By Elisabeth Parker | In the words of the very weird Ron Swanson – the anti-hero of NBC’s comedy series Parks and Recreation – “The free market is a jungle. It’s beautiful and brutal and should be left alone. When a business fails, it dies, and a new, better business takes its place. Just let business be business and government be government.”
In the same episode when Ron’s immediate subordinate Leslie Knope tries to use government money to bail out a video store and it becomes a porn rental store instead, she discovers the unintended consequences of well-intentioned government initiatives.
Recently, the S.C. Senate and S.C. House passed a massive appropriation for farmers with extensive damage due to the historic October flooding. Gov. Nikki Haley vetoed the bill, rightly arguing that government shouldn’t aid one industry over another. The veto was easily overridden by both chambers, making $40 million available to farmers.
It sounds like a benevolent plan. Farmers’ crops were destroyed and some will not be able to recover without government assistance. The General Assembly is taking this money out of a surplus of funds from the previous completed fiscal year, so the money was not previously allocated.
There is a serious problem with the move, though, and that problem is the attitude behind the legislation, the attitude that assumes: If someone is in trouble, government must act to get that person or company out of trouble.
The point is not to accept some American-Dream, pull-yourself-up-by-your-bootstraps solution. Sometimes there are no bootstraps and you have to find something else to pull yourself up by, and it may be harder and take longer than you could have expected. No, the point is a simpler one: When disaster happens – even if the disaster isn’t our fault – we can’t assume taxpayers should bail us out.
We all know that disaster will befall us at some point, whether we run a farm or a bank or a corporation. The government is not there to shoulder the consequences of bad decisions or bad fortune. Government is there to make sure that the playing field is level. Some would argue that in order to make it level, certain industries deserve a leg up to get back on par with everyone else. But the government is meant to simply give everyone a fair chance to play the game. It should not step in any time someone is hurt or loses.
The government certainly gives farmers a leg up, essentially creating a “bailout culture” within the ag industry. America’s farmers certainly aren’t the subsistence workers of popular imagination. South Carolina farmers received $27 million from the federal government in response to the October flooding. In addition, several insurance and loan programs are made available to agriculture workers year-round, propping up their business even in times without disaster.
The federal government even pays 62 percent of their insurance premiums, practically making their insurance another cash payment. State government then provides random marketing campaigns to support farmers – for instance, the “Certified SC” campaign. (Many other industries don’t receive state-sponsored marketing campaigns, and it’s not clear why the agriculture industry should.) Marketing services in the Department of Agriculture’s budget are allocated $10 million in the latest state budget. In short, farmers don’t need an additional bailout when they have bailout money readily available to them.
In any case, South Carolina farmers have until the end of August to apply for government aid. The funds automatically expire by the end of June next year. Department of Agriculture officials are allowed to inspect farms to see the extent of damage done and figure out what they deem as sufficient in order to receive money. Who knows how long it will take for the bureaucracy to process farmers’ applications and give verdicts?
The more serious consequences of bailing out the farm industry, however, will likely be the unintended ones.
Elisabeth Parker is a research assistant at the South Carolina Policy Council. Have a comment? Send to: feedback@statehousereport.com
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