Saturday, November 24, 2012

Banjo Man

Shale Gas Doubters Speak Up

Steve Horn, via nc links:

In a recent interview, Powers said the "bubble" will end up looking a lot like the housing bubble that burst in 2008-2009, and that U.S. shale gas will last no longer than ten years. He told The Energy Report: My thesis is that the importance of shale gas has been grossly overstated; the U.S. has nowhere close to a 100-year supply. This myth has been perpetuated by self-interested industry, media and politicians...In the book, I take a very hard look at the facts. And I conclude that the U.S. has between a five- to seven-year supply of shale gas, and not 100 years. The hotly-anticipated book may explain why shale gas industry giants like Chesapeake Energy have behaved more like real estate companies, making more money flipping over land leases than they do producing actual gas.... Arthur Berman, another investment insider, echoed Powers in a recent interview with Oil Price, remarking that the decline rates in production in shale basins nationwide are "incredibly high." Berman is a petroleum geologist, Associate Editor of the American Association of Petroleum Geolgists Bulletin and Director of the Association for the Study of Peak Oil. He maintains the blog Petroleum Truth Report. "In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%," he stated. "They're going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we're talking about $10 or $12 billion a year just to replace supply." Berman believes there's a possibility that this could lead to an economic crisis akin to which happened during the Big Bank bailouts of 2008.
I'm skeptical of the oil and gas industry's and most politicians' and businessmen's optimistic assessment of shale oil and gas.  These guys may be a little too pessimistic, but I guarantee that in 5 years (maybe two or three) we'll have a much clearer picture of the future.  Keep an eye on North Dakota and Texas oil production numbers from the EIA.  When those numbers peak, we are looking at the top of the hype for shale oil.  The shale gas is a little more opaque, but I think the hype will become apparent soon enough.  I'm guessing we aren't on the cusp of an energy revolution.  If somebody comes along selling you an investment in mineral rights, I'd pass.

Would The Tea Party Really Like Hayek?

Robert Solow reviews The Great Persuasion: Reinventing Free Markets since the Depression
By Angus Burgin, via Ritholtz :
One Tea Party activist reported that his group’s goal is to fill Congress with Hayekians. This project is unlikely to go smoothly if the price of admission includes an extensive reading of Hayek’s writings. As Davidson remarks, some of Hayek’s ideas would not go down well at all with the American far right: among them is a willingness to entertain a national health care program, and even a state-provided basic income for the poor.
The source of confusion here is that there was a Good Hayek and a Bad Hayek. The Good Hayek was a serious scholar who was particularly interested in the role of knowledge in the economy (and in the rest of society). Since knowledge—about technological possibilities, about citizens’ preferences, about the interconnections of these, about still more—is inevitably and thoroughly decentralized, the centralization of decisions is bound to generate errors and then fail to correct them. The consequences for society can be calamitous, as the history of central planning confirms. That is where markets come in. All economists know that a system of competitive markets is a remarkably efficient way to aggregate all that knowledge while preserving decentralization.
But the Good Hayek also knew that unrestricted laissez-faire is unworkable. It has serious defects: successful actors reach for monopoly power, and some of them succeed in grasping it; better-informed actors can exploit the relatively ignorant, creating an inefficiency in the process; the resulting distribution of income may be grossly unequal and widely perceived as intolerably unfair; industrial market economies have been vulnerable to excessively long episodes of unemployment and underutilized capacity, not accidentally but intrinsically; environmental damage is encouraged as a way of reducing private costs—the list is long. Half of Angus Burgin’s book is about the Good Hayek’s attempts to formulate and to propagate a modified version of laissez-faire that would work better and meet his standards for a liberal society. (Hayek and his friends were never able to settle on a name for this kind of society: “liberal” in the European tradition was associated with bad old Manchester liberalism, and neither “neo-liberal” nor “libertarian” seemed to be satisfactory.)
The Bad Hayek emerged when he aimed to convert a wider public. Then, as often happens, he tended to overreach, and to suggest more than he had legitimately argued. The Road to Serfdom was a popular success but was not a good book. Leaving aside the irrelevant extremes, or even including them, it would be perverse to read the history, as of 1944 or as of now, as suggesting that the standard regulatory interventions in the economy have any inherent tendency to snowball into “serfdom.” The correlations often run the other way. Sixty-five years later, Hayek’s implicit prediction is a failure, rather like Marx’s forecast of the coming “immiserization of the working class.”
I find this part to be really interesting.  The book focuses on the rise of neoliberalism in economics through the leadership of Hayek and Friedman, and how it became the driving force of right wing political theory.  It is pretty interesting how Solow goes after the legacy of Friedman.  I get the feeling that the respect for Friedman and his ideas has peaked in political discourse, and it is slowly fading to the fringe of discussion.  It is too certain in its rejection of government involvement in market economies to work in the real world.  Slowly, but surely, the folks who have done so well in  our economy are going to realize that their gains are put at risk by overreach, and they will move for reforms.

Friday, November 23, 2012

Long Term Experimentation

Richard Lenski has been running an evolution experiment using E Coli bacteria at Michigan State University since 1988.  He plans for the experiment to last for generations after he's retired.  Across campus, another experiment has been going on since 1879:
That experiment is currently cared for by Frank Telewski, who runs Michigan State University's botanical garden. The garden is named after botanist William J. Beal, and he started a long-term study on seed germination all the way back in 1879.
Beal was inspired by local farmers who had been asking him this question: If we weed our fields year after year, will we ever reach a point where the weeds just don't come back?
"Well, that was a very interesting question," says Telewski, because it wasn't at all clear how long seeds might remain viable in the soil. "We know that seeds can remain dormant for a long period of time, and Professor Beal's key question was, 'How long?' "
So Beal put a precise quantity of seeds from different species into 20 sand-filled bottles and stashed them underground. The original plan was to dig up one bottle every five years and see what would grow.
"Clearly, burying 20 bottles and only taking one out every five years, the plan was to go beyond Professor Beal's career, let alone Professor Beal's life," says Telewski.
The only writings from Beal about his experiment are dry scientific reports, but Telewski assumes it meant a lot to him.
"He had to be passionate about it," says Telewski. "You don't do something like this, you know, with that long-term desire, without being passionate."
Beal opened six bottles before he retired. Then he passed it on to a colleague, Henry Darlington. Eventually it was taken over by others, including Robert Bandurski and Jan Zeevaart, who passed it on to Telewski.
The experiment has lasted longer than Beal ever intended because the caretakers extended it. They first decided to open a bottle only once every decade, and now, once every two decades.
Telewski dug up his first bottle 12 years ago. He did it at night, with a flashlight, trying not to draw any attention to the secret burial spot. He says it was exciting to think back and remember that the last person to see the seed was Beal, 120 years ago. "For me that holds a level of significance, that holds a level of fascination, charm," says Telewski.
And he says the mysteries of long-term seed viability remain scientifically interesting. Only two plant species sprouted from the last Beal bottle. Telewski can't wait to dig up the next bottle, in 2020.
Will that be the year that nothing germinates, wonders Telewski, or "will something that hasn't germinated in 30, 40 years all of a sudden appear?"
If you are interested in genetics, I recommend you read about Lenski's project.  Both experiments are fascinating.  I'm sure I can find plenty of people who think this research is a waste of money, but I think it is awesome.

Decrying the Industrial Turkeys

Garance Franke-Ruta:
Unless you have gone out of your way to order and buy a heritage bird, this is the type of turkey you just ate on Thanksgiving: a Broad Breasted White. It is the only turkey breed still widely raised for the market, and it is a troubled creature. Wild turkeys have feathers colored iridescent red, green, copper, and bronze -- colors memorialized in crayon and tempera-paint images on the walls of every elementary school in America each fall. Heritage breeds like the Jersey Buff, the Narragansett, and the Bourbon Red grow feathers in an array of striking patterns and can range from tawny to black. All those shades have been bred away by the turkey industry, because feather buds (the pin feathers) are less noticeable under the skin of a plucked bird if they are white. With short legs and wide breasts -- the better to serve up white meat -- Broad Breasted White turkeys do not fly and can't even reproduce on their own.
As the New York Times described it in 2001:
After years of selective breeding, only one breed of turkey, the aptly named Broadbreasted White, remains in large-scale production in the United States. For about 30 years, it has been the breeding stock owned by the three major companies, Hybrid Turkeys of Ontario, Canada; British United Turkeys of America in Lewisburg, W. Va.; and Nicholas Turkey Breeding Farms, Sonoma, Calif. A blowzy specimen with short stubby legs, its disproportionate supply of white meat has come at the expense of taste and texture. It's stupid to boot.
The joke about turkeys drowning in the rain may actually have some basis in fact. Glenn Drowns, secretary-treasurer of the Society for the Preservation of Poultry Antiquities, and owner of the Sand Hill Preservation Center in Calamus, Iowa, a preservation farm, is infuriated by the degradation of the turkey. ''The commercial guys say they have to keep the turkeys in buildings because they'd drown in the rain,'' he said. ''It makes my blood pressure boil. Next year I'm going to raise some of them to see if they are that far gone.''
She wants to know why the White House goes in with the turkey lobby and always gets a Broadbreasted White to pardon.  I too would like to know if turkeys would drown in the rain.  I believe that is a rural/urban legend.

steve sunk - axe man

steve sunk - axe man from rob norton on Vimeo.

College Football Boundaries

NYT, via Ritholtz:

And this estimate of fans nationwide:

The link to commoncensus was overwhelmed.  I'll have to get back and check it out.  Also, this:

With the Irish winning, this might change a little bit.

A Grey Cup Tradition

The Atlantic wire:

One of the biggest stories north of the border today revolves around a Toronto's hotel refusal to let a horse walk through their lobby. 
See, Canada has its own version of football where everything is bigger, faster and easier. And Canada's version of the Super Bowl, the Grey Cup, is this weekend. Justin Bieber is performing at halftime! It should be a rollicking good time, if you happen to be from one of the eight cities that have teams. (Seriously.)
Anyway, the Calgary Stampeders made it to this year's Grey Cup and they have this strange Cup tradition where a horse rides into the lobby of a hotel every year they make it. It started in 1948 when Stamps fans rode a horse through the lobby of Toronto's Royal York Hotel to celebrate making the Grey Cup that year. So, with the Stamps here again, and it being the 100th Grey Cup and tradition is important, AND the game is being played in Toronto this year, they were going to do it again. Except the hotel had second thoughts.
People were outraged. It resulted in a bunch of bad press for the hotel. Fans lined up outside and chanted, "Let us in!"
But then they relented...
And that's the story of how a horse walked into Canadian hotel. For really great pictures, go check out the National Post.
That is funny.  God bless the crazy Canucks.  I saw something about the 1948 tradition on the CFL's Grey Cup timeline, here.

Soon To Be Vacated

Bob Wojnowski gets in his annual digs against Ohio State prior to this year's OSU-Michigan matchup:

I want to make something perfectly clear here. I wouldn't waste all this valuable time and space mocking our Buckeye friends if I didn't respect the program's history, determination and relentless obnoxiousness. There simply aren't enough things you can count on in college football anymore, and Buckeye irrationality is one of them. According to my sources, they're so offended by being called "Ohio," the band planned to introduce a new halftime formation: Script "T-H-E O-H-I-O S-T-A-T-E." Unfortunately during practice, a half-dozen tuba players were treated for exhaustion. Now they'll try something more emblematic of Ohio State fandom: A script finger. The Buckeyes also are marking the 10-year anniversary of their 2002 national championship this weekend. That means Tressel will be there, along with several key players, pending work-release approval. To commemorate it, the team will be introduced, and approximately three minutes later, officials will throw penalty flags. Hoke knows it will be a tough environment, but anytime you give the Buckeyes something to think about, you have a chance. Near as I can tell, Michigan's starting quarterback will be Devin Gardner, Denard Robinson, Brian Griese or John Navarre. I'm sure if Meyer wins, he'll immediately launch a whiny campaign to face Notre Dame in the national title game. For the right price, Delany might even allow it. Pick: Ohio State 24-17*
* Estimated to be vacated in 2016
line about the result being vacated makes the piece for me. Earlier in the piece he forecasts Notre Dame staying undefeated until getting mauled on the order of 37-3 by Florida in the BCS Championship game. That wouldn't surprise me much.

About That Spending Problem

It's really a revenue and inequality problem:
As a society, we will produce far more than enough goods and services to preserve Social Security and Medicare in their current form without making younger people worse off. But these programs will consume a growing share of total societal resources, and since they are administered by the federal government, that requires higher taxes.
So the real point isn't that we can't afford Social Security and Medicare. It's that some people don't want to pay the higher taxes necessary to maintain Social Security and Medicare. This is a question of distribution, pure and simple.
At first blush, it may appear that young people don't want to pay for retirement benefits and health care for old people. But most of us will be both young and old at different points in our lives, so we're on both sides of the transfer. The real issue is that Social Security and Medicare are risk-spreading programs, which means that rich people** end up subsidizing poor people.
When people say that we can't afford our entitlement programs, they're really saying that rich people won't pay the taxes necessary to sustain our entitlement programs. To be fair, many rich people probably would be willing to pay higher taxes if they knew the facts. But a small number of extremely rich people have successfully spread the myth that we can't afford our entitlement programs.
Amen.  Why doesn't this get brought up more?  People have paid like $4 trillion dollars ahead into Social Security, but since that money has already been spent on things that would have been paid for by income taxes that were cut by Republican presidents, we have to cut Social security.  How about getting rid of the damn tax cuts?

The Behavioral Economics of Black Friday

From NY magazine, via Ritholtz:
As Dan Ariely explains in his book, Predictably Irrational, "We all make the same types of mistakes over and over, because of the basic wiring of our brains."
This applies to shopping on the other 364 days of the year, too. But on Black Friday, our rational decision-making faculties are at their weakest, just as stores are trying their hardest to maximize your mistakes. Here are just a few of the behavioral traps you might fall into this Friday:
The doorbuster: The doorbuster is a big-ticket item (typically, a TV or other consumer electronics item) that retailers advertise at an extremely low cost. (At Best Buy this year, it's this $179.99 Toshiba TV.) We call these things "loss-leaders," but rarely are the items actually sold at a loss. More often, they're sold at or slightly above cost in order to get you in the store, where you'll buy more stuff that is priced at normal, high-margin levels.
That's the retailer's Black Friday secret: You never just buy the TV. You buy the gold-plated HDMI cables, the fancy wall-mount kit (with the installation fee), the expensive power strip, and the Xbox game that catches your eye across the aisle. And by the time you're checking out, any gains you might have made on the TV itself have vanished.
Implied scarcity: This is when a store attempts to drum up interest in an item by claiming "limited quantity" or "maximum two per customer," which makes us think we're getting something valuable when we may not be. It's a staple of deceptive marketing, and at no time in the calendar year is it in wider use than on Black Friday. (There is also actual scarcity on Black Friday — when stores carry only a 50 or 100 of an advertised doorbuster item — which also introduces a risk that you'll be 51st or 101th in line and waste your time entirety. Both are bad.)
I'll leave the Black Friday shopping to the professional fools.  See you in the stores the weekend before Christmas.

Thursday, November 22, 2012

Deficits and the Debt

Patriotism Is the Last Refuge of a Scoundrel

Were Samuel Johnson alive on Thanksgiving Day 2012, he'd be referring to this JP Morgan ad:

Unfortunately, it seems to be fairly popular.  I guess a spot highlighting how they steal money from productive activities wouldn't be nearly as moving.

Where Our Turkey Comes From

Via The Dish:

Based on my drives through southern Mercer County, I figured Ohio would be higher on the list.

Thanksgiving PSA

The clever folks at Grantland dig through YouTube for some classic Thanksgiving videos.  My favorite:

Mark Lisanti: Deep-fried turkey is delicious. It is also deadly. This guy doesn't even want you to bother; the fryer is too inherently uncontrollable a device for the process to ever be truly safe. "If we can't talk you out of it, just lock yourself in the garage and light yourself on fire. Save us all the trouble of having to worry about you," he wants to say, but doesn't, because he has a job to do, and that job is destroying your holiday with a caution as savory as a breast full of underseasoned white meat.
But once Mr. Hardhat Q. Killjoy steps aside at the 1:49 mark, welcome to the Additional B-Roll Turkey Conflagration Good Times Jamboree, starring a bunch of dudes in fireman drag stuffing frozen birds into overflowing vats of boiling oil and watching the world burn. Who do you want to party with on Thanksgiving? We thought so. (William Shatner.)
That is awesome.

Sundays At Rocco's

Sundays at Rocco's from StoryCorps on Vimeo.

The Underdog City

Zach Baron reviews Silver Linings Playbook through the movie's setting and sports focus:
 The ways in which Pat, in his pitiable mix of out-of-control rage and deranged optimism, is a product of his struggling underdog city and the maddening football franchise that it hosts will probably be obvious to most readers of this site and lost on a solid percentage of non-sports fans who go see the movie. You have to know Philly, know the Eagles to really get it, how each of these characters is simultaneously badly scarred and up for more punishment. Silver Linings Playbook is a few different movies at once, but one of those movies is about the complicated interplay between a city's sports teams and a city's citizens, the way that over time the two start resembling one another.
The film is set in 2008, and in one scene, De Niro's Pat Sr., devastated in the aftermath of a loss to the Giants and despairing of his erratic son, begins yelling at Cooper's character, telling him he's dropping the ball on his life like DeSean Jackson dropped the ball at the 1-yard line — the end zone loomed wide open for both, and neither could find a way in. The comparison tells you everything you need to know about this family and the younger Pat's failure to be a good member of it. It also tells you a lot about certain kinds of fathers and sons, how they talk to each other, the way in which invoking Jackson is a safe way of invoking something that's dark and otherwise hard to say out loud. If there's been a better representation of the complicated but very real overlap between the football field and the city full of people that surrounds it, I haven't seen it.
There is something unique about Philly.  When I was there on an east coast baseball trip, I got this kid brother vibe from people, like they grew up in the shadow of New York, and just couldn't shake it.  The sports mania is intense, and they seem to just expect to be let down.  It is fascinating.

Fail Parade Bound To Continue

Conservatives continue fighting their losing battles:
“The moderates have had their candidate in 2008 and they had their candidate in 2012. And they got crushed in both elections. Now they tell us we have to keep moderating. If we do that, will we win?” said Bob Vander Plaats, president of the Family Leader. Vander Plaats is an influential Christian conservative who opposed Romney in the Iowa caucuses 10 months ago and opposed Sen. John McCain’s candidacy four years ago.
The conservative backlash sets up an internal fight for the direction of the Republican Party, as many top leaders in Washington have proposed moderating their views on citizenship for illegal immigrants, to appeal to Latino voters. In addition, many top GOP officials have called for softening the party’s rhetoric on social issues, following the embarrassing showing by Senate candidates who were routed after publicly musing about denying abortion services to women who had been raped.
Ted Cruz, a tea party favorite, trounced Texas’s establishment candidate in a primary on his way to becoming the second Hispanic Republican in the Senate, and the battle he waged in the Lone Star State epitomizes the fight between the two sides. Although he is considered a rising star with a personal biography that GOP leaders wish to promote, Cruz falls squarely in the camp that thinks Romney was not conservative enough and did not fully articulate a conservative contrast to President Obama, except during the first presidential debate.
“It was the one time we actually contested ideas, presented two viewpoints and directions for the country,” he said at the Federalist Society’s annual dinner in Washington. “And then, inevitably, there are these mandarins of politics, who give the voice: ‘Don’t show any contrasts. Don’t rock the boat.’ So by the third debate, I’m pretty certain Mitt Romney actually French-kissed Barack Obama.”
Rick Santorum, a former senator from Pennsylvania who finished second to Romney in the GOP primary, lampooned Romney’s assertion that Obama’s victory was fueled by “gifts” to core liberal constituencies in the form of legislative favors.
“The American people do not want ‘gifts’ from their leaders, particularly when these gifts leave a steep bill for our children to pay, but they do want us to be on their side,” Santorum wrote in a USA Today op-ed published Monday. He placed the blame on the national party, saying it lacked an appealing agenda: “We as a party, the party of Ronald Reagan and ‘Morning in America,’ failed to provide an agenda that shows we care.”
These guys are freaking clueless.  The rest of the country can tell they are idiots, but they remain the heart of the Republican party.  When people talk about a civil war in the GOP, I say bring it on.  They need to rid themselves of the know-nothing fundamentalists who have worked their way up from the local school boards to Congress.  If the feud does break out in the party, I just keep thinking of this as the theme song for the fight:

We don't need no water...

Failing Infrastructure-Urban Gas Lines Edition

Live Science, via nc links:
Beneath the streets of Boston is an aging network of natural gas pipelines that delivers fuel to heat homes and power appliances but also threatens to feed fires and even cause explosions. Highlighting the need for repairs, a new study detected more than 3,300 natural gas leaks throughout the city.
Researchers from Boston University and Duke logged 785 road miles (1,263 kilometers) in the city, driving around in a GPS-equipped car with a device to measure methane, the chief chemical component of natural gas. The team discovered 3,356 separate natural gas leaks — some of them potentially hazardous.
"While our study was not intended to assess explosion risks, we came across six locations in Boston where gas concentrations exceeded the threshold above which explosions can occur," Nathan Phillips, associate professor at BU, said in a statement.
The leaks were associated with old cast-iron underground pipes and were distributed evenly across all neighborhoods, regardless of socioeconomic differences, the researchers said. Their findings were detailed online this week in the journal Environmental Pollution.
Concerns about aging natural gas pipelines aren't unique to Boston. Each year, pipeline failures cause an average of 17 deaths, 68 injuries, and $133 million in property damage across the nation, according to the U.S. Pipeline and Hazardous Materials Safety Administration. Some of the devastating fires that erupted in the New York area during Hurricane Sandy were fueled by natural gas and recent deadly accidents — like the 2010 explosion in San Bruno, Calif., which killed eight — have drawn attention to the importance of pipeline safety. Natural gas leaks also pose an environmental risk, as methane is a greenhouse gas.
One good thing is that at least they added odorant to the gas so it is easier to detect leaks.  That wasn't always the case:
The New London School explosion occurred on March 18, 1937, when a natural gas leak caused an explosion, destroying the London School of New London, Texas, a community in Rusk County previously known as "London". The disaster killed 425 students and teachers, making it the worst catastrophe to take place in a U.S. school building. In the mid-1930s, the Great Depression was in full swing, but the London school district was one of the richest in America. A 1930 oil find in Rusk County had boosted the local economy, and educational spending grew with it. The London School, a large structure of steel and concrete, was constructed in 1932 at a cost of $1 million (approx $15.75 million in 2009 dollars). The London Wildcats (a play on the term "wildcatter", for an oil prospector) played football in the first stadium in the state to have electric lights.
The school was built on sloping ground, and a large dead-air space was contained beneath the structure. The school board had overridden the original architect's plans for a boiler and steam distribution system, instead opting to install 72 gas heaters throughout the building.
Early in 1937, the school board canceled their natural gas contract and had plumbers install a tap into Parade Gasoline Company's residue gas line in order to save money. This practice, while not explicitly authorized by local oil companies, was widespread in the area. The natural gas extracted with the oil was seen as a waste product and was flared off. As there was no value to the natural gas, the oil companies turned a blind eye. This "raw" or "wet" gas varied in quality from day to day, even from hour to hour.
Untreated natural gas is both odorless and colorless, so leaks are difficult to detect and may go unnoticed. Gas had been leaking from the residue line tap, and built up inside an enclosed crawlspace that ran the entire 253-foot (77 m) length of the building's facade. Students had been complaining of headaches for some time, but little attention had been paid to it.
March 18th was a Thursday. Friday's classes had been canceled to allow for students to participate in the neighboring city of Henderson's Interscholastic Meet, a scholastic and athletic competition. Following the school's normal schedule, first through fourth grade students had been let out early. A PTA meeting was being held in the gymnasium, a separate structure roughly 100 feet (30 m) from the main building. 
At some time between 3:05 and 3:20PM Central (local) time, Lemmie R. Butler (an "instructor of manual training") turned on an electric sander. It is believed that the sander's switch caused a spark that ignited the gas-air mixture.

Chart of the Day

Bigger turkeys:

Wednesday, November 21, 2012

Blinded By The Lies

Dana Milbank:
Among those states with large numbers of petitioners asking out: Louisiana (more than 28,000 signatures at midday Tuesday), which gets about $1.45 in federal largess for every $1 it pays in taxes; Alabama (more than 20,000 signatures), which takes $1.71 for every $1 it puts in; South Carolina (26,000), which takes $1.38 for its dollar; and Missouri (22,000), which takes $1.29 for its dollar.
Since the effort gained attention this week, copycats in all but a few states have joined the petition drive. To be fair, White House officials could refuse the secession petitions of states Obama won, such as New York (which gets only 79 cents on its tax dollar), Michigan (85 cents) and Colorado (79 cents).
What would be left is a Confederacy of Takers, including relatively poor states such as Alaska, West Virginia, Kentucky, Tennessee, Arkansas and Mississippi. One of the few would-be Confederacy members that pays more than it receives is Texas, which because of oil money is roughly break-even at 94 cents of benefits for its tax dollar. (The statistics, from an analysis of tax and revenue data by the nonpartisan Tax Foundation, were published in 2006, but the broad pattern doesn’t vary much over time.)
Depending on how aggressive a fiscal hawk he wishes to be, Obama could also try to offload onto the Confederacy of the Takers North and South Dakota and Montana ($1.73, $1.49 and $1.58 in benefits, respectively), but this would probably only work if Canada agreed to allow overflight rights for American aircraft to reach the West Coast states of Washington, Oregon and California (88 cents, 97 cents and 79 cents on their tax dollars, respectively).
I hate to see rural folks be so foolish.  The government spending benefits rural communities much more than they seem to realize.  Oh well, they'll find that out eventually.  I'd just prefer they figured it out without hurting themselves.

Sports illustrated Jinx?

If so, Notre Dame is in trouble:

Whatever happens, it's been a hell of a ride.

Tuesday, November 20, 2012


Spirits from Nicholas Buer on Vimeo.

I'm a sucker for Aurora Borealis videos.  It probably doesn't help that I'm well south of prime viewing latitudes. Even when there is a lot of activity visible nearby, the highway rest area just north of my house casts off way too much light pollution.

Demographics Ain't Just For Politics

Michael Weintrab on the bleak future of the Big Ten (now with Maryland! WTF?):

Those of us who still bother to pay attention to Big Ten football1 have seen it coming for quite some time. The demographics are working against us. The population is shifting south, where high schools practice in the spring and construct $60 million stadiums; Ohio, Pennsylvania, and Michigan have all shed electoral votes since 1980, while Florida and Texas have gained them. Only Ohio State (and perhaps Michigan, to a lesser extent) seem positioned to be nationally competitive by recruiting locally.
Meanwhile, maybe you've noticed that Big Ten games have gotten slower and slower, and less and less compelling. Do you know the last Big Ten quarterback to be chosen in the first round of the NFL draft? It was Kerry Collins, in 1995. The two best pros the Big Ten has produced in recent years, Drew Brees and Tom Brady, came from Texas and California, respectively. Russell Wilson, who transferred to Wisconsin for his senior season, went to high school in Virginia. And in case you missed it, all of this was hammered home by the high-profile oopsy-daisies of standard-bearing Ohio State in BCS bowl games throughout the '00s.
" … I'm not a demographer, nor am I a football coach," said Big Ten commissioner Jim Delany, when Rittenberg questioned him about these issues a few months back. No, like most conference czars, Jim Delany is a lawyer, a Type A master of the universe who recently climbed to the summit of Mount Kilimanjaro at age 64, and he has often presided over his fiefdom by limiting public information and defending the indefensible (i.e., the BCS) because he can get away with it.
The numbers don't lie.  By the way, I wanted to see the Big Ten add the Midwestern members of the Big 12 and create a 16 team conference.  With Kansas, Kansas State, Iowa State and Missouri, they would cover all the worthwhile agricultural states.  They could also put those schools in with Nebraska, Iowa, Minnesota and Wisconsin and have a nice Eastern conference and Western conference, and they could get rid of that Leaders and Legends bullshit and maintain most regional rivalries.  Oh well, instead they added the worthless Maryland Terrapins.  Screw you, Big Ten.

Explaining Marginal Rates

Derek Thompson tries to explain how marginal tax rates work for the successful, but not mathematically gifted businesspeople out there (his example being a chiropractor who plans to shut down the business and take a vacation if she and her husband get too close to making $250,000 a year):
When President Obama says he's going to raise the top marginal tax rate, the key words there are "top" and "marginal." According to the president's plan, every dollar under $250,000 of earned income will enjoy the same tax cut it has today. He's only pledged to raise taxes on income above that level by about 5%. So, if you make $251,000 next year, your tax bill wouldn't go up by $12,000. It would go up by $50. A steak dinner, not a small car.
Basically, Kristina Collins is making a miscalculation that's probably worth tens of thousands of dollars. No wonder she doesn't want to expand her company.
An economic journalist needn't play financial adviser for his sources. But the distinction between marginal and total rates is confusing and ought to be made clear to readers. If thousands of small business owners like Mrs. Collins are operating under the presumption that Obama wants to raise taxes on every dollar of income for rich households, some might choose to keep from expanding their businesses. That's not just bad for their hypothetical new employees. It's bad for them! If not understanding the tax code is preventing you from working, that right there is ignorance making you poor.
I am amazed by the number of people who think that a 50% marginal rate on incomes over $1,000,000 means that a person making a million a year would pay $500,000 in taxes, not understanding that all the income below that amount taxed at lower rates, when only the money above a million would be taxed at that rate.  People just don't get math.  A lot of these people may make way more money than me, but I've got them beat in the math department.  I'll keep that in mind as they pass the Focus in their fancy cars.  I've got to comfort myself somehow.

The Farmland Bubble

From Big Picture Agriculture, where the post was titled, "Yes, Farmland Prices Are A Bubble:"

The Federal Reserve Bank of Chicago is reporting that “For the third quarter of 2012, the year-over-year gain in District agricultural land values was 13 percent—the smallest increase since 2010. Iowa’s farmland values continued to lead the District, with a year-over-year increase of 18 percent.”
Farmland values in the St. Louis region averaged $6,003 per acre in the third quarter, according to a survey by the Federal Reserve Bank of St. Louis. This District’s bankers reported that subsidized crop insurance, which is required on all farmland loans, was contributing to higher profits this season than last, but that livestock producers were hurting from high feed costs due to the drought and ethanol policy.
Nebraska UNL Extension Educator Allan Vyhnalek said, “Greed is a powerful negative emotion that’s causing some of our problems here.” He was addressing Nebraska farmers about problems establishing fair rents in this environment.
Land prices are outpacing rental rates which should raise some alarm bells. The WSJ recently quoted Greg Page, Iowa farmland owner and Cargill’s CEO. Page estimates the multiple of farmland value to rents in his region has climbed from about 10 times 12 years ago to 22 times or more today. Yet, the farmland debt-to-equity ratios are much lower today, at 11.4%, than in the mid-1980s when they were 30%. The low interest rates of recent years have been a major contributing factor for today’s prices.
The crop prices can't keep going up, and neither can the land prices.  However, 156 acres across the road from one of our farms sold today.  The farm was sold in two parcels, and the owners took sealed bids for each.  The top 4 bidders for each piece got a chance to raise their bid to be the leader on each piece.  Then any of those bidders could bid above the combined total for the whole farm.  I submitted a couple of bids straddling $5300 an acre, with the intention of bidding up to $5600 an acre for the whole thing.  I failed to make the top 4 on either piece.  The winning bid was $8000, or $1.25 million.  My understanding was that most of the bidders were from the closely-knit (read inbred) agricultural area north of us.  The winning bidder was one of the largest farmers in our county, and the landowner told me that this farmer said that the out-of-towners pissed him off, and he wasn't going to let them win.  All I know is that I didn't feel really comfortable with $5600 an acre, so $8000 was way out of my league.  They might not make any more land, but there will always be some up for sale.  I guess I'll just have to wait.

Monday, November 19, 2012

Coach Gagliardi Retires

After 64 years as a head coach and at 86 years of age, St. John's legendary football coach John Gagliardi has announced his retirement.
Gagliardi, who has been at St. John's since 1953, goes out as the winningest coach in college football history. He finishes with a 489-138-11 record overall, a .775 winning percentage, and four national titles, two of them in Division III.
“Seventy years (60 at SJU) is a long time to be doing the same job,” Gagliardi said. “Luckily, I've always been blessed with great players, friends, family and support to make it this far.
“Nobody ever said that getting older was easy. I just can't do the job at the level I used to anymore.”
St. John's finished this season 5-5, 3-5 in the MIAC, after ending its 2012 season with a 27-22 loss Nov. 10 at Bethel.
I didn't realize this:
 Aside from the football field, Gagliardi also won two conference championships with SJU's track team and coached the SJU hockey team for five seasons from 1954-59, compiling a 42-25-1 record. The .625 winning percentage is still the best of any hockey coach in school history. In addition to his various head coaching duties, Gagliardi has also been athletic director at both Carroll (1949-53) and Saint John's (1976-94). In June 2006, Gagliardi was inducted into the National Association of Collegiate Directors of Athletics (NACDA) Hall of Fame.
I don't think anyone will ever break his record for wins.  If you are looking for an enjoyable book about sports and life, pick up The Sweet Season.  For a shorter read, try this.

Sunday, November 18, 2012

NASA Photo of the Day

November 17:

Like a Diamond in the Sky
Image Credit & Copyright: Alex Cherney (Terrastro, TWAN)
Explanation: A dark Sun hung over Queensland, Australia on Wednesday morning during a much anticipated total solar eclipse. Storm clouds threatened to spoil the view along the northern coast, but minutes before totality the clouds parted. Streaming past the Moon's edge, the last direct rays of sunlight produced a gorgeous diamond ring effect in this scene from Ellis Beach between Cairns and Port Douglas. Winking out in a moment, the diamond didn't last forever though. The area was plunged into darkness for nearly 2 minutes as the Moon's shadow swept off shore toward Australia's Great Barrier Reef and out into the southern Pacific. Ranging from 1/4000 to 1/15 seconds long, five separate exposures were blended in the image to create a presentation similar to the breathtaking visual experience of the eclipse.

Luck of the Irish Continues

Notre Dame moves to #1 as Kansas State and Oregon each lose:
Notre Dame got one first-place vote in the coaches' poll last Sunday -- head coach Brian Kelly's.
Against Wake Forest, the Fighting Irish reinforced Kelly's faith in his team, then third-ranked Notre Dame got some help later Saturday night.
Oregon and Kansas State, the two teams ahead of the Irish in the AP and BCS rankings, each lost. Now Notre Dame will control its own fate as it tries to capture its first national title in 24 years.
Earlier in the day, Everett Golson threw three touchdown passes and Cierre Wood scored on a 68-yard run as Notre Dame beat Wake Forest 38-0 Saturday to finish the season undefeated at home for the first time since 1998 and keep its national championship hopes alive.
"I told them tonight I'm proud of them," Kelly said. "I voted them No. 1 for a reason, because I think they're the best team in the country. I think they played like that tonight."
The Fighting Irish were in third place in last week's BCS standings, but likely will move up after Kansas State, which was No. 1, lost 52-24 to Baylor and Oregon, which was second, lost to Stanford 17-14 in overtime.
If Notre Dame manages to beat Southern California next week, it could wind up in a BCS title game against Alabama, now No. 4 in those rankings. The Irish would be a 10-point underdog in that game, oddsmaker Danny Sheridan told ESPN's Darren Rovell.
Three things to note.  First, the last time the Irish were number one was 1993, when I was there, and that only lasted one week before they were upset by Boston College.  We'll see how they do against USC.  Second, the Irish have only managed to win twice at USC since I graduated in 1996 (2000, 2010).  Finally, if the Irish were truly lucky, only one of the teams ahead of them would have lost, so they wouldn't get stuck playing Alabama.

Potential Tax Changes Push Farm Sales

Des Moines Register:
But pressure is intense to sell land before Jan. 1 when, if Congress doesn’t intervene, capital gains taxes will rise from 15 percent to 23.8 percent and deductions on estate taxes will drop from $5 million to $1 million.
“If there is a chance that you may want to sell your farm, then you should think hard about getting it done before the end of 2012,” said Des Moines lawyer Bill Hannigan of the Davis Brown firm.
On the front lines of Iowa’s farmland boom, farmers and landowners are filing into small-town meeting halls for auctions with one eye on the tax debate in Washington.
“The tax changes are on everybody’s minds. We have a sale every day, except Sundays, between now and Thankgiving,” regional sales manager Sam Kain of Farmers National Co. said before selling 169 acres of Bremer County farmland from the estate of Alvin and Maxine Walther on the day before the election.
“I’ve been in this business for 30 years and I’ve never seen it this busy,” Kain said.
The extra inventory of land sales hasn’t cooled off Iowa’s hyperheated farmland boom. In October the state set a record price of $21,900 per acre in Sioux County.
There are a lot of recent sale details in the article.  A lot of farms bought for a couple hundred dollars an acre 60 years ago are selling for 15 thousand an acre now.

There is a farm next to us selling on Tuesday.  I've got to decide how high I'll be willing to go when bidding.  While I believe that land prices are getting bubbly, if I can get this at a relatively reasonable price, I'll do it.  And the scale for reasonable has shifted more than I would like to admit.  A good sign that there is a bubble is this, from the same article:
The high prices paid for Iowa farmland inevitably conjure up memories of the extended Great Depression in agriculture during the 1920s and ’30s and the farm crisis of the 1980s.
As rural prophets warn constantly, both of those calamities were preceded by the same kind of commodity and land price boom that Iowa has enjoyed since the middle of the last decade. But others point out that this time is different (emphasis mine), in part because corn prices are above $7 per bushel and expected to stay there, if the U.S. Department of Agriculture forecast is to be believed.
“The price of corn is high and interest rates low and there is a shortage of alternative investment,” Kain said.
It is never good when that appears, because this time is never different.

Lamb Prices Hurt Sheep Farmers

Via Big Picture Agriculture, we have this:
A year ago, the price of lambs intended for slaughter was soaring to record levels. This year, sheep producers are struggling through the combined forces of volatile prices and a harsh drought.
Utah Woolgrowers Association officials said they are unaware of any ranchers who have actually gone bankrupt.
But Doug Livingston, a retired sheep rancher who now works as a sheep broker, has been trying to help one eastern Utah rancher sell his herd and get out of the business, but he says there are no buyers.
"I'm in my 60s and this is the worst year I've ever seen," Livingston told the Deseret News for a story Monday ( "I think there's a lot of ranchers, sheepmen, who would give it up if they could."
The price for lamb "on the hoof" is about half to a third of what it was a year ago, according to Sanpete County rancher Phil Allred, a fifth-generation sheep producer.
"It does threaten the future of it," he said. "For me, myself, I'm old enough that if I didn't have three sons working with me, I wouldn't be here."
Some ranchers have blamed U.S. slaughterhouses for artificially manipulating prices. They claim that prices in grocery stores stayed high, while prices paid to ranchers took a nosedive.
Eight U.S. senators who represent North Dakota, South Dakota, Wyoming and Montana have called on Agriculture Secretary Tom Vilsack to investigate.
Mike Harper, who runs one of the biggest lamb feeding operations in the West, said he believes it's wrong to blame meat packers, who have had too much inventory as well, and that there's no conspiracy.
Last year, the price for lamb was at a record high.  That is a rough roller coaster to ride.  I've just never been tempted to order lamb at a restaurant.

Failing Infrastructure-Pipeline Edition

 Map of major natural gas and oil pipelines in the United States. Hazardous liquid lines in red, gas transmission lines in blue. Image: Pipeline and Hazardous Materials Safety Administration

Scientific American:
Since 1986, pipeline accidents have killed more than 500 people, injured over 4,000, and cost nearly seven billion dollars in property damages. Using government data, ProPublica has mapped thousands of these incidents in a new interactive news application, which provides detailed information about the cause and costs of reported incidents going back nearly three decades.
Pipelines break for many reasons – from the slow deterioration of corrosion to equipment or weld failures to construction workers hitting pipes with their excavation equipment. Unforeseen natural disasters also lead to dozens of incidents a year. This year Hurricane Sandy wreaked havoc on the natural gas pipelines on New Jersey's barrier islands. From Bay Head to Long Beach Island, falling trees, dislodged homes and flooding caused more than 1,600 pipeline leaks. All leaks have been brought under control and no one was harmed, according to a New Jersey Natural Gas spokeswoman. But the company was forced to shut down service to the region, leaving 28,000 people without gas, and it may be months before they get it back.
One of the biggest problems contributing to leaks and ruptures is pretty simple: pipelines are getting older. More than half of the nation's pipelines are at least 50 years old. Last year in Allentown Pa., a natural gas pipeline exploded underneath a city street, killing five people who lived in the houses above and igniting a fire that damaged 50 buildings. The pipeline – made of cast iron – had been installed in 1928.
Not only are there bridges and dams which may fail, there are also pipelines carrying things that go boom which may fail.  Our failure to properly invest in replacing our aging infrastructure over the past 30 years will cost us mightily going forward.

Politics, Religion and Age

Via the Dish, the Public Religion Research Institute breaks down the religious makeup of different age groups, and the religious breakdown of voters for each candidate.  Obama's coalition looks a lot like the youth religious breakdown, while Romney's looks a lot like the elderly:

This is not only a bad sign for the future of the Republican Party, it is also a bad sign for churches.  Just look at the percentages for white Catholics (I'll leave the evangelicals alone since I don't really know much about them).  It shows a steady decrease from 19% of the population of people over 65, down to 8% among the 18-29 year old cohort.  These numbers are being reflected in the pews.  Each October, our archdiocese requires churches to take attendance counts at each mass each Sunday of the month.  The two churches in the town north of me (back in the day one of the churches was the Irish church while the other was the German church) published the numbers for some of the years, while I got the numbers from my church because they were presented to parish council.  Here's what it looks like:

Year             North Church A          North Church B           South Church
1993                     984                              974                              1509
2000                     798                              892                              1492
2008                     591                              584                               832
2009                     586                              589                               825
2010                     577                              562                               823
2011                     625                              508                               803
2012                     589                              496                               763

The increase in 2011 for North Church A reflected a Sunday evening mass they were holding that year.  While the town to the north hasn't really been growing, the town to the south has been.  These numbers, combined with the chart up above, present a very gloomy future for the church.  Each of the towns has a Catholic grade school, and while I don't have numbers for the north town, the south one has about 20 kids per grade.  That is compared to at least 30 per grade when I was attending that school.  When I was there, they had a waiting list for some of the grades.  Today you can enroll a student at any time. 

Last week, the bishops held their annual meeting in Baltimore:
The three-day meeting falls just a week after the re-election of President Barack Obama, whose policies on contraception coverage and gay rights mobilized the bishops in what was widely seen as an effort to elect Republican challenger Mitt Romney.

Many individual bishops spoke out in especially stark terms about the duty of Catholics not to vote for Obama, yet Obama won the Catholic vote 50-48 percent, according to exit polls.
In addition, voters in three states endorsed same-sex marriage initiatives and in another rejected an effort to ban same-sex marriage. All those votes represented major defeats for the bishops, who had invested prestige and millions of dollars in the campaigns.
On Monday, various speakers reiterated that they were not about to change their beliefs or policy positions, but they indicated they have to rethink their strategy. Dolan’s approach in his presidential address was to repeatedly stress the theme of humility and the need for bishops to go to confession to renew themselves spiritually so that they can then preach their message more effectively.
Dolan’s remarks marked a striking change of tone from the assertive and even aggressive rhetoric that the hierarchy deployed during the campaign season.
Now, with Obama back for another four years, the bishops recognize that they have an uphill task in trying to change the administration's mandate that requires employers to provide free contraception insurance coverage, and in halting the acceptance of gay rights.
They vowed to try to win their case in the courts, where possible, but said they will also try to rebuild bridges to the Obama administration.
I know the bishops' positions on abortion and contraception are not going to change, but their opposition to providing their employees insurance covering birth control is not going to win any friends amongst younger folks.  Our priest indicated that he thought the bishops would pressure lawmakers to allow ALL employers to be able to choose to refuse to cover contraceptives for their employees based on their individual consciences.  Maybe the bishops are playing a long game to delegitamize the employer-provided health insurance system and bring about socialized medicine.  I think that will be the long-term impact of such a plan, as Republicans and the bishops further alienate the young and women. 

Likewise, the Church's position on same-sex marriage, and its active campaign to ban gay marriage, are pure poison to young folks, as the bishops and Republicans are starting to see.  The fact is, every time the bishops rail about birth control and same-sex marriage, they are losing people who would potentially be the heart of the Church as older parishioners pass away.  The best move the bishops could take would be to grudgingly accept the birth control insurance mandate and to quit publicly fighting same-sex marriage.  No state will require them to marry same-sex couples, so they could go about their business without having any issues.  Instead, they show no real inclination to back off much on either fight.  It is going to hurt them way down the road.