RoguePundit

Freedom From Urban Oppression

Unlike so many American males, I've never been into cars or other vehicles.  They've simply been tools which I try to make last as long as possible.  Nonetheless, I got a huge kick out of an article by P.J. O'Rourke in today's Wall Street Journal on the end of America's love affair with the car.  Here's a slice...

Pointy-headed busybodies of the environmentalist, new urbanist, utopian communitarian ilk blamed the victim. They claimed the car had forced us to live in widely scattered settlements in the great wasteland of big-box stores and the Olive Garden. If we would all just get on our Schwinns or hop a trolley, they said, America could become an archipelago of cozy gulags on the Portland, Ore., model with everyone nestled together in the most sustainably carbon-neutral, diverse and ecologically unimpactful way.

But cars didn’t shape our existence; cars let us escape with our lives. We’re way the heck out here in Valley Bottom Heights and Trout Antler Estates because we were at war with the cities. We fought rotten public schools, idiot municipal bureaucracies, corrupt political machines, rampant criminality and the pointy-headed busybodies. Cars gave us our dragoons and hussars, lent us speed and mobility, let us scout the terrain and probe the enemy’s lines. And thanks to our cars, when we lost the cities we weren’t forced to surrender, we were able to retreat.

But our poor cars paid the price. They were flashing swords beaten into dull plowshares. Cars became appliances. Or worse. Nobody’s ticked off at the dryer or the dishwasher, much less the fridge. We recognize these as labor-saving devices. The car, on the other hand, seems to create labor. We hold the car responsible for all the dreary errands to which it needs to be steered.

So true.  And using Portland as an example of being green and diverse...what a kick.  Beyond graft and corruption, there's little that's sustainable in that ugly, smelly metropolis. 

The Bursting of the Organic Milk Bubble

Organic farming used to be dominated by believers.  But as organic sales shot up, a number of conventional farmers got into the business, lured by the prospects of bigger profits.  Dairy farmer Ken Preston went organic in 2005.

Sure enough, his income soared 20 percent, and he could finally afford a Chevy Silverado pickup to help out. The dairy conglomerate that distributed his milk wanted everything Mr. Preston could supply. Supermarket orders were skyrocketing.

But soon the price of organic feed shot up. Then the recession hit, and families looking to save on groceries found organic milk easy to do without. Ultimately the conglomerate, with a glut of product, said it would not renew his contract next month, leaving him with nowhere to sell his milk, a victim of trends that are crippling many organic dairy farmers from coast to coast.

For those farmers, the promises of going organic—a steady paycheck and salvation for small family farms—have collapsed in the last six months. As the trend toward organic food consumption slows after years of explosive growth, no sector is in direr shape than the $1.3 billion organic milk industry. Farmers nationwide have been told to cut milk production by as much as 20 percent, and many are talking of shutting down.

The chart the New York Times included shows that consumption hasn't just slowed.

But with consumer confidence now on the rise, it will be interesting to see how that's reflected in the sales of organic products.

Hood and the two other big processors, Horizon Organic and Organic Valley, say cutting contracts, pay and production are necessary to absorb overproduction and offset softening demand. Organic Valley, a nationwide cooperative, told Maine organic dairy farmers last month that its sales growth had dropped to near zero from about 20 percent six months ago.

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For many farmers, the changes coincide with crushing debt resulting from the cost of turning organic, which can run hundreds of thousands of dollars. In addition, the price of organic feed has doubled in the last year. Credit has dried up for some, and others say it is nearly impossible to sell cows and so thin their herds.

Cattle prices have been depressed ever since the U.S. fully reopened its borders to Canadian beef (previous blog here), despite the continuing occurrence of mad cow disease there.  The most recent case was earlier this month, again in Alberta.

Here's an example of some bubbly organic milk behavior.

“We’re in big trouble,” said Craig Russell, an organic dairy farmer in Brookfield, Vt., who owes $500,000, mostly from converting his farm to organic in 2006.

Mr. Russell quit a day job as an accountant to farm full time last year. “I made more money in six months than in five years of conventional farming,” he said, but his farm is now barely hanging on. The price he receives from the distributor dropped another $1 per hundredweight on May 1, just when he most needed money to prepare for the summer grazing season.

“It’s going to cost me more to make milk than sell milk,” he said.

Conventional dairy farmers are used to enduring volatility in milk prices...but not with organic milk.  It's becoming just another commodity.

More Transparency Would be a Good Start

The Oregon Investment Council has twice this decade presided over multi-billion dollar PERS losses, leaving the taxpayers on the hook (previous blog here).  With four of the five OIC members having been appointed by Governor Kulongoski and the fifth being the State Treasurer, none of were there for both financial disasters.  But, it's obvious that our governors routinely appoint (and we vote for) folks who are in over their heads. 

They're huffing and they're puffing. But in the end, it's not clear that the Oregon Investment Council's efforts to extract better terms from the private investment partnerships that manage $9 billion in state pension money will amount to much more than hot air.

Earlier this month, the five-member citizens council that manages the state's $43 billion public employee retirement fund adopted a statement of principles designed to rein in exorbitant fees and demand more transparency from the historically secretive private equity partnerships that invest in leveraged buyouts, distressed bank loans and other investment vehicles.

The Oregon Investment Council's hope is that other state pensions and institutional investors will follow suit, and that the private equity sector, in which firms have historically set take-it-or-leave-it terms, will become more of a buyer's market.

That's a nice, but timid initiative.  If you don't like the terms, don't invest in the firms.   

Private equity firms' high fees and lack of transparency have long been controversial. General partners of firms such as Texas Pacific Group and Kohlberg Kravis Roberts typically charge annual management fees between 1 and 2 percent of the amount of capital committed to a fund, then take 20 percent of the profits they generate.

Hedge funds, which are also high-risk investments, typically charge two and twenty.  By design, pension funds should have little-to-no exposure to high-risk investments.  But in Oregon, the PERS beneficiaries are immunized from the losses...except when it comes to the cancerous impact of higher PERS contributions on state and local budgets.  Thus, the OIC keeps on rolling the dice in search of eight percent returns, which are unrealistic over the long haul.  A number of investment firms have taken advantage of that.  

The resulting fees can be gargantuan -- Oregon alone paid $85 million in fees to alternative equity firms in 2007, including $13 million to KKR in 2007 and another $8 million to Texas Pacific.

The largely unregulated partnerships also offer investors far less transparency in terms of governance and accounting than publicly traded investment vehicles.

While the stock market was booming and cheap debt was fueling the buyout market, investors like Oregon were lined up to invest with the firms, no matter the cost. Now that private equity returns have crashed with the overall markets--Oregon's private equity portfolio is down 25 percent in the past year--the push is on to drive a better deal and make sure that management fees don't become a profit center while the partnerships aren't delivering any returns for investors.

There was a lack of transparency way back in the go-go '90s and earlier this decade when PERS was in a $17 billion in the hole.  Finally fighting for more transparency in its investments is a good thing.  But, you never commit money to such investments unless you're satisfied with the terms.  The OIC still doesn't get that.  This is another aspect of the excessive risk it takes.

Pendleton Woolen Mills Perservering

Pendleton Woolen Mills makes some absolutely wonderful blankets, clothing, rugs, and other products.  But little of it comes cheap.  And with consumer confidence understandably being down...

The slow economy has caught up to the Pendleton Woolen Mills.

Mill manager John Boston has reported orders are down 30 percent compared to this time last year. The lack of orders prompted Boston to lay off two permanent workers in May. Boston said Friday he's looking at having to let a couple of more go until orders pick up.

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Boston said while some customers are reporting a 100 percent sell through of their Pendleton products, they haven't reordered at last year's level.

A few layoffs is much better than some of its competitors and suppliers are doing.

The recession is affecting the business in other dramatic ways as well. Some of the company's suppliers have gone out of business, Boston said, and as of May 1, the Pendleton Woolen Mills became the largest blanket manufacturer in the nation.

But Boston isn't bragging. The economic slide has meant the demise of some major U.S. blanket producers.

I wonder how many blanket manufacturers are left in the U.S.

Stimulus Money for an Unhealthy Forest

For several years now, the Oregon Departments of Forestry and Agriculture have been working together to eradicate--well, limit the spread--of sudden oak death fungus in Curry County.  For a spell last year, these efforts stopped because the agencies ran out of money (previous blog here).  Fortunately, the Legislative Emergency Board came up with $427,500 to allow the work to continue. 

More work needs to be done this summer, but there's no state money to do it.  However, it looks like some federal stimulus money is on the way. 

The Oregon Department of Forestry hopes for $2.7 million in federal stimulus money to slow the spread of Sudden Oak Death, Forest Pathologist Alan Kanaskie said at a public meeting Thursday.

“We’re told we’ll get $2.7 million, but we haven’t got it yet,” Kanaskie said. “If we can reduce the host species in the north part of the quarantine area, we can slow the spreading.”

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When the stimulus money is approved, Kanaskie said each $1 million would be enough for 22 full-time workers to remove host plants.

Unemployment in Curry County is currently 14 percent. 

He said the best way to contain the spread is to take host plants out in a 3-mile wide path at the edge of the quarantine area, which remains the same as last year.

The eight new sites were found in a recent aerial survey and there will be another one in about a week.

“We’ll have a bigger one in July,” Kanaskie said.

Since 2001, when Sudden Oak Death was first found in the Brookings area, about $4 million has been used to slow the spread of the tree disease, including $1.35 million from the state.

Thus, $2.7 million should certainly allow local officials to take aggressive action this year.  Wonder if anybody will have money to spend next year.

Random Nature #215

Range Wars:  There are many activists who decry the consumption of beef.  The reasons include the resources cows consume, the wastes they produce, animal cruelty, how cattle degrade the landscape and water quality, on and on.  And of course all of that belching and farting.  But what about some of the other ruminants on the range?  In the UK...  

A government-sponsored study into greenhouse gases found that producing 2.2lb of lamb released the equivalent of 37lb of carbon dioxide.

The problem is because sheep burp so much methane, a potent greenhouse gas. Cows are only slightly better behaved. The production of 2.2lb of beef releases methane equivalent to 35lb of CO2. Tomatoes, most of which are grown in heated glasshouses, are the most “carbon-intensive” vegetable, each 2.2lb generating more than 20lb of CO2 Potatoes, in contrast, release only about 1lb of CO2 for each 2.2lb of food. The figures are similar for most other native fruit and vegetables.

Uhhh, potatoes aren't native to the UK, Ireland, or anywhere else in the Old World (previous blog here). 

That tomato statistic highlights the fact that choosing local foods isn't necessarily better for the environment.  FYI, the production of pork and chicken releases less methane than does mutton and beef.  And let's not forget about the original reasons for ethanol production.  

Alcoholic drinks are another significant contributory factor, with the growing and processing of crops such as hops and malt into beer and whiskey helping to generate 1.5% of the nation’s greenhouse gases.

And of course the UK doesn't have the weather to produce much wine. 

Saving Brightness:  People in many nations are used to judging the amount of light an incandescent bulb produces based upon its wattage.  Yet, the watt is a measure of the power consumed, not the light emitted.  The rise of more efficient bulbs has added confusion, as they produce more lumens--light that people can perceive--per watt than do incandescents. 

In many instances, the solution has been to label the newer bulbs as being the equivalent of, for instance, a 60- or 100-watt incandescent bulb.  However, this hasn't worked very well for a number of reasons (previous blog here).  Maybe the following will be an improvement in the long run...though I'm sure the transition will be annoying for many consumers.    

Lightbulbs are to lose their wattage markings, thanks to new European Union rules.

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When the changes take place bulbs will appear with the symbol Lm for Lumens instead of W for Watt. A 60W bulb, for example, will be given the label 800 Lm.

The EU will develop advertising to help make the transition easier.  But with various fluorescent bulbs (and for that matter LEDs) producing different types and frequencies of light, the use of lumens won't eliminate apples-to-oranges comparisons.

Soon, 60W bulbs won't be available for another reason.  Both the EU and the UK are phasing out the sale of most incandescent light bulbs.  With the same thing occurring in the U.S. by 2014 (previous blog here), suppose we'll soon go through a similar labeling transition from watts to lumens?  

Changing Hormones:  60 percent of women undergoing menopause claim that they experience memory problems during the transition.  The following study attempted to document this by analyzing changes in the ability to learn, which obviously depends upon memory.   

For a four-year period, researchers studied 2,362 women, who were between the ages of 42 and 52 had at least one menstrual period in the three months before the study started.

The women were given three tests: verbal memory, working memory and a test that measured the speed at which they processed information. Scientists tested the women throughout four stages of the menopause transition: premenopausal (no change in menstrual periods), early perimenopausal (menstrual irregularity but no "gaps" of 3 months), late perimenopausal (having no period for three to 11 months) and postmenopausal (no period for 12 months).

The study found that processing speed improved with repeated testing during premenopause, early perimenopause and postmenopause, but that scores during late perimenopause did not show the same degree of improvement. Improvements in processing speed during late perimenopause were only 28 percent as large as improvements observed in premenopause. For verbal memory performance, compared to premenopause, improvement was not as strong during early and late perimenopause. Improvements in verbal memory during early perimenopause were 29 percent as large as improvements observed in premenopause. During late perimenopause, verbal memory improvement was seven percent as large as in premenopause. 

So, how does hormone therapy impact the results?

The study also found that taking estrogen or progesterone hormones before menopause helped verbal memory and processing speed. In contrast, taking these hormones after the final menstrual period had a negative effect: postmenopausal women using hormones showed no improvement in either processing speed scores or verbal memory scores, unlike postmenopausal women not taking hormones.  "Our results suggest that the 'critical period' for estrogen or progesterone's benefits on the brain may be prior to menopause, but the findings should be interpreted with caution," said Greendale.

Low testosterone adversely impacts memory in men. 

Damage Control Rather than Quality Control

It wasn't the FDA that found the salmonella-tainted pistachios in March.  

Thank the aggressive food safety system at Kraft Foods for last month's recall of the entire 2008 pistachio crop of Setton Pistachio of Terra Bella in California. Internal testing by Kraft between December 2007 and last month found salmonella in a trail mix made from those pistachios. Kraft voluntarily informed the FDA of the positive salmonella test results on March 23 after it was able to link them to Setton's pistachios. There have only been two complaints of illness and no deaths reported.

And thankfully, the FDA didn't sit on the news.

Dr. Joshua Sharfstein, the former head of the Baltimore City Health Department [and acting FDA commissioner], reacted immediately to a report of salmonella in pistachio nuts in March, ordering the manufacturer, Setton Pistachio, to recall a million pounds of nuts even before there were any reports of illnesses in humans.

Funny how the press release said that Setton voluntarily recalled the pistachios.

Setton Pistachio, the nation's second largest producer, was the only company found to be selling salmonella-tainted pistachios (previous blog here).  The FDA's inspection report was made public this week, and it doesn't paint a pretty picture.

The FDA's five-page report summarizes 17 separate inspections that took place at the Terra Bella plant between March 26 and April 30. Ten different inspectors swarmed over the facility and reported finding flaws both in the procedures and the physical plant.

The problems, at this point, are considered "inspectional observations" rather than "violations." Taken together, though, inspectors identified a "failure to manufacture, package and store foods under conditions and controls necessary to minimize the potential for growth of microorganisms and contamination."

Specific physical problems ranged from a rusty hole in the roof above one pistachio roaster to "thick layers of dust and debris" in a packaging room. Procedural shortcomings included failure to monitor roasting temperatures and allowing raw and roasted pistachios to potentially come into contact.

Even worse is what the FDA found regarding operations before its inspectors arrived. 

Between October 2008 and March 2009, the report noted that "there were at least eight reported Salmonella-positive test results" coming out of the Terra Bella plant. When the firm learned of the private laboratory test results, inspectors said, there were no "procedures in place" to respond appropriately.

Prior to January, inspectors added, the Terra Bella plant did not monitor roasting temperatures, roasting times or the depth of pistachios placed on the roasting conveyor belts. Inspectors checked records for 14 lots of roasted pistachios. In a potentially dangerous step, 10 of these lots had raw pistachios packed on the same packaging equipment prior to the roasted pistachios being run.

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In one instance, the company re-roasted pistachios that had tested positive for Salmonella and blended them together with other nuts for sale.

The investigation is still ongoing.  You can sure tell that Setton's lawyers are involved in the damage control.

Lee Cohen, general manager of Setton Pistachio, said Friday that the company "adamantly" disagrees with any suggestion that safety wasn't a top priority.

Plus, Mia Cohen--the COO--said the company "never knowingly shipped pistachios potentially contaminated with salmonella."  

Setton tried to get away with sloppy quality control, and now the whole industry is paying via depressed sales.  Fortunately though--no thanks to Setton, not many people got sick.

Persistent Snow

In most of the Northwest, the past six months have been drier than normal. 

However, they've also been cooler than normal. 

Imagine how much further below average Oregon's spring would have been if not for those two hot spells. 

In other words, it's not that surprising that in parts of Oregon, snow is inhibiting some typical Memorial Day activities.   

Campers and picnickers this Memorial Day weekend may find a cold, wet blanket of snow over some of their favorite high-country picnicking and camping spots.

On the Deschutes National Forest, visitors are warned of 8-foot snow depths at campgrounds and picnic sites above 5,500 feet. The Cascade Lakes Highway, south and west of Bend, has been plowed open but offers barely enough room for two cars to pass between snowbanks.

On the Mount Hood National Forest, visitors are likely to encounter snow on any road or trail at 3,500 feet to 4,000 feet elevation, said Rick Acosta, another Forest Service spokesman.

"Some of our more popular spots are snowed-in still," he said. "It just depends on where you go. A lot of those campgrounds are normally open for Memorial Day, but this year, they are not."

But, the local Bear Camp Road is open.  Excuse me though, it's now called the Bear Camp Coastal Route...because that name is less likely to mislead people into driving it during the rainy season and getting stuck--and possibly dying--in the snow.    

The situation is no better in eastern Oregon's scenic Blue Mountains. Most camping and picnicking sites above 4,500 feet on the Umatilla National Forest are still snow-covered "to the point of being inaccessible," said Joani Bosworth, a Forest Service spokeswoman in Pendleton.

At lower elevations, travelers should beware of large, impassible snowdrifts on roads that are shaded by trees or cutbanks, she said. Three to 5 feet of snow still covers the popular Tollgate recreation area of the Blues along Oregon 204, linking Elgin and Weston, she said.

But since less people camp nowadays, these snowy conditions are less of an inconvenience, right?

The Single Majority in Grants Pass

I'm sure a number of folks in Grants Pass are glad that the double-majority rule is no more.  That's because despite the surprising 2-1 majority that approved the public safety levy yesterday, only 41 percent of the registered voters cast their ballots.  That would have meant failure last year.  The gamble in asking for just a dime less than the levy that failed last November paid off.

If one cranks the numbers, 28.5 percent of registered voters approved the two-year levy while  14.2 percent voted against it.  About 55 percent of city residents are registered voters.  Or as the Daily Courier saw it...

It was a stirring show of confidence in this city and its public safety workers, especially when one considers Josephine County's unemployment rate hovers at around 16 percent.

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Critics of the city administration might also keep in mind that Tuesday's vote has to show some fairly high confidence in the staff who run this city, as well as its firefighters and police. After all, these people are the ones who handle the money and coordinate services. City councilors may well be going against the will of the majority by trying to force out City Manager David Frasher.  Certainly, several on the council misjudged their fellow voters when it came to the Public Safety levy. They reluctantly approved the levy, saying they thought it was doomed, and refused to campaign for its passage, as previous councils have done.

Thank goodness the overwhelming majority of their fellow citizens had the courage and good sense to refuse to let their quality of life slip away.

Only in election math is an overwhelming majority just under one-sixth of city residents.  But, those folks helped prevent some significant cuts, mostly in public safety.

California's Voters Say Time to Cut Something

Yesterday, Californians resoundingly thumped the various propositions related to the state's budgetary nightmares.   

- 1A:  A rainy day fund that would have also extended the income, sales, and vehicle tax increases for two years.  65.8% against.

- 1B:  Increase and set a floor under education funding.  62.5% against.

- 1C:  Borrow from the lottery and try to boost its revenues.  64.6% against.

- 1D:  Divert $1.7 billion from child services over the next five years.  65.7% against. 

- 1E:  Divert $460 million from mental health programs for two years, and add 1 percent to the income tax on folks earning over $1 million a year.  66.4% against.

Not a single county voted in favor of propositions 1A, C, D, and E, and only three counties voted for 1B:  San Francisco, Santa Clara, and Santa Cruz.  Hmmm. 

Thus, I checked proposition 1A to see what counties came closer to voting yes.  All but one of the counties topping 40 percent for 1A are in/near the Bay Area:  Alameda, Contra Costa, Marin, Monterrey, San Francisco, San Mateo, Santa Clara, Santa Cruz, and Yolo Counties.  The outlier was Imperial County, in the southeastern corner of the state.  The results were similar for propositions 1C, 1D, and 1E.

The overall vote on 1B was a bit closer.  The additional counties topping 40 percent were Humboldt, Mendocino, Napa, San Benito, San Joaquin, Solano, Sonoma, and Stanislaus Counties.  All are in/near the Bay Area or extend up the North Coast.  Imperial County was again the lone outlier.

Meanwhile, every county voted for proposition 1F, which prevents pay raises for legislators and statewide officials in years with budget deficits.  The only counties in which less than 70 percent voted for the measure are in/near Southern California:  Fresno, Inyo, Kings, Los Angeles, Orange, Tulare, San Bernardino, and San Diego. 

Fascinating lack of overlap.