GWB did the RIght Thing Here.

I use the "food stamp metric" as a primary gauge of American politics and the economy. "Politics" because every nation is only 3 meals from revolution (and 9 meals from the abyss - not that I think America is that close on this regard). "Economics", because food is a basic necessity - if one can't afford food its a safe bet they are destitute.

Although 1 in 8 Americans now receives "nutritional assistance", that ratio swells to 1 in 4 when measuring the number of American children.

While the numbers have soared during the recession, the path was cleared in better times when the Bush administration led a campaign to erase the program’s stigma, calling food stamps “nutritional aid” instead of welfare, and made it easier to apply. That bipartisan effort capped an extraordinary reversal from the 1990s, when some conservatives tried to abolish the program, Congress enacted large cuts and bureaucratic hurdles chased many needy people away.

Seems GWB, a Republican, overturned a number of initiatives of the 1990's that limited access to the program (this is no criticism of then President Clinton who also worked to expand the program, but it was GWB that did the heavy lifting).

The next program we desperately need will be installing greenhouses, mini-dairies, gardens, and chicken coops in housing projects and poor neighborhoods (and similar help to the rural poor) to help these people help themselves. I have traveled fairly extensively in Central and South America's Third World countries. The people there have no "government safety net". But they did have plenty of food. My son and I did a 2 week hiking and camping trip through the Peruvian Andes a few years back. We stayed a couple days in an Indian town where they spoke Quechuan, a native language, rather than Spanish. The locals lived in small, 1 room houses that were surrounded by their gardens and livestock. The men and boys played soccer every night (we played, too, but the 8000 foot altitude was a little tough on my then 43 year old legs), and the women socialized together while working cloth. Our guide told us that there was nearly no divorce or crime. The people were, by our standards, poor but they looked healthy and happy. There was no TV, even in the Inn where we stayed (speaking of which... the Inn was something out of the Flintstones - the rooms where mortared fieldstone and the beds mere platforms to keep you off the fieldstone floor. Though there was no heat or AC, we were comfortable under inch thick Alpaca wool blankets. There were 2 lightbulbs per room, and one was in the bathroom. Hot water could be had for a shower by appointment only). There was music. Everywhere, there was music.

It just wouldn't be that difficult to plant an orchard, dig raised beds, keep chickens and dairy animals. In raising and maintaining this, the people would learn useful skills that they then might use in commerce. It has to start somewhere. Unless we want another generation coming of age thinking that food comes from a government "credit card". A credit card that might not be there for them.

Libertariananimal (at) gmail (dot) com

People Vote with their Money (and feet on occasion)

Well, The People have spoken - and they are not particularly worried about Oil shortages, the economy, saving money, etc...

They are interested in flat screen T.V.'s and video games. (This reminds me of an email I received a couple of years ago from a good friend of mine, a former Marine Corps. artillery officer complaining that "America is NOT at war. The Marines are at war. America is at the Mall".)

I know its just one article, but the data does support that point of view. Not that folks are out there buying like its 1999, but they are not saving and reorganizing their lives. It seems we are content with end of the world movies like 2012 and The Road. Hence the Flat Panel T.V.'s?

-----------------------------------------------

In the final analysis this is as much a Libertarian Blog as it is about energy. Our politics have been so ordered here in the U.S. and the West during the past 75 years or so because of cheap and plentiful energy, and that order is coming apart.

I get comments and emails railing me about my distaste for the Left in America. Be careful what you ask for, because you may just get it. Libertarians like me do not object to "community lifeboats", "cooperative communities", "religious sects" living out in the desert, or any other communal social structure that floats your boat. What we object to is being forced into it ourselves. Libertarians have no interest in stopping socialists from socializing themselves in anyway they wish, but we really, really, really want you to leave us out of it.

From our point of view, and with a couple of glaring exceptions, the Right is simply closer in spirit to Libertarianism than the Left is - and for better or worse, the funding is simply not going to be there for the Left's destructive social programs nor the Right's military budget. Both sides are going to have to get used to it, but in the death throws of this some very unfortunate political consequences are highly probable.

For my part, it is my sincere hope that Americans will seek out a path to re-embracing our freedoms and responsibilities rather than seeking out more government interference in our lives.

Libertariananimal (at) gmail (dot) com

I received this email tonight from one of my partners. While the sender is himself educated as an attorney, he does not make a living in the Law but owns and operates a substantial manufacturing company.

You may or may not like the politics of the non-lawyers listed below, but that does not diminish the larger point...

His email goes on to say:

Subject: Perhaps this is THE Problem

Do you think there is any substance in this analysis?

Herewith the analysis:

This is very interesting! I never thought about it this way.

The Democratic Party has become the Lawyers' Party.

* Barack Obama is a lawyer.

* Michelle Obama is a lawyer.

* Hillary Clinton is a lawyer.

* Bill Clinton is a lawyer.

* John Edwards is a lawyer.

* Elizabeth Edwards is a lawyer.

Every Democrat nominee since 1984 went to law school (although Gore did not graduate).

Every Democrat vice presidential nominee since 1976, except for Lloyd Bentsen, went to law school.

Look at leaders of the Democrat Party in Congress:

* Harry Reid is a lawyer.

* Nancy Pelosi is a lawyer.

The Republican Party is different.

* President Bush is a businessman.

* Vice President Cheney is a businessman.

The leaders of the Republican Revolution:

* Newt Gingrich was a history professor.

*Tom Delay was an exterminator.

* Dick Armey was an economist.

* House Minority Leader Boehner was a plastic manufacturer.

* The former Senate Majority Leader Bill Frist is a heart surgeon.

Who was the last Republican president who was a lawyer? Gerald Ford, who left office 31 years ago and who barely won the Republican nomination as a sitting president, running against Ronald Reagan in 1976. The Republican Party is made up of real people doing real work, who are often the targets of lawyers.

The Democrat Party is made up of lawyers. Democrats mock and scorn men who create wealth, like Bush and Cheney, or who heal the sick, like Frist, or who immerse themselves in history, like Gingrich.

The Lawyers' Party sees these sorts of people, who provide goods and services that people want, as the enemies of America . And, so we have seen the procession of official enemies, in the eyes of the Lawyers' Party, grow.

Against whom do Hillary and Obama rail? Pharmaceutical companies, oil companies, hospitals, manufacturers, fast food restaurant chains, large retail businesses, bankers, and anyone producing anything of value in our nation.

This is the natural consequence of viewing everything through the eyes of lawyers. Lawyers solve problems by successfully representing their clients, in this case the American people. Lawyers seek to have new laws passed, they seek to win lawsuits, they press appellate courts to overturn precedent, and lawyers always parse language to favor their side.

Confined to the narrow practice of law, that is fine. But it is an awful way to govern a great nation. When politicians as lawyers begin to view some Americans as clients and other Americans as opposing parties, then the role of the legal system in our life becomes all-consuming. Some Americans become "adverse parties" of our very government. We are not all litigants in some vast social class-action suit. We are citizens of a republic that promises us a great deal of freedom from laws, from courts, and from lawyers.

Today, we are drowning in laws; we are contorted by judicial decisions;

We are driven to distraction by omnipresent lawyers in all parts of our once private lives.

America has a place for laws and lawyers, but that place is modest and reasonable, not vast and unchecked. When the most important decision for our next president is whom he will appoint to the Supreme Court, the role of lawyers and the law in America is too big.

When lawyers use criminal prosecution as a continuation of politics by other means, as happened in the lynching of Scooter Libby and Tom Delay, then the power of lawyers in America is too great. When House Democrats sue America in order to hamstring our efforts to learn what our enemies are planning to do to us, then the role of litigation in America has become crushing.

We cannot expect the Lawyers' Party to provide real change, real reform or real hope in America Most Americans know that a republic in which every major government action must be blessed by nine unelected judges is not what Washington intended in 1789. Most Americans grasp that we cannot fight a war when ACLU lawsuits snap at the heels of our defenders. Most Americans intuit that more lawyers and judges will not restore declining moral values or spark the spirit of enterprise in our economy..

Perhaps Americans will understand that change cannot be brought to our nation by those lawyers who already largely dictate American society and business. Perhaps Americans will see that hope does not come from the mouths of lawyers but from personal dreams nourished by hard work. Perhaps Americans will embrace the truth that more lawyers with more power will only make our problems worse.

The US has 5% of the world's population and 66% of the world's lawyers!

Tort (Legal) reform legislation has been introduced in congress several times in the last several years to limit punitive damages in ridiculous lawsuits such as 'spilling hot coffee on yourself and suing the establishment that sold it to you' and also to limit punitive damages in huge medical malpractice lawsuits. This legislation has continually been blocked from even being voted on by the Democrat Party. When you see that 97% of the political contributions from the American Trial Lawyers Association goes to the Democrat Party, then you realize who is responsible for our medical and product costs being so high!

End of letter.

Here we are with the most difficult issue to face the World in Centuries, one that will take the best mathematical, scientific, and ethical minds our society has to offer... and who do we have a bat? A bunch of argumentative wordsmiths.

So we got that going for us.

Libertariananimal (at) gmail (d0t) com

Thanksgiving!

It is 6:30am as I write this, sitting at the kitchen table as my wife hustles the kitchen for the big day. A fat turkey headlining the event, with family and friends joining in the festivities.

When I was a kid, Thanksgiving was my second favorite holiday after Halloween. I am amazed that today we still have a holiday centered around a slaughtered, roasting bird. How very politically incorrect.

Some of the insanity of the climate change/vegan folks (especially given the outing that the Climate Research Unit received last week for falsifying data, along with the fact that there are not enough carbon fossil fuel deposits left to inject CO2 in the atmosphere to meet the projections. You can't have it both ways, if we have limited Oil, NG, and Coal, then by mathematical necessity we DO NOT have unlimited carbon entering the atmosphere).

At times like this I feel the need to break out Gene Logsdon:

The paranoia so rampant in society right now stems at least partly from the fact that so many people lead a life sheltered from the reality of nature. They don’t see life the way it really is: the entire food chain sits at a huge banquet table, eating and being eaten. Such people begin to entertain strange ideas. For instance, if we would just quit eating meat, some of them think, many of our problems could be solved including not having livestock exhaling and emitting carbon dioxide. I think most of us eat too much meat too, but it is impossible to solve any carbon dioxide problems by getting rid of livestock, as some people seem to believe. Nature abhors a vacuum. Take the domesticated animals away, and the land no longer used to raise livestock would fill with wildlife. It already is happening and eventually something will have to be done about it.

Herds of deer, sometimes thirty or more in number, are now roaming at will over the farmlands where I live. If they were cows, people would be having fits. Eventually, if we quit eating meat, there would be just as many wild animals burping and farting as there are livestock now. I ask people affected by carbon-phobia how much carbon emission comes from squirrels, rabbits, groundhogs, geese, deer, bears, elk, rats, birds, not to mention dogs, cats and horses etc. etc. etc. No one seems to know. The only concern at the moment is about getting rid of cows, as if these are the only animals that belong in the equation.

I have another question: how much less carbon emission would follow if the 6.5 billion human beings on earth would all just quit eating beans. The carbon phobic society doesn’t seem to have thought of that. They are too busy worrying about death from cow breath.

Is that a scream, or what? Gene, you can't debate with "true believers"...

------------------------------------------------

Gold and Silver have had a "melt up". The market has spoken, and it does not approve of the management of the U.S. currency. Before you do anything rash, just consider the "Gold/Cow" ratio. A decent Angus cow (yes, I mean livestock) sells for $1,200 to $1,500 per head. Let's go with the lower number. An ounce of Gold buys 1 Cow. In 2000, it took 4 or 5 ounces of Gold to buy 1 Cow. I can do this same trick with Soy Beans, Corn, Natural Gas...

You know what happens when you put 1 Bull in a field of 40 Cows (with a little mood music and candlelight)? Right, the next year you have 80 cows (steers) and 1 bull. Try that trick with 40 Krugerrand's and a Canadian Maple Leaf in safe deposit box.

That does not mean that a panic into Gold could not drive the price of Gold MUCH HIGHER, or that Asian Central Banks do not try to diversify their way out of US$'s into Gold. You are going to have to draw your own conclusions.

Right now, the Dairy market is in the dumps. Farmers are slaughtering dairy cows to cut costs and bring production in line with demand (which has been cut by the decline in restaurant meals served, because many dishes have a high cheese content). That is certainly affecting the price of Meat in the market place.

The U.S. is actually a net IMPORTER of Beef (see Figure 3)

Given the U.S. natural advantages in Agriculture, this often comes as a surprise. But a cow can only bear 1 calf per year or so (twins are born occasionally, but rarely do both survive), so the supply constraints are obvious. This is not the case with Chicken or Pork, the price and supply of which is driven primarily by feed costs, as each can produce many offspring each year. Given that, it surprises me to see how small of a net exporter of Pork the U.S. is, especially given Asia's preference for Pork.

It will interesting to see how any decline in trade caused by lower Oil availability for transport affects this in the future.

A happy and blessed Thanksgiving to you and yours!

The Wall Street Journal Article

I posted Tom Whipple's excellent article for the AEC community because I was thrilled to see the WSJ eating a little crow, and because I think Whipple is an extremely competent analyst.

Analysis is boring. Financial and economic analysis is even more boring than the analysis they do at Whipple's former employer, the CIA. My game is hours of tedious boredom punctuated by moments of sheer terror (when your bets in the market are getting creamed) or pleasure (when you get it right, its the best feeling you can have with your clothes on). Last year's financial collapse was an interesting time for us. Anybody thinking that the American Energy Crisis that this blog is named after is always going to be so entertaining is going to be disappointed.

The WSJ article is just another "dot" in a collage of dots that I am trying to connect - that article measures "sentiment", the closing of refiners measures the "commercials" view of the future, the EIA data I report on measures the past.

The empirical facts support peak Oil imports have already happened to the U.S. If "Plateau Oil", as the WSJ refers to Peak Oil, is here for the world, by mathematical necessity peak imports are here for the importing nations - SIMPLE LIKE THAT. I write this blog to contribute to the debate about how to best prepare and adjust to a very different environment - business, economic, political, educational, etc... - here in the U.S. as well as the West's Liberal Democracies. I started writing to alert folks, but I think we are well past needing to be alerted now. I think from this point forward IDEAS are needed far more than alarms. I implore those reading here to contribute micro solutions (spare me the macro sh*t, if The Powers That Be can't make a dent in this... well, let us accept that we are less empowered than they to affect the macro outcome) on how best to organize our lives.

Too much discussion centered on which exact month, rather than discussions on how to begin the adjustment process, just isn't very productive. As a matter of fact, too much discussion - instead of DOING stuff - is a big part of the problem. We learn by doing. You can read a repair manual until h*ll freezes over, but get a tool set and fix something and you are on to something. So many folks in the doomer web site community talk about gardening that I suspect its mostly talk - if you ever raised a serious garden you'd know that gardening happens all by itself... its WEEDING that takes 80% of your efforts, and preserving what you have grown the other 20%. G-d and nature take care of the garden. If you can fix, sharpen, shape, carve, knit, fish, build, cook, soothe, brew, clean, butcher, dig, design, maintain.... stuff, well you have already made the adjustment away from specialization. Because that's what serious energy shortages mean - it means the end of specialization.

(PLEASE - I do not speak in absolutes! There will be a certain percentage of the population that will still be specialists - but this subset will be far fewer in number.)

I try to "practice what I preach", because what we face is a fundamental issue - how we live our lives. On my farm, in addition to growing a great deal of our food, I have outfitted a workshop, and have learned the all important HOW TO, that can accomplish most of the tasks I am likely to face. It took me several years and I would guess $10k (and I bought everything used, table saw, miter saw, drill press, air compressor, solar panel to charge battery set, generator, etc... from sources like craigslist and flea markets...this includes a decent inventory of parts and pieces in addition to tools, otherwise it might have been $20k), and now I can repair the barns, our house, tractors, and vehicles (parts will always be available for the creative home engineer - just look at how they keep cars running in Cuba), I can care for the animals (foot trimming, shoeing, vaccinations, milking, slaughtering and butchering), save seeds, preserve food, etc... Getting there takes TIME - years, not months or weeks. Now for a small business within the community.

Not that my, or your, solution works for everyone. Perhaps my solution won't even work for me. Energy crisis or no, we will still have to engage in commerce for a living. Union gigs and high paying government jobs with oodles of bennies are going to shrivel up like a Boca Raton trophy wife in the Florida sun. Somebody has to fish, somebody else is going to cut bait. If I am right about the Oil import situation, there will be no place to hide out in the Corporate world. This is the time to find another gig. Small business will once again, by absolute necessity, be the way most folks earn a living. It won't pay as much as that big corporate job, but that's the way it is going to be.

So let the debate come to an end, and let the good ideas roll.

Tom Whipple's Latest

The following is an article written recently by Tom Whipple. Tom is a 30 year veteran of the U.S. Central Intelligence Agency (yea, THAT CIA), and publishes a good deal of great work at the Falls Church News Press (should you want to see his other stuff).

Without further ado:

"The day was a long time in coming. For many months now, world oil production has remained essentially flat and world oil exports have fallen while world oil prices just climbed and climbed. Poor country after poor country was priced out of the market and world oil stockpiles started to melt. Yet as the world lurched towards the mother of all economic crises, the major media of the country led by Wall Street’s own Journal remained strangely silent.

From time to time they would report some good news such as “billions of barrels found 25,000 ft under the Gulf” or “steaming out sticky oil will save us.” However, they never got around to asking what is involved in extracting oil from deepwater wells or just where all that tar melting steam was coming from. Anyone who questioned that oil production could keep on growing for the foreseeable future was castigated as lunatic fringe.

This make believe world finally came crashing down on Monday when the Wall Street Journal published a front page story admitting there was a big, big problem with oil production just ahead. Now the flagship of economic journalism does not come to such a decision lightly. To admit that you have been dead wrong in ignoring the most important economic issue the world is likely to face in the next century certainly strains your journalistic credibility.

There must have been hours of agonized meetings in the offices of senior Journal editors as they hashed out just how to break the news that world oil production was about to peak without admitting that the world is arriving at peak oil.

The solution turned out to be rather ingenious. Write a story about a new kind of “plateauing oil” that has just been recognized while continuing to bash the old “peak oil.” Sophistry? Of course, but it enables the Journal to maintain that all important face.

The title of the Journal’s story sets the stage “OIL OFFICIALS SEE LIMIT LOOMING ON PRODUCTION.” The first sentence carries the message “A growing number of oil industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.”

There you have it. The story is not portrayed as “evidence is growing that world oil production will soon go into decline.” It turns out that the real news is that an increasing number of oil-industry leaders are afraid that the world is approaching “a practical limit” on oil production. “Practical limit” is a nice touch which sweeps a number of issues under the rug.

To give the Journal its due, right up front they lay out the magnitude of the problem: “The world certainly won't run out of oil any time soon. And plenty of energy experts expect sky high prices to hasten the development of alternative fuels and improve energy efficiency. But evidence is mounting that crude-oil production may plateau before those innovations arrive on a large scale. That could set the stage for a period marked by energy shortages, high prices and bare-knuckled competition for fuel.”

After so much honesty the Journal, unfortunately, falls back into its old ways by attempting to make a distinction between what it is telling us as news and the old “peak oil theory.” The following paragraph from the Journal’s story is a gem.

“The current debate represents a significant twist on an older, often-derided notion known as the peak-oil theory. Traditional peak-oil theorists, many of whom are industry outsiders or retired geologists, have argued that global oil production will soon peak and enter an irreversible decline because nearly half the available oil in the world has been pumped. They've been proved wrong so often that their theory has become debased.”

“Proved wrong so often?” “Debased”? As could be expected, peak oil adherents were apoplectic at these words. The web was instantly populated with reasoned refutations and charts which ask, “What on earth are they talking about?”

The answer probably is in the way large institutions such as the Journal pass important stories through layers of editors – not just to get the commas right but to insure political correctness from the paper’s perspective. The “debased” paragraph plays such a discordant note, it can only be a political afterthought from management.

The story then goes on to explain “plateauing” oil. “The new adherents...don't believe the global oil tank is at the half empty point. But they share the belief that a global production ceiling is coming for other reasons: restricted access to oil fields, spiraling costs and increasingly complex oil field geology. This will create a global production plateau, not a peak, they contend, with oil output remaining relatively constant rather than rising or falling.”

Once the story gets beyond the “face saving” it does a credible job in explaining why the world will soon be facing a major shortfall in oil production: “The emergence of a production ceiling would mark a monumental shift in the energy world.” The “expanding pool of oil, most of it priced cheaply by today's standards, fueled the post-World War II global economic expansion.” “Since 1990, despite billions in new spending, the industry has found only one field with the potential to top 500,000 barrels a day.” “Some of the most promising geological formations are in locations that are inhospitable, for reasons of geography or, especially, politics and strife.” “Labor and construction bottlenecks also are making it difficult to develop proven fields.”

The Journal’s story marks an important turning point in the public’s understanding of peak oil. Now that the ice has been broken by the flagship of the financial press, it will not be long before others muster the courage to explore and discuss the ramifications of “plateauing” oil. This cannot be a bad thing for as the notion that we are entering the greatest paradigm shift of the last 100 years sinks in, people can start preparing for it."

End of essay by Tom Whipple.

"Problem Mortgages"

Mortgages in arrears and already in foreclosure are 14.1% of the market.

Some "experts" are saying that this will peak next year. I guess that depends on how one defines "peak" in this context.

Allow me to fold my "Oil imports are in terminal decline" argument in with Real Estate is not done getting trashed just yet. While Oil imports are down 10.4% this year from 2008, imports during the most recent 4 week period are down 19.3% when compared to the same 4 week period from last year.

Maybe that is a one off, an outlier, a sigma 6 event... or maybe it isn't. In fact, the last 4 weeks Oil imports have been lower than I posted would be the worst case for 2010... that is, if the rate of decline remained unchanged. If total petroleum supplied to the US economy does in fact fall by 30%+ from 2006 to 2014, said supply constraint would bite deeply into gasoline supplies necessary for commuting - something that has not happened yet (while total petroleum supplies have fallen over 10% peak-to-date, the effects have been felt almost entirely in distillate fuels for commercial applications such as trucking, air travel, and industrial consumption). In other words, both residential AND commercial properties at either end of the commuting distribution model would go to ZERO value. After all, what is the value of a property you can't get to?

It then follows that a significant write down on the mortgages on these properties is in the offing, over and above the mainstream consensus of write downs coming due to the slow pace of loss recognition. This also means that the need for ANY new construction, as well as the need for a single new car, is ZERO - which does not bode well for "job growth", now does it?

This is where it gets tricky. The above described scenario is very deflationary. Maybe. Yes, the contraction in debts written off is certainly deflationary - but does the money supply contract faster than the GDP contraction? If not, that would be inflationary, wouldn't it? See why you can't get a straight answer from anybody on this issue? And I am giving you the simple version.

In the 1930's people did not have enough money for food while farmers were dumping milk, slaughtering pigs, and sowing grain into the dirt in an effort to force prices high enough so that they could farm profitably. This was due to the extreme contraction in credit and money supply. This is no exaggeration.

While "Tech" has diversified the U.S. economy somewhat, the chant "Housing-Autos, Housing Autos, Housing Autos" still plays in the collective head our economy. We built our economic system based on the expansion of debt to fund these 2 industries, industries that will not exist as we knew them in an era of Oil supply contraction. So what are the banks going to lend against? Will we once again wind up with folks without enough money to buy food while farmers cannot earn enough to keep farming? Wait! Isn't that what is happening RIGHT NOW?

Its all about Oil imports. Either they continue to decline, or they do not.

The Problem With "Safety Nets"

A comment was posted on this blog from a long time (and thoughtful) commenter - "Kathy".

Those who expect we will all just crank along as we adapt to 30% less oil are not taking into account the impact on state coffers and what a breakdown of safety nets will mean to our inner cities. We have an entire society that exists on the largess of state and federal "programs" If we can't fund WIC and Head Start and food stamps and medicaid and fuel assistance and food stamps and AFDC and welfare and SSI (this is a huge one) then we will have an enormous group of angry, hungry people in a tight mass. Talk about a long, hot summer. Is it doomer to chose to live in a place that keeps one well away from large cities, in an area with reliable rainfall and good soil? I think it's nuts to be in a place without a strong social fabric and a way to provide food to it's citizens. I am still hoping that riots and civil unrest are confined to the big population centers but they may not be. I don't call myself a doomer. I call myself a realist.

I must admit that I was not fully considering the issues facing our inner cities in a budget/currency/funding crisis. Please keep in mind that I have no training in social work or policy - but the point cannot be overstated: Our cities are have all of the ingredients for a Katrina like disaster, only played out in 50 cities at once. If my vision of a 30% decline in total petroleum products in the 2006-2014 time period is correct, I think Kathy's vision is probable enough to be avoided like the plague. And no, Kathy, I would not call you a doomer. Your ability to calculate the probabilities is self evident.

The problem is that 50 million people living in and around Newark/Camden/Trenton/New York/Philidelphia/D.C./Baltimore... cannot do much about the circumstance they find themselves in.

Life will go on, even if major unrest breaks out. Just take a look at the suicide bombings that seem to occur daily over at the Middle East Nut House. Car bombs go off killing 50 here, 13 there, another 123 over there and the locals still have to go food shopping, kids gotta go to school, people gotta use the facilities... life goes on. People must accept the consequences of their actions and inactions alike. If I were an Iraqi I wouldn't keep my family in Baghdad under any circumstance, even if I had to live on a Camel Caravan or join up with the Bedouin tribes and wander the desert. Living with the real possibility that one of my kids would be killed by a suicide bomber would be enough motivation for me - but obviously not for everyone living in Baghdad. "Kathy" has made her decision, and "Bureaucrat" has made his decision. The outcomes of the myriad decisions we make in our lives casts the die as to whether you make old bones, leave descendants, live well or scrape by, etc...

In life, timing is everything. Are we 2.5 years into the 10+ year slide to zero Oil imports? Or is this just a head fake?

That, my friends, is the $64,000 question.

U.S. Oil Refiners Shutting Down

Last month, Sunoco shut down a major Oil refining plant. Just 3 weeks later Valero announces it is shutting down a whopper of a refining plant as well.

Remember just 2 years ago when Wall Street was blaming the energy crisis on those pesky environmentalists who just wouldn't let Big Oil build more refining capacity? As I said then, and will repeat ad nauseum, the U.S. has refining capacity coming out of its ears - because we don't have enough Oil to keep all of the refiners busy.

But read the article... the nit wit that wrote it blames the problem on:

Meanwhile, biofuels, hybrid cars and a deep economic recession have cut into demand. Fuel inventories have risen steadily, especially in the Northeast, protecting consumers from any sudden kinks in the supply chain.

Go that? Biofuels and hybrid cars! Not the fact that Oil imports are down 2.5 million bpd in only 3 years!

Propaganda is everywhere.

The refiners cannot pay the bills with propaganda. Never before in the history of the Age of Oil has the the American refining industry cut such capacity. My bet is they have a couple of sharp guys who can think as well as count.

This is just another Dot that I am connecting that supports my "The Oil Import Crisis is Here and Now" thesis.

More soon,

Libertariananimal (at) gmail (d0t) com

No Political Solution to Oil Import Decline

Today's quote:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." - Judge Learned Hand

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Societies in the West, while functioning liberal democracies (small "L"), still carry the vestiges of their monarchical past in our view of our political leaders. We view our political "leaders" as divine merchants that could, if they were only competent enough, deliver the "goods" - however you define that.

In turn, our candidates plug into this silly belief by making promises and pledges during campaigns that defy credulity - yet their constituents actually believe these obfuscations and untruths (lies).

Think back to the 2008 campaign: "You can't tell me we can put a man on the moon but we can't solve America's energy crisis." - then candidate Obama speaking to the uninformed... and taking advantage of their ignorance.

Dear Mr. President: "Can you hear me know?" Obama (and McCain) knew full well that there is no comparison in American History for what we are confronted with.

The political will necessary to put a man on the moon is chump change next to the coming Oil shortage - not least of which is that our political leaders view this as a "problem" to be "solved" when it is more likely a "condition" that needs to be managed gracefully - its kind of like getting older... in that this "condition" is inevitable.

Getting back to why politics will fail us, and why this is entirely a "self rescue event"... nobody in Washington is concerned with anything other than the mid-term elections. The Republicans smell blood, and will likely take at least one house back and end the Democratic dominance in Senate. The Dems? Their leaders want to hold on to their chairman posts. In a political environment like that who is looking out to 2020 to figure out the best policy responses?

Answer: No One In Politics.

So, its up to you to take care of you and yours - just as it has been since man emerged from caves and dug his plow into the dirt. For a little over 50 years we have had a "safety net". Did it help? Perhaps on the individual level, certainly not on the macro level, and in the final analysis the safety net that was the family became eviscerated by the government run safety net(s) that were funded by cheap Oil... talk about your unintended consequences.

Now, the doomers will tell you that this means we are all going to starve to death, society is going to break down, yada, yada, yada. Of course there will be protests and unrest and maybe a riot or 2. Big deal. Life will go on (with some casualties along the way. After all, life is a contact sport), and because people have to eat they are going to be too busy trying to scratch out a living to be protesting too much. The big question is: How fun/secure/satisfying is your life? Most of that is up to your own ideas and your own enlightened self interest, and some of it will be decided by the political outcomes that arise AFTER Oil shortages decimate our economy - because during that time we will be far more interested in affixing blame.

OK, so we have established that "its all up to you". What is all up to you? That, is for you to decide. For me, it means establishing myself and my family in small city, with agreeable weather, in a home that we can afford to live in come hell or high water, in an area with rainfall, rail service, a hospital, a university, etc... in a state that has low property and income taxes. To engage in commerce (I have a wife and family to provide for), as well as my hobbies, and stay the heck out of politics.

I bring this up because IF Oil imports decline at the pace of the past 3 years, 2010 imports will be 9,157,500 barrels per day ("bpd"), 2011 imports will be 8,333,405 bpd, 2012 will come in at 7,583,398 bpd, 2013 - 6,900,892 bpd, and 2014 - 6,279,812 bpd.

Said another way: From 2006 to 2014 total petroleum products available to the U.S. will have declined a little over 30%, and if it were not for ethanol being included in that number, 35%+.

No rational person can believe that the outcome for the economy will not be earth shaking if the above mentioned rate of change remains constant. (Actually, Jeffrey Brown's models show that the rate of change would dramatically accelerate in the 2011-2016 period, if memory serves.)

Its all about Oil available for import. There is no "alternative" in the time frame discussed that is going to add a single NET kilo/cal to equation. There is NO WAY TO KNOW if this is it - as far as the rate of change in the volume of imported Oil. If I were sure of anything, I would not need my day job. Still, given the data, the most probable outcome is that over the next 5 years the U.S. is going to experience a significant decrease in the supply of petroleum... not that it will end in 5 years... its just that that should be the most profound adjustment period. Of course, given the time frame, being off by 5 years wouldn't be that hard, either. But there are only 60 months in a 5 year time frame. As each month ticks off the data should make the outcome more and more clear.

The Bottom Line

Every now and then you gotta boil things down to the bottom line...

This is one of those moments:

The markets - and I don't care WHICH market; stocks, bonds, commodities, banking, housing etc... - and the economy, specifically the U.S. economy (but considering that the U.S. is 25% of the world's economy) and Western Europe, and politics all hinge, right now and at this moment, on whether or not the Oil Import Decline is real.

Do the exporting nations have the ability to increase their exports? Or NOT? If their exports are in permanent decline the next question is the RATE OF CHANGE. Over the past 30 months or so, imports of Oil into the U.S. have declined at roughly .70% per month. Does that rate of change continue? If it does, the economy will crack - big time. If it does not continue, and imports level off for a few years, we will limp along. If imports INCREASE, the economy will actually grow.

Ergo, its ALL ABOUT OIL.

I am going to flesh this out over the next week or two... so check in...

Libertariananimal (at) gmail (d0t) com

Odds and Ends

Toll Brothers CEO says that the FHA is the next big disaster.

As my son said when he was 12: "Duh".

FHA insures mortgages where the mortgagor has only put down 3%. It really doesn't take a great deal of mathematical talent to see the most probable outcome.

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Commercial Loans to Small Business are going down like a rock in a pond. The companies in the S & P 500 are masking the disaster under the covers. But you can only cut expenses for just so long... after that they are going to need some top line growth, and the only customer is the &^%$! government.

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"Residential Construction unexpectedly dropped..."

Unexpected? By WHOM?

The U.S. does not have the household formation to support the anemic building we have going on in the market - the last thing we need to do is artificially increase demand.

The lunatics are running the &^^%$#!! asylum.

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I may seem like a frustrated "Perma-Bear" - but I think not. I think that we, the World led by the U.S., will be in a monetary-deflation-environment for at least a year or 2. Yes, I am frustrated to have missed the equity rally (not that I would have bought financials or retailers under any circumstance, and they led the rally) but I am as suspicious of the market as I have ever been.

More soon,

Libertariananimal (at) gmail (d0t) com

Oil, Food Security, and GWB

Well, its wednesday. And that means the EIA Weekly Petroleum Status Report!

Really, I DO have a life, but Oil supply data just does it for me...

Oil imports continue their trajectory - DOWN. My crystal ball says that this will continue, but we all know how reliable those things are...

Its ALL about Oil... Just look at Mexico: Fitch downgrades Mexico's debt because their Oil revenues are plunging. Here's the rub: If Oil heads up any more from here, it will grind the U.S. economy to the bone; if Oil declines to $40 per barrel, Mexico will devolve into a failed state - with all of the attendant effects of sharing a 1,000 mile boarder AND a significant population with said failed state on the U.S.

Ergo, its ALL about Oil.

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Except that Food is more important politically...

More than one in seven American households struggled to put enough food on the table in 2008, the highest rate since the Agriculture Department began tracking food security levels in 1995.

That's about 49 million people, or 14.6 percent of U.S. households. The numbers are a significant increase from 2007, when 11.1 percent of U.S. households suffered from what USDA classifies as "food insecurity" — not having enough food for an active, healthy lifestyle.

Researchers blamed the increase in hunger on a lack of money and other resources.

President Barack Obama called the USDA's findings "unsettling." He noted that other indicators of hunger have gone up, such as the number of food stamp applications and the use of food banks. And he said his administration is committed to reversing the trend. "The first task is to restore job growth, which will help relieve the economic pressures that make it difficult for parents to put a square meal on the table each day," Obama said in a statement.

Does anybody else think "jobs" comes first - before food?

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I was thrilled at this piece from a Liberal Blogger apologizing to GWB and family.

We know absolutely no one in Bush family circles and have never met former President George W. Bush or his wife Laura.

If you have been reading us for any length of time, you know that we used to make fun of “Dubya” nearly every day…parroting the same comedic bits we heard in our Democrat circles, where Bush is still, to this day, lampooned as a chimp, a bumbling idiot, and a poor, clumsy public speaker.

Oh, how we RAILED against Bush in 2000…and how we RAILED against the surge in support Bush received post-9/11 when he went to Ground Zero and stood there with his bullhorn in the ruins on that hideous day.

We were convinced that ANYONE who was president would have done what Bush did, and would have set that right tone of leadership in the wake of that disaster. President Gore, President Perot, President Nader, you name it. ANYONE, we assumed, would have filled that role perfectly.

Well, we told you before how much the current president, Dr. Utopia, made us realize just how wrong we were about Bush. We shudder to think what Dr. Utopia would have done post-9/11. He would have not gone there with a bullhorn and struck that right tone. More likely than not, he would have been his usual fey, apologetic self and waxed professorially about how evil America is and how justified Muslims are for attacking us, with a sidebar on how good the attacks were because they would humble us.

Honestly, we don’t think President Gore would have been much better that day. The world needed George W. Bush, his bullhorn, and his indominable spirit that day…and we will forever be grateful to this man for that.

WIll wonders never cease?

9.983 Million barrels here, and 9.983 Million barrels there, and pretty soon you are talking about real Oil

As I have been pointing out to anybody that comes near me:

Oil imports are down BIG - to 9,983,000 barrels each and every day for 2009.

So let's go to the videotape! (Or in our case, the calculator.)

9,983,000 X $80 X 365 days equals $291,503,600,000. Somehow I think that to be vaguely important.

You see, the U.S. trade deficit is ONLY about $400 BILLION for 2009, with nearly 75% of that for Oil. All we need to do is eliminate Oil imports and we will ONLY have a $110 Billion trade deficit! And this is with the US$ so low it could walk under a nickel without bending over.

The only reason Oil exporters were willing to do engage in this transaction is that The Powers That Be in those Oil exporting countries were, for all intents and purposes, US CITIZENS. They sent us their Oil, we sent them our "Money", they, as US citizens, repatriated that money and own a significant slug of the American economy and body politic. But this arrangement does not work out so hot for real citizens of those countries, and said arrangement is in its death throws - giving rise to militant Islam, confrontations with nuclear armed states, the destruction of our currency... among other unhappy outcomes. These policies were promulgated and and continued by Republicans and Democrats alike - including our current Hero in Chief.

We need new policies and a new political paradigm, and a way of accepting politically that which we have no control over - that we are going to be forced to live with smaller government, lesser services and benefits, and a new reliance on family and community (and when I say "community", it is with "family" as the foundation of the community), as well as self sufficient, enlightened self interest. I realize how painful this idea is for the Left... you guys felt you were sooooooo close - but everything held by Liberal dogma was built upon a foundation of plentiful and cheap Oil and energy, and that foundation is no more. You are going to have to come to terms with that, because the real risk now is a political crisis born of an insistence on having something that CANNOT be had.

Just look at California.

More soon.

Libertariananimal (at) gmail (d0t) com

A Picture Worth a Thousand Words

The IEA, Europe's version of the U.S. Department of Energy's EIA, just had their cover blown by one of those pesky "Whistle Blowers".

Seems the Oil supply situation is indeed much worse than the story portrayed in the media - a media that relies exclusively on data from the EIA and the IEA.

Well, here is a graph/picture worth the proverbial thousand words:

Seeing how this is nearly 2010, and anyone with a minimum of two (2) neurons still firing under their hat can see that I have better shot at the Nobel Peace Prize than the above graph has of coming to fruition.

Still want to save for the "Long Term"?

On a brighter note, I play chess against my computer using Apple's chess program a great deal - and last night I won! Never happened before. Given that, I am feeling pretty good that everything is right with the world... at least until I fire up another round with this miserable computer...

Libertariananimal (at) gmail (d0t) com

Something's Not Right

For months now I have had this feeling that "something is not quite right", or "the numbers don't tell me what my eyes are telling me", etc...

Today it occurred to me that the problem was with the data on small and family owned businesses - like mine, my brother's biz, my sister's biz, the sandwich shop on Federal Highway, the Realtors over on Palmetto Park Rd, the Pizza Shop that closed on the corner...

I see it in the vacancy of shops and offices here in sunny South Florida, and I hear it on the phone in speaking with my clients and prospects around the country. Business sucks - and that's for the lucky ones still IN business. The big corporations obviously had lots of fat to cut, considering unemployment and the length of the work week, but the little family business was always run pretty lean - and it relied almost exclusively on the owner. Everyone else working there usually supported the owner in his efforts. The supporting cast is gone and the small business owner is just barely hanging on. Business creation? Dead as fried chicken.

And the U.S. equity market is making new highs at the same time that the Junk Bond default rate is well into double digits - and rising. It really pays to be big, connected, and to have gone to one of the establishment's favored schools.

So, what can the government do? State, Local, and Federal governments can cut their regulatory elements to the bone. Will they? NAFC. Our government HATES business, especially small business.

I wonder what my little town in Wilson County, Tennessee will be like in 5 years. There is no big company there to bring employment, tax revenue, etc... (with the exception of WalMart - I wonder if the local folks know just how much damage that WalMart did to their nice little 200- year-old-city. Their down-town was once a vibrant commercial district that has no been reduced to a bunch of antique shops with starving proprietors.) 20% of the county's residents are already receiving food assistance, yet they still have enough money to smoke (and state laws in much of the South, tobacco states, do not exactly encourage people to quit smoking... there seems no shortage of older folks walking around with Oxygen tanks), which kinda/sorta tells me what kind of cultural/educational system they have...

Not that what they do have is the kind of life you would want for your kid... endless muffler, oil change, car repair, Taco Bell and The Waffle House type businesses... and in any event, as I said before.... business sucks. Yet the young people I speak with who are working in these establishments are college educated and indebted, well the ones without the Prison Tattoos, that is.

But at least The Powers That Be have decided to abandon the US$ in order to bail out the big banks... So we got that going for us.

Real unemployment is over 17%, not 10.2%, the highest since the 1930's - yet consumer debt as percentage of GDP is the U.S. is the highest in the history of modern economics.

While I lack the proverbial crystal ball, I think it highly probable that something bigger than just another economic dislocation is in the offing.

Libertariananimal (at) gmail (d0t) com

Like Broken Record

The EIA released its weekly data today, a day later than usual because of the Veteran's Day holiday - and the data was as ugly as it gets.

Imports of Oil into the U.S. accelerate their decline down 10.6% this year from 2008, and the market is not soaking up the decreased imports - inventories continue to bulge.

My sense is that the Oil inventories are correct and the mainstream economists are wrong (and that would include the equity market), but what the hell do I know... just kidding. The energy usage data simply does not support a return to an expanding U.S. economy, nor does the rail traffic data for crushed stone and lumber (remember all that "shovel ready stimulus" money? If the government was REALLY putting that money to good use building the nation's infrastructure, roads, ports, bridges, etc... one would expect the shipments of these 2 building products to increase substantially - especially from such an easy comparison point).

Total rail traffic is getting a boost from Coal and Corn (for ethanol) - and that makes sense given the U.S. decline in Oil imports - but even with that boost total traffic in 2009 is still down 16.9% for the last 4 weeks compared to the same period in 2oo7. Speaking of which... tax receipts are down 20%, rail traffic is down 16.9%, unemployment DOUBLED, but GDP declined... 6% total? (Peak to trough.) I gotta get a gig working in data collection for the Feds...

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The banks continue to "extend and pretend" to keep their balance sheets afloat - but for how much longer? A long, long, long, looooooong time, I'm afraid. If the banks/Fed/Administration was interested in the truth... well, an RTC style entity would serve the purpose of price discovery for these "assets"... anybody hear of anything like that? Nope. And you won't, at least not any time soon.

Our banking system is still belly button deep in sh*t.

Perversely, that might be very supportive of the US$ in the short term. Unless it isn't. We have entered the world of the surreal.

More soon,

Libertariananimal (at) gmail (d0t) com

The Unthinkable?

"Don't deny what your own eyes are seeing" was my admonishment to traders and brokers over the years...

So let's recap what we are seeing right now:

1. The Fed and Treasury appear to have walked away from the US$ in favor of housing and banking.

I would have thought they would have tried to walk the tight rope, but it appears that both their actions AND their speeches are telling folks to abandon the US$. "Don't deny what your own eyes are seeing".

2. The International Debt Market continues to buy Treasury bonds, notes, and bills - but for how much longer? The Japanese continue to buy, and have accelerated their purchases of, Treasury paper; clearly they believe that deflation is the bigger risk. They better be right, or the Treasury market is going to have one very, very unpleasant day sometime soon. (Disclosure: My biggest holding, bigger than precious metals are Treasury Notes.)

3. The Gold market does not believe in anything except Gold. That market continues to go vertical.

4. Natural Gas consumption denies the industrial pickup that the equity market foresees.

5. Oil prices in US$'s are high enough to tip the US over into another recession.

Given the above, I have no firm conviction on any course of action.

50% of American Children will receive Food Stamps

Before I tackle the recent AP report and study on children in need of food assistance I wanted to say how appalled and horrified I am at the cold blooded murder of innocent, hard working, honest men and women at Fort Hood. I have no insights into this particular tragedy other than that the violation of the sanctity of human life in this incident is beyond my abilities to properly place in its terrible perspective.

Sometimes I despair for my fellow man. This is one of those times.

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I use the "food stamp metric" as part of my analysis of the economy and markets.

The AP reported that 50% of all children, and 90% of "black youngsters", will receive food stamps before they reach adulthood.

How are we to take that? Clearly, it is a positive that children in the U.S. do not go hungry for the most part. What does it say about the parents? Does society, and certain special interest groups in particular, bear responsibility for its contribution to the disintegration of the family unit - or the lack of its formation in the first place?

Children living in poverty tend to have one circumstance in common - their father is missing in action, if you will. That the percentage of children living with both parents receiving food assistance is a fraction of all children receiving food assistance is beyond debate. It would seem that the critical input in this data set to work on would be how to encourage/force/cajole/shame/beg/ the children's fathers TO BE FATHERS.

This is a very complicated issue. For instance, the vast majority of "dead beat dads" are in prison, parole, or probation. Its very tough to provide for your children when you are wearing grey pajamas and eating off paper plates. Guess what happens latter in lives of the children of convicts? This is the "gift that keeps on giving" if you are a lawyer, cop, judge, corrections officer, etc... but the rest of us will not be able to support it for much longer.

This is quite the conundrum.

libertariananimal (at) gmail (d0t) com

Weekly EIA Data

The Weekly Status Report from the U.S. Dept. of Energy' EIA is in, and in no surprise the decline in the volume of imported Oil into the U.S continues to accelerate with year over year imports down 9.6%. With 10 months of data, and given the last 2 year's import decline, I think you can start to draw your own conclusions.

Saudi Arabia

Recently I cited Mexico's declining Oil exports into the U.S. Bad stuff, but small potatoes compared to Saudi Arabia.

Here is the history of Saudi Oil exports into the U.S. since 1973. Please scroll to the bottom. Notice 2009 Saudi exports to the U.S.? Down BIG.

Why?

I have no idea, but it certainly is statistically significant (IMHO).

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India buys half of the IMF's Gold. I need to put my head around that for a day or two.

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Warren Buffet buys Burlington Northern Santa Fe Railroad... Now why would he want to do that? Buffet buying a business that will certainly survive, and thrive, in an Oil starved America (coal moves by rail)? Who'd a thunk it.

Its good to be the King.

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If you think the US$ is at risk, we've got NOTHING on Japan. Japan's national debt makes ours look puny, they have no natural resources or farm land to speak of, and a birth dearth that will leave the island uninhabited some time in the next century (only a slight exaggeration), with only senior citizens to work the factories later in this century.

Yet look what happened to the Yen when that carry trade came to an end. I think the US$ will see the same event play out - but bigger

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I hate to point out to the Obamaphiles... but your guy has been in office for nearly 1/4 of his term. Did he accomplish 1/4 of his promises? How about 1/8? Maybe a steenth (before decimalization, that was Wall Street lingo for a 1/16th, sometimes called a "teenie")? Ah, but we know the truth, don't we? He has not delivered on 1/32 of his promises, nor 1/64, 1/128, or 1/256. Your side, your guys, are somewhat more FOS than your opponents... you were so... sanctimonious.

"Kuum By Ya, My Lord..." Meets the MTVization of American politics.

Whatever.

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Hopefully, when I get done with this post I will turn on the T.V. to hear Jon Corzine's concession speech. Not that his oppenent does it for me, but the world needs another Goldman alumni in a leadership position like it needs a hole in its head.

Halloween

When I was a kid, Halloween was my favorite holiday. Every year, my best friend Freddy and I would dress as hobos, burning a wine cork to use as make up for fake beards. Those were the days (funny, Freddy tracked me down last year from this Blog).

Here is a photo of one of buddy's kids in a costume that must have taken he and his wife hours to get together (if anybody has any other cool halloween photos feel free to email me, and I will put them up. Its good for kids to have 15 minutes of innocent fame).

libertariananimal (at) gmail (d0t) com

"A Fit of Sanity"

Coal Guy described the article written by Gene Logsdon about "animal rights" that I posted on my web site some weeks back as "A fit of sanity in an insane world".

Well, this Logsdon fellow is at again. Read that link. This guy simply overwhelms me with his good sense and lack of fear of political correctness. I am a stone cold, Libertarian-Capitalist... yet Logsdon's analysis of the "business" of farming is unnerving - if you really take the time to think about it.

Agriculture gave rise to civilization - not the other way around. But most "civilizations" collapse at some point, and reorganize into another that eventually collapses once again... it amazes me that my fellow American's know how much the CD rate at the local bank is, but have no idea what food inventories are across the land, and while I fully recognize that is more likely a shortage of MONEY that causes food shortages, Logsdon's point on SOIL could not be more accurate. Just take a look at Haiti (or Africa, or China) in satellite photos to see what happens when soils are permitted to erode or are over produced.

I am more than an avid gardener, I am almost a rabid gardener. I care for my garden's soil like one of my children, and it returns the favor - we produce most of the vegetables we eat on the farm (not to mention, our meat, milk, and eggs).

I loved his essay, as well as his mind set, and taken a step further - that small scale farming/gardening IS (or could be) a money making enterprise for every family with access to a plot and the interest to work it in that growing stuff is fun, and anything you grow yourself you don't have to buy, or pay for the gas to get back and forth to the store. (A neighbor of ours in Boca Raton, FL, has chickens in their backyard! No big deal in rural Tennessee, but in Boca Raton? Could have knocked me over with a feather.)

You see, I am a big fan and supporter of "family farms" (and all small/family business for that matter... I told you I was a capitalist), but "family farms" means much more expensive food - not everybody is going to support that or can support that. Industrial farming is the low cost producer, no matter how many Farm-Aid concerts we have. Folks that cannot afford family farm prices can certainly grow their own, and all of this is going to come to pass over the next decade or 2 - but it sure would not hurt to motivate people, especially the 11% of the US population now receiving food assistance, in this direction. In the end, as any gardener worth his shovel knows:

If you keep taking the produce out of the garden without putting it back in (if you catch my drift) you won't be taking much out for long. What you are really selling is your soil, and once its gone you can't sell it anymore. Even a capitalist like me can grasp that.

Mr. Logsdon, keep it coming.