Ad hawk; how Paul Newman and McDonald's get the U.S. government to push their products abroad

Washington Monthly, July-August, 1991 by Doug Turetsky

Given the broad array of criticisms of the export subsidy program, the poor USDA oversight, and the massive federal deficit, why does Congress allow major corporations to continue dining at public expense? Part of the reason is that there's precious little debate over national farm policy. Forget labels like Democrat and Republican, liberal and conservative. When it comes to farm policy, Congress is generally one big team-perhaps because farm-belt legislators are so skilled at calling in favors when farm bills hit the floor.

At a budget committee task force hearing last year, Kansas Rep. Dan Glickman was one of several agriculture committee members to punctuate his defense of subsidies like the export program with a stark threat to his urban peers. "I have supported food stamps, urban programs," Glickman reminded them. "I would hate to see a lot of programs jeopardized because of an attempt to drive a train through agriculture programs."

While some congressmen inevitably prefer pork barrel politics to policy debates, there are some serious questions here. Let's assume that the export subsidy program aims to help U.S. agricultural businesses overcome unfair trade practices. Is funneling USDA money into the advertising budgets of our biggest corporations really the best way to achieve that?

Last year's $200 million Marketing Promotion Program budget was bigger than that of the Department of Commerce's entire International Trade Administration (ITA), which provides marketing assistance for all U.S. goods and services except agricultural products-that is, everything from software to underwear. But ITA doesn't line the pockets of Microsoft and Maidenform. "Our money never goes to private corporations," says an ITA spokesman. Rather, it goes for technical assistance to various industries attempting to develop their markets overseas. Instead of buying brand-name billboards, ITA runs programs that try to link U.S. companies to foreign distributors, prints a monthly promotional magazine, and sponsors pavilions at overseas trade shows.

And unlike USDA, ITA still devotes most of its energies to helping American industries blocked by foreign trade bans-telecommunications and computer companies in Korea and Japan; footwear manufacturers in Europe; and car makers in Indonesia, where the car tariff ranges from 100 to 200 percent.

ITA has the right idea. Where the playing field is truly tilted, industries-although not private companies-deserve special help. But building that level field involves taking a hard look at the home team, too. Instead of just arguing for relaxed trade barriers at GATT talks, the U.S. government might consider revising its own, more subtle industrial policy by eliminating U.S. import restrictions or price supports on commodities like wool and peanuts-instead of funneling even more money into international ad departments.

When the nation faces a $3 trillion deficit, the $68 million spent last year to subsidize the overseas advertising of U.S. agricultural firms may seem like small potatoes. But the bottom line is this: Do you really think Paul Newman and the Jolly Green Giant need your help? Doug Turetsky is a New York writer Research assistance was provided by James Lee.