"This is what I think Democrats need to be talking about," wrote Austin Frerick yesterday, sharing the link to his latest guest column in the Des Moines Register: "To save rural Iowa, we must end Monsanto's monopoly."
Frerick has been warning for some time that economic concentration, especially in the agricultural sector, hurts rural Iowa. He has also highlighted lack of competition and little-known pharmaceutical company practices that keep drug costs inflated, so powerful corporations can overcharge Medicare under the guise of helping sick people.
He may soon be raising those and other issues as a Democratic candidate in Iowa's third Congressional district.
"THERE'S REALLY TWO DIFFERENT IOWAS"
A Cedar Rapids native and Grinnell College graduate, Frerick moved to Winterset a few months ago after working in Washington for several years, most recently as an economist for the Treasury Department. Bleeding Heartland readers may recognize his name as the author of seven guest posts here since last spring, discussing large-scale public policy problems (the decline in state support for higher education, how welfare reform failed Iowa's children, or the "human cost of Big Pharma's greed") and offering solutions (on education and manufacturing innovation and job-protected paid family leave).
Before we get to what's driving Frerick to consider a Congressional bid, I encourage you to read his Des Moines Register piece, which went online yesterday and is in today's print edition. Excerpts:
Iowa farmers face a crisis. Crop prices have fallen by more than 50 percent since 2013, with no end in sight. At the same time, farmers hold more debt and possess fewer capital reserves to fall back on. In fact, farmers’ debt levels are almost as high as they were prior to the farm crisis of the mid-1980s.
Meanwhile, a wave of mergers among the world’s agricultural giants is upending the markets for seeds, fertilizers and pesticides. If approved, the proposed merger would result in just two companies — Monsanto-Bayer and Dow-DuPont — controlling about three-quarters of the U.S. corn seed market. The power that these corporations would hold in the seed market is unprecedented. [...]
The merger does not just strengthen Monsanto’s control over the corn seed industry. It also helps the company grow its dominance in other areas, like fertilizers, pesticides, and precision farming technology. Monsanto’s goal is to bundle all of these products together, sort of like how a cable company bundles internet, phone and television. And just like with most cable companies, the service will be overpriced and shoddy because it will leave farmers with no other option.
Frerick ended his column with a call to break up Big Ag giants to "restore competition and bring vitality back to Iowa’s rural communities." He encouraged Register readers to contact him via e-mail (email@example.com) or through Twitter @austinfrerick and received a strongly favorable response right away. A few hours later, he spoke to me by phone about how he developed an interest in the challenges facing rural Iowa and working Iowans generally, which would be a focal point of a Congressional campaign.
Frerick hasn't formed an official exploratory committee. He's had some conversations with people in IA-03's sixteen counties but plans to do much more on that front while he decides whether to join the field of Democrats challenging two-term Representative David Young (Cindy Axne, Theresa Greenfield, Paul Knupp, and Heather Ryan). He hopes the editorial about breaking up Monsanto will reflect the "vision I'm putting forward."
Although he spent his whole childhood in this state, living in a working-class household, it was only during college that Frerick became aware "there's really two different Iowas. Urban Iowa's very different from rural Iowa." Getting to know a fellow Grinnell student who grew up on a farm outside Spencer, he realized the importance of 4H in a rural high school, compared to his Cedar Rapids school, which didn't even have a 4H chapter.
Frerick wrote not one but two senior theses, inspired by research he started during an internship at the Center for American Progress. He traveled the state, conducting interviews in meatpacking towns like Columbus Junction, Denison, Marshalltown, Perry, Postville, Storm Lake, and West Liberty. One of the projects analyzed how changes in that industry fueled the rise of majority-minority school districts in rural Iowa. The other explored the reemergence of "company towns" in rural America, as corporations like Tyson Foods located more slaughterhouses outside large urban areas. Frerick adapted some of that research for a Bleeding Heartland post last year: "Big Meat, Small Towns: The Free Market Rationale for Raising Iowa’s Minimum Wage."
After Grinnell, Frerick pursued a master's degree in public policy at Wisconsin, then landed a job at the non-partisan Congressional Research Service. Working in the domestic social policy section, he studied a wide range of programs relating to health care, children and families, and income support. He noticed that policies affecting millions of people are often poorly thought out. Language inserted into a bill to appease some powerful member of Congress still affects how Medicare is structured decades later. Under the 1996 welfare reform, state officials are supposed to convene panels every three years to figure out the best uses for the federal block grant that replaced cash welfare programs like Aid to Families with Dependent Children. Frerick learned that very few states even go through the motions. Often some bureaucrat copies and pastes together old reports on ways to spend the block grant. Iowa's poverty commission last met in 1996, even though the number of children living in poverty here has risen by 44 percent since 2000.
Frerick would have stayed at the Congressional Research Service for a long time, but a "once in a lifetime" opportunity came up to be a financial economist at the Treasury Department. During his years in the tax department there, Frerick did a lot of revenue estimating, but also worked on ideas to improve the tax code. He described the office as "a kind of think tank for the president." In this working paper, Frerick and a co-author considered whether "excess returns to corporations have been increasing over time." He published some of his original research in peer-reviewed academic or industry journals.
Why would a policy wonk--"I could talk about this all day," Frerick told me--leave such enriching work? "I've always found D.C.'s a fun city to visit, it's never fun to live." As he and his partner considered their future and where they would want to raise children, "the quality of life we want and the environment we want to raise a family in" would not be possible in the Washington area. The prospect of "free day care from my mother" was another draw, "I ain't gonna lie," Frerick said, laughing. "I don't think people here realize how good they have it, just the balance of life between work and family." After Donald Trump's election, the prospect of four more years in the capital was even less appealing.
The growth of monopolies "wasn't on my radar at all" until he did a lot of data work for a Treasury Department colleague on family leave.
That's when I started noticing, oh wow, it's getting really concentrated. You don't realize it at first because a lot of these companies have multiple brand names, but it's really just one company. [...]
When you boil down a lot of the problems of our time with money in politics, the divisiveness and all that, a lot of it's just rooted in, with economic concentration comes political power.
You know, you can try to organize workers at a slaughterhouse all you want, but if that company has 60 percent market share, they can just shut it down. That plant is nothing to them.
So if we want to, I mean--we really do need to bring back a robust public-sector union, but that's also going to require addressing the economic concentration point.
You're just seeing it in all these different studies, where people aren't being entrepreneurial, companies aren't investing in R&D [research and development] as much as before. And a lot of this is, when these companies capture these markets, they're just going to milk them. They're just going to milk consumers, and not--they don't have to fight for it. So they just kind of take it easy.
"DEMOCRATS SOMETIMES FOCUS TOO MUCH ON THE STORY OF THE CANDIDATE AND NOT ON THEIR VISION"
"Ag anti-trust" is a key issue Frerick wants to bring before voters in IA-03. But economic concentration isn't a problem restricted to the farm economy: "Pharmaceuticals are just a beef on their own." At Treasury, Frerick learned a lot about strategies companies use to hide their intellectual property to avoid paying taxes. That work led to an academic publication about "The Cloak of Social Responsibility: Pharmaceutical Corporate Charity." Frerick broke down the scheme in a post for this site about the overpriced Hepatitis C cure. He told me yesterday,
My heart will always be with social politics, ladder of opportunity. It was like that post I wrote for you on welfare reform failure. You look at child poverty rates in, like, Montgomery County, and it's just--I mean, it's growing in times of economic prosperity. The bottom's collapsed in our society. It's a have and have-not place. For every Clive [a well-off suburb in Polk County] there's a community like Newton that's struggling to get by.
After Frerick and his partner decided to relocate to Iowa, they wanted to live in a small community, partly because of Frerick's fond memories from his college years. He's enjoying Winterset, and getting to know locals has reinforced his views about the effects of economic concentration. "Corn went up to seven dollars a bushel, and seed prices rose with it. Corn's dropped back to three-something now. Seed prices didn't come down. Every farmer right now is trying to reduce their costs."
He has also noticed, "Seed costs in rural Iowa are like gas and milk prices. They're so salient." While trying out the fare at a restaurant reputed to have the best tenderloins in Madison County, he struck up a conversation with the owner, who walked him through how the price of soybeans affects her livelihood.
What will influence Frerick's decision to run for Congress? "I'm not going to have the institutional money behind me" like some other Democratic contenders, he acknowledged. To see "if the grassroots support is there and the message is connecting," he is willing to put in the time and the miles. "I think Democrats sometimes focus too much on the story of the candidate and not on their vision, and I want to put forth a strong vision." He won't limit himself to gatherings of Democratic activists, such as campaign events or central committee meetings. He'd like to speak to local Farm Bureau groups and small-town bankers, who see the effects of Big Ag monopolies on a daily basis.
That manufacturing piece I wrote a while back--that one kind of stemmed from frustration of how everyone just thinks, you've got to move to a city and work in a cubicle, and that's the future. And it's just--I grew up in a working-class family, and there's something about me that, it felt pretentious.
Talking to people afterward who read that article, a lot of people who work with their hands or live in rural areas just feel disrespected. Undervalued. And I just was showing, I'm not from rural Iowa, but I've lived in rural Iowa, and I know enough to respect it.
A lot of people don't realize how much math goes into farming.
Winterset has a reputation as a fairly conservative town. Have people been welcoming to the new gay couple in the neighborhood?
Oh, God yeah. I mean, the first day here we had half a dozen people come up and say hi to us, because, they were like, "You look new here." We got farm-fresh eggs from someone, and we also got invited to a gay farm couple's jazz camp concert next month.
There's diversity here. It's not apparent when you look at it, but people--I don't think my gayness is going to be an issue at all. I think people today, are just, "How are you going to help me and my life." That's what I want to focus on.
"It's been years" since he's gotten any negative feedback in Iowa over being gay, Frerick added a short while later.
I've had so many conversations where Democrats in D.C. or in Des Moines just say, "Oh, people in rural Iowa are just ignorant, racists," insert your word. And it's just--I just don't believe that. I think that most people, if you're a good person, they're good to you.
I think what happened here is, our economy is only benefiting a few. And I think people just expressed their frustrations in the election of Donald Trump. [...] Most of my family voted for Trump, and I get it. I get it. We moved to a high-end service-based economy, we forgot about skilled manufacturing, and we privatized higher education.
"The notion that manufacturing's dead is just not true," Frerick added, pointing to Germany's advanced manufacturing. Iowa will always need tractors. "The question is, is our technology and our labor base going to be good enough so that we're producing the tractors, or are they going to be produced elsewhere?"
Furthermore, "we subsidize the heck out of Pharma" in this country. Research supporting many high-end, service-based jobs relies on subsidies "we don't put elsewhere. And a lot of these companies that we hold up on pillars in Silicon Valley, a lot of them don't pay their taxes."
It's certainly not the standard Democratic Congressional candidate talking points. "That's the thing I bring to this race," Frerick said. "I know policy well enough. I've been very fortunate, I have a deep understanding of policy" from working for the federal government in non-political jobs. "I think right now as a party, we focus too much on the metrics of success as dollars raised, not on the connection with voters or putting forward the quality of ideas."
Frerick doesn't have a timetable for making a final decision. He feels lucky to have a lot of time to devote to exploring this idea while he isn't working full time and doesn't yet have children. He's under no illusions: "It's an uphill battle. I mean, anyone who thinks that beating David Young is going to be easy is lying to themselves. He works hard, and you've got to--he's one of the hardest-working congressmen, and you've to work harder than him." Whether a message focusing on rural Iowa will resonate in Polk County, where two-thirds of IA-03's Democratic voters live, is another open question.
Electoral tactics aside, an articulate person highlighting under-reported root causes of rural Iowa's economic pain will be a welcome addition to the political landscape.