Higher food prices and shortages because of the Dodd/Frank Credit Reforme act?
By bobmnu
@bobmnu (8157)
United States
March 21, 2012 1:58am CST
A friend of mine who is a farmer was telling me that he was having problems getting a loan to put his crops in. Under the new Dodd Frank Credit Act farmers who have been borrowing money for years to put their crop in and paying it off when the crop is sold now have to have more money up front. My friend told me that it cost them $45,000 for fertlizer and they have a 400 acre farm (not all the land can be used for crops)to say nothing about the seed and other items needed for planting.
Who will be blammed for the the increase in food prices or food shortage (remember the great renewable ethonal and what it did to food prices) and what about the farms that will fail because they can't get a loan to plant the crops? This is what happens wehn you get career politicians. They focus on one problem and find a solution to the problem without looking at the whole picture.
As one reporter pointed out about a ranking politician who he like his ideas but did not like the person finally decided that the reason was the person "never had kick the tires of an old Chevy". What he meant was the politicians of today come out of college and go to work for the government until they can get elected to public office. Like the Energy Sect. who does not own a car so he does not care how high gas prices go. He gets to work in a chaffured Cadaliac at the taxpayers expense.
When you can not afford to buy food or can't find food remember that congress stuck it to the Big Banks. Makes you feel good, right.
3 responses
@crossbones27 (53005)
• Mojave, California
22 Mar 12
I agree with your premise of your post but the big banks are out of control. Something had to be done and still needs to be done because look at Goldman Sachs. The VP resigns because they care more about their own profits that their own customers. I know these guys are their to make a profit but how are you going to be profitable if you keep ripping off your customers. I do not know why anyone still uses them.
People need to realize there is a reason why we work. Apparently we need to go all the way back to the stone ages and take a refresher course. We work to stay alive. We need food clothing and shelter to survive. The rest of it is just to make our lives easier and more efficient. They are living in a everyone for themselves mentality, when it does not need to be. The only people we are fighting anymore is us. Every time these guys get greedy for the wrong reasons it is just making it harder for the rest of us to feed our families. It destroys other work markets, and cause government to spend extra money and resources on making sure these people play by the rules. When they can be doing other things like figuring out ways to get everyone a job, and making the basic necessities affordable for everyone.
@Taskr36 (13963)
• United States
22 Mar 12
People need to realize that banks are a for-profit business and they need to make money. They are doing a SERVICE by keeping your money, giving out loans, giving you credit cards, etc. When the government takes away their means of generating revenue, they are forced to find new means to make money. Banks needed a bailout because of bad loans that weren't paid back. Now, because of that and the new legislation, they are much more cautious about giving out loans.
@crossbones27 (53005)
• Mojave, California
22 Mar 12
Yes that was one side of it, but what about the other side, that they were letting people to believe they could afford loans they could't. Then making side bets of when people were going to go under. If you are not doing whats right by your clients, eventually you are not going to have any left.
@bobmnu (8157)
• United States
22 Mar 12
It was called the Community Reinvestment Act. The Government said that you had to loan out a certain amount to people who did not have the income requirement and in neighborhoods where the property values were declining. If banks did not make a certain percent of their loans to low income people for purchasing homes then the government would send in the Bank Examiners.
When it came time to bail out the banks the Government choose which ones to help and which one not to help. AIG got a bail out but Lehman Brothers did not. Why? Some say because of the connection between the politicians and AIG. I don't know.
Banks use to require 20% down or you had to buy an insurance policy for the difference. Banks started to offer loans for 5% down and an insurance policy to make up the other 15%. There were still people who could not afford that so the government changed the rules and allowed Banks to make loans with an interest only payment for 5 years then you had to pay interest and principal. Many people took these deals because it was cheaper than renting, until the principal payment came due.
It was the government social engineering policies that were as much or more to blame than the banks.
@thegreatdebater (7316)
• United States
23 Mar 12
Bob, I know MANY farmers, and they aren't having these problems. As a matter of fact your friend SHOULD (depending on where the land is at, if it is has tile, and of course location) at worse be able to rent out the land, and make about 70% of what it would cost of him to farm it himself without lifting a finger. He also could talk to the feds, or state about not growing this year, and would get paid very well for NOT FARMING!!!!
Using farmers for this example isn't a good one, because they feed for the government troff worse than Alaskians. If you really want to get a farmer upset, tell him you want to end ethonal subsidizes (ask Rush Limbaugh about that)!!!! The number one supporter of ehtonal are farmers, and their lobbyist. The funny part is how anti government MOST farmers are, but if it wasn't for the government they wouldn't have life as good as it is today. Our government artificially keeps grain prices high by exporting grains to foreign country. They provide subsidizes for ethonal, and they did for bio diesel, they use tax payer dollars to pay for grains that are exported to foreign countries . All of this increased grain, and makes all farming more lucrative.
I talked to a customer of mine a month ago and he said it best: ANY IDIOT CAN FARM AND MAKE MONEY TODAY!!!! That is all due to the government that they all DESPISE!!!!
@bobmnu (8157)
• United States
29 Mar 12
I agree with you that the farmers are some of the biggest complainer. Just look at them complain about having to pay real estate taxes, the one tax they can't get around paying. I even knew one farmer who was accepting awards for outstanding sales and making it into the million dollar sales club and receiving a very large bonus for doing so. This was at the time his children were receiving free hot lunch, and full rides to private collages.
My point was that the politicians see a problem and focus on solving that problem and never look at the unintended consequences. Look at the problem of gas prices going up they pass a law saying that you have to use more ethanol and it was great for the farmers for one year but now everything cost more to ship and food prices have gone up.
@thegreatdebater (7316)
• United States
30 Mar 12
Bob, you might want to ask your farmer friends how he feels about Obamacare? This ruling could directly effect farms in a VERY bad way. If Obamacare is struck down, than that would overturn a 1943 ruling that allowed the government to regulate how much grain could be sold in order to keep prices high. This would actually hurt farmers because the US government wouldn't be allowed to regulate grain prices like they do now, and would cause the bottom to fall out of the grain prices. Right now, the US government send grains overseas as a form of foreign aide, and charges them higher prices than we would pay here. Now, the government wouldn't be allowed to do that.
Every farmers I know HATES the US government, yet they feed from the government troff worse than people on welfare, and cost us much more.
What I see politicians do is see problems, and find ways for THEM to make money off of it. They are nothing but bottom feeders who are only worried about themselves.
@sierras236 (2739)
• United States
22 Mar 12
Mary, Mary Quite Contrary How Does Your Garden Grow?
An old nursery rhyme but certainly relevant.
In other words, there is half an answer to higher food prices and shortages. You grow your own garden. It isn't hard. Even city folks can do it with a few pots and a trip to the garden section. Spring is early this year. Might want to start planting now.
Actually, we can blame the Federal Reserve. They are the ones who flooded the system with dollars. As a result, inflation occurred. AKA Higher everything. Higher Gas price predictions aren't going to help either. Look for overall prices to shoot up to compensate. Interest rates haven't been adjusted to pull out the surplus. Until that happens, inflation will continue to grow.
Yes, it is harder to get loans. Some of it is the Big Bank's fault but more of it was the unsustainable economic principle that ultimately led to the housing bust. This is the same unsustainable economic principle that President Obama is using to loan taxpayer money to "green" companies and the stimulus package. There is absolutely no guarantee backing up the loans.
@bobmnu (8157)
• United States
22 Mar 12
A garden will help but what about the Farmers who will left with no food for their livestock. What about the people of the world that will starve because there is no food being produced in the US.
The answer is to get the government out of our business and quit trying to make everything fair and equal for everyone - those who work and those who do not work.
@sierras236 (2739)
• United States
22 Mar 12
Inflation is the main reason why food prices are so high. Also playing a significant factor is the price of gas. Inflation is a result of too many dollars in the system. The Fed controls the rate of inflation by directly changing interest rates. Since the Federal interest rates have been indefinitely stuck at zero, we are getting very close to the same type of economic situation that was in the 1970s called stagflation. If inflation keeps growing, this will very likely happen within the next year or so.
A garden is a practical solution for a lot of people to offset some of the higher costs of food. It is still cheaper to purchase seeds and soil and grow your own vegetables.
The farmers can actually grow food. They have decent soil. I haven't heard of any major droughts except for Texas. The problem is when it comes time to sell. There is this balance between keeping prices high enough so that farmers can make a profit to pay back loans and keep them low enough for the average consumers. It is the selling of the crops that depend on the bank loaning money to the farms. Yes, it is more difficult to get a loan but the whole industry is still highly subsidized. It is the small farmers that will feel the tightening of credit the most.
