Wednesday, December 31, 2008

Happy New Year!!...

Welcome to the newest iteration of The Blog Formerly Known As John's World.

The name has been changed to protect the innocent and mostly to prevent confusion with my column in Farm Journal. 

The content will be much the same.

Let me know what you think.

(Is it me or is it waaay larger or something?)
How bad was 2008?...

In this amazing post, one blogger counts the ways:
2008 was the worst: year ever, for Wall Street, for movies, for restaurants, celebrities, malware, for women, for children, for relationships, for newspaper history, for the environment, for Arts, for ad revenue, for CDs, IPOs, MMOs, the GOP (duh!), for hurricanes, (almost) for weather related disasters, number of disaster victims, the nerd elite, Italian military helicopters, the vain and the venal, for guerillas and bear encounters
Follow the links and be dismayed.

Pass the champagne.

[via mefi]
Is the noodle our future?...

From the Top Food Trends for 2009:
4.    Noodle Bars are the new Sushi Joints
With some seafood being suspect or overfished and raw fish prices high, noodles make complete sense. If there's no ramen, udon, or soba shop in your neck of the woods, there will be soon.

I seem to have skipped the sushi trend - or maybe it really didn't catch on this far from fresh fish. But the noodle idea doesn't seem so far fetched.

Does it have implications for domestic wheat demand?

Anyone?  Anyone?  Bueller?

[via mr]
They all seem this way now...

Time just zips by.

One year in 40 seconds from Eirik Solheim on Vimeo.

[via mefi]
Have you seen these men?...

Meet the infamous Willis Hawley and Reed Smoot, original authors (although the end product was highly amended) of the much-maligned Smoot-Haley Tariff Act that is roundly excoriated for making the Great Depression so great.  To be sure, it was not the only cause, perhaps not the major one, but nothing deepened the economic crisis like the protectionism it put firmly into law.
Nevertheless, the act added poison to the emptying well of global trade (see chart). The worldwide protection of the 1930s took decades to dismantle. And bad monetary and fiscal policies were at least based on the economic orthodoxy of the day: economists would tear each other apart over the heresies of John Maynard Keynes. On protection, there was no such division. More than a thousand economists petitioned Hoover not to sign the Smoot-Hawley bill. Bankers like Lamont sided with them; so did editorialists by the score.

The “asinine” bill began as a much smaller beast: the plan was to help American agriculture, which had slumped in the early 1920s. Congress passed several bills to support prices and subsidise exports, but all were vetoed by Calvin Coolidge, Hoover’s predecessor. With no obvious logic—most American farmers faced little competition from imports—attention shifted to securing for agriculture the same sort of protection as for manufacturing, where tariffs were on average twice as high. To many of its supporters, “tariff equality” meant reducing industrial duties as well as raising those on farm goods. “But so soon as ever the tariff schedules were cast into the melting-pot of revision,” this newspaper wrote, “logrollers and politicians set to work stirring with all their might.” [More]
Their ghosts still haunt us, as protectionism not only lives, but currently thrives, to the horror of modern economists just like their predecessors. The incoming administration would have to surprise most observers to put liberalizing trade issues as a high priority. Reading the accounts from the thirties also leaves the uncomfortable suspicion economists have not gained much, if any respect over the years.

The deepening economic downturn has been hard on a lot of people, but it has been hard in a particular way for economists. For most of us, pain and apprehension have been mixed with a sense of grim amazement at the complexity of what has unfolded: the dense, invisible lattice connecting house prices to insurance companies to job losses to car sales, the inscrutability of the financial instruments that helped to spread the poison, the sense that the ratings agencies and regulatory bodies were overmatched by events, the wild gyrations of the stock market in the past few months. It's hard enough to understand what's happening, and it seems absurd to think we could have seen it coming beforehand. The vast majority of us, after all, are not experts.

But academic economists are. And with very few exceptions, they did not predict the crisis, either. Some warned of a housing bubble, but almost none foresaw the resulting cataclysm. An entire field of experts dedicated to studying the behavior of markets failed to anticipate what may prove to be the biggest economic collapse of our lifetime. And, now that we're in the middle of it, many frankly admit that they're not sure how to prevent things from getting worse. [More]

(Boy - can you imagine the economist jokes that are going to emerge after this debacle?)

But the sadder aspect of this flashback comparison is the recurrent and lamentable role of agriculture in strangling world trade. Interestingly, the same Republicans who have bravely or insanely decided to oppose the upcoming stimulus package see no hypocrisy in supporting subsidies and tariffs for agriculture in the US.  In fact, some are the biggest champions of shielding me from global competition.

The failure (to date) of the Doha Round primarily over agricultural subsidies may enact an enormous toll as trade continues to spiral down and calls for trade barriers disguise themselves like a workable answer. Even grain farmers ignore the importance of exports while fixated on supplying ethanol plants.

In fact, years from now we could have our own history/economics test answer to rival "The Smoot-Hawley Tariff Act".

Tuesday, December 30, 2008

Weird year, great photos...

2008 in photos from The Big Picture.  My favorites (click to enlarge):

I said, "LEFT hard rudder, you idiot!"

"Chancellor, the pregame pep rallies are getting out of hand."

Looks suspiciously like Buzz Lightyear to me.

[See the whole collection]

These small copies don't do justice to the magnificent work collected by the Boston Globe. The storeis behind the photos are as captivating. You paid for all those display pixels, might as well use them.
It's now official...

Inflation is the answer.

When sober-minded, clear-thinking conservative/libertarians like Steve Chapman join with economists from all over the political spectrum to endorse rising prices, it looks to me like a signal which matters.

So some economists have concluded that expanding the money supply is the worst option except for the others. Kenneth Rogoff of Harvard writes that "a sudden burst of moderate inflation would be extremely helpful." Casey Mulligan of the University of Chicago says, "Inflation will alleviate some economic problems; prolonged deflation will aggravate them."

Gregory Mankiw, who was chairman of the Council of Economic Advisers under President Bush, urges the Federal Reserve to abandon price stability and commit itself to modest inflation. David Henderson of the Hoover Institution says that if the choice is more federal spending or rising prices, he prefers the latter.

It's not hard to see why. Most of our problems stem from the bursting of the housing bubble. That sent home prices plunging, which reduced the value of mortgages and mortgage-backed securities, which caused losses at banks, which forced a cutback in lending, which squelched consumer spending, which brought the economy to a halt. Which started the whole miserable cycle over again.

But if the crisis stems from declining real estate values, why not stop them from declining? A spell of inflation would arrest the slide by pushing up the price of everything. As home prices stabilize, mortgage-backed securities would regain value, banks would get financially stronger, and loan officers would stop hiding in the vault.

Consumer spending would also revive. In the first place, those who want to buy new cars or remodel their kitchens would be able to borrow money to do so. In the second, people whose money is eroding in value would be motivated to spend today rather than tomorrow—the opposite of the incentive when prices are falling, as they are today. [More][Links added]

I am more convinced than ever we will see rising and prolonged inflation to reverse asset value deterioration and ease the government debt problem.  It would not take long for deeply negative real interest rates on T-bills to induce a shift from cash to anything else.

Foremost among those desired investment items, I think, will be assets that have barely faltered at all - assets which have held or even increased in value throughout this whole financial emergency.

Gee, I wonder what that asset could possibly be?...

Monday, December 29, 2008

So hard to choose...

The 21 Dumbest Moments in Business in 2008.

My choice: #18

Of course, we still have 3 days left.

Sunday, December 28, 2008

Won't you help?...

You can be the difference.   (And you will.)

I think we're going to be seeing a lot of humor in this vein.

[via mcardle]
The competition is fierce...

For the Worst Prediction of 2008.

5. "No! No! No! Bear Stearns is not in trouble." —Jim Cramer, CNBC commentator, Mar. 11, 2008
Five days later, JPMorgan Chase (JPM) took over Bear Stearns with government help, nearly wiping out shareholders. [Complete list]

 “If [Hillary Clinton] gets a race against John Edwards and Barack Obama, she’s going to be the nominee. Gore is the only threat to her, then. … Barack Obama is not going to beat Hillary Clinton in a single Democratic primary. I’ll predict that right now.” —William Kristol, Fox News Sunday, Dec. 17, 2006 [Another list, some overlap]

"For all intents and purposes, McCain's campaign is over. The physicians have pulled up the sheet; the executors of the estate are taking over. Paying bills and winding down - not strategizing, organizing, and getting the message out - will be the order of the day," - Charlie Cook, National Journal, last July. [Still time to vote here]

To review predictions I highlighted last year at this time click here, here, and here.

More as I find 'em.

(It would be unfair for me to participate, since I have to endure how bad mine were.)

Friday, December 26, 2008

My Deep Think Future™- Dot #2: Finance, money, capital

I have been spending spare moments looking at our farm budget for 2009.  While I know somewhere in my brain that the farm is expanding next year by about 25%, we have invested prodigiously for the future since Aaron returned, and the farm is profitable and [relatively] secure, the huge numbers are freaking me out!

While I have been known to suck it up and plod on, it's not my first instinct. Alas, I don't see many other options, right now.  Therefore, I need to get a firm grasp on my tools for coping with the Money Problem in the next 4-5 years (no reason for this duration, just an arbitrary window).

The most basic question is how wealth will be allocated and traded, or what investing and commerce will look like. Let's look at the economy as a whole and then zero in on farms.

The big picture for the future of wealth is being shaped, I think, by the End of Trust. The idea of handing your wealth over to other people to invest and earn income off of has taken a huge hit.  Consider the ongoing unraveling of the Madoff Swindle.  Even if you had never heard of the guy, a fund you own might own a fund which invested in his imaginary products. And just like financial institutions are frantically trying to find out if they own some "toxic assets" indirectly, many are finding out the hard way, they were connected to Madoff.
The 53-year-old investor, who asked not to be identified to protect his stake, took out about $600,000 this year from his $1.5 million account, using some of it to pay down a mortgage. He and other Madoff clients who withdrew funds as long as six years ago may be sued on behalf of other victims to return profits and even principal, securities and bankruptcy lawyers say. 
Under New York state law, which can be invoked for Madoff recoveries, a trustee can seek redemptions going back six years, said Tracy Klestadt, a New York bankruptcy lawyer.
In a similar case, U.S. Bankruptcy Judge Adlai Hardin in White Plains, New York, ordered investors of defunct hedge-fund manager Bayou Group LLC in October to disgorge profits they’d taken out. Investors were required to pay back any gains they’d redeemed involving “fictitious profits.” Before the fraud was discovered, Bayou paid out more than $135 million, according to court papers.
‘Good Faith’ Rule
Hardin also ruled some investors would have to hand back their principal. Only investors who acted in “good faith” -- a legal standard that makes investors prove they didn’t have knowledge or suspicion of fraud -- could protect their initial stake, Hardin ruled. He said investors could show they had good faith if they didn’t see any “red flags” when they withdrew the funds.
That decision could be a guide for Picard, Klestadt said.
The Bayou decision set a high bar for investors who hope to protect their principal, said Carole Neville, a lawyer representing Bayou investors.[More]
As "clawbacks" leave painful "clawmarks" on victims, the hard lesson is being broadcast globally.  Now couple that with the general contempt for Wall Street denizens and corporate leadership and you have a decreasing number of folks you would willingly hand your money to.  Arguably, it might be forgotten if roaring good times return next week, but I suspect something has been broken deep in the engine of American commerce.

So how might this play out in the months ahead?  Has trust left the building?
We were wrong. Madoff's pyramid scheme, far broader than anything MMM dreamed up, was made possible by our own tradition of lawfulness. And now he will help bring that tradition down. Here's a prediction: In the coming years, American capitalism will become slower, more cautious, less productive, and less entrepreneurial. We're still a long way from Eastern Europe of the 1990s or from the Latin America or Russia of the present. But maybe not as far as we think. [More of a great article]
I tend to agree, and think it will take a decade at least to recover.  It might even require generational change to lose the living memory of these fiascoes.  Others think we'll be back with our checkbooks at the first sign of a bull market.

If there is a lasting effect from Madoff, it will be to accelerate a shift already well underway: the idea that, when it comes to their money, the only thing many Americans now truly trust is a specific government promise.

In his inaugural address in 1981, President Reagan intoned that "government is not the solution to our problem; government is the problem."

In this financial mess, government is turning out to be the only solution.

There have been runs on plenty of hedge funds this year, but no run on the banks overall, because the government insures deposits and most people (thankfully) still have faith in that insurance.

Likewise, many investors have been happy to sink their savings into low-yielding U.S. Treasury securities because they're confident that, at the very least, Uncle Sam will return their principal intact.
As for the issue of Wall Street's wretched image, history is clear: It's nothing that a good bull market, somewhere down the line, won't make a lot people forget, if not forgive. [More]

Carving a position somewhere in between these two, I believe folks with cash will take about 6 months to get tired of zero-return government paper before contemplating anything a sliver of risk higher. Assuming dramatic stimulus measures are enacted, it would seem at least some stocks will rise. But it may take several months of climbing before even aggressive investors develop much appetite for risk.

A complicating factor is how fear of unemployment freezes our brains when it come to wealth decisions.  Evene though the vast majority of Americans will not lose their jobs, they will likely know well someone who become a casualty.  Further, unlike previous recessions, many of the job losses are coming much higher up the ladder.  The financial sector has essentially disappeared, for example, and along with it thousand very highly paid jobs.

Surviving in the job market will not eliminate some collateral damage to most of us.  Wages will be depressed by the availability of eager (and cheaper) replacement workers right here at home.  At the same time some organizations are experimenting with lower hours to avoid layoffs.  The prospect for income growth as a whole could be impaired for a considerable period, as a result.

Meanwhile, back on the farm, we not still be connnected to those who are on the front line of this misery. Children and other family members may need temporary help. Siblings who inhereited with you may need to liquidate their share of the farm to fund retirement, college, whatever. Landowners may see the same pressures, although I don't think that will have much impact if land prices hold steady while all other assets struggle.

So the combination of these factors could produce these capital characteristics:
  • Cheap borrowing for 12-18 months for upper tier operations, especially from deposit-based lenders (banks). (Of course, it looks like every financial institution will be a bank soon.
  • Possible relief in inputs, but not until later into 2009, meaning continuing demand for credit for ag.
  • Wild ranges between borrowing rates since swithcing lenders will be viewed with considerable risk.
  • Credit shortages for farms highly dependent on off-farm income, when such employment is an area under pressure, such as manufacturing.
  • Less urgency to expand if it requires massive drains on working capital (new machines, storage, people, etc.). At the same time cash-rich operations will look more favorably on expansion, since cash will be such a poor income generator.  While this strikes me as logical, I tend ot forget cash-rich operations often are not aggressive by nature, so those needing to sell out may struggle to find reasonable value for their operations.
  • New paperwork we can't even imagine yet.  If Enron gave us SarBox, heaven knows what bizarre regs will be attched to the flood of government money surging toward us.  This will try the patience of many farmers and their lenders.
  • A rare opportunity to lock in historically cheap long-term money.  I'm not sure where it will come from, but if home mortgages hit 4.5% there would likely be some farmland money for similar rates.
Unlike most of the rest of the economy, access to capital is not our biggest problem.  That will be demand for our output.  And we'll look at that presently.

But money?  I think this one is manageable.

Thursday, December 25, 2008

At least I made one...

Good decision in 2008:  I ran as fast as I could from Windows Vista.

Microsoft (NSDQ: MSFT) in the past week announced yet another life extension for its supposedly retired Windows XP operating system, a sign that, despite almost two years on the market, Windows Vista is a no-go for most businesses. Only 10% of 700 business executives recently surveyed by the Information Technology Industry Council and Sunbelt Software said their companies are using Windows Vista in the enterprise. [More]
Now a year into my affair with Apple iMacs, I am pleased by the reliability and performance. Although upgrades can be challenging for satellite users like me, and while some have their own unique hangups, our Macs have been nearly bulletproof.

I have navigated the re-learning process and as a result, am faintly startled by how unintuitive Windows now seems to me. The two major programs I use (QuickBooks and Office) have been updated for the Mac this year to their enormous benefit.

I just remembered - I did have a failure of the motherboard, and for once I had bought the extended warranty.  The repair was close, fast and effective.  And I paid for the Applecare immediately.

All in all, a happy camper.

Wednesday, December 24, 2008

Who needs elves?...

What the hey - it's Christmas Eve.

Meanwhile, all our dog can do is remind us when suppertime is.

[via neatorama]
Spot the flaw...

In one of those esoteric-seeming arguments about why our world is the way it is, a recent "Good Eats" episode touched off a rollicking debate on Think Progress about hunting/gathering and farming.  Alton Brown alleges "man had shifted to ranching and farming as an alternative to hunting for food because hunting was time-consuming and labor-intensive."  And the debate took off:
Even modern-day hunter-gatherers, who in the nature of things don’t inhabit the most promising land, work shorter hours and enjoy happier lifestyles than do the poorest of modern-day subsistence farmers. The problem with the hunter-gatherer lifestyle wasn’t — and isn’t — that it’s too labor intensive, it’s that it was too land-intensive. A hunter-gatherer lifestyle can only support a small number of people on a given parcel of land. If people somewhere start engaging in a more settled lifestyle, what happens is that population density can go way up. That facilitates the division of labor and the creation of specialized warrior castes and so forth. Consequently, a settled society will probably be able to conquer a hunter-gatherer population and/or drive them off their land. Thus, once this quality-of-life-destroying innovation comes into being it tends to spread inexorably. The higher level of inequality agriculture permits allows some people to be better-off than any hunter-gatherer, but average living standards plummet even as pure quantity of people alive goes way up, a la Derek Parfit’s repugnant conclusion. It’s only with the coming of the industrial revolution that societies with higher average quality-of-life than those enjoyed by hunter-gatherers come into existence. And over time, that circle of beneficiaries of industrialization has tended to spread. [More - best stuff in the comments]
One commenter pointed out the necessary flaw in the positive picture of hunting/gathering: just how exactly such societies managed to keep their population low.  The answer was starvation, disease, and very low infant survival.  To be sure those who made it to adulthood may have had better lives and diets, but that's a survivor benefit, not a universal positive.

Sedentary (as in staying in one place - not couch-potatoing) agriculture raised populations by generating more and storable calories and raising survival rates. In fairness, it also made serfs and slaves a good idea until the industrial revolution drastically lowered labor requirements.

Regardless, we're past that now, we understand the costs of our food choices and instead of arguing which relatively miserable past was better, we should be applying our understanding to shaping an agricultural system that raises human well-being in better ways than simply available calories.

The fastest way to do this is via consumer decisions at the marketplace.  The fact this debate is occurring could be an indicator of slow changes in public views about our work.
I've never had anybody...

This glad to see me.

Returning home after 14 months in Iraq.

[via andrew sullivan]
You're gonna want...

These six minutes back.

Don't tell me we didn't have entertainment in the 70's. 

Lemme see that on a iPod!

[via arbroath]
Bloggers' laments, editors' gripes, publishers' frustrations...

This bizarre world of blogging has finally reached the non-ignorable stage, and the media hierarchy is flummoxed as to how to manage it.  Three events I base this observation on:
  1. The Grey Lady deigns to recognize op-ed bloggers.
Five years after blogging went mainstream and more than seven years after the WSJ's editorial page launched Best of the Web Today, the Grey Lady is finally dipping its toe into the editorial blogosphere. If you saw this news story without a date on it, what are the chances that you'd guess it came out at the very tail end of 2009?
NEW YORK The New York Times is planning to launch a new "Instant Op-Ed" next month that will allow the paper's Web site to post immediate expert viewpoints on breaking news, according to Editorial Page Editor Andrew Rosenthal.
"Our Op-Ed now is very rapid response, but it is at the most the next day," said Rosenthal. "We are looking at a way to take advantage of the expandability of the Internet, the back and forth of it and the instantaneous nature of the Internet."
I'm old enough to remember when a next-day editorial could be considered "very rapid response", but the readers who will make or break the future of the NYT are not. [More]
       2.  This first widely publicized editor smack-down of a major blogger.

Matt Iglesias, a widely read and preternaturally prolific blogger, opined about about The Third Way, a moderate policy think-tank. The actual post meant little to me, but it obviously meant something to his employer who posted directly on his blog the following:
This is Jennifer Palmieri, acting CEO of the Center for American Progress Action Fund.
Most readers know that the views expressed on Matt’s blog are his own and don’t always reflect the views of the Center for American Progress Action Fund. Such is the case with regard to Matt’s comments about Third Way. Our institution has partnered with Third Way on a number of important projects - including a homeland security transition project - and have a great deal of respect for their critical thinking and excellent work product. They are key leaders in the progressive movement and we look forward to working with them in the future. [More]

Major bloggers from all over the political and cultural spectrum were aghast.  Regardless of the issue involved, it quickly became one of editorial control.  As readers and dollars bleed from traditional media, the blogosphere is at least holding its own, with some, such as The Atlantic or ScienceBlogs setting the pace for content, breadth, and speed.  And bloggers feel one reason they are seeing increasing readership is their stark departure from existing media policies, such as editorial chains of command.

The essential nature of blogging is immediacy and directness. In exchange for occasionally sloppy sentences and typos, readers can get reactions and helpful pointers to information practically in real-time. However, that doesn't require editors to correct, smooth, and well, edit.  I'm sitting in my office now, watching an ice-storm and in a few minutes I will publish this post without any help whatsoever (except Google/Blogger - who gives me the tools free).

The urgency to monetize what bloggers do has never been more apparent. And the stark realization of how many people are not needed to run the blogosphere is dawning just when economic news could not be worse (I hope) and ad dollars are disappearing along with their companies.

The Yglesias Incident illuminated one key aspect of these painful adjustments.  Blogging will not work under every old media rule. Bloggers are loose cannon, to be sure.  But we now see emerging some basic rules of this fledgling craft, and one of them is editors probably shouldn't publish over the top of a blogger.  In this case, Yglesias lost some cred (Is his stuff being vetted now or is he being more circumspect on given issues?) and his brand lost some value, IMHO.

   3. John's World and Agweb:

I get paid to blog for AgWeb, who of course has the right to put ads around the copy to recover their costs. But because of my own shortcomings (I type with two fingers) and the difficulty I had learning Blogger, shifting to the AgWeb blog engine would be a hassle for me. More importantly, many functions my readers and I have come to rely on would be missing.

For example, when you comment on, I get an e-mail immediately, and the comment is posted in the feedback column to the right.  This means I (along with you) see every recent comment and can respond as needed.  Comments on AgWeb go may go unnoticed unless you re-read every post several times.  In addtion, I often get comments on much older posts, but unless they are the JWorld home blog, I will never see them - nor will many other readers. I really depend on this feature.  A prime example is the surprising response from this post, which I luckily stumbled upon, and most folks may not have seen.

The other stuff is obvious - a robust search engine, labels to organize posts by topic, archives, etc.  Most of all you see all the posts from the last week.  This minimizes page-views and hence ad revenue, so understandably AgWeb arranges it differently.

Consequently, like other bloggers, there is a dynamic tension between content providers who pound out the words and website administrators who try to keep the lights on.  This is why you won't see every post (and most likely, not this one) on AgWeb.  The need to monetize a product that some of us have been providing free is important and not easy.  We're trying to solve these issues, but like all media right now, blogging is a moving target, as software developers keep finding more amazing capabilities to build into their products.

I'm not sure how big-time bloggers and their parent sites will work this out.  The whole tiny industry is watching closely. But I really think we're on to something, and the power of the Internet to frustrate traditional editorial policy and publishing business models is being revealed and wrestled with.

I'll let you know how it's going for me.  And if you want to see all my work or if you're miffed I didn't reply to your comment, you'll need to check here at blogspot every now and then, in addition to AgWeb.


Tuesday, December 23, 2008

Apocalypse-o-rama #4...

Just in time for Christmas, this vision of the future by Robert Paterson after a weekend of conferring with colleagues:
  • That there is no soft landing. We are not in a recession. We are not even in a depression. We are at the end of an era. The Tipping Point is of course the financial collapse. The Vast Ponzi Scheme of our financial world - with the vast sums in the Derivative Market and the Credit Bubble all in effect lost - cannot be saved. There is not enough money in the national accounts to pull this back.
  • The search for efficiency and the urge to consume has set us all up like a row of dominoes - there is no buffer, no resiliency. As one problem rises it causes another. As one solution is tried it drives another problem. We all pull back and the consumer economy stalls. The auto industry and credit firms feeds the media (40% of conventional advertising). Papers and TV and Radio networks, many subject to LBO's will have to fail as per the Tribune. Every sector will be laying people off. Sales of all things fall off a cliff - driving more business failures and layoffs. Cities and states that depend on sales tax and property tax and the credit markets can rely on none of these. So they too will have to lay off millions - thus making all the problems worse. National governments will be asked to save us all and of course cannot. As States and Cities get squeezed and cannot borrow, they will too lay off millions - teachers, firemen police. No one will be safe
  • As all of this is happening - the web is also sweeping through all businesses and gutting all who made artificial scarcity the heart of their model. This would be enough to drive a revolution but now is only one aspect of a perfect storm. There is no time to feel a way into a new model. A new model has to be found in 2009 or your business will die from this alone.
  • The world food system is exceptionally connected and tightly coupled. High fertilizer prices in 2008 will drive a food shortage in 2009. Inventories of grain are already low. The collapse of commerce and credit may risk food supplies in 2009. The 2008 rice problem was a harbinger for what is to come

I do not discount the possibility of the outcomes described above, but too many of them are forced to line up in one direction: decentralized societies rather than nations as the necessary - and not coincidentally, desired - answer.  I have suspected for a while that cultural critic would use the financial crisis as justification for a return to more local forms of social organization, to "de-integrate"  ("distintegrate" didn't sound right) away from monstrous institutions and especially globalization.

This could occur in the short run. It looks like an attractive and safe answer.  But we'll soon discover that without a sophisticated network of systems which evolved because they provided huge benefits outweighing their costs, much of the charm of retrenched civilization fades rapidly.  I note the Amish make use of MRI's for example, giving rise to a small industry of folks who shuttle non-driving Amish to hospitals.  The point is the astonishing benefits we have developed by slowly providing more linkages between people around the world will be sharply missed once the Great Fallback begins.

Like locavores who are faced with mostly grim root vegetables in February and March, the knowledge that New Zeland apples used to be down at the grocery cannot be unlearned. Even should we choose to retrace our steps economically and culturally, the same huge payoffs will be dangling there for those who re-offer a chance to markedly improve standards of living with just modest investment in technology or integration.

Farmers will be under pressure to embrace agrarian production to fit with this decentralized mythos. A growing sector will serve these communities, but I seriously doubt whether the world can begin to de-urbanize and un-link enough to markedly change our sytems of economics and basic living.

More likely is the emergence of stronger and more independent members of national or international systems.  By pushing more decisions and innovation to lower levels, institutions and even governments could better counter the inherent instability of massive entities capable of massive failures such as we have seen. In short, I think we will see new ways to aggregate and achieve economies of scale without stripping smaller components of risk or reward.  

We may be about to franchise our culture.

[All Posts]

Sunday, December 21, 2008

The Good Book in good plastic...

The Lego Bible or Brick Testament.

 Exodus 34:27
Yahweh then said to Moses, 'Put these words in writing...'
Matthew 26:20
When it was evening, he took his place at the table with the twelve.

[Seriously, this is a good website to share Bible stories with children.]

[via andrew sullivan]

[All Posts]
Our US car problem explained...

Megan McArdle has the best Auto Industry 101 post I have read.  If you have 10 minutes to spare, this lucid summary provides a good background for understanding what is happening.  Some key grafs (but please read the whole thing).
I will now attempt what I think is a fair rendition of Detroit's history over the last fifty years.    In the early 1950s, for various reasons Detroit developed a cozy three-way oligopoly.  The UAW developed a cozy monopoly on supplying labor service to that oligopoly.  In some ways, the UAW helped sustain that oligopoly.  If you're a big company whose quality suffers, you have problems.  But if you have a union making sure that labor quality cannot vary across the industry, you don't need to worry that your competitors will make a better car.  Detroit competed on styling and power, not reliability or price.
Detroit should have reacted, I'm sure, by making smaller cars.  But smaller cars were harder to make for Detroit.  Buyers thought of them as a non-premium product, which meant they wouldn't pay for the lucrative options packages.  And because they used fewer materials, the labor component became a relatively larger part of their cost.  Labor was where Detroit was least competitive.  According to the automotive analysts I've seen, Detroit still loses money on small cars like the Ford Focus, which are sold at a loss to help make Corporate Average Fuel Efficiency numbers come out.
But perhaps more importantly, Detroit turned from making money on cars to making money on financing.  Detroit didn't make a big profit by selling you a Ford Taurus.  It made money on financing your Ford Taurus; often, the car was sold at a loss in order to get the finance business.  The Big Three were banks manufacturing cars as a loss leader.
They also provide capital for selling cars.  Dealers have their own independent credit lines, which they use to buy cars, advertise, and so forth.  Dealers may be parasites on the body public 95% of the time, but right now, they're probably helping keep the Big Three out of bankruptcy by carrying unsold inventory, not pushing them deeper into it.
Spoiler: her conclusion is not a happy one.

Aside from being able to opine knowingly at holiday parties and farmer meetings, what do the auto industry death-throes mean to rural America? My guesses:
  1. Big pickups will have many fewer models and cost a fortune. 
  2. We're going to lose small dealers, like mine in Chrisman. We will travel farther for service and be more hung up when cars break down and the towing fee is $200.
  3. Rural living will lose some attraction.
  4.  I think we'll buy vehicles from now on based on three things: reliability, reliability, reliability
  5. In more of a reach, farms located near the fringes of metropolitan centers will be worth slightly more because of this access advantage.
  6. The loss of ad revenues from local dealers will be fatal to local papers and school scoreboards.
  7. An astonishing number of small farms supported by auto-industry wages (especially small parts suppliers) will be subsumed into larger operations.
While this sounds not so good, I now accept it is unlikely Detroit can survive.

[John's World: All Posts]

Saturday, December 20, 2008

For Aaron, and his generation...

That's entertainment!

[via neatorama]

[All JWorld Posts]
Building my Deep Think Future™: Dot #1...

As is customary for me this time of year, I take occasional breaks from eating Christmas cookies to ponder the future of our farm, and strengthen the rum-eggnog ratio. This year is more fun than usual since we have stumbled into a world where assumptions seemingly have no bounds and imagination cannot find many constraints which have not already been breached.

What follows are some items that comprise my background for aiming my future plans. They may seem wildly disconnected, but we have learned from recent brain research that's one thing our brains do well - connect seemingly unrelated dots.

Dot 1: The Energy Environment

Consider these slides from the DOE EIA Annual Energy Outlook 2009:

From the summary you don't get the real sense of the scope of the change of outlook.  But in the following charts observe the difference between the 2008 forecasts and the 2009.

 While I don't fault them, one glance at the next chart says to me: We have no idea what oil prices could be.

However, between curtailed demand and biofuels, there is good news for those who despise importing oil.  Note however, that this chart does not suggest where the imports will come from - a point frequently lost in the jingoistic oversimplified view of oil coming only from the Mideast.

Whether I like it or not, and to the deep concerns of the meat/dairy industries it looks like biofuels are being woven into a "given" for our energy future, despite the funky science and economics underlying them. As this perception of acceptance spreads via seemingly disinterested parties like EIA, political will to subsidize and grow the ethanol industry solidifies.

And as I have long believed, cellulosic biofuels will continue to disappoint.  Inference: higher mandates for corn use will be accepted with decreasing resistance.

For the first time, energy demand is being seen as responsive to costs.  My take: energy suppliers will be in fierce battle for market share. Oil companies may decide it's better to own some ethanol production than fight the farm lobby.

Some wild conjectures:
  • Suppose BP buys Verasun. For that matter, suppose Mobil buys ADM. From the point of view of who has money and who is grossly undervalued in the market, it's not unthinkable.  Oil companies would thus participate in the only growing domestic supplier share. I think it could be one of the best outcomes for this market, and would certainly blow some farmer minds to depend on an oil company for their corn check.  It would also quiet farmer "Big Oil" rants, at least in 100-mile circles around ethanol plants.
  • Since we have been stunned by the first drop in electricity consumption EVER in the US, what if saving energy becomes a fad that escapes the greenies to the general public? Now add in GHG emission rules that make this shift in thinking even more favorable.  I think the demand changes in this presentation will be expanded in future forecasts. At that point energy suppliers will really love market share protection afforded by mandates, ergo more fuel for the ethanol industry.
  • With domestic NG production rising, domestic NH3 production looks better and better. (We'll look at production issues at a later time).
  • Could some serious money be made here at N 2100th Street by betting on a change in energy usage and production, not to mention energy politcs? Seems like it to me.  at the very least, some serious competitive prressures could be pre-empted.
  • While the biofuel industry is busy fending off critics (like me) a case can be made that succeeding beyond their wildest imagination could be the more ominous outcome. If biofuels grow to the extent projected here, the slam-dunk nature of their quasi-governmental status will be a commodity of great value in the market. And this value could be apparent far earlier than the recovery of confidence in the general equity markets.  Like the flood of government-backed debt in the market, I think government-mandated equity, such as ethanol plants represent will be golden.  This could happen overnight as part of the infrastructure stimulus and energy plans of the new administration. I think some combination of these effects is very likely.
  • Can grain merchandisers like Cargill, who have largely avoided the ethanol business to prevent conflict with their feed/food customers end up big losers? Oh, yeah. 
 Piling guesses on conjectures is a silly business, but in the process of dreaming we prepare our imaginations for clues, which if they occur, speed our responses.  At the least, I know which indicators I will be watching next year.

Again, I may not be crazy about my predictions, but I do have to compete in a world where they might come true.

Of course, this could all be the eggnog talking.

[John's World: All Posts]

Friday, December 19, 2008

Heinz 57 pragmatism...

A charming essay in the NYT about Christmas and Narnia, the much-loved mythical land created by C. S. Lewis.
But Lewis embraced the Middle Ages’ indiscriminate mixing of stories and motifs from seemingly incompatible sources. The medievals, he once wrote, enthusiastically adopted a habit from late antiquity of “gathering together and harmonizing views of very different origin: building a syncretistic model not only out of Platonic, Aristotelian and Stoical, but out of pagan and Christian elements.”
Christmas as we now know it is much the same sort of conglomeration, and when people call for a return to its pure, authentic roots, they’re missing an essential quality of the holiday. Narnia is a mongrel thing, and so is Christmas. As is often the case, this mongrelizing is the source of its strength. [More]
I agree.  The mashup of pagan, Christian, commercial, philanthropic, and you-name-it influences continue to help Christmas evolve and maintain relevancy.  To be sure, the core strength of this desperately needed winter holiday is anchored in the Christian tradition, but the timing, for example, has always been suspect.
For many centuries, Christian writers accepted that Christmas was the actual date on which Jesus was born.[8] However, in the early eighteenth century, some scholars began proposing alternative explanations. Isaac Newton argued that the date of Christmas was selected to correspond with the winter solstice,[6] which in ancient times was marked on December 25.[9] In 1743, German Protestant Paul Ernst Jablonski argued Christmas was placed on December 25 to correspond with the Roman solar holiday Dies Natalis Solis Invicti and was therefore a "paganization" that debased the true church.[5] In 1889, Louis Duchesne suggested that the date of Christmas was calculated as nine months after the Annunciation on March 25, the traditional date of the conception of Jesus.[10]

 These pseudo-intellectual quibbles, along with the fabricated "War on Christmas" only add to the curious and, I think, engaging quality of Christmas.  From mistimed masterpieces (the Hallelujah Chorus was intended for Lent) to technological geeky light displays there is literally something for eveyone.  Christmas is inclusive and tolerant. And pretty irresistable.

While I certainly don't extend any mantle of religious sanction to the approaching Obama administration, so far its composition seems to adopt these same qualities. Personnel selections have been met with mostly grudging approval and fairly balanced grumbling from both extremes. Consider two of the most recent.

Tom Vilsack at USDA:
Zealous advocates of sustainable agriculture question his support of biotechnology, while partisans of the status quo find him insufficiently loyal to the system of farm subsidies. That leaves him with a very large center of support. He’ll need it to move this country’s broken agricultural policy in a new direction. [More]
And the Inaugural Invoker, Rick Warren:
In choosing evangelical pastor Rick Warren to deliver the invocation at his inauguration, President-elect Barack Obama is associating himself with one of the most popular religious figures in the nation, reaching out to conservative America and proving he's willing to take some flak from the liberal flank of his party.
It will be yet another high-profile moment for Mr. Warren, an evangelical leader who opposes abortion and gay marriage but has worked to broaden the Christian agenda to include issues of poverty, AIDS and the environment.
The invocation gives both men the opportunity to build on their longstanding efforts to create big tents and extend their appeal beyond their natural constituencies. As a result, both have taken some criticism from their traditional supporters. [More]

After a period in America where idealogical purity and orthodox political practice were the highest virtues, I think we are in for a surprise to see how well mongrelization of political belief can work.

Such an approach certainly seems to have kept Christmas alive and available to more people around the world each year, and allowed them to tweak it to fit their culture as well.  Has something been lost in the process? Of course, but certainly not the core tenet of the birth of Christ.

The extra Good News is much more has been gained, I think.

Thursday, December 18, 2008

The gateway candy...

"Medicinal wine from a teaspoon - then beer from a bottle."

Prof. Hill was on to something.  Thanks to important research we now have identified truffles as a gateway candy.  One you've tasted one, you want more.
Indulging in just one small chocolate truffle can induce cravings for more sugary and fatty foods—and even awaken a desire for high-end status products, according to a new study in the Journal of Consumer Research.

When participants were allowed eat a truffle, they unconsciously activated a goal of indulgence, the authors explain. Likewise, those who were asked to resist the treat activated health goals. Once people felt their goals were met, they tended to reverse their behaviors. For example, when people who resisted the truffle were told they did a good job, they indicated that they desired fatty foods more than healthy foods.
"Once people feel like they have achieved a certain goal, they tend to pursue the opposing goal. When asked about their behaviors, no participant related their desires to the initial chocolate consumption, indicating the operation of a non-conscious system that guides people's behaviors," write the authors.
Interestingly, truffles served as triggers for more expensive indulgences as well. "A second study again had people eat or resist a chocolate truffle and asked them to indicate how much they desired several products that are symbols of status (a nice shirt, an Apple computer, a fine watch). People who ate the truffle desired the status products significantly more than those who had to resist the truffle," the authors write.
The researchers believe this new study has important implications for both marketers and consumers. Stores may want to use samples as way to motivate consumers. And consumers may want to resist small acts of indulgence, knowing they can lead to larger ones. [More]
This is shocking news for me personally.  I am married (to virtually all my friends' astonishment) to a woman who allows herself one truffle a week. On Tuesday night.  Not that we're overly organized, mind you.

Obviously, this sad practice and the ensuing moral collapse have contributed to her low station in life and her overindulgence in stuff like expensive cookware and fancy garden tools.

Worse still, I'm her low-life, truffle-pushing supplier.

Works for me.
'Tis the season...

For lists.  The Top 10 Astronomy Photos for 2008.  My favorite:

Mercury.  A planet about which we know little captured by Messenger.
Enter MESSENGER. This new spacecraft has to swing by the tiny planet three times before it can settle into an orbit, but in the two passes it’s done so far it’s already transformed out knowledge of Mercury. There were so many images to choose from; I considered this detailed overview showing tons of features, or this incredibly feature-laden crater rim segment, or this oblique view of a triply-concentric-crater, or these phenomenal rays blasting out of a young impact feature, or this beautiful view of sunset at a double crater where you can see the mountain shadows on the crater floor.
But in the end, it was the overview of Mercury showing the rays from impact craters blanketing the entire planet that made me sit back in wonder. It was taken as MESSENGER departed the planet for the second time, when it was nearly 28,000 km out. There is something about a large-scale yet detailed image that is truly pleasing to the eye; there is beauty and science together here (and in my mind, the two are nearly indistinguishable). [More]

To my dismay, near-President Obama doesn't appear all that space-happy.  Maybe it will force more cost-effective mission plans.

Jeez - what am I saying?...
Maybe I'm reading this wrong...

But leaving a drop-down ad on too long could be counterproductive.
The new research, led by cognitive scientist Mark Changizi of Rensselaer Polytechnic Institute, shows why direct exposure to repeated ads initially increases a consumer’s preference for promoted products, and why the most effective advertisements are the ones consumers don’t even realize they have seen.
It has long been known that repeated visual exposure to an object can affect an observer’s preference for it, initially rapidly increasing preference, and then eventually lowering preference again. This can give way to short-lived fads. But while this may seem illogical, Changizi argues that it makes perfect cognitive sense.
“A rational animal ought to prefer something in proportion to the probable payoff of acting to obtain it,” said Changizi, assistant professor of cognitive science at Rensselaer and lead author of the study, which appears in the online version of the journal Perception. “The frequency at which one is visually exposed to an object can provide evidence about this expected payoff, and our brains have evolved mechanisms that exploit this information, rationally modulating our preferences.”
A small number of visual exposures to an object typically raises the probability of acquiring the object, which enhances preference, according to Changizi.
On the other hand, Changizi says overexposure to an object provides the brain with evidence that the object is overabundant, and is likely not valuable, thereby lowering the individual’s preference for it. [More]
As newspapers die from advertising starvation (and customer disappearance - car dealers can account for as much as 40% of newspaper ad revenue) much of the blame is placed on ad dollars flowing to the Internet.  But so far, monetizing on-line traffic has not proven easy or as lucrative.

And there have been some discoveries of what not to do.

One reason may be captured above.  Ads need to be ubiquitous, but only to a point.

Not that I'm hinting or anything...

Wednesday, December 17, 2008

I'm drawing a line...

And this is on the wrong side.

C'mon - Amazing Grace??

[via dailydish]
Leading with contempt...

A couple of incidents recently make me question if the ag community is paying attention to anything other than their own backyard.

First, the great cow tax hoax.  Livestock producers couldn't get in print or on the air fast enough to denounce what our own Steve Cornett grudgingly admits was essentially a red herring thrown out to fire up waves of righteous indignation among farm folk.
"You can't believe this, but it's happening in Washington," Schumer said. "It effectively amounts to a tax on cows when they belch."
His comments left EPA officials bewildered.
The EPA denied it has any such tax plan for regulating farm animals. "EPA is not proposing a cow tax," the agency said in a statement. Moreover, the agency may not even have the authority to impose such fees.
So where did Schumer get his information? It seems the only mention of possibly regulating farm animals as a source of greenhouse gases came from the U.S. Department of Agriculture in comments to the EPA.
The USDA recommended against such a move as the EPA begins exploring how it might regulate all greenhouse gases as pollution - complying with a U.S. Supreme Court ruling from 2007.
Once USDA made its comments, several advocacy groups for farmers figured it was time to take action - before anyone got any ideas of an animal tax. Schumer was quick to support their effort.
When Schumer was told that EPA officials said their early planning had been distorted, and that the agency has no intention of suggesting such a tax, New York's senior senator said he knows better. [More] [My emphasis]
Steve joins in the we-don't need-no-stinkin'-proof crowd with uncharacteristic gracelessness.
It looks like the “cow tax” brouhaha was a bit premature, but don’t think there may not be some fire where the smoke seems to have cleared. [More]
Ok, let's assume Steve and Sen. Schumer are right and the EPA is a collective of lying weasels. They could be for all I know, but that's not the real point here.

Preemptive contempt and self-righteous condescension are poor choices in the current political atmosphere, I would suggest. Especially since ag really doesn't know how much oomph it packs right now. Opening the dialogue by calling the EPA liars is not just remarkably inflammatory, but it could be based on pretty shaky political presumptions.  Do we really want these people to automatically categorize us as unreasoning idealogues?

I suppose until we've been hammered in Congress a few times, agriculture may not be willing to accept that business may not be as usual. The incredible aspect of this for me is how short our memories seem to be.

The tone of the "cow-tax" hoax matches exactly the tone of the political rhetoric aimed at our new president-elect a few months ago.  Hoots of derision and howls of disdain resounded over his middle name, his pastor's excesses, his lightweight resume, his leftist stances, etc.  Obama's every word was prejudged a lie, his elevating rhetoric a shallow gimmick, his unflappable demeanor a PR ploy.

Yeah - that turned out to be an effective political strategy. 

This juvenile attitude sprang from a conviction among detractors they would handle the interloper just like they did in earlier elections.  Ag may be making the same fatal error. I'm not so sure where agriculture is assuming their political strength is coming from, but it won't be from many of the sources it used to count on.  And there are some powerful new forces to be taken into consideration, I believe, like the Food Movement.

While I have outlined my own differences with voices like Michael Pollan, I think the sneering contempt filling the ag press for the food movement and its unofficial spokesman is unwise, to say the least. In an environment of pandemic distrust and full-time scapegoat searches, going out of our way to make enemies or ammunition for them is foolish.

Industrial agriculture does not need a war with agrarian agriculture, and we would likely fare poorly if it did break out.  After all, they don't need to pose as us to get subsidies.

I realize self-control and temperate speech are for sissies.  But we seem determined to learn the hard way a lesson too many on the right are just beginning to grasp:  things have changed, and not for the better for their side.

But the greater reason is while livestock operators are inventing regulatory threats to attack, they risk ignoring the threat that really rocked their world in the first place.

Hartwig said RFA has suggested a number of steps including setting up a $1 billion short-term credit facility so ethanol producers could finance current operations; a $50 billion federal loan guarantee program to finance investment in new renewable fuel production capacity and supporting infrastructure; and a requirement that any auto maker receiving federal aid only produce new vehicles that can run on any blend up to 85% ethanol, beginning with the 2010 model season.
The price of ethanol has dropped with the price of oil, squeezing producers’ profit margins. Critics note that the U.S. ethanol industry already benefits from a number of fairly generous federal subsidies, including a tax credit paid to gasoline producers for blending gasoline with ethanol; a federal renewable-fuel standard that sets a minimum amount of ethanol to be blended into gasoline; and a 54-cents-per-gallon tariff on imported ethanol.
The RFA is one of many business groups looking for help in the financial stimulus legislation expected to move through Congress early next year. It’s not clear how much support RFA has for its proposals; calls to several senior lawmakers close to the industry weren’t immediately returned. [More]
From my perspective, this is a problem an order of magnitude greater than the imaginary cow-tax. You open up the Treasury to ethanol manufacturers and plant construction will take off again, followed shortly by rising corn prices.

But hurling invective at the ethanol lobby takes a little more cajones than picking on bureaucrats, I guess. And granting even grudging respect for the possible capability of the new adminstration to reshape ag's political playground may be more than we can rise to.
I've been lucky...

This is a time of year to count blessings, and it turns out most of us in industrial agriculture probably don't make our list long enough.  If you have the privilege of farming today, you've almost certainly achieved much of what you have by being lucky.

This also applies to every other profession.  One of the curious side-effects of the incredible Madoff Swindle (or CDS's, CDO's, or similar derivatives) is how so many rich people could have been so completely duped.  
Even if you tried, it might seem that Madoff would have been impossible to catch. But at least two warning signals flashed for anyone to see.
First, Madoff’s accounting firm, Friehling & Horowitz in New City, New York, was a rinky-dink shop, as a simple Google search shows. The firm doesn’t have a Web page. I found it on a junky site that lists local businesses by type and address, along with the boilerplate comment, “rated as good by a New City citizen.” That’s an unlikely auditor for the $17 billion that Madoff claimed to have under management. When the fraud came to light, F&H turned out to be a tiny office which, neighbors said, wasn’t even open all the time. (The office didn’t answer its phone.)
Second, Madoff held your securities (or what he claimed were your securities) in his own advisory firm. That’s not the way reliable advisers handle publicly traded investments. The custodian should always be a large, independent financial institution that reports cash flows and trading activity to you directly. When you invest new money, you should make out the check to that account. [More]

Being rich/successful is not an infallible indicator of intelligence, skills, or judgment.  And we've developed some data to back up skepicism that is does.
I think these are fine points, but they also reflect precisely the sort of misconceptions that books like Outliers and Fooled By Randomness are aimed at clearing up. We look at successful people and see that they share certain common elements. From that, it’s easy to infer that the successful succeeded because of these characteristics in a way that’s unduly strong. We forget to look at all the other people who also share those characteristics.
To get rich in the United States you pretty much have to work hard. But the idea that success is due to hard work ignores the fact that there are all these other people working hard and not succeeding. Hard work is much more common than success. And advantages of birth and dumb luck are making the difference — separating the hard-working partner at the corporate law firm from the hard-working guy who moved the furniture into the law firm’s office. Similarly, if you only look at the successful traders on Wall Street you’ll probably decide they got rich because they’re smart — these firms usually try to hire smart guys who went to good schools. But if you look at the failures, you’ll see that they’re smart guys who went to good schools, too. The difference between the two groups is luck. [More]

Yglesias is commenting on Malcolm Gladwell's new book "Outliers"*, and the reactions to it, but to me the empirical evidence is clear:  There but for the Grace of God...  For the intelligentsia, this admission would be tough to make, as it undermines their status, I would think, and hence the many negative reviews.

We are, of course, reluctant to ascribe achievements we have struggled for to "accumulation of advantage".  In fact, our belief in people with superior ability to accomplish consistently superior success is so strong many slavishly copy the success story of the month.

One long-running disagreement I have had with the editorial policy at Top Producer centers on this idea of allocating success disporportionately to people and not circumstance.  Indeed, my former editor, Marcia Taylor, considered the "profile" or personal success story to be the epitome of professional advice.  (I rarely read them through).

In my occasional moments of fairness, I wrote this response off to simple jealousy. What did those guys have I didn't? Answer: some great breaks at crucial moments.  This is patently false, of course, but as the economy crumbles around us, it is revealing feet of clay in wingtips and workshoes alike. Rich people didn't suddenly turn dumb, often their luck just ran out.

As Iglesias points out, we in the media repeatedly fall under the influence of a type of survivor bias.  And all around us in farm country are wannabe farmers every bit as good as current producers who simply were not in the optimal places at the optimal times.

What the evidence also suggests is that old disclaimer for market advisors is likely true for producers as well: past performance is no indicator of future results.

Still, the accumulation of cultural advantage does offer some cushion from the random outcomes to our plans.  So counting your blessings may be a better indicator of what 2009 holds for your farm than your painfully wrought business plan.

* Haven't read it yet - waiting for paperback or Kindle.