Bravo, Rep. Camp...  

This wayward Republican was heartened to see a very reasonable proposal from Rep. Camp for tax reform. While there is much I would quibble with, it looks to me like just everybody's special interest ox gets gored.

It turns out that Camp's plan specifies the tax breaks he wants to close in considerable detail. And according to the analysis of the Joint Committee on Taxation, which is usually fairly reliable, it would be both revenue neutral and distributionally pretty neutral too. Over ten years it would raise about $3 billion more than present law, and the chart on the right shows how tax rates would be affected. Generally speaking, effective tax rates would go down for the poor and the middle class, and would go up slightly for the affluent. (These are estimates for 2015. They change slightly in subsequent years.) [More] 

But what's in it for me, I can hear you say. Well, I've got good news and some less good news.

Some of the farm-specific details I could find:

• Cash accounting for all farms (although your accountant thinks it is a really bad idea)
• Sec. 179 made permanent at $250,000; phased out at $800,000 total purchased.
• Repeal of soils and water conservation expenses deduction
•  Fertilizer would not be a deductible expense (if I'm reading this right)

Sec. 3115. Repeal of deduction for expenditures by farmers for fertilizer, etc.

Current law:

Under current law, a taxpayer engaged in the business of farming may elect to

deduct immediately expenditures for fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming.

Provision:

Under the provision, the special rule for deducting expenditures for fertilizer and

other farming-related materials would be repealed. The provision would be effective for

expenses paid or incurred in tax years beginning after 2014.

•  Repeal of 1031 exchanges
• Repeal of biodiesel  and cellulosic ethanol tax credits
• Repeal of farm income averaging
• Generally slower and straight-line only depreciation after 179 deductions
• C ans S Corp stuff I couldn't understand

Of course, farmers will enjoy (?) all the benefits available to all filers that will make the headlines - lower rates, bigger standard deduction, etc.

More later.

Bottom line, we'll mostly hate it in farm country, but I think it's a remarkable start from the Republican side.
 

Years ago...

I gave a wistful commentary on what RR beans might mean to monarch butterflies.  The link is the virtual eradication of milkweeds from our fields.

Never mind I thought I hated them as they slipped aside from my hoe walking beans or the sticky sap gummed up my fingers.  Still there were the amazingly beautiful surprises when the combine reel would whack a ripe pod and the seeds would explode like graceful slow-motion snowflakes.

But like my ancestors talking about passenger pigeons, it may soon be a lost piece of nature.

While other factors cannot be dismissed, lack of milkweeds is the main cause of the monarch's slide toward extinction.

“The migration is definitely proving to be an endangered biological phenomenon,” Lincoln Brower, a leading entomologist at Sweet Briar College in Virginia, told the Associated Press. “The main culprit is now GMO herbicide-resistant corn and soybean crops and herbicides in the USA, [which] leads to the wholesale killing of the monarch’s principal food plant, common milkweed.”Monarch butterflies lay their eggs on milkweed plants. When the eggs hatch, the larvae feed off the plant. Researchers say that without milkweed, there are no butterflies."They can't lay eggs on anything else,” Christopher Singer, founder of the nonprofit Live Monarch Foundation, said in a statement, according to theChristian Science Monitor. “Can't lay it on a watermelon, can't lay it on a parsley plant. It has to be a milkweed plant."[More]

This is not an "Alas Babylon!" post. Species go extinct and arise constantly. This one strikes me as regrettable, but only because of so many milkweed-monarch memories. My grandchildren will never miss the monarch butterflies they never saw. 

It does seem a little unnecessary, however. And more than a little sad.

Peak of the Week...

Is there a limit to how many cars we can crowd into cities?

The world that Henry Ford put on wheels is poised for a stall.In the globe’s growing megacities, pollution and gridlock are putting a damper on driving. In India, some commuters are leaving their cars at home to avoid traffic snarls and long prowls for parking. More young Americans are forgoing the dream of auto ownership for public transport, bikes and vehicle-sharing. Cars on the road are lasting longer than ever.
All of that may herald a new era for an auto industry weaned on a century of global growth. The world will reach “Peak Car” -- a point at which annual global sales growth will top out -- in the next decade, several auto-industry analysts predict. Researcher IHS Automotive, for one, sees annual sales cresting at 100 million within that time.Peak Car is at odds with the ambitious expansion plans of global automakers, which IHS says are gearing up to produce more than 120 million vehicles by 2016 -- almost 50 percent more than last year’s worldwide sales mark of 82 million. The dynamic also threatens the business plans of parts producers, suppliers of raw material and oil companies.Driving this upheaval is a rapidly emerging reality: The vehicle that ushered in an unparalleled era of personal mobility in the last century is, in many cases, no longer the most convenient conveyance, particularly as more of the world’s population migrates to big cities. [More, with a great infographic]

I find this concern a plausible problem in the medium-term future, but it could be worse in cities I have not first-hand knowledge of like Mumbai. But the inability or reluctance to spend on roads, parking, and other auto infrastructure seems like a transportation "wall" we are hurtling toward. 

Basically, you can only get X cars on Y roads, no matter how wealthy a population is. Something will give: decentralization to shorten commutes; public transport; telecommuting; bicycles, etc.; even denser urban living to allow walking to work; whatever.

This doesn't even take into account China-like smog and the externalities of cars. But it also seems to me to cap one one the most cherished "good" job sources: the auto-industry. Between a ceiling on demand, increased use of robots, and other factors affecting labor needs, this key middle-class life-lifter industry could be less of a contributor to economic mobility in the future.

Junkbox, Episode MMXIV ⨩...

I have no idea what those ending characters are for. They are cute, though. Bonus points if you can identify them. Without googling.

• Dave Barry on manning up
• China looks to be concentrating on animal agriculture
• What's next - Ag Mech 101?
• The best guess on Ukraine I've found
• Where children go hungry
• The Federal Reserve Comedy Club
• The Iran "martyr-state" illogic
• Rural America still losing jobs
• It just looks like there's a choice

NASS is sponsoring the taping of USFR Roundtables at Commodity Classic. I am not making this up.

Lucky us...

While we're whining about this bitter, and unending winter, the rest of the world is sweating it out.

We seem to be a smidgen self-centered, no?

Why we can't have nice things...  

Count me alongside Kevin Drum on the issue of better credit cards here in the US.

In any case, we're finally getting EMV technology in the United States starting in 2015. But in possibly the stupidest decision in the history of payment networks, we're actually getting chip-and-signature cards. Why? I've been unable to find a straight answer to this. The banks vaguely talk about merchant resistance to getting new terminals that accept PINs, but that makes no sense. PIN terminals aren't very expensive, and the cost would be effectively zero if you have a five or ten-year phase-in.
Alternatively, they make noises about American consumers not being used to PINs, but that doesn't make sense either. We all use PINs for our debit cards already. We'd learn to use PINs for credit cards in about five minutes.
And then, to add insult to injury, the cards we're getting will mostly be signature-only. That's not a requirement of the technology, though. They could be "signature preferred," which requires a signature if possible but accepts a PIN if not (at automated kiosks, for example). Why not do that? I truly have no idea.
Honestly, the whole thing is just a mystery. EMV technology is old and well-tested. Everyone knows how to make the transition because dozens of countries have already done it. It's not wildly expensive. It wouldn't spark a consumer revolt. So why are we getting idiotic signature-only PIN cards, which are probably the worst possible compromise imaginable? They require more expensive cards and upgrades to infrastructure, but they don't provide much additional security and they don't work universally outside the US. [More of a quality rant]

I got a new Citicard with chip before going to Africa last year. Just called them up and asked. But I didn't realize it wasn't a real EMV card like my European friends have.

Cripes, if we admit they can build better cornheads why can't we accept they have better credit cards? And adopt them?

Aussies are realists...  

It's hard not to admire the attitude of pragmatism of our southern cousins.

DO Australians need to rethink which areas of our country are actually viable for farming?
Droughts and floods are an inevitable part of agriculture in any country but it seems rational to ask how often these calamities can afflict a region before prudence demands it is marked as unsustainable for food production.

“In most Australian farmlands, the rainfall is sufficient to raise crops to maturity in only a fraction of all years”

If a private company wishes to run at a loss, it is no-one's business but the proprietor's, however, when that business is subsidised by taxpayer dollars, it's commonsense we ask questions about where the money is going.
The 2009 Australian Productivity Commission report on government drought support found some Aussie farms had been on "income support continuously since 2002". [More]

There is more at at stake here than just political or economic policy. Extended life support for farm that make no sense strips the farmers and the profession of any dignity. This is the same argument I have heard in our ag press about food stamps, oddly enough, but we can't seem to realize it applies similarly to our farms.

What worries me most is subsidies outlined in the new farm bill will encourage unneeded production too far into the future by enabling marginal land to stay in production. When economic response times are expanded like this by artificial means, the whole system suffers from an inability to adjust supply and demand in a timely way.

On a different note, climate change - which has become a political rugby ball there - may rule out Australia as a major competitor for Asian demand.

The Walmart of space...  

'Splain to me again how we are going to compete technologically with India.

While India’s recent launch of a spacecraft to Mars was a remarkable feat in its own right, it is the $75 million mission’s thrifty approach to time, money and materials that is getting attention.

Just days after the launch of India’s Mangalyaan satellite, NASA sent off its own Mars mission, five years in the making, named Maven. Its cost: $671 million. The budget of India’s Mars mission, by contrast, was just three-quarters of the $100 million that Hollywood spent on last year’s space-based hit, “Gravity.” [More]

As the world splits into a tiny number of extremely rich and a gargantuan population of poor, the middle class will be built by societies like this, I think.

We may have fallen into a logical trap of assuming they will have to upgrade their vast agricultural system before becoming a true competitor. Maybe the Indian leadership believes it is better to keep most down on the farm progressing slowly through an agrarian phase until labor demand pulls them to the cities.

Another hint... 

The GMO labeling battle is only beginning.

Consider this reference from an article about using CGI (computer-generated imagery) in the porn industry to "remove" condoms from video while still following health regulations.

The adult industry has an even more symbiotic relationship with technology, so you can bet top-billing actors will be asking for reductions, edits, and enhancements during their porn post-production. It will be up to the fans to ask for better labeling: “This porn contains no digitized parts”—the equivalent of GMO foods where most pornography will be modified in some form. There will be a Whole Foods of porn, and it will do great. [More]

When casual references like above begin to pop up, it's usually a sign somebody has lost control of the narrative, as they say these days.

Literally lost...

This year has been a year of transition unlike all the rest of them, I suppose. But as some readers have noticed, my views have changed or become less rigid as a result of cumulative experience and some additional learning. Much of that evolution has been part and parcel of my faith experience, and how I try to make sense of belief and its purpose.

Perhaps, the ending of my work as a choir director suddenly put in stark comparison how crucial that ministry was for my Christian identity. Choral music was deeply important to my life pattern and a powerful shaping force for my belief system. Its ending left a  much larger hole than I ever anticipated, and a grief that abides today.

Simultaneously, the more history I listened to on my commute the USFR - from history of the early Church, to the Crusades, to the "alternative Christianity's", to the ongoing story of how religion and secular government have evolved, to any number of carefully substantiated historical dismantling of my rather naive lay convictions of who we Christians are and how we got here - the more my understanding was pressured to either give up on reason or bend to the facts.

Additionally, in the past two decades at least, the conflict between politics and religion has been brought into sharper focus and stronger engagement, as the wall between church and state has been questioned by the right. I see this widely evident in disagreement about global warming, diplomacy with other cultures, support of Israel, welfare policy, and perversely, economic theory justification.

For the last few months I have been slogging through the exhaustive (and exhausting) Christianity: The First Three Thousand Years.

It is a monsterpiece of academic precision and detail, as well as an ongoing challenge to my commitments to rationality and faith. While I highly recommend it, pack a lunch - this is no quick read.

I have been sequentially intrigued , disconcerted, alarmed, and antagonistic toward evangelical Christianity as practiced in the new business model developed over the last three decades.

Apparently, I'm not the only pilgrim wandering on roads less traveled. New research, as well as a spate of commentary from thinkers I respect has flooded media from religious periodicals to popular blogs.

One current subject of contention is what is happening in the evangelical wing. Even I have been startled by the findings.

The common thread in these books is the contention that Christianity, especially conservative Christianity, is rapidly losing strength and cultural authority in a changing America. Charting Americans’ religious beliefs is notoriously tricky, as comparison between any two religion-related polls will attest. Nevertheless, these authors’ argument that conservative Christianity — both evangelical Protestantism and conservative Catholicism — is losing sway in America has become the consensus view of most experts who study American religiosity. In 2012, the Pew Research Center made headlines with a study showing that for the first time, the percentage of Americans claiming no religious affiliation (19.6 percent) surpassed the number of white evangelical Protestants (19 percent). Other surveys conducted in recent years (by Gallup, the General Social Survey, Baylor University, and other research organizations) show declines in the number of people who identify as Christian, believe in God, and attend church regularly. American Catholicism has undergone its own similar involution, with nearly half of all Catholics under age 40 now Hispanic and a majority of Catholics favoring same-sex marriage, according to Pew. Meanwhile, the number of Muslims in America has risen rapidly, more than doubling since 1990. In the most recent (2008) American Religious Identification Survey, Islam surpassed Mormonism as America’s fastest growing faith.For conservative Christians, the turnabout has been disorienting. Just 10 years ago, conservative Christianity appeared ascendant, with a coalition of evangelical Protestants and conservative Catholics twice electing a born-again Christian to the presidency and, in 2004, outlawing gay marriage in 11 states. Today, laws against same-sex marriage are being rolled back and conservatives have failed to budge debate over access to contraception in the new health law. The Tea Party, which pairs evangelicals in an uneasy alliance with an increasingly assertive libertarian movement, is now a dominant force in Republican politics, shouldering aside once-feared evangelical organizations such as the Christian Coalition. Key evangelicals, stung by polls showing younger Americans are turned off by strident conservatism, have begun pivoting politically, as have Catholic bishops in response to Pope Francis’s attempt to reorient his church toward evangelism and social justice. Last year, prominent evangelical leaders, including the political director of the Southern Baptist Convention, spurned the Tea Party and emerged as prominent backers of comprehensive immigration reform. Evangelical leaders told me they were responding to demographic change in America: both the rise of immigrants in their churches and the emergence of a younger, more politically progressive generation of Christians. Yet in a sign of Christians’ diminished political clout, so far evangelicals’ fervent activism on this issue has failed to garner congressional Republican support. [More highly recommended]

Disclaimer: I have grown increasingly intolerant of the fundamentalist branch of the the church, probably because its increasingly anti-intellectualism. This mindset is nothing new, of course. Aaron offered this helpful quote from Isaac Asimov: 

“There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "my ignorance is just as good as your knowledge.”

Amen. But my intolerance is of the same cloth as those I condemn, and singularly unhelpful as well.

So I find myself simply withdrawing, less willing to dispute of even acknowledge what I consider bad religion and life-damaging practices. This is a path of least resistance, and certainly lest reward as well. At the same time, I find myself more likely to try to help rather than persuade. I am beginning to think I waited far to long for this step.

I am also growing less discouraged with my sense of disconnection with modern religious practice - slightly more comfortable in the wilderness I wander. I still find meaning in belief and communal worship, but am actively looking for a more cohesive view of my life and purpose. 

This all sounds like I've postponed my hippy phase until marijuana was legal. But it is also immensely absorbing and frankly time-consuming. I find some evidence to support the theory this is typical for my age, but precious little literature to compare my thinking with others. Maybe, as suggested above, these journeys are just beginning to be chronicled.

I'll keep you updated as I think appropriate, but if you are finding your life is taking you places you never really imagined before, be assured it's not just you. 

Junkbox, Episode MMXIV ⋇...

Rain, believe it or not.

• Once a week I force myself to read Fox
• Even as cable news is slip-sliding into irrelevance
• Is America resilient?
• This post may be recorded
• The new hot spot for snowbirds: Somalia
• What was the ROI on farm bill lobbying?
• Own nothing, lease everything

Good crowd at TP seminar. Good to see old long-time friends.

In case you missed it...

Paul Neiffer has a small bombshell regarding the ARC program on his blog at AgWeb.  We talked about this Wednesday night at the TP seminar and he ran some numbers to try to verify our back of the envelope thinking.

I ran some numbers for Buchanan County, Iowa based upon the county yields for the last five years and arrived at the following conclusion:

• The Olympic average yield for the last five years for the county is about 169 bpa.

• The Olympic average corn price over the last five years is $5.15 (this is for the whole US, not just the county).

• A claim would be paid if the actual revenue was less than $748.

• The maximum claim is about $75 and if the yield was 160 bpa and the average corn price was less than $4.25, then the full claim of $75 would be paid.  The average price would have to rise to almost $4.75 to have no claim.

• If the yield was 170 bpa, then a full claim would happen at about $4.10.  At about $4.40, no claim would be owed.

• If the yield rises to 180 bpa, then a full claim is allowed if the average price falls below $3.70 and no claim is allowed if the price goes over $4.15.

Let’s assume we have a Buchanan farmer with 1,000 corn base acres in 2014 and the county yield ends up at 170 bushels per acre and the final corn price for the year is $4.  In this case, he would receive the maximum $75 per acre on 850 acres (1,000 times 85%) or $63,750.  Since the payment limit is now $125,000 per person ($250,000 for married couples), the farmer will get the full amount.  In fact, the farmer, if married he could farm 4,000 acres and collect full ARC payments.  Under the old law, this most likely would be limited.  If these numbers were based on his actual yields, then the payment would be reduced to 650 acres times $75 or $48,750.  Using this coverage, the farmer could farm 6,000 acres and collect full ARC payments. [More]

It looks like this math will be roughly the same for 2015 too because of the Olympic averaging. So while I had been wondering why Heritage, AEI, etc. had been complaining about the bill cost estimates being way too low, this would seem to confirm it.

We're talking ~2.5 X DCP payments. I'm calling it a 7.3 (out of 10) boondoggle.

The catch: the payment won't be made until Oct 2015, and of course everything depends on actual prices and yields during the 2014 year. My thinking is if yields are higher, prices will be (much) lower, so this is a reasonable first guess.