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Political clunkers

"Political clunkers" Continued...

Issue: "Upside down," April 9, 2011

But what about Americans who will lose their jobs? Western Michigan has a lot of sugar beet growers. We protect them, and sugar sells in the United States at a price markedly higher than the price in the world market. We guarantee this by banning sugar from outside sources. This means that if you have a hankering to make Life Savers, it is a lot more expensive to make them in the United States. Western Michigan had a Life Savers factory. It employed about 600 workers in what were seen as dependable, lifetime jobs that paid well. You didn't need a great education. Because of the U.S. ban on global sugar, Beatrice Foods picked up and moved to Canada, where it buys sugar at the lower world price, instead of at the higher trade-protected price. So in an effort to save Michigan sugar jobs, we lost 600 relatively low-skilled, well-paying jobs that had been around for 35 years.

What are some other examples of unintended consequences that you display to your students? "Cash for Clunkers" had some not-so-good effects on working-class people and the poor. When I was trying to buy a used car for myself in 2009, it was really difficult because Cash for Clunkers was in play. If you had a car that didn't get some minimum gas mileage, it was designated a clunker. If you were a relatively poor person who just needed transportation to get to and from work, pick the kids up from school, go to church and back, getting a used car at a reasonable price became more pricey. People who normally would have traded in their cars or sold them in the used car market opted to take the tax credit: The old car was put in a crusher.

What are better ways to help the poor internationally? Compassion International makes sure children get good nutrition and good education. Kiva.org helps entrepreneurs get access to financial capital. It's great not to throw money at a faceless poor person someplace, but to help an individual child, an individual businesswoman. Then, economic growth can start to happen in exciting ways.
Listen to Marvin Olasky's complete interview with Victor Claar.

Marvin Olasky
Marvin Olasky

Marvin is editor in chief of WORLD News Group and the author of more than 20 books, including The Tragedy of American Compassion. Follow Marvin on Twitter @MarvinOlasky.

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