Wednesday, March 31, 2010

Watching the wrong chart...

Many folks upset at the "trilions and trillions" of dollars in liquidity pumped into the global economy to replace consumer demand are poised in breathless anticipation of inflation or even hyper-inflation.  Every day I become more convinced they are looking at the wrong numbers.

Indeed, even the most vigilant inflation hawk, would be hard pressed to show much evidence of consumer inflation - a rise in the price of goods and services.

But meanwhile, asset inflation is brisk indeed.  Consider stocks, for one.
The CHART OF THE DAY displays a price-earnings ratio for the Standard & Poor’s 500 Index that’s based on average profits for the past decade, as compiled by Yale University Professor Robert Shiller. Grice used the data to reach his conclusion, outlined in a report today.
Shiller’s cyclically adjusted ratio stood at more than 20 times earnings this quarter as the S&P 500 headed for a fourth straight quarterly gain, the longest winning streak since 2007. The index rose 5.2 percent through yesterday.
“The risk is there -- as it always is -- but the returns aren’t,” Grice wrote. The Shiller P/E is within the highest of five ranges since 1881, when his calculations begin, the report said. When the S&P 500 was similarly expensive, returns averaged 1.7 percent a year for the next decade, according to Grice. The comparable figure for the lowest range was 11 percent.
Stocks also cost too much relative to “intrinsic value,” based on his projections for earnings and asset values. He made that judgment after analyzing shares of non-financial companies in the FTSE World Index, a benchmark for developed markets. 


 [More]

Another closer to home data point is farmland. I think it qualifies because the returns (rents) are not keeping pace with values.  In other words, the p/e is creeping upward.

Why do we have this new kind of inflation?

I have a very simple answer to this question: Follow the money. Whether an economy generates asset price inflation or consumer price inflation depends on the details of to whom cash flows. In particular, cash flows to the relatively wealthy lead to asset price inflation, while cash-flows to the relatively poor lead to consumer price inflation.
Why? In Keynesian terms, poorer people have a higher marginal propensity to consume. The relatively poor include people who are cash-flow constrained — that is they cannot purchase what they wish to purchase for lack of green, so their marginal dollar gets immediately applied to the shopping list. Also, poorer people may be different, there may be a correlation between poverty and disorganization, lack of impulse control, inability to defer gratification etc. Think of Greg Mankiw's Spenders/Savers model.
Except when the world seems very risky, no one holds cash for very long. Poorer people disproportionately use their cash to purchase goods, while richer people disproportionately "save" by purchasing financial assets. If the supply of both goods and financial assets is not perfectly elastic, then increases in demand will be associated with increases in price. If relative demand for goods and financial assets is a function of the distribution of cash, what price changes occur will be a function of who gets what. [1] [More]
This is an indicator of income distribution.  Until most consumers get income increases, I can't see consumer inflation picking up steam, which means there will be less reason to raise interest rates and also more reasons to invest in non-monetary assets like land and stocks.

In short, we may have a positive feedback loop set up that will baffle policy makers and investors for some time to come.
Loss of field "cred"...

Just a thought as I wait for the Planting Intentions Report.  Will we believe them? How strongly?

I just realized past performances by NASS makes me feel the report will have less impact than we used to give it, and will fade from debate very rapidly. 

We'll see.
Gee, I wonder what Brazil will do...

With all their surplus sugar?
Brazilian yields are beating forecasts as a waning El Nino brings dry weather, boosting prospects for a record harvest. Mills began crushing cane early after two years of heavy rains pared output, said Maurilio Biagi Filho, the world’s second- largest grower.
“I had never seen a single mill operating in January before,” Biagi said in an interview on March 24. “This January, we had 90 of them working at full capacity.”
The Indian Sugar Mills Association on March 25 estimated production in the year ending Sept. 30 will be 17 million tons, up 1.5 million from a February projection. Output next season may be as much as 24 million tons, the group said.
‘Overestimated Deficit’
“The market had basically overestimated the extent of the deficit,” said Judith Ganes-Chase, a Katonah, a New York-based consultant. She forecast “single-digit” prices in 12 months, assuming favorable weather conditions.
The global supply shortfall will be 12.8 million tons this year, down from 14.8 million projected in February, Czarnikow Group Ltd. said on March 24, citing higher-than-expected output in India. The market will return to a surplus next year, according to London-based Czarnikow and Ratzeburg, Germany-based F.O. Licht. [More]
Now add in our economically perplexing approach of protectionism and its efficacy on importing the available ethanol from SA.
Before the EPA finalized the new mandates, imported sugarcane ethanol from Brazil competed directly with domestically produced corn ethanol. They received the same price. They both could be used by gasoline and diesel producers to meet the old mandates. And both qualified for tax credits. Because U.S. and Brazilian ethanol competed directly for the same market, the import tariff directly increased the profitability of the U.S. corn ethanol industry by increasing the cost to U.S. fuel producers of using Brazilian ethanol.
But the EPA ruling that sugarcane ethanol qualifies as a noncellulosic advanced biofuel means that corn ethanol and sugarcane ethanol are now differentiated products. Though they may be chemically identical, they are no longer economically identical. Brazilian ethanol can be used to meet the advanced biofuels mandate whereas corn ethanol cannot. Because advanced biofuels will be scarcer in supply relative to their mandate, their price will eventually be higher. This means that Brazilian ethanol will be imported to meet the advanced biofuel mandate first. Only if there is an excess supply of Brazilian ethanol available after meeting Brazil’s internal demands and the U.S. demand for advanced biofuels will Brazilian ethanol then become a competitor to corn ethanol. In essence, Congress and the EPA have created a U.S. biofuel mandate specifically for Brazil. This means that domestic gasoline producers will have to pay enough for Brazilian ethanol to induce Brazil to export enough to meet the mandate. Under this
scenario, the only impact of the import tariff is to increase the price that domestic
gasoline producers pay for Brazilian ethanol. As long as there is no alternative supply of domestically produced, noncellulosic advanced biofuels, there will be no benefit to the U.S. biofuels industry from maintaining the import tariff. The question the U.S. biofuels industry needs to ask is whether another biofuel will emerge that can meet this mandate. If so, then the import tariff may benefit the industry. [More][My emphasis]
I cannot prove with it hard numbers yet, but my underlying confidence in markets to patiently circumvent efforts to control them remains unshaken.  I also remain convinced ethanol proponents think their grip on policy-makers is absolute, which will tend to encourage them to push farther over the edge of market-based realities.
Mommy, where did I come from?...

In my case, England.  From brilliant site that can display where your (English) surname was most prevalent in 1881.

For "Phipps"

[via fallows]

Tuesday, March 30, 2010

A little place in  history...

I have received e-mails and comments in ALL CAPS.  After long enough, we who read mostly electronically can hear shouting in our head when reading such documents.

Therefore, I pause today to honor the guy who thought up small letters.

Lower case (also lower-case or lowercase), minuscule, or small letters are the smaller form of letters, as opposed to upper case or capital letters, as used in European alphabets (Greek, Latin, Cyrillic, and Armenian). For example, the letter "a" is lower case while the letter "A" is upper case.
Originally alphabets were written entirely in capital letters, spaced between well-defined upper and lower bounds. When written quickly with a pen, these tended to turn into rounder and much simpler forms, like uncials. It is from these that the first minuscule hands developed, the half-uncials and cursive minuscule, which no longer stay bound between a pair of lines [1].
These in turn formed the foundations for the Carolingian minuscule script, developed by Alcuin for use in the court of Charlemagne, which quickly spread across Europe. Here for the first time it became common to mix both upper and lower case letters in a single text.
The term "lower case" comes from manual typesetting. Since minuscules were more frequent in text than majuscules, typesetters placed them in the lower and nearer type case, while the case with the majuscules (the "upper case") was above and behind, a longer reach. [More]
I love the explanation of how the term "lower case" originated.  Another dazzling conversational opener.
Junkbox...

This week's loose bits:

Monday, March 29, 2010

GS-EEEK...

Consider this takedown of Fannie Mae and Freddie Mac as worthwhile government activities.
Careful analysis, then, reveals the irredeemable flaws underpinning the GSEs:  their putative benefits in the provision of liquidity, and in the subsidization of fixed-rate mortgages, exist solely because they enjoy the implicit backing of taxpayers. But it is precisely that implicit taxpayer backing that destroys the integrity of their credit decision-making processes.
To correct those flaws, housing finance reform, at minimum, must abide by a handful of principles — which together mean eliminating Fannie Mae and Freddie Mac:
1. Privatize the GSEs’ credit guaranty business.  Taxpayer-supplied subsidies for homeownership cannot be effectively delivered through taxpayer-backed credit extension.  The fact of taxpayer backing destroys debt market discipline, which is a necessary ingredient for rational credit allocation. 
2. Eliminate the GSEs’ portfolio business, thereby nationalizing the emergency liquidity function.  There is no benefit provided by the GSEs’ portfolio business that is not entirely the consequence of taxpayer backing.  The portfolio business achieves that which could be provided through more direct means, but needlessly transfers economic wealth from taxpayers to GSE shareholders, GSE management, and GSE bondholders.
3. Create transparent homeownership subsidies, or none at all.  It is an appropriate time to reconsider whether homeownership is a judicious choice for lower and middle-income Americans — or at least whether it is so obviously judicious that it justifies massive taxpayer subsidization.  If, after that review, policy-makers decide to continue promoting artificially high levels of homeownership, more straightforward cash subsidies (through refundable low-income tax credits, for example) would be both simpler than GSE intermediation, and less prone to catastrophic error.
4. Create a transparent fixed-rate mortgage subsidy, or none at all.  In a similar vein, if policy-makers wish to continue to support the availability of long-term, fixed-rate mortgages, they should consider doing so directly.  For example, Congress could authorize a Fed-managed rate swap facility, which would offer subsidized fixed-to-floating interest rate swaps to banks or securitization vehicles that hold fixed-rate mortgages.  This would require that rate risk be absorbed by taxpayers, but taxpayers bear that risk today as well, given the systemic risk created by the GSEs’ interest rate risk positions.
5. Mandate standards for private-label transparency.  Due to both their dominant market share and a certain inflexibility in their IT platforms, the GSEs over time created de facto standards for the sprawling U.S. mortgage business (e.g. loan delivery standards, servicing standards) — standards that have proven alarmingly elusive in the private-label MBS market.  As the GSEs are eliminated, regulators should take care to ensure that necessary market standards are promulgated (by either private sector associations, or if necessary by regulation) in both the primary and secondary mortgage markets. [More]
While this is more than a little abstruse for most of us, it is of considerable interest to the continued existence of the Farm Credit System - another, similar GSE.

Essentially, if I grasp the point of this analysis, the same public good could be accomplished with subsidies to private lenders.These same arguments could be directed at the FCS.  More importantly, it would be hard to predict how investors would view the FCS in the wake of any major changes at Fannie and Freddie.

It will be interesting to see where those adamant about reducing the role of government in our lives come down on this free-market solution.
It's unthinkable, I think...

We've all been tsk-tsking about those poor pork producers for what, several years now, it seems.  But what if they actually made tough decisions and are on the way to recovery?
Analysts on a post-report call sponsored by the Pork Board agreed Friday's number could skyrocket hog futures prices on Monday and will very likely end sow culling.

"I think culling is likely to come to an end," said Len Steiner, principal at Steiner Consulting Group. "This report will give them some reasons to hang around."


The
report showed all hogs on March 1 down 3 percent from a year ago compared to analysts surveyed by Reuters expecting a 1 percent decline.

It put hogs kept for breeding down 4 percent compared to an expected 2.6 percent decline and hogs kept for marketing down 3 percent compared to an expected less than 1 percent decline.


Prices


Compared to what Meyer estimates as a break-even price of $65 per hundredweight on a carcass weight basis, Erica Rosa, an economist with the Livestock Marketing Information Center, predicted hog prices will average $68 to $70 this year, which would be a 20 percent to 22 percent price increase from last year. [
More, free registration required]
One consequence of some brightness on the horizon may be a little more confidence in the feed usage numbers. With hog numbers sort of stabilizing, corn demand from that important industry could be written in something other than pencil.

There is more than a little way to go to recovery for most producers, but any bump in prices might calm some nearly hysterical lenders into extending needed credit before it's too late.
Blog note...

I've been struggling through the last of the speaking season, and will spend this week in Ontario for RBC.  Posting could be sporadic and possibly metric.

After that I have list of subjects to research and blither on about.

This way you'll have stuff to read on your iPhone between turns in the field!
Too good to pass up...

Here in the proud home of Red Green, another recognition of things that should NOT be homemade. (My favorites)
  • The Snow Plow

    • The Hot Tub

    •  The Children's Bicycle Seat


     [Sadly, even more]

    I did get some brilliant ideas, however...


    [via sullivan]

    Sunday, March 28, 2010

    Perfect for Holy Week...

    A virtual tour of the Sistine Chapel.  Very cool.  Nice tunes, too.

    [Meanwhile, I am not the only one to ponder the astonishing (albeit slim) possibility of a pope resigning. The scandal is not disappearing.]
    Meanwhile, we're padding them up to ride a bike...

    I have noticed in farm safety stats this obvious blind spot.  As deaths from farm ponds (at one time the leader) decrease we've added a new, even worse threat.
    Larry Foreman describes himself as "a libertarian at heart," but not when it comes to kids. A veteran emergency-room physician—he works at the Arroyo Grande Community Hospital, near the Oceano Dunes State Vehicular Recreation Area in San Luis Obispo County, California—he's seen an endless queue of injured riders of all-terrain vehicles, including children as young as 4. After a particularly busy Sunday in 2004, Foreman decided to do some research. He was stunned to find that in a recent 22-month period, the small rural hospital had treated 210 children with ATV-related injuries.
    Foreman began meeting with officials and went on radio to talk up tougher regulations—quickly drawing fire from some off-roaders, including at least two who appealed to hospital officials to fire him. "I was just kind of on this Don Quixote quest, and the windmills were beating the heck out of me," Foreman recalled.
    He persisted, however, and eventually the California Chapter of the American College of Emergency Physicians decided to make the issue a legislative priority. In the spring of 2008, it drafted a safety bill incorporating key elements of a model law drawn up by the ATV industry, such as expanded training and the ban on kids riding adult machines. The legislation was introduced in the California Senate by State Sen. Abel Maldonado, Foreman's senator, but a coalition of off-road groups quickly mustered to fight it, and the legislation died later that year.
    Four-wheelers look disarming, almost like overgrown toys. Yet the powerful vehicles, also known as "quads," can reach highway speeds, and unlike cars and trucks, they offer no protection in rollovers. More than 10,000 people have been killed in ATV crashes since federal authorities began keeping track in the 1980s; more than 2,500 deaths and hundreds of thousands of injuries have involved kids under 16. [More]
    If these deaths occurred off the farm, rural America would be howling, but one of the peculiar things about risk assessment is our tolerance of familiar threats.  It's why many of us think pit bull owners are insane.

    I'll take farm safety organizations more seriously when they stop chanting slogans and start taking on the real causes of child deaths.  Consider the reluctance to take a firm stand by Farm Safety Just 4 Kids.
    The following suggested practices will help assure safety.
        •    Drivers should receive sufficient training and supervision.
        •    Restrict the use of ATVs by children.
        •    Always wear personal protective equipment when operating an ATV.
        •    Maintain correct body position and weight distribution during ATV operation.
        •    Refrain from taking unnecessary risks such as performing stunts, using alcohol or drugs, excessive speeding, and accepting riders.
        •    ATVs are not to be driven on paved roads.
        •    Do not operate the ATV under adverse conditions such as inclement weather, insufficient light, hazardous terrain, or an ATV in need of repair.
    All-terrain vehicles can be hazardous. These vehicles are used for work and recreation, and are capable of achieving high speeds. Chance of injuries is greater among inexperienced ATV drivers than those who have received training. If young people are using ATVs they must have proper instruction and be able to fully comprehend the machine they are operating. No matter what function the ATV performs, remember that it is only as capable as the operator.  [More] [My emphasis]


    The word they are avoiding is "prohibit".  Anything less grants approval of sorts to parents who think it is cute, or their children are exceptional.  It also will incur serious pushback from ATV manufacturers.  Frankly, like farm equipment, the time has come for state-licensing for operation of ATV's.

    Yeah - I know, more government intrusion.  But it is actually a sign of parental failure, IMHO.
    Another domino was Home Ec...

    As part of the last generation to remember schools preparing women to be primarily mothers and housewives, it now seems there was more than a little logic to it.  People who know the basics of kitchen sanitation are the best defense against food-borne pathogens.

    "We're paying Martha Stewart to teach us the home ec stuff that's been taken out of the schools. Parenting, fashion, food. That's all home ec. The reality TV shows are merely picking up on that and making money from it."
    She offers more evidence of the popularity of human ecology in noting the knitting club at Western, the farmers' market held Tuesdays at Brescia and the fact the Bernardin Canning Company can't offer enough courses in canning to meet demand. "They're backed up for months and months."
    And she discusses the need now, and more than ever, for the skills taught in this field.
    There is the obesity crisis in North America, with 26% of young people aged two to 17 deemed to be overweight.
    The necessity of ensuring safe food and water for all is another example, and a local one, with lead water pipes back in the news. [More]
    Say what you will about fried chicken, but hot grease kills pathogens pretty effectively.  But as we placed less emphasis on things like cooking and kitchen basics, the health responsibility for food passed up the line, especially hitting the meat industry.  Demands for food safety led to intense regulation which led to this:

    What struck me as a high fastball directed at my head was a report by the U.S. Department of Agriculture that the number of slaughterhouses nationwide declined from 1,211 to 809 between 1992 and 2008 while the number of small farmers of livestock increased by 108,000 in the last five years.
    At first blush, I considered this uptick in farmers naive and committing economic suicide if they can’t get their product processed in a timely fashion to sell at their markets starving for locally produced meats. It is akin to crates of lettuce rotting on my dad’s packing platform because the truck transporting the goods to the produce market broke down.
    That is precisely the scene described by the Times for many livestock farmers in Vermont and upstate New York. By the time they travel long distances or wait for an opening at a slaughterhouse, the animals are stressed and unfit for butchering. Some farmers make reservations for the slaughterhouses before their cows, pigs or sheep are even born.
    The decline of slaughterhouses is both economical and environmental. Animal rights activists such as People For The Preservation of Animals (PETA) play a small role. Even in farming communities, no one wants them in their back yards.
    Agriculture Secretary Tom Vilsack said in a Times interview “It’s pretty clear there needs to be attention paid to this. Particularly in the Northeast, where there is indeed a backlog and lengthy wait for slaughter facilities.”
    The increase of small, independent livestock farmers is part of a movement for America’s local-food movement, championed by so-called locavores. But, it is what my dad would say was “putting the cart before the horse” if the supply chain is interrupted.
    “There are a lot of people out there who raise great animals for us to use, and they don’t have the opportunity to get them to us because the slaughterhouses are going away,” said Bill Telepan, chef and owner of Telepan, a high-end restaurant in New York.
    The newspaper quotes Randy Quenneville, program chief for the Vermont meat inspection service,. that small, family-owned slaughterhouses started closing when strict federal rules regarding health control went into effect in 1999.
    The result was large corporations such as Cargill began to take over much of the nation’s meat market. [More]
    I agree with the author that the greater threat will not be HSUS and PETA, but a broken value chain for agrarian production. Perhaps market demand will encourage new small slaughterhouses, but I am skeptical.

    It could be the trend to industrial food production is irreversible within the current risk-tolerance of our culture. I'm not sure this can't be changed, however. But of all the threat to meat consumption they are on the horizon, I think food safety in the home is where we should be focusing.

    Saturday, March 27, 2010

    The first log cabins...

    So I'm listening my way through yet another history lecture series, and it's pretty good.

    Before 1776: Life in the American Colonies by Robert J. Allison

    Strongly recommended, but as always, don't buy it until it's on "sale", which is darn near always.

    Anyhoo, I'm plodding through the part when the Dutch still controlled New York (Amsterdam), but what I did not know was anything about New Sweden to the south, essentially around Wilmington, NJ.

    It was at this point Allison (who has a massive bass voice, BTW) interjects that the first log cabins in America were built there by Swedes (who were actually Finns).
    In the present-day United States, settlers first constructed log cabins in 1638. Swedish settlers in New Sweden (present-day Wilmington, Delaware) used log structures. Later German and UkrainianScots and Scots-Irish had no tradition of building with logs, but they quickly adopted the method. The first English settlers did not widely use log cabins, building in forms more traditional to them.[1] Few log cabins dating from the 18th century still stand, but they were not intended as permanent dwellings. When settlers built their larger, more formal houses, they often converted the first log cabins to outbuildings, such as chicken coops, animal shelters, or other utilitarian purposes.    [More]
    Makes me wonder what kind of shelter the New Englanders used.

    He also had revelations about the unique slave culture of South Carolina, which, looking back at my years in Charleston during the Navy, helped some pieces fit together.

    Also highly recommended: The Art of Critical Decision Making by Michael Roberto.  Great content, poor delivery (sloppy, rushed articulation) but still well worth it, especially if you work with or in groups.
    Check out the northern Plains...

    Those guys do their homework!  See how your hometown is doing in the 2010 Census.

    Chrisman is struggling along at 39%.

    Thursday, March 25, 2010

    Sentences you don't hear too often...

    Regarding early European farmers:
    Studies of mitochondrial DNA (mtDNA), which is inherited maternally, tell a different story. The majority of European mtDNA haplogroups appear to have arrived on the continent during the Palaeolithic.
    Dr Patricia Balaresque, first author of the study, said: "In total, this means that more than 80% of European Y chromosomes descend from incoming farmers. In contrast, most maternal genetic lineages seem to descend from hunter-gatherers.
    "To us, this suggests a reproductive advantage for farming males over indigenous hunter-gatherer males during the switch from hunting and gathering, to farming - maybe, back then, it was just sexier to be a farmer."[More][My emphasis]
    Deep inside, I think we all know this still to be true.

    Wednesday, March 24, 2010

    Before ag spokeshumans rush to Facebook...

    Consider what can go wrong. The folks at Nestle didn't.
    It's a sad sight, to see a man (or woman) broken by the taunts of an angry mob. But what I find most confounding about this whole sorry display is that the real error here was for the moderator to act like an actual human being. Most corporate public relations is about smoothing all rough edges away with the goal of creating an essentially false version of reality, full of comforting jargon and meaningless buzzwords. Exhibit A: Nestle's official statement on palm oil. Many of the commentators on this Facebook fracas are saying that Nestle should just have kept reiterating what was in that statement and avoided riling the crowd. But what's the point of simply pushing regurgitated pap? How can that be considered good manners? It's managed discourse that means nothing, and I think it's far more degrading to the chances of real communication between corporations and consumers than the damage done by one person who shows his annoyance at a bunch of people who imagine that they are engaging in some form of meaningful social protest by posting complaints about a company while sporting juvenile profile pictures on a Facebook fan page.
    Don't get me wrong -- I think the whole concept of fan pages for corporations is stupid to begin with, and I think Nestle has done some truly vile things in the course of its existence on this planet. But I gotta say I'm kind of loving the nameless gal (or guy) who had the temerity to tell his (or her) critics "Consider yourself embraced." That was real! That was awesome.
    He or she will never make that mistake again, of course, and that just contributes to our greater social detriment. Because if we are going to use social media to its fullest capacity, it should be to help us make real connections between people -- not to attack them when they reveal their own humanity. [More]
    One of the most popular breakout sessions this year at meetings I attended were workshops/seminars on social media. Often these were led by (forgive me for stereotyping) very enthusiastic, cheerleadery women who could clearly outline all the upside, but had apparently rarely dealt routinely with trolls or ideologues who have discovered the power of "anonymous".

    If you cannot hold your own face-to-face in heated arguments, my suggestion is your ag PR campaign in Twitter could cause you considerable heartburn. And bad actors are just the beginning.  Out there on the Internets are many, many people smarter, more articulate, and rhetorically gifted than you who can hand your your virtual head on a platter just for fun. DAMHIKT.

    I point this out not to diminish the idea of what social media may be able to accomplish toward ag's perceived media problem, but rather to encourage those neophytes to gird their onloins*.


    *Did I mention the problem of fiendishly clever wordplay that few others find amusing?
    Why I don't go to movies; Part XXVIJ...

    They all seem...I dunno...similar predictable formulaic done been done?

    Tuesday, March 23, 2010

    Me, too...

    All the Big League Bloggers are posting their Ten Most Influential Books, so...
    1. The Lord of the Rings
    2. Danny Dunn and the Anti-Gravity Paint
    3. Our Friend, the Atom
    4. Language in Thought and Action
    5. Things Fall Apart
    6. The Happiness Hypothesis
    7. The Source
    8. The Chronicles of Narnia
    9. The One Best Way
    10. The History of the English-Speaking Peoples
    11. The Aubrey-Maturin Series
    12. The Art of Loving
    (I included twelve in case two were wrong.)
    Cremation is also a big factor...

    Escorted funeral processions are fading away, and local government budget cuts won't help.

    The funeral cortege, a staple of mourning in the USA for generations, is rolling up against modern realities. Concerns about staffing, cost and officer safety forced the change in Gulfport, Smith says. Police were overwhelmed, sometimes working six funerals a day, and some funerals required as many as eight of the city's 190 sworn officers — 4% of the force.
    "In some cases, we would have an entire section without protection," he says. A five-vehicle procession can be handled by a single officer.
    There are also liability concerns. Courts in Tennessee and Florida have found that police and funeral homes that provide escorts for funeral processions can be held liable for crashes that occur during the processions.
    In most states, the lead vehicle in a funeral procession must obey traffic signals and stop signs, but other vehicles are not required to do so. Still, funeralgoers all over the USA are getting cited by red-light cameras for running red lights while a part of a funeral procession. The Georgia House of Representatives is considering a law that would require camera companies to include on citations a box saying the vehicle owner was part of a funeral procession when the violation occurred.
    "There are cases where you legally run a red light. The most prominent is a funeral procession," says Rep. Barry Loudermilk, a Cassville Republican.
    In some places, the practice of motorists respectfully pulling over to the side of the road as a funeral procession passed, has passed on, too. In several instances in recent months — including in Memphis and Houston — funeral escorts on motorcycles have been hurt by drivers attempting to cut through processions. And each year, motorists around country are hurt or killed in wrecks involving funeral processions.
    Still, some smaller communities have managed to hang on to the practice of police escorts for funerals. "We do it on a case-by-case basis," says police Sgt. Curtis Bristol of Charlotte, Mich., which has a population of about 9,000. [More]
    We live a mile from a lovely cemetery, and now that I think about it, we are seeing fewer corteges as well. I know our own family experience with funerals has been widespread families are planning delayed memorial services instead of funerals after an immediate and intimate cremation. Plus many final dispositions are scatterings rather than burial.

    I think one indicator of how the funeral procession is disappearing is the confusion and failure to recognize one by many motorists who pass into the midst, or honk at intersections.

    Monday, March 22, 2010

    What does it mean?...

    Permit me to pause the apocalyptic predictions for a moment to point out some of the best information I have found to decipher what HCR means for each of us.

    First, this interactive table from the NYT: How the Health Care Overhaul Could Affect You.
    [BTW - have you noticed the emergence of these Flash animations as powerful tools for explaining complex information. We need this kind of communication for farm bills and crop insurance, IMHO]

    The chart version (click to embiggen):

    [Source]

    A time-line for events.

    There are many possible ramifications for rural America in this legislation.  A good start is to see what it will mean to your family, especially when something goes wrong: serious disease/accident, loss of the benefits-providing job, whopping premium increases, or insurance company failure (it happens).

    Then think what these changes will mean to your children, and how they will view employment differently. The bill also has provisions specifically for rural health care that could keep your small clinic open.

    It will cost us, to be sure.  I will pay more taxes, and so will others. We will begin to control costs clumsily and bureaucratically, but surely.  And we will find other items in the budget we will cut before we pull back these promises, I'll bet.
     
    [via sullivan]
    Falling to the left...

    A reader comments:
    You seem to be sliding (falling) to the left. Are you celebrating the Health Care vote today? I suspect you are. Just tell all us ugly conservatives how we pay for it. [Source]

    I hope I have never referred to conservatives as "ugly", but laying that aside, I assume the commenter is not aware that the HCR bill was scored as deficit-reducingOr in other words, it pays for itself and then some.

    Now, we all know, the CBO projections are not iron-clad predictions of what will happen from now on, but these are the de facto rulings that both sides have used as impartial refereeing.

    But I remain curious.  Where were all these "conservatives" when Medicare D was passed without funding?  When the Bush tax cuts adds trillions to the deficit after his term? And did the conservative hawks think wars were cheap? While current "conservatives" have tried to disavow their work of the past decade, they are greatly responsible for those deficits at least. So I ask them, how will they pay for their own promises?

    Pseudo-conservatives today don't care about their own deficits, IMHO, they care about deficits that benefit others. I do care about deficits, except when the country is mired in recession, as I have posted. I have been detailing first where we can't solve the problem, and then I will start to address the substantive issues of deficit reduction.

    It is all good fun to yell "liberal" to stall for time, but it wore off for me a long time ago.

    Whatever.

    I continue to oppose subsidies to farmers, ethanol, and other businesses that should be able to handle reality in the marketplace, like most already do.

    I support efforts to control health care costs and redirect health care spending from the elderly (like me) to younger citizens. And yes, I am cheering the beginning of decoupling of employment with health insurance.  In fact, I will post more about some of the not-so-obvious ways this legislation could change farms and farmers.

    I support free trade with all the pain it brings. (Yeah - I'm talking about sugar and ethanol and beef).

    I support habeaus corpus, oppose torture and want to reinstate the draft. I want free speech and privacy respected.

    And if wanting all Americans to have an equal chance for health care coverage, and being willing to pay for it with taxes on people like me makes me something other than a conservative, so be it.

    I don't think of it as falling to the left, as much as climbing to the light.
    You know who they are...

    Some helpful books my readers would never need.

    Anger Management for Dummies: Is it really a good idea to call someone a "dummy" if they have anger management issues?
    Anxiety and Depression Workbook for Dummies: And do anxious and depressed people really want to be called dummies?
    Cosmetic Surgery for Dummies: This is right up there next to Hedge Funds For Dummies on the list of Books You Don't Want To See On Your Professional's Shelf.
    Currency Trading for Dummies: Buy low, sell high. That's your entire book right there.
    Day Trading for Dummies: Yes. Yes, it is.   [More]

    [The whole catalog]

    (No, there is no "Farming for Dummies", albeit you can buy "Hobby Farming for Dummies")

    Sunday, March 21, 2010

    Maybe the right is just louder...

    I was surprised by this chart of political contributions and occupations.  Farmers seem to be split more evenly than I expected.

    Combined with the procedure described the previous post, this allows for interesting comparisons of ideological giving patterns across industries/professions.As a first cut, I recovered ideal point estimates for the 3125 PACs and 131,000 individual contributors that gave to two or more unique candidates during the 2007-2008 election cycle and scaled them using the IMWA procedure. The figure below ranks a subset of occupations from left to right based on the mean ideal point of the members of each occupation. As a point of reference, the occupation ideal points are imposed over the density plots for all Democratic and Republican candidates.
    [More]

    On the other hand, there aren't too many to the right of us, either.
    So what are you planting...

    In your Imperial garden?



    [More]

    Bwahh-haaa-haaa



    [via presurfer]

    Saturday, March 20, 2010

    In my next life...

    I want to be a cartoonist.  This is communication.


    [More]
    Well, now we know where...

    The 1031 money went.
    The Yadavs are members of a new economic caste in India: nouveau riche farmers. Land acquisition for expanding cities and industry is one of the most bitterly contentious issues in India, rife with corruption and violent protests. Yet in some areas it has created pockets of overnight wealth, especially in the outlying regions of the capital, New Delhi.
    By Western standards, few of these farmers are truly rich. But in India, where the annual per capita income is about $1,000 and where roughly 800 million people live on less than $2 a day, some farmers have gotten windfalls of several million rupees by selling land. Over the years, farmers and others have sold more than 50,000 acres of farmland as Noida has evolved into a suburb of 300,000 people with shopping malls and office parks.
    That has created what might seem to be a pleasant predicament: What to do with the cash? Some farmers have bought more land, banked money, invested in their children’s educations or made improvements to their homes. In Punjab, a few farmers told the Indian news media they wanted to use their land riches to move to Canada. But still others are broke after indulging in spending sprees for cars, holiday trips and other luxuries.
    “They go for Land Rovers,” said N. Sridharan, a professor at the School of Planning and Architecture in New Delhi. “They buy more televisions, and quite a lot of money also goes into drinking. They try to blow it out.”
    Much of this conspicuous consumption is bad financial planning by farmers who have little education or experience with the seductive heat of cold cash. But some sociologists say such ostentatious spending, especially on weddings, is rooted in the desire of lower castes to show off their social mobility, partly by emulating the practices of the upper castes. [More]
    Meanwhile, back at our ranch, the hot money is either farmers who thought $3000 dollar ground wasn't expensive enough, or investment funds.

    Call me a closet colonialist, but examples like this make foreign ownership of farmland look slightly  less imperialist, and slightly more responsible conservationist.


    Friday, March 19, 2010

    Tackling the deficit (III)...

    OK, we've talked about waste and foreign aid, which didn't demonstrate large real savings of the magnitude we need to dent a trillion-dollar shortfall - although the effort might get us 5% or so of the way there.  Now let's stop all those vile earmarks.

    First problem is the actual cost.  While significant, it is not overwhelming.
    The amount of money directed by lawmakers in 2010 to specific projects back in their districts adds up to $15.9 billion, according to the analysis by Taxpayers for Common Sense. [More]
    The larger problem is the politics of earmarks.
    But even with both parties taking actions against earmarks, there are a few reasons why pork barrel spending will continue in many forms.
    1. Every member of the House and senator could agree to never put an earmark in another bill, but billions of dollars' worth of projects for special interests could continue. That's because there are many provisions in large spending bills that resemble earmarks, but Congress does not define them as such. Taxpayers for Common Sense, a nonprofit taxpayer watchdog group in Washington, estimates that there were about 91 provisions worth about $5.9 billion in fiscal year 2010 alone that TCS considers earmarks but Congress does not. For example, in the fiscal year 2010 defense spending bill, there was $2.5 billion to build 10 C-17 Globemaster Strategic Airlift Aircraft, despite the fact that the Defense Department said the 205 C-17's it already has are sufficient. This spending is not considered an earmark by Congress, and thus would not be affected by either the Democratic or Republican earmark reform. "They've decided that it's not an earmark, even though it walks like an earmark and talks like an earmark," says Steve Ellis, vice president of TCS.
    2. As the majority in Congress, Democrats have the most influence over earmarks at the moment. They have decided not to allow earmarks "directed to for-profit entities." But evidence suggests that this move affects only a small minority of earmarks. It can be difficult to find out which percentage of earmarks are for private interests and which fund nonprofit groups or state and local governments. Finding out which is which is time-consuming. It requires combing through the sometimes thousands of earmarks in a given bill because "Congress doesn't tell you right off the bat who the beneficiary [of an earmark] is," says Ellis. According to Representative Obey's announcement, the new earmark reform would have affected about 1,000 earmarks for 2010 had it been enacted last year. But according to TCS, there were about 9,000 earmarks in fiscal year 2010. Citizens Against Government Waste, another watchdog group, counts 10,160 earmarks, of which the Democratic reform affects only 10 percent. [More]
    So setting aside the likelihood of earmark reform, their contribution to the deficit is still small.

    Thursday, March 18, 2010

    Junkbox...

    I'm playing outside - not surfing.

    And you should be too!

    Wednesday, March 17, 2010

    It takes more than "gumption"...

    Energy independence will require more natural resources and/or conservation that we have.

    Let's look at some numbers. Total U.S. petroleum demand is 19.5 million barrels per day.  Total daily crude oil production from U.S. oilfields is a shade below 5 million barrels per day. Once you net out other factors - production of usable natural gas liquids, imports of gasoline and other refined products, and exports - yes, U.S. producers on the hunt for market advantages export some 1.8 million barrels daily in crude oil and refined products - net imports of liquid fuels total 11.1 million barrels per day, according to the U.S. Energy Information Administration (EIA).
    By 2035, however, net imports are projected to fall to 10 million barrels daily, according to EIA. Demand is projected to rise to 22 million barrels per day, but that would be offset by higher domestic production - an extra million or so barrels from deepwater oil wells in the Gulf of Mexico and greater use of biofuels, chiefly ethanol. Fuel efficiency standards that are due to take effect in 2016 will save an estimated 2 million barrels per day.
    Could the gap between domestic supply and demand be closed further? Let's say the coastal plain of the Arctic National Wildlife Refuge, the most biologically rich habitat in the circumpolar north, is handed over to oil companies. A what-if analysis published in 2008 by the U.S. Energy Information Administration projected, in a best-case scenario, maximum daily production of 1.45 million barrels daily by 2028.
    If that projection is accurate, we would still need to find another 8.5 million barrels per day to close the gap by the 2030s. How much could be expected from offshore waters that no longer are under leasing moratoria? EIA's Annual Energy Outlook for 2009 provides a clue. Under business-as-usual, assuming that previously closed areas are open to leasing, EIA projects that offshore production in the lower 48 would total 2.7 million barrels daily by 2030. In a what-if analysis of reinstating the moratoria, production drops to 2.2 million - a difference of only 500,000 barrels.
    Why the small difference? EIA explains that lifting of the moratoria is not the magic elixir that the "drill, baby, drill" brigades claim. "Conversion of the newly available (offshore) resources to production will require considerable time, in addition to financial investment," EIA notes.
    How about liquefying coal? America's Energy Future figured that coal-to-liquids could produce the equivalent of 3 million barrels per day by the 2030s. To accommodate that production would require a 50 percent increase in U.S. coal production - from about a billion tons to a billion and a half tons every year. The likely air, land, and water impacts boggle the mind.
    In addition, liquid fuel from coal results in more than twice as many life-cycle carbon dioxide emissions as gasoline. If carbon sequestration proves impractical, scaling up coal-to-liquids production would put paid to any reasonable prospect of stabilizing the atmosphere's concentration of heat-trapping gases.
    Ethanol? America's Energy Future estimates the equivalent of 1.7 million barrels daily might be doable by the 2030s. There are issues, however. Ethanol would need its own pipeline network. Ethanol from cellulosic sources is more expensive than coal-to-liquids. [More]
    It is, of course stirring to cry out for the US to take the same technological leap in energy as it did to put a man on the moon.  But in case you haven't noticed it, we haven't been able to even repeat that remarkable feat, and it now stands as the high water mark of our collective and political will as a nation.

    But the larger issue outlines well by by the report cited in this post, is those resources are not available in our country, not the means to develop them. I do think a goal of reducing our dependence to the equivalent of western Hemisphere sources might be possible, but due to oil's fungibility, we'll never get to no Saudi Arabia imports, nor is there a commanding reason to do so.
    The best analogy I've seen of this is one put forward by Fred Singer from the University of Virginia. He said the global oil market is like a giant bathtub. All the producers dump their oil in the bathtub and all the consumers pump their oil out of the same bathtub. And the level in the bathtub is the price. So yes, we could consume less oil by finding something else—we don't know what yet. But in the meantime, we're still going to be tapping into that same bathtub and paying that same price that the rest of the world's global consumers do. This idea that we can detach from this market is craziness. [More]
    If security is at the heart of the issue, using less seems to be a far more effective strategy. However, sacrifice, as we are learning slowly from public budget deficits, seems to only be imposed on us, not taken willingly.

    The larger question about energy from a corn grower perspective is the looming financial crunch for government and the continuation of ethanol and biodiesel subsidies.
    The U.S. ethanol and biodiesel industries are finding it more difficult to maintain political support for a variety of tax credits. We've heard some rumblings that both industries may be joining forces to push for longer-term extensions of the ethanol blenders credit and the $1 biodiesel tax credit. Though both industries have their share of challenges, the ability to secure long-term extensions of those credits may be the determining factor as to where both industries go from here. Environmental groups and others say it makes no sense for ethanol and biodiesel to have tax credits and federal mandates driving production. When the biodiesel tax credit was allowed to expire at the end of 2009, the industry virtually shut down. It is expected the same likely would take place if ethanol lost the blenders credit. With ethanol, based on the current markets, losing the 45-cent credit would make ethanol production a break-even proposition. [More]
    The fact ethanol will apparently never outgrow its need for subsidies may be partly because of  competing subsidies for oil, NG, etc. but it raises another question for corn producers. Given the absolute reliance on mandates and subsidies for viability, we may have created a too-big-to-fail entity, not unlike megabanks.  


    Loss of government support would put most ethanol production at great risk, even rapid failure, I suspect. Lobbing 3-4B bushels of unneeded corn back on the market as a consequence would at least temporarily (2-3 years) take agriculture to its knees, and dramatically restructure agriculture as we know it. 


    So when farmers cry out to let big investment houses die the deaths of their own making, they are creating a rather dangerous precedent.



    Tuesday, March 16, 2010

    6,000,001...6,000,002...6,000,003...

    I'm in charge of lady beetle eradication in our house.  Because I can reach the ceiling with the vacuum.  And I am an expert with that power tool, as with many household chores.

    But how many of those rascals are there? And why have they moved in?
    The little guys are called multicolored Asian lady beetles.They are related to our native ladybugs, but the name ought to be a tip-off that they are not American citizens.
    Our native ladybird beetles spend the winter protected by piles of leaves or in crevices. The Asian cousins overwinter in cliff faces. Imagine how disappointed they were to come to Michigan and find a complete lack of cliff faces. So they took the next best thing, and that was large vertical surfaces called house walls.
    In the early fall, they mainly land on southern and western sides of houses and squeeze themselves into cracks.
    Eventually, they end up in the wall void between the outside wall and the inside wall. On sunny days, the wall void heats up and the little lady beetles pop out next to windows or under baseboards. Your tiny aliens aren't outside; they are already in and just coming in a bit more.
    They are under the misguided impression that spring has come.
    While they are wandering around, they don't eat or damage anything. The only damage may occur when you bash them and cause them to stain a surface with their bodily fluids.
    And whose fault is that?
    Since they are just coming out of dormancy, pesticides rarely kill them. Their metabolisms are too slow. Grab the vacuum and suck them up. [More]
    Like kudzu, we most did this to ourselves.
    This species was possibly established in North America as the result of introductions into the United States in an attempt to control the spread of aphids. Whatever the source, in the last two decades, this insect has spread throughout the United States and Canada and has been a prominent factor in controlling aphid populations.
    In the U.S., the first attempts to introduce it took place as far back as 1916. Repeated efforts were not successful. In the early 1980s, aphids were causing significant problems for growers of pecan trees, so the United States Department of Agriculture again attempted to bring the insect into the country—this time in the southeastern United States, using beetles brought from their native region in northeastern Asia. After a period of time, USDA scientists concluded that their attempts had been unsuccessful. However, a population of beetles was observed near New Orleans, Louisiana around 1988, though this may have been an accidental introduction event independent of the original, planned efforts. In the following years it quickly spread to other states, being occasionally observed in the Midwest within 5–7 years, and becoming common in the region by about 2000. The species was also established in the northwest by 1991, and the northeast by 1994, in the former case quite possibly involving additional introductions, rather than reaching there from the southeast. It is reported that it has heavily fed on soybean aphids (which recently appeared in the U.S. after coming from China), supposedly saving farmers vast sums of money in 2001.
    Many people now view this species as a nuisance[4], partly due to their tendency to overwinter indoors and the unpleasant odor and stain left by their bodily fluid when frightened or squashed. (It is also currently increasing in Europe to the detriment of indigenous species, due to its voracious appetite which enables them to out-compete and even eat other lady beetles, as it also does in the United States.)
    In addition to its household pest status, it has been reported to be a minor agricultural pest (contaminating crops of tender fruits and grapes)[5] in Iowa, Ohio, New York State, and Ontario[3]. The contamination of grapes by this beetle has been found to alter the taste of wine[6]. [More]
    I can tolerate them dropping off the ceiling into my supper dish, but I draw the line at wine contamination - especially our cherished Iowa wines.


     [Source]

    I suspect milder winters aren't helping. And to be fair, I haven't had to spray for soybean aphids yet either.

    Still, cute wears off after a few million.

    Monday, March 15, 2010

    Exactly how fast...

    Are you surfing?  The FCC wants to help with a simple Internet speed test.

    Try it here.

    So I did, and this is my score: Download 2835 kbps   Upload 634 kbps

    The funny part is I immediately repeated the test at my favorite speed site: pcpitstop.com

    The answer there:  Download 4835 kbps  Upload 631 kbps

    So I checked back at the FCC site: Download 4780 kbps  Upload 592 kbps

    The operative phrase is "your results may vary", I guess.

    Anyhoo, the FCC will unveil soon an ambitious plan with some astronomical numbers. Even so the plan for "100-Squared" (100 Mbps in 100 million households) is not extraordinary in international comparison.

    Are other countries doing this?

    Yes, many countries are already way ahead of the United States in terms of broadband speeds and availability. South Korea, for example, boasts an average broadband speed of 43.3 Mbps, according to a 2008 report from the Organisation for Economic Cooperation and Development (OECD). But, dissatisfied with those speeds, the South Koreans in February 2009 announced an ambitious goal to introduce 1 Gigabit-per-second broadband by 2013.
    Other countries also boast impressive broadband speeds, according to the OECD. France, for example, averages speed of 43.3 Mbps and the Japanese enjoy speeds of 93.7 Mbps. The United States broadband speeds hover around 9 Mbps; however, keep in mind that broadband speeds in urban areas tend to be much higher. [More]
    I'll try to read the plan when published and see what it might mean for rural citizens. Right now, I'm embarrassed by how giddy I am over 5 Mbps. 
    I know I'm tired...

    Is outrage-fatigue setting in for much of America?
    If there's a rock, there must be a scorpion under it. And if there's no scorpion, someone must have helped it get away.
    Public officials deserve, in fact demand, our scrutiny. But there's a problem when almost every story, large and small and in between, is packaged the same way, and that's as a personality-driven scandal, an abuse of the public trust. Motives are always to be questioned - whether there's evidence of a devious conspiracy or not.
    What did they know and when did they know it? Will they come clean? Will they apologize? Will they step down? Is there a crime, and whether or not there's a crime, is there a cover up?
    That's the process: Get lathered up, rinse, repeat.
    Along the way, if we're lucky, the scandals dovetail with larger public policy questions. If we're lucky.
    In the Bush administration the momentous decision to invade Iraq changed history forever and warranted our full attention. But somehow it didn't really translate into a media-consuming debate until we could package it as a scandal - or a series of scandals: over the "16 words" spoken in the State of the Union address, over Valerie Plame, over Pat Tillman, over Abu Ghraib.
    We've treated health care the same way: putting out fires over the public option and so-called death panels. Dizzily searching for side-debates. Weekly handicapping the President's tactical victories and defeats. Doing it all at the highest imaginable volume.
    Yes, we've loved scandal from the earliest days of the Republic. Alexander Hamilton's sex life sold newspapers by the thousands. But it never occupied quite as much national oxygen as all our rat-a-tat obsessions on everyone and everything do these days.
    At some point, we're going to exhaust ourselves. The backlash will come.
    In ever greater numbers, we will start to slow down, turning off cable and talk radio and blogs and turning on something like PBS, or just shutting out politics entirely.
    Maybe that sounds naïve. But we're to the point that the static has become the show. And you can only stare at static for so long. [More]
    I think this could be a real political phenomenon, but if so, what does it mean? Will politics really become verboten conversation as it was fifty years ago in polite social gatherings? Will newspapers and TV continue to lose ground as the nation tunes out the bad news?


     To some extent, I believe so. I know farmers I have visited with lately really, really want to talk about farming, not the larger issues facing us. And I don't relish conversations on the hot topics becuase they never seem to get anywhere and make me feel worse than I did before they began.

    This dropping-out will bring its own consequences, of course. And maybe the bitter-enders who can't let an issue drop deserve to win. But is also suggests voices of relatively non-confrontational leadership may find more audience than they suspect.

    Then again, we've thought these things before. And it's just issues that fall from favor, not outrage itself.  Or maybe different voices are taking turns ranting. Indeed, the rotation seems to be making another lap.  Remember the horse-slaughter "debate"?

    It's baaack.

    Yippee.

    Sunday, March 14, 2010

    It wasn't just Vancouver...

    Canada had no winter. At least by their standards.


    From the balmy Arctic, to the open water of the St. Lawrence and snowless western fields, this winter has been the warmest and driest in Canadian record books.
    Environment Canada scientists report that winter 2009/10 was 4 C above normal, making it the warmest since nationwide records were first kept in 1948. It was also the driest winter on the 63-year record, with precipitation 22 per cent below normal nationally, and down 60 per cent in parts of Alberta, Saskatchewan and Ontario.
    "It's beyond shocking," David Phillips, a senior climatologist with Environment Canada, told Canwest News Tuesday. Records have been shattered from "coast to coast to coast."
    "It is truly a remarkable situation," says Phillips, noting that he's seen nothing like it in his 40 years of weather watching. He also warns that "the winter than wasn't" may have set the stage for potentially "horrific" water shortages, insect infestations and wildfires this summer.
    As much of Asia, Europe and the U.S. shivered through and shovelled out of freak winter storms, Phillips says Canada was left on the sidelines.
    "It's like winter was cancelled in this country," he says. [More]
    You have to wonder if corn seed companies are eying the Canadian Prairies.

    Also there is good article on climate change in Successful  Farming March Issue, which they may get around to posting on the their website someday.

    [Remember these are ℃ - the big ones]

    Saturday, March 13, 2010

    It's scary enough...

    That 1966 is considered the Stone Age.

    [More]

    But 1993?

    [More]

    (And yes, I do think those women are hot.)

    Thursday, March 11, 2010

    Farmer numbers to plummet...

    In China.  It would appear that even if your don't build it, they will come.
    If Han Jun is right, over the next three decades a population the combined size of Germany, France, Britain, Italy, South Korea, South Africa, Spain, Poland and Canada will up sticks and move to China’s swelling cities. Mr Han, a rural expert at Beijing’s Development Research Centre, reckons that by 2040, the number of people in China’s countryside will have shrunk by 500m to just 400m. On that assumption, China’s city-dwellers would rise to well over 1bn, catapulting the urban population from 45 per cent of the total to around 70 per cent.
    The startling numbers conjure up images of mass migrations and the trebling or quadrupling in size of big cities such as Beijing, Shanghai and Guangzhou. In practice, it is unlikely to be quite like that. China, after all, is a planned economy. Even so, McKinsey Global Institute, which has researched China’s urbanisation trends, paints one scenario under which, by 2025, the country will have 15 super-cities with an average population of 25m people each. Meanwhile, many cities will “move” to the countryside as the state frantically constructs new urban centres in the interior and as changing land use blurs the distinction between village and town.
    This is not futurism. By some counts, China already has some 170 cities with a population above 1m. That compares with nine in the US and two in the UK. In population terms, Tianjin is China’s New York and Qingdao its Los Angeles.
    The emergence of second and third-tier Chinese cities with big populations has businesses salivating at the prospects of a consumer bonanza. A steady stream of urbanites could indeed become tomorrow’s purchasers of kitchen appliances, insurance and cars. City authorities will need mass-transit systems, power grids and telecoms equipment. Chinese urbanisation could, as McKinsey says, be the biggest business opportunity of the next several decades.
    There is a hitch. Not only will planners need to build the physical infrastructure to accommodate this urban groundswell. Harder still, China will have to erect a legal framework. As things stand, of the estimated 200m migrants who have already swapped their hoe for factory aprons or a hard hat, the bulk have no right to permanent residence in the cities. The so-called hukou registration system, instituted by Mao Zedong in the 1950s as a way of limiting internal migration, divides China’s urban population into two castes – privileged official residents and marginalised migrants. [More]
    Examples like this are the reasons why I am not wringing my hands about the rapid expansion of the Chinese economy.  Too many worriers simply fail to acknowledge the burden 1.3B people represent even for a rapidly expanding powerhouse.

    Now add in the increasingly likely appreciation of the yuan, and instead of a threatening debt-holder, China begins to look like the Mother of All Consumer Markets.  To be sure it's early, but China seems to have the ability to accelerate trends.