Archive for August, 2009

A Triptych

Monday, August 24th, 2009
Mt. Mansfield. photo by Jared C. Benedict

Mt. Mansfield. photo by Jared C. Benedict

Today’s opus will be presented as three un-related chapters, each with its own title, as follows:

1—Vermont the Healthy?

Among Vermont’s other distinctions, it seems to be Number One in health-consciousness.

In the latest Gallup-Healthways Well-Being Index, Vermont scored 69.1 on the “healthy behavior index score,” higher than it did last year and 1.3 clicks ahead of second-place Hawaii.

This does not prove that Vermonters are healthier than anyone else. In fact it doesn’t prove anything; it’s survey research, which provides indications, not incontrovertible fact.

The indications are that Vermonters take care of themselves better than other Americans. They are less likely to smoke, more likely to exercise, most likely to eat lots of fruits and vegetables.

That’s the good news. The not-so-good news is that being best in America does not necessarily men being very good. Overall, the survey found that the “nation as a whole (is) dropping substantively on the Healthy Behavior Sub-Index, from 63.7 in 2008 to 62.6 in the first half of 2009.” In fact, “Mississippi, whose score ranks among the bottom 10, is the only state to record a statistically significant increase in its healthy behavior score.”

So there’s little justification here for Vermonters getting a swelled head about their (relatively) good habits. To begin with, there doesn’t seem to be all that much specifically “Vermontish” in these results. Almost all the states in the Northeast scored reasonably well, as did the Rocky Mountain states and the West Coast (except Washington State and Nevada.). To some extent, then, being health-conscious is a regional habit.

And probably an educational habit. More than 35 percent of adult Vermonters graduated from college, more than in all but five other states. College graduates tend to be more health conscious, not to mention more affluent. Not only do they know that they ought to go to the gym, they can afford the membership.

On the other hand, Vermont is the most rural of the states in the top ten, and there is ample evidence (such as this 2005 study in Pennsylvania) that rural residents don’t have the healthiest habits. They are more likely to smoke, less likely to exercise, and they gobble up lots of fried foods.

Meaning that perhaps it is the residents of Chittenden County and a few others outposts who take good care of themselves. But the survey didn’t get down to the county or town level.

The Gallup survey says it provides “a daily measure of people’s well-being…based on the World Health Organization (WHO) definition of health as not only the absence of infirmity and disease but also a state of physical, mental and social well-being.”

Whereupon we segue, as the TV folks would say, into……

CHAPTER TWO: VERMONT THE GOOD?

One way lots of Vermonters stay healthy is by doing stuff outdoors. That’s not in the Gallup survey, but we know from many sources that people in this state are more likely than most other Americans to hike and camp out, to paddle a kayak or canoe, to work in their gardens or in the woods.

Now comes evidence that all this activity not only helps make a person healthier. It can him or her a better person – kinder, more generous, less selfish. Contact with nature, says a new study “brings individuals closer to others, whereas human-made environments orient goals toward more selfish or self-interested ends.”

A bit of skepticism is in order here. Psychology lacks the precision of physics. Studies such as this one – conducted by psychologists Netta Weinstein, Andrew K. Przybylski, and Richard M. Ryan – sometimes conclude with the conclusions the studiers wanted to find before they started.

But these folks have credentials – Weinstein is a clinical psychologist at the University of Rochester – and their findings sufficiently intrigued the editors at the interesting, lively, new Miller-McCune Magazine that they wrote about them in an article called “Immersion in Nature Makes us Nicer.”

Why would it? Writer Tom Jacobs reports that “Weinstein and her colleagues suggest the answer lies in an enhanced sense of personal autonomy. ‘Nature affords individuals the chance to follow their interests and reduces pressures, fears, introjects and social expectations,’ they write.

Introjects? A term the meaning of which seems to be in dispute but is related to making too big a deal of oneself.

If both un-confirmable and un-refutable, the notion does seem to make some sense. Not there aren’t some very nice couch potatoes and a few avid white-water paddlers who are real stinkos, but connecting with the natural world (and this includes spending time with your house plants)would seem to reduce stress, encourage a contemplative outlook, and keep one on an even keel (except, literally, in that kayak in white-water).

And speaking of even keels, we segue to….

CHAPTER THREE: ET TU JACOBE?

Did everybody note that even Gov. Jim Douglas would not come right out and say what he (almost surely) knows is true: that this business about “death panels” in the proposed health care legislation is some combination of dishonesty and insanity?

Asked about it at his press conference last week, the Governor, as reported by Terri Hallenbeck of the Burlington Free Press in the paper’s Vermont Buzz blog, would only note that the argument was “an example of the kind of rhetoric that’s distracting us from fundamental reform.”

“But he did not come out and denounce the death-panel debate nor would he say he felt confident the proposed legislation didn’t include death panels,” Hallenbeck wrote. “He said that like most members of Congress he had not read every word of the legislation.”

No condemnation here of Douglas, who was doing what he had to do. Oh, it would have been admirable for him to have said (in somewhat more diplomatic language), “this stuff is crazy.”

But that would have been dangerous, and what is interesting is why it would have been dangerous.

In the latest polling on the subjects (NBC News/Wall Street Journal), 45 percent of the respondents said they thought the health care proposals before Congress “Will allow the government to make decisions about when to stop providing medical care to the elderly.”

Those proposals will allow no such thing.

Checking the polls’ “internals, “ it’s reasonable to conclude that the percentage in Vermont is smaller, probably closer to a third, roughly the percentage of Vermonters who voted for John McCain last year.

In other words, that third is Douglas’s base. A politician can not afford to tell his base that they are (not to put too fine a point on it and using the term in its colloquial rather than its clinical context) out of their minds.

Or, more gently, that they have allowed themselves to believe outright lies.

But maybe “allowed is less accurate than “affirmatively chosen” to believe outright lies, which leads to the question of why so many people would so choose.

A complicated question, perhaps pursued another time. Meanwhile ponder what it means that a sane and responsible governor fears to suggest that some of his constituents are acting in a manner neither sane nor responsible.

The Price of Milk

Friday, August 21st, 2009

Sen. Bernie Sanders says Vermont dairy farmers are getting such low prices for their milk because Dean Foods Co. is a monopoly and is manipulating the price.

Flapdoodle, says Dean CEO and Chairman Gregg Engles (in effect; CEO’s don’t customarily talk that way), his company doesn’t set the price. The U.S. Government does.

Engles is wrong. The Government does establish a minimum price. But a year ago the actual price was some 40 percent higher than the $11.28 cents per hundredweight farmers are getting these days.

But Engles being wrong doesn’t necessarily make Sanders right. After all, a year ago, when the price was higher, Dean’s dominance of the market was roughly what it is now. Why weren’t they manipulating the price downward then?

It’s interesting that Engles did not say what big-shot dairy executives and their backers usually say when accused of manipulating the price – that the market, good old supply and demand, determined the price.

On the face of it, that would seem like a pretty good argument right now. There’s a recession, so it makes sense that people all over the world are drinking less milk and eating less cheese. If demand goes down, so will the price.

If demand is going down. Some say that it is not.

Either way, maybe Engles knows that the old, “the market did it” argument won’t fly anymore. By now, most people seem to understand that, in the words of John Peck of Family Farm Defenders, “there’s no free market in milk.”

And even if lower demand is one reason for lower prices, that doesn’t prove that Sanders (who didn’t claim that market manipulation was the only reason prices were low) is wrong in blaming Dean and calling for a U.S. Department of Justice anti-trust investigation into whether Dean is using its market power to suppress prices.

He has some powerful supporters and some persuasive – if by no means conclusive – evidence. In a letter to the Justice Department, Sanders and Democratic Sens. Charles E. Schumer of New York and Russell D. Feingold of Wisconsin say that three years ago the “career professionals in the Antitrust Division…recommended action against…Dean Foods” and other dairy firms.

The letter also states that “According to numerous complaints, Dean Foods and DFA (about which more in a moment) have repeatedly conspired to refuse independent farmers and small cooperatives access to bottling plants in order to force these entities to join DVF or market through DFA affiliates.

DFA (Dairy Farmers of America) is actually the company to which most Vermont dairy farmers sell their product. It isn’t Dean Foods. But then, it isn’t exactly not Dean Foods, either, and not just because it then turns around and sells almost all of what it buys to Dean for processing.

The two firms have all sorts of interconnections. For instance, after Dean merged with Suiza Foods in 2001 (Suiza actually bought Dean, but the combined firm took the Dean name), anti-trust regulators told the new company that its size made it a potential monopoly, and ordered it to sell 11 bottling plants.

So DFA and two former Suiza executives started a new company, National Dairy Holdings, and bought the plants from Dean, making NDH the second largest bottler of fluid milk in the country, after Dean itself. (DFA just sold NDH to Grupo Lala, a Mexican dairy firm). DFA also held a share in a Suiza subsidiary, Suiza Dairy Group, but subsequently sold its share to…Dean Foods.

Confused yet? If so, you’re in good company. The dairy industry is a bewildering concatenation of subsidiaries, partnerships, agreements, and brand names, all of which sound sort of alike. Just in New England, for instance, a customer in most stores might buy a container of milk from either Booth brothers or Hood.

Hood owns Booth Brothers.

Or that customer can buy milk from Garelick Farms, “New England’s Home Town Dairy,” except that Garelick is owned by none other than Dean Foods, whose home town is Dallas.

All those names and inter-locking arrangements almost seem designed to make it difficult for the average person to know who owns what.

Come to think of it, maybe they were.

In fact, going through all the Dean Foods corporate machinations and legal allegations would both take too much time and only stupefy most readers. For now, let’s deal with a few facts, plus a little speculation.

The facts:

–Dean (via DFA) is said to buy at least 70 percent of Vermont’s milk. Those who say this are hostile to the company, which has said the figure is too high. But it has not given its own figure, and did not respond to a request to do so yesterday;

–Dean Foods reported second quarter profits of $64.1 million, a 31 percent increase over the second quarter of 2008 even though total sales declined. Costs declined even more;

–In Wisconsin, where no one processing firm controls as much of the market, dairy farmers get 55 centers per hundredwieght more for fluid milk (after transportation and other costs are deducted) than do their peers in the northeast, according to John Bunting, an upstate New York farmer and farm advocate.

When there’s more competition, you usually get a better price. That’s how economics works,” said John Peck, who said he teaches economics at a community college (though is doctorate is in another field).

Suggesting, of course, that the market – supply and demand – does have an impact on price. So if people are drinking less milk and eating less cheese because of the Recession, that could account for almost all of the price decline afflicting Vermont’s dairy farmers.

“There has been no fall in demand,” said John Bunting, a self-described “troublemaker” to the dairy establishment, but also a frequently consulted expert on dairy matters. Reading from what he said were data from Information Resources Incorporated, which tracks shipments to major retailers, Bunting said that American supermarkets were buying more dairy products this year than last year.

As to reports that Chinese had cut way back on dairy purchases, Bunting dismissed that as an “insignificant” decline in raw milk exports.

”They (dairy firms) could have taken care of that by taking 67-cents-a-hundredwieght (from the farmer’s milk price). Instead they took a billion dollars a month from farmers milk checks,” he said.

None of this proves that Dean is manipulating prices, or even that it’s a monopoly, however a monopoly is defined. Economists differ. One rule of thumb is that if four firms control 80 percent of a market (the “four-firm concentration ratio”) that market is said to be an “oligopoly.” By that standard, and if Dean really controls 70 percent of the Vermont dairy market, it might well be considered a monopoly.

And if it could control the price, it would be foolish not to. Corporations are not in business to compete. They are in business to earn as much money as possible. Buying cheap and selling dear is one good way to do that.

Michal Lunak, Extension Specialist and Assistant Professor at the University of New Hampshire Agricultural Extension Service, said of Dean Foods, “can they manipulate the price? Yes. Can you prove it? No. We do not have a competitive market. We used to have 14 independent processers in New England and the farmer got a good price. Now there’s one buyer and the farmer has to take his price.”

According to some experts, market domination is not the only means by which dairy prices are manipulated. John Bunting said the single most significant factor affecting dairy prices nationwide is “the trading of generic block Cheddar on the Chicago Mercantile Exchange,” which can be partially controlled by “a handful of elite players.”

What? Manipulate the Chicago Mercantile Exchange?

Well, the News Guy will examine this again at some time, though truth to tell, his first reaction was that this must be a paranoid populist pipe dream.

Except that eight months ago, the Commodity Future Trading Commission fined DFA and two of its executives $12 million “for attempting to manipulate the Class III milk futures contract” on the Chicago Mercantile Exchange.

The Boomers Are Coming

Wednesday, August 19th, 2009

Is Vermont on the verge of an economic and population boomlet?

(psst. But if so, don’t tell the Wall Street Journal, which apparently doesn’t understand what’s going on here at all. Otherwise, it might dispatch another confused reporter. Details below).

Don’t start counting the money yet. Don’t put up the barricades, either; multitudes are not about to mass on the state’s borders clamoring for entry. Then there’s this recession business, which may or may not be at the end of its beginning or the beginning of its end. Prosperity could be around the corner, but not necessarily the nearest corner.

The Baby Boom

The Baby Boom

Still, there does seem to be a concatenation of demographic, economic, and social developments that just might create an era of affluence and energy in the state.

With needless to say, some potential costs, both financial and cultural.

The evidence is found in a new report from the U.S. Department of Agriculture. It’s called Baby Boom Migration and Its Impact on Rural America, and it’s by John Cromartie and Peter Nelson of USDA’s Economic Research Service.

What the analysts found is that those Baby Boomers, who have been dominating and bedeviling American life since they first emerged in 1946, are approaching retirement age. Over the next 20 years millions of them will stop working and many of those millions will move hither, thither, and (of course), yon.

Nothing new abut that. What does appear to be new is that for many of these aging Boomers, ‘yon’ is neither in the city nor in the suburbs. It’s in the country, or “non-metro counties,” as the demographers put it.

Demographic statistics can mislead. For years, many people were moving to “non-metro counties,” but they weren’t really moving to the country. They were moving to non-metro counties that were right next to metro counties. Adjacent metro counties, to the pros. They weren’t becoming rural; they were becoming exurban.

Not these folks.

Measured in terms of relative change, populations in more remote (nonadjacent) nonmetro counties will experience the most dramatic changes from Baby Boomer migration,” the report says.” The effect of remoteness, or nonadjacency, becomes slightly positive for migrants in their sixties.”

That’s because the Baby Boomers (the oldest are now 63) nearing retirement don’t want city conveniences as much as they want “desirable physical attributes—pleasant climates, mountains, beaches, lakes.” These counties, says the report, are likely to increase their already high share of Baby Boomer migration.”

Remoteness, pleasant climates, mountains, beaches, lakes? That’s Vermont, right?

Well, four out of five ain’t bad.

In fact, the report makes it clear that one advantage Vermont does not have when it comes to attracting Baby Boomer retirees is location.

“For virtually every age group…the effect of southern destinations is positive, “ the report says. “In addition, the particularly strong pull of Florida and other States in the South Atlantic region reflects a long association with older age migration.

But the retirees-to-be who are not sun worshipers might find Vermont an attractive destination, and it could behoove state policymakers to take advantage of this potential source of people and money. In general, people who move after retirement have a bit of money, and they use it to buy goods and services where they relocate.

“New Baby Boom residents are likely to have a positive

impact on income and employment levels in migration destinations.,” the report say.

And while they’d cost some money, largely for health care services, they don’t add to school populations.

In fact, they wouldn’t add all that much to the total population. We’re not talking hordes here. The report projects that some 400,000 Boomer retirees will move to remote non-metro counties throughout the Northeast during the decade starting next year.

There’s an awful lot of Northeast, and most of it is warmer than Vermont, so the state could expect only several thousand of these Baby Boomer retirees to move in—enough to make an economic impact, not enough to clog up the place.

Which is probably a relief to the folks who live here now, first because at some point population growth endangers nature’s integrity, and second because old people tend to be grouchy.

Another reason Vermont can expect to attract some of these retirees is that many of them are already here part-time. They own Vermont vacation homes or visit every year. According to the report, it’s common for people to move to an area where they had been vacationing.

The report describes. It does not recommend. But it’s clear from its contents what Vermont has to do if it wants to attract some of these retiring Boomers: Maintain the integrity of those “amenities,” make sure high-speed Internet service is available everywhere, encourage the growth of adult education and cultural institutions.

There is, according to the report, one other vital factors when it comes to attracting Boomer retirees—real estate prices. People in their 50s and 60s, the report says, “are moving away from areas with higher median home prices.”

Wait a minute. Doesn’t that put the kibosh on Vermont, where from both left and right come complaints that housing prices are too high and that the state is not “affordable”?

Apparently not., at least not according to the calculations of Razib Kahn, a scientist who blogs for Gene Expression and who (apparently) likes to play with social/economic statistics. Using U.S. Census Bureau figures, he calculated the relationship between income and housing costs for every county in the country.

And how did Vermont come out? Housing was slightly on the inexpensive side compared with income. People get less house for their money on the West Coast and even in the rural South (probably because income there is so low).

Relative to the rest of the country, though, Vermont seems downright affordable, at least when it comes to housing.

Downright safe when it comes to housing, too, which is why the state has the lowest foreclosure rate in the country.

Foreclosure in California

Foreclosure in California

A fact acknowledged by Gary Fields of the Wall Street Journal, who also noted that “Vermont’s strict mortgage-lending laws largely prevented the state’s residents from signing the types of dubious home loans written in other markets across the country.”

By and large, though, the story in Tuesday’s paper concentrated on all that Vermont has suffered, its policies keeping it “on the sidelines of the housing boom and the economic bonanza that came with it. Vermont’s 10-year growth trails the national average.”

By all of three percentage points.

Worse, “Vermonters didn’t see the same sharp rise in home ownership that swept much of America in recent decades.” Nationally, the story said, the percentage of owner-occupied houses rose by 4.2 percent, all the way up to 68.1 percent. Poor Vermont. Its rate rose by a mere 1.1 percentage points .

Yes, to 73.7 percent.

Did anybody ever tell these guys that at a higher level percentage gains are almost always going to be lower?

Still, the point has been made and perhaps Vermont should be ashamed of itself, with all those laws that make it hard for banks to lend money to people who probably can’t….you know…pay it back.

How passé.