Hanlon's Razor , the best I can trace it, is typically delivered: “Never attribute to malice that which is adequately explained by stupidity.” This keeps me from expending too much energy figuring motives when bureaucrats line up square pegs and pound at round holes. In the case of requiring farmers to comply with federal Department of Transportation commercial driver’s license rules under the Motor Carrier Safety Act, we witnessed in action just what the huge uptick in federal hiring will continue to deliver.
As the rule changes were suggested, the normal cycle came into full view.
It goes something like this:
1) Non-elected federal rule makers float a new regulation that would turn an industry upside down.
2) Members of said industry funnel time, money and energy away from their usually productive schedule to point out how ridiculous and damaging the new rules would be.
3) Public relations professionals, lawyers and lobbyists draw up grand plans and multi-layer billing schemes to counter the proposed rules in the sphere of public opinion.
4) Mass media smells a story that will get emotional reaction from readers and viewers, dispatching staff to capture the drama.
5) The public is duly outraged.
6) The bureaucrats at the rule-making agency respond by saying they’re just doing their jobs to make everyone’s life safer, longer and more fulfilling, but that, obviously, they never intended such a ridiculous rule be inflicted on the affected industry.
And once that’s done, Media Matters reminds us it was all an right-wing conspiracy. Never mind that pesky Federal Register.
It’s our great republic at work.
The Food and Agricultural Policy Research Institute at the University of Missouri released its study on the economic impact of continuing the ethanol tax credit and tariff. The study offers projections for both agricultural and biofuels markets. Download the 13 page FAPRI report here.
Below is the complete press release from University of Missouri.
MU FAPRI reports economic impact of extending ethanol tax credit, tariff
by Duane Dailey
COLUMBIA, Mo. – Extending the current ethanol tax credit and tariff would boost corn-based fuel production -- and corn prices, report University of Missouri economists. The current 45-cent tax credit for biofuel blenders and associated 54-cent tariff on ethanol imports were studied by the MU Food and Agricultural Food and Policy Research Institute (FAPRI). Economists ran “what-if” scenarios on FAPRI computer models of the U.S. farm economy. Both tax laws are due to expire Dec. 31, 2011. With incentives in place, they saw fuel production from corn go up 1.2 billion gallons a year and corn prices rise 18 cents per bushel.
Increased demand for corn as an ethanol fuel source would expand corn acreage by 1.7 million acres, said Seth Meyer, MU FAPRI economist and author of the study, released June 27. The report is available on the FAPRI website: http://fapri-mu.org/. The study considers only changes in the ethanol tax credit and tariff, but not changes in current mandates to use a set amount of biofuels,” Meyer said.
FAPRI prepares an annual 10-year baseline of agricultural production to analyze effects of policy changes on farm income. "The baseline prepared earlier this year assumed biofuel tax credit and tariff expire at the end of 2011, as provided in current law,” said Pat Westhoff, director of MU FAPRI. “This analysis looks at an alternative scenario that keeps ethanol tax credit and tariff at current levels. “There is debate about federal support of the ethanol industry,” Westhoff noted. “At a Paris meeting last week, G-20-nation trading partners raised concerns about U.S. support of biofuels. “The revised baseline gives FAPRI a tool to study proposed policy changes.” Under current energy legislation, blenders who add ethanol to gasoline receive a 45-cents-per-gallon tax credit. A 54-cent-per-gallon tariff slows import of foreign ethanol.
Our ethanol policy is complex, Westhoff explained. “When you give fuel blenders a tax credit, they keep part of the benefit and charge service stations less for blended fuels. In turn, service stations should charge consumers less for blended fuel at the pump. “At the same time, blenders can pay more to ethanol plants that in turn pay farmers more for corn. “Our work suggests that how benefits of the blender’s tax credit are shared among fuel consumers, ethanol plants and corn farmers is very sensitive to market conditions,” Westhoff said. MU FAPRI maintains computer models of all agricultural commodities. Those are used to calculate the economic impact of changes in laws and farm policies.
FAPRI is part of the MU College of Agriculture, Food and Natural Resources.
Walter Russell Mead has some interesting things to say about the death of the American Dream over at The American Interest. As you see in the block quotes below, he explains that the great shift from farm to city and suburb was the death of an earlier American Dream—farming. Of course I'd argue there are some who still harbor dreams for farming (that's how I'll spend my lottery income once I buy a ticket). But Mead is correct in explaining the evolution of rural culture and agriculture as mechanization bloomed into an exodus from fields and small towns to cities and suburbs. When someone laments the decline in the number of farmers, I tend to remind them that their family, if anyone in it has ever given up farming, is partly to blame. It's a straw man, I know. But rural-to-urban migration did happen, and it takes plenty of people to populate an exodus.
But Mead is only using the death of that first American Dream to preface his comments on the death of the current American dream—home ownership.
On to Mead:
This isn’t the first time the American Dream has died. The old dream — your own farm rather than your own home — once dominated American culture, politics and family life as much as the family home ever did. The slow and painful death of that dream was one of the country’s core preoccupations in the first half of the twentieth century. The death of the new dream is likely to be a big deal as well.
The ideal of the family farm was once even more deeply rooted in American life than the ideal of the owner-occupied home. In the 18th and 19th centuries, the average American family owned and farmed a small piece of land. Cheap land on the frontier made the original American dream accessible to just about anybody. New immigrants and young people would work for a few years to save up money for basic tools and equipment, head west and start up a farm.
Of course, the West filled up, and much of it was poor farming until waterworks made prime land (some has reverted to poor thanks to recent environmentally driven water allotments). And working a few years to save up for the basic tools and equipment of the modern Midwest farm won't launch you past that pesky barrier to entery: $4,000-per acre land and the capital cost for a line of equipment.
I worked for a state farm magazine as the 21st Century rolled in. We did plenty of those lists that celebrate the Top Things of the Century. For agriculture, even by the late 1990s, the real doozies—the things that set up modern agriculture—really came in those first years of mechanization: Electricity. Tractors. Rubber tires. Power Take Off. Commercial fertilizer. Chemistry for herbicides and pesticides.
I've written elsewhere that these things were adopted because they made life on the farm better by making it less strenuous and reducing time needed for pure labor, which meant the exodus toward town was inevitable. Mead spells it out like this:
The old dream died from a combination of reasons. The closing of the frontier dried up the supply of free land and the mechanization of agriculture made small farms uneconomic. Federal subsidies lured too many people onto the land; many homesteads in parts of the west were climates unsuited to smaller holdings. A vast expansion in global acreage under the plow in the late 19th and early 20th centuries exposed small family farmers to tough global competition. The terms of trade between farm goods and town goods changed over the years; farmers’ incomes steadily fell in comparison to urban dwellers. The more complex and expensive farm techniques needed to meet the competition required farmers to spend more on equipment and education than their small farms could really support. Young people craved the excitement and the opportunity of urban life.
The changes that came with this demographic shift were immense. And Mead thinks the latest economic turmoil and shifts in family makeup and other social trends are just as big.
Read the whole thing here. It's not exactly a tonic for a happy day, but from demographic and economic variables at hand, Mead might be on the path toward reality.