VENEXITING BEYOND CHAOS

Inflation doesn’t exist in real life. ~ Luis Salas 

The Bolivarian Republic of Venezuela has been making headlines for all the wrong reasons. Under the nation’s socialist dictator, Nicholas Maduro, Venezuela has suffered from epic socio-economic mismanagement, stratospheric inflation and colossal emigration.

Mr. Maduro, a former bus-driver, callously blocked needed food aid from entering his ailing, corrupt petroleum state several weeks ago. His thoroughly misguided, cruel policies have caused 3.4 million Venezuelans – more than 10% of its population – to Venexit across its borders into several neighboring nations including Columbia, Brazil and Trinidad and Tobago. Among other things, President Maduro has given socialism (admittedly, an extreme and horribly-implemented variety) a very bad name.

Last month Juan Guaido, an opposition leader, proclaimed himself the rightful president of Venezuela because of widespread election “irregularities” that resulted in Mr. Maduro’s victory last year. Mr. Guaido has received the support of the US and 50 other nations that have recognized him as the president, not Mr. Maduro. For the last week Mr. Guaido has travelled through South America to shore up his broad but thin international backing. He apparently re-entered his homeland today, but fears of being arrested by Mr. Maduro’s forces continue. No matter how this key political issue may be resolved, Venezuelans endure their suffering every day.  

I here examine the on-going, dark humanitarian tragedy of Venezuela and compare its horrific predicament to a much lower-profile, far brighter South American nation, the Oriental Republic of Uruguay. Yup, that’s Uruguay’s official name.

In addition to being an interesting place, Uruguay is an etymologically remarkable word because it is one of the few that has three u’s in the span of seven letters, with no q’s to boot. Another even shorter three-u word is geographically related. Urubu is a black vulture that inhabits Uruguay, and also is the name of not one, but two rivers in Brazil, Uruguay’s northeastern neighbor.

Unlike Venezuela, for the last 35 years Uruguay has been a well-functioning constitutional democracy. Its government has been the most progressive of any in South America: abortion was legalized in 2012, followed by same-sex marriage and cannabis in 2013. Uruguayan athletes have won 10 Olympic medals, including two gold medals for soccer, long ago. Venezuelan athletes have won 15 Olympic medals, including two gold medals, one in fencing and one in boxing.

Moving to the un-medaled dark side, Venezuela holds the ignominious title of the world’s most miserable country for the past three years, according to the Hanke Misery Index. Currently, Venezuela “beat” Syria, the 2nd most miserable country, by a hands-down factor of 10x, principally because of the government’s multi-faceted socio-economic malfeasance.

The table below compares Venezuela and Uruguay by 13 economic, geographic, health and other factors.

Comparison of Venezuela and Uruguay

Factor\Nation	Venezuela	Uruguay
Motto	Dios y Federación [God & Federation]	Libertad o Muerte, [Liberty or Death]
National drink	Chica	Mate
Olympic medals	15	10
GDP (PPP)	$381.6 billion (47)	$78.2 billion (96)
GDP real growth	-14% (222)	2.7% (127)
GDP/capita (PPP)	$12,500 (126)	$22,400 (85)
Inflation – 2017	1087.5% (226)	6.2% (189)
Population	31.7 million (43)	3.7 million (133)
Geographic size	353,841 sq. miles	68,037 sq. miles
Median age	28.7 years (96)	35.1 years (146)
Infant mortality	11.9 deaths/103 births (107)	8.1 deaths/103 births (73)
Maternal mortality	95 deaths/103 births (73)	15 deaths/103 births (137)
Life expectancy at birth	76.2 years (93)	77.6 years (69)
Petroleum reserves	298.4 billion barrels (1)	Nada
Figures in parentheses indicate national rank by factor. Source: CIA World Factbook.

First off, Uruguay’s motto, “Libertad o Muerte,” sounds a lot like a vocal cousin of Patrick Henry landed long ago somewhere in Uruguay. My, how haunting public phrases can hop across vast distances. And now that you know mate is its national drink, enthusiasts can set their sights on visiting charming Montevideo, Uruguay’s capital, for a cup or two. Mate is a tea-like beverage made from an infusion of dried leaves of yerba mate plant. Venezuela’s drink of choice, chica, is a fermented beverage also popular in Andean countries. It’s made with boiled rice, milk and sugar. If you’re into chica, I recommend you drink it beyond Venezuela.

Venezuela’s population is eight times larger than Uruguay’s and its territory is more than five times greater. Venezuela is 30% bigger than the state of Texas, the second largest US state. Uruguay, the second-smallest South American nation, is close to the size of Missouri. Like their disparity in physical size, the two nation’s median age is quite distinct; Venezuela’s is more than 6 years younger than Uruguay’s.

Comparing health-related factors, Uruguay’s healthcare system is shown to be superior. However, Venezuela’s and Uruguay’s life expectancy is remarkably similar, within two years of each other. But this small difference accounts for a much greater difference in the two nations’ international rankings. Uruguay’s life expectancy is ranked 69th lowest, Venezuela’s is 93rd. Infant and maternal mortality rates are not at all comparable. Uruguay’s maternal mortality is only 16% of Venezuela’s. Although Venezuela’s infant mortality rate is less than four deaths higher than Uruguay’s rate, that increase accounts for its ranking 34 nations worse than Uruguay.

The most striking differences between these two countries are found in the economic arena. Venezuela’s GDP, adjusted for purchasing power parity (PPP), is almost five times larger than Uruguay’s. It has been steadily declining during the recent past due to its misconceived economic policies; last year Venezuela’s real GDP declined by a significant 14%. Uruguay’s real GDP increased by 2.7%. Uruguay’s GDP/capita (PPP) was $22,400, 85% higher than Venezuela’s. Overall, the average Uruguayan citizen is far better off than his/her Venezuelan counterpart.

These macroeconomic dissimilarities rest on Venezuela’s mammoth inflation. For the past four years, Venezuela’s hyperinflation has crushed its citizens and its economy. In 2017 it was 1087.5%; the world’s largest, and a zillion times larger than Uruguay’s 6.2% inflation. I exaggerate, it was 175x higher. It’s impossible now to directly estimate Venezuela’s yearly inflation because the government stopped publishing reliable data after 2014. Knowledgeable economists believe Venezuela’s 2018 annual inflation was 1,370,000%, which is equivalent to prices rising 3.5% each and every day. This year, prognosticators expect inflation to reach a staggering 10,000,000%.

An historical aside regarding super hyperinflations: Even Venezuela’s astonishing price increases pale in comparison to the “winning” national inflation rate in my Hyperinflation Hall of Fame. That was the 9.63 x 10²⁶ annual inflation rate which plagued Hungary beginning in June 1945. FYI, the highest yearly inflation in US history occurred in 1779, 192%, caused principally by the costs of the Revolutionary War.

How has such a ghastly macroeconomic situation happened in Venezuela? In part by initiating appalling, ideologically-driven policies, in part by rampant corruption, in part by endlessly printing Bolivars and finally by having folks like Luis Salas appointed as Venezuelan Vice President for the Economy. In January 2016, when inflation was only 254.4%, Luis denied the very possibility of inflation, stating, “Inflation doesn’t exist in real life.” Every breathing resident of Venezuela disagreed. Luis retired for “family reasons” after less than five weeks on the job. Apparently even Nickolas Maduro couldn’t hack Luis’ incompetence and otherworldly disavowal of reality, and that’s saying something.

Venezuela’s prolonged, colossal inflation has necessitated a series of five significant devaluations of the Bolivar, starting after former President Hugo Chavez imposed strict currency controls in 2003. During several of these severe devaluations the official Venezuelan currency also changed. Since August 2018 the official currency of Venezuela has been the Bolivar soberano (VES). The market exchange rate of a US dollar and the VES is zero for all intents and purposes. Even the government’s official exchange rate for VES to dollars – 1 VES = $0.00030 (3-hundredths of one cent) – has no claim on fiscal reality. That’s right, it’s worthless with respect to the dollar, and thus with the international financial community.

In desperation last year the government launched the Venezuelan petro, its own cryptocurrency, to supplement the plummeting Bolivar. The petro’s value was based on Venezuela’s oil reserves. Within six months the forlorn petro did not appear to be functioning as a currency. The petro’s well was dry, what a surprise.

Venezuela’s external debt has blossomed to $200 billion. These issues create huge problems for its petroleum-based economy. That’s because the world’s oil is priced in dollars, something the government cannot easily or economically obtain. Using the Mar. 3 price of West Texas Intermediate (WTI) crude, a barrel of Venezuelan oil costs 184,556 VES.

The practical worthlessness of the VES, together with the stringent economic sanctions the US has imposed and international credit-reporting agencies declaring Venezuela in default with its debt payments, means the country cannot effectively export petroleum to the US or other western nations.

Consequently, Venezuela has been running out of money to pay for everything from medicine and machinery to food and clothing. Its official foreign (cash) reserves have been depleted; they are less than one-half what they were four years ago. Last week, the government apparently removed eight tons of gold from the Venezuelan Central Bank to sell abroad to raise badly needed cash.

In the good ol’ days prior to Venezuela’s hyperinflation, petroleum accounted for 95% of its exports, now it’s over 98%. Venezuela nationalized its petroleum industry in 1975. Petróleos de Venezuela, S.A. (PDVSA), the state-owned energy company, has been used as a partisan tool of the government. It overflows with political and military appointees rather than experienced engineers. Venezuela’s petroleum exports have steadily declined. Last year oil production of 1.24 million barrels a day was one-third of what it was three decades ago and the lowest since 1990, before Hugo Chavez launched his socialist revolution. Despite having the planet’s largest petroleum reserves, for the first time it imported oil to serve its needs in 2018.

Forced by its Oscar-worthy economic bungling, Venezuela is exporting its oil to China, which unsurprisingly has exercised its significant leverage in negotiating agreements with Venezuela. For Venezuela, it’s China’s way or the highway. Over the last decade China has provided Venezuela $65 billion in tied loans, cash and investment. Venezuela owes China more than $20 billion. These trade/finance agreements are similar to those that China has made with other nations like Sri Lanka. Such accords have been referred to as debt-trap diplomacy.

Who has suffered most from the Venezuelan catastrophe? It’s certainly not Mr. Maduro or his military cronies. It’s Venezuelan citizens, whose 1.8 billion VES per month minimum wage cannot buy food, medicines, clothing, or much of anything else in empty-shelved stores. Venezuelans’ daily plight is an entire world apart from tranquilo Uruguayans. That’s why they’re Venexiting across the border.

GREEN DEALING

The future will be green or not at all. ~ Bob Brown  

Rep. Alexandria Ocasio-Cortez (OAC), Sen. Ed Markley and their fellow Green Dealers may be in their ascendency. Their Feb. 7 introduction of the Green New Deal (GND) certainly got the media’s attention. So much so that it was promptly designated another key litmus test that all Democrats vying for the 2020 presidential nomination must judge. How many Dem candidates are there now? It seems like at least 23; with the list including Pete Buttigieg [mayor of Ft. Wayne, IN] but at this moment it’s merely 13 and sure to rise.

After Medicare for All appeared at the top of candidates’ litmus tests several weeks ago, it’s now just basic blue and the GND now basks as uppermost. These litmus tests are being tossed at candidates as each new “hot topic” newly emerges and the media decides it’s one that candidates must instantaneously adopt or reject. Unfortunately, most candidates readily take the bait before understanding what they’ve signed on to. These repeated tests must make each candidate feel like they’re back in high school. Ah, the good ol’ days.

Green Dealers like OAC seem to believe that shouting from the proverbial tippy-top of endangered redwood trees, combined with a fervent belief that they’re holding a royal flush of solutions, is the best way to change laws. Others, including the many more taciturn Democrats, likely disagree. OAC hopes the GND manifesto will rearrange everyone’s priorities, now. Why; because she has gladly taken the scepter of lead spokesperson for the capital “P” Progressive clan at the capital “C” US Capitol and beyond. She also sees herself as savior of the truly environmentally righteous (or is it leftous) across their much-expanded purview. This expansion comes from the nature of progressivism.

Progressivism is progressive. Over time it seeks ever larger moral advance. If progressives have their way, the list of things considered unequal, unjust and unworthy will broaden, as the scope of the GND’s “environmental” agenda has swelled. This can be a good, but. Here’s a recent example of progressivism’s progressiveness: Additional New York City regulatory guidelines to be released this week will give legal recourse to individuals who have been harassed, punished or fired because of the style of their hair. NYC will henceforth ban discrimination based on an individual’s hair style, which will now be considered racial discrimination.

Because I live way outside the DC beltway, I wasn’t aware of the GND’s initial rounds of formulation, based on gathering opinions of experts and stakeholders. There were some discussions, right? If so, it’s not obvious. Instead, it appears OAC and Markley couldn’t and didn’t say no to any progressive idea that’s somehow connected to an improved “environment” for needful people, especially workers. Beyond decarbonizing the entire US economy in 11 years, the GND’s extra-environmental commandments, er objectives include the government being responsible for:

·        guaranteed jobs, with living, sustainable wages and full benefits for all workers, including folks who have been unable or unwilling to work;

·        affordable, adequate and energy-efficient housing for all;

·        universal, high-quality health care provided by a single-payer;

·        competitive economic markets not clouded by nasty monopolies and oligopolies; and

·        high-quality, free public college tuition for all.

In other words, the GND comes in many varieties of green that will cost lots of green; likely over $40 trillion during the next decade. And these multiple, herculean goals must be accomplished by 2030, only a few proverbial ticks of the governmental clock to entirely revamp the world’s largest economy. Sir Thomas More, the creator of utopian literature 500 years ago, would be impressed with the GND.

Advocates of the GND, being fantasists, are insisting that no trade-offs will be needed nor sacrifices incurred in order to satisfy their manifesto’s objectives. Indeed, AOC has stated, “The question isn’t how will we pay for it, but what is the cost of inaction, and what will we do with our new shared prosperity created by the investments in the Green New Deal.” [Emphasis added.]

She’s not worried about how to pay for these grand objectives perhaps because progressives like her are thoroughly at one with emerging Modern Macroeconomic Theory (MMT). MMT posits that sizeable government deficit spending, which increases the nation’s public debt, isn’t a concern at all. The government can keep printing Benjamins 24/7 as long as inflation doesn’t rise to an unpleasant level.

Fiscal irony is very much alive and well in Washington. MMT’s semi-magical leftish thinking is completely in line with solidly-right Republican conservatives who happily passed their unfunded 2017 Tax Cuts and Jobs Act that’s raised the US debt to historically high levels. This year’s federal budget deficit will be nearly $1 trillion. The 2017 tax law revealed Repubs to be hyper-hypocritical deficit scolds. They condemn “excessive” government expenditures only when it involves Democratic policy, not their own.  

Let’s look at the GND’s principal environmental objective, rapid decarbonization of our $20.7 trillion economy. I spent the majority of my career working to promote and assess energy efficiency programs and policies. I’m all in with a greener America. The GND’s objective of requiring the entire nation to produce 100% of its energy from renewable sources and produce net zero carbon emissions by 2030 is as astonishing as it is realistically unattainable. The International Panel on Climate Change (IPPC) has previously and ambitiously proposed to cut global emissions just by 40% to 60% by 2030, and hopefully get to net zero by 2050. How does OAC and her Green Dealers propose do to this in 20 less years than the IPPC? They never say; that’s for others to stress about.

For reference, in 2017 (a baker’s dozen years before 2030) just 18% of total US power generation was produced from renewable energy sources, an all-time high. In the nine years between 2008 and 2017 this renewable share of power generation doubled, an impressive accomplishment. The GND’s goal for 100% of US energy use, not just power generation (electric power accounts for about 16% of total energy use), to be produced from renewable sources, would require renewable energy to increase by 550% over the next 13 years. The Green Dealers leave reality by the side of their utopian, all electric-vehicle throughways to the future.

I have no doubts that were only one of the GND’s lofty objectives to be undertaken; it could certainly benefit us all and would create many prosperous winners in that endeavor. But there also would be losers. For example, the vast majority of workers in the coal, oil, gas and petrochemical industries (1.44 million people, over half of which are blue-collar workers) would be out of jobs. Sure, job retraining is clearly called for, but in the undefined interim that can last for a while in job retraining, such workers would be SOL. They are not likely to be happy GND campers, nor would their employers. But no worries; each of them would be offered a government-guaranteed job.

Eliminating the internal combustion engine as the transportation sector’s motive power, another GND goal, would likewise lead to numerous lost high-paying manufacturing jobs and large economic dislocation in the short- to medium-term. Transportation of people and goods accounts for 29% of US total energy use. The auto industry is one of the largest in the US, contributing about 3% to the US GDP. Three percent seems like a small number, but it works out to $620 billion in cumulative yearly economic activity. That’s not a small number to trifle with. In 2018, US electric vehicles (EVs) sales reached an all-time high of 361,300, accounting for 2.1% of total vehicle sales. Getting to 100% EVs in 11 years boggles my mind’s engine.

As always, trade-offs will be present if and when the government begins investing in GND’s vast decarbonization. Any and all trade-offs have been denied by the Green Dealers, together with dismissing the substantial costs of attaining the manifesto’s goals. Such denials weaken OAC’s Green Dealing in the jungles of Congress and make the prospect of political victory much smaller. She might not care.

However, if AOC et al. really do want to create actual legislation based on the GND, then it’s incumbent on them to transparently develop specific plans for how the GND objectives could be met by 2030; how these objectives can overcome inevitable challenges; and what trade-offs, if any, the Green Dealers are willing to make to secure decarbonization within 11 years. That process is unexciting and tedious compared to commandment creation.

Maybe OAC is playing a longer game. Fundamentally, I suspect the Green Dealers don’t view their GND as a basis for actual legislation. In this sense it’s worthwhile remembering that Nancy Pelosi has already agreed to step down as Speaker by 2022. After all, the GND will require unprecedented and very big expansions of federal, state and local government programs, oversight and regulation. This is entirely consistent with the precepts of the few elected democratic socialists, like AOC and Sen. Bernie Sanders. This future is not consistent for the majority of current Congressional Democrats. Speaker Pelosi has given the GND a “seal clap,” hardly unequivocal support. But who knows what the future will bring.

With all its practical and political challenges I imagine AOC and other acolytes see their GND more as an edict for progressives of every stripe to rally around their maypole, not as a summarized playbook for real legislation.

Any specific legislation that might have a chance of becoming law coming through Speaker Pelosi and other “establishment Democrats” will elicit cries of derision from progressives. Because Democrat decrees that could actually pass the House will be instantly declared limited, insufficient and unworthy by Green Dealers. They have already claimed the very highest green ground, even if it’s realistically and politically impossible. They’ve now planted their flag, the GND, atop an ever-green Mt. Everest, without having to worry about actually climbing it.

It will be a long time before AOC and Green Dealers might gain enough votes in the House to pass her GND. I’m not holding my exhaled CO2-filled breath. Nevertheless, she has three million Twitter followers right now who have rallied behind her and probably the manifesto. To these devotees, the GND and its 6 commandments are gospel for achieving an alleged more perfect and far greener future. Alas, I’m not one of them; I’m too pragmatic.

  

BEING THERE AND WHERE

Finally, in conclusion, let me just say this. ~ Peter Sellers 

The president’s delayed SOTU (acronymic Washington slang for the State of the Union speech) was eviscerated in a recent Slate story, stating he said nothing new and pretty much had nothing to say. “Trump was just a piece of furniture along the wall [not his wall] of a room. He was just … there.“

This last sentence whisked me away on a return voyage to Peter Sellers’ “Being There: a story of chance,” the brilliant 1979 satiric commentary on Washington politics. Being There’s trailer is here.

Peter Sellers skillfully plays the movie’s simpleton protagonist, Chance the Gardener, who also assumes the name Chauncey Gardiner. Chauncey is a truly passive non-agressive schlub who lives in Washington, D.C. and tends to his rich employer’s garden. When he’s not gardening, his only other activity is watching TV. His world is his garden, literally. The movie follows Chauncey through a series of wholly unexpected, astonishing circumstances as he becomes a confidante of the US President. The proposition of the movie is: Could a person of seemingly diminished intelligence ascend to the heights of political power in the US? Peter Sellers provides us with the unsettling answer based on his dexterous portrayal of Chauncey.

In one of the movie’s scenes the president asks Chauncey “Do you think we can stimulate [economic] growth through temporary incentives?” After pausing for a long time (it’s actually just ten seconds), Chauncey latches onto the word growth, which he recognizes, and then slowly replies, “As long as the roots are not severed, all is well, and all will be well in the garden. In a garden, growth has its season. First comes Spring and Summer. But then we have Fall and Winter. Then we get Spring and Summer again.”

The president is initially dumbfounded by Chauncey’s answer that appears utterly nonresponsive. But after the president’s colleague misinterprets Chauncey’s declaration as a profound comment on economic growth, by saying “We welcome the inevitable seasons of nature, but we’re upset by the seasons of the economy.” The president finally declares, “Well Mr. Gardiner, I must admit that is one of the most refreshing and optimistic statements I’ve heard in a very, very long time. I admire your good, solid sense. That’s precisely what we lack on Capitol Hill.” And thus, the schlub becomes the savant in the nation’s vain political stratosphere.

Sellers' performance of Chance/Chauncey was universally praised by critics and audiences. Sellers commented on his role as Chance/Chauncey, “My ambition in the cinema, since I came across it, was to play Chance. I have realized that ambition, and so I have no more.” He died the year after the picture was released.

Is cinematic history now repeating itself, or at least rhyming, in real life 40 years later? Can Chauncey be a representation of President #45? After dutiful deliberation, I’d say yes. Except that Chauncey has none of #45’s singular egotism, bellicose intransience, unfounded sense of self-worth, profound untruthfulness or thin skin. The two do share, however, an extraordinary inability to see the actual world beyond one solitary, restricted perspective. Chauncey’s sole perspective is as a gardener; #45’s seems to be his bombastic conceit. Chauncey's and #45's rise to prominence is likely due in no small part to Washington's miasmatic atmosphere. 

It’s not now so much about if #45 is being there as is he being where? We all know where his world is defined by: falsehood, prejudice, extremism and ego. Chauncey’s world is defined by the plants he carefully tends. Fewer and fewer Americans want #45 to be where he is. Just like Chauncey, I believe #45 continues to walk on ever-thinning ice towards his just demise. But that future requires help.

Can Dems help by providing a broadly-appealing, alternative candidate and pathway back to what in pre-Trumpian times passed as workable normalcy? I certainly hope so for all our sakes. I believe the Dems’ pathway should not rest on fundamentally and radically expanding the role of government or by mandating Senatorial impeachment proceedings. Instead, this pathway rests on American citizens decisively voting #45 out of office on Nov. 3, 2020; and having him not being there at 1600 Pennsylvania Avenue on Jan. 20, 2021.

FOWL TIMES

Left wing, chicken wing, it don’t make no difference to me. ~ Woodie Guthrie

Are these fowl times? Most certainly they are.

I’m not referring to the all-too-extended federal government shut-down or the deluded, inept man who’s responsible for it. No, I’m referring to the swelling success of Gallus gallus domesticus, a subspecies of the red junglefowl, otherwise known as chicken. During the past several decades chicken has become the world’s most popular meat.

Chickens were first domesticated in India and South East Asia around 6000 BCE. They were not kept strictly for food until much later, probably the 4th to 2nd centuries BCE. There are hundreds of chicken breeds that differ principally by primary use, whether for eggs, meat, or ornamental purposes, as well as size, amount and color of feathering and plumage, number of toes (some have four, others five), egg color and origin.

Chickens are no longer little; they account for 23 billion, 77%, of the 30 billion land animals now living on farms. As shown in the chart below, chicken surpassed pork consumption in 2000 and hasn’t looked back yet. They have better vision than humans and can see the ultraviolet spectrum. Average per person consumption of chicken is 92.1 lb. Beef consumption is just half that of chicken. Chicken has captured the fancy of meat-eaters around the world, from Chicken Tandoori and General Tso chicken to southern fried chicken and, of course, chicken nuggets. Above the world, Thai chicken was the NASA shuttle astronauts’ favorite meal. Chickens have flown their coops onto our meal tables in a big way. My Google search for “chicken recipes” resulted in 901 million hits; “beef recipes” garnered a mere 647 million.

Source: The Economist and OECD

Chicken is flying ever higher as our preferred meat, thus the US produces a lot of it. In 2017, 8.91 billion chickens were consumed. One important reason for chicken’s increase in consumption is its price. The real price of chicken has diminished to one-third that of beef. Chickens have also grown heavier due to breeding. The average weight of an almost 2 month old broiler chicken has increased over 200% from 1978 to 2005. Frank Lloyd Wright once said, “Regard it as just as desirable to build a chicken house as to build a cathedral.” The average commercial poultry farm processes over 38,000 chickens each year; that’s some cathedral.

What state is the largest producer of chickens in the US? It’s Georgia, which produces 9.3 million pounds of chicken every day. The largest producer of chicken eggs is Iowa, whose hens lay 15.9 billion eggs each year. Every year, the US produces 27 chickens for each and every person and 325 eggs per person. The most popular type of fried or frozen chicken eaten in America is the nugget.

Chicken nuggets were invented in the 1950s by Robert Baker, a food science professor at Cornell University, and published as an unpatented academic work product. Baker and his associates called this bite-sized piece of chicken, coated in batter and then deep fried the "Chicken Crispie." McDonalds first introduced its McNuggets in 1983. My quest to determine how many chicken McNuggets are sold was not successful. McDonalds says it sells 550 million BigMacs each year in the US, but not how many nuggets. Perhaps they can’t count that high. I did discover that 69.4 million Americans consumed nuggets in 2018.

McDonalds McNuggets, like all chicken nuggets, are manufactured. The breast meat is ground and added to a blender with a mix of seasonings and chicken skin, which acts as a natural binder and is said to add flavor. Next, the chicken mixture is molded into the four signature McNugget shapes: the ball, the bell, the boot and the bowtie. The shapes are coated in a light batter and then coated again in a thicker tempura batter. The double-breaded nuggets are par-fried at the factory, which sets the batter but keeps the chicken raw until it's fully fried and served at the restaurant. A 4-nugget box has 180 calories, 11g of fat, 11g of carbohydrate and 10g of protein. There’s also a 50-nugget box that has 2210 calories if you’re especially famished. Yum.

But chickens don’t just come in boxes; they roam a small but increasing number of American backyards. From a 2013 USDA study, "Raising chickens in urban environments is a growing phenomenon in the US. Urban chicken flocks are not part of the commercial poultry industry; however, they sometimes provide chicken meat and eggs to local food systems such as farmers’ markets.” The study found that 0.8% of all households own chickens. Chickens were owned on 4.3% of single-family homes of one acre or more.

A survey of urban, suburban and rural household chicken keepers revealed that most (71%) respondents owned fewer than 10 chickens and had kept chickens for less than 5 yr (70%). Major reasons for keeping chickens were as food for home use (95%), gardening partners (63%), pets (57%), or a combination of these. 

      Part of the growing interest in backyard chicken keeping is that it’s crunchy. Witness the California Poultry Federation’s, urban flock workshops described at their Backyard Flock Information Page: You’ll have to hurry if you want to attend their latest workshop on Jan. 27, 2019 in Stockton that focuses on flock care, management and pest/disease control. Aesop said long ago don’t count your chickens before they’re hatched. However, backyard chicken flocks are spreading their wings across America.

So when you next want to eat some chicken remember Guy Fieri’s maxim, no one likes rubbery chicken, and cook it tenderly. You’ll be in good company.

FAREWELL TO 2018, A NOTABLE AND ARDUOUS YEAR

Please cherish the craziness that we all have within ourselves. ~ Nobukazu Kuriki[1]

Happy New Year! Welcome to 2019, the year of the Pig, according to the Chinese Zodiac. At the turn of this New Year it seems more challenging than ever to maintain an affirmative attitude. Our positivism and empathy quotient have faded from the onslaught of both political and personal anxieties. The media’s implacable focus on what’s unsuitable in this nation and the world makes being an optimista ever more challenging.

I refuse to succumb to such pessimista opinion. As I highlight below, humanity is still improving, despite disparities, tragedies and imperfections. 2018 was, in the largest of pictures, probably the best year ever. The sun does shine on the world as a whole amidst the clouds of misrule, inequity and selfism.

Before delving into our part of the world, the achievements we’ve made globally as well as nationally are as impressive as they are unprecedented.

The year’s single-most key political advancement (I hope) is the Democrats have regained control of the House of Representatives, again under the able leadership of NDP (as Nancy Pelosi now appears to be referred to by the inside-the-Beltway crowd, where initials become names).

Outside of the overly-nasty political realm, 2018 was in many ways the best year yet to be a human living on Earth. The Economist has nicely summarized several of our vital collective accomplishments that unfortunately are not as acknowledged as they should be.

The liberal world of the early 21st century is more prosperous, healthy and peaceful than ever before. For the first time in human history, starvation kills fewer people than obesity; plagues kill fewer people than old age; and violence kills fewer people than accidents. If you think we should go back to some pre-liberal golden age, please name the year in which humankind was in better shape than in the early 21st century. Was it 1918? 1718? 1218?

This summary harkens Franklin Pierce Adams’ apt quote: Nothing is more responsible for the good old days than a bad memory. Average US life expectancy in 2018 was 78.6 years. 1918 celebrated the end of World War I, which killed up to 100 million people worldwide; the Spanish Flu pandemic hit the US (in Kansas); and US troops engaged Yaqui Indian warriors in Arizona, one of the last battles of the American Indian Wars. US life expectancy was 53.5 years. 1719 saw British forces defeat the Scottish Jacobites and their Spanish allies; Daniel Defoe published Robinson Crusoe; Andrew Bradford started the American Weekly Mercury, Pennsylvania's first newspaper. Average life expectancy was 36 years. 1218 Damietta, Egypt fell to the Crusaders after a siege and thereafter St. Francis of Assisi introduced Catholicism into Egypt; the windmill was first introduced to China. Life expectancy in the middle ages was 31.3 years.

Here’s some additional, worthy socio-economic achievements that should be recognized about the recently departed 2018, published in Quartz. Worldwide, the number of people living without electricity fell below 1 billion. Electricity access is essential to health, education, and economic stability and all of those measures also improved in the past year. One of the simplest ways to assess global poverty is to compare the difference between what the average person makes a day, and a predetermined global poverty line. The difference was about $0.25 in 1990, and is now nearing $0.05; every year the poverty gap closes a little more. Meanwhile, literacy rates have progressively climbed for decades, and even a small change can make a huge difference: The 0.23 percentage-point increase from 2015 to 2016 means about 11.5 million more people can read. Global public health continued its steady improvements. World infant mortality declined in 2017 to 29 deaths/1000 live births. In 1990 it was 65 deaths/1000 live births. Global average life expectancy at birth rose to 72.0 years in 2016; in 1990 it was 62.4 years. Over the last 65 years the global literacy rate increased by 4% every 5 years – from 42% in 1960 to 86% in 2015. Although only 12% of the people in the world could read and write in 1820, today the share has reversed, only 17% of the world population remains illiterate.

Global education levels continue to rise. In 1970, 28% of primary-school-age children in the world were not attending school, today this share has decline to 9% -- equivalent to 60 million children not in primary education. Data published this year show that in 2016 there were 99.7 girls enrolled in primary and secondary school for every 100 boys. For comparison, in 1986 that number was 85.1, reflecting an impressive and needed boost to gender-based educational equity.  

It’s also not all pessimista in the US now, despite assertions that our nation is suffering as never before. Key positives of 2018 include the following. US median household income reached a record $61,372 in 2017, up 1.8% from 2016. This marks the third year in a row that median household income has increased. The poverty rate also fell for the third consecutive year. In 2017, the official poverty rate was 12.3%, down from 12.7% in 2016.

A large drop in oil prices provided broad economic benefits in the last half of 2018. Petroleum that cost $107/bbl. in June sold for only $45 by year-end. For consumers, that meant gasoline prices that fell to an average $2.38/gal., compared with their peak of $3.70 in April. All told, the drop in oil prices was equivalent to an annual tax cut of about $750 per American family. The US, using its pioneering fracking technology (that has nasty environmental effects), has become an important global petroleum producer and has directly influenced the drop in world oil prices, much to OPEC’s dismay.
The average price of a residential solar photovoltaic power system is less than one-half its level in 2010. Nearly two million US homes have solar panels installed on their roofs, representing 10 times the solar capacity as in 2010. And for the first time the share of global energy that was produced from renewables passed 10%.

Despite what nightly local news stories portray, the number of reported violent crimes committed in the US has dropped 48% since 1992. The birth rate for American teenagers dropped to 20.3 births per 1000 girls ages 15–19 in 2016 (most recent year), according to the latest fertility data. This teenage pregnancy rate represents a 9% decline from 2015 and a 67% reduction from the modern-day peak in 1991. It’s the lowest teen birth rate since 1940.

The US Labor Department just reported one of the strongest months of job gains in the last decade, with employers adding 312,000 people to payrolls in December. Wages, which had been lagging until recently, showed impressive gains. December’s year-over-year increase was 3.2%, tying October for the biggest surge since 2009. Unemployment inched up to 3.9% from last month’s 3.7%, but remains much below the 4.61% Natural Rate of Unemployment in 4Q2018. For perspective, towards the end of the last recession, the unemployment rate was 10.0%. Real Wages for lower-income workers in the US also increased in 2018. November figures show that the real cash income of hourly workers rose by a 0.8% after adjusting for inflation. This positive result is augmented when cash benefits are added to income. And finally, who could forget that the US men’s curling team won their first Olympic Gold medal last February in South Korea. You don’t remember this impressive athletic feat? [Actually they used their brooms more than their feet as they swept to victory.] Praise be.

But of course it’s not been all sweetness and growth. Casting an infectious economic pall, the media has been offering an increasing number of stories about a possible recession around a future corner. Here are five of the 64.1 million Google results I found from “the coming recession”: “Markets are signaling higher odds for a 2019 recession;” “The next recession is coming…”; “Stocks are nosediving, is a recession coming?”; “The next recession is really going to suck”; and “The next financial calamity is coming.” A recession seems almost certain, doesn’t it? Perhaps not, if you remember that economists and the markets have predicted nine of the past five recessions.

If you’re not concerned about the coming recession, then maybe you’re convinced that some facet of the inequalities of life and commerce described by newspapers, magazines and broadcasters could cloud your prospects. There certainly have been many descriptions of the ever-expanding flavors of inequity the media has been announcing. I start with the two most basic and traditional types of inequality, income and wealth.

Income. A nation’s income inequality has been an issue ever since Corrado Gini first published in 1912 his statistical measure of the distribution of income by decile of population, now known as the Gini Index. The higher the index, the more unequal is the income distribution. The US Gini Index has been slowly increasing for the past three decades. According to the World Bank, the 2016 US Gini index is 41.5, and ranked 58th most unequal of the 160 nations listed. California’s Gini Index (49.9) is the fourth most unequal state; the District of Columbia’s Gini Index is the most unequal.

Wealth. A nation’s wealth is usually more unequally distributed than income; the US is no exception. Wealth is the cumulative net worth of a person (or nation), the total value of a person’s assets (like homes, automobiles, personal valuables, businesses, savings, and investments) minus their liabilities (like loans, mortgages). Income is the amount of money that a person (or nation) receives in return for their services, sale of goods, or profit from investments during a particular period of time, say one year.

The share of our nation’s total wealth owned by the top 1% of the US population was 37.24% in 2014. In contrast, the top 1% accounted for 17.99% of gross income in 2014. By 2017, the richest 1% owned 40% of US wealth; the top 20% (folks who earn $115,000/yr or more) accounted for 90% of US wealth. The distribution of wealth in the US, like many nations, has grown more unequal since the mid-1980s.

Liberal/Progressive Democrats have made increasingly strident proclamations that the current income and wealth inequalities must be seriously remedied. Over time, reducing income and wealth inequality may increase the nation’s overall economic growth mostly because people in the middle-class and below spend a higher percentage of their income on goods and services than higher-income folks.

Progressives vow to significantly reduce economic inequality, which will require two sets of federal and state policies that are politically fraught. First, income and other taxes will need to be increased. Second, government redistribution programs will need to be expanded and/or created. Progressives strongly favor increases in welfare (e.g., food stamps), public social services, universal health care, free college, higher federal minimum wage, payoff student debt, improve infrastructure and enlarge social security. With luck, decent design, fortuitous timing and effective implementation such programs could reduce inequality over time. After Congress and the presidency are led by Democrats in 2020, such expansive redistribution programs might be politically possible.

Income and wealth redistribution requires more active government that administers more taxes and fees and expands more programs that provide services to less fortunate folks. An October 2018 national Gallup poll found that 50% of Americans say the government is doing too much, 44% say the government should do more, with 7% undecided.

Such programs are very expensive to implement. Progressive politicians rarely mention how much such redistributive programs will cost, because it could lead to electoral downfall. Relatively few voters would agree to have their taxes increased as much as these programs would require under some of the PAYGO rules that the Democratic House just passed.

Remember the fate of Washington State’s two propositions to impose a state-based carbon tax to mitigate climate change and environmental inequality? Both went down to defeat, the latest this past November. Large electoral thrashings also occurred several years ago in Colorado and Vermont, Bernie’s home state, regarding implementing state-wide Medicare for All (M4A). The legislatures couldn’t find the money except through higher taxes, and voters didn’t want to pay more taxes. California’s M4A ideas were shelved last year after initial cost estimates were calculated.

Progressives imply or explicitly state such programs would simply require increased taxes on just the rich, meaning the 1%. That’s fake news. Tax increases limited to the “rich” will be entirely insufficient to fund these programs. Liberal media sources estimate such redistributive programs could cost $42.5 trillion (T) during the next decade. Conservative estimates are much larger. There are not enough rich people and even their pockets aren’t deep enough to pay for all such programs.

To put this $42.5T in perspective, the federal government is projected to collect $44T in total tax revenues from all sources over the next decade. The 2017 Republican Tax Cuts and Jobs Act, understandably and universally decried by Democrats as irresponsible (and by House Speaker Nancy Pelosi as “Armageddon”), will cost less than $2 trillion over the decade. Thus, if these redistributive programs are implemented, they will need increased taxes from many middle-class income-earners as well as all the rich.

Other interesting and sometimes peculiar forms of inequality cited by the media include the following.

The environmental inequity of wildfires. This story mentions the 2015 Napa, CA fire that displaced scores of “poorer folks who never re-occupied their places.” Consequently “fire produces gentrification,” so even Mother Nature is pushing a localized Gini Index higher. Oh my.

Another story theorizes that data-driven medicine can worsen inequality in society. The author says that data-driven medicine will help people, but its “technological advances threaten to make a crushingly unequal system more so.” She hypothesizes that data-driven, technology-based medicine’s “knowledge gaps” between socio-economic groups will lead to better access for “privileged” groups and worse for “poor” groups. Should medical Luddites unite against more sophisticated medical databases and assessment? Perhaps.

Inequality is made worse by K-12 schools’ long summer vacations. This story fixes its attention on the impact of schools’ long-vacation-induced “summer learning loss” that is apparently not shared equally among students. In the US, children from low-income families fall farther behind in reading during the summer than peers from richer families with more access to books, museum trips, and camps. The author puzzlingly suggests that “in an era of longer lives, we should have longer, slower careers with more frequent breaks instead of short, intense careers that end abruptly in long (and costly) retirements. And in an era of lifelong learning, perhaps the school year should be changed to a year-round model.” Curiously, she doesn’t specifically suggest eliminating the multi-week Hanukkah/Solstice/Christmas/Kwanzaa vacation. And I’m not sure what a “longer, slower career” might be. From my own experiences at the local high school, teachers and staff, not to mention operators of and counselors at full-season summer camps, and possibly parents would take strong exception to her “year-round school” recommendation. This story is consistent with the sense that pretty much everything can cause increased inequality. So of course, long school vacations add to inequality.

Corporate cannabis is squandering legal weed’s promise of a more equitable society. This story laments the passing of a popular but hazy dream of better, “more equitable” times for small growers when weed is legalized. The author states that after legalization, large well-funded cannabis growers make it nearly impossible for smaller independent growers to compete with lower prices. I must have missed this particular weed mantra; that once legalized, society will become more equitable. The well-established and large black market for marijuana in California seems to be doing OK, despite legalization.

“The icon for cannabis is going to become the Marlboro Man,” Lynda Hopkins, a Sonoma County supervisor who took a lead in licensing marijuana businesses, said referring to the symbol of the tobacco industry, to which critics often compare the legalized cannabis business. “In California we’ve done what we always do — regulate, regulate, regulate, which ultimately gives significant advantage to large companies with significant economies of scale.” Legalization has been liberating for big players but for hundreds of smaller producers the paperwork alone has been enough to put them out of business; or more likely, stay in the black market’s sizeable business. A cannabis producer must submit applications to as many as five state agencies, including obtaining a certificate to ensure they are able to use a scale.

In California, Canada and every other place where recreational marijuana has been legalized, the numerous, encompassing rules, regulations and taxes favor growers and distributors who have big-time resources. The utopian dreams of small-time, mom and pop (maybe even former hippie) growers succeeding in a legalized and thus more equitable world are just that, dreams gone up in smoke.

Library fees are eliminated because they’re inequitable. Yup, the Berkeley Public Library has stopped charging late fees for overdue teen and adult books, DVDs, CDs, and magazines in an effort to make the library “more egalitarian.” The Library’s justification apparently linked disproportionate overdue fee charges to library card holders in 3 lower-income ZIP codes in Berkeley. The Library and city concluded that such fees were a “barrier to use [of the Libraries].” Before the change, if you owed overdue fees, you couldn’t check out other books.

This story illustrates the bizarre lengths my fine city will go to in using inequality as a spurious rationale for policy changes. What this will do for the already-circumcised Library budget is pretty clear. The elimination of library late fee revenues will require Berkeley taxpayers to more heavily subsidize the Library’s operations. My jaundiced view is that the Library employed this politically-correct but perverse link to “inequality” to reduce the cost of borrowing books to zero even when one doesn’t return them on time (or ever, now). More to the point, the new no-fee policy is most likely due to the Library’s desperate attempt to get more folks to actually use its services. In this Age of Google and Amazon, far fewer students and other folks ask reference librarians to help them learn the causes of the War of 1812, or actually use the library’s books. There may not be a free lunch, but in Berkeley there are “free” books. We’re now bound forever in library egalitarianism.

Onward towards a satisfying and more equitable 2019.

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[1] Mr. Kuriki was a Japanese mountaineer who, starting in 2009, attempted to climb Mt. Everest. He never summited. He died during his eighth attempt last spring. He made an art of hardship and spoke of breaking down “the barrier of negativity.”

SOYBEAN SORROWS AND LOBSTER LOSSES

How’s Trump’s trade war going for you? 

Trade is the mother of money. ~ Thomas Draxe (1613)

News about the US-China trade war has been eclipsed by the midterm elections. The elections are now (almost) over; the trade war continues.  

     Thousands of products’ prices have been increased by the US and subsequent Chinese tariffs. The US tariffs, started in May by the president, are imposed on $200 billion (B) of Chinese imported goods, 40% of 2017 Chinese imports to the US. You can see the full list of tariffed items from the US Trade Representative here. This document is 194 pages long; starting with “Frozen retail cuts of meat of swine, nesoi” all the way to “Furniture (o/than seats/than of 9402) of plastics (o/than reinforced or laminated).” In retaliation and predictably, China has imposed tariffs on roughly $60B US exports to China, which represents 46% of 2017 US exports to China. Although China has certainly stretched WTO protocols to its advantage and broken others, it’s highly doubtful that hardball tactics like 194 pages of tariffs is worth the pain and cost that’s harming soybean farmers, lobstermen and thousands of other business-people and citizens.  

The US imports more goods from China than any other nation in the world. This fact is reflected in the sizeable trade deficit the US has with China, $375.6B in 2017. China’s dramatic economic growth over the past decade has been export driven. It is the leading exporter of goods in the world, ahead of the US. China’s exports of goods represent a large 18.6% of its GDP. In contrast, US exports of goods represent just 6.9% of our GDP. As a consequence of the trade war, the monthly US trade deficit increased in September from $53.3B in August to $54.0B in September; extra costly imports increased more than curtailed exports.

In examining the current trade conflict with China, I here focus specifically on US farmers, who are enduring heavy and direct economic cross-fire from the president’s trade war. Currently, more than 20% of US agricultural exports face reciprocal tariffs from China and other countries.

I examine an incongruous pair of harvested products, soybeans and lobsters, which are now subject to Chinese tariffs. Last year, before the president initiated his tariffs, the US exported to China $21.6B of soybeans and $128.5 million of live lobsters. Before we dive into marine crustaceans, let’s first consider soybeans.

Soybeans.  The soybean (Glycine max) is a legume species native to East Asia, widely grown for its edible bean. US  farmland is awash with soybean plants, shown below. For the first time in 35 years, soybeans are now planted on more acreage than any other crop– 89 million acres. In other words, soybeans are big, very big agriculture. Soybeans are the nation’s single largest agricultural export, more than double that of corn. In part this is why China imposed a retaliatory 25% tariff on US soybean exports. The other part is based on where soybeans are grown – in true red Trump country. The top 6 soybean-producing states are rural parts of Illinois, Iowa, Minnesota, Nebraska, North Dakota and Indiana. In addition to being the source of all things in the tofu universe, unfermented soybeans are used in animal (especially pig) feedstocks, and as an ingredient for biodiesel fuel and crayons. Fermented soy foods include soy sauce.

Over the past 6 years American soybean production has increased 44% in part to meet ever-growing export demand. In 2016 US exports represented 47% of total US production. The Chinese market dominates US soybean exports; it’s 6.5 times as large as the EU, the second largest foreign market for US soybeans.

The Chinese tariffs likely have changed all that. US soybean sales to China plunged by 98% since the beginning of this year. Prices have fallen 22% since April. “It’s a big concern,” understates David Williams, a Michigan soybean farmer. In addition, the USDA expects farm incomes to drop by 13% this year. The ratio of farm debt to assets is forecast to rise to its highest level since 2009. The trade conflict, which the president initiated with steel and aluminum tariffs, has spread far afield.

Some optimistic soybean farmers hope that because they help feed the growing Chinese middle class, where soybean-fed pork has become a mainstay of their diet, China’s need for US soybeans will become more acute later this year when Brazilian soybeans – the world’s second major producer that China has recently turned to – grow scarce as their growing season ends. Hope springs eternal.

In any case, US soybean farmers have taken it in the beans with respect to their livelihood. Those of us outside the soybean belt may remember that the Trump administration has offered $3.6B to soybean farmers to offset price drops. This new subsidy will end up being about 82.5₵ per bushel, covering less than half of the farmers’ losses. Half a soybean is better than none at all, but as a non-farmer, I cringed when I learned of this announcement. Why? Because industrial ag commodity growers, like soybean farmers, already receive sizeable government subsidies – about $25B per year for “farm income stabilization,” Now they’re receiving billions more because the president initiated a trade war that’s hurting some of his political flock.

Are soybean farmers upset at the president? Some are, most aren’t. Grant Gebeke, a large soybean grower in North Dakota, isn’t happy. “I’m trying to follow and figure out who the winners are in this tariff war,” Gebeke said. “I know who one of the losers is and that’s us. And that’s painful.” In addition, he laments that “They [the US and Chinese trade negotiators] could get together tomorrow and iron this thing all out and I don’t think we’ll ever get all of our market back.” Just like happened in 1979-81, when President Carter embargoed wheat exports to the Soviet Union. Soybean farmers have been thrown under the tractor as the president’s tariff war bumbles along.

Lobsters.  Lobsters are large marine crustaceans. North Atlantic lobsters, Homarus ameicanus, are found off the ocean coasts of New England and Canada. Lobsters are sold and shipped as living animals. They can live up to 50 years in the wild. The largest lobster ever caught weighed 44.4 lb. in Nova Scotia. The preferred commercially harvested lobster is much smaller, weighing 1.25 lbs., aka “a quarter.” The largest producer and exporter of American lobsters is the state of Maine, which I’ve written about before.

The famed author David Foster Wallace wrote his “Consider the Lobster” article that was published in Gourmet magazine about the State Crustacean of Maine. Being Wallace-written, the treatise contains a fair amount of food for thought, but not about lobsters per se. He likened these creatures to giant sea insects. Wallace tells about his attending the 2003 Maine Lobster Festival, an “enormous, pungent, and extremely well-marketed” affair. Perhaps in finite jest, Wallace called these benthic denizens of the depths “garbagemen of the sea, eaters of dead stuff.” He also reminds us that our fondness for lobster meat is recent. During US Colonial times until into the 1800s lobster was considered low-class food, only given to poor and institutionalized folks and prison inmates. The inmates only ate lobster once a week because more often would have been considered cruel and unusual punishment. My how times change. 

For the majority of the essay Wallace travels way beyond the festival and discusses the “inconvenient” moral issue directly connected with eating lobster: because each lobster is supposed to be alive (as shown in the above picture) when you, or the cook, kills it in a kettle of scalding water. Basically, the lobster’s pain issue boils down to whether it feels pain when this happens, and how a lobster-eater deals with this likelihood. The vast majority of lobster eaters attempt to disregard the issue completely, much to PETA’s chagrin.

But enough lobster philosophizing. For New England, and especially Maine, lobsters have been a large and growing business. In 2016, the US “landed” 161.1 million (M) pounds of live lobster. Maine’s 5,400 independent lobster fishermen alone provided 132.5M lb., worth $540.3M. Both numbers are records. The lobster industry has experienced significant growth; in the last dozen years the lobster catch has sustainably increased 76.3%. As mentioned above, the US exported $128.5M worth of live lobsters to China in 2017. But in 2018 lobster exports to China have shrunk by 17% so far, due to China’s retaliatory 25% lobster tariff imposed in July. Similar to soybean growers, some lobstermen are upset, most apparently are not.

Kristan Porter, the president of the Maine Lobstermen’s Association, has said the issue of China’s tariffs and Trump’s trade wars “is a long way down the list for most guys” of things they worry about. From Porter’s perspective other concerns are more important; including revised regulations that will increase the cost of lobster bait (herring), the rising temperature of ocean waters that reduces lobster catches, and stronger protections for migrating North Atlantic whales that swim in the same waters as lobsters. The reality is that recent times have been wonderful for the Maine lobster industry, which provides some pluck – others would say complacency – for the nonchalance regarding tariffs.

 “We’ve been kind of spoiled the last few years,” Porter says. Other lobstermen are concerned because exports to China during the past 5 years have increased 322%, accounting for much of the industry’s expansion and added profit. The Chinese tariffs may change this complacency.

Mark Barlow, owner of Island Seafood, a large business that ships live Maine lobsters around the world, has a view very different from Kristan Porter’s. Barlow mentions that as soon as China slapped its 25% tariff on US lobster exports, I said to my sales team, “China’s dead.” His Chinese customers confirmed his expectation. “I don’t think there is [a] way to import US lobster,” one Chinese buyer stated. Barlow believes the Chinese tariff is a significant blow for Maine. As Barlow put it, “The orangutan in Washington woke up from a nap and decided to put tariffs on China, and the Chinese stopped buying [Maine lobster] immediately. We’re getting absolutely slaughtered.” Trumpian tariffs have thrown lobstermen overboard.

Introducing US tariffs on thousands of imported goods may ultimately benefit US exporters and citizens, but right now everyone from Maine lobstermen to Minnesota soybean farmers are seriously suffering, along with millions of consumers who are paying more for all kinds of imported goods.

As Thomas Draxe perceptively stated over 400 years ago, trade is the mother of money. Soybean and lobster exporters – and virtually every US consumer – now have less money than they expected due to the president’s myopic, contemptuous, hardball trade tactics. Too bad we can’t trade him in before 2020.

A Coda Regarding Nancy.  The upcoming election of a new House Majority Speaker will surely anoint Nancy Pelosi. But the media’s recent swirl of stories makes it seem that someone else will also be in contention to challenge her. No other Dem has yet announced his/her candidacy and most likely won’t. No matter. Sixteen Dems are now on record opposing Ms. Pelosi, without anyone else to vote for. The vexation of the Dem progressives, who seem to think their political power transcends their numbers, is based principally on ageism. The Congressional Progressive Caucus represents about one-third of the Democratic Caucus. [At last count 4 years ago, there were 697 caucuses in the House.]

I believe there isn’t anyone else who should be Speaker. No other Democrat is as qualified, capable or proven as Ms. Pelosi. Her legendary ability to achieve success was reaffirmed on Nov. 20, when Ms. Pelosi offered Rep. Marcia Fudge, the only other Dem to say she was "interested in considering" a run for Speaker, a subcommittee chairpersonship. This was an offer Rep. Fudge could not say no to; she accepted. Rep. Fudge is now firmly in Ms. Pelosi's camp.
Other than eagerly seeking influence, there are no direct benefits to the circular firing squad approach the Progs now have been using. Their media-centric tactics magnify the chants of a small number of newly-elected Prog Dems, who have negligible substantive power, but do have the media’s focus. Their momentary dramas in hallways, letters or press statements have produced no alternative candidate for the speakership. It’s completely appropriate for multiple Dems to vie for this important job, but the Progs’ candidate-less approach wounds their cause in many voters’ minds. The media’s attempts to make it seem viable simply compound the miscalculation.

I offer two suggestions. First to the Progs; realistically look at the midterm elections results. The Prog candidates won in House districts that are already blue. The soon-to-be Rep. Alexandria Ocasio-Cortez, a media-darling, is a sterling example. She deserves her victory. But guess what; if the Dems really aim to take control of the Senate and the White House 2 years from now, there simply aren’t enough cobalt blue districts to do it with strongly progressive placards. As a reference, consider the state-wide defeats of dynamic Prog candidates in Florida, Georgia, and Texas. Going lefty left isn’t yet a viable election strategy beyond geographically-limited House seats. And in 2019 they will surely need proven leadership. 

Second and as I mentioned on Nov. 11, after winning the Speakership this January Ms. Pelosi should nobly announce a year from now she’s resigning. The concerns of younger House Dems about the hoary nature of their current leadership have merit. Even before January 3, and certainly afterwards, she should work with Dems who represent all the flavors of Democratic progress (perhaps as many as 233 flavors?), to facilitate younger Dems’ entry into the hallowed halls of Democratic House leadership.  

BLUE WAVE OR RIPPLE?

The waves are always on the side of the ablest navigators. ~ Edward Gibbon 

Praise be. The Democrats have managed to overcome their usual cacophonous campaigning and gained control of the House of Representatives, come January 3. They fielded enough interesting, empathetic, authoritative candidates to win 225 seats, with 13 still to be called. Alas, the same result couldn’t be duplicated in the Senate, where the Dems won only 46 seats, the Republicans 51, with 3 yet to be called. In these troubling times, the House’s half-a-loaf of legislative authority for the Dems is far, far better than the Dems living in the WOPPed (wholly out of political power) 115th Congress.

The media’s obsession about this election centered on how big the Blue Wave would be. Would our fractious population somehow collectively come together in voting booths? Nope, but a lot more folks voted than expected. Would millennials and people of color finally start voting? Probably yes and we won’t really know for several months. For the Dems, it’s been the year of non-traditional candidates, meaning folks who aren’t older, white men. Dem candidates included historic numbers of women, African Americans, LBGTQ, and even socialists. Some won, more lost as always.

Given the Dems’ victory in the House, they will elect a new Speaker. It’s not yet completely certain, but it’s also very hard to believe the new Speaker of the House won’t be San Francisco’s own Nancy Pelosi, and thus second in the line of presidential succession. Assuming she becomes Speaker in 2 months, it will be the second time she’s held this formidable job. She became the 60th Speaker of the House and the first female Speaker in American history in 2007 and held it until 2011.

I have a suggestion for Ms. Pelosi. She rightly deserves to be the 63rd Speaker of the House of Representatives. And in order to advance the Dems’ chances in the 2020 elections, I suggest she resign her speakership when the Congress convenes in January 2020. Like it or not, the Repubs have painted Nancy Pelosi as the “face” of Democrats. The Repubs, especially the president, always use her as their foil. In their eyes, she has more than enough baggage, simply by being female let alone from true blue San Francisco, to merit false overage charges that are displayed in multitudes of their campaign ads.

She’s ably served in Congress for 31 years. If she is Speaker during the 2020 campaign season, her alleged notoriety will be a hurdle that many Dem candidates will have to jump over, go around and through continuously. By nobly resigning her speakership, but not her House seat, she can cast aside that hurdle and further heighten her aura and Dems’ prospects.

After her one-year term as Speaker, her resignation will serve two purposes. She will no longer be as prime a foil for the Repubs and perhaps more importantly, it will force the current, elderly Dem Congressional leaders to find a younger leader, hopefully even several (like for the Majority Caucus Leader and Majority Whip). These new leaders can vigorously carry the Dems’ banner and state a clear, unwavering and convincing message as to why people should vote for Dems in 2020.

Unfortunately and not for the first time, the Dems’ messaging in this mid-term election was muddled and disjointed. What was the Dems’ message, beyond being anti-Trump? It wasn’t evident. What were the Dems actually for? It wasn’t clear. Enough of the Dems’ stronger, mostly moderate House candidates developed their own messages and succeeded. But senatorial candidates appeared more challenged and less effective. The Dems lost 3 seats, including 2 incumbent women. There was no elevating Blue Wave in the Senate, only a downward red-tinged swirl.

Even if the 2018 election wasn’t the “most important” ever – after all, every election is that, despite the media’s fixations – it was a much-needed, decent blue ripple. It assuredly was the most important election since 1920 by and for women. Women voters and women candidates created historic waves. The New York Times stated there were 257 women candidates for Congressional office, including 19 who identify as LGBTQ and 84 women of color. Election results so far (as of 11/10/18) indicate that a record 35 newly-elected women won House seats and 2 new women candidates won Senate seats. CNN projects that the new 116th Congress with have at least 102 newly-elected women in the House and 12 newly-elected in the Senate. Thus 44.4% of the female Congressional candidates won their elections. Batting 444 will get one into any Hall of Fame.

After 4 years meandering in the Congressional political desert, the Dems finally can exercise some political and legislative power in Washington, D.C. Their control of the House will provide some obligatory checks and balances on the Repubs’ and especially the president’s misguided, dangerous, misanthropic actions.

I believe the House Dems should now focus on 3 legislative priorities; first, provide DACA-recipients with a proscribed, legal path to citizenship. Second, increase public investment spending for our nation’s infrastructure (including rural areas), to be paid in no small part by revoking the Repubs’ “give the 1% more money, forget the rest” tax package. Third, and probably most importantly, improve health care.

As I’ve stated before, I’m not in favor of the progressive’s Medicare-for-all (M4A) mantra. Besides being a divisive strategy that appeals chiefly to left-leaning liberals, it’s fiscally budget-busting (not that that seems to matter anymore) and will require raising taxes. M4A has many important, powerful stakeholders strongly opposed to it, including doctors and hospitals. Instead, the Dems should strengthen and enhance the existing federal health care law, the Affordable Care Act (ACA). Like anything politically meaningful, this will be a challenging but worthy effort. Progressives won’t like it, but the mid-term election results didn’t reveal enough broad voter support either for Prog candidates (see Beto O’Rourke, Stacey Adams, or Andrew Gillum) or their talismanic programs like M4A. A majority of surveyed Dems stated that they prefer Congress to improve the ACA rather than create a new single-payer (e.g., M4A) national health care plan. 

The Dems should focus on 3 improvements to the ACA. First, allow the federal government to negotiate drug prices for Medicare Part D beneficiaries and other public programs. This common sense approach to lowering America’s sky-high drug costs has been argued about for way too long. Amazingly, just before the election, the president said he wanted to lower prescription drug prices. Ta da, the Dems should take him up on his new-found interest. Second, increase funding of community health centers and provide incentives for more people to enter the primary care workforce. More community health centers should be established, including those in rural areas, as a focus for locally-provided, lower-cost, basic health care services. Third, the Dems should stabilize the health care marketplace that’s been sabotaged by the Repubs. As part of this needed effort, the Dems should indemnify folks with pre-existing medical conditions so their insurance costs will be non-discriminatory, just like they were when the ACA first became law.

If the Dems can effectively navigate the upcoming political waves created by the Repubs and use them advantageously, their political beachhead in the House can be expanded in 2 years. Here’s hoping.