A sense of perspective...

We forget how flippin' huge our economy is. This map may help.


[click on map for larger image]

By linking GSP (Gross State Product) to GDP (Gross Domestic Product) you can get a sense of how far ahead we are economically, despite all the hype about other countries' growth rates.

The blogger where I found this map had a rather curious comment:

The creator of this map has had the interesting idea to break down that gigantic US GDP into the GDPs of individual states, and compare those to other countries’ GDP. What follows, is this slightly misleading map – misleading, because the economies both of the US states and of the countries they are compared with are not weighted for their respective populations.

Pakistan, for example, has a GDP that’s slightly higher than Israel’s – but Pakistan has a population of about 170 million, while Israel is only 7 million people strong. The US states those economies are compared with (Arkansas and Oregon, respectively) are much closer to each other in population: 2,7 million and 3,4 million. [More]

The population matters little, IMHO. The size of the economy is the size of the economy. Period.

Why they invented "yadda yadda"...


Behold the largest island

in a lake

on an island

in a lake

on an island.

[via Metafilter]

Are you doing your part?...

Americans are only 40th in the world in alcohol consumption.


Some of you obviously aren't trying.

Actually, I found this statistic mildly encouraging. Especially after reading about Japan and the almost mandatory alcohol consumption for mid-level workers.

[More in a new book review soon]

Inquiring minds want to know...

It's kinda like Googling yourself for farmers. Look up your entry in the EWG database.

Regardless of your position on subsidies, this is impressive computer work. And to date, even the most vehement payment boosters have found no grounds to claim the EWG results are inaccurate. In fact, their database work informs the farm bill debate. (As opposed to having NASS or ERS generate numbers 5 years later)

I like the map feature, although it reinforces something I noticed a few years ago. Not too many farmers live around me.

Lots of farmland - just not many resident tillers in my area.

Maybe it's me.

I hope they use it for football scholarships...

The USDA has made subsidy data much more personal.

It's not just wealthy individuals who get farm subsidies - state governments are reaping the benefits too. In Arkansas, for example, EWG ranks the state's Department of Correction as the top subsidy beneficiary, pulling in nearly $2.3 million from 2003-2005. The University of Illinois is first in Illinois, with nearly $1.3 million in payments for the three-year period. [More] [Emphasis added]

I just don't get any sense of outrage, but maybe the combined efforts of disparate voices such as Congressman Earl Blumenauer (D-OR) will have some effect:

Current farm policy favors corporate special interests. Fully 70 percent of the payments go to the top 10 percent of farmers, and even more of that benefit is concentrated for the large processors. What’s more, aid is so concentrated in a few powerful states that the support received by most states is almost negligible. We deserve a food and farm policy that serves all Americans, not just the politically-connected. [More]

It would be easy to giggle about a liberal from Oregon wandering into the farm policy debate like a choirboy into a pool hall, but efforts like these have sprung up all over. While they may be too diffuse politically to accomplish much, we DCP-collectors need to remember we can't fool all of the people all of the time.

If the issue is decided in committee, we can extrapolate our future pretty easily. If it is determined by the Congress as a whole, who knows?

The Iowa situation...

Gets even more byzantine.

Rudy Giuliani: Six visits to the state show that Giuliani at least knows where Iowa is. But as a national figure who polls remarkably well, "America's Mayor" has made no secret of his emphasis on Florida and other "Super-Duper Tuesday" states over the traditional first three; strategists in rival campaigns simply note that garnering the nomination this way would upset the calendar once and for all. To the extent he does decide to take on the state, Giuliani's chances in Iowa are hampered by a slight tin ear for the rhythms of the heartland: it's not just his support of abortion rights and his colorful personal life, but missteps like his advance staff reneging on an event with an Iowa farmer who turned out not to be rich enough to help illustrate Giuliani's stance in support of abolishing the estate tax. [More]

While some have argued moving up so many big-state primaries to early February will make Iowa more critical, I'm not so sure. This could be the last moment in the political sun for the tiny electoral prize.

Send him the $100...

Farm Journal's $100 Ideas oughta include farmers from all over. Like this Chinese dude who drank beer just to help his family have hot water.


Solar powered and ethanol enhanced - true genius.

[via Arbroath]

Feel first, think later..

A recent report in the journal Science corroborates something most of us have suspected for some time. We are basically moral weasels.

In a review to be published in the May 18 issue of the journal Science, Jonathan Haidt, associate professor of psychology at the University of Virginia, discusses a new consensus scientists are reaching on the origins and mechanisms of morality. Haidt shows how evolutionary, neurological and social-psychological insights are being synthesized in support of three principles:

1) Intuitive primacy, which says that human emotions and gut feelings generally drive our moral judgments;

2) Moral thinking if for social doing, which says that we engage in moral reasoning not to figure out the truth, but to persuade other people of our virtue or to influence them to support us; and

3) Morality binds and builds, which says that morality and gossip were crucial for the evolution of human ultrasociality, which allows humans - but no other primates - to live in large and highly cooperative groups.

"Putting these three principles together forces us to re-evaluate many of our most cherished notions about ourselves," says Haidt, whose own research demonstrates that people generally follow their gut feelings and make up moral reasons afterwards. "Since the time of the Enlightenment," Haidt says, "many philosophers have celebrated the power and virtue of cool, dispassionate reasoning. Unfortunately, few people other than philosophers can engage in such cool, honest reasoning when moral issues are at stake. The rest of us behave more like lawyers, using any arguments we can find to make our case, rather than like judges or scientists searching for the truth. This doesn't mean we are doomed to be immoral; it just means that we should look for the roots of our considerable virtue elsewhere - in the emotions and intuitions that make us so generally decent and cooperative, yet also sometimes willing to hurt or kill in defense of a principle, a person or a place." [More]

The line about the lawyers was painful, but I suspect Haidt may be right. More intriguing is the possibility that science may make this problem even more divisive in our culture.

When offspring genetic engineering becomes possible I expect parental choices to produce bigger differences in how people morally reason. Conservative-leaning people will make their children morally reason even more strongly in the conservative style. The liberals will do likewise. So the size of the center will shrink. This will lead to deeper political divisions and perhaps civil war in some countries and wars between countries.

I also expect offspring genetic engineering to produce more other styles of moral reasoning including ones that are rare today and others that do not exist at all today. Who knows, maybe genetic engineering will move libertarianism up in the ranks of moral reasoning styles. [More]

The most alarming prospect of genetic engineering of humans for me is, while we are busy deciding which traits and predispositions we want in our children, other cultures are out-reproducing us. We're overplanning - they are taking potluck, and getting on with business.

Which system sounds like a winner to you?

You are here....


An atlas of the universe.

For when really need to get away.

[via Futurismic]

It's not about insurance...

Masked by the political persiflage of the '08 Campaign is the quiet realization that the health care issue is really, really about controlling costs - not extending coverage.

After more than a decade in the wilderness, health care has returned to the center of the political discussion. But the only topic getting any serious attention is universal health insurance. It’s the entire point of the ambitious new program in Massachusetts and a similar proposal in California. Universal coverage has dominated both the news media’s coverage of the Democratic presidential candidates’ reform ideas and the candidates’ own jockeying over those ideas. [More of an insightful article]

The underlying problem is painfully (no pun intended) obvious. We cannot afford, individually or collectively all the health care we think we need. Worse still, we don't need much of what we want.

Trying to sort these two ideas out will be the challenge. Our cultural obsession with medicine as the fix for bad choices complicates our thinking. Insurance masks the reality of health care by foisting the costs on third parties, penalizing those who by virtue genetics, luck or behavior need less care. This insulation is both seductive and destructive.

Ultimately, I think we are headed for a collision of cultural values. We prefer insulation to real insurance. We expect services to be readily available, without the supply limitations or waiting lists that exist in countries where government is responsible for more health care funding. And yet we are growing increasingly concerned over the expansion of health care spending that takes place in a system that lacks constraints on either supply or demand.

Real health insurance may not be popular now. But when Americans see that the providers of insulation, including Medicare, have to turn to the rationing of health care services in order to meet budgetary constraints, real health insurance may start to look like a good alternative. [More]

This is a discussion we can't avoid forever. And it may turn out less rancorous than we fear. Our powerful economy is making such decisions a little less painful every day.

Technology responds...

Science is not the awe-inspiring tool many of us grew up believing in. Not that it has changed, but I suspect the march of progress has quickened into a steady trot - faster than many can match. So we fall behind and choose to base our decisions on intuition and emotion instead.

Even then, the pursuit of knowledge recognizes our disenchantment and adjusts to find answers to our fears. Farmers have struggled with educating observers about our ready alliance with chemical tools to control pests of all kinds. Perhaps it's fair to be suspicious of both agriculture and agribusiness - Lord knows we have been known to spin the truth a teensy bit.

Even so, those whose passion in life is verifiable scientific truth labor on and produce answers to these challenges. Understanding biodegradability and being able to predict it before the compounds are released would address a wide range of objections and save countless resources testing those products. Scientists are getting results, and they are promising.

Perhaps not surprisingly, the press release associated with this work focused on those compounds, including herbicides, that are most resistant to biodegradation, but fails to mention the even larger group of compounds that are intrinsically biodegradable. The usual news write ups about toxic chemicals and the environment 9999 times out of 10000 will inevitably highlight those that are the nastiest.

The huge benefits of the thousands of organic compounds used in the pharma, biotech, plastics, and other industries as well as medicine and agriculture will simply be ignored whether or not those compounds accumulate in the environment or not. Biodegradation is only one route by which thousands of compounds are destroyed naturally in the environment (heat, light and interaction with other non-living materials, are others). The predictive system will be useful, certainly, but its wider applicability should consider these other routes and the risk factors and toxicity associated with any particular chemical, rather than tarnishing all entries in the database simply on the basis of whether or not a microbial enzyme exists to digest it. [More]

News items like this renew my faith in our embrace of technology to improve our existence, and our ability to adjust course to confront legitimate concerns.

No wonder she was crying...

Observers close to the action at Paris Hilton's court appearance were struck by her tearful denunciation of the action of the House Subcommittee on Specialty crops ignoring calls for reform to farm payments.

The draft also reauthorizes the peanut program, including an extension of the 2002 Farm Bill's direct and counter-cyclical payment and loan provisions for peanut farmers. The loan rate would be increased from $355 per ton to $375 per ton and payments acres would be lowered from 85% of base acres to 74%.

The Subcommittee voted to extend the current sugar program until 2012, requiring the USDA Secretary to continue to operate the program at no cost to the federal government by avoiding forfeitures of sugar. [More]

(Well, they were pretty sure that was what she was wailing about.)

I shed a tear as well.

Given this development, the Pelosi position suddenly becomes more interesting.

Paris Hilton's cell phone...

May not work well in some rural areas - especially Downstate Illinois. And if landline companies have their way it may be some time before coverage gets better for the blond heiress.

The Universal Service Tax (Fund) has benefited rural citizens by helping to establish rural telephone companies. Because telephones provide a vital link to emergency services, to government services and to surrounding communities, it has been our nation’s policy to promote telephone service to all households since this service began in the 1930s. The USF helps to make phone service affordable and available to all Americans, including consumers with low incomes, those living in areas where the costs of providing telephone service is high, schools and libraries and rural health care providers. Congress has mandated that all telephone companies providing interstate service must contribute to the USF. Although not required to do so by the government, many carriers choose to pass their contribution costs on to their customers in the form of a line item, often called the “Federal Universal Service Fee” or “Universal Connectivity Fee”. [More]

But the fund has swollen to over $7B annually and is badly mismanaged. Sadly, this is a rural-on-rural problem.

Most people familiar with the universal service fund, including members of the FCC, agree that it has grown out of tune with the times. But reforming it has proven difficult because small wireline telephone companies have grown accustomed to collecting subsidies and lobbying their political representatives to keep the money flowing, said U.S. Cellular's Rooney. [More]

Those small wireline companies are typically rural phone coops whose business plans have always been financially distorted because a significant portion of their budget came from the USF - a permanent subsidy.

The basic problem is that the High-Cost Fund subsidizes small rural local exchange carriers (RLECs) on the basis of their reported costs of providing service. This cost-plus system provides no incentive to reduce costs or to provide service using the most efficient technology. On the contrary, it rewards inefficiency. As a result, according to a recent study by George Mason University economist Thomas Hazlett, subsidies can be as much as $13,000 per year per line. Hazlett estimates that yearly savings of $1 billion are easily achievable using standard mobile and satellite phone subscriptions to provide service to people in sparsely populated areas. [More]

Meanwhile, because IL cell phone companies have not been applying for USF funds to build towers downstate, the proposed cap means they won't be getting any in the future if they did try.

Bottom line, the pattern of some rural/farm constituents optimizing subsidies more shrewdly than others continues.

Recently, the USF has gained new attention as several Iowa-based companies have used USF subsidies to provide free, international calling.^[1] This practice, which began in late 2006, represents an unintended consequence of the USF. [More]

The secret seems to be to live in a state with 1 Senator for about every 1000 citizens, not Illinois.

One solution Paris and I favor is reverse auctions:

Another recommendation is the use of "reverse auctions" to assign universal service obligations, a plan endorsed by FCC Chairman Kevin Martin. Phone carriers would compete to become the "provider of last resort" in areas where regulators deem local services insufficient, bidding a price, to be paid by the government, to supply such services. The lowest-cost bidder wins. [More]

The political clout of rural telcos - the beneficiaries of these billions - will likely prevent this, unless the addition of wireless carriers changes the dynamics of the debate. Their argument of degraded communication consequences reminds me of predictions referring to commodity subsidy reform. Still cost-plus calculation to determine government support has seldom proven to be economically efficient. The process of learning competitive business practices would be difficult, but not impossible.

Paris and I will be following this closely. (She has a little time on her hands right now.)

Any minute now...

A breathless announcement of a cellulosic ethanol breakthrough.

At a Brazilian ethanol conference June 4-5, Brazilian government-funded researchers said they have perfected a method of producing cellulosic ethanol that drastically reduces the cost of processing. At this point, the assertion -- and many other similarly optimistic claims made at the conference -- is unconfirmed. But should it prove true, the world could well be peeking over the horizon at a massive geopolitical, not to mention economic, shift. [More]

As many of you know, I consider cellulosic ethanol the cold fusion of agriculture - mostly because the energy density of the feedstock is so low, and transporting that much stuff negates the energy yield.

More tricky is the problem of the ethanol production itself. Cellulosic biomass is bulky and materially complex, unfit for the same methods of ethanol extraction used with corn. In order to even get the stuff into manageable form, processors must soak it in a pre-treatment bath, followed by an acidic or enzymatic digestion that splits it into simple sugars. [More]

Perhaps cellulosic ethanol will become a major part of energy plans. But think about the ramifications if we can sell crop residue.

The ethanol boom will look like a cheap date.

[via Andrew Sullivan]

Uh-oh...

Guiliani is skipping Iowa. So is McCain.

Farm policy may never see the light of day in this presidential campaign.

I wonder what the economic loss to IA could be from reduced media coverage?

Because the economic impact of a political primary is so short-lived, few deep analyses have been done on the subject. Officials in Iowa, which hosts the nation’s first contest in the presidential campaign calendar, the Iowa Caucus, suggest the quadrennial event brought between $70 million and $90 million into the state in 2000, but have never quantified how they arrived at that number. [More]

Anther Pillar of Farm Policy trembles.

What do you get when...

You cross Star Trek with J. R. R. Tolkein?

It's not pretty.

Go figure...

The livestock industry asked some economists to estimate the effects of letting ethanol tax credits and tariffs expire in 2008. They seem to think it would be a good idea. So, equations were concatenated, models lovingly constructed, and serious hard-core economicking was done.

In the end, the cattle and pig folks perhaps didn't get the answer they anticipated.

An excellent summary is here at Farmgate. But lightly skipped over in the report and the study paper itself was this little gem.

Livestock producers pay lower feed costs, but their inclination to raise output in response leads to falling output prices as quantities move along an inelastic demand. [Full report]

Run that around in your mind for a while.

First lesson: it's your own fault. You silly producers and your "inclinations".

Second lesson: Lower feed costs are actually bad for livestock producers, because when feed costs go down, producers put more cattle on feed and farrow more pigs. With demand inelasticity, livestock income then drops as more meat lowers the price.

Say what??

Reading this backwards, can we assume the new higher prices for corn are raising profits in the livestock sector? Those cowboys and hog producers should be rolling in the profits when corn hits $6!

I will be looking forward to some cattle economist reaction to this strange conclusion. My instinctive response is meat production expansion is more a function of higher sales prices rather than lower input prices. After all we had $1.80 corn and expansion livestock numbers did not explode.

[Update: As I was driving to South Bend (3 hrs 9 min best time) I had one of those "poster-regret" moments. The report shows "livestock receipts" which I believe to be gross sales - not gross profits as I had alluded to above. Hence lower feed costs should provide larger margins. However, looking at net farm income numbers lower down the table, it's hard to separate out the livestock/crop differences. It seems to show both sectors are net losers to me. My questions still stand.]

Science - it's stranger than truth.

One other assumption that caught my eye is that the mandate (RFS) stays where it is. I think it is reasonable (politically) to suggest that number is going to rise. I made this case previously. In which case, the loss of tax credits and tariffs mean much less, I would think.

Reading carefully, I also note that the world very likely will not end without biofuel subsidies. (Well, they can't be absolutely certain of course)

The rest of the conclusions are pretty predictable. Ethanol production slips, ethanol expansion slows, and farmers lose about $3B in gross receipts.

Oh yeah, taxpayers save about $6B. As if we care.

Still, it kinda makes you wonder where the other $3B goes each year, doesn't it?

[The report does not note what the income implications for economic research organizations are if the tax and tariff weren't around to study.]

The precedent problem...

There are many cattlemen in disagreement with the voluntary BSE testing appeal decision by the USDA. One is our own Steve Cornett.

Your reporter remains skeptical about USDA’s refusal to allow voluntary BSE testing. As has been argued before, it’s not that voluntary testing is needed or the expense justified.

That’s not the question.

It’s a matter of the proper role of government and the fact that, from a public relations angle, this looks awful. [More]

This semi-science matter may be linked in the USDA's policy thinking to analogous issues with BST-labels for milk. Allowing marketing differentiation based on the consumer's health perceptions and not the regulator's is profoundly new territory. It may be the USDA is appealing just to say "Hey, we did all we could - blame the courts", when beef industry honchos complain.

As the music industry is finding out, consumers are getting pretty uppity these days.

I think Steve is pointing the right way on this one.

The sausage recipe...

Interesting commentary on how the farm bill process might develop.

“So this is a huge deal. If Pelosi blocks amendments on the bill, it is very possible that reforms suppported by the majority of the House will not be in the House version of the farm bill because votes will never be allowed. This would be a subversion of democracy- one committee being allowed to write an enormously important piece of legislation without regard to the desires of the rest of the House. In effect, this means that the citizens represented by Ag Committee members will get to write the farm bill- and to hell with everyone else.

“Let me go further. If Pelosi blocks amendments on the 2007 farm bill that are supported by a majority of the House, that would be a clear message that the change in leadership in the House means nothing at all; that the Democratic leadership intends to run the House in the same top-down corporate fashion as its predecessors.” [More good political analysis]

As I have said before, Pres. Bush (remember him?) is still a wild card, and could actually be a powerful reformer ally - regardless of whose side of the aisle they are on. The question is would reformers vote to sustain a veto?

With Rep. Peterson apparently aiming for equal dissatisfaction as a goal, the mechanism seems to be in place for achieving this lofty ambition.

How we got here...

A tragic and touching reminder of the the kind of people who made the Midwest. "Went to Kansas" - from diaries of Miriam Colt as she traveled to Kansas in search of a vegetarian utopia:

AUGUST 5TH.-- Another most terrific thunder-storm broke, last night, peal after peal, over head in deafening, crushing sauna; and the lightning's glare seemed burning the heavens from pole to pole! the torrents of rain came right through the warped "shakes" on the roof; the wind was blowing--the mud, from the logs, and water, were flying in every direction through our cabin. I made every effort to keep my sick ones dry, but my husband, children, and myself, being in the loft, got completely drenched and my husband and children had their chills in the midst of the storm. We kept our beds until a late hour this morning, as wet as they were, they being the most comfortable place, while the sun was drying up the water around.

Mr. Broadbent came this forenoon, went to the spring over the river again for water, making a walk of four miles from his tent to get two pails of water for us.

I bring water from the creek, where it stands just in the deep places, and they have to be dug out for that. This water will do to cook with and for washing.

The Indians pass every day in long files, on ponies and on foot, going to Cofuchigue "to swap," as they say, their dried buffalo meat, tallow and robes, for coffee, sugar, tobacco and whisky. Their ponies of burden are so heavily loaded that the juveniles who ride them have their limbs horizontally extended, instead of hanging down. Their many long-eared, grizzly-gray, gaunt-looking dogs, bring up the rear. How they can keep alive such a drove of dogs after their hunt is over, and keep them in going order, is truly a problem not for me to solve. They look like so many hungry hyenas; I should think they would swallow both horse and rider, and "lick their chops for more." Their buffalo meat is relished by some. It seems to be clean, and sweet; it is cured without salt, by being cut into strips, braided, the braids woven into a web, with strings of bark, and dried in smoke; can be bought by the yard, half or fourth, just as one desires or their appetite craves.

Some of the squaws have been here to-day; wanted to "swap" some of their dried buffalo meat for some pumpkins we had in our cabin. I gave them the pumpkins, and they handed back some dried meat. Father and the children relish it. Willie says, "please mamma, give Willie some dried buffalo meat." We have so little change in our diet, that almost anything is relished. We have plenty of green corn and squashes, but I am afraid to let the sick satisfy their appetites, which have become craving, as they always do, after having the chills for a while. I can persuade my little children to lay the cob by for a little, with the corn half eaten off, but it is a difficult matter to persuade children whose heads are gray with age, for "they know, they guess, when they have eaten enough, and when they are hungry." [More]

I am struck by how mobile early Americans were despite the problems of travel. If you saw the PBS documentary "The Mormons" perhaps you noticed a similar theme of building a new society somewhere in the vast frontier, as Mrs. Colt also believed.

What amazing people our forebears were. Or perhaps they were just like us, only faced with different circumstances and fewer easy options. I think this spirit lives on in America, but we work hard not to uncover it.