Payment LImitation and OIG: a Puzzle

OIG tried to do an audit of FSA's administration of the payment limitation  rules in the 2008 farm bill, notably the "attribution" of payments made to legal entities to the natural-born persons who comprise the entity.  Ferd Hoefner at Sustainable Agriculture notes the report, and comments.  The gist is summed up in his title: "Commodity Payment Limitations, Weak System, Weak Report."

I may comment more later, or I may lose interest, but I am puzzled by one aspect of the report.

OIG says they couldn't audit because of problems with the system, specifically including this point:

"Specifically, we learned that joint ventures without permanent identification numbers were not recorded in FSA’s entity database,..."

As they recognize in a footnote, FSA doesn't make payments to such joint ventures, payments are made to the members. That should mean the payments are automatically attributed to members. To me that says it doesn't constitute a weakness in the system and shouldn't be considered a problem in auditing.

FSA's response doesn't point this out.

If I follow correctly, Environmental Working Group has been "attributing" payments for some time now, using the same data as OIG refused to tackle. 

The Importance of Place

Charles Kenny writes for Businessweek on the importance of place: Indian workers making Big Mac earn much less (one seventh) than US workers, even when specified in terms of Big Macs--in other words, how many Big Macs can a McDonald's employee buy with her hourly wage.  From the piece:

Why do people in the U.S. earn so much more doing the exact same jobs as people in India? One reason is infrastructure: physical infrastructure such as (comparatively) good road and electricity networks, alongside economic infrastructure including a (somewhat) robust banking system. Institutions such as a (passable) set of commercial laws and (not completely capricious) regulatory regimes are another factor. The higher quality of these public goods allows the same amount of effort by the same quality employee to create considerably more value in the U.S. than in India.

 As your typical government-loving liberal, I hasten to point out the factors Kenny refers to are based on government.

The Conservative America

Thomas Fleming has an op-ed in the Wall Street Journal (hat tip Ann Althouse), discussing the colonies at the time of independence.  The closest he comes to mentioning slavery is this: " In some parts of the South, 10% owned 75% of the wealth."

It's amazing how easy it is to exclude people.  For example, Mr. Fleming above excluded the slaves.  But I myself did not remember to include Native Americans.  Were they "Americans" included in the Declaration? Are they "Americans" today?  Certainly their status is more complicated than most other citizens of the country.  When Jackson sent the Cherokees and Creeks on the Trail of Tears from Georgia to Oklahoma was he in effect taking away their citizenship in the U.S.?

A Safe Prediction

"
The Bottom Line
Unless Mitt Romney personally beats back an alien invasion — and maybe not even then — Mr. Obama will win the District of Columbia’s three electoral votes."

From Fivethirtyeight

(I voted for McGovern in the District in the year the Republicans came closest to winning.)

GAO Disses Direct Payments

GAO issued a report yesterday critical of FSA 's direct payment programs.

They ding them on several grounds, but I'd highlight the last:

Oversight: Oversight of direct payments is weak. With regard to oversight, USDA has not systematically reported on land that may no longer be eligible for direct payments because it has been converted to nonfarm uses, as required for annual reporting to Congress. In addition, GAO identified weaknesses in USDA’s end-of-year compliance review process. For example, USDA conducts relatively few reviews and generally does not complete these reviews within expected time frames.

Their recommendations for USDA/FSA:

• "...develop and implement a systematic process to report on land that may no longer be usable for agriculture, as required for annual reporting to Congress.
• ...ensure the more timely and consistent regular collection and distribution of geospatial imagery needed to corroborate that payments are only made for lands usable for agriculture.
• ...consider options within given budget constraints to improve FSA’s end-of-year reviews by selecting a larger sample of cases to review and ensuring that these reviews are completed in a timely manner.
• ...maintain comprehensive data on misrepresentation and enforcement actions taken nationwide, as needed for management oversight and reporting purposes."

 The main thrust of the report is for Congress to end direct payment programs:

"Direct payments generally do not align with the principles significant to integrity, effectiveness, and efficiency in farm bill programs that GAO identified in an April 2012 report. These payments align with the principle of being “distinctive,” in that they do not overlap or duplicate other farm programs. However, direct payments do not align with five other principles. Specifically, they do not align with the following principles:

• Relevance: When the precursors to direct payments were first authorized in 1996 legislation, they were expected to be transitional, but subsequent legislation passed in 2002 and 2008 has continued these payments as direct payments. However, in April 2012, draft legislation for reauthorizing agricultural programs through 2017 proposed eliminating direct payments.
• Targeting: Direct payments do not appropriately distribute benefits consistent with contemporary assessments of need. For example, they are concentrated among the largest recipients based on farm size and income; in 2011, the top 25 percent of payment recipients received 73 percent of direct payments.
• Affordability: Direct payments may no longer be affordable given the United States’ current deficit and debt levels.
• Effectiveness: Direct payments may have unintended consequences. Direct payments may have less potential than other farm programs to distort prices and production, but economic distortions can result from these payments. For example, GAO identified cases where direct payments support recipients who USDA officials said own farmland that is not economically viable in the absence of these payments.''

Locavores and Vulnerability

I mentioned the storm which hit the Mid-Atlantic states had gone through Reston.  The local Safeway got its power back yesterday, but its stock of perishable food, particularly frozen food, is still being rebuilt.  I think it reflects the extent to which the food chain has adopted the "just-in-time" logic of Japanese car makers from the 1980's, which was a hot meme in the 1990's. 

The discussion in the Post of the impact of the storm included observations from local vendors of high-end meat, including one perhaps apocryphal statement that his butcher had 80 head of cattle which he had to dispose of.  At first it sounded unlikely to me, but thinking about the practicalities makes it more likely.  Consider an operation where a butcher/meat packer buys cattle.  He's set up to move the cattle from the feed lot/ranch to his slaughterhouse where they'll be killed and cut into products he can ship out to his stores.  He knows how much meat his stores can take; he knows how long his refrigerated trucks will take to get the products to the store; he knows how long it will take to slaughter and butcher the animals. 

Simple economics means he should speed the animals through as fast as possible; that's good for the bottomline, reduces the amount of capital needed, and incidentally probably serves the animals well. So what happens when the storm comes through and the stores call up and say, no deliveries until we notify you we've got power back?  He's probably got no storage, no way to hold inventory.  He maybe could load up his trucks and keep their refrigeration units running, but that won't hold much surplus. If he's got 80 head of cattle in the lot, he's not set up to feed and care for the animals, certainly not humanely.

There's a Chaplin or Lucille Ball short where one end of an assembly line stops and the rest keeps going--that's what can happen here.

The point of my reflections is this: though I often question the advocates of the food movement, they've got one thing right:  our modern integrated food production and distribution system is efficient, but it's vulnerable.  Simply because of its integration, a disruption wreaks more damage than with the locavore system. 

Our Christian Nation Founded in Sin?

John Fea reports that one conservative scholar believes it was unChristian to rebel against Britain. 

Lonesome George: RIP

Via NYTimes, the last Galapagos tortoise of his subspecies is dead.

Ginsu: Made in the U.S. of A

Another illusion shattered.  I wonder if the implication of the previous sentence is true: do we start life with a defined set of illusions (Santa Claus, tooth fairy, etc.) and gradually they're shattered one by one so that by the end of life we face reality with no illusions?  Or is the truth that we create new illusions as we lose the old ( housing prices can go up continuously,etc.0 so that I'm now seeing the world through a whole new set of illusions?

Anyhow, the NYTimes has an obit of Barry Becher, in which it reveals the shattering truth: the ginsu knife was made in Ohio.  Not only that, "ginsu" has no meaning in Japanese. 

A tangent: this is interesting.  I remember the first things I ever saw which were made in Japan: a couple cheap mock fighter planes with friction motors, which may not be the right word but when you pushed them along a flat surface, they made an engine like noise.  This was probably 1949 or so, the time when "Japanese" meant "cheap" and "junk", at least if it didn't mean something more hateful.  So from that point to 1978 the image and associations with the word changed completely. Still a bit exotic, but completely believable that Japan could export great knives, which could do miracles.

How the World Changes: Stylish Russian Women

The Times had an article today discussing fashionable and rich Russian women.  For some reason I found that amazing; maybe because I remember Nina Khruscheva, Nikita's wife, who for the 1950's and 1960's stood as a model for Soviet women.  Hard to find a picture of her, so I'll steal this from Brown University.

Anyhow "stylish" was never used in connection with Soviet women.  Nor was "fabulous".  As proof, I did Google searches for "stylish Soviet women" and "stylish Russian women".  Six hits for the former, 5600 for the latter.