Monthly Archives: September 2011

Edamame Economics

So I’m starting to reap the fruits of my garden. Ok, mostly the vegetables of my garden, as I didn’t plant any fruits other than tomatoes, which can legally be classified as a vegetable. In any event, the harvest is here. I’m planting a few late season lettuces and carrots, but most everything is finished.

One of the arguments for starting a garden is quality produce at low cost. How does this actually play out?

I planted carrots, lettuce, edamame, leeks, green beans, green onions, tomatoes, and peppers. We had a ridiculously cold summer, and everything was in a raised bed. Not counting the beds, which were a capital investment, of course, I spent about $30 on the seeds and plants for the veggies. I haven’t properly accounted for the watering, but we used a soaker hose, and didn’t run it more than we would have normally.

The harvest thus far:

We got lettuce every week for about 2 months. So, given that we would have bought 1-2 heads a week, and since this is organic produce, we’ll say that was about $22 worth of lettuce we didn’t buy. We got one meals worth of peas, plus enough for about 4 jars of baby food. The eating peas were about $1.00 worth, and the baby food was about $3.50. The same with the green beans, although we got 2 meals worth of those, and twice as much baby food, so we’ll call that $10 for the green beans. The edamame I just harvested, and it was 20 oz, which would run me about $5 from Amazon Fresh. The peppers didn’t fruit, although the plants grew, and I’m not sure what happened to the leeks or the green onions — I don’t see them at all. The tomatoes were my favorite thus far, and yielded 6 jars of tomato sauce, at around $2.50 per jar, plus 2 tomato sandwiches that are otherwise priceless, since I can’t make them with the tomatoes in the store. So call that $20 worth for the tomatoes. The carrots I just pulled, but there looks to be about 3 pounds, so that’s 2 meals and about 20 jars of baby food. Call that $25 in carrots

So to this point, the $30 investment has yielded $86.50 in produce. Not a bad return, if I do say so myself. Next season I can start more from seed, and double the number of plants that I have in the best producers, and manage to harvest things before the dry up, since I won’t be busy having a baby at the same time. 🙂  I would point out that none of that accounts for my time, which is worth a bit, but that should be balanced out by the utility I get from both the actual gardening, plus knowing exactly where the first foods I feed my new baby are coming from. So, I say it’s a winner!

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Non-market production

So as part of the staying at home part of being a stay at home economist, I decided to start a vegetable garden. Gardening has been a part of my life since I was little girl — my grandfather had a 1/2 acre garden in the back of his house, and the summers that I stayed with them were filled with nights of shelling peas. I always thought I would garden, but living in Texas made it hard, as I’m not an especially early riser, and it’s usually 90 degrees by 10 a.m. in the summer, or worse.

So when I moved to Seattle, I decided to get serious about it. With the addition of Professor X to the family, I also wanted him to taste food as I remember it, delicious, juicy, and flavorful — not mealy and vaguely bland as most mass produced vegetables. So I planted a smattering of items that were deemed suitable for the climate. Since we had a cold summer, the lettuce did the best, while the tomatoes are just starting to ripen, and the peppers are nowhere to be found. And the yields would make a Monsanto CEO laugh. But at least the little one will be able to have a taste of the bounty when he starts to eat solid food, thanks to a chest freezer and the miracle of electricity.

Tomatoes

 

Peas

So far the investment far outstrips the return, but that is only if you don’t include the utility I gained from eating a tomato that tasted like a tomato instead of juice laden cardboard. With that addition, it was well worth it.

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Essays on the Great Depression – Introduction

In the introduction to his book, Ben Bernanke makes the argument that monetary factors, specifically the gold standard that many countries held two between the first and second World Wars, and the policies that resulted from this choice played an important role in the Great Depression. He makes the point that countries that left the gold standard were more easily able to adjust to changes in output and prices than those that didn’t.

Another point he makes that due to the gold standard, there can be actually multiple possible paths an economy can take (multiple equilibria). The equilibrium point can be one of flexibility and stability, or it can be one of pessimism and large fluctuations. Without belaboring the equations – the major difference between the different points is the confidence of both consumers and investors. When there is high confidence, things are well, and when there is low confidence, things are poor.  Bernanke then presents evidence to support the point that monetary contractions, thought under some theories to have no effect of import on an economy, actually did contribute to the extent of the Great Depression. This is evidence of the non-neutrality of money. This concept is a highlight of the Keynesian school, anathema to the neoclassicists, and as usual, no one is really sure where the Austrians stand on it.

The next portion of the introduction is dedicated to the failures on the Aggregate Supply side of the situation. He lists these as two – debt deflation and the slow reaction of nominal wages to adjust to price changes. Sticky wages, as they are called, are often the bane of an economy’s existence. While theory would suggest that wages should be able to fluctuate as rapidly as prices, in reality this never happens. Contractual obligations, political pressure, and habit will prevent wages from dropping when prices drop; and pressure to maintain profits will prevent them from rising quickly. A final point addresses the idea that wealth redistribution can have real negative consequences.

So what does this mean for us? First, any notion of a return to the gold standard should be squashed on first sight. Theory and evidence shows that a gold standard economy is not a nimble economy, leaving aside the reality that modern economies have far outstripped the world’s ability to supply such gold. Second, it would be great if we could come up with some way to be more flexible with wages. One way would be to encourage more part-time work, but that is difficult in this country with our aged employer-based health care system. Too many people are tied to jobs that they aren’t optimally productive at, or would be willing to work for less (in terms of hours), but can’t because they can’t pay their health care bills if they do so. This lack of flexibility in the economy is one that should be a sticking point for those who claim that the economic health of the country is foremost, but is sadly lost in partisan concerns about the intrusion of government. I’m sure we will get to that down the road.

 So there is the introduction. The next part discusses financial markets – we’ll slog through that one and hopefully get there before Professor X learns to roll over.

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Come on a journey with me….

My days are currently spent being quite domestic. While my Pumpkin is away at school with his dad, Professor X and I are holding down the home fort. As of today, he is about 6.5 weeks old. Current activities include sleeping, watching the ceiling, spitting up on Mom, and learning to smile to make it all better. Since sleeping is one of his pasttimes, I again have the mental energy to tackle reading some of the driest text ever put to paper.

Over the next unspecified time (not willing to commit to a month, year, etc. You’ll get it when I have it) I will delve into those texts of economics that everyone always says “Oh, I’ve been meaning to read that” while in actuality they are watching the latest episode of American Idol. However, since division of labor is one of the hallmarks of an advanced economy, and I’m trying to limit TV for Professor X, I will throw myself on them. If you have any suggestions of topics or readings you want to see, feel free to leave them in comments.

We’ll start with “Essays on the Great Depression” by Ben Bernanke. A timely and important book, I hope. I’ll summarize and then do my best to apply to the current situation, as best as I can.   Hopefully it will be enjoyable to all.

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