Milk and Tea: Raw Dairy Producers Test Tea Party Principles

Mr. Kelley brings to my attention two alarming articles from Grist. Apparently there is a widespread, federally coordinated effort to raid dairies producing and selling raw milk.

Now you can take sides in the debate over whether raw milk you want raw milk on your kids' Wheaties. Just as important as the health debate is the economic debate, summarized neatly in Grist:

Clearly, we are moving closer to judicial consideration of how far consumer rights extend when it comes to consumers opting out of the factory food system and arranging for private access to the nutritionally-dense foods of their choice [David Gumpert, "Want Raw Milk? Lease a Farm—and Hire a Lawyer," Grist, 2010.07.22].

Monsanto and the other giants of the ag-industrial complex have already driven most independent family farms into bankruptcy or subservience to the corporate will.

But what still gets me is that the professed conservatives and teabaggers among us who rage against the nanny state and government intrusion in our lives don't seem to even notice the real government oppression of independent dairy operators. They were silent about South Dakota's effort to ban raw milk (an effort that failed, although producers had to settle for a compromise with our state Ag Department). Ranch blogger Troy Hadrick even turned on his fellow producers, taking the Big Ag line and supporting restrictions on raw milk even while whining about tighter federal requirements to test for E. coli in slaughterhouses.

Tea Party, the raw milk issue is tailor-made for your movement. You have local, state, and federal officials conducting searches and seizing property and vital computer data from independent farmers. You have bureaucrats taking away the freedom of producers and consumers to engage in commerce. You even have government collusion, with the feds helping smaller agencies do their meddling. This issue is crying out for grassroots activists who want to advocate for pioneer-style self-sufficiency and market freedom. (And I'll bet the Founding Fathers drank raw milk while writing the Constitution.)

Let's add some milk to that tea: conservatives, check out the South Dakota Alliance for Raw Milk, and prove your conservative cred by standing up for independent producers and consumers who don't want to get gobbled up by the big corporate ag machine.

Volcker Identifies Shattered Illusion of Deregulation

Quote of the weekend comes from Paul Volcker, chairman of President Obama's Economic Recovery Advisory Board and former Fed Chairman. Volcker discusses his regret that he didn't more vocally oppose the deregulation of the financial markets that got us into our current mess:

“You had an intellectual conviction that you did not need much regulation — that the market could take care of itself.... I’m happy that illusion has been shattered” [Paul Volcker, quoted in Louis Uchitelle, "Volcker Pushes for Reform, Regretting Past Silence," New York Times, 2010.07.09].

Bonus conservative teasing: Uchitelle mentions that the financial reform bill is 2400 pages. Why haven't I heard the same outrage from the tea "party" over this hefty legislation that we heard last year when the town-hall shouters would indict the health insurance reform bill as obviously bad by mere dint of its comparable page count? Where are the misspelled-placard-waving patriots warning that Uncle Sam is trying to come between you and your banker? I guess financial reform is too good of an idea for the teabaggers to counterprogram with lies about death panels or some similar oversimplified propaganda.

Antitrust Regulation Route to Economic Growth

Remind me to invite Philip Longman over for dinner. Last summer he provides a great article about how the Veterans Administration's leadership in innovations in electronic medical records has made VA hospitals the best care in America.

Now my D.C. friend Ned Hodgman gets me reading Longman's latest, a collaboration with Barry C. Lynn that asks "Who Broke America's Jobs Machine?" It's a lengthy, thoughtful, well-argued essay. I do it injustice milling it down to bullet points.

However, recognizing the impaired Internet attention span, I summarize possible take-aways from Lynn and Longman:

1. Regulation—specifically antitrust laws—creates jobs. (See Ned's headline.)
2. Bush didn't kill job growth in the last decade; Reagan did.
3. Consolidation kills job creation.
   
4. Industry concentration hinders innovation.

Lynn and Longman say monopolization is just one of numerous factors contributing to the the fact that the last ten years are the first decade since the 1930s that we've experienced anything less than 20% job growth. (Since 1999, America's job growth is zero.) They discuss many of those other factors, explain pretty clearly why those factors are mitigated as causes of our problems, then analyze the impacts of corporate consolidation. Lynn and Longman argue that for a real economic recovery, Uncle Sam must get serious again about regulating monopolies, busting trusts, and supporting the small businesses that have historically generated the most innovation and jobs.

Some choice passages from Longman and Lynn (but please, please, go read the whole thing!):

It is now widely accepted among scholars that small businesses are responsible for most of the net job creation in the United States. It is also widely agreed that small businesses tend to be more inventive, producing more patents per employee, for example, than do larger firms. Less well established is what role concentration plays in suppressing new business formation and the expansion of existing businesses, along with the jobs and innovation that go with such growth. Evidence is growing, however, that the radical, wide-ranging consolidation of recent years has reduced job creation at both big and small firms simultaneously. At one extreme, ever more dominant Goliaths increasingly lack any real incentive to create new jobs; after all, many can increase their earnings merely by using their power to charge customers more or pay suppliers less. At the other extreme, the people who run our small enterprises enjoy fewer opportunities than in the past to grow their businesses. The Goliaths of today are so big and so adept at protecting their turf that they leave few niches open to exploit.

...Even so, most Americans still believe that our economy remains the most wide open, competitive, and vibrant market system the world has ever seen. Unfortunately, the stories we have told ourselves about competition in America over the past quarter century are simply no longer true.

...One result [of the Second New Deal's focus on antitrust regulation] was a remarkably democratic distribution of political economic power out to citizens and communities across America. Another was an astounding burst of innovation. As the industrial historian David Hounshell has documented, the new competition among large corporations led companies like DuPont and General Electric to ramp up their R&D activities and fashion the resulting technologies into marketable products. Smaller firms, meanwhile, were carefully protected from Goliaths, enabling entrepreneurs to develop not merely ideas but often entire companies to bring the ideas to market.

Antitrust enforcers weren’t content simply to prevent giant firms from closing off markets. In dozens of cases between 1945 and 1981, antitrust officials forced large companies like AT&T, RCA, IBM, GE, and Xerox to make available, for free, the technologies they had developed in-house or gathered through acquisition. Over the thirty-seven years this policy was in place, American entrepreneurs gained access to tens of thousands of ideas—some patented, some not—including the technologies at the heart of the semiconductor. The effect was transformative. In Inventing the Electronic Century, the industrial historian Alfred D. Chandler Jr. argued that the explosive growth of Silicon Valley in subsequent decades was largely set in motion by these policies and the "middle-level bureaucrats" in the Justice Department’s Antitrust Division who enforced them in the field.

[Barry C. Lynn and Philip Longman, "Who Broke America's Jobs Machine?" Washington Monthly, March/April 2010]

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Related: Thomas Friedman sees America's innovative competitiveness flagging and says we need better education and incentives to spur more capital investment and hiring... by big multinational companies. Hmm....

American Health Care: Pay More, Get Less

For the free market to work, you need rational actors, buyers and sellers who can evaluate how much utility goods and services provide and agree on reasonable prices.

When it comes to health care, we Americans are far from rational. We are idiots. We get less utility from health care than folks in other countries, yet we pay more. Way more. Absurdly, stupidly, indefensibly more.

There's a sucker born every minute. In health care, the suckers are right here in the capitalist U.S. of A.

Not Enough H1N1 Vaccine? Why Isn't Free Market Solving?

GOP House candidate Thad Wasson tickles my logical-fallacy bone this morning with a dollop of "blame government" paranoia. He sees detainees at Guantanamo slated to receive H1N1 vaccine as a sign that the federal government's "total control of health" leads to rationing and prioritizing.

I prefer to look at the treatment of prisoners throughout the country as part of the moral argument that we have a moral obligation to take care of each other and that government ought to be the single provider at least of health insurance. If it's good enough for prisoners, soldiers, veterans, public employees, and retirees, it's good enough for me.

But specifically on swine flu shots: if everyone is so darned eager to get shots, why isn't the free market solving? Medicine comes from private companies running private factories. If I were a pharmaceutical giant, and I knew there were a bunch of scared folks eager to pay top dollar to avoid the pandemic they hear about in the news every day, I'd be running my factories overtime... unless, of course, someone demonstrated that the profit such basic, essential medicine wouldn't outweigh what I make on luxury drugs like Botox and Viagra.

The Obama Administration has said that they've made their predictions on vaccine avvailability based on numbers provided by industry. And really, if you want more vaccine, what solution do you want? Would you prefer the government nationalize the pharmaceutical industry and direct all production toward H1N1 vaccine and Tamiflu? Would you prefer the CDC do even less science, less testing before sending the vaccine to market?

Blaming the government for H1N1 vaccine shortage, not to mention the conclusions that "government can't do anything right," is just a smokescreen of political spin. I could suggest a free market solution: if you want more vaccine, you should make it yourself. But that's about as realistic as Steve Sibson's suggestion that the solution to underinsurance is for you and me to start our own insurance companies.

For all the griping, I still haven't heard an effective free market solution for the H1N1 vaccine situation. If you want more shots, it seems to me your only option is more radical government intervention in health care, not less.

Thune: Working to Stop the Bailouts... Well, Not All of Them

I learn from Amanda Nolz that President Obama just signed into law more stimulus... for farmers! HR 2997 is actually the appropriations act for agriculture, rural development, the Food and Drug Administration, and other federal programs. It includes some increases that one would think will be good for South Dakota farmers...

• $4 billion more for food stamps
• $1.9 billion more for school lunches (and breakfasts, I imagine)
• $290 million to keep struggling dairy farmers afloat (maybe Rick Millner can pay his bills)
• $60 million to buy up dairy products for public food programs
  

And Senator John Thune, champion of ending federal bailouts, voted aye on this federal bailout of dairy farmers.

Let the free market rule, right?

Pass ACESA III: A Skeptic's Question -- Market Solving Already?

[Part 3 of a series based on my conversation with the gents from Repower South Dakota and the Environmental Law & Policy Center.]

Don't think I had nothing but softballs for Matt McGovern and his Repower SD crew. It occurred to me that we're already seeing movement toward one of the major goals of the American Clean Energy and Security Act, the scaling-back of heavy-carbon coal power. The Big Stone II project is dead, Warren Buffet is getting out of coal, industry leaders like Otter Tail are recognizing that they can build wind more quickly for less cost ($2.3 million per megawatt of installed wind power versus the projected $2.8 million per megawatt projected for Big Stone II).

Pass ACESA
a Madville Times series

1. Cap and Trade Works
2. The New China Syndrome
3. Market Solving Already?
4. Techno-Hope
5. Perfect vs. Good
6. Smart Grid
7. The Big Picture

Read H.R. 2454, The American Clean Energy and Security Act

So my question: are we already seeing enough movement toward clean energy? Do we need ACESA or any other federal mandates to make a low-carbon future happen?

Now let me note, the folks backing ACESA, Matt McGovern included, are fans of the market, just like most of us. ACESA is a market-based solution. Its cap-and-trade components ask companies to pay a fair price, determined on the open market, for the carbon they emit. The incentives create opportunities for lots of entrepreneurs to invent, innnovate, and make a profit. The alternative to market-based ACESA is top-down regulation. The Supreme Court ruled in 2007 that the EPA can consider regulating carbon dioxide under the Clean Air Act. The EPA could lay down hard CO₂ rules tomorrow and start levying fines. But the EPA has chosen thus far to defer to Congress (what ever happened to all that Obama-power-grab malarkey, anyway?).

Markets are great, but they aren't perfect. Markets can produce some rotten results, like strip mining, SUVs, and Lady Gaga. We've heard good arguments for getting off foreign oil since the 1960s, but market forces—e.g., usually cheap oil—have kept us from investing in energy independence. Sometimes we need to intervene with the right incentives to steer the market toward more sustainable goals, like energy sources that won't heat up the planet and run out a century from now.

Just as we shouldn't take this cool summer as a refutation of global warming, we shouldn't take the current economic downturn as refutation of the need for serious action on carbon emissions. Sure, energy use is down and utilities are scaling back their plans to expand their coal-power capacity. But long-term, energy demand will almost surely rise, as it has historically, almost without exception. We thus need to get more momentum behind clean energy sources now, while we have some wiggle room.

McGovern also argues that ACESA is a good response to the current high unemployment. Remember, even that optimist Ben Bernanke says recovery of jobs will lag behind recovery of the economy "for some time." People need work, and ACESA can help.

Now wait a minute, say my astute readers, even if passed, ACESA doesn't kick in until 2012. We've got to wait three years for those green jobs?

Ah, but consider: if we pass ACESA now, the utilities will know it's coming. Any coal plant like Big Stone II started now wouldn't be operational until after 2012, so the utilities would already be building in compliant technology. Utilities would start hiring now to build the technology they need to comply in 2012. Inventors and investors would see 2012 coming and start looking for ways to invest their brain power and capital to take advantage of the new energy market. Even enacted in 2012, ACESA can serve as a jobs booster and overall economic stimulus right now, right when we need it. And dollar-for-dollar, investment in clean energy will produce lots more jobs—like two to three times more jobs—than investment in fossil fuels.

And as Matt McGovern emphasizes every chance he gets, ACESA would create 5000 clean-energy jobs in South Dakota alone, jobs that would be darned hard to outsource (try hauling wind turbines across the ocean). 5000 new jobs: according to current South Dakota Department of Labor stats, that would put to work every unemployed person in 48 of South Dakota's 66 counties. Given that we've nearly drained our state unemployment fund, I don't think we'd mind a speedier solution than just sitting back and waiting for the market to work.

This economic lull is the perfect time to pass ACESA. We can lock in some alternative energy gains before the economy recovers and we slide into our lazy cheap-fossil-fuel habits again. We can get Americans back to work in good jobs that will last. We won't see those benefits if we wait for the market to solve on its own.