Take the Fanjul family, which controls Florida Crystals Inc. and Domino Sugar, owns more than 400,000 acres of sugar cane farms and produces one-third of Florida’s sugar. Yet, the federal government protects them against competitors by imposing U.S. import quotas that maintain sugar prices at artificially high levels. U.S. consumers and businesses have had to pay twice the world price of sugar on average since 1982, according to economist Mark Perry.
Why? The fact that the sugar industry spends millions in lobbying might be one reason.
The U.S. sugar lobby contributes millions of dollars to political campaigns to maintain federal support for the subsidies, according to the Center for Responsive Politics. The Fanjul family alone spent $715,000 on lobbying in 2008 and has spent an estimated $2.6 million on political campaigns from 1979 to 2006.
Thursday, December 23, 2010
Tuesday, December 21, 2010
Tuesday, December 14, 2010
In a speech in 1999, shortly after Congress repealed the Glass-Steagall Act, the Depression-era law that separated investment banking from commercial banking, he warned that “in a world dominated by mega-financial institutions, governments could be reluctant to close those that become troubled for fear of systemic effects on the financial system.”
Sure enough, in 2008, the Fed helped sell Bear Stearns to JPMorgan Chase, rescued the American International Group and, after the collapse of Lehman Brothers, bailed out the financial system.
The crisis has only made the biggest banks even bigger. “They have enormous power,” Mr. Hoenig said. “Just look at their lobbying expenses. I use the word — and it’s a fairly flammable word — oligarchy. These things are huge and powerful, and that’s where the money is. This country through its history has abhorred concentration of financial power, and for good reason.”
Tuesday’s Fed vote will be Mr. Hoenig’s last, because the presidents of the Fed’s regional banks, other than New York, share votes under a rotation system. Mr. Hoenig does not have a vote next year, and he must retire after he turns 65 in September.
As for his future, Mr. Hoenig is certain that he will not follow other Fed veterans who have gone to work on Wall Street. “I can tell you one thing,” he said. “I’ll never work for a too-big-to-fail bank.”