Economic Policy and Unemployment

  Paul Krugman recently compared the economic policies of western Europe and the US to a three stooges skit where one of them asked the other why he was banging his head against the wall and, I think it was Curly who replied, "Because it feels so good when I stop".  Meaning, the austerity policies adopted by these countries have been hurting them, and if they stop, their economies will improve even if they do nothing to stimulate them.  that seems pretty much what is happening in the US right now.  The job numbers are up and optimism is in the air in the private sector.  Of course, the long term unemployed are still hurting and likely to remain so.  Unless Congress approves some sort of job plan to employ many of these people, they will likely remain unemployable.  A writer in Rolling Stone recently suggested that anyone who can't find a job and wants one should have a guarantee the government will be the employer of last resort and pay them a living wage to do something.  This is reminiscent of the WPA under Franklin Roosevelt at the height of the Great Depression.  This program worked well until the war production programs of the early 1940s eliminated the need for it.   If this program was reinstituted now, there would be increased pressure for wage gains among the Walmarts of the world who would have to compete with government jobs.  While this is anathema for corporate America, it would be a boon to the 99%.

Year round fresh or not

NPR is doing a series of articles on the North American Free Trade Agreement and its effects on Mexico, Canada and the US.  Today's concerned the increasing availability of Mexican fresh vegetables 365 days a year in the other two countries.  It was done in a light hearted way, but it raised some serious issues for all concerned.   The food safety issues are way overblown, and from personal experience, I can say I would trust the Mexican exporters at least as much as the average American or Canadian grower.  Mexican agriculture has come a long way, guided in part by California growers who have poured millions into state of art of facilities.  Since the laborers are the same on both sides of the border, in many cases, the Mexicans have better food safety.  The larger issue is the breezy assumption that we should have tomatoes, string beans, squash, etc. available every day all year long.  Many people, myself included make a living from this trade, but I at least have a nagging feeling the whole trade is unsustainable in the long run.   The entire enterprise on both sides of the border is built on cheap fuel and cheap labor as well as a transportation infrastructure which is crumbling and not being rebuilt in a timely fashion. 

Inequality and democracy

When Lyndon Johnson declared war on poverty 50 years ago in Kentucky, nearly 30% of Americans were living below the line that defined poverty.  There are fewer of us beneath that line today, but both the poor and the middle class have seen their standing become more precarious every year.  Lose your good paying job and you can find yourself sliding down the social ladder very quickly.  Most households are a paycheck away from difficulty.  Meanwhile, lawmakers from the county level all the way to US congress continue to chip away at the social safety net, mostly claiming that those helped by these programs need to pull themselves up and not count on the government to help them.  Meanwhile, the same government has its hand on the scale, passing legislation and tax breaks that disproportionally help the top 10% and especially the top 1% at the expense of the rest of the population.  It's no wonder.  As elections become more and more expensive to win, only the well heeled and well connected can afford to enter public service.  It costs hundreds of thousands and even millions to win a seat in the House of Representatives and tens of millions to become a senator.  If you can finance your own campaign, you are part of the 1%.  If you can't, you will probably be beholden to the 1% for the funds you need to run.  This creates a pliant and indeed robust voice for the richest who are increasingly not even among us any more.  The disconnect is evident in republican talking points; cut taxes on the rich and shred the safety net and all will be well.  The mythical "job creators" will then be unleashed in the service of the rest of us.  As most of us intuitively know, this is hogwash at best.  The reason so many are so close to poverty is that so many have no jobs and have no money.  Less money means less demand.  It is a simple formula for societal misery, and until we address some of the above issues it will continue to concentrate wealth and ignore the factors which enable this unhealthy behavior.

Frozen thoughts

The markets for southern vegetables will continue to be bullish as the freezing weather continues.  South Georgia and northern Florida will take big hits as the temperatures fall into the teens and 20s.  This is fodder for climate change deniers, some of whom claim we are now entering a new Ice Age.  I wonder what they will be saying in July when temps on the east coast and the Midwest top out in the low 100s.   Meanwhile, consumers will pay more for squash and cucumbers in coming weeks.  California is facing a drought situation not seen in decades, although one Pacific storm could erase the moisture deficit at any time.  Most veg growers don't depend on Federal water projects for their supplies.  They usually pump water from underground aquifers which have not been affected by the drought so far.  If it continues for a second year, lettuce and celery could become scarce in the nation's salad bowl.  Talking to a spinach grower in Texas yesterday, we both agreed agriculture has become steadily more challenging as the new weather regime has overturned conventional wisdom regarding farming. The new generation of farmers will have to be far more risk oriented than their predecessors, otherwise, there will have to be much more government subsidies to entice them to keep planting with these uncertain forecasts.

Quick Changes

Unlike our frozen political discourse, the weather is changing wildly this week.  As I write this it is 45 degrees on the NCR, or about 60 degrees warmer than it was on Saturday morning.  By nightfall, we will be back in the single digits.  After that it will warm back up to the mid 30s by Friday with freezing rain again.  There will be collapsing roofs around the north country;  hopefully none will be mine.  Meanwhile, the congress will be looking to continue the pain for the long term unemployed.  While legislation to restore benefits will be introduced, the Ayn Rand caucus will filibuster the bill, because it will do a "disservice" to said unemployed by allowing them to not find the non-existent jobs that are currently begging.  NOT.  With three applicants for every job opening, employers can be extremely picky and one of the first disqualifications they make are for those who have not had a job for more than a few months.  The stigma, especially for a worker in their 50s and early 60s is devastating and will probably prevent many from ever  returning to gainful employment.  If the government is not willing to be the employer of last resort, just continue the benefits until these people reach retirement.  It would be a kinder, gentler way to keep the economy going until it can generate the numbers of jobs necessary to reach full employment.

Another day in the Sub-Zero

I was whining about the cold weather last night to an former  air force brat who set me straight.  His family was stationed in Minot, North Dakota during the 70s and 14 below would have seemed like a walk in the park.  However, it is what you get used to that counts, and although the NCR is sometimes known as the Frozen North, we have not had weather like this in at least 6 or 7 years.  So I'll keep whining until I get used to it.  Under a snow and cold weather emergency, New York closed the main road heading South last night and of course hundreds of trucks were stopped from delivering their cargoes.  With NYC and much of New England covered in new snow, the deliveries will be backed up for days and future orders will be uncertain until the roads are cleared and customers can reach stores.  Meanwhile, the NFL is getting a preview of what might happen in New Jersey on Super Bowl Sunday, and it isn't pretty.

One down

It's 14 degrees below 0 as I write this and I'm not happy.   Winter on the NCR is looking more brutal by the day.  2014 has started, but the weather is definitely retro.  This is more like something the locals experienced back in the 50s and 60s.  Of course the climate deniers will be out in force.  Meanwhile in Australia, the temps are in the 120s.  The changes mankind is making to the weather are not uniform and some areas may experience colder weather for a time, but the general trend is for higher temps and erratic weather events.  California is in a drought situation which may affect fresh vegetable prices in the future.  If growers cannot get enough water, they will not be able to grow the volume of crops  they might wish and the supply will not meet demand, leading to higher prices.  So, climate change will indirectly affect all of us.  One day into the new year and I already feel like Cassandra.  Hopefully, Pollyanna will come out to play tomorrow.