Monday, July 30, 2012

The Drought of 2012


Just one more parched and stunted field,
With the corn forlorn and reduced in yield,
Lower leaves  baked to a wheat-straw gold,
Yet the crop, though failed, is already sold.
Without asking the farmer, we can take it for granted,
That his crop was all sold before it was planted.
The size of the harvest, no person can know. 
Yet he’s bound to deliver what he guessed he could grow.

And the money now spent, (who knows where it went?)
For the combine they’ll deliver in mid-September?
Why he thought it was needed, he can’t remember.
Machines to cut corn that will never exist
Would not be on top of today’s shopping list,
But when it was ordered, it seemed like a plan;
Not a gold plated comb for a bald headed man.

This has happened before, or so I’ve been told.
But you wouldn’t remember, unless you’re quite old.
No quicker a way to lose a man’s shirt
Than squeezing the gold out of Iowa dirt.
To survive, it takes guts, and brains, and endurance;
And also---some government crop insurance.

                                                 The Cat

Saturday, July 28, 2012

Citigroup Pioneer Now Says Big Banks Bad

            According to an article in the July 26, 2012 issue of Wall Street Journal, Sanford Weill, the man who built Citigroup, the largest banking empire in U.S. History, has now said that big banks are a mistake.   He now admits that allowing banks that are “too big to fail” sets up taxpayers for the cost of future bailouts.  In 1998, it was Mr. Weill who almost single-handedly persuaded Congress to repeal the Glass-Steagall Act. But he now believes that the commercial banks who accept FDIC backed deposits should not be allowed into the high risk business of investment banking, since this allows bankers to gamble with taxpayers’ money.    In an interview on CNBC, Mr. Weill, in just a few minutes, repudiated his entire life’s work.   “Mistakes were made,” said Mr. Weill.   

            In the back pages of this same issue was another article about Sanford Weill’s recent “about face,”  entitled Sandy Weill Regrets Breaking Glass, by David Reilly.   Reilly Says that Weill’s change of heart, though too late, is still welcome--but Weill is only now catching up with what the market has already discovered. He points out that the stock price of really big banks, like Citigroup, J.P. Morgan Chase, and Bank of America is not doing very well compared to smaller banks.  The stock of these three are trading at a steep discount (the total value of all outstanding shares at the current share price adds up to less than half the net value of the corporation, in terms of tangible assets)  whereas the share price of smaller banks adds up to 1.5 to 2 time the net value.  So a case can be made, says Reilly, that if the law were to break up the mega banks and restore Glass-Steagall, though this would protect taxpayers and make the system safer, the main beneficiary might be the banks themselves. By breaking banks into smaller, more manageable units, they might eventually be restored to profitability. 

Saturday, July 21, 2012

limericks: Mid-Year Re-cap

limericks: Mid-year Re-cap.
There once was a mean old assessor,
Whose freezer required a compressor.
He petitioned his God,
And though this may seem odd,
He appealed to Saint James the Lesser.

Still he prayed to his Lord and Creator,
And then also to Saint James the Greater.
For he’d got no compressor
From Saint James the Lesser,
So to him he would no longer cater.

If he really would like that compressor,
Then forget about Saint James the Lesser.
Never waste any hymns
On the lesser of Jims.
Just petition St. Ed the Confessor.

There once was a linguist named Cindy
Who spoke both Bengali and Hindi,
With fluency such
That she spoke them too much,
And was generally thought a bit windy.

Our posts are, alas, evanescent,
Whether written by poet or peasant.
If we post a new tune
In the full of the moon,
It’s erased e’er the light of the crescent.

Had Xerxes invented the zerk,
Grease would never have been so much work.
But ‘twas Greece and not grease,
That disturbed the man’s peace.
Oh well—He was still such a jerk.

When battling Custer, the Sioux
Attacked with their whole retinioux.
But when the Lakota
Had slaughtered their quota,
They didn’t quite know what to dioux.

If you’re feeling a touch of catarrh,
Try spending less time at the barrh.
A bit of the sauce
Makes you feel like the bauce,
But you’re better off just as you arrh.

A restaurant owned by Ann Dewey,
Sold Cajun food in Saint Lewey.
But Ann Dewey’s Andouille
Was tasteless and chouille.
Her business went busted—Aw fewey!

A spelling like “rhythm” or “rhyme,”
Confuses us thyme after thyme.
But with spellings like “rhythm,”
You’re against ‘em or whythm.
Ridiculous—yet so sublhyme.

To keep away colds, I use zinc.
It’s pretty effective, I thinc.
It’s good for the flu,
And I think it might du,
To keep away badgers and minc.

The Eighteenth Amendment banned booze,
Along with our own right to choose.
But people soon clamored
For ways to get hammered,
On any foul thing they could use.

This created a market demand,
And gangsters were quick to expand.
Any war against drugs
Gives openings to thugs,
Who soon take control of our land.

The “robbery attempt” by Paul Ryan
(Well, you can’t blame the fellow for tryin’)
Would transfer our wealth
To purveyors of “health.”
If Paul tells you different—He’s lyin’.

Lightly stirring some gin and vermouth
Makes a drink that’s exceedingly couth.
(Unlike boiler makers,
And drinks made in shakers,
And things that they’d drink in Duluth.)

A muscular fellow from Gratz,
Who had for his staffer, “the hots,”
Behaved rather wild,
And now has a child,
But suffered the loss of his shatz

Another experience with gout.
It makes a man want to “check out.”
From dawn until dusk,
This frail human husk,
Give ever more reason to pout.

This time, it isn’t my toe,
Which causes such grief and such woe,
But my lower right thumb.
(I wish it were numb.)
Nor can it be moved to and fro.

There once was an amiable yokel,
Whose speech was entirely vocal.
This may sound like hyperbole,
But he only spoke verbally,
And his accent was markedly local.

A Japanese monster, Godzilla,
Ate ice cream—but mostly vanilla.
Not so bold or so spunky,
To try chunky-monkey,
He relished the chunky gorilla.

But the monster’s first cousin, Daiichi,
Had some flavors a little less peachy.
We’ll be eating that dust;
(California or bust!)
In time, the long isotopes reach ye.

Prince Rupert just barely protested,
As his flunkies were being arrested.
They hacked all the phones,
And bribed all the drones.
Even Scotland Yard was infested.

If you’re buying a Patek-Phillippe,
Don’t expect it to be very chippe.
If you drop down a notch
In your choice of a wotch,
You’ll find prices a little less stippe.

To learn the conventions of spelling,
(For reasons both grave and compelling,)
Can drive a man daft,
With vowels fore and aft,
And reduce us to mumbling and yelling.

The plural of spouse may be spice,
But perhaps you should stop and think twice,
And consider how Cain
Just trashed his campaign,
Before you try rolling the dice.

And then there's this fellow called Newt,
Whose own horn he continues to toot.
When I hear his ex-wives
Discussing their lives,
I say, "God! What a phony old Coot!"

When "Wassy" confessed to his fraud,
We were all understandably Awed.
Yet he tricked all his peers
For about twenty years,
So there's hardly much cause to applaud.

For the first year since I was born,
It's becoming too dry to grow corn.
Should we all get more practice
Devouring cactus?
Or face nature's full-furied scorn?

Sunday, July 15, 2012

TTP: The Final Secret Trade Deal

                             The July 16/23 issue of Nation Magazine, has an article on the Trans-Pacific-Partnership
         Negotiations now being conducted between the United States and several other countries.   The
         article, “TPP:  NAFTA ON Steroids”, is by Lori Wallach, director of Public Citizen’s Global Trade
         Watch. Every year or so, we hear a rumor by some conspiracy theorist concerning some
         sinister secret treaty which will transcend our national sovereignty and destroy our way of life.
         But no conspiracy theorist to date has been sufficiently demented to conceive of anything even
         remotely as absurd, outrageous, and probably treasonous as that which our trade
         representatives are currently attempting to inflict on the public.  If you have not heard much about TTP, join the club.  All countries a party to this thing agreed in advance that the entire text of the agreement would we be kept secret till four years after it went into effect. No one, not the public, not the press, and not even Congress has access to this information.  Senator Ron Wyden, chair of the Senate sub-committee with jurisdiction over TTP does not even have access to our own       negotiators’ proposals.
                     Because certain sections of the deal were leaked earlier this year, we know that the treaty isn’t even about trade per se. We already have trade agreements which eliminate tariffs for all the countries involved.  Only two of the 26 chapters even mention traditional trade matters.  The rest deal with the right of trans-national corporations to sue national governments for passing any laws or regulations which might interfere with profits.  If any country imposed import restrictions related to human rights issues, environmental issues, or even food safety issues, these regulations could be, and probably would be challenged—and thrown out. And so would any legislation designed to slow the outsourcing of jobs, or to protect American interests in any way. And the suits would bypass normal courts and be held in special corporate tribunals.  As in NAFTA, the tribunal would be staffed by a three judge panel, and would be held in secret. The judges would be corporate lawyers, who would rotate between serving as judges and representing the corporate plaintiffs. No representative of the nation being sued would even be present, yet such tribunals would be empowered to levy unlimited damages against any country who dared to have a regulation that might interfere with profits—and there could be no appeal.  No; I’m not making this up.  Click on the link and read it and weep. By the way, once this treaty is in effect, any country in the world could sign this agreement and be eternally subject to all its provisions.  So, if you happen to live in a country that is not currently part of this, don't think that makes you much safer.  In practice, the corporate elites already have control over most of your life. This treaty would formalize that control, and give it the force of law. (But not just state law or national law or constitutional law.  A treaty trumps all  three.)

Monday, July 9, 2012

Viet Nam and the 60s Revisited

            In the July/Aug issue of The American Prospect, the lead editorial, by Paul Starr, notes that this is the 50th anniversary of the publication of Michael Harrington’s The Other America.  This was the book which raised awareness about poverty in America and can be considered the opening shot in the war on poverty. The year 1962 can also be seen as the beginning of the final push to pass a civil rights law and the beginning of what would be called “the protest generation.” Paul Starr’s article, “The Sixties at Fifty,” looks back at the 60s with a half century of hindsight to see what went right, what went wrong, and what lessons  might be learned.

            The first goal of the 60s activists had been to help get a civil rights law passed-- and in this they succeeded. But no sooner than the Civil Rights Act of 1964 was passed, the Viet Nam War, or at least, major American involvement in that war, began.  The protest generation then became the anti-war protest generation, and its main struggle, a struggle which nearly ripped this country apart, was to end the war.   And in this, they also succeeded.  It took a while to end this war, and before it was over, more than 50,000 young Americans had died in a lost cause which, toward the end, almost no one believed in. But the activists eventually succeeded and the war ended.  The activists also demanded an end to the draft, and in 1973 they got it, though the jury is still out on whether this was a good idea.
             But as for the broader goals of the 60s activist generation, goals involving a major power shift from the owners of this country to the people, they failed abjectly.   The most amazing thing, looking back, is how much we all took for granted.  By the end of the 60s, we had experienced a 25 year boom, and the distribution of wealth and income had been gradually becoming more equal ever since Roosevelt.  And everyone just assumed that this situation would continue indefinitely. By then, even Republicans had accepted the New Deal, and we all assumed that the only point of contention would be whether any additional redistribution of wealth would happen quickly or very slowly.  But getting agreement about how big a slice of the pie everyone should get is much easier when the pie is growing.
            But in the 70s growth slowed down.  Fighting the Viet Nam War without raising taxes to pay for it had nearly wrecked the economy, and when the price of oil quadrupled in 1973, we had runaway inflation.  The Dollar lost 75% of its buying power in less than a decade. Every interest group in the country jockeyed for position, desperately trying to maintain their own economic status, ostensibly at the expense of everyone else’s status.  Early on, the billionaires realized that there would be no way for the rich to continue getting richer unless everyone else got poorer.  So from ’73 on, the billionaires have waged unceasing war on working people in general and on organized labor in particular. Although productivity has continued to increase after 1973, real wages, after inflation, have been stagnant or falling since then, the distribution of wealth is nearly where it was in the 1890s, and only 7% of the private sector is still unionized.
            Yet in the late 60s, we had more liberal boots on the ground, and more people passionately committed to progressive change than at any time since the Civil War.    So how could we have lost?             We lost because the two main engines of social change, the unions and the activists, were not working in concert—in fact, they weren’t even on speaking terms. The student/hippie/activist/protest  groups never understood that, in the real world,  transferring power to working people would have to involve the cooperation of organized labor. 
And organized labor, from the international presidents to the rank and file hard hats, did not grasp that these street protestors were the only effective political force that might be on their side.  Not only did these two groups not trust each other, they each saw the other as the enemy.
            I saw this from both sides.  I had attended college in the late 50s for a couple years before I was drafted.  (Actually, I enlisted to avoid being drafted.)   After I got out of the Army, I became a construction electrician.  So in the late 60s, I had a foot in both camps.  Half of my friends were student activists, and the other half were hard hat construction workers.  I spent five or six years trying to convince each group that the other could be trusted. 
            The main issue was the Viet Nam War.  By the late 60s, the activists felt that the war was destroying the country and had to be stopped.  The blue collar workers still supported the war-- and believed that the activists were destroying the country. You may ask, “How could the hard hats have been so na├»ve?”   But remember, you are viewing this with 45 years of hindsight.  In the beginning, the entire country supported the war.    When the Gulf of Tonkin Resolution passed the Senate in ’64, it did so with only two dissenting votes—Ernest Gruening of Alaska, and Wayne Morse of Oregon.  And the people who were the architects of our involvement in that war were Kennedy’s own, handpicked cabinet—the best and the brightest—the Harvard educated geniuses. 
            But the Kennedy cabinet all suffered from one fatal flaw:  They were all WWII survivors. They remembered Hitler, and saw every nationalist movement through the same lens.  They knew that if we had squashed Hitler like an insect, which we could easily have done in 1932, then we might have prevented WWII.  So every trouble maker was seen as a potential Hitler. The only high level administration members who did not see Vietnam in this way were Under-secretary of State George Ball and Ambassador John Kenneth Galbraith.  Galbraith eventually resigned over Viet Nam, and published the book, Viet Nam, the War We Cannot Win, Should Not Wish to Win—and are Not Winning.  But the advice of these two lone dissenters was ignored.
            So, if the President’s cabinet fell for the Viet Nam trap, how could a mob of student hippies grasp the issue, when many of them were too incompetent to find their way out of a phone booth?   The reason is that they had access to better information.  At the time that the war began, the State Department had only a handful of people who could speak Vietnamese, and all of them were probably recruited through our friends in Saigon.  These people, as agents of the Saigon Government, would have told us only what the Saigon government wanted us to hear.  And no one in the government was an expert on Asian history.  The only independent scholarship on this subject was to be found on college campuses.  The various professors of Asian history were all alarmed as soon as they saw that the U.S. was about to commit troops to try to save the Saigon regime. But who listens to professors of Asian Studies?   Not the government, unfortunately.  But students do listen to professors, and this particular mass of students had good reason to pay attention. They knew that they would all eventually be drafted-- and might easily be killed or wounded in this war.  So they had an urgent interest in finding out whether this war was actually in America’s interest and whether it was winnable.  And the answer, from those who had spent their whole lives studying Asia, was an emphatic no to both questions.  Word passed from student to student, and soon every college student in the country knew something that the government did not know.
 Every generation of college students believes that it knows more than their parents.  Well, this is a generation who actually did—but no one listened, at least, not at first.
            During the late 60s, the blue collar working class still supported the war, not because they were stupid, but because they did not have access to the same information that the students had.  And one must remember that the mainstream media were not neutral on this issue.  Every night, some network news show would have interviews with Secretary of State Dean Rusk or one of his underlings, in which these government spokesmen would be given as much air time as they wanted to explain, in exquisite detail, why the Viet Nam war was both necessary and winnable, and why the Viet Cong were a threat to free peoples everywhere. Of course, after the first few years of the war, they knew that what they were saying was nonsense.  But by then, we were so deeply committed in Viet Nam that there was no way out. After thousands of American soldiers had died, how could we just leave? So the Administration just doubled down, sent in more and more troops, and hoped for some kind of miracle. But the miracle never came.
            But during all this time, did the networks ever give equal time to the anti-war faction?  No; they just showed footage of throngs of students waving signs and screaming, “Hell no!  We won’t go!”   At no point, in the early years, did any news program invite the anti-war protestors into the studio to calmly explain the reasons for their opposition.  The anti-war faction had all the facts on their side--arguments that most people would have found overwhelming if they had been exposed to them.  But these views were not aired on TV.  They could be found only in obscure left wing print journals which nobody reads.
            Eventually, the mainstream media realized that they were being manipulated.  Walter Cronkite, a CBS news anchor was the first to turn against the war.  And when Daniel Ellsberg leaked the Pentagon Papers, (which proved that the U.S. had deliberately provoked the “Gulf of Tokin Incident” to obtain an excuse to enter an Asian civil war) the New York Times published them.  Congress began holding hearings in which all sides were asked to testify. John Kerry, a Viet Nam vet who had become an anti-war spokesman testified:  He asked, since we know that we will have to abandon Viet Nam sooner or later, why don’t we do it now, before more people die?  He asked, “How do you ask a man to be the last American to die in Viet Nam?” In 1973, Congress cut off funding for the war, and we withdrew from Viet Nam. But though the war ended, the bitter rift which it caused continues to this day.
            Starr claims that because organized labor and the student activists split over the Viet Nam war, they were unable to cooperate on several other issues that they might otherwise have agreed on. I certainly agree. The low point in relations came in 1968, at the Democratic National Convention in Chicago.   An anti-war candidate, Senator Eugene McCarthy, had amassed a number of delegates, but there was a dispute over who would be seated and who would be allowed to speak.  Basically, the convention was fixed, and the anti-war faction got screwed.  A demonstration broke out on the streets and Mayor Daley’s regime organized a “counter demonstration” and on the evening news, we saw footage of hard hat construction workers beating students over the head with clubs.  The day after, some of my hard hat friends, who seemed very pleased with this event, asked me what I thought of it.   I replied, “What you have just seen may be the end or organized labor in America.”   They recoiled in horror and asked, “But why?  How could beating up a bunch of commie hippie scum make a difference?”
 I asked, “Do you know who those people are?  That “commie, hippie scum” is probably the future top leadership of this country.”  I said, “There is an old saying: ‘Be careful whose toes you step on--they may be connected to an ass you might have to kiss someday’.”     I explained that all of these hippies were students. And in a country where higher education is rationed to those families who can pay for it, that means that they all come from solidly middle class families.   And when they dropped out of college to protest the war, many of them were at the top of their class.  Someday the war will be over, and they will all return to college and complete their degrees.   Kittens grow up to be cats, and law students grow up to be lawyers, judges, and congressmen. Engineering students grow up to be CEOs of high tech companies that dominate the economy.  Economics students grow up to be Wall Street titans.   “In fact,” I said, “nearly all of the people of our generation who will be in influential positions 30 years from now are anti-war protestors today.  Someday, organized labor will need their help—but it isn’t going to be there, because of what just happened in Chicago.”
            Looking back, I may have over reacted to the Chicago disaster.  But the split between anti-war activists, labor, and the Democratic Party was real--and had consequences that haunt us even today.

Wednesday, July 4, 2012

LIBOR Scandal? Just the Magic of the Market.

            If there is one lesson to be gleaned from the British banking scandal, it is this:  If the LIBOR can be rigged, then anything can be rigged—and probably is.  The LIBOR (which stands for London Interbank Offered Rate) is the benchmark rate that affects interest rates all over the world.  It is computed daily according to the rates which the 16 largest banks in London offer to each other.   Every day, the 16 banks report the rates which they are currently offering.  The highest four and the lowest four are ignored, and the eight in the middle are averaged. Since the highest and lowest are thrown out, it seems like it would be hard from anyone to manipulate this rate. But it seems that Barclays' Bank, possibly in collusion with several other banks, has found a way to do this.
             So, who are the victims of this chicanery?   There is an old saying about playing poker with strangers: As you look around the table, if you can’t spot the sucker, it’s probably you.  And since I’m not sure who got fleeced in this game with the LIBOR, then it was probably me.  Not directly, of course.  I have never borrowed or lent money in any contract which was linked to the LIBOR.  But I probably lost indirectly.  Nearly every company in the world borrows money on contracts that have some link to the LIBOR.  And if these companies get fleeced, then we can assume that all of the goods and services which we buy from them must be very slightly over priced to offset this loss.  So any person who has ever purchased anything--has been affected by the LIBOR.
            The greater lesson to be learned here is this:  We should have a realistic view of all of the so called “market forces.” We continually hear conservatives extolling the virtues of markets.  We are told we should replace any kind of government regulation with “market regulation.”  Yes, just leave it to the market.   After all, why would a free people choose to have the most important economic decisions in their lives made by representatives whom they themselves are allowed to choose?  No, better leave it to the market.  Governments are made of people, and people might be corruptible.
            They would have us believe that “the market” is some mathematical entity with the wisdom of Solomon, the impartiality of Blind Justice, and the inevitability of fate.  But, it turns out that “the market” is a bunch of old, rich white guys cutting secret deals in back rooms. 
            I have always been given to suspicion of anyone who seems to have more wealth or more power than I do.  I tend to wonder just how they got it.  I look for malevolent bankers under every woodpile. I have such suspicions that I check under my bed every night to see if there might be a hedge fund manager lurking there.  But as suspicious as I am, if anyone had told me that the LIBOR could be rigged, I would have dismissed him as a lunatic conspiracy theorist.  But I would have been wrong.  And if the LIBOR can be rigged—anything can be rigged.  Think about it. 

Tuesday, July 3, 2012

Corn Crop Uncertainty

            The Farm and Business section of the DesMoines Register, July 1, 2012, contains a disturbing article. The article, by Dan Piller, is entitled, “Hot Weather During Pollination Could Wreak Havoc With Corn Crop.”  And the title says it all.
            Northeast Iowa, where I live, is often called “the golden buckle of the corn belt.” (When we say “corn,” we mean maize.)  Though the Corn Belt extends from upstate New York to eastern Kansas, a distance of over a thousand kilometers, no part of this region delivers more consistently heavy yields than Iowa.  In recent years, Iowa corn growers have come to expect yields of 180 bushel per acre.  And much of the world has come to depend on this crop.
            But this year, it may be different. Iowa is having a bit of a drought this year and also a heat wave. When this year’s crop was planted in late April, the moisture content of the soil and sub soil was only one third of normal.  With warmer than average temperatures this spring, the corn was off to a good start, and grew rapidly.  The folk wisdom claims that to have a good corn crop, the corn should be “knee high by the 4th of July.”   This year, most of it will be at least chest high.  But all is not well. We still have not had enough rain.  We have a little shower every week, enough to barely supply the current needs of the crop, but not the soaking rain that would actually recharge the soil moisture level. And even in a year with normal rainfall, it is not unusual to have three dry weeks in late summer.  If there is normal soil moisture, the crop can survive this dry period. 
            When we think of drought, we call to mind images of parched, cracked ground scattered with a few withered and dead plants. Yet today, all the corn fields in Iowa are filled with a lush growth of robust, dark green plants.    If you drove through this area and someone complained about drought, you would say, “What drought?” But it is not certain that this lush growth of corn plants will actually yield ears with a normal number of kernels.
            Besides the lack of moisture, there is another problem.  The hot weather may disrupt the pollination cycle.  When daily high temperatures are above 90 deg f, the male part of the plant (the tassel) may not shed its pollen at the time that the female part (the silk) is able to receive it. The result would be ears with few if any kernels.  
            Ah, with romance, timing is everything—even if you are a corn plant.  The price of corn went up 25% last week, on fears that the crop may be far less than usual. Most of the Iowa crop is sold before it is actually harvested, and some of it is sold before it is even planted.  Usually, when the price goes up sharply, farmers rush to sell any of the anticipated harvest that they have not already sold, so as to lock in this higher price. A farmer I know was thinking of doing this, but after sober reflection, he thought it best to wait and see how much corn he will actually have, before signing any more contracts requiring him to deliver corn.