Beeronomics: Ingredients and Quality

I had a fascinating conversation with a brewer recently about beer ingredients. It started with a talk about a possible impending shortage. This time in malted barley as, he claims, the ethanol market and subsidization is making more and more acreage go to corn. Plus, he said, growing barley for malting is risky because if the quality is not there, it is no good for malting and the price of non-malting barley is very low. There is also continuing concern about hops as well as the acreage of hops apparently continues to shrink. All this suggests that we may be paying even more for beer in the future.

But what really interested me was the claim that we should also expect the average quality of ingredients to suffer. Makes sense: with smaller amounts of barley and hops, even marginal crops will make their way into beers that they might not have before. Apparently there is also a pecking order for ingredients whereby bigger brewers get the best stuff and smaller brewers get ingredients of lesser quality. [That means home brewers are getting the real crappy stuff, I said, and he concurred] I have never noticed quality differences from smaller breweries, so does this means that they are especially good at overcoming poor quality ingredients to produce great beer?? Any brewers out there like to refute this assertion or concur with it?

Switching gears, because it is Friday and because where else would you turn for beer reviews than an economist, Beervana? Ha! I don't know where Full Sail is in the pecking order (probably pretty high) but either way, John Harris continues to produce remarkable beers. His latest, Keelhauler, is a Scottish ale meaning a malt-forward beer. I don't tend to like these very much as I am a bit of an incorrigible hop-head, but John's is, predictably, magnificent. It retains the traditional rich malty body but is nicely rounded with hops giving it a delightful scent and making it a more flavorful beer than most. Kudos. The spring season also brings out my favorite of the seasonals: Full-Sail's Prodigal Sun, new faves Ninkasi's Spring Reign and Deschutes' Red Chair. All three are worth the price of admission a few times over. Get ye some.

Making the pub rounds: Deschutes Bitter (on cask at the PDX pub), Fish Organic IPA (on cask at Belmont Station), Ninkasi Tricerahops (on cask at Bailey's Taproom) and how about an old classic served Real Ale style: Deschutes Mirror Pond (on cask at Horse Brass). Do you see a pattern? Yes, Portland needs more casks...please!

Cashing Out During the Housing Bubble

From the Calculated Risk blog, a picture worth a thousand words, so I'll shut up:

Economist's Notebook: Randomized Experiments

Economics is a social science, meaning most of what we study cannot be replicated in a laboratory. We have to find causal links in data that are contaminated by lots of real-world complication and interconnectedness. We have become exceedingly good at doing so, but our conclusions will never rise to the level of "truth." We can propose hypotheses and fail to falsify them, but generally no more.

Often we have to deal with the fact that we don't have the counter-factual. Case in point: how will we know how effective federal fiscal stimulus was? Answer: we won't. We will never know what would have happened in the absence of federal fiscal stimulus.

Randomized experiments therefore are the holy grail of many economists. They are not laboratory experiments (meaning you still can't control all environmental variables), but at least you can create a counter-factual. Often we try to use real world data to estimate treatment and control groups but they are not random. For example, we know that college graduates make a lot more money that those with only a high school diploma on average but does this tell us the extra income the education itself commands? No, because the population of college graduate is a non-random sample of people in general: they are probably richer, better students, more highly motivated, etc. So using average differences will bias the inference of the value of the college education because part of this is due to self-selection into college.

Randomization then, allows the researcher to assume that the people who are effected by a variable (a college education say) are no different than those that don't. The problem in economics (like medicine) is that we are often talking about policies that affect peoples lives and welfare and randomizing treatment for the purposes of study is of questionable ethics, and more importantly for economics, is politically untenable.

It is happening more and more, however, as economic researchers get more involved in policy design and roll-out. It is often possible to roll-out a new policy in phases and in so doing randomize treatment and control groups, but it is still hard and as the control groups usually end up getting treated eventually, it gives you only a short-term view.

I say all this because yesterday The Oregonian published a fascinating article on a unique randomization event that happened in Oregon by Don Colburn. The essence is that Oregon ran short of money and randomly picked from a population a sub-group who got Medicaid health insurance. This allows for a careful study of how insurance affects behavior. Turns out in predictable ways, but the real value is in estimating the marginal behavior: e.g., by how much do doctor and hospital visits decline when the patient has to pay, how much is spent on medical care and how do health outcomes differ in relation to the first two? The results will have huge utility to those contemplating wholesale changes to our nation's health system.

State Tax Revenue

From the Rockefeller Institute via the Wall Street Journal:



Ouch.

Trade and the Oregon Economy

Short on time this AM. From The Oregonian: Oregon Exports Drop. From the US Government (ITA):

"Export-supported jobs linked to manufacturing account for an estimated 7.6 percent of Oregon's total private-sector employment, the fifth highest figure among the 50 states. Over one-fifth (20.5 percent) of all manufacturing workers in Oregon depend on exports for their jobs (2006 data are the latest available.)"

As I have said before, Oregon is badly battered by the national recession, but gets a doubly whammy from the huge global downturn in trade.

From the WTO:

Quarterly world export developments, 2005-08 (2005Q1=100, in current US dollars)



Note: The Oregonian has some nice graphics but they are not on the OregonLive website.

Paradox of Thrift: Update

This graph from the BEA shows the US personal savings rate since Q1 of 2000. From it you can clearly see both the sharp decline in savings rates in the US in the 2005-2008 period and the sudden and strong retrenchment. This is what we speak of when we speak of the Paradox of Thrift. But what does this look like from an historical perspective? Here is the savings rate since 1947 (but before this recent uptick).



During most of the second half of the 20th century we were saving 8 to 10 percent of our disposable income. We are still pretty far from that, but it is the recent sudden reversal that has helped fuel this recessionary cycle.

Not-For-Profit Newspapers?

Congressman Ben Cardin (D - Maryland) has introduced the Newspaper Revitalization Act to allow newspapers to become 501(c)3 non-profit corporations. He explains his motivations in this op-ed in the Washington Post.

This not-for-profit model is something I have thought a lot about before, and though I really don't know if it will work, I think it is worth a try. This bill confuses me a little bit, however. For starters, I am not sure why an existing newspaper cannot become a 501(c)3 corporation already, one of the categories is education and it seems pretty easy to argue that newspapers are educational. The other thing that confuses me is that political endorsements would be prohibited, but "they would be able to editorialize and take positions on issues affecting their communities." This seems like a hair-splitting argument. For instance, if the Sam Adams lies came out before the election, could The Oregonian editorialize that he should not get elected? Could it say it would be better to vote for the opponent?

I have explained the economics of the newspapers role in our democracy before - it is a public good, and a vital one, and thus the public has an interest in supporting it. Others have pointed out that it might be hard for newspapers to be a watchdog if they are beholden to the pubic purse controlled by politicians. This might be true, when Ken Tomlinson became the head of the Corp for Public Broadcasting, NPR was threatened. Though in the end NPR does not seem to have suffered too badly. This economics argument is distinct from the economics of the newspaper business by the way - that is another story.

So is non-profit status the answer? This legislation is designed to community newspapers not big city dailies, and yet it is the big city dailies that I am worried about. Could an OPB-like model of memberships, foundation and corporate support work for such large newspapers? I don't know, what are your thoughts?

Economist's Notebook: Inferior Goods?

From the Portland Business Journal comes this little tidbit on seven industries that are thriving. What does well in an economic downturn? - inferior goods, things we consume more of as a proportion of our income as incomes decrease. Here is the list:

• Vehicle maintenance. Auto-repair shops increased sales an average of 2.4 percent over the past 12 months. In contrast, car dealers saw their sales drop 9.7 percent in the same period.
• Home remodeling. Sales rose 4.6 percent in the past year for contractors such as electricians, plumbers and heating specialists. On the flip side, home builders saw their sales fall at least 5 percent in the same period.
• Food stores. Grocery stores’ average sales increased 6.7 percent in the past year, while sit-down restaurants saw sales fall 3.9 percent.
• Specialty schools. In 24 months, technical and trade schools had top-line revenue growth of 7.8 percent, up from 5.9 percent in 2007.
• Dentists. The average dentists’ office saw sales increase 7 percent in the past year, up from 5 percent in 2007.
• Certified public accountants. The average revenue at accounting firms grew 10.2 percent in the past year, making the accounting industry among the top 20 sectors in the country by sales growth.
• Personal-care services. Skin-care specialists, nail salons, barber shops and hair salons saw average sales grow 4.5 percent in the past year.

Now some of these make sense, you fix your car rather than replace it, ditto for your house (though the ability to extract equity has diminished), you eat out less, and buy more food in the store, and you look for new skills in a tight job market. But dentists? I guess CPAs are good at making sure you don't pay too much taxes but this is a little bit of a surprise to me. Finally, I was just discussing over the weekend with my neighbor whether to expect salons to be doing well - they are good substitutes for vacations and thus relatively small treats that we indulge in more in tight economic times (her conjecture), but they are also an expensive luxury items, I would have thought. I guess she was right. People like a little pampering in a stressed out world.

Anything surprise you? Can you explain the dentists?

UPDATE: A student in my class said that "This American Life" covered the dentist thing - apparently it has something to do with grinding teeth from stress. I guess I see the allure of a spa treatment.

Do Unions Hurt Business Performance?

One of the recurring themes of the 'problems with Detroit' narrative is that labor became too powerful, won too many costly concessions (e.g. the jobs bank) and these concessions are now crippling and are responsible for a big part of the troubles of America's auto companies.

A rather compelling case can be made that in this specific instance the rigidity that more and more complex union labor contracts begat hurt a company in crisis (in my view, a less compelling case can be made that it was labor that caused the crisis). But it begs the question, is this true in general?

Here is an abstract from a new NBER working paper by David Lee and Alexandre Mas:

We estimate the effect of new unionization on firms' equity value over the 1961-1999 period using a newly assembled sample of National Labor Relations Board (NLRB) representation elections matched to stock market data. Event-study estimates show an average union effect on the equity value of the firm equivalent to a cost of at least $40,500 per unionized worker. At the same time, point estimates from a regression-discontinuity design -- comparing the stock market impact of close union election wins to close losses -- are considerably smaller and close to zero. We find a negative relationship between the cumulative abnormal returns and the vote share in support of the union, allowing us to reconcile these seemingly contradictory findings. Using the magnitudes from the analysis, we calibrate a structural "median voter" model of endogenous union determination in order to conduct counterfactual policy simulations of policies that would marginally increase the ease of unionization.

We all know that stock market performance is based on many things, however a unionized work force appears to hurt it on average, but have little effect on the margin. This is probably explained by the fact that when you are using close elections, there is little difference in the performance of firms because there is not a huge discrepancy in what the union wants and what the firm is offering. On average though, these differences might be large - and especially so through time. A very small difference in growth rates of unionized versus non unionized firms can lead to large differences over time.

A caution: this says nothing about whether such differences are welfare improving. It may be that even with slower firm growth, such a trade off is welfare improving if unionization is beneficial to workers.

US Unemployment Hits 8.9%

Is this good news?  From the BLS:

Nonfarm payroll employment continued to decline in April (-539,000), and th unemployment rate rose from 8.5 to 8.9 percent. Since the recession began in December 2007, 5.7 million jobs have been lost. In April, job losses were large and widespread across most private-sector industries. Overall, private-sector employment fell by 611,000.

The unemployment rate is rising and over half a million jobs were lost in one month, how can it be?  Well, it appears that there is a clear trend of slowing job losses and it seems that this trend might be more robust than was forecasted - many economists expected to see over 600K this month.  Job losses now have slowed for three months in a row: 741K in Jan, 681K in Feb and 699K in March (okay, so not exactly monotonic, but nevertheless a pretty clear trend).  And since (as I have blogged about before) unemployment is one of the last things that recovers so this early trend could actually signal an economy beginning to recover.

As you may have read elsewhere, in the past when the job losses begin to slow down, the recession is generally over soon after.  [The usual caveat here, positive GDP growth means we are starting to recover, not back to pre recession economic activity - that is going to take years]  Here is a nice graphic from The New York Times illustrating this point:



So keep these little tidbits of information in mind when you vote in the new poll. So far my erudite readers have been pretty good on unemployment, let's see how good you are with recession dating.

New Poll

Okay, new poll. Which quarter will be the first to see positive GDP growth and thus signal the end of the recession? Yes, I know it is not exactly the same thing, but for the purposes of this poll, positive GDP growth means recession over. And I have finally learned my lesson and created a category for all the uber-pessimists out there. You have one month.

Beeronomics: A Story of Honest Pints and Poor Pours

In which the Beervana blogger and Honest Pint Project mastermind is told by his economist friend (guru really) that he should not be upset at this pathetic pour at the Deschutes Portland Pub because it is a full information game - the glass is 20oz. but the pour is about, what, 16?!?  The point is you know it is a lousy pour.  And there is a solution: tip not, says I, though our server is great - but she needs to be on top of the bartender who is lazy.  After a nice beer, however, everyone relaxes, the server is tipped well and the sun breaks through the clouds on a wonderful spring day in Portland.

And the beer is fantastic - XPA on cask.  Wow.  Go now.  Just ask them to give you a full pour.

Beeronomics: Is Craft Beer Recession Proof After All?

I stumbled across this little tidbit when I was looking for some coverage of Boston Brewing's Q1 report (the essence is business is down at Boston Brewing about 5%).  Here is the interesting passage from the Patriot Ledger of Quincy MA:

Craft beer sales appear to be holding up during the recession, boosted by customers strong demographics.

Throughout the U.S. beer industry, overall shipments from brewers have declined 3 percent year-to-date compared with the previous year, said Benj Steinman, president of the trade publication Beer Marketer’s Insights. Import shipments have declined 19.3 percent, with domestic shipments down 1.8 percent.

For the 52 weeks that ended on March 9, craft beer sales rose 12.6 percent from the previous 52-week period, compared with 3 percent for all beer, according to data from market researchers the Nielsen Company.

What is particularly interesting to me is that I had assumed that imports were probably a decent proxy for craft beer sales and I knew sales of imports have been down.  But in reality it seems that consumers are very loyal to craft beers and not shifting to macro from craft.  In economics terms the cross-price elasticity of craft and macro brews appears to be very inelastic, or that beer drinker do not think of macro lagers as a good substitute for micro brews.

This is good news, I wonder if Oregon brewers are experiencing the same thing?  I hear through the grape vine that things have been tough, perhaps this is due to inventory depletion on the part of distributors and retailers (something that would explain the seeming 3 percent down 3 percent up contradiction in the second and third paragraph).  If this is the case, inventory depletions rather than sales, we might see a lot of new orders coming in soon as the inventories run out.

But Boston Brewing's recent struggle also suggests that within craft beer the environment is getting more and more competitive and they need to continue to fight off the challenge of all of the new 'it' beers that come along.  As I mentioned a few days ago, I think this is precisely why Deschutes is pushing its specialty releases hard.

This is also good news for my brother, who is finishing his master brewer certificate program soon and is looking for work.  He has offers in hand, but nothing yet from Oregon.  Anyone hiring out there?

Vampires Need Economists and Governments

Reader Stacy Brock sent me this link about Vampires.  The essence is that Vampires (like virulent viruses) have in them the seeds of their own destruction.  To wit: they tend to kill the thing they need to live.

Apparently some physicists with too much time on their hands have 'proven' this to be true.  Whew - one less thing to have to worry about (but don't worry, there are many more, see Bill Bryson's A Short History of Nearly Everything if you find yourself a wee bit too optimistic about the human race these days).  

An Economist chimes in to say that models of vampire self-destruction fail to take into account the fact that humans will likely resist annihilation by doing things such as picking up wooden stakes and doing nasty things with them.

The mathematicians interject the fact that vampires would not be stupid enough to deplete their entire food supply.  But would they?  I think Jared Diamond has a story to tell them about Easter Island.  Without a central form of government it is unlikely that individual vampires would self-regulate and pretty soon, no humans.

But I think they have all missed the point.  Clearly the vampires face a commons problem: the population of non-vampires is a common property resource and the individual incentive of a single vampire is to 'over-graze,' shall we say.  But don't despair vampires! Economists have long understood the commons problems and have designed regulatory structures to deal with them.  Just like the regulation of fisheries, vampires, through centralized control and authority, can limit the depletion of this renewable resource - heck they can even start to 'farm-raise' humans to keep the population up.

So what vampires really need are a bunch of economists and a good government.  The economist part is easy, just bite a few of us, the government part is a bit trickier - especially since it all has to be done in the dark.  But vampires are intelligent, handsome and cultured (hey, I have seen "Interview With the Vampire," I know of what I speak).  So, thanks to us economists the future of the vampire is secure.  You are welcome vampires.

Unfortunately, I cannot say the same for Zombies who show no proclivity for cooperation and for whom the prospect of a well-functioning bureaucracy is decidedly dim.  [Perhaps I underestimate them, because apparently they have their own banking system]  So worry not for the vampires, they are in good shape, but shed a tear for the poor zombie, who like the Easter Islander, are doomed to extinction.

Economist's Notebook: The Economics of Charitable Giving

My drive to Corvallis has suddenly gotten much longer - it is pledge drive time at OPB. This, however, does get an economist thinking - why do people give charitably?

We generally assume people are altruistic - they like to see the poor being helped, for example - but the first best is always for the poor to be helped, but for me to keep my money. In general for public goods we call this the free-rider problem, since I can get just as much OPB whether I contribute or not there is no reason for me to contribute. Yet I, and many others, do. Well, perhaps it is because we actually get satisfaction from the act itself - economists call this the 'warm-glow' motive - in which case we are actually making ourselves happier by contributing.

But is it all true this way that economists think about these decisions? Well, the emerging field of 'neuro-economics' hopes to better understand such things by watching brain function of people in the process of making such decision through the use of functional MRI. One such person working in this field is Bill Harbaugh of the U of Oregon, who has looked at charitable giving and has found:

Consistent with pure altruism, we find that even mandatory, tax-like transfers to a charity elicit neural activity in areas linked to reward processing. Moreover, neural responses to the charity's financial gains predict voluntary giving. However, consistent with warm glow, neural activity further increases when people make transfers voluntarily. Both pure altruism and warm-glow motives appear to determine the hedonic consequences of financial transfers to the public good.

So, it appears that it is a general part of our preferences: we may be hard wired to get pleasure from charitable acts.

Now there are a few caveats: functional MRI is looking only at one type of brain function and is pretty crude relative to the sophistication of the brain. So, just because we see stimulus in certain areas of the brain it is not yet clear that we can generalize this into preferences the way that economists think of them. However, that said, the results suggest that you are happier if you give.

Given this result we might want to ask: what is altruism? Or, it is really altruism if we get pure pleasure from it?

Either way, OPB is waiting for your call...

Now This is Getting Ridiculous: More Journamalism at The O

Let's see, the victims of Sam Adams careless driving, who have a real interest in his condition at the time, the Portland Police, who are trained to spot signs of intoxication, and a professional reporter, who clearly has higher ethical standards than The Oregonian, all say Adams showed no signs of having been under the influence of alcohol when he had is fender-bender. So what does The Oregonian report? Two bystanders who say he 'smelled of beer.' Is this the lede of an objective journalist and news organization? No. [Note that The O has changed the headline on the web site - the print headline read something like "Second Bystander Claims Adams Showed Signs of Intoxication' - which shows that even they may realize objectivity has been lost]

The Oregonian is allowing its (misguided, but that is another point) editorial opinions to color its journalism, and is at risk of loosing credibility. There is a term for this type of coverage: yellow journalism.

As if this was not enough, Anna Griffin decides this is a good opportunity to essentially reprint an old column suggesting that since Adams is not perfect he risks destroying the city! And she has the temerity to assert that the timing of this column has nothing to do with the accident - yea right. At least she could write something original.

I do think an effective city government is a good thing (as Jacob Grier has made me admit) - and this constant attempt to undermine Adams's effectiveness is destructive to the city. The Oregonian is so desperate to show that they were right that Adams cannot be an effective mayor, that they are actively trying to make it so. It is a disgrace. I am a staunch defender of the fourth estate and have even suggested publicly subsidizing reporting, but my defense comes from the vital role journalism plays in our democracy, and with this privileged position comes responsibility to journalistic ethics. The Oregonian is failing in that regard.

So, hey Oregonian, how about reporting on what the city, under Adams's leadership is actually doing these days - now that would be useful to know...

[By the way, April Baer of OPB had it just right, mentioning the allegations in the body of the piece but leading with the official report which asserts so signs of intoxication - kudos]

Do We Need a Domestic Auto Industry?

A reader asks for my comments on this discussion at the NY Times website, particularly Mark Thoma's contribution. I'll give my general comments first and then specifically comment on Mark's bit.

First, there is some truth to Tyler Cowen's assertion that we should not care where the auto companies are based, after all a job in the US is a job, but he is deliberately narrow minded. To the extent to which the high value added activities of engineering, designing and upper management of the companies happens elsewhere, we are loosing that part of GDP. However, I think the 'these are good jobs and must be protected' attitude of some of the commenters is misguided. The shrinking middle class (or perhaps the declining relative position of the working class) is more about what is happening in the upper parts of the income distribution than what is not in the middle parts. I am not sure protecting and preserving one specific industry is the remedy.

Now to Thoma's argument: that national security considerations mean that we should preserve the auto industry. I was immediately amused, for as an undergrad it he late eighties, I had precisely this debate (then it was about how Japan would soon make everything and us nothing). Well it made little sense to me then and less to me now. To imagine a industrialized war that lasts years and is on a global scale such that we can't get heavy manufactures for elsewhere is wrongheaded. Even if we could make stuff (and I can't see why we could not tool up for such a task) where would the raw materials come from, or more specifically where would the fuel we need come from? The point is that I am no political scientist, but it is hard to imagine a WWII scenario again which is where this attitude comes from, and if such a situation were to arise where we had to be self-sufficient, we have more problems than a lack of auto plants.

My take is that there is no reason we can't be competitive in cars and that management and the US education and technological infrastructure are causing the auto industry to suffer. I think the incentives of top management in US corporations has become far too heavily weighted in short-term performance than long-term and this has seen disastrous results in cars and banking. But the lack of skilled workers and investment in research and development of new technology does bode badly for the future of the US economy. It is not a zero sum game but we want to be at the forefront of the high value added industries and that requires public investment. Transportation is always going to be a top need of humanity and the challenge of the 21st century is to figure out how to do it more efficiently and less harmfully to the earth. The countries that are at the forefront of this new 'auto' industry are poised to reap large rewards - and help humanity in general.

UPDATE: A nice article on the future of the US auto industry can be found in the April 27th New Yorker. (Subscription is required to read the whole thing)

Poll Results and Portland Politics

The poll is closed and the masses have spoken: MLS in Portland is a Boondoggle.

Given that I have been an ardent supporter of the deal, this result can be interpreted in many ways:

1. My readers are intelligent and independent and are willing to consider my opinions but are not unduly influenced by them.

2. I am not very persuasive.

3. I was fighting against truth and reason all along and I should wake up to that fact.

4. Some dude was stuffing the poll.

I hope the truth is 1. I hope this is true in general and if this poll is an artifact of this fact, then this is wonderful news. 2 is also probably true. I am not ready to accept 3 - I am not convinced that the opportunity cost of turning down this deal has been adequately understood. I suspect 4, however. The poll suddenly took a decided turn in the opposite direction and continued its trajectory suspiciously. Though the economic indicators of the Oregon economy did the same...

But who knows? And who really cares, the point is that if this is any indication of the mood among the general population, Paulson and City Hall have some more work to do to convince people.

And speaking of City Hall, will The Oregonian ever give up on trying to run Adams out of office? Regardless of what their personal opinions are, he is our mayor and needs to be effective for our well-being and their crusade is contrary to our interests. Normally I respect David Sarasohn's opinion pieces, but when he writes the following I wonder what he is thinking:

Friday brought yet another development in the endless tale of the mayor's admitted lies and his desperate effort to survive in office. From Freedom of Information Act requests, Ryan Frank and Brent Walth of The Oregonian reported 33 phone calls from Adams to Beau Breedlove before Breedlove turned 18, a very different view of the relationship from even the mayor's most recent account of it.

There was actually another City Hall story Friday, about Portland's new budget, with higher than expected revenues allowing the city to maintain more of its services.

Guess which was the top City Hall story of the day?

Ummm, it was The Oregonian that made it the story of the day and could have (AND SHOULD HAVE) made the budget the story of the day. When the major daily of the city is not focusing its reportorial energies where it should, don't blame city hall. This is like saying "I hit you for no reason and therefore you must have been at fault."

Beeronomics: Mass or Niche Markets and Incentives

[Note: Stan Hieronymus had to set me straight - aroma and bitterness are as much or more about how you use hops as the hops themselves.  Add them later in the boil and you get more aroma and less bitterness.  All this re-education is making me want to brew again.  Perhaps with Summits...]

I had to stop at a Safeway to get some milk on the way home alst night and on the way to the dairy case I spied a bottle of Deschutes Red Chair IPA. Well, I have a duty to sample it for the loyal readers that tune in for my erudite discussion of economics, right? Sure. Seriously, this is a magnificent beer - hop-forward IPA but with low alpha acid hops (or at least I think this is the case) so you get seriously strong hop aroma and taste but without the heavy bitterness of, say, a Hop Henge. Wow - what a wonderful result. Good thing I only bought one. It is medium bodied, slightly more malty and darker than a typical IPA, but exceptionally balanced and eminently quaffable.  Yummy.

It made me think of the other new beer I have tried recently: after a long wait my local grocery finally started stocking 'Drifter' from the Bros. Widmer. This beer followed a similar philosophy, they used Summit hops to create a medium bodied pale ale that has the nice citrus-y aroma characteristic of Summits but without the bitterness as Summits are low alpha-acid. [Correction: they are actually quite high, thanks for the correction Stan]

What is interesting is the completely different approaches to the business of beer these two offerings represent. Drifter is a fine beer (but a bit far from my personal sweet spot - I like bitter): it is a mild, medium bodies pale ale that is designed to please the masses. My immediate thought was: "this is their Fat Tire fighter." In my mind this is a beer deliberately designed for mass appeal to a defined market that supports a huge volume of Fat Tire sales. "Let's go for that market," I can hear them saying. And, with luck, it will - it is a better beer than Fat Tire.

Deschutes is busy these days (with a stable of exceptional standard beers in place) pushing the fringes with specialty beers, cementing its reputation not only as an outstanding volume beer producer, but a truly top class boutique brewery as well. By doing this, I imagine they think they can keep up their reputation and keep getting noticed and thus the sales of the standard line up will be bolstered.

Widmer does this too, of course, but I wonder how much being a public corporation changes the incentives. Does always worrying about the return to investors cause a more intense focus on producing beers with mass appeal? I don't know, but I suspect so. It doesn't really matter - as long as they keep making good beers, I am happy to have both around. Oh and someone had switched out a couple of Drifers with some Hefewizen, and drinking them took me way back to when it all began and reminded me that, though my tastes have moved on, it is still a really good beer.

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