November 26, 2016

Repealing The Rule Of Law For White-Collar Criminals

A report from Salon by Paul Rosenberg. “With Donald Trump representing a frightening unknown future, more akin to foreign authoritarian leaders like Vladimir Putin, Recep Tayyip Ergodan of Turkey and Abdel Fattah el-Sis of Egypt than anything in American history, Barack Obama looks better all the time — a fact reflected in his approval ratings. But there’s a good argument to be made that a more forceful, more boldly progressive Obama could prevented this outcome. Not a radically different person, just one more comfortable with the sort of direct confrontation that was central to the teachings of Saul Alinsky, whom he was tarred with anyway.”

“One trope that’s emerged after Trump’s election, is that leftist attitudes are somehow responsible. A recent Politico article is typical of pieces with this argument that liberal smugness was to blame for Trump. This argument overlooks two things: first, the worldwide rise of authoritarianism over the past two decades, intensified both by the fight against al-Qaida and then ISIS and then by the worldwide Great Recession; and second, the failure to indict high-level officials of former president George W. Bush’s administration for actual crimes.”

“Not every Republican is a criminal, of course. But with crimes unpunished and democratic norms eroding, those students are expressing a moral censure that the nation’s institutions and political leadership ought to have provided on their own. This was primarily President Obama’s responsibility — one he ducked in the name of ‘looking forward, not backward,’ a progressive, no-nonsense way of framing letting war criminals go scot-free — and financial criminals as well, the ones who crashed the whole world economy. There were reasons offered for those decisions at the time, but by now the failure of that approach should be obvious.”

“Just from January 2007 to December 2011, there were more than 4 million completed foreclosures and more than 8.2 million foreclosure starts, of which only a small fraction received effective help from Obama’s Home Affordability Modification Program, which provided government payments to mortgage servicers and investors in exchange for lowering a mortgage’s interest rate and occasionally reducing the principal. This was a clearly ill-conceived plan that relied on the same people who had caused the problem in the first place.”

“The flip side to Obama’s foreclosure failure was his unwillingness or inability to hold any insiders criminally responsible for the greatest financial crime spree in American history. In March 2009 economist and former regulator William K. Black provided a road map for understanding the crimes involved.”

“‘The FBI has been warning of an ‘epidemic’ of mortgage fraud since September 2004,’ Black wrote. ‘It also reports that lenders initiated 80 [percent] of these frauds,’ which qualifies it as ‘control fraud,’ he explained. ‘The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.’ Obviously, it did not. But Obama, unaccountably, refused to hold anyone criminally responsible.”

“In 2013, the Frontline documentary, ‘The Untouchables,’ looked back at what had happened. ‘Even during the bubble years, the Department of Justice had arrested and prosecuted many small mortgage brokers, loan appraisers and even home buyers,’ but no bankers had gone to jail. Only the little fish got caught.”

“‘We have known for decades that repealing the rule of law for elite white-collar criminals and relying on corporate fines always produces abject failure and massive corporate fraud,’ Black wrote in 2015. But that was precisely what Obama chose to do.”

Prices From Years Past Aren’t The World We Live In Now

A report from “The value of agricultural land, especially in the Midwest, is likely to continue falling in 2017, two experts told lenders attending the National Agricultural Bankers Conference in Indianapolis. ‘2017 is going to look a lot like 2016,’ said Jason Henderson, director of Purdue University’s Extension and former head of the Omaha branch of the Kansas City Federal Reserve Bank. Henderson looks for continued decline in land values of 5% to 10% next year, he said.”

“Rex Schrader, president of Schrader Real Estate and Auction Company in Columbia City, Indiana didn’t disagree, although he said some land sales this fall have brought more than expected. He agreed that land prices have been declining for the past two years, falling 10% to 15% in Indiana. While economists are comparing the current financial situation in agriculture to some aspects of the 1980s or 1970s, Schrader sees an important difference. During the 1970s, land prices were rising while farm income was falling, he said. Unlike the inflation-driven land bubble of that earlier era, the run-up in prices earlier in the current decade was tied to strong farm income.”

“‘I think there was sound fundamentals for why land values got so high a couple years ago’, he said. ‘I’m not smart enough to know how it all ends.’”

From AgriNews Publications. “Farmland values went down about 5.8 percent from 2015-2016 in Indiana, according to analysts at Farm Credit Mid-America. ‘Compared to other states in our region, Indiana farmers are going to have more pressure — given their heavier reliance on the corn and grain industries,’ said Dennis Badger, vice president of collateral risk management for Farm Credit Mid-America.”

“In spite of the decrease, Badger expects prices won’t fall dramatically. ‘We expect land values to decrease slightly over the next year since interest rates are expected to decrease,’ he said. ‘Now is the time to negotiate or renegotiate cash rents. For landowners, they should keep in mind that variable leases could serve as a win-win for both parties. It might call for a slight discount in rental rates today, but once commodity prices increase it would give them greater upside potential, as well.’”

From “For Indiana corn-and-soybean producer Jason Wykoff, determining how to handle landlords who aren’t interested in long-term relationships has become easier over 22 years of farming. Just this past year, he says, he walked away from 1,200 acres because a landlord had asked too much for rent when it came time for renewal. That’s a growing trend among farmers, according to Pro Farmer’s annual LandOwner Survey.”

“‘We find 44% of our members and subscribers are willing to walk away from a cash lease if that lease is not lowered going into 2017,’ says Mike Walsten, editor of LandOwner, part of the Farm Journal Media family. The percentage of producers who ‘absolutely will’ walk away if there’s not a significant cut in cash rents is up 2 points from a year ago.”

“Cash-rent rates are declining, which is good news for farmers. In Wykoff’s home state of Indiana, rates have been on a steady decline since peaking in 2014, according to a Purdue survey conducted in July. ‘I don’t think that’s reflective of people walking away from leases,’ says James Mintert, director of Purdue University’s Center for Commercial Agriculture and a professor of agricultural economics, ‘but more reflective of farmers having conversations with their landlords that prices from years past aren’t the world we live in now.’”

The Echo Press. “A weak ag economy in the coming year may be hard on farmers and landowners who rent out their acres. Pauline Van Nurden, University of Minnesota Extension educator out of the Willmar office, gave presentations in Alexandria last week on factors that landlords and renters will need to consider when negotiating contracts. A big one will be what kind of profit margins farmers can expect from corn and soybean crops. ‘It looks like it will be another tough year for producers coming up,’ Van Nurden said.”

“While yields have been strong in Douglas County the last couple of years, prices are down significantly from a few years ago. Tillable land in Douglas County rented for an average price of $85 an acre in 2011, then jumped up to an average of $112 an acre from 2012 to 2014. It dipped back down to $102 an acre in 2015. A 10-year average of gross income on corn land in Douglas County showed gross income of $722 an acre, with total expenses of $264 an acre, leaving $264 that could cover rent and provide a profit.”

“But projections for 2017 show $558 in gross income per acre, with expenses up to $480, leaving $78 for rent and profit. If rent is more than $100 an acre, there is no profit.”

From NBC Nebraska. “Harvest is all but over for farmers in Nebraska, and 2016 will be remembered as a down year, reaching crop values not seen since the 1980s. So, I wanted to know what it was like to be a farmer in this declining market, and I went to Nance County to find out. ‘We’re the only industry in that we’re told what we’re going to pay for our product, we’re told what we’re going to receive for our product and everything in between,’ farmer and rancher Ryan Sonderup said. ‘We have no control of what we get or what we do.’”

“2016 hasn’t been the best year for farmers and ranchers of Nebraska. ‘A lot of it is praying,’ said Ryan’s father Mark. ‘To know when to walk and when to run.’”

“Crop values are down - at times matching the lows seen back in the 1980s, but what has made this year’s harvest particularly troubling is it’s not just crop values. ‘It’s very unusual that the cattle market - or livestock in general, cattle and hogs - and the crops are at low prices at the same time,’ Mark said. ‘I’ve been through a cycle like this already,’ Ryan added. ‘The younger guys that are coming back from four or five, six, eight years even - they’ve never seen a year where they haven’t made money.’”

“While this year’s harvest has come and passed for most farmers, both Mark and Ryan agree the pencil pushing and penny-saving is far from over. ‘Taxes have gone up, rent has gone up,’ Mark said. ‘There’s probably going to be another low coming. Probably lower than what we’ve seen this year, but there will be a sales opportunity in between time.’”

“‘We all have to work together to come through something like this,’ Ryan said. ‘Plain and simple, you can’t afford to pay those high-dollar rents when commodity prices are so low.’”