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CapitalPress.com
January 6, 2017
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Capital Press Editorial Board.
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the opinions of the authors but
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Editor
Managing Editor
John Perry
Joe Beach
Carl Sampson
opinions@capitalpress.com Online: www.capitalpress.com/opinion
O UR V IEW
It’s time to free the Hammonds
A
t the end of their terms
presidents typically grant
pardons or clemency
to a host of federal inmates
whose cases are too politically
controversial for all but a lame
duck to handle.
It’s time that President
Obama grant Dwight and Steven
Hammond clemency and allow
them to return to their Oregon
ranch.
Ranchers in Oregon’s Harney
County, father and son have a long
history of disputes with the Bureau
of Land Management over grazing
allotments. Dwight Hammond was
convicted of one count related to a
fi re that burned 139 acres of BLM
land in 2006. Steven Hammond
Dwight Hammond
Steven Hammond
was convicted of one count related
to the 2006 fi re, and a separate
count related to a fi re in 2001.
The Hammonds received a
fair trial and were found guilty.
Many believe they had just cause
to start the fi res and deserved
no punishment even if they had
technically broken the law. The
jury found otherwise, and the
original trial court handed down
fair, and lenient, sentences.
In addition to lengthy
probation, Dwight Hammond
received six months in prison, his
son one year. The original prison
sentences were served.
But those sentences ignored
the minimum mandatory fi ve-year
sentence prescribed by the federal
arson statute. The government
appealed, the sentences were
overturned and the trial court
ordered the Hammonds to serve
out the remainder of new fi ve-year
sentences.
They have been in federal prison
for a year.
That’s enough.
When the crack cocaine
trade was destroying minority
communities, Congress was
pressed to set a strong deterrent.
It used its constitutional authority
to remove judicial discretion in
sentencing. It worked so well on
inner city drug offenders that the
concept was applied to a wide
range of federal crimes.
That is the law. To quote
Dickens, the law is an ass.
We understand the appeal of
mandatory sentencing. It’s easy,
and it demonstrates that criminality
won’t be tolerated. But the purpose
of prosecution is to serve justice.
It’s not supposed to be easy.
Removing judicial discretion to
weigh the circumstances does not
serve justice, even if in some cases
judges err and are too lenient.
Sometimes, the cause of justice is
served by leniency.
President Obama must think
so, too. He’s spent the last couple
of years speaking out against
mandatory sentencing. To
punctuate the point, he has granted
clemency to drug offenders whose
mandatory sentences he has judged
unjust and overly punitive given
the circumstances of their crimes.
By coincidence, the original
judge in the Hammonds’ case
found a mandatory fi ve-year
sentence overly punitive given the
circumstances of their crimes.
The Hammonds have served
enough time, justice has been
served. The president should
commute their sentences to time
served and send them home.
The economy: What
lies ahead in 2017?
O UR V IEW
By STEVE SCRANTON
For the Capital Press
A
Dry beans are harvested in a
fi eld near Nampa, Idaho. The
state’s overall private sector
weekly wage is growing at
twice the national rate, and the
average ag industry wage is
increasing even faster.
Sean Ellis/Capital Press
Healthy economy more
important than minimum wage
P
roponents of higher minimum
wages may be disappointed to
fi nd out that a robust economy,
not governmental fi at, benefi ts
workers most.
Those state legislators and
initiative sponsors who supported
minimum wage increases in states
such as Washington, Oregon and
California believed they were
helping workers.
They were right, to a point.
Jacking up the minimum wage to
$11 an hour is fi ne — if you’re not
an employer on the edge of breaking
even. For employers, hiring fewer
people or cutting their hours is the
only fi scally responsible option.
That, in turn, depresses the economy
and hurts workers instead of helping
them.
An interesting case study is
Idaho, which adheres to the federal
minimum wage of $7.25 an hour.
While proponents of government-
mandated increases might bemoan
that fact, the reality is that Idaho
workers are doing quite well without
their help.
The average Idaho worker earns
$18.57 an hour, and the average
agricultural worker earns $15.55
an hour. Both are well above the
$11 minimum wage required in
Washington, $10.25 required in
Oregon and $10.50 required in
California.
The reason for the disparity is
Idaho’s robust economy. In Southern
Idaho alone, about $1 billion in
capital investments have been made
during the past several years as
national and international companies
built or expanded their food
processing plants, creating 5,000
jobs, according to the Southern
Idaho Economic Development
Organization.
Because of the economic
expansion, good workers are at a
premium. As a result, employers
must pay more to get and keep
employees.
In other words, a strong economy
means higher wages.
Such a basic economic lesson
appears to be lost on proponents
of higher minimum wages, who
believe employers are somehow
obliged to raise wages whether or
not the market warrants it.
In states such as Washington
and Oregon, whose economies are
still struggling, legislators are on
the prowl for new taxes. The one
alternative that doesn’t appear to
be on the table is reducing state
spending to match revenue.
In the meantime, Idaho continues
to attract investments by companies
that grow the state’s economy and
reward the state’s work force.
Other states would do well
to emulate Idaho’s model of
encouraging market forces instead
of hanging more taxes on the
economy.
When it comes to growing a
healthy economy that benefi ts
workers, the minimum wage is not a
major factor.
Readers’ views
Balance U.S.
milk supply,
demand
It has been said that trade
agreements over the last two
decades have made U.S.
dairy a net exporter.
Almost everyone gets
caught up in exports thinking
exports are a good thing be-
cause almost everyone in the
supply chain has a window
of profi tability.
Almost everyone except
the dairy farmer, who makes
the milk and is told he must
compete with a global milk
price of $14 per hundred-
weight or less.
Tami Kerr, executive
director of Oregon Dairy
Farmers Association, strong-
ly supports exports, stating,
“I think it’s a no-brainer for
us. We’re producing more
milk than we’re consuming.”
Instead of making milk in
excess of profi table domestic
demand and selling it at a loss
on the global market, why
don’t dairy farmers, through
their dairy farmer-owned co-
ops, simply balance the milk
supply with profi table do-
mestic demand and promote
U.S. made milk?
The U.S. dairy farmer’s
goal should be sustainable
profi tability, not global ex-
ports that fail to pay at least
what it costs to make the
milk.
Dairy farmer: Join and
implement National Dairy
Producers
Organization’s
policies of balancing the
milk supply with profi table
domestic demand so that
milk has at least the average
value of what it costs the av-
erage U.S. dairy farmer to
make it.
Bob Krucker
NDPO board member
Jerome, Idaho
Dannon doing
the right thing
Shiloh Perry from the
Farm Bureau questions Dan-
non’s decision to use non-
GMO feed for its dairy cows
(Guest Comment, “Capital
Press,” 12/9/16). But Dan-
non is doing the right thing.
The poison glyphosate,
together with its even more
poisonous adjuvants, are the
dance partners of GMOs.
GMO crops exist largely to
be drenched with glyphosate.
The glyphosate residues
in GMO food and feed like-
ly mimic and replace the es-
sential amino acid glycine in
bodily systems causing hav-
oc with health. See “Acres
USA,” Sept. 2016, page 8,
discussing the new study in
the “Journal of Biological
Physics and Chemistry” link-
ing glyphosate to disease.
Tom Stahl
Waterville, Wash.
fter living through a
campaign season that
featured anger and dis-
trust as the primary themes,
we may well see hope and
uncertainty as the new themes
in 2017. The reality is that the
economic outlook over the
next 12 months is far less cer-
tain than in previous 12-month
windows due to the results
of the U.S. elections and un-
certainty about how critical
upcoming elections in Eu-
rope, especially Germany and
France, will shape global poli-
cy and global economies.
The recent Federal Reserve
move raising the key interest
rate by 0.25 percent and the
U.S. Dollar Index crowding its
all-time high for recent years
will continue to put pressure
on agricultural commodities
that are heavily dependent on
exports. The cost of capital
sources with interest will in-
crease the cost for producers
to hold crops with anticipation
of better prices. That, coupled
with the uncertainty of pos-
sible changes in foreign trade
policy, will challenge produc-
ers in their marketing strate-
gies.
From a national perspec-
tive, the Republican sweep
and President-elect Donald
Trump’s platform suggest
prospects for tax cuts and
tax reform; increased infra-
structure, energy and defense
spending; a reduction in the
regulations affecting a number
of industries; a more restrictive
and potentially hostile trade
policy; and sooner and faster
increases in interest rates if
policy changes result in either
faster economic growth or
faster infl ationary growth.
If government remains
gridlocked, however, it is un-
likely that the economy will
break out of the 1.5-2.5 per-
cent growth pattern that has
held since the recovery began.
Based on President-elect
Trump’s platform, these are the
major policy areas to watch.
• Tax policy: Reductions in
the personal and business tax
rates are on the table as well as
the potential for a more com-
prehensive tax reform pack-
age.
• Fiscal policy: The focus
of President-elect Trump is on
infrastructure, energy and de-
fense spending.
• Regulatory policy: Presi-
dent-elect Trump has made it
Guest
comment
Steve Scranton
clear that he wants to reduce
the role of government and
reduce regulations. This holds
the potential for major chang-
es to regulations related to fi -
nancial services, health-care,
energy and environment.
• Trade policy: The pros-
pect of a more restrictive
and potentially hostile trade
policy exists, especially as it
relates to Canada, China and
Mexico.
• Monetary policy: If poli-
cies and actions implemented
by Congress and the president
result in either faster econom-
ic growth or faster infl ation-
ary growth, then the Federal
Reserve would probably raise
interest rates sooner and fast-
er.
Regardless of the politi-
cal environment, there is one
fundamental economic reality
that we should not forget. His-
torically, the average business
cycle has lasted 84 months.
The current business cycle
is into its 90th month. Even
with the potential boost from
a changed political environ-
ment, the reality is that we are
closer to the end of this busi-
ness cycle than the beginning.
Sound risk management
practices call for advance
preparation; it is best to plan
for the next downturn when
times are good. As the old
Aesop’s fable counseled, it is
better to be the “ant” and have
a plan ready when hard times
arise than the “grasshopper”
and simply hope that the good
times continue. On that note,
the best advice I can give is
the following:
• Stay focused on your
business and what makes you
successful, and avoid the noise
and distraction of the 24/7
news and information stream.
• Develop your “disaster
recovery” plan for when the
business cycle ends and the
next downturn comes, when-
ever that may be.
Steve Scranton is the
chief investment offi cer for
Washington Trust Bank. He
holds a chartered fi nancial
analyst designation and has
over 30 years of investment
experience. Throughout the
Pacifi c Northwest, he is a
well-known speaker on the
economic conditions and the
world securities markets.
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