Wednesday, December 17, 2014

Letter from Langdon: Langdonomics

05/18/2010

It was a beautiful March evening. Sidewalk cafes were open. Young people were sitting along the sidewalk texting and laughing. Arm-in-arm lovers were walking and talking. I was in the city for a big meeting the next day, just taking it all in.

I was thinking that if this is what it would be like to be an urban farmer, city life might not be so bad. Then, as I hiked to my hotel I noticed a familiar looking furry four legged pedestrian up ahead just as he dove into a bush in the landscaped greenery at the base of my hotel.

It was so pleasant even the rats were out.

One of the worst things that can happen on the farm is rats. Rats in the corn crib, rats in the barn, rats are bad news just about anywhere you find them…except maybe in poorer parts of the world where they’re on the menu

If we have to, I suppose we can always eat them in self defense.

Rats have no restraint, no sense of decency. They will breed like there is no tomorrow and pass on the worst possible habits to their young. They have no qualms about anything right down to destroying the buildings where they live.

As if all that’s not bad enough, rats burrow so deeply and hollow out such intricate mazes that basic foundations have been known to collapse.

There must be a burrow connecting Washington and Wall Street, because for the last several years the foundations of democracy and capitalism are settling at about the same rate. 

Don’t get me wrong, I’m not throwing a tea party.

I’ve heard way too many retired people cuss taxes as they cash their publicly funded retirement check on the way to a doctor appointment paid for by Medicare. Some are even retired from government jobs.

Through the miracle of television I’ve seen trouble brewing on the concrete curb of public streets as signs wave, saying “No More Taxes.” Chances are, everyone took a drink from the public water system and flushed into a public sewer before attending a protest guarded by public law enforcement. 

I think I’d give up tea before I gave up all that.

To top it off, even after the worst financial collapse since 1929, some tea bag waving legislators don’t seem to realize (or alarmingly, maybe they do) that government mandates for Wall Street investments just shove more of our money down a rathole. During his first term, President Bush called for privatizing Social Security so we could get big government out of the way of profit and free enterprise in retirement savings. That failure in judgment is one of his proudest accomplishments. But if that sounds good to you I have some nice cheap derivatives for sale at bargain prices…. 

Wall Street bankers say that Washington legislators, particularly Arkansas Senator Blanche Lincoln, don’t understand the ramifications of limiting the use of derivatives. That’s because derivatives alone contributed $29 billion to their bottom line last year.

Of course, at least some of that came from selling completely worthless contracts to unknowing consumers. Barabeke In Deshnok, close to Bikaner, India, there is a temple devoted to the rat. Rats are everywhere. Visitors are required to enter the temple barefoot.

The best definition of derivatives I could find is that they are valueless bets based on something someone might or might not do in the future that is totally unconnected to anything else. That sounds more like a rat race than stable, predictable investment. At least in off-Wall-Street races, bookies give odds for winning.  

Compare that to commodity futures and options contracts which are based simply on “things” — like corn or soybeans — and their value at a certain point in time in an openly traded market. It seems derivatives have a lot in common with rat droppings.

I for one am tired of giving my money away to rich men. Unfortunately, a lot of people think that I, as a U.S. farme.r fit the same description because I collect farm subsidies. But at least everything I deal in is real.

U.S. Department of Agriculture grain subsidies guarantee production of a real, cheap supply of raw agricultural materials to well-fed corporations. That’s mostly because corporations have burrowed into USDA, all the way down to the footings. That lets them help decide which policies are passed and which are ignored.

Some people think that a more sustainable and healthy food supply could be the result of restructured farm programs that favor a different type of un-infested farming. 

With debate over the new 2012 farm bill just beginning, arguments are beginning about who gets a bite out of downsized USDA budget dollars. It may take an exterminator to eliminate the bad policies before new ones can be put into place. Either way, lots of other people’s money is at stake.

Basic Langdonomics (that’s the measure of economic gains on the farm here at Langdon) state that it is better to profit and be taxed than never to have profited at all. 

With fair profits, taxes can be paid for the good of everyone. Without profitable farms, our schools, our roads, and everything we have in rural Midwestern communities starts to crumble like vermin infested tenements.

Our farm economy has become dependent in part on grain subsidies and big-agribusiness-instigated quotas of a few products at the expense of a broader economy. That’s one reason why bioenergy is such a big deal in rural America. It’s a chance to sell more products into a new and independent marketplace. 

In our livestock markets, a limited number of big corporations are responsible for such a huge part of the trade that it’s hard to tell if values are based on anything that’s real. 

Now we face increasing competition from other free trade competitors. They say our subsidies aren’t fair and we have to buy more from them or they will tax our exports into oblivion.  

Anyone care for tea? 

Cotton production and textile jobs have moved to other continents, along with a lot more manufacturing jobs. We already know about the doubtful safety of foreign food. And livestock diseases in other parts of the world, imported because of trade mandates, could sicken herds and break the backs of independent producers here at home.  Sherlock77 A 1947 Packard.

U.S. farmers lose as U.S. consumers are being told to accept the risk of buying unsafe food. 

Most of us can only take so much. But a rat just keeps on taking. It’s all about other people’s money and watered down laws.

Sort of reminds me of a neighbor from the early ‘50s who drove an aged Packard sedan. In the days before powerful diesel engines, modern farms kept a big barrel of gasoline on hand to power the farm tractor.

Back then, everyone went to town on Saturday night. That’s when the neighbor would roam the countryside looking for a likely place to fill his car’s gas tank. Apparently one tank of gas per week wasn’t enough, so after awhile he removed the back seat from his car and installed two 50-gallon barrels which he also filled at someone else’s expense.

One wily farmer who’d had enough of it loaded his gas barrel with water, and the Packard died before making it home that night. Next day, all the neighbors smiled a little as they drove past the stalled car on their way to church.

I guess that proves there’s more than one way to kill a rat. But someone still has to set the trap.