Imagine the following CNN headline: "Government Buys $20 Million in Surplus Pepsi as Demand Plummets." The fictional article informs readers that tax dollars will soon be buying millions of unwanted cola cans, all as a favor to the flailing soda industry, which just kept producing drinks no one wanted.
As outrageous as such a government handout to the soda industry would be, that's exactly what the U.S. Department of Agriculture is doing for the industrial dairy industry. As CNN reports, "sluggish demand and shifting consumption habits have helped to create the huge cheese reserve, pushing the surplus to a 30-year high." And as a result, at the request of the dairy industry, an industry dominated by factory farmers, our government's buying up $20 million of the unwanted cheese with taxpayer dollars.
Given our multi-trillion dollar national debt, $20 million may not be the biggest chunk of cheese, but put into bigger context, it's just the latest example the federal government bailing out animal agribusiness at the expense of the American tax payer.
People just aren't consuming as much dairy as the industry is producing, and rather than allowing typical supply-and-demand economics to work in the market, the USDA is using taxpayer dollars to prop up the dairy industry. That's right: though you didn't want to spend your money on cheese, the government's using it to do just that anyway.
And the dairy industry isn't alone. Whether it's the pork industry's constant clamor for well, federal pork, or the chicken industry's truly foul dependence on government purchases of its surplus meat, the trend is clear. The USDA views itself as an integral player in the market, helping to prop up industries that rely primarily on factory farming even when customers aren't buying as much as they're producing.
It's these same factory farmers and big agribusiness companies that are often the first to protest any federal involvement in their business. Whether on environmental protections, animal welfare rules or food safety regulations -- their mantra is typically libertarian. But as soon as they irresponsibly produce more than their customers want, their professed love for libertarianism is abandoned in favor of stark socialism. At that point, they come to Uncle Sam with outstretched arms and cupped palms, seeking to defy the normal laws of economics that other businesses must navigate, such as a decrease in product demand.
There may indeed be times when federal intervention to save an industry might be warranted. Consider for example the auto industry bailout of 2009. But when the auto industry got its federal bailout, serious strings were attached, like improving fuel efficiency and eliminating corporate jet budgets. And of course, importantly, they had to pay the money back. But when the government subsidizes dairy producers, for some reason they don't have to pay taxpayers back, nor promise reforms of any kind.
It's quite the sweet -- or in the case of cheese, fatty -- deal.