Womens' Economic Roles and Agricultural Practices

at Naked Capitalism:

A number of scholars have argued that these differences can be explained by cultural values. However this leaves the questions of where these values come from. Ester Boserup (1970) in her path-breaking book Women’s Role in Economic Development argues that gender role differences have their origins in different forms of agriculture practiced traditionally.

In particular, she identifies important differences between shifting and plough cultivation. The former, which uses hand-held tools like the hoe and the digging stick, is labour intensive and women actively participate in farm work. The latter, in contrast, is more capital intensive, using the plough to prepare the soil. Unlike the hoe or digging stick, the plough requires significant upper body strength, grip strength, and burst of power, which are needed to either pull the plough or control the animal that pulls it.

Because of these requirements, when plough agriculture is practiced, men have an advantage in farming relative to women. Also reinforcing this gender-bias in ability is the fact that when the plough is used, there is less need for weeding, a task typically undertaken by women and children. In addition, child-care, a task almost universally performed by women, is most compatible with activities that can be stopped and resumed easily and do not put children in danger. These are characteristics that are satisfied for hoe agriculture, but not for plough agriculture since large animals are typically used to pull the plough.

In a recent study (Alesina et al. 2011) we test Boserup’s hypothesis. The idea is that this division of labour then generated norms about the appropriate role of women in society. Societies characterised by plough agriculture, and a resulting gender-based division of labour, developed the belief that the natural place for women is within the home. These cultural beliefs tend to persist even if the economy moves out of agriculture, affecting the participation of women in activities performed outside of the home, such as market employment, entrepreneurship, and participation in politics.

Interesting.  That isn't something I would have considered.

An Argument I Don't Understand

Peter Treadway:

The US is no virgin here. The US has legally defaulted twice, the first time when the gold clause was eliminated from debt obligations in 1934 and in 1971 when President Nixon refused to honor the Bretton Woods rule that the US sell its gold to foreign nations at $35 per ounce. And a dollar in 2010 was worth 4.6 cents as compared with $1.00 in 1914 (see mykindred.com/cloud/TX/Documents/dollar/). In 1914 the traditional near- zero-inflation gold standard was jettisoned and the Federal Reserve was established.

I don't understand what the point is about the dollar being worth 4.6 cents as compared to 1914.  The only income figure I can find for 1914 is that the average salary was $627 a year.  That would compute to $13,630 per year using the 4.6 cents number.  If the dollar was still worth a dollar, and we were making $627 per year, would we be better off than we are now.  I know wages could grow because of greater productivity, but if your earnings keep up with inflation, and your assets grow in value because of inflation, what is the major concern with inflation?  It is only when you own bonds or hold other peoples debts when inflation attacks your holdings.  I think right now, we could use some inflation, if it actually went into wages.

Why Did the U.S. Institute a Welfare State?

The Washington Post, via Mark Thoma:

The specter of a European social order, with societies irredeemably divided between aristocrats and a permanent underclass, seemed to have arrived on U.S. shores. Wealthy Americans began to fear for the stability of the social order.
What force, the wealthy asked in desperation, might mitigate the social chaos and misery, and mute what one public official called “the antagonism between rich and poor”?
Today, new fortunes have been accumulated that rival those of the Gilded Age. Some of that wealth, possessed by people like Charles G. Koch and David H. Koch or Peter G. Peterson, has been used to promote cuts to social spending. Before these opponents and their allies in Congress move forward with the dismantling of the welfare state, however, they might think harder about the reasons such policies were put in place.
The Gilded Age plutocrats who first acceded to a social welfare system and state regulations did not do so from the goodness of their hearts. They did so because the alternatives seemed so much more terrifying.

No kidding.  The welfare state benefits those who have the most.  It protects them from mobs taking what they have. 

Commodity Stocks and Price Swings

Greed, Green and Grains:

In just the last couple weeks corn prices have fallen from nearly $8/bushel to about $6.15.  All of that is due to a rather small amount of information about the progress of this year's crop.  Yes, there were reports of flooding and late plantings, but that kind of thing rarely has much effect on the overall crop production.  The late plantings just set up even more volatility going forward, since the plants will be  susceptible to extreme heat in July and August.

This volatility is exactly what economic models predict when inventories are low and cannot buffer weather shocks.  I expect to see even larger swings in late July and August, because it's weather in these months, and particularly the amount of extreme heat in the Midwest, that will determine the size of the corn and soybean crops.

But this volatility does provide a teachable moment:  it shows how sensitive prices are to small quantity changes.  That sensitivity provides some indication of how much ethanol could be influencing food prices globally.  And while long-run sensitivities are likely less than those in the short run, it also shows us how sensitive food commodity prices could be to even modest climate change impacts on US and world agriculture.

I don't really have much handle on what the effects of climate change could be on agriculture, but any more than very minor change could be disastrous for production in the Eastern Corn Belt.  Our heavy clay soils would be brutal if we began getting more wet springs like this one.  That could put us out of being a productive corn growing region. 

Rebels of the Sacred Heart

Today is the Feast of the Sacred Heart in the Catholic Church.  This may be heretical, but I like the song, so here it is, even though the video quality isn't so good (somewhat NSFW, some f-bombs):

NBA Accounting

How and Why an NBA Team Makes a $7 Million Profit Look Like a $28 Million Loss, at Deadspin, via Ritholtz.

Crooked bookkeeping?  No, never.  What would owners have to gain by claiming a loss? Hmmm....

Commodity Bubble?

At The Big Picture:

Wheat Harvest is Complete

We got the wheat harvested.  It wasn't bad, but it wasn't stellar.  We averaged about 75 bushel per acre, with two fields around 80 and one field near 70.  We got hit for 40 or 45 cents on one load for vomitoxin, and about 10 cents on most of the others.  From anecdotal evidence, our fungicide application didn't make much difference this year.

Naked Capitalism Link of the Day

Today's link: Meet the Millionaires And Billionaires Suddenly Buying Tons of Land In Africa, at BusinessInsider:

Oakland Institute just completed the most thorough investigative report on who's buying land in Africa we've seen yet: "Hedge Funds Grabbing Land in Africa," as BBC called it.
As commodities prices rise and inflation picks up, the OI made the report public, they say, because the number of investors buying up land in Africa concerns them.
For obvious reasons, there isn't much out there about who's buying what and how much in Africa. But what OI has discovered is a small number of investors paying sometimes nothing for large plots of land in some African countries.
The lease deals are arranged between seemingly corrupt African leaders, reportedly without disclosing the details to the members of the communities that will be displaced because of the land development, and investors such as hedge fund managers.
The end result -- beating villagers, digging up their cemeteries, and taking over land that villagers have lived on for centuries -- looks a lot like a less cruel version of what history tells us colonizing Americans did when they ousted the Indians, according to this one report anyway.

I can't say that I trust a bunch of hedge funds and such to cut fair land deals in Africa.  According to this report, it doesn't look like I should.  These guys would do anything to make bucks, including starving their grandma.  Conspiring with crooked leaders to steal land in Africa isn't going to faze them a bit.

Up North, It's Canada Day

Happy birthday to the next door neighbor:

Frequently referred to as "Canada's birthday", particularly in the popular press, the occasion marks the joining of the British North American colonies of Nova Scotia, New Brunswick, and the Province of Canada into a federation of four provinces (the Province of Canada being divided, in the process, into Ontario and Quebec) on July 1, 1867. Canada became a kingdom in its own right on that date,^{[n 1][8][9][10][11]} but the British Parliament kept limited rights of political control over the new country that were shed by stages over the years until the last vestiges were surrendered in 1982 when the Constitution Act patriated the Canadian constitution.

A little explanation, since in the U.S. we have enough trouble with our own history, let alone somebody else's

Planes May Trigger Snowfall

An image believed to be that of a hole-punch cloud. Scientists say airplanes create these patterns when they fly through certain types of clouds. The water in the clouds can turn to rain or snow and fall to the ground.



All Things Considered: 

The idea for the study came in 2007, when a plane full of weather scientists flew through a very odd snowstorm near Denver International Airport.
The storm was unusual because it produced only a narrow strip of snow leading from the runway, says Andrew Heymsfield, a senior scientist at the National Center for Atmospheric Research and one of the study's authors.
So the scientists did some research on the storm, Heymsfield says. And they found that the narrow band of snow they'd flown through followed the exact flight track of two turboprop aircraft that had taken off a few minutes earlier.
"The quite amazing thing was that their flight track actually produced about an inch of snow at the ground," he says.
The scientists were pretty sure the planes had made that snow fall, Heymsfield says. But they wanted to know precisely how.
They knew that research in the 1980s had found that airplanes, especially those with propellers, could cause ice crystals to form when they flew through certain clouds at just the right temperature.
So it seemed plausible that planes could trigger a little snow. And Heymsfield found evidence that they often did cause precipitation close to their flight path.
But as he used satellites and airport data to study the phenomenon, he realized that a single aircraft could also cause snow to fall for miles around.

That is pretty cool.  Get a bunch of geeks together, and they'll find something to wonder about.  Nothing like a bunch of civil engineers riding a bus, drinking beer and staring out the window at bridges and stuff.  But be careful about hanging out with surveyors, they'll want to retrace the original survey of some Meridian somewhere, possibly in pioneer garb, and everyone knows that pioneer surveyors got awful lonely and cold at night out in the woods with no females around.

Weird Al, a Prophet of Modern America

Mike Barthel:

Al doesn't break new ground on Alpocalypse. His latest polka medley, called “Polka Face,” serves as a reminder that Yankovic’s many previous medleys prefigured the modern mash-up. “Style parodies” of the White Stripes and Meat Loaf songwriter Jim Steinman, and straight parodies of Taylor Swift’s “You Belong With Me” and Miley Cyrus’s “Party in the USA,” show it’s the same Al as ever. And why shouldn’t it be? Yankovic's primary purpose is to make people happy, and if things are working, why try anything different?

In fact, his consistency has given him a kind of power in the current era. Lady Gaga, or at least her management, initially opposed Yankovic’s parody of "Born This Way," but relented after a skillful public campaign by Yankovic. He released the song for free and put up a lengthy blog post detailing his efforts to be properly respectful towards a track that had come to be seen as an anthem and towards an artist who paints herself as a kind of cult leader. It's a battle Yankovic lost when going up against Prince and Paul McCartney in decades past, but this times, the terms of public debate had shifted in his favor. No longer are decisions about who parodies who made in record-label offices. Instead, social influencers can come into play. Just as technological changes have allowed Yankovic's form of expression to become much more common, so too has the Internet shifted the criteria we use to legitimize these expressions. Reuse of existing material has come to be seen as something the original artist shouldn't necessarily control, and so the hoops Yankovic jumped through with “Born This Way” actually come off as charmingly quaint. The good-natured public face he's developed, which seemed so lacking in edge before, is now precisely what we want from our public figures. It's given him a kind of power he used to beat the queen at her own game. Being a prophet has its advantages.

My all-time favorite is Amish Paradise, but this is close:



Looks like the work of a prophet, right? Maybe Modern America is actually doomed. Oh well, put on some polka.

The Story of the "Genius" Who Invented Sea Monkeys

At the Awl, via Ritholtz:

In a 2002 interview with Erik Lobo of Planet X magazine, Harold von Braunhut comes across as the kind of charming old guy who might detain you in conversation a bit too long if you were volunteering at a home for the aged. An inventor and entrepreneur who brought us legions of wonderfully gimmicky toys before he died, at 77, in 2003, von Braunhut holds forth about times gone by, interrupted only when his cockatoo chews at the wire connecting his hearing aid to the telephone.
Von Braunhut was a short, balding man who had the accent that turns “beautiful” into “bee-YOO-dee-full,” and he often cast himself as the guy they all doubted until he showed ’em. In the interview he seems to delight in telling Lobo about his most famous and successful novelty item, Sea-Monkeys. These little critters, you may recall, carry with them the promise of “a BOWLFULL OF HAPPINESS—Instant PETS!” They’re supposed to arrive in the mail, spring to life in water, and soon start horsing around and making babies. According to von Braunhut, the problem with selling Sea-Monkeys early on, ya see, was that “nobody believed it!” He adds, “It’s a little bit like the story of the Wright brothers.”
The accounts Von Braunhut gave of his adventures in American kitsch are consistently winning. Granted, he makes some claims that a skeptic is inclined to independently confirm. At some point in the years after he raced motorcycles as The Green Hornet, von Braunhut worked as a talent agent of sorts. He tells Planet X about a stunt performer he used to manage—the article has von Braunhut calling him “a fella by the name of Henry Lamore”—who would dive from a height of 40 feet into a kiddie pool filled with 12 inches of water. I began to lose faith while trying to verify this doozy, but it turns out that the Internet allows you to watch a man named Henri LaMothe still pulling off this feat at 71 years old, as an opening act for Evel Knievel.
As anyone sold by the Sea-Monkey ads could tell you, it was hard to say exactly where von Braunhut was walking on the terrain between truth, embellishment and con. That was his gift. He convinced us to look at the jazz hands and lose sight of the footwork. Von Braunhut’s inventions were not quite what they seemed to be. Neither was he.

Inventor/con man, Aryan Nations member/born Jewish.  Definitely an interesting read.  Definitely not what you would expect.

Naked Capitalism Link of the Day

Today's link: High Court undoes Scalia's pro-tobacco order, at Physorg:

Supreme Court Justice Antonin Scalia exercised a rarely used power last fall to let Philip Morris USA and three other big tobacco companies delay making multimillion-dollar payments for a program to help people quit smoking. Scalia, a cigarette smoker himself, justified acting on his own by predicting that at least three other justices would see things his way and want to hear the case, and that the high court then would probably strike down the expensive judgment against the companies.
This week, the court said he was wrong about that.
On a court that almost always acts as a group, Scalia singlehandedly blocked a state court order requiring the tobacco companies to pay $270 million to start a smoking cessation program in Louisiana. The payment was ordered as part of a class-action lawsuit that Louisiana smokers filed in 1996. They won a jury verdict seven years ago.
Scalia said in September that the companies met a tough standard to justify the Supreme Court's intervention.
"I think it reasonably probable that four justices will vote to grant certiorari," Scalia said, using the legal term to describe the way the court decides to hear most appeals, "and significantly possible that the judgment below will be reversed."
Not only did the justices say Monday they were leaving the state court order in place, there were not even four votes to hear the companies' full appeal. And the court provided no explanation of its action.
Scalia said through a court spokeswoman that he also had no comment on the matter.

The article states that the case went to Scalia because he oversees the 5th Circuit, and the last time a justice acted alone was Justice Anthony Kennedy, in a case involving a cross in a San Diego park.  I think it is interesting that Scalia would step in on a case involving cigarette companies having to spend money, but the court almost never gets involved in death penalty appeals.  I guess we can see what justice Scalia and other court members, are concerned with.  I guess we can chalk this up as a rare loss by corporations  in the Roberts Court.  Another link today at naked capitalism is an E.J. Dionne column attacking the Roberts Court for the Arizona campaign finance ruling.  This Court is a radical pro-business court made up of 5 conservative judicial activists, along with 4 liberal members.

Banks Are Lying Thieves-Debit Card Edition

Marketplace:

Moon: So give me a sense of how big these fees have been on merchants and what difference today's decision is going to make.
Vanek Smith: Well the fees vary, actually, depending on your bank and the size of your purchase. But the average charge is about 44 cents per debit card swipe, which might not sound like a lot, but the banks take in about $15 billion in swipe fees every year. Now, the Fed is going to cap that at about 20 cents per swipe.
Moon: Now I understand the Fed originally planned to cap it at around 10 cents. Now we're talking just a dime or two less per transaction. Is that really such a big deal?
Vanek Smith: Yes. They did originally say they were going to cap it at 10 cents, but the banks made a lot of noise about it -- the Fed got thousands of comments -- so it compromised and will cap the fees at 20 cents. And it is actually a pretty big deal. It's going to take a big chunk out of the $15 billion the banks were taking in, and what's more, the banks now say they'll lose money on every transaction. They say every time you swipe your debit card, it costs them about 27 cents, which is higher than the cap. Just FYI, though, the Fed did their own calculation and says the bank only pays about 4 cents per swipe, which would still leave room for a pretty healthy profit for the banks. (emphasis mine)

I just bought a case of Mountain Dew on sale for $5.  That's 21 cents per can.  How can Pepsi make pop, put it in an aluminum can, ship it to the store and the store sell it for less than what banks claim it costs them to electronically process the debit card swipe to pay for it.  The Fed is right, and banks are lying asshole crooks, that's how.

Republican Orthodoxy

St. Louis Dispatch (h/t Mark Thoma):

Today we have the spectacle of smart, patriotic men and women putting their brains and integrity on ice to please a party dominated by anti-intellectual social Darwinists and the plutocrats who finance and mislead them.
Consider the mythology that makes up GOP orthodoxy today. Imagine the contortions that cramp the brains and souls of men and women of intelligence and compassion who seek state and national office under the Republican banner.

• They must believe, despite the evidence of the 2008 financial collapse, that unregulated - or at most, lightly regulated - financial markets are good for America and the world.
• They must believe in the brilliantly cast conceit known as the "pro-growth agenda," in which economic growth can be attained only by reducing corporate and individual tax rates, especially among the investor class, and by freeing business from environmental rules that have cleaned up America's air and water and labor regulations that helped create America's middle class.
• Though rising health-care costs are pillaging the economy, and even though health care in America is now a matter of what you can afford, Republican candidates for office must deny that health care is a basic right and resist a real attempt to change and improve the system.
• GOP candidates must scoff at scientific consensus about global warming. Blame it on human activity? Bad. Cite Noah's Ark as evidence? Good. They must express at least some doubt about the science of evolution.
• They must insist, statistics and evidence to the contrary, that most of the nation's energy needs can be met safely with more domestic oil drilling, "clean-coal" technology and greater reliance on perfectly safe nuclear power plants.
• They must believe that all 11.2 million undocumented immigrants living in the United States can be rounded up, detained, tried, repatriated and kept from returning at a reasonable cost.
• Even though there are more than four unemployed persons for every available job, GOP candidates should at least hint that unemployment benefits keep people from seeking jobs.
• They must believe that the Founding Fathers wanted to guarantee individuals the absolute right to own high-capacity, rapid-fire weapons that did not exist in the late 18th century.

By no means is this list complete. It almost makes you feel sorry for the people who pretend to believe this stuff. Almost.

This is close to being a checklist for whether I will vote for a candidate.  If they state any three of them, I probably won't vote for them.  So, in reality, I won't be voting for many Republicans anytime soon.  Another good indicator for whether I will vote for a Republican is whether he is being called a RINO.  If he is labeled a RINO, I will probably consider voting for him, if he's a tea party favorite, I almost certainly won't.

Iowa Butter Cow Sculptor Dies

All Things Considered:

Norma "Duffy" Lyon passed away over the weekend at the age of 81.
If you don't recognize that name, maybe this will help: for 46 years she was "the butter cow lady" at the annual Iowa State Fair. That is, she was the artist who every year would create a life-sized cow out of butter for display at that fair (and a few others around the country). It is, as the Iowa fair's website says, one of the big attractions in Des Moines every August.....
Lyon's last butter cow at the Iowa fair was sculpted in 2005. This afternoon, All Things Considered host Melissa Block spoke with the woman who took over the honor in 2006, Sarah Pratt, who like Lyon is from Toledo, Iowa.
"What was it about sculpting out of butter that [Lyon] liked so much?" Melissa asked.
"I think she was a born artist," Pratt said. "No matter what the medium was going to be, she was going to be an artist." It didn't hurt that she was also a dairy farmer and had studied animal science.

I remember my last trip to the Ohio State Fair.  We checked out the butter cow, and that year also featured a butter Darth Vader (I think it was 1983, the year Return of the Jedi hit screens).  It was neat, but I thought at the time that it was only an Ohio feature.  Later I would hear on the news about another state fair's sculpture.  The Dairy Board gets good press out of this, but they ought to have a big party at the end of the fair with tons of bread and corn on the cob, where people get to use the butter.

Update:  Here's the guy who did the Darth Vader sculpture, Dan Ross, who retired from creating Ohio's butter sculptures in 1999:

He's going out in style. For this year's exhibit, Mr. Ross created a collection of his greatest butter hits. In addition to the mini-Neil Armstrong, he molded a diminutive ballerina and Olympic gymnast, scowling Star Wars villain Darth Vader and swinging golfer Jack Nicklaus.

I thought I should give the man credit for his work.

Soggy Fields Cut Corn Planting

Bloomberg, via Ritholtz:

U.S. corn farmers were unable to plant on soggy or flooded fields from Arkansas to North Dakota this year, signaling tighter grain stockpiles even after rising demand for livestock feed and ethanol sent prices surging.
The U.S. Department of Agriculture may cut its planting forecast on June 30 to 90.629 million acres, according to a Bloomberg News survey of 31 analysts. That’s less than the 92.178 million that farmers predicted in a government survey three months ago and would be the USDA’s biggest such reduction from the March forecast since 1995.
Parts of the Ohio River Valley and North Dakota had triple the normal rainfall in the past 90 days, Mississippi River floods were a record in May, and millions of Midwest acres were inundated with water. While prices slumped in the past few weeks, as drier weather improved conditions, late planting means fields are susceptible to heat and frost damage before this year’s harvest in September.
“It’s incredible how wet it has been this year,” said Scott Stirling, who plans to make an insurance claim for the first time in his 21 years of farming because 500 acres of his 7,500-acre farm near Martinton, Illinois, were too soggy to plant. “We needed the best crop ever to begin to rebuild inventories this year, and that’s just not going to happen.”

We barely got done this year, but it is good that people noticed we were struggling there.  We'll see what happens, but it was a long spring.

What's Wrong With Iowa?

Or actually, Iowa Republicans.  First Michele Bachmann, now this:

Late in the afternoon, Democrats and other non-fans of Sarah Palin cleared out of downtown as a horde of supporters (and journalists) descended on the historic Pella Opera House for the Iowa premiere of "The Undefeated," filmmaker Steve Bannon's biographical movie of Palin. Just after 5 p.m., Palin and her husband, Todd, both smiling and dressed casually in jeans, arrived and ambled down Franklin Street greeting well-wishers. The event had the air of a revival; supporters had come from as far away as Dallas and were rapturous at the sight of their shepherd.

Earlier in the day, Palin's daughter had let slip in a television interview that her mother had made up her mind about a presidential run--but didn't say which way she was going to go. Before the heading into the theater, Palin spoke to reporters, but she didn't let on much either: "I told Bristol, too, what is talked about on the fishing boat stays on the fishing boat." 

Then it was on to the show. Bannon made brief remarks about the making of "The Undefeated" and paid homage both to Pella's and to Palin's authenticity: "The hard-worn bricks outside the Pella Opera House are all the red carpet she needs." After a prayer, the Pledge of Allegiance, and spirited renditions of "The Battle Hymn of the Republic" and "This is My Country," the lights went down and the movie began. The crowd thrilled to the celebration of their hero and seemed pumped up by the film's dramatic imagery--volcanoes, earthquakes, snipers, ferocious lions, and clip after clip of Palin fighting back against her sundry enemies. (Subtlety isn't part of the Bannon arsenal.) When Palin, in the film, declared "We are an exceptional country and that is not something to apologize for," the audience broke into whoops and cheers. 

Then the lights when up, and the director, producers, and star took the stage to a standing ovation. Palin gave a brief, peppy stump speech and took a few swipes at the "lamestream media" before leading the crowd out of the theater and around the block to a giant barbecue (that, from the looks of it, attracted several hundred more revelers). Everyone look relaxed and happy and very pleased to be there.

Will heartland Republicans vote for every mildly attractive idiot woman put in front of them?  Will they buy such ridiculous spoon-fed bullshit?  I sure as hell hope not.  Let's actually sort out facts, and not comforting stories that make fundamentalist suckers feel better about themselves.  These women are terrible candidates (well, one is still dragging out whether to announce).  I can't believe anyone pays attention to them.  I wouldn't leave them in charge of my dog.

Map of the Day

Number of prisoners housed in private prisons, by state (h/t Mark Thoma):

The whole article is worth reading.  Almost 45% of New Mexico's prisoners are housed in privately-run prisons.  Prisons, hospitals and schools shouldn't be run as for-profit businesses.  There are just too many incentives for poor outcomes or outright fraud.  I think the bad actors among charter schools, for-profit colleges and for-profit hospitals should make this case pretty easily.  We are allowing private businesses to steal from taxpayers with almost no oversight.  It is a crock.

Dickey Cruises To Victory in Easy Mets Win

Knuckleballer R.A. Dickey turned in 7 innings of work, getting the win while giving up 3 runs and 10 hits as the Mets cruised to an easy 14-3 win over the Tigers.  Also, while Chief Wilson's all-time single-season record of 36 triples in a season remains pretty safe, Jose Reyes hit his 15th triple of the season, giving him 98 triples in his first 1,000 games, not far off of Ty Cobb's pace of 106 triples in his first 1,000 games.

Naked Capitalism Link of the Day

Today's link: A Land of Haves and Have-nots, at ConsortiumNews:

Yet with all the calumnies that are committed on an hourly basis behind the facade of our nation’s capital, what had local media there outraged a few days ago? Lemonade.
Seems a TV news cameraman caught a county inspector in an affluent Washington suburb trying to shut down a kid’s lemonade stand just outside the Congressional Country Club during the recent US Open.
And if that wasn’t bad enough, he slapped the enterprising tikes – who were raising money to fight pediatric cancer – with a $500 fine.
As the June 18 Washington Post reported, for a while it seemed “the all-American rite of passage might instead become a master class in government overreach,” yet public anger was so immediate and vociferous the fine was quickly revoked and the youngsters permitted to reopen down a side street a few yards away.
But these weren’t your garden variety, neighborhood moppets, selling drinks from Mom’s Tupperware pitcher on a card table near the sidewalk.
For one thing, according to the Post, “There was a tent for shade, five plastic coolers, and a couple of industrial steel ones packed with ice and cans of Coke and Diet Coke. For the fundraiser, the kids’ parents had also secured cases of bottled lemonade wholesale…”
For another, among those helping out and defending their boys and girls were the former head of Lockheed Martin and the Red Cross and members of the Marriott family.
“When something’s right you stand up for your beliefs,” Carrie Marriott, wife of the hotel heir, said. “That’s what America’s about. It’s about free enterprise. It’s about taking an idea, making it happen, and making it successful.”
Coincidentally, the very next day, the Post reported that total compensation was up an average of more than 20 percent last year for the Washington area’s highest paid executives.
Among them, Ms. Marriott’s father-in-law, J. Willard Marriott, Jr., who in 2010 earned nearly $10 million. The report was part of the newspaper’s investigation of so-called “breakaway wealth” among the nation’s richest.

What?  Kids of super-wealthy families selling lemonade to other super-wealthy folks at the U.S. Open get busted by a suburban official and fined?  What a bunch of crap on all sides.  I'm sure these folks are teaching their kids a lot of valuable lessons in hard work and ignoring regulations.  Is there a non-reprehensible adult involved in the story?  I am glad this story wasn't on my local news.

Do Corked Bats Make the Baseball Travel Further?

No, says Lloyd Smith (h/t Mark Thoma):

Some baseball superstitions are accepted as cold, hard truth. But in the world of physics, the most accepted verities are subject to experimentation. A corked bat hits the ball further? Not in Lloyd Smith's lab.
Baseballs today are livelier than in the past? See above.
Storing balls in a humidor can curb home run production? We'll grant you that one, but only because Smith has fired the balls through a cannon and measured their bounciness as they hit a bat.
Smith, an associate professor of in Washington State University's School of Mechanical and Materials Engineering, tested all three premises his Sports Science Laboratory on Pullman campus.
"I've got the cool machine that can do the tests," says Smith. Working with colleagues from the University of Illinois and Kettering University, his findings are in this month's American Journal of Physics article, "Corked Bats, Juiced Balls, and Humidors: The Physics of Cheating in Baseball."
The juiced-bat question arose in earnest in 2003 when Chicago Cubs slugger Sammy Sosa was caught using a bat that was illegally drilled out and stuffed with cork. The researchers first took a 34-inch wooden bat and repeatedly measured the speed at which a ball bounced off it when fired from a cannon at the combined speed of a thrown ball and swung bat. They then hollowed out the barrel of the bat, stuffed it with bits of cork and fired the ball at it again.
If anything, they found, a ball came off a corked bat more slowly than a regular bat.
However, the authors acknowledge that batters might cork bats to make them lighter, improving their ability to "get around" on the ball faster and make more solid contact. But fully addressing that issue would require player interviews, acknowledges Smith.
"They're not going to want to talk to us about this," he says.
The issue of juiced balls emerged in 2000, when the first two months of the major league baseball season saw substantially more home runs than the same time the previous year. In 2004, the researchers compared contemporary balls with a batch of late-'70s balls provided by the family of former Oakland A's owner Charlie Finley. They fired them at both a steel plate and a bat at speeds of 60, 90 and 120 mph.
They found the balls' coefficients of restitution—their ability to bounce—were nearly identical.
In retrospect, Smith speculates that it may have been the players, not the balls, that were juiced.

The corked bat theory never really made much sense to me, other than lightening the bat, while keeping the barrel diameter.

Incorporation Haven

Cheyenne, Wyoming (h/t Ritholtz):

The secretive business havens of Cyprus and the Cayman Islands face a potent rival: Cheyenne, Wyoming. At a single address in this sleepy city of 60,000 people, more than 2,000 companies are registered. The building, 2710 Thomes Avenue, isn't a shimmering skyscraper filled with A-list corporations. It's a 1,700-square-foot brick house with a manicured lawn, a few blocks from the State Capitol.
Neighbors say they see little activity there besides regular mail deliveries and a woman who steps outside for smoke breaks. Inside, however, the walls of the main room are covered floor to ceiling with numbered mailboxes labeled as corporate "suites." A bulky copy machine sits in the kitchen. In the living room, a woman in a headset answers calls and sorts bushels of mail.
A Reuters investigation has found the house at 2710 Thomes Avenue serves as a little Cayman Island on the Great Plains. It is the headquarters for Wyoming Corporate Services, a business-incorporation specialist that establishes firms which can be used as "shell" companies, paper entities able to hide assets.
Wyoming Corporate Services will help clients create a company, and more: set up a bank account for it; add a lawyer as a corporate director to invoke attorney-client privilege; even appoint stand-in directors and officers as high as CEO. Among its offerings is a variety of shell known as a "shelf" company, which comes with years of regulatory filings behind it, lending a greater feeling of solidity.
"A corporation is a legal person created by state statute that can be used as a fall guy, a servant, a good friend or a decoy," the company's website boasts. "A person you control... yet cannot be held accountable for its actions. Imagine the possibilities!"

The "shelf" corporations, paper businesses with a plain but steady history, which can be sold to people who want to quickly get loans, bid for work or project stability, are created, and then left to "age."  Great, as if it isn't already difficult enough to sort through who is a crook and who is a legitimate business person.  This sounds like a scam one of my former renters would have had on his list to try in his "entrepreneurial" ventures.  His files, which were left when he moved out, were entertaining to read.

The Capture of Ned Kelly

June 28, 1880:

Edward "Ned" Kelly (June 1854/June 1855 – 11 November 1880) was an Irish-Australian bushranger, considered by some merely a cold-blooded killer, while by others a folk hero and symbol of Irish-Australian resistance against oppression by the British ruling class for his defiance of the colonial authorities.
Kelly was born in Victoria to an Irish convict father, and as a young man he clashed with the Victoria Police. Following an incident at his home in 1878, police parties searched for him in the bush. After he killed three policemen, the colony proclaimed Kelly and his gang wanted outlaws.
A final violent confrontation with police took place at Glenrowan on 28 June 1880. Kelly, dressed in home-made plate metal armour and helmet, was captured and sent to jail. He was hanged for murder at Old Melbourne Gaol in November 1880. His daring and notoriety made him an iconic figure in Australian history, folklore, literature, art and film.

Ned Kelly's armour on display in the State Library of Victoria
The apron and one shoulderplate are not Ned's and comes from either Dan Kelly's or Steve Hart's armour

Map of the Day

Yglesias:

The Texas Economic "Miracle"

The New Republic:

Is Texas Governor Rick Perry some sort of economic genius? That’s the line from many conservatives, particularly after the Federal Reserve Bank of Dallas recently found that more than one-third of all new jobs created in the United States since June 2009 have been located in the Lone Star State. In a chat that dazzled The Wall Street Journal’s editorial board, Dallas Fed President Richard Fisher chalked Texas’s success up to its conservative policies (no income tax, lax regulations, tort reform), especially when compared with that deep-blue basket case, California. Perry himself hasn’t been shy about taking credit: “In Texas, you don’t have to use your imagination, saying, ‘What’ll happen if we apply this or that conservative principle?’” he remarked at a recent Manhattan fund-raiser. “You just need to look around, because they’ve been in play across our state for years, generating real results.” It’s one reason why so many Republicans are urging Perry to run for president. Here, at last, is the man they’ve been waiting for.
But, before anyone goes too gaga, it’s worth taking a closer look at the Texas miracle. Texas, economists note, has long been a low-tax, loose-regulation state, but it hasn’t always thrived—between 2008 and 2010, after the U.S. economy collapsed, the state’s unemployment rose faster than in high-tax Massachusetts. In May, Texas’s unemployment rate, at 8 percent, ranked twenty-fourth in the country, slightly worse than liberal New York’s. What’s more, not all of those vaunted jobs are great jobs: Texas has the highest percentage of minimum-wage workers in the country, and its per-capita income still sits below California’s.
What is clear is that Texas’s population has been exploding, leading to disproportionate job growth. In the past decade, the state added more people than anywhere else, partly due to fast-growing Hispanic families, but due also to migration from other states. So why are people flocking to Texas? It could be the state’s lower taxes, though that probably isn’t a big driver: As Brad DeLong of University of California, Berkeley, has noted, Texans pay, on average, 26 percent of their income in taxes, not much lower than the 28.5 percent average in California.
More likely, people are moving to Texas because housing is so affordable. In a 2006 survey by the Census Bureau, Texas ranked forty-second in the cost of housing. Conservatives can take some credit—by and large, it’s easier to build houses in Texas’s biggest cities, with fewer land-use and zoning hassles, according to Harvard economist Edward Glaeser.
But conservatives shouldn’t be too triumphal. Texas didn’t suffer from a ruinous housing bubble like nearby Arizona and Nevada, thanks to regulations that limited debt on homes and restricted “cash-out” refinancing (a common practice in states like Florida and California, in which people got free cash for refinancing their homes). As a result, Texas didn’t fare as badly when the housing market cratered this time: Only 6 percent of Texas borrowers were in or near foreclosure, versus a national average of nearly 10 percent. Two cheers for intrusive regulations.
Other aspects of Texas’s success come down to sheer luck. The state is home to large oil and gas reserves. As oil prices have climbed over the past decade, new rigs have sprouted up like toadstools, while the natural-gas craze has led to economic booms in North Texas and the Eagle Ford Shale near San Antonio. The Dallas Fed has found that, every time oil prices rise 10 percent, Texas gets a 0.5 percent GDP bump. That’s hardly something other states can replicate.

Oil and gas aren't going to be as big of a factor for other states as they are for Texas.  But the fact of the matter is that states go through a cycle in which growth fuels more growth, and it is easier to provide services when the growth is occurring than after it stops.  Rust Belt states have already gone through the cycle, California growth peaked, and the Sun Belt will see the growth slow down and stagnate also.  Texas isn't expanding services, like the other states did, but that just signifies how crappy Texas is, not how smart they are.  Texas is overrated, and Texas governors are way overrated.  Rick Perry as president would make George W. Bush look like a compassionate conservative, and he'd make Bush look like a success.

Naked Capitalism Link of the Day

Today's link is from the Dayton Daily News, which I missed.  It is titled Major banks may give away discarded residences to cut losses:

City officials are in preliminary talks that could lead to donations of foreclosed and abandoned properties from the banks holding the mortgage loans.

Negotiating for an exit strategy from the mortgage meltdown, representatives for a foreclosed properties servicer that works with major banks met Monday with Dayton city officials to discuss the abandoned properties.

How the early discussions will shake out is unknown, but a potential outcome includes transferring some properties clogging up bank balance sheets to a land bank or some other public entity, a move that occurred earlier this year in Chicago.

In May, Bank of America announced a collaboration with the city of Chicago and a community group to give away 150 vacant and abandoned properties in and around the city. A bank spokesman said the bank agreed to pay as much as $10,000 per home for demolition, according to the Chicago Sun-Times.

Makes a lot of sense that the banks foreclosed on the homes.  I wonder what the total losses to the banks are on such homes.  I would assume a loan of about $80,000, probably $5,000 in foreclosure costs then maybe $10,000 more to have the city demolish them.  That doesn't work out well.  It would have been cheaper to cancel the mortgage and give them to the homeowner.  Of course, then the bank probably would have turned around and written another mortgage on the house.  I don't feel sorry for the banks, and I'm glad there are some homes in which government-backed mortgages aren't involved.

Forecasting Commodity Prices

The Federal Reserve Bank of New York looks at various methods (h/t Mark Thoma):

Over the last decade, unprecedented spikes and drops in commodity prices have been a recurrent source of concern to both policymakers and the general public. Given all the recent attention, have economists and analysts made any progress in their ability to predict movements in commodity prices? In this post, we find there is no easy answer. We consider different strategies to forecast near-term commodity price inflation, but find that no particular approach is systematically more accurate and robust. Additionally, the results warn against interpreting current forecasts of commodity prices upswings as reliable and dependable signals of future inflationary pressure.

I'd say good luck with that.

Cost of A/C in Iraq and Afghanistan

All Things Considered, via the Dish:

The amount the U.S. military spends annually on air conditioning in Iraq and Afghanistan: $20.2 billion.
That's more than NASA's budget. It's more than BP has paid so far for damage during the Gulf oil spill. It's what the G-8 has pledged to help foster new democracies in Egypt and Tunisia.
"When you consider the cost to deliver the fuel to some of the most isolated places in the world — escorting, command and control, medevac support — when you throw all that infrastructure in, we're talking over $20 billion," Steven Anderson tells weekends on All Things Considered guest host Rachel Martin. Anderson is a retired brigadier general who served as Gen. David Patreaus' chief logistician in Iraq.
Why does it cost so much?
To power an air conditioner at a remote outpost in land-locked Afghanistan, a gallon of fuel has to be shipped into Karachi, Pakistan, then driven 800 miles over 18 days to Afghanistan on roads that are sometimes little more than "improved goat trails," Anderson says. "And you've got risks that are associated with moving the fuel almost every mile of the way."

That seems almost impossible, but it gives an idea of how expensive these wars are.  We've flushed so much money down the drain in these wars the past 10 years, and that doesn't even take into account the men and women killed and wounded.  The sooner we are gone, the better.

Genessee Bock Beer

This wasn't too bad, and the price is definitely right:

Fertilizer is On

Spent a long day sidedressing the corn and trying to thicken up a hay field.  Maybe we'll try running wheat tomorrow if it doesn't rain tonight.

Churchill and the Welfare State

George Watson, via the Dish:

The forgotten truth about health provision is that socialism and state welfare are old enemies, and welfare overspending is a characteristic of advanced capitalist economies. Nobody doubts that California is capitalistic, and its public debt is notorious; the People’s Republic of China, by contrast, is a major creditor in international finance. When the two Germanies united after 1990, the social provision of the capitalist West was more than twice that of the socialist East, and the cost of unification to West Germany proved vast. Talk of socialized medicine was always misleading if socialized implies socialist, and the very word probably guarantees that confusion. The British National Health Service of 1948, like the Canadian version that followed it 20 years later, always allowed for a flourishing private sector—a sector that has tended to grow with the years. It neither banned private medical care nor discouraged it. Only a competitive economy, what is more, is likely to generate a tax base big enough to maintain public hospitals, pensions, and schools. In short, a free economy needs state welfare, and state welfare needs a free economy.

I think that a capitalist system needs a welfare state to moderate the predation inherent in the capitalist state.  If inequality becomes too great, the choice is between capitalism and something unstable.  The welfare state provides stability and balance to the capitalist economy.  It is a necessity and not a hinderance.

What is Petraeus Doing?

Conor Friedersdorf:

Asked about "enhanced interrogation techniques," Gen. David Petraeus has always insisted that the U.S. should question detainees in accordance with the Geneva Conventions and the Army Field Manual. It's a position he reiterated even when asked about a "ticking time bomb" scenario.

That changed when Gen. Petraeus testified Thursday before the Senate intelligence committee, answering various questions as part of the confirmation process for the top job at the CIA.

The LA Times reported on the exchange:

In the vast majority of cases, Petraeus said, the "humane" questioning standards mandated by the U.S. Army Field Manual are sufficient to persuade detainees to talk. But though he did not use the word torture, Petraeus said "there should be discussion ... by policymakers and by Congress" about something "more than the normal techniques." Petraeus... described an example of a detainee who knows how to disarm a nuclear device set to explode under the Empire State Building.

Adds the Associated Press:

Petraeus said lawmakers should consider setting policies that would require authorization from the top, implying that the president would be consulted on whether to use enhanced interrogation techniques and lower-level officials would not be under pressure to make the decision in a "ticking time bomb" situation.

Are we meant to believe that a nuclear device under the Empire State Building and a captured terrorist able to defuse it wouldn't presently trigger a call to the President of the United States? "Petraeus hardly reversed course and endorsed torture," Spencer Ackerman writes. "But there are many Republicans in Congress who thought Obama made a big mistake by banning it. If Congress revisits the interrogation debate at Petraeus' behest, torture might very well return to U.S. interrogations."

I've said it before and I'll say it again, if you believed strongly enough in a cause that you would try to launch a terrorist attack, and you knew when the attack was going to take place, wouldn't you try to resist torture or give false information in an attempt to allow the attack to occur.  Not only is the ticking time bomb scenario not very likely, it is the one situation I would think would be the easiest to resist giving in to torture, or in wasting your target's valuable time with wild goose chases.  Plausible lies would render torture in such situations as counterproductive relative to any other time.  One good lie could allow enough time to elapse to allow the planned attack.  Please, lets all grow a pair and not cower around worrying about how we might have to use torture to stop an imaginary attack.  I can't believe Petraeus wandered back into this discussion.

Naked Capitalism Link of the Day

There are a number of great links today.  Yves has done a stellar job today.  I recommend you go over and take a look.  The stories about how capitalist is the U.S. economy, the great speedup and especially the shale gas emails are all interesting.  I figured I would highlight Germany's season of angst: why a prosperous nation is turning on itself, at the Globe and Mail, since Germany is key to the survival or failure of the Euro, and I always want to find out more about the place:

Here in the industrial core of Europe, things have never been so good.
Germany's western flank has become the greatest exporter in the Western world, second only to China and far ahead of the United States. The container ports along the Rhine are working day and night to deliver record orders of German products to southern and western Europe, the U.S. and especially to China. Shops are busy. Home sales are rocking. Unemployment hasn't been so low since the eighties. In terms of growth, profits and productivity, the current German economic boom has surpassed even the “wonder years” of the 1950s. These are, by several measures, the most successful people in the world.
Yet it is very hard to find anyone here who is happy about this state of affairs. Unlike the great Rhineland industrial booms of the 1950s and 1970s, this one is provoking Germans to turn against their government, against Europe, against technology and growth, against outsiders. It is an inward-looking, self-questioning moment in a country that the rest of Europe very badly needs to be involved in affairs outside its borders.
If previous German booms were marked with a national mood of confidence and optimism, this is a prosperity of angst and fear: According to one survey, 80 per cent of Germans now believe that the future will be worse than the present, that “everything is getting worse.” There is an entire consulting industry devoted to analyzing the “national angst.”
“What we're repeatedly finding is that, despite the very good economic data, there is a huge amount of unease and uncertainty,” says Stephan Grünewald, a Cologne-based psychologist who recently interviewed 7,000 citizens for his book Germany on the Couch. “There is a manifest crisis of trust. … The Germans have at the moment a mood, a feeling that things can go to pieces, a feeling of being in a situation in which one is completely incapable of action.”

Maybe that is pop psychology, but the article goes over some interesting anecdotal evidence of German unease.  Their position on the southern European debt situation will determine the fate of the Euro, and it will be one of, if not the major story of 2011-2012 for the world economy.

State and Local Government Cuts May Cause Double Dip

Rebecca Wilder at Angry Bear (h/t Mark Thoma):

I don't see why the aggregate state funding gap is not numero uno on the 'risks' to the US outlook (I usually hear oil, Europe, China, etc., in my line of work). According to the Center on Budget and Policy Priorities, the State budget gap is not expected to clear at least through 2013. From the CBPP report "States Continue to Feel Recession's Impact":

Three years into states' most severe fiscal crisis since the Great Depression, their finances are showing the clearest signs of recovery to date. States in recent months have seen stronger-than-expected revenue growth.

This is encouraging news, but very large state fiscal problems remain. The recession brought about the largest collapse in state revenues on record, and states are just beginning to recover from that collapse. As of the first quarter of 2011, revenues remained roughly 9 percent below pre-recession levels.

Consequently, even though the revenue outlook is better than it was, states still are addressing very large budget shortfalls.

Better put: state revenues are rising more quickly than expected from a low base following the most precipitous drop 'on record'. Not feeling too confident here.

This has been my biggest economic concern, especially since the huge Republican electoral win (in a low turnout election) in 2010.  The radical cuts put in place by the Republican governors and legislators in Ohio, Michigan, Pennsylvania, Indiana and Wisconsin will really slow down those states' economies.  Those cuts don't kick in until after July in Ohio.  I expect things to continue to slow down this fall.  Hopefully I'm wrong, but some other people are saying the same thing as we see weak economic numbers right now.

Also from that post, this chart:

Catholic Throwdown

H/t the Professor

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