Upward Mobility Revisited

Robert Samuelson has a column in the Post on the decline of upward mobility in America.

What's being measured is inflation-adjusted incomes, comparing children and parents.  So the percentages of children who exceed their parents income has declined. A Brookings study tries to parse out which classes and which age cohorts see the change.

A couple of observations strike me:  it's (relatively) easy for poor kids to beat their parents; it's hard for rich kids to beat their parents.  The child of a welfare mother with no job only has to make it into a lasting job while the child of Warren Buffett or Bill Gates will never beat her parents.

The 1940 cohort has the greatest success, so using it as the baseline for comparison skews the results.  People like me profited by the post-war boom, the increase in productivity, which hasn't been matched in later years.

One thing the discussions, particularly Samuelson's, don't approach is a hobbyhorse of mine: in a steady-state economy every person who is upwardly mobile has to be matched by another who is downwardly mobile. That's apparent when, as here, you use inflation-adjusted income as your measure; it's less apparent when you talk about people moving from one level (decile, quartile) to another.

With dollars of income, it's possible for everyone to out earn their parents, provided only that the economy grows enough.  (Think of China, where the income measure means everyone is upwardly mobile.)

White Anxiety and Spelling Bees, etc.

Usually discussion of white anxiety focuses on growing economic inequality, the decline of the middle class, and the influx of immigrants resulting in a minority-majority country (not that I necessarily agree with these).  But I think there's another source of anxiety which isn't often discussed: white stupidity.

What I mean is whites look around and see that South Asians are dominating the National Spelling Bee (19 of the last 23).  I don't have an article to link to but I believe that students with immigrant backgrounds are also out competing "whites" in what used to be the Westinghouse Science Competition.  The new suit charging Harvard discriminates against Asian students forces "whites" to recognize their grip on claims to superiority in test-taking is slipping away.

To rub salt into "white" dreams of superiority Asian women have dominated the LGPA.

"Milk", by Mark Kurlansky

I got this book from the library, not Amazon, so I wouldn't feel right reviewing it there.  But I think the "critical" reviews on Amazon are  generally on point. 

For someone who grew up on a dairy farm the subject is interesting.  For someone who doesn't cook all the recipes aren't interesting.  The coverage is wide and broad, but not deep.  He tries to cover milk from a variety of species around the world, tossing in recipes every two or three pages.  He wraps up with a brief look at modern US farming.  The book started as a magazine article, and it still retains some of that character.  The author leans somewhat to the side of organic/locavore dairy, finding farms which are trying to find a niche where they can charge high enough prices to stay in business.

But the author is a bit credulous, I think, in accepting some of the claims.  For example, that one Holstein could outproduce 50 Jerseys.  Not possible--the farmer must have been pulling his leg. 

There's also the claim cows stay in the herd until 3 or 4.  Seemed incredible to me--3 means one lactation, which isn't enough to cover the cost of rearing the calf.  I know we had cows in our herd aged 9 or 10, because they were still productive milkers.  Did some superficial googling and found 4 or 5 is a common figure.  Still seems low to me, but then I remembered what we did with our calves: the males went for veal, of course; some of the females we kept and others we sold (depending on whether chance had given us a run of females).  The selling is the key--dad could sell calves because there were other dairies in the region, and his herd was respected.  Today, I'd assume there's no market for female calves, so they all go into the herd. If the cow has two pregnancies, chances are she's borne her replacement.  So the economic calculation for the herd is the cost of rearing the calf until it can be bred and give birth, versus the cow's production over that time.   (I'd also assume because of better breeding the calf has a greater potential than its mother had.)

USDA and FSA IT

The USDA CIO's office has a blog post touting their work towards "dashboards" consolidating access to data across the USDA.

Fedscoop notes in the second phase of the "lighthouse" project:

In this second phase, USDA plans to award contracts across the same five focus areas as Phase I — IT Infrastructure Optimization, Cloud Adoption, Customer Experience, Data Analytics and Contact Center — and an additional contract for support of its program management office.

 The same piece offers this quote:

"While the CoEs address a wide swath of IT modernization at USDA, the White House’s Matt Lira argued in June that what they all have in common is creating a better-functioning government.
“We are ultimately in the business of restoring the public’s faith in these institutions themselves,” Lira said.

I'm a little dubious of these efforts.  I do hope they are collecting metrics.  If I were feeling energetic, I'd file a FOIA request for available metrics of online usage. But then, if I were feeling energetic, I'd have better things to do than nitpick efforts.

The Need for Photo ID and Our Assumptions

President Trump last night said you need photo id when you go to the grocery store.  His people have defended the statement two ways: if you're paying by check, you need the id or if you're buying alcohol you need the id.  His opponents find these lame rationalizations--few people pay by check anymore and he didn't mention beer and wine.

As an opponent, I agree. But there's a danger here of accepting and reinforcing the assumption--all Americans go to the supermarket, all Americans have checking accounts, and all Americans live in single-family homes.  All, of course, are false.  Many Americans go to the local grocery, where their family may have shopped for years, and where the owner knows them and needs no id.  Many Americans have no checking account. Many Americans never go to the store, being essentially confined to their homes and dependent on others to buy their groceries for them. And many Americans  live in group settings where food is served. And some Americans live on the street and depend on food kitchens, etc.

[updated: Vann Newkirk at the Atlantic agrees.]

DOJ Says TRump Lies?

That's the gist of this post at lawfareblog.com.

Implementing the Trade War Payments I

Agweb has the announcement of the CCC programs, which include these details (from Jim Wiesemeyer, who was a pain in the neck  back in 1983 during the the implementation of the Payment-in-Kind (PIK) Program).

“USDA says it will take some time to develop the needed rules and regulations for the efforts and there will be a Federal Register notice published,” Wiesemeyer said. “There will be a relatively simple signup —producers will need to tell USDA what their 2018 production is for the crops targeted, and that level of what they actually produced times a payment rate and producers would get a payment based on that formula.”

Specific details for how the program will work, how the program will be implemented and how farmers can sign up for payments have not been announced. According to USDA undersecretary, Greg Ibach, the details will be released closer to Labor Day when USDA plans to fully implement the program.

“Payments are expected to start going to producers in September and will be also dictated by when the producer actually harvests the crops where the direct payments will be made,” Wiesemeyer said. “That would signal most wheat producers would be first up to receive the payments along with pork and dairy producers.”

I suspect there's some parallels with PIK--USDA and FSA have been working on the program for a couple months.  And they'll be working even harder now the announcement is out.  Based on my experience with PIK and other programs, the biggest problem will have been figuring out what decisions need to be made, specifically things like which commodities will be included and the economic logic for computing payment rates. How long do you assume the trade war is going to last is a big one.  Maybe you can compute an impact on prices for the 2018 crops of wheat, corn, soybeans, etc and assume that the trade war will be over in time for the 2019 crop?  But for dairy and pork the exact duration is more important.  Or maybe you set up a continuing program so you can do multiple computations and multiple payments?

Those are policy issues for the big shots in USDA and OMB--I hope Sec. Perdue's policy team is well staffed and works smoothly, much more smoothly than the administration's foreign policy team.

The bureaucratic issues are of more interest to me.  Developing the signup forms and procedures, writing the regulations, and getting OMB clearance on the forms and regulations are big jobs. In 1983 we didn't have all the tools they have now--IIRC Wordperfect was our major tool.  I know for sure we were still printing forms and procedures then. And those had to be shipped to state and county offices and arrive before farmers could sign up for the program.

 My big question on this program is how Trump's EOs on reducing the burden of regulations and the number of regulations will come into play.  I'm sure at the beginning of the year USDA and OMB didn't plan on having at least one brand new regulation, and more likely three new ones, to fit under the Trump rules.  Three new rules would mean having to do away with six old ones.  My cynical take is OMB will waive the rules and no one of any consequence will notice.

I'm also curious how FSA in DC will train the states and counties.  I know they're doing a lot of training online.  In 1983 DC had to train the states and the states would train the counties.  Preparing training materials when issues are still in up in the air is fun.  Getting up in front of 100 state people who are impatient to get going and nervous over the jam they're in is great fun.  The reality though is that "training" is more complicated than simply passing on information and procedures.  In-person training is an opportunity to find out the holes and flaws in what you (the DC specialist) has done.  And it's an opportunity over the long run to build trust--if you promise to get an answer from the big shots and are able to deliver, people trust you more.  And I think that trust ultimately pervades the whole network of people from DC specialist through to the farmer applying for benefits.

Succesion on the Farm

NYTimes has an op-ed on Trump's trade war, focusing on the emptying of the rural landscape.   His example:

A friend, a small-town Iowa banker who specializes in working with farmers, offered a local example. It’s time for Mom and Dad to retire, get off the farm and move to town. Much of the time, if no heir is interested in continuing the operation, the farm is auctioned to the highest bidder.
This time, one son wanted to take over the farm. But there were other children entitled to their share, so the farm went up for auction.
But now they had to compete with larger farm operations. The son “did the best he could,” said my friend, but a big operation “bid it up more than it was worth, some guy from out of town no one knew — probably from one of the big operations up north. The kid didn’t have a chance. It was heartbreaking.”

It's wrenching, but good planning might have saved the day:  the parents establish a legal entity (not a lawyer but likely a corporation of some ilk) in which all the children share equally, with the son who wants to farm an employee/owner.  Over time, if the operation is profitable the son buys out his siblings, assuming they don't want any link to the farm.

A couple things of note:

• this proposed sequence means converting a "family farm" into a "corporate farm" even though there may not be much change in the day-to-day operation.  Although likely the son who wanted to farm was bearing much of the workload when his parents decided to throw in the towel.
• the "big operation" is unknown, unspecified.  It could well have been a neighbor who has the greater access to capital than the aspiring son has.  It's logical it's a bigger operation: with everything else equal, the bigger operation will have lower per-acre operating costs than the smaller operation
• the succession problem is one reason why the median farmer is old.   

Five Out of Six Elections Lost--Learn From the Past

Joe Scarborough had an op-ed in the Post this morning. He wrote "Republicans would win the White House in six of the next seven presidential elections [after 1964]. I don't think the math works: 1968, 1972, 1980, 1984, 1988, ?? I count it as five out of six elections (which is even better for his point--that the Republicans recovered fast after the Goldwater disaster).

Naturally, being a nitpicker, I leaped on the statement.  But thinking more broadly, I was reminded of the 1972 election and George McGovern.  To me, and others who supported McGovern such as the Clintons, that was a cautionary lesson.  The lesson: the first rule of politics is you have to win the election.  While I've a good deal of sympathy for many of the proposals now being floated by Democrats, I'll always support that rule.  

USDA in a Best Seller?? Maybe in a Movie?

Improbable as it seems, it's possible, not certain but possible, that USDA will be featured in a best selling book available for its bureaucrats to give as Christmas presents to their family members.

How?

Michael Lewis has a new book coming out in October, described in this NY Times piece.

“The Fifth Risk,” which W.W. Norton will publish in October, paints a dire picture of the chaos and mismanagement in the departments of Energy, Agriculture and Commerce during the transition from President Barack Obama to President Trump. Within these seemingly dull, benign bureaucratic systems, Mr. Lewis encountered devoted public servants struggling with understaffed and neglected agencies while confronting potentially catastrophic risks.

Lewis has a good history of hitting the best seller list.   And several of his books have been made into movies ("The Blind Side", "Money Ball").

I've already added it to my Amazon wish list.