Water Cooler Observations, July 1, 2020

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By Stephen W. Hiemstra

The Other Stephen Hiemstra

In honor of Father’s Day, I would like to devote this post to my father, Stephen J. Hiemstra. Dad has been on my mind a lot this year because in the middle of the Corona Virus Pandemic, my dad suffers from Alzheimer’s and I worry a lot about both him and my mom. Locally in Fairfax County, two-thirds of the corona virus deaths are of people over the age of eighty. My parents will be ninety this year and still live in their home in Falls Church, Virginia with the help of caregivers.

The remainder of this post will be essays taken from my father’s memoir, My Travel Through LifeMemoir of Family Life and Federal Service (2016) published in Centreville, Virginia by T2Pneuma Publishers. Check Amazon.com for copies.

Synopsis

In this rags to riches story, read about how an Iowa farm boy finds love, earns a doctorate, serves his country, combats hunger, advises presidents, and starts the first doctoral program in hospitality anywhere. 

Foreword by John E. Hiemstra

I am pleased to introduce my brother, Stephen’s, memoir from the days on our family farm through his service as an economist with the U.S. Department of Agriculture.

Although I was 3 years older than my brother, Stephen was clearly the brains of the family. This became obvious when our family moved from one farm to another in March of 1936 and our mother, Gertrude, took me to enroll in the area’s one room school house, Walker No. 6 of Spring Creek Township which was 3 miles south of the County Seat of Oskaloosa, Iowa and about a half mile from our new home. At the time, the school enrolled about 10 or 12 students in the eight grades offered.

After enrolling me in the third grade, the teacher turned to my brother, who was standing quietly alongside my mother, and asked: “Who is this?” She was told that Stephen would be five years old next month in April. With a gleam in her eye and perceiving a bright, young man, she said: I can enroll him in kindergarten now and in the fall he can start the first grade. Stephen’s academic pursuit took off from that moment forward. As the brightest of the three sons in the Hiemstra family, he went on to high school, college, and graduate school where he earned a doctorate, always at the top of his class.

One of three boys, Stephen grew up on the 160 acre farm that our father, Frank, worked hard to support us. And it was hard. When the crops failed in the depression, our Dad had to surrender his other farm east of Oskaloosa. Having lost much of his investment in the first farm, he moved to the less expensive farm in 1936 where he was able to start over and provide for his family—without the aid of tractors and power machinery—having only his own manual labor. As boys, we learned to plow and cultivate fields behind a team of horses. But we never felt poor having the example of a dedicated and hard working father and a loving mother.

Not only were we well taken care of physically, we had the gift of God’s love. The focal support point for the family was the Bible and the Central Reformed Church in Oskaloosa, Iowa, a protestant church of mostly Dutch heritage members. The church was one of about 20 Dutch churches, descendants of a colony of Dutch immigrants who founded Pella (16 miles West of Oskaloosa) in 1847. 

Church life had a strong influence on our family. We attended Church twice on Sundays—Sunday school and worship on Sunday mornings and worship again on Sunday evening. We also attend weekly Bible study and catechism on Saturdays. Sunday afternoons were spent reading or taking a nap, unless we were visiting our grandparents.

The Christian faith deeply affected our father and our family. He prayed with us every day and urged us to maintain a deep commitment to Jesus Christ. As a youth, my father wanted to become a minister and started attending the Central Academy to pursue this dream, but family obligations forced him to drop out. So he encouraged his sons to enter the ministry, which I did—as a boy of seven or eight I took his dream as my own and studied to be ordained later as a minister in the Reformed Church in America.

This deep religious surrounding and commitment also impacted my brother, Stephen, but his faith took him in a different direction. Stephen wanted to be a farmer, like his father, but he wanted to be a more informed and educated farmer. His academic bent therefore took him to enroll in Iowa State College at Ames, Iowa. But, having experienced the academic life, he never returned to the farm.

After completing a two year degree aimed at farm operation, Stephen switched to a four year program in agricultural economics. Ironically, his love for agricultural economics led him to his other love, the lovely Hazel (Billie) Deacon, who he met while attending an agricultural economics conference in Guelph, Ontario, Canada. They were married during his last year at Ames. After attending the Reserved Officer Training Corps (ROTC) in college, he enlisted in the U.S. Air Force where he was commissioned as a Second Lieutenant and was sent to serve as a communications officer at a base near Seoul, Korea. After completing his military service, he returned to Iowa State to complete a master’s degree and, later, to the University of California in Berkley to complete a doctorate (Ph.D.) in agricultural economics. 

After graduate school, in 1960 Stephen accepted a position with the in the U.S. Department of Agriculture (USDA). In USDA, he distinguished himself in research, publication, and administration. From 1960 to 1969 he wrote numerous articles for the National Food Situation (NFS), but in July of 1969, he and a colleague, Al Egbert, published a study, “Shifting Direct Government Payments from Agriculture to Poor People: Impacts on Food Consumption and Farm Income,” which set the stage for the rest of his career. He soon joined the Food and Nutrition Service (FNS) where he worked on: Food Stamp Program, the Child Nutrition Programs, the School Lunch Program, the Child Care Food Service, and the Woman, Infants, and Children Program (WIC). Stephen details the research and implementation done in these programs in this book.

Following his years with the FNS, Stephen served as an executive in the new Council on Wage and Price Stability created by President Jimmy Carter in October 1978 and later dissolved when President Ronald Reagan took office in 1981. At that point, Stephen returned to USDA. 

In this book Stephen chronicles experiences that he had, including an invitation to an event with his family in the White House with President Carter. In 1983 Stephen retired from federal service and moved to West Lafayette, Indiana where he accepted a teaching and research position with Purdue University. There he founded and directed a doctoral program in the Department of Hospitality and Tourism Management, which was the first such program in hospitality anywhere in the world.

In addition to his professional accomplishments, Stephen remained devoted to his faith and his family. He was baptized and confirmed at the Central Reformed Church in Oskaloosa, Iowa and was later ordained as an elder by the Presbyterian church, another denomination in the reformed tradition.

Also see:

Water Cooler Observations, June 24, 2020

Interview about the Corona Life in English and Spanish with Stephen W. Hiemstra, April 24, 2020

Managing Change 

Believer’s Prayer

Other ways to engage online:

Author site: http://www.StephenWHiemstra.net

Publisher site: http://www.T2Pneuma.com.

Newsletter: https://bit.ly/HangHome_2020

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The Other Stephen Hiemstra

Art by Stephen W. Hiemstra

“Before I formed you in the womb I knew you,
and before you were born I consecrated you;
I appointed you a prophet to the nations.” (Jer 1:5)

My father, which I sometimes introduce as the other Stephen Hiemstra, was born on April 17, 1931 during the Great Depression. He grew up on a small, feed-livestock farm in southern Iowa and attended college, in part, under the GI Bill.[1]

His education followed a series of apparently serendipitous decisions, which, in fact, allowed the family to prosper during the normally traumatic move from rural to urban employment. Dad was one of the first in his extended family to attend college and our end of the family prospered more than most. God’s hand is clearly on him.

Although Dad was one of the first in the Hiemstra family to attend college, he was not the last. Dad firmly believes in education. He made sure that each of his children made it through college and two of us, John and I, have completed doctoral studies. Between Dad, his brother John, my brother John, and I, there are four of us in the extended family with doctoral degrees. We are truly blessed.

Dad worked for the federal government during a formative period, beginning in late Eisenhower Administration through the early Reagan Administration, when belief in the positive contribution that government could make was at an historical peak. President John F. Kennedy set the tone for this golden age of government service in his inaugural address when he chided Americans to: “ask not what your country can do for you–ask what you can do for your country.”[2]

Dad took up this challenge with vigor and passion. Not only did he strenuously pursue his work writing voluminous numbers of studies and professional papers, Dad was active in professional societies[3] and often took a leadership role and won awards for his work.

Because I followed Dad into a career in agricultural economics, many of the professionals mentioned in his memoir are my own personal friends and colleagues. Early in my career, this posed something of an embarrassment as I worked to distinguish myself from my father. This was a vain effort. Everywhere I went at home and abroad, I ran into friends of my father.

During my year abroad studying in Germany, for example, I felt that I had finally escaped the shadow of my father—I was so wrong. One evening, for example, I attended a doctoral celebration party and in the middle of it the department chair walked up to me and invited me to dinner—he apparently was doctoral candidate with Dad at the University of Berkeley in California. At another point, I helped a couple of random American tourists order dinner in a restaurant only to learn that the husband was an agricultural economist from Oregon State University and a friend of my father. Another time when a colleague asked if I had authored a journal article in 1963, I joked: “didn’t you know that I was a child prodigy agricultural economist?” The article was, of course, one of my father’s publications.

Now that the need to distinguish my career from my Dad’s has subsided it is easier to appreciate the broad scope of his contribution to agricultural economics, particularly in the areas of food consumption, demand, and distribution studies.

In 1983 Dad retired from federal service and joined the faculty of what is now the School of Hospitality and Tourism Management at Purdue University as associate professor on August 17, 1983. He taught classes such as marketing and strategic management, but also undertook research and consulting for numerous institutes and firms in the hotel and restaurant industries. He traveled, for example, on lengthy study trips to Liberia and Hong Kong during these years.

Dad was best known at Purdue University for starting the first doctoral program (anywhere) in the field of hospitality and tourism management in 1989. His first three students are now faculty members and the program that he started now has 30 doctoral students and is a leading program in the field.

The role of Dad’s Christian faith in his life experience has always been important, even if his memoir makes only occasional references. The church has traditionally taught personal disciple, commitment in marriage, and generosity in giving which are all evident in my father’s life. Dad was a good role model to the rest of us who benefited from his faith and devotion to Christ. He also served a number of churches as elder and in other roles.

More than his church work, however, Dad—introduced once as the “father of the WIC program”—[4]took seriously the concept that God is the creator of all creation and all knowledge is God’s knowledge. His work as an economist was a calling, not just a career. As the Prophet Jeremiah wrote of his own calling:

“Before I formed you in the womb I knew you, and before you were born I consecrated you; I appointed you a prophet to the nations.” (Jer 1:5)

Dad’s call came early, even before he was aware of it himself. A prophetic call is not necessarily just to preach and teach—we only know of Jeremiah because of his writing. For Jesus’ own brother, James, wrote:

“Religion that is pure and undefiled before God, the Father, is this: to visit orphans and widows in their affliction, and to keep oneself unstained from the world.” (Jas 1:27)

He was most proud of his contribution to USDA’s food and nutrition programs, which provided food to needy families (primarily single moms with kids) throughout the United States and territories, such as Puerto Rico and Guam, where the need was especially urgent.

References

Hiemstra, Stephen J. 2016. My Travel Through Life. Centreville: T2Pneuma Publishers LLC.

[1] I abstracted this reflection from a postscript that I wrote for my father’s own memoir. See: Hiemstra (2016).

[2] http://www.presidency.ucsb.edu/ws/?pid=8032.

[3] During his federal service the principal groups were the American Agricultural Economics Association, the American Economic Association, and the Society of Government Economists. During his time at Purdue University, Dad was heavily involved in the International Council of Hotel, Restaurant, and Institutional Educators (CHRIE).

[4] The USDA has a feeding program for pregnant women called: women, infants, and children (WIC).

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Farmer Mac

ShipOfFools_web_07292016

“Answer me when I call, O God of my righteousness!
You have given me relief when I was in distress.
Be gracious to me and hear my prayer! O men,
how long shall my honor be turned into shame?”
(Ps 4:1-2)

Farmer Mac

By Stephen W. Hiemstra

Once I began to focus on the work of Finance and Tax Branch in Rural Economy Division (RED) in 1986, I was asked to undertake research on the Federal Agricultural Mortgage Corporation, commonly known as Farmer Mac. Farmer Mac was new and exotic and largely incomprehensible for researchers focused on retail lending. As the new kid on the block, I enjoyed an interesting assignment with virtually no competition, making Farmer Mac research the ideal project.[1]

Farmer Mac’s authorizing legislation passed in 1987 as part of a broader bill to bail out the Farm Credit System (FCS), which had experienced serious losses during the farm financial crisis of previous year. Farmer Mac was authorized to garner support from community bankers for the FCS bailout under the premise that Farmer Mac would offer improved access to the bond market for the bankers similar to the bond market access enjoyed by FCS through their funding corporation.

As a conduit to the bond market, Farmer Mac had two business functions in its authorizing legislation. It was to securitize commercial farm mortgage loans and federally-guaranteed Farmer’s Home Administration mortgage loans. The commercial loan business was modeled after the home mortgage market securitizations of Freddie Mac and Fannie Mae, while the guarantee business was modeled after Ginnie Mae securitizations of Federal Home Administration guarantee mortgages. The parallels between Farmer Mac’s proposed business and the existing businesses in the home mortgage markets were incomplete, however, because farm loans are business loans and home mortgages are consumer credits—business loans are much riskier than consumer loans because their performance depends on business prospects while consumer loans rely on more stable salary income.

My initial research on Farmer Mac was a legislative review, Prospects for a Secondary Market in Farm Mortgages (1988), which took three of us about a year to complete. As subject-matter research in an agency more focused on disciplinary research (Hiemstra, 1991), the report got little attention in the building but was picked up by the farm press, the Farmer Mac board, and the board of directors at the Farm Credit Administration (FCA), which was tasked with Farmer Mac oversight. By 1989, when I gave a paper at the American Agricultural Economic Association conference in Baton Rouge, Louisiana, I was well-known enough to be invited to lunch by the FCA Chairman during the August conference and, later, was offered a promotion to join the FCA staff.

By September, however, the reality of my situation started to sink in.

The Friday of the week before I was to start work at FCA, I received a telephone call from my prospective supervisor. He asked: “Would I be willing to meeting him at J. Gilbert’s Wood-Fired Steaks and Seafood after work that day?” I responded: “No problem, but it would be no problem to swing by the office on the way home from work.” He returned: “No. Let’s get together at Gilbert’s.” Later, at Gilbert’s he proceeded to inform me that the FCA Chairman (who I had lunch with in Baton Rouge) was unhappy that an “aggie” (me) had been selected for that my position and he threatened my supervisor with a bad evaluation if he went ahead and hired me.[2] The punchline was: “Did I really want to work at FCA?” Yes . . . Absolutely . . . I needed the promotion, but the stress of my new position was now obvious even before I began work.

To deal with the stress and to celebrate my promotion, I bought a new Young Chang Studio Upright piano and began playing hymns daily.[3]

On Monday when I started work, I immediately left for Capital Hill. The agriculture committee was holding hearings on Farmer Mac and, as the resident FCA expert, it was a priority to attend. On Tuesday, the hearings were to continue and I planned to attend, but I got an early morning visit from a second-level supervisor who asked about my plans for the day. I replied: “I plan to attend the Farmer Mac hearings.” He responded that I could not attend as an FCA observer, but that I might take annual leave to attend. Dumbfounded, I asked why. Apparently, the FCA Chairman called from a conference in San Francisco to make sure that I did not attend the hearings.

Oh, by the way, welcome to the Farm Credit Administration!

References

Hiemstra, Stephen W. and Hyunok Lee. 1989. “Implications of Land Transfer Survey Data on Agricultural Mortgages for Farmer Mac,” Presentation at the American Agricultural Economic Association summer meetings in Baton Rouge. August .

Hiemstra, Stephen W., Steven R. Koenig, and David Freshwater. 1988. Prospects for a Secondary Market in Farm Mortgages. U.S. Department of Agricultural. Economic Research Service. Agricultural Economics Report No. 603. December. (Reprinted March 1989).

Hiemstra, Stephen W. 1991. “Production and Use of Subject-Matter Research in the Federal Service: Example of Research on Farmer Mac,” Agricultural Economics: The Journal of the International Association of Agricultural Economists. July. pp. 237-251.

[1] As a newly authorized financial intermediary, Farmer Mac was a start-up corporation without a staff or clear template for operations and most agricultural finance analysts had no experience with secondary mortgage markets.

[2] The issue was that the 1987 Act converted FCA from the head office of the FCS into an independent federal regulator. Agricultural economists (“aggies”) were considered too sympathetic to the FCS and not schooled in financial regulation. The preferred hires were accordingly bank examination personal from the Office of the Comptroller of the Currency in the U.S. Department of Treasury.

[3] The stress reducing effect of piano playing came to me from a story told to me by a roommate in college. His father was a station chief in the Central Intelligence Agency and could not discuss his work so he played piano to deal with the stress.

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Mentor

Cover for Called Along the Way
Art by Stephen W. Hiemstra

“Two are better than one,
because they have a good reward for their toil.
For if they fall, one will lift up his fellow.
But woe to him who is alone
when he falls and has not another to lift him up!”
(Eccl 4:9-10)

Mentor

By Stephen W. Hiemstra

When I landed in the Finance and Tax Branch in Rural Economy Division (RED) in 1986, carryover work kept me busy for a number of months. Because of a thorough review process and a team of competent editors, carryover publications could take months or even a year to finish up. Still, I needed to get busy on the work of the new branch and earn my stripes in finance.

Although I had not been trained in technical finance, finance and the mechanics of trade worked hand-in-hand to affect agricultural exports. More importantly, U.S. agriculture required substantial investments in land, resources, and infra-structure that left it sensitive to changes in the financial environment. It’s funny—I never considered myself a derivatives expert, but my first lecture as a teaching assistant at Cornell University was explaining to my students in a retailing class how farmers could hedge their soybean crop in the futures market. I knew more finance than the typical economist, in part, because of my agricultural training.

My insight into the financial sensitivity of agriculture led me to have second thoughts about the Reagan Administration’s policy objective of dismantling agricultural support policies, particularly for grains and oilseeds, at a time in the mid-1980s when interest rates were both high and volatile—exchange rates were also volatile during this period and poorly understood in terms of their implications for agricultural trade. Rates of return on investment in land, for example, were about 1 percent during those years, yet interest rates had risen into the double digits as the Federal Reserve worked to tame inflation. Farm families were having trouble passing their farms onto a new generation, both because of these high interest rates and plummeting prices of grain. If price supports were then also removed, many farm families would be run out of business even faster than was already happening. In so many words, the Reagan policy seemed out of touch with their own republican base (most farmers at the time were republicans) and contrary to USDA own mission statement, as frequently and publicly espoused.

As I watched all this going on, I found myself repeating a rant about the financial implications of the Reagan policy initiative, even before I joined RED. After a while, I realized that this rant was both a real concern and could make a good policy analysis paper. Writing a paper critical of the policies of a sitting president was not, however, something to take lightly. In consulting with sympathetic colleagues, I was encouraged to go ahead and write the study. It was a relatively short paper with the title: Monetary Implications for GATT Agricultural Negotiations.

Because I had changed divisions in ERS, a finance paper would be reviewed by managers in RED, not International Economics Division (IED) where the policy implications would be more obvious. This meant that the paper would not be on people’s radar system during the review process and might potentially be published before critics would pay any attention—even if I offered to let them be reviewers!2/ It was important, however, to have administrative support when the critics finally woke up and began to raise questions.

My administrative support came in the form of a co-author. A friend and mentor had recently been promoted into a high visibility administrative position. He supported my critique and encouraged me to write the paper. In return, he became a co-author.

When my paper hit the news stands, the Reagan supporters went nuts and argued that the paper should be retracted from publication. A meeting was held; objections were noted; the paper went forward. In fact, the paper was so popular that it had to be reprinted twice. I was also invited to be a keynote speaker at a national conference with 6,000 in attendance[1] the week before the 1988 presidential election—I thought that my branch chief would pass out when I told him. As it turned out, that invitation was kicked up to the Secretary of Agriculture never to be heard from again.

Reference

Hiemstra, Stephen W., and Mathew Shane. Monetary Implications for GATT Agricultural Negotiations. USDA. ERS. Foreign Agricultural Economics Report No. 236. April 1988. (Revised reprint August 1988). 20 pp.

[1] My recollection was that it was the National Water Resources Association (http://www.nwra.org).

[2] As a mere economist, it was hard recruiting reviewers.

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The Killer Instinct

“Go to the ant, O sluggard; Life_in_Tension_web
consider her ways, and be wise.”
(Prov 6:6)

The Killer Instinct

By Stephen W. Hiemstra

In my first professional job as an economist, I interned with the Economic Research Service (ERS) in the U.S. Department of Agriculture (USDA), where I found a summer job in 1979 with Western European Branch in the International Trade Division. After spending a summer living in Puerto Rico, my Spanish was excellent for an economist and I was assigned to assist with research on the agriculture of Spain.

If the truth be told, federal agencies are not sure what to do with interns. Interns typically are sons and daughters of senior managers or others in positions of authority within the government. Because of their connections, managers generally farm them out either to staff interested in having help or interested in working with young people, but there is seldom any expectation that they will accomplish much of anything—before micro-computers came on the scene, they frequently had no certifiable job skills. The majority of interns stand for most of the summer in front of the photocopy machine or simply putt around for the time they are present. I was a bit different because I came trained in agricultural economics and spoke Spanish.

In the late 1970s, Spain was a major importer of U.S. corn and soybeans and had not yet entered the European Community (EC). The U.S. supported Spanish entry into EC to strengthen their economy and bolster their political stability and commitment to NATO, because the U.S. had strategically important military bases in the Azores Islands, among other places. But U.S. agricultural exporters were concerned that Spanish entry into the EC would threaten lucrative U.S. grain exports, as a result of Spain’s adoption of the EC’s infamous import levies on grain. Consequently, my office was interested in producing research to facilitate discussions about Spanish agriculture.

In discussions about my work during the summer, I proposed assembling a statistical bulletin focused on Spanish agriculture. Statistical books were tedious to produce, but popular as publications because most researchers at that time did not all have access to the libraries, such as the Library of Congress and the USDA library, that we had in Washington. My proposal was enthusiastically approved by management, but the support staff almost rioted.

The poor reception with staff could have been anticipated because in the 1970s publications were not automated like today. For my part, I would spend the day looking up numbers in Spanish census books and translating the row and column headings. Row and column sums were computed with a manual calculator (the following year I was given an electric calculator) which required punching a bunch of numbers and then pulling down a large handle which produced a distinctive crunching sound. I recorded all these figures and titles on lined (or graph) paper in pencil and double-checked all numbers and calculations marking changes with  a nice red pencil .

When I finished my work, this table was then passed to a secretary who typed it all up on an IBM Selectric typewriter on large sheets of camera copy. Tables bigger than an 8.5 * 11 inch sheet of paper were photocopied and reduced in size to be 8.5 * 11 inch—the term camera copy described this process. This process was tedious to begin with and errors needed to be corrected with white-out, which could only be done with great effort to line up the typewriter and, then, only a limited number of times. If too many errors were made, the entire table needed to be retyped. Needless to say, I went through about three secretaries before I found someone with the accuracy and persistence to complete the task.[1]

The tedious nature of assembling a statistical bulletin, both for the researcher and the secretary, sealed my reputation as a researcher because it demonstrated that I had the “killer instinct”—the ability to design, implement, and complete useful projects without undue supervision. The project also convinced me of the merits of computer automation, which became a theme later in my career. The bulletin that I prepared in a summer of mind-numbing work also became the template for  country bulletins undertaken by other analysts .[2] Consequently, I was invited back for a second summer’s work as an intern and, when I finished my doctorate,  was hired as a full-time researcher—not for my intellect, but for my energy.

REFERENCE

Hiemstra, Stephen W. 1980. Selected Agricultural Statistics on Spain, 1965-76. USDA. ERS. Statistical Bulletin 630. March.

[1] After President Reagan fired striking air traffic controllers, my expert secretary later applied for and received training as an air traffic controller, which was at the time an unusual career path for a woman and additional testimony to her talent and persistence.

[2] For example, a statistical bulletin like mine was prepared for Portugal, but it took an entire year to complete.

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