Monday, April 23, 2007

Pork (Spending) Makes Us Fat

Michael Pollan has an intriguing piece in the NYT Magazine linking farm subsidies to obesity. He argues that because corn and soy are so subsidized, products maid from them are much cheaper than they should be, leading to the proliferation of cheap junk food. Perhaps worse, the incentives to grow corn and soy and a few other commodities diverts most farming away from produce, significantly raising the price of what produce does exist (much of it having been imported from South America).

This is a text book example (hopefully literally, as it would make a very nice box in an econ book) of government's benevolent regulation, purporting to know better than those greedy markets what The American Farmer should be growing, and using the gentle hand of economic incentives to enforce their policy. The fact that it causes junk food to be far cheaper than fresh food is a text book example of unintended consequences. After all, why should an American farmer risk growing a crop of carrots that may or may not sell, or even make it to market without spoiling, when he can get paid just to grow corn, whether or not it sells?

HT: Reason Hit & Run


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