Stephen Roach Op-Ed Piece

Roach reminds readers (ahem, the FOMC) that altruism is not the impetus driving foreign entities to fund our nation’s debt, and that “no nation has ever devalued its way into prosperity.” [NYT]

SF mayorial race: best thing I read all day…by far

“…San Francisco Mayor Gavin Newsom is running for re-election virtually unopposed, more popular than ever, after admitting to having an affair with a top aide’s wife and entering an alcohol-treatment program.

Newsom, whose approval ratings are running close to 80 percent, said he expects a credible candidate to emerge eventually. So far, challengers include a street-performing clown, a homeless man, an advocate for nudism, and a candidate who pledges to wear a camera so voters can monitor his performance in office.” [Bloomberg]

Weird thing/true story: someone that knew a friend of mine tried to set her up w/ Newsom about a year after his divorce in 2005 –she, thinking him slimy, turned down the opportunity. Needless to say, we gave her a serious amount of shite at the time –after all he’s tall, good looking, single and the mayor of SF!, which, incidentally, meant much more at the time.

Congestion pricing: LA traffic, kill me now

Los Angeles traffic, perhaps the only experience other than Real Analysis in Evans to force me to ponder the pros and cons of suicide, is the kind of phenomenon that causes you to give up friends and family altogether, provided they live in the godforsaken jungle and the only way to get to them is the 210E or 405 in any direction. 

After the relative success of congestion pricing –charging high fees to consumers for goods/services during times of heavy use– on roadways in places like London (20% fewer cars on the road) and Singapore (40% reduction in AM traffic),* some think implementing such fees on Southern California freeways may be a better alternative to the gasoline tax which, at pennies on the gallon goes virtually unnoticed by consumers and will consequently have little effect on their driving behaviors until our gasoline prices catch up with the rest of the world (Iran excluded).**As a consumer, I’d welcome congestion pricing with open arms, and expect that such fees would alter my own driving habits (I currently travel by way of a toll road twice daily –one that employs congestion pricing), and thus those of my commuting peers, in the following ways:

1. Gives people somewhat objective means to make more efficient decisions regarding where to live –incentivizes moving closer to workplaces… maybe you’d have thought twice about moving to Temecula if you had to price in a $10 daily charge to use the 405 to get to your office in Marina Del Rey –don’t laugh, people do this.
     
2. Encourages deviations from the typical workday schedule that have positive effects on the rest of the commuter’s life: for instance, I drive to work at 6am, and because the schedule is so ingrained in my psyche, even if I try, I can’t sleep past 7am on any day. Consequently, I’m always the first in line for bullshit errands that I can’t outsource.
    
3. Encourages people to be more mindful when deciding whether/how to use the roads; paying for a good has that effect on people. I find that commuters on the toll road I use are more likely to adhere to the unique speeds unofficially ascribed to each lane –you find less jams caused by the schmucks driving at the exact same speed as the guy in the lane directly adjacent to them, the same men and women who refuse to speed up or slow down in order to let anyone pass unless one blinks their headlights profusely and, in cases of real dimwits, pulls out the horn for an unpleasant start to the day: activist driving –at some point you cease believing that the hurled insults of guys like Dan Loeb make them a$$ holes, and a newfound respect washes over their images in your mind

On downsizing the USDA: notes from the Cato Institute

The Cato Institute would like nothing more than to help our misguided Congress as it hashes out a new farm bill in the coming weeks. Since Congress will most likely opt to keep up trade barriers, maybe even erect new ones, and continue ridiculous spending on subsidies and grant programs, we’d like to pay our respects to the eloquent proposal that in all likelihood will die with the passage of another ridiculous bill.

USDA Proposed Spending Cuts
by Chris Edwards
“All agricultural and rural subsidies in the U.S. Department of Agriculture’s budget should be abolished… Agricultural trade barriers should also be repealed….Forest Service subsidies to the states and private businesses should be ended. Congress should also explore options to transfer the national forests to the states or to new independent trusts that would be self-funded from forest-related receipts.

Under the proposal, the USDA would retain responsibility for animal and plant health inspections, food safety, grain and packing inspections, and conservation activities.”

 

Our own search through the Catalog of Federal Domestic Assistance yielded the following ‘necessary’ measures: 

10.081 LAMB MEAT ADJUSTMENT ASSISTANCE PROGRAM
PURPOSE: to provide immediate financial assistance to sheep and lamb producers who have recently experienced low prices and poor market conditions. Payments under this program will provide those who are eligible with an immediate infusion of funds to help pay for operating expenses and meet other financial obligations.
TYPES OF ASSISTANCE: Direct payments with unrestricted use

10.224 FUND FOR RURAL AMERICA_RESEARCH, EDUCATION, AND EXTENSION ACTIVITIES
PURPOSE: provides funds …to aid farmers, ranchers, and rural communities to address changes and challenges facing agriculture and rural communities as a result of fundamental reforms to Federal farm programs.
TYPES OF ASSISTANCE: Project Grants.

10.572 WIC FARMERS’ MARKET NUTRITION PROGRAM
PURPOSE: (1) to provide fresh, nutritious unprepared locally grown fruits and vegetables from farmers markets to [people that aren’t grown men] who participate in [a program that implies that said people value processed and prepared foods]; and (2) to expand the awareness and use of farmers’ markets and increase sales at such markets.
TYPE OF ASSISTANCE: Formula Grants.

10.774 NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER
PURPOSE: to assist the U.S. sheep and goat industries by strengthening and enhancing the production and marketing of sheep and goats and their products in the United States
TYPES OF ASSISTANCE: Direct Loans; Guaranteed/Insured Loans; Direct Payments for Specified Use; Project Grants.

10.082 TREE ASSISTANCE PROGRAM
PURPOSE: to provide assistance to tree, bush and vine owners who have trees, bushes or vines lost by a natural disaster
TYPES OF ASSISTANCE: Direct Payments with Unrestricted Use.

10.454 DAIRY OPTIONS PILOT PROGRAM
PURPOSE: to share the cost of premium for ‘put’ options purchased by DOPP participants and for a portion of the brokers’ fees to conduct and execute transactions. 
TYPES OF ASSISTANCE: Direct Payments for Specified Use

There’s a takeaway in all of this. You’ll never get back the 16 hrs/week spent working to bankroll programs that cause you to pay artificially high prices for food, so maybe its time to consider owning timber and agriculture stocks.