The 2007-08 Farm Bill

According to the Washington Post, the Senate has just passed their version of the Farm Bill--a $10 billion increase in subsidies! How ridiculous is that? Where are they going to come up with the money? And how can we support farm subsidies at all, never mind $10 billion more?

There are three simple facts about the subsidies:
1. They create shortages in crucial areas like wheat, which have become less profitable as the market for ethanol has driven up prices for corn and other crops. This year we may face higher prices because of wheat shortages while we throw out billions of dollars worth of other crops. Makes sense, no?
2. They artificially raise market prices, especially when one of the largest ag producers in the world (the US) pays farmers to let their land sit idle or plant other more profitable crops. Simply put, prices should be determined by supply and demand, without any subsidies or other interference. (Although, admittedly, it is near impossible to eliminate all interference.) If there is demand for wheat there will be supply just the same.
3. The US usually leads by example--we are a great democratic republic--and we would do well to take initiative and eliminate subsidies because other countries would then be pressured to do the same. The US and EU have the largest ag subsidies and reducing them would do wonders for the global economy. There would not be any shortages, prices would be more stable and probably less inflationary.

Wake up people!

The economy IS doing fine

So here are the facts:
3Q GDP = 3.9%
2Q = 3.8%

Jobs report:
October: 166,000 gain
September: 96,000 gain
August: 93,000 gain

Other signs:
Booming tech sector with better than expected earnings for most companies.
Stable inflation (despite what I think were two unnecessary interest rate cuts by the Fed)

There are a lot more positive data as well. You tell me, are we in a recession? Are we headed that way? NO!

Even with the mortgage and credit "crises" the economy is dynamic. Let's be honest, a little correction was needed in those markets anyway, but that hasn't significantly slowed the US or global economies.

Now, if only I could find a job before I graduate.... :)