In some countries, the highlight of Father's Day can be as simple as
the kids mowing the lawn, cleaning out the garage or serving him
breakfast in bed. In Germany, though, it's the one day of the year when
fathers are officially allowed to liberate themselves from their
parenting duties -- or, it seems, any responsibility whatsoever.
In cities across the country groups of men can be seen pulling wagons
packed to the brim with all manner of beer, schnaps, mixers and anything
else that will ensure a messy, drunken afternoon and a head-pounding
hangover the next day. By no means limited to fathers, Männertag or Herrentag, which translates as "men's day," is open to any male who wants to demonstrate his loutish, caveman side.
On Thursday, tens of thousands of German men celebrated their
Männertag in "mostly peaceful" ways, as one news agency wrote. Another
newspaper even ran the headline: "Men's day remains relatively quiet."
Of course, that could be attributed to the high number of men who passed
out from drinking before they could do any damage.
But each year, some idiot, in some town, is there to spoil the party
with pranks gone bad. In the town of Troisdorf near Bonn, 25 people were
injured, eight seriously, after a fireworks mishap in a party tent. A
similar incident in Oberallgäu in Bavaria caused three injuries and led a
crowd to flee a beer tent en masse after several men tried to add a
little spark to the day of binge drinking.
A number of cities in Germany sought to impose public drinking bans on
Männertag this year to cut down on the number of booze-fuelled fights
and injuries, but courts in the state of northern state of
Schleswig-Holstein overruled those efforts, saying they violated the
constitutional right to freedom of action in a country where beer
drinking is a part of the national culture.
In the U.S., we have the freedom of corporations to buy the government, while in Germany men have the right to get drunk in public. Not a tough call as to which judicial ruling I like better.
Judging by his appetite and appearance, Bodemeister has rebounded nicely
from his vigorous trip in the Kentucky Derby and is ready to shine at
the Preakness.
Bodemeister finished second in the Derby and has been installed the favorite in Saturday's second jewel of the Triple Crown.
"I've had some horses, they run (and then) they don't eat for a few days
and they sulk in the stall or whatever," Bodemeister trainer Bob
Baffert said. "But he's a pretty tough horse. He just bounced out of it
really well. If you watch their weight over their rumps, that's where
they usually lose it if they can't handle what you're giving them. He
filled out nice and his hair looks good. He looks good."
So, Baffert's got nothing to worry about, right?
Uh, not exactly. Because not even a Hall of Fame trainer can predict how
a horse will react when thrust into a big race for the second time in
15 days.
After that run in the Kentucky Derby, Bodemeister is an obvious favorite. However, since no horse has won a Triple Crown in my living memory, I'm pulling for I'll Have Another. In the end, with so many strong horses and such a grueling schedule, it may be a while before we see another Triple Crown winner. That 1 1/2 miles in the Belmont is just brutal.
Mike Konczal writes about how a strong middle class is a win-win and features this graphic from a lost era (h/t Mark Thoma):
But why should this be? If the long-term health of the economy is
driven by human capital, savings, and technology, what does inequality
have to do with anything? Here is where they create a map of the
arguments through which a strong middle class and a more egalitarian
distribution of income can build long-term growth:
We have identified four areas where literature points
to ways that the strength of the middle class and the level of
inequality affect economic growth and stability:
•A strong middle class promotes the development of human capital and a well educated population.
•A strong middle class creates a stable source of demand for goods and services.
•A strong middle class incubates the next generation of entrepreneurs.
•A strong middle class supports inclusive political and economic institutions, which underpin economic growth.
They pull together the current research, as well as the range of
supporting evidence, for each point. They focus on how educational
attainment is becoming more tied to parents' income, the instability of
growth and macroeconomic risks to weak middle-class demand, the fact
that the Kauffman Foundation found that less than 1 percent of
entrepreneurs come from extremely poor or extremely rich backgrounds,
and the way inequality is involved with our polarized politics. All of
these have consequences for our economy.
It is nice to know that there was a time when outrageous wealth wasn't accepted as untouchable. The United States happened to prosper at that time. Tax policy was by far not the only reason for that prosperity, but it was one reason. The Great Depression led to much better times for nearly everybody in the United States. I get the feeling that the Great Recession won't.
A birthday salute to U.S. President John F. Kennedy takes place at Madison Square Garden, New York City. The highlight is Marilyn Monroe's rendition of "Happy Birthday". Monroe's dress was noted for being made of a sheer and flesh colored marquisette fabric, with 2500 rhinestones sewn into it. The dress was so tight-fitting that Monroe had to be literally sewn into it; she wore nothing under it. Under the bright stage spotlight the fabric seemed to "melt away", leaving only the glitter of the rhinestone brilliance. It was designed by Jean Louis.
The Washington Monthly has a great story about the Menhaden fishery and Omega Protein, the company that fishes menhaden and processes them into fish food and Omega-3 supplements. Here is where the tide turned against Omega Protein:
In 2009, the Menhaden Technical Committee updated its
methodology for estimating the menhaden population—something it
does every five years—and then ran the menhaden catch data through a new
computer model. The results weren’t much different: although the
numbers of menhaden were declining, the estimated number of eggs
produced by spawning female menhaden was at the target level, so
according to the reference point, menhaden weren’t being overfished.
Shortly thereafter, a colleague of Jim Uphoff’s, a biologist named
Alexei Sharov, got hold of the computer model that had been updated by
NOAA scientists. Going through the code line by line, Sharov, one of
Maryland’s representatives on the Technical Committee, found a
fundamental miscalculation buried inside the model. Uphoff, meanwhile,
studied the methodology of the code and discovered that NOAA had both
underestimated the amount of fish killed by the industry and
overestimated the spawning potential. Sharov brought these two mistakes
to his peers on the committee, and it was agreed that corrections needed
to be made.
Several months later, after the model had finished running a second
time, the science finally caught up with what Jim Price and the anglers
had been saying for decades: even using the lax reference points
developed by the ASMFC, menhaden had been subject to overfishing in
thirty-two of the past fifty-four years. When the assessment was then
peer reviewed by a group of international scientists, the reviewers
deemed that the reference point currently in use for menhaden—8 percent
of maximum spawning potential—was not sufficiently safe or
precautionary.
Furthermore, the number of menhaden swimming in the Atlantic had
declined by 88 percent since 1983—to a level so low that it caused
George Lapointe, former commissioner of Maine’s Department of Marine
Resources, to have what he called an “oh shit moment.”
However, since Omega Protein has the Republican government of the State of Virginia in it's pocket, Virginia may pull out of ASMFC and let Omega Protein ignore new fishing limits. The whole story is fascinating, but I really don't understand how Republicans and big business can be so fucking short-sighted.
Nassau County Executive Ed Mangano proposed the sewer privatization plan earlier this year, choosing United Water
on May 3 to operate and upgrade the system. An investor would first be
needed to provide the county with the upfront costs of selling the
system, profiting from revenue generated from United Water. Mangano
stated at the time that such revenue would remain flat for the first
year and not increase above the rate of inflation for all subsequent
years.
no post
But NIFA members disputed that claim.
“Potential financial investors who invest money to a public-private
partnership expect annual returns of 10 to 15 percent,” NIFA Board
Member George Marlin said. “To suggest that a private operator will
achieve enough efficiencies to cover most of that cost, and that
assessment or user fees will increase no more than the rate of inflation
– well, anyone who believes that, I have a coliseum in Hempstead I
would like to sell them.”
I doubt the 10 to 15% return, but I agree that keeping fee increases at the rate of inflation is doubtful. Privatizing public infrastructure only benefits the people who buy it. Everybody else gets screwed. As for the savings from privatization, workers get less pay, and rich investors pocket the difference. It is a long term con. The only reason these deals go through is because short-sighted citizens won't go along with tax or fee increases to improve infrastructure, so the politicians get some up front money, and then people still get said increases.
Researchers have long known the coyote as a master of adaptation, but
studies over the past few years are now revealing how these unimposing
relatives of wolves and dogs have managed to succeed where many other
creatures have suffered. Coyotes have flourished in part by exploiting
the changes that people have made to the environment, and their
opportunism goes back thousands of years. In the past two centuries,
coyotes have taken over part of the wolf's former ecological niche by
preying on deer and even on an endangered group of caribou. Genetic
studies reveal that the coyotes of northeastern America — which are
bigger than their cousins elsewhere — carry wolf genes that their
ancestors picked up through interbreeding. This lupine inheritance has
given northeastern coyotes the ability to bring down adult deer — a feat
seldom attempted by the smaller coyotes of the west.
The lessons learned from coyotes can help researchers to understand how
other mid-sized predators respond when larger carnivores are wiped out.
In sub-Saharan Africa, for example, intense hunting of lions and
leopards has led to a population explosion of olive baboons, which are
now preying on smaller primates and antelope, causing a steep decline in
their numbers.
Yet even among such opportunists, coyotes stand out as the champions of
change. “We need to stop looking at these animals as static entities,”
says mammalogist Roland Kays of the North Carolina Museum of Natural
Sciences in Raleigh. “They're evolving”.
At a fast rate, too. Two centuries ago, coyotes led a very different
life, hunting rabbits, mice and insects in the grasslands of the Great
Plains. Weighing only 10 to 12 kilograms on average, they could not
compete in the forests with the much larger grey wolves (Canis lupus), which are quick to dispatch coyotes that try to scavenge their kills.
They are definitely pretty damn smart. I tried to run one over with a snowmobile, but every time I got close, he'd turn in a tighter radius than I could and get some space on me. I've decided that so long as they kill cats and groundhogs, don't kill my calves and don't kill too many chickens, I'll only take the occasional shot at them. Of course, that's because I only occasionally see them.
Tennessee, the first Third World agrarian society modernized by the United States:
Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Thirty percent of the population was affected by malaria, and the average income was only $639 per year, with some families surviving on as little as $100 per year.Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut, with another 10% of forests being burnt each year.
TVA was designed to modernize the region, using experts and electricity to combat human and economic problems. TVA developed fertilizers, taught farmers ways to improve crop yields and helped replant forests, control forest fires, and improve habitat for fish and wildlife. The most dramatic change in Valley life came from TVA-generated electricity. Electric lights and modern home appliances
made life easier and farms more productive. Electricity also drew
industries into the region, providing desperately needed jobs.
This is also interesting:
During World War II, the U.S. needed aluminum
to build airplanes. Aluminum plants required huge amounts of
electricity, and to provide the power, TVA engaged in one of the largest
hydropower construction programs ever undertaken in the U.S. Early in
1942, when the effort reached its peak, 12 hydroelectric plants and one
steam plant were under construction at the same time, and design and
construction employment reached a total of 28,000. The largest project
of this period was the Fontana Dam Project. After negotiations led by Harry Truman ("I want aluminum. I don't care if I get it from Alcoa or Al Capone."), TVA purchased the land from Nantahala Power and Light, a wholly owned subsidiary of Alcoa, and built Fontana Dam.
Electricity from Fontana was intended for Alcoa factories. By the
time the dam generated power in early 1945, the electricity was used for
another purpose in addition to aluminum manufacturing. TVA also
provided much of the electricity needed for uranium enrichment at Oak Ridge, Tennessee, as required for the Manhattan Project.
Yes, the South is and always has been self-sufficient. And never racist.
The great Scottish philosopher and economist David Hume understood
all too well how national boundaries and balance-of-payment statistics
affect and even determine flows of international trade. Where national
boundaries exist, customs offices and government bureaucracies
assiduously monitor the flow of goods and assets between countries.
Surpluses and deficits are seen by politicians as a sign of national
pride or shame. Hume criticised the mercantilist view but was optimistic
that trading patterns would ultimately right themselves. In 1752 he
wrote:
“Where one nation has gotten the start of another
in trade, it is very difficult for the latter to regain the ground it
has lost.... But these advantages are compensated, in some measure, by
the low price of labour in every nation which has not an extensive
commerce, and does not much abound in gold and silver. Manufactures,
therefore gradually shift their places, leaving those countries and
provinces which they have already enriched, and flying to others,
whither they are allured by the cheapness of provisions and labour; till
they have enriched these also, and are again banished by the same
causes. And, in general, we may observe, that the dearness of every
thing, from plenty of money, is a disadvantage, which attends an
established commerce, and sets bounds to it in every country, by
enabling the poorer states to undersell the richer in all foreign
markets.”
In principle, the vaunted “Hume mechanism” should operate within the
Eurozone. Countries which export less than they import should lose euros
to surplus countries, unless offset by private capital inflows. Euro
outflow leads to a scarcity of money and credit, less lending for
consumption and investment, a slowdown in activity and falling prices.
Chronic deficits will imply higher interest rates and declining
creditworthiness for both sovereign and private borrowers. But declining
domestic absorption and non-traded goods prices ultimately bring wages
back into line with productivity and restore competitiveness. Similarly,
chronic surplus countries should accumulate euros and domestic bank
lending should expand, leading to more demand and inflation there
relative to deficit countries.
Hume’s insights are as relevant today as they were 250 years ago.
It is amazing how in many ways Smith and Hume better understood people than today's economists. Smith, while favoring free markets, knew that people generally worked against them, and Hume seems to have understood people's motivations better than almost anyone ever.
The Reds square off against R.A. Dickey this afternoon. Dickey brings his 5-1 record and 3.65 ERA in to face Mat Latos. If Dickey's going to have a bad outing, let's have it be today.
In 1983, the Department of Energy declassified a report showing that significant amounts of mercury
had been released from the Oak Ridge Reservation into East Fork Poplar
Creek between 1950 and 1977. A federal court ordered the DOE to bring
the Oak Ridge Reservation into compliance with federal and state
environmental regulations.
This story claims that the actual pollution was more than an order of magnitude smaller:
For decades at the Y-12 National Security Complex in East Tennessee,
mercury from making hydrogen bombs flowed into East Fork Poplar Creek.
After its atomic bomb making in World War II, the Oak Ridge plant began
work in the early 1950s on different processes to separate isotopes of
lithium. The goal was to selectively concentrate the lighter lithium-6
isotope for use in fusion-type weapons that became known as hydrogen
bombs.
Mercury was essential and Oak Ridge historian Bill Wilcox said there were big releases.
Environmental scientist Mike Ryon said by the mid-80s the creek showed little sign of any life.
There are varying reports of how much mercury likely entered the creek,
but it's estimated at somewhere between 240,000 and 280,000 pounds.
Since 1982 the creek has been posted as a hazard because of the mercury
pollution and that is not likely to change anytime soon. But now lots
of fish and cleanup efforts are ongoing.
Either way, that is comparable to a hell of a lot of compact fluorescent bulbs.
Looking to get more popular on Facebook? Alex Melen will sell you 1,000 "likes" for about $75.
Melen runs an Internet marketing company.
About six months ago, companies he worked with started coming to him
more and more with a simple problem: They had created pages on Facebook,
but nobody had clicked the "like" button.
"You
would go there, and there would be two likes," Melen says. "And one of
them would be the owner. And people right away lost interest in the
brand."
For the right price, Melen can fix that.
Facebook
knows an incredible amount about hundreds of millions of people — what
they like, what they want, who their friends are, where they live. This
is the key reason why investors think the company is so valuable. But
that value only holds up if the data is real — if all those people
actually like what they say they like.
Ad executives are stupid, and so are folks who think Facebook is going to be Wall Street gold. I guess I'm glad I've managed to get more than 2 likes without paying people. Actually, my goal, so far unsuccessful, was to get more likes than a similarly named conservative blog. Maybe I will, someday.
In the discussion over Bain Capital's "investments" in the steel industry, here's a chart:
The reality is that producing 50% of the world's steel wasn't sustainable. In fact, a number of factors played a part in the changes, including lack of capital investment, failure to adapt to new technology, the decline of quality ore in the Mesabi Range, massive iron ore deposits discovered in Australia, labor-management strife, environmental regulation and U.S. bank financing of foreign steel mill construction. There's a lot of blame to go around, but even now we are producing our share of steel based on our ratio of world population.
At 11 p.m Monday, the Columbia Human Rights Law Review
(at Columbia University) published and posted its Spring 2012 issue --
devoted entirely to a single piece of work about the life and death of
two troubled and troublesome South Texas men. In explaining to their
readers why an entire issue would be devoted to just one story, the
editors of the Review said straightly that the "gravity of the
subject matter of the Article and the possible far-reaching policy
ramifications of its publication necessitated this decision."
The article is titled "Los Tocayos Carlos: Anatomy of a Wrongful Execution"
and it was written by James S. Liebman, Shawn Crowley, Andrew
Markquart, Lauren Rosenberg, Lauren Gallo White, Lauren Rosenberg and
Daniel Zharkovsky. Los Tacayos can be translated from Spanish as
"namesakes" and the two men at the heart of the story were, indeed,
named Carlos DeLuna and Carlos Hernandez.. On December 7, 1989, this
intense piece establishes beyond any reasonable doubt, Texas executed
the former for a murder the latter had committed.
The Review article is an astonishing blend of narrative
journalism, legal research, and gumshoe detective work. And it ought to
end all reasonable debate in this country about whether an innocent man
or woman has yet been executed in America since the modern capital
punishment regime was recognized by the Supreme Court in 1976. The article is also a clear and powerful retort to Justice Scalia in Kansas v. Marsh: Our capital cases don't have nearly the procedural safeguards he wants to pretend they do.
Soon to be published as a book, Los Tacayos Carlos is a seminal piece of online advocacy as well. Not only is the article itself now available on the web in its entirety (at www.thewrongcarlos.net) but so are all of its supporting materials. "The web version of the Article contains approximately 3,469 footnotes," the Review
editors tell us, which in turn "provide hyperlinks to view the cited
sources," including a great deal of the evidence relevant to the case.
Now, everyone in the world who is interested can learn how bad it all
can go when human beings try to administer what's supposed to be a fair,
just and accurate death penalty.
I believe the real answer is yes we have, a sizable number of times. But now there may be irrefutable proof. Cohen starts out by highlighting Antonin Scalia's asinine opinion from a death penatly case a few years ago. It shows just one instance of a truly terrible jurist spouting off. The death penalty should be abolished in this country. It is a racially and class-based misapplication of justice, and the number of innocent men released from death row should shame even the strongest supporter of capital punishment. It is not a deterrent to crime, and it isn't any cheaper than life imprisonment. And for all of those Catholics out there upset about paying for abortion and birth control, don't forget you are paying for state sanctioned murder.
The lawyers for Goldman and Bank of America/Merrill Lynch have been
involved in a legal battle for some time – primarily with the retail
giant Overstock.com, but also with Rolling Stone, the Economist, Bloomberg, and the New York Times.
The banks have been fighting us to keep sealed certain documents that
surfaced in the discovery process of an ultimately unsuccessful lawsuit
filed by Overstock against the banks.
Last week, in response to an Overstock.com motion to unseal certain
documents, the banks’ lawyers, apparently accidentally, filed an
unredacted version of Overstock’s motion as an exhibit in their
declaration of opposition to that motion. In doing so, they
inadvertently entered into the public record a sort of greatest-hits
selection of the very material they’ve been fighting for years to keep
sealed.
I contacted Morgan Lewis, the firm that represents Goldman in this
matter, earlier today, but they haven’t commented as of yet. I wonder if
the poor lawyer who FUBARred this thing has already had his organs
harvested; his panic is almost palpable in the air. It is both terrible
and hilarious to contemplate. The bank has spent a fortune in legal fees
trying to keep this material out of the public eye, and here one of
their own lawyers goes and dumps it out on the street.
The lawsuit between Overstock and the banks concerned a phenomenon
called naked short-selling, a kind of high-finance counterfeiting that,
especially prior to the introduction of new regulations in 2008,
short-sellers could use to artificially depress the value of the stocks
they’ve bet against.
You know, when somebody screws up this badly, I tend to feel sorry for them. In this case, I don't feel much pity. However, if somebody happened to deliberately undermine their clients' interests for the good of the country, I hope to God they were able to disappear to safety before anyone knew what happened. Because in that case, it is likely said person would very possibly be found to have committed suicide by shooting himself in the back of the head.
I asked the other day who is moving to the Great Plains for the schools. Here may be the answer, although I would guess they are actually moving there for the jobs Americans won't do (h/t Big Picture Agriculture):
The current demographic and cultural changes in Midwestern and Southern
communities are among the most important transformational events
shaping the future of U.S. agriculture and rural America. Migration has
been an important source of labor for the U. S. agricultural sector.
Today’s immigrants, primarily Latino/as, began to move to rural towns in
growing numbers in the 1990s, alleviating decades of population
decline, and contributing to the economic vigor of rural communities.
There are a number of implications of this changing demographic trend
for rural wealth creation. Often the focus of private organizations and
public institutions that promote rural wealth is to invest in existing
resources in ways that create wealth for the community—increased income,
improved housing, and infrastructure. Similarly increasing access to
important services such as education and health care can support the
creation of wealth and make the community a better place to live.
Responding to the demands for jobs in agriculture, food processing,
construction, services and related industries, Latino/as have
principally contributed as providers of labor in many rural communities,
and have largely been left out of the discussion of wealth creation in
rural areas.
Now, young Latino immigrant families—a potential and substantial driver
for the future of agriculture and development in rural America—are
settling in communities, bringing renewal and growth. They are buying
houses, starting businesses and expanding the talent pool. However,
little is known, and often much is misunderstood, about how Latino/a
newcomers create wealth. We have been studying the process of Latino/as
settling in rural areas, based on information directly provided by
newcomers and members of the receiving communities in the Midwest.
There is no doubt that Hispanics are moving into rural areas, and that they will have a positive impact on population growth and demographic change in otherwise dying communities. If a town has a packing house, I guarantee they will have a growing Hispanic population, at least as long as ICE doesn't show up.
I must confess, this chart does give me pause. It does nothing to refute my grandfather's claim that health care costs have skyrocketed since the government got involved in subsidizing health care. However, he is saying that on two partial knee replacements funded by Medicare. I think the whole story is more complicated than that, but I don't really know enough about the health care system to make a convincing case against grandpa's claim.
Another interesting thing to note is how much more we were paying in interest as a percentage of government spending in 1987. Those 12% Treasuries they sold back in 1982 really cost a lot to service.
Grantland features a 30 for 30 short film featuring Pete Rose (h/t Julianne), at his current job selling autographs at Caesar's Palace. One thing about Pete, he knows baseball inside and out. It's a damn shame his gambling, and later foolish decisions, have kept him out of the game. I think if Pete hadn't insisted on being allowed to manage again, and hadn't written that stupid book admitting he bet on baseball while he was negotiating with Bud Selig to get reinstated, he might be at least allowed more involvement in the game. Granted, as he says in the film, he just wants a chance to manage again, so he never would have been satisfied with a deal that removed the majority of the ban but didn't give him a chance to be back at the helm. However you look at it, Pete's story is a sad one.
In roughly 20 years, entire categories of factory work nearly
disappeared. If your job hinged on your aptitude with a shoe machine, it
was in danger. Likewise if you worked a lathe every day for a living,
or had a spot anywhere else on a classic production line, where dozens
of hands handled simple, discreet tasks. (How sociologists ended up on
this list, I'm frankly not sure.) These were jobs that, thanks to their
heavy levels of unionization, paid a good middle class wage to employees
without many skills. And when manufacturing technology improved, they
became redundant.
Of the fastest-growing occupations, the winner, by a long shot, was
numerical control machine operators -- the men and women who program and
run factory machinery. Specialized knowledge replaced a steady hand and
strong back. But nearly all of the other fast-expanding job categories
required even higher levels of education, and few had high union
membership.
I understand the drilling and boring machine operators, lathe operators and milling machine operators declining while numerical control machine operators increased massively. But bricklayer and stonemason apprentices? Is that because apprenticeship programs have disappeared, or are there that many fewer bricklayers? I would guess that barriers to entry have dropped. From anecdotal information, it sounds like Hispanics do a lot of the bricklaying today.
The company’s stock, which has lost about half its value over the
last year, went into a tailspin late Friday, dropping 14 percent after
Chesapeake warned in a Securities and Exchange Commission filing that it
might have to delay the selling of $14 billion in assets to comply with
the terms of a critical line of credit. The company, which is based in
Oklahoma City, also gave the impression of disarray when it said it
would delay releasing its quarterly earnings report, but then filed it
anyway just minutes later.
But on Monday, Chesapeake’s chief
executive, Aubrey K. McClendon, tried to reassure investors by saying
the company was merely postponing the $1 billion sale of future
production from its South Texas Eagle Ford oil field along with the
spinoff of a drilling subsidiary. He further reiterated that he was
fully confident that the company could raise roughly $10 billion from
asset sales in Texas, Oklahoma and Kansas this year.
“There are lots of options and lots of levers to pull,” he said. “We will get our asset sales done.”
The
prize asset up for sale is 1.5 million acres of the Permian Basin, one
of the country’s hottest oil prospects, where Chesapeake is the
third-largest leaseholder and 12th-largest producer. With 12 rigs but
roughly 25,000 well drilling locations already pinpointed, Mr. McClendon
said Chesapeake simply did not have the resources to fully exploit the
prospect.
“We couldn’t fund it,” he said. “It needs a bigger company.”
I don't understand why Chesapeake was paying so much for leases in the Utica shale in Ohio. I guess they think there is tons of gas there, but that doesn't explain why they sold a share of their position to Total. Apparently, they spent too much on leases, and need some serious cash inflows. That is a hell of a bet to make. Overall, I'm not too impressed with the corporate leadership. The CEO is corrupt, and the company looks like some kind of pump and dump operation.
The Sedition Act of 1918 is passed by the U.S. Congress, making criticism of the government an imprisonable offense.
The Sedition Act of 1918 (Pub.L. 65-150, 40 Stat. 553, enacted May 16, 1918) was an Act of the United States Congress that extended the Espionage Act of 1917
to cover a broader range of offenses, notably speech and the expression
of opinion that cast the government or the war effort in a negative
light or interfered with the sale of government bonds. "
It forbade the use of "disloyal, profane, scurrilous, or abusive
language" about the United States government, its flag, or its armed
forces or that caused others to view the American government or its
institutions with contempt. Those convicted under the act generally
received sentences of imprisonment for 5 to 20 years. The act also allowed the Postmaster General
to refuse to deliver mail that met those same standards for punishable
speech or opinion. It applied only to times "when the United States is
in war." It was repealed on December 13, 1920.
Though the legislation enacted in 1918 is commonly called the
Sedition Act, it was actually a set of amendments to the Espionage Act.
Therefore many studies of the Espionage Act and the Sedition Act find
it difficult to report about the two "acts" separately. For example, one
historian reports that "some fifteen hundred prosecutions were carried
out under the Espionage and Sedition Acts, resulting in more than a
thousand convictions."
Court decisions do not use the shorthand term Sedition Act, but the
correct legal term for the law, the Espionage Act, whether as originally
enacted or as amended in 1918.
In June 1918, the Socialist Party figure Eugene V. Debs of Indiana was arrested for violating the Sedition Act by undermining the government's conscription efforts. He was sentenced to ten years in prison. He served his sentence in the Atlanta Federal Penitentiary
from April 13, 1919 until December 1921, when President Harding
commuted Debs' sentence to time served, effective on December 25, Christmas Day.
In March 1919, President Wilson, at the suggestion of Attorney General Thomas Watt Gregory released or reduced the sentences of some two hundred prisoners convicted under the Espionage Act or the Sedition Act.
With the act rendered inoperative by the end of hostilities, Attorney General A. Mitchell Palmer
waged a public campaign, not unrelated to his own campaign for the
Democratic nomination for president, in favor of a peacetime version of
the Sedition Act.
He sent a circular outlining his rationale to newspaper editors in
January 1919, citing the dangerous foreign-language press and radical
attempts to create unrest in African American communities.
He testified in favor of such a law in early June 1920. At one point
Congress had more than 70 versions of proposed language and amendments
for such a bill, but it took no action on the controversial proposal during the campaign year of 1920. After a court decision later in June cited Palmer's anti-radical campaign for its abuse of power, the conservative Christian Science Monitor
found itself unable to support him any more, writing on June 25, 1920:
"What appeared to be an excess of radicalism...was certainly met
with...an excess of suppression." The Alien Registration Act of 1940 was the first American peacetime sedition act.
The U.S. Supreme Court upheld the Sedition Act in Abrams v. United States (1919),, although Oliver Wendell Holmes used his dissenting opinion to make a commentary on the marketplace of ideas. Subsequent Supreme Court decisions, such as Brandenburg v. Ohio in 1969, make it unlikely that similar legislation would be considered constitutional today.
Congress repealed the Sedition Act on December 13, 1920.
The freedoms we take for granted are always at risk, especially during wartime.
But what has become unavoidably clear is that Germany,
the linchpin of the eurozone, has been hopelessly stuck in an attitude
that makes the break-up of the eurozone almost unavoidable. If Germany
cannot pull itself together to keep Spain in the euro, then the markets
can no longer ignore the fact that the lack of leadership and governance
is a fatal flaw in the system.
What accounts for this? I would
argue that the heart of the problem lies in the political culture of
Germany and the mindset of its political and economic elites, which have
never been willing to admit to their own voters the sacrifices that
must be undertaken in order to be the leader of Europe.
Instead, they have led Germans to believe that they can have it both
ways: enjoying the fruits of the eurozone while times were good, and
lobbing the burden of adjustment onto others when times got bad.
By
doing this, the German elites set a trap for themselves with their own
voters from which they cannot easily escape. Greece has been the perfect
storm for the flaws of the eurozone and the vacuum of German
leadership. Early in the crisis, the best course of action – the one I
believe most likely to have preserved the core of the eurozone – would
have been to admit the mistake of admitting Greece into the euro. From
that recognition, Greece should have been eased out of the euro, while
the German and French banks that were on the hook for losses could have
been recapitalized. Finally, a massive firewall of monetary and fiscal
support for Spain would have been announced.
But to achieve all
this would have required a huge loss of face to the German voters – and a
willingness to assume the burdens of leadership.
Instead, in the
German mindset, Greece became a convenient but bogus template for
assigning blame to other periphery countries – particularly, Ireland and
Spain. Rather than acknowledging that these countries suffered from the
bursting of a property bubble, greatly inflated by German and French
lending, German elites pilloried them alike for having out-of-control
budgets and inefficient workers. In the end, it was easier to blame and
to moralize than to admit the truth.
The hyperinflation phobia is paralyzing for Germany. Printing money to replace bad debts just won't ignite inflation. It holds off deflation. If they want the Euro, the Germans are going to have to pay for it.
For better and worse, the President Barack Obama most readily calls to mind is Kennedy. He has J.F.K.’s intellect, his detachment, his cool under pressure, his carefulness, his aversion to either-or thinking, his equivocations, his good looks. Like so many Americans, Obama has always characterized Kennedy in heroic terms, and in the 2008 campaign he seemed disinclined to acknowledge the contributions of Lyndon Johnson to American justice. His campaign got into a silly argument when Hillary Clinton alluded to Johnson’s key role in passing civil rights, as if this obvious point were a slight against Martin Luther King, Jr. And at the convention in Denver, the nominee gave his acceptance speech on the forty-fifth anniversary of the March on Washington, an event that Obama rightly saluted—while neglecting to mention that the previous day, August 27th, had been the centennial of the birth of the greatest civil-rights President in the twentieth century.
If Obama identifies with Kennedy, it’s worth wondering if Biden feels at all close to the ghost of L.B.J. Both men rose to power in the Senate by learning to master its byzantine ways. Both were defeated for the Presidential nomination by much younger, more glamorous senators whom they regarded as less than their equals, at least as colleagues in the Senate. Both suffered unflattering leaks and periodic scorn from members of the White House staff once they became Vice-President. Neither was considered a great friend of equal rights by those on the front lines of the issue of their day.
Recent statistics show that China’s money supply
growth is slowing, loan growth is mediocre, and, occasionally, banks’
deposits are dropping. The conventional explanation for deposits
falling is that money is going elsewhere: perhaps real estate, or
perhaps the stock market, and more recently, wealth management products
which offer better yields, for example. Most reason then that if
deposits are leaving, banks can’t extend as much credit as they want to.
However, there is another possibility.
With the economy slowing and companies not
profitable, demand for credit is slowing. Not surprisingly, with the
real estate bubble bursting, demand for mortgages is also slowing. With
demand for credit lower, the banking system is creating money at a
slower pace. And with asset prices falling, it is be possible (in the
future, if it is not already happening) that loan repayments and
defaults overtake new loan creation. In that event, the banking system is destroying money, all else being equal (i.e. if the central bank isn’t doing anything).
Loan growth is now slow as
demand is low, and deposits fall every few months. At the same time,
M2 money supply growth dropped on the month. You can argue that some of
the money has gone to somewhere that has no way to be included in the
money supply numbers, however, there is also the possibility that debt
deflation, if not already started, is approaching.
So how did we get to this point? Back in the 1920s, when blimps and
other airships seemed like a useful military technology, the United
States set up a national helium program. In the 1960s, it opened the Federal Helium Reserve,
an 11,000-acre site in the Hugoton-Panhandle Gas Field that spans
Texas, Oklahoma and Kansas. The porous brown rock is one of the only
geological formations on Earth that can hold huge quantities of helium.
And the natural gas from the field itself was particularly rich in
helium — a relative rarity in the world.
By 1996, however, the Helium Reserve looked like a waste. Blimps
no longer seemed quite so vital to the nation’s defense and, more
important, the reserve was $1.4 billion in debt after paying drillers to
extract helium from natural gas. The Republican-led Congress, looking
to save money, passed the Helium Privatization Act, ordering a sell-off by the end of 2014.
There was just one small hitch. According to a 2010 report
by the National Research Council, the formula that Congress used to set
the price for the helium was flawed. Bingaman has dubbed it a “fire
sale.” The federally owned helium now sells for about half of what it
would on the open market.
And, since the Federal Helium Reserve
provides about one-third of the world’s helium each year, this has
upended the entire market. There’s little incentive to conserve, recycle
or find new sources of helium. Instead, we’ve been frittering it away.
And once helium escapes into the air, it can’t be recovered.
Ah, the Gingrich Congress. The only group that can screw things up worse is today's Tea Party. Give them a chance, and they will.
But here’s what else is funny: According to a recent analysis, the population of downtown Cleveland is surging,
doubling in the past 20 years. What’s more, the majority of the growth
occurred in the 22-to-34-year-old demo, those coveted “knowledge
economy” workers for whom every city is competing. Pittsburgh, too, has unexpectedly reversed
its out-migration of young people. The number of 18-to-24-year-olds was
declining there until 2000, but has since climbed by 16 percent. St.
Louis attracted more young people
than it lost in each of the past three years. And as a mountain of
“Viva Detroit!” news stories have made clear, Motor City is now the official cool-kids destination, adding thousands of young artists, entrepreneurs and urban farmers even as its general population evaporates.
It’s a surprising demographic shift that has some in the Rust Belt
wondering if these cities should trumpet their gritty, hardscrabble
personas, rather than try to pretend that they’re just like Chicago or
Brooklyn, N.Y., but cheaper. Detroit has certainly proven that a city’s
hard knocks can be marketed, from “ruin porn” coffee table books to award-winning Chrysler ads to “Detroit Hustles Harder”
hoodies. Could other Midwestern cities go all-in on their own
up-by-your-bootstraps appeal? “I think there’s a backlash in the
American psyche that’s longing for that,” says Cleveland native Richey
Piiparinen. “Look at Miami. We’ve learned that all that glitters isn’t
gold.”
Piiparinen recently referenced this trend as “Rust Belt chic”
in a post on the blog Rust Wire, describing its allure as “the warmth
of the faded, and the edge in old iron and steel … part old-world,
working culture, like the simple pleasures associated with bagged
lunchmeat and beaten boots in the corner. And then there is grit, one of
the main genes in the DNA of American coolness.”
Once you decline so far, you almost have to go back up. The increase in manufacturing jobs is pretty much the same thing. You can only offshore so many jobs. Anyway, I'm pulling for the Midwest here.
Fast Company interviews a former New York City PR specialist who fell in love with a farmer and now lives on a Vermont dairy and blogs about her on-farm experiences:
What was the most surprising thing for you coming from your
life before and actually living on a farm? Has it been de-romanticized
for you?
In New York, New Jersey, and Philadelphia,
there are lots of accountants who have 10 sheep and call themselves
farmers. There’s a big difference from that and people who farm for a
living, when you’re relying on the weather to cooperate, and you get up
at 4 a.m., or you get up to help animals in the middle of the night.
There’s a real surrender of control in agriculture, so many things you
can’t get your arms around. People say farmers are the salt of the
earth, that they’re hardworking and honest, and it’s true. But I think
that’s because farmers are more acquainted with the notion that this is
all bigger than us. We know we can’t manage everything we think we can
manage. Other people have more of an artificial sense of their ability
to be masters of their domain, where farmers are, “Well, we gotta be
patient. Plant something this spring and hopefully we’ll get something
in the fall." That’s interesting to me.
In the advertising
industry in New York, you’re always looking, keeping your resume
polished and talking to recruiters. That always-looking mentality was
deeply ingrained in me. In my 20s I changed jobs every two years. That
quick turnaround is the antithesis of what farming is about, which is
sticking around and cultivating things over a long period of time,
delaying gratification. As someone who often solved problems by getting a
new job, I’ve had to acclimate to this longer view of things. Getting
comfortable where you are, that’s what farming’s all about. That’s why I
think Ransom said to me on our first date, “I’m going to be here
forever.” If you want to be with me, you’ll find a way to grow within
this environment. I don’t think I realized what that was about at the
time.
That was one of the tensions I ran into when I tried the dating thing in college. Everybody was planning on going on to a career in the fast track. The farm life didn't sound very appealing to most girls. Even in farm country there aren't a whole lot of girls who are looking for a life on the farm. Needless to say, I wasn't very successful (but the social awkwardness of isolation on the farm didn't help).
For a number of reasons, I did try to get away from home one time. The thing was, I wanted to go somewhere even smaller. When I tried it, I realized two things. First, if I wanted to actually farm, it would be much easier to do where our family was already established, no matter how quickly the area was developing around us. Secondly, I realized that I liked knowing about the place I was from: the people, the history, the land. Going some place else meant becoming a stranger. I decided the familiar was better than the unknown.
On Monday, the U.S. Navy will officially announce the ships for its
demonstration of the “Great Green Fleet” — an entire aircraft carrier
strike group powered by biofuels and other eco-friendly energy sources.
If a powerful congressional panel has its way, it could the last time
the Navy ever uses biofuels to run its ships and jets.
In its report on next year’s Pentagon budget, the House Armed
Services Committee banned the Defense Department from making or buying
an alternative fuel that costs more than a “traditional fossil fuel.”
It’s a standard that may be almost impossible to meet, energy experts
believe; there’s almost no way the tiny, experimental biofuel industry
can hope to compete on price with the massive, century-old fossil fuels
business.
Committee Republicans, like Rep. Randy Forbes, insist this isn’t an
attempt to kill off military biofuels before they have a chance to
start. “Now, look, I love green energy,” he said in February. “It’s a
matter of priorities.”
But if the measure becomes law, it would make it
all-but-inconceivable for the Pentagon to buy the renewable fuels. It
would likely scuttle one of the top priorities of Navy Secretary Ray
Mabus. And it might very well suffocate the gasping biofuel industry,
which was looking to the Pentagon to help it survive.
“We’d be years behind if it wasn’t for the military,” said Tom
Todaro, a leading biofuel entrepreneur whose companies have supplied the
military with tens of thousands of gallons of fuel made from mustard seeds.
Look, I think biofuels are in general a boondoggle, but wtf? Have Congressional Republicans heard of our nuclear powered fleet? Here is the CBO on the relative costs of nuclear versus petroleum:
Estimates of the relative costs of using nuclear power versus
conventional fuels for ships depend in large part on the projected path
of oil prices, which determine how much the Navy must pay for fuel in
the future. The initial costs for building and fueling a nuclear-powered
ship are greater than those for building a conventionally powered ship.
However, once the Navy has acquired a nuclear ship, it incurs no
further costs for fuel. If oil prices rose substantially in the future,
the estimated savings in fuel costs from using nuclear power over a
ship's lifetime could offset the higher initial costs to procure the
ship. In recent years, oil prices have shown considerable volatility;
for example, the average price of all crude oil delivered to U.S.
refiners peaked at about $130 per barrel in June and July 2008, then
declined substantially, and has risen significantly again, to more than
$100 per barrel in March of this year.
CBO regularly projects oil prices for 10-year periods as part of the
macroeconomic forecast that underlies the baseline budget projections
that the agency publishes each year. In its January 2011 macroeconomic
projections, CBO estimated that oil prices would average $86 per barrel
in 2011 and over the next decade would grow at an average rate of about 1
percentage point per year above the rate of general inflation, reaching
$95 per barrel (in 2011 dollars) by 2021. After 2021, CBO assumes, the
price will continue to grow at a rate of 1 percentage point above
inflation, reaching $114 per barrel (in 2011 dollars) by 2040. If oil
prices followed that trajecto ry, total life-cycle costs for a nuclear
fleet would be 19 percent higher than those for a conventional fleet, in
CBO's estimation. Specifically, total life-cycle costs would be 19
percent higher for a fleet of nuclear destroyers, 4 percent higher for a
fleet of nuclear LH(X) amphibious assault ships, and 33 percent higher
for a fleet of nuclear LSD(X) amphibious dock landing ships.
I would assume the costs are similar for aircraft carriers and submarines. So does this prevent the Navy from building ships whose upfront costs for construction and fueling are higher than fossil fuels? Besides, one of the few benefits of our crazy defense spending is that some defense and space research ends up becoming commercially useful for civilian life. For example, GPS, the internet and Tang. Despite the quasi-religious beliefs of Republicans, biofuels might be another instance of that phenomenon.
But here's a step onto another limb: I'll Have Another won't win the
Preakness or the Belmont, and three horses will share the jewels of this
Triple Crown. The main reason for such an argument, aside from the
sheer improbability of winning any Triple Crown race, is that this group
of 3-year-olds has more talent than any one horse can dominate.
And some good ones will take on I'll Have Another in Baltimore. Bob
Baffert was undecided Sunday morning about Bodemeister. The colt's
trainer said he wanted to wait a week and see how the Derby runner-up
trains before making a decision. But he's a Preakness possibility, and
if Bodemeister runs, he'll probably be the favorite, based on his Derby
effort.
Although beaten Saturday, he gave a superlative performance, leading
through three-quarters of a mile in 1:09.80 and a mile in 1:35.19.
Bodemeister became only the sixth horse in Derby history to run the
opening six furlongs under 1:10, and of those only the second to "hit
the board," or finish in the top three. (Spend a Buck won the 1985 Derby
after opening up a six-length advantage in 1:09.60.) The imagination
almost has to wonder and speculate about what might have happened if
only the sprinter Trinniberg, a 44-1 long shot who never had raced
beyond seven furlongs, had not been entered in the Derby. Trinniberg
pressed the pace before fading to 17th.
Since Bodemeister is going to be in the race, I would think he'll be the favorite based on his powerful 10 furlong run in the Derby. If that race was a mile and 3/16, he would have won. However, no matter how unlikely it might be, I'd love to see I'll Have Another capture the Triple Crown.
B.R. Myers writes a scathing review of the it novel of 2011, The Art of Fielding:
Enough; writing too much about a novel this slight is as unfair as
writing too little. Sometimes the only way to counter the literary
establishment’s corruption of standards is to take a highly praised
trifle apart, for one’s own benefit if no one else’s, but as I have
said, the publicity that launched The Art of Fielding was a
rather innocuous affair. Just the year before, a mediocre book that is
already half forgotten had been touted as a classic for the ages, and
its author likened to the greatest novelist of all time; that was some
serious bullshit. Misrepresenting a dull story as an engrossing one is
nothing in comparison. I realize some reviewers mentioned Moby-Dick and The Art of Fielding
in the same breath, which was certainly a bit much, but the point being
made was at least an arguable one: just as we don’t need to like
whaling to enjoy the one novel, we don’t need to be baseball fans to
enjoy the other. Exactly what it is we need to be, I’m not sure.
All of this will come as small consolation to serious readers
suckered into buying Harbach’s book, but they should have known better.
As long as the classics remain more deeply relevant to our lives than
the novels our own time produces, we should remain “untimely,” in
Nietzsche’s still-dangerous sense of the word. This means being more and
not less skeptical of advertising when it deals with new books.
Testimonials solicited before publication are exactly that: solicited.
They are scarcely worth reading at all, as the back cover of The Art of Fielding demonstrates.
No articulate person who really “gave [himself] over completely” to a
novel “and scarcely paused for meals” would then describe it (as Jay
McInerney did) as “an autonomous universe, much like the one we inhabit,
though somehow more vivid”—which is either meaningless or deranged,
depending on how seriously you take the “vivid” part. To quote the
British scholar Ian Robinson: “An emotion can safely be judged a fake if
the language does not convey it.”
I enjoyed the book, but I can see what he's getting at. It seems that modern novels try too hard to dwell on the mundane, and sometimes base details of life. The book does do that. But I definitely enjoyed the baseball portion of the novel, especially with the Steve Blass mental block angle. When I was at the Reds game on Saturday, Rick Ankiel was playing in centerfield. In my lifetime, there have been four notable cases of a player becoming unable to throw the ball accurately: Steve Sax, Mark Wohlers, Chuck Knoblauch and Rick Ankiel, and nobody melted down more brutally, nor came back in a more unique way than Ankiel did. He was unbelievable in his rookie year, and then in the playoffs, he just blew up. He was never the same, and had to quit pitching. But he could hit superlatively for a pitcher, and was able to work his way back up through the minors as an outfielder. I can only imagine what kind of brutal taunts he took from drunks like me in all the podunk one-horse towns he had to play in on his way back. He's been a journeyman outfielder, but the fact that he made it back to the bigs is amazing. For me, that angle made The Art of Fielding worth reading. Here is a little video from when he went back to the minors as a pitcher. The camera work is terrible, but you get the drift.
Richard Posner reflects on the changing view toward homosexuality during his lifetime (h/t the Dish). After recognizing that homosexuality is accepted fact these days he makes an interesting point:
It seems that the only remaining basis for opposition to homosexual
marriage, or to legal equality between homosexuals and heterosexuals in
general, is religious. Many devout Christians, Jews, and Muslims are
strongly opposed to homosexual marriage, and to homosexuality more
generally. Why they are is unclear. If as appears homosexuality is
innate, and therefore natural (and indeed there is homosexuality among
animals), and if homosexuals are not an antisocial segment of the
population, why should they be thought to be offending against God’s
will? Stated differently, why has sex come to play such a large role in
the Abrahamic religions? I do not know the answer. But whatever the
answer, the United States is not a theocracy and should hesitate to
enact laws that serve religious rather than pragmatic secular aims, such
as material welfare and national security.
First off, I would assume sex has come to play such a large role in the Abrahamic religions because sex without restrictions can play such a destabilizing role in social relations. If people are doing what feels good, lots of feelings will get hurt, and lots of violence will ensue. As for why homosexuality is proscribed in each of the religions, I would assume it has something to do with rivalry between tribes. I want to make sure my tribe grows faster than the other tribes so that mine can win battles. Homosexuality doesn't give us future members to whip the other tribes. Maybe that isn't right, but if I had to lay money on it, that's what I'd be betting.
New Geography is pushing back against the cities as engines of growth meme:
Why are the stronger smaller cities growing faster than most larger
ones? The keys may lie in many mundane factors that are often too
prosaic for urban theorists. They include things such as strong
community institutions like churches and shorter commutes than can be
had in New York, L.A., Boston or the Bay Area (except for those willing
to pay sky-high prices to live in a box near downtown). Young families
might be attracted to better schools in some areas — notably the
Great Plains — and the access to natural amenities common in many of
these smaller communities.
Please refer me to any statistic showing notable growth in population for families with young children in the Great Plains. Other than fossil fuel booms, I haven't seen any semblance of population increase, especially among people of child bearing age, between the 20 inch line and the Rocky Mountains since the Dust Bowl. I would be interested to see some statistics on that migration. In other words, I call shenanigans. Considering current fuel prices, and the prospects for the future, I wouldn't be betting on the future growth of sprawl and rural areas.
Back to the table: The clinking of knives and forks accompanied brief discursions on biochar (use charcoal in your soil and other handy tips from the 1800s), climate change (weird weather is upon us), and the soil crisis
(20 kilograms of topsoil are lost for every 25 kilograms of corn
produced in this country). The rivers of America run brown with our
patrimony while farmers are enserfed to big business, while employing
legions of actual serfs to service their fields, according to several of
the speakers at the conference.
In fact, ethical conundrums abound when it comes to food. How to reconcile stewardship of the planet and the moral imperative to provide better food
(and nutrition!) to the billions starving? How to reconcile a lifestyle
founded on getting fat and a need to convince others not to widen their
own girths? The central tenet of the discussion: this doesn’t have to
be a conflict, technology can save us from having to choose, whether
through genetically modified crops or lab grown meat. But the cow cells grown in culture still have to eat something as well as nourish. So how do we convince others to eat less meat while still enjoying a nice steak?
Setting those social quandaries aside for a moment, there are at
least six other major challenges facing agriculture in the 21st century,
according to farmer Fred Kirschenmann, president of the Stone Barns Center for Food and Agriculture. Those are: climate change, depleting natural resources, the loss of biodiversity, mining soil, aging farmers, and the end of cheap energy.
As it stands, modern farming relies on a stable climate, endless
supplies of fertilizers and water as well as being “enormously dependent
on energy,” Kirschenmann noted at the conference. “It takes 10
kilocalories of energy for every calorie of food we produce. It’s the
least efficient system we’ve ever had.”
I have a feeling, things will be much different if I live to be as old as my neighbor Woodie. He saw us go from real horse power to tractors. Hopefully, I won't see us go the other way.
As chairman and principal owner of Revere Copper Products,
Mr. O’Shaughnessy runs one of America’s oldest manufacturing companies,
started by Paul Revere himself, a fact that exerts considerable
pressure. As he put it: “What kind of a message are you sending to the
people of the country if you abandon America?”
But spend a day with him, and a more complex picture emerges. He wonders
sometimes about the less patriotic alternative of relocating production
to Asia or closing the factory entirely on the ground that Revere’s
profit margin here is too thin — less than $1 million on $450 million in
annual revenue.
“If we simply shut down today,” Mr. O’Shaughnessy said, “I could sell
the inventory and the machinery, which could be moved elsewhere in the
world, and pay off our debts and walk away with $35 million to $40
million.”
What staves off those alternatives are labor concessions and a
substantial government subsidy, something he and others in the United
States say is increasingly important to fuel a nascent recovery in
manufacturing. The labor concessions at Revere, in a contract endorsed
by the United Automobile Workers, are much like those unions are giving
to other manufacturers. The subsidy comes from New York State, which
supplies, at cost, the electric power that Revere uses to produce copper
sheets and slabs. Mr.
O’Shaughnessy says it accounts for half of
Revere’s profit.
Corporate leaders have to realize that if profits are driven by sales in the developed world, workers in the developed world have to be paid wages sufficient to pay developed world prices for goods. Can Chinese people making $5 a day pay $20 for a toaster? Arbitraging third world wages versus first world prices only works as long as other people are still paying first world wages. The main problems we have in being competitive with the third world are our energy consumption and investment in housing stock. But energy costs cut both ways. Shipping Huffy bicycles from China to Des Moines uses more fuel than shipping them from the old plant in Celina, OH, especially when you figure in the cost of getting coal and iron ore from Australia to China. We will eventually reach some sort of balance in standard of living between developed and developing countries, but there will be a lot of deflationary pain in the developed world, and we may cook ourselves in the process.
