Showing posts with label rents. Show all posts
Showing posts with label rents. Show all posts

Sunday, May 01, 2011

Are liberals just conservatives...

Who have made some money? Will Wilkinson, who normally thinks about three levels above me does a wonderful job of drawing together some current research on our "default" values and how they change. Please read the whole post, but here is the set-up:

University of Virginia professor of psychology Jonathan Haidt is a pioneer in the scientific study of moral emotion and cognition. Haidt’s principal claim to fame is his “five foundations” theory of human morality. Imagine a graphic equalizer on a stereo with five separate settings that slide up and down. One setting determines our sensitivity to suffering and harm. One calibrates our sense of reciprocity and fairness. Another fixes our degree of in-group loyalty, and establishes how inclusively we draw the circle around those we consider one of “us”. Still another concerns our attitudes toward authority and the duties of our station. And then there is our “spiritual” sense of the sacred and the profane. Recently, Haidt has entertained the possibility of a sixth slide on the moral equalizer determining our attunement to matters of individual autonomy and freedom, but we’ll stick with just the five for now.The elegant basic idea is that variation along a small number of universal dimensions of emotion and cognition can account for the entire stunning range of human morality. Afghani herdsmen and American animal rights activists surely disagree about a lot, morally speaking. But their respective cultures draw from the same fund of psychological resources to construct each of their deeply-felt, guiding moralities. We all have the same basic moral equalizer. We just differ in our settings.Among Haidt’s most provocative findings is that American liberals and conservative differ systematically in the calibration of their moral equalizers. Liberals have harm and fairness (Haidt calls these the “individualizing foundations”) pushed way up and in-group, authority,and purity (the “binding foundations”) pushed way down. In contrast, conservatives have all the slides pushed up, though their individualizing settings are not set as high as are liberals’.Haidt has tended to characterize conservative morality, resting on as it does on all five moral foundations, as more complex or in some sense full-bodied than liberal morality, which rests almost entirely on just the two individualizing foundations. Haidt argues that traditional moralities, like contemporary conservative morality, tended to have all the settings on the moral equalizer turned up relatively high, and he describes the process by which we have arrived at liberal morality, with everything butfairness and harm turned down, as “the great narrowing.”
But he goes on to touch on the puzzle of my own value evolution and shed great light on why we are not guided by the same morality over our whole lives. It may be that prosperity, or at least less stress over wealth and material well-being frees us up to tweak our values.
In other words, as the threat of economic insecurity and its concomitant zero-sum conflict over resources recedes with the rise of material prosperity, the defensive binding foundations also recede, leaving the rising generation with a moral equalizer on which in-group, authority, and purity have never been turned up, making fairness and harmrelatively more salient. Now, toss in Inglehart’s Maslovianism. As our material needs are met, higher-order needs of consciousness become more pressing. So, at the point in development in which a generation is struck by the “postmaterialist” impulse to seek meaning through moral activity, it finds itself with a historically relatively liberal morality preoccupied with distributive fairness, the reduction of suffering (and, I think, autonomy). In the quest for meaning-making, postmaterialist generations latch onto and refine these moral sensibilities, further raising their salience relative to the binding foundations. Haidt’s “great narrowing” follows from the “great cushioning” of rising prosperity. Of course, as soon as, say, a recession hits, the defensive binding foundations kick in a bit, and a bunch of us buy bald-eagle t-shirts and get mad at about immigrants stealing our jobs.
But here's the catch for grain farmers: we cannot escape the zero-sum aspect of our work. There are only so many acres, and if I farm them, you don't. Now add in the added insecurity over tenure (land rental) we have developed though increasing transparent cash rental markets, and it is small wonder farmers poll as very conservative. We do not operate in a world where we can ever back off our conservative settings, or at least until we own enough land to make us effectively invulnerable to rent predators. [I define that as able to survive comfortably on just what we own]
This would help to explain why grain farmers, in the midst of the biggest boom in US history for their sector of ag, have high disapproval ratings for Pres. Obama. This has mystified me, since in addition to making oodles of money (as compared to say, Reagan) Obama has defended ethanol, GMOs, and generally been less eager to slash the ag budget. I think there is a considerable racial element as well (judging by the jokes I hear), but clearly we are not voting our wallets. We are voting our perceived insecurity.
This really strikes home with me. It seems logical that my changing views about inequality and social well-being are luxuries I could only afford very recently. In addition, the zero-sum aspect of our work is a bigger clamp on our moral outlook than I ever imagined.
At any rate, Will's writing is first-rate, and his logic is impeccable. Highly recommended.
[You may need to read some of it 2-3 times. DAMHIKT.]

Saturday, April 10, 2010

Don't lie...

Just don't tell. 

In a moment of uncharacteristic honesty, I sat down with some colleagues to talk about cash rents.  Greg Vincent captures it well. But like most loudmouths, I have twinges of regret.

My basic position is rents are similar to your operating note interest rate, or your discussions with your attorney: private.  There is little upside in sharing that information other than commanding local attention for a few moments.

Moreover, such candor simply underwrites the predation of $10/acre-better renters. Nonetheless, these things seem to happen. So my current view of the problems is this:

If your relation to your landlord is based on 1) the ignorance of the landowner of current rental values, or  2) a check sent every spring/fall, THEN

You are not long for this business.

Wednesday, February 17, 2010

They're not freeloaders...

They're latent demand.  All the twenty-somethings who have returned home to cut expenses could be a big part of any recovery in housing.

Amid recession, fewer households are formed, in no small part because more family members live together to cut down on expenses. In particular, the kids aren't so anxious to be out on their own these days:
The number of 18- to 24-year-olds living at home increased by 300,000. This recession has been particularly hard on younger workers.  The number of jobs held by 20- to 24-year-olds declined 4.5 percent in 2009, while the number of jobs held by people over the age of 25 dropped 1.8 percent.
As Mr Glaeser notes, slow household growth puts off housing market recovery, which prolongs the period during which residential investment and construction aren't contributing very much to output. And that's true. But I think it's also probably worth recognising this as a source of shadow demand. Shadow housing supply, recall, refers to housing units held by banks and homeowners who'd like to sell their properties but who are waiting for better market conditions. It is supposed that any brief uptick in housing could quickly lead to renewed decline as shadow supply hits the market.
But it's also likely that there is shadow demand in the system. I suspect that as economic conditions improve, twentysomethings living at home will quickly look to move out and start their own households. This, in turn, will support housing demand, housing prices, and housing construction, buoying the initial uptick.
To put this another way, everything comes back to unemployment. If you get steady job growth, many housing concerns (though not all) will begin to take care of themselves. Unfortunately, America has still had only one month of payroll growth since the onset of recession. [More]

Working from only a few anecdotes, I wonder if this phenomenon isn't muted in agriculture as ag college graduates still seem to be finding work in the relatively robust agribusiness sector. And while living with the parental units may be a drag in town, it's the pits in the country.

Still, any difficulty finding work for Junior may evince itself as added (as if we needed any) pressure to expand the farm.  I find that part of my thinking with Aaron home now, and while hard to parse out from any rent data, I'll bet it's adding $30-50 per acre to rents.

In conversations yesterday in NE with some younger producers (and wannabees) I thought I also caught a glimpse of fathers reluctant to step down because they suddenly can't pencil out a comfortable retirement from their savings. It takes a wad of moolah to support a condo in FL at 3% returns.  So the succession escalator is stopped for some.

Those with owned land they could rent for big bucks are different, but guys who had the good fortune to rent 1-2 big acreages on shares for twenty-plus years for example, had little reason to take the plunge into expensive ownership.

Poor guys are left with nothing but money.