AIG Probably Has a Big AGI
WASHINGTON (Sep 19, 2008)—During the farm bill debate, critics of farm policy were quick to accuse the men and women who feed and clothe the country of preferential treatment.
Farm bill opponents pushed for a restrictive cap—based on a farmer’s adjusted gross income or AGI—to limit who can receive benefits from the farm safety net.
They succeeded, and a means test was put into place to exclude wealthy Americans from farm payments. Still, the opponents want more and are looking for any opportunity to cut farm supports and make further reductions to the AGI cap.
The events of this week make one wonder, what’s AIG’s AGI?
And isn’t it strange that many of these same stone-cold zealots haven’t had much to say amid the flurry of massive corporate bailouts?
Let’s take them one by one.
- AIG, the nations largest insurer, was loaned $85 billion in taxpayer funds to keep it afloat.
- Mortgage giants Fannie Mae and Freddie Mac, each received a $100 billion lifeline from Uncle Sam on Sept. 6.
- Bear Stearns needed a $29 billion boost in March to help complete its sale to JP Morgan.
These figures make the $6 billion spent on commodity programs each year look puny. And you better believe that there are more taxpayer bailouts for billion-dollar behemoths on the horizon.
We’re not saying that these bailouts are a bad idea. After all, these companies are the underpinning of America’s economy and their survival will be key to America’s economic future.
Then again, agriculture contributes to the employment of 20 percent of the country’s workforce and is the underpinning of rural America’s economy. Not to mention, it’s an industry that nourishes every one of us—and many more around the globe-and contributes to our national security by providing us with a safe and stable food supply.
It’s also important to note that farm financial catastrophes are usually the result of Mother Nature, input cost spikes, commodity speculators, and other factors outside producers’ control. Farmers’ risks are greater and more unpredictable than in other lines of work, which is why having a safety net that kicks in during down times is so important.
Big businesses, on the other hand, usually find themselves in a pickle after poor decision-making, and in some cases, good old-fashioned greed.
Main Street takes a back seat to Wall Street in the eyes of far too many people inside the Beltway. The truth is America needs a vibrant Wall Street AND a vibrant Main Street to prosper.
Hopefully lawmakers will keep that in mind next time a handful of extremists take out the long knives looking to slash agriculture’s funding.