Saturday, July 21, 2012

Commercial Music I Like


They rank up there with this one:

Turnpike Privatization Is Apparently Not Popular

Governor Kasich's idea doesn't get much support in its first public hearing (h/t Lambert)
Of the 77 people in attendance Tuesday, 75 raised their hands to say they are against the governor's idea of privatizing the 241-mile toll road that spans Ohio from Indiana to Pennsylvania -- and many made strong statements for keeping the status quo.
The vast majority in attendance at the Lorain County Transportation and Community Center agreed with the analysis of the Akron Metropolitan Area Transportation Study that concluded the turnpike is an efficiently run, revenue-producing asset and, "if it ain't broke, don't fix it."
Ernie Peto of Olmsted Falls said leasing the turnpike would be like pawning it.
"Once you pawn a valuable watch and then spend the money, what do you have left?" he said. "We can't give away this asset."
Many in the audience cited what they said were deplorable conditions on the Indiana Turnpike, now being leased to a private company. One who registered that complaint was Cuyahoga County Executive Ed FitzGerald, who has gathered county commissioners in northern Ohio to oppose a turnpike lease.
"The company in control of the Indiana Turnpike is having all kinds of financial problems," FitzGerald said. "We don't want to have happening in Ohio what happened in Indiana."
"The Indiana Turnpike is a nightmare," said Lenore Novak of Lorain, who said she travels it often. "Their roads are deplorable, and you can't get through their toll booths."
Margaret Conway of Avon Lake added, "The plazas are also an embarrassment. Their bathrooms are really bad."
Will that stop the plan?  Hopefully.  Honestly, why does somebody think that a private corporation can provide a public service more cheaply than a public entity, considering that the private company expects to return a profit.  Considering that the major cost of operating a highway is maintenance, wouldn't it seem like the best place to squeeze out a profit is by cutting maintenance spending?  Won't that be bad long term?  The private sector thrives where innovation and risk-taking are needed.  Highways don't fit in that category.

What Makes The Mormon Church Tick?

Walter Kirn describes his history with the Mormon Church, and discusses living with a bunch of church members in Los Angeles (h/t Ritholtz):
In a way I remembered from my teenage years, my housemates did everything in groups, with friends from their Santa Monica “singles ward.” They hit the beach for all-night bonfire parties and convoyed off to a giant monthly flea market held at the Rose Bowl in Pasadena. At least once a week, they threw a backyard cookout: burgers and chicken, rolls, potato salad, lettuce salad, Jell-O salad, ice cream. When everybody finished eating, we’d gather inside the main house’s soaring living room to watch that week’s episode of Sophie’s talent show or one of the bloody, hard-boiled action movies that Bobby couldn’t get enough of. The mood was casual and disheveled, reminding me of a fifth-grade sleepover. I was faintly aware of crushes within the group, of certain young men who had eyes for certain young women, but there was no withdrawing into pairs. Everyone paid attention to everyone else.
I’d forgotten that social life could be so easy. I’d forgotten that things most Americans do alone, ordinary things, like watching television or listening to music or sweeping a floor, could also be done in numbers, pleasantly. One night, I sat on the floor next to a kid, muscled and tall, rectangularly handsome, who turned out to be a quarterback for UCLA. I learned this from Kim; he’d never bothered to mention it. Too absorbed in the goofy talent show, too busy barbecuing chicken breasts or squirting Hershey’s Syrup on bowls of ice cream, assembly-line style, while someone else stuck spoons in them. At Beverly Zion, that’s how it worked: pitch in, help out, cooperate, cooperate. Divide the labor, pool the fruits. This reflexive communalism went way back in Mormonism and underlay a frontier economic system known as “The United Order.” It had also inspired the early Mormons’ symbol of themselves, the beehive. In Brigham Young’s Utah, where speculative self-enrichment was explicitly discouraged (along with the mining and trading of precious metals, which Young decried as a barren, corrupting enterprise), the direction of the pursuit of happiness was toward the advancement of the common good.
It dawned on me that the purpose of Beverly Zion was not to seal out Hollywood at all, but to provide a setting for the enjoyment of a mutualistic way of life familiar from childhood homes and churches. Well, good enough: It kept me fed. It kept me company when I wasn’t writing and when Amanda, also a writer, was on assignment. It provided me with a car when mine broke down, with a truck when I bought a used sofa and had to fetch it, with laundry supplies when I ran out of them, and with dog-sitters for Amanda’s poodle when we flew to St. Louis to watch the filming of Up in the Air. It also provided me, thanks to Bobby’s father, a product designer for a Big Three auto company, with an insider’s discount on a new car that saved me a sweet 4,000 bucks. And in repayment for these kindnesses? Nothing. I asked. Just help finish this Jell-O salad.
“I mean it: Are they for real?” Amanda kept asking me. She’d grown up a Roman Catholic in Chicago and felt guilty about accepting favors that she couldn’t instantly return. Beverly Zion soon overwhelmed this attitude.
It is an interesting perspective that is often overlooked in today's discussion of individualism and self-sufficiency.  American history is full of communalism which has been blocked out by the story of the rugged individualist.  Frontier America was full of a combination of the two.  People really did do most things for themselves, but at the same time, you had barn raisings and communal threshing and church-based support networks.  Ghetto Catholicism was based on a similar understanding of communalism.  That melted away with the suburbanization of the post-war era.  I can understand some of the concerns of religious folks about a secular support network replacing a faith-based one, but can anybody tell me that part of the resistance to the welfare state doesn't have something to do with opposition to helping out people who aren't like you (for instance, minorities)?  It seems odd that the first Mormon party nominee for President seems to ignore the historic recognition of actions for the common good in his quest for the Presidency. 

Friday, July 20, 2012

Adam Smith And Our Modern Political Debate

A post at the Dish:
An antidote to the right's current madness from the indispensable Adam Gopnik:
Smith, as I wrote, does not think that “government is the problem”; he thinks problems arise when the rich are able to make the government take their side. A healthy sovereign state is what serves the public against the producers. (He was all for high wages, by the way, on the now old-fashioned grounds that the actual wealth of a 402px-AdamSmithsociety can be discerned not by how much its top class has—you can find rich topsters in Ur or ancient Egypt—but by the dissemination of wealth to the many. “The high price of labor,” he wrote, “is the essence of public opulence.”)
It isn’t just that a free market can survive regulation; it’s that the free market is the product of regulation, regulation designed to protect the public from the kind of arrangement that, let’s say, allows people with undue influence on the government to have a lower tax rate than people who don’t. This makes Smith, as I wrote, a firm believer in public goods: his state has an obligation to build roads and schools, establish an army, build bridges and highways, and do all the other things necessary for a sane polity in which the market can function naturally. Everyone should pay for them, and the rich should always pay more than others. “The rich should contribute to the public expense not only in proportion to their revenue,” Smith writes, “but something more than in that proportion.” (He also thought, Mitt, that taxes should be paid with joy, as a contribution to the well-being of all.)
Gopnik's quite marvelous long essay on Smith is here. It helps you realize how today's rightists simply misunderstand the thing they claim to love..
 I'm sorry I'm posting all of Sullivan's entry, but I think this is really important.  The supposed father of modern, supposedly "laissez-faire" economics was really a moral philosopher.  He just happened to realize a lot of things about the human condition.  But remember, he was of the Scottish Enlightenment, and wasn't tainted with the postmodernism of today's Republican party.  He was much more likely to take into account the importance of the seven deadly sins and the seven cardinal virtues (even though my understanding of them is shaped by my Catholicism that he definitely didn't share).

Take a look at the controversy over the President's "you didn't build that" line.  The whole point of the speech was that no matter how hard we work, we owe a bit of our success to others, because we don't exist in a vacuum.  Other people have some impact on our lives.  I think that is an irrefutable statement.  However, the Republican party has thrived on stoking up what is considered the most deadly of sins, pride.  The opposite Cardinal virtue of pride is humility.  But listen to the Republican talking heads like Limbaugh and you would find humility sorely lacking.  They trump up pride.  Accomplishment should be recognized and honored, according to them.  You know, they already are, since they make a lot of money because of their accomplishment.  But maybe the most successful of us should be a little humble, because things happened to break their way at some point. 

The whole argument reminds me of Frank Grimes on The Simpsons.  Every terrible thing in the world happened to Frank, and yet, he managed to reach his goals (even though he got his job because Mr. Burns was touched by the news story about Grimes).  But once he got there, he realized that Homer, a blundering boob, had managed by extreme luck, to end up even better off than he had through all his hard work.  This realization eventually led to his untimely demise, because he couldn't come to grips with it.  This argument strikes a real chord with me, because after watching that episode of The Simpsons, my college roommate called me to point out the similarities between myself and Homer, and of our other roommate, The Professor, and Frank Grimes.  It made me laugh, mainly because I was being compared to Homer (he also called to point out the similarities between Homer's  boxing career and mine).  But beyond that, there was a real comparison between the Professor and Frank Grimes.  Both had worked extremely hard to get where they were at.  Both became angry that somebody else got by without working hard (envy of Homer and I).  But I always accused the Professor of falling victim to the sin of pride (it is a running joke between us that while sloth and gluttony were my failings, pride was his), because he never seemed to realize that he actually didn't have to work that hard, he was lucky that he was extremely intelligent (he is one of the three or four smartest people I ever met).  His type A personality drove him to work so hard, and he damn well wanted recognition for it.  While he deserved that recognition, that is why humility is a virtue.  It is a personal sacrifice to not seek the recognition, and also an inspiration that someone who is successful realizes that he got where he was at not solely of his own merit.  I don't understand how the attitude of Ayn Rand (that self-sacrifice is a moral failing) has trumped the historically Christian tradition of humility and altruism.  Rand's relishing of selfishness and avarice are the polar opposite of Christianity's humility and charity.  How did a party of supposed Christians stray so far from Christianity?  And why should we honor those faults?  If Adam Smith were alive today, I would guess he would think that Republicans were right-wing loons.

Landing On The Moon

Best story from The Onion ever, commemorating July 20, 1969:

The Bicycle Man

Dave Eggers' new book focuses on American outsourcing:
In years past, Alan was married to Ruby, an abrasive if good-looking activist who wants, in her loud, unpleasant way, to save the world. (Her ideal mate, Alan later decides, would have been Aristotle Onassis or George Soros.) Back then he worked as an executive at Schwinn, the long-classic bicycle manufacturer. But Alan was part of the team that decided it would be cheaper to build bikes in China instead of the United States. Unfortunately, once the Chinese learned how to produce a solid product, they undercut the American price point and put Schwinn out of business.
Since then, Alan has lurched from one misjudged business venture to another, gotten divorced, and is now facing utter ruin:
“He had moved from Schwinn to Huffy to Frontier Manufacturing Partners to Alan Clay Consulting to sitting at home watching DVDs of the Red Sox winning the Series in ’04 and ’07. The game when they hit four consecutive home runs against the Yankees. April 22, 2007. He’d watched those four and a half minutes a hundred times and each viewing brought him something like joy. A sense of rightness, of order. It was a victory that could never be taken away.”
Alan yearns for such a victory himself, recalling with bitter nostalgia a time when he was “selling actual objects to actual people.” Alas, the America of foundries and factories, of mills and looms, seems to have vanished. Even when trying to establish his own premium, Made-in-America bicycle company, Alan finds himself dismissed as a relict of the past. “Some of the bank people were so young they’d never seen a business proposal suggesting manufacturing things in the state of Massachusetts. They thought they’d unearthed some ancient shaman, full of clues to a forgotten world.”
That concept is made very real by the fact that my friend's dad ran Schwinn back in that time frame, and that I saw Huffy close its plant in Celina, Ohio when it moved all of its production to China.  The short term gains of outsourcing just don't make sense long term.

Dryland Vs. Irrigation Farming

Eve Troeh: There are two types of farmers in the Midwest. The first, called dry land farmers, are actually in the wetter places. They rely on rich soil, and rainfall. When the ground's dry, and it doesn't rain, what's their backup?
Darin Newsom: Well, there really isn't one.
Darin Newsom is an agriculture analyst with DNT in Iowa. He says for those farmers:
Newsom: It's over. There's just no chance that the crop's going to be salvageable.
Watering from above won't cut it. And there's no underground irrigation in place. Now, other farmers in drier parts of the corn belt have had elaborate irrigation and pumping systems for decades.
Newsom: Where you actually have to pull the water out of some source.
Like a creek, or aquifer. Those water supplies are managed by state or local government. Farmers hooked up to irrigation can get more water, technically.
George Rafetlis: But the amount that is allowed to the agricultural section might be limited.
Most everything east of the 98th meridian is dry land agriculture, with the exception of  the high dollar truck crops and fruit farms over very productive aquifers.  It's just a crap shoot whether you get the rain or not.  But overall, the odds are in our favor.  Or at least they have been before global warming.  We may find out differently in the future.

The Man Responsible For Modern Accounting

Bloomberg (h/t Ritholtz): 
The system that generates these 21st-century accounting figures -- the numbers that run our nations and corporations -- was first codified by a Renaissance friar named Fra Luca Bartolomeo de Pacioli. He was at one time more famous, as a mathematician, than his collaborator Leonardo da Vinci.
Pacioli is remembered today, if he’s remembered at all, as the father of accounting. He wrote the first mathematical encyclopedia of Europe, which made two critical contributions to modern science and commerce: It was the first printed book to explain Hindu-Arabic arithmetic and its offshoot, algebra, and it contained the first printed treatise on Italian accounting.
Algebra would underpin the Scientific Revolution; Italian accounting, the Industrial Revolution.As his encyclopedia was going to press in Venice in 1494, Pacioli added a 27-page summary of a new form of accounting that had first emerged in Italy around 1300 and been perfected by the merchants of Venice. He called the addition a “special treatise which is much needed” to help merchants keep their accounts in an orderly way.
Known in the 15th century as accounting “alla Veneziana,” the system is now called double-entry bookkeeping and is standard practice throughout the world. In 1494, it was exceptional -- and in his treatise Pacioli recommended it above all others.
In their ledgers, Venetian merchants separated debits and credits, dividing them into two columns. As Pacioli wrote: “All the creditors must appear in the Ledger at the right-hand side, and all the debtors at the left. All entries made in the Ledger have to be double entries -- that is, if you make one creditor, you must make someone debtor.”
Pacioli’s system was revolutionary because it allowed merchants to calculate increases and decreases in their wealth, recorded in their capital account. In other words, it allowed them to determine that driver of capitalism: profit (or loss). Pacioli wrote that the purpose of every business was to make a lawful and reasonable profit, which could be tallied with Venetian bookkeeping. And thus the seed of capitalism was planted.
I didn't know that.  As far as I'm concerned, the algebra was a bigger deal, but that isn't quite Bloomberg's interest.   I could only think of two people I knew who might find this interesting, but I posted it anyway.

The History of Rabies

An interview with Bill Wasik and his wife, Monica Murphy, about their book, Rabid:A Cultural History of the World's Most Diabolical Virus, gives us this tidbit of information:
Can you explain what happens to a person when they become infected with rabies?
MM: Usually, of course, this happens through a bite wound. The virus in the animal's saliva enters through the wound and infects the nerve cells there. Then it slowly climbs its way up the nervous system toward the brain. If you're bitten on the face, it might reach the brain in a matter of days, but usually this journey will take weeks, months, or even upwards of a year. If you get vaccinated at any point before the virus arrives at the brain, you can clear it without any danger. But once it infects the brain, you have rabies, and it's nearly 100-percent fatal.
BW: After that things get grisly. The first symptom is actually sort of interesting: Supposedly you get this tingling sensation at the site of the wound. Like, you didn't have it before, all that time that rabies was crawling up to the brain. Usually the wound has even healed at this point. But once your brain is infected, you'll often start to feel something odd at the site: a tingling, an itch, a stabbing pain. It sounds almost supernatural, but apparently it's true.
MM: Soon, it manifests as a flu-like illness—a sort of general malaise. It gets worse from there. You start to become disoriented and deranged.
BW: Another classic symptom is a difficulty in swallowing, which winds up manifesting as a visceral revulsion to water or other drinks—hence the term "hydrophobia," which used to be the medical term for human rabies. Occasionally, patients also experience hypersexual behavior, with involuntary orgasms. (I read about one case report in Latin that said, "Semen at animam simul efflavit," i.e., "His seed and his life were lost simultaneously.")
MM: Over a short period of time, you swing back and forth between periods of hysterical aggression, on the one hand, and terrible lucidity on the other. So you're able to contemplate just how bad your situation is.
BW: And then it kills you.
MM: Yeah. Rabies ultimately shuts down the brainstem, at which point you either suffocate or your heart stops.
My mother got bit by a neighbor's dog, and when she went to the hospital, they wanted to check out the dog.  She went over to the neighbor's house and told him the authorities wanted to see the dog, and he said it was too late, he'd shot it and burned the body.  She decided to chance it and not take the rabies shots.  It worked out for her, but the authors advise against such a gamble.

Chart of the Day

From the North Dakota Department of Mineral Resources, via James Hamilton:

That may be a little worse than reality, because some of the other data may be a little dated, but overall it doesn't look as rosy as the optimists make it seem.

Thursday, July 19, 2012

Cinematic Gold

A post about sports which are no longer Olympic sports (like baseball or indian club swinging) informed me that Gaelic football and hurling were demonstration sports in the 1904 St. Louis Olympics.  It also linked to the "Men With Brooms" trailer:

I believe I am one of the eighteen citizens of the United States who watched this movie.

Stay Classy, Pete

Pete Rose as reality show subject:
Pete Rose is taking a swing at his own reality TV show.
Cable's TLC network says it has started production on an unscripted series to chronicle the lives of baseball's all-time hitting leader and his fiancee, model Kiana Kim.
The series will follow the couple as they plan a wedding and go through the process of blending their respective families. The show is so far untitled.
The network announced Wednesday that TLC has ordered five episodes to air late this year. The 71-year-old Rose agreed to a lifetime ban from baseball in 1989 after an investigation concluded he bet on games when he was the manager for the Cincinnati Reds. The ban has left him ineligible for induction into the Hall of Fame. He leads baseball with 4,256 career hits.
His fiancee:

 Lordy, Pete.

Are Canadians Wealthier Than Americans?

From the Dish:
Stephen Marche claims that, "for the first time in recent history, the average Canadian is richer than the average American." He ponders the implications:
Both liberals and conservatives in the U.S. have tried to use the Canadian example to promote their arguments: The left says Canada shows the rewards of financial regulation and socialism, while the right likes to vaunt the brutal cuts made to Canadian social programs in the 1990s, which set the stage for economic recovery. The truth is that both sides are right. Since the 1990s, Canada has pursued a hardheaded (even ruthless), fiscally conservative form of socialism.
Reihan reframes:
The really interesting question is this: given the massive housing bust in the U.S. and the continuing appreciation of home values in Canada, Canada’s importation of large numbers of college-educated immigrants and its draconian policies towards unauthorized immigrants, and its markedly different family structure, why isn’t the gap in average net worth between Canada and the United States much larger?
Wait a second.  First off, they should be. Canada is in the midst of a ten year resources boom, which has caused issues in other resource rich countries who have had large capital inflows.  Secondly, they are in what very well be a housing bubble driven in markets such as Vancouver by Chinese capital inflows.  I think Spain may have had a similar real estate boom partially fueled by foreigners. 

But now to the government spending.  The U.S. spends 4.8 percent of GDP on defense versus 1.4% by Canada.  And then there is health care.  The U.S. spends $7500 per person for health care, compared to less than $4100 in Canada.  Finally, Canada is a net exporter of oil, unlike the U.S. 

Since the Canadians economy has slightly more of a percentage of GDP in government spending, they must be spending more on education, infrastructure and/or social programs.  Overall, the conservatives are right, we should follow Canada's lead.  We just probably wouldn't follow them where Republicans would want us to.

Pork Producers Struggle With Feed Prices

Cedar Rapids Gazette, via nc links:
While federal crop insurance will help Iowa grain farmers survive the drought, many livestock producers, who lack such protection, will not, according to Bill Tentinger of LeMars, president of the Iowa Pork Producers Association.
High corn prices – now approaching $8 a bushel — will force many pork producers out of business, Tentinger said Tuesday at a drought status meeting called by Gov. Terry Branstad.
“I know how grain farmers will benefit. I do both (row crops and hogs),” Tentinger said.
Farmer Wayne Humphreys of Columbus Junction called federal crop insurance “wonderful” and “absolutely critical” for grain farmers this year.
“I think this year’s drought is worse than the one in 1988, but we will come out a lot better because of crop insurance,” which was not widely available until 1994, he said.
Lambert's comment echoes my own to some extent:
 Now watch small government free market Rs ask for public money.

Wednesday, July 18, 2012

Some Rain Finally

Well, I got three quarters of an inch of rain, after no measurable rainfall in 2 weeks.  I'm sure it will help the beans, and I'm not sure about the corn.  Dad is pretty confident that the corn pollination is so spotty that some of it can be saved by rain.  As usual, I'm not as confident.  It will definitely help out the double crop beans, which have been amazing me with their growth.  It will help out the hay, too.  Overall, it was a good day.

Del Mar Opening Day

From the Del Mar website:
Today marks the start of a special season for California racing fans.  Del Mar Thoroughbred Club will open today for its summer meet.  The premier race on the card look to be the two-division ungraded Oceanside Stakes.  Some of the nation's best three-year-olds will take to the turf and run a mile to win $100,000.  Here's your complete handicapping analysis for the first division.
It is a beautiful course.  If it was within driving range, I'd go.  Unfortunately, it's not.  The  Saratoga meet opens on Friday.  I guess I wouldn't fit in with the society crowd at either track.  Oh well.

Superlaser Breaks Power Record

Laser physicists at the Lawrence Livermore National Laboratory have broken the record for the highest-power laser shot with a collection of beams delivering more than 500 trillion watts of peak power. The National Ignition Facility fired 192 beams at the same time, delivering 1.85 megajoules of ultraviolet laser light to a target a mere two millimeters in diameter.
To put those numbers into perspective, the 500 terawatt figure is 12,500 times greater than the demand for electricity in 2006 in Britain, which averaged out at 40 gigawatts.

“For scientists across the nation and the world who, like ourselves, are actively pursuing fundamental science under extreme conditions and the goal of laboratory fusion ignition, this is a remarkable and exciting achievement,” said Richard Petrasso, senior research scientist and division head of high energy density physics at the Massachusetts Institute of Technology in a press release. “The 500 TW shot is an extraordinary accomplishment by the NIF Team, creating unprecedented conditions in the laboratory that hitherto only existed deep in stellar interiors,”
The National Ignition Facility is the world’s foremost laser research establishment, producing lasers than can regularly carry more than 100 times the energy of any other laser. The 500 terawatt firing hits a milestone set in the late 90s when the facility was being planned, and takes researchers a step closer to the goal of igniting hydrogen fusion.
Some stuff is just way over my head.  However, I would like to point out that I believe the government investment in scientific research is worth its weight in gold.  Actually, worth more than that.

This Time Is Different

A chart from EPI via Jared Bernstein:

These raw numbers of public sector losses get a lot of attention, but the part I wanted to highlight is the private-sector jobs multiplier from public sector jobs.  I quote at length here because Heidi and Josh provide an excellent explanation of this overlooked point.
However, even that 1.1 million public-sector jobs gap leaves out an important component: public-sector job cuts also cause job loss in the private sector, for a couple of reasons. First, public-sector workers need to use inputs into their work that are sourced by the private sector. Firefighters need trucks and hoses, police officers need cars and radios, and teachers need books and desks. When public-sector jobs are lost, it stands to reason that the inputs into these jobs will fall as well, and indeed research shows that for every public-sector job lost, roughly 0.43 supplier jobs are lost.
Second, the economic “multiplier” of state and local spending (not including transfer payments) is large – around 1.24. This means that for every dollar cut in salary and supplies of public-sector workers, another $0.24 is lost in purchasing power throughout the rest of the economy. Teachers and firefighters stop going to restaurants and buying cars if they’re laid off, which reduces demand for waitstaff and autoworkers and so on. Add these two influences together (supplier jobs and jobs supported by this multiplier impact) and roughly 0.67 private sector jobs are lost for every public sector job cut.   This means that the public sector being down 1.1 million jobs has likely cost the private sector 751,000 jobs (1.1 million*0.67). [my bold]
Further, it should be noted that this 0.67 figure only accounts for private-sector job loss that is due to direct public-sector job loss.
The public sector job losses have been a major drain on the economy.  It is important to note that most of the benefit in cutting government spending and not raising taxes, or, in the case of states like Ohio and Wisconsin, cutting government spending and cutting taxes, goes to the wealthy, who really don't need that additional money.  There is something very stupid in that, in my opinion.

Damn, Billy Hamilton Is Fast

Minor-league speedster Billy Hamilton has stolen 109 bases through 87 games this season, earning himself national accolades from the likes of our own Jeff Passan as well as a spot in last week's All-Star Futures game in Kansas City. Yet even the 20-year-old Reds farmhand must realize that such prodigious numbers can somehow start to glaze our jaded eyes a bit over time. So now the noted Mountain Dew swiller is making headlines with an inside-the-park home run completed in an unbelievable amount of time for the Double-A Pensacola Blue Wahoos on Sunday. Minor-league speedster Billy Hamilton has stolen 109 bases through 87 games this season, earning himself national accolades from the likes of our own Jeff Passan as well as a spot in last week's All-Star Futures game in Kansas City. Yet even the 20-year-old Reds farmhand must realize that such prodigious numbers can somehow start to glaze our jaded eyes a bit over time. So now the noted Mountain Dew swiller is making headlines with an inside-the-park home run completed in an unbelievable amount of time for the Double-A Pensacola Blue Wahoos on Sunday.

Global Warming And Drought

Brad Plumer:
4) And future global warming will seriously dry out the United States. Keep in mind that human activity has only warmed the planet about 0.8°C above pre-industrial levels. According to the International Energy Agency, we’re on pace to warm the planet by 6°C by the end of the century. That’s a big difference. And plenty of scientific evidence suggests that warming will dramatically increase droughts around the world, including in North America.
This 2011 review paper (pdf) by Aiguo Dai of the National Center for Atmospheric Research summarizes much of what’s known about climate change and drought. In North America and around the world, decreased precipitation and increased evaporation will continue drying out soils and make persistent, Dust Bowl-style droughts more likely in the next 20 to 50 years. (Again, these droughts aren’t unprecedented, but they’re expected to become more frequent.) Here’s a map of what the world will look like mid-century under a “moderate” emissions scenario:
The Palmer Drought Severity Index mid-century under a moderate emissions scenario. Under the PDSI, "a reading of -4 or below is considered extreme drought." (Source: National Center for Atmospheric Research.)
That’s the expected Palmer Drought Severity Index around the world under a “moderate” warming scenario. Take a look at the United States, where the PDSI ranges from -4 to -8 in the Plains. As Joe Romm notes, the PDSI briefly spiked to -6 in the Plains during the Dust Bowl, but it rarely exceeded -3 for the rest of the 1930s. In other words, we can expect drought conditions more severe than they were during the Dust Bowl.
If this is even close to correct, we are very screwed.  As the story said in another part, droughts have been a part of our life forever, but they will probably become more likely with climate change.  Is that a big  risk to be taking?  Yes, it is. Is Midwestern farmland a good long-term investment at current prices?  I have no idea.  Anyway, this year may be warping our perspectives, but the chance of major change is very scary.

Tuesday, July 17, 2012

When You Can't Tell The Truth

David Frum on the challenge for Mitt Romney in explaining his involvement with Bain Capital:
Romney's core problem is this: He heads a party that must win two-thirds of the white working-class vote in presidential elections to compensate for its weakness in almost every demographic category. The white working class is the most pessimistic and alienated group in the electorate, and it especially fears and dislikes the kind of financial methods that gained Romney his fortune.
Romney has a strong potential defense: Bain was in the business of making companies more efficient and profitable. Downsizing and outsourcing were necessary -- and often indispensable -- means to that end. In a growing economy, the workers who lost their jobs should find new jobs elsewhere, and it's precisely the relentless search for profitability that causes economies to grow in the first place.
That's an argument that, to borrow an old joke of Henry Kissinger's, is not only convincing but has the additional merit of being true. However, it's not an argument that appeals much to the voters Romney most intensely needs to win. Hence his unleashing of the war room -- but in the end, there's only so much a war room can do. And this time, by trying to do too much, the Romney war room may have blasted its own side with lethal friendly fire.
I'm not sure how strong that potential defense is.  Looting the economy might not be everyone's idea of necessary and indispensible:
Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney’s watch produced about 70 percent of the firm’s profits. Four of those 10 deals, as well as others, later wound up in bankruptcy. It’s worth examining some of them to understand Romney’s investment style at Bain Capital.
In 1986, in one of its earliest deals, Bain Capital acquired Accuride Corp., a manufacturer of aluminum truck wheels. The purchase was 97.5 percent financed by debt, a high level of leverage under any circumstances. It was especially burdensome for a company that was exposed to aluminum-price volatility and cyclical automotive production.
Forty-to-one leverage is casino capitalism that hugely magnifies gains and losses. Bain Capital wisely chose to flip the company fast: After 18 months, it sold Accuride, converting its $2.6 million sliver of equity into a $61 million capital gain. That deal, which yielded a 1,123 percent annualized return, was critical to Bain Capital’s early success and led the firm to keep maximizing the use of leverage.
In 1992, Bain Capital bought American Pad & Paper by financing 87 percent of the purchase price. In the next three years, Ampad borrowed to make acquisitions, repay existing debt and pay Bain Capital and its investors $60 million in dividends.
As a result, the company’s debt swelled from $11 million in 1993 to $444 million by 1995. The $14 million in annual interest expense on this debt dwarfed the company’s $4.7 million operating cash flow. The proceeds of an initial public offering in July 1996 were used to pay Bain Capital $48 million for part of its stake and to reduce the company’s debt to $270 million.
From 1993 to 1999, Bain Capital charged Ampad about $18 million in various fees. By 1999, the company’s debt was back up to $400 million. Unable to pay the interest costs and drained of cash paid to Bain Capital in fees and dividends, Ampad filed for bankruptcy the following year. Senior secured lenders got less than 50 cents on the dollar, unsecured lenders received two- tenths of a cent on the dollar, and several hundred jobs were lost. Bain Capital had reaped capital gains of $107 million on its $5.1 million investment.
I'm not sure how necessary and indispensible charging $18 million in fees for running up tremendous debt to cash out all of your investment is in strengthening our economy.  That seems to me like calling leeches necessary and indispensible in medicine.

Hyatt Regency Walkway Collapse

 Connection details of a cross beam on the fourth-floor elevated walkway in the Hyatt Regency Crown Center in Kansas City, Missouri, United States. The failure caused the deaths of 114 people, injuring 200 more. It was the worst structural failure of its time (1981).
(a) Original connection design; each nut takes the load (P) of one walkway (because the load of the NEXT walkway is transmitted through the single, continous steel rod, not through the nut)
(b) Modified design (done due to constructibility issues) that ultimately led to the failure of the walkway due to one nut having to bear the the load of two walkways (2P)

July 17, 1981:
A structural failure leads to the collapse of a walkway at the Hyatt Regency in Kansas City, Missouri killing 114 people and injuring more than 200.
The two walkways were suspended from a set of 1.25 in (32 mm) diameter steel tie rods, with the second floor walkway hanging directly under the fourth floor walkway. The fourth floor walkway platform was supported on 3 cross-beams suspended by steel rods retained by nuts. The cross-beams were box girders made from C-channel strips welded together lengthwise, with a hollow space between them. The original design by Jack D. Gillum and Associates specified three pairs of rods running from the second floor to the ceiling. Investigators determined eventually that this design supported only 60 percent of the minimum load required by Kansas City building codes.
Havens Steel Company, the contractor responsible for manufacturing the rods, objected to the original plan of Jack D. Gillum and Associates, since it required the whole of the rod below the fourth floor to be screw threaded in order to screw on the nuts to hold the fourth floor walkway in place. These threads would probably have been damaged and rendered unusable as the structure for the fourth floor was hoisted into position with the rods in place. Havens therefore proposed an alternate plan in which two separate sets of tie rods would be used: one connecting the fourth floor walkway to the ceiling, and the other connecting the second floor walkway to the fourth floor walkway.
This design change would prove fatal. In the original design, the beams of the fourth floor walkway had to support only the weight of the fourth floor walkway itself, with the weight of the second floor walkway supported completely by the rods. In the revised design, however, the fourth floor beams were required to support both the fourth floor walkway and the second floor walkway hanging from it. With the load on the fourth-floor beams doubled, Havens' proposed design could bear only 30 percent of the mandated minimum load (as opposed to 60 percent for the original design).
The serious flaws of the revised design were compounded by the fact that both designs placed the bolts directly through a welded joint connecting two C-channels, the weakest structural point in the box beams. Photographs of the wreckage show excessive deformations of the cross-section. During the failure the box beams split along the weld and the nut supporting them slipped through the resulting gap between the two C-channels which had been welded together.
Investigators concluded that the basic problem was a lack of proper communication between Jack D. Gillum and Associates and Havens Steel. In particular, the drawings prepared by Jack D. Gillum and Associates were only preliminary sketches but were interpreted by Havens as finalized drawings. Jack D. Gillum and Associates failed to review the initial design thoroughly, and accepted Havens' proposed plan without performing basic calculations that would have revealed its serious intrinsic flaws — in particular, the doubling of the load on the fourth-floor beams.
Along with the Quebec Bridge collapses and Galloping Gertie, this is a textbook civil engineering failure.  It is one of those things that a quick review of a design change can overlook, but 114 people died because of it.  That was more than the two collapses at the Quebec Bridge (75 and 13) and the Tacoma Narrows Bridge (0) combined.  All because of overloaded one-and-a-quarter inch nuts. 

What Will The Drought Damage Be?

A worst-in-a-generation drought from Indiana to Arkansas to California is damaging crops and rural economies and threatening to drive food prices to record levels. Agriculture, though a small part of the $15.5 trillion U.S. economy, had been one of the most resilient industries in the past three years as the country struggled to recover from the recession.
“It might be a $50 billion event for the economy as it blends into everything over the next four quarters,” said Michael Swanson, agricultural economist at Wells Fargo & Co. (WFC) in Minneapolis, the largest commercial agriculture lender. “Instead of retreating from record highs, food prices will advance.”
The U.S. Department of Agriculture declared July 11 that more than 1,000 counties in 26 states are natural-disaster areas, the biggest such declaration ever. The designation makes farmers and ranchers in affected counties -- about a third of those in the entire country -- eligible for low-interest loans to help manage the drought, wildfires or other disasters.
Corn rose today to the highest in 10 months while soybeans increased to the costliest since 2008.
Wow.  $50 billion.  So if the government comes up with a disaster payment in October (which I anticipate) will all these big government and Obama haters turn it down?  I'm guessing no.  Meanwhile, if we have a corn shortage, will the economics and morality of the ethanol mandate come into question?  I would think that in a rational world it would.  Whether it will come into question here might be more questionable.

Revitalizing Northeast Mill Towns With High-Speed Rail

The Atlantic:
From New York's Pennsylvania Station, you can catch a northbound subway train toward the Bronx. Thirty-nine minutes later, it will pull into Pelham Pkwy, a dozen miles away. But imagine, instead, that you could hop aboard a Next Generation High-Speed Rail train and in thirty-nine minutes pull up in Waterbury, Connecticut. The aging industrial town would be more swiftly accessible from midtown Manhattan than much of New York City.
That's the alluring vision Amtrak unveiled on Monday morning. The national railroad passenger company imagines a high-speed network that, by 2040, would whisk travelers from New York south to Washington or north to Boston in just 94 minutes. It's the highlight of an ambitious, $151 billion plan to rework its northeast corridor to meet burgeoning demand. The price-tag alone makes the plan implausible. But for the beleaguered rail corporation, which Mitt Romney and Congressional Republicans have suggested privatizing, the vision amounts to an argument for its future relevance and unmet potential.
The report touts many prospective benefits, including creating construction jobs, shortening travel times, boosting productivity, enhancing safety, and mitigating environmental impacts. These benefits are quite real, but urban economist Ed Glaeser has argued that they aren't remotely worth the price. He calculates relatively modest gains in productivity, safety, and the environment and points out that a construction project stretched over decades is an ineffective counter-cyclical stimulus.
Glaeser does, however, acknowledge one potential benefit large enough to tip the scales. Large economic impacts from high-speed rail, he writes, come "only if it significantly increases the speed at which an area with cheap real-estate gains access to a booming place that doesn't have any comparable, closer available land area." That describes, almost perfectly, the relationship of Connecticut's rusting industrial towns to the burgeoning prosperity of New York City.
That is an interesting idea.  I'm already impressed by travel in the northeast with just the Acela service.  You can cover a lot of territory when traveling at 130 mph.  I wouldn't put much stock in the plan right now, with conservatives pushing cuts in government spending to go along with their enduring hatred of all public transportation.

Monday, July 16, 2012

Breaking Bad And Reality

Closer than you might think:
The one feature in the show that is most glaringly off is the gleaming subterranean mega-lab that Gus constructs for Walter. To be sure, labs like these exist—just not in the United States. One major challenge for any meth producer, which gets scant attention on the show, is how to source adequate precursor chemicals, which are heavily regulated in the States. In real life, it would be impractical to undertake the sort of industrial-scale production that Walter does (two hundred pounds a week) inside this country, because of the difficulty of acquiring the necessary chemicals. It is much easier to shift production to Mexico or Guatemala, as the major drug cartels have done, where mega-labs (that dwarf Walter’s) churn out meth for export to the U.S. Meth is still cooked in this country, but generally in smaller “shake and bake” batches more typical of what you see in “Winter’s Bone.” Otherwise, the show’s portrayal of Mexican cartels is devastatingly accurate. It has been suggested that Vince Gilligan has a sick mind, but nothing he could dream up, even the unfortunate fate of Tortuga, can rival the creative barbarism of the cartels. Many viewers were repulsed when Walt and Pinkman used acid to melt a body in an early episode, but this is such a common disposal technique in Mexico today that it has acquired a nickname—the guiso, or “stew.” One plot device that drives much of the third and fourth seasons is the notion that Walt is irreplaceable (and therefore, likely to survive) only until someone else, whether his lab assistant Gale, or Jesse Pinkman, can learn to reproduce his recipe. A federal prosecutor in California told me recently about a case in which a group of American ecstasy producers entered negotiations with a Mexican cartel to manufacture large volumes of the drug, but ended up abandoning the deal when they realized that the cartel intended to keep them around just long enough to learn their recipe, then kill them.
That is just plain scary. 

Hangover Cures

Sarah Marshall looks at a study Frank Paulson published in 1961 dealing with hangover cures.  An example:
“Mix cinnamon in wine and sip on it. Any kind of sweet wine will do.”—George Fonte, Club 58, Detroit. Bartender; white, male, about 45; born and reared in Wisconsin; has been tending bar, mostly at exclusive private clubs, in Detroit for 20 years; he was my most cooperative and informative informant. (Fonte also suggested: milk; lemon sherbet; Mashed strawberries and sugar dressed with egg whites, gin, and chartreuse; a whiskey sours; salty dogs; an orange blossoms; a shot of vodka mixed with equal parts tomato juice and clam juice; sherry mixed with an egg yolk and served at room temperature; a shot of Pernod mixed with an egg white and four dashes of bitters; and warm seltzer water mixed with bitters.)
The best hangover story I've heard involved a friend from college who was an Army medic.  After meeting up with his old roommates in D.C., he was hungover and had to drive home.  His solution: give himself an IV of saline solution.  Apparently, it worked like a charm.  Now he's a doctor.  Another cure from the study that isn't safe for work, after the jump:

Chart of the Day

Why is there so much income inequality?  Krugman's chart may be an indication:

All these estimates show that taxes on the rich are the lowest they have been in half a century. But what about before 1960? Well, we know that the top marginal tax rate was even higher in the 40s and 50s than in the 60s; and it was very high by modern standards through much of the 30s too.
So I think it’s safe to say that taxes on the rich are currently lower than they have been for not 50 but 80 years. And if Mitt Romney gets his way, we’ll bring those taxes down to levels not seen since Calvin Coolidge.
There really need to be more tax brackets on people making $1, $5 and $10 million a year, or something like that.  Why do people making $50 million a year pay the same rate on every dollar over $250,000 as people making $300,000?  Why is Mitt Romney paying an effective 14% rate on all the money he gets paid each year?  Why should we elect him to lower those taxes even further?  He hasn't exactly been creating jobs recently.

Is China Slowing Down?

Matthew O'Brien:

China's policymakers can do a lot more. Consider that inflation fell to 2.2 percent in June. That's actually worryingly low. But it also means the People's Bank of China can cut rates without feeling concerned that rising prices will squeeze workers. 

China will have to walk a policy tightrope. They face two contradictory problems right now. The first is slowing exports. The second is its slowly deflating housing market. They can thank Angela Merkel for the former, and their own policymakers for the latter. For the past year, policymakers have tried to cool its frothy property market, which boomed after the credit-fueled 2008 stimulus. China's leaders are reluctant to repeat that experience -- they do not want housing to get bubbly again -- so that makes it a bit harder to make up for lost exports this time around. Harder, but certainly not impossible. Enough government spending could make up for it. There are already signs that might be starting to happen.
 Can the Communist Party engineer a soft landing?  I'd say maybe, but it's doubtful.  A hard landing will shake the whole world.

Soil Erosion Factoids

From Big Picture Agriculture:

Michael Duffy at Iowa State has come out with a new report on soil erosion and how it decreases land values in the state of Iowa. This is an ugly truth that no one wants to talk about. We are literally mining our topsoil.
Here are some interesting facts from his report:
● In 1982 there was an estimated 7.4 tons per acre of soil erosion on Iowa cropland.
● By 2007 erosion in Iowa had decreased to 5.1 tons per acre.
● For the entire United States, erosion rates dropped from 4.0 tons to 2.7 tons per cropland acre over the same time period.
● The hypoxia zone in the Gulf of Mexico is directly related to the amount of erosion on farms.
● Per acre: Soil weighs roughly 154 tons per inch. If we assume that you are losing 4 inches as you move in the different erosion phases then you would lose 616 tons of soil. The average of all the estimates for cost of erosion was $268 an acre.
The mining point is true.  Our clay-rich soils have more water erosion than the wind erosion which can occur out west in the heavy loess soils, but it is still a real problem.  The last few winters, we've gotten pummelled by big rains which cut gullies in the fields.  If that is related to global warming, we may be in for many years of issues.  I've never been able to get this anecdote from Jared Diamond's book, "Collapse," out of my head:
" ... about half of the topsoil of Iowa, the state whose agricultural productivity is among the highest in the U.S., has been eroded in the last 150 years. On a recent visit to Iowa, my hosts showed me a churchyard offering a dramatically visible example of those soil losses. A church, built there in the middle of farmland during the 19th century, has been maintained continuously as a church ever since, while the land around it was farmed ... the churchyard now stands like a little island raised 10 feet above the surrounding sea of farmland.
10 feet?  A lot of our ground is lucky to have a foot of topsoil.  No wonder the crops are so good out there. But I'd hate to be responsible for pissing away that much unbelievably rich soil.

Sunday, July 15, 2012

NASA Photo of the Day

Today's picture:

Orion Nebula: The Hubble View
Image Credit: NASA, ESA, M. Robberto (STScI/ESA) et al.
Explanation: Few cosmic vistas excite the imagination like the Orion Nebula. Also known as M42, the nebula's glowing gas surrounds hot young stars at the edge of an immense interstellar molecular cloud only 1,500 light-years away. The Orion Nebula offers one of the best opportunities to study how stars are born partly because it is the nearest large star-forming region, but also because the nebula's energetic stars have blown away obscuring gas and dust clouds that would otherwise block our view - providing an intimate look at a range of ongoing stages of starbirth and evolution. This detailed image of the Orion Nebula is the sharpest ever, constructed using data from the Hubble Space Telescope's Advanced Camera for Surveys and the European Southern Observatory's La Silla 2.2 meter telescope. The mosaic contains a billion pixels at full resolution and reveals about 3,000 stars.

Will Votto Break The Doubles Record?

Joey Votto is currently on pace to hit 65 doubles this season, bringing him extremely close to breaking the 81-year-old record of 67 which Earl Webb set in 1931.  Those 67 doubles were 43% of the 155 doubles Webb hit in his seven year career.  Many have started on a pace to break Webb's record, but none have recently come close (Todd Helton had 59 in 2000).  I'll guess that Votto too will come up short, but it will be fun watching him try.

The Malaise Speech

July 15, 1979:
When the energy crisis set in, Carter was planning on delivering his fifth major speech on energy; however, he felt that the American people were no longer listening. Carter left for the presidential retreat of Camp David. "For more than a week, a veil of secrecy enveloped the proceedings. Dozens of prominent Democratic Party leaders—members of Congress, governors, labor leaders, academics and clergy—were summoned to the mountaintop retreat to confer with the beleaguered president." His pollster, Pat Caddell, told him that the American people simply faced a crisis of confidence because of the assassinations of John F. Kennedy, Robert F. Kennedy and Martin Luther King, Jr.; the Vietnam War; and Watergate. On July 15, 1979, Carter gave a nationally-televised address in which he identified what he believed to be a "crisis of confidence" among the American people. This came to be known as his "malaise" speech, although Carter himself never uses the word in the speech:
I want to talk to you right now about a fundamental threat to American democracy. . . . I do not refer to the outward strength of America, a nation that is at peace tonight everywhere in the world, with unmatched economic power and military might. The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation. . . . In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning....
I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel.... I have seen the strength of America in the inexhaustible resources of our people. In the days to come, let us renew that strength in the struggle for an energy-secure nation. . . .
Carter's speech was written by Hendrik Hertzberg and Gordon Stewart. Though it is often said to have been ill-received, The New York Times ran the headline "Speech Lifts Carter Rating to 37%; Public Agrees on Confidence Crisis; Responsive Chord Struck" later that week.
In retrospect, the speech reads fairly well.  As time passes, the changes brought about by the Reagan election look worse and worse.  1980 stands as an important turning point for our country.

PGBest Founder Was Cedar Falls Philanthropist

Des Moines Register:
Wasendorf offered 401(k) plans for workers in his restaurants and PFGBest’s child care center, a rare luxury for service workers. His favorite quote, according to his Facebook page: “If I wanted patience, I’d buy it!”
He donated $2 million to the University of Northern Iowa athletic programs, the largest single donation in school history. His company’s charity arm, Peregrine Charities, donated $50,000 for technology scholarships at Hawkeye Community College in Waterloo.
“He and his company were real strong supporters of Panther athletics,” said Bill Calhoun, president of the UNI Foundation. “Russ was very concerned with enhancing the quality of life in the Cedar Valley.”
The charity also sponsored a triathlon. In 2011, it bought MRI equipment for St. Luke’s Hospital in Cedar Rapids and a cell-therapy machine for the University of Iowa, and it donated $100,000 to University of Iowa Hospitals.
“He was a big hero in this community, and he was also someone people looked up to,” said Anelia K. Dimitrova, editor of the Cedar Falls Times. “He was literally revered. I see him as a tragic figure now in the aftermath of what happened.”
I'm still trying to figure out how you run what appears to be a functioning commodities brokerage without actual money in the bank.  Did they actually transact customers' trades, or were they telling them they had the positions and they didn't?  This seems like an extremely difficult fraud to perpetrate.  

Money And Power

Beverly Bandler looks at corporate control of the electoral process and finds a couple of interesting quotes (h/t Ritholtz):
Rolling Stone’s Rick Perlstein writes: “The party of conservatism, the Republicans, has  labored mightily … to convince the populace that it is business, in fact, operating according to the profit motive, that is the generous protector of  middle-class interests.”
That their case is contradicted by history has gone unnoticed. The result of the Right’s propaganda and a weak, intimidated Left is an American society that appears to have forgotten the principles of a democracy and a republic. The society has become confused, internalizing the values of corporations as their own. This is what Occupy Wall Street asks Americans to examine.
Writer Chrystia Freeland points out: “The lesson of history is that, in the long run, super-elites have two ways to survive: by suppressing dissent or by sharing their wealth. It is obvious which of these would be the better outcome for America, and the world.”
It is also obvious which way they plan to survive.  The article is correct that Democrats are just a slightly more generous version of the Republicans.  Maybe the corporate interests are just using the loony wing of the Republican party to force people like me to support a Democratic party which will do most everything those businessmen want.  Look at the health care bill, it is just a giant giveaway to insurance companies, but I support it as opposed to the do nothing Republican plan. 

A Seventy Year Grudge

Planet Money:
The story starts when Russ Roberts, a George Mason University economist, started hearing about how veterans don't like the Red Cross. That struck him as odd, and when he asked about it, he always got the same answer: the doughnuts.
"And I thought, the doughnuts?" Roberts says. "What could that be?"
Go to any VFW hall, even today, and you'll get the same story: During World War II, the Red Cross had comfort stations for soldiers overseas, with free coffee and free doughnuts. Then, in 1942, the Red Cross started charging for the doughnuts. Soldiers have held a grudge ever since.
Turns out it's true.
  "It keeps coming up, that they were charged for coffee and doughnuts," says Susan Watson, archivist for the Red Cross.
The organization started charging only because the U.S. Secretary of War asked it to. British soldiers had to pay for their snacks, and the free doughnuts for Americans were causing tensions. So the Red Cross complied, after protesting to no avail. It didn't last long — for most of the last 70 years, Red Cross doughnuts have remained free — but veterans haven't forgotten.
I had never heard that before.  The best part of the story on the radio was that of all the veterans she interviewed who held a grudge against the Red Cross, none of them actually ever got charged for doughnuts.  So all these guys have been hating on the Red Cross because they thought they were entitled to free doughnuts, which they actually got, but they knew somebody or somebody told them about guys who had to pay for doughnuts?  Wow.