Truckers and Food Prices

Freakonomics blog talks about the role truckers have in the American economy, from the author of Trucking Nation, a book I am soon going to read.


From the article

Q How have truckers’ attitudes toward their jobs affected food prices?

A The key connection between trucker culture and food costs in the mid-20th century was the deep-seated resistance of many independent truckers to labor unions. Most truckers who hauled farm products, rather than general freight, were not members of the Teamsters’ union — even though the International Brotherhood of Teamsters was the nation’s single largest and most powerful union from the 1950’s into the 1970’s. This was in part a product of truckers’ sense of independence — as Rubber Duck played by Kris Kristofferson in the 1978 movie Convoy declares, “The Teamsters ain’t my damn union!” But this ferocious anti-union stance was also encouraged by federal policies that exempted farm and food truckers from the regulatory oversight of the Interstate Commerce Commission.

Unlike the regulated, consolidated general freight sector, farm and food trucking was largely carried out by unregulated small firms. These small companies, often owned and operated by a single individual, were extremely difficult for the Teamsters to organize. In the decades from the 1930’s through the 1970’s, agribusiness firms relied on these non-union truckers to dramatically transform the way food moved from farm to fork, lowering the prices of key foods such as beef, milk, and packaged produce for supermarket shoppers.

In the case of milk, for instance, milk processors relied on non-union truckers to deliver cheap milk in paper cartons and plastic jugs directly to supermarket loading docks beginning in the 1950’s, rather than deliver milk in glass bottles to consumers’ doorsteps via Teamster milkmen as had been done since the late 19th century.

So independent truckers’ willingness to perform sweated labor without union representation (and the high wages and pension benefits that went along with membership) played a large part, I think, in the decline of food costs as a portion of the average American family’s budget in the second half of the 20th century.

They are just figuring this out?

Hat tip to my fellow researchers

Could This Happen Here?

An Amazon book distributor closes shop on its 55,000 SF warehouse in England and abandons 5 million books. I guess it was just cheaper to give the books away rather than move them and try to sell them.

Used books seem like a pretty low margin item, but why didn't the landlord try to sell them to try to recoup some losses? Or sell the whole lot to another bookseller?

This sets a scary scenario of firms just going out of business and not bothering to clean up after themselves, leaving the landlords with the abandoned inventory and the costs associated with its disposal.

The Recession In Perspective

Neat little tool from the Minneapolis Federal Reserve Bank. Basically it allows you to compare various economic statistics for past recessions.

In terms of employment, it looks like the current recession is only trumped by the 1948, 1953, 1957 and the 1961 recessions. The recessions from the mid 1960's onward look pretty tame by comparison. I wonder what the fundamental difference between these two time periods could be. Perhaps it is a greater reliance on agriculture and manufacturing (goods production) or less action taken by the Fed in those early years. Maybe it was the removal of the gold standard in 1973 that allowed more freedom in dealing with monetary problems that made latter recessions milder by comparison. Who knows?

The somewhat disheartening thing is that most recessions have rebounded or flattened out by the 12th month or so. Just on the basis of employment, the current recession looks on par with the 1961 recession, which did not begin to recover until the 18th month.

I suppose the problem with this reasoning is that we don't know if we ended a recession yet, do we? I mean it took the NBER 12 months to announce that we were in a recession, we might be out of the woods already and not even know it.

Yeah, I am not convinced either.

The Crisis of Credit Visualized - Part 2

Part Deux:

I.E. Industrial's Absorption of Spec is Immediate Concern

The article for the Ca Real Estate Journal was finally published.

Here is the link

A couple of thoughts:

1. It is hard work to be a journalist. Kari interviewed at least 7 people and combined published information from at least 4 published sources for information for this piece. That is a lot of networking, coordinating and communicating between many different entities.
I wish I could do that for my monthly pieces, it would definitely take the loftiness down a notch or two and I would definitely meet more people.

2. Be careful what you say. The reason why I am quoted so much in this article is that I sent a lot of information. I debated what to send and I am always a little bit nervous in how I will sound and be perceived in an article.
I guess I am just sensitive to trying to come off as smart and insightful. When I read the pieces I always feel like I came off as bumbling incoherently through the piece. In comparison, I do not have as many insightful zingers or sound bytes because I did not focus my message to one or two carefully worded talking points.

Things to work on in the future I suppose.

The Crisis of Credit Visualized - Part 1

Wow. If you did not know by now how everything fell apart in the housing bust, this movie sums it up nicely.

As the problems get more complex, at least there are people out there willing to simplify things. And more tools exist to explain this crisis than the dot com bust.