Trade Deficits Indicate Prosperity

170613150857-trade-deficit-full-169

The Trump administration has launched a full-frontal attack on America’s trade deficit with the rest of the world.  The weapon of choice in what is evolving into an all-out trade war, has been to impose punitive tariffs on a host of products, most notably steel and aluminum. Predictably, Newton’s third law of physics, which states that for every action there is an equal and opposite reaction, applies here, as our trading partners have responded in kind with tariffs of their own.

The headline number is the dollar value of goods and services imported versus goods and services exported. In 2017 the trade deficit was $568 Billion. Lost in the headlines, is the fact that United States exports increased by 5.6 percent during the year to the tune of $2.6 Trillion.  Imports increased 6.9% to $2.9 Trillion.

This overall combined increase of over 6% is simply an indication of robust economic activity, particularly in the United States. Witness the year’s economic benchmarks of real GDP growth, inflation, equity prices, manufacturing output, civilian employment, the unemployment rate – all displaying positive numbers signifying a healthy economy.

Meanwhile the Trump administration is complaining that the trade deficit of $568 Billion translates into 3.5 million lost jobs here at home, most of which would be in the manufacturing sector. At the current unemployment rate of 3.9%, it is not clear where these workers would come from. Further, even if these jobs were repatriated, the higher cost of labor to produce the same goods in the U.S. would cause their prices to skyrocket.

So, aside from the positive effects of imports and their role in checking inflation, they also contribute to our economy in other ways.  Dollars used to purchase imported goods do not just disappear or get stuffed under some international mattress. They continue to circulate in the world economy and eventually find their way back to the United States.

For example, when an American buys a Japanese made Toyota or a Korean made washing machine, dollars flow to the respective country. The dollars received are eventually reinvested to purchase assets in the United States. Those assets include Treasury bonds, stocks, real estate – all of which support our economy and keep interest rates low. If a country chooses not to reinvest in the United States, it will sell the dollars in world currency markets to other countries that will. Without these dollars circulating in the world currency markets, the value of the dollar, relative to other currencies, will rise making our exported goods even more expensive to foreign consumers.

So, there you  have it. This may be a rather simplistic view of the complexities of world trade, but it is intended to be just that – simple.  Building barriers to free trade using tariffs accomplishes nothing and will just make everyone worse off.  American businesses rely on low cost imported raw materials to remain competitive and the American citizens enjoy the lower cost of imported consumer goods.

In conclusion, I would argue that a trade deficit is not a sign of economic distress, but quite the contrary. It is a sign of a healthy economy evidenced by the fact that every recent U.S. economic expansion has been accompanied by an expanding trade deficit.

Advertisements

The Case for Universal Basic Income

ubiWe are at the most dangerous moment in the development of humanity… the rise of artificial intelligence is likely to extend job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.” – STEPHEN HAWKING

Between 2000 and 2014, five million manufacturing jobs were lost in the United States. This trend shows no signs of abating. Now there are more American men drawing disability insurance than there are working in production manufacturing jobs. Turning to retail, the pending apocalypse in that sector of our economy is illustrated by the elimination of 100,000 jobs just during the six months ending in May 2017.

The list goes on and on and is now beginning to impact not only the lower end of our country’s income spectrum but is also invading the space of middle-skill and professional sectors. Whenever tasks are routine, these jobs are candidates to be replaced by artificially intelligent robotic devices. With the Federal Reserve categorizing 44% of the current jobs in the United States as routine, that portends an uncertain, if not downright, scary future.

Artificial Intelligence is not the only contributing factor. We have for years exported jobs overseas to low-cost labor countries while we witness the decline of shopping malls as e-commerce sales grow in excess of $50 Billion per year. Meanwhile the income gap between the well-off and the not-so-well off continues to expand. Witness the ratio of CEO pay to the average worker in 1965 at 20 to 1 that now stands near 300 to 1.  Yes Virginia, the stock market has done very well for the top 20 percent that own over 90 percent of the stock market holdings.

While there are many examples of job destruction and the widening income gap threatening our social fabric, space in this article will not permit me to list them all. One solution to mitigate this impending disaster is the adoption of a Universal Basic Income (UBI). Once, only a far-left proposition, UBI is beginning to gather bipartisan interest. Under most plans, it would modify or replace other social safety net government programs. It was reported just last month that Social Security payments are now exceeding revenues collected. Clearly, we cannot continue down this do-nothing path.

Most plans suggest a monthly minimum income to all adult U.S citizens of around $1000, which is near the individual U.S. poverty level. The intent is to grant this payment to all citizens, working and non-working. This could slow the pressure on private companies to increase minimum wage rates which is a chief reason to adopt automation over hiring workers.

Funding is obviously a major issue for such a program. Andrew Yang, in his book “The War on Normal People” is suggesting a European style Value Added Tax (VAT) at somewhere between 5 and 10 percent. Contrast this to the current 17% rate in Europe. Another suggestion is a negative income tax.

Funding issues aside, the first step to solving the problem is to recognize that we have a problem and that we are at an inflection point. And like most systemic social problems, denial is often present in their early stages. As the great Yogi Berra once said… “The future ain’t what it used to be.”

A Defining Decade

“It Was the Best of Times, It Was the Worst of Times” – Charles Dickens; Tale of Two Cities.

To say that the ten-year period between 1965 and 1975 was a defining decade may be one of the understatements of the century. Just as the first of the baby boomers began to graduate from high school in 1964, the era of the “Happy Days” culture was about to become a distant memory. America’s involvement in the Vietnam conflict would forever erase that age of innocence that we enjoyed during the previous ten years as portrayed in everyone’s favorite sitcom by the characters of Richie Cunningham and the Fonz.

If you were an able-bodied young man in that graduating class of 1964, of which I was one, your near-term future would be dictated by the options available because of this conflict. You either secured a college deferment, fled to Canada, or just took your chances on the draft. A fourth option was to enlist in the military service in hopes of landing an assignment to anywhere but Vietnam.

It was in October of 1965 that I enlisted in the U.S. Army for a four-year hitch for that very purpose. However, as things turned out, despite guarantees otherwise, I ended up in Vietnam anyway. I was stationed in a place called Phu Bai, which was located about six miles south of the city of Hue. Hue, which was the northernmost major city in South Vietnam, was the country’s provincial capital until 1945. We were a unit of the Army Security Agency operating under the cover designation of 8th Radio Research Unit. Phu Bai was also the headquarters of the 3rd Marine division.

Up until the end of 1967, Hue (pronounced Huway) was largely untouched by the warring parties. That would all change at the beginning of the 1968 lunar new year, aka, Tet on January 30, 1968.

If there was a tipping point in this decade, it could arguably be the North Vietnamese Tet offensive. As chronicled in detail in Mark Bowden’s recent book “Hue 1968”, it was the single bloodiest battle in the entire Vietnam war, brilliantly conceived and concealed by the North Vietnamese planners with secrecy that could rival that of Pearl Harbor. Throughout the conflict, the U.S. military brass continued to discount and dismiss the strength and resolve of the North Vietnamese invaders. U.S. Marine ground forces who were trained for jungle warfare, were now fighting house to house. The battle continued for a month, and ultimately the city was recaptured, only after heavy U.S. and South Vietnamese casualties.

The misguided judgment and bungling of the U.S. command, headed by General William Westmoreland, in managing this conflict sparked a sea change in America’s support of the war. Within 30 days after the end of hostilities in Hue, President Johnson announced that he would not seek reelection. General Westmoreland was summarily relieved of his command. A brand-new counter culture was born in America. In the first six months of 1968, more than 200 demonstrations took place in colleges across the country.

Throughout this period, we endured bell bottom pants, leisure suits, and the Watergate scandal, until the defining decade mercifully came to an end on April 30, 1975 with the end of hostilities in South Vietnam.

Trump Tax Proposal – Plan or Parody

gop-tax-break-richRecently, the Trump administration unveiled its self-imposed 100-day deadline broad tax cut plan.  In doing so, Mr. Trump appeared to be thumbing his nose at the two states that overwhelmingly rejected him in the November election – California and New York.  To wit, eliminating the federal deduction for state and local taxes, including property taxes. Because California and New York are among the highest tax states, the pain of this $100 Billion revenue grab will be disproportionally felt by New Yorkers and Californians relative to the rest of the nation. Meanwhile they propose retaining the mortgage interest deduction on mortgages up to $1 Million. Repealing this would most surely upset his political support base.

What is interesting is that it remains a well-guarded secret as to where Mr. Trump calls his home state for tax filing purposes. What do you want to bet that it is Florida and not New York?  Florida has no state income tax. Get the picture?

Then there is the plan to roll back corporate taxes from their current rate of 35% to 15%. This is not as big a deal as it seems. Corporate income taxes only account for around 11% of federal revenue. Contrast that to 80% from individual and payroll taxes. Now here’s the rub. Besides reducing the rate on top earners from 39.6% to 35%, the administration is proposing a pass-through provision. Currently big law firms and hedge funds organized as Limited Liability Companies pass their income through to the individual partners where they pay taxes at their individual income brackets. Now under the new tax cut plan, those partners will pay taxes at the same corporate rate of 15%. So, is it fair for this select group of highly paid individuals to be taxed at 15%, well below the rate of their lower paid employees?

Americans are very resourceful when it comes to avoiding higher taxes. An unintended consequence of this pass-through rule would be for employees in the middle to higher tax brackets to request reclassification to independent contractor status and thereby qualify for the 15% tax rate.

The elephant in the room with respect to corporate taxation is how to deal with the $2.5 Trillion in cash currently parked overseas by U.S. companies led by the likes of Apple, Google, and Microsoft. There has been no clarity provided on this issue. What must be avoided is a repeat of the tax holiday mistake of 2004 when $300 Billion was repatriated from overseas only to be returned to stockholders in the form of dividends and share buy backs. The goal should be to bring this money home for the purposes of growth and expansion to benefit the overall economy such as rebuilding our decaying infrastructure and not just for the benefit of a few elite stockholders.

To the administration’s credit, doubling the standard deduction from $12,700 to $25,400 for joint married filers is probably a good thing for many filers as it relieves them of the arduous task of itemizing.  But, it will likely come at the cost of eliminating the personal exemption of $4,050 for individuals and their dependents which would hurt larger families. The jury is still out on this.

Much remains to be done before this hastily prepared proposal becomes an actual viable plan.

Uncle Bill… “You Were Somethin’ Else”

Last Sunday, my Uncle Bill passed away.  Uncle Bill was 88 years old, in failing health, and legally blind.  He knew that it was his time and was in full acceptance of this final stage in the cycle of life. His last years were spent in Ohio under the watchful and caring eye of his beloved daughter, Kimberly. I wasn’t there when he passed, but I am sure that he was feisty till the end.

I suppose most everyone has or had an Uncle Bill in their life.  You know, that special family member that was always a little eccentric, rough around the edges, but someone that you simply adored like no other. My first vivid memories of Uncle Bill were at the age of 4. I lived in a small town just outside of Los Angeles, called Artesia. Artesia in those days was a dairy farming community heavily populated with first and second generation Portuguese. I was the oldest of four kids, which included three younger sisters. Uncle Bill, who was my Mom’s younger brother lived somewhere in East Los Angeles. In those early memories of him, I can still hear his loud booming laugh as he lovingly slapped me around in order to “toughen” me up, as he said. I idolized him. He was my hero.

When Uncle Bill came to visit us in Artesia, it was the equivalent of a trip to Disneyland for me, even though there was no Disneyland in those days. As soon as he arrived, he and I would hop back in his 1946 Ford and head to the corner grocery store to buy an apple pie and ice cream. Let the party begin.

Somewhere between my ages of 5 to 6, Uncle Bill and Aunt Barbara moved to Artesia and bought a house right next door to ours. I’m not sure how long they were there because we moved away first, but it seemed like a long time to a 5 year old. As I recall, I would hang out with Aunt Barbara after school and wait for Uncle Bill to get home from work so that we could “rough-house”.

Uncle Bill was about 6 feet tall and skinny as a rail. I can still picture him as a young twenty something in dirty jeans and a t-shirt.  He always had greasy hands from working on cars. In fact, in his spare bedroom in that Artesia house, I remember spare engine parts scattered all over the floor.  I would sometimes play in that room and pretend to be working on those parts, just like my Uncle Bill.  It was one of those episodes in that sacred room that got me in trouble one day.

It was a few days before Christmas and I was 5 years old. I was at my house and Uncle Bill came over and told me to “get my butt over to his place”. He proceeded to chew me out and demanded to know if I was in his “auto parts bedroom” that day. He told me that if I was, he would have to throw everything away in there and it would be all my fault.  I had no idea why he was so upset nor why he would have to throw everything away.  I was very confused and began crying and ran back to my house. Apparently, there was something in that room that I was not supposed to see.

As it turned out, the thing that I was not supposed to see was my first bicycle that my grandfather had bought me for Christmas. Uncle Bill was the designated assembler and it was his job to make sure it was a surprise. I don’t know how I missed the bike in the room, but seeing the bike under the Christmas tree was truly a surprise.

There were many isolated memories of those Artesia years with Uncle Bill living next door. I think I was about 7 years old when my Dad and Uncle Bill built a wooden patio cover attached to our house. When it was time to paint, I was recruited to help out. Uncle Bill didn’t paint as that was too slow for him, so that job was relegated to my Dad, Mom and me. I can remember being on the top rung of the ladder and leaning backwards to reach a remote area of the structure with my paint brush. My Mom yelled at me to be careful.  My reply was “this is how Uncle Bill would do it”.  I can still remember saying those words.

My parents, Uncle Bill and Aunt Barbara would have adult late night parties under that patio. Maybe it was just one or two but it seemed like more. I can remember getting up early on the morning while my parents were still asleep and sampling the left over Tom Collins cocktails scattered around the patio area.  I recall hearing a story about Uncle Bill getting rowdy at one of those parties and that one time he drank champagne out of my Aunt Maxine’s shoe, much to the anger of her husband, Uncle Gene. Aunt Maxine, who is still alive and well, is my father’s sister.

Uncle Bill had lots of interests.  You might say he was the ultimate jack of all trades. For example, there was the time that I went over to Uncle Bill’s house to discover a baby calf in the back porch area of his house. My job was to feed the calf milk from a bottle. I don’t know what the greater plan was for the calf or if we were going into the dairy business, but that phase passed quickly and no more calves showed up.

Fast forward three years to 1954.  I was 8 years old and we moved away from Artesia and I had to leave my beloved Uncle Bill.  The reasons for the move were not clear to me at the time, but as I would learn later, it was the prelude to the breakup of my parents. Shortly after arriving to our new home which was a second story apartment in Concord, California, we began to see less and less of my father. He spent most of his time with his new girlfriend that he eventually married. We had it pretty rough, moving around a lot during the first year, until we finally settled in a little town called Port Chicago.  Port Chicago was a navy town located on the Suisun Bay about 30 miles from San Francisco. Our family now consisted of me, my 29 year old Mother, and three younger sisters. I was 9 years old and now the man of the family.

It was the summer of 1957 when my Uncle Bill and Aunt Barbara drove up and visited us in Port Chicago. He showed up at our place in a brand new red and white 1957 Corvette – a fitting arrival for this audacious, larger than life personality. After a couple of days, it was decided that I would go back with them and spend the summer back in Artesia. I was elated and little did I know; I would embark on the most hair raising exciting journey of my life.

The distance between Port Chicago and Artesia is about 450 miles. That was before the Interstate 5 days, so the only direct route was Highway 99. Riding with the top down, with me seated in the middle of the two-seater Corvette, we made the trip in 6 hours, which calculated to an average speed of 75 miles per hour – including stops for gas and lunch. There were stretches where we exceeded 100 mph. One can only imagine how thrilling that is to an 11 year old boy. More than once, we eluded the California Highway Patrol, by outrunning them and pulling off the main drag until it was safe to resume. Yes, that was Uncle Bill, and that is a true story.

Uncle Bill worked in construction. He could build or fix anything. That summer of 1957, at 11 years old, I went to work with him every day. We poured cement slabs, installed aluminum awnings and patio covers all over the L.A. area. By the second week he had me installing awnings on my own. “Figure it out kid”, he would say. If I screwed up, he would make me tear it down and start over. Business was good, and he took on a helper.  The three of us would ride together in Uncle Bill’s pickup to the residential job sites and do our thing. We went through two or three helpers that summer. I had become pretty proficient at installing awnings it was my job to train the young adult helpers. They never lasted long as they just couldn’t keep up with Uncle Bill and his 11-year-old nephew.

I can’t remember if I ever got paid for this work, but it didn’t matter. Hanging out with Uncle Bill was an adventure and it was payment enough. Soon the summer was over, and I had to leave Artesia and return to Port Chicago. The train ride back was fun, but nothing like the ride of my life in that red and white ’57 Corvette.

Although we always stayed in touch, I didn’t see that much of Uncle Bill as I moved through my adolescence and high school years. My Mom had remarried and we eventually returned to Southern California, settling in Orange County. In 1965, just a year after graduating from high school, I enlisted in the army. After training, I was sent to Vietnam in 1966. After returning from Vietnam, the next Uncle Bill story begins.

Within days after returning home from Vietnam, I rekindled my love affair with Sandi, who is my wife of 48 years. The story of us getting back together is a long one, but the short version is that we eloped to Las Vegas in September of 1967, much to the dismay and objections of her parents. We were young and in love, but broke as hell and nowhere to live. Further, I still had two years remaining on my army hitch which would be a tour in Taiwan. Who did I turn to? Yes, it was Uncle Bill.

I would only be home for 30 days before I would have to ship out again. Uncle Bill and Aunt Barbara had long since left Artesia and were living in Norco. They happily put us up and I spent much of my remaining time working with Uncle Bill in his construction business.  This time, I did get paid.

So at age 37, Uncle Bill must have mellowed with age from that brash young man that always seemed to throw caution at the wind and reveled in the challenge of outrunning the cops in his Corvette. Well, yes and no.

In the few weeks that we worked together, we had our share of adventures that are still indelibly etched in my mind.  There was the time that we were working at a job in Hemet. Now that I was 21, I was legal to have a beer. We stopped at this roadside bar after work and walked in finding no one in the place. So rather than go somewhere else, Uncle Bill just went behind the bar and drew a pitcher of beer just as if he owned the joint. We drank beer and shot pool for an hour or so, until someone finally showed up. Uncle Bill laid a $10 bill on the bar for the beer we had helped ourselves to.  The bar began to fill up, and before long we were best friends with everyone in the place, mostly red-neck types. We shot pool, made bets and generally raised hell. It wasn’t long before Uncle Bill got too frisky and challenged someone to a fight.  The odds were definitely against us with the red-neck bar patrons easily outnumbering us at least 8 to 1. The wise thing to do was leave.  We did so in haste with someone named Ernie and his buddies chasing us with pool cues.  The reason I know his name was Ernie, is that Uncle Bill returned to this dive after I shipped out and became best buddies with this guy named Ernie. That was Uncle Bill.

After I finished my tour in the army, Sandi and I would see Uncle Bill and Aunt Barbara from time to time. They moved from Norco back to Orange County. Uncle Bill adored Sandi and the feeling became mutual. I can still hear his deep baritone voice repeatedly saying to Sandi – “You’re ‘somethin’ else!”  Sometime in the mid 70’s, Uncle Bill and Aunt Barbara moved to Nevada. We sort of lost touch for a while as families often do.

I think it was the summer of 1983 when Sandi and I drove up to Topaz Nevada to visit Uncle Bill and Aunt Barbara. Our two sons, Mark and Jeff were 15 and 11. Mark had his learners permit and was bragging about how good a driver he was. In typical Uncle Bill fashion, he tossed the keys to his truck to Mark and told him to show us how good he was.

“By myself?” Mark asked.

“That’s right big shot.  Show us what you got.”

We all got a good laugh at watching Mark try to drive the truck while repeatedly popping the clutch and stalling the engine. Not once did Uncle Bill come to his rescue, but Mark eventually figured it out.  That is how Uncle Bill did things.

Jeff, at 11 years old was quite a clothes horse even back then.  I remember Uncle Bill playing rough house with him and teasing him about his pink Izod golf shirt with the alligator logo.

In 1988, Kimberly threw a surprise 60th birthday party for her Dad, my Uncle Bill. I drove up to Topaz for this, but unfortunately Sandi could not go. His first words after seeing that I was there were “Where’s Sandi?”

So that was and is my Uncle Bill. He was unconventional, brash but had a heart of gold and was larger than life to me. He loved his two kids, Jimmy and Kimberly dearly. I know he loved me and I loved him very much as well. He was “somethin’ else!”

May he rest in peace.

Redshirting Raises the Bar For All

In colleRedshirtingge sports, redshirting is the practice of holding back a student athlete from actual competition in order to preserve an additional year of eligibility while his or her skills improve.  In everyday life, redshirting kindergarten aged children has become an increasingly common practice among middle-class parents as they attempt to give little Jacob a competitive edge over his 5 year old peers.

Malcom Gladwell, in his book “Outliers” makes a case for this practice citing the superior development and performance of Canadian Hockey players throughout their career whose birthdays occurred in the first four months of the year versus those born in the last eight months.  He contends that because the cutoff age in youth hockey is almost always January 1, the older, more physically developed players tend to excel, which leads to more all-star team selections, better coaching, better opportunities, and so on.  Further, he documents this fact with an example where 72 percent of the roster of the 2007 Medicine Hat Tigers had birthdays in the first four months of the year.  He goes on to provide similar examples in baseball and the results appear to be consistent with those found in hockey.

As the redshirting practice proliferates, it seems that it is having the effect of just raising the bar for everyone, often at the expense of the younger ones that struggle to compete with their older classmates. Then there is the unintended consequence of having the older, more physically and mentally developed child playing down to the level of the younger ones. I have personally witnessed this over and over as a coach in organized youth sports.

Moreover, it seems that the overall stress level of young middle-class families has been elevated, due in large part, to overscheduling of their kid’s activities. The term “Soccer Mom” was born in the 1996 presidential election. It was coined by the Clinton campaign to describe the overburdened, working, middle-class, minivan driving moms.  This high octane activity level of activity has now progressed to the whole family while reducing quality family time – a time when the whole family gets together at the dinner table every evening to communicate with each other. While the marvels of technology now allow us to be always available and plugged in, text messaging has now taken the place of face to face conversations.

The pressure put on our children and grandchildren to excel should be carefully evaluated.  All too often, it is the parent’s interests and agendas that are forced upon the kids, while they dismiss the true talents and interests of the child. Not every 12 year old boy will be an all-star shortstop or a world class hockey player. We should work harder to recognize and understand where our kid’s true abilities and interests lie so that we can help channel them in the right direction.  In the process, we just may just get to know them better and even have an actual conversation from time to time.

One thing I have learned over the years with my two sons and five grandsons is that each has their own special set of skills and interests, and one size does not fit all. You learn these things as a grandparent that you were too busy to recognize as a parent.

A brief history of food safety

Valley Voice, Feb. 25:

Recently, an article appeared in the Wall Street Journal, “Fresh Ingredients Came Back to Haunt Chipotle.”  Since going public in 2006, Chipotle has built a near cult following with its fresh fare burritos trumpeting natural ingredients and a commitment to purchase locally grown produce.  The cause of the E. coli outbreak last November that sickened 55 people remains a mystery.

This is neither an indictment on Chipotle or locally grown produce but rather a discussion of food-safety as it applies to the fresh produce supply chain.  After spending over 40 years in the fresh fruit and vegetable industry at the farming and distribution levels, I have witnessed and participated in nothing short of a quantum leap in industry practices.

One catalyst that transformed food safety practices at the farm, distribution, and retail levels was the 2006 E. coli outbreak that was traced to spinach grown and packed in California’s Salinas Valley. I will never forget that October day when the doorway to my office was darkened by two federal agents – one from the FDA and the other from the FBI. I was asked to step away from my computer and our entire office complex was subsequently placed on lockdown.

MICHAEL GERSON: The problem with Chipotle’s anti-GMO stance

The purpose of the joint FDA/FBI raid was to search for a smoking gun or any evidence of complicity to knowledge of the contaminated product and failure to act. Later in the day, the feds were convinced that our firm had not grown or handled any spinach during the period in question.  It seems that we were singled out because our firm provided food-safety guidelines and record retention services to other growers in the area that would otherwise be unable to effectively organize such a program.

As it turned out, the best guess as to the cause of the outbreak was wild pigs running through manure at a cattle ranch and then into a spinach field.

That incident was the dawn of new initiatives in food safety.  Efforts were made to reduce animal intrusion and increase sampling of product prior to and post harvest. The most notable initiative was called the Produce Traceability Initiative, or PTI.  The initiative was launched with compliance milestones intended to provide the ability to trace all fresh produce from retail back to a specific point of origin, including the farm, the field, the grower, the harvest date and so on. In fact, our firm developed the technology to trace a single head of romaine lettuce back to a 100 square feet of a field using GPS technology at the harvest point.

A whole new industry was created on the back of this initiative.  Food-safety firms popped up much like the dotcom boom 15 years ago. They eventually consolidated and we were left with two or three. The final milestone was for retailers to begin scanning bar codes on cases at arrival to their distribution centers. This never happened.  The complexity of the produce supply chain simply thwarted that final phase from being universally adopted.

Today, the price of admission for a grower to service a retail grocery chain is to have a fully staffed food safety department. This comes at a significant expense and can conservatively add 2 percent to 5 percent to the cost of product. This is a burden that many independent small farmers simply cannot afford.