A Financial Choice, Act II

In early September 2008, I drove down to Charleston to visit a cousin who had recently suffered a terrible accident. Throughout the drive I listened to extended public radio reports on an evolving calamity: the collapse of Lehman Brothers financial services firm. The horror that the government was going to allow such a large firm to go under was decorated with the baroque gadgetry of terms that would become more familiar in the coming years: credit default swaps, subprime mortgage lending, tranches, CDOs. The gore and detail of the cover that had been constructed around scams and fraud at the broadest level was audible in the voices of interviewers and guests. There was a tinge of disbelief within their attempts to explain what these terms meant and how they had gotten us all (!) into so much peril. It was as close to 1929 as we had come and potentially far worse – so extensively had the giant vampire squid of financial engineering welded its tentacles to every sector. Housing, banking, investing, construction, debt, bonds… this is business America now, and every other activity is vulnerable to its caprice. It was the stretch run of a presidential election as well; one candidate tried to suspend the campaign, the other fortunately tried to hold things together.

And he did mange to hold things together, despite rather obvious at the time challenges he personally faced. But the Lehman moment got everyone’s attention, everyone who mattered. $700 billion for Troubled Asset Relief (TARP), $250 billion for Capital Purchase(CPP), in addition to billions more in government-backed guarantees to individual banks. And eventually, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. It seemed the public assistance required to save the vampire from itself had sealed the argument in favor of financial reform.

Yesterday, the Republican House of Representatives passed the Financial Choice Act and can you guess what it does? Right! Overturns Dodd-Frank. And not only is it a bad idea to weaken a law that requires stronger banks,

The bill also offers the wrong kind of relief. During the last crisis, all kinds of financial activity — including insurance, money-market funds and speculative trading at banks — depended on government support. That’s why Dodd-Frank placed limits on banks’ trading operations and provided added oversight for all systemically important institutions, and why regulators require them to have enough cash on hand to survive a panic.
Those provisions aren’t perfect — simpler and more effective options exist — but the Choice Act just scraps them. What’s more, it would eliminate the Office of Financial Research, created to give regulators the data they need to see what’s going on in markets and institutions. The law would leave regulators in the dark, and taxpayers implicitly or explicitly backing much of the financial sector.

If you didn’t click, that’s coming from fcking Bloomberg. The financial industry doesn’t even think it’s a good idea. In trying to undo more Obama-era legislation, the know-nothings in Congress are re-setting the table for our financial catastrophe guests. Sure, certain things could make Dodd-Frank unnecessary. But unfortunately, none of the thousands of people, firms, funds and frauds who populate this sector care about a stronger financial system or its being more competitive. It’s the logic of business – the democracy, whiskey, sexy of fools.
Image: Detail from The Garden of Earthly Delights, by Hieronymus Bosch, ca. 1500

Food and Where It Comes From, part MCMXIV


Great dinner out last night with Mrs. G, and probably a nice lunch in a little while – two examples of the luxury amidst which we find ourselves. Just order, buy, what looks good? How our food choices got there practically never enters into our thinking, but the Los Angeles Times published some extraordinary journalism earlier this week, an investigation of the Mexican farms that send us all the delightful produce we choose or ignore – all while choosing to ignore something much greater and more fundamentally wrong with this scenario:

American consumers get all the salsa, squash and melons they can eat at affordable prices. And top U.S. brands — Wal-Mart, Whole Foods, Subway and Safeway, among many others — profit from produce they have come to depend on.

These corporations say their Mexican suppliers have committed to decent treatment and living conditions for workers.

But a Los Angeles Times investigation found that for thousands of farm laborers south of the border, the export boom is a story of exploitation and extreme hardship.

The Times found:

  • Many farm laborers are essentially trapped for months at a time in rat-infested camps, often without beds and sometimes without functioning toilets or a reliable water supply.
  • Some camp bosses illegally withhold wages to prevent workers from leaving during peak harvest periods.
  • Laborers often go deep in debt paying inflated prices for necessities at company stores. Some are reduced to scavenging for food when their credit is cut off. It’s common for laborers to head home penniless at the end of a harvest.
  • Those who seek to escape their debts and miserable living conditions have to contend with guards, barbed-wire fences and sometimes threats of violence from camp supervisors.
  • Major U.S. companies have done little to enforce social responsibility guidelines that call for basic worker protections such as clean housing and fair pay practices.

Doing anything differently begins with just knowing. So, just know. There are real people involved in the growing and harvesting of our bounty.

via LGM.

Arguing With Success

Tom Philpot at Grist links to this quote from Virginia farmer, Joel Salatin:

Number one is that it[industrial agriculture] destroys soil. Absolutely and completely. The soil is the only thread upon which civilization can exist, and it’s such a narrow strip around the globe if a person could ever realize that our existence depends on literally inches of active aerobic microbial life on terra firma, we might begin to appreciate the ecological umbilical to which we are all still attached. The food industry, I’m convinced, actually believes we don’t need soil to live. That we are more clever than that.

At the advent of industrial agriculture, right after the Great Depression and really catching fire right after World War II, the only consideration for the natural world was as an abstraction of our national heritage. We didn’t have a large body of oil paintings or bronze sculpture – Americans had land, mountains, canyons and sky, which we assumed went on forever and we owned. Environment as a resource was only concerned with economic determinism. No ideas of preservation, only the concept of a bottomless well. This is not castigation – it’s genuinely difficult to appreciate the past in its own time. During and after the Dust Bowl we couldn’t eat, and we recognized the fact that we couldn’t produce enough food on our farms. So we reacted, and brilliant technicians solved the problem, based on what we knew at the time.

There was no ecology, no environmental science much less any larger systems view as to how these elements of plantary ebb and flow worked together. And so the shift to industrial agriculture worked; we grow food in copious volume. It’s hard to argue down successful ventures.

But that’s exactly what we must be able to do, in a sense, in order to transition to something other than a catastrophe based on the multiple negative externalities that have been produced as a result of our great success. And they have been great. But now in possession of a greater consciousness – we can perceive the problems our actions create. Plus, as it is easy to see, we know much, much more, about our planet, our problems and our solutions. We know the problems are far more complex than is navigable with conventional responses. The non-safety, non-economic externalities are the ones that have caught up with our grand abilities to provide and prosper, which is why these are should be the first things to be brought into question, upon honest appraisal. Instead of twitching at the notion of lower inputs, we’ll have to bore into it with all we have and then some.

As a colleague said to me on this very note, “the science that got us into this situation will not be able to get us out.”

Warrior-Philosophers and the Nitrogen Cycle

What does Marcus Aurelius’ Meditations have to do with hypoxia zones in the Gulf of Mexico? As pointed out, if one out-sized work by a grand personage were seen as rather ordinary prescriptions for decent conduct and otherwise commonsensical, might other directives of a seemingly radical nature take their place among the more banal measures of merely astute management? So it may seem.

The United Nations recently approved the broad application of the first agricultural methodology, or biological approach, for Clean Development Mechanism (CDM) projects to reduce greenhouse gas emissions. The UN’s announcement coincides with the USDA’s analysis report that shows the economic benefits to agriculture from the U.S. cap-and-trade legislation.

The agricultural methodology, which will be used to design projects that eliminate the use of synthetic nitrogen on legumes like soybeans and cowpeas, was developed by Amson Technology LC, a greenhouse-gas-reduction and sustainability consulting firm, Becker Underwood Inc., a leading developer of bio-agronomic and specialty products and Perspectives GmbH, a Point Carbon company, a high-quality greenhouse gas reduction market solutions provider.

In the U.S., a sustainable agriculture survey conducted by Rabobank shows that nearly 70 percent of the U.S. farmers and ranchers have taken steps toward implementing sustainable agricultural practices, and dairy farmers are striving to cut 25 percent annual GHG emissions related to the production of fluid milk by 2020.

Whether via legislation, grass-roots activism or market economics, many of the more exotic-seeming solutions to the way we lay waste to the natural environment are nothing of the kind. Problems of excess can be managed with sensible long-term projections about production and the pollution horizons that will result; scaling one down until it bears a manageable relationship to the other (sustainable or better). In other words, what we need divided by what we know. In what other world would these types of reasonable management practices seem radical?

Marcus Aurelious was hailed, even at the time, as a philospher-emporer, as if that was an unusual combination. The mixed message of our age is the mythology of ‘economies of scale’, as if one can transcend the other. We’ve got no business in that business. Industrial agriculture should be seen as the grotesque distortion, not our attempts to correct it.

Smallholder farms

Smallholders, or smallholdings, refer to small farming operations, usually commercial and usually the work of a single family. According to the Guardian UK, some 450 million smallholder households earn their livelihoods from plots of three acres or less; with their families they make up a third of all humanity.

Most of these enterprises are scattered throughout what we commonly refer to as the Third World. As WE now have several generations between us and growing things, that’s simply not the case for many others and there currently exists a burgeoning economy of smallholder farms across the globe – not in the sense that we typically think of burgeoning or economy – but they are, or are nearly, self-sustaining, a term with which we are becoming increasingly familiar. I have a colleague of African descent who has initiated several excellent sustainable development projects there and elsewhere, targeted at seemingly minor technological innovations (solar powered, small-quantity refrigeration, for ex.) to increase the profits of smallholder farms without changing their way of life in ways that alter the social fabric of their community. It’s a tough line but also the essence of the triple bottom-line idea that gives equal consideration to people, planet and profit.

The connection of many of these farms and enterprises to the larger world is the Fair Trade federation, of which many are familiar. I bring all this up because today is the beginning of Fair Trade Fortnight, as good a time as any to familiarize yourself further with the ideas and practices of smallholder farms, their plights, fates, hopes and destiny. Who knows, there could be some overlap with yours.

Food, and where it comes from

There exist all manner of local food co-operatives and CSA ( Community Supported Agriculture) projects. In most of the rest of the world this is not a newsflash in need of acronyms; but even Americans are becoming increasingly in tune with what our far-flung system of food distribution hath wrought. Organic and long shelf-life don’t really go together, though if we demand them at any price, they can be found. But there are some truisms that crush this paradigm occasionally, like the fact that fruits are seasonal and vegetables taste best on or near the day they come out of the ground.

Enter Athens Locally Grown. Well… I did. Fresh and online, it’s the largest farmer’s market in Georgia. Watch below.