January 15, 1997
There are few instances where handouts are more flagrantly immoral than those to corporations. Corporate tax cuts don't qualify as handouts unless you believe that companies’ earnings belong to the government and that it's a handout when government allows corporations to keep more of their earnings. Corporate handouts refer to the evil government practice of taking our money and handing it to corporations.
According to Consumer Research (November 1996), a publication of the Washington-based Consumer Research Inc., President Clinton convinced the Mexican government not to “dump” low-priced tomatoes in the U.S. market. Clinton doesn't have a monopoly on this practice. Presidents Bush and Reagan and their predecessors committed similar acts of corporate handouts. So let's look at the principle.
The government can give handouts to corporations simply by using the Internal Revenue Service to take our money and have the Commerce Department or Agriculture Department distribute it. The risk of visible handouts is that they can easily invite voter retaliation against politicians. A secretive and underhanded way is market restriction. There's little bottom-line difference between government taking $100 from me to give to XYZ Corporation and government making it possible for XYZ Corporation to charge me $100 in higher prices for what I buy.
Clinton was pressured into restricting Mexican tomato imports because of Florida tomato growers’ complaints that the U.S. market has been flooded with $800 million worth of lower-priced tomatoes. One administration official said Mexico agreed to deal because of Clinton's $12.5 billion Mexico bailout. Another Clinton official said, “The math is simple. Florida has twenty-five electoral votes and Mexico doesn't.”
During the winter months, Americans consume tomatoes grown mostly in Florida and Mexico. Nine wealthy Florida growers control 70 percent of the Florida market. They complain NAFTA, which lowered tariffs on Mexican tomatoes, threatens to drive them out of business. A more likely explanation for the demand for Mexican tomatoes is their taste and how they are grown. Florida tomatoes are picked green while Mexican tomatoes are vine-ripened.
There's no case for handouts to Florida tomato growers, but suppose I'm wrong. At least the handouts should be visible and require an act of Congress. Florida's congressional delegation should introduce an Aid to Dependent Florida Tomato Growers Bill for whatever millions of dollars necessary to insure the survival of Florida tomato growers. That way handout costs would be visible. Americans could make a more informed decision about whether we want to make corporate handouts.
We'll never see such a bill and for good reasons. Most Americans would be outraged at the thought of their earnings going to wealthy corporations whining about Mexican competition. The news media would have a heyday and a congressman voting in support of such a bill would be run out of office. It's far more politically practical to give the tomato growers stealth handouts. Who's to know? Americans might grumble and groan about winter tomatoes costing a few pennies more. But it wouldn't make economic sense for consumers to organize and take action against politicians who caused the higher prices. From the growers’ point of view, it's a different story. It pays them to spend resources pressuring politicians for handouts; it means millions to them. In fact, to demonstrate how much clout they have, the Clinton campaign reportedly feared Florida growers hitting them with negative ads.
Aside from the issue of evil corporate handouts is the issue of liberty. If I wish to purchase tomatoes from a Mexican producer, on mutually agreeable terms, is there a moral case for a third party preventing me from doing so?