Thursday, May 23, 2019

Banning Abortions Doesn't Work, Says Guest Poster Emily Tsitrian. Reducing The Need For Them Does.

     Abortion is like the death penalty. Two squeamish political issues facing modern
day society that seem to originate somewhere in the soul, and generally never shift without deep introspection, triggered by either a life event, spiritual exploration, or cultural norms.

For that reason, we really need to examine these issues through looking at return-on-investment related to what sorts of policies empirically reduce abortions, which I generally think most people agree is a reasonable shared goal.
     Abortion bans Do. Not. Work. and disproportionately affect communities of color and those living in poverty. Those with resources will always find a way around these bans, and I'm guessing any one of us knows someone who has taken matters into their own hands at some point. Not a pretty thought, and I'll spare you the details of how this is done, but I'm sure some googling or thinking back to your friend from middle school who strangely disappeared for a month then came back will spark your imagination.
    To reduce the underlying need for abortions (most effective), try the following:
1) make reproductive healthcare universal and accessible. empirically shown to reduce abortions. Period.
2) invest in anti-poverty policies. as communities move up the economic sphere, abortion rates decrease as bearing children becomes easier financially.
3) make sex education universal. it's horrifying how many young adults actually don't understand how human reproductive biology works, and abstinence-only approach has shown to be wildly ineffective.
Finally, if you insist that life begins at conception (not going to argue here, nobody's mind gets changed) and are looking for ways to reduce the rate at which you believe losses of life occur, abortion bans get you very low ROI. Here are some policy ideas to prioritize instead:
1) universal access to healthcare. we can debate how to get there until the cows come home, but you will achieve so much more lives saved by getting people to a damn doctor's office than the hypothetical ones "saved" by these bans.
2) climate change. Climate change is projected to create a humanitarian crisis like we've never seen before, and the clock is running out on our ability to intervene before it's too late.
     My point is that my own personal opinions (or yours) on the morality of abortion aren't going to change and these debates usually devolve into identity politics which doesn't usually produce results or open minds. However, I think anyone can agree that reducing abortions is generally a good thing, and that if we're optimizing for lives saved (not arguing a fetus is a life or not here, but for the sake of the argument let's say that it is), abortion bans are a poor use of political capital and resources and do not achieve the desired result of reducing human suffering.

Emily Tsitrian was born and raised in Rapid City, South Dakota.  She is an honors graduate of the University of California, Berkeley (2011, Economics) and is the implementation manager of a San Francisco-based health information services company.  She is also my daughter.

Tuesday, May 21, 2019

The Mueller Report And Our Congressional Delegation. How 'Bout Them South Dakota Values, Thune, Rounds, And Johnson?

     With so many of its contents redacted, Volume 1 of the Mueller Report was actually a
Preach It!
Thune and Johnson Are Right There
With Ya
faster--if occasionally non-sequential--read than I'd expected. 
But even with many of its choice bits hidden, the report  has a "let's face it, Trump has to be impeached" quality to it.  There's too much to recap or condense here, but just one episode makes you wonder if commitment to the rule of law in D.C. has gotten so watered down as to be nonexistent.  It comes in the part where Trump told his lawyer Don McGahn to lie on the record about being told to fire Mueller.  Testifying about this to the Senate, Attorney General Barr said, "well, that's not a crime." 
     To that, I'd say the AG is nuts.   Common sense tells me that the President's behavior was obstructive, and Trump's effort to fool the justice system should be enough to call the President on the Congressional carpet.  But apparently there are enough politically-driven reps of both parties in Congress to hesitate over the issue of impeaching the President for (among other things, read the report) telling his subordinate to lie.  And how do South Dakota's congressional reps feel about the matter?  These people have long claimed they champion "South Dakota values."  Congressman Johnson last February even made it a point to boast that "our leaders may change, but our core South Dakota values don't."  Whether the values our congressional delegates treasure and promote are actually South Dakota-specific is debatable, but there's no doubt that "telling the truth" is probably high on the list of the "core" values that Thune, Rounds and Johnson claim to uphold. 
     So what have our value-embracing reps been saying about the Mueller Report?  Enough to rate several gags on the hypocrisy meter.  Thune, pretending to be a legal scholar and analyst, says that "there is no provable obstruction."  Does the senator need to be schooled on the fact that there's a third branch of government--the judicial--where judgements like that are supposed to be rendered?  Hundreds of former federal prosecutors are on the record as saying they would indict Trump on the basis of alleged actions detailed in the Mueller report, including the McGahn incident.  Does Senator Thune know more about the law than these people do?  The senior senator from South Dakota is in over his head and should heed the experts, not his political wishful thinking.  As to South Dakota values, what about them, Senator? 
     And speaking of South Dakota values, how does our junior Senator Mike Rounds see the impeachment thing?  Rounds' classic utterance on Trump's family values a couple of months ago, when he said that Trump paying hush money to a porn star proves that the Prez loves his family, is a real doozie from someone who's so proud of his state's values.  Basically, Rounds is such an unquestioning loyalist to Trump that you already know you can't expect much of an opinion on the impeachment matter.  Searching for one, you won't be disappointed.  Googling turns up nothing, a point about him that I covered here a couple of years ago in a piece I titled "Mike Rounds And The Mastery Of Nothingness." 
     As to Congressman Johnson, all that I could find was a commitment to read the Mueller report.   Speaking a few days after the report came out, Johnson said he doubted that it would change many minds, but that "facts matter."  Given the boatload of facts that are in the report, it would be nice to know how much they matter to Dusty Johnson.  So far the facts seem to be a minor annoyance to our state's federal reps, who swoon over South Dakota values when appropriate but freely abandon them when political necessity dictates. 

Thursday, May 16, 2019

South Dakota Congressional Reps To Trump: Our Farmers Need "Equitable Short Term Relief." But Is It Equitable? And Will It Be Short Term?

      With a tone that swings between ingratiation and urgency, South Dakota's all-GOP
If You Say So
congressional trio, Senators John Thune and Mike Rounds, and Congressman Dusty Johnson, today sent a letter to the White House seeking financial help for their state's beleagured farmers. 
The jointly signed letter was sent to Secretary of Agriculture Sonny Perdue and begins with a supplicating acknowledgement that  "a resolution of our trade dispute with China is our top priority." Then the reps immediately beg for mercy from the financial pain inflicted on South Dakota farmers by the trade war.  "Equitable short term relief" is how they put it.
     "Equitable" is a tough word to use in this scenario, because, as a synonym for "just" or "fair," it ignores the fact that South Dakotans, amply forewarned about Trump and his dangerous predilections toward trade wars, voted for him in huge numbers just the same.  Trump carried the state with 63% of the vote.  Now that all the predictions of financial nastiness-- mine  (in 2015 I said that Trump would be "a complete freakin' disaster for South Dakota") among many others-- have materialized, South Dakotans are asking the source of their pain for relief, all of it paid for by American taxpayers.  I support help for our farmers, big time, but equitable this is not.  Taxpayers have already gotten what amounts to a sizable tax increase thanks to Trump's tariffs, and now they're being asked to bail out many of the very people who supported the President in the parts of the country--the farm belt--that put him over the top in the electoral college.
     Trump's obsequious congressional trio from South Dakota has gone out on another limb in their solicitation for relief funds from the White House.  The "short term" nature of the problem is a questionable presumption.  There is no guarantee whatsoever that China will resume its purchases of American soybeans at their pre-trade war levels once this tariff spat is over.  To understand the magnitude of the lost business to China due to the trade war, consider that soybeans now are trading at their lowest prices since the Great Recession a decade ago.  Adjusted for inflation, they might be at their lowest level ever.  Hoping that China will return as the customer it once was isn't supported by news that Chinese agronomists and planners are working toward reducing their demand for soy products and developing sources in other parts of the world.  This tariff war is probably the best thing that ever happened to China's drive toward self-sufficiency in commodity production--and for Americans, particularly South Dakotans, it may well end up being the worst.  In a dilemma that is neither equitable nor short term, farm bankruptcies continue moving apace, probably accelerated by Trump's tariff wars and his enablers in Congress.

Sunday, May 12, 2019

South Dakota, SSR

     Having completely fouled up the production and marketing matrix that sustained South
Call It Humanitarian Aid
But It's Just Another Boondoggle
Dakota farmers for decades, our benevolent comrades in Washington, D.C. are trying to make amends.   
Coming up with one of the most socialistic schemes I've ever seen in the government's quest to support our farmers, who've been clobbered by the "so easy to win" trade war with China, President Trump yesterday announced that the United States government would buy American crops to offset losses in the farm belt.  Apparently, the plan is to abandon existing market mechanisms and let central planners in Washington decide the disposition of affected products--soybeans being high on the list--by buying them and determining their distribution.
     Though it's a far cry from the collective farming methods used by the Soviet Union during most of the 20th century, this aspect of intervening in the free market dispostion of agricultural products is Soviet-style farm policy.  There was no market in the Soviet Union for farmers, only government controlled supply and demand.  By effectively creating the oversupply of soybeans via its misguided tariff war, the Trump administration has now stepped in on the demand side and promised $15 billion worth of purchases of soybeans and other affected crops.  The president has said that the products would be distributed to "poor and starving" countries as a gesture of humanitarian aid.
     On the surface, you have to admire Trump's magnanimity, but I doubt that the president has a clue about the mechanics and logistics of this distribution scheme, nor a sense of the history of American food aid and its effects on the countries receiving it.  Federal agencies called upon to make this happen haven't disclosed even the outline of a program, which has to be an enormous challenge, considering the hundreds of millions of bushels of product that have to be harvested, stored, transported to ports, and shipped to myriad countries around the world.  I doubt this could happen in the space of a crop year.
     In the meantime, food aid has at best a checkered track record when it comes to doing much good in the countries that receive it.  The National Bureau of Economic Research studied this in 2012 and concluded that "U.S. food aid increases the incidence, onset and duration of civil conflicts in recipient countries."  A Foreign Policy analysis titled "Please Don't Send Food" reaches much the same conclusion.  Well-intentioned as they've been, U.S. food aid programs have created more problems than they've solved.  Using the "give the man a fish/teach a man to catch fish" dictum, helping develop food production techniques is probably a much better way of assisting undernourished populations.  Sending teams of ag-technicians instead of food is a common sense approach that most South Dakotans would probably understand and appreciate.  Tossing food at hungry people is simply a grandiose version of throwing rolls of paper towels at victims of natural disasters.
    Basically, the Trump administration is using the patina of public-relations to sugar coat what is essentially a payoff to farmers whose crops have become unmarketable thanks to the tariff wars.  It's a nice try, but it's not easy to fool free market adherents, who used to be called Republicans.

Monday, May 6, 2019

Is South Dakota's Trump-enabling Congressional Delegation Aware Of The Breakdown In Crop Prices? Why Are They So Helpless? Or Should I Say "Hopeless?"

     The grain and soybean markets are breaking down hard this morning, thanks to the
Why Are These Men Grinning?
Grain Prices Are Collapsing
mercurial behavior of President Trump. 
After months of assurances that tariff talks with China are moving in a positive direction, he suddenly tweeted over the weekend that he's preparing to increase tariffs on Chinese goods from 10% to 25% by the end of this week.  The result overnight?  A massive selloff in grain and soybean futures contracts.  Ag futures have already been under pressure because of the existing tariff war and large stockpiles left over from last year, a situation that has been largely unaddressed by South Dakota's Congressional delegation, including GOP Senators John Thune, Mike Rounds, and GOP Representative Dusty Johnson.
     A head-in-the-sand reaction is probably the only available option to this trio of Trump sycophants, who can't come up with a reassurance to their largely ag-connected constituents that all will be well with markets, someday, somehow.  Today's downside assault only underscores their inability to influence events that are driven by President Trump's irrational compulsion to wreck the matrix of international trade relationships that up to now have been a strong support for farmers and livestock producers in South Dakota.
     Senator Thune, in particular, has been whiny and weak-willed.  Last December he gave a less-than-table-pounding assessment of the situation, saying that "it's very frustrating and the more you drag this out without a deal, the more anxiety and uncertainty you create in agriculture."  Well, duh.  Since Thune made that stunningly vapid observation, soybean prices have dropped by about 75 cents a bushel, and that was before the weekend tweet by Trump that has taken them down another 20 cents this morning.  Checking out Senator Rounds and his  twitter account (@Senator Rounds) during the past few weeks is a waste of time if you're looking for something substantive regarding the tariff wars.  I'll be watching for a statement from Rounds and will be happily surprised if he says anything more than the perfunctory "we need some resolution" rhetoric that means nothing.
     Congressman Johnson's thoughts on the trade war with China are difficult to find, at least via Google.  As a candidate last year he was opposed to a trade war, but acknowledged that "now that we are in the middle of trade disputes, we should not merely concede defeat."  I'm not sure what parameters Johnson uses in assessing victory and defeat, but one glance at corn and soybean price charts makes it obvious that South Dakota farmers have been the big losers in our trade disputes to date.  I'm anxious to see what Johnson has to say to his constituents who are getting clobbered by the Trump administration's self-destructive trade policies.  It would be nice to see a break from the toadying and spiritless remarks so far proffered by our state's two senators.

Thursday, May 2, 2019

Crop Prices Are Low, Farmers Are Planting, And The "New NAFTA" Is Stalled. Something's Gotta Give.

       Ag producers in South Dakota and the rest of the country have good reason to be fed up
Not So Fast
We've Got A Congress To Deal With
with the volatile state of trade negotiations touched off by President Trump. 
For all the puffery coming out of the White House about how his trade deals will be a boon for American farmers, markets have remained indifferent.   Soybeans--a huge crop in South Dakota, which produced nearly 300 million bushels last year--are still languishing at their lowest prices in the last 10 years, at less than half their peak in 2012.  Corn farmers, who produced 825 million bushels in South Dakota in 2018, are also dealing with markets that are on the low end of their trading range during recent years.  This is bad news for South Dakota's ag-dependent economy, because hundreds of millions of dollars worth of crop sales have vanished since markets peaked several years ago.
     During the interim, of course, President Trump has been regularly assuring farmers that his trade negotiating skills would dazzle them with greater opportunities for export sales.  Last January Trump crowed at the American Farm Bureau's annual meeting that his revamped version of NAFTA would "increase exports of . . . wheat . . . dairy . . . chicken . . . and products from farmers and ranchers all across the country."  Attendees seemed to be buying Trump's rhetoric, which doesn't exactly square with their experiences last year, when a $12 billion federal bailout was distributed to farmers that were stung by Trump's trade wars.  But that was last year.  Trump has assured farmers that all will be well in 2019, so we'll just wait and see, I guess.
     Meanwhile, this year's soybeans, scheduled for delivery in November, are still trading at  depressingly low levels.  Trump can talk, but the trade has heard it before.  As to the "New Nafta," it looks like the deal may be having its troubles.  President Trump can brag about the deal all he wants, but the Constitutional reality is that Congress has to approve it.  And the news about its prospects on Capitol Hill right now isn't very good.  Word this morning is that a delegation of Senators, including South Dakota's John Thune, is visiting the White House to urge President Trump to remove the metal tariffs that are part of the trade deal (USMCA) that will replace NAFTA.  That the delegation also includes Iowa Senator Chuck Grassley, whose state is among the largest soybean and corn producers in the country, suggests the urgency that farmers feel about getting this deal done.   Grassley, in particular, is so adamant about the situation that he wrote last week in the Wall Street Journal that unless the metal tariffs are lifted, USMCA "dies."  
       If Thune, Grassley, and a few others get their way, of course, death is the fate that awaits Trump's infatuation with protective metal tariffs.  

Sunday, April 28, 2019

The Brain Drain In South Dakota Is Abysmal Compared To Our Surrounding Neighbors'

     South Dakota has an awful track record when it comes to retaining our most well-educated
Second Worst
We Can Do Better
 Last week the United States Congress's Joint Economic Committee (Chaired by Utah GOP Senator Mike Lee) released the results of a study on "brain drain" in this country titled "Losing Our Minds:  Brain Drain Across The United States." It is comprehensive, comparative, and concerning to us South Dakotans, who are net losers of highly educated residents.  That freshly-quantified fact is a long-standing subject of local conversation and, apparently, political indifference.  Most recently, a measure (HCR 1001) to recognize South Dakota's talent drain in the 2018 legislative session failed in the senate.  It called for "statewide recognition of the migration of many young people from our state and urging state and local officials to take steps to counter that action and attract new residents to our state."
     No doubt many took the news with a shrug because there's a sense that the "brain drain" happens to be endemic to this region of the country.  The U.S. Senate study agrees somewhat--but a closer look at the rankings provided show that South Dakota is bleeding with particular intensity in the loss of our most educated residents.  We're second worst in the nation (behind Vermont) with a net loss of most educated (defined in the study as those in the top third of educational attainment) residents of 24%, meaning that's the percentage difference between "leavers" and "stayers."  The next worst state among those surrounding us is Iowa, coming in at 38th worst, with our other contiguous neighbors scaling up from there. Nebraska is 17th highest and Wyoming is number one at retaining its most educated.  As with GDP growth, we come in dead last when compared to our neighboring states.
     Is there a connection between brain-drainage and economic growth?  The linkage may be hard to quantify, but facts are facts.  That our elected officials in Pierre haven't made addressing this issue a priority suggests that many of them and their constituents are either comfortable with the status quo or don't have a clue about what's going on. Compared to regional and national economic growth standards of the post-recession era, South Dakota's gains have been awful.  With this kind of history and a state government that doesn't seem to care about moving forward with the rest of the nation's economy, most of our best-educated will continue looking elsewhere for better lives.

Tuesday, April 23, 2019

Guest Poster Rick Knobe Explains And Exposes Two Laws That Subvert The Democratic Process In South Dakota:

Enough on the Mueller Report, President Trump and Washington, DC. It is time to come back to South
Dakota and talk about the status of our Republic and participatory Democracy.
During the last two South Dakota Legislative sessions our representatives have attacked with enthusiasm and vengeance our ability to Refer their bad laws and Initiate our own ideas.
Two bills in particular target people who gather petition signatures. The first, passed in 2018 requires gatherers to register with the Secretary of State BEFORE they can start gathering. In the registration form are requests for personal information. Where you have lived, where you live now, proof of who you are, where you plan on living.....the list goes on.
This was passed under the guise of "Keeping Out of State people out. " Sounds OK on the surface but it makes it harder and much more invasive in our personal lives to be a petition gatherer.
It is a not so subtle way of our legislators telling us We AREN'T SMART ENOUGH to know good laws from bad ones, so to protect us from ourselves they making it harder for us to Initiate AND refer.
Last session they passed a bill REQUIRING all petition circulators to display badges with your name, address, and I believe phone number on it, so anybody can contact you to discuss what you are doing.
Both of these laws, intrude on our privacy. Imagine your daughter or granddaughter having to provide and display personal information to anyone merely because she wants to be a part of our democratic process.
The GOOD NEWS, there are petitions now being circulated to make these bad laws go away.
The leaders of this effort ARE South Dakotans.
The Website is:
It's the People Power Initiative.
I have seen the petitions being carried in Sioux Falls. Yes, I have signed them.
You have no doubt read stories of Voter Suppression going on in other parts of the country. Georgia for one.
The laws I mentioned above are the South Dakota version of Voter Suppression.
Our legislators are taking away our right to disagree and vote out the bad laws they pass, and making it nearly impossible for us to initiate our own laws.
It's a blatant effort to further isolate them from us.
We can't let these two laws stand.
Please find the petitions. Sign them. Tell your friends and family.
I know petition gatherers are needed. If i was going to be here this summer I would be knocking on your door for your signature.
This is important. We can't let our precious and nearly sacred right to Initiate and Refer be taken away.
Thanks for reading this.

Rick Knobe is a former mayor of Sioux Falls, South Dakota, and a long time host of a radio talk show based in South Dakota.

Thursday, April 18, 2019

South Dakota Congressman Dusty Johson Sees A Problem At The Mexican Border. Actually, Dusty, It's An Opportunity For South Dakota.

     Our South Dakota GOP Congressman Dusty Johnson has been bombarding Twitter
Dusty Points The Way . . .
. . . Backwards
(@Dusty Johnson) with pictures of himself in Arizona checking out the border security scene. 
Probably trying to undo some of the lingering political damage he created for himself among South Dakota Republicans by repudiating President Trump's "national emergency" declaration, Johnson has sent pictures of himself, grim-faced and earnestly gesturing, next to a stream near Yuma, Arizona, and then another one that he misleadingly claims is "on" the border watching construction of Trump's wall when he's actually more than a hundred miles north of Mexico.  Aberdeen-based blogger Cory Heidelberger in his excellent blog Dakota Free Press, does a nice piece exposing Johnson's misleading claim about his location.  So do a lot of Twitter respondents, me (@john tsitrian) included.
     But, politically understandable as it its, Johnson's transparent attempt at ingratiating himself with rank-and-file Republicans in South Dakota and party leaders in D.C. misses what should be an obvious point.  Many of these folks logjammed at the border could fill a need in South Dakota--and probably a lot of other states--where chronic labor shortages are a way of economic life.  As an employer I'm aware of the problem every day and I know just about all of my peers in South Dakota are trying to deal with it too.  A recent piece in the Sioux Falls Argus Leader is titled "Workforce Shortage Calls For Creative Recruitment."  Things got so bad in recent years that then-Governor Daugaard dedicated the entire year of 2014 to finding solutions via a series of "Workforce Summits" that brought community and business leaders together in cities around South Dakota in search of a solution.  Five years later, as the Argus Leader notes, we're still so short of workers that we need to seek more "creative" means of fixing the problem.
      And this is where the situation on our southern border comes in.  Dusty Johnson's approach may satisfy some GOP yearnings for excluding immigrants from Mexico and points south, but it's entirely wrong in the broadest economic and social contexts.  We need these people.  The New York Times this morning ran a piece  identifying cities around the country that have seen their economic status improved, big time, by immigrants entering their labor forces.  Brookings and Huron in South Dakota made the list.  The tie between economic growth and immigration has such a long history in the United States that the idea of categorically excluding entire families of refugees wanting to enter this country makes little sense.  Pre-Trump refugee admissions numbered around 100,000 a year.  Trump seeks to reduce that inflow to 30,000 in 2019.
     This makes no sense to a South Dakota employer like me, who has seen what has happened in Brookings and the expansion of its turkey-processing industry since the appearance of Karen refugees escaping Burma during the past few years.  By race, Asians now comprise 12% of Huron's population, no doubt a factor supporting Huron's claim as the "hub of a thriving regional economy."  There's no reason to think that similar pockets of economic growth in our state couldn't develop if we had enough workers to make them materialize. Congressman Johnson should take off his political blinders and realize that the "problem" at our southern border is a potential "opportunity" for his state of South Dakota.

Sunday, April 14, 2019

South Dakota Has A Low Tax Burden, But We're Spinning Our Wheels Economically. What's That About Low Taxes Stimulating Economic Growth?

      Those who believe that low tax burdens are the pathway to strong economic growth
SD Is Always Way Down There
Low Taxes Haven't Helped Much
haven't been watching South Dakota. 
Just in time for "tax day,"  the excellent researchers at WalletHub today came up with a table that ranks states in order of lowest tax burdens.  As usual, South Dakota turns out to be one of the lowest, this year ranking as the state with the 42nd lowest tax burden.  WalletHub creates an amalgam of property, sales, personal income and excise taxes for its comparisons, and followers of these data know that South Dakota typically ranks among the lowest 10 states in the country on this annual list.
     By itself this is pretty decent news, but in context, maybe not so much.  Our low tax status has been a perennially applied asset in South Dakota's economic marketing campaigns.  This year The Tax Foundation even lists South Dakota as #3 in its annual "Best Business Tax Climate" index, a fact that's promoted aggressively by our Governor's Office Of Economic Development.  GOED stresses our "stable tax climate" that "puts business first."  There's no doubt that South Dakota and its low overall tax burden are relentlessly pushed and widely known.  But has there been much of a payoff in terms of stimulating economic growth?
     Not really.  In 2017 (latest full year numbers I could find), South Dakota's economy grew by less than a percent (.3% to be exact).  This compares to a national growth rate of 2.1%.  It also placed us dead last among the states that border us, with (contra-intuitively if you're in the low tax/high growth school of thought) Minnesota, Iowa and Nebraska, which beat us out even though they rank among the top 15 states in overall tax burdens. You could say that much of this is a matter of the recent slump in our state's agricultural economy, but using a longer and broader scale that takes into account the swings in the farm and ranch sector, South Dakota's per capita growth rate from 2011 to 2016 was up less than 1% (.22%) compared to a national rate of 6.27%.  Both short and long term results contradict the notion that our low tax burden has done much, if anything, to generate even a competitive growth rate, much less a robust one.
     South Dakota's fixation on low taxes as a drawing card for new business and subsequent gains in economic growth has been a dud.  If low taxes alone were enough to draw investment into the state, businesses would be leaving high tax states by the droves in order to relocate to South Dakota.  That hasn't happened and it won't, mainly because tax burdens aren't the only thing that matters.

Tuesday, April 9, 2019

Q For South Dakota Farmers: Are You Tired Of Trump's Tariff Wars? Might As Well Get Used To It. Now The EU Is In Trump's Crosshairs.

     President Trump is at it again.  Not content with settling his still unresolved score with China and its trade imbalances with the United States, Trump is now threatening to slap tariffs on $11 billion worth of goods we import from the European Union, this time over mutual claims that each side is violating trade agreements by subsidizing its airline manufacturers, specifically Boeing in the U.S. and Airbus in the EU.  It's been a long festering dispute, partially adjudicated by the World Trade Organization, but still unresolved.  Trump is fed up with the delay and tweeted this morning (#@realdonaldtrump) that the U.S. "will now put tariffs on $11 billion of EU products!"
At It Again
   So, in other words, the macho posturing continues, never mind the collateral damage.  As South Dakota farmers have learned from Trump's gratuitous tariff war with China, that damage is inflicted directly on our ag industry. Soybean prices in particular have been hobbled by the Chinese exercise in pointless trade warfare, and from what European trade spokespeople have been saying, American ag products are likely to suffer when the EU announces its retaliatory tariffs in response to Trump's $11 billion broadside.  Responding last November after Trump threatened tariffs on European autos, EU Trade Commissioner Cecilia Malmstrom made it clear that retaliation would be aimed at a variety of American products.  "It could be cars, it could be agriculture, it could be industrial products, it could be everything," she said, coyly avoiding specificity in the spirit of shrewd negotiation.  The Agri-Pulse website said at the time that the tariff threat "would add to ag retaliation woes," a sentiment that no doubt carries over to the potential disruption in our ag exports coming from this morning's threats from the president.
     In 2018, Europe became the third largest market for American ag exports.  Our nation's farmers sold $13.5 billion worth of their products to the EU, including nearly $4 billion worth of soybeans.  Given South Dakota's 6% share of American soybean production, that's nearly $250 million worth of product that our farmers sold from South Dakota. This market is actually more fragile than you'd think. Short term, world demand will still exist and other markets are accessible to American farmers.  Long term, the risk is that rising prices created by tariffs will push development of soy substitutes for both oil and livestock feed, permanently depressing demand for American soybeans.  Chinese agricultural researchers and producers are already making plans to reduce significantly the amount of soymeal needed to feed that country's immense hog herd.
     The uncertainty about soybean prices and supplies will only accelerate that trend. South Dakota's ag industry, already badly bruised by Trump's dispute with China, could be in for another whack if this EU situation doesn't resolve itself, and soon.

Saturday, April 6, 2019

Who's Minding The Deficit? Certainly Not South Dakota's Callously Hypocritical Senators Thune And Rounds

     Jimminy!  The Congressional Budget Office yesterday put out its monthly federal budget
Let's Celebrate!
Deficits Are Biggest Ever.  Yippee!
and it's a tale that fiscal conservatives in Washington should review with embarrassment, despair, and a profound sense of guilt.  This is really a shocker, and I hold South Dakota's GOP Senators John Thune and Mike Rounds complicit in the creation of this ocean of red ink.  The federal deficit grew by $94 billion to $693 billion during the first half of fiscal 2019.  CBO further projects a full year deficit of $900 billion, with deficits exceeding $1 trillion yearly beginning in 2022.  As a percent of Gross Domestic Product, these numbers are "well above the average over the past 50 years," according to congressional budgeteers.
     The bill of goods that we were sold by those supporting President Trump's tax cut, including Thune and Rounds, is largely responsible for this outrageous lapse in sound budgeting by the federal government.  Outlays (including those mandated by Social Security, Medicare and Medicaid) rose by about 4 percent (pretty much the the same as my biz expenses did, no big deal there) but thanks to the tax cuts, individual income and payroll taxes were up just 1 percent and corporate taxes fell by 15 percent.  That wasn't supposed to happen.  The tax cut was supposed to juice up the economy so dramatically that corporate and individual taxes would increase.  The CBO itself warned that this would not happen when the tax cut was being debated in 2017.  But Republicans in Congress, including Thune and Rounds weren't buying it.  They were obsessed with the prospect of corporate tax relief.  Thune himself wrote that "it was humbling to have been part of this process." Now that the process has created a gusher-like deficit, Thune should be feeling humbled indeed.  Rounds was just as ebullient, joining his South Dakota colleagues in claiming that it would give our state's economy a boost.  Considering that in 2018 South Dakota's GDP per capita was up less than 1% (.77% to be exact, per the Bureau of Economic Analysis) I'd say the economic boost has been negligible.  As with Thune, Rounds was full of hot air on his projections. On a macro level, the overall U.S. economy grew 2.9% in 2018, which is so-so at best and well below the hopes for 4% and more when the tax cut was being touted by Republicans.
     In the meantime, I'm still waiting for our senators to square the existing deficit (and projections for it widening) with their earlier vows to fight federal red ink as hard as they could.  On his website, Thune makes the hollow assertion that "every South Dakota family must live within a budget, and I continue to believe the federal government should do the same."  At some point I hope Thune spares us this hypocritical nonsense and deletes the sentence from his site.  Rounds is just as sanctimonious a pretender.  On his site, Rounds says of the deficit, "we must reverse the trend before it crushes our economy."
     Yes, we must.  And yes we must before it does.  

Monday, April 1, 2019

Trump's Threat To Shut Down The Mexican Border Should Worry South Dakotans

     Frustration with the pace of his border wall fixation apparently overflowed last Friday as
South Dakota Farmers
Making A Sale In Yucatan Last Year

(from AGWEEK)
President Trump announced that he would be shutting down our border with Mexico.
Empty or not, the President's threat should put South Dakota's ag industry on notice.  We have a lot at stake here. Trump said that he "will be closing the border, or large sections of it, next week" and that he could close the border to trade "for a long time."  The threat was directed at Mexico, which must "immediately stop all illegal immigration coming into the United States through our southern border."  To make sure we appreciated his seriousness, Trump added, "I'm not playing games." The rhetorical shot may have been aimed at Mexico, but the recoil will come against the shoulders of American ag producers, including to a significant extent, South Dakotans, who send immense quantities of their products to Mexico.
     Should we be concerned?  Hard to say.  Given his track record of following through on threats to Mexico (Remember how they were going to pay for the wall?), some backtracking by Trump would be par for the course. Indeed, the news coming out of the White House today has a more cautious tone to it, with the head of Trump's Council of Economic Advisers saying "it's something I'm sure we'll be looking into and studying" when discussing the economic impact of the President's threatened border closure. You don't have to be an economist to know that the impact of Trump's impulsive decision would be almost financially incomprehensible.
     "Disaster" seems to be the most frequently applied noun to the economic situation that would follow Trump's decision to close the border.  Daily trade across the border amounts to more than a billion dollars and supports 5 million American jobs.  Though the effect in our southern states would be most acute, South Dakota wouldn't be immune from a significant amount of that pain.  In 2017, South Dakota sold $150 million of meat products and another $30 million of grain to Mexico, which amounted to about 25% of our state's total international sales. That year Mexico was second only to China as an export market for South Dakota soybeans.  Since then the trading world has evolved, but in 2018 our state's farmers remained upbeat about our sales to Mexico, which account for more than 15,000 jobs in South Dakota.
     While storability may help grain and oilseed farmers weather a market-halting closure at the Mexican border, our meat producers don't have the luxury of waiting it out. That $150 million of meat products that go from South Dakota to Mexico, perishable at is, can't stand much of a back-up at the border.  Considering how badly our state's ag producers have been hurt by the tariff war with China, slowing down sales to a customer as steady as Mexico would only make the situation worse.  This threat is probably empty and most definitely self-defeating.

Saturday, March 30, 2019

Paula Hawks, South Dakota Democrats, And The Hierarchy Of Needs**

     Paula Hawks last week was elected to chair the South Dakota Democratic Party. The former state legislator (2012-2016, District 9, metro Sioux Falls) and unsuccessful candidate for Congress (2016, against incumbent Kristi Noem) will run a party that has gotten bruised badly during the last decade.  Looking at the South Dakota Secretary of State website, the changes in party registration numbers have been disheartening.  In 2010, South Dakota had 235k  Republicans vs. 194k  Democrats.  Currently, Republicans count 258k  members while Democrats tally just 158k. Pubs gained, Dems lost, expanding the numerical spread from 41k to 100k, which amounts to a GOP  registration advantage of 47% to 29%.  Independents (like me) and party-unaffiliated voters make up the difference.

     As daunting as the task of turning things around for Democrats looks, last November provided evidence that a party renaissance can occur.    Democrat Billie Sutton won 48% of the popular vote in his race for Governor, compared to just 25% won by Democratic candidate Susan Wismer in 2014.  In my home county, Pennington, Sutton nearly doubled Wismer's take, 43% to 22%.  There's a trove of South Dakota votes to be won by the right Democrat.                                          But how to do it?  This is where  groundbreaking psychologist Abraham Maslow's 1943 classification of human physical and psychological yearnings, "The Hierarchy of Needs," could stand some consideration.  As much as personality and style were the source of Billie Sutton's appeal, real life issues are still the building blocks of political success.  The state party's 2018 platform was appropriately aspirational, but the generalities of its goals weren't converted into the specifics of their implementation on the various campaign trails that I followed. For example, I never heard a plan for expanding Medicaid, just that the party is in favor of expansion.  Sutton's stylistic appeal did some good, but  where charisma stops, the imperative to address fundamental human needs starts.  Enter Maslow's work.  His "hierarchy" is a pyramid-shaped table of necessities, the base of which consists of primary needs like food, shelter, safety, employment and good health.  Could there be a more concise round-up of priorities that Democrats have traditionally addressed? Democrats should direct the focus of voters to issues that bear on the basics.  One example?  Expanding Medicaid so that thousands of South Dakotans who live without health insurance can get the healthcare they need.  Another?  Raising wages so that our chronically scarce labor force can be augmented by people who will remain in--or move to--South Dakota for the better wages and working conditions they can get here.  You want a third?  Improve our schools. Regarding school systems, Wallet Hub ranks us last in our region, behind every state that borders South Dakota.  Great schools are an essential draw for those thinking of making their homes
Maslow's Pyramid
here, and right now our state comes up short.
     Paula Hawks will no doubt spend a great deal of her time on structural issues that involve the field work of getting Democrats to operate more effectively in their local, mainly county level, organizations.  That will involve raising money and visibility, which need much of her attention, particularly on the visibility front out here in western South Dakota. But as process-oriented as Hawks will have to be, some attention to message will do her party a lot of good.

**A big thank you to well-known South Dakota Democrat Joe Lowe for introducing Maslow and the "Heierarchy of Needs" concept to me.  John T.

Wednesday, March 27, 2019

Per Trump, Republicans are "the party of healthcare." Per South Dakota GOP Senator Rounds, they're "the party of wealthcare."

     South Dakota GOP Senator Mike Rounds reminded us of his "let's bash Obamacare"
If At First You Don't Succeed
Fail, Fail Again
fixation this morning. 
His column in the Rapid City Journal is a reminder of his hatred of the Affordable Care Act and his desire to replace it with "patient-centered, market-based reforms that are truly affordable."  Rounds wants to go to a system that will give patients more options so they can find plans that fit their needs and budgets.  I suppose the rhetoric is appealing to free-market diehards who cling to a vision of an ideal society built on their survival-of-the-fittest fantasies, but in real life, Rounds is talking about distribution of healthcare as a commodity sold to the highest bidders.  "Market-based reforms" means only that those with more money can afford the most comprehensive plans and those with less money will have to settle for correspondingly less coverage. Guess which group will be able to deal with premiums for policies that cover pre-existing conditions--if such policies could even exist.
     Rounds said nothing about pre-existing conditions in his column.  Ignoring it for the moment, the senator seems to have picked up this anti-ACA theme again in the wake of President Trump's declaration yesterday that his administration would again seek to repeal Obamacare, having been unable to do so in 2017.  But whether Rounds wants to address it or not, the pre-existing condition conundrum will have to be resolved.  News reports say that Trump, after stressing that Republicans will be "the party of healthcare," told Republican lawmakers that they would have to come up with a replacement plan that covered pre-existing conditions.  Did he offer any suggestions?  Nope.  Apparently, free-marketeers like Rounds will have to figure out how to come up with their own ideas.
     It will be a challenge.  I have yet to see a model that allows for market-based, competitive insurance plans to guarantee pre-existing condition coverage for everyone, regardless of how comprehensive their policies are.  Rounds's options are probably non-existent.  What's more, he's playing with political dynamite.  Last October a Fox News Poll showed that Obamacare's popularity is at an all-time high with 54% favorability vs. 43% unfavorability.  This month the Kaiser Family Foundation finds the spread to be 50-39.  With numbers like these, an assault on the ACA doesn't make much sense as we come into the 2020 election cycle.  More compellingly, there's a much starker number that Rounds and his market-obsessed cronies should note:  Since Obamacare came into being in 2010, 20 million previously uninsured Americans now have health coverage, and I'm guessing that most of them vote.


Saturday, March 23, 2019

Could Somebody Tell Me What "Riot Boosting" Means?

     South Dakota's Senate Bill 189, which just became law, makes "riot boosting" illegal.  I
Don't Suppress Them
think I get the idea behind the law's passage, but "boosting" is such a nebulous word that I'm wondering how enforcement of the statute can take place. SB 189 makes "boosting" another dimension of the law against riot-incitement already in the South Dakota books (22-10-6.1).  That law says  "any person who does not personally participate in any riot but who directs, advises, encourages, or solicits other persons participating in the riot to acts of force or violence is guilty of a class 5 felony."  By using the word "boost," the new law opens up those indirect participants to financial responsibilities for damages caused during the riots they "direct, advise and encourage." 
     There's a reasonable element of objectivity to the existing law.  "Directing, advising, and encouraging" are activities that probably can be pinned down to specific individuals and maybe even organizations.  But SB 189 gets cloudy when it considers "boosting" to be an activity that can occur through "an employee, agent, or subsidiary." It opens a can of rhetorical worms that will no doubt be tested in the courts.  Consider that in 2017, the Sierra Club  announced that it was supporting Native American resistors of an oil pipeline crossing eastern Oklahoma.  If similar protests in South Dakota were supported by the organization and the protests turned violent and destructive, would the new law apply?  I'm certain the Sierra Club neither openly nor covertly supports violence, but if its sponsored demonstrations get out of control would the club be considered a "booster" of the mayhem?  Would the Sierra Club be considered an "agent" of its financial supporters, putting them in legal jeopardy?
     As compelling as these questions are, the larger point is how chilling an effect a law like this will have on those who legally demonstrate.  True to its intent, SB 189 will probably give potential activists second thoughts about gathering at protest sites, where passions can easily get out of control and, even if they don't, some incidental crowd management and damage repair expenses are likely to accrue.  Who pays for those?  As with its other question-raising elements, this dissent-stifling law is unclear and imprecise.  

Tuesday, March 19, 2019

Governor Noem's Repudiation Of Hemp Production Is Irrational And Overly Precautionary

      South Dakota Governor Kristi Noem has put her foot down when it comes to legalizing
Because I Said So!
the production of industrial hemp in our state. 
Explaining herself to the Sioux Falls Argus Leader last month, Noem said that because we're ill-prepared to deal with the THC-tinged crop from a regulatory and enforcement standpoint, "we will be opening the door to allowing marijuana to be legalized in the state of South Dakota."  To arguments trying to persuade Noem that history, science, economics and even her own vote in Congress allowing for hemp's legalization all suggested otherwise, Noem's reaction was the executive equivalent of a steadfast, firm, parental "no, because I said so, and that's final." She vetoed the overwhelmingly supportive votes in our legislature allowing for industrial hemp production in South Dakota--and was able to make the veto stick because hemp supporters in the state Senate couldn't quite muster the 2/3 majority needed for an override.
     You'd have to have a hard heart not to appreciate Noem's protective nature, which I believe is sincere and, in its way, admirable. The part of it that doesn't quite fit is that she's going against the grain of her Republican party's commitment to free market forces determining what farmers should be able to plant on their own land.  This is especially enigmatic when you consider that as a Congresswoman she was perfectly fine with the notion of hemp legalization, which was incorporated in last year's Farm Bill. Of her role in its passage,  Noem said, "I was proud to lead the U.S. House of Representatives in passing the 2018 Farm Bill." At the time, I couldn't find any reservations that she had about the industrial hemp component in the bill, which makes her adamant opposition to the crop's development in South Dakota a little tough to figure.
     Making it even tougher to figure is that so many states in the American farm belt are okay with industrial hemp production.  A month ago Noem tweeted that legalization would "flood our health lab, strain law enforcement . . . and lead us down the path of legalized marijuana."  This doesn't square with the experiences of the vast majority of American ag producing states, including all of our immediate neighbors except Iowa.  These states are not only comfortable with the idea of adding industrial hemp to their ag product mix, they're getting quite the leg up on penetrating a rapidly growing market for hemp products, which is expanding by 14% a year and expected to reach nearly $11 billion by 2025. I'm surprised that Noem hasn't reached out to some of these states to find out how they've been able to incorporate the crop into their legal and regulatory infrastructures.   For a Republican dedicated to the essential GOP principle of allowing business as much freedom from central control as possible, Noem isn't making much sense with her inflexible opposition to hemp.  "No, because I said so" isn't much of a rationale for stopping farmers from raising a crop that looks to be a big winner in coming years.

Thursday, March 14, 2019

Trump And His Bizarre Threat Of Violence Against His Critics Gets A Reaction From Rick Knobe

     President Trump's bizarre warning in a Breitbart interview today that his military, police and biker supporters
could get "tough" on his opponents was a musing that had some threatening overtones. 
Trump's gutter-level inclinations, punctuated by the not-so-veiled threat that "it would be very bad" got a swift response from former Sioux Falls Mayor Rick Knobe.  Knobe, who has also hosted a radio show for many  years in South Dakota, drafted a letter that he thinks South Dakota U.S. Senator John Thune should send to the President immediately.  Thanks to congressional longevity, Thune has ascended to a powerful position as Majority Whip in the Senate. A rebuke like this is probably what President Trump needs to get the message that opining about his supporters "getting tough" violates all the principles of a civil society to which Americans aspire.  Here's Knobe's suggested letter for Thune to send to the President:

Dear Mr. President,
I read with shock and dismay your interview with Breitbart news. In it, you state, "I can tell you I have the support of the police, the support of the military, the support of 'Bikers for Trump'-I have tough people, but they don't play it tough-until they go to a certain point, and then it would be very bad, very bad."
Mr. President, I am a farm boy from South Dakota. Not used to big city ways of talking, but even I understand the strong implication of control and violence in your words.
Although I was not alive during the rise of Mussolini, Hitler, and Stalin, I have heard enough from my elders and read enough history to know that the words you have used are very similar in tone to those used by the three I mentioned above.
Mussolini, Hitler, and Stalin rose to power, creating havoc in their own countries, by pitting citizens against each other and killing people who disagreed with them. They nearly destroyed the world as we knew it.
I have less than four years left in my term. As one of the ranking members in the Senate, I have supported the Republican party and you almost all the time.
Obviously, you have taken over the party. We have quietly allowed you to do that.
You will recall, I have publicly said more than once I wish you would stop using Twitter. Others have used much stronger language with the same message.
With the quotes attributed to you in the very conservative Breitbart, I now have to say, I can no longer support your administration.
I have children and grandchildren. Your words are frightening to me. The strong suggestion of violence from The President is unacceptable..
As you know, South Dakota is a very red state. You won here handily in 2016 and Republicans easily won state wide races in 2018. I am well aware that separating myself from you will come with a political price back home and no doubt in Washington.
Your words and actions are taking us in the wrong direction. We are not becoming "great again." We are weakening ourselves in country and our esteem world wide among our allies has taken a huge hit.
I realize you are popular with your base. However, that doesn't mean you are right.
I will stay Republican, I will serve out my term, but I will no longer vote You and Party first. I will vote my country, my children and my grandchildren first. They are much more important to me than going along with your herd.
Finally, Senator John McCain was a friend and mentor to me. We didn't agree all the time but there was and still is mutual respect. I am firmly requesting you stop denigrating his memory. It is beneath the office you hold.
Most Sincerely,
Senator John Thune of South Dakota

Move Over, South Dakota Farmers. Trump's Budget Does A Number On Our National Parks, Too.

     The Trump administration's disastrous gamble on the tax cut has forced him into
Trump Administration
Are You Paying Attention?
preparing a budget that shorts not only South Dakota's farmers, but our state's other principal economic driver, tourism, as well. 
Out here in the Black Hills/Badlands region, tourism is the number one industry, much of it built on our magnificent collection of some of the National Park Service's crown jewels.  Mount Rushmore, the Badlands, Devil's Tower (just over the border in Wyoming), and two of America's most prominent caves:  Wind Cave and Jewel Cave. Together the natural and historic wonders make for a matrix that draws millions of tourists every year.
     Last year, the National Park Service budget was $3 billion. That was in line with incremental budget increases matching overall U.S. economic growth for the preceding 5 years.  Given that growth coming into 2019 has been at 2.9%, you'd expect the NPS budget to bump up by about that much in keeping with the overall trend.  But expectations are one thing.  Reality is another.  As with our fellow farmers in South Dakota, tourism operators in South Dakota will see the budget of their overseeing agency dropping by 15%.  This is actually pretty outrageous, coming as it does during a year of economic growth.  The explanation, of course, is depressingly simple.  Trump's bet on the tax cut increasing government revenues because of stimulated economic activity is a loser, big time.  Tax revenues for 2018 actually fell nearly 3% (about $80 billion) compared to 2017. You've already heard the horror stories about how our national debt has been ballooning to record levels as a result.  The administration has been forced to put the brakes on spending, essentially forcing us ordinary folks to foot the bill for tax cuts that have principally been aimed at the country's highest earners.
      So how much of this will be laid on the National Park Service?  Nearly $500 million, which is about a 15% cut that I would expect to be roughly spread across the system.  Operations, recreation and historic preservation expenditures, construction--all will be cut by tens of millions of dollars.  And then there's that deferred maintenance backlog of $11.6 billion.  The administration suggests that about $900 million of  the NPS budget per year be spent addressing needed repairs for the next 5 years, which won't necessarily cut it by the amount spent because additional repair items will be added to the list during the interim.
     This really isn't supposed to be happening in an era when inflation and economic growth more than justify a slight increase in the NPS budget.  Our National Park Service saw about 320 million recreational visitors in 2018, so we're not talking about government expenditures limited to a particular special interest group.  This is about all of us and our magnificent stretches of landscape and historic sites, of the limited chances for urbanites to connect with America's natural wonders, and the preservation of what everyone knows to be the best parts of our undeveloped expanses.  I call B.S. on Trump cutting back on maintaining them because his ill-advised tax cut for rich people didn't pan out.