We need sustainable tax, farm policies

If only the New York Times would let the dog days of August pass quietly so all might nap in blissful ignorance until Labor Day.

But, no, the Times asked a couple of big dogs to get in the game mid-month and now we can expect a few weeks of loud barking from Big Farm advocates and Big Government haters. The first warning appeared in an Aug. 14 Sunday Times Magazine piece that predicts an all-but-certain food disaster if we continue our unsustainable use of natural resources.

The warning comes courtesy of Jeremy Grantham, “the founder and chief strategist for the asset-management firm” — get this –“GMO.” So who is Jeremy Grantham and why should you care about his view on anything?

Two reasons

First, his firm manages $100 billion of other people’s money and, second, he’s called every market turn in the last 40 years and foreseen (and profited from) the biggest market bubbles — Japan in the 1990s, the tech stock crack-up in 2000, the housing market collapse in 2007/08 — since the mid-1980s.

“He’s like a mechanic,” one of his competitors explains to the Times, “who’s telling you, ‘Fix this, or you’ll have trouble down the road.'”

Paradigm shift

The trouble down the road now, describes Grantham, is that few people believe in the “paradigm shift” in commodity values: the long-term doubling and tripling in price of key economic building blocks like corn, coal, metals, red meat, cotton and oil. Moreover, he relates, these prices now fuel our alarming, unsustainable use of resources to produce food.

Our use of water, phosphate and potash, combined with an astonishing increase in soil erosion, Grantham warns, makes it all but certain we cannot support 2 billion or 3 billion more people on earth without serious “mitigation,” huge changes in today’s production systems or population or both.

Will we change before it’s too late? Will you? (Links to both the Times’ magazine story, Can Jeremy Grantham Profit From Ecological Mayhem, and his 15-page, July 2011 GMO Quarterly Letter, in which he lays out his reasons for both alarm and hope are posted at www.farmandfoodfile.com.)

Another example

The second warning bark published by the Times was a reasonable analysis of these unreasonable economic and political times by America’s most reasonable, richest sage, the Oracle of Omaha, Warren Buffett.

In it, Buffett made a clear case that the best tax shelter he and his “super-rich friends” have is Congress who, unnecessarily, “feels compelled to protect us, much as if we were spotted owls or some other endangered species.” (A link to it is posted at www.farmandfoodfile.com, also.)

To prove his point, Buffett discloses that his 2010 federal tax bill, at $6,938,744, was “a lot of money (but still) only 17.4 percent of my taxable income” and less than one-half the rate “paid by any of the other 20 people in our office (whose) tax burdens averaged 36 percent.”

All baloney

Buffett relates that he’s heard all the arguments on how “we mega-rich” should call for lower capital gains tax rates to encourage investment and more tax cuts to spur job creation. It’s all baloney, he says.

“I have worked with investors for 60 years and I have yet to see anyone … shy away from a sensible investment because of the tax rate on the potential gain.” And, he adds, “… I would note that a net of nearly 40 million (jobs) were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower jobs.”

Will these big dogs’ calls for more fair, more sustainable tax and food policy be answered or will today’s lazy mutts just roll over and ignore ’em? If this August is any indication, bet on the mutts.