Tuesday, June 30, 2009

Riveting, simply riveting...

Like most of you, I have been glued to my TV - not by coverage of historic federal legislation, or international unrest, or even by that old farmer entertainment favorite, weather - but by wall-to-wall coverage of some guy named Michael Jackson and his recent demise.

Perhaps newscasters are relieved to get back to a topic they are comfortable with.  And maybe most TV audiences are too.

But one happy bit of serendipity was stumbling across this piece of rather important (IMHO) TV news:

The Supreme Court cleared the way for Cablevision Systems Corp., a New York-based cable operator with more than 3 million subscribers, to deploy so-called remote storage DVRs. Unlike current DVRs, which record programs on a device in a customer's home, remote storage DVRs record them in a central location.
As of March, the penetration of DVRs in the United States was 30%, according to Nielsen. Because storing shows on a central server is so inexpensive compared with deploying devices, the ruling clears the way for Cablevision and other distrubutors to offer the service to consumers at very low or no cost.

The move is a blow to Hollywood, which had fought the technology all the way to the Supreme Court. Fox, NBC Universal, Paramount, CBS, Disney and other programmers argued that because Cablevision transmits recorded programs to consumers over its cable lines, the remote storage DVRs actually constitute a new on-demand service for which they should pay licensing fees.
Of course, what this is really about is advertising. Television executives are very worried about the ease with which consumers can skip advertisements while watching recorded programs via DVRs. [More]

But if you pause (heh) to think about it, this ruling may have enormous consequences.  Essentially all TV would be on demand if you subscribe to a recording service (i.e. cable or satellite). While not having troublesome hardware in our home sounds great to me (plus and easy way to watch anything on any TV - we I were was too cheap to buy more than one box), ponder what it means in the long run.

At first blush, this seems pretty unobjectionable. Under current U.S. law, it’s legal for a consumer to record television programs for later viewing. This is considered time-shifting, and was first made possible by the VCR. Conventional DVRs are high-tech cousins to VCRs, with a hard drive replacing the videotape. In the U.S., many cable and satellite companies provide boxes that include DVR functionality, generally for an additionally monthly fee.
Cablevision wants to offer DVR as a service instead of a device. Rather than recording 30 Rock on the box attached to your TV, the show will be recorded at Cablevision’s headquarters. Then, when you want to watch it, Cablevision will send the show to your television. If it works right, it should feel just like a normal DVR. Only without the cost of the DVR.
If Cablevision offers this service, I think it will be very successful. Less hardware means less things to break, and the service could presumably send a show to any TV in the house. (Some conventional DVRs can do that, but it’s often a hassle.) Plus, storage scales very well. Cablevision could offer a user much more recording space than a conventional DVR.
In fact, Cablevision could offer unlimited storage. And that’s where it gets dangerous.
Say Mary Jones sets her Cablevision RS-DVR to record 30 Rock. So does Bob Smith. Cablevision only needs to record it once. They can send the bits to Mary or Bob whenever one of them asks for it.
Given that Cablevision has more than four million customers, it’s a fair bet that at least one of their customers would be interested in any given show, so it makes sense for Cablevision to record and catalog every channel it distributes, 24/7/365.
Conventional DVRs only record what you ask them to record, with some modifiers, such as “new episodes of The Simpsons,” or “movies with Steven Seagal.” So for Cablevision’s service to work like a conventional DVR, it should only offer you programs you specifically chose to record. No fair waking up Friday and asking for last night’s The Office.
But wait. Cablevision is already recording every show. Why don’t they just offer a “Record Everything” option? [More]

With lower TV revenues, stuff like "I'm a Celebrity..." could float to the top of TV quality entertainment.

Some sore losers in the competition for advertising revenue see it as a possible playing field leveler.

Perhaps this win for DVR is also a win for print and online advertising revenue. If people can just fast-forward through their TV commercials, it's hard to understand why they would be any more effective than magazine or newspaper ads, in paper or online. That could begin to bridge the gap between what advertisers are willing to pay for TV and print/online advertising. As a result, maybe the DVR will save print journalism. I dare to dream. [More]

This strikes me as a stretch and at the very most, a long time coming as on-demand takes time to penetrate fully. But the point is taken.  If you can't beat 'em, cripple 'em.

Still, I won't miss those fragile recorders (lightning zaps ours routinely).  And maybe I'll only have to learn one final set of remote commands.  After all, rural America is the remote in "remote DVR".

Sunday, June 28, 2009

Amaze your friends, confound your enemies: Episode 42...

Yet another Cliff Claven moment.

Why are there 60 minutes in an hour?  24 hours in a day?

Here's a hint:

[Full answer ]

I knew this, of course.

[via 3QD]
Maybe not "enjoy" the ride...

More reasons to live in Edgar County, IL...

#26:  We actually missed a rain last night.  I am not making this up.

#27:  Safety from submarine attacks

Is it expensive to sink your own sub? Not if you're a drug lord. Each sub costs about $1 million to produce. The crew gets $500,000 or less. A recent 6.4-ton payload of cocaine was worth more than $100 million. As a percentage of the gross, subs are so cheap that they're routinely scuttled anyway.
That's the genius of submersibility. Several months ago, during the Israeli invasion of Gaza, we explored the terrestrial underworld of the Gaza tunnels. The tunnelers were developing a three-dimensional way of thinking about land: While one side built walls and stationed soldiers above ground, the other side went down 60 feet and dug past those barriers.
The nautical underworld is even better. You don't have to dig. You just glide. Even the semisubmersible crafts built by the drug lords are low enough to evade radar. And underwater, you can do something else that can't be done on land: dump your contraband and let gravity take it beyond your enemy's reach. No evidence, no conviction.
To stop this tactic, Congress recently enacted the Drug Trafficking Vessel Interdiction Act of 2008, which declares that anyone operating "any submersible vessel or semi-submersible vessel that is without nationality ... with the intent to evade detection, shall be fined under this title, imprisoned not more than 15 years, or both."
Maybe that law will deter submarine drug commerce. But what about submarine terrorism? Ultimately, "U.S. officials fear that the rogue vessels could be used by terrorists intent on reaching the United States with deadly cargos," the Post reports. In fact, "Colombian officials say some former military personnel might be helping to design, construct and direct the vessels" used by the drug lords. If so, all that's needed is a financial lure from al-Qaida to build a vessel for a different mission.
It might not be a suicide mission, either. Drug submersible builders are "trying to develop a remote-controlled model," according to officials contacted by the Post. Two men were arrested last year, apparently while peddling this technology. No crew necessary. Just pack the radioactive bomb aboard your craft, slip it underwater, and hit any coastal target.
Think about that the next time you take off your shoes at an airport security gate. If we expect the next 9/11 attack to come from the sky, we may be looking the wrong way. [More]

While my history (I served aboard USS Seahorse SSN-669 back when subs had sails) predisposes me to find this threat credible, it does seem to make sense.  It also points out one more thing that is wrong with our drug policy (it makes drugs so lucrative that any cost is feasible for drug dealers) and also that if terrorists are the "Lex Luthors" Gitmo fans make them out to be, they probably are not planning a duplicate of 9-11.

Saturday, June 27, 2009

What institutions will survive?...

If they do what will they look like?

Yesterday driving home from taping USFR I checked the news and markets (and traffic on I65 - particularly gruesome accident there) and of course, there were more than a few announcement that Michael Jackson was still dead.

But leave it up to WBBM in Chicago on the Noon Business Hour (an outstanding collection of business programming) to tell me something about MJ I was mildly interested in.

Being a business show, they spent some time talking about Jackson's finances (not pretty) and then a music business expert slipped in a statement to the effect that unlike the Presley estate, Jackson's body of work probably would not be worth much over the next decades, because recorded music is essentially a Dead Business Model Walking.

This strikes me as perceptive. In fact, I began to wonder what intellectual property would retain much value as the digitization and access to words, songs, etc, becomes freer, faster, and easier.  To date our legal system seems fairly powerless to reverse this trend.

So if we were to start a list of enterprises that likely won't be around in 25 years, say, I think I would put the music industry (as we know it) on the list.  The exception might be live performances, perhaps.

But what else will slip away?

Well, we've talked about various forms of printed information - books, newspapers, magazines.  I would consider them candidates.  Additionally, there are serious questions what TV will be.

But what about universities?
"Universities are finally losing their monopoly on higher learning", he writes. "There is fundamental challenge to the foundational modus operandi of the University — the model of pedagogy. Specifically, there is a widening gap between the model of learning offered by many big universities and the natural way that young people who have grown up digital best learn."

    The old-style lecture, with the professor standing at the podium in front of a large group of students, is still a fixture of university life on many campuses. It's a model that is teacher-focused, one-way, one-size-fits-all and the student is isolated in the learning process. Yet the students, who have grown up in an interactive digital world, learn differently. Schooled on Google and Wikipedia, they want to inquire, not rely on the professor for a detailed roadmap. They want an animated conversation, not a lecture. They want an interactive education, not a broadcast one that might have been perfectly fine for the Industrial Age, or even for boomers. These students are making new demands of universities, and if the universities try to ignore them, they will do so at their peril. [More]
I had not thought about this - college was a long time ago. But I do think the college experience is profoundly different that it was back in the day, both socially and educationally.  The author goes on at length to center in on collaborative learning, and there along with others, I found a common thread running through my list of endangered business species.
I think there are two ideas that pretty much sum up this whole discussion. One is multi-way interaction (as opposed to reliance solely on 1-to-many lecturing). The second, not unrelated, is collaboration among educators and students, and especially among students themselves.

I also think it's pretty clear some ways the modern Internet is able to facilitate the implementation of both these ideas. Namely, things like: video lecture series, social networking tools, constantly improving search tools, online and open-access books, journals, and reference materials, collaboratively made encyclopedias, and on, and on....

Let me conclude by referring to something I wrote about two months ago, that is Clay Shirky's diagnosis of the impending demise of traditional media journalism. (See here.) Near the end was this:

    [T]here is one possible answer to the question “If the old model is broken, what will work in its place?” The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did, as octavo volumes did.

    Journalism has always been subsidized. Sometimes it’s been Wal-Mart and the kid with the bike. Sometimes it’s been Richard Mellon Scaife. Increasingly, it’s you and me, donating our time.

In other words: collaboration among consumers of information.

Interesting parallel, wouldn't you say? [More]
For a number of reasons, tools like the Internet and texting are making collaborative effort easier and more productive.

Is agriculture another possible victim/beneficiary of the power of collaborative effort?

As Aaron and I try to build a business organization for his future and my exit (see the next Top Producer Perspective) I am increasingly seeing his working methods and signature skills are reflective of mine, but tending in a collaborative direction.

I have always worked alone, or with Jan - like many old married couples we function essentially as one. I was neither  comfortable with, nor adept at group efforts.  Needless to say this has limited our ability to expand to what technology could do to increase our two-person productivity.  This has not been insignificant either.

Part of the problem for me I believe has been the need to supervise someone else at a distance or give incredibly complicated instructions to cover contingencies. Often this was nearly impossible.

But nearly full-time communication has changed everything for farm operations, I think, and as such allows for larger work groups which can capture even more economies of scale.  In short, collaboration may determine our future as well.

A few years ago I wrote a short story about farming in 2020.  Looking back over it, I envisioned a farm business model similar to law firms, i.e. "Dewey, Gougem and Howe".  I'm not claiming prophetic powers, but that type of multi-principal operation could be the more natural form of work for those who follow the Boomers.

The operational and economic advantages seem considerable at first glance. The analogies to other professions and how they adapted earlier are at least partially valid, I think. And now with the incredible advances in communications, a generation raised in a more connected world seems to be guiding farming away from the "solitary sturdy yeoman" archetype.

The more pertinent question could be "How fast?"

Friday, June 26, 2009

A new fruit to me...

In a comment to my post on the Waxman-Markey Bill, a reader offered this:
I am extremely disappointed by the parochialism shown by the Ag sector.
I am a farmer who could benefit from offsets re. no-till.
More importantly I am truly concerned about the future of our country and what this Bill could do to it. This Bill is nothing more than an energy tax to appease the watermelons who support BO.
 My reply:
Perhaps the tone of my original post encouraged your remark, in which case we have both embarrassed ourselves.
 And the counter:
Speak for yourself. I don't feel embarrassed at all. Perhaps you don't know the origins of the word watermelon (in regards to environmentalists). It refers to that group of activist that were heart broke when the Wall in Berlin was torn down. They found new meaning in the enviro community. With efforts such as working for climate change, they are once again able to rail against Capitalism and the free market. John, I know we are on the same side on this issue. My problem is that I take it very seriously and have been working to defeat it. I guess that your blog, appeared to me as as, taking to lightly, the total ramifications of this legislation.
 In fairness, I checked the usage and found this:
Eco-socialists are critical of many past and existing forms of both Green politics and socialism. They are often described as Red Greens - adherents to Green politics with clear anti-capitalist views, often inspired by Marxism (Red Greens should be contrasted with Blue Greens). The term Watermelon is commonly applied, often as an insult, to describe professed Greens who seem to put social justiceecological ones, implying they are "green on the outside but red on the inside"; the term is usually attributed to either Petr Beckmann or, more frequently, Warren T. Brookes,[2][3][4] both conservative critics of environmentalism, and is apparently common in Australia,[5][6] New Zealand[7]United States[8] (a website in New Zealand, goals above and the The Watermelon, uses the term as a compliment, stating that it is "green on the outside and liberal on the inside", using the term 'liberal' while also citing "socialist political leanings", reflecting the use of the term 'liberal' to describe the Left-wing in many English-speaking countries[7]). Red Greens are often considered 'fundies' or 'fundamentalist greens', a term usually associated with Deep Ecology despite the fact that the German Green Partyfundi' faction included eco-socialists, and eco-socialists in other Green Parties, like Derek Wall, have been described in the press as 'fundies'. [More] '
 I would offer that this term is not widely used in ag circles, and the pejorative context of "watermelon" would more likely spring to mind for most readers now we have an African-American president.

Regardless, it still strikes me as highly hypocritical that proponents of our socialized agriculture, which I have long opposed, suddenly find it a danger to our republic if replicated in other sectors.  One wonders where ND agriculture would be without crop insurance, disaster payments (an annual affair), and DCPs. Are these aspects of free markets and pure capitalism, or artifacts of political power courtesy of the same number of senators as California? Nonetheless, I do not call them socialist, merely politically opportunistic (a fine distinction, I know).

As we stray further from the point of the entire exercise, making emission-producing inputs more expensive is the goal of the bill, not an unfortunate side-effect.  Of course it's going to make farming harder - controlling emissions is going to make most lives experience stress.

But, for farmers, it wasn't enough to get a free pass on carbon emissions. They are unhappy that the effect of the caps and pollution permits will be to raise the price of their fuel, fertilizer and electricity. No matter that other Americans will suffer similar effects. In the mind of the entitled American farmer, any increase in costs or reduction in revenue -- whether from natural causes, market forces or government regulation -- must be compensated for by the government.
So farmers demanded that they be allowed to earn some extra cash by reducing the carbon footprint on their farms and selling these "offsets" to the factories and power plants unlucky enough to be subject to the carbon-cap regime. They want to be paid extra if they change the feedstock to cut down on cow burps and farts. Or if they use the no-till method for planting seeds, which doesn't release the carbon trapped in the soil. Or if they put in devices to trap the methane released from animal poop.
And they demanded to be paid not just if they do these things in the future, but also if they did them last year or the year before. They demanded the payments even if they are already getting a check from the government to do the same things as part of some other conservation program. And perhaps most notably, they demanded that the job of supervising this offset program be shifted from the Environmental Protection Agency, whose focus would actually be ensuring that the reductions are real, to the Department of Agriculture, which sees its mission as preserving, protecting and defending American farm subsidies.
Elmer's support for the climate-change bill, however, could not be had for merely a few billion dollars a year in offsets. There was also an ethanol boondoggle to protect.
It seems those pesky scientists over at the EPA had done a preliminary analysis showing that if you considered the indirect effects of producing a lot of additional corn-based ethanol -- like the need to make up for the lost food production somewhere else -- then ethanol might not qualify as a carbon-reducing "renewable fuel" under the 2007 energy bill, potentially jeopardizing ethanol's guaranteed market of 15 billion gallons a year. To rectify this gross injustice, Elmer demanded -- and won -- a five-year moratorium on any final determination while a study is conducted on how the EPA was conducting its study.
All of these concessions were hammered out last weekend among Collin Peterson, chairman of the House Agriculture Committee, and fellow Democrats Henry Waxman and Ed Markey, the chief sponsors of the climate-change bill. The House leadership and the White House acquiesced; the press conference was duly held. And what was the result?
Bob Stallman, president of the American Farm Bureau Federation and the self-proclaimed "voice of agriculture," yesterday urged all House members to vote against the climate-change bill, claiming it would "result in a net economic cost to farmers with little or no environmental benefit."
The next time the world's most selfish lobby comes to Washington demanding drought relief, someone ought to have the good sense to tell them to go pound sand. [More]
What he said.

However, I stand corrected on my grasp of the term "watermelon".

Tell me these guys don't get the chicks...

Extreme model airplanes - without engines.

Beats my ancient experience of spinning around in a circle flying my P40 Flying Tiger.
It’s called Dynamic Soaring, or DS, and it requires some specific land and weather conditions, experience and the cojones to slice your precious RC plane through extreme wind shears. If you have a long hill or ridge and the wind is hitting it at a right angle, the air that moves over the top causes an eddy on the leeward side, a steady, spinning whirlpool of air underneath the wind shooting over the ridge.
If you can hit it right, you can power the glider over the ridge and then dip it down into the torrent of air running in the opposite direction. Flip the plane 180ยบ, over and over, and you’ll build up speed. The video above shows a glider clocking an astonishing 392mph from a wind gusting to just 45mph. Think of it as somewhere between surfing a big wave and pumping a skateboard around a half-pipe. [More] [RC = radio-controlled]

Helpful illustrated description of Dynamic Soaring here.

Thursday, June 25, 2009

Plus you don't need rectangular hogs...

America's senior business leadership uses bacon to save their... ummm, bacon.
Next time you order breakfast at a Marriott, you may notice something new about the bacon. Instead of being served in identical six-inch strips, it now comes in an assortment of sizes. That's because senior executives of Marriott, after sampling four or five varieties of bacon in a blind taste test, found that an irregular cut, which costs less, tastes just as good as the rectangular slices traditionally served in the company's hotels.
Although J.W. "Bill" Marriott Jr., the company's longtime chairman and chief executive, had his doubts, he approved the new specifications when he learned that they would save about $2 million a year. "Times are changing," says the 77-year-old CEO. [More]

In a more serious note, I wonder if we will have to have a period of really cheap meats to maintain demand.  This would mean shifting the focus from the most expensive cuts and simply feeding for low-priced protein.
And you wonder why...

College textbooks cost so much.
Elsevier officials said Monday that it was a mistake for the publishing giant's marketing division to offer $25 Amazon gift cards to anyone who would give a new textbook five stars in a review posted on Amazon or Barnes & Noble. While those popular Web sites' customer reviews have long been known to be something less than scientific, and prone to manipulation if an author has friends write on behalf of a new work, the idea that a major academic publisher would attempt to pay for good reviews angered some professors who received the e-mail pitch.

Here's what the e-mail -- sent to contributors to the textbook -- said:

"Congratulations and thank you for your contribution to Clinical Psychology. Now that the book is published, we need your help to get some 5 star reviews posted to both Amazon and Barnes & Noble to help support and promote it. As you know, these online reviews are extremely persuasive when customers are considering a purchase. For your time, we would like to compensate you with a copy of the book under review as well as a $25 Amazon gift card. If you have colleagues or students who would be willing to post positive reviews, please feel free to forward this e-mail to them to participate. We share the common goal of wanting Clinical Psychology to sell and succeed. The tactics defined above have proven to dramatically increase exposure and boost sales. I hope we can work together to make a strong and profitable impact through our online bookselling channels." [More]
Given the stakes in the market, it is hardly surprising that easily posted Amazon reviews are being solicited from early buyers and academics.  It's similar to book-jacket blurbs: you scratch my back...

I've posted a few reviews on Amazon, some good, some not-so-good, but am still waiting for my gift card.  I guess I need to the big leagues of really expensive tomes.

 If you have a new college student matriculating this fall, brace yourself for some truly astonishing textbook prices.  In fact, the lucrative textbook market is one prime place e-book technology could make a whopping difference.
Harris has traded in some of her textbooks and paperbacks for something much lighter — her 10.2-ounce Kindle, an electronic reader than can store about 200 books downloaded for a fee from Amazon.com.
It’s one way Harris said she and other teachers in the Las Virgenes Unified School District are embracing what students already know: Technology can make learning fun and accessible.
“I read books to students from this,” Harris said as she gave a short demonstration. “It makes books more accessible for me, and it shows students that I also understand technology. This is where we are headed, whether we like it or not.”
Gov. Arnold Schwarzenegger agrees. On Monday, he visited Calabasas High amid much fanfare to introduce the nation’s first Free Digital Textbook Initiative, which he said could save schools across the state millions of dollars per year. [More]
Plus you wouldn't have to move those leaden boxes seventeen times to your daughter's ever changing new apartment/dorm room.
The difference between ads for men and women...

via videosift.com

Yes, yes - with you so far...

[via neatorama]
You want a lobster with your fries?...

Although you have to travel to Maine to take the most advantage of this, lobsters are dirt-cheap.  And not for really obvious reasons.
But here's the problem--and this is the key to understanding what's happening now. Way before our current recession began, lobstermen were doing such a good job conserving their resource that beginning in the 1990s, they were already catching more lobsters than the market could sustain. There's never been enough demand for all those live lobsters. They've always had to go somewhere else.

Remember how I said stocks of codfish in Canada had collapsed 20 years ago? Those cod used to be packaged and frozen by Canadian processing plants. After the cod collapse, the same Canadian plants started packaging and freezing the extra lobsters being caught in New England. They took up the slack.

By an unfortunate twist of fate, those plants had their financing tied up in the Icelandic banking system, and when it collapsed last fall, the capacity of the processing plants did, too. Ever since then, the market has been flooded with excess live lobster. Lobsters that used to get turned into frozen claws and tails for mid-level chains like Red Lobster are now filling the fresh lobster tanks to overflowing. Thus the crash in price. The fact that luxury dining has declined doesn't help, but it's not the cause. The problem is simply that New England's lobsters have finally come home to roost.

Now lobstermen are trying to hawk their extra lobsters on the street, and retailers are furious, because it's undercutting prices even more. [More]
I almost wish I liked it now.

Anyhoo - another weird chain of events from the global financial turmoil.  If you don't appreciate how bad banking several time zones away can clobber your business plans, ask a lobsterman.
The race is on...

A rather frightening strain of rust is trying to spread from its origin to most of the world's wheat fields.  I love the name - Ug 99.  It definitely has the attention of wheat scientists around the world.

Crop scientists fear the Ug99 fungus could wipe out more than 80% of worldwide wheat crops as it spreads from eastern Africa. It has already jumped the Red Sea and traveled as far as Iran. Experts say it is poised to enter the breadbasket of northern India and Pakistan, and the wind will inevitably carry it to Russia, China and even North America -- if it doesn't hitch a ride with people first.

"It's a time bomb," said Jim Peterson, a professor of wheat breeding and genetics at Oregon State University in Corvallis. "It moves in the air, it can move in clothing on an airplane. We know it's going to be here. It's a matter of how long it's going to take."

Though most Americans have never heard of it, Ug99 -- a type of fungus called stem rust because it produces reddish-brown flakes on plant stalks -- is the No. 1 threat to the world's most widely grown crop.

The International Maize and Wheat Improvement Center in Mexico estimates that 19% of the world's wheat, which provides food for 1 billion people in Asia and Africa, is in imminent danger. American plant breeders say $10 billion worth of wheat would be destroyed if the fungus suddenly made its way to U.S. fields.

Fear that the fungus will cause widespread damage has caused short-term price spikes on world wheat markets. Famine has been averted thus far, but experts say it's only a matter of time.

"A significant humanitarian crisis is inevitable," said Rick Ward, the coordinator of the Durable Rust Resistance in Wheat project at Cornell University in Ithaca, N.Y. [More]

I have to believe that Big Seed (is that a fair appellation?) is in overdrive developing a GM variety resistant to this fungus.  But upon reflection, this is where it gets interesting.

Suppose Monsanto did come up with a GM answer to this global threat to the world's most-consumed grain.  I'm guessing the resistance traits would breed true, so like soybeans, a real saved-seed issue arises.  Outside our country it would be virtually unenforceable, especially considering the absolute risk once the fungus is in your fields.

I suppose it could be released only in countries with legal systems and intellectual property laws, like the EU and US, but I struggle to believe this stuff would not be smuggled like drugs to the entire globe, with indignant cries of righteousness. Already, GM oppononents can see such a scenario coming.
One of the consequences of the spread of Ug99 is a campaign by Monsanto Corporation and other major producers of genetically manipulated plant seeds to promote wholesale introduction of GMO wheat varieties said to be resistant to the Ug99 fungus. Biologists at Monsanto and at the various GMO laboratories around the world are working to patent such strains.

Norman Borlaug, the former Rockefeller Foundation head of the Green Revolution is active in funding the research to develop a fungus resistant variety against Ug99 working with his former center in Mexico, the CIMMYT and ICARDA in Kenya, where the pathogen is now endemic. So far, about 90% of the 12,000 lines tested are susceptible to Ug99. That includes all the major wheat cultivars of the Middle East and west Asia. At least 80% of the 200 varieties sent from the United States can't cope with infection. The situation is even more dire for Egypt, Iran, and other countries in immediate peril.

Even if a new resistant variety was ready to be released today it would take two or three years' seed increase in order to have just enough wheat seed for 20 percent of the acres planted to wheat in the world." (Thanks Nelly)

I'm blogging this post from "Global Research" as an update on the posts on black stem rust, because I haven't seen much on it from other sources. I hope-really- that an effective policy will be enacted at global level to prevent the patenting of Ug99 resistant wheat. This will be dramatic for poor farmers who cannot afford patented seeds. [More]
How should Big Seed handle this prospective discovery?  How should they try to market it?

Why not give it away to indigenous breeders in poor countries?  It'd not like they can pay for it in the first place.  And I'm sure Big Seed could recover a significant part of the undoubtedly serious development costs from selling me 17-stack corn.

More importantly, it could be a key to unlocking GMO acceptance in places little progress has been made. 

If nothing else, it would mess with GM-critic heads.

Wednesday, June 24, 2009

How'd they do that?....

We just replaced our windows and sliding patio doors with new ones from Renewal by Andersen.  The windows are great, but the replacement was the kind where a whole new frame slides into the old frame, which makes it look like a picture with too much frame (until we get used to it, I guess).  But on the other hand, it only took two days with virtual no disturbing the inner or outer trim.

Plus Jan no longer has an excuse to make me get up and close the window when it rains at night.

The job was incredibly expensive to my thinking (16 double-hungs, two patio doors = $22,000), but what are ya gonna do?  Over 30 years maybe it's not so bad, and they seem to meet expectations.  At least, we don't think we'll have a 6x6 slab of ice (inside) in our living room this winter.

But here's the curious thing.  We opted for the top-of-the-line energy saving High Performance Low-E4 Glass, which makes us eligible for a (maximum) $1500 tax credit.

The difference in cost was $1504.

Time to raise my bids...

My hat's off to Rep. Peterson who bullied the House leadership into what looks like capitulation on the Waxman-Markey Climate Change Bill. 
Rep. Henry Waxman (D-Calif.) on Tuesday surrendered to agriculture interests on a key provision in the massive climate and energy bill he introduced with Rep. Ed Markey (D-Mass.). Facing a defection from farm-state Democrats, Politico.com reports that Waxman agreed to change the bill so that “the U.S. Department of Agriculture will oversee the [carbon] offset program for farmers, and the House will seek further guidance from the Obama administration about the appropriate role for the EPA.”
Politico further reported that Waxman “agreed to ask the EPA to roll back its new requirements that farmers offset rural land developed in other countries.” [More]
I don't anticipate significant changes in the Senate, since ag interests are even more heavily weighted there.  While I think this is bad for agriculture - not to mention the environment and economy - I'm not one to deny when I've been blown out of the water.

Now there are a few questions as farmers anticipate more checks.

The first is, "What will I have to do to get a check?"  Hmmm. Given that the list of stuff corn farmers (the biggest political force IMHO) are actually willing to do is remarkably short, I'll guess, "Have a body temperature of close to 98 degrees F". 

For example, the most often suggested offsets are no-till and tree-planting.  Only no-till poses some issues for all-corn operations, so we'll have to get no-till redefined to "no more than 6 passes".  With the USDA (read: our former lobbyists) in the role as our "regulator" (wink, wink), that should be no problem.  Besides, a real NO-till requirement would certainly not set well with Deere and CNH, I'll wager.

The other problem with no-till is: we don't wanna.  Driving big machines is more fun.  If no-till were the optimal way to farm everywhere, we'd all be doing it by now.  Instead, many farmers are buying tillage equipment to rip up no-till acres around here.

As for planting trees, that's a pasture problem for cow-calf operators, and the corn lobby has evidently decided they are going to throw livestock farmers under the ethanol bus.  Besides, they get $$ for methane digesters.  Only it takes a sizable dairy to take advantage of one.

But let's try to get ahead of the competition in our thinking.  Since this bill is now officially a boondoggle for the ag lobbies with the most clout, let's assume the big crop guys end up with the thrown money.  Not only am I in the center of that herd, now I have beginning farmer on board to complete the idyllic picture.  I think it's safe to say I should be ground zero for money from heaven without really having to do much.

Since we know from DCPs such money goes straight to land prices/rents, we can make some calculations.  Risky?  Of course, but this is the kind of risk our profession has become expert at - gaming government subsidies.  Not only that, but as livestock operators go down in flames, there will probably be wall-to-wall coverage of weeping families selling out, and we're pretty sure the public and Congresshumans can't differentiate between ag's various (and now, conflicting) segments, so some of the help for "farmers" will likely wind up in my bank account as well.

Above all remember, like all subsidies, these offset stipends will attach to acres - not operators.
"A viable carbon offsets market -- one that rewards farmers, ranchers and forest landowners for stewardship activities -- has the potential to play a very important role in helping America address climate change while also providing a possible new source of revenue for landowners," said Vilsack before the House Agriculture Committee. [More] [Emphasis added]
I'm saying now is the time to get your hands on as as many of them as possible.  Once the checks arrive, anybody can figure it out.

That's the thing about narrow self-interest.  It is terrifically contagious.

Tuesday, June 23, 2009

On the other hand...

I love it when this happens.  First you read about one exciting trend and what it could mean.
A new study in the Proceedings of the National Academy of Science (PNAS) says yes. A team led by Michael McElroy at Harvard University assessed the global capacity for wind power — the total amount of sheer energy that's being carried on the breeze — and found that current technology could harness enough power to supply more than 40 times the planet's present-day levels of electricity consumption. For the U.S., there's enough wind concentrated in the Midwest prairie states to supply as much as 16 times the current American demand for electricity. The energy is there, on the breeze — it just needs to be tapped. (Read more about green energy ideas.) [More]
Then in the same surf-session you stumble across something completely contrary.
The report by the Potential Gas Committee, the authority on gas supplies, shows the United States holds far larger reserves than previously thought. The jump is the largest increase in the 44-year history of reports from the committee.
The finding raises the possibility that natural gas could emerge as a critical transition fuel that could help to battle global warming. For a given amount of heat energy, burning gas produces about half as much carbon dioxide, the main cause of global warming, as burning coal.
Estimated natural gas reserves rose to 2,074 trillion cubic feet in 2008, from 1,532 trillion cubic feet in 2006, when the last report was issued. This includes the proven reserves compiled by the Energy Department of 237 trillion cubic feet, as well as the sum of the nation’s probable, possible and speculative reserves.
The new estimates show “an exceptionally strong and optimistic gas supply picture for the nation,” according to a summary of the report, which is issued every two years by a group of academics and industry experts that is supported by the Colorado School of Mines. [More]

If natural gas stays relatively cheap, it offers an environmentally  advantageous way to get electricity that both tops both coal and wind. Let's face it - we all are more likely to have NG hookups or LP tanks than simply a windmill in the back yard.

Of course, in some sense natural gas and wind power are complementary - wind turbines need gas turbine generators, which can fire up far more quickly than coal plants to be on standby when the wind drops.  I know the popular wind advocate answer is a "smarter grid" but really, we're talking about a Genius Grid if we want to get more than a few percent of of electricity from wind.
But Frank P. Prager, managing director of environmental policy at the company, said that the higher the reliance on wind, the more an electricity transmission grid would need to keep conventional generators on standby — generally low-efficiency plants that run on natural gas and can be started and stopped quickly.
He said that in one of the states the company serves, Colorado, planners calculate that if wind machines reach 20 percent of total generating capacity, the cost of standby generators will reach $8 a megawatt-hour of wind. That is on top of a generating cost of $50 or $60 a megawatt-hour, after including a federal tax credit of $18 a megawatt-hour.
By contrast, electricity from a new coal plant currently costs in the range of $33 to $41 a megawatt-hour, according to experts. That price, however, would rise if the carbon dioxide produced in burning coal were taxed, a distinct possibility over the life of a new coal plant. (A megawatt-hour is the amount of power that a large hospital or a Super Wal-Mart would use in an hour.)
Without major advances in ways to store large quantities of electricity or big changes in the way regional power grids are organized, wind may run up against its practical limits sooner than expected. [More]
First let's examine what a "smart grid"means.
A smart grid delivers electricity from suppliers to consumers using digital technology to save energy, reduce cost and increase reliability and transparency. Such a modernized electricity network is being promoted by many governments as a way of addressing energy independence, global warming and emergency resilience issues. [More]

Notice the term "transparency".  If we had, via a smart grid", a readout in our kitchens that showed the true economic price of electricity at any minute,  I think the response of consumers would be astonishing.  That is my conception of transparency.

This scenario presumes that consumers are billed in real time - at the actual cost of each kwh at that moment.

We have never had the technology to reflect instantaneously what some inputs  costs. But we do now. And my guess is if real-time rate meters are installed routinely, we could see a major flattening of the demand curve for electricity.

It could also mean bad news for the purveyors of wind energy paraphernalia.  Especially if you start adding up what a truly Smart Grid would cost.
Demonstration projects, including the smart meters installed in thousands of homes, are cropping up across the country. But the smart grid as seen by Gilligan and others probably will take years to develop and could cost $75 billion.
Overall transmission modernization, including new higher capacity lines along with the communications technology, could cost as much as $1 trillion, according to some estimates. [More]
Amazingly, fewer of us flinch when we talk ten of billions anymore. I think the larger obstacle is building the transmission lines that we need to move electricity from the windy Midwest to the coasts. How many farmers would welcome a tower in the middle of their field?

I have written ad nauseum about the over-hyped promises of wind energy. Nonetheless, I'm willing to be proven wrong.

I just don't see it happening now.  Especially because the powerful farm lobby will not tolerate a transparent energy market.  Which would mean bundling the environmental costs of energy with the product,
Maybe it's not working...

As push comes to pushback on the health care reform effort, one popular response (ostensibly from those with jobs and good insurance, for the time being) is our system is working fine, thank you very much.  Maybe.

Perhaps if they check the windshield, they would notice a road hazard ahead.  Behold the portion of our national output (GDP) consumed by health care, as projected by the CBO.


We may in fact be running ahead on these curves, as our GDP falters and health expenses don't. Regardless, health insurance costs increases will soon show up in even complacent consumer budgets.

Despite the slower 9 percent growth in medical costs projected for 2010—the growth rate was 9.9 percent in 2008—the increased cost-sharing could squeeze workers, the report says. In the last five years, health insurance premiums increased four times faster than wages—and the consultancy expects that trend to continue in 2009 and 2010. Some 6 million workers—an unprecedented number—were in high-deductible health plans in 2008, up from 1 million in 2005, according to America’s Health Insurance Plans.
Although the report says that health reform could eventually slow the growth of medical costs, these costs will continue to increase. Citing the Centers for Medicare & Medicaid Services, the report says the health industry is expected to represent 18 percent of the U.S. economy by 2010. [More]
It's hard for me to see anything to conteract this trend either.  Health care doesn't fit with capitalist economics or popular ideas about moral response to sickness.

In a capitalist economy, the thing that is supposed to keep prices in check is the buyers. If someone offers me a product that costs more than it is worth to me, then I won’t buy it. But we can’t count on patients to play this role in health care, because there is no way to make patients internalize all of the costs of their care; they simply don’t have the money. Furthermore, most people don’t understand the health production function (the relationship between treatments and outcomes), so they don’t have the ability to select treatments that provide benefits that are worth their costs. (And, in many cases, it’s not obvious even to professionals that a treatment isn’t worth the cost; it’s only obvious when you look at the data in aggregate.)
What about payers (health insurers?) A “market” solution would be to change the reimbursement rates for different procedures – increase payment for things that doctors should do more of and reduce payment for things that doctors should do less of. Theoretically, payers should be doing this already. However, in the current situation, a private payer who tried to reduce the rates for popular, expensive procedures would find itself unable to attract providers. The only payer with any real negotiating power is Medicare. The private payers have little ability to control costs. Or, if they have the ability, they aren’t exercising it.
In short, prices will only go up. As a result, the cost of health insurance goes up, and the market finally kicks in in the crudest possible form: people who can’t afford it become uninsured. At some point, if we have enough uninsured people, the health care industry will hit a point where it cannot increase revenues anymore, because it has fewer and fewer paying customers. [More]

Are we at the point where enough of us a) are affected adversely by the current system or b) believe we will be soon?

I'm not sure.  But recent polling provided some surprising support for an alternative to the present system.
The poll found that most Americans would be willing to pay higher taxes so everyone could have health insurance and that they said the government could do a better job of holding down health-care costs than the private sector. [More unexpected results]
The public option is becoming the focal point of contention.  It could well be that fears of government control will overcome the urgency for addressing this issue again.

But oddly, nobody is proposing doing away with truly government run health insurance: Medicare.  In fact, it is now a familiar, announced "joy" in our church for 65-five-year-olds to be thankful for the happiness of that birthday and qualifying for Medicare.

Maybe guaranteed health care is a well-deserved reward for years of breathing.  But then we should not be taken aback at how much we spend on health care in the last years of life.

As the prognosis fluctuates on the end of the recession, where we are in our outlook could make the future of health care more ominous.  Hence my suspicion the recent revival of of recession fears (or its length) could actually nudge the outcome of this debate in favor of more vigorous reform.

Monday, June 22, 2009

Too big to farm?...

One persistent argument arising from the financial crisis has been the issue of firms labeled "too big to fail".  It is easy to look at investment firms and banks and count the zeroes in their financial statements and come to the conclusion they are so big their failure could trigger catastrophic "knock on" failures.

Although these explanations can help account for how individual banks, insurers, and so on got themselves into trouble, they gloss over a larger question: how these institutions collectively managed to put trillions of dollars at risk without being detected. Ultimately, therefore, they fail to address the all-important issue of what can be done to avoid a repeat disaster.
Answering these questions properly requires us to grapple with what is called "systemic risk." Much like the power grid, the financial system is a series of complex, interlocking contingencies. And in such a system, the biggest risk of all - that the system as a whole might fail - is not related in any simple way to the risk profiles of its individual parts. Like a downed tree, the failure of one part of the system can trigger an unpredictable cascade that can propagate throughout the entire system.
It may be true, in fact, that complex networks such as financial systems face an inescapable trade-off - between size and efficiency on one hand, and global stability on the other. Once they have been assembled, in other words, globally interconnected and integrated financial networks just may be too complex to prevent crises like the current one from reoccurring.
Rather than waiting until the next cascade is imminent, and then following the usual modus operandi of propping up the handful of firms that seem to pose the greatest threat, it may be time for a new approach: preventing the system from becoming overly complex in the first place. [More]

While complexity is not the same thing as size, it certainly seems as size increases for any business, the complexity of their connections and risk management rises as well.  Noting the last sentence (which the author goes on to cogently flesh out), it is interesting to speculate whether agriculture has its own "TBTF" entities.

I would suggest we do, and we also have our own systemic risks.  Consider the failure of ADM or Cargill, for example. The huge dairy or supply coops. Or Deere. If you can't quite picture such a thing, that is one hint as to how their sizes make them seem invulnerable, but if nothing else, we have learned that very large businesses can almost inadvertently expose themselves to more risk than they think they really are facing.  Also recall, not long ago most Americans would have felt the same way about GM.

Consequently, as regulators begin bandying about solutions the the complexity/size risk problems, we might be surprised how that could suddenly change our commercial landscape.

Sunday, June 21, 2009

Whiskey Tango Foxtrot, Episode 27...

It leaves you speechless...

The closest I can come is Flaming Monks on Segways with Tuba and Banjo.

Friday, June 19, 2009

The Health Care Reform Half-time Report...

This was the most useful summary of what is simmering legislatively for health care reform.  Without stealing the whole damn post (always considered bad form) I would offer this excerpt with these helpful hints:
HELP Bill Senate Finance Draft Tri House Bill
Individual Mandate Yes Yes Yes
Employer Mandate Yes (currently blank) No, but employers with workers at or below 300% FPL have to pay Yes
Medicaid Expansion 150% FPL, but still unclear 133% FPL for pregnant women/children; 100% FPL for parents, childless adults 133% FPL
Subsidies between 150 - 500% FPL on sliding scale between 133 - 300% FPL on sliding scale between 133 - 400% FPL on sliding scale
Public Option Yes (currently blank) No (Conrad’s co-op compromise) Yes, Medicare + rates
Insurance Regs Guarantee issue, modified community rating (2:1), no rescissions Guarantee issue, modified community rating (7.5:1), no rescissions Guarantee issue, modified community rating (2:1), no rescissions

[More really good info] [For some reason the top line is shifted left one column]

The most important elements for farmers, I believe, are in the bottom row.  For those of us who struggle in the individual health insurance market, guaranteed issue is a BIGGY. 

I may be crazy, but I think of all the legislative efforts percolating in Congress, this one will have the greatest offect on farmers - especially young farmers.

Thursday, June 18, 2009

I think I know where it is....

Seattle is missing its famous rain.

The Seattle Times reports, "If the rain holds off today, Seattle will match the May-June record of consecutive rainless spring days set in 1982. While there have been reports of some very light rain in and around Seattle, no precipitation has reached Seattle-Tacoma International Airport, where the National Weather Service measures rain levels. The record for consecutive dry days for May-June is 29." [More]

[via drum]

Wednesday, June 17, 2009

Property rights are alive...

And well in many places, it seems.
near the start of up (pixar's latest gold-plated effort) we come to learn that carl fredricksen's house, or the land beneath it more specifically, is in demand by hungry developers due to its location amongst a sea of half-built, multistorey building projects, a fact that seems to make him all the more reluctant to let go of the nest he made with his late wife regardless of the offer slapped on the table. the result, until the house floats away at least, is the depressing but somehow uplifting landscape in the picture above. 

watching the film reminded me of a few very similar (but non-rendered) stubborn homeowner situations i've read about over the past couple of years, the rememberance of which resulted in me researching a fascinating and surprisingly common property (especially in china) i now know to be called a 'nail house'; so called as 'they stick out like nails in an otherwise modernized environment' and are hard to remove...  [More]

And a "nail farm".

[via info nation]
The cost of "winning"...

There is a real possibility that farm-state lawmakers will be successful in their efforts to exclude farmers from any participation other than getting checks from the government in efforts to combat global climate change.
The two powerful House Democrats said Thursday that they had made "good progress" in their talks on the climate bill, H.R. 2454 (pdf), following an hourlong meeting with House Speaker Nancy Pelosi (D-Calif.). But Waxman said yesterday that he has not spoken to Peterson since that session as the congressmen handed the negotiations over to their staffs.
Waxman declined to comment on the details of the climate talks, though the farm state lawmakers have not been shy in stating their problems with provisions in the bill that give U.S. EPA the principal oversight role for the carbon offset market. Peterson also is against a draft EPA regulation that would hold the ethanol industry accountable for "indirect land use," such as crop conversion in other countries.
House Democratic leaders are working behind the scenes to shore up support among the farm state lawmakers through language that could be added to the bill in a manager's amendment package. It is unclear, though, if those changes will be enough. [More]
Rep. Collin Peterson has been remarkably capable in this effort, and here's how:
Meanwhile, the fact of the matter is that in recent years plenty of incumbent Republicans have been brought down by primary challenges from the right and as best I know zero Democrats have been brought down by primary challenges from the left. This has been a huge advantage for the Democrats in terms of winning elections—it’s an important part of the reason Democrats have these majorities. But it also means that when it comes to policymaking, Republicans have a lot of solidarity but Democratic leaders have little leverage over individual members. In other words, nobody thinks that Collin Peterson (D-MN) is going to lose his seat over badly watering down Waxman-Markey and that matters a lot more than airy considerations of capital. [More]
In fact,  Peterson bluntly points out global warming might be good for his constituents, regardless of who else it harms.  In fairness, I think this accurately reflects most farmer opinions of climate change (if they buy the idea at all).  But he could be securing a place in history as the poster child of parochial interest over national (and international) well-being.  In short, this legislative "win" may prove to be more costly that anyone currently imagines.

On Tuesday, the White House released a report based on the work of government scientists that said climate change will cause more frequent and intense heat waves in the U.S. and more severe and frequent flooding that will increasingly swallow up coastal lands.
For agriculture, the report found that higher temperatures will mean a longer growing season for crops that do well in heat such as melons, okra and sweet potatoes, but a shorter growing season for crops such as lettuce and broccoli that are more suited to cooler conditions. The report said higher temperatures also will cause plants to use more water to keep cool.
In an effort to highlight what they see as the stake that U.S. farmers have in combating climate change, members of the Obama administration -- including the administrator of the National Oceanographic and Atmospheric Administration, Jane Lubchenco -- were expected to participate in a conference call on Wednesday to discuss the report's findings on agriculture.
But Mr. Peterson, when asked by reporters Tuesday about the report's findings, said they run counter to what many in his region are experiencing.
"We've just had the biggest floods and coldest winters we've ever had," he said. "They're saying to us [that climate change is] going to be a big problem because it's going to be warmer than it usually is; my farmers are going to say that's a good thing since they'll be able to grow more corn."
He added that the measure proposed by Messrs. Waxman and Markey would penalize farmers in the Midwest who rely on coal-burning electric cooperatives. [More]
But Peterson might want to read that latest government report on climate change more closely before blithely touting "benefits" for corn growers. Making long range predictions based on the weather last year also strikes me as singularly non-scientific.

The report is here.  It is a whopping PDF download and to tempt you to wade through it (it is very readable), I excerpt these charming graphs. [Click each to enlarge]

And the one that definitely caught my eye:

To be sure, MN does seem to be a "winner" as annual precip and temps improve.  But MN agriculture will also cope with new pests, diseases, and even larger rain events as well.  But don't listen to me, the report has separate sections for parts of the country.

The immediate cries of unprovable nonsense will greet this report, I am sure, including many voices from farm country. Reading the report, noting the quantity and quality of the research and researchers, and the care with which the results are communicated certainly goes a long way to addressing the challenges of scoffers.

This is one issue I would prefer to have been seen by future generations as too easily alarmed than callously self-interested.  However, I am not all that optimistic meaningful mitigation will be begun until the effects are more clear to more people.  So I'm working on the adaptation strategy, while hoping for emissions reduction sooner than later.

It's also why we are investing more in drainage tile than machinery.
Deficits: another view...

Megan articulately outlines reasons why "deficit-blame" is a futile exercise.

I am a long-time believer in the notion that nobody cares about the budget deficit.  People say they care about the budget deficit, but people say they care about a lot of things.  Almost everything, in fact.  What people flogging the budget deficit actually care about is the programs it goes to pay for.  Every time the presidential party turns over, I get the pleasure of watching deficit-hawk Democrats suddenly discover that borrowing hundreds of billions of dollars actually has no moral or economic implications, especially when compared to national health care.  Meanwhile, Republican scientists who presumably spent the last eight years locked in a vault in the basement of Heritage run out into the metaphorical street screaming that they have just made a shocking, horrible, and totally unexpected new discovery:  budget deficits will make the economy melt down into a pool of manufacturing-depleted sludge, and also, cause rabies.

Economically, much of the talk about deficits is hysteria.  A budget deficit of less than 4% of GDP is not a good thing, but it rarely results in catastrophe either, because inflation and GDP growth steadily erode the value of past debt.  As long as the deficit is less than inflation + GDP growth, the government is unlikely to get into much trouble.  It's possible that this borrowing may crowd out private borrowing, but at least over the last decade, this has obviously not been the case.  [More]

Her point is taken, but she slides gently over cumulative effects, methinks. She also somehow misses the clear political tactic now embraced fully across the right of harsh criticism of the Bush fiscal performance. For example, the Bush tax cuts expire on Obama's watch, and does anyone doubt that those deficit contributions will be framed as tax increases by the GOP when (and if) he lets them expire?  A deficit of manageable proportions is no big worry, I agree, but arranging for so much to fall outside your own term has now become standard practice. 

This is how we get the CBO to score legislative spending much cheaper than it actually will be, since the length of the analysis and back-loading of costs doesn't show the true effect on the budget.

Regardless, she does clearly point out that the deficits we are facing exceed the "not-to-worry" category, regardless of the author.  So setting aside paternity testing every deficit dollar, the growing uneasiness is how will we (and the rest of the developed world) staunch the beleeding of red ink?

Not since the second world war have so many governments borrowed so much so quickly or, collectively, been so heavily in hock. And today’s debt surge, unlike the wartime one, will not be temporary. Even after the recession ends few rich countries will be running budgets tight enough to stop their debt from rising further. Worse, today’s borrowing binge is taking place just before a slow-motion budget-bust caused by the pension and health-care costs of a greying population. By 2050 a third of the rich world’s population will be over 60. The demographic bill is likely to be ten times bigger than the fiscal cost of the financial crisis.
Will they default, inflate or manage their way out?

This alarming trajectory puts policymakers in an increasingly tricky bind. In the short term government borrowing is an essential antidote to the slump. Without bank bail-outs the financial crash would have been even more of a catastrophe. Without stimulus the global recession would be deeper and longer—and it is a prolonged downturn that does the greatest damage to public finances. But in the long run today’s fiscal laxity is unsustainable. Governments’ thirst for funds will eventually crowd out private investment and reduce economic growth. More alarming, the scale of the coming indebtedness might ultimately induce governments to default or to cut the real cost of their debt through high inflation. [More]

One approach by the author above is binding budget enforcement measures that limit future debt when the economy is recovering. Pay-as-you-go is one such idea.  Also recall the choking effects of Graham-Rudman some years ago.  It should be noted that any law Congress passes, Congress can wriggle around.

Most heartening to me, is that we are having this discussion at all. Considering that  only a few months ago, deficits were way down the list as the idea of global depression seemed nearly inevitable. To the extent that general confidence is important to the working of our economic system (and it appears to be crucial), this is surprisingly good news.

Deficit-carping beats depression-mongering in my book.

Tuesday, June 16, 2009

You don't always get what you want...

We just have to decide how that line will be drawn.   Despite the intense rhetoric this week surrounding health care reform, the central issue is still barely mentioned.  The Republicans, for example, have keenly honed in on a list of things they think Americans don't want, and of course, one of them is any hint of restraint in health care for any reason (for people who have insurance already, of course).
As President Barack Obama tried to sell the American Medical Association today on his health care overhaul, the top Senate Republicans launched a familiar line of attack.
They warned of rationed medical care, lack of patient control and government bureaucracy.
"The American people will not stand for rationed health care," Senate Minority Whip Jon Kyl said Monday. "We believe that a one size fits all approach is the wrong approach." [More of a news story that mentions "ration" several times]
I think this will be the Great Wall for defenders of our current system: curtailing any amount of health care is anathema.  Oddly voices on the right have been pointing out that's exactly what is needed, although we can't bring ourselves to use the word "ration".
 There are only three ways to pay for this expansion of health insurance coverage: increased taxes, reduced benefits, or shiny gold ingots falling out of the sky. Voters emphatically prefer the latter option, so that is the one most likely to be embraced by Congress and the administration.

One way to bring down the cost of health insurance is to limit access to certain doctors, treatments, and medicines. But the Kaiser/Harvard poll found most people are averse not only to paying more but also to anything that would "involve government limiting or dictating their choices."

Or anyone else, by the way. Most people have forgotten that in the 1980s, the private sector devised an ingenious way to reduce medical outlays. Known as managed care, it put modest restrictions on the freedom of patients to get care from specialists, limited hospital stays and gave doctors incentives to choose less costly therapies. It saved money, and it didn't appear to reduce the quality of care.

It was a perfect remedy, except for one thing: Patients and doctors hated it. Why? Because it kept them from behaving as though cost is no object.

So managed care is history. But the dilemmas it addressed are not.

One of these days, we'll have to address them, but not now. The administration would rather pretend we can get generous government-sponsored coverage for everyone without higher taxes, higher insurance premiums or rationing of health care. In short, it refuses to treat us like grownups. I wonder why. [More]

The tricky political problem for the GOP is the number of people with coverage they like is dropping. Uncontrolled expenditures are pushing premiums up, even as employers offload the burden to workers. And if you lose your job...

The status quo is rapidly deteriorating.  Something has to give on health care, according to economist Tyler Cowen - hardly a left-winger.

Scholars have been applying comparative-effectiveness research to Medicare for years, and the verdict is not altogether pretty. It turns out that some regions spend more on Medicare than others — sometimes two or three times as much, as documented by the Dartmouth Atlas Project. Yet the higher-spending regions often fail to produce superior health care results.
Robin Hanson, professor of economics at George Mason University, surveys evidence demonstrating the ineffectiveness of many medical expenditures in his 2007 paper, “Showing That You Care.”
If we are willing to take comparative-effectiveness studies seriously, we could make significant cuts in Medicare costs right now. We could cut some reimbursement rates, limit coverage for some of the more speculative treatments, like some forms of knee and back surgery, and place more limits on end-of-life-care.
Those cuts alone will not solve the fiscal problem, but if we aren’t willing to take even limited steps to conserve resources, we shouldn’t be spending any more money elsewhere. [More]

If you didn't pick up on it "comparative-effectiveness" is how you actually go about the unspeakable practice of spending health care dollars to the greatest benefit.  It will be one key aspect to any useful reform effort.

More seriously, there is something about the arguments against CER that I have never understood. The opponents of CER claim that it will inevitably be used to make decisions about care. Insurers will not want to pay for care that is not effective, and so people will be deprived of the care they need. But notice what "deprived of care" means here. No one is seriously proposing to make it illegal to purchase whatever medical care you want on your own. 

This means that even if your insurance company decides that it will not pay for some treatment that has been shown to be ineffective, you will, under any proposal being seriously considered, still be able to get that care; you just won't be able to get someone else to pay for it. If not having someone else pay for your medical care counts as being "deprived of care", then 46 million people are being deprived of care even as we speak -- and that's just the uninsured; it doesn't include people who have insurance that doesn't cover the treatments they need. And yet, strange to say, the opponents of CER generally do not see this as a problem.

Moreover, once you notice that what the opponents of CER describe as "being deprived of care" just consists in someone's deciding not to pay for some treatment, the idea that decisions about who gets what treatment are currently made by your physician is true only if you pay for your care out of your own pocket. If, like most of us, you rely on medical insurance, then someone other than your doctor is already making decisions about your care. All CER would do is allow this person to do so on the basis of actual knowledge about what works and what doesn't. [More]
Doubtless we will "ration" in a convoluted and obscure method, but the point is made that at some time even the most lavish insurance programs will have to draw some lines on the expanding array of medical treatments and drugs that provide minscule benefits while burdening countless others with the costs.  
That point approaches, I think.