincome/data/cr_t3.htm (June 4, 2007).

[12] The marketing loan program can operate in different ways. It can be a loan that must be partially repaid later in the year (called a marketing loan gain), or the benefit can be paid in a lump sum as a subsidy (called a loan deficiency payment). Despite these distinctions, the net effect is to subsidize farmers up to the marketing loan rate level.

[13] University of Tennessee, Agricultural Policy Analysis Center, “An Analytical Database of U.S. Agriculture, 1950-1999,” 2001, Tables 7.1a and 7.2a.

[14] Paul C. Westcott and C. Edwin Young, “U.S. Farm Program Benefits: Links to Planting Decisions and Agricultural Markets,” U.S. Department of Agriculture, Agriculture Outlook, October 2000, pp. 12-13.

[15] Dan Chapman, Ken Foskett, and Megan Clarke, “How Your Tax Dollars Prop Up Big Growers and Squeeze the Little Guy,” The Atlanta Journal-Constitution, October 1, 2006.

[16] American Farmland Trust, “Farm and Food Policy for All-Farmers, Citizens and Communities,” 2007.

[17] Ralph Chite, “Emergency Funding for Agriculture: A Brief History of Supplemental Appropriations, FY 1989-FY 2006,” Congressional Research Service Report for Congress, updated July 3, 2006. Chite mentions a total of $36.5 billion, and approximately $3.5 billion was added in 2007.

[18] Gilbert Gaul, Dan Morgan, and Sarah Cohen, “Crop Insurers Pile Up Record Profits,” The Washington Post, October 16, 2006.

[19] Ibid. The article includes a graphic showing gains and losses since 1998. The cost of premium subsidies and administrative costs since 1998 were calculated using the 1998-2005 totals listed in the article and then projecting forward for the 2006 and 2007 totals.

[20] John Frydenlund, “Farm Subsidies: Myth and Reality,” Citizens Against Government Waste Issue Brief No. 1, April 3, 2007, at www.cagw.org/site/DocServer/2007_Farm_Bill-_
Issue_Brief_1.pdf?docID=2121
(June 4, 2007).

[21] Elizabeth Becker, “Land Rich in Subsidies, and Poor in Much Else,” The New York Times, January 22, 2002, p. A14.

[22] Council of Economic Advisers, Economic Report of the President, p. 175.

[23] See Environmental Working Group, Farm Subsidy Database, at http://www.ewg.org/farm (June 4, 2007).

[24] Covey et al., “Agriculture Income and Finance Outlook,” pp. 40, 48, and 63.

[25] Dean Kleckner, “Farm Subsidies Are Not Saving the Family Farm,” updated manuscript. Copy available upon request.

[26] For a list of subsidy totals, see Environmental Working Group, Farm Subsidy Database. Corporate totals include subsidiaries. Subsidies for lawmakers are described in detail in Ronald D. Utt, Ph.D., “How to Discourage Conflicts of Interest in the Federal Agriculture Subsidy Programs,” Heritage Foundation Backgrounder, forthcoming.

[27] John Lancaster, “More Subsidy Money Going to Fewer Farms,” The Washington Post, January 24, 2002, and Environmental Working Group, Farm Subsidy Database.

[28] Dan Chapman, Ken Foskett, and Megan Clarke, “How Savvy Growers Can Double, or Triple, Subsidy Dollars,” The Atlanta Journal-Constitution, October 2, 2006.

[29] Economic Research Service, “Farm Income and Costs.”

[30] Dan Morgan, Gilbert Gaul, and Sarah Cohen, “Farm Program Pays $1.3 Billion to People Who Don’t Farm,” The Washington Post, July 2, 2006.

[31] Dan Morgan, Sarah Cohen, and Gilbert Gaul, “Growers Reap Benefits Even in Good Years,” The Washington Post, July 3, 2006.

[32] Ibid.

[33] Gilbert Gaul, Dan Morgan, and Sarah Cohen, “No Drought Required for Federal Drought Aid,” The Washington Post, July 18, 2006.

[34] Gilbert Gaul, “Farming Your Insurance,” The Washington Post, October 15, 2006.

[35] James Bovard, “Farm Bill Follies of 1990,” Cato Institute Policy Analysis No. 135, July 12, 1990, at www.cato.org/pubs/pas/pa135.html (June 8, 2007).

[36] Organisation for Economic Co-operation and Development, Agricultural Policies in OECD Countries: At a Glance (Paris: OECD Publishing, 2006), p. 69, Table 2.12. The 2003-2005 average annual transfer from consumers was $12.285 billion.

[37] Mark Drabenstott, “Do Farm Payments Promote Rural Economic Growth?” Federal Reserve Bank of Kansas City, Center for the Study of Rural America, The Main Street Economist, March 2005, at www.kc.frb.org/RegionalAffairs/mainstreet/MSE_0305.pdf (June 4, 2007).

[38] Although conservation programs raise prices, it is still clear that commodity subsidies reduce prices relative to what they would be with only conservation programs.

[39] Ben S. Bernanke, Federal Reserve Chairman, “Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy,” remarks at the Montana Economic Development Summit 2007, Butte, Montana, May 1, 2007, at www.federalreserve.gov/boarddocs/Speeches/2007/
20070501/default.htm
(June 4, 2007).

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China and India lose their appeal for investors on inflation fears

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Fund managers are still super-bullish on Russia, betting that the energy boom has life yet. A net 62pc are overweight oil and gas shares. The most hated trio are travel and leisure (-66), banks (-62) and property (-60).

Karen Olney, Merrill’s European equity strategist, said oil is nearing its cycle peak. “Is the trade too crowded? Probably. As long as fundamentals remain strong, we retain our overweight stance,” she said.

“The burning question is when to sell oil companies and move back to banks.

“We resist the temptation. The time is nearer when inflation rolls over, towards the end of this year and certainly into 2009.”

A record number (net 29pc) are now underweight on European equities; many have switched into cash as they wait for the European Central Bank to inflict punishment – ever more likely after eurozone inflation reached an all-time high of 3.7pc in May.

The ECB’s chief economist, Jurgen Stark, said yesterday that the price spike was a “cause for alarm”.

Mr Bowers said Europe is now facing a triple whammy as the downturn in global export markets combines with a strong euro and a monetary squeeze.

“Eurozone retail sales have been worse than in the US on a year-on-year basis and eurozone GDP growth has also been worse,” he said. “If you look at Spain and Italy, and even France, they are very weak.

“The Fed has eased dramatically, but the ECB hasn’t eased at all. It intends to tighten regardless of the consequences on growth. This is what is eating away at confidence in Europe,” he said.

Merrill Lynch said fund managers were belatedly adapting to a global inflation shock that poses a serious danger to asset prices, and risks setting off “civil protest” in Argentina, Indonesia, South Africa and the Gulf states.

As the new story unfolds, America is coming back into favour, emerging as a sort of safe haven in a fast-changing world where trusted institutions command a premium. Investors are quietly rotating back into Wall Street – despite a chorus of pessimists. A net 23pc are overweight US equities, the highest since August 2001.

The long awaited “decoupling” has begun.

The United States looks like the winner after all.

RBS issues global stock and credit crash alert

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By Ambrose Evans-Pritchard, International Business Editor

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

“A very nasty period is soon to be upon us – be prepared,” said Bob Janjuah, the bank’s credit strategist.

A report by the bank’s research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as “all the chickens come home to roost” from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the “Crossover” index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

“I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

“Cash is the key safe haven. This is about not losing your money, and not losing your job,” said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America’s fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

“Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point,” he said.

US Federal Reserve and the European Central Bank both face a Hobson’s choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. “The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation,” he said.

“The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets,” he said.

Kit Jukes, RBS’s head of debt markets, said Europe would not be immune. “Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

“The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured,” he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

BBC uncovers lost Iraq billions

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BBC uncovers lost Iraq billions

By Jane Corbin, BBC News

A BBC investigation estimates that around $23bn (£11.75bn) may have been lost, stolen or just not properly accounted for in Iraq.

The BBC’s Panorama programme has used US and Iraqi government sources to research how much some private contractors have profited from the conflict and rebuilding.

A US gagging order is preventing discussion of the allegations.

The order applies to 70 court cases against some of the top US companies.

War profiteering

Henry Waxman

Waxman: “It may well turn out to be the largest war profiteering in history.”

While Presdient George W Bush remains in the White House, it is unlikely the gagging orders will be lifted.

To date, no major US contractor faces trial for fraud or mismanagement in Iraq.

The president’s Democratic opponents are keeping up the pressure over war profiteering in Iraq.

Henry Waxman, who chairs the House committee on oversight and government reform, said: “The money that’s gone into waste, fraud and abuse under these contracts is just so outrageous, it’s egregious.

“It may well turn out to be the largest war profiteering in history.”

In the run-up to the invasion, one of the most senior officials in charge of procurement in the Pentagon objected to a contract potentially worth $7bn that was given to Halliburton, a Texan company which used to be run by Dick Cheney before he became vice-president.

Unusually only Halliburton got to bid – and won.

Missing billions

The search for the missing billions also led the programme to a house in Acton in west London where Hazem Shalaan lived until he was appointed to the new Iraqi government as minister of defence in 2004.

He and his associates siphoned an estimated $1.2bn out of the ministry. They bought old military equipment from Poland but claimed for top-class weapons.

Meanwhile they diverted money into their own accounts.

Judge Radhi al-Radhi of Iraq’s Commission for Public Integrity investigated.

Judge Radhi Hamza al-Radhi

Judge Radhi al Radhi: “I believe these people are criminals.”

He said: “I believe these people are criminals.

“They failed to rebuild the Ministry of Defence, and as a result the violence and the bloodshed went on and on – the murder of Iraqis and foreigners continues and they bear responsibility.”

Mr Shalaan was sentenced to two jail terms but he fled the country.

He said he was innocent and that it was all a plot against him by pro-Iranian MPs in the government.

There is an Interpol arrest warrant out for him but he is on the run – using a private jet to move around the globe.

He stills owns commercial properties in the Marble Arch area of London.

Panorama: Daylight Robbery will be on BBC One at 9pm on Tuesday 10 June 2008.
Published: 2008/06/10 17:25:48 GMT

Scott Ritter on War With Iran

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Scott Ritter on War With Iran

By Scott Ritter, Dec 19, 2007

Scott Ritter

The Truthdig columnist (and WMD expert) warns that war with Iran could be inevitable, despite the National Intelligence Estimate report that says Iran dismantled its nuclear program in 2003. Bush, Ritter argues, doesn’t let facts get in the way of what he wants.

Listen to this interview. (PodCast)

Transcript:

James Harris: This is Truthdig. James Harris sitting down with Scott Ritter, former chief weapons inspector in Iraq. And today we’re talking about the latest report from the National Intelligence Estimate. The report says that Iran is not, as of mid-July, in the nuclear weapons business. Scott Ritter-I think, wisely-told me to look at this report with caution and that this means nothing to the White House, that they [members of the Bush team] are about regime change. Please explain.

Scott Ritter: Well, I think it’s important to assess patterns of behavior. When we take a look at the Bush administration and how it has sought to implement its policies of regional transformation in the Middle East, inclusive, these policies include the notion of regime change, removing unpopular regimes, regimes that the United States unilaterally declares incompatible with its vision, removing them from power. This includes Saddam Hussein and the theocracy in Tehran. They have demonstrated a tendency to exaggerate threats in the form of weapons of mass destruction to exploit the ignorance of the American public and the fear that is derived from this ignorance. They did so with Iraq. They made a case for war based upon weapons of mass destruction that they fail to back up with anything other than rhetoric. I can say, as a former weapons inspector who ran the intelligence programs from ’91 to ’98, that we had fundamentally disarmed Iraq, so for the president to say that there’s this new weapons capability, he would have to demonstrate some new information, and he failed to do so. And that’s why I said, unless he provides this new data, that there isn’t the WMD threat that he said. The same thing can be said about Iran.

Harris: Why should we be cautious about what President Bush is telling us right now?

Ritter: Here’s a president who has said Iran is a threat, a threat in the form of a nuclear weapons program. But for some time now I have been saying, “Where’s the beef, Mr. President? …”

Harris: Hmm.

Ritter: ” … I hear the rhetoric, but your pattern of behavior leads me to believe that you might be exaggerating the threat, fabricating the threat, misrepresenting data to achieve your policy objective of regime change, trying to exploit the ignorance of the American public and the fear derived from this ignorance.” Now we have a National Intelligence Estimate that is released that says, “Time out. There hasn’t been a nuclear weapons program in Iran since 2003.” Now I need to make a point here: I continue to say that there’s never been a nuclear weapons program in Iran. And the National Intelligence Estimate doesn’t provide any evidence to sustain its assertion that there was a nuclear program. But be that as it may, they’re saying that the concept of Iran today pursuing nuclear weapons is a fallacy. There’s no data to promote this. Now, if we lived in world where government functioned the way it’s supposed to when it comes to policy-that is, you get your intelligence, you look at it, you examine it, you assess it, and you say, “OK, how do we now interact with the target, the nation, in this case, Iran?”-that’s normal. That’s cause-and-effect relationship.

Harris: Sure.

Ritter: But what we have is, the administration has already made up its mind about what it wants to do with Iran and had been fabricating a case based upon a nuclear weapons program that the U.S. intelligence community now says doesn’t exist today. Do you think there will be a change in policy? And the answer, of course, is no, because they’ve got the cart before the horse. They put the policy out in front. Inconveniently, the intelligence community didn’t back them on the nuclear weapons issue. …

Harris: But you say Iran’s status as a terrorist organization also plays into this. How so?

Ritter: Not only does the Bush administration continue to say that Iran is a terrorist state, that it supports terrorists who were directly or indirectly involved in the events of Sept. 11, 2001. The United States Senate has passed a resolution that says the same thing and certifies the Iranian Revolutionary Guard command is a terrorist organization. So anybody who thinks for a second this National Intelligence Estimate somehow retards the ability of the Bush administration to engage in military action against Iran, you’re sadly mistaken. The Bush administration’s policy has been made. This estimate was not used to make that policy, and as you yourself have reflected, the president’s not going to let this estimate get in the way of his continuing to articulate Iran as a threat.

Harris: Well, Scott, if you’re right, that’s a high crime. That’s wanton disregard for American wishes, disregard for any of the national intelligence agencies that supposedly cover our back.

Ritter: It’s wanton disregard for everything we stand for as a nation. We elect representatives to government to do our bidding. We expect them to operate within a framework of due process set forth by the rule of law. We might call this the Constitution or laws derived from the Constitution. We speak of checks and balances where we have three separate but equal branches of government, and when it comes to foreign policy and national security policy, really, two. The judiciary takes a step aside and it becomes the executive and the legislative branch. And there’s a system, a bureaucratic system there-the State Department, the CIA, the Defense Department-that is supposed to weigh in on these issues. And like I said, you want to gather the facts, examine the reality, and then make the policy. What we have here is an administration that, ideologically, has committed itself to certain policy actions divorced from what we’ll call reality, early on in the Bush administration.

Harris: Hmm.

Ritter: We heard people speak of a new reality, that the Bush administration can make its own reality. I’m not joking. Paul O’Neill, former secretary of the Treasury, who sat in Cabinet meetings where this was said. And so we now take a look at a situation where the president and his administration are continuing to march forward on a policy direction, regardless of what the data says. Am I jaded? No. I’m alarmed, as much as you are, but I think it’s imperative that we address this responsibly by first realistically acknowledging what’s occurring. There’s too many pundits out there today who are raising the flag of victory, saying, “Aha! Because of this NIE, this National Intelligence Estimate, war’s off the table. We don’t have to worry about it. The Bush plan has been undermined.” It most certainly hasn’t, because the Bush administration has never shown a tendency to respect the normal system of government. This estimate won’t have an impact at all.

Harris: Is it likely that George Bush will look at this report, throw it in the garbage and continue on, business as usual? The business, in this case: engage hostilely with Iran.

Ritter: The answer is yes. He is engaging hostilely with Iran. Remember: I’ve been saying for some time now that the Bush administration is taking the nuclear issue off the front burner. The CIA’s estimate follows on the heels of a finding by the International Atomic Energy Agency back in September that said the same thing: There’s no evidence of a nuclear weapons program. And this was one of their final analyses. They’ve been saying this for some time. The Bush administration has been, for many months now, having a hard time selling Iran’s nuclear threat as a causa bella. This is why they’ve shifted to terror and terrorism. The Bush administration is going to use the gift it was given by the U.S. Senate, this target list of the Iranian Revolutionary Guard command to serve as the cornerstone of its target list when it comes to launching a limited military operation against Iran that’ll probably take place some time in the spring. This is the plan, and the NIE-I don’t think-has changed this one iota. Now, it could. Let’s say Congress woke up all of a sudden. Let’s say Congress said, “Oh my goodness, this president’s been pulling our chain, been lying to us, hyping this thing up. There’s no threat,” and Congress intervenes in a way that it’s refused to do so to date, then maybe, maybe this war could be stopped. But if Congress continues to turn a blind eye or worse, as in the case of the Senate resolution, to facilitate Bush’s hyping of Iran as a threat, I think war is inevitable.

Harris: They’ve been asleep for five years now. Why would they wake up now? Why …

Ritter: [Unintelligible.]

Harris: Yeah. Hillary Clinton voted “yes.” She’s a U.S. senator, she’s running for president, and she said, “Yes, the Iranian Revolutionary Guard is indeed a terrorist organization.” Does this further the idea that “the Democrats and the Republicans-you know what?-they’re all in bed together”?

Ritter: It furthers the notion that front-runners are all in it together. The bottom line is, Hillary is getting money from the same sources that fund Giuliani. And if you take a look at their foreign policies, they’re pretty much one and the same. They’re very aggressive foreign policies. They’re based upon the premise of a unitary executive, that the president has the right to pre-emptively launch military strikes against threats that emerge, and maybe do so in a manner which negates Congress. There’s no difference between Hillary and George W. Bush or Rudy Giuliani when it comes to issues of this sort. There’s other Democrats out there who of course take a more nuanced, I would say responsible, point of view. Bill Richardson, governor of New Mexico, an outstanding candidate. But he’s not getting money from the same sources that are underwriting Hillary and Giuliani and others.

Harris: Scott, tell me what you think our president should be all about these days.

Ritter: The president should govern in accordance with the Constitution. What we have here is a situation that has existed for some time now where successive presidential administrations, frustrated by the inadequacies of democracy, so to speak-.

Harris: [Laughs.]

Ritter: It’s an ugly process. It takes time. It’s not convenient. And presidents want to wield their executive authority. And so, especially in time of war, they’ve created this concept-and it’s totally at odds with the Constitution-of the unitary executive where the president has unilateral powers in times of war. Somebody like Ron Paul, I think, somebody who knows the Constitution, takes a look at this notion of unitary executive authority and says, “Humbug. That’s ridiculous.” And I agree with him. I think it’s imperative that whoever becomes president understands that there are constitutional restrictions on what the president can and can’t do. I also think it’s imperative that Congress start reading the Constitution and flexing its constitutional muscles. That there is a role for Congress to play. It’s called oversight. And that Congress can retard irresponsible policy, that the president doesn’t get a blank check when it comes to foreign policy and national security policy. But, as you mentioned, we don’t have a Congress that seems to be enlightened in this fashion, and outside of a Ron Paul we don’t have too many people who have announced themselves as candidates for the president who will publicly commit to reversing this trend towards a unitary executive.

Harris: Before we move on, what are you optimistic about as we close the year and some of us being to make resolutions? Having told us before, there are no weapons of mass destruction, having been vociferous about the fact that the Bush administration is not doing their job, what keeps you optimistic in all of this? How do you not become jaded? How do you not become disillusioned?

Ritter: I’m a student of history. I allow myself to go back and examine the history of the United States, and I recognize that throughout our history our nation has been faced with serious problems, and yet we overcame these problems. It wasn’t pretty, and it didn’t happen overnight, but I’m a firm believer in the resiliency of the American people and our system of government because it’s founded in the Constitution. And as long as we respect that Constitution and abide by that Constitution, I’m comfortable with the fact that we will recover. It’s not going to happen overnight. It won’t happen in the next decade. I’ve said-. This invasion of Iraq has set in motion events that are going to take decades to cure. And so I’m not optimistic about 2008, 2009, 2010; I’m optimistic about 2020, that America will heal itself. But we’re not going to heal ourselves without a fight. That doesn’t mean that I can just sit back and throw my feet up and say, “I’ll just wait until the time passes.” No. We’ll heal ourselves because we will wake up collectively. Congress will reawaken. The presidency will be brought in line with the Constitution, but not without a fight. And so 2008 is going to be a fight, 2009 is going to be a fight. We have to fight, because if we don’t, then I have no confidence whatsoever in America healing itself.

Harris: Tell me a little about your dig. You’re leading a dig on Truthdig, Truthdig.com. And it’s called “Calling Out Idiot America.” Can you share with us some of what you’re saying? Your thesis, if you will?

Ritter: That was the first piece I wrote. I was approached by Mr. Scheer [Robert Scheer, Truthdig editor] and Ms. Kaufman [Zuade Kaufman, Truthdig publisher] to write for Truthdig. I thought probably the best thing to do is to set the tone of how I was going to approach this, which wasn’t going to be a kinder, gentler dig; it was going to be an in-your-face dig, but not one that was irresponsible. I chose, right off the bat, the issue of Iraq. I say we have a responsibility to the soldiers, sailors, airmen and Marines who are over there and a responsibility to our government to be engaged on Iraq. But, sadly, most Americans were ill equipped. I was driving down- I had just talked to the publishers and the editors of Truthdig and I was driving down from L.A. to San Diego, formulating this concept of-how do I explain Shia, Kurds and Sunni to people? And I was listening to the radio and the Green Day song came on, “Calling Out to Idiot America.” I said, “That’s a great title. That’s pretty much what I’m trying to do.” With all due respect to the American people, we’re 300 million people, technologically advanced, but we’re probably the most ignorant people in the world …

Harris: How do you mean? How do you mean?

Ritter: … so I have no qualms about calling Americans idiots when it comes to issues like Iraq, Iran and other areas around the world that somehow in our nationalistic-. We thump ourselves on the chest and say we have a right to intervene, but when you ask people to talk about the reality of that country, we know nothing about it, so we’re basically sticking our nose in an area that we’re ignorant of.

Harris: Mm-hmm. How do we cure that? Because I think that’s the main reason we can’t make change. At least that’s one speculation: that we are thousands of miles away from where the action is going down. We’re disconnected. We’re over here living our lives, we’re doing our own thing and there’s a war going on. Maybe that’s why we aren’t up in arms collectively.

Ritter: It’s a huge part of the problem, the complacency of a society that has been dumbed down by the narcotic of consumerism. If you just think about it, we wrapped ourselves in this cocoon of comfort and so long as the powers that be keep us waddling down a relative path of prosperity, we don’t want to rock the boat. But the fact is, we must empower ourselves with knowledge and information. That’s why I’m grateful to Truthdig for giving me a chance to write, because I view it as an outstanding forum for informing people and for having people empowered with knowledge and information so that we make informed decisions. We go back. We talk about our system of government. It doesn’t work if we, the people, are divorced. And if you accept, as I do, that the Constitution of the United States is the foundation of our government, that preamble says that we, the people of the United States of America, we shouldn’t take that lightly. The Supreme Court has said, because of that preamble, the Constitution belongs to us; we are the defenders of the Constitution. And so it’s imperative that we, the people, get empowered and we empower ourselves through the acquisition of knowledge and information and then assert ourselves onto a system of government. But it’s going to require people to stand up and shake off this apathy, as I said, the narcotic of consumerism brings the bear. I love Christmas. I help my Jewish friends celebrate Hanukkah. I think there’s nothing wrong with this time period, but we also need to reflect on how far we’ve shifted away from a holiday that celebrates human beings coming together and instead become involved in a holiday that’s about conspicuous spending.

Harris: Yeah.

Ritter: We need to recognize that there’s an enemy out there. And if we look in the mirror long enough, we’ll realize that the enemy is us.

Harris: I think you make a good point. Some of my busy friends would say, “You know what? What time do I have to make a difference? Is there anything the average Joe can do to help affect change? Besides writing the senator and writing the congressman, what else can you do?

Ritter: The first thing is to recognize that there’s a need. That’s step one. You have to say, “There is a need for change.” The next thing, after that, is to allocate time. I keep hearing people say, “I don’t have time.” Last night was Monday Night Football. Heckuva game, by the way. I sat in a bar with my friends. These are good guys; they’re not stupid. But they keep telling me over and over again, “That foreign policy stuff is too complicated, man. How do you expect us to get our fingers wrapped around it? You’ve been living this for your life, but we don’t do this. We have jobs and everything.” And I said, “That’s fair enough.” But then we’re watching the game, and they start criticizing play calls. They say, “You know, if they’d given the ball to the fullback on this play, statistically speaking on second down through the guard and tackle off the right side, he’s going to gain 3.5 yards.” I said, “How do you know that?” They go, “Oh, we studied the stats.” I’ll tell you what: If you’ve got enough time to study sports stats so that you know this kind of information, you can make that kind of analysis, you’ve got enough time to study American foreign policy and have an informed opinion about places where Americans are dying.

Harris: You would agree, then, that the more informed, and the more masses, the more people that are informed, the better off we are. We benefit from that, don’t we?

Ritter: It’s the only way we can be. It’s not one of these things that we would say is an “elective.” We don’t get to opt out of this one. If you call yourself an American citizen, you have to be informed. It’s a responsibility of citizenship. It’s not something you can opt into or opt out of. If you opt out of it, turn in your passport and leave my country. If you want to be a citizen in America, you’ve got to opt in and say: “Hey! I’m here. I count. I’m relevant, and I’m going to be informed.”

Harris: I think it is the job of every American to know something about foreign policy and something about government and be able to talk intelligently about these subjects, because that only means a better public. So I agree with you there. But we are preaching that Americans need to participate, yet the chief American is not participating. He’s not doing the things that we’re preaching Americans should do. So then, how, at this time, can we mount an effort to overcome the backward thinking that’s coming out of the White House?

Ritter: One of the reasons why the executive headed down the path towards unilateral executive power is that they got frustrated with the slow pace of democracy. I think the first thing we have to recognize is that the American people can’t allow themselves to be frustrated by the slow process of democracy. The other thing they have to recognize is that the rule of law means nothing unless the law is enforced. And we have a president who is showing a wanton disregard for the rule of law. There are constitutional remedies for executives who behave in this manner. It’s called impeachment. And I’m a big fan of the American public letting Congress know that impeachment is on the table. It’s Congress’ job, not to impeach, per se, but to investigate. And we have clear examples in the case of Iraq of the potential of wrongdoing that Congress has yet to investigate in a satisfactory manner. And now we’re taking a look at Iran. If we speak of holding the president to account for his actions, how about starting to hold Congress accountable for their failure to act in accordance with the will of the people? And what I’m talking about is a Nancy Pelosi and a Harry Reed, these “great” Democrats. And I say “great” in quotations because I don’t think they’re great at all. These Democrats who were elected to office by the will of the people and who have said that they are going to do nothing to tie the hands of this president when it comes to issues such as Iran and Iraq. And the last thing they’re going to do is defend the Constitution by holding the president accountable for his failure to abide by the Constitution. It’s time we started holding these people accountable as well.

Harris: Certainly refreshing to hear that you still maintain optimism and that you still have belief.

Ritter: I have belief in the American people. The government, as long as it’s reflective of the will of the people within the framework of the Constitution, I’ll continuously eye it in a suspicious fashion. But the government we have in play today? No, I don’t have any faith in it. It needs to be changed, and this is our collective responsibility to elect people to office who will do our bidding in accordance with the Constitution and who will be held accountable to us. Too many times we vote, but then that’s it. We don’t do the second half of the representative democracy equation, which is to hold them to account.

Harris: Yeah. If we keep calling the people, maybe they will answer one day. I believe they have to answer.

Ritter: I agree.

Harris: Scott Ritter, the former chief weapons inspector in Iraq, is also the author of “Iraq Confidential” and the first man I heard say there are no weapons of mass destruction in Iraq. Scott Ritter, thank you for joining us today on Truthdig.

Ritter: Thank you for having me.

Harris: All right then. For Scott Ritter, this is James Harris, and this is Truthdig.

AL-WIRDUL AAM – Dua

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AL-WIRDUL `AAM
THE GENERAL LITANY

1. Recite Once :

الرَّجِيْمِ الشَّيْطَانِ مِنَ بِاللهِ أَعُوْذُ

A-`ŪDHU BILLĀHI MINASH SHAYTĀ-NIR RAJĪM

I seek refuge in Allah from Shaytan, the rejected one.

2. Recite Three Times :

الرَّحِيْمِ الرَّحْمنِ اللهِ بِسْمِ

BIS-MIL-LĀHIR RAHMĀ-NIR RAHĪM

In the Name of Allah, Most Gracious, Most Merciful.

3. Recite Once :

اللهِ عِنْدَ تَجِدُوْهُ خَيْرٍ مِّنْ لِأَنْفُسِكُمْ تُقَدِّمُوْا مَا وَ
أَجْرًا أَعْظَمَ وَ خَيْرًا هُوَ
اللهَ اسْتَغْفِرُوا وَ
رَّحِيْمٌ غَفُوْرٌ اللهَ إِنَّ

WA MĀ TUQAD-DIMŪ LI-ANFUSIKUM MIN KHAYRIN TAJIDŪHU `INDAL-LĀHI HUWA KHAYRAN WA A`A-ZAMA AJRĀ WAS-TAGH-FIRUL- LĀH INNAL-LĀHA GHAFŪRUR- RAHĪM

“And whatever good you send forth for yourselves, you shall find it with Allah, better and greater in reward. And seek the forgiveness of Allah, for Allah is Oft-Forgiving, Most Merciful.” [ Surah Al-Muzzammil, 73:20 ]

4. Recite Ninety-Nine Times :

اللهَ أَسْتَغْفِرُ

AS-TAGH-FIRUL- LĀH

I seek the forgiveness of Allah.

5. Recite Once :

الْقَيُّوْمَ الْحَيَّ هُوَ إِلاَّ إِلَهَ لآ الَّذِيْ الْعَظِيْمَ اللهَ أَسْتَغْفِرُ
. إِلَيْهِ وأَتُوْبُ

AS-TAGH-FIRUL- LĀHAL `AZĪMAL- LA-DHĪ LA ILĀHA ILLĀ HUWAL- HAYYAL- QAY-YŪMA WA ATŪBU ILAYH

I seek the forgiveness of Allah, the Most Great, other than whom there is no god, the Living, the Self-subsisting Supporter of all, and I turn to Him in Repentance.

6. Recite Once :

النَّبِيِّ عَلَى يُصَلُّوْنَ مَلاَئِكَتَهُ وَ اللهَ إِنَّ
. تَسْلِيْمًا سَلِّمُوْا وَ عَلَيْهِ صَلُّوْا آمَنُوْا الَّذِيْنَ أَيُّهَا يَا

IN-NALLĀHA WA MALĀ-IKATAHU YUSALLŪNA `ALANNABIY, YĀ AY-YUHAL- LADHĪNA ĀMANŪ ŞALLŪ `ALAYHI WA SALLIMŪ TASLĪMĀ

“Verily Allah and His Angels send blessings on the Prophet: O you who believe, send blessings on him and salute him with all respect.” [ Surah Al-Ahzab, 33:56 ]

7. Recite Ninety-Nine Times :

النَّبِيِّ رَسُوْلِكَ وَ عَبْدِكَ مُحَمَّدٍ سَيِّدِنَا عَلَى صَلِّ اَللهُمَّ
. سَلِّمْ وَ صَحْبِهِ وَ آلِهِ عَلَى وَ الأُمِّيِّ

ALLĀHUMMA ŞALLI `ALĀ SAYYIDINĀ MUHAMMADIN `ABDIKA WA RASŪLIKAN- NABI- YIL- UMMIY,
WA `ALĀ ĀLIHI WA SAHBIHI WA SALLIM

O Allah, bless our master Muhammad, Your Servant and Messenger, the Unlettered Prophet, and his family and Companions, and grant them peace.

8. Recite Once :

النَّبِيِّ رَسُوْلِكَ وَ عَبْدِكَ مُحَمَّدٍ سَيِّدِنَا عَلَى صَلِّ اَللهُمَّ
بِقَدْرِ تَسْلِيْمًا سَلِّمْ وَ صَحْبِهِ وَ آلِهِ عَلَى وَ الأُمِّيِّ
عَظَمَةِ
. حِيْنٍ وَ وَقْتٍِِ آُلِّ فِيْ ذَاتِكَ

ALLĀHUMMA ŞALLI `ALĀ SAYYIDINAA MUHAMMADIN `ABDIKA WA RASŪLIKAN- NABI- YIL- UMMIY,
WA `ALĀ ĀLIHI WA SAHBIHII WA SALLIM TASLĪMAN BIQADRI `AŻAMATI DHĀTIKA FĪ KULLI WAQTIN WA HĪN

O Allah, bless our master Muhammad, Your Servant and Messenger, the Unlettered Prophet, and his family and Companions, and grant them peace, as greatly as the greatness of Your Being, at every moment and time.

9. Recite Once :

. الله إِلاَّ إِلَهَ لاَ أَنَّهُ فَاعْلَمْ

FA`LAM ANNAHU LĀ ILĀHA IL-LAL-LĀH

“Know, therefore, that there is no god but Allah.” [ Surah Muhammad, 47:19 ]

10. Recite Ninety-Nine Times :

. الله إِلاَّ إِلَهَ لاَ

LĀ ILĀHA IL-LAL-LĀH

There is no god but Allah.

11. Recite Once :

اللهُ صَلَّى اللهِ رَسُوْلُ مُحَمَّدٌ سَيِّدُنَا اللهُ إِلاَّ إِلَهَ لاَ
عَلَيْهِ
. سَلَّمْ وَ صَحْبِهِ وَ آلِهِ عَلَى وَ

LĀ ILĀHA IL-LAL-LĀHU SAYYIDUNĀ MUHAMMAD UR RASŪLUL-LĀH, ŞALLAL-LĀHU `ALAYHI WA `ALĀ ĀLIHI
WA SAHBIHI WA SALLAM

There is no god but Allah, our Master Muhammad is the Messenger of Allah, may the blessings of Allah be upon him and his family and his Companions, and may He grant them peace.

12. Recite Three Times : (Suratul Ikhlas)

الرَّحِيْمِ الرَّحْمنِ اللهِ بِسْمِ
أَحَدٌ اللهُ هُوَ قُلْ
الصَّمَدُ اَللهُ
يُوْلَدْ لَمْ وَ يَلِدْ لَمْ
أَحَدٌ آُفُوًا لَّهُ يَكُنْ لَمْ وَ

BISMIL-LĀHIR- RAHMĀ-NIR RAHĪM QUL HUWAL- LĀHU AHAD, ALLĀHUŞ- ŞAMAD, LAM YALID WA LAM YŪLAD, WA LAM YAKUL- LAHŪ KUFUWAN AHAD

“Say: He is Allah, the One; Allah, the Eternal, Absolute; He begets not, nor is He begotten; And there is none like unto Him.” [ Surah Al-Ikhlas, 112: 1-4 ]

13. Recite Once : (Suratul Fatihah)

الرَّحِيْمِ الرَّحْمنِ اللهِ بِسْمِ
يَوْمِ مالِكِ الرَّحِيْمِ اَلرَّحْمنِ الْعَالَمِيْنَ رَبِّ لِلَّهِ اَلْحَمْدُ
الدِّيْنِ
الْمُسْتَقِيْمَ الصِّرَاطَ اهْدِنَا نَسْتَعِيْنُ وَإِيَّاكَ نَعْبُدُ إِيَّاكَ
عَلَيْهِمْ الْمَغْضُوْبِ غَيْرِ عَلَيْهِمْ أَنْعَمْتَ الَّذِيْنَ صِرَاطَ
. آمِيْن . الضَآلِّيْنَ وَلاَ

BISMIL-LĀHIR- RAHMĀ-NIR RAHĪM ALHAMDU LIL-LĀHI RABBIL- `ĀLAMĪN, AR-RAHMĀ-NIRRAHĪM, MĀLIKI YAWMID- DĪN, IY-YĀKA NA`BUDU WA IYYĀKA NASTA`ĪN, IH-DINAŞ- ŞIRĀTAL MUSTAQĪM, ŞIRĀTAL LADHĪNA AN`AMTA `ALAYHIM, GHAYRIL MAGH-DŪBI `ALAYHIM WA LAD-DĀLLĪN. AMEEN.

In the Name of Allah, Most Gracious, Most Merciful. All Praise is for Allah, Lord of the Worlds. Most Gracious, Most Merciful. Master of the Day of Judgement. You (alone) we worship; And You (alone) we ask for help.
Guide us to the Straight Path. The Path of those upon whom You Have bestowed Your Grace, Not (the Path) of those who earn Your anger (wrath), Nor of those who go astray. [ Surah Al-Fatihah, 1:1-7 ]

14. Make Du`ā’ for yourself, your parents, your Sheikh, your fellow Brethren on this Path, and all Muslims.