"I'm from the Government and I'm Here to Help... Poison America!"

Settle in for a whirlwind, link-filled tour through government and argibusiness

In my previous post on U.S. government (dis)regulation, I discussed a variety ongoing scams and frauds by our government against its people, but principally I covered occupational licensure, the “living wage” fraud, the “gender wage gap” fraud, and one of “the reverend” Al Sharpton’s (many) race-hoaxes. Now we move on to something even worse.

"I'm From the Government and I'm Here to Help... Screw the Poors"

I. …In the Beginning Was the AAA

I’ve tried repeatedly to write this but for a host of reasons, I just can’t seem to tell it as a narrative without it turning into its own two-hour movie, so I’ve opted for a different angle. I would love to “name the names” of every rotten politician, lobbyist, or businessman involved (who bought the former two off) - because they all deserve every ounce of ridicule, ignominy, and public shame they ever get - but instead I’ll have to settle for explaining the background, the broad outline of how Americans being systematically poisoned by their government and corporate interests got enshrined into law, and then one particularly pernicious example. This one particular example, however, should be seen in its proper context, as perhaps the prime example of how government interventions and hyper-regulation produce ever-escalating downstream effects that lead to further bad interventions, in a spiral of ever-more-expensive (and not just in terms of money) solutions that beget only more problems: the “business” of buying off politicians, government subsidies creating bubbles like the student loan debacle, the Welfare State, etc. The Law of Perfectly Foreseeable Unintended Consequences ensures that large-scale, governmental solutions always have built into them the seeds for violating citizens' rights and fucking things up in the long run. In sum, it’s just like a Charles Dickens’ story, except American-style, so without the funny accents.

I’ll start at the beginning… sort of.

Like any good tale involving government waste and abuse, the actual legislation I want to rail about was passed as part of the New Deal under that wonderful statist, dictator-wannabe, Franklin Delano Roosevelt. In 1933, the first Agricultural Adjustment Act (AAA) was passed by Congress at the urging of FDR as a part of a host of legislative proposals right after he was inaugurated. The AAA was meant to help rural farmers, which made up a substantially larger portion of the workforce - and voting population - than currently.

But in point of fact, the origins of the problem lay in earlier government meddling in markets almost 20 years earlier under a different statist piece of crap in the White House, Woodrow Wilson. During World War I (1914-1917 for the US), Wilson tapped an obscure official named Herbert Hoover to head up the U.S. Food Administration, which was implemented to “to prevent monopolies and hoarding, and to maintain government control of foods through voluntary agreements and licensing.” (Does any of this sound familiar?) Among the primary tasks was to stabilize the price of wheat and increase farm production in the United States in order to help support our (starving) European Allies during the “War to End All Wars” (ahhh-hahahahaha!!). Ahem.¹ Below is a state-level historical view of how this was accomplished.

Almost immediately after the war declaration the previous April, the Agricultural Extension Service had begun a campaign to help farmers boost food production. The April 14 issue of Extension Farm-News claimed “wars are not only waged with guns and shells; they are fought along economic lines, with food, clothing, and shelter as three empirical fundamentals.” The situation was serious: food shortages existed in the U.S. and locally because of bad weather, in Europe because former farmers had become soldiers or war casualties, and worldwide because of increased demand and decreased supply. The weekly concluded that the “rural United States looms up greater and more significant than ever before in its position of patriotic civilian citizenship, in producing crops and feeding the urban world.”  That spring and summer, it regularly carried urgent headlines:  “Pork production is a patriotic duty, and it pays,” “Grow more food and feed crops,” “Let our slogan be this year: the highest yields per acre possible,” “Urgent demand for peanuts,” and “Grow more wheat.”  The 1917 Farmers’ and Farm Women’s Convention certainly carried the same messages.

The above quote is from North Carolina State University’s special collections on World War I’s impact on agriculture. So, here is Big Daddy Gubmint getting into an entirely optional war in Europe, drafting its principle farmhands - fighting age males - and sending them this war, and then demanding that those who remained behind produce more, More, MORE crops to support the absent European farmers, who were also being systematically turned into fertilizer by German artillery and machine-guns in the mud and muck of the western front.

Anyway, the U.S. Food Administration was telling farmers to grow like crazy in order to help with the war effort, so farmers who were still here, men and women alike, took out loans, expanded operations, and generally undertook activities in support of the government’s artificially imposed demand. Remember - this was not “the market” demanding this increase in productivity. What also happened at the same time? Technology changed with the invention and adoption of internal combustion engine for the motorized car, which was also encouraged to increase productivity on farms.

Prior to the tractor, this is how we farmed

Pre-war, the US produced roughly 650,000 bushels of wheat. After the war, despite the absence of men and losses in the war, output grew to 940,000 bushels per year and stayed at 800,000 throughout the Roaring 20s.

During World War I, farmers worked hard to produce record crops and livestock. When prices fell they tried to produce even more to pay their debts, taxes and living expenses.

Iowa PBS

Read that last sentence again. As prices cratered because of increases in production (the iron law of supply and demand, anyone?), people following the government admonition panicked and attempted to produce - and sell - even more, which in turn caused prices for agricultural products to drop even further. And what was a knock-on effect of these cratering prices to farmers? Lest one think this is me drawing unwarranted conclusions, let’s see what PBS Iowa says.

However, for Iowans and the Midwest, hard times had started about ten years earlier. During World War I, the government guaranteed farmers high prices for their crops and livestock. Farmers put more acres in cultivation and increased the size of their herds. They borrowed money from local banks to buy more land and machinery. As the demand for land increased, so did its price, and sales of Iowa farmland rose sharply.

In 1920, however, the government ended its guarantees. Farm prices were allowed to drop back to natural prices—determined by supply and demand. In this case, there were big supplies. Farmers continued to produce at high levels and soon surpluses appeared. As a result, prices for crops and for land fell. Those who had borrowed money could not pay off their loans. Even if they sold their farms, the money they received sometimes was less than what they owed. When banks could not collect the money they borrowed, they could not repay the people who had deposited money in their bank accounts. Many Iowa banks closed, and depositors lost their money. Around the state, 167 banks closed in 1920. That number rose to 505 in 1921. For several more years the number of bank failures remained high. 

Like every price-control ever tried in the history of for-fucking-ever, it inevitably failed because - as every Austrian-schooled economist knows - no single individual, nor collection of individuals, nor government cabal, can possibly know market prices and shift quickly enough to react to those changes. And by the time they do, it’s too late. The linked article shows how government continued to tell people to grow-grow-grow while there were insufficient hands available (i.e a labor shortage) to work the land because the men had all been drafted to fight in the war. At the same time, technology was changing and farm equipment was replacing - and outpacing - that same manual labor. This is not a failure of capitalism, it’s an iron law of information theory, but the bogeyman of “capitalism” gets blamed every time for the failings of bureaucrats.

Because the US government had established arbitrary - and frequently inflated - prices for wheat and other crops, when it became clear there was a food glut, due to (among other reasons) increased production from other countries around the world, the US had to impose high tariffs to keep the price of imported goods artificially high.

Efforts in Congress to protect U.S. farmers from foreign competition failed. As a result the farmers’ situation worsened throughout the 1920s. Farmers had to borrow to buy seed and equipment. Most took out loans against their land and homes. But food prices continued to fall, and by the late 1920s many U.S. farmers were hopelessly in debt. They began to miss payments on their loans, weakening their local banks. Between 1921 and 1929 an average of more than six hundred banks failed every year (compared to sixty-six a year between 1910 and 1919). Almost all of the failures were small rural banks. By 1929 farming families—roughly a quarter of the U.S. population—were desperately struggling.

Id.

And yet another site regarding the origins of the Depression points out this:

Between 1923 and 1929 worker output of manufactured goods increased by 32 percent. Assembly lines and new machinery boosted production. As manufacturers saw it, the more goods produced and sold, the more profit there was to be had. Homes in U.S. cities were being electrified, which created a market for new, timesaving electric appliances. Appeals to buy were everywhere. Advertisers touted their products, and movies teased Americans with images of movie stars living with luxuries all around. Although most Americans had little money left over after paying for necessities such as housing and food, they found a way to buy the new automobile, the electric washing machine, and the radio: It was called credit, or installment buying. A small first payment (down payment) was made; then the rest of the price was paid over time. This system worked well as long as the buyer had a job. Installment buying had never been used in America before the late 1920s. Previously, if the total cash price could not be paid up front, the purchase was not made.

I'll just leave those bold items there to see if they ring any bells or set off any more alarms.

Which brings me back to the beginning of the non-stop government subsidizing of the farm industry for one-hundred years. The AAA of 1933 was meant to - guess what? - artificially prop up the prices of wheat and other farm commodities. (Stop me if this sounds familiar). It also included a program to feed the hungry - the precursor to Food Stamps. These kinds of short-term policies are always done with the best of (short-term) intentions, but never with an understanding of the inevitable *pop* of the bubble and what that is likely to look like, so we stagger from one government-inflated bubble to the next, always wondering how we got there and blaming supposedly “free” markets for the failure of horribly shitty bureaucratic and statist policies.

Roll the clock forward and the AAA has been a fixture of every budget since FDR’s. NPR did a piece on the debates surrounding the 2008 Farm Bill. Congress passed that version over then-President Bush's veto. Bush noted that the bill was bloated and contained all manner of pork for various Senators - because it did. Now all of this might leave one scratching one’s head. Why do farmers still need subsidies? Particularly when: (1) the entire basis for the country’s economy has shifted away from farming; (2) small farms have all but disappeared; (3) most of the subsidies, given how they’re structured, benefit large agri-businesses, like Monsanto and Archer-Daniels-Midland (ADM); and (4) we can import grains and other such commodities from nearby countries very cheaply, given the absence of minimum wage laws and other government interference that doesn’t drive up the costs associated with farming?

The answer, of course, is found in that link regarding agri-business. The New Republic points out how Congress has ended its direct subsidy program because of how politically unpopular it was to pay farmers NOT to grow on their land, thus incentivizing non-work AND paying more to those who hold the most acreage (larger farms), rather than through any justified need.

There is an old joke that ADM harvests more in Washington, DC, than it ever does in Iowa or Nebraska. I was in Omaha for a conference by a political organization dedicated to small(er)-government, at which my Boss at the time - the Founder and CEO of CrossFit, Inc., Greg Glassman - was speaking. After a speech about the benefits of smaller government as it relates to the health and fitness industry, during the Q & A someone asked about corn subsidies and the room got quiet. Greg made a joke about it and everyone laughed, but it was clear that it was a political third-rail.

II. This is How You Get Poisoned

And now we get to the heart of the matter...

Corn is subsidized more than just about anything in the United States. To wit:

A guaranteed source of income is attractive. That’s one of the reasons that, of the 300-million-plus acres planted with food (other than grass, hay and forage for animals) in this country, half are corn and soy. Another 50 million are wheat. Only 14 million are devoted to fruits and vegetables, from peas (1.2 million acres) to mangosteens [1 acre, which I’d dearly love to visit].

So what? You say. Well, in this country, what is corn primarily turned into? HFCS-55. For those not in the know, that is High Fructose Corn Syrup-55. Which means that it has a mixture of 55% fructose and 45% glucose, made thusly.

It is in virtually EVERYTHING you eat. Check the labels of virtually anything you buy in the aisles of the grocery store. And it is subsidized, which is why Coke and Pepsi can produce vast quantities of their product for pennies. The government is underwriting the costs of production to the tunes of billions each year. That’s why Coca-Cola is cheaper than water in developing nations. And there’s also the problem that Coke and Pepsi use 2.7 liters of water to produce just 1.0 liter of product, thus causing droughts in some areas.

Now, that would be just one bad example, but I would like to explicate what I like to call the “Economic Cycle of Evil.” First, government underwrites the costs of production of Coca-Cola, Pepsi, and all of the shitty food that has HFCS in it. HFCS has been shown to be uniquely awful for human beings (and a lot of poor lab rats). Dr. Richard Johnson, a nephrologist at the University of Colorado has done pioneering research on the effects of fructose on the human body. His book, The Fat Switch, while perhaps not the easiest read for a lay reader, provides all the scientific evidence one would need to reach the only conclusion that can be reached: HFCS sets off a cascade of biochemical reactions in the body that leads to fat storage. It is an evolutionary mechanism and human genome researchers have figured out exactly where the mutation occurred in our DNA - and when - that gives us some pretty compelling guesses as to the “why” of it. It’s how we as a species survived periods of famine. Like bears hibernating for the winter, our bodies are hypersensitive to fructose in order to allow us to store food as fat, in response to the slightest uptick in fructose consumption. Unfortunately, in the current environment, with plentiful food, not only are we getting fat in record numbers, we’re also getting diabetes, non-alcoholic fatty liver disease, more cancers, kidney disease, hypertension, and even dementia and Alzheimer’s - all of which are increasingly being linked to excess sugar consumption. The terrible thing about all of this - and why soda is likely the biggest culprit - is that according to experiments, because our bodies are so sensitive to fructose, we can only consume limited quantities of it directly. I have the paper but can’t get it uploaded now, but my recollection is that the number was around 20g of fructose. That is, in an excellent experiment done by Dr. Johnson, most people couldn’t consume much more than 20g of fructose directly without having digestive problems, like gas, diarrhea, etc. HOWEVER, when fructose is combined with glucose - which is called sucrose, also known as table sugar - people can consume vastly higher quantities. Moreover, when that combination is consumed in liquid form, as in sodas - not only can we consume vastly higher quantities than our bodies can safely intake, we also seem to crave more.

Second, after government underwrites Coke and Pepsi’s production costs, people consume it in vast quantities and get sick. Now, why would people do that? Certainly, part of it has to fall to individual choices, however, it’s hard to fully blame people when Coke and Pepsi give hundreds of millions of dollars to health organizations, who simultaneously claim that this money won’t influence their public statements or research, yet studies show it does. And then there are the studies that show sugar is at least as addictive as cocaine.² Regardless, just ask yourself this simple question: why in the fuck is Coca Cola funding the Juvenile Diabetes Research Foundation? Is there anyone who can read who believes that Coca-Cola or Pepsi will somehow help with the epidemic of juvenile Type 2 diabetes?  The influence of big soda on these organizations has been widely reported in the media and I’m proud that my old company was at the forefront of exposing that fraud, like the Global Energy Balance Network and their ilk. Thus, the American (and world) consuming public is bombarded with messages about the health benefits of soda. Consider this: Coca Cola was sued over its advertising for Vitamin Water and part of its defense was not that its advertising was misleading, but that no one could seriously have believed Vitamin Water was healthy. I shit you not. Coca Cola settled the suit eventually.

Third, the overwhelming majority of consumers of Coca Cola’s and Pepsi’s products are the poor. And not just minorities. As Kevin Williamson detailed in a piece for National Review, the Appalachian spine of the country that runs from southern New York all the way south to northern Mississippi, is 98.5% white, and abysmally poor. What do they buy with their food stamps/EBT cards? Cases of soda.

I don’t think much of that overheard remark at the time, but it turns out that the local economy runs on black-market soda the way Baghdad ran on contraband crude during the days of sanctions. It works like this: Once a month, the debit-card accounts of those receiving what we still call food stamps are credited with a few hundred dollars — about $500 for a family of four, on average — which are immediately converted into a unit of exchange, in this case cases of soda. On the day when accounts are credited, local establishments accepting EBT cards — and all across the Big White Ghetto, “We Accept Food Stamps” is the new E pluribus unum – are swamped with locals using their public benefits to buy cases and cases — reports put the number at 30 to 40 cases for some buyers — of soda. Those cases of soda then either go on to another retailer, who buys them at 50 cents on the dollar, in effect laundering those $500 in monthly benefits into $250 in cash — a considerably worse rate than your typical organized-crime money launderer offers — or else they go into the local black-market economy, where they can be used as currency in such ventures as the dealing of unauthorized prescription painkillers...

www.nationalreview.com/article/367903/white-ghetto-kevin-d-williamson

This is right in the heart of where Lyndon Johnson announced his "War on Poverty" in 1964. I'll leave it to the educated reader to figure out how much has been pissed away on that “War” and whether or not we’ve won that one.³

Fourth, the overwhelming majority of cases of diabetes and related chronic diseases also hit the poor, not coincidentally, given their consumption of soda. That data is pointed out in the same hyperlink above at number three.

Fifth, we are now a country of socialized medicine, so the costs for diabetes treatments falls to all of us. And, boy, is it expensive. That’s to say nothing of how many amputations there are from diabetes. I mean, how do you properly calculate the costs associated with losing a foot because of diabetes?

The National Limb Loss Information Center reports that more than 133,000 amputations are performed nationally every year, with the majority of them because of diabetes-related complications like infection and peripheral arterial disease.

www.californiahealthline.org/insight/2013/treatment-trends-pushing-diabetic-amputations-down-list-of-options

The projections for 2050 are that there will be 100,000,000 (yes, that’s one-hundred million) people with diabetes in the United States by 2050. The CDC's website has all kinds of data on diabetes. None of it is good. And let’s try to remember: I am talking about only ONE of the diseases to which we can attribute the influence of HFCS-55. This is to say nothing of the statistics on obesity, coronary artery disease, or the myriad of other conditions that all arise from hyper-insulinism in homo sapiens.

Now, here comes the kicker. And how it related to CrossFit, Inc and health more generally. When I was there, we were constantly assailed in the press about the proliferation of CrossFit gyms, concerns about quality control, blah blah blah. Oddly enough, we looked around to see who else was growing at a rate like us, as we occasionally do, out of curiosity more than anything else.

The only thing we could find that was close was.....wait for it.... kidney dialysis centers! At the time IO checked, there were approximately 7200 CrossFit Affiliates in the United States. There are about 6800 kidney dialysis centers. They. Are. EVERYWHERE. But they’re hidden. The people go into these centers are the ones “lucky” enough to make it to Stage 4 or 5 diabetes - most patients die of other complications long before that, generally.

III. Cradle to Grave Poisoning

Now, here’s the part that made me throw up a little in my mouth and how we bring it all full circle.

Who owns the majority of these kidney dialysis centers? Berkshire Hathaway. Yes, the company founded and owned by...the Oracle of Omaha - Warren Buffet. Buffet is the single largest shareholder of DaVita, a company that makes kidney dialysis machines and these dialysis centers. His only major competition is another company called Fresenius.

And what else is Berkshire Hathaway the single largest shareholder of? Why, Coca Cola, in an amazing co-inky-dinky.

I would never suggest there’s some giant conspiracy to kill people, with Buffet at the center of it. I’ve never met the man. I think he’s probably just investing in growth industries. Whether he’s aware of the relationship between Coca Cola and diabetes - or exactly what his or Berkshire Hathaway’s role is in lobbying for corn subsidies from the government, that’s beyond the scope of this. Maybe some investigative reporter with some more time can dig into it.

I just know that our government (1) subsidizes the production of a product that it then (2) pays for people to buy with government subsidized money (SNAP/food stamps/EBT), and (3) that product has been indelibly linked to a host of chronic diseases, which the government then wants (4) everyone to pay for with government subsidized health insurance. It’s a wonderful, cradle-to-grave program for the American citizenry aided by its hardworking and honorable public servants.

And none of it will change until “We, the People” do something about it. Until we demand that it fucking stop, or people lose their jobs - or worse. We went to war over taxes and the Stamp Act, among other abuses by the British, and now we’re sliding into death, inexorably, paying for it with our dollars and our health, and blaming “capitalism” for it. All while our benevolent overlords in Congress and the Oval Office continue to collect money from political donors, pass legislation favorable to those donors - like agri-business and others - and tell our children that pizza is a vegetable.

I’m out.

1. For you young’uns and/or the historically ignorant, that was the naively optimistic name for WW I at the time.

2. If this seems crazy, consider that the name “Coca Cola” came from when the company first put cocaine in its drink. When that became problematic, why do you think they switched to HFCS/sugar… because of how healthy it is??

3. We might want to start being a little more cautious about the “Wars” we choose to fight, be it the one on Drugs, or Poverty, never mind the ones where we actually use the military.