Something I'm Ready to Believe

From Jack Shafer at Slate, in an article on the NPR fund-raising thing:

If you've ever hung out with rich people, you know they have a lot of crazy ideas and aren't afraid of expressing them.

Of course, on mature second thought, I'll just believe it without going to the trouble of hanging out with rich people.  Charlie Sheen is evidence enough.

From the Horse's Mouth: Michael Roberts on Climate Change

I'm too lazy today, after a visit to the dentist, to link to the NY Times article on the impact of global warming climate change (people who don't agree the globe is warming will agree the climate it is achangin')on US agriculture, but Michael Roberts clarifies the U.S. may make out like gangbusters. Sure, our corn production will be severely impacted by high temps, but because of inelasticities farmers may see crop losses more than offset by higher prices. Or they may not.

Those Overpaid Federal Bureaucrats, and a Certain House

There's a house on sale for $800,000.  I got to thinking about whether the price was too high (the answer: not if the seller can find a buyer at that price. :-), a thought triggered by the note on zillow.com of the down payment and mortgage payment required.

Let me wing a few figures, based on the conventional wisdom back when I first bought a house (1976): a 20 percent down payment means a buyer needs $160,000 in cash.  I guess that's probably not a problem, at least usually, because any buyer is going to be selling their current home. Although these days there's many fewer owners who have that much equity in their homes; many owners are under water.

The principal and interest with a 30-year mortgage is roughly $3,500, or $42,000 a year. Property taxes, at $12 per 1,000 assessed valuation, might be $9,000 or so.  Add insurance of maybe a couple thousand, so you're talking PITI of around $53,000.  Call it $50,000, because I like round figures, and figure what it's 30 percent of and you come out to about $170,000 a year.

Yes, when I bought my first house, the conventional wisdom was PITI shouldn't be more than 30 percent of gross income, at least that's what I remember.  So, what's the bottom line?

Almost no federal employee could afford that $800,000 house within the constraints of 1976 wisdom.  I don't know how many houses in the U.S. would go for more than $800,000, but lots.  It's just another confirmation that high ranking federal employees are not overpaid, whatever may be true of lower ranking employees.

The National Grange--a Remembrance

Extension.org's RSS feed the last couple days has been focused on cooperatives, including this piece on early cooperatives.  The first national one was the Grange,or The National Grange of the Order of the Patrons of Husbandry.  Turns out it was triggered top down: the first organizational meeting was in USDA offices  in DC.

The Grange was still biggish where I grew up, biggish because the community was so small as to be almost non-existent. In my early years there were the Methodist church and the Grange hall (a barn which had been converted and improved over the years). Some people were active in the church, at least when they weren't turned off by the minister the bishop had assigned.  Some people were active in the Grange, and not the church.  Some, like my mother, were active in both, and got very aggravated when there were conflicts between the two.  In my early years the Grange hall had the facilities for dances and community suppers. But when the church members dug out and finished a basement under the church for meeting rooms, the monopoly on eating facilities was broken. Dancing, of course, was still verboten for Methodists.

When it was created, and during my mother's early years, the Grange could be the center of social life, at least nondenominational social life. Its organization had roles for men and women, more egalitarian than many of the churches of the time. Economically it could join with other organizations to form buying and marketing co-operatives, like the Northeast's Grange League Federation (Dairymen's League and Farm Bureau Federation) in which my father was active.  Politically it was one of the big three ag groups, behind the Farm Bureau (which my home county claims to have started), and jousting with the National Farmer's Union.

Lifetime habits and organizational inertia kept the Grange going into the mid-20th century, but then it faded as the car, radio, and TV offered more entertainment possibilities. It's still around, as a visit to the website shows, but not any more in my locality of birth.

Sad Sentence of the Day: the Replaceable Kevin Drum

From a post on the advance of computer intelligence in replacing people, Kevin writes:

In the meantime, I just hope that Mother Jones doesn't figure out that they could almost certainly find some extremely bright, knowledgable, plugged-in Indian blogger who would work much harder than me and for a quarter of my salary.There probably aren't a ton of Indians who could replace me, but there don't need to be tons. There only needs to be one.
[Emphasis added]

Surprising Sentence: Our Growing Obesity

From a Patch post on the Fairfax police aviation unit:

"Kaminski said the helicopters do have some restrictions they can fly in. Severe inclement weather can ground the helicopters he said and in some cases with larger patients, the unit may not be able to transport them. [emphasis added]

When the System Is Poorly Designed

When an IT system is well designed, the user wants to use it because it makes her job easier or better--any data to be entered is new and unique, and needed to produce the output.. At the next level down, the system is so designed the user has  to use it to accomplish the job, hopefully without frustrating the user too much.  At a lower level, the user can defy management and dodge the system.  Perhaps the worst system is one where data-entry is after the fact.  Those thoughts were inspired by this Government Executive article on an Army mental health record system.  Because the medicos aren't entering data upfront, the paper records are to be shipped off and scanned. 

Changes to Farm Programs

Chris Clayton at DTN reports on suggested changes or possible changes in both direct payments and the SURE and ACRE programs from an Ohio State professor:

Zulauf said perhaps direct payments could be reformed in that farmers would receive them only if they have a loss. Going a step further, Zulauf said perhaps a loss should be required for receiving any farm safety net program. Such an idea could save $1 billion to $2.5 billion a year, he said, though Zulauf noted he doesn't have a way to fully model out that figure. Nonetheless, "This is not a small item."

Programs Which Soar in Cost: Crop Insurance

A difference between farm programs (i.e., direct payments or counter-cyclical) and crop insurance is significant for budget purposes. Typically the basis for payment for the farm programs is set by law, and won't change until the next farm bill. For crop insurance, if I understand correctly, the basis for payment is updated each year.  So when commodity prices soar, the cost of crop insurance to the taxpayer will also rise.

When you look at other government insurance programs, like social security or unemployment insurance, the basis for payment also rises as the insuree's salary rises.  The difference here is commodity prices can rise abruptly, as in the last year, while salaries don't rise abruptly across the board.

Why So Many Different Government Programs--Tom Davis

From a Government Executive piece on a hearing of the House Oversight and Government Reform Committee, Tom Davis, who for a short while represented me in the House testified:

But the committee's former chairman added Congress itself deserves much of the blame for redundant programs. He noted that the need for a particular service often arises out of jurisdictional greed.
For example, if a member of the Education and Workforce Committee wants to enact a job training program, he or she will write the legislation to ensure it falls under an agency in that committee's purview, Davis said. The same philosophy could then hold true for members of Veterans Affairs and Financial Services committees, who establish similar programs under the jurisdiction of their own panels.
"Under this arrangement, they are all funded differently, measured differently and administered differently," Davis said. "Common sense suggests they should be combined to take advantage of economies of scale, or even just to make it easier for citizens to know these programs exist. We can blame the bureaucracy, but in many ways Congress created the many-headed monster we bemoan in an attempt to protect its jurisdictional prerogatives."

See my earlier post.