February 22, 2013

Weekend Topic Suggestions

Please post topic ideas here!

RSS feed


Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 08:44:26

Is hair-of-the-dog housing market stimulus meeting its objectives?

And by the way, what were the objectives?

Comment by Carl Morris
2013-02-22 09:09:36

Yes. The banks are still in business and bonuses are still being paid.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 08:46:56

How will the sequester affect your local housing market if it happens? In particular, will it have an effect on real estate markets in areas with heavy concentrations of federal workers, like San Diego and Washington, DC?

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 08:48:24

Here’s how you run a sequester: ‘Scrape five percent less poop’
Posted by Dylan Matthews on February 22, 2013 at 9:00 am

The last time we ran a sequester, in 1991, things got a little out of hand.

Barry Anderson, then the head of the OMB’s budget review division, recalls one particularly vivid dilemma his team faced. “The Chesapeake Bay has light buoys among the rocks and stuff. They’re floating in the bay and they’re 10 feet high,” Anderson says. “Within the Commerce Department, there’s a program for nautical navigation, and then within that there’s a project to approve specific buoys, and then you finally get to the activity, which is this buoy. And Congress said you couldn’t remove them. I got a call from somebody at Commerce saying, ‘I have to go as low as I can go, and the lowest I can go is this buoy, so how do I cut 5 percent?’ I asked, ‘Do you do anything with the buoys?’ And they said, ‘Twice a year we send somebody to scrape off the bird poop.’ So I said, ‘Scrape five percent less poop.’ ”

Comment by Carl Morris
2013-02-22 09:10:57

The joke going around the military bands right now is to remove one measure out of every eight from each song.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 09:27:34

It really is hard to gauge the importance of military bands and other cultural institutions to a powerful nation’s status. But I can say one thing: Ending support for cultural institutions is a canary in the coalmine for national demise.

For instance, when the former Soviet Union crumbled after an exhausting military quagmire in Afghanistan, their musicians suddenly lost their stipends en masse. Many of them ended up in the U.S., including a large Russian expatriate community of music teachers in SoCal.

(Comments wont nest below this level)
Comment by Carl Morris
2013-02-22 09:34:21

We do spend a lot on military bands. The problem is that nobody will really want to make significant cuts to the DC bands that are in the public eye a lot. So they’ll cut more division bands. Except people don’t understand that those bands actually perform a backup function to the MPs in war zones, and someone else will have to do it, which requires more bodies from other types of units. So you don’t end up saving that much money in the end. And then you get public relations SNAFUs when somebody with friends in high places doesn’t get a live bugler for their funeral…

Comment by Arizona Slim
2013-02-22 09:34:57

For instance, when the former Soviet Union crumbled after an exhausting military quagmire in Afghanistan, their musicians suddenly lost their stipends en masse. Many of them ended up in the U.S., including a large Russian expatriate community of music teachers in SoCal.

Let me guess: They’re excellent musicians, and, once you get past the accent, pretty good teachers too.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 09:47:37

“They’re excellent musicians, and, once you get past the accent, pretty good teachers too.”

They are also artistes who are a real pain in the butt to deal with on a business level, as my hapless wife frequently attests.

Comment by Arizona Slim
2013-02-22 09:33:05

The joke going around the military bands right now is to remove one measure out of every eight from each song.

Okay, HBB Musical Corps, let’s edit some scores!

(Comments wont nest below this level)
Comment by Carl Morris
2013-02-22 09:39:58

Oh say can you see,
By the dawn’s early light,
What so proudly we hailed,
By the twilight’s last?
Stripes and bright stars,
through the perilous fight,
o’er the ramparts we’d watched
were so gallantly?
Rocket’s red glare,
The bombs bursting in air,
Gave proof through the night
That the flag was still.
Say does that Star Spangled Banner yet wave
O’er the land of the free, and the home of the?

Comment by tresho
2013-02-22 11:29:16

After the US economy crashes, the national anthem will be drastically shortened to match the shrunken economy:
“Oh, say can you see
And the home of the brave.”

Comment by polly
2013-02-22 09:30:26

Funny anecdote, but you would have to scrape a lot less poop than 95% of the previous total to save 5% of the poop scraping budget. Getting the poop scraping boat out in the water and in the general area where the bouys are is significant fixed cost. To save 5% of the money spent scraping, you might have to scrape 10% or 20% or 50% less. Depends on how close together the bouys are and how the compensation of the contractors (it is contractors, right?) is calculated.

Comment by alpha-sloth
2013-02-22 16:58:42

Instead of doing it every six months, they should do it every six and a half months. Save a little more than 5%.

(Comments wont nest below this level)
Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-22 17:53:09

Stock market participants clearly have called the politicians’ sequester bluff. There isn’t even an entry point for people who might have wanted to buy the pre-sequester-cancellation dip.

Stock market closes in on record high
By Tim Devaney
The Washington Times
Friday, February 22, 2013

Wall Street is poised to hit new milestones next week with the Dow Jones Industrial Average and Standard & Poor’s 500 both approaching record highs.

The Dow edged above the 14,000-milestone at Friday’s close, and is now just 165 points away from breaking its all-time high of 14,164.53 on Oct. 9, 2007.

The Dow, Wall Street’s benchmark index, finished up about 120 points Friday to close the week at 14,000.57.

Meanwhile, the S&P closed Friday up 13 points at 1,515.60. The index saw its first losing week of the year, after closing Monday at 1,530.94, but it is still within striking distance of the record high of Oct. 9, 2007, when it closed at 1,565.15.

While some are warning the markets are overpriced, some market experts predict that the Dow could flirt with 15,000 and the S&P could hit 1,600 by the end of the year.

The rally has come despite rising gas prices, a sluggish economy and a continuing standoff in Washington between President Obama and congressional Republicans over “sequester” across-the-board spending cuts to the federal budget set to take effect March 1.

Comment by Michael Viking
2013-02-22 09:19:08

If you could make one rule regarding business and the economy into law to “fix” things, what would it be and why?

Here’s my choice: Look back historically and find the average multiplier between the highest and lowest paid employee and fix it so that nobody’s compensation package can be worth X times more than their lowest paid employee’s compensation package. Let’s imagine the multiplier is 250. If you want to pay your secretary 25K/year, then the most you can make as the highest paid is 6.25 million. If you want to be paid 10 million/year then just pay your secretary 40K/year. If you want to outsource your work to India and pay somebody $2000/year, then the most you can earn is 500K/year.

I think this kind of solution solves global outsourcing, too. Anybody in the food chain should be considered a worker for a company to avoid “independent” factories selling finished goods to a company over here to skirt the law. If you’re buying goods from some factory in China where they pay X, then the most the CEO can make is X.


Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 09:28:53


Comment by polly
2013-02-22 09:32:24

Really. I thought Nixon was the last president to implement wage controls on the up side?

Comment by Michael Viking
2013-02-22 09:43:48

LOL. I suppose you believe that increasing marginal income tax rates is communist as well?

Do you even know what communism is?

Comment by polly
2013-02-22 09:47:16

Bear was being sarcastic. Actually, I think he is making fun of one or more of Northeasterner’s recent rants, but that is all.

(Comments wont nest below this level)
Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-22 11:32:51

Thank you for clearing up my post for the terminally dense.

Comment by Michael Viking
2013-02-22 11:59:28

Thank you for clearing up my post for the terminally dense.

More LOL. When somebody posts as frequently as you do, there’s bound to be good and bad. I notice that often when you’re called on something you’ve said you claim “sarcasm” or “I just like to stir things up”. If nobody calls you on your preposterous statements then you figure they stand as fact. I just wanted to know which was which here.

Here’s another thing for the terminally dense like yourself: do you really believe I don’t think you know what communism is? Apparently you’re the one who was caught hook, line and sinker.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-22 13:25:26

Thanks for the exhaustively banal clarification, Michael.

Comment by tresho
2013-02-22 13:30:10

Sometimes even originality gets obvious & boring.

Comment by Cantankerous Intellectual Bomb Thrower©
2013-02-22 18:13:03

“Sometimes even originality gets obvious & boring.”

That’s when the Joshua Tree Extension comes in handy.

Comment by oxide
2013-02-22 14:06:48

Eliminate the mark-to-fantasy accounting such as “deferred interest.”

Tobin transaction tax for sure.

Pay CEO’s in stock options redeemable in 8 years, no early cash-out, no parachute. If the company doesn’t like it, then take it out of their tax loopholes.

Comment by oxide
2013-02-22 14:11:16

And oh.. head-bonk. Reinstate Glass-Steagall.

Comment by polly
2013-02-22 09:27:20

What government programs would you rather get rid of completely rather than going through the sequester?

And I don’t mean a moronic list where you just say get rid of every acronym you can think of. You can’t just say get rid of the Department of Energy - the DoE is in charge of most of the nuclear arsenal. If you get rid of it, all that functionality would have to get moved someplace else and it would cost more for a while, not less. Don’t say get rid of the IRS - as long as we have taxes, some department has to administer them. But I bet the IRS could save money by requiring every single form/return/check/whatever be filed electronically. It would mean that every person in the country would have to deal with (and pay) a private company in order to do their taxes (can you guess what I am doing this weekend?), so it wouldn’t necessarily save each individual person money, but it would save the government money.

So, I mean specify the programs, or military equipment being bid or the NASA projects or the loan guarantee or the tax subsidy or whatever.

What do you want to get rid of. Bonus points if you can find out how much money it would actually save. Triple points if you can find out how much money it would save and how many people would lose their job because of it. Quadruple if you can explain the eventual outcome, like how much house prices would fall (at least in wealthy areas) if the MID went away, or how much extra time it would take to track down sources of salmonella if the FDA lost certain programs, or how many of the bouys in the Chesapeake would fail over 5 years if their bird poop didn’t get scraped.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 09:41:32

I can think of one program we could get rid of in a heart beat.

Op-Ed Contributors
Illogical Housing Aid
Published: October 30, 2012

THE tax deduction for mortgage interest may not quite be the “third rail” of politics that Social Security is, but politicians on both sides have long been afraid to touch it. So when Mitt Romney recently floated the idea of capping this deduction, Democrats pounced.

Here, after all, was Mr. Romney arguing to cut a long-favored tax benefit for middle-class homeowners — in the midst of a soft housing market, no less — so as to make up lost revenue from his proposed tax cuts that, critics say, disproportionately benefit the wealthy.

But while Mr. Romney’s tax proposal over all may not be fair or sensible — or even mathematically logical — Democrats shouldn’t be so quick to attack any change to the mortgage interest deduction. In doing that, they’re depriving themselves of a potentially powerful tool for progressive governance, one that could greatly increase funding for affordable housing. In truth, the mortgage interest tax deduction benefits the rich far more than middle-income families. A 2012 study by the nonpartisan Center on Budget and Policy Priorities shows that of federal tax expenditures for homeowners, more than half goes to households with annual incomes above $100,000, about twice the United States median.

Upper-income Americans take advantage of these policies to help them buy million-dollar homes, but there are relatively few federal housing dollars for extremely low-income families — and even fewer for those in the next tier up, who earn between $20,000 and $50,000 a year. Rather than preserve the mortgage-interest deduction as it is now, progressive politicians would do better to redirect the benefits we currently provide to America’s wealthiest homeowners to supporting housing for struggling and moderate-income families.

Comment by cactus
2013-02-22 21:34:48

Adding taxes is not the same as cutting Government departments

But much easier to add taxes especially after prolonged work by the “department of we get people to think the correct way”

Comment by goon squad
2013-02-22 11:31:18

Speaking of DoE, we are aware of about 60 layoffs effective March 30 on a DoE contract that is being terminated. These are mostly mid-level analyst positions.

Comment by ahansen
2013-02-22 12:39:26

The problem with getting rid of Departments and agencies outright is that many of those employed therein are suddenly dumped into a jobless economy, further straining the whole system as the survivors regroup and recoup. Moreover, the expertise and social infrastructure they’ve amassed and developed is lost along with them. In my experience, federal employees are a lot more qualified and accountable than state (or certainly municipal) employees.

A more rational approach would be to implement 1% across-the-board cuts in EVERYTHING paid for by US government check this year. Everything. Tax returns, DoD contracts and foreign aid allotments, Medicare reimbursements and SSI payouts, federal salaries, state subsidies, corporate kickbacks and contracts, agency budgets, military hardware, salaries, and benefits, grants and loans, bond payouts. Everything.

Then next year, cut 1% from THAT amount etc., until we’ve reached the desired level of austerity. That way the pain is distributed equitably and gradually, organized blowback in minimized as everyone is involved on some level, and no one is disproportionately “punished”. A 1% reduction for everyone is far less disruptive than a 10% (or 20%) cutback in selected established systems, while still allowing for streamlining and managerial evolution as they adapt.

Secondly, the Tobin Transaction Tax (.001%/share traded on any market or bourse) should be instituted forthwith. Overnight end to high frequency trade manipulations by “sanctioned” players, with the money collected going directly to UN-monitored relief efforts. That should help rein in the FED and keep the IMF accountable to the markets, not the bankers who feed from them.

Comment by tresho
2013-02-22 13:36:29

Secondly, the Tobin Transaction Tax (.001%/share traded on any market or bourse) should be instituted forthwith. Overnight end to high frequency trade manipulations by “sanctioned” players
At first I thought you were joking. I think your basic idea is sound, not that that the Vampire Squids would allow it to be enacted, or that any such ’sanctions’ will ever be applied to privileged system manipulators.
Sheila Bair, a Republican & former head of the FDIC, suggested taxing capital gains at the same rate as personal income. As if that would ever happen.

Comment by Arizona Slim
2013-02-22 15:47:23

Sheila Bair, a Republican & former head of the FDIC, suggested taxing capital gains at the same rate as personal income. As if that would ever happen.

Your HBB Librarian recommends Bair’s book, Bull by the Horns. All the financial policy wonkery you’d ever want to read.

(Comments wont nest below this level)
Comment by polly
2013-02-22 18:55:19

The problem with 1% cuts for everything, is that some stuff should be cut 100% (corn and soy bean subsidies for a start) and some stuff should be funded more (effectiveness research for medical procedures and drugs). Congress often doesn’t allow the departments to make those decisions. That is their prerogative, but then they also refuse to make the decisions as to what should be 100% cut themselves.

In the mean time, good luck finding a paperclip in my office. I’ve been sharing mine with the new people. Pads of paper are a lost cause.

Comment by AnnGogh
2013-02-22 20:04:48
(Comments wont nest below this level)
Comment by cactus
2013-02-22 20:41:24

Not the national Science Foundation !!

1.“RoboSquirrel.” $325,000 was spent on a robotic squirrel named “RoboSquirrel.” This National Science Foundation grant was used to create a realistic-looking robotic squirrel for the purpose of studying how a rattlesnake would react to it.

Department of education get rid of it

“ED administers programs authorized and funded by Congress. These programs provide financial aid for eligible applicants for elementary, secondary, and college education; for the education of individuals with disabilities and of those who are illiterate, disadvantaged, or gifted; and for the education of immigrants, American Indians, and people with limited English proficiency.”

Comment by cactus
2013-02-22 20:53:13


too many departments there must be hundreds what do they all do ?

How they would howl if you cut one more than the other

Comment by cactus
2013-02-22 21:09:47

what would we do without these guys ??

Securities and Exchange Commission (SEC)

(Comments wont nest below this level)
Comment by cactus
2013-02-22 21:14:54

Government National Mortgage Association

without these guys we would all be living in caves

Comment by cactus
2013-02-22 21:22:01

Fiscal Responsibility and Reform, National Commission

the Department nobody pays attention to

Comment by cactus
2013-02-22 21:27:30

Federal Housing Finance Agency
The Federal Housing Finance Agency provides supervision, regulation, and housing mission oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

really …

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 01:16:11

If a Wall Street bankster analyst sez it, it must be so.

Zach Carter
Obama Will Fire FHFA Director Ed DeMarco In December, Wall Street Analyst Says
Posted: 11/02/2012 2:14 pm EDT Updated: 11/02/2012 2:56 pm EDT

Bank of America analyst Ralph Axel said Friday that he expects President Barack Obama to fire acting Federal Housing Finance Agency Director Ed DeMarco, should Obama win reelection. Firing DeMarco, Axel said, would unleash a “secret weapon” to boost the economy by allowing more borrowers to refinance their mortgages.

DeMarco has been embroiled in a public feud with the White House for most of 2012 over his refusal to allow principal reductions for troubled borrowers whose mortgages are owned by Fannie Mae and Freddie Mac. Writing down the total debt burden these “underwater” borrowers owe would bring their mortgages in line with current home values, and reduce their monthly mortgage payments, giving them more money to spend on other economic activities.

“Although DeMarco has agreed to some stimulus programs, including an expansion of the HARP program, much more can be done,” Axel wrote in a note to clients dated Friday, Nov. 2. “We would expect to see President Obama use the recess appointment to replace DeMarco in December were he reelected.”

Comment by ahansen
2013-02-22 19:54:24

Corn and soybean growers (and the international industries they support) would likely argue your assessment. It’s not the crop per se, it’s keeping the land, equipment, and infrastructure in play as farmland. What’s actually grown on it is largely irrelevant.

I wasn’t suggesting that cuts be limited to 1%, but it’s a good (and democratic) place to start — if for no other reason than to demonstrate to corporate socialists that not only are such cuts coming, but that our national life will go on in spite of them.

An abrupt 100% (or even 10%) cut would displace far more than just the growers; there are invested pension funds, international food banks, commodities markets, manufacturing and immigration concerns, and myriad spin-off industries to consider.

Ya gots to boil that frog slooooowwwwlyyyyy.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-22 21:22:49

There is also the whole residual industry of agricultural economics, which spends a great deal of ongoing research funding and effort explaining why it would be a great idea to cut back on agricultural subsidies.

And then there is the federally-subsidized crop insurance program, which hides direct wealth transfers to farmers in the form of subsidized (below actuarially equivalent cost) insurance rates for farmers, which guarantee them a bumper crop of federal dollars over the ups and downs of crop disasters.

Comment by cactus
2013-02-22 21:48:45

This forces farmers to buy seeds from Monsanto. Even in Rural Mexico Monsanto corn DNA has spread. This Judge is either ignorant or bought off. Big AG and the department of agriculture.

According to many family farmers, there is an atmosphere of fear in rural America today. The threat of litigation looms, carried on the wind, by bird and by bee, in the form of Monsanto’s genetically engineered seeds. When these patent-protected drifters settle on a neighbor’s non-GE field, in effect contaminating their crops, unwitting farmers are suddenly at risk for legal retribution from the biotech giant.

In an effort to protect themselves from such spurious lawsuits, 60 family farmers, seed businesses and organic agricultural organizations gathered in federal district court in Manhattan on a chilly January morning to file Organic Seed Growers & Trade Association, et al. v. Monsanto, with hundreds convening across the street in Foley Square in solidarity with the plaintiffs. The lawsuit sought to challenge the validity of Monsanto’s patents and to receive court protection from Monsanto-initiated patent infringement suits.

Less than a month later, Judge Naomi Reice Buchwald dismissed the case, which had garnered international attention, stating, “There is no evidence that plaintiffs are infringing defendants’ patents, nor have plaintiffs suggested when, if ever, such infringement will occur.” She went on to scold the farmers for what she claims was “a transparent effort to create a controversy where none exists.”

Buchwald’s strongly worded criticism of the farmers’ pursuit of justice is surprising (and perhaps unfair) given Monsanto’s history of aggressively pursuing lawsuits against farmers. Between 1997 and 2010, the company filed 144 lawsuits against farmers for alleged infringement, with another 700 cases settled out of court. Not to be dissuaded from their mission, on March 28 the family farmers filed a Notion of Appealon Judge Buchwald’s ruling.

Comment by AbsoluteBeginner
2013-02-22 22:24:08

Lucky ducky farmers.

(Comments wont nest below this level)
Comment by ahansen
2013-02-23 01:08:39

The Supreme Court just agreed to hear this case — which has international (and perhaps existential) implications.

To wit:
Who owns the end product? (Can a farmer, who has purchased surplus GE seeds for feed, repurpose them to be…well, seeds? And then plant them, harvest them and sell them?)

Implications for creative commons, 3D printing, imaging and ownership….

(Comments wont nest below this level)
Comment by ahansen
2013-02-22 23:06:47

And food stamps. Don’t forget the BigAg giveaway that is food stamps.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 01:07:26

And don’t forget about the original form of government cheese!

While Warning About Fat, U.S. Pushes Cheese Sales
Katie Orlinsky for The New York Times

A government-created industry group worked with Domino’s Pizza to bolster sales by increasing the cheese on pies.
Published: November 6, 2010

Domino’s Pizza was hurting early last year. Domestic sales had fallen, and a survey of big pizza chain customers left the company tied for the worst tasting pies.

Then help arrived from an organization called Dairy Management. It teamed up with Domino’s to develop a new line of pizzas with 40 percent more cheese, and proceeded to devise and pay for a $12 million marketing campaign.

Consumers devoured the cheesier pizza, and sales soared by double digits. “This partnership is clearly working,” Brandon Solano, the Domino’s vice president for brand innovation, said in a statement to The New York Times.

But as healthy as this pizza has been for Domino’s, one slice contains as much as two-thirds of a day’s maximum recommended amount of saturated fat, which has been linked to heart disease and is high in calories.

And Dairy Management, which has made cheese its cause, is not a private business consultant. It is a marketing creation of the United States Department of Agriculture — the same agency at the center of a federal anti-obesity drive that discourages over-consumption of some of the very foods Dairy Management is vigorously promoting.

Urged on by government warnings about saturated fat, Americans have been moving toward low-fat milk for decades, leaving a surplus of whole milk and milk fat. Yet the government, through Dairy Management, is engaged in an effort to find ways to get dairy back into Americans’ diets, primarily through cheese.

Americans now eat an average of 33 pounds of cheese a year, nearly triple the 1970 rate. Cheese has become the largest source of saturated fat; an ounce of many cheeses contains as much saturated fat as a glass of whole milk.

When Michelle Obama implored restaurateurs in September to help fight obesity, she cited the proliferation of cheeseburgers and macaroni and cheese. “I want to challenge every restaurant to offer healthy menu options,” she told the National Restaurant Association’s annual meeting.

But in a series of confidential agreements approved by agriculture secretaries in both the Bush and Obama administrations, Dairy Management has worked with restaurants to expand their menus with cheese-laden products.

Consider the Taco Bell steak quesadilla, with cheddar, pepper jack, mozzarella and a creamy sauce. “The item used an average of eight times more cheese than other items on their menu,” the Agriculture Department said in a report, extolling Dairy Management’s work — without mentioning that the quesadilla has more than three-quarters of the daily recommended level of saturated fat and sodium.

Dairy Management, whose annual budget approaches $140 million, is largely financed by a government-mandated fee on the dairy industry. But it also receives several million dollars a year from the Agriculture Department, which appoints some of its board members, approves its marketing campaigns and major contracts and periodically reports to Congress on its work.

The organization’s activities, revealed through interviews and records, provide a stark example of inherent conflicts in the Agriculture Department’s historical roles as both marketer of agriculture products and America’s nutrition police.

In one instance, Dairy Management spent millions of dollars on research to support a national advertising campaign promoting the notion that people could lose weight by consuming more dairy products, records and interviews show. The campaign went on for four years, ending in 2007, even though other researchers — one paid by Dairy Management itself — found no such weight-loss benefits.

When the campaign was challenged as false, government lawyers defended it, saying the Agriculture Department “reviewed, approved and continually oversaw” the effort.

Dr. Walter C. Willett, chairman of the nutrition department at the Harvard School of Public Health and a former member of the federal government’s nutrition advisory committee, said: “The U.S.D.A. should not be involved in these programs that are promoting foods that we are consuming too much of already. A small amount of good-flavored cheese can be compatible with a healthy diet, but consumption in the U.S. is enormous and way beyond what is optimally healthy.”

(Comments wont nest below this level)
Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 01:11:34

Got Cheese?

Euthanized cows and caves full of cheese: the government policies behind ‘Got Milk?’

Government dairy policy, until recently, reflected Depression-era norms. Starting in 1995, a government nonprofit has promoted a pro-dairy policy – in direct opposition to the Department of Agriculture and government nutritionists. Behold the power of cheese.

By Donald Marron, Guest blogger / November 8, 2010

Jerry Heimerl, co-owner of the Saxon Homestead Creamery, cuts into a wheel of award winning Greenfield’s cheese in Cleveland, Wisc, in this Oct 8 file photo.

Sue Pischke / Herald-Times Reporter / AP / File

American cheese policy is full of contradictions. (If it were full of holes, it would be Swiss cheese policy.)
Donald Marron

Donald B. Marron is director of the Urban-Brookings Tax Policy Center. He previously served as a member of the President’s Council of Economic Advisers and as acting director of the Congressional Budget Office.

The Christian Science Monitor
Weekly Digital Edition

What, you didn’t know America has a cheese policy? Well, we do, as part of our larger dairy policy. And over the years the dairy policy’s failures have led to caves full of uneaten cheese, subsidized cow euthanasia, and, as Michael Moss documents in the New York Times this morning, the creation of a marketing board whose goal in life is to encourage Dominos and Taco Bell to use even more cheese on their pizzas and quesadillas:

Every day, the nation’s cows produce an average of about 60 million gallons of raw milk, yet less than a third goes toward making milk that people drink. And the majority of that milk has fat removed to make the low-fat or nonfat milk that Americans prefer. A vast amount of leftover whole milk and extracted milk fat results.

For years, the federal government bought the industry’s excess cheese and butter, an outgrowth of a Depression-era commitment to use price supports and other tools to maintain the dairy industry as a vital national resource. This stockpile, packed away in cool caves in Missouri, grew to a value of more than $4 billion by 1983, when Washington switched gears.

The government started buying only what it needed for food assistance programs. It also began paying farmers to slaughter some dairy cows. But at the time, the industry was moving toward larger, more sophisticated operations that increased productivity through artificial insemination, hormones and lighting that kept cows more active.

In 1995, the government created Dairy Management Inc., a nonprofit corporation that has defined its mission as increasing dairy consumption by “offering the products consumers want, where and when they want them.”

Dairy Management, through the “Got Milk?” campaign, has been successful at slowing the decline in milk consumption, particularly focusing on schoolchildren. It has also relentlessly marketed cheese and pushed back against the Agriculture Department’s suggestion that people eat only low-fat or fat-free varieties.

The pro-cheese policy thus runs exactly counter to the anti-cheese policy of the Agriculture Department’s nutrition efforts.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 01:00:12

What I want to know about these mortgages for international home buyers is, how much of the tab is underwritten by the U.S. taxpayer and how? For instance, are these federally guaranteed, as in bought up by the Fed or turned over the Fannie Mae or Freddie Mac?

There just has to be some way the U.S. taxpayer gets screwed in this scheme — I can smell it!

Feb. 22, 2013, 12:23 p.m. EST
Banks court international home buyers
Lenders have figured out how to provide mortgages to affluent foreigners
By AnnaMaria Andriotis

For wealthy buyers finding the ideal property in the U.S. may be easier than getting a mortgage to pay for it.

Financing a luxury home has been challenging for affluent international buyers—despite their ample assets and income. Most don’t have Social Security numbers, their credit history is limited, or they’re unable to provide the extensive financial profiles required by U.S. lenders. The lenders themselves may avoid these transactions because of the work involved with translating foreign tax returns and other financial statements. Often, these buyers can’t turn to banks in their countries if those institutions remain skittish about originating mortgages pegged to U.S. real estate.

Aware of the limited options, several lenders have figured out ways to provide mortgages to affluent foreigners. In some cases, lenders are reaching out to real-estate agents and developers and offering their services to the foreign buyers they’re working with. First Choice Bank, which started working with these buyers in 2009, has since originated about $75 million in these loans. Other banks, including Citi and Deutsche Bank, say they consider providing mortgages to some foreign buyers with whom they have an existing relationship in one of their offices abroad.

Based in London, Adu Advaney says he and his wife were able to secure a mortgage on a two-bedroom penthouse suite in New York’s Trump SoHo last year—five years after first making a down payment in 2007. At the time, Mr. Advaney, co-founder of a private-equity firm, had lined up a mortgage with a Dutch bank, which pulled its offering amid the U.S. downturn. He spent the next few years, while the property was being built, looking for financing. After getting a referral from his sales agent, First Choice Bank approved a mortgage that covered 60% of the more than $4 million purchase price.

Comment by Cantankerous Intellectual Bomb Thrower™
2013-02-23 01:13:09

What advice would you offer a friend, colleague, or family member who asks whether “now is the time to buy real estate”? (I get asked that question a lot, to the point where I no longer feel motivated to provide a detailed answer.)

Comment by hazard
2013-02-24 13:36:38


Comment by hazard
2013-02-24 15:00:24

dollar crash

Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post