Paul Krugman: The frauding of America’s farmers

U.S. Agriculture Secretary Sonny Perdue speaks to reporters at an Ag Policy Summit during a visit Wednesday, Aug. 28, 2019 to Decatur, Ill. Perdue has sought to assuage farmers' fears of financial problems after China halted purchases of U.S. farm products in an escalating trade war. (AP Photo/John O'Connor)

Donald Trump is unpopular, but he retains the loyalty of some important groups. Among the most loyal are America’s farmers, who are a tiny minority of the population but exert disproportionate political influence because of our electoral system, which gives 3.2 million Iowans as many senators as almost 40 million Californians. According to one recent poll, 71% of farmers approve of Trump’s performance — which is down somewhat from previous polling, but remains far above the national average.

Yet farmers are hurting financially. Investors are worried about a possible recession for the economy as a whole, but the farm recession is already here, with falling incomes, rising delinquency rates and surging bankruptcies. And the farm economy’s troubles stem directly from Trump’s policies.

This apparent contradiction — Trump is inflicting the greatest harm on the people who supported him most — isn’t an accident. Farmers’ past support for Trump was predictable: The demography and culture of (white) rural America make it fertile ground for politicians promising to restore traditional society, and especially traditional racial hierarchy. But farmers’ financial distress should also have been predictable: While rural America may dislike and distrust cosmopolitan elites, the U.S. farm economy is hugely dependent on global markets, and it has inevitably been a major victim of the Trumpian trade war.

The questions, looking forward, are whether farmers understood what they were getting themselves into, whether they understand even now that their distress isn’t likely to end anytime soon, and whether economic pain will shake their support for the man who’s causing it.

At one level, it’s not hard to see why farmers supported Trump. Hostility to nonwhite immigrants was central to his campaign, and such hostility tends to be highest in places where there aren’t actually many immigrants. So rural America, with its still tiny immigrant population, was a receptive audience for his fear-mongering. More generally, Making America Great Again — which was basically about setting back the clock racially and culturally — was a message that played well in places that still tend to think of themselves (and are told by politicians to think of themselves) as the Real America, as opposed to the big metropolitan areas where most Americans actually live.

On the other hand, while farm country may be notably lacking in ethnic diversity and feels generally distrustful of globalists, the farm economy is in fact deeply integrated with and dependent on world markets. On the eve of Trump’s trade war, America exported 76% of its cotton production, 55% of its sorghum, half its soybeans, and 46% of its wheat.

Overall, U.S. agricultural exports are almost 40% of the value of farm production, up from just 15% circa 1970. Globalization hurt some parts of U.S. manufacturing, with particularly harsh effects on some small industrial cities. But the rise of China and the growth of world trade have been nothing but good news for farmers.

And here’s the thing: It shouldn’t have been hard to predict that Trumponomics would be bad for farmers. Trump’s desire for a trade war was out in the open from the beginning; protectionism is right up there with racism and anti-environmentalism as one of his core values. And a trade war was bound to hurt farm exports. Did anyone really imagine that China, an economic superpower with its own fierce nationalism, wouldn’t retaliate against U.S. tariffs?

So what were farmers thinking? My guess is that they let the will to believe override their judgment. Trump seemed like their kind of guy. He certainly seemed to share their dislike for urban elites who, they imagined, looked down on people like them. So they convinced themselves that he knew what he was doing, that he would win his trade war and that they would be among the victors sharing the spoils.

Even now many farmers seem to believe that the pain will end any day now, that Trump will soon announce a deal that restores all the old markets and more.

In short, farmers’ support for Trump should be seen as a form of affinity fraud, in which people fall for a con man whom they imagine to be someone like them.

And as is often the case in such frauds, the con man and his associates actually have contempt for their marks.

Recently Sonny Perdue, the agriculture secretary, let the mask slip during a meeting with farmers complaining about their plight. “What do you call two farmers in a basement?” he snarked. “A whine cellar.”

Trump’s own remarks about trade with Japan were even more telling. According to a White House transcript, Trump complained that while Japan sends us millions of cars, “We send them wheat. Wheat. (Laughter.)” Do farmers realize that their president considers their livelihood a joke?

So what will happen as the trade war drags on? Don’t expect farmers to suddenly exclaim en masse, “Hey, we’ve been had!” Real life doesn’t work that way. But they have, in fact, been had, and they may finally be starting to realize it.

Paul Krugman | The New York Times (CREDIT: Fred R. Conrad)

Paul Krugman, winner of the Nobel Prize in Economic Science, is an Op-Ed columnist for The New York Times.