Land Grab

The so-called African land grab grabbed a lot of headlines at the end of 2009: Guardian, NYTimes, BBC, not a bad collection, all available through the African Agriculture blog.

Malibya, the Libyan government's development company in Mali, has built one of the largest canals in Africa. The largely critical article from The Guardian [who apparently failed to ask permission to be on the company's land] notes that 150 families were forced off their land for the canal with minimal compensation and worries that this is only the beginning.

"The government are bandits. What they are doing is completely against every law," says Ibrahim Coulibaly, president of the Coordination Nationale des Organisations Paysannes, which has been organising protests. "Even if the land does belong to the government, the people living on it still have rights, and we will do everything to fight against this injustice."

Mapping systems are said to be quite poor, causing construction workers to dig up several cemeteries which led, very understandably, to further local opposition. There are also serious concerns about water rights issues. A NYTimes article mentioned that " 'In Mozambique, one investment company discovered an entire village with its own post office on what had been described as vacant land,' said Olivier De Schutter, the United Nations food rapporteur. ... The agreement signed with the Libyans grants them the land for at least 50 years simply in exchange for developing it."

Kofi Annan, former UN secretary general, says that “The food security of the country concerned must be first and foremost in everybody’s mind. Otherwise it is straightforward exploitation and it won’t work. We have seen a scramble for Africa before. I don’t think we want to see a second scramble of that kind.”

Of course, statements like this from the state-funded companies do little to help:

Kassoum Denon, the regional head for the Office du Niger, accused the Malian opponents of being paid by Western groups that are ideologically opposed to large-scale farming. “We are responsible for developing Mali,” he said. “If the civil society does not agree with the way we are doing it, they can go jump in a lake.”

One US project is supporting 800 farmers to acquire title to about 12 acres of land each.

How large are the parcels of land being transferred to foreign governments? The World Bank estimates that, between Jan-Nov in 2009 alone, enough land to match California and West Virginia combined, more than 10 times the size of annual land transfer deals worldwide before the food price spike. In Mali, the range is between 600k [as reported by the foreigners] and 1.5 million hectares.

BBC reports that Ethiopia is selling off an area the size of Belgium populated largely by ethnic minorities at about $10/yr/ha. "The Ethiopian government stipulates that foreign investors will have to satisfy domestic food needs before they can export." The government claims that the land is unused, but there are millions of pastoralists in the country, many of whom pass through that area and none of whom are being compensated.

More posts on the Africa "land grab," and a general article mentioning several of the larger deals and concerns. Senegal is reportedly in talks with Saudi Arabia about a parcel of land 4 times the size of Manhattan.

Investing in African Agriculture

Senegal now produces 50% of its rice consumption, according to the government. This is up significantly from earlier and claimed to be the result of the president's agricultural investment program. Producers associations apparently claim production is not up that much.ni

Tanzania is hoping to triple rice production in three years. They are partnering with AfricaRice, targeting larger farms, and pushing genetically modified Nerica (NEw RICe for Africa) varieties. If successful, this would move Tanzania from being a rice importer to a rice exporter. The article praises Nerica:

Guinean farmers have managed to increase their yields by 50 per cent without the use of fertilisers and by more than 200 percent with fertilisers. Cultivating Nerica varieties also has shown a positive effect on schooling rate of children. This effect is partly the result of Nerica’s shorter growth cycle and higher weed competitiveness, alleviating the labour burden put on children, and partly as a result of the higher yields and quality, generating higher revenues.

A Norwwegian company is also investing in Tanzanian fertilizer capacity, according to a company press release. The Mozambique government is investing in livestock, also according to company press releases.

Researchers speaking at the December climate change conference in Mexico argued that a "culture of maize" was holding back African farmers' ability to cope with climate change.

Blessing Chinsinga, science and research lecturer with Chancellor College University of Malawi: “While politicians equate the availability of maize to food security, a family without maize in the farming communities is associated with vulnerability. If you have millet or sorghum, many will still think you are desperate because you do not have maize.” ...

Mclay Kanyangarara, climate change advisor for the Common Market for Eastern and Southern Africa:  “Maize is an introduced crop and the small grains have always been our traditional indigenous crops, which are better suited to our climate. Maize is also more capital intensive, requiring a lot of fertilizer and pesticides and we need to realise that we cannot force it to grow."

The mechanization of tea leaf picking in Kenya is not met with universal approval. Anyone surprised?

Food Crises in Africa

Minot of IFPRI researched the transmission of the 2007/08 global food price crisis to African food prices in 12 countries. African food prices increased about 63%, with significant variation - much larger in Malawi, smaller in Uganda for instance. With a more concentrated set of prices, about half of the rice prices moved significantly with global food prices but most other food prices did not respond significantly over the longer term. He hypothesizes three factors that would influence this: the size of the shifts, the importance of oil prices in the crisis, and local policy factors. "In general there isn't a strong relationship between African prices and world market prices" and any connections are stronger for wheat and rice than other commodities.

The Tunisian revolution is unusual for many reasons. One is just that revolutions are unusual in Africa. A second is that it does not appear that the revolters have anyone in mind they would like to put in power; they're just kind of against whoever takes the reins at the moment. A third is that there is a wide variety of reasons given by the protestors, including responses to high food prices but that isn't the first thing being mentioned in most stories. A fourth is that Tunisia also appears to be unusual when compared with other Arab states, Cowen's principle mention being that there are significant policy areas they get right, like clean water provision.

Food prices are rising fast in Cote d'Ivoir:

In the northern city of Odienné and in Gagnoa in central Côte d’Ivoire, before the election crisis a kilogram of sugar cost the equivalent of about $1.25. It now costs $2.40; and the same goes for a litre of cooking oil. A sack of rice now costs around $35 in Odienné and the centre-north city of Korhogo; families could buy the same sack before the political crisis for around $26. In Abidjan [the capital] a kilogram of meat cost $2.80 before; now prices range between $4.40 and $5. ...

In Abidjan’s wealthier neighbourhood of Cocody, Fatim Touré [food retailer] sat waiting for clients. “Many people just turn around when I tell them the prices,” she told IRIN. “But it’s not the vendors’ fault; with this crisis, hauliers are charging more for moving vegetables into Abidjan.” She said a sack of aubergines which used to cost her $20, now cost $26.
Cooking fuel is costing families more: In Abidjan a 12-kg bottle of propane gas that went for about $9, now costs about $13. A market vendor in Gagnoa told IRIN charcoal there used to be $10 a sack; now it’s double that. ...

Higher-income families in Abidjan are able to keep extra food at home just in case of further unrest. Some said the most significant impact for now is that they feel confined to their homes. “Every week we stock up at the supermarket, just in case,” bank executive Bertrand Comoé said. “I don’t allow the children to be out after 6pm. Everyone is home by that hour; it’s like a prison. It’s stressful, but we have to do what we can to avoid the worst.”

And let's not forget the role of BLOOD CHOCOLATE in Cote d'Ivoir's current political struggles.

FAO happily announces that Niger's food production is up 60% over last year and that the livestock that survived last season's drought are now well-pastured.  The people, however, not so much. Malnutrition and food insecurity are still quite high. "FAO/WFP called for an improvement in family purchasing power in Niger by assisting pastoralists to replenish their livestock and boosting off-season agriculture such as vegetable and roots and tubers production."

The Africa News Blog is concerned that drought could seriously hamper Kenya's economic growth (6% last year), ability to provide electricity, and political stability.

Yglesias:

I think speculators get a bad rap and speculation is a stabilizing impact on commodity prices. The easiest illustration of this comes from the price of onions. Onion futures trading was banned in 1958 at the behest of then-congressman (later president) Gerald Ford who felt speculators were engaged in price manipulation. The result is that onions are one of the most unstable commodities out there:

And for a food crisis of a different kind: for authentic African cuisine in Dubai, there's just one place to go: Tribes, serving authentic African BBQ and burgers, accompanied by authentic music: Wakka Wakka.  Hoo boy.

The Monetary Debate

Beckworth's primary discussion point of late has been trying to convince people that there was and is an excess of money demand: people and banks want to hold more money than is out there. That slows down monetary velocity, resulting in a recession. That basic story is told in a prison context and in multiple graphs.

If money demand has spiked, as these figures indicate, to an all time high then inflation fears are seriously misguided.  In fact, it doesn't matter how much the monetary base or money supply increases if money demand increases more. There simply will not be inflation.

Sumner, of course, agrees heartily. His main talking point, though, has been on when the medicine needed to be applied. There was already evidence he and Beckworth have shown that there were signs of excess money demand in June-Sep of 2008 before the financial institutions collapsed and before the stock market tanked. Had the Fed acted then and provided additional liquidity, the crisis need never have happened. Indeed, at the time it appears that folks were looking for any sign of monetary easing from any quarter. Once the crash took over, Cowen and others have argued, the Fed may have been powerless to step forward and credibly say they would NOW provide the needed liquidity. Sumner's response is that he is trying to prepare us for the next time we get to the zero interest rate bound. If people expect easing then, we can avoid the next crash altogether.

The real news last week in that with the release of the minutes from the 2005 Federal Reserve meeting, it is clear that the Fed knew a good deal in December about the housing bubble but did not change policy. The transcripts also show that Fed President Hoenig (of Kansas) has consistently claimed that high inflation was just around the corner, though he has never been right. Sumner points out that the Fed understood half of the story, admitting that there are exceptions when the Fed might actually want inflation above 2%, but not the full implications. Paraphrasing Cathy Minehan's statements in Feb 2005, he says:

if unemployment is sort of high, say 7%, and inflation was 3% due to energy price increases, you would not try to immediately bring inflation down to 2% if it meant pushing unemployment up to 9%.  And I am pretty sure that everyone at the Fed agrees with that.  However the inescapable implication of the argument is that if you have 9% unemployment and 2% inflation, you’d be better off pushing inflation up to 3% if it would reduce unemployment down to 7%.  The argument is completely symmetrical.

Big Bag of Ethical Thinking

C. S. Lewis on miracles via The .Plan

If [miracles] were not known to be contrary to the laws of nature how could they suggest the presence of the supernatural? How could they be surprising unless they were seen to be exceptions to the rules? And how can anything be seen to be an exception till the rules are known? If there ever were men who did not know the laws of nature at all, they would have no idea of a miracle and feel no particular interest in one if it were performed before them. ...

When a thing professes from the very outset to be a unique invasion of Nature by something from outside, increasing knowledge of Nature can never make it either more or less credible than it was at the beginning. In this sense it is mere confusion of thought to suppose that advancing science has made it harder for us to accept miracles.

Gallup polls recently showed that about 40% of Americans believe that God created the Earth without evolution, about 40% believe that God created life through evolution, and a bit less than 20% that it's only evolution playing a role. Here is Yglesias on Young Earth Creationism:

There’s absolutely nothing in the scientific record that can disprove the possibility that the world is 4,000 years old. The scientific method makes certain claims about the state of the universe 4,000 years ago. Now assume that God created the universe—fossils and all—to look exactly like that 4,000 years ago. That’s obviously a religious hypothesis rather than a scientific one, but it’s consistent with the evidence and doesn’t [ask] anyone to believe in a scientists’ conspiracy or anything. Of course this would ... be an odd thing for a just and moral God to do.

Sumner enjoys being counter-intuitive. "People behave as if they care about utility, not happiness." He then goes on to quote some heartrending stories of Mexicans working in US agriculture. When asked if they would still come again knowing what they now know, they say no ... and then yes. Yet research suggests Mexico is the second happiest country in the world. John Rawls apparently does not agree (Milanovic on John Rawls via Thought du Jour):

Rawls is a liberal thinker but he comes out against aid. He says aid can only be given up to the point that a society is ‘decent’ and consultative (everyone has some stake or a vote), because after that point there is no reason to give aid. Rawls also comes out strongly against migration. He views each people as being a custodian of the land that it occupies and having the right to exclude others who would like to move there. The only justified migration is the one which has to do with political or religious persecution. But economically motivated migration is not acceptable.

Gordon with a thought experiment on absolute vs. relative inequality via Newmark:

“Suppose,” I said, “there were an economic magic bullet — that if Congress would pass the necessary legislation and the president were to sign it, the effect would be to double everyone’s real take-home income. If you were living on $50,000 this year, you’d have $100,000 to spend next year.”. . . .

“But there’s a catch,” I answered. “The effect of the magic bullet would not double the take-home income of those earning over $1 million — it would quintuple it. In other words, the rich would make out far, far better than the average Joe. But there’s no way out, it’s all or nothing. Would you vote for the magic bullet if you were a member of Congress?”

This relates to another question of how many people are hungry or at threat of going hungry in the US. Telephone surveys that ask people if at any point in the last x months they went hungry or worried about going hungry suggest about 49 million Americans are food insecure. Boudreaux points to other poll results, however, which say that 9/10 Americans think they are middle-class. Even if all the remaining think they are poor and no one thinks of themselves as rich, that still means there have to be millions of people who think they are simultaneously middle-class and food insecure. Boudreaux's conclusion is that therefore no one is hungry. I instead point to the difficulties of the methodologies (how many homeless people can be contacted via telephone?), psychology (Both poor and rich like to think of themselves as middle class), and the difficulty of defining hunger and middle-class.

Finally, the art of lying well:

If you want to be an expert deceiver, master the art of self-deception. People will believe you when they see that you yourself are deeply convinced. It sounds difficult to do, but in fact it's easy -- we are already experts at lying to ourselves. We believe just what we want to believe.

Yes, We Know Fast Food is Bad for Us

I've mentioned the San Fransisco law to ban toys in fast food before. The Daily Show did a great job with it.
Best moment: interviewing one of the law's proponents who admitted that the city does not have the authority to order a private company (e.g. Netflix) to change its business practices ... when that's exactly what they are doing to private companies. The fellow goes speechless for a second. Classic. Video below the fold.

Also (pictured) how to find real food at the supermarket a la M. Nestle.

Pictures that show the difference between the way food looks when advertised and when you actually buy it.

How to check to make sure your pizza is salmonella free.

Newmark presents one of the more interesting predictions for the future:

The U.K.'s Guardian assembles some experts to predict. Some are plausible; some are not. This one, from an executive at Ogilvy and Mather, made me laugh:

In 25 years, I bet there'll be many products we'll be allowed to buy but not see advertised – the things the government will decide we shouldn't be consuming because of their impact on healthcare costs or the environment but that they can't muster the political will to ban outright. So, we'll end up with all sorts of products in plain packaging with the product name in a generic typeface – as the government is currently discussing for cigarettes.

(The man knows how government works.)

And while we're at it, some tongue in cheek celebrations of farmers' markets (also below the fold)

A World of Interesting Incentives

USAID cannot help Haiti develop crops that would compete with US producers.

Haiti weddings are up by a lot since the earthquake. Annan, posting at Blattman, hypothesizes the reason is that the social norms are changing: you don't need to get married in a big church because they were destroyed, and you don't have to have a big house to live in because they're gone too. The costs of marriage are down, so people are practicing monogamy while the getting's good.

The DRC is looking at changing its constitution in the way the president and legislature are elected. One version says the hope is to stamp out corruption. The other side is that the hope is to centralize corruption. But will the congress agree to the shift in corruptive rents?


On how commercial incentives erode social norms (work ethic, the nobility and sacrifice of the public servant, etc.), possible making the situation far worse.

Is the problem that companies can buy their Congressional representatives loyalty, or is it that Congressional representatives are already loyal to their constituents and companies merely give them the clout to follow their political incentives? Yglesias argues that the case isn't very clear regarding ethanol support.

What set of incentives would be necessary for colleges to offer these kinds of courses? (HT: Newmark)

FINAN 141: Introductory money management course. Offers a brief overview of higher-level theories such as relatives you may never have thought to ask for money, state-by-state law into just how far you can fall behind on your rent before being evicted, and getting the most for your old Magic the Gathering cards on eBay.
SPAN 301: Explanation and response to the four questions employers most commonly ask you in Spanish to make sure you weren't lying when you put on a resume that you speak it fluently.

Markets and the Environment

Cafe Hayek recommended a fascinating speech given by Harry Teasley. He used to be a Coca-Cola executive and he discusses the role of markets in producing agricultural and environmental efficiencies using multiple example from his time at Coke. I'll include just one of these stories. The rest are equally engaging and illustrative of the importance of looking at the entire system rather than just one part:

I was asked to present a paper on orange juice packaging, which I did.  As I began my presentation, a young woman from Maine immediately challenged me, as she thought that I was essentially an immoral brigand for packaging orange juice. She thought that the orange was a great example of a product which required no packaging, and that was the way it should be sold.

Upon closer examination, this is not the case. 

Development in China: many facets

China may have already surpassed the US in terms of total GDP, though that will always be open to quibbling as Sumner reports:

Arpit Gupta sent me an article by Arvind Subramanian that suggests China did pass the US at some point in 2010.  I find his argument quite plausible, although I certainly wouldn’t claim it is “True,” as there is no fact of the matter.  The US and China produce a vastly different set of goods.  China produces much more “stuff” and we produce much better “stuff” (on average.)  Who produces more RGDP?  That depends on how one defines RGDP, and I’ve never seen an even half-way plausible definition.  Have you?

The Chinese government has decided to invest heavily in clean energy - on the kinds of scale only China manages - and the Obama administration's response is to praise them for joining his vision of a greener world. Psyche. Obama is filing a case against China at the WTO for subsidizing green Chinese companies unfairly. So apparently it's not that the US is in favor green technology so much as we're in favor of greenback technology.

A new paper by Wang and Gunderson analyzes the effects of a minimum wage hike in China from 2000-2007 and finds very different effects depending on where they look.

Lit in Review: The false idol of objectivity

The Journal of Economic Perspectives ran a very good series last year on improving empirical economics, particularly to improve believability. It is happily available for free. Following are notes I made at the time but hadn't written up yet. By way of background, Leamer (1983) had written a critique of empirical investigations and the authors in the papers are asking how far we have come in answering his condemnations. There's a fair amount of disagreement among the authors on what is needed for further progress.

More from Sudan

Blattman argues that pastoralists in Sudan are part of a reaction against statehood. He has a book on anarchist history to recommend. [Video on Sudan's pastoralists and their concerns about statehood below the fold]

FAO happily reports that food insecurity decreased in southern Sudan during 2010 thanks to favorable rains. Though food production is up 30% on 2009, there is still a sizable food deficit. People returning to the area following the referundum are expected to increase food demand further, increasing the deficit. The range of estimates suggest an increase of 40-170% in the number of food insecure people.

Texas in Africa on political stability:

My real worry for this situation is not that war will break out between north and south ... but rather than tensions within the South will be played out in the context of an extremely fragile state. Southern Sudan will immediately become one of the world's poorest, weakest states - albeit one with oil - with a plethora of ethnic groups who don't see eye-to-eye on everything. That's rarely a recipe for stability.

McDoom at the African News Blog on southern Sudan's ability to govern itself:

“Is (the south) ready to govern itself? That’s what they’ve been doing for the last six years, doing just that,” David Gressly, the top U.N. official in the south, said.
It has its own constitution, a separate central government,  10 state governments all answering to Juba, its own parliament and even its own laws.
The two regions even have different banking systems...Juba in fact kept an entirely separate immigration system.

According to the Economist, Arabs have viewed the separation in a much different light than other groups. Some have claimed it is part of a Western plot to isolate Arabs, while others have pointed out to the implications for Kashmir.

Blattman also discusses [below the fold] a few important points on thinking about using aggression and the threat of aggression to bring about peace. Granted, he's largely discussing Cote d'Ivoire, but the principles apply equally well to any future instability in or around southern Sudan. Also below the fold are two videos: one on the life of Sudan's pastoralists and The Daily Show on Clooney-vision.

The Socially Acceptable Price of Fried Chicken

I have The .Plan to thank for all these surprising phrases I never thought I'd hear or read on the politics of food, the story from mid-December:

$4.40, is the price of the most politically charged bucket of fried chicken to hit South Korea.

In four days, the chicken has generated impatient three-hour queues, street protests, a regulatory investigation, national soul-searching on the ethics of competition and condemnation from the office of the President. ....

The poultry-centric controversy began late last week when Lotte Mart, one of South Korea's biggest retailers, began selling its fried chicken at a level that undercut the prevailing market price by more than 60 per cent. ...

That was the cue for a verbal bombardment from Kyochon Chicken, Goob-ne Chicken and hundreds of small restaurants and shops across South Korea that make their living from fried chicken, who fear they would be thrust out of business. Their trade body, the Korea Franchise Association, quickly weighed in with a threat of legal action and allegations of “fried chicken dumping”.

At first, the public shared their rage and seemed ready to be worked up by the media into passionate defence of the little guy against rapacious giants such as Lotte. Then they smelt the chicken, realised they could feed their families for roughly the price of a bus ticket and joined the monstrous queues at branches of Lotte. ...

South Korea's co-prosperity committee, a body established to ensure balanced growth between big and small business and designed with precisely this dilemma in mind, met overnight for the first time.

Lotte announced that it would stop selling the fried chicken this week.
--Leo Lewis, The Australian, on the socially acceptable price of fried chicken

Additional thoughts from the article:

South Korea's presidential secretary for political affairs bristled in a blog that, even on a crude calculation of raw materials and processing, Lotte Mart appeared to be losing about 1200 won [~$1] every time it sold a serving of fried chicken from one of its 82 stores.

Trivia, my dear Watson

I blogged earlier about IBM's Jeopardy playing supercomputer Watson. Now you can see him in action below the fold.

Food Prices are Now at 2008 Peak

The big news is that FAO's measure of  general food prices in December reached the peak we had in 2008, a little more than twice as high as prices were in 2002-2004. Evans and GDN are quick to point out the difference between this time and last:

• Most of the increase is in meat, sugar, and vegetable oils rather than cereals. Poor consumers can substitute away from those products and buy more staples, so they should be hit less hard than last time.
• Of staple cereals (left) rice has seen very little movement - still at half of its old peak - and wheat is still well below its peak. This is important because the most harmful and wide-reaching policy actions last time happened in countries where rice is the most important staple. If rice prices stay where they were in 2009, we might avoid a repeat of 2008's policy reactions.
• Only maize, the cheapest of the three, has reached its 2008 peak. This is another contributing factor in why meat prices are high.
• Many African countries have done a good job responding to the last food crisis by investing more in their agriculture. As a result, African and Asian countries have had bumper crops - so much so that while world maize increased 45%, they are down 10% in some parts of Africa.
• Oil prices are still $50/barrel lower than their peak in 2008, another boon to farmers.

GDN argues that among the implications of these is that US policy can have a large impact by suspending biofuel mandates and improving food aid policies when the farm bill comes up for debate again in 2012.

One thing neither report mentions is possible psychology factors. The 2008 food crisis had a very high percentage change in food prices, while absolute price changes were relatively small and remained lower than they were in the mid 1980s for the most part. This time we are at a higher base, so there is a smaller percentage increase in prices. If it is less the absolute price level that matters to consumers' perceptions and chance of rioting, and more the rapid change in percentage that matters, that would help explain why we see so little unrest right now as well.


Nelson at IFPRI points out that the relative threats to the global food system change over time. Right now, population and income growth matter most, making random weather shocks more potent than they would have been ten years ago. Over the next 40 years, however, population growth is expected to slow so it will be less important and climate change and supply side factors will become more important. He predicts that the next 40 years will see a doubling of maize prices and roughly a 50 percent increase in rice and wheat prices. If agricultural research can increase productivity 40 percent beyond the baseline scenario, however, those increases can be cut in half.

IFPRI has just released a new set of international wheat market tools to help people track prices and other information. Further tools are expected soon for maize and rice. Worldwatch Institute is also releasing its new report on 15 innovations that are already happening in parts of Africa to increase production on small farms and reduce hunger. I will return to that report in a future post.

Zamiba's Food Reserve Agency is exporting nearly 300 thousand tonnes of maize to nearby Namibia, DRC, and Zimbabwe. High export costs and a lack of trucks have been slowing the process.

Update: "so little unrest" is a bit more than I thought:

And just as they were posting, riots flared up in Algeria, with two killed and hundreds injured in the protests against soaring food prices. Across the border in Tunisia 14 were killed in clashes with the police. As the unrest spreads across northern Africa, Egypt is nervously trying to put measures in place to prevent any comparable violence, with extra supplies of meat being flown in from Kenya. An occupational hazard of blogging; no sooner have you posted, than somewhere in the world you have been outstripped by events.

Climate change comments

I was chatting with Per this week about weekly food price volatility, which has been up significantly since the food price spikes. We've been analyzing the trends in food price volatility for the time period during which we have weekly data. For some commodities (e.g. wheat and maize) price variation has been increasingly fairly steadily since the mid-90s. For other commodities (e.g. rice) price variation was lower between the mid-90s and the food price spike. He opined (reasonably) that rice is more often irrigated than wheat and maize, so their price volatility is more dependent on weather fluctuations. Makes sense.

What surprised him was I don't think climate change has much to do with post-spike volatility. So let me put my thoughts out here and feel free to improve my understanding.

Climate change is fundamentally a gradualist story. Even the most apocalyptic scenarios involve a change of 1 degree Fahrenheit per decade. This decade has seen an increase of half a degree Fahrenheit and last decade saw less. ANY story that blames climate change for a difference from one year to the next has to involve a severe threshold effect: global temperatures rise by 0.1 degrees Fahrenheit and massive crop failures ensue. Something like that. I was shocked this year to hear a local plant scientist arguing on NPR that climate change had, from one year to the next, caused massive growth in poison ivy, oak, etc. growth and pain. Ivy is just not that sensitive a plant. So while I freely acknowledge the role of climate change in increasing food production volatility from 1980-2010 (increasing temperatures, rainfall variation, extreme weather events, etc.) I strongly doubt that it makes much difference between 2006 and 2008.

Climate change does not happen smoothly. There are regular downs even while the gradual trend is up. If you like numbers, here are some that show that even though 2001-2010 were warmer than 1991-2000, the coldest year in this decade was 2008 with 2005 and 2010 tie-ing for warmest. Since 2005 was warmer than 2006-2009, the food price spike would have happened several years earlier if that were the prime culprit. The three warmest months in the last decade were March of 2002 and 2010 and January of 2007 (yes, Virginia, there is a southern hemisphere) and there was no panic in 2002. Yes, this is not a formal analysis, but this also isn't a formal publication venue. Suffice it to say, the initial data do not look good for a climate change story.

Where I do place the blame is persistence of memory. Food prices were recently high, so speculators who wouldn't normally be interested in food commodities are paying attention; commodities in general are getting much more financial game thanks to the recession; governments are still adjusting their food policies in response to the last food crisis and that uncertainty increases volatility; Russia declares an export ban on wheat and so people start buying wheat in anticipation of the next spike even though the export ban is meaningless since Russia is now importing wheat. I imagine - we don't have data on this, sadly - that food price volatility was fairly high for several years following the 1973-74 food price crisis despite the onset of the long downward trend we enjoyed after. It takes time for volatile markets to calm down. The increase in weekly wheat price volatility happened just after the 1996 food price spike, after all.

Thankfully we aren't seeing the panicked responses from governments that have a lot of influence in food markets like we did a few years ago. I'll be putting up another post either today or tomorrow about the current high food prices, some of which are quite high. It was largely government reactions that turned rising food prices into a panic, and as long as governments avoid the same round of export bans and other policy reactions we saw last time, we should be okay. But more on that next time.

Good sentences

Yglesias on the "Chinese mother" article making the rounds.

On the list of problems typically experienced by the children of Yale Law School faculty “not successful enough” comes way below “has dysfunctional relationship with mother.”

On Chinese entrepreneurs inventing a business we don't have in the US:

Drivers who get stuck in traffic in some cities can now get on their mobile phones and call for a substitute to take their cars to their destinations while the frustrated drivers are whisked away on the back of a motorcycle.

On how to get brilliant, non-mainstream development projects off the ground:

He set up a pilot project in a faraway state in secret — so as not to attract the attention of special interest groups.

The program? Opportunidades.

Yglesias on how to prevent anarchy: rather than moving police from protecting citizens to protecting senators,

I think it would sit poorly with all of us if assassinating a senator led to a change in partisan control of the senate via gubernatorial appointment, but many states’ laws leave the door open to that possibility. Senators ought to be replaced, in my view, either through a special election or else through an appointee pre-designated by the Senator as a legitimate proxy for his or her approach to politics.

And on nothing in particular:

So should we subsidize or tax research into time travel?

Five Second ... Roberts

He asks "What is economics good for?" but is really trying to convince people that economics is a lot more like biology than physics. This is an exceptionally reasonable thought. Among his comments:

We do not expect a biologist to forecast how many squirrels will be alive in ten years if we increase the number of trees in the United States by 20%. A biologist would laugh at you. But that is what people ask of economists all the time. ... So the fact that economists did not foresee the Great Recession with any precision and have failed to model accurately the recovery does not mean that economics or even macroeconomics is worthless. My claim is simply that we should recognize the limits of reason in analyzing complex systems ...
So what is economics good for? It’s good for organizing your thinking. It helps you know where to look for causal elements even if we cannot measure their precise contribution or how to relative weights of factors that pull in opposite directions. Economics helps us understand ... relationship[s between complex variables holding all else constant] . ... But they do not reach the level of what the media expects economists to be able to explain. ...
Perhaps most importantly, economics can often remind us of the full range of effects of a particular policy, what Bastiat called the seen and the unseen. This is very valuable. Is it science? I don’t care. It’s a very powerful way of organizing your thinking about what happens when something changes in a complex system. Economics inevitably makes you aware of unintended or what might better be described as non-obvious consequences of a particular change.

Food policies

The price of tortillas in Mexico - The world price for maize is now at its highest since mid-08. "On December 22nd the economy ministry announced that it had bought maize futures, which it said should guarantee price and supply until the third quarter of 2011. It also increased a modest subsidy for corn millers."

Kosher Nation: "If they want to sell their product in the United States and they are not kosher, no one will buy it," points out Menachem Lubinsky.  "Coca-Cola won't buy it, Kellogg's won't buy it.  They'll be cut out of the market.  If you're in China or Thailand and you want to export, you have absolutely no choice but to seek out kosher certification."

From Wikileaks - US Ambassador to France in 2007 argued that the US should retaliate to encourage France to not enact a number of policies harmful to GMO interests.

Equine ethics - Horse lovers used to fight to shut down horse slaughter plants and they laregly succeeded. Owners with very old horses now ship the horses to Mexico for slaughter or strand them to await starvation. Both options involve a lot of pain for the horses and very poor conditions. So animal-welfare experts are beginning to consider other options.

Oh, and recent research has overturned the belief since the 1970s that you shouldn't eat mussels that haven't opened. What you should do is smell your mussels before you cook them to check for freshness and make sure you accurately measure the cooking time.

AEA Session: Agricultural Export Bans

The final AAEA session at the AEA meetings in Denver discussed the agricultural export bans put in place in eight countries (plus export tariffs in many more) during the food price crisis a couple years ago. The major contribution was to consider the political economy explicitly and its impact on food prices. My major complaint about previous studies trying to measure the effect of biofuel prices on the food price spikes ignored this essential factor, and then claimed biofuels did most of the work.

The bottom line: the export bans and import tariff drops alone caused at least 40% of of the price change, and likely a lot more.

Government actions were responsible for more if you include growing stockpiles, offers to buy up a lot more than usual at prices above already inflated prices, and account for large-country effects. On that last point, rice export bans in Brazil don't matter much because they don't export much rice. The ban in India makes a much larger difference. Similarly, Russia's current export ban doesn't matter: they've moved to being an importer of wheat this year so the official ban is just a nice photo-op (or as Martin put it, a chance for Mr. Putin to show off his hairy chest).

The papers will be coming out next January. Until then, my notes are below the fold

Evil Alert: Pepsi's Plans

Every once in a while I have to agree with my nutrition colleagues about the occasional spots of villainy in our major food companies. Today it's Pepsi, whose plans for domination of the snack market of the future involve convincing people that not-nutrition is very nutritious. Consider as an example the following three products coming out, advertised to parents as great ways to get your kids to eat more fruit:

    *  Grape World: Apple puree, filtered water, banana puree concentrate, fibersol-2 fiber (maltodextrin), grape juice concentrate, apple juice concentrate, lemon juice concentrate, natural flavor and ascorbic acid (vitamin C).
    * Cherry World: Apple puree, filtered water, banana puree concentrate, fibersol-2 fiber (maltodextrin), apple juice concentrate, cherry juice concentrate, lemon juice concentrate, natural flavor and ascorbic acid (vitamin C).
    * Apple World: Apple puree, filtered water, banana puree concentrate, fibersol-2 fiber (maltodextrin), apple juice concentrate, lemon juice concentrate, natural flavor and ascorbic acid (vitamin C).
Translation: “Juice concentrates” is another euphemism for sugar.  You don’t believe me?  See the list of sugar euphemisms in the 2005 Dietary Guidelines (Table 14). My translation: this is watery apple and banana sauce, artificially thickened, sweetened with fruit sugars, flavored with additives, and with added vitamin C.

Another phrase to watch out for is "fun-flavored."

But, okay, so they want to sell flavored sugar as if it were a variety of fruits. That's not EEEEEvil. Pepsi does have more healthy brands than, say, Coke. This is the line that worries me, from Pepsi's CEO:

"We see the emerging opportunity to ‘snackify’ beverages and ‘drinkify’ snacks as the next frontier in food and beverage convenience."

Now where have I heard something like that before? ... No no, don't tell me. I know it'll come to me.... 

Ship's Computer: Time for lunch... in a cup!

Duuuuude.

21st Century Inflation

The reigning methodology [for collecting inflation data] is, well, clunky. It costs Washington around $234 million a year to get all those people to go and bear witness to a $1.57 price increase in a packet of tube socks and then to massage those individual data points down to one number. Moreover, there is a weekslong lag between the checkers tallying up the numbers and the government announcing the changes: The inflation measure comes out only 12 times a year, though prices change, sometimes dramatically, all the time. Plus, the methodology is archaic, given that we live in the Internet age. Prices are easily available online and a lot of shopping happens on the Web rather than in stores.

Answer #1 - the Billion Prices Project from MIT - "based on 5 million items sold by 300 online retailers in 70 countries. (For the United States, the BPP collects about 500,000 prices.)"

Answer #2 - Google it - using every price available on Google showed periods of deflation that the CPI did not.

Both new measures track the CPI well, confirming that the old clunky method still does useful things. But if the other methods are available at less expense, greater ease, more frequently, and so forth, maybe there is time to consider a transition?

In other inflation discussion, Beckworth notes that, yes, of course velocity and money supply move infversely: that's one of the things the Fed is supposed to do to keep inflation low! When velocity changes, the Fed responds by purchasing or selling bonds and changing the amount of money in the economy. And overall it has done quite well during the 30 years between Volcker and the current recession. During the 60s and 70s... not so much [see figure]. And during each recession since Volcker, the correlation breaks down.

In a comment, Rowe reminds us of Friedman's thermostat analogy:

"If a house has a good thermostat, we should see no correlation between the inside temperature (NGDP) and the amount of oil burned in the furnace (M).

We should also see no correlation between the inside temperature (NGDP) and the outside temperature (V).

And we should see a strong correlation between the outside temperature (V) and the amount of oil burned (M)."

Nutrition Labeling

By this time next year, USDA has mandated that all meat and poultry products will have to contain information on calorie and fat content. Note for instance this label for 10% fat ground beef: half the calories come from fat, one quarter pounder has a quarter of your daily satured fat intake and 2/5 of an average person's protein recommendation. M. Nestle notes that serving sizes have generally been growing (2-3 oz, now 4) but the number of recommended servings of meat has remained constant.

The Institute of Medicine is similarly weighing in on private nutrition labeling programs, finding many to be too much marketing and not enough medicine. They compare how the same product would score using different labeling systems and finds too much variation, implying they provide no real guide for nutrition. "In place of complex multi-nutrient [and algorithm-based] schemes, the report recommends emphasizing just a few key nutrition components for which the research base is most solid and the connection to major chronic diseases is strongest: calories, saturated fat, trans fat, and sodium."

On a related note, this article discusses the importance of vitamin A and the efforts in Bihar, India to provide children with vitamin A supplementation. There is significant outreach to the scheduled castes and tribes, requiring a lot of trained and local labor.

Big Bag o Blog Links to start the new year

China in Africa meets Micro-livestock: a new research program is introducing Chinese weaver ants to African fruit trees to combat pests. The researchers note that if this works, it is: green and organic, another source of income and jobs (rearing ants to sell farmers), and a viable protein source for people who don't mind eating ants.

Half of a charter city: Dijbouti, Ethiopia. The charter city part comes at the end of a lengthy musing on Ethiopian political history, wondering why democracy has taken so little hold.

A policy entrepreneur in India is using Facebook to increasing citizen access to government (ie - complain here) and improve information sharing between government sectors.

GMOs meet Florida orange juice to prevent an insect-borne bacteria which causes "greening" that wipes out the crop and the tree. "Most scientists who have studied the problem seem to agree that genetic modification, and the cultivation of trees resistant to the bacteria that causes "greening" disease, currently hold out the only real long-term hope of fighting it." That was the conclusion of a report sponsored by the Florida Department of Citrus and U.S. National Academy of Sciences

Obama is signing the food safety bill today ... but where will the money come from?

A defense of large incomes for people in finance: "As long as we have an economy that is increasingly dominated by “idea companies,” where the idea is really, really hard to discover and really easy to implement once discovered, finance will earn huge gains." (Response to the responses)

On the gains from having a single currency in the US. To Libertarians, this is called the transaction cost side of private currency creation.

Education spending and minorities: it's easier/more cost-effective to educate a homogeneous population. Tino shows that once you remove immigrant populations from the analysis, the relationship between education spending and outcomes is large and positive. It only looks like additional spending worsens or has no effect on outcomes in the full sample because it's much more expensive to educate more diverse groups, who have lower outcomes for a variety of reasons. Within minority groups too, there is evidence of the same positive effect. The 0-effect sometimes observed is an artifact of lumping groups together.

Which shipping company is best for your package? Depends on the type of package. USPS is gentlest with packages but worst with Express Mail. All carriers were less careful with Fragile boxes.

Miracle in Sierra Leone

I was most fascinated to read the following account today about some of the first Latter-day Saints (Mormons) in Sierra Leone. The first converts in Freetown were baptized in 1988. By 1990 there were a number of LDS congregations with chapels, including several in Bo, second largest city in Sierra Leone. But then in January 1991, Ezra Taft Benson - then president of the church - sent a letter to the local leadership, Brother Touray,

in which he asked the Saints in Bo to abandon their meetinghouses and to gather again in their homes to worship. The young leaders were very discouraged, feeling that the buildings were such an important milestone for the Church in this part of Sierra Leone.
Uniformly, members were disappointed and unhappy about the request. Some members of the infant congregations were offended that the prophet in Utah would give such unwelcome advice. Others were heard to question whether or not the prophet understood their circumstances, and, lacking faith in the Lord's servants, they left the Church. Others felt the stirring of testimony and confirmation of the Spirit, and while they didn't understand why President Benson would ask such a thing, they knew him to be a prophet. They had also come to trust their mission president who they loved. President Touray spoke recently of those days with grateful appreciation. He was sad and discouraged, but "recognized that we had been given a formal commandment, and I had to obey. I realized it would be very important for us to obey although I did not know why at the time." The chapel doors were closed.
In March 1991, civil war erupted in Sierra Leone and this little nation became engulfed in a fiery battle that lasted more than a decade. Communities collapsed, infrastructures deteriorated, banks were shuttered, food was in scarce supply and repeated military coups left uncertainty as to who was a friend or foe. Churches were frequently targeted by the rebels with bullets and firebombs, and thousands of people lost their lives while sitting on pews hoping to pray and worship.
But the members of the Lord's Church were safe from this harm for they were home worshiping in obedience to a prophet's counsel.
President Touray spoke of the miracle that had come to the people because of their obedience. "No member of the Church died in Bo during the war — not one. The LDS Church was the only church that continued operating during the war in Bo — the only one. Every other church closed its doors. It was too dangerous for the people to walk to church and too dangerous to sit and worship. None of us (the Latter-day Saints) had any problem during the war. We worshipped through the whole war no matter how grave the situation was. Because we were obedient, our members received this great blessing."

Natural Resources and Poverty: Win-Wins Possible

Pinstrup-Andersen recently presented some work at the International Conference of Development of Dryrlands that he and I did on links between agriculture and climate change. The paper is available here and is based on earlier work we presented at the Global Development Network.

We argue that while most of the debate is about trade-offs between development/economic growth/poverty reduction and reducing harm to the environment, there are areas where it is possible to do both. Reducing poverty or the threat of extreme negative shocks can reduce the extremely poor's need to draw down their natural capital in the form of soil nutrient mining or deforestation. On the other hand, promoting better soil health and forestry practices can provide additional or improved sources of income, helping smallholders emerge from poverty and strengthen food security.

Christmas and Governance

No, pre-reform Scrooge isn't against government programs. He's quite in favor

Indeed, the modern Scrooge, instead of asking, “Are there no prisons?” would ask, “Is there no Medicaid? Are there no food stamps?” The modern Scrooges, in short, are those who advocate government programs for the poor rather than charity for the poor.

One commenter demurs: "Dickens’ point is more that we should make provision for the destitute than that we should do so in any particular way. He doesn’t want to repeal the Poor Act or close the workhouses, you know." Landsburg takes a different, contrarian approach by praising misers for not using up our scarce resources so everyone else can enjoy them. Both articles, HT Mankiw. Alternatively, thoughtful comments about the Christmas story by a Muslim, who focuses on being there and being good enough if not perfect.

Boudreaux has a modest proposal for politicians who want to index executive pay to future company performance: try it yourself. "Members of Congress and all top White House officials – including the President – should receive at least half of their pay in the form of ten-year bonds whose redemption values are structured to rise with decreases in the national debt and fall with increases in the national debt."

Was this month's tax law a cut or an increase? Marron answers "Yes" and has Johnny Depp explain why.

An excellent example of a very good use for Twitter by Newark's mayor: identifying those who need help being shoveled out.

100 Years of Coase

Yesterday was Nobel Economist Coase's 100th birthday. A Boudreaux (2007) article celebrates one of his less-known articles on a fallacy of relying solely on marginal cost to determine value.

To celebrate, here are a few links that serve to either reduce our research transaction costs or to correct other economics fallacies:

IFPRI has released a new weekly food price series going back to 1998 with daily data for futures back to 2001. It includes hard wheat, soft wheat, soybeans, maize, and rice.

Nick Rowe demonstrates that there are no income effects. Well, not from price changes anyway.

Yes, thing are bad in Haiti one year after the earthquake. This is par for the course after disasters everywhere.

Is government growing or shrinking? Yglesias repeatedly shows that total government employment is down slightly as state and local governments are shedding workers. The federal government, however, has been growing its workforce: a little in 2002 and a lot since the recession started. It's not just the retired census workers. Oddly enough, it's Krugman showing us the graph that demonstrates it, though we need to turn to Murphy for the pointer and a response to Yglesias:

But I bet if a had a bullhorn I could get a Tea Party crowd pretty worked up by saying, "Can you patriots believe this? The federal government is growing, while state and local governments have to lay off teachers and firefighters! So grab your pitchforks and let's go give Obama a lesson in federalism he'll never forget!"

Obvious Things I Never Knew

"But the whole logic of life insurance completely fails to apply to retired people."

Well, of course not. So why is the AARP marketing the stuff to its members?

Yglesias, in pointing out that being ripped off is not just for tourists in developing countries, lottery ticket purchasers, and fortune teller visitors adds:

But if you look at the price premium people are willing to pay for “organic”-labeled products and the dubious science behind the theory that these products are superior to conventional varieties, I think it’s clear that yuppies aren’t immune to getting ripped off, either. And I think we should be open to the possibility that this is happening in finance. How much do the sundry pension fund beneficiaries, 401(k) holders, endowed nonprofit managers, etc. of the world really know about the investment game? Are they really that much more savvy and sophisticated than their working class lottery ticket buying peers? Or does their self-image as savvy sophisticates make them that much more prone to being ripped off? After all, Bernie Madoff was able to swindle a bunch of very sophisticated investors out of a great deal of money. He did it through actual, prosecutable, criminal fraud. But not every scam and ripoff is a fraud, and not everything that’s legal is a mutually beneficial transaction.

LDS in Africa: Emergency Preparedness

Non-African missionaries from the Church of Jesus Christ of Latter-day Saints have been transferred from Cote d'Ivoire because of the post-election political unrest to Benin and Togo.

A midwife in Ghana reports how an LDS training mission to teach resuscitation techniques are saving lives.

Five from vacation: education, hyperinflation, and Chinese food safety

I've been taking my Christmas vacation early this year, and since my son hasn't woken up yet I got to do a little econ reading this morning. That sentence belongs under the heading "You know you picked the right profession when...".

Today we're talking about education

Recent research (Hanushek via Mankiw) shows:  

A teacher one standard deviation above the mean effectiveness annually generates marginal gains of over $400,000 in present value of student future earnings with a class size of 20 and proportionately higher with larger class sizes. Alternatively, replacing the bottom 5-8 percent of teachers with average teachers could move the U.S. near the top of international math and science rankings with a present value of $100 trillion.

Tino demonstrates that the PISA data really aren't that negative on Americans because it includes immigrant workers. If you compare European-descent students in Europe to European-descent in the US, the students in the US score higher. If you compare Asian-descent students in Asia to Asian-descent in the US, they score just as well. The issue is that we have a lot more immigrants, we filter out for high-skilled workers less, and he claims it's otherwise unfair to compare a city with a large and diverse nation.

In other news, Mankiw shows us how to do menu costs during hyperinflaiton (write them in chalk so you can update the price during the course of the day), Cowen asks why we need price controls if the point of health care legislation was to bring costs down, and Powell reports that the Chinese food safety system puts the onus of accountability on the regulators who can be sentences to ten years in prison if people are harmed through their negligence.

Can This Really Be Real?

The New York Times actually published diatribes against the steam-powered trombone? In not just one part, but two? The Times thinks that

"nailing the [trombone] student to the wall with a javelin is about the mildest form of expostulation that is appropriate to the offense. But a steam trombone, a trombone of two hundred horse power, even as a freak of the imagination, shows a terrible malignity, and the embodiment of such cynicism in actual brass, and the pouring through it of volumes of sonorous steam, show what the statute defining murder describes as a depraved mind regardless of human life."

Officials in Mogadishu can't understand what this man is doing there. Tourism? What's that? (Hat tip Wronging Rights)

Post-modern art meets psychology. You can get this stuff published in top-quality journals? "The Unsuccessful Self-Treatment of a Case of 'Writer's Block'" Published without revisions!

Holidays explained in economic terms: Hannukah and Christmas.

Sumner has said over and over again that it takes a remarkably ineffective monetary authority to FAIL to produce inflation. Wait. Are you telling me we can't even print money? (Video below the fold)

Measuring the Unmeasurable

Dow Jones is creating a new index of 50 firms working to end AIDS, TB, and malaria: the Global Fund 50 Index. A portion of the royalties will go to the Global Fund. So let's say the value of the index goes up. Does that mean that people think solutions are more likely (and hence want in) or less likely (and hence need more help)?

Easterly and then Ravallion responds to the new Human Development Report's methodology change. R: "I find that the HDI’s valuations of longevity in the new HDI vary from an astonishingly low $0.51 for one extra year of life expectancy in Zimbabwe to $8,800 in Qatar. The valuations are lower than for the old HDI, especially in poor countries."
E: "Previously we were all whining about differences in the value of life of 70 times between rich and poor – now it’s a differential of 17,000 to one."

Okay, sometimes it's actually measurable (with error): The US used 29 million pounds of antibiotics on livestock in 2009. The comments are informative: on the prohibited use antibiotics in poultry, on where the data comes from (pharma, not livestock farms so it's production rather than consumption data)

Sentences that Intrigued me a month ago

Not sure why this didn't post then, but here they are:


Coulmas describing Japan - "A growing percentage of the population, both married and never married, without children has no vested interest in society, with hitherto unknown consequences for its self-image and sense of purpose"

Reported by Economix - "Bulgaria’s defense ministry on Thursday lifted a ban on women serving aboard submarines just as parliament decided to mothball the country’s only submarine."

Kaestner and Khan on Medicare Part D - "much of the additional use of prescription drugs that results from gaining prescription drug insurance is [of ] relatively low value in terms of health benefits"

On EU regulators: "Nonsensical decisions may be taken by majority vote on things that are really about the UK." But who will supervise the supervisors of the supervisors?

LDS around the world

The Church of Jesus Christ of Latter-day Saints (aka Mormons) had a brief, government-authorized presence in Burundi before civil strife broke out in 1992. Last August the first officially recognized church unit in Burundi held meetings again. The article tells the story of the Malabi family, their sacrifices, and the regrowth of the Church in Burundi. It mentions how a group of hundreds of people who wanted to join the Church had formed an informal church group and when they found Bro. Malabi asked him to visit them and teach them more.

Brother Malabi made the long trip to Uvira to teach them two or three times a month. This continued for five years. He traveled at his own expense, usually alone but sometimes accompanied by his wife or one of his children. When asked how much he paid for each trip, he responded, "$10". That travel expense of $30 per month was 5 percent of his total monthly income of $600.

I thought I had blogged about this earlier, but I can't find it now:  LDS Apostles Holland and Christofferson visited a number of African countries last month, pronouncing blessings on Burundi and Angola."Elder Holland expressed his feeling that Africa had been held in reserve by the Lord in the spirit of "the last shall be first" and that Africa would someday be seen as a bright land full of gospel hope and happiness." Both blessed "government leaders as they seek to serve the people and prayed that persons of ability and integrity would be drawn to public service." Picture shows members in Zimbabwe.

Proselyting missionaries save up to help pay for their endeavors. A recent article showcased what a young man in the Democratic Republic of Congo does to save for his mission:

Each day, Sedrick pushes his bicycle, laden with 200 pounds of bananas, for two hours to get to the market. He sells the bananas for the best price he can, then rides back for another load. He does this several times a week. Sedrick has been doing this backbreaking work for four years.

Sedrick told me that he makes about $3 a trip. From that he must buy his food, repair his bicycle and save for his mission. His savings will only pay for the high cost of getting a passport in the DR Congo. Member contributions to the General Missionary Fund will pay the rest.

Putnam and Campbell's study of religion in America shows that "Religious Americans are more likely than others to act in a variety of ways that benefit society, and they tend to be more actively engaged in the surrounding social sphere as well."

The Kosovo ambassador to the US was a refugee ten years ago during the ethnic cleansing. This week during a trip to speak at Utah Valley University he visited Church headquarters and LDS Humanitarian Services to thank the Church of Jesus Christ of Latter-day Saints for their humanitarian involvement during that time.

Church service missionaries (different from proselytizing missionaries) rebuilt schools in Peru following the 2007 8.0 earthquake.

The Church provided the rebuilding resources then contracted with local construction companies to build the classrooms. Church engineers, added Brother Ramirez, oversaw every aspect of the school building, from the foundation to the roof and right down "to the amount of mixture in the cement." ...

Gil Villa is the mother of a child attending the Chincha school. She has noticed a difference in the students and her fellow parents since the rebuilt classrooms were opened last year. The children, she said, take ownership of their school. They are quick to report vandalism and other abuses. And the parents are doing their part to help.

"Every week parents come to clean the school," said Mrs. Villa. "We come every Friday to polish and wax the floors. We clean everything so on Monday, when the children return, they find a clean school."

 And a brief mention of last week's flooding in Venezuela and LDS relief efforts there, and cholera relief efforts in Papua New Guinea and Haiti. The Church also established its first stake [multiple congregation unit] in Guam for the 2,000 LDS living there.

Being a Supply and Demand Side Economist

Yglesias answers one reason why there is so much talk of consumption rather than production during recessions: our productive capacity has not diminished since 2008 while consumption has. Consumer spending may be a touch higher this holiday season that the last two years, but not much and it's well behind spending in 2007.

 But exclusively focusing on just "getting people to spend more" is not going to get the job done. It's not 10% of everyone who is unemployed: it's 30% of particular demographics and 2-5% of other demographics. Sending money to the demographics that aren't as hard hit isn't going to do as much as efforts to get that other 30% trained, moved, hired, or otherwise [back] into the system. As much as I may like lowering income taxes, I really doubt that changing the marginal income tax rate is going to be the main driving force getting us out of the recession. (Though here is yet another short piece on the effects of taxes on "quirky" rational behavior.)

That's where supply side, productive policies still have an essential role. Even though consumption has taken a hit, it's investment that moves the most during recessions and this is no exception. Firms are showing record profits without investing in more workers, more facilities, more anything. The money is sitting there and needs to move. This isn't about high-mindedly reminding people to avoid debt. This is cash hoarding. Aggressive monetary policy would encourage firms to invest those funds, creating jobs and moving us forward again. Lowering employer-side taxes would encourage hiring. Others have gone on in more detail (Mankiw on employee-side payroll taxes)

Big Bag of Thursday

On democracy in poor countries (and on the election in Ivory Coast whose results are still delayed): "In the bad old days of post-colonial Africa, dictators would hail their landslide re-elections as a demonstration of the will of an adoring people while international observers would dismiss the polls as electoral farce. In the brave new Africa, it is often the other way round." That is, internationalists hail re-elections as free and fair while the people murmur that it was not. The article argues that this is because it is harder to rig elections now and the international political economy favors smooth transitions and playing nice.

The US Senate passed the food safety bill. This article, recommended by M. Nestle, covers the differences between the House and Senate version that need to be hashed out.

Aid Watch's headline: "WHO: 20 to 40 percent of money spent on health wasted, more funds needed to be wasted."

The aid skeptics' Thanksgiving:

• For the largest reduction in world poverty in human history, which has already happened in our generation.
• For the largest improvement in health and life expectancy in human history, which has already happened in our generation.
• For all those who contributed to these successes: whether individuals operating in private, social, nonprofit, charitable, civic, public, aid, or international realms.
• For all those who helped themselves and those around them escape poverty through their own efforts.

Improving the efficiency of the bribe market may actually be good for the economy. That is, making bribe prices more transparent/widely-known reduces transaction costs for bribery, which in turn reduces bribe sizes.

A chef preparing to head to a job at an elite hotel instead stays in his home town in India to provide three nutritious, freshly cooked meals to around 400 of the poorest people in the area.

National Geographic's annual photo contest - many of the results on Big Picture.

Blindfolded humans walk and drive in circles. Hunh?

A Little Star Wars Economics

What occupations exist in the Star Wars universe? Let's count them off:

Government (lots and lots of it)
Military (Stormtrooper, Jedi, palace security, assassins, body doubles, undersea cops, and of course the cloners)
Bartenders and entertainers at bars (possibly one greasy spoon chef/informant, I'm not sure whether it's a diner or a bar)
Subsistence farmer - 1
Used car salesmen
Nomads and hermits
Criminal elements - Mafia, gamblers and their jockeys, smugglers, presumably some slavers

Anybody else? In the entire far far away galaxy?

One might think that there is a middle class keeping everything running. At least finance. After all, the prequels *spit* tell us right from the outset there is an Evil Trade Federation that allies itself with shadowy groups like Merchants and Commerce. Gotta be a few pin-striped bankers in there somewhere, right?

Well, what do these supposed industrialist financiers do? They order military around, vote in the senate, and use force to get sovereign governments to sign treaties. ... They sound a lot like governments, actually! We never see any financing, never hear of anything being produced other than military units (and those are produced by machine - no factory workers in the universe), never meet salesmen or mid-level managers, no engineers, no scientists, no attorneys (clearly an oversight by Lucas - how can you have an evil Empire without lawyers?) or CPAs to help you avoid paying taxes to the various federations and the Empire, no education facilities except for Jedi Younglings, no media, no fashion industry (insert snarky comment here) ... no film makers. Any medical work I recall was done by droids.

Actually, there is one Legitimate Businessman in the entire double trilogy: Lando, legitimate businessman. What does his legitimate business consist of? Mostly bribing the government to not regulate him. ... Oh dear.


Who makes the ships? Who repairs them? We only see people buy used parts but no assembly. There is some work for translators, but droids do that too so the wage is probably really close to 0. WHAT GOES ON IN THIS ECONOMY?

Is there anyone more familiar with the extra-canonical literature who can recommend some other occupations? Wookiepiedia is not much help. It's largely about the economic history: there is trade between planets, but no people who are making the products and no one trading them except smugglers. No technological progress over time, furthering my assertion there are no engineers, inventors, scientists, or even app writers.