Indian Call Centers....in Ohio? Outsourcing TO USA

It would be easy to imagine Reno, Ohio, as the type of place that would be hit hardest by outsourcing - a small American town losing out to the invisible hand shifting jobs to places like Bangalore. Instead, outsourcing is bringing the jobs to Reno. Across the street from an Army Reserve center and next to a farm, a customer-service call center hums, its 250 workers answering phones for online travel agency Expedia. The center's owner? Indian conglomerate Tata Group (NYSE:TTM), based in Mumbai.

According to the Organization for International Investment, firms headquartered abroad employ 5.1 million Americans in their U.S. offices. But while these jobs have typically been in manufacturing (think German carmakers' factories in the South), the mix is changing, and more companies are finding that hiring Americans offers distinct advantages. Some companies feel hearing a fellow American makes callers feel more comfortable. Other foreign firms think Americans bring a more entrepreneurial attitude to their work. In Expedia's case, its call-center workers need a firm grasp on U.S. geography.

Read more from CNN.

(HT: Sanil Kori)

Globalization: Trade Works Both Ways

First it was Starbucks entering the Indian market, then Wal-Mart, then Foot Locker and now Procter and Gamble is set to enter the Indian skin care market with a range of products, read more here.

(HT: Sanil Kori)

Private Bridges?

The tragic bridge collapse in Minneapolis is a stark reminder that too much of our transportation infrastructure is not well-maintained and requires extensive, costly investments to be fixed or even, in some cases, completely replaced.

Nearly a fifth of America's roads are now considered in poor shape and about one-in-four bridges is rated "structurally deficient." The U.S. Department of Transportation estimates that the cost to fix these problems is a staggering $460 billion.

Is more federal transportation money the answer? The problem is that 98% of our bridges and 97% of our roads are owned and operated by state and local governments -- and that these governments have often used past increases in federal transportation aid simply to replace their own infrastructure spending.

Instead, a few states and cities are now creatively turning to the private sector for help. They are partnering with private investors to build from scratch new toll roads, bridges and other infrastructure that the private owners -- not government -- will finance and operate. A few cash-strapped cities and states are also replenishing their transportation trust funds -- so that they can pour more money into repair and maintenance -- by auctioning off existing toll roads and bridges to private operators, who are bidding far more for these assets than most experts would have predicted.

~From today's WSJ editorial "How To Keep Our Bridges Safe"

Note: The original U.S. toll roads in the 18th and 19th century were privately owned, until taken over by state highway deparments in the early 1900s, click here for some history.

The Political Reality of Highway Spending

The last major highway bill was passed in 2005.

From the Heritage Foundation in 2005: "With the House proposing $370 billion against the Senate’s $318 billion, the President ultimately forced both sides to accept $284 billion as the upper limit on spending, and that number became a part of both bills. But while the President won on total spending, Congress apparently believed that its consolation prize was the right to waste the money on frivolous programs that provided little or no safety and mobility to the motorists whose taxes fund the program."

From CBS News in 2005: Congress passed sweeping highway and mass transit legislation that will send $284 billion to the states to build and fix roads, create thousands of new jobs and — lawmakers hope — save lives and cut hours wasted in traffic jams.

The bill "will affect every American in some way," said Sen. James Jeffords, I-Vt. "The impact of this bill will be felt for decades to come."

The bill is also stuffed with thousands of so-called "earmarks," projects big and small that influential members of Congress have put in to by-pass state highway department priorities and make a splash in their home districts.

Taxpayers for Common Sense, which lists 6,361 of these projects valued at $23 billion, and other watchdog groups say such projects are wasteful, handed out as political rewards.

From the Cato Institute in 2005: You may recall the highway bill that Congress passed in July. It was the biggest porkfest in history -- more than 13,000 individual projects awarded federal tax dollars in an orgy of logrolling and back-scratching.

Among the most notorious projects were two bridges in Alaska, dubbed the "bridges to nowhere." The bill included $223 million for a bridge linking Gravina Island to the town of Ketchikan in Alaska. According to Taxpayers for Common Sense, federal taxpayers will eventually pay $315 million for this bridge. Here’s the deal: Ketchikan is a town of 8,000 people (13,000 in the whole county, and population is declining). Its airport is on the nearby Gravina Island. Right now you have to take a 7-minute ferry ride from the airport to the town. To save people that 7-minute ride, Alaska wants to build a $315 million bridge.

MP: Perhaps instead of building "bridges to nowhere," Congress should have paid more attention to existing bridges in need of repair?

Thanks to Larry Kudlow.

Sicko in Europe's Backwards Health Care System

We live in an age of unprecedented medical innovation. Unfortunately, most of today's cutting-edge research is conducted outside Europe, which was once a pioneer in this field. About 78% of global biotechnology research funds are spent in the U.S., compared to just 16% in Europe. Americans therefore have better access to modern drugs. One result is that in the U.S., the annual death rate from cancer is 196 per 100,000 people, compared to 235 in Britain, 244 in France, 270 in Italy and 273 in Germany (see chart above, click to enlarge).

It is both a tragedy and an embarrassment that Europe hasn't kept up with the U.S. in saving and improving lives. What's to blame? The Continent's misguided policies and state-run health-care systems.

It is time for politicians and regulators to confront our backward health-care systems and unleash the powers of medical research. Besides expanding drug budgets, European countries should work together to deregulate the pharmaceutical industry -- for instance, by speeding up the approval process for new drugs. The EU can better ensure that drug patents are adequately protected both in Europe and around the world against compulsory licensing and other infringements. Finally, we should give medical researchers tax incentives to slow the brain drain to the U.S. -- much like Ireland is attracting artists with favorable tax laws. We Europeans are getting older; we should be getting wiser, healthier and happier, too.

~From today's WSJ, "Sicko in Europe" by Daniel Capezzone, president of the productivity committee of the Italian Chamber of Deputies

Convenient, Affordable Health Care: Retail Clinics

I have posted previously on low-cost, consumer-friendly, market-driven, walk-in retail health care clinics in retail stores like Walgreens, CVS and Wal-Mart, see here, here, here and here.

In today's WSJ, there is an excellent article by the CEO of RediClinic, one of the nation's largest convenient care providers (mostly in Wal-Marts), "Health Care When You Want It," here are some highlights:

1. There are about 400 such clinics today and could be several thousand more in the next few years.

2. Convenient care clinics are small health-care facilities with new brand names like RediClinic, MinuteClinic, and Take Care Health Clinics. Most are located in high-traffic retail outlets with pharmacies, such as Wal-Mart, CVS and Walgreen stores.

3. Convenient care clinics have been embraced by consumers, who give them consistently high marks for patient satisfaction: 97% of the more than 4,000 RediClinic patients surveyed this year said they would recommend RediClinic to their relatives and friends. This is because the clinics are delivering something that is all too rare in our system -- convenient and affordable health care.

4. The quality of care at convenient care clinics stems from their use of nationally certified nurse practitioners, who are registered nurses with master's degrees or comparable advanced training. Research over the past 30 years has consistently shown that the primary care provided by nurse practitioners is comparable in quality to that provided by physicians, though nurse practitioners are still required to collaborate with local physicians in most states.

5. Treatment for most common ailments ranges from $40 to $70 and preventive services start as low as $15, significantly less than what most physicians, urgent care clinics or emergency rooms charge. Indeed, research shows that as many as 50% of the people who seek care at overburdened emergency rooms could be treated much less expensively in convenient care clinics. Prices are prominently displayed so patients know what they will pay before they are treated, and visits are covered by a growing number of insurance plans, including Medicare.

6. As would be expected, their growth is being threatened by burdensome regulations in some states and opposition from some corners of high-priced organized medicine (MDs, AMA, etc). Instead of opposing convenient care, physicians should be working collaboratively with operators -- as many physicians are today -- to fill the critical need that all Americans share for easier access to high-quality, affordable health care.

Bottom Line: Perhaps we don't need more high-cost, bureaucratic, inefficient, socialized medicine, we need more efficient, low-cost, market-driven, and consumer-friendly retail healthcare clinics to reform our health care system.

Almost "All Children Left Behind" in D.C. Schools

Spending per child in Washington, D.C. public schools: $15,414

D.C.'s ranking for per student spending: #1, more than any state

Average spending per student, nationally: $8,899

Percent of D.C. 8th grade students not proficient in reading: 88%

Percent of D.C. 8th grade students not proficient in math: 93%

D.C.'s ranking for reading and math proficiency: #51

Bottom Line: Washington, D.C. spends the most money per student, and gets the worst results. So much for the idea that spending more money on public schools will improve academic performance.

Read more here.

Minneapolis I-35W Bridge Collapses into Mississippi

See security camera footage that shows the actual collapse of the I-35W bridge in Minneapolis yesterday.

In less than 24 hours, "instant online encyclopedia" Wikipedia already has an extensive listing on the "I-35W Mississippi River Bridge," with a history of the bridge, more than 40 references, photos, external links, alternate routes, etc., updated continuously.

Note: I left Minneapolis yesterday about 1 p.m. to drive down to the Winona, MN area, about 100 miles south of Minneapolis on the Mississippi River, and I am now looking out at a magnificent, peaceful river scene from Buffalo City, Wisconsin, just south of Lock and Dam #4 near Alma, WI, quite a contrast to the chaos and destruction on the Mississippi in Minneapolis, just north of Lock and Dam #1.

"Just Say No" to Corn and The Ethanol Hustlers

There is a real danger that Congress will remain oblivious to the economic and scientific realities of ethanol and take us down the wrong path by mandating a huge increase in ethanol production. Washington might have a love affair with ethanol for political reasons, but increasing ethanol production will lead to higher taxes, higher prices for both food and fuel, and damage to the environment, making us all worse off.

Congress needs to say no to the ethanol hustlers and end its political addiction to corn.

~From my commentary in today's Detroit News "Cornfed overexuberance: Ethanol push raises food prices, guzzles fuel, reduces water levels."

Bottom Line: Corn ethanol is all about politics, not about sound economics or sound science. Ethanol is a classic public choice example of rent seeking, special interest groups, and rational ignorance.

Price Controls Lead to Empty Shelves in Zimbabwe

NY Times: Robert G. Mugabe has ruled over this battered nation (Zimbabwe), his every wish endorsed by Parliament and enforced by the police and soldiers, for more than 27 years. It appears, however, that not even an unchallenged autocrat can repeal the laws of supply and demand (with price controls).

Neither can Congress nor local governments in the U.S. Like when they pass minimum wage laws, rent control laws, price gouging laws, etc.

The biggest difference between market prices and government-controlled prices? See pictures above (controlled prices) and below (market prices) for the answer.

Doh!

Foreign rivals outsold the Big Three in July for the first time in history, see graph above (click to enlarge). Read more about it here in the Detroit News.

Cartoon of the Day: Northwest Homers

1,028 Economists Oppose Protectionist Policies

Some in Congress are considering ways to enact protectionist policies against China. Fortunately, 1,028 of America’s top economists, from all 50 states and top universities, have signed the following petition sponsored by the Club for Growth in opposition to protectionist policies against China. In addition to many other prominent and well-respected economists, signatories include Nobel Laureates Finn Kydland, Edward Prescott, Thomas Schelling, and Vernon Smith. The petition and names of the signers appears as full page ad in today's Wall Street Journal.

PETITION

Concerning Protectionist Policies Against China

We, the undersigned, have serious concerns about the recent protectionist sentiments coming from Congress, especially with regards to China.

By the end of this year, China will most likely be the United States' second largest trading partner. Over the past six years, total trade between the two countries has soared, growing from $116 billion in 2000 to almost $343 billion in 2006. That's an average growth rate of almost 20% a year.

This marvelous growth has led to more affordable goods, higher productivity, strong job growth, and a higher standard of living for both countries. These economic benefits were made possible in large part because both China and the United States embraced freer trade.

As economists, we understand the vital and beneficial role that free trade plays in the world economy. Conversely, we believe that barriers to free trade destroy wealth and benefit no one in the long run. Because of these fundamental economic principles, we sign this letter to advise Congress against imposing retaliatory trade measures against China.

There is no foundation in economics that supports punitive tariffs. China currently supplies American consumers with inexpensive goods and low-interest rate loans. Retaliatory tariffs on China are tantamount to taxing ourselves as a punishment. Worse, such a move will likely encourage China to impose its own tariffs, increasing the possibility of a futile and harmful trade war. American consumers and businesses would pay the price for this senseless war through higher prices, worse jobs, and reduced economic growth.

We urge Congress to discard any plans for increased protectionism, and instead urge lawmakers to work towards fostering stronger global economic ties through free trade.

To see the full list of the 1,028 economists who signed the petition click here.

MP: I, along with four other economists at the University of Michigan-Flint signed the petition: School of Management Dean Jack Helmuth, and Professors Yener Kandogan, Dennis Ellis and Chris Douglas.

See a related editorial in the WSJ here.

Minnesota Repeals 1913 Ticket Scalping Ban

Most crimes involve a victim - someone who has been assaulted, raped, murdered, burgled, deceived by fraud, attacked, blackmailed, slandered, or otherwise damaged or harmed in some way. Ticket reselling or "scalping" is an exception, it's a "victimless crime," involving a voluntary buyer and a voluntary seller engaged in a mutually advantageous transaction for tickets to a sporting event or concert. Win-win. The buyer values the tickets more than the cash, and the seller values the cash more than the tickets.

Houses often sell for more than the list price, coins often sell for more than face value, cars sometimes sell for more than the sticker price, and thousands of bonds sell daily for more than face value. Why should tickets to the Superbowl or a Prince concert be any different?

Well, they're not different any more in Minnesota, where the 94-year-old Minnesota law that made reselling tickets for more than face value a misdemeanor was erased from the books at 12:01 a.m. today, see the story "Scalp All You Want" here in the Twin Cities StarTribune.

Minnesota is now the 42nd state to decriminalize scalping. There are only 8 left.

Ethanol: Dangerous, Delusional Bullshit

Ethanol is not just hype -- it's dangerous, delusional bullshit.

Ethanol doesn't burn cleaner than gasoline, nor is it cheaper. Our current ethanol production represents only 3.5 percent of our gasoline consumption -- yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World. And the increasing acreage devoted to corn for ethanol means less land for other staple crops, giving farmers in South America an incentive to carve fields out of tropical forests that help to cool the planet and stave off global warming.

So why bother? Because the whole point of corn ethanol is not to solve America's energy crisis, but to generate one of the great political boondoggles of our time. Corn is already the most subsidized crop in America, raking in a total of $51 billion in federal handouts between 1995 and 2005 -- twice as much as wheat subsidies and four times as much as soybeans. Ethanol itself is propped up by hefty subsidies, including a fifty-one-cent-per-gallon tax allowance for refiners. And a study by the International Institute for Sustainable Development found that ethanol subsidies amount to as much as $1.38 per gallon -- about half of ethanol's wholesale market price.

The ethanol boondoggle is largely a tribute to the political muscle of a single company: agribusiness giant Archer Daniels Midland (ADM).

Today, ADM is the leading producer of ethanol, supplying more than 1 billion gallons of the fuel additive last year. Ethanol is propped up by more than 200 tax breaks and subsidies worth at least $5.5 billion a year. And ADM continues to give back: Since 2000, the company has contributed $3.7 million to state and federal politicians.

From "Ethanol Scam: Ethanol Hurts the Environment And Is One of America's Biggest Political Boondoggles," in RollingStone Magazine

MP: The chart above shows the 5-year return on ADM stock (+200%, top blue line) vs. the S&P500 (+60%, bottom red line).

Price Discrimination: Russians Get a Discount

The picture above (click to enlarge) shows a sign at St. Issac's Cathedral in St. Petersburg, Russia. The church, designed to accommodate 14,000 standing worshipers, was closed in the early 1930s and reopened as a museum.

The top sign says "ENTRANCE TO THE MUSEUM" in Russian. If you can read Russian, you enter to the left and go to a separate ticket counter, which has a lower entrance fee than if you speak English, and enter to the right.

Happy Birthday Milton Friedman

Indeed, Friedman once said, "Freedom is not the natural state of mankind. It is a rare and wonderful achievement. It will take an understanding of what freedom is, of where the dangers to freedom come from. It will take the courage to act on that understanding if we are not only to preserve the freedoms that we have, but to realize the full potential of a truly free society."

So as we celebrate Milton Friedman's birthday and achievements, we must continue his legacy and keep making the case for freedom.

Mr. Siems, senior economist and policy advisor at the Federal Reserve Bank of Dallas, writing in today's Wall Street Journal

Markets In Everything: Dog Time Shares

SAN FRANCISCO - From the state that popularized purse puppies, drive-thru dog washes and gourmet dog food delivery comes the latest in canine convenience — a company that contracts out dogs by the day to urbanites without the time or space to care for a pet full-time.

For an annual fee of $99.95, a monthly payment of $49.95 and a per-visit charge of $39.95 a day, (discounted to $24.95 Sunday through Thursday), animal lovers who enroll in FlexPetz get to spend time with a four-legged companion from a 10-dog crew of Afghan hounds, Labrador retrievers and Boston terriers.

(HT: Sanil Kori)

Plain English vs. A Bureaucrat's English

The Missouri Civil Rights Initiative's (MoCRI) proposed language for its November 2008 ballot measure, which has been approved by the Missouri Secretary of State Robin Carnahan:

Shall the Missouri Constitution be amended to prohibit any form of discrimination as an act of the state by declaring: The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting?

Language for the ballot measure, with changes, from Secretary of State Carnahan:

Shall the Missouri Constitution be amended to ban affirmative-action programs designed to eliminate discrimination against, and improve opportunities for, women and minorities in public contracting, employment, and education?

Hmmmmmmm.... that seems just a little bit different.....

As you might expect, the MoCRI filed a petition in the circuit court of Cole County legally challenging the changes in the ballot language.

Just Drill in US, Baby; We've Got 131 Billion Barrels

From today's WSJ, "Just Drill Baby," by Pete DuPont:

The government reports that U.S. crude oil production declined to 1.9 billion barrels in 2005 from 3.5 billion in 1970, and the share of our oil that is imported has increased to 60% from 27% in 1985. Washington politicians will tell you this is an "energy crisis," but America's energy challenges are far more political than substantive.

First, we are not running out of oil. In 1920 it was estimated that the world supply of oil was 60 billion barrels. By 1950 it was up to 600 billion, and by 1990 to 2 trillion. In 2000 the world supply of oil was estimated to be 3 trillion barrels.

The U.S. has substantial supplies of oil and gas that could be accessed if lawmakers would allow it, but they frequently don't. A National Petroleum Council study released last week reports that 40 billion barrels of America's "recoverable oil reserves are off limits or are subject to significant lease restrictions"--half inshore and half offshore--and similar restrictions apply to more than 250 trillion cubic feet of natural gas. (We consume about 22 trillion cubic feet a year.)

Access to the 10 billion barrels of oil in Alaska's Arctic National Wildlife Reserve has been prohibited for decades. Some 85 billion barrels of recoverable oil and 420 trillion cubic feet of natural gas exist on the Outer Continental Shelf, but a month ago the House again, as it did last year, voted down an amendment that would have allowed the expansion of coastal drilling for oil and natural gas. All of which leaves the U.S. as the only nation in the world that has forbidden access to significant sources of domestic energy supplies.

From a previous CD post:

Percentage of domestic oil resources currently off-limits in Arctic National Wildlife Refuge (ANWR) and the Outer Continental Shelf (OCS) : 78

Amount of Domestic oil currently off-limits: 131 billion barrels (that's 131,000,000,000)

Oil imported annually from the Persian Gulf: About 1 billion barrels

Oil imported annually: About 5 billion barrels

Oil consumed annually in the US: About 7 billion barrels

Oil produced annually in the US: About 2 billion barrels

Number of years that domestic oil in the OCS could substitute for Persian Gulf imports: 60

Number of years that domestic oil in ANWR could substitute for Saudi imports: 25

Elephant in the Room That Politicians Are Dodging

If you haven't noticed, the major presidential candidates—Republican and Democratic—are dodging one of the thorniest problems they'd face if elected: the huge budget costs of aging baby boomers.

Consider the outlook. From 2005 to 2030, the 65-and-over population will nearly double to 71 million; its share of the population will rise to 20 percent from 12 percent. Social Security, Medicare and Medicaid—programs that serve older people—already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office. The result: a political impasse.

The 2030 projections are daunting. To keep federal spending stable as a share of the economy would mean eliminating all defense spending and most other domestic programs (for research, homeland security, the environment, etc.). To balance the budget with existing programs at their present economic shares would require, depending on assumptions, tax increases of 30 percent to 50 percent—or budget deficits could quadruple. A final possibility: cut retirement benefits by increasing eligibility ages, being less generous to wealthier retirees or trimming all payments.

Little wonder politicians stay silent.

~Robert Samuelson in Newsweek, "When Silence Isn't Golden."

Socialism on the Installment Plan: Zimbabwe

Inflation in Zimbabwe is estimated to be somewhere between 4,000% and 9,000% (see graph above through April 2007, the last time that CPI data were released, click to enlarge).

President Robert Mugabe's solution to the hyperinflation caused by excessive money creation? Print more money to fund government spending. See the full story here in today's Washington Post.

The decision to print more money comes after the government ordered sweeping price cuts of about 50% last month, accusing store owners and businesses of fueling the inflation. The government-ordered price controls have emptied stores across the country, with businesses saying they can't afford to sell at the new prices. About 5,000 managers and gas station and store owners have been arrested and fined for defying the price controls since the order was issued June 26.

Although an extreme example, the pattern of events in Zimbabwe illustrates a fairly common phenomena of "socialism on the installment plan."

1. The government intervenes in the economy with excessive money creation, price controls, tariffs, capital controls, regulation, etc. which create economic inefficiencies and distortions.

2. To "fix" the distortions that they created, the government then intervenes with additional programs, policies, price controls or regulations, which exacerbate the original distortions, which create further interventions, which create more distortions, etc.

3. The government interventions breed and foster additional interventions, which put the economy on a path towards socialism, with a ratchet-like movement toward ever bigger and stronger government, or socialism on the installment plan.

In Zimbabwe, the government engaged in excessive money creation and inflationary finance, which created hyperinflation and massive distortions and inefficiencies in the economy, e.g. the unemployment rate in Zimbabwe is currently 80%. To "fix" hyperinflation, the government orders price controls, which create widespread shortages, and greater economic distortions and inefficiencies. Then to "fix" hyperinflation and shortages, the government prints more money, which will further fuel hyperinflation and lead to even more inefficiencies.

Then with the economy in shambles, and the private sector decimated, the government will have to propose giving itself more power and control to try to "fix" the ailing economy, which will make the problems worse, not better. Socialism on the installment plan. Exhibit A: Zimbabwe.

More on How Medical Tourism Can Help Americans

From the Forbes article "Open-Heart Surgery--90% Off" by Steve Forbes:

A fast-growing phenomenon--"medical tourism," which will be a $40 billion industry by 2010--is showing how we can "solve" the health care financing crisis.

More and more Americans are choosing to go abroad for elective and/or major surgeries. What entrepreneurs began more than a decade ago by constructing world-class facilities to lure patients from the U.S. and around the world into traveling for cosmetic surgery has now blossomed into freshly built foreign hospitals offering a wide array of other types of medical procedures. India, Thailand and Singapore are among the countries heavily involved. Panama and others are just entering this arena.

The hospitals and physicians are usually first-rate and, amazingly, can provide operations at 10% to 30% of the cost in the U.S. For instance, knee replacement surgery that might cost $16,000 here can be done for $4,500 in a top-tier (by U.S. standards) Indian hospital. Dr. John Helfrick, president of the International Society for Quality in Health Care, and Dr. Robert Crone, CEO and president of Harvard Medical International, tell of one dramatic example: A patient was in need of complicated heart surgery. His hospital said the cost would be $200,000 and wanted $100,000 up front. The patient's son, a medical student, knew of the medical tourism industry and arranged for his father to have the operation overseas. The complicated surgery was a success. The cost: $6,700.

How is this possible? Excellent hospitals can be built overseas without the bureaucratic red tape found in the U.S., thereby saving construction time. Construction costs are lower, as are nursing, physician and administrative expenses. Expat doctors who have trained here and in Europe are returning home, where money goes considerably further than in, say, New York or California. More and more of these foreign hospitals--currently numbering about 120, and growing--are not just mirroring the best U.S. practices but are emerging as innovators. They are certified by Joint Commission International, a not-for-profit subsidiary of the Joint Commission, which accredits U.S. hospitals. The international accreditation process is as rigorous as it is in the U.S.--but without the unnecessary bureaucratic paperwork.

(HT: Sanil Kori)

American Farmers Addicted to Harvesting Cash

Fifty-seven percent of farms receive no payments and two-thirds of those that do receive less than $10,000. The largest 8 percent of farms receive 58 percent of the payments. Farms with revenues of $250,000 or more receive payments averaging $70,000.

Under the continuing New Deal approach, five commodities -- corn, soybeans, cotton, rice and wheat -- got about 90 percent of last year's $19 billion in subsidies. This is a perverse incentive for overproduction of the five, which depresses prices, which triggers federal supports.

By subsidizing corn-based ethanol, the government is making the "crop specific" approach to subsidies increasingly irrational: Ethanol enthusiasm has produced a one-year increase of 12 percent in acres planted in corn, the price of which has risen 20 percent in a year. So farmers are planting fewer acres in soybeans, which therefore also are being made more expensive by federal policy. Furthermore, U.S. agriculture subsidies, which have the World Trade Organization properly frowning, are becoming major impediments to further liberalization of global trade, and hence to the huge potential growth of U.S. farmers' incomes from exports.

Agriculture policy -- another manifestation of the welfare state, another contributor to another faction's entitlement mentality -- involves a perennial conundrum of welfare, corporate as well as individual: How do you break an addiction to government without breaking the addicted? If Lugar and like-minded legislators can accomplish their aims, their achievement will be comparable to the welfare reform of 1996 -- the fecund year of the short-lived Freedom to Farm Act. As Lugar again puts his hand to the plow, attempting to plow under a New Deal remnant, wish him well.

~George Will from his most recent column

FlightStats Website Tracks Airline Performance

The chart above is from FlightStats, a website that tracks performance by airport and airline in 3 hour increments, showing today's departures for Northwest Airlines from Detroit (DTW).

Of 94 flights scheduled to leave this morning, 8 have been cancelled (8.5%), and the other 86 (91.5%) are either en route, landed, or scheduled to leave on time.

That's better than several time periods yesterday, when between 20-30% of Northwest flights from DTW were cancelled, see this story in the Detroit News.