Gerald Ford's Legacy

Two contrasting posts on his legacy: one positive--his support for rescuing Vietnamese refugees over the opposition/disdain of some Democrats in this Post op-ed; the other negative, Tim Noah in Slate on his pardon of Nixon as either or both premature (should have waited for the indictment to specify what he was being pardoned for) or wrong (set a bad precedent, as when George H.W. pardoned Caspar Weinberger (who had been indicted).

Individual Values Versus the System

This Washington Post article is an interesting description of now-retired black men who bowl. (It's part of their continuing series on black men.) They're part of a generation that moved North and found good government jobs (post office/Metro), raised families, moved to the suburbs, put kids through college. Several of the generation (mostly but not entirely female) worked with me at one time or another. One of the things they debate is whether the younger generation has gone to hell, whether the kids blame the system when they should blame themselves (think Bill Cosby).

Over at Greg Mankiw's blog there's a big discussion, sparked by Tyler Cowen's NYTimes column from yesterday, on whether poverty is the fault of the individual or the system. The discussion seems to split two ways--one side says the poor are unwise and don't save, the other says it's the system.

What's interesting is both groups tend to take extreme positions. It's one or the other, but not both.

Cowen and Ownership Society

Tyler Cowen of Marginal Revolution has his column in the Times today, discussing universal 401K's. (As pushed by Gene Sparling of American Progress.)

The core idea is simple. The federal government creates tax-free retirement accounts for lower-income Americans, supplementing private accounts where they already exist, and matching personal contributions to those accounts. The amount of the match would depend on the income of the family and how much they save.

He seems sympathetic, but points out the likelihood of creating two classes of poor--the one that uses the savings in the 401K wisely, the other that gets sucked into misusing the money. I think that's true. Even for the EITC, which both liberals and conservatives agree is a good measure, there is a problem. Or rather two problems: one of fraud--people claiming the credit who aren't entitled; one of nonuse--people who qualify not applying.

This leads to the age-old question: is a liberal more concerned for equality of opportunity or equality of result. Typical American liberals have mostly said the first; many radicals, either of the Marxian or Christian variety, have said the second.

From Cartel to ?, the History of AAA

In previous posts I referred to the idea that the farm programs started as a cartel. To expand: a good part of the "first New Deal", at least as Arthur Schlesinger, Jr. diagnosed the economic problems as a surplus of production due to excessive competition. By permitting and encouraging different industries and management and labor to cooperate and scientifically plan their work, production could be brought back into balance with demand. So the National Recovery Administration set up codes industry by industry and boards with labor on them. Similar thinking influenced the agricultural programs. Different commodities already had had different groups working. Whereas the movement of the early 20th century was the development of the extension service and scientific agriculture, followed by the organization of the Farm Bureau (I was raised in the home of the first Farm Bureau, Broome County, NY) and then the development of farmer cooperatives in the 1920's. Some co-ops were for production, some for purchasing. For example dairy farmers got together in co-operatives to handle the marketing of milk, while such co-ops as the GLF (Grange-League-Federation) bought feed and supplies for resale to farmers.

The problem with farmer production co-ops was that they were subject to "free riders". If the cotton growers tried to limit production to raise prices, any grower who stayed outside the arrangement could grow all he wanted and benefit from any increase in prices. So a lot of the early New Deal farm legislation was putting the power of the federal government behind such arrangements--hence the agricultural marketing orders for fruits and vegetables and the marketing quota programs for tobacco, peanuts, cotton. The economists call such arrangements "cartels". (They don't call the Federal Reserve System a cartel, but that's what it is--it fixes the supply and price of the commodity known as money.)

IMO over the years the focus for the major field crops and now dairy has moved away from adjusting production to demand and setting prices and towards direct subsidies.

The Iron Triangle (Updated)

Morgan, Cohen, and Gaul (seems as if that's a different sequence than yesterday, it's got the rhythm of FDR's "Martin, Baron, and Fish") have another article on farm programs . This one outlines the various interests that come together in creating a farm bill, with particular attention to Rep. Larry Combest (R) (Texas) and the 2002 Farm Bill. They even searched out my old boss, Bill Penn, for a comment on the changing of the rules for "actively engaged" determination in 1987. (Bill and his wife-to-be wanted to require half a year's worth of work for management; Rep. Huckaby (D) (LA) said no, managers could do it in their spare time.) Following personnel is one way to follow the interlinking of interests, what the political scientists used to call the "iron triangle" (relationships between the agency, Congress, lobbyists and clientele).

For example, another old boss of mine was an assistant to Huckaby, or maybe House Ag--Parks Shackelford. He moved from Congress to USDA in 1993. This is a good piece in Gov. Executive from 1998 on the overall background, including the problems of combining agencies. Googling his name reveals that he now has twin daughters and a son on the way. His father-in-law is chancellor of Arkansas State U, and his wife is general counsel to the American Farm Bureau. He himself is working for a Florida sugar company after serving as President of American Textile Manufacturers Institute.

It's way too difficult to Google "William Penn", for obvious reasons. He first came to ASCS as a deputy director in the area office, indicating good Republican connections (he might have been a State executive director in Michigan before), showed his talents and moved up to Asst. Deputy Administrator. Moved to the field of law and Arents Fox around the early 90's, focusing on payment limitation, then back to Michigan for a farmers organization.

The same sort of thing goes on with all administrations and both parties: the ambitious come to Washington, move among Congress, the executive, lobbyists and legal firms until they become satisfied or reach their level of incompetence. Then they're shunted to "turkey farms" to live out their days.

The Post article closes with discussion of prospects for the 2007 Farm Bill.

Daylight on SS Retirement

A belated Merry Christmas to all.

I note a couple of articles relevant to the debate over Social Security. Sen. Sessions of Alabama puts my back up. But he has an op-ed piece in the Post
suggesting a bipartisan approach to SS reform. What's new, on a fast reading at least, is the acceptance of the pattern of the Thrift Savings Plan (the Federal govt's 401K equivalent) to give people individual accounts without going through Wall Street. In the past conservatives have used the bogeyman of the government controlling the economy through vast stockholdings to oppose this idea. Apparently Sessions, perhaps honoring the populism sometimes found in the South, is ready to abandon Wall Street. (Actually, the TSP system gets competitive bids from a financial firm to run its 6 funds; I think Barclays had the account for a while.)

The reason I'm encouraged by this concession is shown in a NYTimes article on the Chilean system. Apparently some in Chile have found their privatized system wanting, and propose some reforms. I was particularly struck by this paragraph:

In hopes of stimulating competition, the reform plan would let banks and insurance companies form pension funds. The six existing funds, down from a peak of more than 20, object. They appear especially fearful that the state bank will jump into a business that has yielded them a return on assets of as much as 50 percent annually.

With Wall Street getting record bonuses this year (an average of $600K per employee in one firm) I'm in no mood to give them any more business.

Takes All Kinds

Over at Marginal Revolution Alex Tabarrok posted on gift giving. Economists have problems with the concept--is there utility in exchanging gifts, etc. etc.. Anyway, I commented. Going back to read comments, I find that Virginia Postrel (who blogs and who has donated a kidney to an acquaintance) finds that O'Henry's "Gift of the Magi" (the wife cuts her hair to give husband a watch chain, husband sells his watch to give wife something--headband?--for her hair) a cruel story.

Big Farms and Foggy Language

Gaul, Cohen and Morgan have another article in their series in the Post on farm programs. This one focuses on the disjunct between our mental picture of farmers and the reality:

"Today, most of the nation's food is produced by modern family farms that are large operations using state-of-the-art computers, marketing consultants and technologies that cut labor, time and costs. The owners are frequently college graduates who are as comfortable with a spreadsheet as with a tractor. They cover more acres and produce more crops with fewer workers than ever before.

The very policies touted by Congress as a way to save small family farms are instead helping to accelerate their demise, economists, analysts and farmers say. That's because owners of large farms receive the largest share of government subsidies. They often use the money to acquire more land, pushing aside small and medium-size farms as well as young farmers starting out."

It's fair, although using John Phipps, who has an interesting blog, as an example might be a stretch, but he gives good quotes. There's the usual blurry (from a biased viewpoint) language. Discussion of "corporate" farming. I think it's true that most "corporations" involved in farming are composed mainly of farm families (and their city relatives). But I doubt that's the image evoked in people's minds. There's also mention of "income", but no description to say whether this was the gross income of the farming operation or the net income the farmer got, two very different things, particularly for someone like a dairy farmer.

And as my ag teacher pointed out many years ago (my high school actually was phasing out its ag instruction--the teacher took over driver's ed, which was inappropriate inasmuch as he was the most nervous man in the school (may have been after effects of war service)), income can be ambiguous for other reasons. Dairy farmers (IMHO the only "true" farmers) in particular have lots of capital invested in land and equipment and animals. When you're accounting for the invested capital on your books, you should really charge the operation for the interest the capital could be earning. In other words, if a man has 600 acres of land worth $4,000 an acre, he has $2.4 mill capital. If he sold, and bought bonds he could earn a comfortable 5 percent on his money, or $120,000 a year just clipping coupons (except that they've done away with coupons on bonds and only us old fogies understand it). But if Gaul, Cohen, and Morgan say the guy has $150,000 income, they don't point out that he's only earning $10 an hour for his labor (using a 3,000 hour year).

Why Do Farmers Like To Swim?

The title's a smartass way of leading into a subject raised by the recent discussion of the Post's article on dairy. What's the subject--why dairy farmers and others like pools or cartels.

Imagine you're a dairy farmer. Twice a day [warning--this is based on information 50 years old] you milk your cows and put the milk in the cooled storage tank. You know the milk truck has to come to empty the tank, because the cows have to be milked or they'll go dry and there's no way to use the milk on your farm. You can't store it. You have to sell it or dump it.

Who do you sell it to--your local processor. Maybe you have a choice; maybe there are two processors within driving range. But even if you have a choice, you can't auction your milk off daily or weekly to the highest bidder. The processor will take all the milk you produce, knowing that cows produce soon more after calving than 6 months after, that quantity can vary by time of year (though I suspect less so now than 50 years ago when most cows still calved in the spring). So you choose your processor once and change very seldom.

The bottom line is that you've no leverage, no market power. Your processor doesn't have much more. If there's more milk than can be sold as fluid, it can be processed into butter, cheese, or powdered milk. That permits a temporary surplus to be stored.

So what do you do if you've no market power--you combine. It's a time-honored American tradition, whether it's a farmers cooperative, a labor union, an oil trust, or a steel cartel. You get yourselves together to pursue your common self-interest. That's why dairy farmers swim.

Surge or Not?

The Washington Post reports that some in the White House want to "surge" the troops; the military apparently is reluctant. If I understand, "surging" essentially means robbing Peter to pay Paul. You keep some troops on longer, you accelerate the deployment of other troops, and maybe you change some rules so you can use the Reserve/National Guard more often. Bottom line is you use assets today that you won't have tomorrow. So that gives some political logic to the WH position. Do the "surge". If it works, great. If not, even the right wing will say we've done all we could. That's cold logic for those who might be killed in the surge, but cold logic is the logic of statecraft.

NY Times and Organic Agriculture

Two articles in the Times today seem to me to be relevant to the organic agriculture debate: one describes the effects of iodine deficiency; the other describes how vodka sellers are getting $60 per bottle by packaging it in bottles that look like perfume. How do they relate:

• there's a fervency of belief in organic agriculture that can lead to mythology. The iodine article reminds us that just because we eat foods from nature doesn't mean that they're sufficient for our nutrition. We need to add iodine to our diet in most parts of the world because the food doesn't contain enough for mental development.
• some of the marketing of organic food (full disclosure, I own stock in Whole Foods) is the developing of tastes that have nothing to do with good nutrition or even with good taste. Not that there's anything wrong with that. Vodka is just another example of it. Farmers in developed countries should push this all they can, as the vineyards have. Most of us could care less about wine tasting, but we spend more money for the higher priced bottle for special occasions anyway.
  

Lack of Bureaucratic Imagination?

The Post today reported that a judge wants FEMA to give explanations of rejections:

"Leon [the judge] ruled that FEMA mishandled the transition from a short-term housing program to a longer-term program this spring and summer. Instead of explaining why funding was being cut, FEMA provided only computer-generated and sometimes conflicting program codes, Leon said.

The judge ordered FEMA to explain those decisions so thousands of evacuees can understand the reasoning and decide whether to appeal.

"I'm not looking for a doctoral dissertation," Leon said. "I'm looking for a couple of paragraphs in plain English."

Sitcov [FEMA's attorney] said FEMA's eight-year-old computer system is set up only to produce program codes. "

I'm jumping to conclusions, but it sounds fishy to me. At worst, any word processing package can generate canned letters--you simply write a paragraph(s) for each code, then enter name and address and codes and you get the letter. Even better, possibly the program can create a file of this information. At any rate, it sounds like FEMA is more interested in defending their turf against judicial intrusion than in working out a solution to the problem.

(In the interests of fair play, I should note that the software program was designed in the Clinton administration. Even 8 years ago a good system designer should have provided for letters of explanation from the system.)

How It All Plays at the Local Level

I've blogged on the "erroneous payments" issue before. Two pieces from local papers show how the effort to fix the defects works out at the local level.

From the Hillsboro Free Press.

From the Murray County News.

Women and Introverts

Fake out title. Two interesting links, one to a piece on "Networking for Introverts". Like many advice pieces I find the contents logical and worthy, but getting the resolve to do is the problem.

The other is to a Christopher Hitchens piece in Vanity Fair on why women aren't as funny as men. Amusing.

Put Up Walls Against the Dutch

I was commenting at volokh.com about the Post dairy article and did a Google seach on "Dutch dairy farmers". It is interesting--apparently Dutch dairymen have emigrated to a number of different states--apparently there's more freedom and cheaper land in the U.S. Yet British dairymen were envying the Dutch because they have more ownership of the whole milk chain (i.e., production, processing, distribution, sales).

I wonder whether they may not be more successful than American dairy farmers simply because they have a fresh start--a son (or daughter) taking over an existing dairy farm is bound by all sorts of tangible and intangible things and finds it harder to change and innovate.

Dairy Woes

Morgan, Cohen, and Gaul (almost sounds like an FDR speech) have an article in Sunday's Post on the dairy program, focusing on the "crushing" of an independent operator. If I understand, Mr. Hettinga started as a dairyman, expanded into processing, and eventually started selling his milk through Costco at $.20 per gallon below the price elsewhere. The story gets complicated very quickly. (Confession: though I grew up on a dairy farm and went to work for USDA, I never really bothered to understand how the program works. But here goes: in the beginning all the dairies in an area (i.e., Wisconsin, New England, etc.) were in a "pool" and everyone in the pool got the same price. The government, in the form of Commodity Credit Corporation, bought butter and cheese when milk was in surplus in order to maintain the price. In the last 25 years, particularly in the 2002 farm bill, there have been changes and additions to the program. There's also been a 75 percent loss of dairies.)

So two big issues are who is in the "pool" and whether production can flow from one pool to another. Hettinga was outside the pool, because he was both a producer and a processor. Long story short, through complex maneuvering on the Hill, he got forced into the pool. Such maneuvering is an old story--Nixon got dairy cash and Hillary and Leahy worried about milk pools, etc.

I can't cry any tears for someone with a private plane and his own lobbyist and Congressman. I'm more sympathetic for the 30 cow dairyman who is no longer operational. The problem is, dairies in the West are more efficient than in New York and big dairies with confined feeding are more efficient than small dairies with pasture. So you can't fight Progress.

An Accomplishment of the Republican Majority (1995-2006)

I was googling on dairy and Watergate and hit this article in Reason .

I can't resist quoting the last paragraph:

"Dairy price supports will be phased out by 2000, thanks to the 1996 farm bill. But throwing programs that were ill-conceived and illegitimate to begin with out of the federal realm and into regionalized cartels is no improvement. As states and localities step forward to shoulder formerly federal burdens, they need to ask not just who should manage a given program but whether it should exist at all. For now, regional cartels seem prepared to make sure that famous milk moustache continues to hide the sly grin of agribusiness as it milks the public."

Of course, they were prematurely optimistic about the end of price supports. Indeed, the Republicans (and Democrats) in the 2002 Farm Bill seem to have added programs. In the old days (tell it, grandpa) FSA/ASCS had little direct contact with dairy farmers, except for cost-sharing for liming or farm ponds under ACP. The dairy program operated through the processors, not directly with farmers. That's changed.

Lame Excuses and Contracting Out

The Times has an article today (Post had one yesterday) on the Coast Guard's ill-fated Deepwater program for getting a new fleet of ship and planes. One thing I learned in the 1970's when I was programming (in COBOL). The computer does not hiccup. It may be frustrating, but when you're writing and testing a program, it's not the computer's fault when it doesn't work, it's yours. An excerpt:

"In September 2004, more serious flaws in the boat conversion program became obvious after the first one, the Matagorda, was launched. As it traveled in relatively heavy seas from Key West to Miami, large cracks appeared in the hull and deck.

Giant steel straps that looked like Band-Aids were affixed to the side of the boats, and the vessels were barred from venturing out in rough water. But cracks and bulges continued to scar the Matagorda and other converted ships, followed by a series of mechanical problems.

Bollinger, it turned out, had overestimated how much stress the modified boats could handle, a miscalculation it cannot fully explain. “The computer broke for some reason,” said T. R. Hamlin, a senior Bollinger manager. “Whether it was a power surge or something, who knows?” The cursory oversight by the Coast Guard meant the mistake was not caught in time."

That excuse is worse than: "my dog ate my homework". Any professional organization would have its power supply regulated.

Overall, the article is cautionary. If memory serves, the former deputy of Homeland Security was the admiral who used to head the Coast Guard. He got good ink from the media, which seems now to have been undeserved. To make a long story short: the Coast Guard lacks sex appeal so it's had trouble getting money to maintain and replace its equipment. So someone (the admiral? or an eager staffer) came up with an idea: package all its needs in one package that big contractors would bid on, spreading the work around to locations that would pull in enough members of Congress to get approval for the appropriations. It worked, except the contractors (a partnership of Lockheed and Northrup (and I'd cynically believe that the partnership in itself contributed to problems)) contracted out much of the work (i.e., to Bollinger) and the Coast Guard trusted its contractors. They forgot Reagan's advice about verifying.

What Was I Reading This Morning

In the Washington Post, the headline reads:

'I'm Not Turnin' Loose of It Until We Get It Right'

At first glance you might think it was George W. talkin' about Iraq.

Then you read the article and this quote:

"It kind of tears me apart," [he] said in an interview. "In life I've had other times like this. You ask yourself: 'How did I get here? How do I get back? And how do I learn from this?' You have to face where you are. Don't be blind to the truth. Otherwise, you can't fix it."

and you know it's Joe Gibbs about the Redskins.

Joe Gibbs for President.

Progressive Lenses vs Bifocals

This week I got new glasses. I've been wearing bifocals for 20 years, but finally decided to spend the money for "progressive lenses"--$340. With bifocals you were either looking close or looking long, a binary condition. With progressive lenses it's gradations. In either case you adjust by tilting your head to adjust the line of sight, which I hope will become automatic after awhile. Amazing what humans can get used to if they have to.

More Immigrants Less Crime?

That's the theme of an article in the NYTimes magazine last weekend:

The most prominent advocate of the “more immigrants, less crime” theory is Robert J. Sampson, chairman of the sociology department at Harvard. A year ago, Sampson was an author of an article in The American Journal of Public Health that reported the findings of a detailed study of crime in Chicago. Based on information gathered on the perpetrators of more than 3,000 violent acts committed between 1995 and 2002, supplemented by police records and community surveys, it found that the rate of violence among Mexican-Americans was significantly lower than among both non-Hispanic whites and blacks.

If I follow the argument, immigrants, at least some groups of immigrants, bring social capital, incentives, and relationships to the U.S. that makes them less likely to commit crime. That is, legal immigrants have their families and a strong family culture; illegal immigrants want to keep out of sight of the police because the consequence is going back home. (So much for locking them up.) The bad side of the argument is that as their kids grow up American, they commit more crime. It's interesting, though I'm not totally convinced.

Author Author (in the Family)

My cousin, Marjorie Harshaw Robie, has just published "Dwelling Place of Dragons: An Irish Story".

Despite the title, I understand it's based on the diaries of James Harshaw, a Presbyterian in Ulster during the middle of the 19th century. For more, see here.

I'm getting it for Christmas and will report on it when I've read it. But family loyalty says it's unfortunate the timing is too late for the NYTimes books of the year list.

Tit for Tat in Palestine

Over the years some supporters of Israel pointed to the schoolbooks Palestinian children are given. The books don't show Israel on their maps of the Mid-East, they show nothing or "Palestine". These supporters have scored points in the debate. Obviously the PLO and Arafat did not accept the existence of Israel as a state if they couldn't change the map.

It's always been my assumption, being the young and naive person that I am, that Israel's schoolbooks showed Palestine. Wrong. Israel always called the PLO a terrorist organization with which they could not negotiate so they got themselves into a map trap of their own. Today's Washington Post has an article showing that a minister in the government is trying to change the policy, but meeting resistance:

Israel's policy of not marking the West Bank began soon after it captured the territory from Jordan in the 1967 war. Most school maps now evoke Jewish history by labeling the territory by the Biblical terms "Judea and Samaria."

In defending her order in interviews with Israeli reporters Tuesday, Tamir [the minister] noted the difficulty in pressuring Arab countries to mark Israel on maps when the Jewish state does not designate the West Bank as a separate entity on its own maps. She told Israel's Army Radio that "if we don't show these borders, we will turn out very confused children."

Contracting Out and the Learning Curve

George Buddy had a piece on contracting that started with peeling potatoes on KP (for whippersnappers, "KP" stands for "kitchen police" which means young recruits doing scut duty for chiefs in the days before it was contracted out). Separate pieces of news today say: we have 100,000 contractors in Iraq; the inspector generals of State and DOD say that the contractors doing training of police in Afghanistan haven't produced a good police force; the FBI is having mixed success with its new computer modernization contract.

IMO "contracting out" works okay when the agency doing the contracting understands what's going on and doesn't need to learn anymore (like peeling potatoes). If you don't understand how to do the job successfully or it's too difficult to learn, then the contract is just passing a hot potato; it's bad for the agency, bad for the taxpayer, and bad for the recipient of the service.

"Specialty Crops" and the New Farm Bill

Interesting, if confusing, piece in yesterday's NYTimes business section discussing specialty crops and an effort they're putting on to get more government aid. California garlic growers and Washington apple growers are feeling the heat from imports from China. They've constructed a coalition and are laying down a market in preparation for the new farm bill (2007).

When you research on http://www.thomas.gov, the bill referred to in the piece is HR 6193, Eat Healthy America Act. Most of the bill looks to be extensions and tweaks of provisions attractive to various constituencies, explaining why a whole mess of representatives joined in sponsoring the bill back in September (i.e., before the election--surprise!). The stuff for specialty crops looks mostly to be expansions of existing programs (for example, the 2002 farm bill had $2 million for technical assistance for exports of specialty crops, the new one bumps it up in stages to $10 million. ) There's also interesting language changes. Usually legislation authorizes
expenditures subject to the money being actually appropriated. If I understand section 802, in at least one instance they're trying to bypass the appropriation process and just use Commodity Credit Corporation funds. That's significant, because it's not unusual for Congress to authorize $20 billion for education (as an example) and just appropriate $5 billion. They've also included a $9 million transfer from CCC each year for AMS and market news services.

If you can judge the coalition's publicity by the Times article, it's people (like now defeated Rep. Pombo trying to convince farmers they're being helped rather than convincing the American public of the worth of the program.

Credit Score/Security Score

ABC does a followup piece on the "Automated Targeting System"--the automated tracking of travelers into and out of the U.S. that was revealed through a Privacy Act Notice in the Federal Register. As best we understand, the system gathers information on people (destinations, how paid for, etc.), accumulates it over time and generates an "assessment" which is capable of being expressed as a numeric score. Senator Leahy and others have problems with it.

I don't, not really. Yes, there's problems because the system was set up years ago and they just got around to publishing the required FR notice on "systems of records". That was wrong. But the basic idea is okay by me--tracking someone's history is a good and valid way of assessing them and the data captured doesn't seem particularly sensitive to me.

I do have problems with the Privacy Act itself--it should be updated in the light of the Internet to require government agencies to make accessible, ideally notify people, of the information they have on file. (It was written in the 70's.) Look at the credit scores that credit reporting bureaus keep. We've finally advanced to the point where people are entitled to a free credit report yearly. Social Security gives you a yearly report summarizing the wages they've recorded for you. Why shouldn't other agencies do similar things? If HSD were doing that, they'd have a lot more support and a lot less paranoia in the country. IMO transparency is key.