PMCIN for Real?

Apparently, there's a field known as "Human Security", which sounds suspiciously like PMCIN, but not as tasty. With that in mind, here's the biweekly qualitative version:

Grain Production: There's an attraction to tangible productivity that a monetary economy can't, and shouldn't be expected, to match.

Fruit Production: Food provides an excellent opportunity for communities to explore the relationship between utility and value.

Dairy Production: What's interesting about this story is the Food Democracy Now calls it "Obama's Tax on Small Farms," while they used to use the Secretary of Agriculture as their boogie man. 2012 is going to be fun.

Housing: Immigration restrictions, rising sea levels and lack of affordable housing in coastal cities got you down? Blueseed is here to help.

Health: Your pie maker may take this example and start labeling his pies with their approximate bike mileage. This story isn't exactly health related, but it makes one feel good.

Transportation: Vindication. Also, a small step in technology, giant leap in private space infrastructure.

Energy: The Durban talks ended with a mild deal, but the best energy plans will probably be local, since it's hard to say sometimes if changing administrations has any impact on environmental or energy policy.

Security: From now on, I may just link to Robert Hadick's column, although this article on manipulating the mechanics of legitimacy is interesting, too. In other news, the Air Cavalry model has a new thoroughbred.

Pie-in-the-sky: Sustained exploration would actually be cheaper than the current half-measures, at least according to this guy, and toys like the Kinect will make it even cheaper.

Weekly news outline

Your pie maker has taken to using this type of post as a convenient frame for his thoughts when they start to wander at a computer.

Grain Production: NOAA's studying a lot of the factors that play into growing foods.

Fruit Production: Organic fruits are a desired luxury. A much better status symbol than shark fin soup, and suggests that we can make labor more lucrative without environmental harm.

Dairy Production: Even in modern, wealthy economies shortages will follow changes in weather and diet patterns.

Housing: Is David Cameron trying to help bring down the marginal product of capital, and thus mean house prices, Europe and world-wide?

Health: Free market economic theory assumes both buyer and seller understand their own interests, end of life health care often fails that check.

Transportation: The FAA's long term funding bill is alive and kicking.

Energy: The amounts are small, but this fuel program suggests there's progress to leverage.

Security: Lacing Europe with tripwires right after talking about this being the Asian century? This is either a very deep and interesting story or bureaucratic inertia at its finest.

Pie-in-the-sky: Projects like this offer an opportunity to motivate the next bunch of kids to reach for the stars. Hopefully, this will turn out to be the most important discovery of the 21st century.

In a previous PCMIN-Pie, I suggested the "Romans" had a steam engine. A better way of putting that would have been to say: The Hellenistic world had examples of a steam engine, intricate clockwork and jars with interchangeable lids, all of the power, mechanical and craftsmanship required for an industrial revolution. Hopefully our descendants won't tell the same story of our space program.

Energy: I wonder if this is making Oracle's CEO think.

Transportation: Okay, most "green" gains are building and fixed plant efficiency, but transport is the second biggest.

Security: Overstressed is how you describe an army that represents a people who believe they can both project force and enjoy a very high standard of living without engaging in looting. Illiberal is how you describe an economy in which the penalty for outright fraud is limited to less than half the damages you cause, if you have the right connections.

Grain Production: Better uses of grains? Honestly, I should not be looking at farm and ag. specific sources instead of mainstream sources for this.

Fruit Production: The growing season is over, but we can get a start on next year.

Dairy Production: English farmers mproving efficiency with IT. Interesting how we're replacing, or at least supplementing, tribal knowledge with the global hive-mind. Also, this is a cute story, which means it's probably more fluff than news.

Housing: Still too cheap for a portfolio, but not quite affordable.

Health: This is an almost elegant duck of fundamentally difficult questions.

Pie-In-The-Sky: The latest Mars rover weighs more than a pop-up camper.

Another "PMCIN Pie." Suggestions are always welcome.

Energy: Leading by example.

Transportation: There's still no permanent FAA funding. But for this, your pie maker would approve Congress for its functional laziness, described below.

Security: A grand bargain has, in fact, been achieved, but no one wants it.

Grain Production: New and more interesting ways of making bread, with thanks to On Being.

Fruit Production: We do, in fact, export tasty things from Virginia.

Dairy Production: As always, it seems, this is the hardest one to find referenced in mainstream news.

Housing: LA's low rent district might be closing down. It's tempting to tell them to "get a job", but who's hiring young graduates without strong programming skills?

Health: Interest trumps ideology in rural California.

Pie-In-The-Sky: This sounds like fun, but it's a depressing reminder that the Romans had a steam engine and viewed it as a toy because it didn't fit their economic model.

Make Pie Not (Class) War

Full disclosure: Your pie maker has and seeks funding from the US federal government and all of his portfolio assets are protected from credit losses by the FDIC. Thanks Shelia Martin!

Your pie maker was recently asked a question about the so-called "class warfare" in which the US President seemed to be engaged. This seemed odd, given that this is the same President who has introduced new tax cuts and, despite promising to take the Great Deleveraging out on the "rich" it's hard to say that anything actually changed on the fiscal front in January 2009. However, this warfare narrative is emerging, at least among the President's critics, and it deserves attention.

To begin, it's interesting to see the Wall Street Journal, and not the Washington Post, editorial page describe what the President is currently doing as "class warfare" since it so clearly benefits a very small elite in the finance industry. Warren Buffet wants to protect his dollar assets, so he's happy to kick in a few extra million to keep inflation down for the rest of the decade. Dodd-Frank and his administration's vigorous enforcement of Sarb-Ox are almost explicitly designed to limit the number of banks that can compete with the 13 biggest, and all but require that they hire those firms' or related contractors to manage compliance. The Treasury Dept. and White House is staffed by major banks' alumni and financial institutions have literally never done better. If President is a class warrior, he should be clutching the Baroness' handbag.

If we want to make pie instead of (class) war, it's important to understand what allows people to benefit from the hostility while current policy effectively gets cast in concrete. An important component is the elimination of credit risk above a certain size (TBTF), which has helped lower interest rates and spur economic growth, and allowing the USG to achieve both bank and pension fund stability through a combination of regulation and loose monetary policy. Unfortunately, it's also spawned the Shadow Banking Industry (next Bond villain?) whose efforts have of late seemed to focus on regulatory arbitrage and using the No Credit Risk (TBTF) guarantee to force governments and central banks to make their pools of money larger. Meanwhile, the "real" economy is not doing well because there are credit risks on things like factories and merchandise stocks.

Indeed, as long as there is a class of people who do not fear asset losses, there will be massive inequity. Today's mechanism for this is investment banking, which has become a game of basis points and hedging, where the word "bet" is used almost interchangeably with "investment." Losses on those bets, at least over a certain size, are prevented by governments seeking to maintain their legitimacy in the eyes of citizens who depend on large employers and unsecured bank loans like checking accounts. The cleverest predictors of basis point shifts get rewarded by the wealthiest for growing their wealth faster than is possible in a truly free market (where they might get wiped out completely) and eventually they dictate policy to elected governments. Now that he's retired, George Papandreou would probably be happy to explain how that works in great detail.

The reason this is so intractable is that addressing this potential source of real class warfare means getting rid of what has apparently been Priority 1 for the duly elected government of the United States. Ridding ourselves of "Crony Capitalism", of which TBTF is a major component, is one of the only points of agreement between the Occupy and Tea Party types, but it's not clear that either understand what exactly that means. Does it mean returning to the era of bank runs? Does it mean putting nationalized institutions in the hands of civil servants, as is to happen soon at Freddie and Fannie? This is not a step to take lightly, and the consequences of taking it will be quite bad.

If we don't want a rigid class system in the US, the kind that encourages genuine class warfare, or simply genuine warfare, we need to allow credit losses in a way that doesn't threaten the social stability of the country. The route that we are currently following has the US federal government effectively owning the vast majority of debt in the US as the Treasury directs failing institutions and the Fed monetizes debt, all to the tune of Turning Japanese (I really think so). Meanwhile, asset and land ownership becomes concentrated in relatively few private hands that are forced to cooperate with the central authority. Perhaps this isn't a bad thing, feudal systems are nothing if not sustainable for long periods.

"Class" is a squishy concept in the US, while warfare requires defined sides and hostile intent. A shouting match over "taxes" vs. "spending" does not define a class struggle, but rather highlights the absence of a real discussion of what should be taxed, what services should be provided, and what can be allowed to face genuine risk. This is a very difficult discussion, but it lets us talk about our interests, goals and fears instead of abstract concepts where agreement cannot be reached. It's the kind of thinking and discussing that requires patience and energy. The kind best done over a slice or two of pie.

Piece out.

A weekly PMCIN pie

A while back, a post suggested an 8-slice model for the Pie Making Capacity In Nation metric.  Actually computing it would be a great task for someone with a love of econometrics, but your pie maker prefers the narrative aspect as a frame for looking at what's going on in the world.

Security: Mitt Romney loves the Navy.  This is something he and your pie maker have in common.

Transportation: The Eclipse small biz-jet is back from the grave. Perhaps this means we'll see a real air taxi service at some point.

Energy: Solar is getting cheap enough that subsidies for it are threatened. Next year, your pie maker plans to explore this with an outdoor solar PV and thermal kitchen.

Housing: Have "home prices" become a modern cargo cult?

Health: An interesting concept that highlights how health can't be treated in isolation.

Dairy Production: The EPA does a pretty good job explaining modern dairy production.

Fruit Production: Sin trabajadores, no hay frutas.. It is a sad day when misguided attempts to preserve Americana hurt pie production.

Grain Production: It's very important.

With a special topping of optimism: Pie In The Sky (Space): Really big starships might not be as hard to build as we think.

'

Baptismal Pie

With apologies for the delay, here's the recipe for your pie maker's first commissioned work, in celebration of the baptism of his first nephew.  In Roman Catholic Church, the sacrament of baptism is the very real act of dying to sin and being reborn into Christ.  Following the pouring the of the water, the new Christian is clothed in a white garment and firmly instructed to bring it unstained to the day of judgment.  The Amish have a tradition of offering the family of the recently deceased a pie made from reconstituted grapes, known as a Funeral Pie, and if P&P is nothing if not willing to borrow good ideas from where ever they may be.


Baptismal Pie


Combine in a medium, preferably non-reactive saucepan:

2 cups raisins (don't use golden, the texture is all wrong)
1 cup water

Start a low flame or medium electric heat and stir occasionally.

Meanwhile, whisk together in a small bowl:
1 cup water
2/3 cup brown sugar
1 t cinnamon
3 T cornstarch

Once the mix in the pan is bubbling, stir in the stuff from the bowl and stir constantly as it bubbles for about 2min.  Then remove from heat and stir in

1/2 cup chocolate chunks

Preferably, chocolate that advertises itself as "sinful."  Decadent will do in a pinch.

Pour the somewhat cooled (but still easily flowing) mix into a 9" unbaked pie shell and place in an oven at 400F for 35min.  Do not add a top crust!  (you're not supposed to go before Jesus clothed in a golden brown and sugar dusted garment!)

Let the pie cool thoroughly, then combine in a cold bowl and mix with cold beaters:

1/3 cup confectioners sugar
1 cup heavy whipping cream

Spread the prepared whipping cream over the cooled pie and serve immediately. 

Obligatory "jobs" post, part 2

To hear most economists explain it, the problem today is that we have too little demand.  Whether that is because the government isn't spending enough or people are afraid to invest because the government is spending too much is a topic for yak shows and other blogs.  The fundamental problem is that people who have the capacity to increase their spending are not because there is simply nothing that they want, can afford, but can't find.

For simplicity, we'll use "rich" to refer to "people who have the capacity to increase their spending."  This is not meant to be pejorative, being wealthy is, always has been and by definition always will be pretty awesome.  The hazard, of course, is that because this group of people are the ones with the capacity to make life better for their fellows, there's a lot of implicit, or explicit, pressure on them to do so.  In individual-celebrating America, the idea of being one's neighbors' keeper is frowned upon as much for our collective desire to not be "kept" as anything else.  As a result, we get these periodic generational swings in which policies favoring the accumulation of wealth result in a small population collecting a rather huge portion of it, and rest find themselves facing essentially no prospect for increasing net worth.  Nations have faced this challenge throughout history, often with prodigious bloodshed.  Before we reach that point in the US, your pie maker proposes we ask the question from last time in a more focused way:

How can we convince the "rich" to spend more of their money on things that require people to work?

The absolute easiest way to do this is for the US federal government to authorize spending on public sector wages.  The "rich" buy US Treasury bonds, and people go to work.  If we buy into the idea of efficient markets, especially for "savvy" (i.e. very rich or institutional) investors, then the organization that is currently being judged best able to generate acceptable returns on capital is the United States Treasury.  This shouldn't be surprising given the number of former investment bankers working there, and Treasury people on Wall Street, but let's not go there today.  More to the point, recently this approach has lost favor with much of the political establishment, both here and abroad.

The second easiest way is to provide them, and so grow the "can afford" part until it includes enough additional goods and services that the unemployment rate drops.  This is what central banks are supposed to do, but we appear to be at the limit of their control authority.  Despite billions (trillions?) spent yearly on marketing, it's fairly hard to convince credit-worthy people to procure more stuff right now, even if they felt their employment perfectly secure.  Expanding "creditworthy" to include more acquisitive types would be functionally similar to treating a hangover with whiskey, which might work but is far more likely to cause more serious problems in the future.

Another way is to intentionally alter the tax code and other policies to boost the marginal value of labor relative to capital.  This suggestion is so completely radical that our bipartisan corporatist government (economist link) simply will never implement it, so it's hardly worth writing about.  However, for as long as profitable securities transactions are taxed at 15% and real profits on sales taxed at 35% (less for companies with good connections), there's hardly any reason for an organization with liquid reserves to actually produce anything, except insofar as that production might induce some sucker to buy the holdings of the organization.  As long as financial instruments are treated as more valuable than physical production, and governments insure their value while letting a market decide the price of goods, we will continue to see impressive wealth concentration and protests against the system that supports it. 

Now that we've left the world of the politically possible, there's one step beyond tax reform that must be taken.  As bad as unemployed life is right now, it needs to become worse or the minimum required marginal product of labor will continue to lag its marginal revenue in an environment of anemic economic growth.  There are a number of ways to do this, and none of them are pleasant.  One analyst suggested, possibly in earnest, that we restart the Byzantine option: six months of support in return for six months of hard labor.  A less extreme version is the Georgia Works program, although for really hard, low-skill work, more incentive is needed on the supply side .  Reducing our quality-of-life requirements will be an important part of any sort of new energy economy, and making clear that the floor is lower than a crappy apartment and bland food might just help that message sink in.  Plus, it might make it easier for your pie maker to hire a full-time dishwasher and copy editor.

The bake sale as performance art

As the GOP nomination fight rolls on and questions about the political appropriateness of the TEA Party continue to simmer, your pie maker found delight in the irony that the most controversy seems to center on those who sell baked goods.  Now, is the bake-sale-as-performance-art a valid form of political expression?  Are there valid non-verbal forms of expression about how the currently powerful should feel about threats to their status?

It's unpleasant to think so, but the alternative is that we self-police to an extent that people only discuss things when they know everyone in the room agrees with us.  Oh, wait.  Is it wrong to implicitly challenge the consensus that regulatory arbitrage is the best way to address society's ills?    A "Town Hall" is likely to disintegrate into a shouting match or agreement-fest, depending on who attends, and there's so much more fun that we could have.

Anyone who seriously objects to this little protest has a very simple means of reprisal.  Set up a bake sale of your own, find a woman with enough Native American to qualify for free goods, and sell the BCR's goods to raise funds for things they hate.  Ah, but of course to do so points out what the performers were trying to say in the first place, that race-based arbitrage results in something seriously unpleasant, at least in the eyes of the BCR.

Instead, go for the "regifted fruitcake" approach.  Use the same woman to collect all of the baked goods, but then sell them based on net tax rate (highly regressive when one includes sales tax), and require proof of legal residency (or a bribe campaign contribution).  Keep a tupee handy in case someone tries to present a birth certificate.  To keep the "fruitcake" door open, make sure there's a category of people, say relatives of oil company workers or defense contractors, who can get them free as a "credit."  Extra credit would be to include a "bake sale to buy a bomber" reference.

There is no shortage of injustice in the world.  There's an even greater abundance of ill will and tender feelings surrounding identity issues.  Universities are where we should be able to discuss these realities, and art is an excellent tool when conventional language and forums fail.  Engagement, uncomfortable or not, leads to understanding.

The Obligatory "Jobs" Post, p.1

This is an economics blog, and your pie maker can't help piling into the great flood of "jobs" posts on other econ blogs.  Despite all the bits shifted (as opposed to ink spilled), there is something unique to say.

If you're wondering about why the US, and indeed much of the developed world's, employment picture and economic growth looks so bleak, ask yourself this question:  What do you want, can afford, but cannot find?

Odds are good that list is pretty small for most people.  For your pie maker, the only example he can think of involves his preferred brand of bike tire.  That being practically a commodity part, he will be trying a new brand, and thus rewarding a different set of employees and investors, but his net outlay will remain about the same.  Utilities service, in particular wireline phone, TV and internet, is the only service your pie maker can think of off-hand that the average consumer has to wait for, but these are generally provided by monopolies with strong regulatory reasons to avoid pushing marginal profits.

In the US, and presumably elsewhere, the people who encounter this problem most often are entrepreneurs who want to expand what people want to include their new, hopefully better, product or service.  They rely, largely, on credit issued by investors who think people will want these things, and up until 2008, on credit issued to consumers to expand the "can afford" criteria above.

Today, "simple(r) living" has become something of a virtue of necessity, shortening the list of what people want.  Even with interest rates at historic lows, few enough investors are willing to expand consumer credit enough to increase the "can afford" category.  Finally, our economy is keeping up with demand with up to 16% of the workforce sitting idle (your pie maker prefers U6, which includes "discouraged" workers).  What are we to do?

Two natural disasters

"No, no, we are not satisfied, and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream." --From Dr. Martin Luther King Jr.'s "I Have a Dream" speech. Instead of staying home and experiencing an earthquake and hurricane in the same week, you pie maker was called away to prepare his first commissioned pie (recipe coming soon). However, he couldn't help noticing a little bit of a media tempest surrounding a GOP candidate's suggestion that the paired disasters might be a warning from the Almighty. Of course, we know that God is not in the whirlwind. Don't we? While your pie maker's economic life is dominated by methodological naturalism, he's not one to shy away from a good narrative. This one begins with Exodus. If one actually reads the Mosaic law, the central theme is loyalty to the one God of Israel, who brought his people out of slavery in Egypt. Because of their loyalty to and love of the greatest emancipator, the Israelites were commanded to treat one another fairly, to not exploit the poor, the orphan or the widow, It is certainly possible to acquire great wealth while following the law, but it commands the follower to avoid and charges the tax-collecting temple to enforce a ban (through dispute mediation) on the gleaning of fields and exploitive lending or business practices. Centuries later, the Babylonian exile forced ancient Israel to wonder what went wrong. Some of their prophets had warned of idolatry and injustice (not so much sexual morality, except as related to idol worship), but were ignored. Sitting by the waters of Babylon, they decided to take such warnings seriously and were eventually allowed to return home. Once there, the temptation to exploit and seek power in this life without divine guidance cropped up again and again. And so, again and again there were prophets warning of disasters that would befall them if they did not. One of these was Amos, whom the reverend doctor famously quoted above. The Thursday before Hurricane Irene arrived, a 5.8 magnitude quake hit Virginia and rattled DC. The District partially evacuated, and all of the monuments were shut down, including Dr. MLK Jr.'s. However, the next day, it was the wealthiest man memorialized on the Mall whose monument was closed indefinitely, That weekend, the national press and government had planned to celebrate the 40th anniversary of the speech quoted above with the formal dedication of the new Dr. Martin Luther King Jr. Memorial. Instead, we are left to imagine the self-congratulatory speeches and pages about how appropriate it is that a man with an black African father should be President on such an auspicious day. About how far we have come as a nation from those bad old days, and how, while things aren't perfect, we are living out and up to Dr. King's Dream. Meanwhile, our gap between rich and poor grows. Laborers, when their work isn't simply offshored, find their livelihoods and safety threatened by an unraveling social safety, weakened unions and tax policy that favors the selling of debt by the very few over the production of goods by the many. That weekend, Irene rolled in with a lot of water and unleashed a mighty stream. Instead of putting a capstone on the work of the man who came to preach Amos to us, the story continues. If someone was trying tell us something, I doubt it had much to do with preserving the suburbs.

Chiffon Pies Are Slow Pies

It's been a busy August for you pie maker, and a lot of interesting, non-pie related business needed attending. That's not to say he had forgotten about this effort, but it seemed that by the time he could get around to writing about something, someone had already written it, and odds were good it was available to the right of this text.

However, tonight your pie maker is attempting his first chiffon pie, and an important component of this process is allowing things too cool and set between steps. Given that your pie maker tries to practice at least some of what he professes, the kitchen is kept at roughly 10F (5C) hotter than the "standard" kitchen in Ken's book, and so cooling takes a bit longer.

Fortunately, this creates some blogging time. Before the watermelon juice starts to thicken around it's gelatin (should be tasty when it's done), there's some time to describe your pie maker's take on recent events.

First of all, the nearly unescapable news of the last month has been the precipitous drop in global equity prices. Apparently fearful of another recession in the US and Europe, investors have been selling stock shares and either parking the money as cash or buying US debt, or buying gold and other commidities on the assumption that Forex or futures contract offer safety "if things get bad." The political response has been lukewarm at best for the simple reason that the central question facing the leaders of those economies have to choose who gets screwed in the Great Unwinding (I'm sure someone's used that already), and every constituency with a tax break or subsidy is doing their best to preserve it. We've seen this before, I really think so.

By allowing the government to become the backstop for financial losses, it is inevitable that the firms that should have failed will instead tax the public coffers until the public can no longer keep its promises. Whether or not the failure to provide this backstop would have resulted in a larger loss of tax income because the prosperity of debt-fueled growth, public or private, is by nature temporary is a question for a different time. Your pie maker never expects to be able to afford a comfortable retirement, and is largely resigned to the fact that he belongs to one of the more easily targeted demographics in the coming realignment. Fortunately, he can also make chiffon pies now, so it should be easier to enjoy a slower pace of life.

It's a poetic weekend

Triple A rating
Three days before a default
Makes sense to someone

In fairness, it's medium term (10-20yrs) debts that pose an economic problem for the US, so in normal times a AAA bond rating would be appropriate. Over the long run, AA+ is probably the most appropriate given the state of economic growth and "Alternative Fiscal Scenarios," but downgrading T-bills is almost as explosive as finding white, black, red and pale horses to ride through global financial capitals.

More Haiku

Does the TEA Party
Belong to the GOP
Or the TFG?

To give credit where it is due, the TEA Party movement didn't get bought off with cheap social wedge issues the way your pie maker expected. Bully for them. Your pie maker grew up expecting something to see entitlements gutted before he was likely to retire, and now they are! Hopefully the rest of the government continues to function.

In other news, someone looking for a government he could drown in a bathtub should probably catch a flight to Mogadishu to see what it actually looks like.

Time for fiance haiku again

This effort began right about the time of the TARP vote and quickly descended from mildly insightful commentary to cheesy narrative (with romantic subplots!) explanations of things to questionable Haiku about finance.

As of July 28th, 2011, every worthwhile thing about the state of markets and the US debt ceiling that could be written has been written, often at great length. Even Simon Johnson is getting a bit repetitive because, frankly, we ran out of new things to discuss sometime in June.

So, this time around the crisis block, your pie maker will skip the analysis and stories of how we got here and go straight to the poetry.

On Congress Today
Markets wait with baited breath
Or was that a yawn?

An interesting take on sustainability

For all that this blog tries to avoid being the hair-shirt wearing prophet of sustainability, albeit with pies instead of locusts, it's a recurring theme.

Readers might find this post by Gail Fisher of Mendstate interesting, as it addresses the key differences between economic and governmental sustainability in Afghanistan.

Pie in the sky (er, space)

Two bits of space news that caught the interest of your pie maker:

(1) One-way space exploration

The age in which exploration was the province of indispensable national heroes is over. The goals of developed nations appear to be limited to providing physical security for their citizens and economic stability for their investors, and the resulting safety culture in government drives up the cost of almost everything it does.

If, instead, we view space exploration the same way we viewed Western expansion or seafaring pre-1900, the costs fall dramatically. The number of deaths will certainly climb, but danger has not discouraged a booming trade in Everest expeditions or recruiting for the All Volunteer Force. With disgruntled youth movements sweeping the Middle East and Europe, and The Week and NYT publishing articles about how it could happen in the US, we're reminded that humanity needs more to live for than retirement.

(2) Space Solar Power

Space infrastructure to support colonization would have a lot of terrestrial benefits as well.

Mulberry Pie Season

It's mulberry season in Virginia, and after about 30min of picking your pie making crew had enough for a pie and a batch of mulberry syrup. Yes, you should come.

This week's pie almost exactly followed the Mulberry Pie recipe on All Recipes, except that we used an 8", deep dish pie plate.

It's primary time!

The original version of this was written shortly after the State of the Union address, but with the ongoing budget fights and GOP primary season filling the airwaves with talk about the size, scope and sustainability of government programs, now is as good a time as any to publish it.

The idea for this blog began when your pie maker was riding his bike to the farmer's market and contemplating the surprisingly complex web of connections required to support his pie-a-week habit. It's hard to imagine a more "progressive hipster" image than the twenty-something pedaling off to buy local produce while thinking about the environment and social justice. However, of the many things your pie maker has been called, "hip" is rarely mentioned and "progressive" hardly ever.

Instead, consider that this particular twentysometing was traveling on an unlicensed vehicle that requires no credentials to operate and for which he paid no special fuel taxes on a trail built with funds from leasing a public toll road (Public-Private Partnerships!). His objective was to conduct cash transactions with multiple small businesses, some with "employees" clearly under 14, many who were clearly related to the owner, and some who's documentation status was probably suspect. The purchased food had no FDA labels or any inspection beyond the seller's and buyers' (caveat emptor!). There was at least one case in which an offer was made to partake in the production of a highly regulated and subsidized product in a way that involved neither regulation nor subsidy, and yet was still legal, mostly (moo!). Your pie maker baked in a home rented from the owner on the basis of a contract they negotiated with no federal interference. A company doctor handled most of your pie maker's medical care (and did an excellent job overall). Far from seeking an abstract notion of equality or justice, his wandering mind was concerned with how to avoid interfering with the complex systems required to keep pie fixings available. PMCIN, it seems, expands with little government help.

Ah, but it's GOP primary season year. What would the "Republican" version of this story look like? Based on demographic data from the last couple elections, your pie-consumer would travel to the nearest suburban big box or supermarket in his pickup truck or SUV while trying to decide whether to buy a pie from the store's bakery, freezer case, or maybe one of the chain restaurants in the shopping center. He would contemplate the necessity to maintain current regulatory, economic and military policies to support his pie-a-week habit because between the mortgage and car payments things are pretty tight, and while the system is clearly unsustainable, the day of reckoning has clearly not arrived. Economic growth requires specialization, and time spent making pies at home is time away from working or more thorough relaxation.

Let's look for the "small government" in this Red State version: Sitting on a state-issued ID card in a registered vehicle with government imposed safety, pollution and materials requirements on a tax-and-debt funded road and fueled by a hydrocarbon that provides more money for socialism than George Soros, the transportation side of this story is a story of central planning. At the store, staffed by people whose documentation, demographics, health and retirement plans all must match imposed guidelines and buying products from subsidized farms with mandated labels, the body politic has clearly chosen regulation over markets to manage information. Even the payroll of the store and its suppliers, likely traded on the commercial paper market, has implicit explicit backing from agents of the USG. Meanwhile, it's a safe bet that this fictitious pie-eater's home mortgage was backed by the US Treasury in hopes of increasing his consumption potential, and thus economic growth overall.

Is it possible to have suburban prosperity without a coercive agency to ensure that the food is safe, that enthnic agitation is minimized, that the roads are in good shape (without disruptive toll collection), that loans (like Savings Accounts) are guaranteed and that, in general, any individual's capacity to do harm is kept to a minimum while their capacity for consumption is maximized?

History suggests not. A "small government" is usually seen as a weak government by its citizens (like Mitch McConnell, look up his comments on last year's oil spill), who generally demand security and prosperity before their basic Lockean rights (see Hannity on torture and detention of US citizens labeled "terrorist"). This forces governments to restrict individual liberties as technology and economic progress give citizens greater ability to expand into their neighbors' interests. The Tea Party's response to the State of the Union Address supports this observation: replace "freedom" with "purchasing power" and Rep. Bachman's statement makes a lot more sense. The reason six years of the GOP holding two branches of government lead to government's largest expansion in history is not due to moral failings or the 9/11 attacks. Very simply, suburbanism requires too many assumptions be and remain true (so that people can borrow against them) for any free or unregulated system to be allowed to emerge. Not, of course, that any of the candidates for office can say that . . .

Chocolate-fat crust

If you come to the Fuzzy Wups B&B with a bar of appropriate chocolate, one of two things will happen. Either it will be chopped up and used to top a pumpkin pie or, if you're staying overnight, it will be heated and have the gooey sweet part separated from the white fatty bits.

The gooey part makes excellent crepes. Come on a weekend when your pie maker is not engaged in wind energy research, and he will make them for you.

The fatty part can be substituted for butter in pie crusts, and smells like good chocolate when heated. Highly recommended for any filling that tastes good with chocolate.

As your pie maker types, a new coconut, almond and pecan pie is baking with a crust with 1/4 chocolate fat and 1/4 cup butter. Yes, we are open for dessert this evening.

"Instant" Graham Crust

There's a lot of important and interesting things going on in the world, so one can be forgiven for not having the time to make a good, flaky, standard or whole wheat pie crust.

Fortunately, your pie maker has stumbled across the perfect graham crust (not graham cracker, mind) for this season's chess pies, and it should hold work very well for wetter fruit pies, like strawberry. Like a good scientist, your pie maker will investigate this claim shortly, and is always seeking co-investigators.

The Recipe:

Pour, in order:
1/2cup whole milk
1/4cup vegetable oil
into a chilled glass measuring cup but DO NOT STIR! and place in the freezer for a few minutes while the oven preheats and you get the filling ingredients staged.

Combine in a medium, preferably very cold bowl:
1cup whole wheat flour
1cup all purpose flour
1T granulated sugar

Pour the liquid into the flour slowly, stirring very gently until it is just mixed. Spread a baking mat with whole wheat flour and place the dough on it. Roll it out to about 1/2" (1cm) thick, then fold it over and roll it out again, and do this once more. If the dough remains cold that will lead to a flakier crust, in a hot kitchen you can expect a more bread-like consistency, both are very good. Once ready, roll out to fill the pie plate. It can be rolled into a double crust for a 9" pie plate, but use it as a single, relatively thick crust for a deep dish pan.

The perils of development assistance

Once your pie maker learned about William Easterly's work, he found a humanitarian expression of the ideas expressed by Hayek and other classical liberals. It comes down to this central thesis: it is difficult or impossible to genuinely help people without getting to know them well. As often as not, feeding one's self while getting to know them well requires that the potential benefactor get some economic benefit from the target population.

People respond imperfectly to any set of incentives, and so any bureaucratic approach to development aid, foreign or domestic, must be able to absorb substantial uncertainty about eligibility, duration and cost. If the goal is to cause a substantial change in the recipients lives, by definition the goal of most poverty alleviation programs, the uncertainty grows with the success of the program. As a result, program sponsors and administrators tend suffer a fair amount of bureaucratic paralysis because the penalty for a small program being late is minor (from the aid deliverer's perspective), while being wrong about the impacts of the program is often fatal.

Organizations that are extremely hierarchical, such as military forces, handle this uncertainty by declaring a qualified person, singular, to be the decision maker with both the responsibility and authority to seek the desired ends. Decentralized organizations such as markets do a very good job of allocating resources if specific conditions about information distribution and scarcity are true, and these are often enforced by the apparatus of a nation-state. Develop aid organizations fall into a middle ground, making them very frustrating to deal with, and possibly irrelevant.

This is an over-simplified version of a very complicated story, for which your pie maker highly recommends reading Reinventing Foreign Aid and The Economist magazine. However, one thing he has often found to be true is that the best way to really screw things up is to try help selflessly, but ignorantly. If you can't make what you believe come true (generally by force) or gracefully be wrong more often than not (markets seek the "least wrong" solution), then the best you can hope is that the situation you're trying to effect will remain static long enough for you to learn how to understand it.

This Week in Pie Making (22-29 April)

Ted Rall's acerbic wit does a pretty good job explaining your pie maker's reaction to the current debate over the 2012 budget. He grew up in a generation that was more certain of intelligent extraterrestrial visits to earth than his chances to receive a state pension, and it's almost nice to see someone finally getting around to killing off those programs. Would the US Congress actually allow the potential lost of investment value right as Baby Boomers retire to make the system stable in the long term? Not bloody likely. Fortunately, your pie maker's commuting habits should keep his medical expenses in the realm of injury-recovery, rather than expensive, rationed, long-term care. Perhaps the Cohen brothers can make a movie out of the dark humor behind Rep. Ryan's Obamacare for Seniors.

In other news of good intentions, things aren't going well in Libya. Apparently someone's started laying mines discretely enough that EUFOR missed it, and as Chris Rawley points out, that capacity means bad things for the opposition. Meanwhile, the war is now spreading across Tunisia's border. North Africa might be moving towards a more stable and democratic future, but it's safe to assume that it's path will be as bumpy as Europe's was.

There's also good news. Spring is here and the Alexandria Farmer's Market is open. The tastiest bike ride of the week is back. The Fuzzy Wups has completed its renovation and instead of barely being able to feed four and sleep perhaps three, we can easily feed ten and sleep four comfortably. You should come!

Debt Ceilings, Sustainability and Taxes

Many years ago, in the early days of internet banking, your pie maker accidentally discovered how to cause a financial crisis while getting free services. It works in three steps:
(1) Sign up for a service with a month bill paid automatically from a checking account
(2) Set up "Overdraft Protection" on the checking account from a line of credit (LOC), aka "credit card"
(3) Set up the checking account to automatically pay the minimum payment on the LOC

Each month, the service provider (SP) permitted your pie maker to use their infrastructure in exchange for a small (but slowly rising) fee assessed after the service had been used. In other words, if your pie maker decided to be a delinquent, the SP was screwed unless it had some kind of recourse. Any resources expended on your pie maker's behalf were aquired with someone else's investment, hopefully at less cost than your pie maker's fees, otherwise the system would be unsustainable from the outset.

At the end of the month, the managers of your pie maker's line of credit issued a "cash advance" on which they charged interest and for which they deducted a fee. This "cash" was used to pay the SP for services rendered, and your pie maker was permitted to continue using the service the next month. A few days later, the LOC's managers again issued a "cash advance" with fees and interest to pay the minimum amount due on the LOC.

This only lasted a couple months before your pie maker's mail finally caught up to him and he promptly cancelled both the service and LOC. Following a Nassim Taleb-esque master narrative on debt, especially consumer debt, coupled with lessons drummed in from childhood, there seemed to be nothing good about having a "free" service that was going to force him into default or substantial reduction in quality of life in a predictable, if distant, time frame determined by the maximum allowable balance (i.e. debt ceiling). The SP's investors were unhappy to lose a revenue-generating customer and the bank was unhappy to lose a lucrative asset, but the beauty of our system is supposed to be that we can each work to our own best interest, and the service wasn't needed. Austerity is often good for the soul, and a PMCIN=1 lifestyle doesn't require many services.

The obvious regulatory response is twofold: (1) tax interest on rolling credit more heavily to discourage its issuance and (2) prohibit the use of rolling credit to pay for rolling credit. (i.e. once a checking account is "secured" by a credit card, it can't be used to automatically pay that bill or pay it all unless there's been a deposit equal to or greater than the credit card bill payment). This would lead to a much larger number of small defaults, fewer bankruptcies, and more stable economic growth.

Given the demographics of post-modernists, it's unlikely they'll try to hard to smash this anti-finance narrative, but let's give it a go. First of all, in this circumstance the cost of losing the service was a minor inconvenience to your pie maker, but what if instead it had been something vital, like, say health insurance. In that case, breaking the cycle would have required your pie maker to find additional revenue to both cover the cost of the formerly "free" service and the interest payments on the debt due to both the service costs and fees. So instead of putting all of his salary into the local economy, plus providing a conduit for global investors to do so as well, your pie maker would exert a deflationary influence that hurt not only local merchants and workers but also the SP's investors, the LOC issuer's investors and his own standard of living.

In fact, given your pie maker's excellent credit rating, loans to him could be highly rated and thus have tiny reserve requirements. If the employees of the bank who collected those fees deposited or invested their money in the same bank, 90-98% of the that money could have been immediately be reissued to your pie maker to cover the next month's expenses. Assuming the SP had covered all of its capital costs and was simply paying off its employees investors with your pie maker's monthly installments, those investors could turn around and reinvest those returns in CDOs, ETFs or other instruments that allow the bank boost its assets by lending yet more SP payments and fees to itself. Since the LOC is such a little money spinner, why not leverage it a bit and borrow against future payments that the highly rated pie maker is sure to provide?

In other words, the real problem here is not debt itself but the debt ceiling and "leakage" from the system. Your pie maker should absolutely not live a more austere life of baking and biking, instead he should maintain the LOC and "free" service, while devoting any income gains to the CDOs and ETFs that allow him to, effectively, borrow money from himself and collect interest on it. The bank needs to be allowed to have very generous capital reserve ratios, and taxes must be as low as possible to ensure that money issued as bonuses, disbursements or dividends can find its way back into the lending pool. The "pro-growth" policy response is absolutely not to limit consumer's ability to hurt themselves and bank bondholders, but instead to ensure that the circular flow of money has few leaks as possible due to taxes and payments to people outside the investing class. The optimism, the belief that any bank instrument will yield positive returns, underlying this system must be maintained at all costs. The growing rich-poor gap is a sign of this system becoming more stable, or at least entrenched.

Of course, the problem with this system is that some leakage is inevitable. At some point, your pie maker and his bank will have exhausted all of the optimism available, and some of those investors will want to realize their gains in tangible assets. At that point, either everyone, investors, banks, pie makers, governments, etc. suffers massive loss of wealth (since the circular flow meant there was never any real money involved) or someone steps in and buys your pie maker's debt with "real" money. Paging Uncle Ben . . .

Your pie maker abandoned the investor-funded lifestyle several years ago and now lives off the largess of people who want better robots. Most governments, however, have not made this choice, and instead find themselves constantly looking for ways to increase the assets of the currently wealth in exchange for the ability to provide services (like medical care and security) to their populations. By structuring their credit systems, labor laws and production systems to funnel consumer funds back into investment vehicles they have been able to close the loop pretty well, and since sovereign debt can be paid coercively (i.e. taxes), their "credit limit" is a very flexible concept.

However, this can't go on forever. Eventually, the optimist assumption about the quality of the debt, or at least the currency in which it was issued, will fade. But unwinding this situation will be incredibly difficult because most of the income that pays for the debt today is itself borrowed money, and liquidating those assets will reveal, as in your pie maker's case, that there is little or no real money, just a lot of promises (consider one's own bank account at an institution with a 10% reserve ratio). The next budget fight will be vicious, full of powerful buzzwords, and require the very best in careful accounting to parse its implications.

Update on North Africa

A while back I suggested that the Libyan intervention was kinda half-baked. CDR Salamander has stuck the proverbial toothpick into the center, and pulled this out.

Highly recommended reading.

Republicans for Slow Medicine?

As of the last couple of years, biomedical engineering has seen explosive growth. Almost every university in the country now has at least a few faculty and a score of grad students in traditional engineering departments with "bio-" attached to their titles. The needs of an aging population are frequently cited as the impetus behind this effort, as the percent of the US, Europe and Japanese budgets and economies devoted to late-life medicine continues to rise.

This is hardly inevitable. Do-not-resuscitate orders are gaining popularity as people begin to assess the quality, not just length, of their lives. In addition to living longer, there's hints that large parts of the population might be making healthier choices about diet, exercise and entertainment (e.g., not smoking). Medicare is even encouraging doctors to have discussions about this with patients before they enter the painful, and expensive, portion of end-of-life care, so that the decisions are made by the patient, not family members under considerable duress. Slow medicine is a philosophy that incorporates these principles.

The House GOP 2012 budget makes sense in one of two ways. Either, they expect their tax structure to create superlative retirement savings for all seniors, that effectively the stock market's capital gains can displace the $38Trillion unfunded liability, or that seniors will chose to purchase less care than the government would provide for free. In other words, by capping the growth of Medicare spending, it guarantees that there simply will not be funds for both quality of and end of life care for beneficiaries, and lets individuals make the choice. Do they have perfect faith in the private sector to do what the government could not, or did the GOP officially embrace Dr. Dennis McCullough?

At first blush, I thought the primary goal of the new GOP majority was to increase upper middle class consumer purchasing power while maintaining social funding for elderly supporters. I also expected them to quickly move away from fiscal discipline and into social wedge issues that inflame more passionate support than actually cutting spending would do. If this new program provides both fiscal restraint and reballances the economy to invest in productivity instead of retirement, perhaps there is something to like about the new Congress. Not that any of this will matter, as recipients of Medicare today will smell a rat as an excuse to cut their services and see to it that it does not happen. Still, your pie maker was perhaps too cynical in his early assessment, and they do deserve credit for putting their careers on the line for a significant, if inadequate and politically unfeasible, change. (I still haven't read the thing in detail, and will have more to say once I do.)

Voice-Enhancing Chocolate Walnut Pie

Lots of things going on in the world, and your pie-maker has lots of things to say about them. So, to fortify his voice, he concocted the Voice-Enhancing Chocolate Walnut Pie.

Make one double-crust quantity of Louis Pipper's Oil Crust, but use the whole thing for the bottom. Roll it out into a 9.5" deep dish pie plate and prebake at 425F for 10min.

While the crust is pre-cooking, combine:
3/4 Cup light corn syrup
1/2 Cup dark brown sugar
3T butter, cut into small bits
in a small pot (I use a 1qt pot for this). Once the butter is melted, scatter:
2/3 Cup semi-sweet chocolate chips
over the mixture, let sit for a couple minutes to start melting the chocolate, then stir to mix thoroughly. When the pie shell is done, reset the oven to 350F.

In a large mixing bowl combine:
3 eggs
a pinch of salt
and measure, but reserve:
2 overfull cups of untoasted walnuts.

Whisk the eggs until they are just frothy, then pour the sugar/chocolate mix and walnuts in. Stir together just enough to coat the walnuts evenly, and pour the mix into the pie shell. Place in the oven and bake up to 40min or until the center puffs up and the edges solidify.

This pie has also proven to be an effective enhancement for singing voices if eaten with breakfast.

How to Help Libya

A big question floating around the Internet in the western world today is this: How can we help Libya?

This being the season of Lent for most of those in the West, the first and most obvious answer is to pray for them. Beyond that, however, our options are a choice between bad and worse. It would be bad, terrible even, for the rebels to be crushed by an oil-funded autocrat with imported troops. Oh, wait, that's Bahrain. As Mark Mardell and The Conservative Wahoo point out, there is no compelling national interest for the US or any Western country to take the risks associated with, effectively, breaking a country with no transition plan in place, a history (and presumably culture) of involvement in a variety of anti-western groups and
at time when neither the United States nor Europe are in a position militarily or financially to take on rebuilding yet another country.

Instead, we citizens of the US especially can take a somewhat longer view of the Arab Spring and help our fellow humans lead pie-friendlier lives.

Step 1: Ride a bike (or telecommute, carpool, use transit or walk) more and drive less. The resource that pays for most of the autocracy in the world is oil. The less of it we buy, the more governments will have to rely on their own people's productivity which, in turns, means their governments will have to care about their well-being.

Step 2: Tell your Congressman to support domestic drilling for oil and gas. Not because it will do a bit for energy independence, but if our way of life demands that someone bear a resource curse, justice demands that we do so too. If seeing how nasty (link for the pictures more than the text) that is encourages people to consider sustainable alternatives in places where there is also money and incentives to invest, so much the better.

Step 3: Tell your Congressmen to bloody well pass a budget for FY11 and sign on to something like the play approved by the National Commission on Fiscal Responsibility and Reform. The dollar's reserve status has become our own resource curse, and if we want to have a military that can credibly deter threats to peace in the future and respond to natural disasters it is vital.

Two weeks in pie making (Feb 6-20)

Last week: Maria's Carmel Nut Custard Double Crust Pie
This week: Butterscotch Nut Custard Pie

Quite a lot happening these past two weeks. In general, it's been a tough time for the current international system, as the governments surrounding the major resource choke-points suddenly find themselves facing populations that doubt their rulers' legitimacy. This is going to get a lot worse before it gets better, as unemployed young people facing rising food prices have very little too lose. Crushing despair and a growling stomach make batons, tear gas and even bullets not seem like such a bad idea. Eastern Europe had the promise of the EU and (for better or worse) hundreds of millions in aid to help them transition from Soviet Satellite to productive member of the global economy to give populations hope and leaders focused. Today's fledgling democracies were governed by clients of a system that has not fallen, and at least the French have powerful and lucrative ties between their top levels of government and recently toppled leaders.

On the domestic front, the great battles over state budgets have found their focus: Wisconsin. There's an interesting question here about the difference between public and private sector unions, although the President's recent push for manufacturing (and Rahm Emanuel's expressed view on the subject) suggests that at least some Democrats are looking for life after the SEIU, which, they hope, will look a lot like life before them. Best of luck! Someone needs to build the ovens and pie plates, and given the choice between organized labor or a planned economy, your pie maker will take the former.

Speaking of, it looks like your pie maker was wrong. In December, especially after the passage of a very iffy tax compromise, it seemed that the GOP had effectively agreed to stasis and would focus on social issues while conceding to a few minor program cuts. This could be very interesting, as injecting effectively $61billion in losses into the various government contractors and lenders to gov't employees around the country will have rippling effects. It's unclear how or if the private labor and finance markets would absorb such a loss. If it leads to the government actually exercising its resolution authority for a major bank, your pie maker will brew a cup of earl gray in tribute. However, the Democrats are hoping to replay 1995, and the biggest impact will likely be a two week vacation for your pie maker in March.

If that happens, expect to see the traveling rolling pin on the back of a bicycle, or maybe a kayak, as the rush to GPS-dependent NextGen is about to collide with GPS-jamming G4 wireless service. Tough times for the System, indeed.

Two weeks in Pie Making (Jan 29, Feb 5)

Pie of the week: Coconut Cream Pie
Pie of last week: Chocolate Chess Pie

Ladies and gentlemen, welcome to your new climate. It's the stuff of crop failures, higher food prices, and hubristic song parodies. Interestingly enough, while nature provides plenty of positive feedback mechanism for accelerating this process, like an amazonian drought and potential for major increases in the amount of methane released from the Arctic sea floor, our global political and economic system appears to have a built-in relief valve.

In other words, a long-predicted crisis of legitimacy in North Africa and the Middle East, in which oil money funded the extraction of water from non-replenishing aquifers to provide cheap food and employment, has finally come to a head. This has implications globally, as the system of socialized banking losses used to guarantee first-world prosperity is only as strong as depositors desire to keep their accounts denominated in dollars, and the populace is willing to accept inflation and lowering standards of living while debts are inflated away. However long this system lasts, the energy intense economies of world will slow down as commodity prices rise, and greenhouse gas emissions will fall. The "invisible hand" might be mother nature's relief valve. Speaking of energy, readers should check out this Economist debate on natural gas vs. renewables.

That's not to say the changing climate, unsustainable water management and its impact on food prices is the only threat to the Westphalian state system. The ongoing "war on drugs" is proving that markets are more powerful than governments more thoroughly than the Cato Institute ever could. The insurgencies that most directly affect US foreign policy are funded by US and European consumption of illicit chemicals, and now it's looking like southern Arizona, California and Florida could be caught up in the wave. P&P wants to know why we aren't taxing this obviously popular product line.

Fortunately, the GOP recognizes that its mandate is weak, especially since the Tories provided such a handy lesson. For those wondering how to assess the impact of large federal reductions, begin with this thought: for roughly every $200k in budget cuts, one employee is laid off. That means one mortgage isn't being paid, and the corresponding increase in the size of the labor pool and housing market both put downward pressure on the two main sources of perceived wealth, wages and home prices. If these cuts happen during a time of robust private hiring, as happened in the 1990's during the Gingrich/Clinton government, the net effect is generally positive since this helps hold down inflation and in some areas improves government efficiency.

Today's world is very different. Instead of the stinging reminder of the S&L failures and their slow process of receivership, national governments implicitly or explicitly own pretty much major bank losses today, while investors move money into safe t-bills, implicitly backed stocks and commodities that allow access to the incomes of non-investors in the way credit-based securities used to (leave a comment if you want citations). Perhaps this is a good thing, but there are doubts about the ability and efficacy of this corrupt fiscal/monetary GDP-growing system.

What's really interesting to see in all of this is how the more thoughtful GOP commentators seem to accept the inevitability of growing gov't intervention in the economy. The origin of "government takeover of healthcare" came from someone talking about how despite increased private market competition via insurance exchanges, inevitable increases in regulation would force us into a UK-esque NHS system (P&P aside: how bad would that be? I'm honestly interested in hearing), while Eric Cantor justified his vote on TARP by saying that one massive expansion of government to prevent a Greater Depression was justified because the alternative was even more gov't expansion via social and reconstruction programs. John Kyl's statement that taxes "don't increase the deficit" suggests he embraces a theory of wealth, popular in the late Roman Empire, that all assets belonged to the state (actually, they belong to God, and in Byzantium His vicar was the Emperor, who embodied the state), but were placed in private hands as a sort of conservatorship, until there is an emergency. Also, the reluctance to cut too deeply into science funding, particularly DoD funded research, might reflect an understanding that fundamental and applied research sometimes gets developed before its time.

On the plus side, the national debate about childrearing and culture continues, quite possibly with a new "Rosa Parks Moment." Of course, the fact that we have tie it, tenuously, to a past event speaks to the ambiguity of this situation, for all that it does reveal the powerful need for more Robinson Community Learning Centers. If Kevin Smith has his way, we'll see more opportunities for smaller community-backed efforts to compete with international companies, which should provide stable and sustainable social mobility than excessive mortgage supports. There is a real possibility that wireless broadband might compete with the big cable/telco dualopolies in enough regions to bring down prices and encourage more telecommuting, and OPM is totally on board with that. Things might get nasty for a while, but it does look like we're heading towards a pie-friendlier world.

Winter commuting carols

Oh the weather outside is frightful
But these tires are so delightful
And soon by trails to work I'll go
Let it snow! Let it snow! Let it snow!

I don't show signs of stopping
With this armor my tubes ain't popping
My lights cast a funkier glow
When it snows! When it snows! When it snows!

When I leave work for the night
How I love heading out in the storm
Trackless powder beneath my bike
When I get home I'll be warm

With gas prices slowly rising
On pies I am relying
To get me where I must go
Let the snow! Let it snow! Let it snow!

Dear reader, the bit about the going out in the storm isn't actually true, at least when I can avoid it. On the other hand, while most of my colleagues have to choose between playing in the snow or going to work, I get to work by playing in the snow.

This Week in Pie Making, Jan 16-22

This week's pie: Kahlua Fudge Brownie in a Yogurt Crust.

If the crust recipe works out, I'll post it. In other culinary news, your pie maker made calzones this weekend with goat's milk Gouda and a sauce made with rendered ham skin, tomato paste and onion. Cooking with animal fats is basically awesome, and your pie maker will soon be investigating grass-fed and organic farms in the DC area. Reports to follow.

Onto the news. It's been a big week for a lot of the major pie-related indicators. First of all, the Great Finger Pointing Game continues as attempts to impose bureaucratic stability on people who genuinely reject big government continues to falter. Speaking of, we got reminders from the capitals of the Western Hemisphere's richest and poorest nations that once a people have accepted the government as legitimate, they most want it to provide prosperity. Your pie maker gladly acknowledges this, and is simply trying to move the goal posts towards a pie-friendlier definition of it.

The Chua thing continues to percolate, and your pie maker loves it. This is the first time in his memory that there has been a national discussion of the relative merits of different cultures' norms without invoking mutual accusations of bigotry.

On the technology front, there were a couple of big stories related to sustainable pie making. The first is that research into car platooning took a big step forward in Sweden. It's more likely to be implemented on specially equipped trucks and buses than passenger cars, but since intercity bus travel is on the rise and infrastructure spending in the US is flat or declining, it's nice to see someone trying address the problem instead of just complain about it. On the defense side, your pie maker is very interested in developments in shipbuilding and armament, since it would appear that while we are moving towards more ships built to commercial, instead of military, standards, there is also a move away from kinetic and into electromagnetic weapons. The civilian take-aways from such developments include higher density power generation that really emphasizes efficiency and surge capacity. Coupled with the success of NASA's latest solar sail test, the long term future of humanity is pretty bright indeed.

On civility and parenting

Unfortunately, your pie maker is not yet able to support his pie making with his blogging, and professional obligations delayed a planned post on the greatness of the United States coming from the fact that unlike the rest of the world we do not have a single "culture" portfolio in our government. Instead, we have a very robust and flexible culture that values, or at least tries to ignore, differences while generally focusing on the merits of productivity.

During that delay, the hype over Amy Chua's book (not her interesting one, tho) reached a crescendo. Ms. Chua is doing her best to make hay while the sun shines.

For many reasons, this blog has shied away from the subject of child rearing, but between this and the general calls for more civility, your pie maker can offer a suggestion: Do not let your children agree with you unless they can explain why they do. At one point during his misspent youth, your pie maker was loading manure into a bin and said to his father, "a dumpster full of [disliked policy proposal]." After a deep breath with the far-off look of a parent who wonders what went wrong, the father asked "Why?"

The lesson was profound. It was not acceptable to simply agree with the popular conclusion, and it is always important to examine one's beliefs. This message, constantly reinforced by parents (as both of mine did, hence this blog's moderate tone) and other adults is the best thing we can all do to ensure a vital and sustainable republic.

This Week in Pie-Making

This week's pie: Maryland Road Pie, a molasses-sweetened pumpkin pie with a chocolate and marshmallow topping.

It's Saturday morning and the biegnets are rising, soon to be rolled out and filled with a carmel-butter sauce left over from dessert a couple days ago. Yes, dear reader, you are welcome to come visit, especially for events such as the League of American Bicyclists conference in March. On your way in, tho, just be sure to check that your charts have their magnetic declination correct, since the "north" pole is increasing its speed toward the Equator. The consequences of this are actually profound most importantly because of how runways around the country are marked, because unlike the DHS, the FAA doesn't want to rely exclusively on GPS.

A dip in gasoline prices brought back echoes of the car industry of 2006, while food and oil prices are starting to look more like 2008. Part of the problem is related to climate change, such as droughts in Russia and floods in Australia, but one has to wonder if there's a bit too much cash chasing returns instead of investing in production. Whatever we do politically, environmentally or economically, we now have a (specious) date for when we can realistically expect to start over on a different planet: AD 2200.

The developing world continues to pose challenges for Westphalian notions of governance, and the response of the developed world challenges international standards of acceptable behavior. The developing world in turn breaks breaking the economic models of the West. Not that Western models are perfect, as a debate about road vs. transit funding suggests.

Speaking of infrastructure and bad assumptions, the US oil sector might be in for a major overhaul, assuming Wall Street and the GOP approve. Across the Pond, the Conservative/LibDem government is warning their banking arm to be discrete about remuneration (clearly the public perception is that the banks are under government control, as they exist due to gov't largess). Meanwhile, the Belgians have started a protest your pie maker plans to join in solidarity with the people of Europe's contribution to the artificial country concept (and laziness).

Thanks, and an apology

Two short notes before I get back to kitchen and put together a Maryland Road Pie, inspired by their use of molasses and salt as deicing tools.

First Thanks! are due to a reader who sent a subscription to The Week. I got my first issue yesterday and thoroughly enjoyed it.

Secondly Apology: In my last "This Week in Pie Making", I made a gross exaggeration of the GOP's ills, and cast them as similar to the most monstrous regime in modern history (by body count and capacity for destruction, anyway, the Nazis, Khmer Rouge, Maoists and a few others could make a case). That is not appropriate, and does a great disservice to both the memories of that regime's victims and the quality of political discussion today. For a blog whose posts frequently end with an invitation to stop by for dessert, breakfast, or even to stay the night, such commentary is even less appropriate. "Come on over, you Bolshy hypocrite!" is not a credible invitation. For a desert-bred pie maker, such inhospitality is shameful, and I apologize.

Yes, this is in part a response to the recent tragedy in Tuscon, AZ. But for a generous offer from my current employer, I would be in Tuscon right now, and Arizona is where I grew up. Personally, I tend to agree with the Economist's take on the events, Arizona has never lacked for crazy people or guns. Most heartening, however, has been renewed interest in the quality of mental health care in the US and some signs that we are actually going to Take It Down A Notch For America.

I will do my part. Even when I disagree with people and am uncomfortable with what they are saying or doing, I will endeavor to write about it such a way as to invite constructive commentary and those very same people for pie.

This week in Pie Making (Jan 2-7, 2011)

The big news of the week is that the leader of the red states (not the Red states) assumed control of the US House of Representatives. He quickly promised to do things for the People, excised undesirable parts of the founding document his comrades found objectionable and ensured that enemies of the People would remain in isolated camps. Fortunately Mr. Boehner is not from Georgia, otherwise a satirist might go too far. Besides, he's more of a Trotskyist anyway (economic planning with debt-based international support, via la revolution!). This will make his job a lot more interesting.

In more mundane matters, it looks like the Consumer Finance Protection Agency has picked up a very powerful member: Mrs. Petraeus. Taken with the selection of Daley as chief of staff, it looks like we're in for the politics of making nice with powerful people over the next couple of years.

Continued pressure on oil supplies is leading to a quiet revolution in transportation and your pie maker's preferred mode of transport is getting additional support. Even gadgets are getting into the efficiency act.

The biggest international news is probably that a major oil exporter is about to split along racial and religious lines, with nary a mention on the Oil Drum. This split is worth keeping in mind as the issue of the Huck Finn edits floats around. It highlights how maintaining a cosmopolitan national identity is absolutely critical to the success of modern economies.

On the security front, things are very interesting. First of all, China's unveiled a new "stealth" jet. Despite this SecDef Gates will continue doing his thing, highlighting the general reduction in the national fear level in the US. We even have what appears to be terrorism in response to disquieting highway signs that barely made it to the front page.

Educating Pie Makers: College (part 2: The Stakeholders)

In the previous post, we found that "ignorance" could buy a yacht and two trips around the world, while education gets one a piece of sheep paper. Currently, this cost is spread over four major sets of stakeholders: governments, charities, employers and students. Each has their own set of interests and expectations from a students' education, but it's important to understand the Opportunity Cost of college to all of them.

The Government: When a government contributes to undergraduate college education, it's looking for some combination of three things: (1) keep young people out of the workforce for a few years, (2) provide a better educated workforce to compete for higher value-added industries and (3) improve the quality of its public discourse. Historically, (1) has paid off quite well, and unemployment rates have been kept under control in societies with people living and working for longer periods. (2) is a bit more tenuous, given that highly skilled people can move to greener pastures, but often they send money if they do migrate, so probably better to pay for students than sailors. Unless, of course, the government runs a maritime nation with a shipbuilding industry suffering from lack of demand . . . (3) has been a manifest failure.

Charities and Foundations: These groups generally want to make experiences that they enjoyed or felt were formative available to others. Since many are directly tied to prominent alumni of various institutions with a strong interest in seeing their alma mater succeed, it's safe to say their role will remain to reduce the costs of, and possibly increase the benefits of, education for students at favored institutions. This situation will likely persist until your pie maker can endow Bake Around the World fellowships.

Employers: The cost/benefit analysis for employers heavily favors having a set of institutions that can handle professional training, mostly at the Master's level in the US. Meanwhile, many express dissatisfaction with the quality of Bachelor's graduates. If this continues, they may decide to use non-academic means of determine recruit quality, which would pretty dramatically change the calculation for

Students: The advice your pie maker gives to all students begins with this: do not pursue any degree until you have an idea what you want to do with it. If after starting you find you don't need it, stop, unless you both want to and can afford to continue. Steve Wozniak and Bill Gates are doing alright, and it's better to be broke and unemployed than heavily indebted and unemployed.

On the other hand, there are some strong personal benefits to being an alumnus of your chosen alma mater. There's no formula to assess the actual value of this, and assuming the student can afford the education, it comes down to a simple question of whether it is worth the Opportunity Cost to the student. Gut reactions are important for more than just pies.

To directly answer comment from the previous post, it's possible to come up with a formula that, assuming several uncertain things are known, can approximate the net benefit in terms of income:

if( (I_B - l_c)*p_F*p_E*d_B > I_HS)
Go to school
else
Go to work

Here, I_B represents the income potential with a Bachelor's degree, I_HS represents high school income after four years in the workforce. I_B must be reduced by the cost of servicing student loans, l_c. This quantity should be modified by three factors: 0 < p_F < 1, the probability* of student finishing despite risks such as lack of interest, mental or physical illness and uncertainty about finances; 0 < p_E < 1, probability of employment with one's chosen degree; and 0 < d_B < 4ish, how badly one wants to study in a particular field. There are far too many factors that play into each of those to give a more detailed answer, but anyone struggling with this decision is welcome to stop by the Fuzzy Wups to discuss. We have pie and just discovered the joys of grinding spices in with coffee.

*Quants: Yes, this is a flagrant abuse of probability theory and I fear someone will take this humble discussion aid and turn it into an AIG-risk-metric-esque tool to fool people into bad decisions. On the other hand, there's already plenty of such tools out there, and at least mine comes with this disclaimer.