How Politics Corrupts Good Economics

A good NY Times article highlighting the political difficulties in reforming the bloated farm bill. This bill is a classic example of special interest groups hijacking the government for their own benefit. It is often, and appropriately, called "welfare for the rich," since most of the farm subsidies go to large corporate conglomerates (e.g. Archer-Daniels Midland).

But opposing the subsidies can cost Congressmen their seats. So the likelihood that subsidies will be eliminated is very slight. This has real costs for the U.S. economy, but it also is a large sticking point in getting support for international free trade agreements in other countries. Reforming the bill real have real benefits for the domestic and international economies, will improve the U.S.'s standing in the world, and help open up developing countries to liberalize and develop through trade. But those benefits are likely to be lost to political self-interest groups.