Feds’ Sugar Quotas Lead to More Demand for Obesity-Causing Corn Syrup

CornSyrupGraph2010-08-05.jpgSource of graph: online version of the Omaha World-Herald article quoted and cited below.

The federal government puts quotas on the amount of sugar that can be imported from abroad, with the result that U.S. consumers pay higher prices for sugar. One result, as taught in economics micro principles courses, is that demand increases for sugar substitutes, such as corn syrup.
Evidence is accumulating (see below) that corn syrup is worse for our health than sugar.
Michelle Obama is leading a drive to reduce obesity. If she is serious, she can begin by asking her husband to ask his congress to remove import quotas on sugar.

(p. 2A) Well-publicized research also has suggested that high fructose corn syrup poses an even greater threat of obesity and other health problems than regular table sugar.
. . .
Researchers at Princeton University made headlines earlier this year when they released the results of a study that found rats drinking a high fructose corn syrup beverage for six months showed abnormal weight gain and other factors indicating obesity. The study concluded that overconsumption of the sweetener “could very well be a major factor in the ‘obesity epidemic,’ which correlates with the upsurge in the use of HFCS.”
A related study found that rats drinking the high fructose corn syrup solution gained more weight than rats drinking a basic sucrose solution.
“The conclusion from that is that high fructose corn syrup and sucrose are not the same after all,” said Bart Hoebel, the professor who worked on the study.

For the full story, see:

Ross Boettcher and Joseph Morton. “Is Corn Syrup Slump Healthy? ConAgra, Farmers Divided.” Omaha World-Herald (Wednesday, July 26, 2010): 1A-2A.

(Note: ellipsis added.)
(Note: the online version of the article is dated July 26, 2010 and has the title “Consumers sour on sugars.)

Employment Further Below Trend than Any Time in Half Century

EmploymentRelativeToJobGrowthTrendGraph2010-08-05.gif

Source of graph: online version of the WSJ article quoted and cited below.

(p. A15) The number of nonfarm private jobs has been growing steadily since the 1950s. That number reached a peak at the end of 2007. Between 1958 and 2007, the number of U.S. jobs grew to 115.4 million from 43.5 million–about 2% per year on average. The steady upward trend reflects the long-run growth of the economy and increased participation in the labor force.

The nearby chart compares employment and that trend. It shows the percentage difference between employment and the trend line generated from monthly employment figures over the past 50 years (July 1960 through June 2010).
What we see is astounding. For almost 25 years–between 1984 and late 2008–the level of employment never fell to more than 3% below the trend line. Over that period, total employment grew by more than 36 million.
Employment fell briefly to about 6% below the trend during two previous recessions: in 1975 and again in 1982-1983. During those periods, the unemployment-rate peaks were 9% (in 1974) and 10.8% (in 1982). The unemployment rate in 2009 peaked at 10.1%.
By 2010, however, employment had fallen to about 10% below the trend, far below any previous level in the last half-century.

For the full commentary, see:
PAUL GODEK. “Jobless Numbers Are Worse Than You Think; The situation is much more dire now than it was during the 1980s.” The Wall Street Journal (Fri., JULY 23, 2010): A15.

“Portland Sucks” Pokes Fun at Angry, Elitest Localism

BechardEric2010-08-04.jpg“Mr. Bechard came to blows when he encountered the organizer of a national culinary contest held in Portland, over the winning pig from Iowa. He objected to the pig’s origin because the flier he received from the event advertised local farms and local chefs.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A9) In its song “Portland Sucks,” the local band White Fang pokes profanely at everything from the city’s joblessness to its self-obsession and sometimes counterintuitive rigidity, from “angry vegans” to outspoken disciples of do-it-yourself (“DIY”) culture (p. A12) — localism in the extreme.

“Being elitist about it is kind of counterproductive,” said Erik Gage, 21, the band’s lead singer, . . .
. . .
For Mr. Bechard, it came down to this: never should a pig from Kansas or Iowa have even been entered in the contest; it only made it worse that the Iowa pig won. After all, there are Red Wattle heritage pigs raised right here in Oregon. The chefs who competed work in Oregon, and most promote locally produced food.
“I get there and I get the flier and I’m immediately sickened because I’m seeing ‘local,’ ‘sustainable,’ ‘local farms,’ ‘local chefs,’ ‘local wine,’ ” Mr. Bechard recalled, “and then two of the pigs are from Kansas and Iowa? I’m looking at my friend and he said, ‘Eric, just let it go.’ ”
Many hours and drinks and insults later, witnesses told police Mr. Bechard was the aggressor when he encountered Brady Lowe, the event’s Atlanta-based organizer, outside a bar. Words were hurled and fists flew. The police came, firing Tasers and pepper spray.
Mr. Lowe, who said his leg was fractured in the fight, said Mr. Bechard “missed the big picture” . . .
“To grow you need to bring in ideas from the outside or you’re just living in a closed community,” he added.

For the full story, see:
WILLIAM YARDLEY. “Portland Journal; The Pride and Prejudice of ‘Local’.” The New York Times (Fri., July 9, 2010): A9.
(Note: the online version of the article is dated July 8, 2010.)
(Note: ellipses added.)

WhiteFang2010-08-04.jpg“In its song, “Portland Sucks”, the local band White Fang pokes profanely at everything from “angry vegans” to outspoken disciples of do-it-yourself culture–localism in the extreme. “Being elitist about it is kind of counterproductive,” said Erik Gage, right, the band’s lead singer. “You can argue about it, but I think one of the most important things about localism is getting along with the locals.”” Source of caption and photo: online version of the NYT article quoted and cited above.

Wozniak Could Only Predict a Year or Two Ahead in Technology

(p. 293) If you could easily predict the future, inventing things would be a lot easier! Predicting the future is difficult even if you’re involved with products that are guiding computers, the way we were at Apple.

When I was at Apple in the l970s and 1980s, we would always try to look ahead and see where things were going. It was actually easy to see a year or two ahead, because we were the ones building the products and had all these contacts at other companies. But beyond that, it was tough to see. The only thing we could absolutely rely upon had to do with Moore’s Law–the now-famous rule in electronics (named for Intel founder Gordon Moore) that says that every eighteen months you can pack twice the number of transistors on a chip.
That meant computers could keep getting smaller and cheaper. We saw that. But we had a hard time imagining what kinds of applications could take advantage of all this power. We didn’t expect high-speed modems. We didn’t expect computers to have large amounts of hard-disk storage built in. We didn’t see the Internet growing out of the ARPANET and becoming accessible to everyone. Or digital cameras. We didn’t see any of that. We really could only see what was right in front of us, a year or two out, max.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.

artdiamondblog.com Turned 5 on July 15th

DiamondBlogArticle2010-07-24.jpgThe article image above is a screen capture from the online PDF of the article cited below.

I usually celebrate the birthday of this blog with a few comments, and sometimes statistics, about blogging, and this blog in particular.
I had thought once or twice about the impending birthday, but as the day approached had forgotten about. On July 15th my former student, loyal reader, and friend, Aaron Brown sent me an email reminding me of the date (thanks Aaron!).
For the month of June 2010, Gongol.com’s ranking of economics blogs ranks my blog 43rd in terms of “average daily pageviews” and 39th in terms of “average daily visits.”
In the spring the blog was receiving roughly 2500 – 3000 visits a day. In June and July, as of this writing on 7/24/10, it has been receiving 1500 – 2000 visits per day. (This is consistent with my guess that students are a large part of my viewers.)
The blog occasionally receives recognition. I was invited by the Kauffman Foundation to participate in their quarterly survey of influential economics blogs, and have participated in three of their surveys so far.
A small article appeared on the blog in the Summer 2010 UNO Magazine. A reference to the article is:
Townley, Wendy. “UNO Economics Blogger Gains National Recognition.” UNO Magazine (Summer 2010): 15.

DiamondBlog2010-07-24.jpg

Tim Fitzgerald took this photo which can be found online at: http://unoalumni.org/unomags10-thecolleges

“Intimidation, Threats and Violence Against the White Farmers” in Zimbabwe

ForcingWhiteFarmerOffLand2010-08-04.jpg“A man tries to force a white Zimbabwean farmer off of his land in “Mugabe and the White African.”” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C9) Lucy Bailey and Andrew Thompson’s “Mugabe and the White African” is a documentary account of the efforts of Mike Campbell and his son-in-law, Ben Freeth, to hold onto their farm. It tracks their precedent-setting lawsuit against Robert Mugabe, the authoritarian Zimbabwean president, in a regional African court, as well as events on the ground in Zimbabwe: intimidation, threats and violence against the white farmers still holding out after a decade of land seizures by the government.

Many viewers will leave “Mugabe and the White African” thinking that they have seen few, if any, documentaries as wrenching, sad and infuriating, and those feelings will be justified. What has happened (and continues to happen) to the Campbells, the Freeths and some of their white neighbors is not only unjust but also a horrifying, slow-motion nightmare. That sensation is reinforced by the movie’s political-thriller style, partly a result of the covert filming methods necessary in a country where practicing journalism can get you thrown in jail.

For the full movie review, see:

MIKE HALE. “Fighting His Country to Keep His Farmland.” The New York Times (Fri., July 23, 2010): C9.

(Note: the online version of the article is dated July 22, 2010.)

Documenting Dangers of Growing Public Debt (and of Replacing History with Math)

RogoffReinhart2010-08-04.jpg “Kenneth Rogoff and Carmen Reinhart at Ms. Reinhart’s Washington home. They started their book around 2003, years before the economy began to crumble.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Like a pair of financial sleuths, Ms. Reinhart and her collaborator from Harvard, Kenneth S. Rogoff, have spent years investigating wreckage scattered across documents from nearly a millennium of economic crises and collapses. They have wandered the basements of rare-book libraries, riffled through monks’ yellowed journals and begged central banks worldwide for centuries-old debt records. And they have manually entered their findings, digit by digit, into one of the biggest spreadsheets you’ve ever seen.

Their handiwork is contained in their recent best seller, “This Time Is Different,” a quantitative reconstruction of hundreds of historical episodes in which perfectly smart people made perfectly disastrous decisions. It is a panoramic opus, both geographically and temporally, covering crises from 66 countries over the last 800 years.
The book, and Ms. Reinhart’s and Mr. Rogoff’s own professional journeys as economists, zero in on some of the broader shortcomings of their trade — thrown into harsh relief by economists’ widespread failure to anticipate or address the financial crisis that began in 2007.
“The mainstream of academic research in macroeconomics puts theoretical coherence and elegance first, and investigating the data second,” says Mr. Rogoff. For that reason, he says, much of the profession’s celebrated work “was not terribly useful in either predicting the financial crisis, or in assessing how it would it play out once it happened.”
“People almost pride themselves on not paying attention to current events,” he says.
. . .
(p. 6) Although their book is studiously nonideological, and is more focused on patterns than on policy recommendations, it has become fodder for the highly charged debate over the recent growth in government debt.
To bolster their calls for tightened government spending, budget hawks have cited the book’s warnings about the perils of escalating public and private debt. Left-leaning analysts have been quick to take issue with that argument, saying that fiscal austerity perpetuates joblessness, and have been attacking economists associated with it.
. . .
The economics profession generally began turning away from empirical work in the early 1970s. Around that time, economists fell in love with theoretical constructs, a shift that has no single explanation. Some analysts say it may reflect economists’ desire to be seen as scientists who describe and discover universal laws of nature.
“Economists have physics envy,” says Richard Sylla, a financial historian at the Stern School of Business at New York University. He argues that Paul Samuelson, the Nobel laureate whom many credit with endowing economists with a mathematical tool kit, “showed that a lot of physical theories and concepts had economic analogs.”
Since that time, he says, “economists like to think that there is some physical, stable state of the world if they get the model right.” But, he adds, “there is really no such thing as a stable state for the economy.”
Others suggest that incentives for young economists to publish in journals and gain tenure predispose them to pursue technical wizardry over deep empirical research and to choose narrow slices of topics. Historians, on the other hand, are more likely to focus on more comprehensive subjects — that is, the material for books — that reflect a deeply experienced, broadly informed sense of judgment.
“They say historians peak in their 50s, once they’ve accumulated enough knowledge and wisdom to know what to look for,” says Mr. Rogoff. “By contrast, economists seem to peak much earlier. It’s hard to find an important paper written by an economist after 40.”

For the full story, see:
CATHERINE RAMPELL. “They Did Their Homework (800 Years of It).” The New York Times, SundayBusiness Section (Sun., July 4, 2010): 1 & 6.
(Note: the online version of the article is dated July 2, 2010.)
(Note: ellipses added.)

The reference for the book is:
Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.

This-time-is-differentBK.jpg

Source of book image: http://www.paschaldonohoe.ie/wp-content/uploads/2010/02/This-time-is-different.jpg

Banks Try to Suppress Competition Through Federal Finance Regulations

Wal-MartBanco2010-07-24.jpg

“Banco Wal-Mart plans to open more than 160 branches in Mexico this year.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B2) Banco Wal-Mart plans to open more than 160 branches in Mexico this year, nearly doubling its presence south of the border. Wal-Mart Canada Bank also opened this month. It is offering a credit card and may make loans, including mortgages.

As Wal-Mart has done with retail in America, a Wal-Mart bank could be a disciplining force in keeping down costs for customers. It could also act as an engine of credit creation for a significantly underbanked subset of the American populace.
The Federal Deposit Insurance Corporation estimates that 60 million Americans, most of them low-income, are underserved by local community banks and wind up using usurious check cashers, payday lenders and pawnbrokers for financial services.
. . .
As part of the financial reform legislation, bankers have supported a three-year freeze on new applications for industrial loan corporations, the charter Wal-Mart would need.
That runs contrary to the supposed spirit of reform that seeks to empower and protect consumers. Greater competition, coupled with sounder regulatory supervision, would help accomplish that. And Wal-Mart could be its catalyst.

For the full commentary, see:
ROLFE WINKLER, ROB COX and MARTIN HUTCHINSON. “Reuters Breakingviews; The Halls of Finance Fear Wal-Mart.” The New York Times (Thurs., June 24, 2010): B2.
(Note: the online version of the article has the date June 23, 2010.)
(Note: ellipsis added.)

Apple Fired Mike Scott for Firing the Laggards

Wozniak writes of pre-1983 management troubles at Apple, in the passage quoted below. The passage highlights that large companies usually lose flexibility in hiring and firing. Good managers who have tacit (or just insufficiently documented) judgment about who the best employees are, have limited ability to act on that knowledge.
I wonder if this is a necessary disadvantage of size, or a disadvantage that is due to our laws, customs and institutions?

(p. 231) By this time, I should point out, Mike Scott–our president who took us public and the guy who took us through the phenomenally successful IPO–was gone. During the time the Apple III was being developed, he thought we’d grown a bit too large. There were good engineers, sure, but there were also a lot of lousy engineers floating around. That happens in any big company.

It’s not necessarily the lousy engineer’s fault, by the way. There’s always going to be some mismatch between an engineer’s interests and the job he’s doing.
Anyway, Scotty had told Tom Whitney, our engineering manager, to take a vacation for a week. And meanwhile he did some research. He went around and talked to every engineer in the company and found out who was doing what and who was working and who wasn’t doing much of anything.
Then he fired a whole bunch of people. That was called Bloody Monday. Or, at least, that’s what it ended up being called in the Apple history books. I thought that, pretty much, he fired all the right ones. The laggards, I mean.
And then Mike Scott himself was fired. The board was just very pissed that he’d done this without a lot of backing and enough due process, the kind of procedure you’re supposed to follow at a big company.
Also, Mike Markulla told me Mike Scott had been making a lot of rash decisions and decisions that just weren’t right. Mike thought Scotty wasn’t really capable of handling the company given the point and size it had gotten to.
I did not like this one bit. I liked Scotty very, very much as a person. I liked his way of thinking. I liked his way of being able to joke and be serious. With Scotty, I didn’t see many things fall (p. 232) through the cracks. And I felt that he respected the good work that I did–the engineering work. He came from engineering.
And as I said, Scotty had been our president, our leader from day one of incorporation until we’d gone public in one of the biggest IPOs in U.S. history. And now, all of a sudden, he was just pushed aside and forgotten.
I think it’s sad that none of the books today even seem to recall him. Nobody knows his name. Yet Mike Scott was the president that took us through the earliest days.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.

Android App Phones Play “One Seriously Crazy Game of Leapfrog”

DroidXphone2010-07-05.jpg

“The Droid X is the latest “best Android phone on the market.”” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) You think technology moves too fast now? You think your camera, camcorder and computer become obsolete quickly?

Try buying an app phone. In this business, the state of the art changes as often as Lady Gaga changes outfits.
Suppose, for example, that you want one of the increasingly popular phones that run Google’s Android software.
Last November, you might have been tempted by the Motorola Droid, “the best Android phone on the market.” A month later, the HTC Hero was “the best Android phone on the market.” By January, “the best Android phone yet” was the Nexus One. In April, “the best Android device that you can purchase” was the HTC Incredible. In May, “the best Android phone on the market” was the Sprint Evo.
Either “the best Android phone on the market” is a tech critic’s tic, or we’re witnessing one seriously crazy game of leapfrog.
The latest buzz is about the Motorola Droid X, which Verizon will offer in mid-July for $200.
. . .
(p. B8) . . . , it’s thrilling to see the array of excellent app phones that the original iPhone begat. If you who crave power, speed, flexibility, dropless calls an almost-Imax screen and Verizon’s network (as opposed to Sprint and its similar Evo), the Droid X is a big, beautiful contender for the “best Android phone on the market” crown.
This month’s crown, anyway.

For the full story, see:

DAVID POGUE. “State of the Art; Big Phone, Big Screen, Big Pleasure.” The New York Times (Thurs., July 1, 2010): B1 & B8.

(Note: ellipses added.)
(Note: the online version of the article is dated June 30, 2010.)

Commodore, Atari, and Some Venture Capitalists, Refused to Fund Jobs and Wozniak

(p. 196) After Commodore turned us down, we went over to Al Alcorn’s house. He was one of the founders of Atari with Nolan Bushnell, and he was the one who’d hired Steve to do video games there two years before.

Now, I knew Al knew me. He knew I had designed Breakout, the one-player version of Pong. I remember that when we went to his house I was so impressed because he had one of the earliest color projection TVs. Man, in 1976, he would have been among the first people to have one. That was cool.
But he told us later that Atari was too busy with the video game market to do a computer project.
A few days after that, venture capitalists Steve had contacted started to come by. One of them was Don Valentine at Sequoia. He kind of pooh-poohed the way we talked about it.
He said, “What’s the market?”
“About a million,” I told him.
“How do you know?”
I told him the ham radio market had one million users, and this could be at least that big.
Well, he turned us down, but he did get us in touch with a guy named Mike Markkula. He was only thirty, he told us, but already retired from Intel. He was into gadgets, he told us. Maybe Mike would know what to do with us.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.