Don't expect much...

Posting from my vacation. I have Internet but only 128k. So this post alone cost me a fruity adult beverage.

So far behaving better than most the europeans, but that is not a high bar.

Chow.


- Posted using BlogPress from my iPad

Location:Messina,Sicily

A cold one for the economy...  

Forget buying a house/car/phone to help get our economy going.

But in fact, mounting evidence suggests that beer in particular, and the beer industry that surrounds it, may be as good for growth as excess sobriety. In some of the world's toughest investment climates, beer companies today are building factories, creating jobs, and providing vital public services, all in the pursuit of new customers for a pint. It's the brewery as economic stimulus: a formula even a frat boy could love.

In a time of unprecedented global prosperity, there are an ever-growing number of beer guzzlers worldwide. Liesbeth Colen and Johan Swinnen of the University of Leuven report that beer consumption in China in 1980 was minimal. By 2005, however, the country consumed more than 40 billion liters per year. In 1961, Brazilians drank 630 million liters of beer; in 2007 that number was 7.5 billion liters.

And it isn't just those in booming economies: Even the poorest of the poor will spend money on alcohol. Abhijit Banerjee and Esther Duflo of MIT have shown that people living on a dollar a day or less can spend 6 cents or more of that on alcohol and tobacco. Add those pennies up and you get a potential market worth billions of dollars a year. Robust demand in even the poorest places is one reason that breweries invest where other industries fear to tread. In just the last few months, Heineken won a bid for two state-owned breweries in Ethiopia for $163 million; Rwanda's stock exchange recorded its first-ever initial public offering that involved a local brewery; and SABMiller dropped an additional $15 million on top of an initial $37 million investment in its brewery operation in Juba, the main city in the aspiring breakaway country of Southern Sudan.

These investments aren't just good for Big Beer. In Juba, SABMiller's brewery will provide tax revenue, lease payments, more than 200 local jobs, and increased demand for local agricultural produce. In more stable markets, breweries can be a considerable economic force. In 2005, East African Breweries was the first company in Kenya to reach $1 billion in market capitalization, and the company paid about $44 million in corporate income tax last year. [More]

Of course, one larger question is whether this effect would be more beneficial without beer marketing's essentially mobster-modeled wholesale monopolies for the giant brewers.

Wisconsin’s craft brewers, who were not consulted while the measure was being framed, account for only about 5% of sales, but their share is increasing. “Everything in this bill is designed to make it harder for small craft brewers to grow,” complained Deb Carey, a co-owner of New Glarus Brewing. “It is a slimy piece of legislation.”
“We are losing assets and we are losing control over our products,” Carey added. “This debate boils down to the fact that the wholesalers do not want a drop of beer going to market in Wisconsin without them making their 30 percent profit from it. That’s it.”
As explained by Think Progress, “The provision will make it much more difficult for the Wisconsin’s burgeoning craft breweries to operate and expand their business by barring them from selling directly to restaurants and liquor stores, and preventing them from selling their own product onsite. The new provision treats craft brewers — the 60 of whom make up just 5 percent of the beer market in Wisconsin — like corporate mega-brewers, forcing them to use a wholesale distributor to market their product. Under the provision, it would be illegal, for instance, for a small brewer located near a restaurant to walk next door to deliver a case of beer. They’ll have to hire a middle man to do it instead. [More]

It is also interesting to note that WI governor Scott Walker is framing his image as a low-government, free enterprise champion. Unfortunately, like his exempting of supportive unions from his public-union busting, it would appear that political stance is subject to financial persuasion.

Which makes an attractive business model.

The price-cost breakdown of mass produced beer in 1996: 

(Consumer Reports, 1996)
Retail and distributor markup 36.4%
Taxes and Shipping 17.2%
Packaging 16.5%
Labor and Production 11.7%
Advertising and Management 8.2%
Brewer Profit 6%
Ingredients 4%

Cost breakdown for Mass-produced six-pack (in 1996):
Ingredients .16
Labor and production .47
Packaging .66
Advertising and Management .33
Brewer profit .24
Retail and distributor markup 1.46
Taxes and shipping .69
Total $4.01
A six pack is 72 oz by volume, a case is 2.25 gallons [Source]

This is the best data I could come up with quickly. Obviously monopolies are good for profits.

....

 Is it me, or is it thirsty in here?

Arrivederci...
 
Yes, Incoming is now bilingual!

Tomorrow, Jan is leaving on a cruise to celebrate our 40th Anniversary. She has graciously asked me to join her. We have been planning this trip to the eastern Med for over a year, and I'm like a 4th grader on December 17th.

I don't know about posting - it's vacation, ya know. And the iPad is not Blogger friendly.  But I will have Internet access and I may try to post some video of old ruins (i.e. shipmates) and stuff.  If I can get to a farm in Greece or Turkey I'll share that as well.

But tomorrow I'm burning 13 years of frequent flier miles to get us to Rome, from whence we sail to Sicily, Rhodes, Ephesus (no longer the real name), Thessalonians, I Peter, other places, and Istanbul.

Thanks for reading. Thanks for commenting. And fer cryin' out loud, take a vacation this summer!

We're special, Example #78...  

Farmers in IL and probably elsewhere are less than thrilled by impending motor carrier regulations that until now applied only to other folks.

A large percentage of Cornbelt farms have semi-trailer trucks to more efficiently handle high capacity harvesting equipment.  While some of those trucks have limited use other than harvest, many others become a second home for farmers who work as commercial carriers when they are not farming.  Although they have the required commercial drivers’ licenses and many of their trucks have US Department of Transportation registration, many will not be happy to learn the DOT is working its way down further into their farming operation.  Buckle your seat belt.
The US Department of transportation has an internal administrative staff to develop rules and regulations and implement those for the Federal Motor Carrier Safety Act. It is designed to enhance safety on public roadways, and part of the rules are licensing and registration for commercial vehicles used in interstate commerce.  Over the road truck and bus drivers know all about the FMCSA and its rules.  And many farmers who obtained a commercial drivers license from their state department of motor vehicles will be familiar with many of those regulations, and may already have a USDOT number on their vehicle if it has been driven across a state line. [More]

Notice the outraged comments and helpful information in the comments to the above post, but there is a big part of the issue conspicuously absent:

Why should farmers be exempt from these rules?

There may be a case for why my truck loaded with grain should be regulated differently from your truck loaded with carpet, but I don't see any compelling arguments.  Instead we have these rather familiar assertions:

1. It will cost money. 
2. It will be a hassle.
3. Farmers are different.

Since the overall goal of the regulatory effort is safety, where are the data showing we aren't part of the problem? Or conversely, why aren't we equally outraged at all the other trucks being taxed/regulated/hassled?

What makes us so special?

This is not an issue about regulatory outreach or taxation.  It's what happens when special political treatment of farmers ends.

(Yes, I will be affected, since I live 2 miles from the state line.)

Today's safety message...  

The Safety Rope.



Next week: The Knot.

Fictive learning strikes again...  

Upset because you didn't sell the rest of your corn three weeks ago? This is your brain on volatile markets:

Montague, et. al. immediately discovered a strong neural signal that drove many of the investment decisions. The signal was fictive learning. Take, for example, this situation. A player has decided to wager 10 percent of her total portfolio in the market, which is a rather small bet. Then, she watches as the market rises dramatically in value. At this point, the investor experiences a surge of regret, which is a side-effect of fictive learning. (We are thinking about how much richer we would be if only we’d invested more in the market.) This negative feeling is preceded by a swell of activity in the ventral caudate, a small area in the center of the cortex. Instead of enjoying our earnings, we are fixated on the profits we missed, which leads us to do something different the next time around. As a result investors in the experiment naturally adapted their investments to the ebb and flow of the market. When markets were booming, as in the Nasdaq bubble of the late 1990s, people perpetually increased their investments. In fact, many of Montague’s subjects eventually put all of their money into the rising market. They had become convinced that the bubble wasn’t a bubble. This boom would be different.
And then, just like that, the bubble burst. The Dow sinks, the Nasdaq collapses, the Nikkei implodes. At this point investors race to dump any assets that are declining in value, as their brain realizes that it made some very expensive mistakes. Our investing decisions are still being driven by regret, but now that feeling is telling us to sell. That’s when we get a financial panic.
In the last year, Montague has expanded on these provocative results. He’s shown, for instance, that heavy smokers are less vulnerable to fictive learning. This is probably because they’ve learned, over time, to ignore those regretful thoughts telling them to quit smoking. (Although they lament their nicotine addiction — they know it’s killing them — they keep on lighting up.) The upshot is that their ability to not learn from fictional scenarios might also make them more resistant to the allure of bubbles. The lesson, I guess, is that it might be good to have a stock broker with a debilitating addiction.
Montague has also begun exploring the power of social comparison, or what he calls the “country club effect,” on the formation of financial bubbles. “This is what happens when you’re sitting around with your friends at the country club, and they’re all talking about how much money they’re making in the market,” Montague told me. “That casual conversation is going to change the way you think about investing.” In a series of ongoing experiments, Montague has studied what happens when people compete against each other in an investment game. While the subjects are making decisions about the stock market, Montague monitors their brain activity in two different fMRI machines. The first thing Montague discovered is that making more money than someone else is extremely pleasurable. When subjects “win” the investment game, Montague observes a large increase in activity in the striatum, a brain area typically associated with the processing of pleasurable rewards. (Montague refers to this as “cocaine brain,” as the striatum is also associated with the euphoric high of illicit drugs.) Unfortunately, this same urge to outperform others can also lead people to take reckless risks.
More recently, a team of Italian neuroscientists led by Nicola Canessa and Matteo Motterlini have shown that regret is also contagious, so that “observing the regretful outcomes of another’s choices reactivates the regret network.” (In other words, we internalize the errors of others. Or, as Motterlini wrote in an e-mail, “We simply live their emotions like these were our own.”) Furthermore, this empathy impacts our own decisions: The “risk-aptitude” of investors is significantly shaped by how well the risky decisions of a stranger turned out. If you bet the farm on some tech IPO and did well, then I might, too.
There are two important takeaways to this research. The first is that neuroscience might soon be able to help make macroeconomic diagnoses, allowing us to better distinguish between booms and bubbles. For instance, one could have subjects “play” the current gold market in a scanner, if only to see how their brain activity compares to that of people playing previous market bubbles.
The second is that speculative bubbles are rooted in a very adaptive learning mechanism, which is probably why they’re so hard to prevent. The only way to keep us from bidding up LinkedIn stock and tulips is to keep us from learning through counterfactuals. Of course, that means we’d be cut off from a crucial means of self-improvement, a way of benefiting from mistakes we didn’t actually make. In other words, the reason we sometimes make such stupid investment decisions is because we’re so damn smart. [More worth reading]

I still don't think our markets are "bubbling", but the more I read about my lyin' brain, the less sure I am about my reasons.

I think the availability bias is also making me think this will be another relatively poor crop, for us and the US, simply because our recent trend is downward as too much water has plagued us consistently since 2007. None of these are sound reasons or bases for prediction.

Speaking of which, I just finished a thoroughly enjoyable, albeit discouraging book:

[More]

Like Philip Tetlock's monumental work the evidence and logic is very persuasive, but Gardener sheds more light on why and how our brains deal with uncertainty (badly) and how we massage our own thinking to relieve the stress uncertainty brings us.

Passive marketing is looking better and better all the time.

By popular request...  

(OK - one guy,  but that's about as popular as I ever get.)

The Phipps Farm Policy

1. Repeal the Agricultural Adjustment Act of 1938 (Look - if Congress passed it, Congress can repeal it, despite being named "permanent")
2. End all farm subsidies, market orders, sugar quotas, dairy programs, and crop insurance subsidies. Totally and immediately.
3. Move food stamps, WIC, etc. to HHS.
4. Move foreign food aid to State Dept.
5. Move the Forest Service and conservation stuff to Interior.
6. Consolidate all food inspection work into the FDA.
7. Subcontract NASS functions to the lowest bidder (Accenture, Deloitte, etc.). Make crop reports weekly on Sunday morning during the season and all objective. Make all other reports more frequent, at least as often as monthly. In short, make ag reports like other industry formats.
8. Whatever remains of USDA (ERS, etc.) is made a subsection of Commerce just like other industries many times our economic size.
9. Encourage the development of a professional body for self-regulation of farmer qualifications like the AMA and medical boards.
10. Rent the USDA buildings. Remove one chair from the Cabinet meeting.
11. Miscellaneous

You can sum it up as "Treat farmers just like other Americans".  Then stand back and watch what we can accomplish.

It's probably a little too liberal for many...

Junkbox, Episode XMEN...  

Vacation time for many. And they are driving like lunatics, IMHO. (I65, Indiana Tollway)

• Chrome was faster, but it couldn't handle Blogger easily. I'm back to Firefox.
• Shoot first, focus later
• Housing could be ready for a comeback. No, seriously.
• Inflation warning #47
• AARP knows what it is doing
• Progress on chronic pain

Not just any element...  

So I'm leafing through the junk mail this morning and I find (gasp!) an invitation for a VISA Black Card! OMG!!!

 For those who demand only the best of what life has to offer, the Visa Black Card is for you. The Black Card is not just another piece of plastic. Made with carbon, it is the ultimate buying tool. [More]

So carbon is the ultimate now. Forget platinum and titanium and those two new ones to be named later. 

Wait - I'm made with carbon!

OMG!!!

Have we thought this through?...  

AgWeb readers really, really seem to dislike President Obama. And I think they are fairly reflective of farmers I know.

There is much to hate, of course.

• His strong support for ethanol
• Record high grain farm incomes during his administration
• A persistently low dollar
• His support of current farm policy
• Soaring farmland prices 
• Record low interest rates that don't budge

Of course, all these are easy to set aside because he's...well, socialist. And if there is one thing we don't like it's socialism for others. (See also: Medicare and seniors)

If only we could get some solid conservatives like Victor Davis Hanson in power. (What up with this guy and three names? Is he a poet or potential assassin?)

The Department of Agriculture no longer serves as a lifeline to millions of struggling homestead farmers. Instead, it is a vast, self-perpetuating postmodern bureaucracy with an amorphous budget of some $130 billion -- a sum far greater than the nation's net farm income this year. In fact, the more the Agriculture Department has pontificated about family farmers, the more they have vanished -- comprising now only about 1 percent of the American population.

Net farm income is expected in 2011 to reach its highest levels in more than three decades, as a rapidly growing and food-short world increasingly looks to the United States to provide it everything from soybeans and wheat to beef and fruit. Somebody should explain that good news to the Department of Agriculture: This year it will give a record $20 billion in various crop "supports" to the nation's wealthiest farmers -- with the richest 10 percent receiving more than 70 percent of all the redistributive payouts. If farmers on their own are making handsome profits, why, with a $1.6 trillion annual federal deficit, is the Department of Agriculture borrowing unprecedented amounts to subsidize them?
At least $5 billion will be in direct cash payouts. Yet no one in the USDA can explain why cotton and soybeans are subsidized, but not lettuce or carrots. In fact, 70 percent of all subsidies go to corn, wheat, cotton, rice and soybean farmers. Most other farmers receive no federal cash.
Yet somehow peach, melon and almond growers seem to be doing fine without government checks in the mail. Then there is the more than $5 billion in ethanol subsidies that goes to the nation's corn farmers to divert their acreage to produce transportation fuel. That program has somehow managed to cost the nation billions, send worldwide corn prices sky-high, and distort global trade in ethanol at the expense of far cheaper sugarcane. And while the Obama administration discourages new production of far cheaper transportation fuels derived from natural gas, oil, shale oil and tar sands, it is borrowing billions to pay farmers to grow uncompetitive fuel.
About every 10 years or so, public outrage forces Congress to promise to curtail the subsidy programs. But when the deadline arrives, our elected officials always find a trendy excuse like "green energy" or "national security" to continue welfare to agribusiness.
Free-market conservatives don't dare touch the Department of Agriculture, given the senatorial clout of Midwest farm states and the mythology of the independent American yeoman farmer. Don't expect left-wing Democrats to object, either. In a brilliantly conceived devil's bargain, the Department of Agriculture gives welfare to the wealthy on the one hand, while on the other sending more than $70 billion to the lower-income brackets in food stamps. [More]

The last thing farmers should hope for is conservative groundswell forcing an ill-timed plunge into austerity and recession. Meanwhile, right-wing think tanks from Cato to Heritage hate our farm policy, and are prodding politicians on the right fiercely. And making progress: the Coburn ethanol coup, for example.

To be sure, Obama wants to target toward smaller farmers, and maybe no program is better than sharing with vegetable growers and beginners. And the regulation uproar (which I consider to be a deliberate distraction from our sector's incongruous good times in this economy) is going to make it harder to do business as usual in areas like animal handling, runoff/erosion, and pollution.

But seriously, are these irritants sufficient  to outweigh the fact Obama is the subsidy-farmer's best friend in Washington? I can appreciate the protein sector going to war against the administration, but corn farmers?

Were it not for the alarming fiscal/social policies being touted by Republicans right now, I wonder how I can even countenance the President.

I hated 'em then...  

I hate 'em now. Not really, but some guys can't seem to stop catching a break.

The two had already sold slightly more than 300 acres outside Chicago, at an average of $25,000 per acre.

They took those proceeds and bought 4,000 acres, in 17 downstate counties, that they rented to other farmers. That left them 1,800 acres to farm corn and soybeans in Chicago's exurbs, including fewer than 1,000 acres they owned.

That's when fate smiled on them.

During the past year, corn prices have doubled on increased demand for use as livestock feed and biofuels, and soybean prices have risen by more than 50 percent.

As those prices rose, the Baltz brothers began selling their fertile land downstate that they paid $2,500 to $4,000 an acre for and which is valued at as much as $8,000 an acre. During the past 12 months alone they've sold more 2,000 acres. Now they are more active farmers in their own backyards.

During the past three months, they've purchased from lenders almost 1,000 acres of farmland in Will and Kendall counties that were once scheduled for homes, paying a fraction of what developers paid years ago.

"A lot of (banks) just want it off their books," Ed Baltz said. "We got a little more power because we got the cash to spend."

On a recent warm afternoon, the brothers stood behind a weathered, vacant white-frame home and barn north of Black Road in Shorewood, on 246 acres that, at their peak, sold for $65,000 an acre and in 2005 were annexed by the village and zoned for more than 400 single-family detached homes.

The Baltz brothers paid $3.6 million, or about $14,500 an acre, for land that already has subdivision utilities brought to the property line. This year, though, the only thing rising out of the dirt will be the corn that Bob Baltz planted last month. [ More]

 [Click to enlarge]

This is the world we live in. And it is germane to recall that Chicago was a mere military outpost when southern IL was booming.

I also use these examples to remind me my decisions about land (like yours) can have disproportionate consequences.

Why male models...  

Don't smile: They make them wear this stuff.

[via sullivan]

Hot cuisine...

Just in time for the fair season. 

This isn't the first time ole Chicken Charlie, named after the food trailers he trots around to California fairs, has gotten ink for his culinary experiments. One LA Weekly article calls him "the inventor of the deep-fried oreo" (though this seems like a controversial title, given that other people have laid claim to "beignets' country cousins"). The same story details his previous deep-fried feats:

In 2007, he gave the world deep-fried Coca Cola, frog legs, and Elvis' favorite peanut butter banana and honey sandwiches; in 2008, it was deep-fried White Castle burgers, spam, and pop tarts. This year, he did it again: a hot dog inside a hollowed-out zucchini boat, battered, deep-fried and served on a stick -- a creation he affectionately calls the zucchini-weeni; and a classic s'more, deep-fried in pancake batter.

That, folks, is a man living his version of the American dream. Oh yeah.

[More]

As far as I'm concerned it could only help the taste of Koolaid. 

 

The zucchini thing is just immoral.

Not from Pixar...  

Incredibly cool photos of Phobos passing Jupiter as seen from the Mars Express.



Mars has two moons, Deimos and Phobos. For orientation see this graphic:

 [Click to embiggen]

I remember a science fiction story where Mars explorers discovered an extremely low-orbit moon previously undetected. The leader of the expedition got to name it, and chose "Bottomos"

(snort)

(via bad astronomy)

Timesuck #42...  

Just added to my growing linklist of webcomics: Calamities of Nature

How high's the water?...

I know it is just coincidence at this point, but it is hard for Aaron and I not to find ourselves constantly bracing for large rains when each week seems to feature news like this:

• ND
• Central IL (just missed us!)
• China
• Canada
• IA

This is not a climate change told-you-so. One year doth not a climate make. But after 4 years of considerable replanting and harvesting issues due to wet weather, we're taking a hint as to which way to bet. 

And if we're wrong and drought resistant corn is the next Best Thing, we'll own up. But I'm thinking biotech won't be delivering us the answers we need (like corn that can stand 96 hours underwater), just the answers they have.

My tiling contractor just told me he no longer bids any jobs except complete systems. Maybe we're not the only ones tired of this weather twist.

OK, all this is a pile of anecdotes, but by the time good data is carefully analyzed it won't be much economic use.

More lead...

When I posted about the EPA and lead, some questioned the math/science of the correlation.  This excellent post by my favorite neuroscience blogger may help supply some reasons behind my opinion.

How I got to be liberal...

Like many of my readers, I have looked back at my words and discovered they no longer match up with modern "conservatism". This is of course viewed with alarm by those who do embrace the movement today in agriculture. It has puzzled me for some time.


In 2004, I wrote this about getting "lost".

The latest jolt though, was President Bush’s 2005 budget. My position on the political chart has always been in the conservative Republican camp. This is where I thought the guy I voted for was anchored as well. But if planning more tax cuts in the face of $500B deficits, erecting trade barriers for politically powerful industries, attacking sincere dissent as craven disloyalty are the beliefs of conservative Republicans today, then I must be something else. Maybe I’m a liberal…Republican. I’ve heard there may be as many as 6 or 7 of us. Now all these perceptions could simply be fusty middle-aged crankiness. Perhaps I am just not well-informed or smart enough to understand my principles are outdated. Regardless, my painfully-acquired intellectual tools and moral compass are all that I have to guide my decisions. [More]

Meanwhile, I have taken comfort in similar, though not identical adventures recounted by bloggers and commentators I admire, and who have vastly greater audiences than mine.

As most of you know, I read Andrew Sullivan (and have for years) regularly. Here is his account.

Back in the 1980s, conservatism was a thrilling empirical, reality-based challenge to overweening government power and omniscient liberal utopianism. Today, alas, it has become a victim of its own success, reliving past glories rather than tackling current problems. It is part secular dogma - no taxes, no debt, more war - and part religious dogma - no Muslims need apply; amend the federal constitution to keep gays in their place; no abortions even for rape and incest; more settlements on the West Bank to prepare for the End-Times. Although there were inklings back then - Stockman was right; Iran-Contra should have been a warning - they were still balanced by empiricism. Reagan raised taxes, withdrew from Lebanon, hated war, and tried to abolish all nuclear weapons on earth. The first Bush was an under-rated deficit-cutter and diplomat, a legacy doubly squandered by his son.
Now it's Levin-land: either total freedom or complete slavery and a rhetorical war based entirely on that binary ideological spectrum. In other words, ideological performance art: brain-dead, unaware of history, uninterested in policy detail, bored by empiricism, motivated primarily by sophistry, Manicheanism, and factional hatred. This is not without exceptions. Douthat, Brooks, Zakaria, Bacevich, Bartlett, Frum, Manzi, Salam, Lomborg, Mac Donald, et al. are still thinking. It's just that many of them are now deemed - absurdly - to be liberals. And none will have or does have any real impact on the base of the party.
Why? Because these thinkers are prepared to believe that the conservatism of the 1980s might have run its course, that new times might require new ideas, that we have been wrong in some areas, while right in others, that it is not a crime to reverse course when events encourage it, that we have to live in the world as it is, rather than as we would like it to be, that we can learn from mistakes and base policy on shifting reality.
In contrast, today's unconservative "conservatism" is a movement held together by cultural resentment and xenophobic panic. Until it wrests free of this trap, it deserves its Palinesque fate: an ideology wrapped in anachronism, and laced with venom. [More]

Sullivan captures many of of my thoughts along with the others he lists in this peculiar club of exclusion. While this can be seen as a whiny pushback against the criticisms of more righteous believers, all these writers have earned reputations for cogent commentary and thoughtful analysis. It is to be remembered to that ad hominen attacks are now the first line of intellectual defense for today's conservatism.


I have no illusions about members of the right being moved by even these voices, let alone mine, but I do think the essential flaws in modern conservatism will reduce both its effectiveness and appeal, and that the high water mark may already have been reached, despite massive funds being made available. It could be even wealth and political power cannot withstand the erosion by higher truth and sounder logic.
 It may also be the case that mainstream conservatism simply has not gotten down to the serious work of creating pragmatic solutions based on their slogans and dislikes. The ex-pats above all have, and found they can only afford so much ideology if problems are to be solved.

Consider health care. While still ranting (and I think that is apt) about ACA, card-carrying conservatives are discovering the range of possible options is actually fairly narrow. Despite their best offerts, some consensus could emerge. Ideology is trumped by reality.


I think, without much justification I'll admit, that conservatism will find a moderate center and once again be able to entertain a wide range of pragmatic positions. It is an inherent aspect of traditional conservatism, after all. It just may not occur in my lifetime. Until then, I am OK with the company I have found.

Two dots...

I would never had connected: the Trib and colonial farmland speculation.

At issue is language regarding the legal rights of creditors vis-à-vis debtors. The United States has long had a body of law regarding this issue. A few years ago, for instance, the real estate speculator Sam Zell bought the Chicago Tribune in a debt-leveraged buyout. The newspaper soon went broke, wiping out the employees’ stock ownership plan (ESOP). They sued under the fraudulent conveyance law, which says that if a creditor makes a loan without knowing how the debtor can pay in the normal course of business, the loan is assumed to have been made with the intent of foreclosing on property, and is deemed fraudulent.This law dates from colonial times, when British speculators eyed rich New York farmland. Their ploy was to extend loans to farmers, and then call in the loans when the farmer’s ability to pay was low, before the crop was harvested. This was indeed a liquidity problem – which financial opportunists turned into an asset grab. Some lenders, to be sure, created a genuine insolvency problem by making loans beyond the ability of the farmers to pay, and then would foreclose on their land. The colonies nullified such loans. Fraudulent conveyance laws have been kept on the books since the United States won its independence from Britain. [More]

The difference between illiquidity and insolvency will continue to be hotly debated as the Greek financial crisis proceeds. Farmers may have a hard time intuitively following this debate as with our asset prices soaring, solvency is not the first concern.

In general, as finance is scrutinized more intensely, I think due diligence of lenders will be stressed more. And as bailouts have proven politically damning (especially on the right), that well of relief may have gone dry.

Maybe ridicule will help...

From Alex Tabarrok at Marginal Revolution, one of the top econoblogs, this post under the title:

Not from The Onion:

The headline says it all:

House keeps farm subsidies, cuts food aid
Here are some of the other provisions which seem designed just to be ridiculed by Jon Stewart:

Directs the Agriculture Department to rewrite rules it issued in January meant to make school meals healthier. Republicans say the new rules, the first major overhaul of school lunches in 15 years, are too costly.
Forces USDA to report to Congress every time officials travel to promote the department’s “Know Your Farmer, Know Your Food” program, which supports locally grown food, and discourages the department from giving research grants to support local food systems. Large agribusiness has been critical of the department’s focus on these smaller food producers.
Prevents USDA from moving forward with new rules that would make it easier for smaller farmers and ranchers to sue large livestock companies on antitrust grounds. The proposed rules are meant to address the growing concentration of corporate power in agriculture.
Delays for more than a year new rules for reporting trades in derivatives, the complex financial instruments blamed for helping precipitate the 2008 financial crisis. A Republican amendment adopted Thursday would require the Commodity Futures Trading Commission, which funded in the bill, to first have other rules in place to facilitate its collection of derivatives market data.
Prevents the FDA from approving genetically modified salmon for human consumption, a decision set for later this year.
Questions the scope of Obama administration initiatives to put calories on menus and limit the marketing of unhealthy foods to children.

Don’t get me wrong, I’d probably do away with a number of these rules as well. But anyone who argues against making school meals healthier because it’s too expensive at the same time as they vote for keeping billions of dollars in farm subsidies is not concerned about expenses. What unites the bill is not ideology but protection of agribusiness.
Perhaps the most outrageous provision was one the good guys won:

Critics of farm subsidies did score one victory: The House voted to block a $147 million annual payment to Brazil’s cotton industry. The United States agreed to make that payment last year after Brazil’s industry complained to the World Trade Organization that Washington unfairly was subsidizing U.S. cotton farmers. The United States lost the WTO case and agreed to make the payments to Brazil as a settlement.

So not only have we been subsidizing cotton farmers but we have been paying Brazil to allow us to keep subsidizing cotton farmers. Incredible. I wonder whether this provision will make it into the final bill.
[With apologies for excerpting the whole post.]

It simply leaves me speechless that our industry (grain production) can look anyone in the eye and justify our farm program. Maybe this whole ugly budget mess will see much of it thrown under the bus.