Wednesday, October 22, 2008

Food Stamps, Public Grocery Stores and Schools...

Why don't we have public grocery stores where poor people can get food for free?

There are private food banks that give food to needy people, but no network of government-run grocery stores. Instead, we have the Food Stamps program, which gives something like $35 billion of food vouchers to low-income people.

What if we replaced Food Stamps with a nationwide network of government grocery stores? Grocery stores make about 6% profit on the stuff they sell; that's two billion dollars of Food Stamps profit we could save if we had all the poor people shop at government-run grocery stores!

Umm, yeah. Does anybody out there really believe that:
1. A government-run grocery store would be anywhere near as efficient as competing, private grocery stores?
2. That, given a choice, anybody would prefer to shop at a government-run grocery store?

We do have government-run grocery stores, by the way-- military base commissaries, where military families can get name-brand groceries less expensively than at regular grocery stores. But according to a 1997 congressional budget office report:
Active-duty families in the United States buy about 40 percent of their groceries in stores other than commissaries, which is evidence that the benefits of commissary shopping cannot be measured simply by savings on grocery bills.
Or, in other words, if you PAY people to shop at a government grocery store by subsidizing prices, they'll still decide to shop somewhere else 40% of the time. I haven't done the math, but I bet the Defense Commissary Agency is less efficient than private grocery stores; I bet they spends more than 6 cents per dollar in revenue running their stores.

Anyway, I'm pretty darn certain that it would be a bad idea to get the government more involved in the grocery store business.

Which makes me wonder: why is the government so dominant in the primary-school-education business? And why, if our food voucher program (food stamps) works so well, are so many people so vehemently opposed to education vouchers?

I think public education is a very, very good idea. Giving every child an equal opportunity to a great education is just simply the right thing to do (and benefits us all in the long run).

But I'm not such a big fan of the idea of public schools; despite spending ever-larger amounts of money, public schools in this country continue to do a mediocre job of educating our kids. IQ scores were up in the 80's and 90's, but test scores weren't-- what's up with that?

Of course, private schools haven't done a whole lot better than the government-run schools in improving student performance, but at least they have improved. If we had more private schools there's every reason to believe that the increased competition would increase quality.

The only argument for government-run schools that almost makes sense to me is that we need public schools because a system of private schools would fragment our society. If we're not mostly all taught the same stuff we'll grow up to be terrorists (or socialists or fascists or Baptists... or whatever you happen to find scary).

I don't know how to reconcile that argument with all the talk about the value of diversity. I like the fact that I can shop at the big, everything-to-everybody supermarket or shop at a little Asian market that has all sorts of interesting food that I don't know how to cook or buy a farm share and support a local farm.

Imagine if we paid for food like we pay for education. We'd all pay taxes, and then we'd all be able to get an amount and type of food, for "free", with the amount and type carefully determined by expert local and federal bureaucrats (oh, and with rigorous testing to ensure quality-- No Chicken Left Behind...), from public grocery stores. If we weren't happy with the quality or amount of food we got, and we were rich enough, then we could pay extra to private grocery stores or restaurants.

Does anybody out there believe we'd be better off in such a system? Why should paying for education be fundamentally different from paying for food?

Friday, October 17, 2008

Unlicensed plumbers! Horrors!

I gotta say, I laughed out loud when I read that "Joe the Plumber" isn't a legally licensed plumber.

I'll have a little more respect for McCain if he comes out and says that requiring plumbers to have state, city, and county licenses to fix people's toilets is bad for everybody except the United Association of Plumbers, Steamfitters, and Service Mechanics. But only a little; claiming that "plumbers like Joe" will pay more taxes under the Obama administration is just plain lying.

Thursday, October 16, 2008

If you're not reading this on the website...

I subscribe to a bunch of blogs, and have decided to use Google Reader's "sharing" feature to comment on, or mark, posts that I find particularly interesting. That's easier than creating new blog posts here, and, I think, less annoying (I don't like blogs that are 90% recycled content).

Anyway, if you want to see a sample of the propaganda I feed myself, check out Gavin's shared items (if you're reading this on, you might have already noticed them in the top widget in the right-hand-column of the page...).

Wednesday, October 15, 2008

Wise and Powerful Leaders ?

The last time I got really worked up over a presidential election was 1984, when Ronald Reagan was re-elected president. I was a freshman in college, and completely, 100% convinced (along with a majority of my classmates) that Reagan was the dumbest, laziest, worst president in history. I was stunned on election night to see that the rest of America (except Minnesota and Washington, DC) disagreed.

My political views have changed a lot since then; mostly, I'm a lot more skeptical-- of the rhetoric from both Lefties and Righties, of course, but I'm also much more skeptical of the whole notion that our Wise and Benevolent Leaders will guide us safely through whatever crisis is currently worrying us.

Yes, it matters who we choose as president. But I believe it matters a whole lot less than we think.

We have a powerful need to feel like somebody is in control, and I think our pattern-matching brains are eager to congratulate or blame whoever happens to be "in charge" when good or bad things happen. God or the Devil. Reagan or Carter.

We're generally too busy or too lazy to figure out what our leaders actually do control, and we seem to be unwilling to admit that large parts of our lives are outside of anybody's control. So we continue to trust that we can build levees to protect our cities from mother nature and elect politicians who we trust will appoint wise bureaucrats who will keep our skies and borders and food safe. Elect the right people, we think, and everything will be perfect.

So: I'm not particularly worked up about this presidential election. I'm going to vote for Obama, because one of the things that the president certainly does control is the US military, and I think Barack will use the military more wisely than McCain. I hope that he will restore some of the checks and balances we've lost since the 9/11 tragedy; the real brilliance of our system of government isn't that we've had particularly Wise and Benevolent leaders; it's that we have a system that works pretty well even if the people in it are imperfect (as we all are).

Friday, October 10, 2008

Sudafed Security

I bought some psuedophedrine at the drugstore yesterday (I've got a nasty head cold that doesn't want to go away), which meant I had to have my driver's license scanned and sign a statement saying that I'm not going to turn it into Methamphetamine.

Which got me to wondering: have those new hoops had an effect? Are they effective, or just slightly annoying?

According to the Office of National Drug Control Policy, methamphetamine use is down about 50% since 2005. So it looks like it is working. Although the crackdown might be having some unintended consequences:
Over the last few years, the methamphetamine market has
moved from being a cottage-type industry (with many small-scale manufacturing operations) to more of a cocaine- or heroin-type market, characterized by a higher level of integration and involvement of organized crime groups that control the entire chain from the provision of precursors, to manufacture and trafficking of the end-product. For example, Asian organized crime groups operating in Canada reportedly receive significant precursor shipments from Asia, which are then manufactured into methamphetamine and ecstasy-group substances. These same criminal groups then reportedly smuggle the finished product into the USA but also to a growing international market outside of the region.
Source: Amphetamines and Ecstasy, 2008 Global ATS Assessment

Oh, and then there's this:
"Although some may conclude that there is a reduced availability for methamphetamine, the fact that our data show an increase in amphetamines suggests that some workers might be replacing one stimulant drug for another in the larger drug class of amphetamines," said Barry Sample, Ph.D., Director of Science and Technology for Quest Diagnostics' Employer Solutions division.
Or maybe they've been switching to oxycodone (the data shows that more people started using oxycodone in the last two years than stopped using meth).

So, if the Asian drug lords manage to ramp up production to replace all the out-of-business backyard meth labs, and meth use rises back up to pre-sudafed-security levels, do you think we'll be allowed to buy cold medicine without showing ID again?
UPDATE: According to the data: it disrupted the supply... for about 18 months.

Wednesday, October 08, 2008

Even more inflation worries

In the debate last night, both candidates said that "we" need to "stabilize" housing prices.

And then this morning the Federal Reserve cut interest rates by half a percent. Which actually means that they're dumping money into our financial system (that's how they get interest rates to go down).

All of which reinforces my belief that they're going to inflate away the financial crisis; they'll raise the price of everything else so that it looks like home prices are stable. If I knew a whole lot more about macro-economics I'd try to figure out how high inflation might get, but I really have no idea. Inflation has lately been about 5% a year; I'd wouldn't be surprised to see double-digit inflation next year.

So, if you're sitting on some extra money, do not put it under your mattress; it will just sit there and lose value. Treasury Inflation-Protected Securities look pretty good to me right now...

Monday, October 06, 2008

Inflation worries

I've been thinking about what's likely to happen with this financial mess we're in, and I'm not very optimistic.

The root cause is over-inflated housing prices. Too many people bought too many houses for too little cash up front.

Possible solutions to the problem:
A. Keep housing prices high by increasing the demand for houses.
B. Keep housing prices high by decreasing the supply of houses.
C. Let housing prices keep falling until demand meets supply.
D. Ramp up inflation so that house prices stay stable (but the price of everything else goes up).

The bailout is plan "D". $700billion is going to magically appear and go into the financial system to prop up failing mortgages. A trillion or more is already committed to propping up Fannie and Freddie and AIG; all that money going into the system means more inflation.

The politicians would never choose options A, B, or C. "A" basically means you need more people here to buy houses, and I don't see any political will to adopt a more lenient immigration policy.

"B" would make for really bad PR-- "The department of Housing and Urban Development bulldozed 600 foreclosed homes in Detroit last month..." might be sound economic policy but it makes for heart-wrenching pictures on the TV news.

"C" means more foreclosures and middle-class people feeling poorer because their $350,000 home is suddenly worth only $200,000. That ain't gonna fly.

The beauty of plan "D" is that it's mostly painless for the politicians. The $340,000 6% mortgage on your $350,000 house will be worthless to the bank when inflation is at 10%, but it's a very good deal for the middle-class home-owning taxpayer. If wages don't keep up with inflation, or if taxes have to be increased to pay for all this, then they'll be worse off, but that's a problem the next administration can deal with.

I can't figure out how they're thinking they'll avoid more bank failures in a higher-inflation economy, though. I've got a 30-year fixed-rate mortgage with Florence Savings Bank at 6% interest that will be less than worthless to the bank (it's "net present value" will be negative) if inflation climbs above 6%. Do small banks hedge their inflation risk somehow?

Thursday, October 02, 2008

On Rescuing the Economy

What's a skeptical person supposed to think about the proposed bailout/rescue?

I know I'm irrational; I have a bias against the investment bankers who made millions of dollars shuffling Other People's Money around. I know that modern finance can be a wonderful thing; hedging risks and investing money in productive activities are worthwhile activities, but I have no idea how much of what Wall Street has been doing is financial snake oil and how much is essential to a well-oiled economy.

I have a bias against people who run up their credit cards or max out their home equity lines of credit to live beyond their means. If no bailout means housing prices fall further and it's impossible to buy a car with no money down... OK.

I also have a bias against the idea that giving a government bureaucracy $700billion to play with will fix the problem. There's just too long a track record of bureaucratic bungling, corruption and outright lying to trust them.

For example, the bill that passed the Senate last night contains, among other things:
  • Exempting children's wooden arrows from excise tax

  • Income averaging for Exxon Valdez litigants for tax purposes
Set aside whether or not you think rewarding domestic wooden arrow manufacturers or oil companies is a good idea or not. The fact that these little "sweeteners" made it into the bill means that some congress-critter is thinking, "Gee, I don't think I should support this; I don't believe Bernanke and Paulson when they say that we'll have a financial meltdown if we don't do this. But you know, if it helps out good-ole Rose City Archery, I'll vote for it..."

Wednesday, October 01, 2008

Budget Choices...

Tomorrow evening (Thursday, October 2nd) there'll be a presentation by the "Facilitation of the Community Choices Committee," followed by comments.

Maybe it's just my head cold talking (I'm extra grumpy today, and also sad), but is there really much to say? Town expenses have been rising faster than revenues, and whether that means we need to cut "unnecessary" services or pass an override to make up the difference is a judgment call. One side will say that our children will be illiterate and our streets overrun with crime if we make cuts. The other side will say that we'll drive working class people into bankruptcy if we raise taxes even a little.

Maybe I'll be surprised and the public meetings will reach a grand compromise of some sort that makes everybody equally unhappy. We'll sell the golf course and privatize Leisure Services and pass an override to fix the potholes, fund the schools, and pay for a couple more police or firemen.

The all-or-nothing nature of the budget bothers me. Couldn't we just all vote and directly express our preferences on:
1. What the total budget aught to be
2. How the budget aught to be split up between the various Town functions

Tally up all the votes and there's the budget.

I know, I know, that's WAY too simple to possibly work...