Is waste paper our major export?

There is a meme floating around the Internet (for example, here):

Do you know what our biggest export is today?  Waste paper.

and

The United States has lost a total of about 5.5 million manufacturing jobs since October 2000.

The former assertion seems based on 2007 data reported here, which indicates (without giving a specific figure) that waste paper fills more shipping containers leaving the U S than any other product.  A big volume, surely, but is it our largest export, either by dollar value or physical volume?

Take a look at the U S Statistical Abstract, 2010 edition, table 1272 (download the pdf for the international trade section here).  Latest data shown is for 2008.  Total value of “pulp and waste paper” exported: $7.744 billion.  This is less than 1% of total exports ($1287.442 trillion).  A few larger figures are Coal ($8.196 billion), Vehicles ($98.871 billion), “Television, VCR, etc” ($24.379 billion).  There are eight different categories of chemicals, five of which each exceed $7.744 billion.  And $115.248 billion of “agricultural commodities,” including Corn ($13.931 billion) and “Vegetables and fruits” ($14.040 billion).

I don’t have data on physical volume, but many of the products I mentioned above typically do not travel in shipping containers.  In fact, one reason for export of waste paper might be that many containers would otherwise have to return empty to Asian ports.

As for the loss of manufacturing jobs, certainly there has been a decline, largely because manufacturing workers have become more productive.  The Statistical Abstract only shows manufacturing data back to 2000, but during the period 2000-2008 the constant-dollar manufacturing GDP increased by over 10%, just slightly more than population growth.

I won’t deny that there are serious problems with the U S economy, and I won’t deny that the net outflow of dollars (largely due to petroleum consumption and “defense” expenditures) is unsustainable.  It would be a good thing to remove obstacles which hinder American labor from producing in America, such as taxes on production and encouragement of nonproductive speculation.  A more balanced flow of trade would likely be a byproduct. The more important result would be higher incomes and a better standard of living for working people.

100% mortgages still available…

… at Prairie Park in Beecher, courtesy Uncle Sam. And, with the $8,000 credit Uncle also provides, you’ll take out some cash right away!

I guess the target market is folks who can’t save a few thousand dollars for a down payment. Or maybe the purpose is to keep some construction workers employed, builders solvent, and housing finance gangsters profitable. It’s a Department of Agriculture program, thus the houses are remote enough that any big increase in gasoline prices will be a problem.  (This DOA site indicates that 50,000 homes will be 100% financed, funded by the American Recovery and Reinvestment Act.)

I thought that, at least for a little while, the authorities would pretend to have learned the lesson, that poor people have better uses for their energy and money than becoming highly-leveraged “homeowners.” Silly me.

Illinois Fiscal Rehab

Our friends over at the Civic Federation on Monday issued a “Fiscal Rehabilitation Plan for the State of Illinois.”  It has a pretty decent summary of where we stand financially, and by what route we got here.  The short version of this is, we are in deep doo doo.  And in recent years, the doo doo has been spread around in confusing ways, making it harder to trace the problem.  But now, no question about it, we have retiree benefit liabilities far beyond the funds available to pay them, debt has been increasing, and programs for the poor are facing increasing burdens with decreasing resources, while tax revenues have been slipping. (The report doesn’t discuss infrastructure needs.)

The report, funded by some of Chicago’s wealthiest foundations, recommends freezing or cutting funds for  State programs, reducing pension obligations to the extent possible, raising the personal income tax 67% and corporate tax 33%, and removing a few relatively minor tax breaks.  It also suggests that pension income be taxed and that the State move toward taxing consumer services.  Despite these tax increases and ongoing national economic difficulty, it pretends that the income and sales tax bases will not decrease.

Of course this is a dumb plan.  Frozen or reduced expenditures will be inadequate to meet the State’s needs. Increased rates of tax on productive activity will cause some of that activity to leave Illinois, or simply not to occur.   When they see their income become subject to tax, some pensioners will choose to move out of state– and the ones best able to leave are the affluent ones, who pay sales and property tax and don’t so much burden public services.

But the State is in a fiscal hole, so if I don’t like the Civic Federation’s plan shouldn’t I suggest one of my own?  Despite the lack of foundation funding, that is what I shall do.

I won’t comment much on the expenditure side. Probably some pension cutbacks are appropriate, and there is surely plenty of fraud and waste in many programs (tho catching it is difficult).   Some programs certainly could be eliminated, but the big ones– education, transportation, aid to those unable to work– are necessary in some form.  Also, there is an existing debt of about  $25 billion, plus $66 billion in unfunded retiree liabilities (for past years). So we need a lot of revenue.  How to get it?

What about a land value tax? Now, nobody knows what the land of our State is worth, but we know for sure that it isn’t moving away.  It might be $2 trillion.  Suppose we were to tax that at, say 1% of value.  That’s $20 billion/year, more than the total raised by the State sales, corporate and personal income taxes. That bails us out of the debt in a few years, allowing eventual elimination of these other taxes.

Is it fair? It’s more fair than asking hardworking people to share their salaries with the State, then pay again when they purchase things.  (The Illinois sales tax originated, in 1933, as a way to eliminate the real estate tax.) It’s not just fairer, but also smarter, than telling employers and retirees that if they stay in Illinois, the State will take a share, an increasing share, of their income..

I have a special affinity for taxing farmland, because I look at listings like this 210-acre farm where real estate tax is only 1/10th of 1% of value.  Others pay even less.  It’s quite legal, tax preferences for “farmland” even tho the owners in most cases are investors, not farmers.  There are plenty of urban examples, too, some illustrated here.

Although Civic Federation’s recommendations are foolish, I think descriptive portions of the report are pretty good.  Two things I learned are, first, that the number of State employees has dropped about 20% in the past decade, and second, that expenditures on “Corrections” are only about $1.1 billion/year. It still would be a good idea to let all the innocent people out of prison, but that’s not going to solve our budget problem. However, if we raise taxes as the Civic Federation suggests, those released, as well as the rest of us, are unlikely to be able to find jobs.

Fisheries, too

I’ve mentioned previously that poor countries are selling or long-term-leasing arable land to more prosperous and densely-populated ones, a phenomenon monitored here. No surprise, it’s not just solid-earth-type land that’s being sold:

“Most counties in Africa are selling fishing rights to industrialised nations which catch large amounts of seafood, effectively out-competing local fisherman,”

according to New Scientist. It’s not stated, but presumably the revenue received for the rights goes to elites, not to the working fishermen displaced. Well, they can become pirates.

Madagascar update

Last fall I mentioned a deal between Korean conglomerate Daewoo and the gov’t of Madascar, for the former to get half a Belgium’s worth of farmland at basically no charge. Turns out it was more controversial than I thought, caused a revolution, and the new government has revoked the deal. But, as the linked article explains, similar deals are proceeding in several other countries.

This information comes from farmlandgrab.org (“Governments and corporations are buying up farmland in other countries to grow their own food – or simply to make money”), via Alanna Hartzok.

Farmers still don't own their land

The Census Bureau has issued the 2007 Census of Agriculture reports for Illinois, and, no surprise, most farmland is not owned by the farmer who works it.  62% of farmland in the state is tenant-farmed, up from 58% in 2002.  (table 9, pdf) . Owner-operators are the majority of farmers, but have much smaller farms, 107 acres and $47,726 gross revenue, compared to part-tenants (784 acres and $407,013) and farmers who rent all their land (439 acres and $254,814) (table 65, pdf)

Nationally, however, more than half of farmland is operator-owned.  And these owners paid more than $7 billion in interest on loans secured by real estate.