With the sounds of families splitting up in our ears, late-model cars disappearing to the repo man, empty houses standing all over town, and an unemployment rate correlated to one of the highest foreclosure rates in the nation, people in Merced are not inclined to weep for the plutocrat growers of Fresno, Kings, Tulare and Kern counties. We have all the water we need for agriculture on both sides of our county (they are provided by different sources) and our unemployment rate is worse than all the counties just listed.
We don't have a water crisis and either do they. We all have a credit crisis. That must have been what directed Rep. Dennis Cardoza, who represents Merced and parts of Stanislaus and San Joaquin counties, together with Rep. Jim Costa, D-Fresno, to plead with the House Financial Services Committee to declare his congressional district an "economic disaster area." Real estate is an absolute disaster with no end to its slide in sight (Merced real estate has lost more than half its value) and farm commodity prices are down and costs of production are up. Merced is the second highest-producing dairy county in the nation and dairies are losing between $30,000 and $100,000 or more, depending on size, per month. Like the Southern California mega-dairies that located here in the last decade, almond orchards have also expanded on investments from outside agriculture, most prominently from real estate profits during the height of the speculative housing bubble. Dairymen and almond growers who did not get their infusion of real estate capital are having credit problems.
There is an excellent truth squad at work to debunk the drought-and-unemployment propaganda campaign foisted upon the media and Congress by interests that want a peripheral canal in the San Joaquin Delta -- developers from Sacramento to San Diego, the governor, and Fresno-based Westlands Water District, to name the most obvious. But there are less obvious interests, generally included in the phrase, finance-insurance-real estate (FIRE). Commercial bankers are Cardoza's top contributors. Independent Community Bankers of America have contributed $10,000 early in the 2010 campaign cycle. In 2004, ICBA was in the forefront of a fight to keep Netherlands-based Rabobank from buying a large consortium of Midwestern cooperative farm credit banks. In the last few years, Rabobank has been buying up community banks or opening its own branches on the Central Coast, in the Salinas Valley, from Roseville to Bakersfield in the Central Valley and in the Coachella and Imperial valleys, all focused on farm credit. Cardoza has a half-dozen Rabobank branches in his district. Three arrived within a few months of the collapse of County Bank, mismanaged to death by some of our fine Merced business and political leaders. Rabobank is the 16th largest bank in the world, it has a AAA rating, a 6-percent stake in Rothschild Freres, it may not yet have as much "community" bad paper as other California agribusiness lenders, it has not bought really stupid community banks like County, and it is poised to pick up assets at cents-on-the-dollar as major sectors of the rural California economy crash.
Tomorrow, Interior Secretary Ken Salazar will hold a "town-hall meeting" in Fresno on the issue of restrictions on Delta pumping caused by court decisions make on the basis of environmental law to protect endangered species. It will be a spectacle of misery, as paid farmworkers parade carrying signs announcing their poverty perhaps including images of the Virgin of Guadalupe, and impassioned west-side growers will denounce environmentalists and environmental law as socialism for starters.
Rep. Nunes, who, along with Cardoza and Costa, arranged the event, will preach a real stem winder the evils of environmentalism. A series of successful environmental suits have slightly curtailed water supplies from the San Joaquin River and from the Sacramento River through the Delta to south San Joaquin Valley growers. Nunes lives in the highest-producing dairy county in the nation. Tulare County is in a farm-credit crisis caused by prices now considerably below costs of production.
All three of the congressmen and the Obama administration are free-market fundamentalists and it would never occur to them that anything less than the invisible hand of this deity had anything to do with the dairy pricing system that is squeezing out all but the largest producers any more than they would believe government should regulate derivatives, credit default swaps, or health insurance companies. Now that the Millennial Rapture has died down a bit, the real fundamentalism appears: the brainless, irresponsible, cowardly, unconscionable dogma of unregulated free-market fundamentalism. There is such a consensus about it in the political classes after 30 years of neoliberal propaganda that we are able to witness idiotic events like tomorrow's without even asking: What is the role of credit in this? Are these fields fallowed for lack of water or for lack of credit? What is the level of indebtedness throughout a water district like Westlands?
We only ask, here in Merced, because we see every day the effects of the credit squeeze. We do not fully understand its cause other than to know it doesn't have anything to do with water or fish.
Nunes has introduced three failed bills to open the Delta pumps and has another one in the hopper. Due to our peculiar agricultural economy, based on publicly subsidized irrigation, a decisive percentage illegal alien farm labor without which the industry would collapse, as well as farm credit and a bewildering array of crop subsidies, Congress may yet come to believe Nunes' persistent brand of the well-known substance and pass one of his bills to further destroy the Delta, its fish, its farmers and the coastal salmon fishery of California and Oregon for the benefit of a few hundred immense agribusiness firms whose systemic environmental destruction is habitual and unredeemable. But what's actually driving Nunes' district to distraction is a credit-and-debt crisis, not a water crisis. But Nunes can't admit that because it violates his dogmatic free-market fundamentalism.