It’s probably too late to get either of the presidential candidates to focus on something as silly as destructive government policies which could absolutely be addressed by congress next year, but for what it’s worth we may as well give it a try. Perhaps we could at least scratch the surface of helping out our struggling economy if our aspiring leaders agreed to take a fresh look at the toxic effects of crony capitalism and ruinous subsidies which are no longer needed. A good place to start would be sugar subsidies.
We have these sugar laws on the books today because they became entrenched in the system thanks to some depression era legislation known as the Jones-Costigan Amendment. This was originally intended as a temporary, emergency measure which would help the nascent American sugar industry to stay on its feet in the face of crushing competition during a difficult period. Unfortunately, like so many cogs in the federal government machinery, once it took root it latched on like a leech.
This program led to the arrival in Florida of the Fanjul brothers from Cuba in the 1950s. They would go on to take advantage of these eternal subsidies and protections, becoming one of the richer and more powerful political dynasties in the nation’s history. This isn’t exactly your typical story of the American Dream coming true, as Kevin Cochrane recently explained at the Weekly Standard, and it’s hitting Americans where it hurts to this day.
[T]he Fanjuls’ success is costing every American money and jobs. In 2014, a study published in the Oxford Journal of Applied Economic Perspectives and Policies found that the artificially high U.S. sugar prices were costing Americans between $2.9 and $3.5 billion dollars every year in consumer welfare. This cost is born through higher prices paid for everything from bakery goods to candy bars and also through direct taxpayer payments to sugar producers. And 40 percent of those subsidies are paid to just 1 percent of all American sugar producers—about 80 people. Fifteen percent alone is paid just to the Fanjul brothers.
Over the years U.S. candy makers have left the United States for cheaper sugar, taking tens of thousands of jobs with them. Brachs moved to Mexico, Kraft’s Lifesaver brand to Canada, and three of Hersey’s largest operations went north of the border as well. With American sugar prices now hovering at almost triple the world market price, it is estimated candy makers alone have relocated over 20,000 U.S. jobs outside of the U.S.
Right there we see the real problem underlying this situation and it’s not some hypothetical argument over solid conservative policy versus liberalism or even a plea to reduce crony capitalism. This is producing real damage to the economy and acting to the detriment of American workers in large numbers. It’s also draining the budget of average consumers. And it’s all preventable.
Unfortunately, there’s been very little will in Congress to take any action to remove these subsidies. Arguments in favor of lowering consumer prices and bringing back some of those tens of thousands of jobs seem to fall on deaf ears when you’re talking about one of the richest political donor families in a vital swing state like Florida. The more jaded in the political class are probably nodding their heads sadly at that statement, but does it really have to be that way? With enough will, the influence of the Fanjul family could be ignored and this massive segment of crony capitalism in our system could be shut down.
Perhaps our debate moderators and cable news hosts could find time to ask the candidates about this.