The Expansionist: July 2018

The Expansionist

Thursday, July 26, 2018

Facebook Lost NOTHING! No Replacement for U.S. Agriculture

TV news has been talking utter nonsense about billions of dollars that Facebook “lost” on the stock market yesterday. Nonsense. Facebook lost NOTHING. It got its money when it sold its stock. As long as the owners of that stock do not try to sell it now, they lose nothing either. To say that the shareholders have lost money is like saying that the money in your savings account in a bank has been lost because the things that that money might buy have gone up in price! That's irrelevant. As long as the money stays in the bank, you haven't lost a cent.
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Facebook is in the same position as the owner of a savings account. It already GOT its money when it sold its stock, which might have been years ago. That transaction is FINISHED, and Facebook still has the proceeds.
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Facebook is an extremely wealthy corporation. It can fund all its needs from its CURRENT resources. It does NOT need to issue more stock, nor sell its reserve (treasury) stock to fund its current operations. Facebook has lost NOTHING.
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No Replacement for U.S. Agriculture. The media are being absurd, again, as regards the costs to American farmers of a trade war in the long term. THERE IS NO REPLACEMENT FOR U.S. AGRICULTURE in world markets. Europe may or may not be largely self-sufficient in regard to food supplies, IF Europeans are willing and able to pay MORE for basic foodstuffs. If Europe is NOT self-sufficient, where is it to get supplemental food? Africa? It is to laff! Africa is perpetually starving, or at the razor's edge of starvation. Russia? Ha! Due to its severe climate and defective economic order, Russia can barely feed itself, and needs to import food. Central Asia? Nope. China? Again, no. India, Pakistan, Bangladesh, Sri Lanka, Vietnam, Japan? No. There is little surplus food in any of those countries to sell to Europeans. Where, then? Maybe Europeans could get food from some of those Asian countries, but only if they are willing to change their diet to replace corn, wheat, barley, rye, potatoes, tomatoes, temperate-zone herbs, and other customary ingredients in their various national and regional cuisines with rice and Asian spices. Are Europeans inclined to replace their entire food history and culture? Of course not.
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Canada and Australasia (Australia and New Zealand) might supply some of Europe's need for traditional foodstuffs, but their agricultural output all put together does not equal that of the United States alone.
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Similarly, some of Latin America might be self-sufficient in some foodstuffs, but is there enuf surplus to ship outside of, say, Brazil and Argentina, to feed Mexico, Peru, Venezuela, and other societies in Latin America that have little surplus of their own, plus Europe, plus Asia? That is extremely dubious.
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Current dislocations in the Midwest are thus but a hiccup in long-term economics. Now the Trump Administration is stealing from urban areas of the country to subsidize farmers. Haven't we had enuf subsidies to farmers? We've diverted TRILLIONS of dollars from economically productive urban and suburban areas to agricultural regions over the course of the past century. And now we have to divert more of our revenues from productive industries to unproductive use by farmers. If farmers are so close to bankruptcy in normal and even boom times that they need subsidy now, it has to be because they have no idea how to run their business. It is not up to the rest of us to make up for their deficiencies.

- posted by L. Craig Schoonmaker @ 8:54 PM

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