Economic Storms Gather in Swing States

Abandoned factory.

As approval of the impeachment inquiry continues to rise, Donald Trump has continued his standard approach to everything: lie and and try to distract, even lying about knowing Rudi Giulian's newly arrested Russian cohorts. Meanwhile, his self-created trade wars are wreaking havoc on the economies of the swing states critical to Trump's re-election hopes: Michigan, Wisconsin, and Pennsylvania.  Particularly hard hit are manufacturing - which Trump promised to restore - and, of course, farming which is being further damaged by climate change in the Mid-West, a phenomenon that Trump claims is a Chinese hoax. A piece in Politico looks at the growing economic storm clouds hanging over states that, if they reject Trump, could end in his defeat in 2020, assuming his isn't removed from office before then.  Here are highlights:

Donald Trump shocked the world and won the White House in 2016 on bold promises to bring greatness back to the industrial Midwest.

But his promise now faces a brutal reality: The U.S. manufacturing sector is spiraling into recession, victimized by Trump’s trade wars and sagging confidence among corporate executives who have little idea how to plan for an uncertain economic future.

Unless Trump can ram his revised North American Free Trade Agreement through Congress and cut a deal with the Chinese to erase historically high tariffs, he may find it difficult to repeat wins in states like Michigan, Wisconsin and Pennsylvania that drove him into office in 2016 by the narrowest of margins.

“Manufacturing is in recession right now. This is what all the data show,” said Torsten Slok, chief economist at Deutsche Bank Securities. “And everywhere I go in the world, the fear I hear is that we are going to be driven deeper into recession because this is all about uncertainty caused by the trade war.”

Broad national gauges of manufacturing are already troubling, countering some of the president’s claims of success. The Institute for Supply Management manufacturing survey . . . . has shown a declining sector two months in a row, recently hitting a level not seen since the end of the Great Recession due to a sharp drop in new export orders. Respondents to the survey blamed a trade war that has reduced export demand and increased costs for parts used in manufacturing.

At the county and state level, the environment looks even darker for Trump.

The negative news on manufacturing comes as senior Chinese officials arrive in Washington for another round of talks aimed at reaching a deal with Trump that would reduce heavy tariffs that have imposed significant economic costs on both sides.

It’s unclear whether Trump would accept such a deal that could eliminate tariffs and relieve some of the pressure on the manufacturing sector, and he told reporters Wednesday afternoon that he didn’t think China was lowering expectations for a trade deal.

It’s not certain that even such a deal will reverse negative trends in the manufacturing sector, which overall is a small slice of the American economy but an important part of overall corporate profits. Manufacturing also supports all kinds of ancillary service-industry jobs that suffer whenever factory work declines.

Overall, the growth in manufacturing jobs — one of Trump’s biggest promises — has essentially vanished. After adding as many as 25,000 new manufacturing jobs per month last spring, the numbers began to decline as the trade war with China intensified. In September, the sector lost 2,000 jobs. That number could grow for October when striking GM workers are included.

“To the extent that the manufacturing slowdown continues unabated, which is likely unless there is a de-escalation in trade tensions, the electoral map could be more difficult for President Trump and Republicans in 2020,” Deutsche Bank analysts wrote in a report this week.

The still-strong national employment numbers, with a jobless rate at a half-century low of 3.5 percent, can also tell a misleading political story. . . . But dig deeper and large numbers of the jobs are coming from uncontested states like California. States that make up Trump’s coalition are not doing quite as well.

“It’s an existential political risk,” said Moody's Analytics chief economist Mark Zandi. “He won the election based on carrying Pennsylvania, Michigan and Wisconsin and appealing to those voters who work in manufacturing or related industries. He promised he would bring manufacturing jobs back and his policies are doing the precise opposite. Jobs losses are mounting, particularly in those states.”

Trump’s trade battle with China has also slammed rural states where farmers have been unable to sell soybeans and other products into one of their biggest markets. Trump has responded by moving to dole out $30 billion in bailout money and praising “patriot farmers.” Many of the states hit by the drop in agriculture exports like Indiana, Nebraska and Kansas are solid Trump country. Others like Iowa could be a problem for the campaign.

Trump is also trying to make inroads in Minnesota, where he narrowly lost in 2016, and plans to hold a rally there Thursday night. But Minnesota is feeling pressure both in manufacturing and agriculture, as are states like Iowa and Pennsylvania.

And it’s not clear that even a quick and limited deal with the Chinese could reverse some of the major negative trends in manufacturing.

Ultimately, Trump’s reelection could come down to three states — Michigan, Pennsylvania and Wisconsin — where manufacturing trends are working against him and where he will need a sharp turnaround. “In those three key states, the economies are weakening. Unemployment is low but rising,” said Zandi. “If it continues to rise between now and Election Day it will be very difficult for him to recover. The trend lines don’t look good.”

The trend lines may not look good for Trump, but are a net positive if they end up removing the orange cancer from the White House. 

The Growing Trump Created Economic Slump

Troubles for congressional Republicans are growing and not just because of Donald Trump's diarrhea of the mouth and tweet storms as the House of Representatives impeachment inquiry gains speed.  Like Trump, they are lying and obfuscating to avoid admitting Trump has engaged in impeachable offenses, and soon they will being doing the same as signs of Trump's self-created economic slump - trade wars and erratic policies do have consequences - become more evident.  Yes, the 35%  of the public that blindly supports Trump in a cult like manner will likely be unmoved as the economic downturn picks up momentum, but sane and sentient voters are likely to connect the dots and realize there is an additional reason Trump needs to be driven from the White House.  As Newsweek reports, one GOP strategist said to fellow Republicans "Trump is a suicide bomber, and you've strapped yourselves to him so tightly that when he explodes, you're going out to meet the 72 porn stars of the Trumpian afterlife with him."   That remark did not even factor in the looming economic issues. A column in the New York Times by a prominent economist lays out the damage Trump has done and continues to do.  Here are excerpts:

When he isn’t raving about how the deep state is conspiring against him, Donald Trump loves to boast about the economy, claiming to have achieved unprecedented things. As it happens, none of his claims are true. While both G.D.P. and employment have registered solid growth, the Trump economy simply seems to have continued a long expansion that began under Barack Obama.

But now it’s starting to look as if Trump really will achieve something unique: He may well be the first president of modern times to preside over a slump that can be directly attributed to his own policies, rather than bad luck.

There has always been a deep unfairness about the relationship between economics and politics: Presidents get both credit and blame for events that usually have little to do with their actions.

Now the U.S. economy is going through another partial slump. Once again, manufacturing is contracting. Agriculture is also taking a severe hit, as is shipping. Overall output and employment are still growing, but around a fifth of the economy is effectively in recession.

But unlike previous presidents, who were just unlucky to preside over slumps, Trump has done this to himself, largely by choosing to wage a trade war he insisted would be “good, and easy to win.”

The link between the trade war and agriculture’s woes is obvious: America’s farmers are deeply dependent on export markets, China in particular. So they’re hurting badly, despite a huge financial bailout that is already more than twice as big as the Obama administration’s auto bailout.

Shipping may also seem an obvious victim when tariffs reduce international trade, although it’s not just an international issue; domestic trucking is also in recession.

The manufacturing slump is more surprising. After all, America runs a large trade deficit in manufactured goods, so you might expect that tariffs, by forcing buyers to turn to domestic suppliers, would be good for the sector. That’s surely what Trump and his advisers thought would happen.

But that’s not how it has worked out. Instead, the trade war has clearly hurt U.S. manufacturing. Indeed, it has done considerably more damage than even Trump critics like yours truly expected.

The Trumpist trade warriors, it turns out, missed two key points. First, many U.S. manufacturers depend heavily on imported parts and other inputs; the trade war is disrupting their supply chains. Second, Trump’s trade policy isn’t just protectionist, it’s erratic, creating vast uncertainty for businesses both here and abroad. And businesses are responding to that uncertainty by putting plans for investment and job creation on hold.

So the tweeter in chief has bungled his way into a Trump slump, even if it isn’t a full-blown recession, at least so far. . . . Also, the pain in manufacturing seems to be falling especially hard on those swing states Trump took by tiny margins in 2016, giving him the Electoral College despite losing the popular vote. . . . . Trump is, as I said, unique in that he really did this to himself.

So what will come next? Trump being Trump, it’s a good bet that he’ll soon be denouncing troubling economic data as fake news; I wouldn’t be surprised to see political pressure on the statistical agencies to report better numbers.

The scary thing is that around 35 percent of Americans will probably believe whatever excuses Trump comes up with. But that won’t be enough to save him.

Trump is poised to utterly destroy the GOP, yet Republicans refuse to shout out that the emperor has no clothes.

Trade War and Oil Industry Waivers Continue to Harm Farmers

Empty grain receiving facility - photo credit: Washington Post.

Ironically, it is Republicans who preach - or at least pretend to preach - the mantra of personal responsibility and that bad decisions and actions should reap consequences on those who make bad life decisions. Thus, for example if suffers the consequences of being gay or poor, somehow one's choices are to blame, not social and economic barriers.  Applying this rule, it is delicious to see Mid-West farmers who helped elect Donald Trump pay an enormous economic and financial price for their bad and - in my view - morally bankrupt decision. I truly worry about the children and youths who are suffering as a result, but as for the adults who chose to vote for a narcissistic demagogue who played to their worse instincts and bigotries, they sadly deserve their fate.  Frighteningly, many continue to refuse to see their own fault in what has now befallen them.  A piece in the Washington Post looks at the continued economic devastation  Trump's self-created trade wars and pandering to the oil industry continues to wreak in the Mid-West in particular.  Here are story highlights (Note the idiocy and insanity: "Many of those grumbling about Trump today concede they are unlikely to vote for a Democratic presidential candidate next year."):

SIOUX CENTER, Iowa — On a typical day, about 80 tractor trailers full of corn line up to dump their loads at Siouxland Energy Cooperative, the ethanol plant just outside of town. The air throbs with the noise and vibration of this industrial moonshine operation, which distills nature’s harvest into a cleaner-burning fuel.

But today, the warm Iowa sun shines on an almost empty parking lot, and the machinery sits idle.

After two decades, Siouxland this month halted operations following the Environmental Protection Agency’s decision to exempt 31 small oil refiners from a federal law requiring them to blend ethanol in their gasoline. The waivers, which the Trump administration has approved almost four times as often as its predecessor, have undercut demand for ethanol and the corn used to make it, farmers said.

“The waivers are what pushed us over the edge,” said Steve Westra, 46, the plant manager. “It absolutely killed the potential for anybody to make any money at this.”

For Iowa farmers already suffering from an extended trade war with China, the ruling has made ethanol the focus of their growing ire over President Trump’s policies.

The trade war has cost farmers potential Chinese orders for the corn-based fuel as well as for a byproduct that is used as animal feed. Now, the refinery exemptions are compounding the financial pain — and threatening political consequences for [Trump] the president, who won this state and its six electoral votes in 2016.

“I supported Trump in the last election. Today, if the election were held, I don’t think I could vote for him,” said Kelly Nieuwenhuis, 60, a corn and soybean farmer in Primghar, about 40 miles east. “It’s definitely growing, the displeasure with the Trump administration.” . . . .Many of those grumbling about Trump today concede they are unlikely to vote for a Democratic presidential candidate next year.

In recent days, amid a rising impeachment furor, the White House has scrambled to midwife a compromise between ethanol advocates and the oil industry. . . . The discontent in deeply conservative northwest Iowa has its roots in [Trump’s] the president’s confrontation with China, which farmers initially backed.

The trade war’s mounting costs are especially evident in this corner of the corn belt. Iowa’s fourth congressional district, which sprawls from the Nebraska and Minnesota borders to the outskirts of Des Moines, has lost more export sales to China than any other district in the country, according to the U.S.-China Business Council.

China’s retaliation for [Trump's] the president’s tariffs on Chinese goods last year cost farmers 78 percent of their $856 million in oilseed and grain shipments to China, the study found.

Those figures may understate the toll. The trade war erupted as farmers were counting on a major increase in Chinese orders for U.S. ethanol and an ethanol byproduct called distillers dried grain (DDG.) Those potential sales for the past two years have now become casualties of the trans-Pacific conflict, Nieuwenhuis said.

China in 2015 had purchased more than 5 million metric tons of DDG, a high-protein animal feed, valued at $1.4 billion, according to the U.S. Grains Council. By the following year, China was the No. 3 export market for American ethanol, purchasing more than 200 million gallons, worth almost $350 million, the industry group said. Since then, DDG sales have plunged by roughly 98 percent; ethanol orders are virtually nonexistent.

China targeted Midwestern farmers for retaliation, calculating that complaints from a key part of Trump’s political base might cause him to buckle. The president so far has instead tried to make farmers whole with a $28 billion bailout and promises of future riches.

Neither seems to be working. Multiple farmers said the Agriculture Department payments that [Trump] the president bills as full compensation for lost Chinese sales, while better than nothing, still leave them in the red.

[The Trump/Pence] administration has exempted more than 38 billion gallons of gasoline and diesel fuel from ethanol blending requirements compared with just 7.4 billion in President Obama’s final three years, according to the Renewable Fuels Association, an industry group.

It is sad that racial animus and clinging to extremist religious beliefs mean more to a majority of these farmers than their own economic survival.  Adding insult to injury is that the rest of America has been forced to pay 28 billion to save these farmers from the consequences of their own idiocy and bigotry.

Voodoo Economics May Be Catching Up with Trump/GOP

The stack market - actually the bond market - has been showing signs that the economy is slowing and that a recession might well begin in 2020 or before.  Recently job growth and GDP figures have been revised downward and manufacturers and consumers are feeling the adverse effects of Trump's insane trade wars with China and other nations.  And then there are America's farmers who have been dealt the double blow of Chinese tariffs and the impacts of climate change, particularly in the Mid-West, even as the GOP denies climate change is occurring.  To what ought to a shock to no one, the Trump/GOP tax cut for the wealthy and huge corporations - which only scattered crumbs for everyone else - has yet again proven that huge tax cuts for the top income brackets (i) do not pay for themselves, (ii) explode the deficit, and (iii) do not strengthen the economy overall. These three realities have been known since the days of Ronald Reagan, yet the GOP continues to live in a fantasy world.  A column in the New York Times looks at the slowing economy and the efforts of Trump and the GOP to shift blame from themselves.  Here are excerpts:

Almost four decades ago then-candidate George H.W. Bush used the phrase “voodoo economic policy” to describe Ronald Reagan’s claim that cutting taxes for the rich would pay for itself. He was more prescient than he could have imagined.

For voodoo economics isn’t just a doctrine based on magical thinking. It’s the ultimate policy zombie, a belief that seemingly can’t be killed by evidence. It has failed every time its proponents have tried to put it into practice, but it just keeps shambling along.

[W]henever tax cuts fail to produce the predicted miracle, their defenders come up with bizarre explanations for their failure.
 My favorite until now came from Art Laffer, the original voodoo economist and recent recipient of the Presidential Medal of Freedom. Why did George W. Bush’s tax-cutting presidency end not with a boom, but with the worst economic slump since the Great Depression? According to Laffer, blame rests with Barack Obama, even though the recession began more than a year before Obama took office. You see, according to Laffer, everyone lost confidence upon realizing that Obama might win the 2008 election.
 Trump has gone one better. As it has become increasingly clear that the results of his tax cut were disappointing — recent data revisions have marked down estimates of both G.D.P. and employment growth, to the point where it’s hard to see more than a brief sugar high from $2 trillion in borrowing — Trump has invented ever more creative ways to blame other people. In particular, he’s now claiming that the promised boom hasn’t arrived because his opponents are hexing the economy with bad thoughts: “The Democrats are trying to ‘will’ the Economy to be bad for purposes of the 2020 Election.”
 [B]laming the Fed for the tax cut’s fizzle won’t wash. For one thing, the Fed has actually raised rates less than in previous economic recoveries. Even more to the point, the Trump economic team was expecting Fed rate hikes when it made its extravagantly optimistic forecasts.
 The Trump tax cut was supposed to create a boom so powerful that it would not only withstand modest Fed rate hikes, but actually require such hikes to prevent inflationary overheating. You don’t get to turn around and claim betrayal when the Fed does exactly what you expected it to do.
 Since the Fed is unlikely to oblige, what else might Trump do? Officials have floated, then retracted, the idea of a cut in payroll taxes — that is, a tax break for ordinary workers, rather than the corporations and wealthy individuals who mainly benefited from the 2017 tax cut. But such action seems unlikely, among other things because top administration officials denounced this policy idea when Obama proposed it.

Trump has also suggested using executive authority to reduce taxes on capital gains (which are overwhelmingly paid by the wealthy). This move would have the distinction of being both ineffectual and illegal.

What about calling off the trade war that has been depressing business investment? This seems unlikely, because protectionism is right up there with racism as a core Trump value. And merely postponing tariffs might not help, since it wouldn’t resolve the uncertainty that may be the trade war’s biggest cost.

The truth is that Trump doesn’t have a Plan B, and probably can’t come up with one. On the other hand, he might not have to. Who needs competent policy when you’re the chosen one and the king of Israel?

Funny how the last GOP administration engaged in massive tax cuts and George W. left the country with the largest economic meltdown since the Great Depression.  The GOP truly never learns. 

Leaked Memo: UK Faces Medicine and Food Shortages if Brexit Goes Through

The parallels between Trump supporters and Brexit supporters continues and now a leaked government memo indicates that economic chaos, including medicine and food shortages are likely if the UK crashes out of the European Union. Despite such potential dire consequences, pro-Brexit supporters motivated by anti-immigrant - read non-white - animus and delusions of restoring a lost empire continue to push for economic suicide.  The parallels with Mid-West American farmers who continue to support Donald Trump despite his policies that are driving many farms towards bankruptcy are stark. Like their British counterparts who long for the days of rue Britannia, these Americans are driven by racism and a delusional dream of a return to a society of the 1950's when blacks, other non-whites, women and gays "knew their place" and  remained invisible and downtrodden.  Highlights from the Washington Post look at Britain's potential self-inflicted harm:

An increasingly likely “no-deal” Brexit could wreak havoc on Britain’s economy, infrastructure and social fabric, the government says in classified documents leaked to a British newspaper.

The costs of food and social care would rise, while medicines could be delayed, the Sunday Times reported. Border delays would interrupt fuel supplies. Ports would suffer severe disruptions and recover only partially after three months, leaving traffic at 50 to 70 percent of the current flow.

Those are some of the effects predicted by “Operation Yellowhammer,” which the newspaper said was compiled this month by Britain’s Cabinet Office and available to those with “need to know” security clearances.

Brexit critics have warned that crashing out of the European Union without an agreement with the rest of the bloc will damage the British economy, devalue its currency and create instability. British leaders have sought unsuccessfully since the 2016 Brexit vote to pass a “divorce” plan.

New Prime Minister Boris Johnson, a leading Brexit supporter, has promised to get his country out of the E.U., deal or no deal, during his first 100 days in office. He’s set to meet with German Chancellor Angela Merkel and French President Emmanuel Macron this week to press his case for a new deal. At the moment, negotiations are at a standstill.
Opposition lawmakers have been discussing ways of blocking a no-deal Brexit, including bringing down the government by calling a no-confidence vote in early September.  It’s unclear whether Johnson would win such a vote.

The Sunday Times said the government predicts a need to restore a “hard border” of limited, controlled crossing points in Ireland, which could cause protests.

House Speaker Nancy Pelosi (D-Calif.) has said there would be “no chance” of Congress approving a U.S.-U.K. trade deal after Brexit if it undermined the Good Friday agreement, the 20-year-old deal between Britain and Ireland that helped advance peace in Northern Ireland.

The government warns that some businesses would halt trade to avoid tariffs, while others who keep trading would pass higher costs on to customers. Agriculture “will be the hardest hit, given its reliance on highly integrated cross-border supply chains” and high trade barriers. And the black market could grow, it says, especially in border communities.

Other possible ramifications detailed in the memo:

• Increased costs for social-care providers caused by inflation could lead some providers to fail.

• Temporary cuts in tariffs would render the oil industry uncompetitive, closing two refineries, causing the loss of 2,000 jobs, spurring strikes and further disrupting fuel supplies.

• Delays at European airports, the Eurotunnel and other transportation hubs.

• Months of slowdowns of over four hours at the Spanish border with Britain’s overseas territory of Gibraltar, which could harm the area’s economy.

• Shortages of certain fresh foods leading to less choice, higher prices and potential panic buying.

• A risk of disruption to supplies of chemicals used to treat water.

• A risk of dust-ups between British and European fishing boats in British waters.

[T]he leaked documents show Britain is mostly unprepared amid “E.U. exit fatigue” after the country missed a planned departure date in March, the Sunday Times reported.

Trump's Trade Wars Continue to Decimate Farmers

Many farmers, especially in the Mid-West voted for Donald Trump whose appeals to racism and xenophobia won them over despite the false narrative than it was financial insecurity rather than bigotry that won their votes.  Now, many are paying - in my view - a much deserved price as Trump's trade wars continue to wipe out markets for American agricultural products and leave many farmers dependent on government bailouts (something they condemn when benefiting others) to stave off bankruptcy. A piece in Yahoo News looks at this self-inflicted harm and notes how farmers want a return to "more normal times" - something that will only be achieved by voting Trump and Mike Pence out of office.  While my heart goes out to children and youths in struggling farm families, I find it hard to dredge up any sympathy for their parents who voted for Trump. Here are article excerpts:

The White House recently announced that it would be providing an additional $16 billion in aid to American farmers affected by the trade war between the U.S. and China.

But the problem for American farmers has becomes bigger than something a bailout can fix.

“This trade thing is what’s brought on by [Trump] the president and it’s really frustrating because he took away all of our markets,” Bob Nuylen, a farmer from North Dakota who grows spring wheat and sunflowers, told Yahoo Finance. “We live in an area where we’re kind of in the middle of nowhere. It costs us a lot of money — over $1 a bushel to get our grain to markets.”

Since trade tensions began in 2018, farmers have faced major financial challenges, since China was once a major U.S. agriculture buyer.

And losing customers has become a major issue. Soybean farmers have been dealing with this, as China has turned to other countries like Brazil for soybeans. Nuylen said this is also happening for wheat farmers, as China has begun importing wheat from Russian regions.

“All these countries went to different countries to get their grain,” Nuylen said. “How are we going to get the relations back with them to buy our grain again and be our customers?”

“Our prices are probably as low as I’ve seen them in a long time,” he told Yahoo Finance. “We were losing just about $70 an acre just by putting our crop in [the ground] this spring.” The Trump administration pledged two installments of a farmer bailout program. The first round of payments totaling $4.7 billion was paid in September 2018, while the second round was distributed in December. By February 2019, the total aid payments reached $7.7 billion.

“Payments are a welcome help for the bottom line of Missouri farmers,” Blake Hurst, president of the Missouri Farm Bureau, told Yahoo Finance in an email statement. “Although the trade payments vary widely from county to county, they’ll keep more than a few farmers in business for another year. ...

“Having said all that,” the statement added, “farmers are profoundly wary of the trade war, embarrassed that ad hoc government subsidies are all that stands between many of us and financial ruin, and ready for the return of more normal times.”

If these farmers continue to support Trump, they deserve any and every misfortune that befalls them. Hate, racism and bigotry need to carry a very heavy price.

Tariff-Slammed Rural Communities Now Battling Climate Change Flooding

A flooded Oklahoma farm - Oklahoma went for
Trump by 65.3% of the vote.

I have written about the plight - much self-inflicted - of Mid-West farmers who, in my view, (i) stupidly voted for Donald Trump  thanks to his appeals to racism and/or religious extremism, and (ii) jumped on the climate change denial bandwagon.  This year, both moves are coming back to haunt them in spades and, but for the children and youths suffering, it's hard not to want to pull out a tiny violin and play a funeral dirge for them.  Between Trump's tariffs which have sent China to other nations for its agricultural purchases and the rains and flooding that some experts say may be the new normal for large swaths of the nation, these Trump supporters may be looking at financial ruin.  That financial ruin also extends to the larger rural communities in which these farmers live. Some are even waking to the reality that perhaps climate change is, in fact real.  Embracing ignorance and embracing hate and bigotry are choices - or stated another way, actions do have consequences - and karma seemingly is repaying these folks in spades.  A piece in Huffington Post looks at the ongoing tariff and flooding situation.  Here are highlights:

Panicked farmers throughout the Midwest are facing the increasing probability that vast tracts of fields will remain unplanted or crops will fail this year as much of their land remains under water or too sodden for farm equipment and plants.

The crushing weather conditions come on top of President Donald Trump’s trade war with China that has already triggered a record number of farm bankruptcies.

It’s been the wettest 12 months ever in the U.S., and scientists link it to the effects of climate change.  “The frequency of these disasters, I can’t say we’ve experienced anything like this since I’ve been working in agriculture,” John Newton, chief economist at the American Farm Bureau Federation, told The Washington Post. 

It’s the slowest planting time in 39 years. 

Sodden fields lie fallow, and corn and soy crops that have been planted are stunted in the mud. Hard-hit states include Ohio, Iowa, Illinois, Indiana, Kansas, Missouri, South Dakota, Oklahoma, Nebraska and Michigan. Waters began to recede in some areas in recent days but there’s more rain in the forecast.

“It’s going to be a train wreck,” Illinois corn farmer James McCune, whose family has been tilling the soil since 1857, told Crain’s Chicago Business. He could only plant 950 acres this year of the 6,000 acres he operates.

Ohio Gov. Mike DeWine(R)  is seeking a federal disaster declaration for more government funds. Just 50% of the state’s corn crop and 32% of its soybean crop had been planted as of a few days ago because of relentless rains and flooding. There’s already a state of emergency in every single county in Oklahoma.

The Trump administration is already spending a total of $27 billion in subsidies just to help farmers survive [Trump's] the president’s trade war.

Trump hasn’t acknowledged the flood toll on the group he refers to as his “patriot farmers,” who are credited with helping put him into the White House. Meanwhile, he continues to raise doubts about climate change exists. . . . . His policy changes — including his intention to ease vehicle emission standards — will predictably worsen climate change, according to scientists.

A new Purdue University study has found that farmers are becoming increasingly pessimistic about their futures, citing losses from both Trump’s trade war and the current weather conditions.

The U.S. Department of Agriculture’s National Agricultural Statistics Service estimated that farmers had planted just 67% of the acreage planned for corn by June 3. This time last year, the figure was at 96%.

It’s not only the farmers, but their communities that suffer.  “Everything comes from land and feeds our small towns, our elevators, fertilizer business, seed business, machinery business, all that,” said Illinois farmer Dan Koster. “There’s that ripple effect that’ll affect all those guys.”

It may sound heartless, but if these people continue to support Trump and his trade wars and denial of cliamte change, they basically deserve whatever misfortune befalls them.   If they want to see the cause of their problems, they need to look in a mirror. 

The Trump/GOP Bludgeoning or Rural America

Harvesting a crop of soybeans at a farm in 

Hickory, N.C., in 2018. Charles Mostoller/Reuters.

For decades the GOP - and more recently, Donald Trump - has used religion and racial hatred and a smoldering feeling of inferiority/resentment to induce rural voters to vote for GOP candidates and against their own long term economic and financial interest.  I have used a cartoon on past blog posts that shows a red state voter stating that "they hate the same people I do" as a basis for voting Republican.  Sadly, there is much truth in the cartoon's message.  Now with the Trump tariffs, many rural voters find themselves and their communities reeling economically.  Trump wants to give farmers a bailout but lies about the revenues to be used to fund the bailout and omits the fact that the tariff revenues will be paid by AMERICANS and not China.  As is always the case, Trump and the GOP hope voters are too stupid to see that they are being conned and in some measure, it is GOP policies that are accelerating economic stress in rural areas.  Enterprising Democrats need to seriously come up with proposals to address the growing economic malaise in rural America and work to educate rural voters to the reality that the GOP and its policies is harming them and that these need to stop taking the GOP race-baiting and appeals to far right Christian extremism.  A column in the New York Times looks at the ongoing decline of rural America and how a new set of solutions is needed.  Here are excerpts: 

[Donald] President Trump’s feckless trade war is bludgeoning the bottom line of the Republican Party’s reliable rural base. But the party’s disregard for the economic interests of its own constituents goes well beyond barriers to Chinese markets.

Small towns and rural areas, along with some Rust Belt metros, are falling ever further behind booming urban dynamos — leaving many heavily Republican regions in a deepening morass of economic deterioration, joblessness, substance abuse and declining life expectancy. The lower-density places most Republicans call home produce barely half as much wealth as our biggest cities — and it’s showing.

Yet the travails of America’s struggling red regions, and practical ideas about might be done to alleviate them, are barely mentioned in right-leaning policy circles. For example, “The Once and Future Worker,” a widely discussed book by Oren Cass, a former economic policy adviser to Mitt Romney now at the Manhattan Institute, focuses on initiatives to expand employment and wages for American workers but largely neglects the changing geography of economic output and opportunity behind the woes of heartland workers.

Worse, the Republican Party under Mr. Trump has blundered into a positively anti-rural economic agenda, leaving the soybean fields littered with $20 bills for enterprising Democratic presidential hopefuls to pick up. The president’s nativist immigration agenda deprives farms and small factories of workers local economies can’t otherwise supply, while the administration’s latest budget proposal continues the Republican assault on the health care and social insurance programs rural populations increasingly rely on to survive.

For decades, poorer areas had been converging economically with wealthier ones, but that stalled in the early 1980s as employment began to shift away from widely distributed agriculture and manufacturing jobs toward the service sector and high-skill “knowledge work” in the city-centered information economy. Since then, inequalities in regional productivity and living standards have been widening. The declining capacity of smaller towns and cities to bounce back from job loss — whether because of recession, automation or offshoring — means that the regional economic gap grows wider with every downturn, “disruptive” technological advance or uptick in global economic integration.

As smaller towns lost population and viability as centers of commerce, the families of workers who remained in rural hamlets came to rely on trips to larger nearby towns and cities for their shopping, education and health care.

But then many of the factories supporting these regional hubs downsized, moved overseas or folded under competition from countries with cheaper labor. Assembly-line workers who lost jobs mostly shifted to lower-paid service jobs or dropped out of the work force. Crucially, the college-educated workers who ran these factories — the engineers, managers and lawyers — began to flee with their families to the opportunities in bigger cities, and took their money, civic energy and organizational know-how with them.

Scholars at the Brookings Institution’s Hamilton Project have devised a county-level “Vitality Index” combining weighted measures of median household income, poverty, life expectancy, housing vacancy and rates of unemployment and prime-age employment from 1980 to 2016. They find that the fifth of the American population living in counties with the highest share of rural population suffer the lowest levels of vitality — by a long shot. Americans in these low-vitality counties are far more likely to live in poverty, suffer health problems, die early and lack a job. These places, it bears emphasizing, are overwhelmingly majority Republican.

So what can be done? Here are five ideas:

·         States with flagging economies and declining populations lack the tax base to finance the programs needed to maintain healthy economies. We should adopt fiscal measures to “equalize,” or share, national wealth, which are standard in other advanced countries. This would help prop-up state budgets and ensure the healthy functioning of our decentralized federal system.

·         Basic scientific research and infrastructure investments pay big, long-term economic dividends, yet they are underfunded. A network of federally chartered regional development banks could support weak local economies by issuing tax-favored bonds to finance infrastructure upgrades and promising Research and Development projects spearheaded by currently struggling state universities.

·         The Small Business Administration could be refitted to expand small firms that generate growth in exports and high-value-added sectors, as the economist Dani Rodrik has suggested, rather than simply supplying cheap credit to mom-and-pop shops that sustain, but don’t expand, local employment.

·         A new federal Office for Struggling Regions could facilitate interstate compacts and agreements to help attract firms to flagging local economies on terms that prevent the race-to-the-bottom tax-incentive bidding wars.

·         Granting states some authority to mint visas to meet their specific labor market needs would help dry up demand for undocumented workers, stave off depopulation, keep businesses in place, and fill in fiscal gaps.

Conservatives who have come to embrace economic nationalism have misdiagnosed the problem, and therefore fail to see why bullying trade partners and indiscriminately cracking down on immigration won’t bring back jobs and increase wages.

But the reality of widening geographic disparities has been slow to penetrate Democratic politics and policymaking. Elizabeth Warren’s plan to protect family farms and check the market power of agribusiness giants takes rural woes seriously, but it’s a band-aid on a hemorrhage.

Politically, if Mr. Trump once again chooses divisive culture-war theatrics over an honest attempt to shore up the places that, for now, still prefer Republicans — probably a good bet — Democrats could flip rural House and Senate seats Republicans have long considered “safe.”

This mere possibility could even become likely if only Democratic primary contenders, now seeking favor in rural states, would finally spot the glittering opportunity that Republican misrule has laid at their feet.

 One can only hope that (i) Democrats will recognize and seize this opening and (ii) rural voters will finally wake up to the reality that being duped by GOP culture war memes is not in their best interests or in the best interests of their children and grandchildren.  Indeed, clinging to the culture wars and far right religion makes rural areas anathema to many progressive and innovative businesses - businesses that rural America desperately needs. 

Trump's Trade War Leaves Mid-West Farmers Reeling

The unkind part of me struggles to have much sympathy for Mid_West farmers who helped put Trump in the White House as they watch their führer pushing trade tariff policies that are wreaking havoc on their financial survival. They are, after all reaping what they sowed, motivated by racism and a war against modernity itself. The kinder side of me, feels sympathy for the children and youth who are suffering as a result of their parents' bigotry and overall idiocy.  Frighteningly, rather than admit his tariffs have been a failure, Trump wants to give a bailout to farmers and shift the costs of his failure to the rest of the American taxpayers.  One can only hope that the Democrat controlled House of Representatives rejects any such handout to farmers and that they are left to live with the consequences of their voting for an unfit candidate.  Actions do need to have consequences. NBC News looks at the growing plight of Trump supporting farmers.  Here are article highlights:

WATERLOO, Ill. — As Tim Bardole surveyed his farmland, the soil too wet to plant corn or soybeans because of a recent downpour, he remarked that there are few rays of hope for most American farmers these days. While the weather continues to hamper the planting season, the news over the weekend that the United States and China had only moved further away from a trade deal was seen by the farmers as another blow.

Bardole runs a 2,400-acre farm near Rippey, Iowa, with his father, brother and son. This time last year, they figured the trade dispute between China and the U.S., which had already created an economic nightmare for farmers, would be over by harvest time in the fall. Now, it appears there is no end in sight.

"We just keep hunkering down and doing what we can to reduce costs as much as possible, and digging into reserves, and borrowing more money and using up equity," Bardole said over the phone, adding that the entire industry is doing the same.

China announced Monday that, beginning June 1, it would impose tariffs on $60 billion of U.S. goods. That caused stock markets in the U.S. to tumble, and left farmers to face a future that looks financially bleaker than the historically tough years they have recently faced.

Because of the Trump administration’s trade tactics, the Congressional Research Service concluded in a report published in December that national net farm income dropped by more than $9 billion, or 12 percent, in 2018.

Things looks like they could get much worse as the trade dispute continues.

With the most recent news of the intensifying tensions between the U.S. and China, the price of soybeans has dropped below $8 a bushel for the first time since 2008, which comes as many Midwest farmers are facing rampant flooding on their land during the planting season.

Despite the financial strain that farmers have been enduring while the White House’s trade war continues, many had remained committed to the president and his negotiating tactics. Most farmers tend to agree that China is not an equal trading partner, so the common refrain is that they are willing to suffer short-term pain for long-term benefits.

But after years of hardship, confidence in Trump’s negotiating tactics has begun to waver among some of his most ardent supporters.

Kenneth Hartman, a fifth-generation farmer in Waterloo, Illinois, said he’s long been a Trump supporter . . . But, he added, farmers also need free trade and open markets or else the agriculture community will continue to erode. More than 160,000 farms in the U.S. disappeared from 2007 to 2017, according to the USDA Agriculture Census released in April.

Whether falling confidence in this particular trade negotiation will diminish Trump’s very solid backing among farmers overall, however, remains unclear.

The East Coast May Become the Gulf Coast in Terms of Future Weather

While Donald Trump, a/k/a Der Trumpenführer,  and many in the GOP continue to admit the reality of global warming and climate change, many living on the nation's coastlines beg to differ.  Now, a new study suggests that in addition to higher sea levels, coastal cities need to be planning for sharp changes in the seasonal  temperatures and rainfall.  Meanwhile, Mid-West farmers will see significant decreases in rainfall as the east coast becomes much wetter. A piece in The Atlantic looks at what our children and grandchildren may witness in their lifetimes. One has to wonder what it will take to make climate change deniers open their eyes. Here are highlights:

Sixty years from now, climate change could transform the East Coast into the Gulf Coast. It will move Minnesota to Kansas, turn Tulsa into Texas, and hoist Houston into Mexico. Even Oregonians might ooze out of their damp, chilly corner and find themselves carried to the central valley of California.

These changes won’t happen literally, of course—but that doesn’t make them any less real. A new paper tries to find the climate-change twin city for hundreds of places across the United States: the city whose modern-day weather gives the best clue to what conditions will feel like in 2080. It finds that the effects of global warming will be like relocating American cities more than 500 miles away from their current location, on average, mostly to the south and toward the country’s interior.

For instance, the Philadelphia of the 2080s will resemble the historical climate of Memphis. By the time kids today near retirement age, Philadelphia’s average summer will be about 7 degrees Fahrenheit warmer than it is now. Winters in Philly will be nearly 10 degrees more temperate. Memphis’s scorching, sticky weather provides the best guide to how those climatic changes will feel day after day.

Meanwhile, Memphis’s climate will come to resemble that of modern-day College Station, Texas, by 2080.

“Everything gets warmer,” says Matthew Fitzpatrick, an author of the paper and a professor at the University of Maryland Center for Environmental Science. “I don’t think I’ve seen a place that doesn’t.” In the West and Midwest, cities also tend to get drier as the Great Plains shift east. So Chicago comes to Kansas, Denver drifts to Texas, and San Francisco starts to feel like Los Angeles.

[N]o city will perfectly match its climate twin, especially when it comes to rainfall. Many cities in the South simply do not have a good twin: “The climate of many urban areas could become unlike anything present” in North America, the paper says.

In the Northeast, you can envision the future as one big Arkansas-ification. The paper finds that if the world meets its goals under the Paris Agreement, then Washington, D.C., will enter the 2080s feeling a lot like Paragould, Arkansas. But if the world follows a worst-case scenario, then D.C. will more closely resemble northern Mississippi—and New York City will feel like Jonesboro, Arkansas.

[T]he eastern U.S. will become hotter and wetter, while the [Midwest] will become drier and hotter,” she told me. Her own research focuses on eastern bluebirds, which have historically spent the summer in New York before migrating south for the winter. But “they’ve started staying in New York” for the winter, she said, “so I know it’s getting warmer there.”

She also warned future New Yorkers about what Jonesboro has in store: “Summer-wise, it’s like Florida here. And I cannot imagine New York like Florida … it’s hard to think about how humid it will be.”

“If I have grandkids and they lived in the same place I do,” he said, “they might not recognize this climate that we’re living in now.”

Homeowners, Businesses and Farmers Begin to Suffer from Trump Shutdown

As the last post noted, some congressional Republicans are beginning to feel pressure from their constituents to vote to end the Trump created shutdown crisis.  A piece in the New York Times looks at the sectors of the economy that are beginning to suffer real harm and the forecasts that economic growth will be curtailed - all so Trump can please his hideous base.  What is in my view most sad is that Trump cares noting about those being harmed.  All that matters is boosting his ego and telling his racist, knuckle dragging base that he's "winning." The man is evil.  Here are article highlights:

The impact of a partial government shutdown began to ripple across the economy as it stretched into Day 17, with mortgage applications delayed, public companies unable to get approval to raise capital and thousands of Secret Service agents expected to show up for work without pay.

President Trump and congressional Democrats have made little progress in negotiations to end a shutdown that has affected about 800,000 federal workers, many of whom will miss their first paycheck this week, and who owe a combined $249 million in monthly mortgage payments, according to the online real estate firm Zillow.

The standoff is beginning to inflict pain on Americans, whose lives are affected, in one way or another, by the federal government. It is already the second-longest shutdown in history, behind the one that started in December 1995 and lasted 21 days.

The effects of a prolonged shutdown have some Wall Street economists predicting a hit to the United States economy.

The effects extend from the president’s inner circle, to Wall Street to farm country.

Virtually every employee with the Secret Service involved in investigations, security and the protective division, which protects Mr. Trump and dozens of other current and former government officials and their families, is required to work during the shutdown. And 6,000 of the organization’s roughly 7,000 employees will not be paid.

The same is true at the Securities and Exchange Commission, which has come to a standstill with “only an extremely limited number of staff members available to respond to emergency situations,” according to a shutdown plan posted on the commission’s website.

[C]raft brewers cannot get approval from the Bureau of Alcohol, Tobacco, Firearms and Explosives for new beer labels. And the Commerce Department has stopped processing requests from auto suppliers and other manufacturing companies seeking an exemption from Mr. Trump’s metal tariffs, leaving them uncertain over the price they will need to pay for key materials this year.

Farmers who planned to apply for subsidies to help mitigate the effect of Mr. Trump’s trade war must wait to get paid until the Agriculture Department’s Farm Service Agency offices reopen. And in neighborhoods across the country, as many as 39,000 federally backed mortgage applications may have already been delayed because of reduced staffing in federal agencies, according to Zillow estimates.

Several nonprofit organizations, including the Federal Law Enforcement Officers Association, are trying to aid Department of Homeland Security workers who need immediate help with a limited pool of cash and other resources, an officer with the group’s charitable foundation said. The Navy Federal Credit Union is offering no-interest loans to service members who face the prospect of missed paychecks.

Secret Service agents are growing increasingly anxious and angry about the shutdown, according to several current and former agents. . . . . “They are asking you to put your life on the line and not paying you — it’s ridiculous,” said Donald Mihalek, 49, a 20-year Secret Service veteran whose own retirement paperwork has yet to be processed because of the shutdown.

[C]orporate America will now have to wait for the government to reopen in order to move ahead with things like initial public offerings and pending corporate mergers that need approvals from regulators. . . .  A dearth of those deals could create financial hardships for midsize public companies that have fewer financial resources to draw upon.

The biggest and most far-reaching effect of the shutdown looms on Feb. 1. Trump administration officials say that funding for the Supplemental Nutrition Assistance Program, or SNAP, which provides food benefits for about 40 million people, will run out of cash by the end of the month.

Other food assistance programs are facing a more immediate cash crunch. The Special Supplemental Nutrition Program for Women, Infants and Children, known as WIC, has already been cut off, with state funds filling the gap as the shutdown drags on. WIC provides aid to an additional seven million low-income Americans who are considered to be at “nutritional risk.”