At Least He Has Guts

John McCain came out in Iowa against farm subsidies. He is, as far as I am aware, the only legitimate Presidential candidate (sorry, Ron Paul, but you’re about as legitimate as Dennis Kucinich) to do so. Ramesh Ponnuru, in addition to noting this, also points out that federal taxpayers subsidize primarily only a few products, and the others do pretty well on their own.

Agricultural subsidies are absurd for several reasons, but there are two which make them crazy. The first, as Stephen Spruiell points out, is that the US is a major food _exporter_. Agricultural subsidies increase the supply of food because that’s what happens when you subsidize an action: you get more of it. For example, milk (and still is) was a subsidized product in the US, leading to major increases in the supply of milk and thus a collapse in prices. The federal government, deciding that the correct solution to breaking somebody’s leg is to break the other one as well, bought up large amounts of milk and turned it into cheese. This is the origin of the phrase “government cheese.”

The other thing that the federal government does is, upon figuring out that subsidies really do increase supply, is to then pay farmers not to produce food. So now, not only are we paying farmers to produce food, but we’re also paying them not to produce it at the same time!

But the richest part of farm subsidies is how, when you think about them, you get the image of a hearty American farmer, living off of the land that his family has owned for generations, just needing a little help to continue this great tradition. In reality, those guys get a small portion of the money; instead, corporate megafarms and Congressmen are big benificiaries. I have nothing against corporate megafarms, but neither am I a fan of corporate welfare, and farm subsidies turn out to be just that. Well, that and kickbacks for Congressmen who write the laws…

It’s just a shame that McCain has burned too many bridges on too many issues for me to support him.  If any of the other candidates were to come up with this as well (hint, hint, Fred Thompson), it would push me more in their direction.  Unfortunately, Rudy Giuliani and Mitt Romney spent last night seeing who can try harder to keep the kickbacks and government handouts to big corporations going…

Is It Too Late To Change Everything?

It’s a good thing that we were planning around changes at work, because we ended up getting a few of them today.  The biggest thing is that we discovered that two things are really the same.  There is one formula which gets used twice, but because the second instance we found in the old program was nothing more than test data, we disregarded it and thought it was something new that we should just ask about later.  Err…yeah…it turns out that this rate was actually the same as another rate.

After finding that out, we also discovered that five quarters of data are actually wrong, and were knowingly wrong.  For 2 quarters of 2003 and 3 quarters of 2004, the federal government set up Medicaid billing differently than otherwise, instituting a temporary increase in their percentage collected.  In the data setup at work, however, they only have the “regular” rates and not the temporary increases, meaning that the setup that we would like to use will end up being wrong unless we correct the data before it gets to our program.  That should not be incredibly difficult but will be a hitch once we get to the 2003/2004 data.

Then, on top of that, I ended up going through a database restructuring because it turns out that I did not normalize things as well as I had hoped.  I thought that I could have a one to one relationship between two tables, but it turns out that it really should be one to many because otherwise, I would be repeating the same data up to 36 times, and that’s not very good…  This required that I rework my views as well.

Also, it turns out that the way that we tracked information up to 1999 differs slightly from the way that we did things from 2000 through 2005.  The structure is similar enough that we are using the same program, but some of the calculations change slightly.  The unfortunate thing is that this means that my already-complex view became significantly more difficult.  I actually had to write a developer document in order to remember what’s going on in the event that I have to maintain this query.  And heaven help the person who has to maintain it if it’s not me…

All of this means that I did not really accomplish much today in terms of writing my program to write a program (stored procedure).  I did get the syntax basically down and came up with a query which works for  the first step (out of about 5), and because I have the original data which came with all of this, I can compare my output to the original data.  Basically, I am trying to recreate the original data, and if they match up, I will know that the logic is correct and I can continue and include the new and interesting data which exists solely in the table.

Programs To Make Programs To Make Programs!

At work, we are using CodeSmith to generate a lot of code for our projects.  This got me making a joke about creating a program to make CodeSmith templates, and a fellow I work with was discussing how he made a website for a company he was contracting for:  he had to make the program in Lotus Script, which would output Javascript, and the Javascript would create the HTML.  “Why didn’t you use Ada to write the Lotus Script program?” I asked…

Then, just because everything wraps up somehow, I ran into a similar situation today.  For a project I am working on, we have a bunch of long, “fat” tables that I want to break down into normalized, “skinny” tables.   Basically, one old row can become between 1 and 36 new rows.  To actually move the data over, I am going to use a SQL stored procedure.  But to actually write the stored procedure, I’m going to write a C# program because it follows a repeatable logic.  I will not use CodeSmith to write the C# program…

Whither American Rail?

Megan McArdle has a post asking why we don’t really have much fast rail in the US.  There are some good posts in the comments, but I would like to take a crack at it.

In Germany, a normal ICE train generally goes about 100 MPH most of the time, dropping speed when it gets near cities, and a bit faster in fields.  ICEs have an expected speed of about 120 MPH for standard operation, so that’s about what you could expect an American train to do.   Also, German rail is heavily prioritized toward passenger travel, with freight a distant second.  In the US, meanwhile, we ship a larger percentage of goods via freight than Germany (which mainly uses trucks in-country).  Thus, German trains have to run on a relatively tight schedule, as people must make expectations that the train will be there at a particular time and will get to their destination at another particular time.  But in the US, trains do not have to run on such a tight schedule—what’s the difference if wheat or automobiles or coal gets to its destination a few hours or a couple days later?  Because of this, American trains do not run as regularly, but do run at higher car capacity, and that’s the logistical trade-off you have to make.

If you want high-speed rail across the US, then, you can either rejigger the entire system or set up a second rail system.  Given the general characteristics of the US (huge, generally flat, generally empty spaces with low-density housing), rail-based freight is quite advantageous for cross-country, interregional, and extended intraregional travel, meaning that you would not want to dismantle a functional system.  Thus, it would be better to build a new line, if such a thing is feasible.

The next step to consider is density.  Again, countries like Germany and Switzerland are very popular in these kinds of discussions, but there’s something important to think about:  Germany has 80 million people in an area roughly the size of Ohio, Indiana, and Illinois.  In comparison, the three states I mentioned have about 30 million between them, and includes the #5 and #7  states in terms of population (as of 2003).  The Chicago metropolitan area alone is responsible for over 9 million, and Chicago itself has a population of 3 million.  This means that a third of the region already lives in the Chicago area and would not have that much use for a lot of fast rail, and they already have some amount of metro rail.  The upshot of this is that it could be difficult to have a decent set of rail lines.  You could probably run a 3C rail line from Cleveland-Columbus-Cincinnati, link these off to Indianapolis through Dayton, and then run to Chicago and Urbana-Champaign (like Amtrak already does), maybe throwing Toledo and Gary in a second line going through Cleveland.  Whether this would actually be profitable or not is another story, but these are the only lines that I could really think of, as I’m having trouble coming up with many other potentially profitable opportunities.  In Germany or Switzerland, meanwhile, you have a lot of people living in a relatively small area, so there is a much larger population base for rail travel.

Third, we have to think about distance.  Very few people are going to take a train from New York to LA, given that it would take at least two days to run.  Instead, you’ll just fly there and take a few hours.  On the other hand, inter-city travel within a region is a possibility.  As I noted, an Ohio-based rail line would probably touch 5 Ohio cities and link to Chicago, Indianapolis, Pittsburgh, and Louisville (as well as that state up north, I suppose), but I wouldn’t see many people going by train much further than that.  Once you start talking about Philadelphia, Milwaukee, St. Louis, Atlanta, or maybe even Chicago (it would be kind of on the edge), it starts making more sense just to fly.  After all, it’s a one-hour flight from Columbus to Chicago and a similar flight to Philadelphia.  At the same time, it would be about a five-hour drive to Philly and 6 hours to Chicago (depending on how far into town you want to go), so estimate 4 hours by train to Philadelphia and about 5 to Chicago.  In Germany, it takes about 5 hours to go from Freiburg to Berlin via ICE, and at this point, it starts making sense to take a train down to Basel and fly to Berlin (and it usually turns out to be cheaper that way).  So this would appear to be the limit as far as how long the average person could stand riding in a train, given the option of air travel.  This means that we would not have cross-continent fast rail, and there are big swaths of the midwest and southwest that would not be profitable at all, given the extremely low density of most of the US.

Our next step is to figure out how to build the lines.  It would make sense in the non-eastern-seaboard areas basically to follow the highway and build around that way.  For example, Cleveland-Columbus-Cincinnati and Pittsburgh-Columbus-Dayton-Indianapolis would be relatively easy to set up, given that there is a lot of flat land and highways already there.  Going through the cities would be more difficult, though, and would be rather costly.  Then, on the eastern seaboard, you have to deal with the Boston-NYC-Philadelphia-Washington-Norfolk mess.  Yeah, that’s probably a profitable line, but McArdle points out that the existing track is twisty-bendy.  This doesn’t even mention the difficulty in getting the land to build straight rail through the region, where land is much more expensive and more-developed.  It is possible, but would involve a lot of land purchases.

Finally, you have the issue of location and time saved.  In Columbus, for example, I could see a train station somewhere near the airport and basically looping around the town to avoid cutting through swaths of existing buildings and roads.  The upside to this is that it would be feasible and not extremely expensive, but the downside is that such a plan would cut down on the likelihood of travel.  For example, I live slightly southwest of Columbus, meaning that I have a good head start on the way to Cincinnati or Dayton.  Even though a train can go faster than I, once you factor in the 30+ minute drive, time spent parking, time spent waiting, time spent getting the train going to full speed, etc., I could beat it to those cities.  Going to Cleveland, Pittsburgh, Detroit, Toledo, Indianapolis, or Chicago is a different story, and Louisville would probably be a wash (given that such a train would stop in Cincinnati), but if I’m going to fly to Chicago anyhow (which I personally would), it basically means that there are three or maybe four routes that I would ever ride, and given the low density of most American cities, this holds for a lot of people.

All in all, I could imagine a few profitable routes, but even my Midwestern Express would have difficulty getting off the ground, I think.  Fast rail is an interesting idea and, if it is cheap enough, could be a nice mode of travel for college students who go to a regional school (like I did, going to Dayton), but rail is not a particularly cheap mode of travel—even when you receive major subsidies, like German rail companies do—is not particularly fast, and would have difficulty serving a lot of people efficiently.  To make one final comparison to the German setup, pretty much every German who lives in a town (no matter how small) will have access to a rail station and a train at least once every two hours.  A fair amount of traffic from Berlin to Frankfurt actually comes from people who live in neither city, but rather in a smaller city in the region and who are serviced by slower, local trains.  These trains almost always run at a loss and would not exist in an American setup.  This means that any potential rail setup in the US would involve driving to a fairly major city’s rail station.  Even if you suppose that each city could have two or three stations, somebody who lives in a smaller town would have to drive a fairly long way just to get to a train station, so my hunch is that intercity rail probably would not work, given that the US is built around highway travel.

Asset Values Maximized

According to Bryan Caplan (who links to a Karen Lewis article), having 39% of your assets be in foreign-held companies is a risk-minimizing strategy. I chose to have 40% of my investment plan go to foreign assets.

A financial winner is me.

In the comments, there is an argument that 50-50 is actually the wealth-maximizing strategy, as well as some discussion of why American foreign investment is so low.  I think that one of the things they missed (at least as of when I read this last night) is that given two firms, there is a higher percentage in most foreign countries that there is a risk of government takeover.  In the developed west, that possibility is rather low, and would not really constitute a big reason not to invest, but in the developing world, there is a serious possibility of “nationalization” or whatever other term you wish to use.  Given that and the general weakness of financial institutions in most developing countries, it makes sense for there to be a bias against development there.  In the developed world, meanwhile, there has historically been little difference between investing in Japan and the US over the past few decades—put your money in a Japanese index fund and you’ll get about the same rate of return as the US.  Meanwhile, the US matches or exceeds most European stock markets over the past few decades, too.

On the other hand, the thing that makes a foreign stock fund potentially more valuable is that you get to pick from the best of a lot of different countries’ companies.  You can also lower risk by investing a fraction of the fund in many different developing countries, so that if one country takes over one industry, it doesn’t hurt quite as much.  Meanwhile, you can get a decent return from the good investments.