Ethanol and the Economy

September 28, 2007

CornCorn ethanol production was subsidized $7 billion in 2006. That was about $1.45 per gallon of ethanol. Since it sold for around $0.38 more than the equivalent amount of gasoline, where did the other $1.07 go? To the farmers, ethanol producers and distributors, of course. ADM got drunk on it. ADM made a ton of money on it, for no good reason other than their ability to get Congress to create such a lucrative Ethanol subsidy in the first place back in 2003.

Corn is already, by far, the most subsidized grain in America. Yet Congress’ mandate to increase ethanol production (from corn, specifically) to 8 billion gallons by 2012 is showing nothing but ugly unintended consequences:

  • It is costing us taxpayers plenty because of the ever-increasing subsidy;
  • It is chewing up 20% of the available corn crop, causing demand to outstrip supply and increasing prices across the board for animal feed stocks, sweeteners and virtually everything else made from corn which we, as consumers, are paying for.
  • It is doing virtually nothing to reduce the cost of gasoline
  • It has done virtually nothing to reduce our dependency on foreign oil.

I am an advocate of ethanol production. However, I am not at all in favor of paying for it twice, which is what is happening.

Once again, Congress has provided a handout which has quickly become an entitlement. They will struggle to turn off that money spigot, even when it’s open far too wide to ever rationally justify.

The Kearney Report

September 25, 2007

New York FlagBuffalo Pundit beat me to writing about Sunday’s New York Times’ article on the stagnating New York economy. His article was followed up by several good comments about the Kearney report, on which the Times’ article was based (some might argue loosely).

AT Kearney was tasked with identifying and prioritizing the reasons why the New York State economy has basically sucked for the past 30 years. The reasons they cited:

  • Too much taxation and regulation. New York could shed $35 billion in taxes and fees – $1,800 for every person in the state – and would end up only at the national average.
  • No cohesive, statewide plan for economic development.
  • New York government profits from, not with, businesses.
  • A growing dichotomy between Downstate (the “haves”) and Upstate (the “have-nots”).
  • Ineffective political leadership.
  • Poorly-planned and miserably failing economic initiatives. Empire Zones were singled out for extra special derision, although the newly-formed Centers of Excellence were not immune from serious criticism, either.
  • An Empire State Development Commission that is so non-credible that the State legislature does not generally trust it to control the management of economic development programs.

We have a lot of work to do. Re-electing the same politicians year after year is not the way to start.

China’s One-Child Policy

September 24, 2007

China’s Population DensityI wanted to write about how China’s one-child policy will be a death knell for that society.  I wanted to say that this is a typical Communist takeover of a fundamental right and how it is causing discord and internal strife.  However, it’s not working out the way I thought it would.  In fact, it’s currently working out pretty well. 

Some of it has to do with the fact that before China even implemented the policy in 1979 China had already begun to reduce its birth rate, from over 5 to under 3 children per couple.  The trend toward smaller families follows that of other developed Asian countries.

The policy itself is a little misnamed.  There are enough exceptions to the policy such the official fertility rate today is around 1.7 children per couple.  In the long run, China’s population will eventually fall.  Assuming that the birth rate remains constant, China’s population will peak at 1.5 billion around 2030 and then start to decrease.  Contrast this with India, whose fertility rate of 2.8 pretty much guarantees that it will soon become the world’s most populous nation.  Where are they going to put all those people?

There are some unintended consequences to the one-child policy, however.  In some areas the male to female ratio is skyrocketing as female babies are either selectively aborted before birth or die shortly after birth at a much greater rate than male babies.  This is a genuine concern for the Chinese government as it will eventually encourage more sex trafficking and prostitution, with the resulting associated health and crime problems.

Then there’s the 4:2:1 problem:  A couple simultaneously caring for a single child and four elderly parents.  70% of the elderly rely on their children for support, and there is no government-provided safety net.

All in all, the one-child policy will cause a demographic shift to a more middle-aged society similar to other developed Asian countries like Japan and Singapore.  And while it may be difficult for China to control its population exactly the way it wants to, for a country that is running out of arable land the solution it chose seems to be more or less equitable, and practiced by most of its citizens.

Google’s Complete Waste of Time

September 24, 2007

Google Image Labeler is an interesting way to pretty much completely waste some time.  If you’re quick-witted and a fast typist, it’s also a great way to compete against an anonymous competitor to see who’s faster and quicker.

For two minutes you get to label as many images as you can with terms that describe each image.  When you and your partner match descriptions, Google automatically moves you to the next image.  You get points every time you match.  (Those points and a couple of dollars will get you a cup of coffee at Dunkin’ Donuts).

I played for about 10 minutes this evening.  I can definitely see this becoming an interesting diversion – one for which I have no time, and nothing to gain from playing this game (0ther than it being a diversion).

However, it’s certainly a great social engineering experiment.  Google does not ask for personal information like age, gender or education level; but wouldn’t it be fascinating to correlate the image and matched keywords against any defining personal characteristics?  That’s got to be on Google’s agenda.  Coming up with ways to computerize the labeling of images certainly is.

Google Image Labeler should be banned from 9 to 5.  This could be a real time waster during working hours.

The Left Bank

September 23, 2007

The Left Bank, on Rhode Island Street in Buffalo, is a phenomenal restaurant.  My wife and I struggled to select just one meal from the menu, which means we’ll be going back to try others that looked just as sumptuous.  Even though I thought that the Left Bank refers to a particular section of Paris, the food was mostly Italian with lots of other European/Continental fixings.

Portions are huge – way too much – but at least we got to take the leftovers home.  I had mine for lunch today.

Don’t go there if you’re looking for a hamburger.  Go there if you want food that challenges the pallette.

Five stars.

To My Wife on Our Anniversary

September 22, 2007

Interlocked HeartsI would be remiss if I did not tell the world that today is our 23rd wedding anniversary.  Even though half of all U.S. marriages end in divorce, most of those occur within the first eight years of marriage.  After that, marriage relationships become pretty stable.  I’m not sure if that’s because of familiarity, comfort, kids or just plain laziness, but I don’t really care.  I love you and I know that it would be a much more difficult life without you.

So I’m sticking around for as long as you’ll have me.

Honey, thank you for putting up with me all these years.

All My Love,


When Bush Speaks…

September 22, 2007

President BushGeorge Bush often makes provocative statements, not very convincing anymore to most Americans but it probably helps rally his conservative base. One unintended consequence is that his words are often construed worldwide as cynical, imperial and militaristic. Occasionally I catch a quote from him that could easily have been said by the other side, his enemy du jour.

Wasn’t it just last August that Iran’s President Ahmadinejad stated “I have authorized our military commanders in Iran to confront Washington’s murderous activities”? No, it wasn’t. It was actually President Bush who saidI have authorized our military commanders in Iraq to confront Tehran’s murderous activities” but with just a slight change of wording, it could have been just as provocative a comment made by Iran’s President. And boy, would we Americans have been pissed. I wonder what the Iranians think when they hear a statement like that coming from our President. I’ll betcha they get pissed. I’m sure such statements are welcomed by President Ahmadinejad; they work so well to rally his base.

Another quote from President Bush: “While there are many dangers in the world, the threat from Iraq stands alone – because it gathers the most serious dangers of our age in one place. By its past and present actions, by its technological capabilities, by the merciless nature of its regime, Iraq is unique.” Change Iraq to U.S. and out pops a statement that will have a large portion of the world nodding its collective head in agreement.

October 7th, 2002, President Bush and his pre-war speech about Saddam Hussein: This same tyrant has tried to dominate the Middle East, has invaded and brutally occupied a small neighbor, has struck other nations without warning, and holds an unrelenting hostility toward the United States. Today, President Ahmadinejad speaks of exactly the same threats of hostility toward Iran – by that brutal invader and occupier, the United States.

It is not surprising that both Iran and North Korea intensified their uranium enrichment efforts given the incendiary words that the President preached in their direction.

It is not surprising that China, Russia and even Venezuela are stepping in to provide aid and trust wherever the U.S. has left a vacuum in those departments.

It is not surprising that by the President’s choice of words alone, the U.S. is seen by many not as a purveyor of freedom, but as a cynical bully whose only real interests lie in the Middle East oil fields.