July 19, 2002

When a Crop Becomes King


CORNWALL BRIDGE, Conn. - Here in southern New England the corn is already waist high and growing so avidly you
can almost hear the creak of stalk and leaf as the plants stretch toward the sun. The ears of sweet corn are just starting to
show up on local farm stands, inaugurating one of the ceremonies of an American summer. These days the nation's nearly 80 million-acre field of corn rolls across the countryside like a second great lawn, but this wholesome, all-American image obscures a decidedly more dubious reality.

Like the tulip, the apple and the potato, zea mays (the botanical name for both sweet and feed corn) has evolved with humans over the past 10,000 years or so in the great dance of species we call domestication. The plant gratifies human needs, in exchange for which humans expand the plant's habitat, moving its genes all over the world and remaking the land (clearing trees, plowing the ground, protecting it from its enemies) so it might thrive.

Corn, by making itself tasty and nutritious, got itself noticed by Christopher Columbus, who helped expand its range from the New World to Europe and beyond. Today corn is the world's most widely planted cereal crop. But nowhere have humans done quite as much to advance the interests of this plant as in North America, where zea mays has insinuated itself into our landscape, our food system - and our federal budget.

One need look no further than the $190 billion farm bill President Bush signed last month to wonder whose interests are really being served here. Under the 10-year program, taxpayers will pay farmers $4 billion a year to grow ever more corn, this despite the fact that we struggle to get rid of the surplus the plant already produces. The average bushel of corn (56 pounds) sells for about $2 today; it costs farmers more than $3 to grow it. But rather than design a program that would encourage farmers to plant less corn - which would have the benefit of lifting the price farmers receive for it - Congress has decided instead to subsidize corn by the bushel, thereby insuring that zea mays dominion over its 125,000-square mile American habitat will go unchallenged.

At first blush this subsidy might look like a handout for farmers, but really it's a form of welfare for the plant itself - and for all those economic interests that profit from its overproduction: the processors, factory farms, and the soft drink and snack makers that rely on cheap corn. For zea mays has triumphed by making itself indispensable not to farmers (whom it is swiftly and surely
bankrupting) but to the Archer Daniels Midlands, Tysons and Coca-Colas of the world.

Our entire food supply has undergone a process of "cornification" in recent years, without our even noticing it. That's because, unlike in Mexico, where a corn-based diet has been the norm for centuries, in the United States most of the corn we consume is invisible, having been heavily processed or passed through food animals before it reaches us. Most of the animals we eat (chickens, pigs and cows) today subsist on a diet of corn, regardless of whether it is good for them. In the case of beef cattle, which evolved to eat grass, a corn diet wreaks havoc on their digestive system, making it necessary to feed them antibiotics to stave off illness and infection. Even farm-raised salmon are being bred to tolerate corn - not a food their evolution has prepared them for. Why feed fish corn? Because it's the cheapest thing you can feed any animal, thanks to federal subsidies. But even with more than half of the 10 billion bushels of corn produced annually being fed to animals, there is plenty left over. So companies like A.D.M., Cargill and ConAgra have figured ingenious new ways to dispose of it, turning it into everything from ethanol to Vitamin C and biodegradable plastics.

By far the best strategy for keeping zea mays in business has been the development of high-fructose corn syrup, which has all but pushed sugar aside. Since the 1980's, most soft drink manufacturers have switched from sugar to corn sweeteners, as have most snack makers. Nearly 10 percent of the calories Americans consume now come from corn sweeteners; the figure is 20 percent for many children. Add to that all the corn-based animal protein (corn-fed beef, chicken and pork) and the corn qua corn (chips, muffins, sweet corn) and you have a plant that has become one of nature's greatest success stories, by turning us (along with several other equally unwitting species) into an expanding race of corn eaters.

So why begrudge corn its phenomenal success? Isn't this the way domestication is supposed to work?

The problem in corn's case is that we're sacrificing the health of both our bodies and the environment by growing and eating so much of it. Though we're only beginning to understand what our cornified food system is doing to our health, there's cause for concern. It's probably no coincidence that the wholesale switch to corn sweeteners in the 1980's marks the beginning of the epidemic of obesity and Type 2 diabetes in this country. Sweetness became so cheap that soft drink makers, rather than lower their prices, super-sized their serving portions and marketing budgets. Thousands of new sweetened snack foods hit the market, and the amount of fructose in our diets soared.

This would be bad enough for the American waistline, but there's also preliminary research suggesting that high-fructose corn syrup is metabolized differently than other sugars, making it potentially more harmful. A recent study at the University of Minnesota found that a diet high in fructose (as compared to glucose) elevates triglyceride levels in men shortly after eating, a phenomenon that has been linked to an increased risk of obesity and heart disease. Little is known about the health effects of eating animals that have themselves eaten so much corn, but in the case of cattle, researchers have found that corn-fed beef is higher in saturated fats than grass-fed beef.

We know a lot more about what 80 million acres of corn is doing to the health of our environment: serious and lasting damage. Modern corn hybrids are the greediest of plants, demanding more nitrogen fertilizer than any other crop. Corn requires more pesticide than any other food crop. Runoff from these chemicals finds its way into the groundwater and, in the Midwestern corn belt, into the Mississippi River, which carries it to the Gulf of Mexico, where it has already killed off marine life in a 12,000 square mile area.

To produce the chemicals we apply to our cornfields takes vast amounts of oil and natural gas. (Nitrogen fertilizer is made from natural gas, pesticides from oil.) America's corn crop might look like a sustainable, solar-powered system for producing food, but it is actually a huge, inefficient, polluting machine that guzzles fossil fuel
- a half a gallon of it for every bushel.

So it seems corn has indeed become king. We have given it more of our land than any other plant, an area more than twice the size of New York State. To keep it well fed and safe from predators we douse it with chemicals that poison our water and deepen our dependence on foreign oil. And then in order to dispose of all the corn this cracked system has produced, we eat it as fast as we can in as many ways as we can - turning the fat of the land into, well, fat. One has to wonder whether corn hasn't at last succeeded in domesticating us.

Michael Pollan is the author, most recently, of "The Botany of Desire: A Plant's-Eye View of the World."

July 19, 2002

American Journal
The Hog Wallow
Pop-Gun Populism Isn't Enough

by Alexander Cockburn

When did the great executive stock option hog wallow really start? You can go
back to the deregulatory push under Carter in the late Seventies, then move
into the Reagan Eighties when corporate purchases of shares really took off.
This was the era of the leveraged buy-out and merger-mania, assisted by tax
laws that favored capital gains over stockholder dividends, and allowed
corporations to write off interest payments entirely.

Between 1983 and l990 72.5 per cent of all US net equity purchases were
bought by non-financial corporations. At the end of this spree the debt laden
corporations withdrew to their tents for three years of necessary restraint
and repose, until in 1994 they roared into action once more, plunging
themselves into debt to finance their share purchases. This was the start of
the options game.

Between 1994 and 1998 non-financial companies sank themselves in debt by
either repurchasing their own shares or acquiring shares as a result of
mergers. The annual value of the repurchases quadrupled, testimony to the
most hectic, sustained orgy of self-aggrandizement by an executive class in
the history of capitalism.

For these and ensuing reflections and specific numbers figures I'm mostly
indebted to Robert Brenner's prescient The Boom and The Bubble, published
this spring with impeccable timing by Verso; also Robin Blackburn's long
awaited book (also from Verso) on the past and future of pensions, Banking on

Why did these chief executive officers, and chief financial officers, and
boards of directors chose to burden their companies with debt? Since stock
prices were going up, companies needing money could have raised funds by
issuing shares, rather than borrowing money to buy shares back.

Top corporate officers stood to make vast killings on their options, and by
the unstinting efforts of legislators such as Senator Joe Lieberman they were
spared the inconvenience of having to report to stockholders the cost of
these same options. Enlightened legislators had also been thoughtful enough
to rewrite the tax laws in such a manner that corporations are allowed to
deduct these same costs from company income.

As Brenner remarks, US law "thus encourages corporations to exaggerate their
earnings in public for the benefit of their stockholders, while deflating
them in private for the benefit of the Internal Revenue Service."

It's fun these days to read all the jubilant punditeers who favor Democrats
now lashing Bush and Cheney for the way they made their fortunes while
repining the glories of the Clinton boom when the dollar was mighty and the
middle classes gazed into their 401(k) nest eggs with the devotion of
Jonson's Volpone eyeing his trove. "Good morning to the day; and, next, my
gold: Open the shrine, that I may see my saint."

Bush and Cheney deserve the punishment. But when it comes to political
parties the seaminess is seamless. The Clinton boom was lofted in large part
by the helium of bubble accountancy. Brenner cites a Bear, Stearns study
reviewing all S&P 500 companies in 1999 that calculated their net income in
that year would have been 6 per cent lower had stock options been counted as
an expense. Earnings at Yahoo, Broadcom, JDS Uniphase and the others would
either have been wiped out or gone deeply negative.

By the end of 1999 average annual pay of CEOs at 362 of America's largest
corporations had swollen to $12.4 million, more than six times what it was in
1990. The top option pay-out was to Charles Wang, boss of Computer Associates
International, who got $650 million in restricted shares, towering far above
Ken Lay's scrawny salary of $5.4 million and shares worth $49 million. As the
Nineties blew themselves out, the corporate culture applauded on a weekly
basis by such bullfrogs of the bubble as Thomas Friedman saw average CEO pay
at America's 362 largest companies rise to a level 475 times larger than that
of the average manufacturing worker.

The executive suites of America's largest companies became a vast hog wallow.
CEOs and finance officers would borrow millions from some complicit bank,
using the money to drive up company stock prices, thereby inflating the value
of their options. Brenner offers us the memorable figure of $1.22 trillion as
the total of borrowing by non-financial corporations between 1994 and 1999,
inclusive. Of that sum, corporations used just 15.3 per cent for capital
expenditures. They used 57 per cent of it, $697.4 billion, to buy back stock
and thus enrich themselves. Surely the wildest smash and grab in the history
of corporate thievery.

When the bubble burst, the parachutes opened, golden in a darkening sky.
Blackburn cites the packages of two departing Lucent executives, Richard
McGinn and Deborah Hopkins, a CFO. Whereas the laying off of 10,500 employees
was dealt with in less than a page of Lucent's quarterly report in August of
2001, it took a 15-page attachment to outline the treasures allotted to
McGinn (just under $13 million after running Lucent for barely three years)
and to Hopkins (at Lucent for less than a year, departing with almost $5
million. Michael Bonsignore, ousted as boss of Honeywell, got a $9 million
settlement, plus a commitment that he continue to be treated as a chief
executive, with "executive transportation" and "financial and tax-planning
services" for the rest of his life.

Makes your blood boil, doesn't it? Isn't it time we had a "New Covenant for
economic change that empowers people". Aye to that! "Never again should
Washington reward those who speculate in paper, instead of those who put
people first." Hurrah! Whistle the tune and memorize the words (Bill
Clinton's in 1992). Prime yourself for a bout of rhetorical populism,
necessary to soothe popular indignation.

There are villains in this story, an entire piranha-elite. And there are
victims, the people whose pension funds were pumped dry to flood the hog
wallow with loot. One great battleground of the next decades across much of
the world will revolve around pensions and issues of asset-based welfare for
the swelling ranks of older folk. Here in the US privatization of Social
Security has been only staved off because Bill Clinton couldn't keep his hand
from his zipper and again because George Bush's credentials as a voucher for
the ethics of private enterprise have taken a fierce beating.

But the wolves will be back, and pop-gun populism (a brawnier SEC, etc etc)
won't hold them off. The Democrats will no more defend the people from the
predations of capital than they can protect the Bill of Rights. (In the most
recent snoop bill pushed through the House, only three voted against a
measure which allows life sentences for "malicious computer hacking": Dennis
Kucinich, and two Republicans, Jeff Miller of Florida and the great Texas
libertarian, Ron Paul.)

It was the Democrats in the US senate in early July who rallied in defense of
the accounting "principles" that permit the present deceptive treatment of
stock options. Not just Joe Lieberman, the whore of Connecticut, but Tom
Daschle of the Northern plains.

Pop-gun populism is not enough. Socialize accumulation! Details soon.