The Latest Forms of Crop Subsidies

Perhaps you are unaware that farmers here and around the world are paid to NOT grow certain crops because if they did it would drive down prices so much that all farmers would suffer.  This is a direct result of free market economics. The law of supply and demand.  Read about it in this article if you are surprised.

Most markets, like oil and natural gas, accept these oscillating price characteristics.  Periods of high prices encourage drillers to explore and drill more only to overproduce that results in shutting down wells.  There is little to no “coordination or control” in these free markets … they tend to seek their own natural equilibrium over time.  Of course, if the market players decided behind closed doors to coordinate this, it is called restraint of trade and can be one of the quickest ways to get into prison.  It is also called “market manipulation” in this country.  In the rest of the world, it is still legal and is called the well-known Oil Cartel.  The idea there of course is to control the world supply so that prices stay high.  Fortunately, through energy efficiency and enhanced oil and natural gas supply drilling techniques, we have pretty much limited the impact of this cartel with our ability to supply our own needs … again due to free markets working in this country.

Carbon is now entering the world of supply and demand with Brazil asking for subsidies to stop destroying the Rain Forest … which they are doing to clear cropland to raise cattle and grow soybeans to feed them.  The government refused to stop them because this provided a livelihood for their people.  Seems reasonable again if you can believe and trust that the Brazilian government will pass this on to their farmers.  Evidence that the money we send to other countries to help their people and actually does seems as scarce as hen’s teeth.  You decide. Read the WSJ article here. 

Please remember that payments like this must be made each and every year.  It reminds me of the stories of our National Park rangers who have emphasized that we should not feed the bears in these parks.  The results are always tragic.  Once you stop feeding them, the bears become extremely aggressive and raid neighboring houses.

One can only hope that our national political process will take a careful look at this latest bribe offer and consider whether it really solves the problem, or more likely just kicks the can down the road while encouraging even more bribery proposals.

The Cutting Room Floor

If you have read my blogs, articles, and books over the past few decades you no doubt have heard me talk of the amount of material I write that winds up on the cutting room floor. If you are young, the meaning of this phrase may elude you.

Wikipedia reminds us that the term cutting room floor was used in the film industry as a figure of speech referring to unused or scrapped footage that was not included in the finished film. Outside of the film industry, it may refer to any creative work unused in the final product.

In fact, these scraps called offcuts of film are retained in a special cutting room bin and numbered during the editing process in case they are required later. In some cases, they become films themselves. A perfect case in point is the film The American President where the offcuts became the TV series West Wing. The lesson here for all of us should be to never throw away those offcuts.

But we do. Ideas, especially once posed in written form, can emerge triumphant over time, and be deemed prescient, but only if preserved. It is OK to call an idea “ahead of its time” and “unrealistic” only to see it as foundational to our future. Plus, when we revisit these offcuts, we can often see our bias and insensitivities better than if they were simply swept away or under the carpet.

Then, as time goes on, a new group of young energetic and creative individuals asks seemingly obvious questions about why we still do this or that, or why we don’t do the same. The team looks at each other and often one person … an older one … squints looking into the air and says: “Didn’t we (pick one of these words: try, do, fail at, offer …) that in the past? Does anyone remember the reasons?” Yep, this is proof of institutional or corporate memory being lost.

The reason I offer all this is that our industry has been here before on so many ideas that are being bantered about. “Been there, done that, and we have a plaque on the wall to prove it!” But those who know where it is buried have been deemed “dumb old utility guys!” Most of them simply took a package because there wasn’t much reason to hang around. Way too many are sitting around watching the clock just waiting for the right offer: not to stay … to leave.

Underwater Wineries

This idea came across my Amazon Show this morning and frankly, I really had to wonder.  Aging wine under seawater?  Really??

Well, who knew.  Apparently this is showing absolutely stunning results. Read this article from The Drinks Business

My engineering mind of course goes to all the things that can go wrong.  After all, the bottles will become encased in sea growth … and how would you know if any seawater had leaked in … which would result in an expensive bottle return process plus a loss of trust.

But, apparently my engineering concerns are not well founded.

What I would really like to know is whether they have tried barrels rather than bottles.  Didn’t someone remind them wine is not bottled until it is already aged?

Growing Fat

I have to admit that when I first saw this headline I thought it was one more criticism and commentary on the consequences of this COVID pandemic.

But, no, this is about artificially growing meat fat so that we can improve the tastes of all these artificial meats that have emerged.

Fat is the secret ingredient that defines how meat looks, cooks and tastes,” said Max Jamilly, co-founder of Hoxton Farms, a startup that’s aiming to grow animal fat in the lab. Leading alt-protein offerings — the burgers from Impossible Foods and Beyond Meat, for instance — contain plant fats that lack the meaty taste of the real thing. Hoxton’s big idea is to grow animal fat from animal cells, which would avoid the need to rear and slaughter actual animals.  It is too early to pass judgement on the company which has raised $2.7 million in a seed round (pun intended). But the startup is symbolic of the increasing specialization of the alt-protein sector. Incumbents such as Impossible developed much or all of their technology, but a new generation of startups is focusing on specific solutions such as bioreactor technologies, 3D printers and low-cost alternatives to the serums that are used to grow animal cells.

Isn’t it funny that nobody is objecting to the fact that these fats are problems in and of themselves?  Don’t we have clear evidence that these are the fats that our medical profession condemns?

Why are we now so virtuous because we made them without raising or killing animals?

Am I the only one to see this?

 

Thinking Positively about Negatives

Francis Maseres

While the first set of rules for dealing with negative numbers was stated in the 7th century by the Indian mathematician Brahmagupta, it is surprising that in 1758 the British mathematician Francis Maseres claimed that negative numbers “… darken the very whole doctrines of the equations and make dark of the things which are in their nature excessively obvious and simple.”

Maseres and his contemporary, William Friend, took the view that negative numbers did not exist. However, other mathematicians around the same time had decided that negative numbers could be used as long as they had been eliminated during the calculations where they appeared.

It was not until the 19th century when British mathematicians like De Morgan, Peacock, and others, began investigating the ‘laws of arithmetic’ in terms of logical definitions that the problem of negative numbers was finally sorted out.

Against that backdrop, it should come as no surprise that negative interest rates showing up now in Europe are met with surprise. Yet, they simply reflect that invisible-hand governed by the laws of supply-and-demand. If there is too much money seeking a place, then you will have to pay people to take it!!

As I read about green hydrogen, I am tempted to recoil at anyone using solar this wastefully … but if I think about the negatives positively, it simply becomes an active agent in the energy portfolio when the use in this way becomes a least-cost or most expedient storage medium. Once again, that invisible hand is at work.

However, we humans have a tough time thinking about negatives positively. It is almost cultural to think of a negative number as some sort of failure. Negative numbers in any management reporting system seem like losses.

Maybe not.