Man-Killing Jobs

Chart of the Day: Looming Farm Crisis Edition

From AgWeb:

I've said it before, and I'll say it again: unfortunately, it is going to get worse before it gets better.  As the chart on the left shows, debt-to-income is at the highest level since the late '80s, and guys are still throwing $8,000-12,000 an acre at land in this area.  This will not end well.  Also, if you are looking for a stock to short, I'd suggest you take a look at Farmland Partners (I am not a financial advisor, and would recommend that you should never short a stock).

Chart of the Day-Rural Suicide Edition

Washington Monthly:

Included are suicide and undetermined deaths suspected of being suicides. Teenage rate is deaths under age 20 divided by population age 15-19; adult rate is for age 20+.

Emerging analyses show rapidly rising suicide, firearms, and addiction-related “deaths of despair” afflict whites the most in rural and suburban areas where white populations are most concentrated. There are many more suicides among the seven million white rural 35-64 year-old men than among all 40 million American teenagers of all races and both sexes everywhere. Rural areas also tend to have higher rates of gun ownership and firearms mortality (correlated with men’s suicide) and lack the level of mental health services that have evolved in cities.

 There has been a spate of articles pointing out that farmers have a suicide rate about twice as high as the rate amongst veterans.  The scary part of that news is that we are just coming off of a generational price boom that I probably won't see a return to for the rest of my (assumed actuarial) lifetime.  Those of us in agriculture are facing much darker days going forward, at least in a financial sense.  Meanwhile, rural areas continue their steady decline.  Considering these factors, I fear the trend in suicide deaths will continue to worsen.  I don't anticipate that either the public or private sector will work to change any of these trends.  What I can say is that faithful readers of this blog do not have to worry about me, I'll be with you until the bitter end.  I enjoy hating life way too much to ever consider cutting it short.  Plus, there is this to consider:

Chart of the Day - Largest Employer Edition

Visual Capitalist, via Ritholtz:

Anything that links Ohio to nearly the entire South is troubling for me.  In the state's defense, our state university system would most likely be a larger combined employer than Walmart but for the system's setup as a number of individual universities, but that is almost certainly the same case in the other states as well (such as Texas or Florida).

The Monster the GOP Created

So nearly 40 years of lying and brainwashing their base has finally caught up with Republicans. Apparently, the saner office holders realize that their base is completely out of its collective mind, and they are retiring in droves to keep from being whipped in the primaries by the craziest loons on the ballot.  Aren't they just profiles in courage.  They and their donors whipped up the regular folks with bullshit about the tyrannical federal government and taxes as theft, and watched as the craziest idiots possible got elected to the local school board and city council.  Then those folks moved to the state legislature.  Then to Congress.  Now they control a large minority of the Senate, and the prototypical 71-year-old Fox News viewer is President of the United States.  The country club set that controlled the Republican Party for years has now realized they no longer can control the lunatic base they used since 1980 to get the votes to overturn regulations and give themselves tax cuts and screw the poor and minorities.  And things are going to get much worse.  40 years is a long time to lie to folks and promise them you are going to help them out, only to enrich yourselves and screw them, over and over and over.  The base wants revenge because even though they can't see Donald Trump is a lying, useless dumbass, they've come to figure out the establishment has been screwing them forever.  All I'm sure of is that I'm going to get very drunk on election night 2018 and that the nation I grew up in is never going to be the same.

Small Towns As The New Inner Cities

The Wall Street Journal goes to Kenton, Ohio to look at the demographic challenges facing many small towns:

In Hardin County, where Kenton is the seat, factories that once made cabooses for trains and axles for commercial trucks have shut down. Since 1980, the share of county residents who live in poverty has risen by 45% and median household income adjusted for inflation has fallen by 7%.
At the same time, census figures show, the percentage of adults who are divorced has nearly tripled, outpacing the U.S. average. Opioid abuse is also driving up crime.
Father Dave Young, the 38-year-old Catholic priest at Immaculate Conception, was shocked when a thief stole ornamental candlesticks and a ciborium, spilling communion wafers along the way.
Before coming to this county a decade ago, Father Young had grown up in nearby Columbus—where for many years he didn’t feel safe walking the streets. “I always had my guard up,” he said.
Since 1980, however, the state capital’s population has risen 52%, buoyed by thousands of jobs from J.P. Morgan Chase & Co. and Nationwide Mutual Insurance Co., plus the growth of Ohio State University. Median household income in Columbus is up 6% over the same span, adjusted for inflation. “The economy has grown a lot there,” said Father Young. “The downtown, they’ve really worked on it.”
Meanwhile, as Kenton—population 8,200—continues to unravel, he said he has begun always locking the church door. Again, he finds himself looking over his shoulder.

There are definitely some similarities between the current struggles of many small, isolated towns and the challenges faced by inner city neighborhoods fifty years ago.  Both areas lost jobs and hope while drug use and family failures spiraled up.  Currently, we haven't seen the spike in violent crime in small towns, and hopefully we won't, but I expect that part of the inner city collapse rose up with the feeling of hopelessness that grew up out of the utter lack of opportunity and impact of drugs.  It very well could crop up in today's seemingly abandoned small towns.

The Financialized Economy

Via Downtown Josh Brown:

Then Steve King says something racist.

Chart of the Day - Manufacturing Job Losses Edition

CNN:

One word: China (they joined the WTO in December 2001).

Why Are Voters Mad?

This:

Because the pre-tax incomes of the bottom 50 percent stagnated while average national income per adult grew, the share of national income earned by the bottom 50 percent collapsed from 20 percent in 1980 to 12.5 percent in 2014. Over the same period, the share of incomes going to the top 1 percent surged from 10.7 percent in 1980 to 20.2 percent in 2014.⁷ As shown in Figure 2, these two income groups basically switched their income shares, with about 8 points of national income transferred from the bottom 50 percent to the top 1 percent. The gains made by the 1 percent would be large enough to fully compensate for the loss of the bottom 50 percent, a group 50 times larger.

To understand how unequal the United States is today, consider the following fact. In 1980, adults in the top 1 percent earned on average 27 times more than bottom 50 percent of adults. Today they earn 81 times more. This ratio of 1 to 81 is similar to the gap between the average income in the United States and the average income in the world’s poorest countries, among them the war-torn Democratic Republic of Congo, Central African Republic, and Burundi. Another alarming trend evident in this data is that the increase in income concentration at the top in the United States over the past 15 years is due to a boom in capital income. It looks like the working rich who drove the upsurge in income concentration in the 1980s and 1990s are either retiring to live off their capital income or passing their fortunes onto heirs.

Trump's policies are just going to worsen these trends.  He can jawbone companies into keeping some decent paying jobs in the States, but overall, there is downward pressure on the middle class, and messing with Medicare and cutting taxes for rich people aren't going to change that.  Even decent paying public sector jobs are getting squeezed out, and the Republicans elected with Trump are all for strangling them further:

Back in 2009, Rick Erickson was happy with his job as a teacher in one of the state’s northernmost school districts on the shores of Lake Superior. He made $35,770 a year teaching chemistry and physics, which wasn’t a lot of money, but then again, he received stellar healthcare and pension benefits, and could talk honestly with administrators about what he needed as a teacher every two years when his union sat down with the school district in collective bargaining sessions.

Then, five years ago, Wisconsin passed Act 10, also known as the Wisconsin Budget Repair Bill, which dramatically limited the ability of teachers and other public employees to bargain with employers on wages, benefits, and working conditions. After Act 10, Erickson saw his take-home pay drop dramatically: He now makes $30,650. His wife is a teacher, too, and together they make 11 percent less than they did before Act 10. The local union he once led no longer exists, and so he can’t bargain with the school district for things like prep time and sick days. He pays more for health care and his pension, and he says both he and his wife may now not be able to retire until they are much older than they had planned....Data suggests that Erickson is by no means unique. Total teacher compensation in Wisconsin has dropped 8 percent, or $6,500 since Act 10, according to an extensive study by Andrew Litten, a Ph.D. candidate at the University of Michigan who used state data showing compensation of all teachers in the state of Wisconsin. What’s more, he found that the most experienced and highest-paid teachers experienced the biggest reduction in benefits.

This will continue, and voters will continue to be mad.  Trump won't solve anything.

End of November Mini-Links

It's been a while, but I'll try to link to a few of the good stories I've seen recently:

Trump's Infrastructure Plan Could Be A Giant Sports Welfare Giveaway - VICE Sports.  Or pipeline giveaway, or outdoor mall giveaway.  I doubt we'll see many century-old water mains replaced.

Choke Point of a Nation: The High Cost of an Aging River Lock - New York Times.  More on the Olmstead Lock and Dam project here and here and here.

A Blade Strikes Steel, and the Blast Shocks a Nation's Energy System - Bloomberg

The Road Ahead - American Scientist

The Desert Rock That Feeds The World - The Atlantic 

Farmers Are Courting Trump, But They Don't Speak For All Of Rural America - The Salt.  Shorter farmers: where's my Obamaphone free shit.

How Drug-Resistant Bacteria Travel From the Farm to Your Table - Scientific American


Trump's Economic Plan: This Isn't Going To Work - Counterpunch

Behind "Make America Great," the Koch Agenda Returns with a Vengeance - Talking Points Memo.  Government of the billionaires, by the billionaires and for the billionaires, as Trump's cabinet attests.

Democrats Don't Have an Easy Answer for the Rust Belt - The Atlantic

Carrier Reaches Deal With Trump to Keep About 1,000 U.S. Jobs - Bloomberg.  I can't wait to hear the details about how much this will cost.  What's to keep lots of other companies from threatening to move jobs to Mexico to get their free money, too?  How about Rexnord?

In Short Strike, Jim Beam Workers Crush Two-Tier and Beat Grueling Hours - Labor Notes

Disgorge the Cash - The New Inquiry.  "Maximizing shareholder return" has done more damage to American workers than anything else.

A philosopher’s 350-year-old trick to get people to change their minds is now backed up by psychologists - Quartz

The 2016 election pitted booming cities against stagnant rural areas - Vox

President Trump and the GOP Congress. Frenemies?

Since the Democratic Party has been gutted by anti-Obama sentiment in the middle of the country, along with gerrymandering and the extremely pro-rural setup of the Senate, the most likely check on the power of President Trump (almost a week in, and I still can't believe I am typing that crazy shit.  Thanks, neighbors.) will be Republicans in Congress.  Looking over what actual policy proposals Trump has laid out, I think we can guess which ones are likely to actually happen. There are two areas in which Trump and Congress will almost certainly find common ground: taxes and military spending.  
On taxes, we are almost certain to see ridiculous tax cut plans put into place.  All the squabbling will be over details.  Here is the Wall Street Journal on possible tax cuts:

“Because Mr. Trump has made it clear he wants to do tax reform in the first 100 days, House Republicans are going to be ready,” Rep. Kevin Brady, chairman of the House Ways and Means Committee, said in an interview Wednesday. “I’m confident that this blueprint will grow the economy significantly, simplify the tax code for families and lower their tax burden and bust up the IRS, redesign it so it’s focused on customer service.”...
Republicans in Washington expect swift action on the most significant proposed tax-code changes since 1986, which offer what they see as an accelerant to U.S. economic growth. They would lighten tax burdens on high-income individuals and multinational corporations and repeal the 100-year-old estate tax.....
Mr. Trump called for reducing the top tax rate on individuals from 39.6% to 33% and for cutting the corporate tax rate from 35% to 15%. Businesses that now report their profits on their owners’ individual returns would get the 15% rate and would likely pay a second layer if the owner takes money out of the business.
He would also eliminate personal exemptions and the head-of-household filing status used by single parents, and his proposed breaks for child-care costs wouldn’t be enough to prevent a net tax increase for millions of families...
The House plan, by contrast, sets the corporate tax rate at 20% and the rate for other businesses at 25%. Either plan needs rules to prevent individuals from making their wages and other ordinary income look like lower-taxed business income, a problem that Mr. Trump’s campaign acknowledged and said Congress would solve.
The House plan would also create a international-border-adjusted corporate tax that applies depending on the location of sales, not profits. That is complicated, and it may face objections from retailers and financial-services companies as well as a potential challenge from the World Trade Organization.
Both plans would significantly increase budget deficits and give the largest tax cuts to high-income households. Mr. Trump’s plan would reduce federal revenue by $6.2 trillion over a decade, according to the Tax Policy Center, a project of the Brookings Institution and the Urban Institute. The top 1% of households would get a 13.5% boost in after-tax income, compared with a 4.1% rise for the entire population.
Republicans say their plans would spur growth due to the tax-rate cuts and the ability to write off capital expenses immediately instead of depreciating them over time.

Ok,so on the tax cut side, it looks like a lot will get done, and very little of it will be beneficial to the regular voters in struggling Rust Belt states who foisted President Trump on the rest of the nation.  However, business people will reap a massive windfall, and Republicans are going to make sure that the IRS is powerless to stop massive tax evasion.  I'm especially curious about the elimination of depreciation.  Maybe it is just me, but something like that would seem likely to make things such as rental properties a nearly perfect tax shelter.  Any simple purchase which ties up tens or hundreds of thousands of dollars of a year's profit, and promises positive cash flow going forward would seem like a no-brainer.  Currently, I believe a rental property is depreciated over something like 27 1/2 years.  Maybe they are only talking about capital equipment, but it is hard to tell by the way the article is written.  Besides, Congress has been pretty consistent in extending Section 179 bonus depreciation annually since the Bush stimulus plan back in 2001.  Recently, that has been capped at $500,000, which to me seems like more than what the average small business profit would amount to.  I would think that expanding that to all business would be a tax loophole that would be massive enough that most businesses wouldn't have to pay taxes almost any year.  If that were the case, I'll let you guess where that tax burden would fall.

As for defense spending, the only thing that will hold Republicans back from throwing crazy money at defense contractors will be the massive deficits created when those tax plans go into place, although St. Ronnie proved that Republicans don't care about deficits when it comes to tax cuts and defense spending.  I would expect the next four years to be Christmas for defense contractors and the Wall Street banks that handle Treasury security sales.

Things get a little more interesting when it comes to infrastructure spending.  Here is a place I somewhat agree with Trump.  The U.S. does have a massive need for spending on infrastructure improvements.   We have a massive amount of infrastructure put in place in the early and mid-20th century that is reaching the end of its useful life.  Unfortunately, I see Trump spending billions to turn JFK airport into a massive version of one of Saddam Hussein's palaces, as opposed to replacing failing century-old water and sewer lines in Rust Belt cities.  Likewise, Republicans in Congress have consistently avoided locating the over $2 billion in outlays required to fully-fund the Brent Spence Bridge in Cincinnati, for example, which Trump promised to fund at a campaign stop immediately before the election.  According to Trump, those funds may come from money currently paid by the United States to the United Nations.  A quick google search indicates that would be about $8 billion dollars a year, so if Trump made very many promises like the one in Cincinnati, Congress is going to have to find significant funds.  They have not been willing to do that, but maybe that was because Obama was evil.  That or they just don't give a shit about infrastructure spending outside of the regular Highway Bill, which, while massive, is still tremendously underfunded, and all-to-often neglects more expensive repairs and replacements in favor of shiny new things, and by its nature only funds transportation projects without addressing utilities.  This will be one of the most interesting things to watch in the Trump-Congress interactions.  Based on where votes for president came from and what Congressional Republicans' priorities are, I would expect mass transit to suffer badly.

As for the border wall, I'm not sure what if anything will happen here.  Private property owners will probably be the most resistant to expansion of the border fence, and there are already hundreds of miles of wall and fence in the areas where it is easiest to build.  After 15 years of talk about border security, I really don't expect to see much if anything done here.  However, the desires of voters who put Trump in office may outweigh common sense.

Finally, there are entitlements.  Paul Ryan and the Freedom Caucus really are chomping at the bit to generally destroy Social Security and Medicare, while Trump has promised to make them more generous to beneficiaries.  Trump's plan is wildly expensive, while the Ryan plan is ridiculously unpopular, especially with the elderly white Rust Belt voters who put all these clowns in office.  I would see little to nothing done here, except possibly some change that takes place far down the line and screws over my baby bust generation instead of the boomer cohort.

To wrap things up, expect President Trump and Congress to agree to a ridiculous tax plan which widens income inequality and creates huge revenue holes in the budget, and adds to them a sizable increase in defense spending and cuts to programs intended to benefit the poor.  These changes are popular with Trump, with the GOP Congress and with the suburban and rural white voters in the South, the Rust Belt and the Plains and Mountain West states.  Expect much less on infrastructure spending, border security and entitlement reform/destruction.  In the end, I expect this President and Congress to be able to enact plans which benefit the wealthy and businesses, while punishing the poor and protecting the elderly from budgetary pain.  Pretty much, Republican business as usual.  Don't expect any of these policies to benefit the rural and Rust Belt voters mentioned above.

President Trump

So far, one can't get a very warm feeling about what a Trump presidency will be like.  It is looking like Trump may have no actual interest in governing, and that he is going to turn that over to the loony part of the Republican party.  That may, in essence, mean that as far as day-to-day activity goes, Mike Pence will be President.  God help us.  Pence is not a smart man.  As far as the law-and-order side of things go, Rudy Giuliani and Chris Christie keep popping up.  Geez.  Then you've got Ben Carson and Sarah Palin. And the guy in charge of them all, Donald Trump.  Holy shit.

My main intention with this blog has been to point out that Republican attacks on government are tremendously counter-productive.  While government often is wasteful and poorly-run, it is also necessary for a functioning society.  Republicans, instead of working to make government better, have been working to destroy it.  That is the worst possible thing that could happen, if your goal is a civil society.  The forces unleashed by the Presidential campaign are going to be very hard to bottle up.  The mood of white folks in the middle of the country is very ugly.  The shock and anger in the big cities is building.  My fear is that instead of fizzling out, the protests against Trump will keep slowly building, and eventually breaking out into civil unrest.  Then you'll have a government run by Trump and his rather incompetent minions cracking down on big city protestors, while rural folks cheer them on.  The rural/urban divide could potentially become the front for a low-level civil war.

However, if that terrible outcome doesn't actually occur, you still have a likely best case scenario of an incompetent administration screwing up an already damaged economy.  As I've said previously, folks in the middle of the country have suffered as factories have closed and jobs have disappeared.  No matter what Trump said he'd do on the campaign trail, fixing that is a damn near impossible task.  If we are supposed to take comfort in Trump's business record, I think we are in serious trouble.  His whole career has been made up of a bunch of grandiose plans and over-the-top bluster followed by miserable failure.  Finally, he gave up on actually selling products and real estate, and sold his image as a loud-mouthed blowhard.  Somehow, he was able to sell himself to nearly half the population to be President of the United States.  By fueling racial resentment and making ridiculous claims about bringing the post-war industrial economy back to the Rust Belt, Trump has again massively over-promised, and will almost certainly fail. His scapegoating of minorities for America's problems reinforces the mindset already flourishing in rural areas. I can't see anything good coming of his Presidency.  For four years, the government will become weaker and more incompetent, while anger and internal resentment will build.  What happens when somebody strikes a match to the massive pile of dry tinder? 

Hopefully, I am completely wrong about all of these possibilities.  Hopefully, the Trump presidency will be a model of government efficiency and civility, and the economy will flourish.  Hopefully, all the people I thought were racist will actually be correct, and that the whole cause of increased racial tension in the country welled up from President Obama personally, and when he retires from public life racial harmony will ensue.  But I don't believe any of that will happen, and I fear that the late 20th century and early part of the 21st century will be seen as a turning point in American history.  The Trump presidency could make the Bush and Obama administrations look good in comparison. 

Some Thoughts on the Election

The election of Donald Trump has been a long time in the making.  Since the oil embargo in 1973, there have been tremendous stresses placed on the U.S. economy.  First, it was dependence on domestically produced petroleum to fuel our economy.  This quickly morphed into an inflationary spiral.  The inflation pressure destroyed or greatly pared down mature manufacturing industries such as steel and the domestic auto industry.  While this was occurring, Ronald Reagan brought anti-union politics to the forefront in the Republican Party.  Throughout the 80s and early 90s, the U.S. economy was guided away from manufacturing and toward finance.  Bill Clinton came in and leveraged what remained of union political strength, along with changing demographics to get elected.  When he finished the push to enact NAFTA, he made it a bipartisan coalition to undermine the manufacturing economy.  Meanwhile, the U.S. economy was supported by massive borrowing in all sectors, corporate, personal and government.  This debt-fueled economy, which continued to shed manufacturing jobs and was governed by a bipartisan coalition that promoted income inequality, hurt manufacturing employment and cut taxes on the wealthy, came crashing down at the end of the Bush presidency.  Obama decided to try to address this with a Republican-based health insurance subsidy plan, new regulations on finance, mild tax increases on the wealthy, and otherwise trying to hew to the bipartisan consensus that had held since the time of Reagan.

Republicans have cynically played on the decline of the white middle class by claiming that environmental regulations and taxes have wrecked the economy while poor people, mainly minorities, have supposedly benefited.  They have conveniently overlooked 100 years of Republican support for free trade and opposition to organized labor.  Meanwhile, Democrats have joined with Republicans to overhaul the tax code to the benefit of the wealthy and abandoned the working class while claiming that only the Republicans favor the rich.  Donald Trump sensed an opportunity to roll up deep ambivalence toward minorities and outright racism amongst white Americans while positioning himself as anti-free trade and pro-manufacturing.  It is an interesting, if massively cynical, position to take.  It has played on a rural-urban divide that has grown under the bipartisan coalition that saw manufacturing decline while national demographics have shifted.  The challenge for Trump is that he will be working with a legislature that is solidly aligned with the Republican party's free trade, anti-labor, anti-tax dogma.  Trump appears to be trying to play to racial animosity while also playing to struggling blue-collar workers and anti-government sentiment, while also repealing the modest reforms to a failing health insurance system which Obama undertook.

Trump's play has highlighted a number of contradictions in our existing political coalitions.  Democrats have increasingly grabbed support from the professional classes in U.S. cities by supporting diversity and secularism, pushing for a strong central government and mouthing support for the working class and unions while doing nothing for them.  Republicans have built a coalition based on white racial resentment, wrapping themselves in religion, championing free trade and tax cuts , attacking government and regulations and destroying unions.  Trump has tried to combine the anti-government policies of the Republican party with the anti-business positions mouthed by Democrats but completely abandoned by the bipartisan coalition, but tied them together with a more vocal racial resentment.

Looking back at the 2016 campaign from the beginning, it appears that the most logical political movement for the times, in a perfect world, would have been Bernie Sanders' campaign.  Sanders combined all of the the economic ideas antithetical to the bipartisan coalition that has reigned for 40 years and led to the hollowing out of the middle class and also fought against the racial resentment of whites toward an increasing diverse population.  Trump, on the other hand grabbed at anti-trade policies while also clinging to the failed tax cut and anti-regulatory and anti-climate change policies of the Republican party, while turning up the racial resentment to 11.  Clinton and the power brokers in the GOP tried to cling to the bipartisan consensus.

Trump is the result of the elites in both parties dividing the lower 80% of the population and giving the gains to the top 20%.  The urban portion of the 20% overwhelmingly supports the Democrats, while the rural portion supports Republicans.  Meanwhile, the urban and rural portions of the 80% are also split between the parties.  I don't see how this division will allow our economic problems to be effectively addressed.  It appears more likely that racial and rural/urban divisions will be made worse, and the illogical combination of policies Trump has supported will lead to further income inequality and unrest.  I'll expand on these ideas more going forward.

Morning in America

This morning, Americans in cities will wake up to a country they can't understand and don't recognize.  They will see that a reality TV star was elected President of the United States.  A man who made outlandish promises he will never be able to keep, and maybe never will try to keep.  They will struggle to understand how this happened, and the answer they will come up with is that rural Americans overwhelmingly elected this loudmouthed, blowhard overgrown child.  Will he bring steel mill jobs back to Youngstown and Pittsburgh?  No.  Will he overturn the economics of shale gas and bring coal jobs back?  No.  Will he dismantle Obamacare and make a dysfunctional health care system even more dysfunctional? Yes.  Will he allow Republicans in Washington to run wild with tax cuts and social spending cuts? Yes.  Will he continue to be a complete buffoon? Certainly.

If Republicans do push forward their tax and spending plans, rural Americans will suffer.  Even worse, whenever the inevitable backlash against Trump and Republicans come, there will be no interest in helping out rural areas which need help but obviously don't want it.  Do not expect the heroin epidemic to let up.  Do not expect the rural economy to improve. As the farm economy tanks, do not expect help to come from Washington.  People in cities just aren't going to care.  They see hateful assholes who gave them the finger and celebrated doing it.  Rural Americans did a stellar job choosing the worst possible candidate, and the worst possible legislature, and all Americans will suffer because of it.  Don't expect the Democrats in the House to bail out the Republican leadership when the do-nothing idiot Freedom Caucus holds out against the budget.  The Republican Party owns everything that happens from here on out, and it won't be glorious.  Sure, the statistics showed that the Bush administration was horrific, but you couldn't tell a Trump voter that.  Going forward, they have no one else to blame.  Patent medicine salesmen loved to move from town to town and rip off the rubes.  Trump continued that long tradition.  It's morning in America.  We'll move on.  We won't improve, at least for the time being.

Crop Glut Worsens

Wall Street Journal:

Harvests are under way of what are projected to be the largest corn and soybean crops in U.S. history, which soon will hit a global market already sitting on the largest-ever grain stockpiles.
Indeed, some farmers are hoping for a weather hiccup somewhere in the world to curb yields and breathe life into crop prices that recently hit multiyear lows.
They may be waiting a long time.
It is a dramatic turnaround from four years ago, when prices for many commodities were soaring to the highest levels U.S. producers had seen in their lives. Back then, extreme drought slashed production of major row crops, forcing ranchers to cull cattle herds as feed costs soared.But now farmers face a problem of the opposite sort. Prices for some crops are hovering near multiyear lows as storage facilities bulge with farm goods.
To make space for crops like corn after a massive wheat harvest last summer, Frank Riedl, general manager at Great Bend Co-op, a Kansas grain elevator and farm supplier, bought and leased extra land on which to build bunkers the size of football fields where he can heap millions of bushels of overflow grain.
“There’s an abundance of corn out here in the country and we don’t have the storage base for it,” he says. “Farmers are trying to find any place they can to dump their crops.”

Things are going to get ugly.  Farmers are still passably optimistic, but I think the next few years will probably beat that out of us.  Luckily for me, I've never been optimistic.

Trump and the Rural-Urban Divide

2012 Presidential Results by county

Cracked has a good piece explaining some of what attracts rural voters to Trump:

These are people who come from a long line of folks who took pride in looking after themselves. Where I'm from, you weren't a real man unless you could repair a car, patch a roof, hunt your own meat, and defend your home from an intruder. It was a source of shame to be dependent on anyone -- especially the government. You mowed your own lawn and fixed your own pipes when they leaked, you hauled your own firewood in your own pickup truck. (Mine was a 1994 Ford Ranger! The current owner says it still runs!).....
The rural folk with the Trump signs in their yards say their way of life is dying, and you smirk and say what they really mean is that blacks and gays are finally getting equal rights and they hate it. But I'm telling you, they say their way of life is dying because their way of life is dying. It's not their imagination. No movie about the future portrays it as being full of traditional families, hunters, and coal mines. Well, except for Hunger Games, and that was depicted as an apocalypse.

I can appreciate the do-it-yourself mentality.  I was proud that I used an 8-pound maul to split all the firewood I used to heat my house for 15 years.  I can appreciate the feeling of emptiness one feels as he or she watches all the things one has held dear slowly die (for me, that includes American manufacturing, rural communities, the Catholic Church and the Republican Party).  I can appreciate the resentment toward "the big city."  I just dropped a large sum of money on a piece of land just so the neighboring town can't burn up more farm ground with big shit shacks for Citiots (yes, that is a combination of city and idiot).  However, I just can't understand how anyone can believe that Donald Trump is a trustworthy person, and not a flaming sack of shit. 

As I listened to this story on NPR tonight, I was thinking that it would be better for struggling white folks to notice that their Hispanic neighbors shared many of the same beliefs in family, church and hard work, and that they would each be better off working together to address the inequality and lack of opportunity they each suffered under.  Meanwhile, they are splitting their vote between two ultra-rich asshole crooks who play them off against one another.  I don't know that this is a divide that can be surmounted, but if it is, I better invest my retirement funds in torches and pitchforks. 

The Case For More Government

NYT:

Last month, four academics — Jeff Madrick from the Century Foundation, Jon Bakija of Williams College, Lane Kenworthy of the University of California, San Diego, and Peter Lindert of the University of California, Davis — published a manual of sorts. It is titled “How Big Should Our Government Be?” (University of California Press).

“A national instinct that small government is always better than large government is grounded not in facts but rather in ideology and politics,” they write. The evidence throughout the history of modern capitalism “shows that more government can lead to greater security, enhanced opportunity and a fairer sharing of national wealth.”

The scholars laid out four important tasks: improving the economy’s productivity, bolstering workers’ economic security, investing in education to close the opportunity deficit of low-income families, and ensuring that Middle America reaps a larger share of the spoils of growth.

Their strategy includes more investment in the nation’s buckling infrastructure and expanding unemployment and health insurance. It calls for paid sick leave, parental leave and wage insurance for workers who suffer a pay cut when changing jobs. And they argue for more resources for poor families with children and for universal early childhood education.

This agenda won’t come cheap. They propose raising government spending by 10 percentage points of the nation’s gross domestic product ($1.8 trillion in today’s dollars), to bring it to some 48 percent of G.D.P. by 2065.

That might sound like a lot of money. But it is roughly where Germany, Norway and Britain are today. And it is well below government spending in countries like France, Sweden and Denmark.

To me, this seems like common sense.  But I've yet to be able to convince any of my neighbors that that is the case.  I think the article hits on an important note: that people are fine with programs that benefit them, but they are sure the "lazy blacks" or whoever are unfairly benefiting from their tax dollars.

Personally, I think the biggest job creation plan of all would be a national healthcare plan that took the burden of the provision of health insurance from employers and put the government in charge of cost-control.  For-profit health insurance makes zero sense whatsoever, and higher income tax rates on the truly wealthy might convince doctors they don't need so much income to keep up with the hedge fund assholes and overpaid attorneys (not to say anything about entertainers, athletes and untalented reality stars like Donald Trump and Paris Hilton).

Sure, a lot of unique ingredients contributed to the egalitarianism and shared prosperity (amongst white folks) of the post-war years, but I feel confident that a progressive income tax and government investment and transfers contributed significantly.  I don't think it is a coincidence that income inequality increased as top marginal tax rates and government programs for the poor decreased.  But, hey, what do I know?  I'm just a stupid farmer (who gets plenty of help from the government, in spite of being pretty well off.)

GDP Growth Disappoints

WSJ:

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.
The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.
Total growth this expansion ranks just 8th of the past 11 cycles. The U.S. economy, at the end of June, was 15.5% larger than it was when the recession ended in 2009.
The current expansion remains smaller than the one during Richard Nixon‘s administration. And that 16% expansion lasted just three years. The economy grew 18% from 2001 through 2007. It grew 52% from 1961 through 1969.
Despite the current expansion’s lack of intensity—or perhaps because of it—it is now one of the longest.

The chart which accompanied the article is very telling.  Since the 1980-1981 recovery, every recovery has come with a lower GDP growth rate than the one before it.  I think it is notable that each recession during this time period has resulted in the permanent loss of manufacturing jobs.  To me, it seems like a simple explanation that GDP growth has decreased as the middle class has decreased.  As long as we keep losing good-paying jobs and replacing them with lower-paying jobs, we are going to see anemic GDP growth.  The real question is how we can end this crapification of the economy.

Just Getting By

The Atlantic:

And folks are supposed to save foe their own retirement?

Ineqality Chart of the Day

From Jared Bernstein: