They're not freeloaders...

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

Amid recession, fewer households are formed, in no small part because more family members live together to cut down on expenses. In particular, the kids aren't so anxious to be out on their own these days:

The number of 18- to 24-year-olds living at home increased by 300,000. This recession has been particularly hard on younger workers.  The number of jobs held by 20- to 24-year-olds declined 4.5 percent in 2009, while the number of jobs held by people over the age of 25 dropped 1.8 percent.

As Mr Glaeser notes, slow household growth puts off housing market recovery, which prolongs the period during which residential investment and construction aren't contributing very much to output. And that's true. But I think it's also probably worth recognising this as a source of shadow demand. Shadow housing supply, recall, refers to housing units held by banks and homeowners who'd like to sell their properties but who are waiting for better market conditions. It is supposed that any brief uptick in housing could quickly lead to renewed decline as shadow supply hits the market.
But it's also likely that there is shadow demand in the system. I suspect that as economic conditions improve, twentysomethings living at home will quickly look to move out and start their own households. This, in turn, will support housing demand, housing prices, and housing construction, buoying the initial uptick.

To put this another way, everything comes back to unemployment. If you get steady job growth, many housing concerns (though not all) will begin to take care of themselves. Unfortunately, America has still had only one month of payroll growth since the onset of recession. [More]

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

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

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

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

Poor guys are left with nothing but money.

Maybe only a few dozen...

If you have ever paused to wonder when looking down the breakfast cereal of cracker aisle in the supermarket if such extravagance of choice is economically efficient, you may have sensed a future trend. Maybe we're going to have our choices narrowed somewhat.

Wal-Mart is not the only one doing this, according to Dibadj. He says leading drug store chains, including CVS and Walgreens, grocers such as Kroger (KR, Fortune 500), and Wal-Mart's rival discounter, Target (TGT, Fortune 500), are also looking to simplify their store shelves.
In good economic times, product variety is a must for retailers. But in down times, when shoppers aren't buying much, variety can be a burden.
"Wal-Mart's a little fed up," said Lora Cecera, retail expert and partner at strategy consulting firm Altimeter Group. "I think the feeling is that as these companies keep extending their [product] lines, it's only causing confusion for shoppers and not really driving them to buy more products."
As a consumer, she asked, "Do I really need to decide between 15 different types of toothpaste when I go to a store?"
Dawn Willoughby, vice president-general manager of Glad brand for the Clorox Co. (CLX, Fortune 500), agreed.
"On an industry level, we've been talking about simplifying product assortment for a long time," said Willoughby. "If you walk into a Wal-Mart or another large retail chain, there are so many products on shelves that it does make it harder to shop."

 [More]

I think in part this could be a response to a buying public more starkly defined by income. As income inequality increases, Wal-Mart especially has fewer takers for slightly higher-end products.  And as the article points out, more (and essentially identical) choices make shopping harder.

So, a little bit of Psychology, to fuzz up your day, specifically the psychology of choice and of happiness. Two gentlemen, Barry Schwartz and Dan Gilbert, have made these topics more accessible via their TED talks last year. To summarize and synthesize the two: The more choice we have, the less happy we are. When we do get choices, we don’t use them well, and when we make mistakes, we rationalize them to ourselves, but still we worry that we didn’t do the right thing. [More]

Wal-Mart may think it is rationalizing shelf space and profits, but what it could be doing is helping customers enjoy their experience in the store by eliminating a subtle source of stress.  Happier customers spend more.

Been there, paid for that...

The predictable dynamic of individual health insurance is underway, as staggering increases have triggered regulatory alarm and consumer outrage.  But the reason for this boost should have been obvious coming down the road.

Premiums are far more volatile for individual policies than for those bought by employers and other large groups, which have bargaining clout and a sizable pool of people among which to spread risk. As more people have lost jobs, many who are healthy have decided to go without health insurance or get a bare-bones, high-deductible policy, reducing the amount of premiums insurers receive.
Steep rate hikes in this sliver of the insurance market — about 13 million Americans, as of 2008 — have popped up sporadically for years. Experts see them becoming increasingly common.
"You're going to see rate increases of 20, 25, 30 percent" for individual health policies in the near term, Sandy Praeger, chairwoman of the health insurance and managed care committee for the National Association of Insurance Commissioners, predicted Friday.

Most states don't have the legal authority to block or reduce health insurance rate increases, Praeger noted. [More]

But the actual mechanics of this is even more complicated and frankly frightening to those of us who buy even high-deductible policies.  Your rate increases depends on some unknown "group" that was likely created when you bought your policy.

When insurance companies sell coverage in the individual market--that is, when they offer polices to people one-on-one, rather than through employers--they don’t typically put everybody’s premiums into one big pot. Instead, they usually break up their business into different “blocks.” A block could be everybody living in a particular area, everybody fitting a certain demographic profile, or everybody buying a particular type of policy, just to use a few examples. And after enough people are in a block, the insurer will often “close” it, meaning they don’t add new beneficiaries to that particular group.
Insurers will set the premiums in each block based on their projection of what kinds of medical bills people in the block are going to incur. And so, for example, a block that has a a lot of young, healthy men will probably have really cheap premiums--since, on the whole, young, healthy men tend not to have very high medical expenses.
(Young, healthy women are another story. They have the actuarially unfortunate habit of getting pregnant and having babies.)
Over time, the blocks evolve. And, inevitably, some of those young, healthy men will develop medical problems. They’ll get injuries or develop life-threatening illnesses--the type that require extended hospitalizations, long stints in rehabilitation, and all sorts of prescriptions. Rates in the group will start to go up.
At that point, people in the block will seek better deals. And the healthy ones will find such deals quickly. But the ones with the medical problems won't have such an easy time. If they shop around, they're likely to find only policies that provide way too little coverage or cost way too much. Whether they stick with their existing coverage or decide to switch, they're going to end up paying a lot more for their medical care.
Policy wonks call this the adverse selection death spiral. And the key thing to remember is that it happens all the time, even when the economy is strong. It is inevitable, given the way the individual market works, although insurers can make it better or worse depending upon how aggressively they want to pursue profits.

An insurer might, for example, raise rates for a particularly high-cost block more severely than its expenses actually require, in the hopes that expensive-to-treat beneficiaries will eventually flee for other carriers. There's no way to know if that's what's happening here, at least given the information now available. [More]

Now consider what this process, which appears to be just beginning, will have on wages and labor mobility. The inability (or even reasonable doubt) to get individual policies should you lose your job will certianly keep unhappy and/or unpaid workers glued to their current employment.

Perversely, this is good news on the inflation expectation front.  Coupled with vast amounts of unused labor, the willingness of workers to show up for health coverage alone means employers can pay as little as possible - perhaps even lowering real wages faster, even as they are also faced with higher medical coverage costs.

It also suggests that if medical coverage costs were to be lowered, real wages will reise.

There is, in other words, very good evidence that employers pass health-care savings onto employees. A Rand study by Dana Goldman, Neeraj Sood and Arleen Leibowitz examined a particular firm's response to a period of premium increases and found that "about two-thirds of the premium increase is financed out of cash wages and the remaining one-thirds is financed by a reduction in benefits." Another study by Katherine Baicker and Amitabh Chandra found that a 10 percent increase in premiums "results in an offsetting decrease in wages of 2.3 percent," which is fairly impressive given that income is much higher than health-care premiums.
There's good reason to think that if health-care costs can be tamed, wages will rise. But one of the big problems in health-care reform is that workers don't understand this connection. They think of health-care coverage as a "benefit," rather than a form of compensation engaged in a fairly zero-sum competition against their wages. [More]

The larger question now, is the loss of participants in the individual market.  While relatively small - about 9 13 million of us - those who cannot afford the increases mentioned above will not only become more economic deadweight by being drafted into the corps of uninsured, we won't be adding what premiums we could afford to the cost of medical care.

For those of us in rural America, this has some further implications:

• More women will be stuck in more undesired work situations simply to obtain health coverage.
• Those few jobs in the country that do provide good coverage tend to be in government, health care or manufacturing. As local/state budgets implode, I am already seeing those jobs being cut. As for manufacturing, the credit crunch alone is having the same affect.
• A small reprieve can be obtained by forming your own employment group, even as small as 3-4 families and qualifying as a group. This provides another advantage to large farms, and effectively adds to their economic edge.

I was in a "death spiral" group a few years ago with my relatively small insurer.  Thanks to a very hard-working agent we were able to shift to a another HD policy even though we had become "uninsurable" as most people are by their 50's.  Being able to afford coverage and not being able to buy it is a panicky feeling, I can assure you.

Assorted important knowledge...

• Cool old cars (watch until the end)
• Hitler's deficit (you'll never hear Colonel Bogey's March the same again)
• There are some dumb questions.  My favorite:

According to Jennifer Haz, of the Greater Miami Convention and Visitors Bureau, one inquiring mind asked: "Can you tell me which beach is closest to the ocean?"

• The tragedy that is North Korea 
• Computer engineer Barbie (just when you think your collection is complete)

[via aldaily, mefi]

Almost one minute...

Of your life you'll never get back.



[via presurfer]

Tackling the deficit (I)...

Although I support running a deficit during a recession - and I think when the American Enterprise Institute agrees the stimulus effort helped, I'm not alone - I also welcome the opportunity to figure out how to tame this beast. First of all, I think we should get some myths and mistaken beliefs straightened or at least exposed to some light.

Let's start with Government Waste.

To begin with while we all know there is waste in government, there is waste in all financial or business activity. I'm pretty sure many of you could point out significant savings in my farm budget, for example.  Is the federal government really that much worse?

Many people think so.

Here's a fascinating little chart. The question is, "Out of every dollar the federal government collects in taxes, how many cents do you think are wasted?" The average answer, in the latest Washington Post poll, is 53 cents. A few comments:

• Clearly, Republicans are winning the PR battle on this score. The idea that 53 cents of every dollar is wasted is obviously ridiculous even for the most ardent tea partier, but I don't suppose this ought to be taken especially seriously as an actual response. Rather, it's sort of crude proxy measure of dissatisfaction with gummint spending. And it's been going up steadily for 25 years.
   
• If the average was 53 cents, that means lots of people must have said 60 or 70 or 80 cents. Even more fascinating! I'd love to see the distribution on this answer.
   
• Although there's a secular rise over time, specific dips and spikes seem unrelated to the party in power or to economic conditions. Maybe this is just statistical noise, though the drop from 1998 to 2000 was pretty substantial.
   
• At this rate, by the year 2135 the average voter will think the entire federal budget is pure waste.

 [More]

As is pointed out in the comments to the above post, the graph is pretty sloppy (the x-axis is irregular), but the fundamental information is displayed.  However, if true, this perception would mean, we could save a TRILLION dollars simply by getting rid of waste.

This sounds exciting and painless, but remember those "wasted" dollars don't just fall under the car seat, they go into somebody's pocket and enter the economy just like, well, non-wasted dollars. This means wasted dollars have a constituency, such as the $900 hammer manufacturer. Even "wasted" welfare dollars end up in grocery and liquor stores, car repair shops and the like.

The point is not there is no waste, but even if identified the best we could hope for is to re-allocate those dollars and we probably wouldn't see a big economic boost as a result. In fact, if you couple reducing waste with an income tax cut to be budget neutral, you might actually move them to the investment class from the spending class. Bottom line is reducing waste is a great idea, but no sure economy lifter.

Another tricky bit is identifying waste.  One thing I have noticed is virtually all "waste hawks" target farm subsidies. For example, from The Heritage Foundation's Top 50: 

Over half of all farm subsidies go to commercial farms, which report average household incomes of $200,000.[12] 
A Department of Agriculture report concedes that much of the $2.5 billion in "stimulus" funding for broadband Internet will be wasted.[28]  
Suburban families are receiving large farm subsidies for the grass in their backyards--subsidies that many of these families never requested and do not want.[36]  
The Conservation Reserve program pays farmers $2 billion annually not to farm their land.[49] 

Trying to systematize waste might help, but even there it can be in the eye of the beholder.

The possibilities for what makes government "wasteful" are many, but it seems to me waste can be reduced to three non-exclusive types:

1. Ineffective spending: Spending on programs that do not work;

2. Inefficient spending: Excessive spending or overhead/overpayment on programs that do work; and/or

3. Inappropriate spending: Efficient and effective spending on programs that the respondents normatively view as something the government shouldn't be involved with in the first place.

So, as an example of Type 1 waste, some citizens undoubtedly view certain welfare spending as ineffective because it doesn't eradicate poverty, while others view certain types of defense spending as ineffective because we have weapon systems to defend against threats more imagined than real. As a Type 2 example, even citizens who support welfare or defense spending probably think that red tape, high salaries and pensions and other federal employee benefits, complex billing protocols, duplication of effort, outright fraud (by government officials and/or programmatic beneficiaries) and other bureaucratic problems as inefficient overhead. Type 3 waste might be something that the government does effectively and efficiently, but citizens believe they shouldn't be doing, like subsidizing corporate marketing abroad in the eyes of liberals, or providing services to illegal immigrants for conservatives. Of course, a citizen who believes the government should not be involved in some policy area and thinks what the government spends on that policy isn't doing any good anyway and believes the feds are spending that money inefficiently, might view federal spending as wasteful on all three counts. [More]

  Certainly, decreasing waste and inefficiency is a worthwhile goal, but my contention is it is grossly overblown as a way to reduce the deficit.  In fact, the hands-off nature of defense spending when it comes to budget cuts insures some of the most wasteful spending will continue.

Attack the waste, but then let's get serious about the reducing deficit. And for farmers, keep in mind that constantly focusing on waste and fraud only makes our favorite "waste" more of a target.

Next up, foreign aid. 

No wonder...

I thought I kept hearing the same song over and over...

In my Economics and Current Policy Issues lecture on copyright, I point out that strengthening the duration or application of copyright both increases the returns to created works and increases the costs of creating new works; I usually point out the list of artists who'd have to be paying royalties to Pachelbel's heirs for ripping off the chord progression from Canon in D (or, more likely, who wouldn't have created their songs at all) were copyright too strictly applied. [More]

Which would also help explain this:

[More]

I think the same story could play out in many other realms of intellectual property.

Print media springs to mind: too many wanna-be authors, too easy to publish and distribute on-line.

Which is why live-performance is the center of attention.

On the other hand, record companies are far less susceptible to the cost-disease. Musicians rarely make money off of recordings, because the record companies' overhead and profit take precedence; some performers have tried to keep more revenue for themselves by starting their own recording ventures. Success isn't automatic—the risks remain high, even as the costs of creating and manufacturing recordings have declined. Internet technology, however, has lowered the barrier-to-entry even further, cutting the distribution costs involved in selling recordings to almost nothing. The demise of Tower Records is lamentable, but the economic forces that shut their doors are creating opportunity: for a historically miniscule start-up investment, performers can control content, manufacturing, and distribution in a vertically-integrated way. In this model, live performance becomes not just an end in itself, but also a marketing tool that funnels money into your record business. [More] 

Hence we see concert ticket prices rising.

Why are concert ticket prices so high?

The only way for ticket prices to go down is if artists charge less. Building owners and promoters don't control pricing. That's controlled by the artists and their managers. Those are the groups that have to make the conscientious decision to give the consumer a break on tickets and pricing.

That said, it's not all their fault. It's also the fault of the promoters who bid up the price. We're our own worst enemies. Agents aren't going to stop us because they want to get as much money as they can for the artist. At some point, we need to deal with the mentality of winning the bid at all costs because, in the end, the consumer ends up paying the price. [More]

Not that I've, like, actually attended a concert in this century, of course.

The "best health care" in the world...

Is getting even more expensive. You can bet this announcement by major insurer Wellpoint just gave cover to similar rate hikes by other health insurance companies.

Sebelius had called the increases "extraordinary" and told the insurer in a letter she was disturbed to learn about them. She also has demanded that the insurer answer questions about how much of a profit it will make from the hike.

Sassi said in the letter to Sebelius that the Anthem Blue Cross unit at the heart of the inquiry lost millions in 2009. He declined to offer specifics in an interview.

The executive said Anthem Blue Cross set some of its prices, or premiums, too low last year for the claims it received. It set 2010 prices based on what it thinks future prices will be.

"We need to make sure that our premiums cover the cost of claims," he said.

Sassi a minority of Anthem Blue Cross's 800,000 individual policy holders in California will see rate increases as high as 39 percent. Most premiums will rise around 24 percent when the rates take effect March 1.

WellPoint as a whole made a profit of $4.75 billion in 2009, though $2 billion of that came from the sale of a business.

The letter to Sebelius said insurance costs also continue to rise because medical prices are increasing faster than inflation, and people are using more health care. That use increase is driven by an aging population, new treatments and "more intensive diagnostic testing," the letter said.

Sassi also said that as much as one-third of their individual insurance customers leave every year. That volatility can lead to big changes in the mix of people covered and rate swings. [More]

Please note I do not necessarily blame the insurance companies.  They are making rational business decisions. But they are a big part of the reason why consumers look at health insurance a ticket to an all-you-can-eat medical buffet. Third party payers sever the link between consumption and cost.

Somewhere along the line - and I think it will be sooner than later - we will have to decide how we weigh the amount of health care we can deliver against how much we have to spend.  Yes, we will need a rationing system - either market (ish) or some other mechanism. The interesting part of the Ryan deficit plan is he simply proposes capping Medicare costs, but leaves the details of how to be filled in later.

While some observers say a growing portion of GDP going to health care is a sign of our prosperity and how comparatively little we have to spend on stuff like food, housing, etc., this trend will soon crush that naive outlook, I think.

At the same time, the political sanctity of Medicare will make announcements like this more common. The costs of caring for an aging population which enjoys socialized medicine as a reward for being 65 and older won't stop at the federal budget. To its credit, the Roadmap for America does exactly this, although like other plans it also contains some ideological silliness in the form of costly privatization schemes that drag down its usefulness.

The proposal would shift risk from the federal government to seniors themselves. The money seniors would get to buy their own policies would grow more slowly than their health-care costs, and more slowly than their expected Medicare benefits, which means that they'd need to either cut back on how comprehensive their insurance is or how much health-care they purchase. Exacerbating the situation -- and this is important -- Medicare currently pays providers less and works more efficiently than private insurers, so seniors trying to purchase a plan equivalent to Medicare would pay more for it on the private market. It's hard, given the constraints of our current debate, to call something "rationing" without being accused of slurring it. But this is rationing, and that's not a slur. This is the government capping its payments and moderating their growth in such a way that many seniors will not get the care they need. This is, in its simplest form, a way to limit the use of a finite resource: Money. [More]

Here's the weird thing.  I find both the current HCR plan(s) in Congress and the Roadmap viable alternatives. They certainly offer different basic visions of the future, but they both address rising health care costs. Either one works for me - warty as they are.

Maybe we are not at the point of realizing how our choices are limited to such a range of "don't-wannas".  But a few more years of 39% premium hikes and we will be.

Right now, folks with jobs that mask their insurance costs are too frightened to contemplate any change. Those jobs will be harder to find, and employers will be shifting more costs to employees. At the same time the ability to get insurance on the individual market will not become easier or cheaper.

I would guess few people who don't have health insurance support maintaining the status quo. At least some of those who do also want some change in how we allocate health care. Those populations are growing and unlikely to change their minds. We will have a different health care system in the future.

If nothing else, we need to start deciding what burdens we can bear and shift the debate that direction.

Maybe this is why they won...

Not a big NFL fan - unlike the rest of you, obviously - but Aaron went to Purdue the same time as Drew Brees, so this is for him.



Color me impressed.

The job drought...

Our position in the economy is peculiar in many ways. As small businessmen, with few or no employees, the nature of the job loss of this recession has been disguised. I'm going to talk about that this week on USFR. But more ideas and analyses are coming out that offer to me at least a possibility of a new world of employment.

First some atypical employment data.  For instance, this graph.

[More]

This one strikes home for me, because recently at a speech, a farmer came up to me and we had the following conversation:

"You were in the Naval Nuclear Power Officer Candidate program, I take it?"
"Yeah - I was a NUPOC, but remember, the subs were wooden back then."
"My grandson just signed up - he's a mechanical engineer."
"Great - I hope he finds it every bit the adventure and leadership training experience I did."
"Thanks for saying that. I hope he does too. But the problem was he couldn't find a job."

The idea of a shortage of entry-level engineer jobs is chilling. I always thought bullet-proof employability was the compensation for being a nerd.  But along with teachers, MBA's and practically all other professions, the difficult truth about this job environment is sinking in after enough time to move us past "temporary".

In past recessions, the most educated carried the lowest unemployment rate. But this economic downturn has been anything but typical. College graduates who have been in the work force for several years are being laid off. Those just leaving school apply for dozens of jobs and receive few, if any, responses.
"Unemployment rates for college graduates are higher than they are in normal (downturns)," Orazem said. "But while the unemployment rate has risen for people with college degrees, they are still much lower than people with a high school degree. They have really gotten nailed in this recession."
According to the U.S. Bureau of Labor Statistics, unemployment rates for college graduates with a bachelor's degree who are 24 years old or younger are close to 9 percent this year. Typically, that group has a 2 percent to 3 percent rate, Orazem said.

In general, the industries hit the hardest by the recession in Iowa include accounting, finance, marketing, manufacturing and mechanical engineering and durable goods manufacturing, Orazem said. [More]

The real nature of this downturn in employment is a combination of both economics and technology, I believe. But not since the Great Depression have we had an employment situation that may well shape a whole generation, as this forecast prolonged job-recession seems to portend. My fear is the most wrenching of these dislocations will be felt by men, and carry over to families and social structure.

The weight of this recession has fallen most heavily upon men, who’ve suffered roughly three-quarters of the 8 million job losses since the beginning of 2008. Male-dominated industries (construction, finance, manufacturing) have been particularly hard-hit, while sectors that disproportionately employ women (education, health care) have held up relatively well. In November, 19.4 percent of all men in their prime working years, 25 to 54, did not have jobs, the highest figure since the Bureau of Labor Statistics began tracking the statistic in 1948. At the time of this writing, it looks possible that within the next few months, for the first time in U.S. history, women will hold a majority of the country’s jobs.
In this respect, the recession has merely intensified a long-standing trend. Broadly speaking, the service sector, which employs relatively more women, is growing, while manufacturing, which employs relatively more men, is shrinking. The net result is that men have been contributing a smaller and smaller share of family income.
“Traditional” marriages, in which men engage in paid work and women in homemaking, have long been in eclipse. Particularly in blue-collar families, where many husbands and wives work staggered shifts, men routinely handle a lot of the child care today. Still, the ease with which gender bends in modern marriages should not be overestimated. When men stop doing paid work—and even when they work less than their wives—marital conflict usually follows.
Last March, the National Domestic Violence Hotline received almost half again as many calls as it had one year earlier; as was the case in the Depression, unemployed men are vastly more likely to beat their wives or children. More common than violence, though, is a sort of passive-aggressiveness. In Identity Economics, the economists George Akerloff and Rachel Kranton find that among married couples, men who aren’t working at all, despite their free time, do only 37 percent of the housework, on average. And some men, apparently in an effort to guard their masculinity, actually do less housework after becoming unemployed.
Many working women struggle with the idea of partners who aren’t breadwinners. “We’ve got this image of Archie Bunker sitting at home, grumbling and acting out,” says Kathryn Edin, a professor of public policy at Harvard, and an expert on family life. “And that does happen. But you also have women in whole communities thinking, ‘This guy’s nothing.’” Edin’s research in low-income communities shows, for instance, that most working women whose partner stayed home to watch the kids—while very happy with the quality of child care their children’s father provided—were dissatisfied with their relationship overall. “These relationships were often filled with conflict,” Edin told me. Even today, she says, men’s identities are far more defined by their work than women’s, and both men and women become extremely uncomfortable when men’s work goes away.
The national divorce rate fell slightly in 2008, and that’s not unusual in a recession: divorce is expensive, and many couples delay it in hard times. But joblessness corrodes marriages, and makes divorce much more likely down the road. According to W. Bradford Wilcox, the director of the National Marriage Project at the University of Virginia, the gender imbalance of the job losses in this recession is particularly noteworthy, and—when combined with the depth and duration of the jobs crisis—poses “a profound challenge to marriage,” especially in lower-income communities. It may sound harsh, but in general, he says, “if men can’t make a contribution financially, they don’t have much to offer.” Two-thirds of all divorces are legally initiated by women. Wilcox believes that over the next few years, we may see a long wave of divorces, washing no small number of discarded and dispirited men back into single adulthood. [More of a superb exploration of the jobless recovery]

Already we are seeing a change in the cultural stages of adulthood. I use a standard laugh-line in my presentations: "Adolescence lasts until 30 now". Only fewer are laughing and more are grimacing.

Especially for fathers of daughters, the hope of their child independence is fading. (It's not much better for young men, in all fairness.) Not only are jobs hard to come by - let alone jobs that pay the rent - the odds for matrimony (for women) even at college are plummeting, thanks to overwhelming female/male ratios in higher education today.

North Carolina, with a student body that is nearly 60 percent female, is just one of many large universities that at times feel eerily like women’s colleges. Women have represented about 57 percent of enrollments at American colleges since at least 2000, according to a recent report by the American Council on Education. Researchers there cite several reasons: women tend to have higher grades; men tend to drop out in disproportionate numbers; and female enrollment skews higher among older students, low-income students, and black and Hispanic students.
In terms of academic advancement, this is hardly the worst news for women — hoist a mug for female achievement. And certainly, women are primarily in college not because they are looking for men, but because they want to earn a degree.
But surrounded by so many other successful women, they often find it harder than expected to find a date on a Friday night.
“My parents think there is something wrong with me because I don’t have a boyfriend, and I don’t hang out with a lot of guys,” said Ms. Andrew, who had a large circle of male friends in high school.

Jayne Dallas, a senior studying advertising who was seated across the table, grumbled that the population of male undergraduates was even smaller when you looked at it as a dating pool. “Out of that 40 percent, there are maybe 20 percent that we would consider, and out of those 20, 10 have girlfriends, so all the girls are fighting over that other 10 percent,” she said. [More about college life that makes me weep to read, having gone to an all-male engineering school in the paleolithic era]

Just anecdotally, this seems to ring true for many of my friends with daughters. Now in their 30's, these attractive, accomplished young women can't find men of even modest caliber. Add in the recession effects on male careers, and the result is not hopeful.

But as I said in the distant beginning, on the farm we often miss these cultural upheavals, since there are no "unemployed farmers". They just disappear. And while many of us are beginning to experience some survivor guilt, it is only through our children, grandchildren and friends that the full trauma of this economic storm becomes real.

It's always been about ethanol...

Maybe we farm in order to imbibe.

Humankind's first encounters with alcohol in the form of fermented fruit probably occurred in just such an accidental fashion. But once they were familiar with the effect, archaeologist Patrick McGovern believes, humans stopped at nothing in their pursuit of frequent intoxication.
A secure supply of alcohol appears to have been part of the human community's basic requirements much earlier than was long believed. As early as around 9,000 years ago, long before the invention of the wheel, inhabitants of the Neolithic village Jiahu in China were brewing a type of mead with an alcohol content of 10 percent, McGovern discovered recently.
McGovern analyzed clay shards found during excavations in China's Yellow River Valley at his Biomolecular Archaeology Laboratory for Cuisine, Fermented Beverages, and Health at the University of Pennsylvania Museum.

The bearded archaeologist is recognized around the world as an expert when it comes to identifying traces of alcoholic drinks on prehistoric finds. He ran so-called liquid chromatography coupled with mass spectrometry on the clay remnants from Asia and found traces of tartaric acid -- one of the main acids present in wine -- and beeswax in the shards' pores. It appears that prehistoric humans in China combined fruit and honey into an intoxicating brew. [More]

Ethanol is a plausible energy source to rival fossil fuels for the same reason it has always been so valued by civilizations around the world: it is a concentration of energy (and consciousness-altering effects) that literally distills the power of sunshine into a transportable and usable form.

Early American settlers knew this.

The new Federal government, at the urging of the first Secretary of the Treasury, Alexander Hamilton, assumed the states' debt from the American Revolutionary War. In 1791 Hamilton convinced Congress to approve taxes on alcohol and carriages. Hamilton's principal reason for the tax was that he wanted to pay down the national debt, but he justified the tax "more as a measure of social discipline than as a source of revenue."^[1] But most importantly, Hamilton "wanted the tax imposed to advance and secure the power of the new federal government." ^[2]
Congress designed the tax so smaller distillers would pay by the gallon, while larger distillers (who could produce in volume) could take advantage of a flat fee. The net result was to affect smaller producers more than larger ones. George Washington, the president at the time, was one such large producer of whiskey.^[3] Large producers were assessed a tax of 6 cents per gallon, while small producers were taxed at 9 cents per gallon. [1] But Western settlers were short of cash to begin with and, being far from their markets and lacking good roads, lacked any practical means to get their grain to market other than fermenting and distilling it into relatively portable distilled spirits. Additionally, whiskey was often used among western farmers as a medium of exchange or as a barter good.^[4]

The tax on whiskey was bitterly and fiercely opposed among the Cohee on the frontier from the day it was passed. Western farmers considered it to be both unfair and discriminatory, since they had traditionally converted their excess grain into liquor. Since the nature of the tax affected those who produced the whiskey but not the people who bought the whiskey, it directly affected many farmers. Many protest meetings were held, and a situation arose which was reminiscent of the opposition to the Stamp Act of 1765 before the American Revolution.. [More]

This is also why cellulosic ethanol has such a steep hill to climb - it starts with thin energy-density feedstock.

It may also be that freaky mutations in the feedstock are reflected in modern alcohol reactions. Just as man was finding more stuff to ferment, he was being selected to tolerate the noxious potions being generated.

If your face turns red after drinking just one glass of wine, blame ancient Chinese farmers. Researchers are reporting that the "Asian Flush" mutation cropped up just as rice was first being domesticated, and it may have protected early farmers from the harms of drinking too much. But some other scientists urge caution, saying that the dates may not match up.

When you drink, enzymes in the liver known as alcohol dehydrogenases (ADHs) convert alcohol to an organic compound called acetaldehyde; another enzyme then converts acetaldehyde to acetic acid. But about 50% of Asians and 5% of Europeans have mutations in these enzymes that can increase the rate of alcohol metabolism up to 100-fold. This leads to a rapid accumulation of acetaldehyde, which can cause capillaries in the face to dilate�--and the face to turn red. Other unpleasant symptoms can include nausea and headaches. In 2008, a team led by geneticist Kenneth Kidd of Yale University found that one of these mutations--known as ADH1B*47His--may have been favored by natural selection in many East Asian populations.

A team led by Bing Su, a geneticist at the Kunming Institute of Zoology in China, set out to find the source of this selection. The researchers searched for the ADH1B*47His mutation in 2275 people across China representing 38 ethnic groups. They found that it was highly prevalent, up to 99%, in ethnic groups from southeast China; a bit less prevalent, 60% to 70%, in western China; and relatively uncommon, 14%, among Tibetans. Moreover, the team found a strong geographical correlation between regions with a high prevalence of the mutation and archaeological sites in China where rice had been domesticated thousands of years ago.

When Su and his colleagues calculated the age of the mutation, it came out at between 7000 and 10,000 years ago. That corresponds roughly to the earliest known evidence for rice farming, the team reports online this week in BMC Evolutionary Biology. "The [mutation] rose to extremely high frequency in a relatively short time, implying that the selective force was quite strong," Su says.

As for what the selective pressure was, the team concludes that the mutation was favored because it protected early farmers from the potentially fatal harms of drinking too much. The researchers cite two additional pieces of evidence for this hypothesis. First, recent archaeological evidence suggests that Chinese farmers concocted an alcoholic brew of rice, honey, and grape or hawthorn as early as 9000 years ago. Second, the drug disulfiram, which causes acetaldehyde to accumulate in the body, discourages alcoholics from drinking by causing nausea, vomiting, and other severe alcohol flush reaction symptoms. [More]

I have always been grateful for my inability to hold my liquor. Obviously it kept my ancestors from alcohol poisoning.

Speaking of which, isn't it about that time?

Odd notes...

Posting may even more sporadic as some scheduled family health care is the focus this week.  Ya never know...

Anyhoo, some isolated thoughts:

• Stumbled across this farm/food/ag blog. Good post on industrial agriculture, although the author once again spotlights no-till as if it was an increasing or even a large percentage of our production.
• Great book.
• Now that NAIS has been canceled (or shifted to the states), will the opposition commend the administration for the decision? Or just dance in the end zone?  More importantly, will they leave my inbox alone for a while? Waht if livestock consolidation continues and private "NAIS" becomes a marketing tool?
• People who don't live like me
• The autism/vaccine controversy should not have happened.  But it did, and we'll get over it.
• As if the speed gene wasn't enough to startle the horse industry, the harness-racing world has another big problem.
• There's no way e-book prices will go back up. If they do they won't sell. This industry needs to understand several layers of publishing are now obsolete.
• We are such tools.
• Bad for geese. Good for farmers. Is it any wonder seed companies are facing north?
• Will your rural paper survive the droop test?

Learning to love the deficit...

Let's make sure we understand the Republican ground rules for reducing the deficit.

• No tax increases, especially for upper-income earners.

A Rasmussen Reports survey finds that while 50% of Republicans would rather see the United States run a budget deficit by keeping tax cuts in place, a plurality of Democrats (46%) favor the opposite approach -- a balanced budget with higher taxes. Voters not affiliated with either party are evenly divided on the question.

When asked if it was possible to balance the federal budget without raising taxes, 47% of Republicans think it's possible while 53% of Democrats do not think so.

Interestingly, TPM notes that only a very small minority knew the correct answer to this question: "Is the following statement true or false? Most federal spending is spent on only three programs -- Social Security, Medicare and national defense."

The correct answer is "True," but only 35% got it right with a 44% plurality saying it was false.[More] 

• Slashing spending (except in Republican districts).

Republican lawmakers continue to bash President Obama's budget for failing to effectively control spending and adding to the nation's long-term debt.
But many of the same lawmakers are complaining about the spending cuts that affect their own communities, often aiming those comments at their constituents back home.
Sen. Christopher S. Bond (R-Mo.), for example, lashed out at Obama for "the same old big government budget that will spend too much, borrow too much, and tax too much." He said: "I'm feeling a lot like Bill Murray in Groundhog Day."
But at the same time, Bond issued a statement criticizing Obama's proposed cuts in the military's C-17 aircraft program -- cuts that happen to affect thousands of jobs in Missouri.
"Despite the need for the proven, on-time, and on-budget workhorse, the President once again wants to shut down our nation's only large airlift line in production," Bond said in a statement.
Republican Leader Mitch McConnell (Ky.), called Obama's budget "another massive budget filled with even more spending than last year's record totals."

But in the Lexington Herald-Leader back home, a McConnell spokesman made it clear that the senator opposes Obama's proposal to slash coal subsidies by $2.3 billion over 10 years as part of his climate change legislation. [More]

This is not to say Democrats have better ideas, just if Republicans have no clue, that's a hint which way to bet.

Besides, lost in the condemnation of the very ugly HCR legislation is the sad truth that doing nothing isn't going to work. And until now, there has been no counteroffer from the opposition. I have some hope, however that fact is finally sinking in on both sides.

The "Ryan Plan" is a brave plan with much I could embrace* - heck, I'd sign on to the whole thing.  But it isn't exactly popular with the GOP.

House Republicans are at pains to point out that a far-reaching budget roadmap unveiled by their top budget guy, Rep. Paul Ryan (R-WI), isn't their budget, but when asked today at a press conference what about Ryan's budget he disagreed with, Minority Leader John Boehner couldn't name anything.
"Off the top of my head, I couldn't tell you," Boehner said.
Despite the apparent lack of substantive disagreement, though, Boehner wants to keep the Ryan plan from sticking to the GOP.
"Paul Ryan, who's the ranking member on our budget committee, has done an awful lot of work in putting together his roadmap," Boehner said. "But it's his. And I know the Democrats are trying to say that it's the Republican leadership. But they know that's not the case."

Ryan's detailed long-term budget roadmap has awakened Democrats, who are beginning to make political hay of his proposal's call for privatizing and slashing Social Security and Medicare benefits. It's a tough spot the Republicans have been trying to avoid. On the one hand, touting that they have a deficit reduction plan better than President Obama's. On the other hand, being careful not to hitch themselves to a plan full of politically unpopular cuts in the middle of an election year. [More]

This is what is disappointing - the fear of participating in the debate because actually offering ideas has been proven to be nothing more than slapping a bulls-eye on your back.

We've proven our abilities at damaging our economic and political systems, let's see if we can actually fix something.


*More later after I have read some details.

Solar power is sneaking up...

On feasibility.  One example:

Here's an idea for a power plant: the solar-powered sports coliseum. What if you skinned an entire stadium with solar such that it could satisfy its own ginormous appetite for power when filled with spectators, but when idle (which is usually often) its solar panels could still be at work, making and feeding electricity to the grid? Sports facility as power plant. A colossal idea not likely to be done anytime soon; a rich fantasy beyond the pale.

Except that it has been done, in Taiwan. Recently completed to host the 2009 Goodwill Games, the stadium will be able to supply all the juice for its 3,300 lights and two jumbotrons, or local residents when the lights and screens are off. [More]

Solar costs seemed to be heading in the right direction, unlike nuclear power.  There is still the Holy Grail of alternatives to fossil fuels to be found however: a really, really, good battery.

Encouraging flip-flopping...

While equated with political suicide, the idea of seeing the other point of view is not without merit.



[via mr]

Why is productivity soaring?...

While vigorously cheered by economists and business, the astonishing growth of worker productivity defies easy explanation.

The productivity of U.S. workers kept surging in the fourth quarter as companies squeezed more out of remaining staff to boost earnings.
A measure of employee output per hour rose at a 6.2 percent annual rate, capping the biggest one-year gain since 2003, the Labor Department said today in Washington. Labor costs dropped at a 4.4 percent pace, more than anticipated, and fell 0.9 percent for all of 2009, the biggest drop in seven years.
Efficiency improved last year as companies slashed worker hours even after sales stabilized, a feat that may be difficult to sustain much longer as demand continues to grow. Lower expenses also help curb inflation, giving the Federal Reserve room to keep the benchmark lending rate near zero.

“Historically, productivity gains of the sort we have seen over the last three quarters have come right before we’ve seen a substantial improvement in job growth,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. “Businesses have simply been pushing their current workers to the absolute limit.” [More]

This seems to be the accepted cause: flogging the galley slaves (the few left) harder. And I agree there is considerable truth in that idea. The fear of unemployment has more of us working more whilst biting our tongues. 

I'm not the only one wondering and surprised by today's number. Consider this skeptical pronouncement just a few days ago when the GDP figure was released.

Third, if you believe the GDP data — remember, there are more revisions to come — then you de facto must be of the view that productivity growth is soaring at over a 6% annual rate. No doubt productivity is rising — just look at the never-ending slate of layoff announcements. But we came off a cycle with no technological advance and no capital deepening, so it is hard to believe that productivity at this time is growing at a pace that is four times the historical norm. Sorry, but we’re not buyers of that view. In the fourth quarter, aggregate private hours worked contracted at a 0.5% annual rate and what we can tell you is that such a decline in labour input has never before, scanning over 50 years of data, coincided with a GDP headline this good. Normally, GDP growth is 1.7% when hours worked is this weak, and that is exactly the trend that was depicted this week in the release of the Chicago Fed’s National Activity Index, which was widely ignored. On the flip side, when we have in the past seen GDP growth come in at or near a 5.7% annual rate, what is typical is that hours worked grows at a 3.7% rate. No matter how you slice it, the GDP number today represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do. [More]

[We'll pause for the gracious retraction.] Given this argument, perhaps we can put a little more stock in the GDP growth rate, but unnerving as it is to me, this doesn't portend much for employment when tempered by worker productivity growth. Oddly, from an investor point of view (albeit very short-range IMHO) some are delighted.

Those bemoaning the increase in U.S. joblessness are right to do so. But they should also remember that unemployment is a direct result of the U.S. economy's greatest strengths - its ability to grow productivity even in a recession.

The Conference Board publishes a Total Economy Database, which gives productivity growth figures - nearly 50 years' worth, in some cases - for most of the world's major economies. The results for 2009 were just released. And the Conference Board's conclusion jumps right off the page at you: The U.S. economy is nowhere near as bad off as many pessimists believe.

In the U.S. economy's bid to rebound in this post-financial-crisis world, productivity growth may be this country's secret weapon.

Productivity growth is damned important to investors. Countries with high productivity growth - like China and most of East Asia - become steadily more muscular exporters. Thus, companies from those countries tend to enjoy a growth in market share and profitability that can provide truly stellar returns for investors. Conversely, companies from countries with inferior productivity growth (Italy and Mexico come to mind) tend to find that life as an exporter becomes steadily more difficult: Their costs soar and profits drop at a faster pace than any of their rivals.There's a clear lesson here: If you're looking for profits, put your money where the productivity growth is healthiest.

That's why last year's heavy U.S. layoffs - in the long run - may end up being good news. U.S. gross domestic product (GDP) declined by about 2.5% during the year, according to Conference Board estimates. However, U.S. employment declined by 3.6% and hours worked declined by 1.5%, so the labor input to U.S. production declined by 5.0% (after rounding). If the input declines 5% and the output declines by only 2.5%, productivity has risen by 2.5%. It's the most painful form of productivity growth in the known universe, but it's still real growth. [More]

But as long as it's not your pain, I suppose...

While this is one of those "non-farm" numbers, I don't think our sector is immune. The ongoing furor over megafarms and farmer number decline could be much less about "greed" than about ability to cover acres with fewer people.

I see one possible common thread between sectors: information technology. The use of computers is first. While the introduction of computing power to the lowest levels of production was positive for worker productivity I suspect having workers who have grown up with ubiquitous computing power will unleash hitherto untouched ways of doing more with fewer people.

The oncoming work force in agriculture takes far less time to learn new computing skills and applications, is more willing to experiment, and faces simpler ways to resolve the decreasing number of hangups. (We outlived Vista, for example). While we are only scratching the surface of what computers can do, we are far more likely to tap that potential with farmers who learned keyboarding early, as opposed to hunt-and-peck dinosaurs such as yours truly.

The second wave of productivity boost arises from connectivity.  Let's face it - we are the Borg. Our farms never have to pause to share information between brains.  (In fact, many of us are looking for ways to control the "sharing") From locating tools to sourcing parts to explaining how to unplug the header, farmers don't have to travel "there" first to solve the problem. The result is more experiential knowledge is available all the time and with ease.

The other big change for the better is technology is overcoming our aversion to writing. From e-mails to stored text messages, more of our communication is searchable, readable, and permanent. The gains for information leakage and loss are likely immense.

Finally, I think this trend in productivity is not only real, but will accelerate. Not only because technology will keep handing us better tools, but because we have humans who are much more adaptable and instinctive in their approach to them.

In short, you ain't seen nothin' yet.

Now tell me your plan to make sure you have one of those increasing rare good occupations. Or more specifically, how does your career path counter the increasing threat of your work and job skills becoming obsolete overnight?

Now any self-respecting Grandpa...

Would have created a very tall story to match this moment.



It needs this too.


[via sullivan]

I was close on several...

OK - I flunked with 40%.

[Take the quiz]

I don't get out much.

[via neatorama]

Tort reform reality...

(My thanks to commenters below) I guess I have not written about this idea - which I indeed support.  Not just due to the normal friction between doctors, lawyers, and engineers in jokes, mind you, but because our medical malpractice system truly has been shown  - like large banks - to be incapable of self-regulating.

That said, it it NOT much help in addressing health care costs.

The CBO report lends credence to Republican arguments that substantive limits on malpractice lawsuits will reduce health-care costs. However, President Obama opposes one of the chief proposed changes the CBO studied, caps on jury awards, and analysts give the measures little chance of passage.

"These numbers show that this problem deserves more than lip service from policy-makers," Hatch said in a statement. "Unfortunately, up to now, that has been all the President and his Democratic allies in Congress have been willing to provide."

The letter comes in response to questions Hatch raised during the Senate Finance Committee's recent debate over health-care reform.

Elmendorf wrote that newly available research prompted CBO to update "its analysis of the effects of tort reform." The agency's conclusion: A package of reforms that included a $250,000 cap on damages for pain and suffering and a $500,000 cap on punitive damages "would reduce total national health care spending by about 0.5 percent."

The federal government would reap a substantial portion of those savings, the CBO said, primarily through reduced Medicare costs. [More]

There are other (usually older), larger estimates of savings, but the CBO is the Gold Standard for these comparisons.  It is as well the most recent. Also the recent exposure of the McAllen, TX medical fiasco - a state that boasts strict malpractice limits - is not encouraging.

It is hard to imagine how tort reform would help the uninsured, for example.  Like removing interstate barriers to insurance sales (which the HCR bill allows via coops) it is a small, worthwhile gesture that avoids tackling any substantive curve-bending.

Nonetheless, I think the Republicans could easily get tort reform if they were to negotiate in good faith.

I got this note from someone with many decades' experience in national politics, about a discussion between two Congressmen over details of the stimulus bill:
"GOP member: 'I'd like this in the bill.'

"Dem member response: 'If we put it in, will you vote for the bill?'

"GOP member:  'You know I can't vote for the bill.'

"Dem member:  'Then why should we put it in the bill?'

"I witnessed this myself." [More]

Now about the other 99.5%...

Speaking of the budget...

A truly helpful chart.

[Click here for the full interactive experience]


Just for "fun", click on the "Hide Mandatory Spending"

Another useful illustration.

[Source]

OK - your deficit reduction plan is....?

[Thanks, Bill]

Why we're entitled...

Or at least think we are.

Psychologists studying the remarkable lack of remorse among leaders who cheat, lie and steal (plenty of examples spring to mind) have been looking at how power does (as Lord Acton suggested) truly corrupt.

A culture of entitlement

Half of 105 participants were asked to write about a past experience in which they had legitimately been given a role of high or low power. The others were asked to write about an experience of high or low power where they did not feel their power (or lack of it) was legitimate. All of the volunteers were then asked to rate how immoral it would be for someone to take an abandoned bicycle rather than report the bicycle to the police. They were also asked, if they were in real need of a bicycle, how likely they would be to take it themselves and not report it.
The “powerful” who had been primed to believe they were entitled to their power readily engaged in acts of moral hypocrisy. They assigned a value of 5.1 to others engaging in the theft of the bicycle while rating the action at 6.9 if they were to do it themselves. Among participants in all of the low-power states, morally hypocritical behaviour inverted itself, as it had in the case of tax fraud. “Legitimate” low-power individuals assigned others a score of 5.1 if they stole a bicycle and gave themselves a 4.3. Those primed to feel that their lack of power was illegitimate behaved similarly, assigning values of 4.7 and 4.4 respectively.
However, an intriguing characteristic emerged among participants in high-power states who felt they did not deserve their elevated positions. These people showed a similar tendency to that found in low-power individuals—to be harsh on themselves and less harsh on others—but the effect was considerably more dramatic. They felt that others warranted a lenient 6.0 on the morality scale when stealing a bike but assigned a highly immoral 3.9 if they took it themselves. Dr Lammers and Dr Galinsky call this reversal “hypercrisy”.

They argue, therefore, that people with power that they think is justified break rules not only because they can get away with it, but also because they feel at some intuitive level that they are entitled to take what they want. This sense of entitlement is crucial to understanding why people misbehave in high office. In its absence, abuses will be less likely. The word “privilege” translates as “private law”. If Dr Lammers and Dr Galinsky are right, the sense which some powerful people seem to have that different rules apply to them is not just a convenient smoke screen. They genuinely believe it. [More worth reading]

The stubborn insistence by farmers for special treatment - taxes, subsidies, un-regulation, etc. - may be the result of priming that switches our mind to the "powerful" mode. Farm magazines, organizations, suppliers, vendors, and colleagues constantly recirculate the language of our importance compared to others.  Without farmers, we'd starve...yadda,yadda.

So when this group is crossed with a generation also primed for self-importance, we have an industry led by voices perpetually dissatisfied with the insufficient obeisance and privilege given them by others. It is also a major problem for solving our national challenges.

As is often the case, actual Republican members of congress have a less edifying perspective than Brooks’ but perhaps a better sense of hardball politics. Thus when you look at Jeb Hensarling’s proposal for drastic cuts in Social Security benefits or Paul Ryan’s plan to pair drastic Social Security cuts with drastic Medicare cuts you’ll see that there’s a trick—none of it applies to anyone who’s 55 or older today. The basic idea is to take the GOP old white people base and insulate them from cuts. The under 55 crowd will still have to pay the taxes to finance their benefits, but we ourselves won’t get the benefits.

As you’ll recall from the health reform debate, somewhat paradoxically it’s the current beneficiaries of single-payer government-provided health insurance who evince the most opposition to universal health care. Basically, they’ve got theirs and don’t care about extending the benefits of universal health care to younger people. Ryan and Hensarling are proposing to institutionalize this version of the intergenerational bargain—culturally conservative oldsters still get paid, but the welfare state they enjoy and support will be phased out for Generations X and Y. [More]

It doesn't help much, but when I now witness farm leaders espousing baldly hypocritical positions (cut entitlements, but not mine) I will try to remember they may honestly believe their bizarre position. Moreover, they may have been taught that frame of mind.

It's not just Illinois...

English farmland prices are attracting investor attention.

Sell the Porsche, buy a tractor and reap returns. Farmland prices that more than doubled in England in the past decade may repeat the gains, according to property adviser Knight Frank LLP.
The average price of the land surged 164 percent to a record in the last 10 years, second only to gold among “major asset classes,” on demand for food commodities, it said.
The CHART OF THE DAY shows farmland prices, in purple, have outperformed an index of prime residential homes in central London, in orange, and English country houses, in red, according to figures compiled by Knight Frank. The S&P GSCI index of agricultural commodity prices, in green, shows they climbed last year, accelerating in the final quarter.
“It seems fitting that farmland, which has been one of the strongest performing assets in recent years, should end the decade at an all-time high,” Andrew Shirley, head of rural land research at Knight Frank, said in an e-mailed statement. “The ongoing imbalance between supply and demand means prices will continue to increase and may well double before the end of the next decade.”

Gains in agricultural properties are partly fueled by a lack of land, because it’s being given over to development, demand from commercial producers and “lifestyle” purchases of residential farms, the company said in the statement. [More and chart source]

Stories like this and a presentation by Chris Erickson of Soyatech at the TP Seminar have balanced my concerns that farmland could be topping with apparently brisk growth of truly "outside" interest. As farmland investor funds multiply - and there are many more of them than I ever imagined - land prices may be pressured more than corn prices alone can predict.