Economics

We must be protected from the “dangerous” white gold: Raw Milk

Apparently there is a movement afoot of milk connoisseurs, people who like to live on the edge and who believe that pasteurization—the heating process that destroys all those nasty bacteria and germs—also destroys the flavor of milk. And so, despite the fact that it’s illegal in half the US states, there is still a brisk underground trade in the lactic hootch.

Harper’s Magazine looks at the trade in raw milk as well the over-the-top enforcement of laws against it.

In October 2006, Michigan officials destroyed a truckload of Richard Hebron’s unpasteurized dairy. The previous month, the Ohio Department of Agriculture shut down Carol Schmitmeyer’s farm for selling raw milk. Cincinnati cops also swooped in to stop Gary Oaks in March 2006 as he unloaded raw milk in the parking lot of a local church. When bewildered residents gathered around, an officer told them to step away from “the white liquid substance.”

I don’t feel strongly about the “right” to have and consume raw milk, but does law enforcement have to deploy the same tactics they use with drug smugglers and terrorists? It’s an effect of the militarization of police, I think.

One interesting aspect of the argument of the milk purists is that people who live on farms develop fewer autoimmune disorders than those who don’t and they believe this is because they are being exposed to bacteria that their bodies learn to fight off from an early age. Many microbiologists and immunologists have made similar arguments about First World urbanites living in super-clean, antiseptic environments weakening themselves in preparation for being laid low by diseases our ancestors would have shrugged off without notice.

For our part, Melanie and I have never been the type of parent who freaks out about our kids touching “unclean” surfaces. If food falls to the floor, we pick it up, wipe it off, and pop it in her mouth. (Obviously not in places like hospitals or high-traffic areas such as malls or restaurants.) And I will point out that Isabella has hardly been sick at all her entire life, perhaps a few days total of sniffles and raised temperatures, which is a far cry from the horror stories I hear from other parents. Is it because we aren’t afraid to expose her to the bacteria found in the wild? Maybe, maybe not.

So maybe there is something to this unpasteurization movement. For the moment, I’ll stick to the organic, BGH-free milk we drink now, mainly because the taste is so good. But if it’s better for us too, that’s even better.

Employees with families make good workers

I really admire the folks at 37signals, the Web 2.0 company that you could argue is the original Web 2.0 company and purveyors of some very fine online software, including Basecamp, which I used to coordinate the production of Catholic World Report when I was managing editor and then editor.

One of the reasons I admire them is because of their enlightened, employee-friendly policies. For instance, they’ve instituted a standard four-day workweek because it’s better for everyone and people are more productive. They subsidize not just employee education, but also employee hobbies because they make the employees better people and thus better employees. And, in contrast to many small Internet companies, they see the value in hiring employees with families.

This particular employee points out that Web startups traditionally favor single twentysomethings who will work untold hours with little complaint and the ephemeral promise of venture-capital millions, but that such devotion ends up being a crutch for management to shovel hour after hour of productivity after badly conceived ideas and ill-considered approaches until they uncover that one shining nugget.

That’s why I like working with the family man or woman. They come in as a cold bath of reality. When people have other obligations outside of work that they actually care more about than your probably-not-so-world-changing idea, the crutches are not available as an easy way out, and you’ll have to walk by the power of your good ideas and execution or you’ll fall fast and early. That’s a good thing!

From the experience I’ve had working with family people, I’ve found an amazing ability to get stuff done when the objectives are reasonably clear, the work appears to have meaning, and if it can be done within the scope of what should constitute a work week. When there are real constraints on your time, like you have to pickup the kids or make them dinner or put them to bed, it appears to bring a serenity of focus to the specific hours dedicated to work.

This is what companies need, startups or not. They need constraints and especially constraints on how often you can play the hero card to Get This Very Important Project Done. Most projects are just not that important and most things just shouldn’t be done anyway, despite how good of an idea you feel it is in the heat of the moment.

In most companies what you need is a good mix of mature, older workers with outside responsibilities that ground them, maybe even make them conservative and cautious, combined with young, fire-in-the-belly, go-getters willing to work long hours to make their mark in the world. Each group tempers the weaknesses of the other with their own strengths and become a powerful tool for whatever your company or organization is doing. Something to think about.

Not everyone should go to college

Economist Thomas Sowell has some difficult words for those who decry the rising cost of college. Rather than offer a blanket criticism of “greedy” colleges or issue a challenge for Congress to increase grants and funding for student loans, he suggests that maybe fewer people should be going to college. He suggests that sending kids to colleges, especially when you use taxpayer funds to do it, shifts the burden of paying for that college onto the whole of society, diverting limited resources.

How many people would go to college if they had to pay the real cost of all the resources taken from other parts of the economy? Probably a lot fewer people.

Moreover, when paying their own money, there would probably not be nearly as many people parting with hard cash to study feel-good subjects with rap sessions instead of serious study.

There would probably be fewer people lingering on campus for the social scene or as a refuge from adult responsibilities in the real world.

Some may accuse Sowell of elitism, but I think he’s just anti-dilettantism; opposed to the frivolous waste of scarce resources on kids who spend four years partying, copulating, protesting, and taking the equivalent of “basket-weaving” classes. I agree with him.

Job application creep has pushed companies to require bachelor’s degrees for work that a skilled— as in properly educated — high school graduate could do. I’ve mentioned before that our local state college offers a degree in pool management.I’m not kidding. Somebody is getting soaked (pun intended) and among them are the students and their parents paying for this, as well as the Massachusetts taxpayers.

Note: Sowell continues his analysis in Part II and Part III. In Part III, he addresses the argument that because college costs so much we need government subsidies by pointing out that colleges can charge so much because they know the government will subsidize it. It’s a vicious circle.

Is the oil bubble about to burst?

Click through to the infographic and see the data that lends some to think that even as we see record prices for a barrel of oil, we may be about to see prices drop again soon. (We have such short memories incidentally. It wasn’t long ago that gas was $3.49 per gallon and then dropped back to about $3.)

So what does the infographic say? That oil production is up 2.5% in the first quarter of 2008 while consumption is up only 2%; that output will go up by 4.1% by the third quarter while consumption is projected to only rise 1.6%; and the US oil consumption was down 4% in January, during the biggest heating month of the year!

Of course, by the time the prices come down a new president will be in office and he (or, God forbid, she) will be able to take credit for that which they have no control over. Such is demagoguery and politics.

At least we’ll be paying less for heating oil next winter.

Moving away from taxes

It’s a form of tax osmosis. A Wall Street Journal editorial speculates that a survey of Americans’ patterns of migration are evidence that taxes affect people’s behavior. Citing data from a survey by moving company United Van Lines, the WSJ points out that the top “departure” states have among the highest taxes in the country while the top “destination” states have the lowest taxes, especially personal income taxes.

Politicians who think taxes don’t matter might want to explain the Dakotas. North Dakota ranked second worst in out-migration last year, while South Dakota ranked in the top 10 as a destination. The two are similar in most regards, with one large difference: North Dakota has an income tax and South Dakota doesn’t.

Here’s another example. The only Pacific Coast state to lose migrant population in 2007 was California, which has the highest state income tax in the nation. This is the continuation of a dismal 10-year performance with nearly one and a half million Golden Staters leaving what was once the premier destination state in America.

Meanwhile, next door, Nevada was second among the states in new families — and a big percentage of the new arrivals are Californians. Nevada has no income tax. High income Californians can buy a house in Las Vegas for the amount of money they save in three or four years by not paying California income taxes.

They note that in the Northeast, New Hampshire was the biggest gainer, although Vermont is a high-tax exception.

Another data point is the cost of moving. Renting a U-Haul from Los Angeles to Austin costs four times as much as moving the other way, for example, which reflects the low supply and high demand in Los Angeles versus Austin.

As the editorial acknowledges, there are many reasons people move: housing costs, the job market, climate, quality of life. But these patterns might indicate that the tax burden in a particular place is one of the big reasons. Certainly, tax burden can also affect some of those other factors as well.

Just who isn’t paying their fair share of taxes?

A while back on this blog, I got into some debates with folks who believed the oil industry wasn’t being taxed enough and that “Big Oil’s” profits were too high and that we ought to confiscate more money from their shareholders and employees.

This should add some perspective to the debate as it confirms that big business more than pulls its weight when it comes to taxes.

In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people!

Of course, if we look to IRS records, we see that the top 50% of individual taxpayers (not corporations) pay 97% of personal income tax. Yet we still hear the old trope that the rich aren’t paying their fair share or that “Big Business” isn’t paying it’s fair share.

“You keep using that word [fair]. I do not think it means what you think it means.”

[Link via Instapundit]

A subsidy grows in Manhattan

If these people can get millions of dollars in federal farm subsidies while living in Manhattan, surely I can convince the government to pay me not to grow some crop here in Peabody, Massachusetts.

It’s a typical big government program whose stated purpose has been turned on its head to benefit political cronies. This is the danger of big government.

Siena wants economic growth while remaining human

I find the attitude of the Tuscan Italians opposing the expansion of the Siena airport to be a refreshing change of pace from the typical “expand at all costs” American business attitude. Yes, I’m a capitalist, but I’m also a Catholic and the needs of communities and persons must come before that of business. Economic expansion is not an isolated good, but must also be weighed against other factors.

Progress cannot be measured only in terms of raising gross domestic product, said Luciano Fiordoni, an economist who spoke at a recent anti-airport rally in Siena. “You have to factor in quality of life,” he said. “We don’t object to growth, but our main intent is to remain human.”

That is a very Catholic point of view, similar to what Pope John Paul II often said. Contrast this with the usual American impulse to “preserve” a place that attracts tourists for its authentic historical charm by expanding access and “Disney”-fying it so that it becomes only a caricature of what made it lovable in the first place.

A prime example would be any of the popular Maine coastal towns, beloved for their old New England seafaring charm, whose shops have all become boutique outlets that no proper fisherman could afford, much less want to patronize and whose tiny streets have become clogged with vehicle traffic nearly every day in the summer. Perhaps they would have been better off without all the inns and hotels and the interstate off-ramp even if it meant not so many of us could visit as we’d like.

Economic stimulus talk is same old hot air

You’d be hard-pressed to better demonstrate the Democrats’ utter cluelessness when it comes to economic matters than their economic stimulus proposals.

WASHINGTON—Democrats controlling Congress are looking at tax rebates, extended unemployment benefits and more food stamps to stimulate the sagging economy.

Food stamps?! Food stamps are not an economic stimulus; they are supposed to be aid for people in crisis, a temporary and stop-gap measure that carries people over until they can take care of themselves again.

Liberal economists say boosting food stamps is one of the most efficient ways of pumping money into the economy, an idea surprisingly embraced by GOP economist Martin Feldstein at a Brookings Institution forum on Thursday.

Look, an assertion without evidence! That’s all they say. There’s no proof, no explanation, we’re just supposed to accept that since liberal economists—and supposedly one “GOP” economist, although the label doesn’t make him a “conservative” economist—say it, it must be true.

As for rebates, here’s an idea: Why not cut out the middle-man and just reduce my taxes? Instead of taking my money away and then giving me back a pittance, let me keep my money in the first place. Obviously it’s because a rebate is a one-time gimmick, while a tax cut goes on in perpetuity — or until they can pass a law raising taxes again (or fail to renew time-limited cuts).

The mantra among Democrats and many economists is that any stimulus bill should be timely, temporary and targeted toward people most likely to funnel the money right back into the economy.

By that they mean, people who are more likely to blow the windfall on unnecessary luxury items instead of saving it or using it to pay down debt. More typical shortsightedness. At best, it creates an anomalous blip in economic indicators, but no real long-term benefit.

But the politicians only care about creating a statistical change sometime this fall so they can claim that they’ve “turned around the economy” just in time for the November elections. That’s the “timely” bit. It is simple political demagoguery.

It’s A Wonderful Life as an economics lesson

Here’s an interesting observation: Frank Capra’s movie “It’s a Wonderful Life” provides an excellent basic economics education, as well as a brief primer and introduction to the financial services industry in this country.

I love “It’s a Wonderful Life” because it’s the greatest financial services movie ever made. Sure, Jimmy Stewart is unforgettable as George Bailey. And Donna Reed as Mary Bailey has permanently blown the curve in the annual competition for ultimate Christmas wife and mom. For me, though, the unsung star of the film is the Bailey Building and Loan.

[…]

George and Mary, through their steadfast adherence to good, their commitment to each other, and to the value of sacrifice for the good of others, are a literary beacon of hope. The Bailey Building and Loan survives as a stalwart against Mr. Potter’s power and greed because George and Mary and all the depositors of Bailey’s Building and Loan stick together. We can’t feed our kids on faith. We can invest and diversify to smooth out the bumps of life for ourselves and each other. As for Mr. Potter, he’ll always be around with a higher salary, a swankier office, and a cigar. Mr. Potter is everywhere. His seductive power is especially compelling when the chips are down, and doubt overtakes our confidence in the long term investment strategy.

The writer also transcribes her favorite scene, during the run on the bank, when George pleads with the depositors that their deposits are not liquid assets, but investments in the lives of their neighbors and figurative pledges of faith in their community to survive. It’s an interesting point.

Update:

I will add that the following dialogue from George in the scene where Potter wants to close down the Building & Loan after George’s father died is a quite accurate reflection of Catholic social justice as it relates to economics:

Just a minute – just a minute. Now, hold on, Mr. Potter. You’re right when you say my father was no business man. I know that. Why he ever started this cheap, penny-ante Building and Loan, I’ll never know. But neither you nor anybody else can say anything against his character, because his whole life was… Why, in the twenty- five years since he and Uncle Billy started this thing, he never once thought of himself. Isn’t that right, Uncle Billy? He didn’t save enough money to send Harry to school, let alone me. But he did help a few people get out of your slums, Mr. Potter. And what’s wrong with that? Why… Here, you’re all businessmen here. Doesn’t it make them better citizens? Doesn’t it make them better customers? You… you said… What’d you say just a minute ago?… They had to wait and save their money before they even ought to think of a decent home. Wait! Wait for what? Until their children grow up and leave them? Until they’re so old and broken- down that they… Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about… they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so. People were human beings to him, but to you, a warped, frustrated old man, they’re cattle. Well, in my book he died a much richer man than you’ll ever be!

Married to the job and living to work

Update: It's been pointed out that I should add a disclaimer that I don't intend this to apply to my own job. My boss and I have talked about the importance to me of spending time with my family and he has been very accommodating of me, allowing me to work a flexible schedule and in other ways.

Have we entered a new era of voluntary indentured servitude? I was listening to a podcast today where the topic of office romance came up. One of the panelists defended the practice by saying that people spend so much time at work now that they have no other time to meet someone. Another panelist asked if any of them knew anyone (presumably salaried employees since hourly employees are a separate case) who works 40 hours per week anymore.

The fact is that most people I know work many more hours than that, especially younger people. It used to be that there was an understanding between employers and employees that you worked a set number of hours and then you went home and that exceptions were made for special circumstances like business trips or seasonal busy periods or intense preparation for a client meeting or the like. Now it’s like that all the time.

The expectation now is often that if you aren’t working many more than your normal hours, if you’re only putting in your 40 or 45, that you aren’t a “team player,” meaning when it comes time for evaluations, promotions, and raises, you will get less than glowing reviews.

Since when did work become life? Man once worked to live, but now he lives to work.

A reporter on that aforementioned podcast admitted that she spends more time with some sources than with her husband. Is it any wonder so many marriages end in divorce? Many couples end up as virtual strangers to one another, not to mention the added dynamic of spending more time with members of the opposite sex in your office, with the attendant dangers.

Maybe it was all the years I worked from home, but I am adamant that my family comes before all else. Melanie and Isabella come before work, before service to my parish, before all of it. That doesn’t mean that I don’t work late occasionally or that I quit the parish council. It does mean that I will not put in 60 or 80 hour weeks away from home.

Actuarially, I probably have about 35 to 40 years left, maybe less. When I take into account my time spent at work (conservatively using the 40-hour week), my time spent commuting, and my time spend asleep (a conservative 6 hours per night), more than 56% of every year is spent away from my family. Isabella will turn 18 in 16-1/2 years and I will have only just over 9 years of time to soak it in.

I recognize that I have a job to do and being away from my family for some time every day is part of my duty and vocation. But I think responsible employers have a duty not to rip families apart by placing onerous demands on their employees. If you wonder why our society and culture is fracturing around us and why divorce and immorality are rampant, the first place to look is at how little time families spend together (and I don’t mean in the car racing to the next extracurricular activity.)

My dad was a workaholic when I was a kid and I generally only saw him on Sundays and then he was usually asleep in his chair because he was so exhausted. (He’s changed in many ways for the better as my three youngest half-sisters can attest.) I’m bound and determined not to do the same thing to my children.

Your job is not your life and it does not define you. It can be fulfilling and exciting and world-changing. For some of you—like those of you in military service or public service—it does demand those long hours away from family. But for most of us, lives do not depend on us being on-call around the clock.

And for those of you who work in ministry, let me tell you straight out: God doesn’t need your ridiculous hours. If He wants something done, He will find a way for it to get done without you driving yourself into the ground or neglecting your family life.

Remember, work to live. Don’t live to work. Make the world a better place by finding fulfillment in your family life, not your job.

No money, no problem

I’ve been conducting sort of an experiment over the past few weeks. I wanted to see how long I could go without using any cash. No bills. Only my debit or credit cards. In fact, I haven’t had any cash in my wallet, nor have I gone to the ATM since several weeks before Thanksgiving. (I don’t know of the exact date because I only started the experiment when I realized it had been some time since I’d used any cash.)

In the meantime, I’ve been to restaurants, supermarkets, drugstores, gas stations and driven through tolls without using cash.

Until today, that is, when I needed a haircut. Some things never change. My barber still uses a decades-old manual cash register.

I wonder how long it will be before cash transactions are completely obsolete.

Extreme childless home makeover

Since we’re moving in the next 8 months or so, I’ve been perusing the real estate section of the newspaper more often. Unfortunately, many of the homes that get the highlight treatment are ridiculously expensive “dream” homes. But the details of many of these homes reveal something about our society and culture.

Take this 1880 farmhouse in the Jamaica Plain neighborhood of Boston. I’m taking a guess that for at least the first three-quarters of its existence, this was a home for families, a place that held more than the current “ideal” of 2.2 kids. In fact, it was probably mainly bedrooms, kitchen, and eating space. Not anymore as this $849,000 house has 1,962 square feet of living space but now only has two bedrooms. Check out this description of the current renovated splendor and the uses to which the rooms have been put.

Entering the blue-clapboard house from the street, you’ll come to a covered front porch that leads into an 8-by-6-foot cherry-wood foyer outfitted with a window seat and coat closet.

To the right, a 13-by-13-foot home office boasts recessed lighting, two windows and a floor-to-ceiling built-in with 20 shelves.

Nearby, a 6-by-5-foot half-bathroom features cherry-wood floors and a pedestal sink.

The home’s 21-by-13-foot living room offers cherry-wood floors and a wood fireplace with a new marble border. Built-ins can accommodate a flat-panel TV and a stereo system.

This elegantly designed room segues into a U-shaped, 16-by-13-foot architect designed kitchen. [Description of the kitchen’s top-of-the-line appointments snipped.]

The home’s 15-by-12-foot dining room features cherry-wood floors, cathedral ceilings, built-in cabinets, a contemporary designer fixture and three skylights.

A restored staircase leads to the second floor, which hosts the home’s two bedrooms.

The master suite includes a 14-by-13-foot bedroom with wall-to-wall carpeting and even a shoe closet.

An en-suite 8-by-8-foot master bathroom […].

An adjacent 9-by-6-foot vanity/laundry room […].

The suite also includes a 10-by-9-foot walk-in closet […].

Down the hallway, the home’s 13-by-13-foot second bedroom features […] a deep closet […].

A nearby 9-by-8-foot guest bathroom boasts […].

I count room for at least six bedrooms on the second floor, five if you want a bathroom up there. What does it say about our society when we put so much stock in material goods? Our investment is in stuff, instead of kids. Shoot, the closet is almost as big as the master bedroom!

This is not a home designed for a family that welcomes as many children as God may send them. (Insert obligatory apologia that God does not choose to bless every couple open to life with many—or even any—children. I’ll stipulate that.) But if you check out the old homes, at least in the Boston area, the ones that originally had six or seven bedrooms, most have either been subdivided in condos and apartments or had extreme makeovers that create more room for our excessive capitalist consumption than for children. The new homes are hardly any better, with giant McMansions sporting massive great rooms, dens, and TV rooms, but hardly any space for bedrooms. The assumption these days is that sane, responsible parents don’t have more than two children, and soon it will be even less.

My dirigible is found

Dfoles links in the comments on earlier post on dirigibles, and the current dearth of what I think would be a great part of the US transportation system, a link to a Popular Science article on a an airship currently being developed. The “flying luxury hotel” would carry 250 passengers in style across the continent or across the ocean, traveling from Los Angeles to New York in about 18 hours.

This isn’t a true dirigible or “lighter-than-air ship”, but is in fact heavier than air, relying on its powerful engines and aerodynamic shape to lift it into the air and keep it airborne. And since it doesn’t need runways, it can actually take off and land in places that can’t support airliners, either physically or politically.

The only immediate downside is that, like with many innovations, it is initially planned only for the wealthy. It will be a long time, if ever, before someone like me could afford a ticket. Hmm.

Where are the dirigibles?

I bought the plane tickets for our annual post-Christmas trip to Austin the other day. With another on the way and Isabella about to move beyond the “lap-child” allowance, this may be our last such trip, at least unless we go at a time of year when flights are even cheaper.

Just for fun, I went to the Amtrak web site to price out tickets to Austin from Boston. The trip would require two overnights and the better part of three days and—with compartments for the two nights—would cost about $1,500. Sheesh! All the convenience and speed of driving with more than the expense of flying. Still, it would be a lot of fun to ride the rails and see the country from ground level.

It makes me wonder, though, why blimps and dirigibles have never made a comeback. Right now, they’re relegated to being floating billboards and camera platforms, but a decent-size dirigible could carry a number of passengers in luxury accommodations at a stately pace, seeing the world, especially bits of the world that are off the beaten path, from above.

Are we still feeling the repercussions of the Hindenburg, 70 years later? Surely technology has advanced enough to have safeguards in place to prevent the recurrence of such a disaster.

Imagine floating across the Atlantic or over the Rockies or across Europe in splendor.

I suppose the problem is that most people care about the destination, not the journey, and only want to get there as fast as possible. I can understand that: after all, I’m opting for bargain airfares and a nonstop flight. But if I could afford it, I’d take the train. Or even the blimp.