Welcome to week 320! The articles below caught my attention this week. What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********). Article titles preceded by [SR] require a subscription to be read in their entirety, although complete articles may be found by an Internet title search.
If you have questions or comments, please send them.
(30 May 2018): “Are avocados toast? California farmers bet on what we’ll be eating in 2050” The Guardian (originally published in Grist)
——–For farmers “planting trees they hope will bear fruit 25 years from now,” climate change projections must be considered now. California, which produces “two-thirds of the fruits and nuts for the United States” and is the locus for a wine industry with grapevines that “bear abundant fruit for about 25 years . . . but can keep going for hundreds of years,” is a state that is “highly sensitive to climate change.” Experienced farmers like Chris Sayer, whose Ventura land has been in the family for 130 years, make crop decisions in light of three risks: climate, market, and execution. Reflection on those risks influence whether an orchard is replaced with another orchard, an annual crop, or turned into houses.
********The article touches upon a wide variety of matters that farmers must take into consideration as a matter of course. What especially struck me was Chris Sayer’s discussion of execution risk, which involved learning the ins and outs of growing a crop, especially a new one, as well as making market connections.
(30 May 2018): [SR] “Rural America Has Jobs. Now It Just Needs Housing” The Wall Street Journal
——–Austin Steinbach was all set to move to the rural farming town of Columbus, Nebraska “for a job that offered benefits, a $500 signing bonus and a higher wage. But the 25-year-old father of two had to turn it down after a week-long search with his wife for a home failed to turn up anything livable or in their price range. . . . Instead, Mr. Steinbach will stay in Creston, Iowa, where he supports his family earning $2 less an hour power-washing farm equipment and has no benefits.” Finding affordable and livable housing is a significant problem. “Fewer homes are being built per household than at almost any time in U.S. history, and it is even worse in rural communities.” Developers find it more expensive to build there and “Rural areas are also seeing their populations stagnate or decline as younger people opt for urban living, adding to the gamble involved in speculative building.” These factors make it more challenging to attract new businesses to rural areas.
********This is not a new problem. The Atlantic published a nice piece on the subject in January 2015. This article clearly relates to Chris Sayer’s options as described in the avocados article above.
(31 May 2018): [SR] “Tech’s Titans Tiptoe Toward Monopoly” The Wall Street Journal
********This article is hard to summarize. It considers Amazon, Apple, Facebook, and Google, and asks us to consider a day when they might be ripe for regulatory action, such as that placed upon the likes of once-dominant firms like AT&T, Standard Oil, and Western Union. Interestingly, of the four tech giants, “Apple is considered more vulnerable to competitive disruption, despite the fact that it tops the tech world in revenue, profit and market capitalization.” Regarding these firms, researcher Glen Weyl notes, “Companies go one of two ways—some are in areas where declining returns to scale set in and they get tamed by market processes . . . And other companies get tamed by getting turned into a public utility. And until they are, they reap extortionate profits.”
(1 June 2018): “Why Inconsistent Income Needs Consistent Planning” The New York Times
——–“Professional athletes, Hollywood players, even tech entrepreneurs whose company rises to a billion-dollar valuation would not seem to need wealth planning.” But what they share “with many others is an inconsistent income. It comes in bulk early in their career or later in chunks that are unpredictable.” Joe McLean, the managing partner of Intersect Capital “and a former professional basketball player in Europe, has drafted a list of 50 reasons that professional athletes and entrepreneurs stay wealthy.” McLean realizes that it can be heard advising someone who has already “beat the odds” by becoming successful where most others fail. As a result, he tends to focus on money basics, such as paying off debt, attending to credit scores, and knowing who to trust.
********As work becomes more gig like, inconsistent income will be an increasingly important factor to consider, so these issues are not only ones to be considered by professional athletes in the prime of their careers. Here is McLean’s list.
********While we are on the subject of financial advice, here is something relating to charitable giving. The subject is “effective altruism” in the article “Faith, hope and clarity” The Economist.
May you have a good week! Bruce