Naked Capitalism Link of the Day

Today is an excellent set of links.  I'm going to highlight two, because they are both significant agriculturally, but there are excellent links to an awesome sky survey, an investigation of corruption in Southern Illinois courts, concern that Fukushima is as bad as, or worse than Chernobyl, a report on Bahrain's Sunni government demolishing Shiite mosques, an interesting history of the removal of the gold indexation clause in debt contracts in the Great Depression, and several other interesting stories.

The first link I'll highlight is Unnatural Selection: Wily Weeds outwit herbicides, at New Scientist:

The weedkillers atrazine and simazine were introduced in 1958. Ten years later, a plant nursery in the US that had been regularly using the pesticides reported that they were no longer effective against a plant called common groundsel – the first confirmed case of herbicide resistance.

Half a century on, the number of known strains of resistant weeds stands at 357 and counting. "Herbicide resistance is a fantastic example of evolution in response to human-induced selection pressure," says Stephen Powles of the University of Western Australia in Perth, who studies the problem.

Because of its huge commercial importance, a lot of money is spent studying the problem and in many cases we know exactly how plants are evolving resistance. The mechanisms range from changes in leaf shape or waxiness to reduce herbicide uptake, to mutations that prevent herbicides binding to the proteins they target.

Strategies such as alternating the type of herbicide used can slow the evolution of resistance, but it is not foolproof. Many weeds have developed resistance to more than one herbicide. In some cases, this is due to plants evolving resistance mechanisms that are effective against more than one pesticide. For instance, many break down pesticides using new variants or higher levels of enzymes of a kind called P450s. These enzymes often protect against a range of different herbicides. In the 1980s, two weeds were found to be resistant to weedkillers that had never been used in the field. In other words, says Powles, weeds can evolve resistance to herbicides that have not even been developed yet.

The second story is Farm Antibiotics: 'Pig Staph' in a Daycare Worker, at Wired:

It’s been just about seven years since an alert epidemiologist in the Dutch town of Nijmegen identified an aberrant strain of MRSA, drug-resistant staph, in a toddler who was going in for surgery to fix a hole in her heart. The strain was odd because it didn’t behave normally on the standard identifying tests, and because it had an unusual resistance factor — to tetracycline, a drug that it should not have been resistant to, because the Netherlands had such low rates of MRSA that tetracycline wasn’t being used against the bacterium there.

Pursuing the source of the strain, researchers at Radboud University found it in the toddler’s parents and sister, and in the family’s friends. Not knowing where else to look, they asked what the parents and their friends did for a living; discovered they were all pig farmers; and went to their farms, and checked the pigs, and found it being carried by them, too. Suddenly, that strange resistance pattern made sense: The Netherlands uses more antibiotics in pig agriculture than any other country in the European Union, and the drug that it uses the most is tetracycline. Clearly, the aberrant strain — known as MRSA ST398 for its performance on a particular identifying test — at some point had wandered into pigs, become resistant to the drugs being given to the pigs, and then crossed back to humans, carrying that new resistance factor as it went.

From that first discovery unrolled the microbiological equivalent of a car-chase scene, complete with unpredictable turns, skids around corners, and unexpected dead ends. Researchers have identified ST398 in animals, people and retail meat in most of the EU; in pigs, farmers and hospital patients in Canada, and in pigs and a few farm workers, and most recently supermarket meat, in the United States. (You’ll find a long archive of posts on ST398, and more here.)

Both of these stories raise significant concerns about how we raise our foods.  They each also indicate that things may become more challenging in the near future, as we deal with glyphosate resistance and antibiotic-resistant bacteria.  Without even throwing in peak oil, I believe there will be no shortage of challenges in the future.

The Tea Party and Liberals Each Misrepresent the Founding Fathers

William Hogeland looks at the economic roots of the American Revolution and how various factions have appropriated what they want to support their causes, even if it is incorrect (h/t Yves Smith):

Yet despite constant appeals to founding values by politicians and pundits across the political spectrum, a perennial American eagerness to avoid framing our founding period in economic terms can make it strangely difficult to keep those all-important 18th-century finance issues in historical focus. The Tea Party movement, for example, has laid its claim on the founding period, and to a great extent that claim is indeed an economic and financial one. Casting the modern welfare state as a form of tyranny, in large part because of what they see as its excessive taxation, Tea Partiers invoke the famous American resistance to Parliament’s efforts to raise a revenue in the colonies without the consent traditionally given by representation. Seeing founding-generation American patriots as unified against British taxation (and frequently misrepresenting the politics even of the elites they invoke), the Tea Party defines its own anti-government, anti-tax values as essential to American identity.
The Tea Party thus edits out an alternative view of government that prevailed among the ordinary 18th-century Americans who were all-important to achieving independence. Those Americans opposed elites epitomized by the Boston merchant class, which the Tea Party, perhaps appropriately enough, so strongly identifies with. The internal struggle for American equality was as important to the founding as the high-Whig resistance to England, but the Tea Party can’t deal with the populist leaders and militia rank-and-file who wrote the socially radical 1776 Pennsylvania Constitution, or the Shaysites of Massachusetts who marched on the state armory, or the so-called whiskey rebels who inspired federal occupation of western Pennsylvania. American Revolutionary patriots all, those democratic-finance leaders had ideas about government’s role in ensuring economic equality that prefigured programs of the 19th-century Populists and the 20th-century New Dealers, the very programs the Tea Party wants to dismantle. Tea Party history therefore has to expunge the welfare state’s roots in America’s founding.
Liberals, too, can have a problem with the economic conflicts of the founding period. Alexander Hamilton’s national finance program, which Madison and Jefferson opposed with such intensity, was economically regressive. Under the influence of the founding financier Robert Morris, Hamilton made a stunningly successful effort to yoke American wealth to great national projects by beating down the popular-finance movement and promoting the interest (in both senses!) of the high-finance elites. Yet when some of today’s liberals look to Madison for support in critiquing Hamiltonian finance, they come up empty. Madison’s attacks on central banking represented anything but an argument for democracy and economic equality.

There is a lot more interesting stuff there, especially when it comes to the New Dealers claiming Jefferson's heritage in their reforms.  I've been struck by the irony of Republicans claiming the mantle of Lincoln, the savior of the Union, emancipator of slaves and supporter of federal grants for the transcontinental railroad and the Land Grant Universities, even though the party is now a states rights party, anti-civil rights, opposed to federal involvement in the economy, and with it base located in the former Confederacy.  Likewise, the Democrats claim Thomas Jefferson and Andrew Jackson, even though each would be anathema in today's Democratic Party. 

My favorite more recent example of a party claiming history it now has no business claiming is when Republicans claim that they are the party of civil rights, because liberal Northern (especially Northeastern) Republicans (find me a liberal Republican today) joined with LBJ to pass the Civil Rights Act over the opposition of segregationist Southern Democrats.  I've actually heard Rush Limbaugh make that claim.  He neglects to mention that most of those Southern Democrats became Republicans when Barry Goldwater ran in 1964 on throwing out the Civil Rights Act, and the national Republican party froze out the liberals in the Northeast, who became Democrats.  That is an amazing example of appropriating history which doesn't match reality.

Health Care Costs

From Business pundit via  the Big Picture:

Via: Medical Billing And Coding

The claim that doctors are overpaid is going to ruffle some feathers.  I would think that if large numbers of scholarships were available to doctors, we might be able to lower their annual pay once they are out of school, but paying off debts makes it much more expensive than necessary.  Unfortunately, the AMA has a century-long track record of keeping doctors from facing billing limits.

Making Money in Microseconds

Via Ritholtz, Donald McKenzie looks at computerized trading and high frequency trading algorithms:

Little of this has to do directly with human action. None of us can react to an event in a millisecond: the fastest we can achieve is around 140 milliseconds, and that’s only for the simplest stimulus, a sudden sound. The periodicities and spasms found by Hasbrouck and Saar are the traces of an epochal shift. As recently as 20 years ago, the heart of most financial markets was a trading floor on which human beings did deals with each other face to face. The ‘open outcry’ trading pits at the Chicago Mercantile Exchange, for example, were often a mêlée of hundreds of sweating, shouting, gesticulating bodies. Now, the heart of many markets (at least in standard products such as shares) is an air-conditioned warehouse full of computers supervised by only a handful of maintenance staff.
The deals that used to be struck on trading floors now take place via ‘matching engines’, computer systems that process buy and sell orders and execute a trade if they find a buy order and a sell order that match. The matching engines of the New York Stock Exchange, for example, aren’t in the exchange’s century-old Broad Street headquarters with its Corinthian columns and sculptures, but in a giant new 400,000-square-foot plain-brick data centre in Mahwah, New Jersey, 30 miles from downtown Manhattan. Nobody minds you taking photos of the Broad Street building’s striking neoclassical façade, but try photographing the Mahwah data centre and you’ll find the police quickly taking an interest: it’s classed as part of the critical infrastructure of the United States.
Human beings can, and still do, send orders from their computers to the matching engines, but this accounts for less than half of all US share trading. The remainder is algorithmic: it results from share-trading computer programs. Some of these programs are used by big institutions such as mutual funds, pension funds and insurance companies, or by brokers acting on their behalf. The drawback of being big is that when you try to buy or sell a large block of shares, the order typically can’t be executed straightaway (if it’s a large order to buy, for example, it will usually exceed the number of sell orders in the matching engine that are close to the current market price), and if traders spot a large order that has been only partly executed they will change their own orders and their price quotes in order to exploit the knowledge. The result is what market participants call ‘slippage’: prices rise as you try to buy, and fall as you try to sell.

It is legalized looting to allow market makers to take advantage of the data to take little amounts of money on vast numbers of shares, but try getting that practice banned.  It seems detrimental to this country that our brightest minds are being used to come up with trading algorithms to shave tiny amounts of money from retail traders and pension funds and deposit that in investment banker bonuses.

Does Cutting State Taxes and Expenditures Increase Growth?

Richard Florida looks at a new economic study:

A new study by Tulane's James Alm and Janet Rogers of Nevada's Department of Budget and Planning (h/t Ryan Avent, whose deadpan tweet noted that it was likely to spark a "lively discussion") takes a close look at the effects of tax and spending policies at the state level.  Entitled  "Do State Fiscal Policies Affect State Economic Growth?", it examines  50 years of data  (from 1947 to 1997),  tracking  the effects of state tax policies, spending policies, and political orientation on economic growth. Looking at the different policy approaches and strategies that have been pursued at the level of states and cities and comparing their results provides a useful lens through which to examine pressing national issues. Alm's and Rogers' main findings are certainly interesting; "lively" is quite likely an understatement for the sort of debate their findings should inspire.
There are two major take-aways. First, a "state's fiscal policies have a measurable relationship with per capita income growth, although not always in the expected direction." Tax impacts, they report, are "quite variable"; "expenditure impacts are more consistent."
Second, they find "moderately strong evidence" that a "state's political orientation, as indicated by whether the governor is Republican or Democrat, whether the state has enacted tax and expenditure limitation legislation, and whether the state frequently elects a governor of the same party as the incumbent, have consistent, measurable, and significant effects on economic growth."  And then they drop their bombshell: "Having a Republican governor," they conclude, "is associated with lower rates of growth." They qualify their conclusions slightly--but only slightly--noting that past measurement errors may have introduced some distortions into the record.
Taken together, these findings seem to support the spending orientation favored by liberals and pose a rather stark challenge to Republican governors who are embracing austerity.

In the current political environment, any data may run into a chicken or egg problem.  Midwestern states which have lost large numbers of manufacturing jobs have been losing young people for years.  Their populations are aging, and have fairly low college graduation rates, their economies are struggling.  It might be more of an issue of demographics leading to Republicans getting elected, in which economic growth is already stagnated.  Then when the Republicans start pushing through their gay marriage bans and abortion restrictions, they drive away even more young people.  It is an interesting concept, though. 

Taxes in the U.S.

Matthew Yglesias includes the following chart in his post about whether the U.S. can preserve Medicare as currently constituted:

One thing to note is that each of those other countries has some sort National Health System which covers more people than our government does.  Once you figure in the privately funded portion of our health care system, which could truly be looked at as a privately administered tax which is paid to health insurance companies, doctors, hospitals and malpractice insurance providers, we would probably move up on the list a decent amount.  Also, imagine how low our taxes could be if we didn't carry the burden of defending all these other developed world countries who spend very little on defense.

NCAA Men's Lacrosse Tournament

Last year's finalists, Notre Dame and Duke, could meet in the second round.  Syracuse is the #1 seed.  Notre Dame and Denver are the only teams in the tournament who aren't located in New York and west of the Appalachian Mountains.  Catch the action on ESPNU.

Chinese Food Safety and the Political Class

James Fallows notes that China may face some real muckraking reform, or maybe not:

- From China Geeks, which translates material from the Chinese press and blogosphere, an English version of a very important story from Southern Weekend,  南方周末, as fearless a reform publication as you will find in China, about a true "let them eat cake" saga underway there now.

At a time when tainted-food scandals are erupting all over the country, the story describes a special farm and food-supply system for government bigshots, to spare them exposure to the heavy-metal laden, adulterated, and otherwise contaminated food the rest of the population ingests. People often compare early 21st century China to early 20th century America, when industrial abuses gave way to the Muckraking and Progressive era. We'll see whether reformers can get similar traction there. If you want an idea of what makes ordinary people in China angry, check out this story.

Wow, that has tremendous potential to bring about massive reform, or it may bring a government crackdown on such media outlets.  Heavy-metal laden, adulterated and otherwise contaminated food.  That is a disturbing situation in a country with 16% or so of the world's population.

Naked Capitalism Link of the Day

Today's link: Food inflation, land grabs spur Latin America to restrict foreign ownership, at the Christian Science Monitor:

One of the first things passengers see when disembarking at Cuiaba airport in central Brazil is a real estate advertisement promoting arable land to foreigners.
South America has some of the most productive land on the planet, and buyers have long been drawn to pastureland for cattle; fields for grains, soybeans, and sugar cane; and forests where they can plant eucalyptus for timber and paper. Farms can reach the size of small nations.
Such advertisements may soon be preaching to an empty audience, however, as this and other South American nations that traditionally welcomed foreign investors are now changing land laws to restrict foreign ownership as arable areas worldwide become more sought after, a fact underlined by recent food crises. For lawmakers in Brazil, Argentina, and Uruguay, a nation where an estimated 25 percent of all land (an area the size of Denmark) already sits in foreign hands, it isn't a moment too soon to roll back the welcome mat.
These three nations produce much of the world's beef and grains and have been attractive to investors not just because land is available, but also because buying it was relatively straightforward.
Newly concerned over land grabs and eager to exercise more control over its food security, Argentinean Pres­ident Cristina Fernández de Kirch­ner said April 27 she would send a bill to Congress restricting how much land foreigners can buy or own. Uruguay fears that nations such as China and Saudi Arabia want to buy prime real estate and has promised to clamp down. Brazil, the world's biggest producer or exporter of beef, coffee, sugar cane, orange juice, and tobacco, last year blocked foreign companies based in Brazil from purchasing additional local real estate.

There was a big push ten years ago for U.S. farmers to go down and buy land in Brazil.  It economically made sense, but I couldn't see moving down there permanently to farm in a foreign land.  Guys who got involved were making a killing, but there was a lot of risk involved also.  I'm not surprised they are clamping down, and would anticipate laws in some Corn Belt states limiting corporate ownership.  Things are going to be very interesting in the near future.

There is also an interesting story about Ireland's alleged plans to restructure its debts to the EU and the IMF within 3 years.

Bush-era War Criminals Continue Claiming Torture Located Bin Laden

Barry Ritholtz takes the offensive against the torture works meme.  He highlights Dan Froomkin making the case that torture slowed down the investigation:

Indeed, as Dan Froomkin notes in a little-noticed essay, torture actually delayed by years more effective intelligence-gathering methods which would have resulted in finding Bin Laden:

Defenders of the Bush administration’s interrogation policies have claimed vindication from reports that bin Laden was tracked down in small part due to information received from brutalized detainees some six to eight years ago.
But that sequence of events — even if true — doesn’t demonstrate the effectiveness of torture, these experts say. Rather, it indicates bin Laden could have been caught much earlier had those detainees been interrogated properly.
“I think that without a doubt, torture and enhanced interrogation techniques slowed down the hunt for bin Laden,” said an Air Force interrogator who goes by the pseudonym Matthew Alexander and located Abu Musab al-Zarqawi, the leader of al Qaeda in Iraq, in 2006.
It now appears likely that several detainees had information about a key al Qaeda courier — information that might have led authorities directly to bin Laden years ago. But subjected to physical and psychological brutality, “they gave us the bare minimum amount of information they could get away with to get the pain to stop, or to mislead us,” Alexander told The Huffington Post.
“We know that they didn’t give us everything, because they didn’t provide the real name, or the location, or somebody else who would know that information,” he said.
In a 2006 study by the National Defense Intelligence College, trained interrogators found that traditional, rapport-based interviewing approaches are extremely effective with even the most hardened detainees, whereas coercion consistently builds resistance and resentment.

I would think that an examination of human nature would tell you that would be the case.  When your enemies resort to torture, they are proving your belief in their inherent evil.  It becomes heroic in your mind to resist them as much as possible.  Because you are suffering physical pain, you have to tell them things, so you make stuff up.  They can't know what is true and what isn't, so they have to try to confirm these stories, leaving you with time to embellish more, and come up with reasons for why they couldn't confirm what you'd told them. 

Whereas, treating the detainees with respect, trying to build trust, undermines the detainee's belief in his enemy's inherent evil.  It is likely that long exposure to the "enemy" will humanize him and convince the detainee that he and the interrogator aren't as far apart as previously believed.

The fallacy of the "ticking time-bomb" scenario which torture proponents use to soften opposition to torture is that if a detainee has information of an "imminent" attack, you need to know the anticipated timing of the attack, which you likely don't, and the detainee must be forced to give up the information quickly.  He actually knows how long he must resist torture to allow the attack to go off, and he knows the factual information about the attack, which you don't.  He can send your manpower off on wild-goose chases in a situation in which time is of the essence.  In other words, the situation in which torture advocates try to prove the necessity of torture is actually the least-likely time in which torture would ever work.  The person being tortured holds all the cards, and in his mind is engaged in a noble struggle against evil opponents.  The torturer is making it less likely that he will get his information.  So far, I have not seen any evidence that utilizing tactics used by tyrants throughout history to get forced confessions from political opponents has ever produced usable intelligence anywhere outside of the obviously fantasy world of 24, where one man is able to stop years of planning in a single day.  Dick Cheney and his henchmen should be tried for their crimes.

Update:  Andrew Sullivan discusses Cheney's campaign: