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Sweetheart Deal: Uncle Sugar and the Sugar Lobby

Written by Gary North on September 20, 2012

For over 200 years, the U.S. government has imposed quotas on the import of sugar into the United States. This has allowed domestic sugar producers the ability to charge more for sugar. Americans consume less sugar.

Don’t think of this as cronyism. Don’t think of this as crony capitalism. Think of this as a government program to fight tooth decay.

Then the government provides subsidies to the sugar industry. Think of this as a way to keep the industry healthy, and dentists, too.

What’s that? You say that this sounds schizophrenic? Does the right hank not know what the left had is doing. Of course it does. When the government greases the palms of a special-interest groups, it uses both hands.

This summer, my wife ad I went to Canada to set up a Canadian bank account. Americans are not allowed to do this unless they journey to Canada. Canadians speak fluent English. Except for an occasional “aboot,” it is almost like conversing with an American.

Before we left, my wife bought some candy. Canadian candy is made with sugar, not corn syrup, or “ethanol for sweet tooths.” When we returned to the USA, we were asked if we had bought anything. “Some candy,” she said. The immigration guard said, “A lot of people do that.” I’ll bet.

If you want to know how Washington works, view this clip from The Distinguished Gentleman, a movie on how a small-time con man gets elected to Congress, and discovers the biggest confidence game on earth.

The effect of sugar quotas is to drive American candy companies to Canada and Mexico. The candy can be imported without quotas. Only sugar in its pre-baking form is restricted. So, Americans lose jobs. But no one notices.

One estimate of what Americans pay extra to keep the sugar industry happy is $2.4 billion a year. Maybe $1.4 billion goes to the sugar barons.

Sugar farmers donate $3.6 million to campaigns.

When you can buy $1.4 billion in benefits for $3.6 million in payoffs — excuse me, democratic donations — you have a sweetheart deal.

To see how Washington works, view this clip from Eddie Murphy’s 1991 movie, The Distinguished Gentleman. It’s the story of a small-time con man who gets elected to Congress and discovers the biggest confidence game on earth.

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8 thoughts on “Sweetheart Deal: Uncle Sugar and the Sugar Lobby

  1. Harold Clark says:

    Harry Truman once said that, (If a person became rich while in the government he was a crook.) I BELIEVE EVERY WORD OF IT. Crooks one and all. Very few self respecting people would stay in government. And that is why we have life timers in congress and senate. Crooks of a feather flock together!

  2. Harry Truman was a very wise outsider. It must have ticked off the "establishment democrats when he won re-election! LOL

  3. The Truman quote I always liked best was the one about banks and whorehouses being on the same block since they're in the same business!

  4. I've heard importers of pure sugar will bring it into Mexico, change it into sugar cubes, import it (sugar cubes avoid the tax) then once it's inside the U.S. transform it back into pure sugar. This process illustrates two principles. 1. Government meddling in the economy always leads to stupid, unnecessary, pointless jobs. 2. The free market finds ingenius ways to avoid violating the letter of the law, while still directly violating the spirit of same law (thankfully).

  5. I LOVED the last lines of the movie scene.. if money is coming in from both sides, how does anything ever get done? It doesn't.. that's the beauty of this system…… SO true.

    So, by increasing artificially the landed cost of imported sugar, that drives production of high fructose corn syrup, which can be produced in many regions not suitable to cane production. Makes perfect sense.
    This whole scam is strong support for abolishing ALL government subsidies in every industry. Seems immoral on its face to take tax money from private citizens, give it to certain players in a specific industry, which increases the cost of goods produced by that industry, paid for again by the consumers.

  6. Bob Marshall says:

    The government started pushing HFCS in the 70's. Today America is the most obese nation on earth. The most obese adult and children.

  7. If the US could import sugar cane, it could be used to make ethanol, reducing the price pressure on corn, which goes into so many products, both food and non-food. Ethanol would be cheaper and sugar can grows very quickly to maturity. That might reverse the rise in food prices.

  8. until ethanol compatible internal combustion automobiles are the norm we need to get ethanol out of our fuel. ethanol causes sever and expensive damage to air cooled gasoline engines, to carburetors and fuel systems, any car not made for flex fuel will have damage.