Wednesday, September 19, 2018

China's Serenade To American Soybean Producers: Got Along Without You Before I Met You, Gonna Get Along Without You Now.

         knew this would happen.   I just knew it.  Chinese agronomists and hog producers are adjusting to life without American soybeans. Turns out they've been using more than they've needed all along, so the downside alteration to their hog industry's soy consumption won't be that difficult to navigate.  Separate items from the Hong Kong-based South China Morning Post last month and Reuters this morning tell a story that will probably set off some profound changes in America's heavily Chinese trade-dependent soybean industry, which of course has some huge implications for South Dakota farmers, who this year will raise nearly 300 million bushels of soybeans.  At around $8/bushel, that's a multi-billion dollar industry, and it's one that has already taken a sizable hit thanks to President Trump and his tariff-fixation over China.  China's retaliation to Trump's gratuitous tantrum, slapping a 25% tariff on its imports of American soybeans, has driven the market down by about $2/bushel, accounting for a $600 million reduction in the value of this year's South Dakota harvest.  That's a lot of money to a state with just over 800,000 residents, and I have no doubt South Dakota's general economy will take direct and indirect hits as result.                                                                                                                                                      So what is it that's happening to China's hog production that will permanently alter America's soybean industry?  Just this.  China has been "importing far more soybeans than it really needed and could do without American imports," according to a Beijing-based agribusiness consultant named Ma Wenfeng.  Turns out that Chinese pig producers can get along with about 65 million tons of soybeans a year, but have been importing about 95 million tons, nonetheless.  That 30 million ton "surplus" is just about how much they've been importing every year from the United States.  Relatively low cost and easy access to supplies have induced Chinese producers to use soymeal for about 20% of their feed requirements even though the science of optimizing feed ingredients to provide the best nutrition at the lowest cost has reduced the soy requirement to about 12%.  Ma notes that "we have plenty of replacements for soymeal, such as peanut meal, cotton meal and rapeseed meal" to replace the protein content of soymeal.  Chinese producers can also add the amino acid lysine to replace soymeal protein.  The changeover to the lower soymeal requirement has been slow because so many producers in China don't have the financial incentive to overhaul feeding systems and formulas, according to Reuters.
    But now that soy prices have escalated because of China's retaliatory tariffs, the incentives
American Soymeal Ration
Soon To Be Reduced
to switch over to lowered-soy content feed are there. 
The wide application of the know-how will permanently affect the 36-year long relationship between Chinese hog producers and American soybean farmers, which up to now has been worth about $13 billion a year.  Considering that soybean sales to China before it joined the World Trade Organization in 2001 were about $2 billion a year, the value of trade alliances should be self-evident to South Dakotans, who must be asking themselves why Trump is doing what he's doing.

Tuesday, September 18, 2018

The Cat Came Back

       Government reformers in South Dakota remind me of the cat in that great old campfire
Cats And Reformers . . .
They Just Keep Coming Back
Like that persistent and determined feline who wouldn't go away no matter how hard its master tried to get rid of him, they just keep coming back, and they "spend their nights 'a howlin' " til our legislators "can't get no sleep."  Shunted aside after the IM-22 debacle of a couple of years ago, this determined group of activist cats, led by Mitch Richter and Darrell Solberg, just keep on coming back.  IM-22 was the ballot initiative that won with 52% of the vote in 2016. It dramatically reformed government and campaign operations in our state.  It required additional disclosures and reporting by candidates for office, it lowered and limited contribution amounts, it severely constricted lobbyist gifts to state officials, and it created an ethics commission to oversee campaign finance and lobbying laws.  It also contained a provision to provide public funding for political campaigns.
     That last element caused me to oppose the measure, but it passed fair and square, much to the consternation of South Dakota's established political class, dominated by Republicans.  As South Dakota's initiative process has no restriction on when or how elected legislators can repeal or amend citizen-approved initiatives, the state's GOP-dominated legislature proceeded to dismantle IM-22 during the following session in 2017, not waiting for a court challenge to the measure that was headed for the South Dakota Supreme Court after an injunction in a lower court put the initiative on
Maybe This Time
They Will
hold.   Effectively eradicating the voter's will, reform-averse officials in Pierre set off quite the outraged reaction, with noisy and loud demonstrations occurring at the capitol as the political debauchery occurred.  Even as a foe of the measure, I was as chagrined by the arrogant and cynical rejection of the voters' will as those who supported IM-22
     Which is why I'm supporting the reform measure that will be on this November's ballot, dubbed Constitutional Amendment W.  Sans the public financing of campaigns that turned off a lot of potential supporters of the last reform measure, Amendment W is exclusively about changing existing campaign financing and lobbying laws, and, most strategically, won't allow alterations to it without voter approval.  The element that should most appeal to the reform-minded is the establishment of a government accountability board that will have some sanction-imposing teeth.  Considering the depth and breadth of a couple of horror stories involving state-managed programs (EB-5 and Gear Up) which resulted in multimillion dollar fiascos along with murders and suicides, a visible and active accountability component in Pierre seems overdue.


Wednesday, September 12, 2018

Move Over Farm Groups. South Dakota's Business Community Also Has Good Reason To Fight The Trump Slump.

     Seems like up to now the only unified opposition to President Trump's ill-conceived
Scaring them off?
I think so.
tantrum has come from farm groups in this country.  That's about to change.  City folks are finally getting fed up and the mobilization against his trade policies is gaining some serious momentum. A coalition of trade associations representing farmers, retailers and manufacturers throughout the United States has coalesced into a group called Americans For Free Trade.   The 80 or so coalition members represent some ultra high-powered associations, including the American Petroleum Institute, Telecommunications Industry Association, and the National Retail Federation. The group is about to launch a $3 million campaign dedicated to fighting Trump's tariffs.                                                                                                                                                                                South Dakotans have some interest in this.   Our state's main retail trade group, the South Dakota Retailer's Association (SDRA, an effective and efficient association of which I've been a satisfied member for many years) shows up on the National Retail Federation's website as one of the 50 state retail associations that NRF describes as "the tip of the spear" when it comes to "retail public policy and government relations in state capitols across the nation." I'd be surprised if the South Dakota group will take a position or involve itself in the tariff issues that South Dakota's farmers have to deal with, but I wish they would.   Retailers, especially those (like me) with interests in the lodging industry, have a stake in our global business relationships.
     Foreign tourists matter.  Calling it the "Trump Slump,"  Forbes magazine last month noted that the U.S. share of international travel has dropped "sharply" during Donald Trump's tenure in the White House, falling by  6%, costing the U.S. 7.4 million visitors and $32 billion in 2017. Forbes says there's likely to be more this year.  So far in 2018, visitations to Mt. Rushmore have fallen by about 6%That would be 108,000 visitors.  Nationally, National Park visitations have dropped by 8.4 million, or nearly 4%.  I think the dropoff in foreign visitation accounts for much of this.  A strong U.S. Dollar might have a bit to do with it, but Forbes research on the fluctuating value of the Dollar and tourism patterns don't give the theory much credence.  The influential business advocacy group Business Forward, which featured the situation last summer in a piece about the "Trump Slump," makes it hard to draw any other conclusion. Now that there's a powerfully mobilized national group of businesses working to stop the negative effects of President Trump's ill-advised tariff wars, South Dakota's business community has reason to consider doing the same thing. 

Tuesday, September 11, 2018

When Does The Winning Start, President Trump? Farmers Will Get A 13% Haircut This Year. And The Hair Loss Could Become Permanent.

     South Dakota's overwhelming mandate for Donald Trump (he carried the state with 62%
Mr. President,
What Am I Supposed To Do With These?
of the vote in '16, nearly twice Hillary Clinton's total) hasn't paid off where it counts--in the pocketbook--for our state's biggest industry, agriculture. 
The USDA last week published its projections for American farm income in 2018, and it says farm income across the country is likely to fall by 13% (about 15% in inflation-adjusted dollars, to 2002 levels, and that number includes government payments).  There are no state-specific projections yet, but considering that the price of soybeans has fallen about 20%   ($2/bu) since last year's crop was harvested, this year's 280 million bushels of SD's soon-to-be-harvested soybeans will take an enormous hit.  Ditto our state's corn harvest of 825 million bushels, which has seen about a 10% price erosion since last year's crop came inAt around 50 cents a bushel, that's another humongous drop in cash receipts. Our entire ag economy-dependent state has good reason to be nervous.
     The old canard about presidents having little, if anything, to do with the general economy has much validity to it.  But when it comes to specific sectors in the American economy, it's been plenty obvious up to now that presidential meddling with markets can make a huge difference.  The damage to crop prices and farm income are directly connected to the tariff wars created by Donald Trump.  Last July American Soybean Association President (and Iowa farmer) John Heisdorffer said "producers cannot weather sustained trade disruptions."  Those sentiments were simulateously echoed by American Farm Bureau Federation President Zippy Duvall, who said "we cannot overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets."  This theme runs steadily through the discourse of all the major ag groups I can think of, yet it seems to fall on indifferent, if not altogether deaf, ears in the White House.
     The short term fix of direct payments to farmers that was announced last July was the administration's way of trying to at least partially mollify farmers that are getting the short end of the tariff stick.  But there are two elements of these payments that need to be noted.  The drop in 2018 farm income includes those payments, which, helpful as they are, don't make farmers anywhere close to being whole after the market devastation that's occurred this year.  And the payouts don't address the all important issue of global market share disruptions that will occur once American soybeans are landlocked during a trade war.  Loss of market share to our biggest soybean buyer, China, could be permanently crippling.  Forbes magazine notes that China can expand its own production by incentivizing farmers and, in time, can find producers like Brazil and other suppliers in Asia and possibly Africa who will increase their  production in order to fill the gap created by tariff-burdened American soybeans.

Saturday, September 1, 2018

Are South Dakota Republicans Hypocrites When It Comes To Following Campaign Finance Laws? Guest Poster Janette McIntyre Thinks So.

Hypocrisy At its Finest

The campaign of Democrat Billie Sutton, running for Governor of South Dakota,  has taken a swipe at Republican Lieutenant Governor candidate Larry Rhoden for a campaign finance violation.   They have him dead to rights, but who cares?

Recently, Dan Lederman, GOP State Chairman said that laws matter.  If political parties don’t have their ducks in a row they shouldn’t be allowed to put candidates on the ballot.  He took it upon himself to make the Democrats have a “do over” for their convention.   He also filed a Writ of Prohibition to keep Constitution Party candidates off of the ballot.

I happened to be one of the candidates that the court decision kept off of the ballot.
At the Constitution Party convention I was nominated to be a candidate for SD District 34 Senate.   I don’t believe that Dan Lederman’s effort was in anyway directed at me but you have to wonder what he was afraid of.

Did the Constitution Party represent a real threat to the Republican Party?  Normally I would have said, “no.”  We may have been an irritation at best to be ignored.

This year however, I believe the Republican Party is facing their own internal struggles.   Some, like myself, a lifelong Republican, have left the party.   The party didn’t leave me, the party elite worked against me.  Party faithful, even those who are still hanging in there doing their best to be the good soldiers, are having their own moral reservations with the elite of the party.

It has never been more evident that the rules only apply to a few.  They apply to the Democrats, they apply to the Libertarians, they apply to the Constitution Party but they do NOT apply to all Republicans equally.   The state GOP  has the funds to file lawsuits continues to prevail.

What should concern all South Dakotans of every political party is that these very laws are written by Republicans who do not enforce them consistently and who do not always obey them.  There is the first real travesty.

As long as there are insignificant two party representations and god forbid a single Independent, Libertarian or Constitution Party candidate elected the current state of affairs in South Dakota will never change.    There is the second real travesty.

No man, not even Dan Lederman as hard as he may try, will be able to stop South Dakotans who will vote to make a change in 2018.   The rein of the elite is indeed being challenged this year.   Many party faithful are stating that for the first time they too will not be voting Republican.  Electing the same candidates time after time and expecting a different result is not just the definition of insanity it will be the third travesty.

South Dakota voters will be able to send a clear message on November 6th.    I hope voters will look to the person, not the party to make a smart choice.

Thursday, August 30, 2018

The Russians Are Coming, The Russians Are Coming! Don't Say Guest Poster David Ganje Didn't Warn Us!


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    To South Dakota from Russia with love
  How does the land of indefinite variety get caught up in these things?  South Dakota is making an international name for itself.  And South Dakota may be under attack. The state’s current Russia problem arises from the state’s longstanding practice of hospitality.  Now, without doubt hospitality is an honorable practice.  South Dakota welcomes aliens (anyone who does not speak the dialect and who does not appreciate chislic) as tourists and hunters.  As a kid hunting with my dad and uncle I remember them hosting exotic foreigners – a judge from Minnesota, a judge from Chicago and most curious of all – a judge from Arkansas.  
   Based on current news reports this hospitality toward foreigners continues in the state.  Consider the somewhat infamous, and now indicted, Russian lady who is criminally charged with conspiracy and acting as a foreign agent (one could read spy).  The native of Russia apparently came to the South Dakota to hunt, to lecture at the University of South Dakota, to set up a South Dakota company or two and may have also considered residency.  As a brilliant effort toward international relations she compared the climate of Siberia with that of South Dakota in an article written for fellow travelers.
    "My notion of the KGB came from romantic spy stories," Russian President V. Putin from a 2005 Washington Post article.  Are the Russians coming?  Well, yes in a manner of speaking they are already here. Just ask someone of German Russian heritage in the bustling metropolises of Hoven, Eureka or my hometown of Aberdeen.  But what about contemporary Russians?  Well, yes it appears they are also invading the state.  We must then look to historical precedent to address the recent invasion.  I refer to an important historical movie on the invasion of America by Russians. In that movie (The Russians Are Coming, The Russians Are Coming) Russians landed in America and were speaking to a local young American.
  Russian Lieutenant Rozanov: [thick Russian accent] “Very clever little boy. Very, very clever, to see that my friend and I are foreigners here, but of course not Russian, naturally. What would the Russians be doing on United States of America island, with so many animosities and hatreds between these two countries? It is too funny an idea, is it not? No, we... we are of course... Norweegans.”
Walt Whittaker: “Norwegians?”
Russian Lieutenant Rozanov: [nods] “On a small training exercise for the Nyaato countries...”
Comrade Alexei Kolchin:  “yes NATO”
  I see problems with this new invasion.  I am of German Russian heritage.  This publicity about Russia could give German Russians a bad name.  First off, the alleged Russian spy was not granted bail on her pending federal charges.  She is considered a flight risk.  If she makes bail she may seek sanctuary in one of the remote but well stocked hunting lodges located throughout the state.  It would be unfavorable notoriety for the state if the feds laid siege to a hunting lodge to recover the defendant - all in front of TV cameras.  That would not look good on the news.  One should seek clarification from state authorities on whether South Dakota is a sanctuary state. My second problem:  ongoing developments concerning the Russian lady, now in jail awaiting legal proceedings, may give anyone loosely associated with Russians a bad name, or at least bad karma.  South Dakotans of German Russian heritage should consider this.  I suggest that all those of German Russian heritage re-label themselves as Italians or Greeks.
  Like angels of mercy, have the Russians and their friends descended upon the state for the goodwill of all mankind?  Possibly.   In today’s world South Dakotans have much in common with the government of Russia except perhaps for language, democracy, freedom of speech, a legal system and certain morals.
  Is Russia trying to get access to political power through the people of Middle America?  When looking at the official Russian spy manual one reads a description of Americans from the middle of the country:  “They may be more provincial than coastal big city people. They may be a little more naive or innocent than coastal city people.  The less they know, the better they sleep.  Not to worry, sophisticated Midwesterners do not exist.”
  Is Middle America the soft underbelly through which Russian machinations are to be practiced?  Are state residents to become the new tool of foreign interests?  The intrusion of Russia into South Dakota is not to be ignored.  These people have a studied understanding of regional people in the U.S.  This is borne out by the movie I cited.  In the movie a keen-eyed Russian military officer states:
Officer Brodsky: [in Russian] Hey, look here. Wheat! American wheat!
Officer Hrushevsky: [picks up a handful and sniffs it; in Russian] That's not wheat you idiot! It's fertilizer.
Officer Brodsky: [in Russian] Fertilizer? You mean manure? Cow...
Officer Hrushevsky: [in Russian]  Yes !
  Should these developments be of ongoing concern in the state?  Is South Dakota obligated to erect a wall around its border?  A good number of sophisticated U. S. politicians and leaders proudly had their picture taken with the alleged Russian spy.  She was also invited to give a speech at the University of South Dakota.
  Everything has a moral if only you can find it.  Here the moral is to be aware that Russians may have infiltrated South Dakota society.  There are practical remedies for this situation.  A longstanding rule based on experience tells us that when one is approached by a Russian bearing favors, giving advice, or offering to do good, you run for your life in the other direction while holding tightly to your wallet.  I anticipate local stores in the state will now do strong sales in running shoes.
David Ganje of Ganje Law Offices in Rapid City, South Dakota, practices in the area of natural resources, environmental and commercial law.

Tuesday, August 28, 2018

Patriotism Doesn't Pay The Bills.

      The underwhelming reaction among farm groups to the news this morning that the Trump
Are American Farmers Winning Yet?
The Trump Bailout Won't Do Much
administration is doling out $4.7 billion to producers hurt by low prices comes as no surprise. 
It's the first payment of the $12 billion that the White House will give to American farmers to make up for their losses created by Trump's commitment to wrecking trade deals that up to now have been a bonanza for farmers in this country.  In making the announcement about this first payout, U.S. Agriculture Secretary Sonny Perdue said, "Farmers cannot pay their bills with simple patriotism."
     Perdue's condescending observation assumes that farmers are willing patriots in the gratuitous "trade war" that Trump drafted them into.  This is total baloney, of course, as agriculture groups have been resoundingly opposed to the tariff tit-for-tats that Trump initiated.  Of the price collapse that has occurred in the soybean and corn markets, American Soybean Association President John Heisdorffer said last Spring "we have been warning the administration and members of Congress that this would happen."  Farm groups have been kicking and screaming about this for many months, and now that their predictions have come expensively to pass the Trump administration suddenly calls them "patriots?"  Give me a break.
     More financially to the point, this measly payoff that the administration is handing out strikes me as a combination of hush money and charitable aid.  Of the former, I guarantee it won't hush up our ag producers, and of the latter, it isn't enough to make anybody close to whole.  Sounding off from the get-go, National Corn Growers Association President Kevin Skunes said
"this plan provides virtually no relief to farmers" after pointing out that the program allocates $96 million to corn farmers, who collectively stand to lose $6 billion during the course of this debacle.  Soybean farmers stand to get $3.6 billion of the dole-out, but that won't even cover half their total loss of about $9 billion that the recent market plunge has cost them.
     It looks like South Dakota's share of the corn and soybean relief money will cover maybe a third of the $1 billion that has been lost by the state to the tariff wars.  Our Congressional delegation hasn't said much about this payoff, but Missouri Republican Senator Ray Blunt has had the courage to speak out, saying "no farmer is going to come close to being made whole" by these payments, which aren't much of a short-term fix.  Nor do they come with any long-term hope, much less promise, that the Trump administration is working to keep our lucrative foreign markets open to American farmers.

Wednesday, August 22, 2018

Trump Is Coming To South Dakota. Good Luck With That, Pubs. He Might Be More Of A Liability Than You Think.

     President Trump will be making a campaign stop here in South Dakota at some unspecified
Trump Coming To SD?
He's Got Some 'Splainin' To Do
date ahead of the November election. 
No doubt a lot of our state's Republicans are cheering, but all considered, he may not be the white knight that Kristi Noem, the GOP nominee for Governor, or Dusty Johnson, the Republican chasing after the state's lone seat in the U.S. House of Representatives, are hoping will show up.  Trump sure didn't do much good in Wyoming yesterday, where the man he endorsed, Foster Friess, lost in the GOP governor's primary by more than 6 points.          Mind you, Trump carried Wyoming with nearly 70 percent of the vote in 2016.  The President's promise to restore coal fell on welcoming ears in that state, the nation's largest producer of coal, producing four times more than second-place West Virginia.  A couple of days ago Trump even scaled back Obama-era coal emission standards, which you'd think would give him and his man Friess all that much more of a boost in the primaries.  And maybe it did.  Without the Trump-assist, Friess may have fallen by an even wider margin. 
      Of course, any comparison to the Trump-effect in South Dakota has to consider that the President didn't go to Wyoming to stump for Friess, whereas he'll be making a personal visit here.  That difference aside, though, there's a more compelling comparison to be made between the two states.  Basically it's an economic one.  For all of Trump's efforts to revive and restore coal mining in this country, the industry is still lagging, hurt by changing technologies that make competing, mainly natural gas, energy sources a better deal for many power producers.   A study by the University of West Virginia's Bureau of Business and Economic Research concludes that production will stabilize short-term "but will erode gradually over the next couple of decades."  All of Trump's horses and men will never put the coal industry back together again. 
     It's no surprise, then, that Wyoming GOP voters didn't respond strongly enough to Trump's endorsement of Friess to carry him over the top.  In South Dakota's coming general election, the central economic issue is probably the soybean industry and how badly it's been devastated by Trump's obsession with a trade war.  If that doesn't change soon, soybean prices--which are at there lowest since 2009--will be the object of a lot of attention as November draws near.  As it stands, prices are about 20% below what they were when Trump was elected, a level that will cause about a $500 million loss to soybean farmers in South Dakota.   In a state with just over 800 thousand residents, that's a tough loss to absorb. 
     Given all that, South Dakotans will probably lose a lot of enthusiasm for Donald Trump, who won this state with more than 60% of the vote.  As with Wyoming, Trump's economic promises haven't materialized here, at least in our economy's all-important agricultural sector.  And as with Wyoming, it wouldn't surprise me if his support during the coming campaign doesn't amount to much--or even turns into a liability for the Republicans he's trying to help. 

Tuesday, August 21, 2018

Kristi Noem Should Do Herself A Favor And Skip Every Debate With Billie Sutton

     So it came out this morning that Republican gubernatorial candidate Kristi Noem, running
Sutton, Noem
against Democrat Billie Sutton for South Dakota's top job in the statehouse, accepted a measly two invitations to debate her opponent. 
In reaction to the news, Sutton gleefully announced that he has accepted invitations to a total of ten debates, and is in the process of scheduling five more.  Noem's reaction?  About as lame as it gets.  Her PR people have said that she's already participated "in nearly a half-dozen forums during this year's race for governor," as if we're supposed to be impressed by a gubernatorial hopeful making it to less than one pubic forum a month during an election year. 
     Since Noem won her primary June 5, I see that she turned up at a few parades, where appearance matters and, by circumstance, substance is avoided.  As things are developing in the race, this may actually be the central strategy of Noem's campaign.  She already flunked her first test as a candidate capable of addressing a major issue, namely education, when she declined an invitation from the Associated School Boards of SD, School Administrators of SD, and SD Public Broadcasting to debate school policy last August 10.  This was a profoundly revealing rejection, because I can't think of a public setting where differences in education policy can be more directly compared and contrasted. 
     Considering that unlike Noem, Sutton was eager and ready to debate the issue, Noem's refusal to meet up in that venue is tantamount to a concession that she can't get specific about her plans for education in this state.  Her website states that Noem "is committed to balancing the needs of families, teachers, administrators and taxpayers," but amazingly fails to list students among those who have needs.  The running theme about education in her website is about developing students who will discover "in-demand jobs" and graduate with "job-ready skills." I guess this means stressing vocational training, a view that needs some explaining and expansion. Unfortunately, by ducking the August 10 confab, Noem missed an opportunity to clarify her thoughts. 
     Then again, her decision to skip the event may have had more calculation to it than meets the eye:  there's a lot of risk to getting on the same stage with a popular and gritty contender whose biography has a storybook quality to it.  Noem will compare unfavorably to Sutton on a personal level and no doubt has good reason to keep joint appearances with him at a minimum. 

Tuesday, August 14, 2018

South Dakota's Farmers Are Not A "Bargaining Tool."

    For a while there, South Dakota Republican candidate for Congress Dusty Johnson put
From Cory Heidelberger
At Dakota Free Press
some distance between himself and President Trump when it comes to Trump's passion for tariffs.  
Last May during his primary fight Johnson differentiated himself from his GOP opponents, who strongly supported Trump's trade policies, telling the Sioux Falls Argus Leader that "government should be cautious" when it comes to trade agreements, and that "access to international markets for South Dakota producers is critical."  The Argus-Leader went on to note that Johnson said he would push back on those who would aim to pass trade policies that could cause problems for South Dakota producers.  At about the same time, Johnson, in a Rapid City Journal op-ed piece complaining about my treatment of him in my column there, stoutly declared "I would ask the President to keep these markets open to the best . . . row crops in the world--South Dakota's."
     But, revealing the dependable Trump-enabler that better suits his compliant nature, the full-of-it Dusty emerged. Johnson just did a one-eighty on his misgivings about the tariff war that Donald Trump has declared.  In an interview published yesterday by the Madison (SD) Daily Leader, the candidate who would "push back" against policies harmful to South Dakota's farmers and at least "ask the President" to keep markets open to our farmers, fell into line with the White House.  According to Johnson, Trump is most likely using tariffs on imported goods as a bargaining tool.  Never mind that collapsing soybean prices are part of the bargain.  Said Johnson, "I'm hoping that will mean better things for producers and manufacturers."  In the heart of row-crop country, Johnson effectively told farmers there that they are bargaining tools for President Trump's trade gambits, as useful as pawns on a chess board.  The two dollars per bushel that markets have shaved off the price of soybeans since they became Trump's "bargaining tool" amounts to an eighty dollar hit on every acre. You have a thousand acres of soybeans?  You just lost eighty grand.  For South Dakota's soybean farmers in total it comes out to half-a-billion bucks.  Some "push back."
     Johnson correctly noted in the Daily Leader piece that the United States is still a principal supplier of high-quality soybeans to the world, and in this incredibly high stakes faceoff with China, that status might get us through, short-term.  But long term?  A much different outcome seems likely now that China and the rest of the world understand that the American bargaining chip dubbed "soybeans" can be produced elsewhere on this planet.  The most common story threading through agriculture media around the world is the pace at which China is becoming more self-sufficient in food production, even while it develops new suppliers elsewhere.  Just as America's dangerous and foolhardy dependence on foreign oil supplies set off a massive effort for our country to finally become self sufficient in energy production, China will take the same approach to soybean production.  We're stupid to let this happen, and Dusty Johnson is an unwitting political tool for going along with it.

Wednesday, August 8, 2018

Warehousing People In South Dakota's Prisons Isn't Working

     It's just crazy how South Dakota's prison population has grown so rapidly during the past
40 years.  In 1977, our state's total prison population was about 500 inmates while today it is more than 3,900, a 750% increase.  That represents a growth rate more than 30 times our state's overall population increase during the same period.  It's also more prisoners per capita than every state we border.  Retired South Dakota circuit judge and current Democratic candidate for the state's Congressional seat Tim Bjorkman wrote a study for the University of South Dakota's Law Review ("A State In Shackles:  The Effect Of A Dysfunctional Childhood On Crime And Imprisonment"), published in 2017, that documents these and a trove of similarly grim facts. 
     That our community at large needs to be protected from a fair number of criminals, namely the violent, is self-evident enough, but more than half the state's male prisoners and 75 % of the female prisoners are there for non-violent crimes.  Quoting liberally from Bjorkman's study, two-thirds lack a high school diploma, and about 90% suffer from a substance disorder, many of those with a co-occurring mental disorder.  A substantial number grew up fatherless and in poverty, and many--including more than half the women--are childhood abuse survivors.  Subjecting these people to mass incarceration doesn't seem to be much of an attempt at confronting what is essentially a social problem, not a crime wave that demands more prison space than ever.
     Setting aside the altruistic impulse to help these people for a moment, consider the cost of housing and caring for nearly 4,000 prisoners every day.  In 2014 (most recent number I could find from South Dakota's Department of Corrections) it cost $54.00 a day to incarcerate an inmate. That comes out to more than $70 million a year--and we're just talking about the state prison system, not country or other local jailhouse facilities.  If most of those prisoners, say 60% extrapolating from Bjorkman's numbers, are non-violent, you have to wonder if the money used to imprison them wouldn't be better spent trying to get these troubled people some help. 
     That conclusion dawned on our state's elected leadership in 2013,  when Senate Bill 70 (the Public Safety Improvement Act) was signed into law by Governor Daugaard.  The bill passed with strong bi-partisan support. It was based on the premise that only those prisoners who had to be sequestered for the public's protection should be incarcerated, while the rest would receive community supervision and treatment, paid for by the money saved from not imprisoning them.  Some early successes weren't sustained, though, and by the end of 2017, the prison population was back to that 3,900 level.  Bjorkman notes that there were concerns "among many who work with the court system that the state has not fulfilled its promise to provide enhanced treatment and supervision for offenders."  I haven't been able to find any analyses on the implementation of SB 70 and invite a response from state government officials to Bjorkman's critique.  Meantime, our prisons are as crowded as ever.
     South Dakota's American Civil Liberties Union has recently decided to call attention to this problem in a unique way.  Janna Farley, ACLU Communications Director.  announced a few days ago that the organization is putting up billboards in Sioux Falls and Rapid City proclaiming "People, Not Prisons."  Considering that Governor Daugaard and a bi-partisan legislature supported just that concept with SB 70 five years ago, it seems like a message that shouldn't have to sold to the general public.  What gives on that front, Governor? 

Friday, August 3, 2018

Yeah. Tax Cuts Pay For Themselves. Yeah. Right.

     Memo to South Dakota Republican Senator John Thune:  Your contention that Trump's
Thune, Rounds, Noem
Why Are These People Laughing?
tax cuts will pay for themselves was nutty in its projections last December and just as nutty now that the bills are coming in. 
More than halfway into the first year of President Trump's fantasy-driven scheme that you wholeheartedly supported by claiming that "even a modest amount of economic growth could cover the cost of this bill," the facts are saying otherwise.  Our junior senator, Republican Mike Rounds, echoed your party's line on the subject, claiming the increased growth created by the tax cut would "grow the economy at a faster rate," thereby creating enough new revenues to reverse steady increases in the national debt. In late 2016 our Republican Congresswoman Kristi Noem actually made the fatuous claim that the Republican tax reform package would result in an economic growth rate of 9.1 percent.  Yes, she really did.   According to this GOP-scripted scenario, the 4% GDP growth that Republicans have been whooping it up about  (slightly better than "modest," at least for the most recent quarter) should have created a gusher of government revenues.                                            But has it?  Nope.  CNBC reported yesterday that "tax and withholding payments from individuals and corporations so far this year have come in about $17 billion below the same point in 2017."  The result is that the Congressional Budget Office is now projecting the federal deficit to hit nearly $1 trillion next year and reach $1.5 trillion by 2018.  These annual deficits continue to add to the overall federal debt of more than $15 trillion, which is still at ultra-high post-WW II levels in relation to the nation's economy.  Financing that debt has continued to grow, even as tax revenues are declining.  What on earth our congressional delegation was thinking when they collectively made their rosy predictions is the story of political intimidation overwhelming established reality.  Both history (Reagan's tax cuts nearly doubled the federal debt, GW Bush's increased it by a third) and a huge majority of the nation's leading economists warned about the negative effects of the tax cuts.
    Meantime, the cost of servicing all this debt has been steadily putting upward pressure on interest rates.   Reflecting the frustration a lot of us are feeling about this, Greg Valliere of the mega-investment firm Horizon Investments, said in his note to clients last week "booming economic growth has not been sufficient to lower the budget deficit.  In fact, the deficit and Treasury borrowing are headed sharply higher, and virtually no one in Washington seems to care."  South Dakota's congressional reps, who often complained about the "unsustainability" of federal debt prior to Trump's election, seem cowed into silence and submission now that they and their Republican cohorts have only worsened the situation.  If President Trump is indeed the "King of Debt" that he once claimed to be, Senators Thune and Rounds, along with Congresswoman Noem, are his compliant vassals.

Tuesday, July 31, 2018

In South Dakota, Trump's Deal-Making "Art" Is All About Surrealism

     If President Trump's deal-making skills are the "art" form he claims them to be, they
Us South Dakotans Worry?
would most certainly fit nicely into the category of "surrealism." 
For those unfamiliar with the genre, defines surrealism as a style consisting "of visions and dreams that are free from conscious rational control." Could there be a more apt representation of how Trump, aided and abetted by South Dakota's all-GOP congressional delegation, has handled the economy-shattering effects of his tariff fixation?  First, these so-called Republicans have abandoned their party's historic commitment to free trade, which has been the foundation of our state's ag economy for many years.  Then these so-called Republicans have socialized the financial pain of South Dakota's farmers by promising them part of the $12 billion that the Trump administration will dole out to make up for the losses created by the looming trade war.  And lately, these so-called Republicans are subscribing to the laughable notion that Trump's trade war-mentality is designed to force abandonment of tariffs altogether.  That our state's economy is getting crushed by the process reminds me of what I often heard when I was a Marine fighting in Vietnam:  "We had to destroy the village in order to save it."
     And now, as if the collective loss of "conscious, rational control" within the Republican party hasn't done enough damage to our state's ag economy, we're confronted with another bit of headstrong nonsense aimed at South Dakota's tourism sector.  President Trump announced over the past weekend that if he can't get the funding he wants for his border wall by September that he'll do what he can to shut down the government altogether.  I have no doubt that I'm speaking for many of my counterparts in the tourism biz (which is how I make a buck), when I say that  this crazy and surrealistic nonsense has to stop.  Why?  Because the last time we had a fiasco like this, during October of 2013, the government shutdown instigated by the GOP-dominated U.S. House of Representatives led to the closing of our national parks, monuments and caves--just in time to wipe out the lucrative Autumn tourism season that is so important to our local economy.  Talk about unintended consequences.  The Rapid City Journal headlined in its story on the subject that South Dakota's economy was "reeling" from the effects of the shutdown.  My peers and I shared stories about constricted bottom lines and staffers whose paychecks were severely cut just as the holiday shopping season was getting into gear.  That shutdown lasted for the first two weeks of October, but the aftereffects lingered throughout the month as news about the national park and monument closures drastically cut down business for the rest of the season.  October 2013 sales tax receipts in Keystone, the town adjacent to Mt. Rushmore, were down 32 percent from the previous year.  If there's an "art" to this, it won't get much appreciation from those who have to deal with the replay of a government shutdown.

Tuesday, July 24, 2018

Only In South Dakota Could Billie Sutton Pass For A Democrat

     Nobody expected Democrat Billie Sutton's campaign for governor to be driven by his

Can He Ride Herd On The Economy?
desire to create a new society for us South Dakotans.  Lately though, even his credentials as an agent for modest but meaningful change seem shaky.  He's stuck on the status quo and he made that clear enough during a seven minute interview with Todd Epp on KELO-radio last week.    His identification with Republican-majority dogma is already well known.  Sutton has a strong anti-abortion voting record, his 80% rating by South Dakota Right To Life speaking for itself.  Ditto his 79% rating by the National Rifle Association.  Siding with those organizations 4 out of 5 times makes him more than just "safe" when it comes to which side he's chosen in the "culture wars."  He's a full-blown ally of the GOP.  Like it or not,  Democrats have to swallow their pride and accept Sutton's affinity with Republicans on abortion and guns, and his party faithful seem to be doing so with a pragmatic shrug.
  All that has been a given up to now, but Sutton's KELO interview revealed an even more Republican-like attitude toward the ultra-important matter of taxation.  When quizzed about a state income tax, Sutton unequivocally said, "I'm opposed."  This was the politically realistic response, no question, but his reasoning behind that position was programmed and reminiscent of the hackneyed rhetoric that has supported the repeated failure of Republican government in South Dakota to move this state forward economically.  When asked why our state shouldn't be taxing income, Sutton supported the present and disdained the future by saying that "we are attracting more people here and attracting businesses here.  We have a very good welcoming business community and culture here in South Dakota.  We want to keep it that way."
     Keeping it "that way" is a woefully poor standard to maintain in South Dakota.  Even Sutton's opponent, Republican Kristi Noem, acknowledged as much last Spring when she declared that "our economy is falling behind." Our state's economic performance relative to the United States and the surrounding region has been awful.  More pointedly, "that way" has been surpassed by our surrounding states, most of whom have an income tax.  The management and consulting behemoth McKinsey and Company just released a table comparing economic conditions by state, using rates of in-migration of millenials as the standard for comparison.  Published in U.S. News and World Report last May, it ranks South Dakota behind the five of our immediate neighbors (Minnesota, North Dakota, Montana, Iowa, and Nebraska) that have a state income tax.  We're at the back of the pack, along with Wyoming, another state with no income tax.  Sutton's politically obligatory reasoning for opposing an income tax in South Dakota is understandable enough, but there's no way to claim that it has something to do with attracting more people and businesses when the comparisons say otherwise.  Promising to be a caretaker of the "same-oh, same-oh" makes Sutton's comfort level with South Dakota's economic status quo unnerving in a state that consistently has trouble keeping up with the rest of the country.

Tuesday, July 17, 2018

South Dakota's Republican Leaders Are A Complacent Lot

    What is it about the idea of bold leadership that makes South Dakota's Republican
What Does SD's GOP Have
Against Elephants?
officials run for cover?
  On the state level there's a bridge between the functions of management and leadership that I don't think has been traversed since, like him or not, Bill Janklow was governor about 20 years ago.  Last Monday Governor Dennis Daugaard was celebrating the state's $17 million surplus--South Dakota's seventh consecutive year in the black--by claiming that a structurally balanced budget "was my number one priority when I took office and it still is as I finish my term as Governor."   I don't get how the modifier "structurally" has any relevance in a state where ongoing revenues are impossible to predict, given the volatile nature of the commodity markets that dominate our state's agriculturally-dependent economy. Laudable as it may sound, Daugaard's commitment doesn't mean much in a state that has had a balanced-budget amendment in its Constitution since 2012.  Basically, Daugaard is congratulating his administration for adhering to the state constitution.  Rather than sending his lame-duck governorship off with gratuitous fanfare, a requiem for Daugaard's years in the statehouse seems appropriate.  Consider that on a per capita basis, South Dakota's GDP growth has persistently lagged the nation and the region.  Daugaard gets some credit for navigating the revenue shortfalls that have plagued this state in recent years, but on providing the strong and visionary leadership it takes to advance South Dakota's economy forcefully enough to keep up with the rest of the country, he rates a "meh."
     On the federal level, the situation is much the same.  Our GOP trio of Kristi Noem in the U.S. House and Mike Rounds and John Thune in the Senate are mired in complacency.  They seem helpless to do anything about the looming financial catastrophe that will strike South Dakota farmers as President Trump's trade war unfolds.  Noem meekly said recently that falling commodity prices "are very concerning to me."  His Trump-deference in full view, Mike Rounds was on Meet The Press last week telling Chuck Todd that South Dakota farmers "need to share and continue to share their concerns."  A month ago John Thune was belaboring the obvious by telling Secretary of Commerce Wilbur Ross that a trade war would have a "harmful effect" on farmers.  Apparently, expressing concern and telling farmers they have to speak up for themselves is the closest the three of these can come to pushing for congressional action that might offset President Trump's potentially ruinous trade shenanigans. As for Republican Congressional candidate Dusty Johnson, he's part of the do-nothing cabal.  He told the Sioux Falls Argus Leader last week that "congressional involvement, at least at this time, is going to inject more politics into it."  To Johnson fending off the collapse of farm commodity prices is a political event, to be shunned by our state's elected officials . . . "at least at this time."  So when is the "right time" to act?  Johnson doesn't have a clue.  The wussiness goes on.   Our congresspeople need to live up to their job description as "representatives."  Their wordplay hasn't stemmed the financial slaughter occurring in our ag sector.  Political intimidation from the Trump administration has paralyzed our federal reps.

Tuesday, July 10, 2018

In South Dakota, We're All Soybean Farmers

     The South Dakota Farm Bureau doesn't have much in the way of moxie these days.  Its president, Scott VanderWal was on KELO-radio last Friday acknowledging the devastating potential of President Trump's tariffs on our state's corn and soybean farmers.  He sounded the appropriate call for alarm by noting that "if we disrupt trade like we are now with the farm economy in poor shape . . . it's going to be economically devastating."  The prospect of farmers selling this year's crop at prices a good fifteen to twenty percent lower than what markets were expecting last Spring, just before Trump's trade war-fixation turned into policy has walloped South Dakota's farmers.
     "Devastating" was certainly the right word to describe the situation, but that's where the
SD Farmers Talk Soybeans To China
August, 2017
strong language ended. 
The logical follow-up to VanderWal's alarming prognosis would seem to have been a call to action but what we got instead was a call to timidity.  He said South Dakota's farmers need to make their voices heard in Washington, "but we have to be careful how we do that because he (Trump) doesn't respond to attacks very well, or perceived attacks." That squeamishness is probably the reason our politically wimpish congressional delegation hasn't been more forceful in criticizing, if not altogether condemning, Trump's tariff gambit.   Maybe it's just me, but it seems like a much more muscular response to the president's threat of financial devastation to South Dakota's farmers is in order.  With Trump, vapidity won't get it.  If the Farm Bureau's approach to the financial armageddon predicted by VanderWal were limited to its members, there wouldn't be much reason for the rest of us South Dakotans to stick our noses into their business.  But as we've heard relentlessly for the past few years, persistent softness in farm income has hurt the state's overall economy.  To a real extent, all of us in South Dakota are farmers, dependent as we are on the condition of our crops and the money they bring in to the state.
     South Dakota's current soybean crop has experienced a $500 million paper loss since last Spring's market peak.  That's a lot of pain for a small state like ours to absorb.  We all have a stake in this.  What's more, the need for getting through to Trump about the "devastating" potential of his trade policies isn't just a short-term thing. There are long-term urgencies to contend with.  Agricultural media have been bursting with news about how China, the world's largest soybean importer, is making it a national policy to build domestic supplies by subsidizing its farmers heavily and seeking new suppliers, including Russia, to replace an American source that has suddenly turned toxic in a geo-political sense.  Considering that about half of the U.S.A.'s annual soybean harvest of 4 billion bushels is exported and that two-thirds of those exports go to China, we're talking about a serious game-changer here.  Even if China's rapacious demand for soybeans forces the country to take a while before it weans itself away from American supplies altogether, we run the risk of this game of tariff-chicken becoming a catalyst for changes in Chinese buying behavior that in turn creates a new network of suppliers for Americans to compete against. In that scenario, the downward pressure on prices will be persistent and painful.

Tuesday, July 3, 2018

From The Z To Belle Fourche, An Old Warrior Remembers

     On the Fourth of July I'll be marching proudly with a contingent of Marines in the Belle
Immigrant Milking Cows
Turner County, SD
Fourche parade
.  So many pungent ironies will be running through my mind.  Fifty one years ago on the Fourth I was a radioman near the Demilitarized Zone in Vietnam, about to get airlifted into a desperate fight nearby, the scuttlebutt being that I was replacing one of the many  radiomen in the field that were dead.  I cursed the war.  I cursed Lyndon Johnson.  I cursed the Halls of Montezuma.  Not yet twenty, I knew I was going to die.
     But it wasn't meant to be.  Enough air cover came in to drive the enemy back to their sanctuary in the Z (short for DMZ, aka the Demilitarized Zone), where we couldn't chase them, allowing the hostilities to come to a pause.  I got reprieved.  Though there were plenty of fights before and after (OMG, you should've seen September 3, 1967, at Dong Ha.  OMG.), that particular engagement, where I never even came within shooting range of the action, scared me the most.
     It was a tough way to become a citizen of the United States, but become a bona-fide, card-carrying American, I did.  Having come over from the shambles of post-war Europe in 1950 with my parents and baby sister, I probably was naturalized along with them a few years later.  Just to make sure, though, I enlisted in the Marines to pick up an automatic naturalization via that route.  For all these many years since then I never gave the fact of my naturalized status a second thought.  Then along came Trump.  I just about couldn't believe it when he made a point last February about  wanting an immigration policy that favored educated and skilled emigres.  If that were the policy back when I checked in at Ellis Island, my barely educated family of eastern Mediterranean (Greek and Armenian) "po' folk" would have been locked out.  And that would have been a shame, because, all modesty abandoned, I doubt that a more proudly American family could have been nurtured by this country, native born or not.
     More specifically, I doubt that the state of South Dakota could have turned out a more productive and contributing family.  I often wonder if most South Dakotans know how many immigrants are a part of the modern fabric of this state.  According to the American Immigration Council, twelve percent of our state's manufacturing workers are immigrants.  Ten percent of our state's building maintenance workers are immigrants.  Turkey processors in Huron now employ several hundred ethnic-Karen refugees from Myanmar.  Given the nature of the work, I'm sure many of these people don't have education and skills levels that would conform to an immigration policy that shuns the untutored.  According to the AIC, nearly 60% of South Dakota's immigrant population has a high-school diploma or less, the "or less" faction making up about 35% of the new arrivals.  Keeping these people out of South Dakota's labor pool would make a tight situation even worse for employers who chronically struggle to deal with our labor shortage.
     And, writing as the son of those in the "or less" category, the children of these families stream into the general population with educations and ambitions that have made this country what it is. Sorting out the good from the bad is one thing, a mandatory thing,  but to deny the U.S.A. its historic source of energy by being overly restrictive about who gets to enter this country is a rejection of a success story that is the American experience.