Ted Auch

There is a bipartisan notion perpetuated by industry and many politicians – specifically those so utterly disconnected from their home states/districts true needs – that natural resource exploitation and large agricultural infrastructure is the key to job creation. Just a little hint before moving further if you hear this rhetoric spewing from a politician’s mouth inquire as to their primary donors. Anyway this is one of the biggest if not the biggest lies being sold the American public today and the data buttresses my argument quite robustly. Here it is in black and white when production increases whether it be in the coalmines of West Virginia or cornfields of Iowa what happens is a massive shift towards mechanization, with larger and larger combines or draglines, or Komatsu front-loaders.

The latter able to move tons of earth or overburden allowing relatively uninhibited access to the coal seam, which by the way are increasingly smaller and smaller requiring less laborious methods or more dangerous exploration of deeper seams. This is evidenced in the exponential growth in surface mining throughout the US a method that requires markedly less labor then its underground alternative. Thus, if you look at the debate in simple output:input ratio terms, with # employed as the input, you will see an inverse relationship developing quite rapidly in recent times, which is to say that large multi-nationals like Massey Energy were extracting 5,087,150.3 short tons per thousand works in 1985 and managed to nearly triple this ratio (~290.2%) to 14,762,463.5 short tons per thousand works. Keep in mind the fact that total coal extraction in the US has only increased by 129.6% since 1985.

How you ask would one go about counteracting this 160% profit disparity? Well you can start by purchasing larger and large equipment, vast swaths of land, breaking the systemic will of the UMW of America, and insuring that crimes against labor like the recent tragedies in Utah and West Virginia go virtually unpunished. If you own the hearts and minds of people like the governor of West Virginia, Senators Byrd and Rockefeller and McConnell, and the supreme courts of many coal producing states you don’t need carrots and frankly you don’t really have much need for sticks either.
If you buy that the above ratio is a valid measure of workplace efficiency and by association a primary driver behind the decline in jobs related to natural resource exploitation and agricultural production then let’s apply it to the farm sector specifically corn to see if it still holds up. The answer is as you could probably guess by my tone is that it does indeed and is slightly more robust in this instance. It turns out that if you look at data associated with corn production in the US at five year intervals since 1910 you will see that that the total number of farms and workers are currently 66.1 and 78.2% of what they were at the turn of the century, while production and output:input have increased by 347.6 and 1,595.4%, respectively.

This suggests that one of two things is occurring, either we are getting better at how we manage our agricultural lands vis à vis chemical fertilizers, pesticides, etc and crop-rotation or our current farmers are on steroids, which I am not ruling out but would hope is not the case.
This is a marked increase in “efficiency” by any standard begging the question: Why not get more from less? The answer is of course that there is no surficially viable reason, but more to the point portending that more coal mining brings more jobs when you know the exact opposite to be true is quite the bait and switch wouldn’t you say?
It is true that neither underground nor surface mining is great but it is underground mining, while extremely dangerous and liable to create vast stability problems down the road, that has traditionally been the engine employing much of Appalachia. This method imbued a greater sense of community and unification that was/is anathema to the coal companies and their strike breakers so vividly depicted in “Harlan County KY”. Much of the debate around “clean coal”, which if you ask anyone from Appalachia is a complete whitewashing, centers around jobs as does the research and production of biofuels and it is true that if done right these industries do create jobs. The fact is that since 1949 when much of the high grade anthracite-type coal was still available surface-mining accounted for 25.3% of all mined coal in the US whereas today it accounts for nearly 70% or 794,263,579 short tons. Furthermore, anthracite coal extraction has declined from 8.9 to 0.14% of all coal extracted in the US during the same period, with a parallel decline in jobs from a high 1,737,000 miners in 1985 to 776,000 in 2007.
So, what we have are two lies being pushed down the throats of Appalachia and America writ large: 1) exploitation of our mountains and arable lands is a perpetual large-scale benefit to the job market and 2) that clean coal and biofuels will benefit the environment, Appalachia, and industry. According to Judy Bond of Coal River Mountain Watch “Even if you could get rose petals to come out of the smokestacks, coal is filthy and will never be clean as long as mountains and communities are blasted and streams and communities are poisoned…The entire cycle of coal must be examined. We in Appalachia are blasted by over 3 1/2 million pounds of explosives daily and are similar to a “banana republic”. The coal industry is allowed to simply kill us slowly with toxic waste.” So, in plain English folks the only ones benefitting are John D. Rockefeller, WV Supreme Court Justice Brent D. Benjamin, and the pious head of Massey Energy Corporation Don L. Blankenship.

It was June 5th, 1997 a day that at first glance seemed quite innocuous. However, there was nothing insignificant about this day from a financial services perspective as it was the day that the Dow Jones & Company signed license agreements for three exchanges to begin trading in the nascent futures market (http://www.nytimes.com/1997/06/06/business/after-15-years-dow-jones-lets-futures-trade-on-its-average.html?scp=2&sq=Norris%201997%20futures&st=cse). Initially Dow Jones was hesitant for fear of excessive market manipulation, but later determined regulations were sufficient to allay such fears. According to an article at the time by Floyd Norris in The Times an editor at the Wall Street Journal John Prestbo felt “…that trading in the Dow derivatives would have little if any effect on market volatility.” Well this appears not to be the case at all. In looking at the historical record for the Dow Jones and NASDAQ I came across a very curious divergence that was initiated on or around June of 1997. It turns out that prior to that month and year what the Dow opened at was a fairly (R2 = 76%) robust linear predictor of their volatility throughout the day, previous day, and next day.

However, post-June 1997 this relationship was non-existent. The same is evident for the NASDAQ, however, the change in predictability declines by 26% vs the 76% for the Dow.
This is fascinating to me and I think it speaks to what we in the biological community refer to as “Buffer Capacity” or “Poise”. That is to say how well a system in this case the Dow & NASDAQ are equipped to handle a perturbations or in the ecological world invasive species. Regardless the point is that all those who were sure that futures were good for business writ large appear to be wrong and furthermore their contentions as to the level of volatility associated with futures are greatly underestimated, given that the data presented here demonstrate even short-term/daily swings in the market have become increasingly difficult to forecast post-futures. This happened to coincide with a considerable uptick in the ratio of Gross Domestic Purchases (BDPu) to Gross National Product (GNP), more than double the increase from 1980-1987.

It is becoming clear from this data that two things are happening at an accelerated rate in the markets: 1) volatility and risk are increasing at an unsustainable exponential rate and 2) the corporate world and financial “institutions” are working very hard to constrain the popular rhetoric so as to promote consumer spending at an equally unsustainable level. Why? Because the multi-nationals, banks, and insurers are assuming – and rightfully so to this point – that the former orgasmic spending will counterbalance the latter’s total disregard for future generations or their fiduciary responsibilities down the road.
This is the message our in-the-pocket of the banking industry Treasury Secretary and National Economic Adviser Timothy Geithner and Lawrence Summers will not tell us. The more this volatility increases the more the American citizen will pay for it, whether it be lessening mark to market accounting regulations, non-recourse loans for the folks engaging in the PPIP, or outright fraud in the case of AIG and the cozy relationship Geithner’s predecessor Henry Paulson had with virtually everyone on Wall Street. Consider that Bush told us to go out and spend after 9-11 and now this administration and congress are telling us that we should spend. Is spending the solution to everything? The solution is understanding that capitalism has tons of problems and one is the boom-bust nature of it all. Well in nature there are those systems that require fire to regenerate and if they don’t get it at timely intervals productivity stagnates. Furthermore, in these systems there are 2 types of fire regimes with one being frequent, mild, and spatially confined to small areas, while the other is an infrequent, spatially broad, and intense scouring of the land. We need the latter desperately, but what we don’t need is a bunch of tricky financial instruments and an over reliance on consumer spending to get us out of this. These amounts to using the frequent mild fire to resuscitate an ecosystem in desperate need of a complete overhaul. The fat cats on Wall Street might need this for their substantial egos and bank accounts, but it is time we decouple from this Oligarchic way of running things as Simon Johnson stated recently in The Atlantic. They can afford & indeed thrive on the amazing daily volatility of the markets, because they always get their share of the pie, but we can’t because we didn’t, don’t, and won’t if this aggregation of wealth continues based entirely on our insatiable appetite for stuff!
Norris F (1997) After 15 years, Dow Jones lets futures trade on its average. The New York Times (p 1). New York, NY

Recently a posting was sent out on the Front Porch Forum regarding the city and more specifically the Parks and Recreation Department’s fiscal bullying tactics relative to the Burlington Farmers Market and proposed 450 percent increase in rent for the former this coming summer.

Chris Wagner the farmers market manager, said, there are 58 summer residents of the market, which means we would essentially be raising their rent, assuming equal contributions, from $62 a summer to $286.90, which while not an end of the world increase is by no means trivial. This is akin to raising taxes on Church Street so that only large entities like Old Navy, Urban Outfitters and Starbucks can afford to display their products.

I know, I know, Ron Redmond and the City Council have already done that so why not rake these farmers and craftspeople over the same type of coals? The answer is that the farmers market represents community, social equity and local values, while the borderline multinational purveyors of goods on Church Street do not, and in many instances are overtly and more likely covertly set on destroying the fabric of the communities they invade.

I would argue that Church Street in most respects no longer reflects the community or state upon which it derives its “charm,” while the farmers market is all things Burlington and all things Vermont. It is a place locals and tourists can intermingle, but more importantly it is a place where our friends and neighbors in the agricultural and crafts sector are the true stars getting to strut their stuff and making a decent, but by no means extravagant, living. The fact that the City Council, Parks and Recreation Department and mayor would jeopardize the aspirations of this venture is quite disturbing not simply because it betrays their message of community but because it smacks of hypocrisy of the highest order.

Oh yeah, and by the way, who decided that the city has the right to charge for this space?

That we do everything we can in this city to accommodate the Church Street Marketplace as it moves steadily away from its community obligation, while something that is entirely communal and has aspirations of becoming even more so is being threatened strikes me as subterfuge and not becoming of those in City Hall or those at Parks and Recreation. I would note that such a raise in rent seems worthy of a citywide referendum, public hearing or town hall style meeting, or all of the above.