Tuesday’s gone with the wind -redux

Please hum one of my favorite Lynyrd Skynyrd songs, “Tuesday’s Gone,” as you read a few miscellaneous thoughts this Tuesday. In no particular order:

– Most news agencies are purposefully not mentioning rhe killer’s name in Virginia Beach. I did hear the killer was a pleasant fellow by all accounts. This rebuts the comment about the good guy with a gun stoppng the bad guy – how do you know?

– Why must every issue or small thing be contentious? This president wears me out and has increased stress levels around the country. Please Mr. Trump stop commenting on so many topics. Please stop picking fights when they are not needed.

– And, the press needs to focus less on the many pedestrian faux pas of the president and more on the bigger issues like tariffs and trade, retrenching from our global position, climate change, environmental degradation, ignoring debt, and ongoing obstruction of justice and diminishing our democratic institutions. Coverage of the small stuff dilutes the impact of the large stuff.

– The middle part of our country is hurting with the flooding from these frequent behemoth storms that slowly move across the country. Plus, it is impacting farmers at the very time they must decide what to plant, which is influenced by the tariff issues.

– Finally, speaking of tariffs, political comedian Bill Maher noted on his show on Friday that Democrats should start calling tariffs what they are – a tax. He said they should be referred to as a “Trump Tax,”

That is all I have for this Tuesday. “Tuesday’s gone with the the wind. My baby’s gone with the wind.”

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Governing is hard enough when we use facts

Governing is hard enough when our elected leaders use facts. What frustrates me is when decisions are supported by purposeful misinformation. As noted in a recent The Charlotte Observer article on the Trade War, the US President consistently repeats that China is paying the tariffs we establish.

Each time, his claim is refuted by economists who note US importers are paying the tariffs and pass most of the added cost to consumers. In the article it is noted by economists for the Federal Reserve the typical US household will pay $831 more each year with the next round of tariffs.

Tariffs are an unwieldy tool to deploy, but continually lying about their impact is poor stewardship. We deserve the truth from our leaders, regardless of what party they claim. Sadly, the US President feels that being loose with the facts or outright lying is a suitable modus operandi. It further frustrates when his staff facilitate these untruthful statements.

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Note: A variation of the above was sent into the Letters to the Editor for The Charlotte Observer.

Trade war and sagging prices push U.S. family farmers to leave the field

Recently, I wrote of the significant increase in farmer bankruptcies in several states. Already in a fragile state, the trade wars have pushed an increasing number of family farmers into bankruptcy.

In a Reuters article entitled “Trade war and sagging prices push U.S. family farmers to leave the field,” bankruptcy is not the only path forward for these farmers.

The article begins “Shuffing across his frozen fields, farmer Jim Taphorn hunched his shoulders against the wind and squinted at the auctioneer standing next to his tractors. After a fifth harvest with low grain prices, made worse last fall by the U.S.-China trade war, the 68-year-old and his family were calling it quits. Farming also was taking a physical toll on him, he said; he’d suffered a heart attack 15 months before.

Across the Midwest, growing numbers of grain farmers are choosing to shed their machinery and find renters for their land, all to stem the financial strain on their families, a dozen leading farm-equipment auction houses told Reuters. As these older grain farmers are retiring, fewer younger people are lining up to replace them.”

This a key reason tariffs and trade wars need to be well thought out and avoided whenever possible. Tariffs usually cast a wider net on the lives of people and business, harming far more than those intended for them to help. These farmers are one audience that is harmed.

The additional troubling aspect is the slow and lengthy impact tariffs and trade wars have on sales and supply chains. These chains are built on relationships. I often quote a CFO who echoes what I observed in 30 plus years of business that CFOs like predictable costs maybe even more than lower costs. Tariffs and trade wars upset that paradigm.

We must help our farmers, especially the family farmers. We also must make more thoughtful decisions with input from people in the know. Why? People are impacted, so we need to make sure we understand the scatter-fire of pulling the trigger on a change.

A little bird and a big crow

While at a stop light, I saw a flying metaphor. A little bird (about three inches in height) chased off a big crow who is closer to a foot in height. The little bird chased the bigger one for well over 100 feet, most likely a mother defending her nest from an egg stealer.

I feel the big crow is analgous to the America First mindset, where we are devaluing our relationships and bullying people into action. Now, some might say we have always thrown our weight around. Yet, our allies are reacting to being treated worse with tariffs and talk of more, our pulling out of multilateral or global agreements, our denigrating respected multinational groups, and telling countries who they can and cannot do business with.

The little bird represents individual countries, businesses and farmers who are doing what they must to perpetuate commerce. When certain avenues are closed or made difficult or costly to use, they have to find new suppliers or customers. They are chasing away the impact of the crow. It is a simple equation – the more difficult an entity becomes to deal with, others will seek other options. Plus, the more difficult we make it for all transactions, then fewer transactions will be made and global trade will suffer.

It is reported the President reached out to former President Jimmy Carter. The reason is Trump’s having concern over an ascendant China. This was happening any way, facilitated by actual long term planning by China. Yet, what Trump fails to realize is his role in greasing the skids. By retrenching from our position of strength, pulling out of a Trans-Pacific trade deal meant to even the playing field with China, he has allowed China to fill the void. By telling countries they will face tariffs if they deal with Cuba and Iran, we are greasing the skids for China to fill the void.

These little birds have to eat. They will look out for their best interests. If they must acquiesesce to the big crow, those actions will be remembered, if they are needed in the future by the crow. It should be noted,  a foreign diplomat said two years ago, the strength of the US is its allied relationships – failing to nurture them comes at a cost.

And, that Chinese bird is getting even bigger and faster than this old crow.

Fast break

With the NCAA March Madness tipping off, let me use fast break as a way to quickly comment on news items. For non-basketball fans, a fast break is an attempt to score before the defense sets up after a possession change.

– Congressman Devin Nunes is suing two Twitter accounts for making fun of his questionable and unethical actions as a Committee chair. Unfortunately, he has brought more followers to the two sites.

– There are a number of experienced and quality candidates running for the Democrat Presidential nomination. Dems need to avoid the “circular firing squad syndrome” which attack candidates’ imperfections. My suggestion is to listen to what each has to offer.

– The US President is headed to Ohio to save face by asking in person for GM not to close two plants hastened by his tariffs and not helping when asked last year. The union leader and two Ohio Senators asked  the President to help GM retool the plants to build SUVs rather than the sedans last year. Senator Sherrod Brown noted now the President is paying attention as it makes him look bad.

– The Brexit “troubles” continue, but hopefully the EU will agree to the delay. And, Parliament needs to use the time to clearly define what Brexit means versus staying with the EU, something they have not done. This needs to be thoughtful and data-driven. I would hate to see a state leave the US based on politics only to wake up to a terrible hangover.

That is all for now. I hope your bracket for the tournament is successful. Fast breaks are fun to watch and usually the team doing more of them wins.

Friday follies

I hope you have had a great week. Since there are several issues bouncing around inside my head, here is a summary review of the follies for the week.

The Brexit clock keeps ticking while the British parliament keeps placing their collective thumbs in their more southern orifices. A second Brexit vote would likely end with a different conclusion, but it would take more time than they have and would involve another decision by an uninformed public. Let me give Parliament its out, but it will take more courage than they have. They should either accept May’s terms or vote to remain. I would urge the Brits to remain, as I would hate to see Northern Ireland and Scotland leave the UK.

Here in the US, Trump’s campaign manager, Paul Manafort, was sentenced to 47 months in prison. While a much lighter sentence than many felt, he does have another sentence coming in another court. If Trump is as innocent as he proclaims, with the guilt of Manafort and other Trump associates, Trump is not very good at judging friends and associates. Yet, as I have witnessed time and again as a consultant, an organization takes on the personality of its leader. So, if subordinates are guilty of lying, cheating, and criminal behavior…

China’s slowing economy is impacting orher countries as expected. It was reported yesterday that China is buying less from abroad and using those dollars internally. The US trade deficit with China has grown not lessened the past year. And, the EU banks have softened economic projections as a result. What continues to surprise me is how little the US President understands how trade deficits and tariffs work. This may be the best metaphor of his Presidency as economics were supposed to be his strength.

Finally, populists are popping up in more countries in greater numbers. To me, a name that implies a broader appeal should not give greater license to spread hate and bigotry. In spite of all of our many faults here in the US and some leaders who need to find a conscious, we have benefitted greatly from being a melting pot. Diversity is a strength. I fully understand the need to govern the numbers of people immigrating in, yet painting all newcomers as evil, is not appropriate. What frustrates me is issues over immigration should be fact-based and reflective of the country’s mores and ideals and not sold on fear.

That is all for now. I know I have overlooked a great deal. Have a great weekend.

 

 

Farm bankruptcies on the rise

There have been numerous stories on the rise in farm bankruptcies in 2018. Picking one from December 1, 2018 in the Lincoln Journal Star by Matt Olberdin called “As ag economy continues to struggle, farm bankruptcies rise,” through October, bankruptcies in a seven state region including and around Nebraska are up 45% compared to all of 2017.

Trade issues and low crop prices are two main issues driving down farm incomes. Coupled with rising interest rates and property taxes, and it is a tougher road for farmers. Per PBS Newshour, trade issues means tariffs getting in the way of the farmers’ markets.

These farmers use Chapter 12 bankruptcy that makes it easier to file and reorganize. This approach allows a higher debt limit as well. Per The Wall Street Journal, farm bankruptcy filings are the highest they have been in ten years.

As with the shutdown, real people are impacted by ill-conceived decisions by the President. Loyalty to a President becomes tough when you cannot feed your family and may lose your livelihood. With the tariffs blocking markets for the farmers’ products, the buyers must look elsewhere. These farmers will have to dump product or let it go to waste.

This is a key reason economist say trade wars cannot be won. More people lose than win on targeted tariffs. Yet, this does not seem to bother the man in the White House. That is troubling and sad for our country.