Minor Thoughts from me to you

Everywhere I turn in the media, I hear that the economy is horrible. I hear that our parents had it better than we do. I hear that my generation may be the first ever to be poorer than my parents generation.

Hogwash.

First off, my parents never had iPods growing up. In fact, they didn't even have cassette walkmen. Surely that's a form of wealth? Second, my daughter will grow up in a home with multiple computers; flat screen high definition televisions; cars with automatic windows, doorlocks, and airbags; wired and wireless networks; video chat with grandparents; cellphones for all; and more. Isn't that also a sign of great wealth? Isn't that also far more than my parents ever had? (Yes.)

Secondly, even if new technology didn't indicate an increased standard of living, rising incomes would. Check out the the National Data Book's spreadsheets for Money Income Of Families--Distribution by Family Characteristics and Income Level.

Between 1970 and 2004, annual median income increased from $9,867 to $54,061. After adjusting for inflation, annual income increased from $41,568 to $54,061. That's quite an increase! Incomes were adjusted using the Consumer Price Index Research Series, to that even takes into account increases in the cost of healthcare.

Sounds to me like we're doing pretty good.

Beth Hanley, I weep for thee.

Armed with a Georgetown University diploma, Beth Hanley embarked in her 20s on a path hoping to become a professional world-saver. First she worked at nonprofit Bread for the World. Then she taught middle school English in central Africa with the Peace Corps. Finally, to certify her idealism, she graduated last spring with a master's degree in international relations from Johns Hopkins University.

... Hanley, a think tank temp who dreams of aiding the impoverished and reducing gender discrimination in developing countries, is stuck. ... Numerous young Washingtonians bemoan the improvisational and protracted career track of the area's public interest profession. They say the high competition for comparatively low-paying jobs saps their sense of adulthood, forcing them to spend their 20s or early 30s moving from college to work to graduate school and back to work that might or might not be temporary.

No, wait. I don't weep for you.

dispatches from TJICistan: Little Miss Perky Nose and Silk Blouse is not making mad benjamins

You know, somewhere there's a guy, toiling in a cube, who just spent six weeks working out a way to make toilet paper with 1% less energy input, thus cutting the cost of goods sold by 0.25%, while keeping the TP just as soft and smooth as it was before.

...and that man has added more to the sum total of human happiness and productivity over those six weeks than little-Miss-altruist Beth Hanley has in her decade of getting elite degrees, wasting time in the Peace Corps, and getting her masters degree in international relations.

I'm not saying that Mr-TP-improvement is a hero ("because what's a hero?").

And I'm not saying that little-miss-perky-nose-and-silk-blouse is a bad person.

But, aside from her own sense of self worth, what has she accomplished in the last decade?

Pretty much zero.

Transterrestrial Musing: Get Out the Hankies

Who is more of a humanitarian, a Norman Borlaug, who through his technological efforts saved untold millions from hunger, and even starvation, and was reasonably compensated for it, or an Albert Schweitzer or Mother Theresa, who labored to help a relatively few poor and ill, while living in relative poverty? Obviously the latter derived personal satisfaction from their hands-on retail efforts, but I don't think that they ever whined about their lifestyle.

These people do in fact need to grow up, and understand that there are other ways to help people than forming non-profits and NGOs, or working for a government bureaucracy. People are helped most by technological advances that make essential items--food, transportation, communication, shelter--more affordable and accessible to them, not by those who provide them with handouts and sympathy, and keep them in a state of perpetual dependency.

Exactly.

I cheer globalization, even when American workers lose their jobs to non-Americans. Why? Because the world's poor are always made better off. To be blunt, I feel far, far more sympthathy for the poor of the world than I do for America's newly unemployed. One group of people gets to enjoy fresh food year round, air conditioning, heating, clean drinking water. The other group -- doesn't. So when the have-nots get an opportunity to become the haves, I cheer.

Why do I bring it up? Well, I read a story in the New York Times that demonstrates, again, how things are improving in India: In India, Poverty Inspires Technology Workers to Altruism:

"Babajob seeks to bring the social-networking revolution popularized by Facebook and MySpace to people who do not even have computers -- the world's poor. And the start-up is just one example of an unanticipated byproduct of the outsourcing boom: many of the hundreds of multinationals and hundreds of thousands of technology workers who are working here are turning their talents to fighting the grinding poverty that surrounds them.

"In Redmond, you don't see 7-year-olds begging on the street," said Sean Blagsvedt, Babajob's founder, referring to Microsoft's headquarters in Washington State, where he once worked. "In India, you can't escape the feeling that you're really lucky. So you ask, What are you going to do about all the stuff around you? How are you going to use all these skills?"

The best-known networking sites in the industry connect computer-savvy elites to one another. Babajob, by contrast, connects India's elites to the poor at their doorsteps, people who need jobs but lack the connections to find them. Job seekers advertise skills, employers advertise jobs and matches are made through social networks.

For example, if Rajeev and Sanjay are friends, and Sanjay needs a chauffeur, he can view Rajeev's page, travel to the page of Rajeev's chauffeur and see which of the chauffeur's friends are looking for similar work.

Woohoo!

It turns out that a privately owned bridge is responsible for "carrying one-third of all road trade -- or more than $122 billion in goods a year" between the U.S. and Canada.

In a remarkable arrangement for a crossing so major, Manuel J. Moroun, a reclusive billionaire from Detroit's suburbs who oversees a trucking empire, owns the bridge, one of only two privately owned bridges along the entire northern border of the United States and by far the most economically significant privately owned bridge in the nation.

Now, with so much commerce depending on a single structure, people have begun to wonder what would happen if a terrorist were to attack it or if the Ambassador Bridge, approaching 80 years old, were to fail.

And so a race is on to build a new $1 billion crossing here.

Of course, the local politicians want it to be a publicly owned bridge this time. They don't trust private ownership, of course.

Supporters of a publicly owned span here say it is the only wise plan, the only one that offers needed public oversight and regulation. They have deep concerns, they say, about allowing a single man to continue his decades-long reign over such a vital connector of nations.

"This man is making billions of dollars on that bridge." said Raymond E. Basham, a Michigan state senator and a Democrat, who said that only a public bridge could ensure the structural inspections and domestic security needed. "When it comes to dollars and cents, there is every incentive for him not to tell us if something is wrong. We have an obligation for the safety of people."

Really, I don't know how to respond to Senator Brasham. The flaws in his argument are so gapingly huge that I feel ludicrous having to actually point them out. But somebody's gotta do it and it might as well be me.

First of all, Mr. Moroun has at least 100 million reasons a year to keep his bridge well maintained and protected. I'd say that's one humdinger of an incentive right there. If there are any fears about the bridge's safety, that traffic could all disappear -- it's in his best interests to make sure that no one ever has any reason to fear for the bridge's safety. That, naturally, means more disclosure -- not less.

Here's how the Detroit International Bridge Company has protected their investment.

... the bridge company had hired private security guards to watch the bridge in the aftermath of the terrorist attacks of Sept. 11.

Mr. Stamper [the president of the company] also said that the Ambassador Bridge received structural inspections every year from private firms and that the results of those inspections were made available to Michigan and Canadian transportation authorities, though not to the public.

Secondly, it's preposterous to suggest that the government will be on top of maintenance and repairs. The most glaring example is the collapse of the I-35 bridge in Minnesota, two months ago. In the aftermath of that disaster, all 50 states suddenly realized that they were way behind on their own bridge maintenance. The levies that collapsed in New Orleans? Also publicly owned and maintained.

I'd far rather trust my life to private ownership and maintenance than public ownership and maintenance. A private owner stands to lose millions of dollars in business if his infrastructure collapses. A politician who underfunds maintenance earns an opportunity to blame someone else for skimping on safety and a chance get on TV, by promising to do better. That's definitely not an incentive for pro-active safety.

Ever wondered how private roads might work? Drew Carey explains -- and it really would be better than you think.

See?

Economists are turning en masse* to new careers in stand-up comedy.

The most well-known example of this new shift in the job market comes from the work of Yoram Bauman, a PhD. who teaches at the University of Washington to pay the bills when he is not performing shows like this.

But he is far from alone at this point; in fact, your correspondent's brother, a stand-up who will be receiving his own degree in Economics this Spring, recently performed an act at L.A.'s The Ice House.

And that's not all: Since writing his autobiography, speculation has been running high as to what newly-retired Fed Chairman Alan Greenspan will choose to do next. Now, in light of actions taken by his fellow economists and a few comments of his own (for instance, that Hillary Clinton "wouldn't be a bad president"), some* are beginning to wonder if America's Elder Statesman of Finance, who always did look like Woody Allen, is finally listening to the siren call of the mic.

• Meaning "at least two people"._

The Wall Street Journal recently reported that Republican voters are skeptical about the benefits of free trade.

By a nearly two-to-one margin, Republican voters believe free trade is bad for the U.S. economy, a shift in opinion that mirrors Democratic views and suggests trade deals could face high hurdles under a new president.

Six in 10 Republicans in the poll agreed with a statement that free trade has been bad for the U.S. and said they would agree with a Republican candidate who favored tougher regulations to limit foreign imports. That represents a challenge for Republican candidates who generally echo Mr. Bush's calls for continued trade expansion, and reflects a substantial shift in sentiment from eight years ago.

Frank Newport, at USA Today, says that the poll is largely worthless.

This type of question, often used by the pollsters who conduct the Wall Street Journal/NBC News poll, is both complex and tricky to interpret.

In essence, the question format gives respondents a set of several reasons to support the subject of the question (in this instance foreign trade) and several reasons to oppose the subject of the question. The respondent is then asked to indicate which set of reasons is most convincing to them.

Thus, the pro and con arguments read as part of the question become very important. In other words, when the topic is something relatively arcane, many respondents listen to the cues presented as the interviewer reads the question and then give their answer based on what seems to resonate most "on the spot". Or - if the respondent is not listening carefully - responses are based on which fragments or phrases sound most appealing.

The Nation Association of Manufacturers does see some cause for concern.

What's happening? The Lou Dobbs effect? The media's incessant hyping of contaminated food and other imports? Just more of the anti-foreign bias as detailed by George Mason University economist Bryan Caplan* in his new book, "The Myth of the Rational Voter?" Or are the advocates of free-trade not working hard enough?

Yes.

We advocates simply have to work harder in making the case for trade in terms that the public can appreciate, connecting good-paying jobs to trade. And not let the anti-trade rhetoric stand unchallenged. Because protectionism makes us poor.

Meanwhile, if voters are potentially misunderstanding the issue, at least the candidates themselves are getting better advice. Here is Barack Obama's economic adviser on free trade.

"Globalization" means free trade and various deregulations that supposedly put downward pressure on American wages because of imports from low-wage countries. Goolsbee, however, says globalization is responsible for "a small fraction" of today's income disparities. He says "60 to 70 percent of the economy faces virtually no international competition." America's 18.5 million government employees have little to fear from free trade; neither do auto mechanics, dentists and many others.

Goolsbee's rough estimate is that technology -- meaning all that the phrase "information economy" denotes -- accounts for more than 80 percent of the increase in earnings disparities, whereas trade accounts for much less than 20 percent. This is something congressional Democrats need to hear from a Democratic economist as they resist trade agreements with South Korea and such minor economic powers as Peru, Panama and Colombia.

So -- stay in school, get an education, become rich. What's not to like? (Oh, and keep both goods and people flowing freely over the border.)

Bubbles are good for you. Not the bubbles kids play with or the bubbles in your bubble bath, but the bigger, flashier kind. You know -- the tech bubble, the housing bubble, etc. At least, that's what Daniel Gross says.

Well, the conventional wisdom holds that bubbles are bad. Economists don't like them because they represent irrational behavior. A lot of people get hurt. They invest at the top, they lose their money. It's a misallocation of resources. My argument is that the pop of the bubble is only half the story.

Well, the way that new infrastructures get built in this country is frequently through investor enthusiasm. The government may help roll out new technologies, but we don't have the government putting up telegraph lines or stringing fiber optic cable that connects people's homes to the internet.

These activities don't proceed in a rational, easy-going way. They move in fits and starts. It's the bubbles that lead to this very rapid roll out of a new commercial infrastructure, one that businesses can plug into and use, like the telegraph or the railroad or the internet.

So bubbles create platforms for growth and innovation that help propel the economy forward.

I like his argument. It's the same one, basically, that Tom Friedman makes in The World is Flat. During the .com boom, telecommunications companies were convinced that the boom would go on forever and that they all needed their own fiber optic cables. So, they spent wildly and laid thousands of miles of fiber.

They were wrong. They didn't all need their own fiber. One by one, they went bankrupt. But the fiber remained. Now, it's been bought up on the cheap by new companies and they're using it to deliver YouTube, Google Apps for Your Domain, Facebook, online video of the NCAA basketball tournament, etc.

Right now, we're reaping the benefits of the irrational exuberance of the .com bubble. Gross thinks that we'll be reaping the benefits of the housing bubble within a few years, and that we're just in the beginning phases of an alternative energy bubble.

I hope he's right -- both for my long-term housing values and because I want to see what we can invent next.

Last night I said that homebuyers were more likely to be greedy than lenders. I haven't changed my mind yet. Instead, I read a story that convinced me even more.

The New York Times describes a couple who bought "a modest home at the southern end of Silicon Valley". Now they're suing their broker and real estate agent for setting them up with a third loan that they didn't even know they had. They may well have a valid complaint -- from the facts presented in the article, the agent was playing both the lender and the buyer for suckers.

But that's not the part of the story I'm interested in. I'm interested in how much house this couple tried to buy. Here a few facts, hidden throughout the story.

First -- how much did their house cost? This is never directly mentioned in the article. It's buried beneath a photo caption.

Sarai Torralba, 5, riding by the home that her family bought for $595,000 in San Jose, Calif. Prospero and Cirila Torralba borrowed almost $610,000 for it.

Second -- how much does this family make? The article never actually says. I would have thought that a key piece of information. The article does mention the Hernandez family, who only earns "about $4,000 a month", or $48,000 a year. We'll assume that the Torralba's are in a similar situation.

Third -- how were these loans set up?

The first and biggest loan was a pay-option adjustable rate mortgage. The loan allows borrowers to pay less than the interest due, adding the difference onto the balance so more is owed with each passing month. The interest rate on the loans from Mr. Curiel was 10 percent, with a 15 percent upfront fee added to the principal balance. That loan called for borrowers to make interest-only payments and pay off the full amount in two years.

The loan from Mr. Curiel is the one that the owners are suing over. Still, what's with the pay-option adjustable rate mortgage? I'd think that simply considering such a loan for 5-10 minutes would convince me that having the loan get bigger month after month was a really bad idea.

Reading these stories, I'm convinced that these buyers were trying to buy something that they knew they couldn't afford. Rather than having enough of a backbone to say "no" to pushy agents and brokers, they allowed themselves to be talked into obviously bad loan ideas.

Again, lack of resources isn't a truly valid complaint. Internet site after internet site explains what the various loans mean and what the amortization schedules are. Even having a poor command of English isn't really a complaint. After all, you are the person signing on the line. It's your responsibility to find someone that you trust, with a good command of English, to go over the loan terms with you. Otherwise -- don't sign.

Though vowing to fight, Mr. Hernandez said his family’s hopes and goals have been dashed. They came to the United States from Mexico nearly three decades ago. Over the years, he and his wife have worked in agriculture, picking cherries, apples and asparagus. They had three sons here — two have their own families, and one son, 17, still lives with them.

They doubt they will be able to pay for him to go to college, as they had planned.

The Hernandez family was trying to buy a $745,000 house. Whether or not their mortgage was a good one, I'm not sure how you afford college at all with a three-quarter million dollar loan of any sort.

Although an apparently crooked agent was involved, I think greed ultimately did these families in.

I've discussed before how toy companies are using "safety" as an excuse to pile more and more regulations on top of their competitors. Mattel has been blaming China for a recent spate of recalls and using the accusations as leverage to push for more safety regulations.

Turns out, China wasn't to blame.

Mattel Inc. made a public apology to China for damage to the country's reputation stemming from a spate of toy recalls. It was an extraordinary attempt to placate Mattel's most important supplier, but it is likely to shift the spotlight to the company's own responsibility in the crisis.

In its apology, the world's largest toy maker said its own "design flaw" was responsible for the biggest recall by far, involving around 18 million playsets studded with potentially dangerous magnets.

Oops. I'm guessing that regulation wouldn't have done much to catch Mattel's design flaws. Maybe we don't actually need regulation after all.

So, has America been throwing our future away the past several decades? Have we been exporting all of our manufacturing capability? Are we at the mercy of China, Japan, South Korea, and Indonesia?

No.

U.S. manufacturing output reached its all time high in 2006. U.S. manufacturing revenue reached its all time high in 2006. U.S. manufacturing profits reached their all time high in 2006. Average annual compensation for U.S. manufacturing jobs is over $66,000. The U.S. manufactures 2.5 times more goods than China does. Finally, the U.S. produces the largest share of total world manufacturing, not China.

So, who's economy has been all hollowed out and is on the verge of collapse? Not ours.

I find the current narrative, about the housing market meltdown, to be extremely disingenuous. Take Barack Obama, for example.

He described this summer's subprime lending crisis as a case study of greed among mortgage lenders and the agencies that provide information about them. ...

Well, that's certainly one way to describe what's happening in the housing market. But I don't think it's very honest. As I've said before, I don't see how giving mortgages to people who are unable to afford them, then going bankrupt when they default on the loan, qualifies as greed.

Instead, I prefer to consider Hanlon's Razor: "Never attribute to malice that which can be adequately explained by stupidity."

Stupidity, sure. Giving money to people who can't give it back is about as far from greed or theft as a business can possibly get.

However, I'll be happy to accuse home buyers of greed. What would you call it when someone earning $40,000 a year decides to buy a home costing $200,000 or $250,000? Many of the families now defaulting on their loans were looking to get in on a "hot" housing market that had the potential to double or triple the value of houses in the area. They saw cheap money and jumped at the opportunity to get rich.

That's why I'm convinced that this won't do any good:

Mr. Obama of Illinois called for regulatory efforts to increase transparency and accountability among financial companies. Mr. Obama zeroed in on the housing market, proposing tighter federal rules on mortgage fraud and government rating systems for mortgages and credit cards.

"If more Americans were armed with this kind of information before they purchased risky mortgage loans," he said, "the current crisis might not have happened."

If Senator Obama really believes that, he's delusional. We were buried in paperwork when we bought our house. We had to sign sheet after sheet of paper, giving us all of the details about our mortgage. Our Realtor and mortgage banker answered all of our questions, throughout the entire process. Even if they hadn't, website after website offered comprehensive information about every different type of mortgage. Americans had plenty of opportunity to arm themselves with whatever information they needed.

The housing meltdown happened because everyone involved believe that the market would continue to go up forever. Consumers got greedy and banks began taking irresponsible risks thanks to easy money. This "crisis" can't be blamed on any one group and I'll not respect anyone that tries to do so.

The problem with eating only locally grown food is that locally grown food may not always be available.

Jai Kellum stands -- stunned yet smiling -- in front of a channel of dirty water, as she describes the catastrophe that destroyed Avalanche Organic farm, which she owns with her partner, Joel Kellum.

The smile, like the voice -- sing-song, almost laughing -- is deceptive, because the words she uses in this video are not happy ones. The nine-minute production, "Flooded Midwest Organic Farms," by Madison filmmakers Gretta Wing Miller and Aarick Beher, is making the rounds on the Internet.

Miller, who made a much-admired documentary film on Wisconsin organic farms two years ago, made this short followup after the floods of August turned a season of plenty into a season of survival. The video is featured extensively in a large fundraising effort, Sow the Seeds Fund, which will be used to help organic farmers.

Miller, a Madison filmmaker since 1994, became familiar with the farmers in the Viroqua, Gays Mills and Soldier 's Grove area in southwestern Wisconsin from her earlier documentary, "Back to the Land ... Again," and because her brother, Jeff, lives in Viroqua.

"We got to know all those farms back then, and after the rains we heard everything was washed away, " she said. "People couldn 't get out of their farm yards, driveways were gone.

"So a week ago we just grabbed our camera and went out there, just showed up at Avalanche Organics. We were horrified. Here was this beautiful farm we had spent months at shooting over and over again for two summers ... "

Jai Kellum had, coincidentally, started filming activity on the farm earlier, so the video features some sad before-and-after views of the farm, which is not in Avalanche but in rural Viola along Highway 131, about 80 miles northwest of Madison.

Avalanche is a major supplier of salad greens to the Willy Street Co-op in Madison, and Miller wasn 't sure the co-op's customers were aware of the scope of the flood damage. The disaster caused ruin in one of the nation 's biggest collections of certified organic farms.

Most also run fully subscribed Community Supported Agriculture (CSA) programs, a popular feature in the Madison area in which customers buy shares in a farmer 's harvest and get boxes of produce every week or two.

Megan McArdle (August 29, 2007) - America: exporting high wages abroad (Labor markets)

I'm always bemused by globalisation doomsday scenarios in which all of our jobs move to China (or India) in order to take advantage of low-wage workers. If we really do lose all of our high-productivity jobs, and no longer make anything worth having, why would the Indians and Chinese continue to ship us software programs and flat screen televisions? Obviously, for individuals this may be traumatic, but in aggregate, if our economy really gets less productive, we won't have to worry about a flood of cheap Chinese goods. Although if the Chinese and Indians do want to ship us their products in exchange for absolutely nothing, I'm willing to talk.

The other reason this doesn't work, of course, is that as these economies expand, demand for workers pushes up their wages. That's why we no longer buy cheap gimcrackery from Japan. According to the New York Times today, this is already happening:

For decades, many labor economists said that China’s vast population would supply a nearly bottomless pool of workers. So many people would be seeking jobs at any given time, this reasoning went, that wages in this country would be stuck just above subsistence levels. As recently as four years ago, some experts estimated that most of the perhaps 150 million underemployed workers in the countryside would be heading to cities.

Instead, sporadic labor shortages started to appear in 2003 at factories in the Pearl River delta of southeastern China. Now those shortages have spread to factories up and down the Chinese coast, specialists say.

This summer, Mary Gallagher, a Chinese labor specialist at the University of Michigan, visited five sportswear factories near Shanghai and Guangzhou. She found them all struggling to hire and retain workers. One had shut one of its two main production lines because it had nobody to sew shirts and other garments.

"Basically half the factory was shut down and one dormitory was empty," Ms. Gallagher said.

In interviews, factory executives across the country complained of being forced to give double-digit raises in order to find and keep young workers at all skill levels. Three or four years ago, said Zhong Yi, vice general manager of a leather-jacket manufacturer in Hangzhou in east-central China, 800 to 1,100 yuan a month ($105 to $145) "was a good salary."

"Now," he said, "1,500 is the bottom" ($198).

Chinese officials are quick to say that there is no overall shortage of labor -- rather, there is a shortage of young workers willing to accept the low wages that prevailed in the 1990s. Factories in cities like Guangzhou advertise heavily for young workers, even while employment offices consider it a success if someone over 40 can find any job in less than a year.

Madison family eats only items made within 100 miles of their home

A Madison family is shunning the SUV diet and thriving on the 100-mile diet.

Although wistful for citrus, soy sauce and better bread flour, Jen and Scott Lynch and their daughter, Evie, pledged to stick to this diet for the month of August, consuming only ingredients from a 100-mile radius around their home in the Bay Creek neighborhood on Madison's South Side.

The SUV diet refers to that of the average North American, whose meals are made from ingredients that travel about 1,500 miles from source to consumer.

"We know that locally grown food is better for our environment, better economics, better tasting, better for our health and better for our relationships," the Lynches write on their blog, www.vidalocal.blogspot.com, through which they share their story without pushy proselytizing.

Sure, when it's in season and available. What happens when Wisconsin harvests are dismal and there isn't enough food to go around?

The article details how the family mills their flour and makes their own peanut butter from fresh peanuts. They say this lifestyle is "better economics". Really? Is their time worth nothing? Apparently so.

They are Jen Lynch, 33, who is a house cleaner; Scott Lynch, 38, who's unemployed now but formerly worked in sales and marketing of sporting goods equipment, and their daughter, Evie, 7, who is home schooled. They have the time for an experiment that means purchasing wheat to mill, sift and use for homemade bread, crackers, tortillas and more.

Given a daughter that's home all of the time and an unemployed husband, maybe they do have enough "free time" to make all of their own food.

But what would it be like if everyone in the nation spent most of their time either farming or preparing food from ingredients produced locally? Well, it'd probably look a lot like the 1860's. People were smaller, frailer, contracted chronic ailments (heart disease, lung disease, arthritis) at an earlier age, and died sooner. Poor nutrition paid a large role in that.

So Big and Healthy Grandpa Wouldn't Even Know You - New York Times

The Keller family illustrates what may prove to be one of the most striking shifts in human existence -- a change from small, relatively weak and sickly people to humans who are so big and robust that their ancestors seem almost unrecognizable.

New research from around the world has begun to reveal a picture of humans today that is so different from what it was in the past that scientists say they are startled. Over the past 100 years, says one researcher, Robert W. Fogel of the University of Chicago, humans in the industrialized world have undergone "a form of evolution that is unique not only to humankind, but unique among the 7,000 or so generations of humans who have ever inhabited the earth."

And if good health and nutrition early in life are major factors in determining health in middle and old age, that bodes well for middle-aged people today. Investigators predict that they may live longer and with less pain and misery than any previous generation.

That is, if we avoid fads like "food miles" and embrace the "SUV diet" instead of avoiding it.

What about the claim that eat local is better for the environment? Recent studies say, that's just not true.

Food That Travels Well - New York Times

It all depends on how you wield the carbon calculator. Instead of measuring a product's carbon footprint through food miles alone, the Lincoln University scientists expanded their equations to include other energy-consuming aspects of production -- what economists call "factor inputs and externalities" -- like water use, harvesting techniques, fertilizer outlays, renewable energy applications, means of transportation (and the kind of fuel used), the amount of carbon dioxide absorbed during photosynthesis, disposal of packaging, storage procedures and dozens of other cultivation inputs.

Incorporating these measurements into their assessments, scientists reached surprising conclusions. Most notably, they found that lamb raised on New Zealand's clover-choked pastures and shipped 11,000 miles by boat to Britain produced 1,520 pounds of carbon dioxide emissions per ton while British lamb produced 6,280 pounds of carbon dioxide per ton, in part because poorer British pastures force farmers to use feed. In other words, it is four times more energy-efficient for Londoners to buy lamb imported from the other side of the world than to buy it from a producer in their backyard. Similar figures were found for dairy products and fruit.

You can eat that way if you want. I'll protect the environment, live economically, and raise healthy children by eating food from around the world. Corn from the midwest, citrus from the south, sugar from Brazil, meat from the southwest. It's the progressive thing to do.

One of the great things about the division of labor -- having each person do one job and do it well -- is the lengths to which complete strangers will go to make each others' lives better.

Take, for example, road signs. We drive by thousands of them each year. Have you ever thought about what it would take to make a better road sign? I haven't. But Don Meeker has.

The Road to Clarity - New York Times

In 1989, after his success with the waterways project, the State of Oregon approached Meeker with a commission to think up a roadside sign system for scenic-tour routes. The problem sounded modest enough: Add more information to the state's road signs without adding clutter or increasing the physical size of the sign itself. But with the existing family of federally approved highway fonts -- a chubby, idiosyncratic and ultimately clumsy typeface colloquially known as Highway Gothic -- there was little you could add before the signs became visually bloated and even more unreadable than they already were. ""I knew the highway signs were a mess, but I didn't know exactly why," Meeker recalled.

Around the same time Meeker and his team were thinking about how to solve the problem of information clutter in Oregon, the Federal Highway Administration was concerned with another problem. Issues of readability were becoming increasingly important, especially at night, when the shine of bright headlights on highly reflective material can turn text into a glowing, blurry mess. Highway engineers call this phenomenon halation and elderly drivers, now estimated to represent nearly a fifth of all Americans on the road, are most susceptible to the effect.

"When the white gets hit, it explodes, it blooms," Meeker, who has the air of a scruffy academic, went on to say.

And, he spent the next fifteen years coming up with a new font for road signs and getting it approved by the Federal Highway Administration. Isn't that fantastic?

Only an economic system that frees people from subsistence living can give people enough freedom and flexibility to spend 15 years designing a better road sign.

Or, take the story of UPS.

U.P.S. Embraces High-Tech Delivery Methods - New York Times

But increasingly, it is the researchers at its Atlanta headquarters, its technology center in Mahwah, N.J., and its huge four-million-square-foot Louisville hub who are asking the questions that will drive the company's future.

What if the package contains medicine that could turn from palliative to poison if the temperature wavers? What if it is moving from Bangkok to Bangor and back to Bangkok, and if customs rules differ on each end? And what if the package is going to a big company that insists on receiving all its packages, no matter who ships them, at the same time each day?

Increasingly, it is the search for high-tech answers to such questions that is occupying the entire package delivery industry. U.P.S. and FedEx are each pumping more than $1 billion a year into research, while also looking for new ways to cut costs.

Customers of both FedEx and U.P.S. can now print out shipping labels that are easily scannable by computers. Meteorologists at both companies routinely outguess official Weather Service forecasts. And both are working with the Federal Aviation Administration to improve air safety and scheduling.

The research at U.P.S. is paying off. Last year, it cut 28 million miles from truck routes "” saving roughly three million gallons of fuel "” in good part by mapping routes that minimize left turns. This year, U.P.S. began offering customers a self-service system for redirecting packages that are en route.

And now the U.P.S. researchers are working on sensors that can track temperatures of packages, on software that can make customs checks more uniform worldwide and on scheduling processes that accommodate the needs of recipients as well as shippers.

Absolutely incredible. UPS and FedEx are spending a combined $1 billion -- just to find a way to get a package to your door faster, cheaper, safer. Their researchers don't know me and they'll probably never meet me, but they're intensely focused on making my life better.

Only the profit motive produces that kind of incentive. (When was the last time a motor vehicle or postal employee cared about your time or happiness?) Only the division of labor allows that kind of single-focused effort.

Capitalism may not be a perfect economic system, but it's the only one I ever want to live in.

As seen on Slashdot

Garbage collection is fine as a private service, but roads? What would possibly improve by letting individual profit-seeking companies control where and when you are allowed to drive?

It's a simple answer. Individual profit-seeking companies only make a profit if you can drive when and where you want. Right now, only one "company" provides roads -- your local state government. And if they don't feel like building where you want to drive, tough luck. A private company would have a financial incentive to build a road where you want to drive.

Example: The population on the west side of Madison has been growing. More people have been moving to West Madison and to the West Madison suburbs. Traffic on the Madison beltline has been increasing, especially in certain sections of the western half. Traffic on County Road M has also been increasing. In some places, it's only a one-lane road.

The state of Wisconsin has no plans to widen the beltline or CR-M. They've publically stated that the earliest they'd even consider doing something would be around 2014. As a result, I increasingly do everything possible to avoid CR-M and the beltline during periods of high traffic.

Unlike the state, a private company would have an incentive to widen both of these roads and increase capacity. More capacity means more drivers. More drivers means more profit. It's a win-win scenario. They get more money, I get a faster commute. This is the beauty of free-market capitalism -- both parties win or there is no deal.

All of this only works, of course, as long as there is more than one private company building roads. Two competing companies would each have an incentive to get me where I want to go as quickly and efficiently as possible. A private company that has no competition -- for instance, one granted a monopoly by the state or local government -- would likely do little better than the government does. Competition is the magic ingredient that makes a free-market work.

So, why do you think roads should be government controlled instead of privately owned?

Do you wonder why gas has been so expensive this summer? Wonder no more. Gas Prices Rise on Refineries' Record Failures - New York Times

Oil refineries across the country have been plagued by a record number of fires, power failures, leaks, spills and breakdowns this year, causing dozens of them to shut down temporarily or trim production. The disruptions are helping to drive gasoline prices to highs not seen since last summer's records.

These mechanical breakdowns, which one analyst likened to an "invisible hurricane," have created a bottleneck in domestic energy supplies, helping to push up gasoline prices 50 cents this year to well above $3 a gallon. A third of the country's 150 refineries have reported disruptions to their operations since the beginning of the year, a record according to analysts.

There have been blazes at refineries in Louisiana, Texas, Indiana and California, some of them caused by lightning strikes. Plants have suffered power losses that disrupted operations; a midsize refinery in Kansas was flooded by torrential rains last month.

American refiners are running roughly 5 percent below their normal levels at this time of the year.

Many factors have led to the rise in gas prices, including disruptions in oil supplies from places like Nigeria and Norway. But analysts say the refining bottleneck in North America has been one of the main drivers of higher energy prices this year.

The refining crunch has pushed wholesale gasoline prices up 35 percent this year and has contributed to a 23 percent gain for crude oil prices. Oil futures in New York closed at $75.57 a barrel on Friday.

The solution: build more refineries. Increase capacity. The problem: Congress.

Meanwhile, refiners have been scrambling to meet a raft of environmental regulations, phase out toxic additives, add ethanol to the fuel mix and introduce new ultralow sulfur standards for gasoline and diesel. Industry insiders attribute much of the fragility of refining operations to the difficulty of making these cleaner fuels.

No refineries have been built in the United States in over three decades, because refiners say they are too costly. Instead, they have been expanding their existing refineries.

But with a third summer of high gasoline prices, lawmakers are debating legislation they claim would punish oil companies for exploiting the tight supply situation and engaging in "price gouging." At the same time, they are pressing refiners to produce more fuel.

New refineries are super expensive. Companies would need to amass a large stockpile of cash -- earned from large profits -- before they would be willing to build a new refinery. But Congress keeps threatening to impose a windfall profits tax on the industry. Whose going to invest in a new refinery when your income could disappear at any time, courtesy of the U.S. Congress?

Note also, the mandates for new fuel mixes. It's hard to keep a refinery running when Congress and state governments mandate ever more exotic fuel mixtures. Each new gasoline blend makes the entire refining process a little more fragile. That leads to breakdowns and higher prices.

Once again, blame Congress for high gas prices. Don't let them trick you into blaming the oil companies.

Hold on to your wallets -- the Senate is in session. Senators Grassley and Baucus plan to make your gasoline even more expensive.

A proposal to hit oil companies with $29 billion in new taxes advanced in the Senate on Tuesday, targeting the money to energy conservation, wind turbines, electric hybrid cars and clean coal technology.

The massive tax package, double what Democrats had discussed as recently as last week, is "designed to promote clean and sustainable energy," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee that approved the measure by a 15-5 vote.

It is expected later this week to be added to energy legislation being considered by the full Senate.

It gets worse.

The American Petroleum Institute, the oil company trade group, said in a statement that the taxes "will discourage new domestic production, discourage new investments in refinery capacity and would lead to the loss of good-paying U.S. jobs."

As I wrote previously, Congress has been discouraging investments in refinery capacity for decades. Our already limited refinery capacity is largely responsible for the current high price of gasoline. We should be doing everything in our power to increase refinery capacity -- not decrease it more.

Baucus said he expects the oil companies to complain, but he doesn't believe the taxes "will substantially change these companies' incentives to produce energy."

Maybe not. But it will substantially change the price that these companies charge to consumers. Senator Grassley doesn't realize that -- maybe he's been smoking something green?

Grassley said the "narrow change" in tax policy "seems likely to have little if any effect on domestic production" or the price of gasoline at the pump.

Uh-huh. Raising taxes by $29 billion will have "little if any effect" on prices. How long has he been out of touch with reality? Also, does he have any plans to return to reality?

How expensive could this all get? The Heritage Foundation did some quick research and put together a state by state analysis for you. Living in Wisconsin, I could see prices rise from $3.29 a gallon (May price) to $3.60 a gallon next summer. By 2016, gasoline could rise as high as $6.62 a gallon. To Senators Grassley and Baucus: "Thanks a lot. I didn't really need that extra $113 in my monthly budget anyway."

As if this wasn't bad enough, Congress would like to make your car more dangerous.

Despite Congress' repeated efforts to repeal the laws of physics in favor of something more politically correct, the fact remains that bigger is safer when it comes to vehicle size. Supporters of increasing Corporate Average Fuel Economy (CAFE) standards ignore what millions of minivan and SUV drivers already know: They stand a much better chance of surviving an accident than drivers of lighter, more fuel-efficient subcompacts. The problem is that significantly improving fuel economy means cutting average vehicle weight. The curb weight of a typical family sedan can be reduced from the present 3,200 pounds to, say, 2,800 pounds. But maintaining the same level of safety with advanced air bags, refined crush zones and other technological fixes could make the lighter family sedan unaffordable for middle-class buyers.

Advocates of higher CAFE standards claim that the smaller vehicles will pollute the air less and consume fewer natural resources. As a result, from a global perspective, such vehicles will do less damage to the environment and fewer people will die or get sick as a result of emissions-related causes. But most Americans with families to transport and businesses to move see a much more immediate and concrete health and safety benefit in driving vehicles that serve their purposes without putting at risk their lives and those of their loved ones. Only through force and coercion will they trade their practical vehicles for the smaller, less useful and often more expensive "green" vehicles favored by higher CAFE advocates.

The land of the free -- she ain't quite what she used to be.

Wealth is created every day. Wealth is created when someone creates something new and fulfills a need that other people didn't even realize was unfulfilled. Wealth is created when someone figures out how to produce an existing product faster or cheaper than it can currently be produced. Individuals innovate for several main reasons: to fulfill a need of their own, to save money, or to fulfill a need revealed by others.

Fulfilling these needs can often make an innovator very rich. Liberals come along and tax it all away for the greater good of society -- but that's another blog post.

Robert Jordan is a recent Wisconsin success story.

Robert Jordan's 20-year career as a long-distance trucker involved a lot more than hauling cheese.

After buying his own truck in 1993, he used the cab as a mobile laboratory to experiment with energy-saving ideas that would cut expenses and put more money in his pocket.

Now those experiments are paying off. Jordan, 51, of Juneau, has patented a battery system to run a truck's electronic equipment so idling isn't necessary. He's started a business called Idle Free Systems and negotiated agreements with Mack Trucks and Chiquita Brands to use his system.

With three employees, Jordan moved this month into manufacturing space in Watertown. He said he hopes to sell about 200 units this year at $6,000 each, which would mean first-year revenue of $1.2 million.

You may think that shoe innovation has gone about as far as it can go. You may think that shoes are the most stable, dependable market available. You'd be wrong. Mark Klein discovered a completely untapped shoe market.

In late July, Mr. Klein's company, Skins Footwear, intends to break the shoe in two, giving it an outer part, including the sole and upper, which he calls a "skin," and a removable inner part, which he calls the "bone."

"The bone is the constant fit and feel," he says. "Then there's this blank canvas for you to express yourself with the skins.""

The idea is that a shopper will buy a bone, for about $60, and several skins, which will range from $125 to $300. People will shift from one skin to the next, depending on what they're doing, much the way they can with other kinds of apparel.

Mr. Klein, who is 33, says he thinks that his patented skin-and-bones concept will eliminate the problem people have with shoes that look good but don't fit correctly, since the bone should guarantee the same fit for any skin in that size. He also says frequent travelers will appreciate the chance to pack only the foldable, lightweight skins, instead of full pairs of shoes.

Sounds good to me. The suggested price points are a little high right now, but if they come down a bit I'd certainly be willing to buy a bone and some skins.

Speaking of shoes, check out Masai Barefoot Technology created by Swiss engineer Karl Müller.

In the early 1990s, Swiss engineer Karl Müller realized that both shoes and backache are unknown to the Masai tribesmen - and that there is a causal connection between these two facts. By walking barefoot on the natural, soft, uneven ground of their East African homeland, the Masai activate also those muscles that atrophy when on walks on hard, even surfaces wearing conventional shoes.

During a visit to Korea he made the startling discovery that walking barefoot over paddy fields alleviated his back pain. Back in Switzerland, Müller began to develop a footwear technology that would make the natural instability of soft ground such as Korean paddy fields or the East African savannah accessible also to those, who have to walk on hard surfaces. In 1996, after years spent on research and development, Masai Barefoot Technology was mature enough to be launched on the market. MBTs are now available in over twenty countries, and approximately one million pairs of this revolutionary footwear technology are sold every year.

Speaking of Africa, the next story caught my eye because it mentioned the ideological division between those that want to help Africa through trade and those that want to help Africa through aid. (I wrote about African aid and trade just a few days ago.) As I read through the story, however, I discovered a great story of risk and innovation.

In 1997, Mr. Conteh recalled in an interview, he heard Laurent D. Kabila, then the country's president, deliver a speech in which he called upon his countrymen to rebuild Congo's infrastructure after the 30-year dictatorship of Mobutu Sese Seko. Mr. Conteh, who had no experience in telecommunications, said he was inspired. He decided to build the nation's first GSM (Global System for Mobile communications) digital network.

Mr. Conteh said he went, cap in hand, to the minister of communications to ask for the country's first GSM license. In January 1998 he got it "” but he first had to pay the government a license fee of $100,000. Over the years, and with little explanation, he said, the government, which is often terribly short of money, increased the license fee, first to $400,000, then $2 million.

Throughout the early days of his company, Mr. Conteh faced challenges unknown to Western businesses. Once, after equipment providers declined to send engineers to Congo during a dangerous time in the country's unending civil strife, he encouraged the citizens of Kinshasa, the capital, to collect scrap metal and weld them into a cellphone tower.

By the middle of 2006, Vodacom Congo had more than 1.5 million subscribers, according to Vodacom's annual report. Today, Mr. Conteh says, the company he founded has more than three million subscribers who have spent, on average, around $50 for a handset and who prepay about $2 for every five minutes of talk time. He says a recent offer for his shares valued Vodacom Congo at more than $1.5 billion. (He refused to name the interested party.)

Mr. Conteh is building a telecommunications network where none existed before. With 600 employees and 5,000 contractors, Vodacom Congo is one of his country's biggest employers. If he realizes his ambition to create a stock market and offer shares in his company, he will have created new wealth.

Wow. That's impressive. All four of these stories are impressive. All four of these stories are also great examples of how wealth is really created. Be wary of those who would promise wealth through redistribution. True wealth comes from innovation, not redistribution. Rather than focusing on shifting around existing wealth, we should be focusing on creating new wealth. These four men vividly demonstrated how it works.