The Old Congressional Shell Game

In order to get the bill scored right (i.e., for the Congressional Budget Office to evaluate the changes in farm programs under the farm bill and assign a dollar figure to the costs), Congress is engaging in its usual shell game tactics. What you do is look at the fiscal years, which is the basis of scoring. Then you move as much revenue as you can from the fiscal years beyond the period of the bill into the period and reverse the process with costs. It looks as if they're doing that with advance payments, and with crop insurance revenues (based on a quick review of the CBO summary of the bills).

It's much the same process with tax paying--if this is a high income year, any tax adviser will say, consider raising your deductibles, like move charitable contributions into this year.

Of course Congress will reverse their shell game down the road, once the "scoring" is safely in the past. Only taxpayers who indulge in fraud can do the same with taxes.

Greenspan the Libertarian Bureaucrat

I mentioned I was reading Greenspan's book. It's not as personal and detailed as I would like--the last part is discussion of geo-politico-economic issues, which takes some effort to plow through. A couple notable points

• He is very complimentary of Clinton--brains, sustained interest in economics, a fellow devotee of facts with good economic policies. Other presidents suffer by contrast.
• He's notorious as an early devotee of Ayn Rand, for whom I have little regard (which no doubt is worrying her as she suffers in the circle of Dante's Inferno designed for libertarians). But, as often seems the pattern, while he generally doesn't believe much in government, he praises the Federal Reserve highly. I say it's a pattern--it seems I often notice Republicans who come into government skeptical of the bureaucracy who, when they leave, say something like: my bureaucracy was able and effective.
  

Comparison of Farm Bills

Via Uof IL farmgate, the URL for the Congressional Budget Offices comparison of House, Senate, bills and current law.

Can States Have "Dutch Disease"?

Reading Alan Greenspan's book. He discusses "dutch disease"--the adverse consequences of having oil or similar natural wealth. Thought of it when I read this post on Alaska by Kevin Drum. Apparently Alaska is riding its oil wealth for all it's worth, and not developing the tax structure needed to support a good society once it's gone. Hence the "Bridge to Nowhere"--if Uncle Sugar will fund our infrastructure, fine.

Problems with Farm Policy

Tom Philpott at Grist writes:

From an ecological standpoint, the fundamental problem with U.S. farm policy dating back to the '70s is that it rewards farmers for maximizing yield at all cost.

I assume that his reference is to the 1970's, but the same statement would be true for the 1870's and the 1770's. As long as farmers are producing for the market, which they've been since Captain John Smith decided that pursuing gold in the New World was not a paying proposition, at least not in coastal Virginia, their incentives lead to short term over-production at the cost of long-term productivity. That's an issue in the cash lease/share lease controversy in Illinois, I just posted on.

Straws in the Wind--Uof Illinois

John Phipps comments on a policy change by the University of Illinois, which owns 11,000 acres of farmland (from donations) and has been share leasing the land. They've decided to switch to cash leasing, which means putting the lease out for bids, and may price the past operators out of the market. See this article, via John.

The Illinois Farm Bureau is opposed to the policy change.

John comes down on the side of the right of the owner to rent to whom he chooses.

Random observations:

• the article comments that 3/4 of the IL farmland is rented, which is higher than I would have guessed.
• There's no comment in the article about the possible role of payment limitation rules. UofIL would no longer be eligible for farm payments when they cash lease. I don't know what the current rules are, but educational institutions used to be exempt from payment limitation. According to EWG, the university got $450K in 2005. I don't know how they might be affected by the pending proposals.
• John mentions the outdated notion that a leasor's labor and improvements gave him some sort of moral ownership of the land. That ties back to Ireland, whence came many of my ancestors, where you couldn't buy land and the best you could hope for was a long term lease. If I'm not mistaken, the English passed a law giving the tenant some right to his improvements. It also goes back to western New York in the early 1800's, where people hoping to buy land from the Holland Land Company also felt they had a right to their improvements. Unrest reached such a point that a Company's office in Mayville, NY was burned, destroying all the records.

A Metaphor for Illegal Immigration

I'm driving along, in rush hour, in the right lane. Traffic slows, then stops. I look in the rear view mirror, and some idiot has pulled over to the shoulder of the road and is driving down it at 15 mph. And now he's ahead of me and trying to merge. Do I yield and reward the bastard or do I cut him off and risk causing an accident?

AGI Limits and Payment Limitation

Some discussion about reducing the adjusted gross income (3-year moving average) limit on individual earnings in order to be eligible for farm program payments, with references to other discussion here and here.

I'm not going to spend much of my remaining time on earth worrying about the details of this argument. I'd just make general statements:

• (apparently) tight laws can be loosened by the right regulations and back-door pressure from members of Congress whose constituents are personally and greatly concerned. So where the advocates of lower payment limits will be tempted to fold up shop once the farm bill is enacted, either declaring victory or licking their wounds in defeat, the opponents will be on the job every work day until the next farm bill
• my first statement applies both to AGI and payment limitation--in theory I don't know there's much difference between them. (In practice, at this stage of the bill, it's different.)
• the law of unintended consequences applies, always

I'm still convinced that a graduated payment limit would be more effective. It could restrict the payments of more people, but give less incentive to work to undermine or overturn the provision. Even so, my three points above would still apply to that provision.

California Dreamin of Water and Alfalfa

Megan at From the Archives, always with an interesting voice, discourses on ag subsidies, water and growing alfalfa in California. Two points I like: it's lots easier to move water to good soil than good soil to water; changing the subsidy structure means social disruption. When the market does it, economists call it "creative destruction", emphasis on "creative". When it's done to you, it feels an awful lot like just "destruction".

FBI and IT, Redux

Government Executive reports on the FBI's latest step forward in automation.

But is anyone bothered by this line?

Under Phase I, Lockheed Martin, which won the $305 million Sentinel contract in March 2006, built the front page of the Web portal, which features functions such as Google search and an FBI phonebook.

Presumably there's also a big security piece (which seems to be referred to later in the story), but gee, Google search and a phonebook? That's such a steal for a mere $305 million.