The Intersection of Business and Government

The Federal Reserve is becoming a monetary punching bag being sucker punched by politicians who want to get their hands on it. See why the Federal Reserve should remain independent. I recently discovered a GAO report on emerging threats to our nation that I believe has been overlooked by the media and thus most Americans. After this introduction, I will discuss the report in more detail in future postings. Many farmers still support Trump while their economy is suffering. Why do they stick with a president who has harmed their economic self interest? I offer my answer to this perplexing question. Hope you enjoy this edition of Coleman’s Corner.

Keep the Federal Reserve’s Decision Making Independent of Congress

Alan Binder who is a professor of economics and public affairs at Princeton and a former vice chairman of the Federal Reserve had a recent op-ed in the Wall Street Journal that responded to the politicians who want to make the Fed responsive to the whims of our dysfunctional political system.  I agree that to turn our monetary policy into what congress has done to our fiscal/budgetary policy would result in a disaster.  Imagine shutting down our monetary system over some politically crafted fictional need. The result would be worse that the Great Depression and would certainly make the world less safe from conflict.  

Long-Range Emerging Threats Facing the United States As Identified by Federal Agencies in a GAO Report

A recent General Accountability Office report that has unfortunately received little coverage by the mainstream media, should be read by every member of congress and all employees in government agencies responsible for our protection.

The opening paragraph of the report requested by the House Armed Services Committee and sent to the relevant congressional committees with jurisdiction over national security matters, grabbed my attention:

The United States faces a complex array of threats
to our national security, including our political,
economic, military, and social systems. These
threats will continue to evolve as new and resurgent
adversaries develop politically and militarily,
as weapons and technology advance, and as
environmental and demographic changes occur.
Our adversaries may include foreign governments,
violent extremists, transnational criminal
organizations, and megacorporations. Threats may
also come from events such as pandemics, human
migration, regional conflict and instability, economic
inequality, or the effects of climate change and
environmental issues.

The unclassified pubic version points out that “it is not possible to predict every potential emerging threat. According to Intelligence Community officials, the further out in time predictions go, the more uncertain they become [and] that there will always be completely unpredictable events with no prior warning.”

I will dive deeper into this report in future postings.

Why Do Many Farmers Still Support Trump?

The key to Trump’s 2016 election victory clearly was America’s heartland. Small town and rural farmland voters overwhelmingly went for Trump.

Now after 2 years of wide spread administration corruption, trade wars and a long government shutdown started by the president, farmers are feeling the brunt of the president’s impulsive decision making. Here are some of the headwinds facing America’s farmers:

• Trade war with China resulting in the loss of our biggest market for soybean farmers driving down the price per bushel to a 10 year low and creating huge soybean stockpiles;
• Trump imposed tariffs on steel imports have increased the cost of new grain bins up 15-25% that are needed to store the surplus grain;
• The government shutdown came at a very bad time for farmers who must plan this year’s crop but having no reliable government market reports, are unable to apply for loans or receive subsidy checks to pay off old debt;
• Trump’s withdrawal from the Trans-Pacific Partnership that now gives advantages to some of America’s biggest agricultural competitors including Canada, Australia, New Zealand, and Chile, and,
• Japan and the EU implementing a trade agreement that will give advantages to EU over U.S. farm exports resulting in the collapse of our wheat export market to Japan and a loss of over $1 billion a year on meat exports.

Notwithstanding these economic disruptions, many farmers voice patience believing that in the long run the trade issues will end up more to their advantage based on perhaps an unfounded belief the president knows what he’s doing.

On the other hand, from my experience in representing small towns, rural areas and farmers for 16 years in congress, there may be something other than economics at play. My sense is that folks living in these communities have had their patience tested many times before and somehow survived, and besides, they see themselves as patriotic Americans willing, perhaps to a fault, to give a president the benefit of the doubt. But that can only be for so long until their economic condition must improve. How the president conducts himself and the outcome of the Mueller investigation are going to be important going forward. Being patriotic Americans, they will be quick to jettison a president who is proven to be conspiring with a foreign government in placing our nation is jeopardy, instead of working for them.