Thursday, March 31, 2011

Another trip to the the Edge...

Edge has done it again - asked some of the world's best minds a penetrating question and published their short essay answers.

The subject: What scientific concept would improve everybody’s cognitive toolkit?

Some of my favorite answers [to date, it's a long list] (The extracts are not the whole entry, and there is no way to link to individual answers, just scroll to the name):
  • Martin Seligman: PERMA
Well being is about what individuals and societies choose for its own sake , that which is north of indifference. The elements of well being must be exclusive, measurable independently of each other, and ideally, exhaustive. I believe there are five such elements and they have a handy acronym, PERMA:
P Positive Emotion
E Engagement
R Positive Relationships
M Meaning and Purpose
A Accomplishment
There has been forward movement in the measurement of these over the last decade. Taken together PERMA forms a more comprehensive index of well being than "life satisfaction" and it allows for the combining of objective and subjective indicators. PERMA can index the well being of individuals, of corporations, and of cities. The United Kingdom has now undertaken the measurement of well being for the nation and as one criterion — in addition to Gross Domestic Product — of the success of its public policy.
PERMA is a shorthand abstraction for the enabling conditions of life.
How do the disabling conditions, such as poverty, disease, depression, aggression, and ignorance, relate to PERMA? The disabling conditions of life obstruct PERMA, but they do not obviate it. Importantly the correlation of depression to happiness is not minus 1.00, it is only about minus 0.35, and effect of income on life satisfaction is markedly curvilinear, with increased income producing less and less life satisfaction the further above the safety net you are.
  • Stephen Pinker - Positive sum games
Some examples. Squabbling colleagues or relatives agree to swallow their pride, take their losses, or lump it to enjoy the resulting comity rather than absorbing the costs of continuous bickering in hopes of prevailing in a battle of wills. Two parties in a negotiation split the difference in their initial bargaining positions to "get to yes." A divorcing couple realizes that they can reframe their negotiations from each trying to get the better of the other while enriching their lawyers to trying to keep as much money for the two of them and out of the billable hours of Dewey, Cheatham, and Howe as possible. Populaces recognize that economic middlemen (particularly ethnic minorities who specialize in that niche such as Jews, Armenians, overseas Chinese, and expatriate Indians) are not social parasites whose prosperity comes at the expense of their hosts but positive-sum-game-creators who enrich everyone at once. Countries recognize that international trade doesn't benefit their trading partner to their own detriment but benefits them both, and turn away from beggar-thy-neighbor protectionism to open economies which (as classical economists noted) make everyone richer and which (as political scientists have recently shown) discourage war and genocide. Warring countries lay down their arms and split the peace dividend rather than pursuing Pyrrhic victories.
Granted, some human interactions really are zero-sum — competition for mates is a biologically salient example. And even in positive-sum games a party may pursue an individual advantage at the expense of joint welfare. But a full realization of the risks and costs of the game-theoretic structure of an interaction (particularly if it is repeated, so that the temptation to pursue an advantage in one round may be penalized when roles reverse in the next) can militate against various forms of short-sighted exploitation.
  •  Charles Seife: The Laws of Randomness
The Second Law of Randomness: Some events are impossible to predict.
If you walk into a Las Vegas casino and observe the crowd gathered around the craps table, you'll probably see someone who thinks he's on a lucky streak. Because he's won several rolls in a row, his brain tells him that he's going to keep winning, so he keeps gambling. You'll probably also see someone who's been losing. The loser's brain, like the winner's, tells him to keep gambling. Since he's been losing for so long, he thinks he's due for a stroke of luck; he won't walk away from the table for fear of missing out.
Contrary to what our brains are telling us, there's no mystical force that imbues a winner with a streak of luck, nor is there a cosmic sense of justice that ensures that a loser's luck will turn around. The universe doesn't care one whit whether you've been winning or losing; each roll of the dice is just like every other.
No matter how much effort you put into observing how the dice have been behaving or how meticulously you have been watching for people who seem to have luck on their side, you get absolutely no information about what the next roll of a fair die will be. The outcome of a die roll is entirely independent of its history. And, as a result, any scheme to gain some sort of advantage by observing the table will be doomed to fail. Events like these — independent, purely random events — defy any attempts to find a pattern because there is none to be found.
Randomness provides an absolute block against human ingenuity; it means that our logic, our science, our capacity for reason can only penetrate so far in predicting the behavior of cosmos. Whatever methods you try, whatever theory you create, whatever logic you use to predict the next roll of a fair die, there's always a 5/6 chance you are wrong. Always.
  •  Aubrey De Grey: A Sense Of Proportion About Fear Of The Unknown

One of the foremost challenges that face scientists today is to communicate the management of uncertainty. The public know that experts are, well, expert - that they know more than anyone else about the issue at hand. What is evidently far harder for most people to grasp is that "more than anyone else" does not mean "everything" - and especially that, given the possession of only partial knowledge, experts must also be expert at figuring out what is the best course of action. Moreover, those actions must be well judged whether in the lab, the newsroom or the policy-maker's office.
It must not, of course, be neglected that many experts are decidedly inexpert at communicating their work in lay terms. This remains a major issue largely because virtually all experts are called upon to engage in general-audience communication only very rarely, hence do not see it as a priority to gain such skills. Training and advice are available, often from university press offices, but even when experts take advantage of such opportunities it is generally too little and too late.
However, in my view that is a secondary issue. As a scientist with the luxury of communicating with the general public very frequently, I can report with confidence that experience only helps up to a point. A fundamental obstacle remains: that non-scientists harbour deep-seated instincts concerning the management of uncertainty in their everyday lives, which exist because they generally work, but which profoundly differ from the optimal strategy in science and technology. And of course it is technology that matters here, because technology is where the rubber hits the road - where science and the real world meet and must communicate effectively.
Examples of failure in this regard abound - so much so that they are hardly worthy of enumeration. Whether it be swine flu, bird flu, GM crops, stem cells: the public debate departs so starkly from the scientist's comfort zone that it is hard not to sympathise with the errors that scientists make, such as letting nuclear transfer be called "cloning", which end up holding critical research fields back for years.

 I'll add more as I can. Nominate your favorites

Wednesday, March 30, 2011

Surprise start...

All of a sudden we are in the field. It's cold, but the ground is working well, and as usual those "simple" tile holes have proven to be remarkably difficult to repair.

So I'm playing in the mud and running a finisher over fields we tiled last year to smooth them down before NH3.

The remodeling is complete, except for the obligatory 1-week carpet delay.

My own bed in the right room on Monday. It's amazing how stuck in a rut I really am.

Monday, March 28, 2011

Plumbing note...

We replaced our household toilets with 1.6 gallons/flush models (they will all be 1.3 gpf soon) this spring due to worries about our well. Some observations:
  • I was concerned our old DWV system would not handle the lower volume efficiently. Turned out to be just fine.
  • The flush mechanism is whole 'nother model from the flapper-and-float workings of yore.
  • Many of the new models are "chair height". The jury is still out, IMHO.
  • The new fixtures came with "slam-proof" seats and lids. If you have a 7-year old grandson, it's the biggest benefit of all.
Thought you'd want to know.
Maybe I get it now...

Of all the video from Japan, this one hit me the hardest.

Unlike the movie tsunamis of 200' waves, a "tide" coming in at 5' per minute (my guess) is both less cinematic and more horrifying.

[via sullivan]
All is not well...

In the boardrooms of big law firms. To begin with we have a surplus of lawyers, at least lawyers who will work for nosebleed hourly rates.

Which is a lot of 'em.

Meanwhile, law schools keep disgorging new litigators like there was a need for them.

Over the past decade, the number of law-school students has also steadily increased, as universities have opened or expanded their schools. Law schools tend to be moneymakers: They're cheap to set up, and tuition runs high, even at poorly rated programs. Thus, universities have added them on with relish, and the list of approved law schools has increased 9 percent in the past decade, to 200. That means that the number of new lawyers minted every year has not stopped growing, either: Law schools awarded 44,004 degrees last year, up 13 percent in a decade.
But the prospects for those legions of new lawyers have been grim, a fact hardly unbeknownst to them. As I reported this fall, in the past few years, young lawyers faced a glut of competition from other legal professionals; plummeting wages; a reduction in openings in and offers at big law firms; and cripplingly high student-loan debts. When the recession hit, thousands of young lawyers suddenly found themselves trying to work off six figures of debt in pay-per-hour assistant gigs. Granted, things are looking better. But the National Association of Legal-Career Professionals still cautions that "entry-level recruiting volumes have not returned to anything like the levels measured before the recession." [More]
I've always thought most people were panicked by outlier cases into over-lawyering. (And for that matter, over-accountanting). But my risk threshold is mine, of course.

But for whatever reason, the market isn't great for billing the big bucks. [Note the opening sentence below: Dept. of Duh!]
When not paid by the hour, lawyers’ approach to their work changes, said Carl A. Leonard, a former chairman of Morrison & Foerster who is now a senior consultant at Hildebrandt International, which advises professional services firms.
In one case, he said, Morrison & Foerster negotiated a fixed fee for defending a company in court, covering work up to the point of a motion for summary judgment.
On top of the fee, if the case settled for less than what the company feared having to pay if it lost in court, the law firm got a percentage of the amount saved. The arrangement made sense when the goal was to resolve the dispute quickly, Mr. Leonard said.
Lawyers on the case negotiated a settlement for much less than the client’s worst-case number, Mr. Leonard said. “The effective hourly rate was something like 150 percent of our hourly rates,” he added. “We made money, the client was happy.”
In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled.
That collapse highlights the risk to law firms experimenting with other payment arrangements: If lawyers set too low a price, they lose money. Many lawyers may not be good enough businessmen to pick the right price, said Mr. Krebs, of the Association of Corporate Counsel. [More]
I'm probably crossing the line into simple lawyer-bashing, but I have always found it hard to figure out what good most of their "work" really is. I think much of that value comes from our inability to judge risks anywhere close to objectively.

Friday, March 25, 2011

Still a good choice...

My support for nuclear power has not diminished because of the Japan accident.

Perversely, some former critics have rethought their position in light of this tragedy.
You will not be surprised to hear that the events in Japan have changed my view of nuclear power. You will be surprised to hear how they have changed it. As a result of the disaster at Fukushima, I am no longer nuclear-neutral. I now support the technology.
A crappy old plant with inadequate safety features was hit by a monster earthquake and a vast tsunami. The electricity supply failed, knocking out the cooling system. The reactors began to explode and melt down. The disaster exposed a familiar legacy of poor design and corner-cutting. Yet, as far as we know, no one has yet received a lethal dose of radiation.
Some greens have wildly exaggerated the dangers of radioactive pollution. For a clearer view, look at the graphic published by It shows that the average total dose from the Three Mile Island disaster for someone living within 10 miles of the plant was one 625th of the maximum yearly amount permitted for US radiation workers. This, in turn, is half of the lowest one-year dose clearly linked to an increased cancer risk, which, in its turn, is one 80th of an invariably fatal exposure. I'm not proposing complacency here. I am proposing perspective.
If other forms of energy production caused no damage, these impacts would weigh more heavily. But energy is like medicine: if there are no side-effects, the chances are that it doesn't work. [More, also the xkcd graphic above is brilliant]
Plus I always like to consider the alternatives we have for electricity, which could be THE energy source of the future if solar, wind, and the Volt come up to speed.
When it comes to safety, there is no game at all.


Finally, for all the contempt we have for Big Oil, it isn't much better dealing with Big Coal.

Ask rural West Virginia.

Thursday, March 24, 2011

This would include Shamrock Shakes...

Yeah - I know. They aren't really milkshakes. Or even good food. But once a week when I commute to USFR, I whiz through a McD drive-through for a Shamrock Shake.

It turns out I'm spending to maximize my happiness like a serious engineer.
A new exciting paper in the forthcoming Journal of Consumer Psychology makes the case that money should buy us happiness, but most people aren't spending it right. On the edge of psychology and economics, Profs. Daniel Gilbert, Elizabeth Dunn and Timothy Wilson lay out eight principles of spending efficiently, including:

1) Buy more experiences and fewer material objects
2) Buy many small things rather than a few large things
3) Avoid extended warranties and outsized insurance plans 

It's easy to nod and say this is all very well, but the older I get the more logical this sounds. At any rate, we are shifting our consumption patterns gradually to "repeatable joys" (our phrase). We seem to have enough stuff.

With the possible exception of just a few new power tools for my new woodshop greenhouse support structure.

Also, never buy the extended warranty.

Wednesday, March 23, 2011

Under-regulation of agriculture, Exhibit A...

Farmers are, for the most part, exempt from OSHA regs. We don't need no stinking feds telling us how to be safe.

Or do we?
Recommended precautions are outlined in grain-handling standards issued by the Occupational Health and Safety Administration. Among them: turning off machinery that helps move grain when someone enters a grain bin, and using body harnesses so workers can be pulled to safety.

At the Mount Carroll grain elevator where the two teens died last summer, crucial safety measures were ignored, according to an OSHA investigation released in late January that cited the owner, Haasbach, for 24 violations and proposed a $555,000 fine. Haasbach, of Warren, Ill., is owned by members of three large farming families.

The company didn't train the young workers, provide safety harnesses, or make sure machinery was turned off, among other forms of negligence, OSHA alleges.

Haasbach lawyer John Doak said his client is challenging OSHA's jurisdiction because it is a farmer-owned grain storage facility that has fewer than 10 employees. [More] [My emphasis]

So when we "whine" about all the regulations stifling our profits, let's not forget the many we are exempted from by our political muscle.

For the most part, we conveniently forget all the regulatory passes we get.

Exhibit B: I just attended a rather abstruse and confusing truck regulation meeting where the state employee assured us that farmers get a pass on about everything. In fact, in IN the rumor is cops steer clear of unlicensed farmers driving overloaded, unlicensed trucks simply because they can usually beat the rap in court. I've seen some of these vehicles at the elevator myself.

We are one of the most privileged sectors in the US when it comes to regulation. So now when it looks like we may have to behave like other businesses have been for decades, we are outraged.

There is a competitive advantage in this for those who will step up and comply, I think.

Not the least of which might be a safer workplace and better community.
Why nobody cares...

About inequality. A superb debate-by-short-essay about inequality and its relatively low importance for  most Americans. I think the arguments are capably advanced by all sides, making all the pieces worth the minute or two it takes to read them.

For example, recent research indicates some reasons why we don't care much right now.
First, the expansion of consumer credit in the United States has allowed middle class and poor Americans to live beyond their means, masking their lack of wealth by increasing their debt. We might think that people who have "zero net worth” have nothing. But in fact, having zero net worth increasingly means owning a lot (cars, televisions, even houses) – but also owing a lot. As a result people with zero net worth, and even negative net worth, can still feel that they are living the American dream, doing “better” than their parents did while keeping up with the Joneses.
Second, poorer Americans’ belief in social mobility – despite strong evidence of its rarity – causes negative reactions to policies that would seem to benefit them, like raising taxes on those who earn and own a lot more. Why would the poor oppose taxes on the wealthy? Because many believe that they, or at least their children, will eventually be wealthy, voting for taxes on the rich may feel like voting for taxes on themselves. As a result, even the word “redistribution” has negative connotations. [More]
On the other hand, maybe we just think it's not a problem worth caring about (at least most of us).
Second, a lot of envy is local. People worry about how they are doing compared to their neighbors, their friends, their relatives, their co-workers, and the people they went to high school with. They don’t compare themselves to Michael Bloomberg, unless of course they are also billionaires. When the guy down the hall gets a bigger raise, perhaps by courting the boss, that’s what really bothers us. In other words, envy and resentment are not going away and they also do not stem fundamentally from the contrast between ordinary lives and the lives of the very wealthy.
Third, many Americans draw an important distinction between earned wealth and unearned wealth. If someone has become a billionaire, but he worked hard for it and supplied a good or service of real value (say Mark Zuckerberg of Facebook), for the most part Americans will respect and admire that person.
A lot of wealth today hasn’t been earned fairly, but still a lot of it has been the result of hard work and creativity, even if mixed in with good luck. The United States is still a society of business and a lot of businessmen provide great value to our economy. The weight has not swung to the point where there is more unearned wealth than earned wealth and so Americans identify with business and a business ethic, especially compared to attitudes in Europe. [More]
Regardless of your own persuasion, you will find both reinforcement and challenges in the articles.

FWIW, I have come to realize I think wealth and income inequality is a bigger deal than the vast majority of people, and these insights provided me with clues to my own prejudices as well as how this issue may develop in the next few years.

Tuesday, March 22, 2011

How long...

Will acres vote? Certainly the US Senate will continue to over-represent rural America, but this tide seems to be inexorable.

Ponder this map of Texas - our fastest growing state.

Check your state results here.

We are an urban country and becoming more so. Higher gas prices may be accelerating this flight.
Our lost victimhood...

One of the biggest casualties of the commodity boom has been serious degrading of our whining power in agriculture. After all, farm income is setting records for more as sub-sectors like livestock slowly adjust to feed costs, and we grain farmers are still polaxed by our good fortune.

The problem becomes how to portray ourselves as victims now?  This is the only public image we seem to be comfortable with, and it under-girds our sense of entitlement.

Enter the Great Regulation Oppression. It would appear that the evil EPA had been timing their unjust moves to help us at this moment, although oddly, like most other businesses, over-regulation wasn't very high on our list until we began making the big bucks.


Over-regulation is the fallback complaint when times are good, I would submit.

More revealing to me are the anti-regulatory screeds that totally omit any discussion of the problem being regulated. One example:
Shaffer said EPA’s over-reaching focus on agriculture is particularly troublesome because agriculture has worked successfully with the Agriculture Department to reduce its environmental impact on the Chesapeake Bay.
“Use of crop inputs is declining,” Shaffer said. “No-till farming has reduced soil erosion and resulted in more carbon being stored in the soil. Milk today is produced from far fewer cows. Nitrogen use efficiency has consistently improved. Farmers are proud that their environmental footprint is dramatically smaller today than it was 50 years ago, and we are committed to continuing this progress.”
Shaffer, a Columbia County (Pa.) green bean, corn and wheat farmer, said agriculture’s success in reducing nutrients in the Chesapeake Bay is well documented, but EPA has ignored the substantial effort and progress of recent years. A new report from USDA’s National Resource Conservation Service outlines the progress made by agriculture.
“EPA moved forward with an aggressive and unnecessarily inflexible new plan to regulate farming practices in the Chesapeake Bay watershed,” Shaffer said. “In the last two years, EPA has set in motion a significant number of new regulations that will fundamentally alter the face of agriculture, not just in the bay, but nationwide. These new regulations will determine how farmers raise crops and livestock and will increase the likelihood of expensive lawsuits filed by activist organizations.”
Shaffer warned that policies already in place or being considered by EPA will greatly extend federal control over crop farmers and livestock producers, regardless of their size or footprint. [More]
What I see missing are any stats on the health of the Chesapeake Bay. Is it getting better or worse? Did the actions touted above have the desired effect? AFBF rarely mentions environmental problems other than to state they are not farmers' fault.

The reason given is more regulation is going to raise our costs.

Well, duh. This is because, in many cases, we have been passing the environmental costs to the future or the general public as economic externalities. Having to actually pay for cleaning up our messes will impact our bottom line, but it may make  a lot of other bottom lines much better.

While I see Great Regulatory Harangue as primarily a campaign for farmers and farmer organizations to regain our victimhood, many of these regs or action may actually be ill-advised or unnecessary. But I would be more convinced by facts and arguments about the actual problem the regulations try to address, not just the farmer costs involved.

Monday, March 21, 2011

Interest rate worries, Chapter 127...

Not being a fan of cash, I virtually always smile at lower interest rates, but those who do constantly parrot "Cash is King!" even in the face of mountains of contrary evidence have a new worry. Who will buy our massive new issues of US debt? After all, famed money manager Bill Gross at PIMCO has unloaded his bonds.

I don’t know. Reserve surplus sovereigns are likely good for their standard $500 billion annually but the banks are now making loans instead of buying Treasuries, and bond funds are not receiving generous inflows like they were as late as November of 2010. Who’s left? Well, let me not go too far. Temporary voids in demand are not exactly a buyers’ strike. Someone will buy them, and we at PIMCO may even be among them. The question really is at what yield and what are the price repercussions if the adjustments are significant. Fed Vice Chairman Janet Yellen in a speech just last week confirmed the theoretical rationale that Treasury yields are directly linked to the outstanding quantity of longer-term assets in the hands of the public. If that quantity is suddenly increased in one year as the charts imply, what are the yield consequences? What I would point out is that Treasury yields are perhaps 150 basis points or 1½% too low when viewed on a historical context and when compared with expected nominal GDP growth of 5%. This conclusion can be validated with numerous examples: (1) 10-year Treasury yields, while volatile, typically mimic nominal GDP growth and by that standard are 150 basis points too low, (2) real 5-year Treasury interest rates over a century’s time have averaged 1½% and now rest at a negative 0.15%! (3) Fed funds policy rates for the past 40 years have averaged 75 basis points less than nominal GDP and now rest at 475 basis points under that historical waterline.
As a counter, one would argue (and I would partially agree) that the U.S. and indeed developed global economies must keep yields artificially low for some time if post Lehman healing is to take place. But that of course is the point. By eliminating QE II, the Fed would be ripping a Band-Aid off a partially healed scab. Ouch!  25 basis point policy rates for an “extended period of time” may not be enough to entice arbitrage Treasury buyers, nor bond fund asset allocators to reenter a Treasury market at today’s artificially low yields. Yields may have to go higher, maybe even much higher to attract buying interest.
Investors should view June 30th, 2011 not as political historians view November 11th, 1918 (Armistice Day – a day of reconciliation and healing) but more like June 6th, 1944 (D-Day – a day fraught with hope for victory, but fueled with immediate uncertainty and fear as to what would happen in the short term). Bond yields and stock prices are resting on an artificial foundation of QE II credit that may or may not lead to a successful private market handoff and stability in currency and financial markets. 15% gratuities may lie ahead, but more than likely there is a negative two-bit or even eight-bit tip lying on the investment table. Like I did 45 years ago, PIMCO’s not sticking around to see the waitress’s reaction. [More]
With celebrity endorsements like that, should we be fretting about rising interest rates looming in the near future?

Maybe not. I submit for evidence what happened during the earthquake: yet another charter flight to "safety".  Which apparently most think we still represent.
Treasury prices fell Thursday as a lack of any major negative developments in the Japan nuclear crisis allowed for a break in the bond market's recent flight to safety rally.
U.S. government bond market prices dropped as Japanese workers continued to work to try to stabilize conditions at the country's Fukushima Daiichi nuclear plant, which was damaged in last week's massive earthquake. Military helicopters were brought in to douse water on overheating fuel stores and officials at Tokyo Electric Power Co. reportedly said they hope to soon restore power to the facility, which could allow cooling pumps to be restarted.
In recent trading, the benchmark 10-year Treasury note was down 15/32 to yield 3.263%. Thursday's losses came after a sharp rally Wednesday that took the benchmark 10-year yield down to 3.138%, a level last hit in December. The two-year was down 3/32 to 0.613%. [More]
But it does illustrate some pretty wild swings in the bond market as evidenced by who is buying our debt.

 [Click to enlarge]

If you can't read the chart text, what we're looking at here is quarterly purchases of American debt. The blue portions are non-Fed American buyers, the yellow bit is the Fed, and the red bit is foreign purchases, many of which are made by foreign central banks.
Who will buy Treasuries when the Fed doesn't? Based on the above, it looks to me as though Fed purchases have largely crowded out other buyers, and when the Fed has previously pulled back, those other buyers have stepped back in. Non-Fed domestic purchases soared between the fourth quarter of 2009 and the second quarter of 2010. What kind of interest rate rise was necessary to induce this increase? Not much of one; yields rose perhaps 10% over the period.
Could things be different this time around? Sure. The American economy seems to be on a much stronger footing than it was a year ago. Other investment opportunities will look more attractive. On the other hand, conditions elsewhere look less inviting. European interest rate increases could make some European bonds more attractive, but they'll also push the euro zone toward new crisis flare-ups, which tend to boost Treasury prices. Instability in the Middle East and crisis in Japan have also provided support to Treasuries. Do we think that smoother sailing is ahead?
It's also worth noting that unexpectedly strong growth will mean a more rapid decline in the federal deficit, which will help on the supply side. I think Treasury yields are far more likely to rise than fall. After all, they're really, really low right now! And if you hold billions in Treasuries and want to sell at the bottom, then it's hard to blame you. But I tend to think that until the global recovery looks more durable, and until global geopolitics calm down, there will be plenty of buyers ready to take ownership of one of the world's safest assets. Things now aren't obviously so much better than they were last spring, such that a much bigger rise in yields will be necessary to bring non-Fed buyers back into the market. In my view. [More]
Bottom line: we'll either have to get used to daily news shocks, or investors will cling like Saran Wrap to US bonds. Old habits die hard, and there still isn't a safer alternative.

Which gets me back to why anyone would want to be cash heavy in the new global economy. It also reinforces my tendency to ask interest rate hawks what their investment mix is, since it looks to me like those seeing astronomical rates in the future are engaging in wishful thinking.
Small farm reprieve...

As I lay awake last night trying to figure out how to make crown molding fit on a downward curving section of ceiling (don't ask), I started doing some farm arithmetic. Using rough numbers, of course, it dawned on me that smaller [usually inherited] farms could now be something other than a source of extra income for the owners.

As prices have risen, so have margins.  We're taking over twice the gross profit acre from our farm - total revenue minus variable costs (fer, seed, chem, fuel, rent) - than just a couple of years ago. And that is with much higher rents.

Farmers rightfully point out that rents are rising to shrink that margin, but c'mon - owners are not taking all the increase by a long shot. (Shiny Metal sales makes this evident) In fact, the split of gross profit to owner and operator is closer to even than it has been for some time, by my figures. More importantly, the combined return is now a 2+ advantage.

The upshot is not just more income from a small amount of rented acres, but a whopping increase for owner-operators of small farms, especially if you inherited say 200 acres free and clear. And many of these might have serviceable equipment from Dad that can be run for years more with little machinery costs.

Suddenly 200-500 acre operations are earning a respectable living wage. Thanks to low inflation, that number hasn't risen like other costs. This changes the consolidation dynamic, as the pressure for outside income drops drastically. For those close to retirement, it also means scaling back to owned land looks like a great way to keep going with far less hassle/effort and still bring in ample income.

I obviously overlooked the 1-2 punch and underestimated how rapidly and far income levels would rise for both owners and operators, and what the combination of those streams would mean on a small scale. One possible conclusion is we could see a slowing of consolidation for some areas and operators who now are much farther from the edge, and for whom rising rents are not just a cost, but an added bonus.

Sunday, March 20, 2011

Earthquakes, wars, limit moves...

And my world is all about crown molding and electrical outlet replacement.

Sorry for the absence. Sooner or later I will finish or it will kill me.

Thursday, March 17, 2011

Remodeling $%^&##* hiatus...

What a surprise!  Our tiny "redecorating"project has grown into a time-eating labor. No posting until I sleep in my own bed again, I would guess.

Thanks for reading.  There is so much to talk about, and I can't even find time to read much.  I would guess about 3 days.

Which means about 10.

Tuesday, March 15, 2011

Why our "10%" brag is mostly spin...

I've been irritated for years about the constant hammering that - thanks to us - consumers only spend 10% of their income on food.

First of all it uses AVERAGE income, which most economists think distorts the picture since nearly 2/3 of Americans earn LESS than average income.

Second, food prices are not determined for the most part by subsidized corn, wheat, etc. and when the are they are in the wrong way: dairy, sugar.

Finally, the poor (who farmers don't like to talk about much) face the problem of inelastic demand.
The financial restraints on lower-income consumers mean they have less flexibility when food and energy prices climb. Families making $15,000 to $20,000 a year use 19 percent of their after-tax income for food and those earning $20,000 to $30,000 typically use 18 percent, compared with 8 percent for families earning more than $70,000 annually, according to the Labor Department's 2009 Consumer Expenditures Survey, released October 2010. [More]
Income inequality is getting worse, so these extremes will be widening. At this rate, farmers will be talking about how lucky consumers making over $200,000 are to have our farm program, while not looking at the other 80%.

While these inequalities are not the fault of agriculture, exploiting them deceptively for self-promotion is - as my father would put it - sharp practice.

We really, really need to know more about who we serve. And care a little more.

Sunday, March 13, 2011

Then addeth ye two sticks...

Stuff you never knew about the history of butter.
There is no evidence that the Romans used butter in their cuisine, (no form of butter appears in the ancient Roman cookery book Apicius) preferring olive oil, but used pure butter “medicinally”, including for making the skin “pliable” and in other situations that are too easy to imagine to be described here. Pliny suggests using it with honey for teething infants (which at least has deliciousness to recommend it) and Galen suggests using it as lamp fuel and then putting it on the eyes to cure inflammation and (presumably) sightedness. In Tablet VIII of The Epic of Gilgamesh, written some four thousand years ago, Gilgamesh makes an offering of purified butter to Shamash, the Babylonian sun god. (the gods, it was known, have no interest in milk solids). These days we usually call this sort of butter “ghee” or sometimes “clarified butter” (clarified butter, which the French quietly use a great deal in baking, has been cooked to boil off excess water, but not long enough for the milk solids to brown) to differentiate it from what we now think of as “butter,” but for millennia it was just butter.

Impure butter was viewed by the Greeks and Romans as a sure sign of barbarism and an invitation to be “civilized.” The Northern peoples were presumed to coat themselves in butter for reasons that ranged from the medicinal to the deeply troubling. The expression “as revolting as a butter-headed Burgundian” (Aussi révoltante que bourguignon avec du beurre dans ses cheveux) dates from this period, and some scholars have suggested that the French reputation for rankness is also butter-related. It was only after the fall of Rome that it slowly became acceptable to eat butter in polite company. By the Middle Ages, German and French butter fanatics would actually bribe their priests to allow them to eat butter during Lent, until, under pressure from the pro-butter Protestants, the Catholic Church allowed the consumption of butter during Lent during the 16th century. [More]
From Gilgamesh to Julia Child, butter enthusiasts have been spreading it thick. And unlike fluid milk consumption, we're eating more of it.


I'm not sure what happened in the mid 90's - was it a diet craze? I grew up on margarine, and actually preferred it. Jan was a butter person. Like all so many things, I soon came to align my preference with Jan's.

It's just easier that way...

[via sullivan]

Friday, March 11, 2011

Free trade saves the day?...

It's a stretch but at least one economist thinks China's savings glut is fueled by their worsening sex ratio (men/women population). Here's his logic:

The lack of a social safety net is often blamed for the high Chinese saving rate. Without welfare and government pensions the Chinese must save to self-insure themselves. But Mr Wei pointed out that even as the government has extended more social welfare programmes, the saving rate has continued to rise. He believes the uneven sex ratio can explain half of the increase in private saving between 1990 and 2005. He explained that the marriage market is becoming very competitive with so few girls. Chinese parents want to accumulate as much wealth as possible to ensure that their son can attract a wife. It is also important to provide sons with the best education possible. A competitive marriage market means that members of the disadvantaged gender must raise their game, which in China means greater wealth and education.
Mr Wei also reckons the sex ratio can explain capital accumulation in the corporate sector. The desire to accumulate wealth means that boys and their parents are more likely to become entrepreneurs, work more hours and take more unpleasant jobs. He found higher rates of entrepreneurship in areas with more skewed sex ratios.
Many different factors can explain global trade imbalances. The currency likely plays a role alongside high saving rates. But unless Chinese citizens start to consume more, a large fraction of the Chinese current-account surplus will persist. Too much saving may seem like an enviable problem, but there can be too much of a good thing. If sex ratios are as important as Mr Wei’s argues, the only way the Chinese can restore global financial order is to either import women from other countries, export men, or promote polyandry. [More]
Then if our economy is saving too little, and our sex ratio is slightly the reverse...

No, no don't tell me - I've just about got it.

Thursday, March 10, 2011

Junkbox, Episode MMCD.27½...

Does remodeling cause drinking or vice versa?

Wednesday, March 09, 2011

What's wrong...

With this graph?


1. Guess which meat doesn't have a checkoff.
2. I doubt if "Be inspired" could have less effect than "TOWM"
3. If checkoffs prevented things from getting worse, how would you prove it?

Maybe producers are not even coming close to understanding the changing American diet.
We're just better, that's why...

Man, I knew this little tempest would trip triggers in farm country given our long years of selfish-steam reinforcement that farmers are the best people on the planet.
Last Friday, the Washington Post's Ezra Klein made a point in touting a book, "The Triumph of the City," to take a shot across the bow at rural America.

"The overarching theme of (Ed) Glaeser's book is that cities make us smarter, more productive and more innovative. To put it plainly, they make us richer. And the evidence in favor of this point is very, very strong. But it would of course be political suicide for President Obama to say that part of winning the future is ending the raft of subsidies we devote to sustaining rural living. And the U.S. Senate is literally set up to ensure that such a policy never becomes politically plausible." [More]
It began with this post by Ezra Klein who (unlike Clayton) followed up with a chance for Sec. Vilsack to respond. (well worth reading, BTW)

EK: Let me go back to this question of character. You said again that this is a value system that’s important to support, that this conversation begins with the fact that these people are good and hardworking. But I come from a suburb. The people I knew had good values. My mother and father are good and hardworking people. But they don’t get subsidized because they’re good and hardworking people.
TV: I think the military service piece of this is important. It’s a value system that instilled in them. But look: I grew up in a city. My parents would think there was something wrong with America if they knew I was secretary of agriculture. So I’ve seen both sides of this. And small-town folks in rural America don’t feel appreciated. They feel they do a great service for America. They send their children to the military not just because it’s an opportunity, but because they have a value system from the farm: They have to give something back to the land that sustains them.<

To being with, it was a comment about a book about cities, but if you document good aspects of cities, you automatically malign rural America, I guess.

But the evidence for the former is considerable, and the proof we are the repository of American values a little less verifiable.

The trouble is we've been in Stuart-Smalley-mode for so long we actually swallow our propaganda: country folk are better than city folk.  Which leads to an interesting problem.  When our children leave the farm to become lawyers and accountants and ice cream salesmen, do they fall away from the moral high ground? And what happens to old farmers who move to Naples? Is my son in Elmhurst less admirable than the one up the road? 


The geographic determination of virtue and values is laughable. We know we divorce, abuse, addict and sin at rates very similar to urban denizens, but those facts stand in the way of a public-relations image which justifies entitlements.

And yes, the money does pour from urban to rural in a big way. There would be no rural utilities (phones, power, roads, etc.), for one example if city folks didn't pay more so we could pay less than the real cost. Rural school are screaming for more state aid to relieve local taxpayers.  And then there are those farm subsidies...

All said, the best summary came from Joyner:

Essentially, Vilsack justifies subsiding farmers on the basis that rural America is the storehouse of our values, for which he has no evidence. And he’s befuddled when confronted with someone who doesn’t take his homilies as obvious facts.
Nobody argues that America’s farmers aren’t a vital part of our economy or denies that rural areas provide a disproportionate number of our soldiers. But the notion that country folks are somehow better people or even better Americans has no basis in reality. [More]
Ryan Avent adds that the real problem is policy debates are reduced to personal affronts, just as Clayton took it.
ONE of the most frustrating things about policy debate is the way in which arguments about efficiency are often interpreted and responded to as arguments about values. A defence of congestion pricing, for instance, will often get one labeled as anti-car. The value-oriented arguments become very intense when one makes arguments about the relative economic benefits of different kinds of places. And so it's not really suprising that an Ezra Klein post praising Ed Glaeser's work on the economic strengths of urban agglomerations hit a nerve with Department of Agriculture Secretary Tom Vilsack. Get to talking about how cities are associated with high productivity levels and incomes, and about how urban tax revenues subsidise inefficient policies like massive agriculture subsidies, and people from rural areas may begin to feel that they're being personally slighted. What is interesting is just how hollow these complaints ring when properly addressed.
First, it may be that the economists who understand the economic virtues of city life aren't doing a sufficiently good job explaining that it's not the people in cities that contribute the extra economic punch; it's the cities or, more exactly, the interactions between the people cities facilitate. It's fine to love the peace of rural life. Just understand that the price of peace is isolation, which reduces productivity.
Second, the idea that economically virtuous actors deserve to be rewarded not simply with economic success but with subsidies is remarkably common in America (and elsewhere) and is not by any means a characteristic limited to rural people. I also find it strange how upset Mr Vilsack is by the fact that he "ha[s] a hard time finding journalists who will speak for them". Agricultural interests are represented by some of the most effective lobbyists in the country, but their feelings are hurt by the fact that journalists aren't saying how great they are? This reminds me of the argument that business leaders aren't investing because they're put off by the president's populist rhetoric. When did people become so sensitive? When did hurt feelings become a sufficient justification for untold government subsidies? [More]
The truth be told, this farmer suspects there are many, many people in the world better than himself. In fact, the older I get, the more the number grows. And the vast majority of them live exemplary lives in cities.

Why can't we be OK with being just as good as other people? Why is any criticism of our lifestyle forbidden?

[One final note. The disproportionate number of military from rural areas Vilsack reiterates doesn't seem to be reflected in farmer ranks. I cannot think of only a single younger farmer I know who is a veteran. The last significant batch seems to have been "semi-volunteers" like me during Viet Nam.]

The single-crop advantage...

A commenter asked my views on the recent actions by NCGA delegates to kinda, sorta nudge toward lower subsidies.
After an extended discussion and failed attempts to change the language, NCGA delegates approved via voice vote that farm programs should look at options for shifting from direct payments to better risk-management tools. The policy read: "NCGA should investigate transitioning direct payments into programs that allow producers the ability to manage risk while assuring food security."
In a 52-48 percent vote, NCGA delegates had rejected a resolution Thursday that the group would "actively pursue transitioning direct-payment dollars into a revenue-based safety net that triggers only when a loss occurs."
Pushed by the Ohio Corn and Wheat Growers Association, delegates from several states then came together to craft the language that eventually passed. NCGA delegates acknowledged they were facing a balancing act of wanting to show farmers would like to help in cutting the federal deficit but other farm groups don't want to necessarily spell out specifics of where agriculture is willing to take cuts in the safety net.
On the floor, delegate Ken McCauley of Kansas, a former NCGA president, cautioned against changing the language reached in compromise. "The original amendment is what people in D.C. told us they were looking for," McCauley said. Later, he added, "This is important and I think this is the right message of where we need to go."
Shortly later, delegates also added a separate resolution stating that NCGA believes a safety net is a combination of risk-management tools available to producers with the ability to protect farmers against revenue losses due to circumstances beyond their control. [More]
As I replied, I had left on Friday, and thought the issue was dead, according to an account from some old friends (yeah, I know - all my friends are old now).

I think this is what first steps look like, and I note it seems it was a struggle just to get this vague language included. The reluctance to give up any payment is enormous, and I commend highly the effort and result. Good on ya, mates!

That said, it is instructive to note that corn (and perhaps soy) associations probably have the only shot at making these advances. Crimony, when corn prices are over $7, and a DCP is ~$25/A, how big a hit are we talking? When all you speak for is corn farmers you have significant latitude.

Meanwhile, Farm Bureau was tied in knots when the IA delegation attempted a similar policy nudge. Populated with growers of all kinds - especially cotton - AFBF is cemented in place on policy, I'm afraid. (Although, you'd think $200 cotton might soothe any payment loss).

It is crucial to keep in mind as well how much organization staffs have at risk when you begin talking about less government intervention. Part of their job justification is brings pieces of the Washington carcass back to members.

The result is while many want to be seen taking one for the team, we also want something in return (better safety nets, etc.) In fact, I would guess what we are looking for is something like a ethanol mandate that grants enormous economic benefits without line-item funding.

The troubling aspect for me is the assumption that what we get right now is deserved, so any cuts are sacrifices. This is baloney. We are the waste and abuse we rail against.

Nonetheless, all this does not take any credit away from the courageous and hopefully example-setting result by the NCGA.
Another comment hiccup...

Don't know why this didn't post below:
Steve has left a new comment on your post "The politics of "broke"... The new fear word for ...":

You make a good point in your previous post about how it is a drop in revenues rather than a jump in spending that is causing the current problem. You imply that a better response is to increase debt rather than reduce spending.

Where I live teacher pay is significantly above the average wage for the community. Teacher average is $60,000 with benefits while average person is $30,000.

What isn't said in most of the reports is that teachers hold more degrees so a masters or a PhD is compared to others who have the same educational level. When compared that way, the teacher is receiving average compensation. But since most others in the community do not have such degrees, they receive less compensation but the reports say they each receive the same amount when adjusted for educational level. Keep in mind, that there is no correlation between educational level and teaching ability. There is a correlation level between education and compensation though. So a teacher has significant financial incentive to amass educational credits during summers and the frequent in-service days even though it doesn't appear to help them teach better.

Gates on Compensation

To be fair, the community is becoming feudal in nature with the 20% who are land owners becoming wealthy while the 80% who do not own land having a hard time keeping up.

Where I live, the union has negotiated a guaranteed 5% return on the pensions and required that the State employees and teachers pension funds be invested in the stock market with the public employees pensions getting any greater return that the stock market might provide but with a 5% floor. The taxpayer makes up the difference if the stock market goes down.

In addition, the union has used the collective bargaining process to leapfrog compensation each year. Anytime someone's compensation is below average then they go to the arbitrator/court and have their compensation moved to average or above. Nothing the local board can do. That moves the other half below average, so they repeat the process. At any point in time, half are below average and have a complaint to file.

The unions by themselves are not breaking the Country. But they have managed to create a system that is inflexible, protects poorly performing people, costs more, and is the primary financial supporter of one political party and opponent of any kind of limit on taxes.

The process to fire a teacher in Illinois according to the Chicago Tribune.

Steps to Fire a Teacher

Steve:  I do not argue your points, and when Jan was president of the school board in our tiny district, it struck me as absurd all the work necessary just to keep the place running.

But my point is do we actually expect these essentially economic and efficiency reforms to make any difference in our abysmal educational outcome? If we're already struggling to attract high quality entrants now, as referenced in the excerpt below, those actions certainly don't strike me as corrective.

I really don't know what reform is needed to make our educational results better, and I also think this is really bad for our future. Leaving a broken educational system could be even worse than leaving a deficit.

Re your other point: I did not mean to imply debt THE solution to the exclusion of other remedies. In fact, I think starting with the Bowles-Simpson plan our best bet. It recognizes the importance of long term deficit reduction and also the tenuous nature of our recovery. Slashing federal programs at the same time state layoffs are dragging down employment is not a bad idea, but bad timing. Again, the bond market tells us the level of urgency needed. What is of primary importance is growth to return revenue to former levels.

I also think tax expenditures to be the place to cut first (after the wars). (Yeah - I'm talking about Sec 179, bonus depreciation, etc.) I would also welcome a return to Reagan-era tax rates.

Sorry about the foul-up.

Tuesday, March 08, 2011

The politics of "broke"...

The new fear word for deficit hawks is broke.  And they can't utter it often enough.
House Speaker John Boehner routinely offers this diagnosis of the U.S.’s fiscal condition: “We’re broke; Broke going on bankrupt,” he said in a Feb. 28 speech in Nashville.
Boehner’s assessment dominates a debate over the federal budget that could lead to a government shutdown. It is a widely shared view with just one flaw: It’s wrong.
“The U.S. government is not broke,” said Marc Chandler, global head of currency strategy for Brown Brothers Harriman & Co. in New York. “There’s no evidence that the market is treating the U.S. government like it’s broke.”
The U.S. today is able to borrow at historically low interest rates, paying 0.68 percent on a two-year note that it had to offer at 5.1 percent before the financial crisis began in 2007. Financial products that pay off if Uncle Sam defaults aren’t attracting unusual investor demand. And tax revenue as a percentage of the economy is at a 60-year low, meaning if the government needs to raise cash and can summon the political will, it could do so.
To be sure, the U.S. confronts long-term fiscal dangers. Over the past two years, federal debt measured against total economic output has increased by more than 50 percent and the White House projects annual budget deficits continuing indefinitely.
“If an American family is spending more money than they’re making year after year after year, they’re broke,” said Michael Steel, a spokesman for Boehner.
A person, company or nation would be defined as “broke” if it couldn’t pay its bills, and that is not the case with the U.S. Despite an annual budget deficit expected to reach $1.6 trillion this year, the government continues to meet its financial obligations, and investors say there is little concern that will change.[More]
It is the equating of a sovereign nation to a household that creates this misapplication of the concept, I think. That and a poor understanding of public finance. 

Still, as has been pointed out by experts like Bruce Bartlett, and the above article, there is no argument in the bond market. To be sure, predicting higher interest rates is a sure winner if you don't specify at time, but we've already got plenty of commodity analysts working that angle (Better buy options!!).

It will be interesting to see how effective this demagoguery to achieve what are essentially targeted attacks against political foes, such as we see with teacher unions. It looks like union-busting may be on a roll, despite public sentiment in the other direction, and screaming "broke" will be one of the tools used. In the case of states, it is actually a more accurate term, but again the test is bond ratings.

What I'm trying to figure out is how our school system will adapt to this. We're already recruiting below the top for teaching (not all teachers, of course, but in general) and wiping out collective bargaining, possibly tenure, and other perks probably will accentuate that trend.

The second thing I know for sure is that we'll never attract the kind of talented young people we need to the teaching profession unless it pays far more than it does today. With starting teacher salaries averaging $39,000 nationally, and rising to an average maximum of $67,000, it's no surprise that we draw teachers from the bottom two-thirds of the college class; for schools in poor neighborhoods, teachers come largely from the bottom third. We're the only leading nation that thinks it can stay a leading nation with a "strategy" of recruiting mediocre students and praying they'll prove excellent teachers.
And I know one more thing - which is as inconvenient for me to acknowledge as it should be for others who've criticized archaic teacher union practices in the United States. The highest-performing school systems in the world - in places such as Finland, Singapore and South Korea - all have strong teachers unions. Anyone serious about improving American schooling has to reckon with this paradox: Unions here are often obstacles to needed reform, even as the world's best systems work hand in glove with their unions to continually improve their performance. [More of a helpful article]
 I really don't have much affinity for unions per se, but cannot agree they represent the threat currently being attached to them. This looks like a group-scapegoating, and blatantly politically targeted. Plus it may backfire - nothing like an attack to rally the troops.

Lost in all this is what it means longer term for a government to turn pretty harshly on its own workers and how that suggests it will function in the future. Like Shakespeare's suggestion to "Kill all the laywers", tactics like this are really just good for applause or laughs on stage, not public policy, IMHO.

Monday, March 07, 2011

Our own worst enemy...

All the posturing and angry rhetoric about the federal budget is almost certainly ensuring we don't make any progress for 2-3 years to come. The reason is the legislative process and especially freshman legislator ignorance of it.
Second, and perhaps more importantly, unless Congress comes together on a budget resolution, it’s almost impossible to make significant progress on cutting entitlement programs such as Medicare and Medicaid. The reason? A completed budget resolution is necessary to enable a special legislative procedure called reconciliation.
Reconciliation allows Congress to force itself to cut spending. In the budget resolution, congressional committees must report legislation that would cut spending or raise revenues, neither of which they like to do. If they fail to act, however, the Budget Committee can circumvent them. This tends to force the hands of the traditional committees of jurisdiction.
The Budget Act provides for expedited procedures in both the House and Senate for consideration of legislation that arises through reconciliation. The legislation may not be filibustered in the Senate. There is a fixed time available for debate, established by law, and the final legislation only requires a simple majority. This is critical, given that Republicans routinely filibuster everything in the Senate and it requires 60 votes to limit debate.
Needless to say, it would be a simple matter for Senate Democrats to play the Republican game and filibuster any big budget-cutting bill sent over by the House even if Democrats didn’t control the Senate. So reconciliation is absolutely essential if Republicans expect to make good on their promises to slash spending and balance the budget. That’s why it’s necessary to have a completed budget resolution agreed to by both the House and Senate; both must agree on spending levels and reconciliation instructions.
And this is why almost every budget expert in Washington believes that Republicans are being extraordinarily foolish, even childish, in wasting so much of Congress’ precious time on the 2011 budget. The potential for significant savings is inherently limited when almost half the fiscal year is past and two-thirds of total spending is off-limits.
Is Simple Ignorance to Blame?
If they had any sense, Republicans should have accepted that it was too late to do much of anything about the 2011 budget the day Congress reconvened in January and put all of their energy into the 2012 budget, including a binding budget resolution with reconciliation instructions. But because they’re still finishing leftover business from last year, they are going to be severely behind the 8-ball in terms of doing what needs to be done to both finish the 2012 appropriations on time or do anything about entitlements.
I think it’s mostly simple ignorance about how the budget process works that is preventing House Republican freshmen from accepting that they simply can’t do everything they promised they would to rein in spending right now. House veterans know that the freshmen have bitten off more than they can chew, but are too frightened of retaliation by the Tea Party to say so. In a few months, when the freshmen have finally exhausted themselves with futile efforts to balance the budget instantly, they’re going to greatly regret that they didn’t develop a long-term plan and properly use the budget process, which was created to do exactly what they claim they want to do: get the nation’s finances in order.
I'm taking no joy in this grim forecast, even though I think it is not the best economic path to follow right now. Austerity budgets from the states may be enough to tip us back into recession. But I do fault debt crusaders for failing to understand their job and instead simply sloganeering.
It turns at that obstructionism isn't good training for actually accomplishing anything. True, we may starve several programs or agency like the EPA, but even that doesn't appear to be well thought out. For example, meat inspectors will be cut right when our protein sector is struggling with nosebleed feed costs.
"Congress isn't changing law requiring constant presence of inspectors in slaughter plants and daily in processing," noted Tucker-Foreman, in an email response to Food Safety News. "In a desire to meet commitment to produce big cuts in budget fast they're setting up collision between irresistible force (campaign promises) and immoveable object (the current law)."

"It's bad news for consumers," said Tucker-Foreman. "Disruptions in inspection are likely to increase risk of contamination and could push up prices."

Tucker-Foreman added that reduced inspection could hurt meat processing plants and impact stakeholders further up the supply chain.

"Bad for farmers and ranchers who won't be able to get animals inspected and will have to keep feeding them [and it's] a special threat to small processing plants," she added.

One FSIS inspector, who is not authorized to speak on behalf of the agency, expressed similar concerns.

"On the inspection side, we'll see increased workloads due to unfilled vacancies at plants needing coverage. We already have more inspectors retiring than we're hiring," wrote the inspector in an email. "We won't be able to focus attention where it's needed because we'll feel like we don't have the time."

The inspector also noted that small plants could be disparately impacted. "Small plants that only work two days a week might not get covered. If there's no inspector, they can't run... Jobs will be lost."[More]
The axe-wielding budget hawks are ignoring where cuts must come from (entitlements), and also that our budget problem is complicated by plunging revenues more than out of control spending.

Cutting our way back to recession will powerfully increase that problem.

Bottom line: more smoke, little fire.

Friday, March 04, 2011

Take a breath, cowboy...

If you want to see what cable-TV ranting has done to opinion writing, consider this jeremiad from a rodeo aficionado.
It’s time to man the Ramparts: Our Western Heritage is Under Attack
Guy Weadick and Pat Burns who were instrumental in organizing the first Calgary Stampede in 1912 must be rolling over in their graves with the most recent announcement about how the Rangeland Derby is being changed to placate those most of whom unfortunately, wouldn’t know the front end of an Angus Steer from the back end of a pick up truck. We are now going to have two outriders and not the four that we have had for time eternal in the Chuckwagon Races, and for all the wrong reasons. To those who made the decisions, if you think that this is the end of the battle about what a Rodeo or more specifically what the Rangeland Derby should look like you are sadly mistaken. This is only one small minute battle that a select group has once again won in the real war that is being waged and that ultimate goal is I believe to totally ban all Rodeos from existence.
It’s time to say enough is enough. It’s amazing how history repeats itself. In September of 1938, Neville Chamberlain, Prime Minister of the England, returned from Germany after signing the Munich Agreement with Hitler. The Munich Agreement gave the Sudetenland (a Czech territorial possession) to Germany on the premise that this would end Germany’s aspirations. This agreement was reached without
Czech input by Britain and France who wanted to avoid war at all cost. Remember how Chamberlain waved the document while debarking the airplane that returned him from Germany, all the while smiling and saying “Peace in our Time?” The ink wasn’t even dry on the document before Hitler invaded Poland, the event that kick started World War Two. The failed strategy caused Chamberlain to leave office in disgrace to make way for the British Bulldog Winston Churchill, but the damage had been done, and millions would die in the succeeding conflict. The reason that the Munich Agreement was a train wreck was that the European Powers failed to realize what Hitler’s true agenda was and what his ultimate objective from the start entailed. In short, Hitler played the other European powers very successfully and they ended up fighting a far more major conflict than would have been the case had they had the backbone to stop Hitler dead in his tracks early on.
Sacrificing one’s principles didn’t work then and it doesn’t work any better now. The well financed groups that incessantly challenge our rights and privileges to a rural way of life are not going away. They will not rest until they have achieved their ultimate goal which is to totally and completely decimate our ability to lead the life that we have all chosen. Do we have a right to protect our heritage? Do we have a right to protect our way of life? Do others have the right to superimpose their value systems on us? I say not now and not ever. If you continue to allow these groups to chip away at those things that we cherish and value then we will wake up some morning and those things will be gone forever, not only for us but for our children and grandchildren. I for one am sick and tired of being castigated for my treatment of animals. [More, and the hysteria only mounts as he takes his arguments to absurd predicted extremes]
Now it could be that I am misreading a pathetically bad attempt at sarcasm. If that the case, this cowboy should stick to their famed poetry.

But obviously he is unaware of Godwin's Law when invoking Hitler.
There are many corollaries to Godwin's law, some considered more canonical (by being adopted by Godwin himself)[3] than others.[1] For example, there is a tradition in many newsgroups and other Internet discussion forums that once such a comparison is made, the thread is finished and whoever mentioned the Nazis has automatically "lost" whatever debate was in progress. This principle itself is frequently referred to as Godwin's law. It is considered poor form to raise such a comparison arbitrarily with the motive of ending the thread. There is a widely recognized corollary that any such ulterior-motive invocation of Godwin's law will be unsuccessful. [More]
I don't even know what the "outrider" issue is, but I'm willing to bet it is not the End of Civilization he describes. And it is fair to point out I don't have much in common with this profession.

Still when all you have to get strung out about is rodeo rules,  it is a powerful argument that Canada is pretty good place to be living right now.
What's the difference...

Between a farmer and a canoe.

Answer: a canoe will occasionally tip.

[Click to make readable]

[via sullivan]

Tuesday, March 01, 2011

Access to knowledge...

I continue to be blown away by the power of the Internet (and Google) to improve my life.

Exhibit A:  When we built our home, we had the shell erected and did the finish work ourselves. At that age (30) I was supremely confident I could handle the carpentry, plumbing, electrical, etc.   Heck, I was an engineer.

Of course, these are trades, and using the tools and materials of the times, experience was a much bigger component of success. But the house got finished and has served well for 30+ years.

In the process of replacing the carpet on the stairs, I noticed that I had installed the treads and risers wrong. I found out after searching for "stair construction" and comparing the advice with my work. Perhaps I could have found this out by a book or from a carpenter back in 1978, but I thought I was doing it right. And it was pretty close, and has sufficed.

But my first instinct now when faced with a fixing problem is to download knowledge. In a matter of seconds, my abilities are multiplied.

I don't think the full effect of this phenomenon is close to being realized, but as many observers are pointing out, the result is not to increase incomes, but lower costs. In this case, the Internet delivered free what an experienced carpenter used to provide for $25/hr. or so.

In don't think farming is exempt from this "value predation". Nor are our vendors. Knowledge given freely makes many jobs lower valued, simply because much of their product was "knowing where to hit", as the old joke goes.

This could be an underlying reason behind the jobless recoveries we have been suffering. Perhaps too many jobs were based on closed information systems.


I've got stairs to fix.
In a fit of spring enthusiasm...

I replied to Jan, "Let's do it now!"

The question?* "When would be a good time to replace the master bedroom and hall carpet, along with a new subfloor and white baseboard and casement trim?"

Don't look for regular posts. Our remodeling projects are to the death.

Meanwhile, the demolition phase is getting a little out of hand...

*Shame on many of you. We're old married Methodists.