Economics in One Lesson

Ok, first off, Dan says I should really credit my brother-in-law, Darrell, for bringing into our house some thought provoking testimony (see last post). So, thank you Darrell!

Next, you may be interested in chapter 4 of this book, Economics in One Lesson by Henry Hazlitt. This was originally published in 1946, and not much has changed. Chapter 4 is great! http://www.fee.org/library/books/economics.asp#4 is the link. It's titled, "Public Works Mean Taxes." It'll help you form a whole new look at the jobs and products that could have been created if the government hadn't intervened first. Think, "Iowa Rainforest" for example. Whew, good thing that died.

Happy Reading!

Econ 101

Dan brought home an interesting "article." Well, it's not so much an article as it is a "Testimony of Michael W. Masters, Managing Member/Portfolio Manager, Masters Capital Management, LLC before the Committee on Homeland Security and Governmental Affairs, United States Senate, May 20, 2008" Wow, that's a mouthful!

The basic thesis, I would say, is that a group of institutional investors are driving up the costs of oil, food, etc, in the commodities futures markets. Masters shows the history and specifically the last five years of these "Index Speculators" and the result of their hoarding. Prices have drastically increased in markets like coffee, corn, wheat, live cattle, lean pork, etc. because of the "Index Speculators" driving up the costs with their insensitivity to price.

Here's just a portion from his testimony - I'm sure you can google him for the .pdf if you want the whole thing:

Let's turn our attention to food prices, which have skyrocketed in the last six months. When asked to explain this dramatic increase, economists' replies typically focus on the diversion of a significant portion of the U.S. corn crop to ethanol production. (see http://www.economist.com/opinion/displaystory.cfm?story_id=10252015 "The End of Cheap Food") What they overlook is the fact that Institutional Investors have purchased over 2 billion bushels of corn futures in the last five years. Right now, Index Speculators have stockpiled enough corn futures to potentially fuel the entire United States ethanol industry at full capacity for a year. (see "Ethanol Reshapes the Corn Market" http://www.ers.usda.gov/AmberWaves/April06/Features/Ethanol.htm ) That's equivalent to producing 5.3 billion gallons of ethanol, which would make America the world's largest ethanol producer. (see "Ethanol Production Could Be Eco-Disaster, Brazil's Critics Say" http://news.nationalgeographic.com/news/2007/02/070208-ethanol.html)

He is asking Congress to take out the loopholes created back in 1936 and regulate the commodities futures markets like they regulate pension funds.

Reading this led me to a unique little book on economics - it's like Econ 101 in less than 100 pages by Richard J. Maybury, entitled, "Whatever Happened to Penny Candy?" It's a great little booklet that summarizes economics and has a variety of resources to continue exploring.

As the dollar continues to weaken, I'm reminded of a quote by Nikolai Lenin, yes, the founder of the Soviet Union: "The best way to destroy the capitalist system is to debase the currency."

Pictures from the Weekend

Now that I'm back where there's high speed internet, I'll give you a little taste of what the kids were able to enjoy over the weekend in Mason City.

Saturday morning was the annual North Iowa Band Festival Parade, and the kids loved it! It was 2 1/2 hours long, but the candy, the floats, there was even stuffed animals that were given away! It was cold, but we all managed to stay warm.

One of the floats was made by a local company called, "Curries" that manufactures steel doors for commercial use. This is their float that is Shrek themed. That dragon is actually coming out of its castle!...Here's Johnny! Yes, that is Johnny Orr. For you kids out there, he was the greatest basketball coach Iowa State University has ever had.
The kids discovered a merry-go-round and had tons of fun. Only old parks have these anymore.
I took these four to the Ice Cream Social at the Music Man Square. This is a museum dedicated to Meredith Wilson, the writer of "The Music Man." We watched a portion of the movie while we ate delicious ("better than Whitey's" according to Moriah) ice cream.

Haley, Guthrie, Brooke and Moriah pose in front of Meredith Wilson.

The weekend included a LOT of pick-up soccer with the next door neighbors. The kids really had fun!

Update on Saturday

Hi -
We're having a pretty good time here in Mason City, as it's Band Festival weekend, which is a big deal around here. Eric and I ran the 4 mile Stu Nevermann Memorial Run this morning. Time: 34:30. It was hard...more mental than physical. But fun, nevertheless.

Then the 2 1/2 hour parade filled with bands and awesome floats. It's quite a production. My dad stayed home, of course, which hopefully did him some good.

I'll post some pictures of our weekend when I get back home to high-speed internet. Until then, it'll be text only.

My dad seems to act like he doesn't have any infectious disease. I hope he recovers quickly and doesn't set himself up for a return, as he's basically running around here like normal.

We're hoping to come back home tomorrow (Sunday). Then I'll probably come back for his follow up appointment later on this week.

Thanks again for your thoughts and prayers!

He's home

My dad got released today with strict orders not to smoke, to take it easy, and take his meds. Well, 1 out of 3 isn't bad, right? He's doing remarkably well! Thanks for your prayers, etc.

Have a great weekend!

the latest

Ok, so I was finally able to talk with the doctor this morning about my dad's condition.

He has pneumonia (bacterial) in his left lung, both upper and lower. She ordered the CT-scan because it was in the left lung, which is apparently pretty uncommon. That showed that he indeed has pneumonia, but it also showed some small spots in both lungs. She said he'd need to have another CT-scan in 3 months or so to see if those spots are growing.

She took him off the IV drip today and he's on oral antibiotics. Looks like he'll be coming home tomorrow. So that's really good! I only hope he doesn't try to overdo it, because tomorrow afternoon is when my brother and his kids come, too, so there will be an entire house full of people, kids running around, the baby screaming, etc. Sounds stressful to me and I don't have any serious illness (ok - I just left myself open for a good return here...like an illness of my brain!).

He needs to go back to the hospital next week (5-7 days from now) to get another chest x-ray. So, I'm hoping to be around for that. We'll probably go back home for a couple of days in between and then come back.

Thanks for thinking of us!
-Linda

Update on Fritz

So by now you have probably heard that the kids and I came up to Masonville to see my dad, who is in the hospital with pneumonia.

The short story: He seems to be doing pretty well. Don't know much. Nurses give out no information! I'm a bit frustrated by that.

The long story: On Tuesday morning, he called his friend, Marge, to cancel card playing, because he wasn't feeling well. In fact, he felt like perhaps he was having a heart attack. Thankfully, she called some neighbors who came right away, helped Fritz gather some belongings, and drove him immediately to the E.R. They admitted him...of course, they ran many tests, ruled out the heart attack, and diagnosed him with pneumonia.

Side note - Did Eric or I know about any of this yet? No.

Continuing: Tuesday was a beautiful day. We had a gazillion things going on, including Brooke's final soccer game of the season. When we arrived home around 7:45, we had a strange message on the answering machine from Marge. I called her. She informed me my dad was hospitalized.

Still continuing: It took me about four hours to get everything put together this morning, and after about a 3 1/2 hour trip, we got here by 4:45, in time to feed Case, and then rush through Culver's drive thru (not the Culver mentioned elsewhere in this blog, ack), and got to the hospital at 5:30, in time to eat together with my dad. He looked a little grayish, but was talking. Glad we came. I still know nothing. He had a CT-scan today, but don't know the results yet, so I'm planning on ambushing the doctor in the morning to find out what's going on...when will he get out, etc? I'll let you know.

So thanks all for your prayers and concerns. We're doing pretty well. Tired! Looking forward to hopefully being able to sleep!