On Monday, Phileena Heuertz, Daniel Lawse and I were able to travel to Salina, KS to meet with Wes Jackson. Wes Jackson founded the Land Institute in 1976 to revolutionize crop production. He realized the academic institutions he studied and taught in, were part of the problem for long-term soil erosion.
Academia was concerned with greater food output and was happy to throw ever greater amounts of petroleum based fertilizers, pesticides, and fungicides on crops but which in the long term, reduced a soil's fertility. It led to soil erosion, demolished root systems, and depleted the soil of natural resources.
Since that time, Wes Jackson has been consumed with converting the world's plant life back from the monocultures of today (almost all arable land is devoted to production of corn, soybeans, wheat, rice, sorghum, etc.), and increasing biodiversity. Interestingly, he is also hoping to cross-bread these crops so that these crops go from being annuals to perennials. By cross-breeding over many (50+) years, they hope to breed a hybrid that produces crops but is a perennial.
For instance, wheat might be bred with a particular grass that is a genetic cousin of wheat. That offspring would be bred again with a similar offspring or even a parent like wheat again. Over enough time, they could produce a grass-like wheat crop that would keep producing food.
Instead of tilling the soil each year and replanting, Wes believes they could get 7-8 years of crops from a hybrid perennial crop. This would eliminate much of the soil erosion because the root systems would stay in the ground. Root systems of some of these early hybrid plants have been 3 feet deep.
Wes is 72 and was working on a 50 year land bill to present to Obama and McCain when we arrived. He gave this task to someone else and talked with us for 4 hours. We received a tour of the Institute and also a history lesson, philosophy, genetics, etc. lesson.
He was gracious to answer our questions and even used some visual aids in his yard to help make a particular point. He invited us into his house and poured us some water. He showed us a small cabin of Leland, a friend of his, that I may mention in a future post. The cabin doesn't have much more than a small bed, a small nightstand, a wood stove, and a bucket that he could pull from underground for his "refrigerated items". Leland passed away 3 years ago.
Being an introvert, I thought I would be overwhelmed. I wasn't. Phileena, Daniel and I talked all 8 hours (4 hours there and 4 hours back) and we were in conversation 4 hours with Wes. It was one of the best days...great company and a fantastic time with Wes Jackson. I can count on two hands the number of speeches/sermons/lessons I've heard that were better. Thank you Wes Jackson (and Phileena for all her work setting up this trip and introducing us to him; she had met him while on her sabbatical at Duke. He was giving a convocation with Wendell Berry).
Wednesday, July 30, 2008
Friday, July 25, 2008
The Amero
The past two days, I've been inundated with junk e-mail referencing the falling dollar and the amero.
I had to look it up on Wikipedia.
The amero is a suggested currency to replace the American dollar, the Mexican peso, and the Canadian dollar. Much like the euro is replacing many European national currencies (those countries that are part of the European Union), the amero is a theoretical currency for all of North America.
There are actually coins you can buy off the web called the Amero, although these seem more commemorative (Similar to Franklin Mint informercials you might see on television). These coins also don't seem to have a standard conversion rate from the dollar: the gold coins are much more expensive than the silver and copper coins, and the value of the coins seem more closely tied to the value of the metal than a currency's actual value.
I had to look it up on Wikipedia.
The amero is a suggested currency to replace the American dollar, the Mexican peso, and the Canadian dollar. Much like the euro is replacing many European national currencies (those countries that are part of the European Union), the amero is a theoretical currency for all of North America.
There are actually coins you can buy off the web called the Amero, although these seem more commemorative (Similar to Franklin Mint informercials you might see on television). These coins also don't seem to have a standard conversion rate from the dollar: the gold coins are much more expensive than the silver and copper coins, and the value of the coins seem more closely tied to the value of the metal than a currency's actual value.
Thursday, July 24, 2008
Should It Be Illegal for Those Under 21 To Join the Military?
I've traveled to a lot of countries that have, in the past, been accused of exploiting child soldiers. Many times these children are forcibly taken from their parents. But child soldiers can also be lured into joining the ranks of soldiers because its perceived much like any other gang....its a family, a broken family that provides a certain amount of freedom, power, and respect.
Child soldiers are supposedly good soldiers. They do what they are told, are easily persuaded and manipulated, quickly develop into good marksmen, and are smaller targets for the enemy.
Leaving aside the conversation about the ethics of an army built on conscription, at what minimum age should volunteers be allowed in an army? In the United States, applicants may join at 17 with a parent's permission but face delayed entry. Most applicants start their training at the minimum age of 18.
However, recent studies have shown that human brains do not fully develop until our early 20's. The prefrontal cortex, which "controls impulses, calm emotions, [and] provide an understanding of the consequences of behavior and allow reasoned, logical, and rational decision making processes" "do not fully develop until the early twenties."
-The International Justice Project, citing other academic research projects.
Instead, adolescents use a different part of their brain: the amygdala, which is "typically associated with emotional and gut responses."
"Studies by Dr. Deborah Yurgelun-Todd and her colleagues at Harvard Medical School using functional MRI scans show that teenagers when interpreting emotional information use this part of the brain rather than the rational decision making region: the prefrontal cortex. Conversely, adults in the same experiment relied more heavily on the frontal cortex. In assessing the results of the tasks set to the two groups, Dr. Yurgelun-Todd found that all of the adult participants interpreted the emotional information correctly in comparison to under half of the adolescents."
ibid.
Dr. Yurgelun-Todd says that "Adult brains use the frontal lobe to rationalize or apply brakes to emotional responses."
There are other parts of the brain that do not fully develop in adolescence including the corpus callosum, which are the axons that help both the left and right parts of the brain communicate.
The author(s) are careful not to suggest that this impedes an adolescent from knowing right from wrong. It does however, suggest that adolescents may have difficulty "controlling their desires", understanding the ramifications of their decisions, and perceiving their "time horizon" differently than adults so they are only concerned about the next 1-3 days whereas an adult engages in "long-term planning".
For more information, see:
http://www.internationaljusticeproject.org/pdfs/juvBrainDev.pdf
This suggests that an adolescent may make an emotional decision to enter the military and may be predisposed to make emotional decisions in combat once in the military. Rationality may have little force in decision making for many of the adolescents caught in the midst of combat. Combine this with stories of basic training where soldiers view battle scenes while listening to loud rock music and this suggests that the military knows about these emotional responses and deliberately manipulates young soldiers for its own ends.
Anecdotally, I have heard a soldier that remarked that he got caught up in the loud music and battle scenes and started hating Arabs (shown in the videos) until he took a step back and started processing that brainwashing. Other studies have shown that the military has made great strides in its training to psychologically help its soldiers be able to kill the enemy (The most helpful suggestion instead of an offensive command, is defensive: to protect your battle buddy).
With the development that has taken place in neuro-biology, should a new minimum age be considered for military service? Say 21?
Suggestions that the military is exploiting the most vulnerable and manipulating them for the military's own ends can be thwarted somewhat by raising the minimum age and by recruiting more soldiers from among the richer classes. Raising the minimum age would put rationality at the forefront and allow each volunteer to make sound decisions when joining the service and also in combat.
This would also perversely shut down the argument of soldiers that they should be allowed to drink alcohol at 18...since if they are able to fight and die for their country they should certainly be allowed to drink. Actually, both are harmful to brains that are still developing.
Child soldiers are supposedly good soldiers. They do what they are told, are easily persuaded and manipulated, quickly develop into good marksmen, and are smaller targets for the enemy.
Leaving aside the conversation about the ethics of an army built on conscription, at what minimum age should volunteers be allowed in an army? In the United States, applicants may join at 17 with a parent's permission but face delayed entry. Most applicants start their training at the minimum age of 18.
However, recent studies have shown that human brains do not fully develop until our early 20's. The prefrontal cortex, which "controls impulses, calm emotions, [and] provide an understanding of the consequences of behavior and allow reasoned, logical, and rational decision making processes" "do not fully develop until the early twenties."
-The International Justice Project, citing other academic research projects.
Instead, adolescents use a different part of their brain: the amygdala, which is "typically associated with emotional and gut responses."
"Studies by Dr. Deborah Yurgelun-Todd and her colleagues at Harvard Medical School using functional MRI scans show that teenagers when interpreting emotional information use this part of the brain rather than the rational decision making region: the prefrontal cortex. Conversely, adults in the same experiment relied more heavily on the frontal cortex. In assessing the results of the tasks set to the two groups, Dr. Yurgelun-Todd found that all of the adult participants interpreted the emotional information correctly in comparison to under half of the adolescents."
ibid.
Dr. Yurgelun-Todd says that "Adult brains use the frontal lobe to rationalize or apply brakes to emotional responses."
There are other parts of the brain that do not fully develop in adolescence including the corpus callosum, which are the axons that help both the left and right parts of the brain communicate.
The author(s) are careful not to suggest that this impedes an adolescent from knowing right from wrong. It does however, suggest that adolescents may have difficulty "controlling their desires", understanding the ramifications of their decisions, and perceiving their "time horizon" differently than adults so they are only concerned about the next 1-3 days whereas an adult engages in "long-term planning".
For more information, see:
http://www.internationaljusticeproject.org/pdfs/juvBrainDev.pdf
This suggests that an adolescent may make an emotional decision to enter the military and may be predisposed to make emotional decisions in combat once in the military. Rationality may have little force in decision making for many of the adolescents caught in the midst of combat. Combine this with stories of basic training where soldiers view battle scenes while listening to loud rock music and this suggests that the military knows about these emotional responses and deliberately manipulates young soldiers for its own ends.
Anecdotally, I have heard a soldier that remarked that he got caught up in the loud music and battle scenes and started hating Arabs (shown in the videos) until he took a step back and started processing that brainwashing. Other studies have shown that the military has made great strides in its training to psychologically help its soldiers be able to kill the enemy (The most helpful suggestion instead of an offensive command, is defensive: to protect your battle buddy).
With the development that has taken place in neuro-biology, should a new minimum age be considered for military service? Say 21?
Suggestions that the military is exploiting the most vulnerable and manipulating them for the military's own ends can be thwarted somewhat by raising the minimum age and by recruiting more soldiers from among the richer classes. Raising the minimum age would put rationality at the forefront and allow each volunteer to make sound decisions when joining the service and also in combat.
This would also perversely shut down the argument of soldiers that they should be allowed to drink alcohol at 18...since if they are able to fight and die for their country they should certainly be allowed to drink. Actually, both are harmful to brains that are still developing.
Wednesday, July 23, 2008
Overheard at the Airport
When taking the early (5:40AM) flight last Thursday to visit some college buddies, I overheard a too-wide-awake earnest fellow making conversation with the sad sap unfortunate enough to sit next to him (I was pretending to sleep).
"Its a fire retardant suit, not retarded, retardant."
"Its a fire retardant suit, not retarded, retardant."
Wednesday, July 16, 2008
Jose Garcia Fixes Cars
While I was traveling to Bolivia and Peru, Jose Garcia fixed my Geo Prizm.
I had a large dent in the car on the drivers side, because of an accident a couple years ago. The insurance company totaled the car and didn't give me enough to fix the dent through a shop.
Jose replaced a door, did the body work, fixed my drivers side mirror, painted the car, and either replaced the rims or made them look like new. All in all, my car looks NEW....it looks fantastic!!
Jose is looking to continue this work on the side...a couple Saturdays each month.
You should call him at: 402-208-6476. He does fantastic work. I have included pictures as proof.
I had a large dent in the car on the drivers side, because of an accident a couple years ago. The insurance company totaled the car and didn't give me enough to fix the dent through a shop.
Jose replaced a door, did the body work, fixed my drivers side mirror, painted the car, and either replaced the rims or made them look like new. All in all, my car looks NEW....it looks fantastic!!
Jose is looking to continue this work on the side...a couple Saturdays each month.
You should call him at: 402-208-6476. He does fantastic work. I have included pictures as proof.
Sunday, July 13, 2008
Paranoid
Some people have a lot of faith in our government. I'm not one of them.
Here are some everyday events that normal Americans are either excited about or in which they take comfort:
1) Flyovers by military aircraft at sporting events. When F-16s fly in formation over some baseball game, most Americans think that these flyovers are cool, or they elicit some patriotic zeal, or think this demonstrates how innocuous our military is to ordinary Americans.
I find them tedious and a sign that we, as a nation, are militaristic at our core. I also suspect that they are a demonstration of might and try to scare the rebellious sort. I wonder if they are taking pictures of the crowd as they flyover.
2) ROTC in college campuses. Lots of Americans believe there should be compulsory national service to instill a sense of country, patriotism, and believing in something bigger than themselves. ROTC is designed to build up leaders within our military and ensure that the best and brightest receive officer positions.
I have been to a number of countries where civil strife started in the universities. Many universities in the last 50 years have been hotbeds of communist, anarchistic, and/or anti-corruption thought. I think the ROTC was put on campuses in the States to keep trouble at a minimum and ensure a quick response to radical ideas. I like the idea that universities are the testing ground for radical ideas and hate the idea of ROTC being on college campuses.
3) American flags being in churches.
Do you know that flag statutes declare that the American flag must take the position of honor above any other flag (including the Christian flag), even in a church? Besides questioning why there is or needs to be a Christian flag, I'm also distraught that the American flag is even placed in a church.
Our allegiance as Christians is to Christ alone. (Why I also don't say the Pledge of Allegiance. gasp.)
4) Saying the Pledge of Allegiance
The "Under God" part of the pledge is the LEAST offensive part of it.
5) The Star Spangled Banner as our national anthem (from the War of 1812). The only worse song might be: This Land is your Land.
Just to let you know I'm not completely unpatriotic, here are a list of my favorite things about the US political system:
1) The Constitution and the Bill of Rights
2) Our founding fathers; flawed but genius (Read the Federalist Papers)
3) Separation of powers (not just Legislature, Executive, and Judicial but also Federal/State separation and structuring state capitals as different from the state's most populous cities).
4) Civic institutions
5) Volunteering
Here are some everyday events that normal Americans are either excited about or in which they take comfort:
1) Flyovers by military aircraft at sporting events. When F-16s fly in formation over some baseball game, most Americans think that these flyovers are cool, or they elicit some patriotic zeal, or think this demonstrates how innocuous our military is to ordinary Americans.
I find them tedious and a sign that we, as a nation, are militaristic at our core. I also suspect that they are a demonstration of might and try to scare the rebellious sort. I wonder if they are taking pictures of the crowd as they flyover.
2) ROTC in college campuses. Lots of Americans believe there should be compulsory national service to instill a sense of country, patriotism, and believing in something bigger than themselves. ROTC is designed to build up leaders within our military and ensure that the best and brightest receive officer positions.
I have been to a number of countries where civil strife started in the universities. Many universities in the last 50 years have been hotbeds of communist, anarchistic, and/or anti-corruption thought. I think the ROTC was put on campuses in the States to keep trouble at a minimum and ensure a quick response to radical ideas. I like the idea that universities are the testing ground for radical ideas and hate the idea of ROTC being on college campuses.
3) American flags being in churches.
Do you know that flag statutes declare that the American flag must take the position of honor above any other flag (including the Christian flag), even in a church? Besides questioning why there is or needs to be a Christian flag, I'm also distraught that the American flag is even placed in a church.
Our allegiance as Christians is to Christ alone. (Why I also don't say the Pledge of Allegiance. gasp.)
4) Saying the Pledge of Allegiance
The "Under God" part of the pledge is the LEAST offensive part of it.
5) The Star Spangled Banner as our national anthem (from the War of 1812). The only worse song might be: This Land is your Land.
Just to let you know I'm not completely unpatriotic, here are a list of my favorite things about the US political system:
1) The Constitution and the Bill of Rights
2) Our founding fathers; flawed but genius (Read the Federalist Papers)
3) Separation of powers (not just Legislature, Executive, and Judicial but also Federal/State separation and structuring state capitals as different from the state's most populous cities).
4) Civic institutions
5) Volunteering
Saturday, July 12, 2008
Great Movie
I just watched "In Bruges" this week. Sad, funny, thoughtful.
Beware of the many, many, many, many bad words.
Great movie...I think may be in my top 10. Stupid movie poster though.
Beware of the many, many, many, many bad words.
Great movie...I think may be in my top 10. Stupid movie poster though.
Market Failures Con't
Menu Prices:
In the beginning of any micro or macro- economics course, university students are taught about supply and demand curves. One of the fun things about continuing on in study is the ability to entertain ideas that turn that understanding on its head. For instance, 4th year students may be invited to throw out the supply and demand curve entirely.
In a normal supply and demand curve, any increase in demand (with the same supply) will increase the price of the good and over the long run invite new suppliers into the market to meet the new demand. If supply of a particular good increases (and demand remains the same), the price of the good immediately goes down until demand recovers and/or suppliers leave the marketplace.
A Keynesian critique of the law of supply and demand is “menu prices”. The term “menu prices” refers to the standard practice of businesses to figure out their costs and then charge a premium over those costs that is consistent with their industry. Supply and demand changes too quickly, is costly to calculate, and therefore difficult to implement price changes quickly. Managing to figure out costs and then charge a premium is a much simpler way for small businesses to operate. Plus, the internet can provide industry-specific mark-ups. Look at Inc. or Entrepreneur and one of the authors will encourage you to enter an industry with high margins (high mark-ups over costs).
If there were true supply and demand, a new entrant would enter the market to drive down these margins. Price stability, rather than the supply and demand curves and their fluctuating prices, is much more of the priority for our economy.
The specific term “menu prices” refers to the prices set by a local restaurant, which vary little over days or weeks. The owner of the restaurant believes that customers will become angry if she offers a hamburger for $4.00 Monday night but because business has been brisk in the days after, she is selling the same hamburger for $10 Friday night. This price instability endangers customer’s goodwill. She is also upset at having to print new menus every week, which can be expensive. Therefore, she keeps the value of price stability over fluctuations in price caused by demand or supply changes.
Since the free market dictates that prices change and change as often as each input (supply and/or demand) changes, there are only a few businesses that change their prices as frequently as supply and demand changes.
The problem that "menu prices" introduces into the market is a certain inertia that helps price stability but ensures a lack of true competition in certain industries. New suppliers entering a particular market with high margins have entered that market FOR its high margins and would not jeopardize those profits. So there are industry pockets that remain insulated from competition and the market. (Restaurant or medical equipment sales anyone?)
In the beginning of any micro or macro- economics course, university students are taught about supply and demand curves. One of the fun things about continuing on in study is the ability to entertain ideas that turn that understanding on its head. For instance, 4th year students may be invited to throw out the supply and demand curve entirely.
In a normal supply and demand curve, any increase in demand (with the same supply) will increase the price of the good and over the long run invite new suppliers into the market to meet the new demand. If supply of a particular good increases (and demand remains the same), the price of the good immediately goes down until demand recovers and/or suppliers leave the marketplace.
A Keynesian critique of the law of supply and demand is “menu prices”. The term “menu prices” refers to the standard practice of businesses to figure out their costs and then charge a premium over those costs that is consistent with their industry. Supply and demand changes too quickly, is costly to calculate, and therefore difficult to implement price changes quickly. Managing to figure out costs and then charge a premium is a much simpler way for small businesses to operate. Plus, the internet can provide industry-specific mark-ups. Look at Inc. or Entrepreneur and one of the authors will encourage you to enter an industry with high margins (high mark-ups over costs).
If there were true supply and demand, a new entrant would enter the market to drive down these margins. Price stability, rather than the supply and demand curves and their fluctuating prices, is much more of the priority for our economy.
The specific term “menu prices” refers to the prices set by a local restaurant, which vary little over days or weeks. The owner of the restaurant believes that customers will become angry if she offers a hamburger for $4.00 Monday night but because business has been brisk in the days after, she is selling the same hamburger for $10 Friday night. This price instability endangers customer’s goodwill. She is also upset at having to print new menus every week, which can be expensive. Therefore, she keeps the value of price stability over fluctuations in price caused by demand or supply changes.
Since the free market dictates that prices change and change as often as each input (supply and/or demand) changes, there are only a few businesses that change their prices as frequently as supply and demand changes.
The problem that "menu prices" introduces into the market is a certain inertia that helps price stability but ensures a lack of true competition in certain industries. New suppliers entering a particular market with high margins have entered that market FOR its high margins and would not jeopardize those profits. So there are industry pockets that remain insulated from competition and the market. (Restaurant or medical equipment sales anyone?)
Friday, July 11, 2008
Unemployment and Inflation Numbers Suspicious
The US likes to taut its low unemployment figures and criticize Europe for its higher unemployment figures...suggesting that it is Europe's rigid labor unions, overly generous worker safety nets, or employee protections that drive up their unemployment.
Unemployment figures are rated from U1 to U7, U1 being the narrowest definition of unemployment and U7 the widest definition. One of the reasons the US unemployment figures are lower are they choose to report a different figure than most of Western Europe. The US quotes from U3 and most of Western Europe quotes from U6. There is nothing wrong with using either number, per say, except when used to suggest economic superiority.
U3 Total unemployed, as a percent of the civilian labor force (the official unemployment rate for the US)
U6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers
I have heard some economists and businessmen recently suggest that the inflation numbers being published in the States are cooked and bear no resemblance to inflation figures published twenty years ago. Core inflation, the number the economists worry about, doesn't take into effect volatile energy and food prices. However, these are the numbers that have been rising exponentially and affecting all sorts of other prices. Inflation is rising and the Fed should act but can't because higher interest rates may predispose the economy even more to recession.
Unemployment figures are rated from U1 to U7, U1 being the narrowest definition of unemployment and U7 the widest definition. One of the reasons the US unemployment figures are lower are they choose to report a different figure than most of Western Europe. The US quotes from U3 and most of Western Europe quotes from U6. There is nothing wrong with using either number, per say, except when used to suggest economic superiority.
U3 Total unemployed, as a percent of the civilian labor force (the official unemployment rate for the US)
U6 Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers
I have heard some economists and businessmen recently suggest that the inflation numbers being published in the States are cooked and bear no resemblance to inflation figures published twenty years ago. Core inflation, the number the economists worry about, doesn't take into effect volatile energy and food prices. However, these are the numbers that have been rising exponentially and affecting all sorts of other prices. Inflation is rising and the Fed should act but can't because higher interest rates may predispose the economy even more to recession.
3 Things You May Not Know About Oil
From "The End of Oil" by Paul C. Roberts
1) Oil fields are considered mature when they pump more water out of the ground than oil. As such, every major oil field in the world is already pumping more water out of the ground than oil (The US is very mature at something like 100 to 1; Saudi Arabia one of the least mature at 5 to 1). As such, oil will just continue to get more expensive because the cost of retrieving oil increases dramatically as the well matures. Add increased demand from China and India and supply cannot keep up with demand.
2) The oil fields that we will find in the future will in large part be harder to get to, harder to extract, and harder to ship to appropriate markets. Geologists largely know where the remaining oil will come from. One boon for oil companies was previously "closed" countries....say communist countries that opened to outside investment and outside exploration. Do you know how long it took oil executives to find the largest oil well in all of Kazakhstan, once it opened? 36 minutes.
3) OPEC sets the quota for each country's oil production based on how many oil reserves they establish. (Oil reserves meaning how much oil a country has already discovered but has not yet tapped). This encourages participating OPEC to inflate their oil reserve numbers to be able to pump more oil today. A geologist traveling to Saudi Arabia several years ago concluded that Saudi Arabia had VASTLY overestimated its own oil reserves.
1) Oil fields are considered mature when they pump more water out of the ground than oil. As such, every major oil field in the world is already pumping more water out of the ground than oil (The US is very mature at something like 100 to 1; Saudi Arabia one of the least mature at 5 to 1). As such, oil will just continue to get more expensive because the cost of retrieving oil increases dramatically as the well matures. Add increased demand from China and India and supply cannot keep up with demand.
2) The oil fields that we will find in the future will in large part be harder to get to, harder to extract, and harder to ship to appropriate markets. Geologists largely know where the remaining oil will come from. One boon for oil companies was previously "closed" countries....say communist countries that opened to outside investment and outside exploration. Do you know how long it took oil executives to find the largest oil well in all of Kazakhstan, once it opened? 36 minutes.
3) OPEC sets the quota for each country's oil production based on how many oil reserves they establish. (Oil reserves meaning how much oil a country has already discovered but has not yet tapped). This encourages participating OPEC to inflate their oil reserve numbers to be able to pump more oil today. A geologist traveling to Saudi Arabia several years ago concluded that Saudi Arabia had VASTLY overestimated its own oil reserves.
Market Failures
Pricing Problems:
The market’s most fundamental error is in its assumption that whoever purchases a particular good will use that good most efficiently. In the supply and demand curve, the person or company willing to pay the highest price for a particular good always receives that good and is expected to use it more efficiently than those who could not pay as high a price.
Say a manufacturing company attempts to purchase steel. This “automobile factory” purchases the steel and pays a higher price because it is expected to use that steel more efficiently than its competitors by producing an auto and then reselling the product for the most money possible. They will pay a higher price because they can sell the finished product for a higher price. This market mechanism assures that the most value possible is being added at each stage of production.
However, at the consumer level, this assumption breaks down. A consumer who is willing to pay $100 for an ice cream cone cannot reasonably be expected to receive 10X the satisfaction or 'utility' of someone who pays $10 for that same good. Another scary proposition could be bidding for a much more important resource: water. Will someone who just drank water 4 hours ago, but can purchase a bottle of water for $100, use that water more efficiently than someone who hasn’t had anything to drink for 2 days but can only pay $1?
Americans have been on the winning side of this bidding war; we’ve had our choice of products (agricultural, manufacturing, services). Most countries try to sell to the American market because it can offer the highest price. In a graphical representation of the world, we can see most products being produced throughout the world but shipped to the US market to be sold here. This way, we see most of the benefits and few of the downsides of the market. We are a net importer…of almost everything…natural resources, finished goods, and even food. In 2005, the US was expected to be a net importer of food.
I read awhile ago, in a National Geographic magazine, that the Japanese have used some technology (satellites or radar or sonar) to find the remaining big schools of fish in the oceans. This brought them to Africa to fish off the coast of Senegal. They brought in big and efficient fishing boats and put local fisherman out of business. They use the best resources to fish these waters because they can afford to....they can sell the fish they acquire in the wealthiest markets in the world. This isn’t just a tale of the market working towards greater efficiency. It means that the Senegalese are not getting enough protein in their diet because they aren’t eating enough fish. Their way of life is destroyed because someone can pay a higher price elsewhere.
It reminds me of the Biblical story of Nathan and David. Nathan tells David the story of a man who was very wealthy and had many sheep. He threw a celebration and instead of slaughtering his own sheep for the occasion, he went to his neighbor and slaughtered that neighbor’s only beloved sheep. David, enraged, says that this wealthy man certainly must die. Are we, as Japanese or Americans, guilty of this same sin?
Americans will see this problem more and more in the coming years…as it loses its pricing power (the dollar no longer reigns supreme). Or maybe when Americans start to see the divide widen in this country. The problem comes into focus as cities like Las Vegas can outbid farmers and smaller communities for water that is becoming privatized (more market-based). Does Las Vegas use water more efficiently than farmers or small towns in the Plains? Does it use it more wisely or produce a greater societal benefit than food production? It may technically recycle the water more than a farmer, but where do wave pools compare in importance to wheat crops (with the caveat that our crops are still grown for food and not for our gas tank)?
The ability to pay a higher price for a good rarely suggests that this good will be used better or more efficiently. It just shows what we value in our culture...whether its Vegas, DisneyWorld, or bottled water.
The market’s most fundamental error is in its assumption that whoever purchases a particular good will use that good most efficiently. In the supply and demand curve, the person or company willing to pay the highest price for a particular good always receives that good and is expected to use it more efficiently than those who could not pay as high a price.
Say a manufacturing company attempts to purchase steel. This “automobile factory” purchases the steel and pays a higher price because it is expected to use that steel more efficiently than its competitors by producing an auto and then reselling the product for the most money possible. They will pay a higher price because they can sell the finished product for a higher price. This market mechanism assures that the most value possible is being added at each stage of production.
However, at the consumer level, this assumption breaks down. A consumer who is willing to pay $100 for an ice cream cone cannot reasonably be expected to receive 10X the satisfaction or 'utility' of someone who pays $10 for that same good. Another scary proposition could be bidding for a much more important resource: water. Will someone who just drank water 4 hours ago, but can purchase a bottle of water for $100, use that water more efficiently than someone who hasn’t had anything to drink for 2 days but can only pay $1?
Americans have been on the winning side of this bidding war; we’ve had our choice of products (agricultural, manufacturing, services). Most countries try to sell to the American market because it can offer the highest price. In a graphical representation of the world, we can see most products being produced throughout the world but shipped to the US market to be sold here. This way, we see most of the benefits and few of the downsides of the market. We are a net importer…of almost everything…natural resources, finished goods, and even food. In 2005, the US was expected to be a net importer of food.
I read awhile ago, in a National Geographic magazine, that the Japanese have used some technology (satellites or radar or sonar) to find the remaining big schools of fish in the oceans. This brought them to Africa to fish off the coast of Senegal. They brought in big and efficient fishing boats and put local fisherman out of business. They use the best resources to fish these waters because they can afford to....they can sell the fish they acquire in the wealthiest markets in the world. This isn’t just a tale of the market working towards greater efficiency. It means that the Senegalese are not getting enough protein in their diet because they aren’t eating enough fish. Their way of life is destroyed because someone can pay a higher price elsewhere.
It reminds me of the Biblical story of Nathan and David. Nathan tells David the story of a man who was very wealthy and had many sheep. He threw a celebration and instead of slaughtering his own sheep for the occasion, he went to his neighbor and slaughtered that neighbor’s only beloved sheep. David, enraged, says that this wealthy man certainly must die. Are we, as Japanese or Americans, guilty of this same sin?
Americans will see this problem more and more in the coming years…as it loses its pricing power (the dollar no longer reigns supreme). Or maybe when Americans start to see the divide widen in this country. The problem comes into focus as cities like Las Vegas can outbid farmers and smaller communities for water that is becoming privatized (more market-based). Does Las Vegas use water more efficiently than farmers or small towns in the Plains? Does it use it more wisely or produce a greater societal benefit than food production? It may technically recycle the water more than a farmer, but where do wave pools compare in importance to wheat crops (with the caveat that our crops are still grown for food and not for our gas tank)?
The ability to pay a higher price for a good rarely suggests that this good will be used better or more efficiently. It just shows what we value in our culture...whether its Vegas, DisneyWorld, or bottled water.
Thursday, July 10, 2008
A Meme
Thanks Monica for the invitation to Meme. You're great....although does this technically fall under the definition of a meme?
Here are the rules:
1. Link to your tagger and post these rules on your blog.
2. Share 7 facts about yourself on your blog, some random, some weird.
3. Tag 7 people at the end of your post by leaving their names as well as links to their blogs.
4. Let them know they are tagged by leaving a comment on their blog.
1) I grew late. My freshman high school English teacher who was 4'11" said she was taller than I was as a freshman. I don't know if I would go that far. Thankfully I didn't experience many of more horrific growing pains: actual growing pains, cracking voice, or wearing clothes obviously too small for my frame.
2) I had braces for 4.5 years. Enough for head-gear and rubber bands. People who saw me the day they were removed must have thought I was flirty....moving my tongue over the smooth rounded surfaces of my teeth. Sorry.
3) I like the sounds of the 50's and early 60's.... Paul Anka, Bobby Lewis, Mamas and Papas, etc. It makes me smile.
4) I like to listen to talk radio. Since Nebraska doesn't have "liberal" talk radio, I end up listening to conservative talk: Sean Hannity ("You're a great American Sean"..."you're a great American" {listener}), Neal Boortz, Michael Medved, Hugh Hewitt, Mike Gallagher, Dennis Prager, Bill O'Reilly. My favorite is definitely Hugh Hewitt...and I'm not being sarcastic. His specialties seem to be law and military news. (I may make another future blog post about the marketing of "fear" by advertisers on conservative radio....protect your identity, buy a paper shredder, invest in gold).
5) I can't float. Or I don't think I can...my legs seem to drift down in the water.
6) I like most food. Especially Mexican, Argentinian BBQ, and Mediterranean.
7) Being the oldest male grandchild, I received a family heirloom....a gold-plated pocketwatch on my 21st birthday for not smoking until then. The pocketwatch was given by my great-grandfather to my grandfather for not smoking at his 21st birthday.
I have smoked cigars, pipes, water pipes, and cloves since then...all legal... but does this invalidate the receipt of the gift? Or was it just to reward youthful wisdom and not bowing to peer pressure in childhood?
In honor of my recent travel, memes now for the following people: Linsey Higgins, Monica Ghali, Sarah Dobrin, Cara Strauss, Wes and Heather Goertzen, and Katie Garner.
Here are the rules:
1. Link to your tagger and post these rules on your blog.
2. Share 7 facts about yourself on your blog, some random, some weird.
3. Tag 7 people at the end of your post by leaving their names as well as links to their blogs.
4. Let them know they are tagged by leaving a comment on their blog.
1) I grew late. My freshman high school English teacher who was 4'11" said she was taller than I was as a freshman. I don't know if I would go that far. Thankfully I didn't experience many of more horrific growing pains: actual growing pains, cracking voice, or wearing clothes obviously too small for my frame.
2) I had braces for 4.5 years. Enough for head-gear and rubber bands. People who saw me the day they were removed must have thought I was flirty....moving my tongue over the smooth rounded surfaces of my teeth. Sorry.
3) I like the sounds of the 50's and early 60's.... Paul Anka, Bobby Lewis, Mamas and Papas, etc. It makes me smile.
4) I like to listen to talk radio. Since Nebraska doesn't have "liberal" talk radio, I end up listening to conservative talk: Sean Hannity ("You're a great American Sean"..."you're a great American" {listener}), Neal Boortz, Michael Medved, Hugh Hewitt, Mike Gallagher, Dennis Prager, Bill O'Reilly. My favorite is definitely Hugh Hewitt...and I'm not being sarcastic. His specialties seem to be law and military news. (I may make another future blog post about the marketing of "fear" by advertisers on conservative radio....protect your identity, buy a paper shredder, invest in gold).
5) I can't float. Or I don't think I can...my legs seem to drift down in the water.
6) I like most food. Especially Mexican, Argentinian BBQ, and Mediterranean.
7) Being the oldest male grandchild, I received a family heirloom....a gold-plated pocketwatch on my 21st birthday for not smoking until then. The pocketwatch was given by my great-grandfather to my grandfather for not smoking at his 21st birthday.
I have smoked cigars, pipes, water pipes, and cloves since then...all legal... but does this invalidate the receipt of the gift? Or was it just to reward youthful wisdom and not bowing to peer pressure in childhood?
In honor of my recent travel, memes now for the following people: Linsey Higgins, Monica Ghali, Sarah Dobrin, Cara Strauss, Wes and Heather Goertzen, and Katie Garner.
Monday, July 7, 2008
Strangest Feeling
My flights home were kind of crazy.
Very short layovers, which normally I love, but both connections were so tight that I ended up running to the gate in Miami and had just enough time in Dallas.
The flight into Miami was late and then I had to get through immigration, customs, retrieve bags, recheck bags and go through security again in 1 hour. That was crazy.
I think my cold sore is from that stress.
Also, on the Lima to Miami flight, I had the strangest feeling: All of a sudden I felt extremely hot, sweaty, and nauseous. I have never felt anything like that before. It was horrible!! I felt like I had been drugged. The plane was extremely cold to begin with, but it didn't matter...I could not get enough cool wind on my body to feel better. My whole body was sweating; I could feel my forearms sweating, which I think is unusual for me. I also felt extremely nauseous and was trying to remain as still as possible. This went on for about 30 minutes.
It was a terrible experience. I said some prayers during the time and believe God was gracious to let it subside.
I'm home now; have a cold...but overall am doing well.
Very short layovers, which normally I love, but both connections were so tight that I ended up running to the gate in Miami and had just enough time in Dallas.
The flight into Miami was late and then I had to get through immigration, customs, retrieve bags, recheck bags and go through security again in 1 hour. That was crazy.
I think my cold sore is from that stress.
Also, on the Lima to Miami flight, I had the strangest feeling: All of a sudden I felt extremely hot, sweaty, and nauseous. I have never felt anything like that before. It was horrible!! I felt like I had been drugged. The plane was extremely cold to begin with, but it didn't matter...I could not get enough cool wind on my body to feel better. My whole body was sweating; I could feel my forearms sweating, which I think is unusual for me. I also felt extremely nauseous and was trying to remain as still as possible. This went on for about 30 minutes.
It was a terrible experience. I said some prayers during the time and believe God was gracious to let it subside.
I'm home now; have a cold...but overall am doing well.
From Kathleen Parker, writer and author
Who I saw on C-Span last night. I found her fascinating and engaging.
This excerpt was referenced during the show:
in post-Judeo-Christian America, the sports club is the new church. Global warming is the new religion. Vegetarianism is the new sacrament. Hooking up, the new prayer. Talk therapy, the new witnessing. Tattooing and piercing, the new sacred symbols and rituals.
This excerpt was referenced during the show:
in post-Judeo-Christian America, the sports club is the new church. Global warming is the new religion. Vegetarianism is the new sacrament. Hooking up, the new prayer. Talk therapy, the new witnessing. Tattooing and piercing, the new sacred symbols and rituals.
Thursday, July 3, 2008
Being in Bolivia and Peru makes me nostalgic
and think of stories from previous travels.
Like:
-Guptas in Kolkata (i was a lightweight...double egg, double meat)
-the 40 hour train ride between Kolkata and Chennai
-Khalsas (not spelling it right) with Tuna and him drawing on napkins
-watching an old man on a dirt road in Kathmandu walk slowly with a cane, stop, pull a slingshot out of his back pocket, aim at an innocent cow and hit it, then keep walking
-coming to Peru back in, I think 1999, and seeing the changes since then...new highrises and restaurants, and new highways.
-seeing the ugliest dogs i've EVER seen from Pachamacac (sp?) the old ancient Incan ruins outside of Lima. (seems like the dogs might be that old too).
- the visa & customs stop between Bulgaria and Turkey where they searched EVERYTHING. every bag, every train compartment, every train piece.
-how El Alto and Kathmandu remind me of each other....the close airports, airplane graveyards, unpaved roads, and building styles. with "development" they are looking less like each other.
-air travel has a definite hierarchy in terms of who are the best carriers:
1) international asian carriers are better than ALL US carriers and most european carriers
2) middle eastern carriers can be quite good.
3) singapore airlines is best. then cathay pacific, nippon, or thai. also, i've heard qatar is good and british airways is supposedly hit or miss.
-football (soccer) matches in brazil. i watched a bit of a game last night in Lima at a restaurant with flares and such in the stands. gave me a flashback. :-)
-being told to be the goalie in Galati, Romania because i wasn't any good. then being forced by a 3 foot kid to get out of the net because i let a ball go through.
-tight, tight. reference sierra leone.
-dancing in Buenos Aires, Argentina after a barbeque (maybe my best meal ever)
-eating seviche on this trip and it being in my top 10 meals.
-trying to measure my travel by how many different forms of transportation i've taken. unfortunately...only about 4 different kinds in one trip (plane, car, helicopter, bus). now that i think about it...the trip to Turkey had plane, car, train, bus, and boat within the trip.
these are all related to location. many more regarding the people i've met. more memories will certainly come flooding in....and i'll try to post those.
Like:
-Guptas in Kolkata (i was a lightweight...double egg, double meat)
-the 40 hour train ride between Kolkata and Chennai
-Khalsas (not spelling it right) with Tuna and him drawing on napkins
-watching an old man on a dirt road in Kathmandu walk slowly with a cane, stop, pull a slingshot out of his back pocket, aim at an innocent cow and hit it, then keep walking
-coming to Peru back in, I think 1999, and seeing the changes since then...new highrises and restaurants, and new highways.
-seeing the ugliest dogs i've EVER seen from Pachamacac (sp?) the old ancient Incan ruins outside of Lima. (seems like the dogs might be that old too).
- the visa & customs stop between Bulgaria and Turkey where they searched EVERYTHING. every bag, every train compartment, every train piece.
-how El Alto and Kathmandu remind me of each other....the close airports, airplane graveyards, unpaved roads, and building styles. with "development" they are looking less like each other.
-air travel has a definite hierarchy in terms of who are the best carriers:
1) international asian carriers are better than ALL US carriers and most european carriers
2) middle eastern carriers can be quite good.
3) singapore airlines is best. then cathay pacific, nippon, or thai. also, i've heard qatar is good and british airways is supposedly hit or miss.
-football (soccer) matches in brazil. i watched a bit of a game last night in Lima at a restaurant with flares and such in the stands. gave me a flashback. :-)
-being told to be the goalie in Galati, Romania because i wasn't any good. then being forced by a 3 foot kid to get out of the net because i let a ball go through.
-tight, tight. reference sierra leone.
-dancing in Buenos Aires, Argentina after a barbeque (maybe my best meal ever)
-eating seviche on this trip and it being in my top 10 meals.
-trying to measure my travel by how many different forms of transportation i've taken. unfortunately...only about 4 different kinds in one trip (plane, car, helicopter, bus). now that i think about it...the trip to Turkey had plane, car, train, bus, and boat within the trip.
these are all related to location. many more regarding the people i've met. more memories will certainly come flooding in....and i'll try to post those.
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