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Happy Days Are Here Again?

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new-logo25Dan Martin

PPJ Staff Writer

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“Dow hits record high as markets are undaunted by tepid economic growth, political gridlock” (The Washington Post, March 5, 2013)

This is just an example of the headlines appearing in virtually every newspaper and on every newscast in001-1008100157-economy5 the country.

Feel better now?

Well, I hate to burst your bubble (that’s one of those highly technical economic terms bandied about by the talking heads), but let’s take a closer look at the numbers.

The common thread here is that all of these headlines trumpet a mindset that is pure horse (manure). (Editor’s note: The writer actually used a stronger epithet and, while we do not pretend to be rated G, there is always the outside chance the PPJG will be left lying about where a nine-year-old might find it.)

Anyone who respects the ‘time value of money’, also known as ‘inflation / deflation’, is conditioned to immediately suspect comparisons of dollar amounts between different time frames, and treat them with a huge dollop of skepticism.

THE REAL NUMBERS

The closing numbers for today (March 5, 2013) were $14,253.77 for the Dow and $3,224.13 for the NASDAQ.

The average annual inflation rate from 2000 to 2013 is 2.24%. The rate from 2007 to 2013 is 1.945% (see InflationData.com.)

Adjusted for inflation, the Dow Jones Industrial Average (DJIA) is $1,479.47, or 9.403% short of its all time high of $14,164.53 on October 9, 2007 ($15,733.24 in today’s dollar.)

The NASDAQ is even more woefully behind its March 10, 2000, record close of $5,048.62; ($6,751.24 after adjusting for inflation.) That would be $3,527.11 – short 52.244%.

WHAT DOES IT ALL MEAN!

Inflation is a basic characteristic of our economy. Those who wield some influence over these things strive to maintain the inflation rate between 0.5 and 1.5 percent as measured by the price index for personal consumption expenditures (the PCE price index).

Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression.

The fact of inflation must be taken into account whenever and for whatever reason we are comparing the cost of things between two different time periods.

Obviously, we have a way to go.

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Dan Martin: procentral@mainstreetcom.com A semi-retired estate planner and tax preparer, determined to help people understand how numbers affect every day of their lives. Comments, questions, or clarifications are welcomed.

Plan B for Obama on the economy

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Op-ED   by: Thomas Palley

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Labor Day, 2010

Mr President,

With hopes of a V- or U-shaped recovery fading, there is the increasing prospect of an L-shaped future of long stagnation, or even a W-shaped future in which W stands for something worse.

The reason for this dismal outlook is economic policy is trapped by failed conventional thinking that can only deliver wage stagnation and prolonged mass unemployment.

Your administration’s current economic recovery program has been marked by four major failings:

1. Inadequate fiscal stimulus.
2. Failure to cauterise the housing market
3. Failure to neutralise the trade deficit
4. Failure to restore the link between wage and productivity growth

If your policy team remedies these four failings our economy will quickly begin robust recovery. However, the longer you wait the greater the challenge, because recession creates new facts in the form of bankruptcies, foreclosures, destroyed credit histories, job losses and factory closures.

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Genetically Engineered Crops Are Not the Solution to World Hunger

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Article from…. Organic Consumers Association

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Genetically Engineered Crops Are Not the Solution to World Hunger

EXTRACTS: As Defra chief scientist Bob Watson has unambiguously stated, “The absence of GM crops is not the driver of hunger today.”

To continue to pretend otherwise is unforgivable as it diverts valuable attention and resources from reliable, accessible and low cost alternatives that are available NOW to help meet the needs of the poor and hungry.
— —
GM no solution to global hunger
http://www.bangmfood.org/feed-the-world/17-feeding-the-wo…

In the face of massive food price inflation affecting some of the poorest countries in the world, claims that GM crops are the silver bullet that can deliver cheap and abundant food for all are once again being made. The evidence to support such claims, however, is scant to non-existent, as noted by the recently concluded International Assessment of Agricultural Knowledge Science and Technology for Development (IAASTD), a process involving 400 scientific experts initiated by the World Bank with the co-sponsorship of the United Nations.

The IAASTD process involved a thorough sifting of the evidence about agriculture and food production, and took four years to complete. Its 2500-page report, based on peer reviewed publications, concluded that the yield gains in GM crops “were highly variable” and in some cases, “yields declined”. The report also noted, “Assessment of the technology lags behind its development, information is anecdotal and contradictory, and uncertainty about possible benefits and damage is unavoidable.” Asked at a press conference whether GM crops were the simple answer to hunger and poverty, IAASTD Director Professor Bob Watson (former director of the Intergovernmental Panel on Climate Change and as of 2008, chief scientist at Defra) replied, “I would argue, no”. The UK Government approved the IAASTD report on 9 June 2008.

The report not only brought into question GM’s claims to be the solution to global poverty and hunger but also to be a solution to climate change. In fact, GM crops are seen by many as reinforcing an outdated model of agriculture, unsuited for dealing with the conditions that climate change and expensive scarce oil bring for global food security. Many also see GM crops as anti-innovation, because they involve patents which restrict the sharing of knowledge and technology.

Large sections of the IAASTD report favoured truly innovative approaches to improving agriculture and increasing food production. These involve techniques suited to small farmers that minimize the use of increasingly expensive fossil fuel-derived inputs like fertilisers and pesticides. These approaches to cultivation and pest control recognise the value, particularly to the poor and hungry, of low-cost practices using locally available materials and technologies in an environmentally sensitive manner. They include integrated pest management (IPM) and agroecological, or even fully organic, methods.

These innovative farming methods have met with remarkable success, both in the developing and developed world. The IAASTD report notes that they can deliver effective crop protection and pesticide reduction and yield advantages. The yield advantages of IPM have been particularly strong in the developing world, increasing productivity for poor farmers while enhancing sustainability. This, the report notes, has significant policy implications for food security. The IAASTD report also notes that the community-wide economic, social, health and environmental benefits of these approaches have been widely documented.

After the publication of one study looking at a large number of projects in the developing world, New Scientist commented, “Low-tech ‘sustainable agriculture’, shunning chemicals in favour of natural pest control and fertiliser, is pushing up crop yields on poor farms across the world, often by 70 per cent or more… The findings will make sobering reading for people convinced that only genetically modified crops can feed the planet’s hungry in the 21st century… A new science-based revolution is gaining strength built on real research into what works best on the small farms where a billion or more of the world’s hungry live and work… It is time for the major agricultural research centres and their funding agencies to join the revolution.”

Here are some examples of the remarkable gains in productivity that have been achieved:

* Some 45,000 farmers in Guatemala and Honduras used regenerative technologies to triple maize yields to some 2-2.5 tons/ha and diversify their upland farms. This has led to local economic growth that has in turn encouraged re-migration back from the cities;

* More than 300,000 farmers in southern and western India farming in dryland conditions, and now using a range of water and soil management technologies, tripled sorghum and millet yields to some 2-2.5 tons/hectare;

* Some 200,000 farmers across Kenya, participating in government and non-government soil and water conservation and sustainable agriculture programmes, more than doubled their maize yields to about 2.5 to 3.3 t/ha and substantially improved vegetable production through the dry seasons;

* 100,000 small coffee farmers in Mexico adopted fully organic production methods, and yet increased yields by half;

* A million wetland rice farmers in Bangladesh, China, India, Indonesia, Malaysia, Philippines, Sri Lanka, Thailand and Vietnam shifted to sustainable agriculture, where group-based farmer-field schools have enabled farmers to learn alternatives to pesticides, and increased their yields by about 10%.

The lot of small farmers in the developing world can also be greatly improved by other practical measures ­ for example, through facilitating access to affordable finance (microcredit, grants) or through increasing investment in rural infrastructure, such as road, transport, and storage facilities. In contrast, when it comes to helping the developing world, GM technology is failing to deliver. As Defra chief scientist Bob Watson has unambiguously stated, “The absence of GM crops is not the driver of hunger today.”

In a recent letter in the UK press, the chairman of the government agency Natural England (formerly English Nature), Sir Martin Doughty, is equally blunt: “We need to be mindful of the lessons of the past before rushing headlong to embrace genetically modified crops as the solution to rising food prices… GM crops can in no way be seen as a quick fix.”

To continue to pretend otherwise is unforgivable as it diverts valuable attention and resources from reliable, accessible and low cost alternatives that are available NOW to help meet the needs of the poor and hungry.

Find out more about the International Assessment of Agricultural Knowledge Science and Technology for Development (IAASTD):

Read the report http://www.agassessment.org/

Coverage of the IAASTD report:

“GM food ‘not the answer’ to world’s food shortage crisis, says report”, Sean Poulter, The Daily Mail, 16 April 2008, http://www.dailymail.co.uk/news/article-559965/GM-foods-a…

“Change in farming can feed world ­ report”, John Vidal, The Guardian, April 16 2008, http://www.guardian.co.uk/environment/2008/apr/16/food.bi…

“IAASTD Report: GM crops not the solution to World Hunger”, Fr. Seán McDonagh, SSC, Impact Mag vol.42 no.6, June 2008, http://www.scribd.com/doc/3804302/Impact-Mag-vol42no06

See also:

“Biotech snake oil: a quack cure for hunger”, Bill Freese, Multinational Monitor, Vol. 29 No. 2, Sept-Oct 2008, http://www.multinationalmonitor.org/mm2008/092008/freese….

“Genetic engineering ­ a crop of hyperbole”, Doug Gurian-Sherman, San Diego Union Tribune, 18 June 2008, http://www.signonsandiego.com/uniontrib/20080618/news_lz1…

“Feeding the world?”, Prof Jules Pretty, SPLICE, Vol. 4 Issue 6, http://ngin.tripod.com/article2.htm

“Organic farming ‘could feed Africa’ – report”, Daniel Howden, The Independent, 22 October 2008, http://www.independent.co.uk/news/world/africa/organic-fa…

“Is ecological agriculture productive?”, Lim Li Ching, Third World Network, November 2008, http://www.twnside.org.sg/title2/susagri/susagri064.htm

“Biotech has bamboozled us all”, George Monbiot, The Guardian, 24 August 2000, http://www.guardian.co.uk/lifeandstyle/2000/aug/24/foodan…