Friday, July 24, 2015

Amazing Good News

The following Quote is from here.
So instead of global famine, food production tripled even as world population doubled. As a result, the amount of daily calories per capita rose from 2,400 in 1960 to nearly 3,000 today.

I have a  friend who is a PHD agronomist from Brazil, he tells me that beef production per acre in Brazil would 6x higher if the average rancher used the practices of the best ranchers. So we have plenty more to go see below.
Researchers at Rockefeller University counter that—because the backlog of productivity enhancing technologies—humanity is on the verge of “peak farmland” and that by 2060 farmers will have returned an area 10 times the size of Iowa to nature, and even more if governments stop subsidizing biofuels.
The surge in food prices also occurred because huge amounts are being diverted into biofuels. Bourne notes that the International Food Policy Research Institute calculated that biofuel production drove up food prices by 40 to 70 percent. The calories in the 40 percent of the U.S. corn crop that is used to produce biofuel would be enough to feed everyone in Africa for a year. In addition, reducing the third of food that is discarded, spoiled, or eaten by pests would increase supplies by nearly 50 percent.

One other often ignored thing, if you look at the chart here, you will see that some lesser used crops like sweet potatoes yield much more per acre than wheat, corn and rice. I have read that tree crops have even greater yields per acre than potatoes. 

Then there is new technology. A 50% increase in wheat yields is at least theoretically possible. 

Tuesday, July 21, 2015

Illness and Bankruptsy

People can easily be bankrupted in the USA due to an illness. Surprisingly to some, people in countries with socialized medicine can also easily be bankrupted due to an illness. Being bankrupt in not necessarily poverty.
Almost no one in the USA lives in poverty today (mostly only the mentally ill homeless still live in poverty and they exist all over the world and are a very though case.) So if the illness is not mental illness, it will not generally drive a person into poverty in any developed country, not even the USA.
If you can go back to working after the illness you can recover from bankruptcy, most will.  In the USA if you cannot go back to working you will be able to get on medicaid and SS disability. If medicaid and SS disability did not exist things would different enough that it is hard to imagine how people would get by but I would bet that they would. 
The trick with all this is to help the needy while maintaining good incentives to produce. Could we be more charitable, yes but we could also be much more efficient in our charity.

Monday, July 20, 2015

Some Thoughts on the Minimum Wage

To me, the minimum wage looks like a very clever way for politicians to hide a tax that redistributes some money to some low wage employees. 

Who it might hurt:

  • A small number of would be low wage workers who will have no idea that the minimum wage is to blame.
  • Some marginal businesses that now pay below the minimum wage who might go bankrupt quicker.
  • Consumers who buy from those businesses. 

Only the few businesses hurt will know what hit them and they account for very few votes. From the perspective of politicians, it is a brilliant, though on might say unethical, scheme. They get to look like the good guys and companies that provide work for employees who cannot find better jobs look bad.

Who it might help:

  • Shy mostly young people working very hard for very low pay who are to shy to ask for a raise. I think that I was once in that group. 
  • Businesses that pay more than the proposed new minimum that compete businesses that pay the less than new minimum.
  • Those employees who are marginal but will keep their jobs.
  • Businesses like McDonald's and Walmart who can easily pay the higher wages but do not who compete with business that may not be able to afford the new minim wage.
  • Businesses like McDonald's and Walmart that compete for employees with business that already pay more that the new minim wage.

Some facts:

  1. Many people already work for less that minimum wage. If you believe Steven D. Levitt some of those are low level drug sellers. Some work for companies like the one a few offices over from mine called Vector Marketing.  I think in the likes of Vector Marketing most people who end up working for them pay to work. Some work scavenging for metals. A few work for cash. 

  2. Also there always some restaurants teetering on the edge of bankruptcy will a higher minimum wage not push them over the edge a little quicker?

  3. There are large regional differences in cost of living. Some of these are because of differences in real-estate costs but also due to life style.

Much depends on how you feel about the trade off between more money for some workers and less jobs and who should pay for any added expense and also how you feel about hidden taxes. 

I think many on the side of the $15/hour minimum wage believe that it is immoral pay someone so little and so are not bothered if it would drive a few small usually poorly run businesses into bankruptcy. They also have little sympathy for those who buy from low paying businesses, besides it allows them to hit McDonald's and Walmart and they can easily afford the higher wages and can most of their customers.

Monday, July 13, 2015

Government Pensions

This from Dean Baker
In fact, the main reason that some public sector funds face severe shortfalls is that politicians like Richard M. Daley and Chris Christie chose not to make required contributions.
Politicians have an incentive to over promise and under fund pensions.  (Just like the auto company executives.) So each individual should try to make the best arrangements he can and get as much money as he can now. Pensions can be a little like pie in the sky. Pay off your mortgage, add insulation and any home capital that pays back. Work as long as you can keep relations with friends and family strong. Diversify.

Thursday, July 2, 2015

Why the Greek People May Vote to Stay in the Euro

So after it has inflicted so much damage on the Greek economy, why might the Greek people vote to stay in the Euro. 

This is from the comments on this Marginal Revolution blog post by Peter Schaeffer.

There are, in fact, any number of pro-Euro factions many of which are anti-austerity. Some folks (a large faction) favor the Euro because they want their pensions, paychecks, and other handouts in Euros, not Drachmas. These folks are very opposed to austerity, but even more opposed to receiving Drachmas from the government. These folks hate the Troika, love Syriza, but will vote yes anyway.Another faction is comprised of Greeks with bank accounts. A no vote means either banks accounts will be confiscated or converted into Drachmas. These folks may or may not like Syriza or austerity, but at this point fear is the only issue on the table.Yet another faction is made up of basically conservative folks like the restaurant owner. These folks see the Euro as a tool for forcing the Greek government to reform. I don’t think they are in correct in this matter. However, it is their opinion, not the correctness of their opinion, that matters.Still another faction (center / left) sees the Euro as a symbol of Northern European efficiency, a large and well funded welfare state, effective and progressive taxes, modernity, the “tolerance” agenda, etc. Of course, they also see the Euro as means of bringing Greece up to the standard of Denmark of the Netherlands. I don’t think they are in correct in this matter. However, it is their opinion, not the correctness of their opinion, that matters.As you can see, lots of groups support the Euro for reasons that are highly divergent and in some cases contradictory. Some of these folks strongly oppose austerity. Others overtly favor austerity. They will all vote yes anyways.Finally, let me offer a quote from a Greek citizen that sums up the situation all too well.“The EU can’t afford to let us fail so we should continue to say no and they will blink and give us a better deal.”This person intends to vote no. However, plenty of folks will vote yes precisely because they think that yes means more goodies from Europe. In one respect, the advocates of yes are probably very correct. A yes vote will probably be followed by a reopening of Greece’s banks. That’s one last chance to “take the money and run”.
One other factor might be that in a country like Greece where people are more likely to ignore laws, the real rate of unemployment might be way below the reported 25%.

Wednesday, July 1, 2015

It is Hard to Measure What Reduces CO2 More - So do not say "Please scam me" to Politicians

"Researchers find Nissan LEAF creates less CO2 than Toyota Prius hybrid in west US and Texas, but more in N. Midwest"

Regionally specific lifecycle CO2 emissions per mile traveled for plug-in hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs) in the US can vary widely based on grid emission factors (i.e., the “carbon footprint” of electricity production and use), according to a new study by researchers at Carnegie Mellon University. Under some conditions, the battery electric Nissan LEAF can produce higher emissions than a Toyota Prius hybrid. The paper is published in the ACS journal Environmental Science & Technology."
The team characterized the vehicle emissions across the United States under alternative assumptions for regional electricity emission factors, regional boundaries, and charging schemes. Among the findings were that:"
It is very difficult to tell which method reduces CO2 the most per dollar. So if you go along with  subsidies to green tech beyond basic research and/or cap and trade you telling your congressman "Please scam me."

Good News on Milk Production

From here

One of the keys to higher production and higher profits is to increase the milk yield while raising fewer cows. Between 1950 and 2000, the number of dairy cows in the United States fell by more than half, yet during that same period, the average annual milk yield more than tripled. What made this possible, and how has it affected the welfare of the animals?
Wow that is some serious productivity growth and from what my Agronomist friends their is still a lot of gains to made by bringing the lower producers up to the best producers. That is without new breeds or new technology.