Sunday, August 31, 2008
Mentos in Diet Coke in zero gravity.
What's the evolutionary explanation for homosexual behavior in men?
A: Women. In fact, "hypersexual women"!
The latest advances in warp drive tech. Although before taking the Mars cruiser out for an afternoon spin, you may want to wait for a drop in the price of fuel.
Oil pollution -- it was bad for the dinosaurs too.
Science and traffic court don't mix.
Saturday, August 30, 2008
A wager you should take at any odds, at Long Bets:
Say this three times fast...
"We should be led by Obama and Biden!"
"We should be led by Obama and Biden!"
"We should be led by Osama bin Laden!"
Timeless political observation.
Forget "The Cornhusker State", what sort of marketing slogan is that? From now on it's...
"Nebraska -- the state for parents with teenagers!"Moving vans across America are packing already. I’ve put my kids on notice.
Friday, August 29, 2008
The first results are coming in! ... Stanford 36, Oregon State 28 ... Georgia 41, Jacksonville State 14 ... South Carolina 34, North Carolina State 14...
Yeah, yeah, the NFL doesn't start until next week.
But let's not have anybody pretend college football ain't pro.
The Forbes September 1 cover story has the score. (Check the sidebar stories too, like the ranking of "Most Valuable College Football Teams")
As the saying goes, "Everybody gets paid but the players."
Wednesday, August 27, 2008
Wegmans Peanut Butter, Creamy, Organic
[The original page. Via Megan McArdle.]
Tuesday, August 26, 2008
Well, his diary is being published online 70 years to the day after each entry was written.
Orwell would've been a blogger if he could've, there is little doubt. He wrote a book called "The British Pamphleteers" that traces pamphleteering back to the 1600s (covering the American revolution and all). Substitute "blog" for "phamphlet" in it and there you are...
Orwell's diary runs to 1942, so his blog assuredly has enough material to run until 2012, which is more than the rest of us can say. A great deal of information about Orwell, including his recipies, are available at the host site of his diary/blog.
The pamphlet is a one-man show. One has complete freedom of expression, including, if one chooses, the freedom to be scurrilous, abusive and seditious; or, on the other hand, to be more detailed, serious and 'highbrow' than is ever possible in a newspaper or in most kinds of periodicals ...
Above all, the pamphlet does not have to follow any prescribed pattern. It can be in prose or in verse, it can consist largely of maps or statistics or quotations, it can take the form of a story, a fable, a letter, an essay, a dialogue or a piece of 'reportage'.
All that is required of it is that it shall be topical, polemical and short...
Orwell's works are available online, and his essay Politics and the English Language should be required reading for bloggers, writers generally, readers, and anybody else who lives through an election year in a country where the politicians and poltical pundits speak English.
Monday, August 25, 2008
Petri Hawkins Byrd, the bailiff on Judge Judy, reportedly makes $500,000 a year. The bailiff. Judge Judy herself makes $45 million.
This is for filming a TV show three days a week, once every two weeks. (To the extent one can believe Wikipedia!) And, of course, on the show Judy's not actually acting as a judge, but as an arbitrator under the terms of a contract signed by the
I know lawyers who appeared before her when she was a real family court judge here in New York City. That's where she got her famous demeanor -- family court will do that to you. They say that back then she was just like she is now.
Mr. Byrd was Judy's real-life bailiff for a while, then moved to California. He was working as a high school student counselor and delivering pizza on the side for extra money when he read in the newspaper about Judy landing the TV job. He wrote her a letter congratulating her, adding "If you ever need a bailiff, I still look good in uniform." She called him right back on the phone, and the rest is history.
Moral: It can pay to leave on good terms and stay in touch.
I have a dream of a day when there will be a nationally syndicated hit TV show, Tax Court: Small Case Division!, starring a small-case arbitrator who gets paid $45 million a year...
Before you put too much faith in Wikipedia...
Check the mistakes in its entry on "New York City", as found by a NYC newspaper....
So remember, when relying on Wikipedia for information more obscure or controversial than the difference between Seventh Avenue and Broadway, it's reader beware.
Broadway runs east of Seventh Avenue north of 45th Street. Donald Trump owns an office building on Sixth Avenue. Lee Brown, the early 1990s police commissioner who presided over the highest murder rate in the city's history, was a hero in the war against crime.
In what otherwordly New York City can this be true? In the wacky world of Wikipedia ....
But it's a joke ... like its notoriously wrong-headed story on Hunts Point, which (to the neighborhood's dismay) cites 20-year old crime data.
Other entries read like dumb bus-tour guides' off-base spiels. One states that the East Village "is considered part of the Lower East Side" -- by morons, maybe, but not by anyone who has ever crossed Houston Street. Nor was the East Village "formerly known as the Bowery."
It would take all the space on this page to straighten out the Times Square article's zany misconstruing of past history and ignorance of how its present-day current condition came to be. But for a hint of how out-to-lunch it is, just check out the top photo depicting the scene looking south from 45th Street. The caption helpfully mixes up Broadway and Seventh Avenue, perhaps accounting for the dazed look of confused tourists I see there every day.
Count on Wikipedia to omit the most important single fact on a given subject. Of the New York Palace Hotel, it says former owner Harry Helmsley hired architect Emery Roth to design a 55-story tower to "blend in" with the historic Villard Houses at the site. Of course, although the entry's writers (maybe the hotel PR people?) don't mention it, Helmsley infamously tried to demolish the Villard Houses -- a widely reported preservation saga of the 1970s that's common knowledge to locals, but unknown to Wikipedia.
Because anyone can tap into the site and put in his or her two cents, it's not uncommon for an article to contradict itself. Anyone trying to learn about the Freedom Tower at the World Trade Center site will end up with a headache hoping to figure out what the endless entry is trying to say. It's such an incoherent maze of mangled chronology and outright falsehoods, you don't know where to laugh first.
For starters, there's no "residential tower" planned at Ground Zero. A museum will not highlight "many of the different aspects of the past and future World Trade Centers." The Port Authority did not "organize a competition through the LMDC" to come up with a master plan in 2002...
Wikipedia is no smarter about our power players than our landmarks. Donald Trump's entry says he "completed" 1290 Sixth Ave., an office building he neither built, owns nor has anything to do with...
At its worst, Wikipedia dangerously rewrites history. Take the entry on Police Commissioner Ray Kelly. When Kelly replaced Lee Brown as commissioner under Mayor David Dinkins in the early 1990s, we are told he "saw the continuing reduction of crime that started with Lee Brown's community policing concept." Most New Yorkers who recall that period will guffaw at that, but readers outside the city or newly arrived might take it as true.
In fact, although crime dipped ever so slightly in Dinkins' last 18 months in office, it assuredly did not under Kelly's predecessor, a top cop so lame he was widely ridiculed as "Out of Town" Brown. Nor is it true that Kelly "aggressively pursued quality of life issues such as the squeegee men" - that didn't start until Rudy Giuliani was elected and he made Bill Bratton his first police commissioner.
Wikipedia unfathomably goes on to say the new Giuliani administration tried to "minimize the effect of the crime-fighting policies already in place." Wha?
Nowhere is Wikipedia worse than when it comes to the history of this newspaper ... "Since 1976, it has been owned by Australian-born billionaire Rupert Murdoch's News Corporation." Except, of course, that for six well-chronicled years it was not -- from 1988-mid-1993, a period that was crucial in the paper's history and was the subject of a book I wrote, "It's Alive!". Wikipedia lifts one irrelevant quote from it without mentioning the book...
The dimwitted entry claims The Post's famous 1983 front-page headline, "Headless Body in Topless Bar," was written by a onetime employee named Paul Beeman. In fact, it was written by then-managing editor VA Musetto ... Mr. Beeman did not even work at The Post in 1983...
Sunday, August 24, 2008
Want to live a long life? Get a new wife.
The looooooong arm of the law should've checked who it grabbed.
(Though they all enjoyed the trip!)
The maddest scientist of all time?
Time travellers from the future 'could be here in weeks'
Communism continues to fade in China, where...
The first correct daily temperature forecast was not broadcast until July 1999. Previously, temperature predictions were never permitted to fall outside the range for efficient factory work. [via Arnold Kling]So it really did create a workers' paradise, at least weather-wise.
Speaking of China, it seems the World Sex Championships were no match for the Olympics. (Event coverage by the Naked News?)
Friday, August 22, 2008
Perhaps it was "in protective custody", the terminology was never quite clear.
I was a student supposed to be on a flight out of Prague heading home, but the Soviet invasion of Czechoslovakia had occurred the night before. As it was occurring, I and my fellow-traveler students were fairly well inebriated and trying to find our way back to our hotel after midnight on the unfamiliar trolley system. We were all well below the legal drinking age in the US, but we weren't in the US, and as students, American students, it was impossible to say "no" to the drinks offered us.
Eastern Europe was gray during the summer of 1968. In Hungary, Poland, Russia, the people had all been friendly to us in their own way, but were all gray -- their clothes were gray, buildings gray, their attitude was gray.
Czechoslovakia was different, full of color during the Prague Spring. The people were happy, optimistic. They wore colored clothes, there were decorations all about. And those Czechs loved Americans. The restaurant waiters kept saying, "You're going home to America tomorrow? Have a beer on us!" So we did, into the night. It's great to be liked by strangers. When we finally headed back to the hotel helicopters and airplanes were flying by low overhead, but we paid them no mind as we tried to find our stop on the edge of the city in the dark. We finally found it, just before turning around to go back looking the other way.
That next morning we had to get up early to catch our flight, and ... oh, god, all the noise ... it sounded like there were tanks going by under the window. One of us looked out it and reported, "There are tanks going by under the window."
That didn't have a real big impact on us at first. We'd been traveling through Eastern Europe and the Soviet Union all summer, and that was a militarist world, we'd seen military vehicles and trains everywhere. Our first thought was just, well, the Czechs are running some tanks down their street the first thing in the morning. But pretty quickly we realized it wasn't just "some" tanks, there was a bigger deal going on.
It wasn't immediately obvious that the tanks were Soviet, they didn't have the big red star on them that you always see in the movies, their only markings were white "invasion stripes". But our slowly awakening minds soon got around to realizing what they were -- we had been studying all things Soviet all summer, including how the Warsaw Pact operated.
It was impressive how much heavy equipment the Russians had gotten to the capital city so quickly. And as the self-centered teenage male mind works (with something of a hangover) our first deduction from that was: "well, no rush, we're not going out through the airport today, we can take it easy". And we did, for a bit. But even the self-centered teenage male mind can recognize history being made, and after taking just a little more rest time we were out and down from our room trying to see what was going on.
It's a strange thing to live through somebody else's nightmare. The hotel staff and restaurant waiters were ashen. There were tanks, "enemy" tanks, going by right outside their windows at eye level. A nation was being invaded, crushed. You could read it on the faces of the people. But as Americans, we had immunity. We had complete sympathy and empathy for the people of Prague -- but also had "experience an invasion free!" cards. So it was out into the streets for us, to see what was happening.
My memories of that are kind of jumbled. There wasn't any armed or physical resistance near us. Mostly crowds and confusion. Russian soldiers, who didn't seem particularly well educated or trained, said they were there "defending" the Czechs from ... oh, Germans, or somebody. They didn't have the attitude of being invaders or seem to be looking to crush resistance. (We later learned the invasion forces had been told they were acting to help the Czechs, and that they were quickly rotated out and replaced before their realization that it wasn't true had any consequences.) We talked to as many people, and as many Russians as we could, and with our Kodak Instamatic cameras took pictures of everything in sight.
Then it was back to the hotel for lunch, because even during an invasion teenagers have to eat. The menu had suddenly become much more sparse, as those running the restaurant didn't know when they were going to eat again. That was OK with us, we were still trying to figure out what was going on. I mean, we didn't know. There was no Internet, no radio, no working phones. Was the Cold War getting warm? Was a real war starting? We had no idea.
There was a lot more troop movement, convoys running right by the hotel. It was on a road that ran straight into the city from out by the airport, and the road was getting heavy use. And Old-European city road, there was no real sidewalk, the convoys were running right next to the building.
We went back to our third-floor rooms and hung out the windows, literally, taking pictures of everything. We could take pictures straight down. When half-tracks went by carrying troops, armored on the side but open on top, we took pictures straight down of the soldiers inside. This made some of them nervous, as they remembered that during their invasion of Hungary in 1956 people who hung out windows sometimes dropped Molatov cocktails on them, and they raised their guns at us. We'd go back inside.
That evening was one of great uncertainty, nobody knew what was going on. Frankly, apart from that, I don't remember much about it.
But the next morning the Soviet army arrived at the hotel. They were there to "confine" us, "protect" us, whatever, translations were uncertain -- but they did not want Americans out on the streets talking to people and taking pictures, that much was very clear.
They also did not want Americans going home with the pictures they undoubtedly had already taken. So the word went out, we were all going to be searched, and our rooms searched, all film was to be confiscated.
Fat chance! All the film of the invasion immediately went into the linings of our coats and every other place that innovative teenagers who'd spent years watching James Bond movies and "I Spy" and "Man from U.N.C.L.E." could think of hiding it. We all had plenty of other film from our summer of travel that we balefully spread across our beds to be seized as the Soviet soldiers came room to room.
Fortunately, we weren't dealing with KGB agents, but with young Russian enlisted soldiers of, as mentioned before, really minimal sophistication. When given a roll of film they'd pull the film out and expose it. But in my room, when presented with a dozen Instamatic film cartridges, they didn't know what the heck to do. They couldn't get the film out of the cartridges! Finally one of the soldiers pulled a bayonet out of his boot and started whacking at them. (Which left us all with the impression, "We are not going to lose this Cold War. Can't happen.")
The soldiers didn't get a single roll of "real" film from any of us. When they threw an overcoat to the side and it rattled and clanked from all the film cartridges and canisters in the lining, they didn't have a clue.
Well, it was all staying inside the hotel after that. Somebody dug up a short-wave radio, and it told us stories such as China had given Russia an ultimatum to pull out of Czechoslovakia or else ... West Germany and NATO were mobilizing to "war" status ... we had no idea whether we were sitting at ground zero of World War III.
To shrink the rest of the story to fit into a blog post, a couple days later a message came from the American embassy: "Get to the railroad station, now." There was a train about to leave to, well, we weren't sure where. But no matter, we were following instructions on this one. We ran to the station on foot leaving whatever heavy luggage we had behind.
The train was the old classic steam engine pulling cars of passenger compartments, just like in old espionage movies such as The Third Man. It steamed on all night, with us not knowing really where it was going. There were strangers on the train, all come together with their own different stories. It was romantic and exciting, just like in the old spy novels and movies, only real life.
I met a girl who chose to share a compartment with me for the trip (did I mention "romantic and exciting"?) not realizing how young I was ... unfortunately, I was too young to know what to do about it. Sometime after midnight we got to a border crossing, with rows of high fences, barbed wire, towers, search lights, the lot. The guards were Czechs and seemed very nervous, I wasn't sure what the story was, but it seemed like the Russians hadn't gotten there yet but were expected any moment. They seemingly let us through as quickly as they could.
The next morning the steam engine pulled us all into ... Vienna. (Dang, it really was The Third Man.) The press was all over as we pulled into the train platform. "Pictures! We'll buy photos!", pushing microphones at the compartment doors, just exactly like in the old movies.
I had to go to a Post Office and wait in line for an hour to make a phone call home to tell my parents I was OK. They didn't know that I wasn't dead. But they were both out when I called, so I left a message at my father's office. A little while later we all flew a nice new 707 back home.
And that was how I spent the end of my summer vacation, 1968. After that it was shortly back to school and for the rest of the year I was like any other American New York City teenager back then, into the Airplane, Hendrix, Sgt Pepper, getting ready to worry about my draft number, enjoying the days off from school due to the anti-war protests, rooting for Joe Namath, all the rest. (Nothing The Third Man-ish about any of it.)
But watching those tanks crush a nation maybe gave me some lasting perspective on politics and international relations that my fellow teenagers who only enjoyed the Summer of Love never got.
Arnold Kling points to a news report stating that
a recent poll found that 70 per cent of Czechs younger than 20 have 'no opinion' on the events of 1968.I don't know about that, but I do know some 20-odd-year-old children of the former East Germany who spent their first dozen or so years of their lives in it, who do seem fairly oblivious to the pre-1989 world of Communism that they and their parents lived in.
Their parents certainly remember, but say they don't want to burden their children by dropping all that on them.
It's a strange world.
Thursday, August 21, 2008
Doritos makes history with world's first extraterrestrial advert
Today Doritos makes history, taking the UK's first step in communicating with aliens as they broadcast the first ever advert directed towards potential extra terrestrial life...
The transmission is being undertaken as part of the Doritos Broadcast Project, which invited the UK public to create a 30 second video clip that could be beamed out to the universe... The message is being pulsed out over a six-hour period from high-powered radars at the EISCAT European space station in the Arctic Circle ...
EISCAT Director, Professor Tony van Eyken who will oversee the transmission said: "The signal is directed at a solar system just 42 light years away from Earth, in the 'Ursa Major' or Great Bear Constellation. Its star is very similar to our Sun and hosts a habitable zone that could harbour small life supporting planets similar to ours."
Dr Darren Wright, a New Blood Lecturer of the University of Leicester Department of Physics and Astronomy said: "... An important part of this project is that it provides an additional component to the Physics and Astronomy Department's ever increasing outreach programme...." [U. of Leicester]
A little bit of New York City in Beijing, and they don't appreciate it.
NYC graffiti activist is arrested in Beijing
A New York City artist who planned to use laser beams to flash “Free Tibet” on buildings in downtown Beijing was detained yesterday, according to a colleague and a pro-Tibet group.
James Powderly, co-founder of Graffiti Research Lab in New York, was detained before dawn as he prepared to use a handheld green laser to project messages on prominent structures in Beijing, according to Students for a Free Tibet.
Powderly’s colleague, Nathan Dorjee, said ...“He was going to project a message that said, ‘Free Tibet,’ and some other messages that would have been three-stories high in different locations in Beijing” ...
Brooklyn-based artist Paul Notzold, who brought a similar project to Beijing two years ago ... told Metro, “It’s definitely taking a risk with all of your equipment, but they got their message across just by getting caught,” adding, “If New York was hosting an Olympics and someone decided to do ‘Bush sucks’ on the Empire State Building, I think the exact same thing would happen.” [Metro NYC]
Wednesday, August 20, 2008
The Empire State Building was built in 470 days. That's from the beginning of excavation work on January 22, 1930, to the grand opening of the building on May 1, 1931.
Today the site of the World Trade Center tragedy hasn't even been cleared yet, nearly seven full years after 9/11/2001.
The story is bad enough at one building....
Well, one may think, being on the "safe side" is important, even if all that safety monitoring slows things down. Better safe than sorry! If you think that, think again.
TRAGIC BUILDING TO STAND ONE YEAR MORE
MILES OF RED TAPE AT DEUTSCHE RAZE SITE
It has blighted lower Manhattan for seven years since 9/11, and the doomed and darkened Deutsche Bank building is likely to be around for at least another year...
"We're hoping to have the building completely down by summer 2009," said [spokesman] Michael Murphy...
A source familiar with the site said that the precautions being taken "are ridiculous" ... "There's so many watchers being watched by other watchers," said one veteran hardhat ... "I've never experienced anything like this."...
...under the vigilant eyes of city and federal inspectors, abatement crews in double-layered suits and filtering masks hack away at the building. They use special tools that won't produce sparks or spew dust, but take much longer to get the job done.
One worker said current equipment takes up to an hour to cut a 10-inch pipe, whereas a traditional demolition saw would slice through it just a few minutes.
The workers are pulling out insulation, air-conditioning conduits, flooring, ceiling and walls, and every piece of material has to be wiped down and put in a hazardous-waste box.
Inspectors from the city Department of Environmental Protection and other agencies are at the site weekly, testing for asbestos and other toxins that could still be in the building, which was gashed open by falling debris on 9/11.
But no test has ever turned up evidence that the building contains hazardous materials, according to a source with knowledge of the results...
Everyone failed them. The two firefighters killed in last year's inferno at the old Deutsche Bank building died as a result of a perfect storm of neglect and tragic mistakes, the FDNY's internal review of the fatal fire shows ...While at another building, things are pretty bad in another way...
The report ... blames the FDNY for not conducting mandatory inspections, the Buildings Department for not issuing a formal permit for demolition and the building's contractor for shoddy work that turned the condemned skyscraper into a death trap...
"It is stunning and disgusting," said Linda Graffagnino (widow of one of the firefighters). "There are so many people responsible who need to stand up and say they made mistakes."
The report also indicated the Buildings Department did not issue a demolition permit ... Instead, "alteration" permits were issued, which may have led to fewer inspections by agency personnel...
New York City, in 70 short years, has morphed from the world's "Can Do!" metropolis to a place where "can't do" inept bureaucracies rule and functionaries who are supposed to serve the local government ("City University") extort the expansion of their fiefdoms from it by threatening the public welfare.
CUNY'S DOWNTOWN SHAKEDOWN
by Steve Cuozzo
City University officials say they won't even think about taking down the hulk of Fiterman Hall, which casts a morbid pall over Ground Zero's north rim, until City Hall coughs up tens of millions of dollars more the school wants to put up its dream replacement....
CUNY Vice Chancellor Iris Weinshall as much as admitted to me that they'd rather let the macabre ruin remain if they can't get what they want.
That might well leave the blackened relic standing on Sept. 11, 2011, the 10th anniversary of the terrorist attack - a prospect that makes the mind and heart recoil.
Having followed the disgraceful Fiterman saga for years, I couldn't believe what Weinshall appeared to say in a recent news story -- that CUNY would balk at taking the building down until it has all the dough it wants for a new one.
But Weinshall politely made clear to me last week she meant just that. She asked disingenuously, "Why would we want to have an empty space there?"
If this isn't a kind of shakedown, then New Yorkers are already dining and dancing on the top floor of a new World Trade Center.
... elected officials, the Downtown Alliance, Community Board 1 and landlords (including Larry Silverstein, who called it "the bane of my existence") -- every responsible voice for Lower Manhattan -- has called on CUNY and on three different governors to erase the blight.
But it hasn't happened, thanks to CUNY's foot-dragging and the same EPA micro-management that continues to delay the takedown of the old Deutsche Bank building nearby.
Now, at least, CUNY is slowly decontaminating Fiterman Hall and hopes to finish the job this fall. Won't that pave the way for demolition once the EPA finally blesses the deconstruction plan?
No. CUNY now says it first needs a total of $325 million to pay for a new facility -- compared to the mere $166 million price tag it cited a few years ago.
The price skyrocketed mainly because CUNY keeps enlarging the job. Once, the project was about simply replacing Fiterman's classrooms; now it's swelled from 300,000 to 364,000 square feet and includes computer labs, lounges and an espresso bar.
CUNY has already secured city, state, federal and insurance funds -- but is still $71 million short of what it wants. So it asked Mayor Bloomberg to kick in. Not surprisingly, given the city's fragile finances and CUNY's insatiable appetite, he said no.
Now, Weinshall is standing by the indefensible and preposterous idea that having a cleared site would be worse than letting Fiterman stand.
"From CUNY's perspective, just to have empty space there would not serve the college's need of . . . space for students, nor would it serve the neighborhood," she said.
Of course, by that logic -- the undesirability of "empty space" -- we oughtn't to have cleaned up the Ground Zero crater after 9/11, but let the nightmarish rubble fester indefinitely.
Weinshall acknowledged that Fiterman is an "eyesore" and that "I don't like looking at that building." So I asked her repeatedly: How can CUNY justify delaying demolishing it?
She and CUNY flack Jay Hershenson took turns changing the subject to BMCC's need for more classroom space...
Let the rest of America note and beware. It can happen to you.
Monday, August 18, 2008
If "backward biking" was an Olympic sport, Obama would've earned a top spot on the national team for his past-year performance with Social Security.
During the primaries he started at the finish line of reform -- recognizing a "crisis" in Social Security that had to be fixed, e.g:...
You know, Senator Clinton says that she's concerned about Social Security but is not willing to say how she would solve the Social Security crisis, then I think voters aren't going to feel real confident that this is a priority for her. [Nat'l Journ]... with his "fix" being to tax the rich -- remove the cap on the wage base subject to the 12.4% Social Security tax. And his fans among the left netroots cheered!
Primaries won, Obama started peddling: By June his tax increase was adjusted to apply only to the very rich...
Sen. Barack Obama today plans to make a firm commitment to a Social Security tax hike on people making more than $250,000 a year, stepping away from an earlier plan he floated last year to boost the 12.4 percent payroll tax on all workers as a way of extending the program's solvency ... the adviser said there has been some confusion about his position and the campaign wanted to make it clear that he was embracing this option and setting aside the idea of boosting the payroll tax on everyone.By July the "firm commitment" became not to a 12.4% tax, but for one of somewhere from 2% to 4% ... And in August it was revealed that the start date of his new tax to save Social Security would be "a decade or more from now" -- that is, sometime after the end of his presumptive second term.
And so he rocketed backward across the starting line of Social Security reform: promising nothing at all for more than 10 years.
An impressive performance! Though not without critics.
Meanwhile, Obama, standing tall at the start line, still shows his political courage by writing bravely anew about the importance of Saving Social Security! How he produces 579 words on the subject that say "I'll do nothing" is parsed by Andrew Biggs.
Sunday, August 17, 2008
Maybe they should teach a few business courses in journalism school? At least for students who plan to write in the business section of the paper?
From my home town "paper of record":
An article ... on Wednesday about the role of Fannie Mae and Freddie Mac in financing multifamily housing projects misstated the average price that buyers are paying for apartment buildings that are being sold by Archstone, a national apartment company. It is $200,000 per unit, not per square foot. Similarly, Tishman Speyer and Lehman Brothers paid $240,000 per unit, not per square foot, when they bought the company last October.OK, we know housing prices got a bit high, but $240,000 per square foot? ;-)
Also from the Times, one that has (deservedly) received a good deal of note around the web, from a would-be breathless revelation of mass corporate tax evasion...
Most U.S. Corporations Pay No Income TaxUh ... no ... not even "in theory". Income taxes are owed not on revenue or sales but on income, which equals revenue minus the cost of earning the revenue, that is, expenses.
Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a report released Tuesday by the Government Accountability Office, the investigative arm of Congress ... The study covers 1.3 million corporations of all sizes, most of them small, with a collective $2.5 trillion in sales .... At a basic corporate tax rate of 35 percent, all the corporations covered in the study in theory owed $875 billion in federal income taxes.
The New York Times Co., which has income equal to all of 2.8% of its revenue -- that's called a "profit margin", for its business section writers and editors -- should be familiar with this. Does Pinch Sulzberger really want to pay $1.09 billion of income tax on $88 million of income, even "in theory"?
The Associated Press simultaneously jumped on the same story with its own spin on the "cheatin' big corporations" angle.
About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts.After which the Tax Foundation kindly explained to it how long division works...
However, the actual report (Table 1, page 23) reflects that, of the 1.26 million U.S. corporations with no 2005 tax liability, just 3,565 were large. That's 0.28%, or 89 times lower than the AP's figure. Oops!Well, if not complex things like the price of housing or the corporate income tax, we might think the press could at least get the price of vegetables straight. But from Britian's Guardian:
... some readers have questioned the discrepancy between the picture of a piece of broccoli on page 3 yesterday ("Food and fuel prices send inflation to new high as City fears interest rate increase") apparently showing a price rise of 11%, and that of another piece on page 2 of G2 ("Beat rising food bills - follow the inflation-proof diet"), which showed its price falling by 20%. The first piece of broccoli was there to represent price changes on vegetables overall, as monitored by the Office of National Statistics. The G2 broccoli price change was based on a shopping basket compiled by the Daily Mail -- which in fact indicated a fall in price of 50%, not 20%. [Via RtE]
I'll add a word about the GAO report that was so badly misreported by the Times and AP stories. Contrary to the impression those stories give, it wasn't at all about tax evasion by US corporations in general, didn't try to measure it and made no claims about it.
The report was about one specific tax issue known as "transfer pricing". This concerns international businesses that set prices on transactions between their affiliates in different nations to move profits across boarders to lower-tax jurisdictions.
For instance, a corporate group's member in foreign Country X makes an item, sells it to a sibling business unit in New Jersey, which then makes some modification to it and sells it to a customer in Hackensack. The profit on the whole transaction is $1,000.
If the corporate tax rate in the US is lower than in Country X, then the corporation in X can sell the item to the affiliate in NJ for a low price taking a profit of say $100 taxable in X, and the NJ corporation can then charge a big mark up to report a $900 profit on the sale to the customer. Total profit, $1,000, of which $900 is in the lower-tax US. But if the US tax rate is the higher one, the group can do the reverse -- have the corporation in X set a price that gives it a $900 profit, while the US sibling charges only a modest $100 markup, so again total profit is $1000, but now $900 of it is in lower-tax X.
This gets complicated for the tax auditor because it is perfectly legitimate for businesses to arrange their operations in light of the tax laws so as to add value to products in low-tax jurisdictions. The question then is whether they shift profits that way, legitimately, or do so only with bogus bookkeeping entries to make it look like they are doing that. And the GAO report doesn't even look at that issue.
Instead, all this GAO paper tries to do is compare the profits of foreign controlled domestic corporations (FCDCs) operating in the US, all of which have the opportunity to engage in transfer pricing, to the profits of all US controlled domestic corporations (USCCs), the vast majority of which do not operate internationally, to see of there is a difference. Presumably, if transfer pricing is a big thing, with a lot of taxable profits being transferred out of the US, then the FCDCs that use it will have lower profits reported in the US than comparable US firms that don't because they don't operate internationally.
The report's finding ...
From 1998 through 2001, a higher percentage of all FCDCs reported no tax liability than all USCCs, but differences after 2001 were not statistically significant.... boils down to "move along folks, nothing to see here".
But not a word of the study's real purpose or findings was reported by the Times or AP. Instead, the Times and AP journalists seem to have been shocked by its raw data -- news to them! -- on the USCCs, showing that hundreds of thousands of lawn-mowing services and other Mom-and-Pop shops, many now defunct (if they ever got off the ground in the first place) but not formally liquidated after being organized as corporations, paid no income tax in 2005! Not only that, but even corporations as large as General Motors and several big airlines avoided income tax on all their sales! And they breathlessly shared this revelation with the world -- inflaming anti-business types everywhere (read the comments under the linked Times story).
Well, judging by the trend line of its profit margin, The New York Times Co. too may soon join the ranks of those big corporations that pay no income tax at all on their revenue.
And after reporting like this, we'll know why.
Friday, August 15, 2008
So says today's Gallup daily tracking poll. Rasmussen has Obama ahead by 44%-41%, putting the two polls are within the 3% margin-of-error of each other, with both making the race a statistical tie.
It's remarkable that with everything he has going for him Obama can't get a meaningful lead, and can't get above 45%. Sort of like, in spite of all that water rising, Noah can't get his ark off the ground. He'd better, or it'll rise right over him.
With everyone still presuming "Obama to win big" his inability to get a lead hasn't become a news story, yet. But if things stay this way for long enough, it will. Then, if the Republicans get the idea, "Hey, if we were to start trying, we might actually win ...", matters could get interesting.
I've placed links to both daily tracking polls to the left, and to the "real money" betting odds on the election at Intrade and Iowa Electronic Markets as well. These both have Obama as a solid favorite over McCain -- so the people putting up their money at this point are thinking either ahead of or behind the polls. If wish I knew which, I'd place a wager myself. (But keep watching them, arbitrage opportunities sometimes develop.)
Obama to finance universal health care with a tax cut.
Obama's top economic advisors say in a new WSJ op-ed that if elected he will not increase taxes by nearly as much as many people expected from his earlier statements.
In fact -- invoking the name of Ronald Reagan, approvingly (!) -- they tell us Obama won't raise taxes at all on net. He will cut taxes!
Yes, taxes on the rich will go up some, but not too much. The tax rate on capital gains would go up from the current 15% to no more than 20%, and top tax rate on ordinary income would increase from 35% to no more than the pre-Bush 39.6%.
And Obama's original proposal to "uncap" the 12.4% payroll tax for Social Security and apply it to incomes over $250,000 -- later adjusted so the tax would apply at only a lower 2% to 4% rate -- now is further adjusted to apply only "a decade or more from now", that is, sometime after the end of his presumptive second term.
Obama's tax scheme is compared to Ronald Reagan's, saying it would....
reduc[e] revenues to less than 18.2% of GDP -- the level of taxes that prevailed under President Reagan ... A 20% rate [on capital gains] is almost a third lower than the rate President Reagan set in 1986...And if that sounds nearly Republican, they take it even further! They emphasize that Obama's tax increases on the few most well-off will be more than offset by tax reductions on everybody else, to produce a net tax cut:
Sen. Obama's middle-class tax cuts are larger than his partial rollbacks for families earning over $250,000, making the proposal as a whole a net tax cut ...What's going on here is politically is pretty obvious. Obama's people are striving to counter the McCain/Republican attack line that he is a typical big-spending ("national health care") big-taxing liberal Democrat. Beyond that, they are using the ancient political ploy of making tax-cut promises to the voting many at the tax-increase cost of the voting few. As far as those "95% of workers" are concerned, they are practically Reaganites -- they have tax cut fever!
The Obama plan would cut taxes for 95% of workers and their families with a tax cut of $500 for workers or $1,000 for working couples. In addition, Sen. Obama is proposing tax cuts for low- and middle-income seniors, homeowners, the uninsured, and families sending a child to college or looking to save and accumulate wealth....
As previously mentioned, the Obama plan is a net tax cut -- his middle-class tax cuts are larger than the rollbacks he has proposed for families making over $250,000.
So now everyone is happy, right? Even partisan Democrats, now inoculated against the "big taxers" charge, are happy? Well, no ... not all of them.
Where's the money for universal health care -- the key issue of the left?
Paul Krugman was unhappily asking this very question not long ago...
Barack Obama’s tax plan is more responsible than Mr. McCain’s ... also far more progressive ... [but] not enough to pay for universal health care, which was supposed to be the overriding progressive priority in this election. Why doesn’t Mr. Obama propose raising more money?And Krugman then was assuming the Obama plan was raising $700 billion of revenue over a decade, not reducing revenue.
With a deficit of over $400 billion projected for next year, and Obama promising to reduce taxes ... where's the money for his universal health care plan? Well...
Sen. Obama would pay for this tax cut by cutting spending -- including responsibly ending the war in Iraq, reducing excessive payments to private plans in Medicare, limiting payments for high-income farmers, reducing subsidies for banks that make student loans, reforming earmarks, ending no-bid contracts, and eliminating other wasteful and unnecessary programs.No mention of any money for Krugman's "overriding progressive priority in this election" in that. Cutting subsidies for student loans isn't going to cover national health care. As to limiting payments for high income farmers, after the farm bill the Democratic Congress just passed, good luck with that! (And isn't Obama himself a big supporter of ethanol subsidies?)
So it certainly looks like Obama is planning to finance his universal health care plan -- the overriding key issue for Democrats and the left -- with ... a tax cut!
And here's a bit of irony. After Obama's advisors put forth the solemn words ...
Sen. Obama believes that responsible candidates must put forward specific ideas of how they would pay for their proposals.... they actually condemn McCain for doing just that -- telling how he would pay for his health care proposal:
Sen. McCain's plan does include one new proposal that would result in higher taxes on the middle class. As even Sen. McCain's advisers have acknowledged, his health-care plan would impose a $3.6 trillion tax increase over 10 years on workers ... Even after accounting for Sen. McCain's proposed health-care tax credits, this plan would eventually leave tens of millions of middle-class families paying higher taxes.McCain's limited health care proposal would cost money, and doing just as Obama's advisors say "responsible candidates must", McCain tells how he would pay for it -- for which they attack him!
Obama's universal health care proposal is free, paid for with a tax cut! Nothing to attack there.
Wasn't Obama billing himself as some "new" kind of politician? That's hard to see in all this. It's hard to make out what he's really doing here.
Has he thrown Krugman and the political left overboard on universal health care? Is he ... oh ... lying to us about his fiscal tax-and-spending plans? Is he going to make up his mind later about what he is really doing now, according to what is expedient then?
Pick you choice of the options, whatever -- he's looking every day like more of the same old, same old, oldest kind of politician you can find, to one observer.
"Promise 'em all what they want. Never mention the cost."
Thursday, August 14, 2008
Rover was never like this...
Giant dog turd wreaks havoc at Swiss museum
A giant inflatable dog turd created by the American artist Paul McCarthy was blown from its moorings at a Swiss museum, bringing down a power line and breaking a window before landing in the grounds of a children's home.
The exhibit, entitled Complex Shit, is the size of a house. It has a safety system that is supposed to deflate it in bad weather, but it did not work on this occasion.
Juri Steiner, the director of the Paul Klee centre, in Berne, told AFP that a sudden gust of wind carried it 200 metres... [Guardian]
Wednesday, August 13, 2008
Back during the Wimbledon tennis tournament there were protests against the organizers' killing the pigeons that were disrupting the tournament, leading Don Boudreaux to observe....
That ordinary people are sufficiently and securely fed, clothed, shod, and sheltered to enable some of them to devote substantial stores of their emotional energies to the care of pigeons is a sure sign of deep and widespread prosperity.Megan McArdle followed with a post on "morality as a luxury good" -- veganism, cruelty to the fox in the fox hunt and the like arising as moral issues only as societies gain unprecedented wealth.
That "environmentalism is a luxury good" is well known in both economics (.pdf) and politics. (If to get calories for yourself and your family you must burn down part of a rainforest, you will. If you can get more calories cheaper at a supermarket you'll do that instead -- then be free to value the wonders of the rain forest, and maybe even work for legislation protecting them.)
But maybe the most impressive thing along these lines is the rise in the value of human life in wealthy societies.
To see very clearly the growing value that governments, taxpayers and voting citizens place on human life today in money terms, look at the huge sums the military spends on equipment to reduce combat casualties ... plus the amounts it spends on rapid full medical care for every casualty possible ... plus amounts spent on rescue missions for even single individuals (such as downed flyers) behind enemy lines, etc. All of which reflects the public's intolerance of casualties -- and high and increasing money value it places on life.
Compare that to say, World War I. At Verdun there were a million casualties, half fatalities, for a military result of near nothing. In only one battle. From there the war just went on. A few months later at the Somme there were another 1.2 million. From there the war just went on ... That was only 90-odd years ago.
Can anyone imagine fighting a war like that, with such casualties, today?
Today, when a single soldier is killed in combat, it is major media market news complete with the story of how he had enlisted to help his mother pay the mortgage on the family home, literally.
Admittedly, this increase in the value we give to human life is mostly regarding our own lives. (And not all of them). And as would be expected from the "luxury good" principle, less-developed societies place less value on life than we do. (The Iran - Iraq war of 1980-1988 caused perhaps a million or more deaths, though still many fewer relative to the size of the nation combatants than did World War I). This could be a source of miscalculations in future conflicts among societies.
But for the most part, we should all be very happy indeed to be living in a society where the value of life has appreciated so greatly over a mere hundred years.
For the record, the Environmental Protection Agency today values a human life a $6.9 million, as noted here previously. With a U.S. population of 305 million, that means we are all of us together worth about ... um... carry those zeros ... $2,104.5 trillion. And going up!
Monday, August 11, 2008
The culling of humans beings to increase the quality of the species when performed forcibly by governments in the past was a crime against humanity.
But when performed voluntarily by middle-class parents today, often at the urging of their doctors ... who notices?
WSJ, from a remembrance of Harriet McBryde Johnson.
As our scientific powers to eliminate disability grow, our acceptance of disability wanes. To cite just one example, consider the rapid near-disappearance of people with Down Syndrome.
Between 80% and 90% of women who find out they are carrying a child with the chromosomal abnormality (which can be tested using amniocentesis) choose to abort. A Harvard medical student who surveyed 1,000 women who were pregnant with Down Syndrome babies reported that many were urged by their doctors to terminate their pregnancies; one woman's physician told her that her child would "never be able to read, write or count change." This at a time when new developments in medicine have nearly doubled the average life span of people who have the condition to 49 from 25 years.
As a culture, we have made what Amy Laura Hall of Duke University Divinity School calls a "democratic calculus of worth" regarding Down Syndrome...
Sunday, August 10, 2008
News headline understatement of day:
"Edwards' affair his most costly political risk" [AP]
The arguments over public school reform are pretty much timeless -- repeating across two centuries on both sides of the big water. [HT: Roland Patrick] The cause of them pretty much is too.
World's oldest joke update: It seems the world's oldest recorded joke is not the Pharaoh joke reported here previously, but instead ... of course ... a fart joke. Scrivener.net regrets the error.
Leopard 1, Crocodile 0. The question that comes to mind is: Why? Is croc meat somehow on the leopard diet plan? I wouldn't think so. So was there something personal going on here? Did that leopard just not like the way the croc was eyeing him out of the water? "Eventually the big cat was able to sit on top of the reptile and suffocate it." How would a leopard even know to do that?
Olympic daily update: Three-time British Olympic hurlder Peter Hildreth has been banned from practicing his training regimen -- running the wrong way up department store escalators.
The grandfather-of-five managed to run up the moving stairs in a Surrey department store but was then told he would be banned from Elphicks in Farnham if he did it again.
He said: "I started doing it last month because I was turning 80 ... But at the top of the escalator in Elphicks is the women's underwear department, and the woman who runs it told me to stop because it was dangerous ... As a young man I used to run up the escalator on the Underground in London, but that was a long time ago. I started off doing it in bits and then did it getting on at the bottom. I used to do it about once a week as part of my training when I was not on the track or in the gym."
Store manager Graham Duerden said: "We have people aged 80 who go the right way up the escalator and fall over, so we simply can't have this man attempting this sort of thing." [Ananova]
Jib Jab makes it official that the new election season has started and it is time for some campaignin'.
Saturday, August 09, 2008
... when prosecutors offered to buy Tremayne Durham, 36, and 275 pounds, a fast-food buffet in exchange for a guilty plea that would land him behind bars likely for the rest of his life, he bit right in.
Multnomah County, Oregon, Judge Eric Bergstrom agreed to the unusual plea deal ...because it saved the expense of a trial and possible appeals. A murder trial could have cost the county about $4,000, officials said.
Durham's insatiable need for greasy food -- which included gorging on KFC and Popeye's chicken, mashed potatoes, coleslaw, carrot cake, along with a pizza, two calzones, lasagna and ice cream -- cost Oregon taxpayers only $41.70. Bergstrom signed off on the deal, and the killer downed the food in two sittings...
Durham is a man who has problems saying no to his impulses. Convicted of rape in Manhattan in 1992 and paroled eight years later, Durham yearned to open his own business and ordered a custom-built, $18,000 ice-cream truck from an Oregon company. When he changed his mind, the company refused to give him a refund because they were already building the truck. So, according to prosecutors, Durham took a bus to Oregon and killed Adam Calbreath, 39, a former employee of the company, while looking for the owner.
Don Hons, 32, a friend of Calbreath's who attended the sentencing, said Durham deserved no favors -- but told The Oregonian newspaper ..."If a couple buckets of chicken are going to help to get a conviction, then get some biscuits to go with it." [NY Post]
Friday, August 08, 2008
[The above true story via Bok]
As home prices slump, Congress moves smartly into action to help homeowners and the depressed housing market -- pausing only to...
 Firstly, bail out two big privately owned for-profit corporations operating with government subsidies ... while assuring they keep paying dividends ... and imposing a new tax on them while they are subsidized ... to finance creation of new low cost housing.
As former Federal Reserve governor Lawrence Lindsey writes
Congress rejected a proposal that Fannie and Freddie be barred from paying dividends if they are receiving injections of capital from the federal government. This idea would seem to be the first lesson in a course on Government Bailout 101. The government shouldn't be shoveling taxpayer money in the front door while the company is shoveling dividends to shareholders out the back door.Yes. And beyond that, one might also question the logic of doing so to fix a housing glut that's causing a depression in home prices by subsidizing more new below-market-cost housing ... but hey, as long as the subsidy is coming from a tax on private corporations receiving a government bailout so they can keep paying dividends, what's to complain about?
Freddie Mac paid $1.6 billion in dividends last year while Fannie Mae paid $2.5 billion. Both have dividend yields that are many times higher than the norm. Congress chose to protect the shareholders at the expense of the taxpayer...
... the legislation included a special tax on mortgages originated by Fannie and Freddie to go into a fund for "affordable housing" run by politicians and community activists. It may seem natural for politicians to help out their colleagues and the people who turn out the votes on election day with newly dedicated taxes. But whatever logic there is in boosting taxes on entities that need public funds escapes me...
 And secondly -- following its rule that "no bill shall be passed unladen with gifts of pork such as to be found under a hog farm's Christmas tree" -- to attach gifts to the deserving such as ... oh ... the auto industry....
"...a provision tailored narrowly for Chrysler to ensure that it can benefit from a corporate tax incentive even though the company is now structured as a partnership not a corporation. The bill does not name Chrysler but rather describes an unnamed automobile manufacturer “that will produce in excess of 675,000 automobiles” between Jan. 1 and June 30, 2008. [NYT]... and a Canadian railroad car company, for Gulf coast hurricane relief, for a plant it is building in Alabama, that is 300 miles away from the Gulf coast....
Hey, I just can't wait for the politicians who deliver this kind of "housing bill" to deliver their bill for nationalized health care!
A tiny provision buried in the bill adds Colbert County in northern Alabama to the Gulf Opportunity Zone, a region that gets federal benefits to help with hurricane recovery.
The provision will let National Steel Car of Canada get hundreds of millions of dollars in tax-exempt financing for a plant it is already building in the county, which is almost 300 miles from the coast and far from the ravaged areas...
Alabama legislators, who had promised the Canadian company it could get state or local financing if the federal subsidy fell through, got it included in the bill. [SFG]
Thursday, August 07, 2008
Playboy, braille edition, is produced by the Library of Congress. [pic via Wired]
There's even been a lawsuit over a furtive attempt to censor it by a Congress that didn't want to use taxpayer money to subsidize people ... doing exactly what with their fingers?
Wednesday, August 06, 2008
But don't government-run health care programs have to screen claims too?
New York is wasting tens of millions of dollars annually by paying the medical expenses of thousands of former residents who have long since moved out of state, an explosive new audit has found.It's not like all this massive waste in this Congressionally created national government-run health care program is news. It's been amply reported before from sea ...
The scathing -- and still-secret -- audit determined that nearly 30,000 people in New York City alone were improperly on the state's Medicaid rolls from November 2006 to November 2007, even while they were enrolled in the Medicaid programs of other states...
...nearly 13,000 of the former city residents "should have been investigated" for violation of New York's Medicaid regulations, according to the audit ... but only 207 cases were investigated...
The audit concludes that investigations of out-of-state residents improperly receiving Medicaid, as well as efforts to recover the cost of their medical care, are virtually nonexistent ... "There are no efforts to recover inappropriate payments," it says.
"This is a totally devastating study which shows that there are no real meaningful controls on who is getting Medicaid," a state Health Department official said.
The official called the audit's findings "the tip of the iceberg" of Medicaid abuse...
New York's $45.4 billion Medicaid program serves more than 3.6 million people and is regularly described by top state officials as rife with fraud and lax management.... [NY Post]
Of $34 billion annually spent by the Medi-Cal program for health care for some 7 million poor Californians, state officials estimate that as much as 40 percent, or nearly $14 billion, is stolen in fraud.to sea...
New York Medicaid fraud may reach into billions ... "It's like a honey pot," said John M. Meekins, a former senior Medicaid fraud prosecutor in Albany who said he grew increasingly disillusioned before he retired in 2003. "It truly is. That is what they use it for."...In response to which, the responsible politicians and government officials have gotten right on the case fixing things ... um, right?
James Mehmet, who retired in 2001 as chief state investigator of Medicaid fraud and abuse in New York City, said he and his colleagues believed that at least 10 percent of state Medicaid dollars were spent on fraudulent claims, while 20 or 30 percent more were siphoned off by what they termed abuse, meaning unnecessary spending that might not be criminal. "So we're talking about 40 percent of all claims ..."
Politicians slashing claims-checking expense ... Yeah, that's the way to keep medical costs down!
Tuesday, August 05, 2008
It was a rant worthy of Basil Fawlty at his most furious. During a talk which was supposed to focus on raising money for conservation work, John Cleese launched a tirade against his estranged third wife, American psychotherapist Alyce Faye Eichelberger...Cleese studied law at Cambridge. After that and two prior failed marriages you'd think he'd have known the word "prenup".
"'Guess how much I'm paying her at the moment? I'm paying her £900,000 a year. And we had no children. It really is astonishing ... When I told my friends, they just put their head in their hands."
His mother Muriel, who died in 2002, also came under fire during the extraordinary outburst.
"I did have a dreadful mother ... And she lived to 101. I thought I'd never get rid of her."
The former Monty Python star -- who split from Miss Eichelberger after 16 years of marriage in January -- also spoke openly about his new relationship with 34-year-old marketing executive Veronica Smiley.
"The tabloid newspapers go on about her being half my age, but I'm not sure that matters. She's absolutely gorgeous, and incredibly intelligent. To be the brand manager for a company like Nice 'n' Easy haircare at the age of 33 is quite something."
[Cleese's friend] Michael Winner said of Miss Eichelberger "Her voice alone could tear the testicles off a rabbit"...
Monday, August 04, 2008
The commanding fact driving the unavoidable future reform of today's Social Security is the circa $15 trillion "backward transfer" made by the system to prior generations -- the amount by which benefits received by workers of the past exceeded the taxes they paid in -- which must be paid for somehow by workers of the future, in addition to paying for their own benefits.
Social Security is a "paygo" system in which total taxes equal total benefits, so if one group receives from it $X more than they pay in, everyone else in the system must receive back from it $X less than they pay in, by arithmetic. It's inescapable. Thus, workers of today and the future must take a loss from Social Security to the same extent that earlier generations received a gain -- $15 trillion.
When I say reform is unavoidable, I am including in the term "reform" the inevitable tax increases/benefit cuts for today's workers that will be forced even if the status quo system stays in place, to close its $14 trillion funding gap -- and which must worsen the loss to today's young by that much even beyond that specified in today's law (which calls for them to pay $1 trillion more in taxes over the benefits they will receive as it is).
Andrew Biggs has just posted an excellent explanation (with a nifty chart!) of this "backward transfer" and its effect on his blog. But if you are happy enough with expert testimony here's ...
The Treasury [.pdf] (2007 data):
"The fundamental reason Social Security must be reformed is that the benefits promised to the public have a present value that is $13.6 trillion greater than the present value of the revenues that the system is projected to receive....The Trustees of the Social Security Administration:
"Why must the system increase net receipts by $13.6 trillion if it is already requiring current and future workers to pay in more than they will receive? The answer relates to the system’s generosity to early birth cohorts — generations of workers now either retired or deceased. Social Security paid these previous cohorts benefits that exceeded their lifetime contributions by more than $13.6 trillion."
"...Subtracting the current value of the trust fund (the accumulated value of past OASDI taxes less cost) gives a closed group (excluding all future participants) unfunded obligation of $15.2 trillion. This value represents the shortfall of lifetime contributions for all past and current participants relative to the lifetime costs associated with their generations."Paul Krugman:.
"Social Security ... has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in.Paul Samuelson, writing back in 1967 during the Ponzi scheme's golden days:
"Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in)."
"The beauty of social insurance is that it is actuarially unsound. Everyone who reaches retirement age is given benefit privileges that far exceed anything he has paid in -- exceed his payments by more than ten times...!You can imagine what Milton Friedman had to say about this ... or look and see.
"How is it possible? It stems from the fact that the national product is growing at a compound interest rate and can be expected to do so for as far ahead as the eye cannot see...
"Social Security is squarely based on what has been called the eight wonder of the world -- compound interest. A growing nation is the greatest Ponzi game ever contrived."
So the "backward transfer" is real enough -- and so is its cost to today's young. There is no possible way around it, it is a sunk cost, a done deal.
The key issues of reform resulting from this are:
 Who should pay the loss? Should it be collected through workers' payroll taxes, dropping their return from their contributions ever lower, increasing their lifetime loss to Social Security? Or, perhaps, should a "reform" move this tax cost to income taxes, spreading it progressively over a much larger tax base of "the richer", enabling workers to get a healthy positive return on their contributions?
And, very related to the above...
 How to preserve the political popularity of Social Security among the "loss generations" of the future? Ask yourself honestly: If the generations of your parents and grandparents had been made poorer by Social Security by $15 trillion, instead of richer by that much --- a $30 trillion swing for the worse -- would they have been as happy with it as they were? Would they have stood for that at all? That is the future of Social Security.
But I've discussed these reform options at some length previously, and am not going to re-hash that here.
The issue here is: What would Franklin D. Roosevelt think of all this, if he saw Social Security as it is today? Or: Are the righteous defenders of the status quo really defending "FDR's Social Security" as they so often claim?
Here are some historical facts:
The "Ponzi game" Social Security system described by Samuelson, Krugman and Friedman was very different from the Social Security program enacted by FDR.
To the contrary, "intergenerational equity" was a major concern of FDR himself and the other founders of Social Security, such as FDR's head of the Social Security Administration, Arthur Altmeyer, who also was one of Social Security's chief designers.
FDR famously insisted that Social Security be "self-supporting" and not drop a burden on future generations. What he'd think of a $14 trillion unfunded liability like today's being dropped on future workers we can tell from both his words and actions.
For instance, when his program was being legislated some working on it tried to slip in "paygo" provisions that would cause it to require funding in excess of payroll tax in the 1960s. To their surprise FDR actually read all the paperwork, found the provision, yanked it, made them re-write it without that unfunded liability, and delayed the legislative submission.
FDR's final program as enacted in the Social Security Act of 1935 was largely "funded" -- as opposed to "paygo" -- and projected to have a very large trust fund accumulation built up by the 1980s, sufficient to operate for decades more. It would have, too, had FDR's original law stayed in place. (Instead, Social Security went broke and had to be "saved" in 1983 with a reform that preserved benefits for the old with large tax hikes on and benefit cuts for the young -- the process of collecting from the young on the "backward transfer" had begun.)
FDR and Altmeyer repeatedly insisted that Social Security would have "insurance-basis funding" providing a "fair return" favorably comparable to that from an annuity bought from an insurance company (which very few people could obtain on their own in the 1930s).
As Altmeyer promised the public in 1936:
"Moreover, every worker eligible ...will receive a monthly retirement benefit upon reaching the age of 65 larger than he could purchase from any private insurance company with the taxes he will have paid."This basically resolved to a return at the Treasury bond interest rate -- a return that was stable across generations and sustainable indefinitely into the future.
Look at the actual benefit schedule of the FDR's Social Security Act of 1935. With the payroll tax rapidly rising to 6%, no benefits payable until five years after tax collection started, and benefits then only very slowly rising to their maximum, and always directly dependent on the amount of tax each individual had already paid -- at the same rate across generations, FDR's funded program was designed to provide a steady rate-of-return that could have lasted indefinitely.
But what happened instead? As soon as the payroll taxes started coming in Congress's Left side said: "Don't save them, don't wait, spend those taxes right now!" And it's Right side said: "The left is just going to squander all the tax money -- stop them by cutting the tax!"
So they made a deal: use all the tax money coming in on faster and bigger benefits right away while stopping the future tax hikes. More spending, less taxes! What politician doesn't like that?? (That's when the trust fund was really wiped out.)
Of course, the arithmetical effect of that was to greatly increase the return on contributions to early participants, while reducing that to later participants who would have to pay taxes larger than originally planned to cover the funding shortfall created in the future -- creating exactly the kind of "burden on the future" that FDR loathed.
FDR vetoed the changes for exactly those reasons. During the legislative fight over the changes he sent his SSA Chief, Altmeyer, to Congress to urge it to preserve Social Security as FDR had created it. Here's some of what Altmeyer said:
"It is a mathematical certainty that the longer the present day payroll tax remains in effect, the higher the future payroll tax must be if the system is to remain financed by payroll taxes.Congress ignored Altmeyer, overrode FDR's veto, kept the tax rate down, raised the benefits, turned Social Security "paygo", and created the "Ponzi scheme that works" that Samuelson praised for the early generations of participants.
"This will eventually necessitate raising employee's contributions rate later to a point where future beneficiaries will be obliged to pay more for their benefits than they would if they obtained this same insurance from a private insurance company.
"I say it is inequitable to compel them to pay under this system more than they would have to pay to a private insurance company, and I think Congress would be confronted with that embarrassing situation..."...
"If we should let a situation develop whereby it eventually becomes necessary to charge future beneficiaries rates in excess of the actuarial cost of the protection afforded them, we would be guilty of gross inequity and gross financial mismanagement, bound to imperil our social insurance system...." [SSA.gov]
And by Altmeyer's "mathematical certainty" it also assured that workers born 30 years later would get retirement benefits worth less than they paid for them, taking an outright loss of $15 trillion -- which sure as heck is a "rate in excess of the actuarial cost of the protection afforded them", eh?
The result is exactly what Altmeyer predicted -- today people who will receive from Social Security a net $30 trillion less than did prior generations are showing signs of, well, being not happy about it ... with the result "bound to imperil our social insurance system". Altmeyer was right.
Political finance is interesting. "Intergenerational equity" was a major concern of FDR, Altmeyer, et. al., at the founding of Social Security. Then it was totally forgotten, wiped from memory, during the easy-money "everybody wins with 'the Ponzi scheme that works'" era. Clearly, it is still wiped from memory among today's left. Then, as the Ponzi game approached its back end during the 1990s, it was discovered as a "new" approach to analyzing Social Security by economists such as Laurence Kotlikoff. But it wasn't new, it was only being rediscovered as the future losses to the young entered plain sight on the horizon.
So ... to everybody who self-righteously thinks, "I'm defending FDR's Social Security from those who want to destroy it" -- get a grip: you're not. That $15 trillion loss being dropped on the workers of today and the future is no part of anything FDR ever had to do with Social Security.
"I say it is inequitable ... we would be guilty of gross inequity and gross financial mismanagement, bound to imperil our social insurance system...."
Here we are living it -- he was right on all counts. (It seems you don't have to be Hari Seldon to see the future in politics.)
That tells us very well what Arthur Altmeyer would think of today's Social Security. And Altmeyer was FDR's guy on everything Social Security ... so you can decide for yourself what you'd imagine FDR would think.
Personally I suspect that all the knee-jerk defenders of the Social Security status quo, and of the $15 trillion loss it drops on the young, who proclaim to be fighting to "Save Franklin Roosevelt's Social Security!", have him burning rubber popping wheelies in his chair, wherever he may be.
Sunday, August 03, 2008
Spaceflight's not easy: Space X loses "Scotty" (and a rocket)Doohan was a real hero. He took six bullets during the D-day invasion working his way through a minefield, had a finger shot off, his life was saved when a bullet hit his silver cigarrette case in his chest pocket. That wasn't enough for him to go home -- after it he transferred to become a combat pilot.
... thanks to the Ansari X Prize, private rocketeers have been working hard to end the state monopoly on spaceflight. Unfortunately, it's not all smooth launching, as Space X discovered with the loss of its Falcon 1 rocket yesterday...
Space X hasn't just lost a rocket, though. The flight was carrying a trio of small satellites belonging to NASA and the DoD. Perhaps less seriously, but probably more newsworthy, the ashes of over 200 people were also on board, including ... "Scotty" himself, James Doohan... [Arstechnica]
He died with a third wife 35 years younger than him and a 5-year old kid. I won't be sexist about the younger wife, but from my experence it must take some sort of special courage to father a child at the age of 80 as he did.
After Star Trek he lamented to his dentist about being typecast into unemployment, and his dentist told him: Actors strive their whole lives to build an identifiable character, "The Duke", Cooper, Gable, you've done it, you're "Scotty" to millions. Don't act anyone else, be Scotty. He did, did fine doing so, and by all accounts he was a great guy.
Happily, that failed space shot didn't lose all of his ashes, only 1/4 of an ounce -- and they'd already been in space in a sub-orbital flight.
"Scotty is ninety-nine percent James Doohan and one percent accent."
Yeah, he was a hero of mine as a kid, my favorite on the show -- in the whole dang franchise -- and it's always nice when a kid grows up and learns he wasn't wrong about his hero. It doesn't happen enough.
Law school education pays off
Words of an admirer posted elsewhere:
...the deliberately nasty ad hominems of someone like jim glass, who combines the schoolyard insult with the sophisticated torturing of facts of the real professional."The real professional"!
(Note to self: Distribute to clients. Raise rates.)
As the home of such endorsements, Diane Lim Rogers' fine EconomistMom blog is added to the blogroll.
Saturday, August 02, 2008
For more than 80 years it's been an extraordinary story in American business -- and still is! Last Friday it reported a $15.5 billion loss. Looking at numbers we see...
Market capitalization: $5.79 billion.
Cash holdings: $23.19 billion.
So after subtracting the cash, the market valued GM's business as of last Friday at negative $17.4 billion.
Last 12 months
Sales: $171.4 billion
Income: - $62.8 billion
Net profit margin: -36.8%
Earnings per share: -103.19
Enough! I am sufficiently impressed! It's true, the bigger they get, the further and longer they can fall and fall...
What to do? Maybe Bill Gates should buy 100% of GM with the fun money Melinda allows him and take it private, sole owner. After all, everybody needs a hobby to keep busy when they start their retirement.
It might do both GM's management and union a world of good, motivation- and innovation-wise, if they found themselves with a new sole owner who was actually accustomed to running an effective, efficient, profit-making business. And who, if he didn't get one from them, would close the whole damn thing down, sell it off for parts, and not feel any loss he takes any worse than he would a bad day at the bridge table with Warren. There's an old saying about how the threat of imminent execution concentrates the mind wonderfully.
But there has to be a better play in the domestic-owned auto industry for the rest of us. Let's look at
Market capitalization: $10.43 billion.
Cash holdings: $25.27 billion.
So after subtracting the cash, the market valued Ford's business last Friday at negative $14.84 billion.
Oh ... drat.