Wednesday, November 16, 2016

What to Do with Rural Hicks?

So Hiram wrote some "fighting words" that I think deserve prime time billing and further discussion.
"The Democrats stopped addressing the concerns of Rural America." G2A

"We really don't actually. In economic terms, rural America has been on the decline for the last century or so, and nothing anything anyone does, can stop that. We do support rural schools, nursing homes, various forms of infrastructure stuff. Out state, Republicans campaign on things like the state office building, and the supposed arrogance of urban liberals, but they offer little of the way of substance apart from the easing of environmental regulations." Hiram

"Rural America may have fewer voters now due to automation and big equipment. That does not make it any less important to our country. Ignore them at your own peril. They are very high "value add" citizens who support many of our aspects of the American economy. (ie wealth creators) Besides they are able to influence elections as we have seen... :-)" G2A

"It's important, sure, but a lot fewer people live there. And those who do are faced with economic forces nobody can do anything about. Certainly the Republicans offer no solutions, which is why they spent so much time demagoguing the office building." Hiram
I personally find this map fascinating.  All those huge parts of the country that "nobody can do anything about"?  And all that RED...  Oh my...  Thoughts?
USA Today Election in 4 Maps
MP Where is the F in DFL
Guardian Democrats Deserted Us
The Hill Democrats Forgot about Rural America
Slate Rural Elected Someone Who will Not Help Them

33 comments:

Anonymous said...

Donald Trump promised us that he will revive the coal industry. He says he will force the Carrier company to reopen their plants in the United States. Republicans tell us that if we repeal Obamacare, you will always have the same doctor. I guess we will have to see what happens.

--Hiram

John said...

Hiram,
Tell me more about the Economic Forces that you think we are unable to overcome.

From your comment above I perceive:
- politicians blocking coal use (maybe with good reason?)
- trade & tax policies, high priced US workers and "price conscience" / "Made in USA indifferent" US Consumers driving jobs out of the country.
- high cost of healthcare in rural America

Is there anything else dooming rural America to become a barren wasteland?

Anonymous said...


Tell me more about the Economic Forces that you think we are unable to overcome.

Mainly the automation of farm work, the transition from family to corporate farming.

Coal is being replaced by natural gas. That isn't a political decision, rather an economic choice people are making.

trade & tax policies, high priced US workers and "price conscience" / "Made in USA indifferent" US Consumers driving jobs out of the country.

Obviously farming interests who are exporters will be the losers in trade wars, or at least it will be their interests which are vulnerable. I don't think Trump emphasized that a lot when campaigning in rural areas.

- high cost of healthcare in rural America

Health care is expensive every where. There is nothing at all that Republicans are proposing that will reduce the costs of health care. Bear in mind that while Republicans can support from rural America, that isn't where they get their money. And shifting the cost of health care from rural America inevitably means shifting it toward the Republican Party constituencies that finance the party.


Is there anything else dooming rural America to become a barren wasteland?

that's been happening for a while but certainly the election of Trump is evidence that our country is failing.

--Hiram

John said...

Personally I would have seen Hillary winning as a sign that our country was failing.

I exchanged the following comments at MP Loser Logic

"I look forward with trepidation to the fallout when the rubes realize they've been conned." Charles

"May I suggest relaxing in a comfortable chair during the long wait?" Jim

"Maybe with a glass of wine, or some hot chocolate and cookies. Anything to reduce this high level unhealthy fear of change.

The Conservatives and the Country survived 2009 and 2010, I am sure 2017 & 2018 will be fine. The pendulum just keeps a swinging..." G2A

"Over the Pit" Paul

"Actually over 2 Pits. On one side we have excessive Capitalism and the other we have Democratic Socialism.

I hope we find a way to stay between the 2 in a balanced mixed economy that strongly pressures every healthy person to contribute (ie learn, work, save & invest) while taking care of the truly disabled...." G2A

John said...

Good point regarding coal / natural gas. Though it maybe all those regs that give natural gas the huge benefit.

I think there is likely more that can be done in those rural communities than just farming. An example is my old college town.

Sean said...

Diversifying rural economies is going to be key. To do that, you need things like broadband, which Republicans in our state haven't been real anxious to get behind.

John said...

Maybe this year they may feel more free to suggest a solution.

Related Link, though I am a bit puzzled because this site says Canby Mn has high speed through Frontier.

Now I do agree that the Frontier DSL is SLOW out at the farm....

My friend near Ivanhoe uses MN Wifi

Sean said...

"Maybe this year they may feel more free to suggest a solution. "

Why would they not feel free to bring it up until now? Because now they're actually on the hook to deliver?

Last session, Speaker Daudt and his caucus fought DFL attempts to spend more on rural broadband. One might gather from your comments that perhaps their opposition was some sort of cynical ploy...

John said...

Apparently the key word is "more"... GOP Broadband Proposal
Media Response
State Scoop

I really do not know how much is enough?

Anonymous said...

A question I have asked, but haven't gotten a satisfactory answer to is what do rural communities want? Apart from senators officing in the state capitol? There is never much of an answer.

Something Donald Trump did is make a lot of promises Democratic politicians would have like to make, but felt they couldn't, in part because there would have been no Republican support for keeping them. Does the Donald presidency change that? We look at the coal fields and say, well economic forces are turning against them, and we don't have the resources to change that. But Donald is willing to support coal and it's jobs. Whether or not that's could economics, it is good politics.

Donald has what even I think as a curiously frozen view of how business works. I think to succeed, business has to be flexible, to have the ability to change. It has to have access to global markets. In thinking this, I am somewhat out of tune with what large segments of the Democratic Party want or think. But Donald, whose business is real estate, and who has never had to worry about Manhattan moving to Dublin differs with me on this. He has promised that once you have a job, you can keep your job. It will never move to Alabama or Mexico. Is he right? Is this within the power of the federal government to do? Time will tell.

--Hiram

John said...

Hiram,
I think many of the folks in rural communities want to keep more of their money and have fewer state and federal regulatory burdens. The equipment costs keep going up in part due to government environmental and safety regs. Clean Diesel Expense

As for pulling businesses back into the USA and rural areas. I think you underestimate the negative impact tax, safety, environmental, financial, licensing, etc, etc regulations have had on American businesses and their employees. We often joke why an engineering, manufacturing and servicing company like ours has ~20% of the personnel working in Finance, Accounting, Import/Export Compliance, Legal and HR, plus having to hire accounting auditors regularly. Then on top of that there are all the company , employees, and shareholder taxes.



Sean said...

You continue to whine about regulations, yet empirical data shows that overall our regulatory environment fares quite well when compare to other first world countries. You either need to stop spouting this point, or come up with something to back this up with. Or is it your assertion that we would be better off assuming a third world posture in terms of environmental and safety regulations?

Anonymous said...

I think many of the folks in rural communities want to keep more of their money and have fewer state and federal regulatory burdens.

But they also want roads, and schools, and nursing homes. And, of course, they want to pollute. But they don't want to pay for the health care they use.

--Hiram

Anonymous said...

I think you underestimate the negative impact tax, safety, environmental, financial, licensing, etc, etc regulations have had on American businesses and their employees.

I really don't. Foreign businesses don't have to pay for the resources they use, but American businesses do, at least to some extent. But let's recall, that while our president elect is one of the world's wealthiest men, he pays no income tax. That's not a bad deal for a man who complains about the taxes he pays.

--Hiram

John said...

Sean,
I think there is a law of diminishing returns at play here. I agree that things were bad in 1907, and that government regulations and unions were key to turning things around.

Well I think somewhere in maybe the 1970's the government and union effectiveness hit a tipping point and generally started to cause more harm than good. Not to say that everything they do is bad... But it seems they are obsessed with wanting to save everyone and everything from everybody with no thought regarding the cost to society.

John said...

Hiram,
You definitely do get obsessed with one concept... Here is a thought.

Though we have no idea what income taxes Trump pays, I would be happy to bet that his property tax bills dwarf all of our total tax bills combined... Now is it "fair" that one person should pay so much?

Yeah, Yeah... I know. We tax rich people because they have the money....

John said...

Sean,
To finish my thought. Now market competition started to correct the problem in the private economy.

Unfortunately the Liberals see the excessive investment for negative returns as acceptable and just keep insisting that we raise taxes and create more bureaucracy.

I mean who cares if it costs society $100,000,000 per year and hundreds of jobs... It may save a life of some foolish irresponsible and/or unlucky person... And they think that is priceless.

Sean said...

Well, that's swell, but those are your feelings.

Let's have some facts: The power of organized labor today is far lower than it was 40 years ago. Private sector union membership has utterly collapsed over that time, and public sector unions have only maintained their share.

And our labor industry rules, frankly, are a lot more friendly than those in other countries. We have a lower minimum wage than most of Western Europe, Canada, and Australia. We have fewer mandates for parental and family leave than just about anywhere.

It's interesting, though, that you bring up the 1970s as the point where things tipped. I agree. That was when we started to see the real split between worker productivity and wage growth. But that didn't happen because of unions or government regulation. Rather, the opposite. It was the destruction of union power and the push to deregulate a number of industries that has (in concert with other factors) fueled that change.

That doesn't necessarily mean that all of those changes didn't need to happen (deregulation was absolutely necessary in some places), but it helped to unleash forces that are still impacting our economy today that we haven't reckoned with.

Sean said...

"I would be happy to bet that his property tax bills dwarf all of our total tax bills combined... Now is it "fair" that one person should pay so much?"

Don't his tenants really pay the property taxes? Or have conservatives dropped that transitive taxation theory they love to talk about so much?

Sean said...

"Unfortunately the Liberals see the excessive investment for negative returns as acceptable and just keep insisting that we raise taxes and create more bureaucracy.

I mean who cares if it costs society $100,000,000 per year and hundreds of jobs... It may save a life of some foolish irresponsible and/or unlucky person... And they think that is priceless."

This is just blather. Put some details behind this nonsense.

John said...

Not in my view... The tenants pay for a place to live... The owner pays the bills... Or are we saying that I am paying the property tax when I bring my car in to have it repaired at a shop.

I will give thought to an example. Unfortunately I have little hope that you would sanction it anyway. The good news is that many voters got it this year.

John said...

By the way, please remember it was the American consumers who finally said enough is enough... And it took a LONG TIME for the Big 3 and the UAW to get the message.
Trade Deficit

WP Laying to rest a Generous Way of Life

"They called it "Generous Motors." If you were lucky enough to get an assembly line job at one of its plants -- or those of Ford, Chrysler and some of their major suppliers -- you could earn half again as much as neighbors with the same skills and education, along with "free" health insurance; a month's paid vacation; and, after 30 years on the job, a generous pension and whatever health services were not covered by Medicare. At some point, the company even agreed to guarantee all workers full pay and benefits, even if there wasn't enough work for them to do."

John said...

Regard Public Unions. Here is some interesting data from our friends at Heritage

Now I know they have a conservative bias, but much of the data is just facts.

John said...

As for a govt reg example. Let's start with going from tier 3 to tier 4 final on off road vehicles. (ie farm & construction equipment)

"The reduction in emissions from diesel engines as a result of this technology has been nothing short of astounding. But it is mandated by the EPA, and it doesn’t come cheap. By some estimates, the new engines have boosted machine prices by as much as 10 percent."

Now that does not sound like much... But when one is pricing a combine that costs $300,000, a $30,000 price increase is noticeable. That and the point that now the exhaust system is more expensive to maintain and like to be less reliable.

Tier Ratings and Timeline

Just imagine the work it took to take all diesel engines from No Tier to Tier 4 final in <20 years... It was good for engineers, but not so good for product cost, complexity, functionality and/or features. Most the R&D budgets went to developing new engines and installing them.

John said...

This shows the incredible journey more clearly.

Now getting to Tier 3 did not change the vehicle cost or complexity much, but Tier 4 hurt...

Was it really worth it in cost to society to make a bunch of tractors that put out fewer NOX and particulates?

Apparently the EPA set the target so tight that some of the engine / exhaust systems clean the air when they are operated in polluted areas they operate...

John said...

And don't forget the VW diesel engine scandal and unhappy drivers. That is all related to similar changes by the EPA to on road stds.

John said...

So gov't caused $100's of millions of expense to go from Tier 3 to tier 4 final. We lose some fuel efficiency and power/torque. We gain additional maintenance costs and push more people towards gas engines. (ie urea tanks) We lose some visibility, serviceability, etc. (ie treatment is size of an extra fuel tank on machine)

Of course this cost is mostly paid by the machine purchasers... To help some problem that may or may not be real. What was the cost benefit to society? Did the EPA or Liberals care?

I mean better is always better !!! Right?

Anonymous said...

Though we have no idea what income taxes Trump pays, I would be happy to bet that his property tax bills dwarf all of our total tax bills combined.

You might notice that while property taxes are deductible, Trump still doesn't pay taxes. He still has carry forward losses from his bankruptcies. My guess is that for tax purposes Trump doesn't own very much property, and doesn't pay much in property taxes.

--Hiram

John said...

Hiram, That is a lot of opinion, how about some sources?

Maybe you can check this one out. Fortune Trump Net Worth

What did you think ? That Trump keeps $3 Billion in a big safe like Scrooge McDuck?

Anonymous said...

The one tax return we have shows that he pays no taxes. If Donald wants to dispute the record, he has the resources. He never has.

What did you think ? That Trump keeps $3 Billion in a big safe like Scrooge McDuck?

I don't think he has a lot of cash. That's why he is still paying down is carry forward losses, and that's why since his bankruptcies, he has been so involved in penny ante cash flow schemes.

--Hiram

John said...

Meaning... He has a lot of property and pays a lot of property taxes...

Anonymous said...

Meaning... He has a lot of property and pays a lot of property taxes...

I doubt if Trump actually owns that much property. My guess is that much of the property he suggests he owns, is property someone else owns and he manages. One would think that if he did, those carry forward losses would have been used up long ago.

--Hiram

John said...

I don't think "management" would add up to billions in net worth. There have to be a lot of assets.

And I have seen nothing saying that he is for sure still carrying the loss forward. And remember that it was a HUGE loss...