I hate steel bands, however...

As giddy as the Rich-Person-Death-Tax repealers are at the idea of no estate tax in 2010, they may soon sober up to the fact that Junior and Sis better not try to sell any of those long-held assets.

Hard-liners are enthusiastic. Abolishing the estate tax even for one year is a triumph, they believe. However, those who actually have to deal with the death of a relative in 2010 may not necessarily feel that way. That is because the repeal legislation replaced much of the lost revenue by requiring that capital gains taxes be paid on estates in lieu of the estate tax.
The way the law has been historically is that assets with capital gains are exempted from the capital gains tax at death--the assets are stepped up to current values. Thus someone planning to hold an asset until death never had any reason to worry about basis for tax purposes and may not have even bothered retaining such records. But his or her heirs will now have to figure out basis in order to calculate the proper capital gains tax--and the person who purchased the assets in the first place won't be around to help.
In 1976, Congress enacted a provision exactly like this, called carry-over basis. It was so difficult for executors to implement that Congress repeatedly delayed its effective date and eventually repealed it. In the coming year, at least some heirs will wish they had the certainty and ease of paying an estate tax for which the rules have been established for many years rather than deal with carry-over basis.
It's too soon to say what the final resolution of the estate tax mess will be in 2010. But given Republican intransigence on the tax issue and their improving electoral prospects in November, there is a very good chance that no action will be taken on this issue and the law will stay on automatic pilot.

Personally, I won't consider this a triumph of principle over expediency. Permanently raising the estate tax exemption and lowering the rate is a good deal, and permanent repeal is an unrealistic goal, especially given the federal government's deteriorating finances. Those who think otherwise are living in a dream world. [More from my favorite conservative blogger]

Having settled a few estates that included farmland that literally cost nothing via land grants, the idea of paying taxes on the centuries of gains should at least give pause to repealers. Moreover, as Bartlett points out, trying to document purchases from say, 1967 would test my record-keeping system.

The basis step-up is the Big Secret of estate taxes. It's also the reason why the claim of estates being double-taxed is patently false for capital appreciation. Throwing it away would be a Pyrrhic victory.

Meanwhile, commentators are envisioning - among other observations - some odd funeral arrangements this time next year.

I’m looking forward to a covert market in death certificates at the end of 2010: doctors willing to formally decree an individual dead, which event would be swiftly followed by a small cremation ceremony with immediate family only. And then a mysterious resident in the guest house on St Bart’s, whom nobody ever talks about. [More]

I think I'll enjoy the weather and the fruity drinks at least.

A medium for everyone...

Artists work in many media, so maybe there is one each of us.  Just like velvet paintings, there are carved leather portraits.

[More]


[via neatorama]

Suppose it passes...

At the risk of re-igniting controversy during the holidays, the actual possibility of HCR passing largely in the form of the Senate Bill does suggest examining what it would mean. Especially for farmers.

First of all, critics would point to the taxes and other negative consequences.

2010: Physician Medicare payments decrease 21% effective March 1, 2010
2011: “Annual Fee” tax on health insurance, allocated according to share of total premiums. Begins at $2 billion in 2011, then increases to $4 billion in 2012, $7 billion in 2013, $9 billion in the years 2014, 2015, and 2016, and eventually $10 billion for 2017 and every year thereafter. Two insurers in Nebraska and one in Michigan are exempt from this tax.
2012: Medicare payment penalties for hospitals with the highest readmission rates for selected conditions.
2013: Medicare tax increased from 2.9% to 3.8% for incomes over $250,000 (joint filers) or $200,000 (all others). (This is stated as an increase of 0.9 percentage points, to only the employee’s share of the FICA tax.)
2014: Individual mandate begins: Tax penalties for not having insurance begin at $95 or 0.5% of income, whichever is higher, rising to $495 or 1% of income in 2015 and $750 or 2% of income thereafter (indexed for inflation after 2016). These penalties are per adult, half that amount per child, to a maximum of three times the per-adult amount per family. The penalty is capped at the national average premium for the “bronze” plan.
2015: Establishment of Independent Medicare Advisory Board (IMAB) to recommend cuts in Medicare benefits; these cuts will go into effect automatically unless Congress passes, and the President signs, an override bill.
2016: Individual mandate penalty rises to $750 per adult ($375 per child), maximum $2,250 per family, or 2% of family income, whichever is higher (capped at the national average premium for the “bronze” plan). After 2016, the penalty will be increased each year to adjust for inflation.
2017: Itemized deduction for out-of-pocket medical expenses is limited to expenses over 10% of AGI for those over age 65. [More detail]

Oddly, the Heritage Foundation leaves a few things out - namely, most all the benefits.

Here are some of the benefits that Democrats say would be available soon after the legislation is adopted:
No annual or lifetime limits Both the Senate and House versions of the legislation ultimately seek to prevent insurers from imposing annual or lifetime limits on coverage in new health policies. In the final package of amendments to the Senate bill, the majority leader, Harry Reid of Nevada, added new language giving the secretary of health and human services the authority to regulate annual limits from six months after the bill is enacted until the broader insurance provisions take effect in 2014. Such limits are a serious concern to people with chronic illnesses like cancer that can require expensive treatments within a relatively short period of time, and the change proposed by Mr. Reid was prompted by inquiries from the American Cancer Society.
Limits on insurance company profits Beginning in 2011, the Senate bill would set tight restrictions to force insurance companies to spend the bulk of their revenues on providing medical care to beneficiaries. The legislation would require insurance companies in the large group market to spend at least 85 percent of their revenues on care and insurers in the individual market to spend at least 80 percent of revenues on care. Critics of the private health insurance, including Senator John D. Rockefeller IV, Democrat of West Virginia, and Senator Sherrod Brown, Democrat of Ohio, said setting such requirements on what insurers call “medical loss ratios” was needed to tamp down on profiteering.
Short-term expansion of state high risk pools To help people who cannot obtain insurance because of pre-existing conditions, both the Senate and House bills would provide $5 billion to increase the availability of coverage through state high-risk insurance pools. This provision would take effect 90 days after enactment of the legislation, but many details remain to be worked out.
New financing for community health centers The House bill provides $12 billion in additional financing for community health centers, which serve needy populations, particularly in rural areas. Senator Bernard Sanders, independent of Vermont, won the inclusion of $10 billion in financing for community health centers in the Senate bill. The final dollar amount will be decided in negotiations between House and Senate leaders, but the money would be available for five years beginning in the current fiscal year.
Closing the Medicare drug “doughnut hole” The legislation would increase the amount of drug costs covered by Medicare by $500 in 2010. And beginning on July 1, 2010, the bill would provide 50 percent discounts on brand-name drugs and biologics that low- and middle-income beneficiaries have to pay for themselves once the coverage gap known as the doughnut hole begins.
Prohibition on rescinding existing coverage Both the House and Senate bills would bar insurance companies from rescinding existing coverage other than “in cases of fraud or intentional misrepresentation of material fact.”
Small business tax credits The Senate bill would offer tax credits to small businesses beginning in 2010 for up to 35 percent of premium costs. The full credit would be available to firms with 10 or fewer employees and average annual wages of $25,000. Reduced credits would be available to firms with up to 25 employees and with average annual wages of up to $50,000.
Patient protections For new health plans, beginning six months after enactment of the legislation, the Senate bill would prohibit insurers from requiring prior authorization before a woman sees an obstetrician or gynecologist. The bill would also require coverage for emergency care.
Discrimination protections for lower-income workers The Senate bill would bar group health plans from setting any eligibility rules for coverage that favor higher-wage employees. This provision would take effect six months after enactment of the legislation.
Cobra extension through 2013 Anyone currently paying for an extension of health benefits as permitted under federal law — for instance, after a loss of employment — would be permitted under the House legislation to continue Cobra coverage until the major insurance coverage provisions of the legislation take effect in 2013.

Reinsurance program for early retirees Both the House and Senate bills would provide federal financing for a new reinsurance program to encourage employers to maintain health benefits for employees and early retirees age 55 to 64.

Consumer assistance provisions Both the House and Senate bills would begin to impose new requirements aimed at making it easier for consumers to interact with insurers, including a requirement that health plans adopt uniform descriptions of plan benefits and appeals procedures and that they begin using identical forms. [More]

Those are the more immediate changes.  When the exchanges get fully implemented this is what the health insurance situation for various families would look like.

So what happens if reform does pass? For starters--and this is no small thing--the insurance company will have to sell you a policy, no matter what pre-existing conditions your family brings to the table. And you’ll know from the start that the policy will cover basic services because the government will be defining a basic benefits package. That package is going to include a broader range of services than the typical non-group policy would without reform. So when your doctor recommends a standard test or procedure, you won't have to panic it falls into some hidden policy loophole.

But what will that coverage cost? The basic premium is roughly the same, according to Gruber’s calculations that he extrapolated from official Congressional Budget Office estimates. But that $50,000 income means you’re also eligible for federal subsidies. Large federal subsidies. In fact, the government will cover about two-thirds of the price, so that you’re left owing just $3,600.

Now, you could end up spending a lot more on medical care if you or someone in your family gets sick. But here, too, the federal government would step in to help. Under the reforms, the government would limit out-of-pocket spending to around $6,000 per year. Combined with the premium, you’re on the hook for around $10,000 total, or about a fifth of your income.

That’s not pocket change, for sure. A family making $50,000 will have to make serious sacrifices to find $10,000. But it’s better--light years better--than finding $25,000 or more. It’s potentially the difference between having to give up your home, get an extra job or declare bankruptcy. Just knowing the bills that could come will be the difference between getting care you need--and skipping it, at grave risk to your health.

It’s a difference you’d feel at other income levels, too. If your family of four makes more money--say, around $75,000--your premiums and out-of-pocket expenses will be higher, but still a few thousand less than it’d be without reform. If you make less money-- $35,000--the savings would be much larger. (If you make less than that, you'll probably be on Medicaid, which offers even more protection.)

[Source]

[Another helpful summary chart from WSJ.]

Perhaps none of this information will sway many farmers in their opposition or support of health care reform. My guess is those who have acceptable insurance they can currently afford oppose, all other would at least consider supporting reform.

The point for our industry is health care reform looks to me much like ag subsidies - a transfer from many to few. Since many of us get coverage from individual market, reform would be a big plus, both from cost and access angles.

As I digest the details and talk to more farm families, I sense health insurance reform could have unexpectedly disproportionate effects on our industry. Some possibilities:

• Larger farms would enjoy less health insurance pricing advantages via their group rates versus single family coverage.
• The efficiency of husband-wife farms would be restored as optimal labor utilization as women would not be working/commuting/struggling simply to keep insurance coverage.  Our industry is ripe for a much larger female operator contingent with the relative decline in the importance of muscle-powered ag.
• Young couples could more easily return with the health insurance - and specifically, pregnancy coverage - question dissipating as a major hurdle.
• Uniform policies would eliminate rural disadvantages.
• Aid to rural health centers might keep care a little closer, and small towns more attractive to live in.
  

There undoubtedly will be more unpredictable cultural and economic consequences for farms, but clearly not all results will be unfortunate. In fact, I can't find many issues until you get to those with incomes over $200K who will pay another 0.9% in Medicare taxes.

But I would suggest most farmers would escape many of the costs as well, in effect creating another transfer of wealth from non-farmers to us. We have already established our staunch belief in the righteousness of such schemes, so there should not much moral twitching about exploiting a new entitlement.

In fact, the smart angle for producers might be to talk against socialized Obamacare (although insurance reform is a long way from nationalized health care) in order to get along, while hoping secretly it passes.

If it fails, we'd better hope the fervor against such programs doesn't gather steam and look for other expensive wealth transfer programs to cut.  In fact, given the much-decried cost/size of HCR, how much easier would it be for ag subsidies to pale in comparison?

Another reason I'm selling too much...

2010 crop.  It could be too many of us are postponing the joy of profitability because of an intrinsic brain bias.

We’re trying to do a cost-benefit analysis of the time lost versus the pleasure or money to be gained, but we’re not accurate in our estimates of “resource slack,” as it is termed by Gal Zauberman and John G. Lynch. These behavioral economists found that when people were asked to anticipate how much extra money and time they would have in the future, they realistically assumed that money would be tight, but they expected free time to magically materialize.
Hence you’re more likely to agree to a commitment next year, like giving a speech, that you would turn down if asked to find time for it in the next month. This produces what researchers call the “Yes ... Damn!” effect: when the speech comes due next year, you bitterly discover you’re still as busy as ever.
Dr. Shu and Dr. Gneezy demonstrated another effect of this fallacy by giving people gift certificates good for movie tickets and French pastries. Some got certificates that expired within two to three weeks; others got certificates good for six to eight weeks.
The people who received the long-term certificates were more confident than the others that they would redeem the gifts — a logical enough assumption, given all the extra time they had. But they just kept putting it off, and ultimately they were more likely to let the gift go unredeemed than the people who had received the short-term certificates.
Once you start procrastinating pleasure, it can become a self-perpetuating process if you fixate on some imagined nirvana. The longer you wait to open that prize bottle of wine, the more special the occasion has to be.

If you’re determined to get the absolute maximum out of those frequent flier miles, you can end up wasting them, as Dr. Shu found in an experiment offering people a chance to use discount coupons in the course of buying a series of plane tickets. Once the subjects were told that they might have a chance at a free flight worth $1,000, they scorned lesser awards and hung on to their coupons so long that in the end they had to use them for much cheaper flights. [More]

I wonder if the atmosphere of economic struggle also compounds our error in calculating the benefit of enjoying today. It certainly seems sorta foolish to be cashing in miles or not hoarding gift cards.  In fact, this could be good news for retailers who have a lot of gift cards yet to be redeemed.

Gift card redemption rates have been discouraging this weekend, she said. They averaged 10 percent, based on a sampling of malls, she said. In good years, those rates are anywhere from 30 to 40 percent. That confirms that gift card sales were just "lukewarm," she said. [More]

While gift cards skew holiday sales numbers, they also represent potential profits as the longer they are held, the less likely that they will be redeemed.  From an issuer's perspective, an expired or lost gift card is about as good as it gets.

It makes you wonder what the utilization rate for seed freebies is. 

What he said...

I'm not looking forward to flying next month - thanks to security theater and hysterical politicians.  In fact, I think the better response is outlined by this expert.

But even as we do all of this we cannot neglect the feeling of security, because it's how we collectively overcome the psychological damage that terrorism causes. It's not security theater we need, it's direct appeals to our feelings. The best way to help people feel secure is by acting secure around them. Instead of reacting to terrorism with fear, we -- and our leaders -- need to react with indomitability, the kind of strength shown by President Franklin D. Roosevelt and Prime Minister Winston Churchill during World War II.

By not overreacting, by not responding to movie-plot threats, and by not becoming defensive, we demonstrate the resilience of our society, in our laws, our culture, our freedoms. There is a difference between indomitability and arrogant "bring 'em on" rhetoric. There's a difference between accepting the inherent risk that comes with a free and open society, and hyping the threats.
We should treat terrorists like common criminals and give them all the benefits of true and open justice -- not merely because it demonstrates our indomitability, but because it makes us all safer.
Once a society starts circumventing its own laws, the risks to its future stability are much greater than terrorism.
Despite fearful rhetoric to the contrary, terrorism is not a transcendent threat. A terrorist attack cannot possibly destroy a country's way of life; it's only our reaction to that attack that can do that kind of damage. The more we undermine our own laws, the more we convert our buildings into fortresses, the more we reduce the freedoms and liberties at the foundation of our societies, the more we're doing the terrorists' job for them.
Today, we can project indomitability by rolling back all the fear-based post-9/11 security measures. Our leaders have lost credibility; getting it back requires a decrease in hyperbole. Ditch the invasive mass surveillance systems and new police state-like powers. Return airport security to pre-9/11 levels. Remove swagger from our foreign policies. Show the world that our legal system is up to the challenge of terrorism. Stop telling people to report all suspicious activity; it does little but make us suspicious of each other, increasing both fear and helplessness.
Counterterrorism is also hard, especially when we're psychologically prone to muck it up. Since 9/11, we've embarked on strategies of defending specific targets against specific tactics, overreacting to every terrorist video, stoking fear, demonizing ethnic groups, and treating the terrorists as if they were legitimate military opponents who could actually destroy a country or a way of life -- all of this plays into the hands of terrorists.
We'd do much better by leveraging the inherent strengths of our modern democracies and the natural advantages we have over the terrorists: our adaptability and survivability, our international network of laws and law enforcement, and the freedoms and liberties that make our society so enviable.

The way we live is open enough to make terrorists rare; we are observant enough to prevent most of the terrorist plots that exist, and indomitable enough to survive the even fewer terrorist plots that actually succeed. We don't need to pretend otherwise. [More]

Furthermore, I stand by my previous comments after 9/11. I refuse to lay awake worrying about explosive underwear when the stuff that will most likely kill me is already coating my arteries.

My Annual Bad Guy Oil Review...

Was riddled with errors as I skipped over an entire column and read 2008 figures as 2009.  I have pulled the chart pending correction when I get home.

Sorry for the lapse.

Thanks, Kevin.

I'm this close...

To a sausage or bacon joke...

Teens who skip breakfast as middle school students tend to have sex at an earlier age than those who start the day with a proper meal, a government-backed Japanese medical researcher said on Friday. [More]

Or maybe Rice Krispies. 

(There's gotta be a usable one-liner somewhere.)

Just wait 'til next year...

Just like Illinois (insert sport here) fans, I'm uttering those famous words. But this time about my bookkeeping.  I finished my summaries and entering and forecasting and planning in time for my annual bank visit.

The biggest hassle was catching my budget up with actual numbers from the accounting system.  Then unraveling the errors.

NEXT YEAR I'M GOING TO DO THIS EVERY MONTH! 

I am not kidding.

I really mean it.

I am going to be all over those figures and have my books up-to-the-second so my budget forecasts will be rock solid instead of murky guesses haunting my waking and sleeping moments. (I have actually dreamt about working on my cashflow).

Of course, according to the person I live with, I say this every year.

This time for sure.

Now we know how...

Children feel about traveling.  Flying is approaching the equivalent of a car-seat for adults.

As part of the increased security, passengers on a flight Saturday from Brussels, Belgium, to Dulles Airport in Virginia were not allowed to leave their seats for the last hour of the flight, a traveler told CNN.
Niki Yazzie said the flight crew told the passengers that they had to remain in their seats with their seatbelts fastened and couldn't have any items, such as pillows or blankets, covering their laps; everything was stowed away.
Passenger Johnny McDonald, who was on a U.S. domestic flight, told CNN he saw officials X-ray milk parents had brought for infants and saw many people patted down.

"They X-rayed the milk I don't know how many times," McDonald said. "And then they took the milk out and sampled each and every bottle of the milk. I've never seen that before." [More]

This unfortunately predictable over-response to the latest incident will continue the hassle of air flight for businesses and even vacationers. I suspect more technology will be thrown at sales programs as opposed to face-to-face transactions.  We'll get used to it, but the airlines won't.

Meanwhile, the BIG story of the day is Iran.  But it isn't getting much coverage outside foreign press and bloggers, especially Andrew Sullivan.  If you think through what regime change could mean in Iran to the US, the possibilities on the upside are enormous.  

Then ponder what a less hostile, more productive Iran oil industry could mean to oil prices.  Defense spending?  Terrorist support?

No guy left behind...

Men are not getting degrees like women.  Especially in Canada.

The chart above shows the number of female college graduates (bachelor's degrees) per 100 male graduates in both Canada (data here) and the U.S. (data here) from 2003-2007. For the most recent year of actual data (2007), there were 163 female college graduates in Canada for every 100 male graduates, as women received almost 62% of all bachelor's degrees. In the U.S. women received almost 58% of all bachelor's degrees in 2007, and therefore earned 137.4 degrees for every 100 males. [More]

It would be interesting to see a plot of beer consumption imposed on the data. 

Seriously, I think many young men don't take higher education and the college experience all that seriously until they are excluded from the "good job" market.

Cash is King...Duke...Count...

Serf?

Indeed, after fees are subtracted, inflation is accounted for and taxes are paid, many investors in C.D.’s, government bonds and savings and money market accounts are losing money. In fact, Northern Trust waived some $8 million in fees on money market accounts because they would have wiped out all interest, and then some.
“The unemployment situation and the general downturn in the economy had an impact, but what’s going to happen now as C.D.’s mature is that retirees and the elderly are going to take anywhere from a half to three-quarters of a percent cut in their incomes,” said Joe Parks, a retired accountant in Houston on the advisory board of Better Investing, an organization that works to help people become savvier investors. “It’s a real problem.”
Experts say risk-averse investors are effectively financing a second bailout of financial institutions, many of which have also raised fees and interest rates on credit cards.
“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”

Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money. [More]

Every day more cash fans are facing tough decisions. CD's roll over, and for many doing their taxes is the ultimate wakeup call. If you had to live on interest alone, what would you be doing?

I'm still betting the recession instilled a fairly long-lasting risk aversion in too many.  If they are farmers, they could be left behind as asset inflation pushes land out of sight.  Furthermore, I think landowners when faced with diminished return rates as a result of higher valuations, will stick with land in the face of the stark alternatives above.

Then too, he can act...

Titters of amusement are going around the blogosphere about Patrick Stewart (whose real name is Jean-Luc Picard) and his impending knighthood.

Palace sources say Patrick Stewart is about to be knighted by Queen Elizabeth II. It turns out he is an avid supporter of Britain’s Labour party; his support must be especially welcome in this, one of Labour’s darker hours. Coincidentally, I have over the past couple of months been watching DVDs of Star Trek: The Next Generation, a show I missed completely in its run of 1987 to 1994; and I confess myself amazed that so many conservatives are fond of it. Its messages are unabashedly liberal ones of the early post-Cold War era – peace, tolerance, due process, progress (as opposed to skepticism about human perfectibility). I asked an NR colleague about it, and he speculated that the show’s appeal for conservatives lay largely in the toughness of the main character: Jean-Luc Picard was a moral hardass where the Captain Kirk of the earlier show was more of an easygoing, cheerful swashbuckler. I think there’s something to that: Patrick Stewart did indeed create, in that character, a believable and compelling portrait of ethical uprightness. [Apologies for a 100% excerpt][Belated attempt at a save here]

Was STNG a bastion of conservative values?  I think so, but they were achieved and protected by progressive means. Conservatism has too often degenerated into entrenched self-interest in a framework of abstract justification. It also has a stultifying effect on "doing something".  One reason I have become less conservative is an increasing optimism about our ability to make things better for not just ourselves but others, in the face of belligerent doubters.

On the other hand, Stewart was a professional - a master at his craft. Consider this evidence.

Or even better:



That, my friend, is professional.  Let's see Shatner match that!

Maybe they've been listening to Barry White...

Male whales are singing lower.

The researchers speculate that in the heyday of commercial whaling, as blue whale numbers plummeted, it may have been advantageous for males to sing higher frequency songs in order to maximize their transmission distance and their ability to locate potential mates. But as population sizes have increased, it may now be more advantageous for males to sing songs that are lower in frequency rather than louder. "When they make these songs they need to use most of the air in their lungs," said Hildebrand. "It's like an opera singer that sees how long he can hold a note." [More]

Hey, baby...

You think you're having a hard time finding work...

Pity the Lego guy.

The endurance is remarkable...

But maybe not inevitable. As long-time readers have known my opposition to farm subsidies is matched by my appreciation for how powerfully they are ingrained into the politics of both sides. And while I may be seeing my own "green shoots" on their eventual disappearance, it is interesting to note new voices of dispproval appearing in the crowd of subsidy opponents.

The next time you hear a Republican or a teabagger complain that President Obama is moving the United States closer to "fascism and socialism" (despite the two philosophies being ideologically opposite of one another), remember this: some of these same people are taking thousands of dollars in a form of "socialism" that we usually don't think about: farm subsidies.

For those not in the know, farm subsidies are when the government pays farmers and businesses in the agricultural field to (a) supplement income, (b) manage commodity supply, and (c) influence commodity cost.

Here's the dirty little secret: some politicians, mostly Republicans but also a few Democrats, figured out how to make tons of money off of this "socialism for the wealthy."  It also comes as no coincidence that most of these particular politicians come from largely rural states. [More]

I think it has been the short-sighted deployment of the most incendiary labels for the Obama administration that has triggered this new spotlight on what is clearly a "socialist" government program.  The long-time conservative view of subsidies has been clear, but also simply a gesture not worth backing with political capital.

I wonder what taxpayers think about the fact that Senator Lincoln and her family have received hundreds of thousands of dollars in farm subsidies?
From a 2007 USA Today article:

Members of Congress must report sources of income totaling more than $200, but most get payments through partnerships or other entities, so it can be difficult to learn which ones receive the subsidies. Recipients are searchable by name on www.ewg.org, but, for example, payments to Sen. Blanche Lincoln, D-Ark., are listed under her maiden name, Lambert, at a Virginia address near Washington.  Records show Lincoln and her family members collected $715,000 from 1995-2005, the most recent year complete data are available. She said she personally received less than $10,000 a year, and the subsidies ended in 2005 when her land was sold.

Let’s say I force a stranger under threat of imprisonment or violence to part with part of his or her paycheck, and proceed to give that money to a friend.  I would rightly be labeled a thief or worse.  Suppose I not only gave the money to my friend, but kept a cut for me and my family.  That would be even worse.

But when politicians do it we call them “public servants”? [More]

The other new wrinkle is as the likelihood of HCR and other spending bills increase, the search for programs to cut to close the deficit will not overlook farm payments.

At the same time the fact that the most heavily subsidized farmers like me have largely bypassed the Great Recession, while unsupported producers like hog farmers have been clobbered doesn't bode well for farmer unity either.

Are all the pieces slowly assembling to free American farmers from this harmful addiction? I think so. If tea-baggers are the future of the Republican party, they won't cut much slack for candidates embracing the hypocrisy of our farm program, I suspect.


Of course, if TB's are the future for the GOP, all kinds of bets are off.

[Update: Here's another "socialist" program virtually all farmer support]

Groping for a balance...

Jim Manzi, whose well-reasoned positions on climate change keep me rethinking my own, produces an excellent practical guide to the political, social and economic divisions that bedevil our national destiny.

It's definitely worth reading in whole as it is about as even-handed as any effort I have read.  My comments follow.

Both major political parties have internal factions that sit on each side of the divide between innovation and cohesion. But broadly ­speaking, Republicans since Ronald Reagan have been the party of innovation, and Democrats have been the party of cohesion.
Conservatives have correctly viewed the policy agenda of the left as an attempt to undo the economic reforms of the 1980s. They have ­therefore, as a rhetorical and political strategy, downplayed the problems of cohesion — problems like inequality, wage stagnation, worker displacement, and disparities in educational performance — to emphasize the importance of innovation and growth. Liberals, meanwhile, have correctly identified the problem of cohesion, but have generally proposed antediluvian solutions and downplayed the necessity of innovation in a competitive world. They have noted that America's economy in the immediate wake of World War II was in many ways simultaneously more regulated, more successful, and more equitable than today's economy, but mistakenly assume that by restoring greater regulation we could re-create both the equity and prosperity of that era.
The conservative view fails to acknowledge the social costs of unrestrained economic innovation — costs that have made themselves ­powerfully apparent in American politics throughout our history. The liberal view, meanwhile, betrays a misunderstanding of the global economic environment.

To grasp the difficulty of this moment for America, we must see more clearly the pain involved in economic innovation, the price we would pay for stifling innovation, and the daunting social obstacles that stand in the way of balancing the two. [More]

It is somewhat reductionist to posit a myriad of issues as "innovation versus cohesion" but any attempt to engage in a broad discussion needs to at least work with the largest concepts at hand. Manzi goes on to propose a handful of helpful steps to reduce the friction between these grand ideologies, but curiously avoids the most urgent debates: health care and war.  In fact, it is hard to apply his suggested approaches to either, it seems.

Nonetheless, his point that common ground must be located it valid, I think. We cannot sacrifice either of these two principles for the other and remain a functional political entity.  Unfortunately, this will require embracing an unfashionable tactic: compromise.

Convinced of ultimate vindication and/or committed to scuttle the ship before surrender of any degree, positions have been hardened on both extremes, but mostly the right, since compromise is a known "weakness" of the left. Consequently it seems to me solutions such as Manzi describes so articulately will remain academic until we have exhausted much of our substance on this particularly wasteful battlefield.  In short, we haven't bled quite enough to find reason more attractive than belief.

Furthermore, I think that confrontation and conquest still stand as the shining goals rather than the more bland alternative of slowly making lives incrementally better.  We're buying political lottery tickets - not depositing scrupulously in passbooks for our future.

His case is powerful and persuasive, and I find much I can agree with. I just don't think many are listening.

Yet.

Twenty years from now...

Will TBS be marathoning one?

Really, REALLY bad Christmas specials.





[via sullivan]

So big, so empty...





Merry Christmas to the Universe!


[via sullivan]

The gold standard...

It's worth it for the comments.

Great satellite photos...

Be sure to read the explanations for the colors for each picture.

Garden City, Kansas – Center pivot irrigation systems create red circles of healthy vegetation in this image of croplands near Garden City, Kansas.

West Fjords – The West Fjords are a series of peninsulas in northwestern Iceland. They represent less than one-eighth the country’s land area, but their jagged perimeter accounts for more than half of Iceland’s total coastline.

[More]

[via rgs]

This explains much...

I am married, through extraordinary good luck, to a woman of Swedish/Dutch heritage.  Jan enjoys the traditions of both sides of her family heritage and our house is crammed right now with Dala horses, straw goats, and various other Swedish God Yul Jul stuff.  Never mind these people used to set fires on little girls' heads as a part of Christmas celebration.

Accustomed as I was to their strange carols and non-Methodist ways, I had made my cultural peace with such quaint Old World practices. However, it was disconcerting to see this inexplicable Swedish Christmas custom revealed.

Three years ago, I went to Sweden with my then-girlfriend (now-wife), to meet her family and celebrate my first Christmas. As an only partially lapsed Jew, I was not well-versed in Christmas traditions, and I was completely ignorant of Swedish customs and culture. So I was prepared for surprises. I was not prepared for this: Every year on Dec. 24 at 3 p.m., half of Sweden sits down in front of the television for a family viewing of the 1958 Walt Disney Presents Christmas special, "From All of Us to All of You." Or as it is known in Sverige, Kalle Anka och hans vänner önskar God Jul: "Donald Duck and his friends wish you a Merry Christmas."
Kalle Anka and the Aracuan BirdKalle Anka, for short, has been airing without commercial interruption at the same time on Sweden's main public-television channel, TV1, on Christmas Eve (when Swedes traditionally celebrate the holiday) since 1959. The show consists of Jiminy Cricket presenting about a dozen Disney cartoons from the '30s, '40s, '50s, and '60s, only a couple of which have anything to do with Christmas. There are "Silly Symphonies" shorts and clips from films like Cinderella, Snow White and the Seven Dwarfs, and The Jungle Book. The special is pretty much the same every year, except for the live introduction by a host (who plays the role of Walt Disney from the original Walt Disney Presents series) and the annual addition of one new snippet from the latest Disney-produced movie, which TV1's parent network, SVT, is contractually obligated by Disney to air. Kalle Anka is typically one of the three most popular television events of the year, with between 40 and 50 percent of the country tuning in to watch. In 2008, the show had its lowest ratings in more than 15 years but was still taken in by 36 percent of the viewing public, some 3,213,000 people. Lines of dialogue from the cartoons have entered common Swedish parlance. Stockholm's Nordic Museum has a display in honor of the show in an exhibit titled "Traditions." Each time the network has attempted to cancel or alter the show, public backlash has been swift and fierce. [More]

OK, maybe it's no different than me and White Christmas or The Christmas Story or It's a Wonderful Life.

Nope, this is fundamentally different.

Well, it's too late for me, but for those of you who have children about to marry into this culture, ponder this deeply.  Sure Swedish descendants  tend to be tall, attractive people, with exquisite manners and superb cooking skills and strong family values, but we're talking about a cartoon duck on Christmas eve, fer Pete's sake!

Remind me again...

What I'm trying to accomplish. A commenter points out an interesting development touched on by my earlier post.

Your friend Ron Swanson wants you to know about the story, 'Life Cycle Budgets: The Next Step in Accounting', on the Farm Futures site. You can get to the story by clicking here or typing http://www.farmfutures.com/story.aspx?s=33813&c=18 into your web browser.

Here is what Ron Swanson has to say about the story 'Life Cycle Budgets: The Next Step in Accounting' on the Farm Futures site:
John FYI - since this seems to be the topic of the day. Ron

The article linked is of importance to farmers right now, but it continues some introspection mentioned before. Not only that, Ron, but it directly ties into a book I have plodding though:

An introduction to econometrics may not seem like the stuff that would keep listeners riveted—much less awake—during a long car ride, but Ayres's provocative audio does just that. Ever wonder how an airline decides to lower its prices? Or why businesses have preferred shopper cards? The answer is data, gigabytes upon terabytes of data. Companies are increasingly relying on data and number-crunching statisticians to make decisions, like how much money they can extract from consumers while still retaining their loyalty. Ayres's exploration of super crunching and its influence makes up the bulk of the audio, but listeners needn't navigate a sea of numbers. The discussion is illustrated by eye-opening examples such as how Continental Airlines took customer service to a new, personalized level and how Mexico instituted an innovative pay-for-performance parenting program. The final chapter on standard deviations may have some longing for the printed page or a PDF file with a graph or two, but overall, Lurie's mellow reading will make listeners firm believers in Ayres's refrain: in a super crunching world, consumers can't afford to be asleep at the wheel. [More]

To be fair, I'm not quite finished, but I already suspect this approach to be shaken by the quant meltdown on Wall Street.  Faith in computer-modeling at all levels (even ours) has been shaken by both the obvious economic prediction failure and the vitriolic climate change debate.  From what I have read, ag isn't easily amenable to randomized testing either, one of the author's key tenets.

In fact, as assertions of non-linear, even random brain processes inherent in our decision making are revealed (more later), I place less emphasis on my lovingly constructed budgets than I do maintaining the correct mental orientation to choose alternate courses in the heat of battle.

As one example, I now suspect when I make decisions, and what happened just before have crucial - even controlling - influence compared to the most intricate and logical analysis. Now add in the growing uneasiness in farming minds that all our thoughtful calculations can be swept aside by a hedge fund rumor.

Looking at my figures, my farm operation has been kept afloat and battered in large part by macroeconomic trends that were buried in the assumptions for cost analyses.  One in particular is the tide of land prices.  While accounting standards would encourage us to discount that effect because it can override unprofitable economic decisions, the truth is guys who rode the wave have overtaken cautious and meticulous allocators of where wealth is generated.

This is a second macro trend our economic decisions must take into account: we are in a zero-sum game in grain farming. Furthermore this boundary is hardened by our immobility.  You don't normally give up on 200-year farms for one far away regardless of the economic benefit. 

Long story slightly shorter: budgets/cash flows will be helpful exercises for securing necessary borrowed capital, but of little predictive use (IMHO).  The form and scope of these devices will be set by the whims of the regulators for the lenders. (Hint: always ask your loan officer what the Comptroller is looking at this year). 

Far better, I think, to have a firm understanding of your internal economic compass and some idea of where happiness comes from. One way I try to remind myself is our Mission (Impossible) Statement:

• Farm well. Farm close.  Be the competition in our township.
• Own the land. Unite the land. Improve the land.
• Be the neighbor you want next to you. Bear more than your share of community load.
• Plant trees in the shade of which you will never rest.
• Avoid working at night.
  

When years like 2009 detonate in your face, it helps to remember which way is up.  Calculating the exact degree of catastrophe is of lesser value.

Time to pause...

And think over the Top Ten Stories....of the Last 4.5 Billion Years!

My favorite:

More than 65 million years ago, a cataclysmic event drove a majority of the Earth's species into extinction, and tragically, wiped out the last of the dinosaurs long before bazookas could be invented and used on them.
According to Ernest Diffey, a fossil archivist at the American Museum of Natural History, a giant asteroid struck the earth in the late Cretaceous period, forever robbing scientists of valuable data concerning the effects powerful rocket launchers might have had on the largest land animals that ever lived.
"Over the years, we've learned a great deal about their physiology, their dietary habits, and even their migratory patterns," Diffey said. "Unfortunately, however, nothing in the fossil record can reveal what it would be like to blow apart the massive front leg of a charging diplodocus and then watch it crash violently to the ground, sending a spray of dirt and dinosaur blood several stories into the air."

"There are so many questions that must remain unanswered," Diffey added. "Like what kind of blood-curdling shriek a pterodactyl would have made after being blasted out of the sky with an M20A1 Super Bazooka. It's truly a shame." [More]

Ya know this is the kinda stuff we'll be reading for a few weeks, right?

Free at last...

I have been metaphorically chained to my computer, trying to get my books up to date and budget for next year. Since I had declined to engage in this sort of activity for... umm,  several months, it was an all-day chore.  And I'm still not done.

However, I have turned the bookkeeping corner. [BTW, did you know "bookkeeping" is the only word with a "triple-double"?]

Forecasting 2010 is proving a challenge. I'm not normally too pessimistic, but bad results this year have probably spooked me. I also think listening to the Cargill market experts several times, has encouraged me to take the profits I can when I can.  Maybe I've reached the point where I begrudge less the guys who can hold and sell at extreme market tops.

I just want to sleep well and show up next spring.

Update: a loyal viewer sent his helpful reassurance my desk demonstrates an ordered mind.

Yet more "ephemeral" wealth...

While I argued earlier that belief in tangible goods as the only source of wealth was misguided, even I have trouble wrapping my mind around some new sources of value.

World of Warcraft matters for all sorts of reasons, but perhaps above all because it did all of this much better than anything else around, or than anyone had really thought possible. There were other massively multiplayer games before it, and there have been plenty since; some are wonderful, some very popular. But WoW was the bridgehead through which a sub-culture rudely inserted itself into the mainstream of cultural life. It has proved—with hard, unarguable numbers (12m players, over $1bn of annual revenues)—that playing videogames is a very serious kind of fun for many, many people. And it has proved that this kind of fun is bound up with a number of other trends that are worth taking seriously.

The study of virtual economics wasn’t born around WoW, but the notion that there can be such a thing as a billion-dollar international market in buying and selling unreal goods has gained common currency through it. WoW has now become a shorthand for the observation that real and virtual worlds can compete for allegiance in people’s lives—with potentially troubling consequences. But playing a game with strangers can also be one of the most eye-opening ways in which it’s possible to meet someone (my wife and I now  regularly visit members of our in-game guild on the east coast of the US). And then there’s the whole culture that has grown up around it. I defy anyone who has played WoW not to hurt themselves laughing at this particular episode of South Park—or anyone who hasn’t to understand a single thing about it. The gulf between those who do and don’t know what playing a video game is like is now one of the most telling cultural fractures around; and it’s thanks in large part to WoW that it’s no longer clear which is the more dignified side to be standing on. [More]

This is not, perhaps, a significant thread in farm culture - yet.  But as more engineers, tech-types and unrelated careerists wander back to our farms, it may not be the cultural outlier it seems today.

It makes you wonder where new wealth will be generated a decade from now.

Have a Merry [Little] Christmas...

A really small snowman.

The snowman is 10 µm across, 1/5th the width of a human hair.

The snowman was made from two tin beads used to calibrate electron microscope astigmatism. The eyes and smile were milled using a focused ion beam, and the nose, which is under 1 µm wide (or 0.001 mm), is ion beam deposited platinum.

A nanomanipulation system was used to assemble the parts 'by hand' and platinum deposition was used to weld all elements together. The snowman is mounted on a silicon cantilever from an atomic force microscope whose sharp tip 'feels' surfaces creating topographic surveys at almost atomic scales. [More]

There has to be a cheesy animated special in this somewhere.


[via sullivan]

Apocalypse Now delayed...

From time to time I check at The Oil Drum to see what thoughtful, but definitely pessimistic minds have to say about changes in our energy supplies and consumption patterns might mean in the future.  TOD has, of course, been as caught off-guard by the decline in oil use/price - ostensibly due to the recession - as oil producers.  And they are seriously starting to wonder when the demand will pick up.

The Organization of the Petroleum Exporting Countries meeting in Angola on Tuesday was expected to keep supply steady because of concern any cut could push prices higher and threaten global economic recovery. But high inventories could force OPEC's hand early next year, before the second quarter when seasonal demand is typically at its lowest, PFC said. "OPEC could face the prospects of needing to undertake Herculean efforts to tighten up fundamentals in early 2010," PFC Energy said in the report.

"Most likely the organization would need to agree to substantial cuts -- of 1 million bpd or more from actual production -- in early 2010 in order to bring total inventories down to manageable levels." The oil price is close to the $75 per barrel top exporter Saudi Arabia and others have said is fair to both consumers and producers. Saudi Oil Minister Ali al-Naimi described the price as "perfect" earlier this month and has said there was no need for the group to change supply levels. [More]

The current oil supply situation is a vexation for Peak-Oilers who are scrambling to revise doomsday scenarios. Plus it is also changing the economic urgency of alternative agrarian ag systems, which fell into step with Peak-Oil predictions.  That body of growers may be larger than I imagine, and if the Census of Ag is of any relevance, may account for the growth in small farms.

At any rate, it is informative to consider how they are betting their operations on a fuel-deprived future.  Contrary to my admittedly vague pregnostications, these producers think the changeover to scarce resources will be swift.  I think it will trgger adjustments to make it a much slower phenomenon, as guys like me adapt to price signals on inputs.

Oddly the decline in petroleum production could mean tougher times for the ethanol business model, as the choice between food and fuel is reviewed in a much harsher light. Regardless, this comment is typical of the discourse among these growers.

I have no doubt that as energy supplies become very restricted that agriculture will be at the top of the rationing list. Especially Big AG as they will have to produce the vast volumes of grain that will be required to prevent mass famine. It will get harder and harder for them to succeed. Riding this wave just behind them will be people like me. Small farms, using little to no synthetic fertilizers or chemicals (those will be restricted to use by the Big Ag farms growing the bulk food). As agriculture evolves back to a more traditional structure the small farms will once again become diversified operations where they produce meats and grains as well as veggies and value added products. Over time the growing of veggies will slow and the growing of beans, grains and other staples will rise on the small operations. This will be as the energy costs rise. When energy costs rise the point will eventually be reached where the CAFO operations will no longer be financially viable. They only exist because we have access to very cheap energy and because the Govt subsidizes corn/soybean production. Much of your grocery store processed food also depends on this situation. In the future all of this will be washed away by rising energy costs and shortages. Thus the diversified small farms close to the population centers will dominate once again.

As energy supplies continue to shrink (long after you and I are gone) there will come a time that operations scaled like mine may pass too. Unless, we have manage to maintain some semblance of 'civilization' via these methods so that we can find clever ways to utilize alternative energies, maybe invent a few more efficient technologies, learn to live on less, etc we will not make it into the future. [More]

These guys are not radical wackos, as industrial producers often categorize them.  In fact, they have on the whole thought more profoundly about what they are doing than most of us in the other sector. Unfortunately, that does not necessarily guaranteee their ability to forecast the future of agriculture, and the last two years have upset most of their stronger apocalyptic announcements.

The could be right in the long run, but it will be a far longer run than most of us think.  And the brains involved in ag will not be idle in the meantime.

Folks who know how...

To decorate trees.

[More]

[via presurfer]

All the world's a stage...

And a computer supplies the scenery.



Don't believe your eyes.

Ever.

[via presurfer]

BandAidgate...

While the rest of the English-speaking world refers to them as "plasters" we mercenary 'Mericans love our brand names.  With that literary guidance this earnest research into bandage removal.

For the study, published today in the Medical Journal of Australia, each student had two plasters applied to their upper arm, hand and ankle. The plasters were then removed using both fast and slow methods, with a randomisation process used to decide which was used first on each student. Subjects were asked to rate the pain on a scale of 0 to 10, with 10 being the "worst pain imaginable".
Fast removal achieved an average pain score of 0.92, while slow removal was significantly more painful at 1.58. The average overall pain scores for women were significantly lower than for men, at 0.91 compared with 1.64. [More][Others demur]

Of course, completely ignored was the strategy of allowing them decay and slough off over time, as showers, sweat and filth cause  them to degrade to putrescent strips of corruption - the path of pain cowards.


Oh yeah - it's an option.

"Most affordable" for some...

The deceptive claim touted by farmers that the American consumer spends only "about 10% of disposable income on food" is becoming more outlandish every year. 

Instead of the USDA (ERS), let's see how the BLS adds up the numbers.

As I have perhaps mentioned before averages are nearly useless in describing the issue (represented by the first bar/point).  This chart (drawn from recent CES surveys) also has some caveats, since low income households receive food aid, like food stamps.  (This would make the first quintile closer to a mere 16% of expenditures, rather than income. See the data table)

Nonetheless, only the top third of Americans get to enjoy the "most affordable food".

But judging by our relentless drive to eliminate the estate tax for the very wealthy, those are the only folks we seem to be concerned with.

The gap between philosophy and practice...

In a post that has stunned the blogsphere, one of the strongest and most articulate voices of libertarianism, Reason editor-in-chief Matt Welch makes the case why he prefers the shockingly socialistic health care in France for himself.

[Note: I really can't excerpt the whole thing, but please click the link to read the post - it's all good and no context is lost]

For a dozen years now I’ve led a dual life, spending more than 90 percent of my time and money in the U.S. while receiving 90 percent of my health care in my wife’s native France. On a personal level the comparison is no contest: I’ll take the French experience any day. ObamaCare opponents often warn that a new system will lead to long waiting times, mountains of paperwork, and less choice among doctors. Yet on all three of those counts the French system is significantly better, not worse, than what the U.S. has now. 
...

What’s more, none of these anecdotes scratches the surface of France’s chief advantage, and the main reason socialized medicine remains a perennial temptation in this country: In France, you are covered, period. It doesn’t depend on your job, it doesn’t depend on a health maintenance organization, and it doesn’t depend on whether you filled out the paperwork right. Those who (like me) oppose ObamaCare, need to understand (also like me, unfortunately) what it’s like to be serially rejected by insurance companies even though you’re perfectly healthy. It’s an enraging, anxiety-inducing, indelible experience, one that both softens the intellectual ground for increased government intervention and produces active resentment toward anyone who argues that the U.S. has “the best health care in the world.” [More]

Even when I disagree with Matt, I have admired both his integrity and clear reasoning. This piece could not have been easy to write, and roughly matches my thinking that our system works OK if you are "in the circle".

Once you fall out of our system, you are screwed.  Now guess which population is increasing.

We can do better, and I don't care what ideological label is attached to it, nor which example we choose to learn from: Canada, UK, France, Germany, Singapore, Holland - whatever.

We're fooling ourselves when we say we have the best system right now.

Where wealth comes from...

I read Steve Cornett's blog religiously.  But then, I'm a Methodist.  He may think he's fooled everyone with his folksy delivery and ham-fisted humor, but I can spot a true intellectual a mile off.  His latest seems like a slab of red meat (heh) for the beef sector but you can tell most commenters didn't pay attention to the last few lines.

Our protein marketing problem is similar to another economic problem I have been droning on about: maldistribution of income.  When the people who really want and need meat can't afford it, we're stuck with trying to argue with vegans to expand our market.

There is a questionable future for that business plan.

"Comfort food is trendy for students because familiar favorites can alleviate stress linked to studying and being away from home," said Tom Post, Sodexo president of campus services. "The biggest change we're seeing is that students are expanding the category of feel-good foods to include comfort world cuisine, such as a Mexican stew or a Vietnamese noodle soup and they are more open to vegetarian dishes with a flair." [More]

Trying to poke more meat down American throats will require overcoming economic, fashion, and medical resistance, as too many of us cholesterol-laden veterans can testify after our annual checkup.

Steve nails this precisely.

This is not going to go away, folks. These new evangelicals are going to keep hammering on these themes in the developed countries.  The beef industry’s future in these countries—with stagnant income growth, nearly stable populations and affluence-guilt—is limited. The future must be in building and serving the broader, worldwide market. 

Vegan Katie isn’t where it’s at. Statistically, she will probably backslide some day, but she will never be a true meat eater. For that matter, neither will her children.

The future is in China and Indonesia and all the places crawling out of poverty doing the jobs Americans used to do. That market is increasing in affluence, but still protein-deficient. And huge. [More]

Meanwhile his fans seem to fixate on his taking on the lefty antiprotein faction.

But I digress, as usual.

It was one comment in particular to Steve's post that arrested my attention.

I'm an Ag consultant, travel all over North America doing seminars--have met in person many of the people you speak of in generalities. These wonderful, but misquided folks have never been in poverty, missed a meal or been denied food..they think it is a right. They are so surprised to find out that food actually comes from the largest industry in the world...agriculture...and they are astonished to find that wealth only comes from Agriculture, Forestry and Mining...the three industries these folks want to see destroyed. What a paradox..the three industries we should be taking the most care are the three most hated and maligned by today's spoiled citizenry. [My emphasis]

I don't mean to pick on this person - his words have been echoed in other comments I see from farmers.  This is an old idea given second life: wealth must be tangible.

The reason it tripped my trigger is I have just finished listening to Niall Ferguson's "The Ascent of Money".  (Another "boomerang" gift from my son who knows he'll get to listen to it as soon as I'm done.  Oh, well - it's the thought...)

It is also one of the the emotive factor behind the rush to gold.  Well, along with the huckstering of the Konspiracy King, Glen Beck.

For farmers, the axiom of wealth being something you can hold is a powerful aphrodisiac.  After all, we take a small amount of seed and produce a thousand fold.  It is visible, it is obvious and it is immensely self-aggrandizing:  I AM THE PHIPPS, CREATOR OF WEALTH.  The rest of you are pathetic parasites.

The only problem is the same one that Ferguson describes with mercantilism.  No economy can grow to its potential if it is limited to a physical basis for wealth. 

The Austrian lawyer and scholar Philipp Wilhelm von Hornick, in his Austria Over All, If She Only Will of 1684, detailed a nine-point program of what he deemed effective national economy, which sums up the tenets of mercantilism comprehensively:^[5]

• That every inch of a country's soil be utilized for agriculture, mining or manufacturing.
  
  
• That all raw materials found in a country be used in domestic manufacture, since finished goods have a higher value than raw materials.
  
  
• That a large, working population be encouraged.
  
  
• That all export of gold and silver be prohibited and all domestic money be kept in circulation.
  
  
• That all imports of foreign goods be discouraged as much as possible.
  
  
• That where certain imports are indispensable they be obtained at first hand, in exchange for other domestic goods instead of gold and silver.
  
  
• That as much as possible, imports be confined to raw materials that can be finished [in the home country].
  
  
• That opportunities be constantly sought for selling a country's surplus manufactures to foreigners, so far as necessary, for gold and silver.
  
  
• That no importation be allowed if such goods are sufficiently and suitably supplied at home. [More]
  
  

The idea of tangible-only forms of wealth seem reasonable until you need a tumor removed or crop insurance. Suddenly the value of knowledge or a legal contract is apparent. In difficult times, the urge to go back to basics is understandable, but we needn't move back to the wheel to regain our footing, surely.

Wealth, as our GDP figures indicate, is increasingly created by the minds of people, not their hands. Those who think that such wealth is illusory have never watched their farm sell to a lawyer from Tacoma.

Neo-mercantilism is simply the latest effort to make extraction industries or farming the Center of the Universe.  I'm not sure we farmers want to be there, even if we could convince the world we are the only creators of wealth.