Cash in Housing

I zip over to patrick.net occasionally and read stories and comments. A year and more ago there were a few very noisy gold supporters. They seem mostly to have vanished (having some gold is not a bad idea, but buying it when prices are sky high and dollar value is down is...also a gold standard is a horrible idea).

I do still read quite a few comments in the "cash is king" strain. I don't deny that cash has advantages in some places in society. Mostly, in housing, however, it doesn't. There are two exceptions. One is competitive bidding when TIME is critical to the seller. The other is auctions--whether for bank foreclosure or tax lien. There are a lot of the latter happening now and for the foreseeable future, but even still, the vast majority of purchases are mortgages, and that is because you are NOT typically advantaged by having cash.

There are two reasons for this. One is that the seller generally doesn't give a damn how the money gets there. If they can sell a house to someone getting a mortgage for $225k and a cash buyer offers them $175k, they are just giving up nearly $50k by going with the cash buyer (not quite because of various fees the seller may be responsible for). The other is that cash buying is not generally a good idea unless you are getting a steep discount (like at auction) because houses are not often very good investments.

Buying a house that you live in is an excellent hedge against inflation, and so makes good sense to do as soon as feasible...which means mortgage. Buying a house to rent out can make sense in some places, but there are several factors to consider, it is neither easy nor cheap to do and there is a good chance that someone who just invested the same money in the market will do as well or better. Buying a house that you live in with some expectation of selling it for a profit in a few years is generally pretty stupid. It can pay off, but so did Madoff for some folks. Didn't mean they were smart.

Bad Theories...

I don't like inequality, and there is certainly an apparent parallel between how much inequality we have in this country and how messed up the financial sector is. Maximum levels of inequality in the US happened just before the Great Depression and the current really bad recession.

However, this theory as to why that may be is pretty weak. This article (from which the first takes cues) is more detailed and more sound, but still misses a few things that seem pretty critical.

Rising inequality is a symptom of a political problem, a circular one. Rich people support politicians who will cut their taxes making them more rich, and more politically powerful. Meanwhile the shortfalls of lower tax revenue tend to most hurt the poor and further weaken their already small political power (until we have publicly financed elections, money = political power). It doesn't matter that a large majority of people in this country would be supportive of a hike in the taxes for the top earners, those top earners have more real say in how the politics shake out and their will is more strongly represented in congress (and in the presidency...at least the last 3 and at least 4 of the last 5).

That rising inequality would coincide with a rise in finance is perfectly sensible. After all, at some point you run out of things to do with money other than hoard it or give it away. Most rich people opt to hoard it; that means finding someplace to park it, and since they are clearly greedy they want to make more money with that money so finance is the way to go. This will, naturally, make finance people extra wealthy as well, and will do relatively little to help the bulk of people in this nation.

The fix is political: higher taxes for the wealthy and higher capital gains taxes in particular. This first means more money for the government that can be used to improve the lives of all citizens but particularly the poor and middle classes. This also means less money poured into investments, which means better, smarter resulting investments and less runaway craziness like the housing bubble, and less productivity drain by the finance sector on the rest of our society.

Actual Liberal Press Article

They are so extraordinarily rare that I must post a link.

Don't Ask the Obvious...

Ezra Klein is a decent blogger for the Washington Post. He has scored several very good interviews including this latest with Glenn Hubbard. Unfortunately, even though he starts toward it with the high income vs. low income tax cut for growth question he still fails to ask meaningful question of this conservative economist, namely: "Why would giving a tax cut to an employer cause them to hire when they otherwise wouldn't?"

If hiring is the right economic decision then it is the right decision no matter what. If hiring is the wrong economic decision then it is wrong. Now, I realize that reduced taxes in some areas do affect how much it costs to hire a worker and that will shift whether or not hiring is the correct economic decision in a small subset of cases, and that even a small subset creates positive feedback (i.e. consumption) that will lead to more jobs at other places. But the areas of taxation that provide that benefit are NOT INCOME!!! Business side payroll tax deductions could do it, conversion to a single payer healthcare system could do it, and maybe some other business/corporate tax code cleanup/reduction could help, but personal income isn't it.

A reduction in income taxes to a small business owner does not reduce the cost of hiring an employee or the level at which that hire becomes economically justified. It only gives the already well off individual more money. That's it.

Further complaint about Ezra's interview, and that question and response in particular: Hubbard's theory requires that there is lots of demand, that companies want to hire but can't because, despite all this demand which should bring them more money, they don't have enough money. But since the problem is low demand, which means that no matter how much money a company has on hand, hiring may not be justified because...there is insufficient demand, then why is increasing demand the wrong choice?

The real answer is: Hubbard wants rich people to have more money, and sees the tax code as an easier way to do that than real economic stimulus.

Education Pondering

We seem to have a real problem with education in this country. Specifically we seem to have a problem of lots of people saying that there is a problem, then coming up with some complex "solution" that fits in nicely with their point of view. Different methods of teaching, ways to evaluate teachers/schools, charter and/or private schools, vouchers, punishment, reward, ...

There are good and bad teachers. There are good and bad schools. There are good and bad parents. There are easier and harder students.

We can't fix parents. But people love trying to deal with the other three.

Personally, I think that one thing that has been happening over the past few decades is that women have had increasing opportunities outside of schoolhouses. There are still plenty of good teachers, but we tend, as a society, to see teaching as a career of last resort, and we further see teaching as being less...glamorous?...as the students get younger. I'm not sure that we can really offset that, largely because the knowledge/education necessary to teach college is much greater than it is to teach kindergarten.

This isn't to say that teaching college is harder. It requires more knowledge but less patience and less of other things. College instructors don't (need to) care if a student doesn't show up to class or fails a test, or even understands the material. Kindergarten teachers are instrumental in developing not so much knowledge, but behavior. But we tend to compensate people based on their level of education more than their level of skill or talent (pro athletes withstanding). And we tend to see prestige in a profession as parallel to how much people in that profession get paid.

I think my best solution would be to dramatically increase the pay of teachers, say 50% across the board, with special incentives for under-served communities. Yes, that would reward some current teachers that are not as good, but it would mean more coveted positions and more resulting candidate competition going forward.

WikiLeaks

The guy is a bit out there in terms of views, and I'm not sure that the WikiLeaks dumps are entirely productive--lots of useless crap, and potentially some things that could endanger "field agents" though evidence that that is really the case seems to keep NOT coming up--but our own news media has become so horrible over the past 30 years that WikiLeaks is about the only game in town that is willing to hold the feet of the powerful to the fire.

Granted sometimes it isn't powerful that are grabbed, and it's possible they are a little to eager to burn and not so much to improve, but right now it's the closest thing out there to journalism that speaks truth to power. If the media would do their job better, then WikiLeaks would disappear.

The US Government is NOT a Household

NPR managed to piss me off again this morning. I don't remember who was talking but they were painting a doom and gloom image of the US debt, and how it would suddenly hit us and we would be like Greece and Ireland and Spain, and how we could fix this by cutting the deficit NOW and by keeping the federal books like a responsible homeowner. But that's a whole load of crap.

First: Greece, Ireland, and Spain would not be such big problems if it weren't for the Euro. We don't have that problem. We aren't sharing our fed with Germany, so if a real problem develops we have a solution that the other nations don't: print money. Yes, wealthy people don't like that because higher inflation eats at their wealth, but for the rest of us, and our nation, it would solve any "debt crisis" fairly painlessly.

Second: The government is not your or my or anyone's household. We have fiat currency (which, no matter how much you hear otherwise, has been far more stable and beneficial to the economy than gold or silver or other commodity backed currency). If the government has too much debt interest rates go up (which, actually is similar to if I have too much debt and ask for a loan), but the US government can't actually default on debt because...IT CAN PRINT MONEY! If people start worrying that the US will resort to printing money...interest rates will go up. Inflation will also go up, and inflation makes debt smaller! A household cannot do anything that will cause inflation and shrink it's effective debt.

Third: "Addressing the deficit" now will make things worse, not better. What we need is to kick start the economy, then worry hard about our future deficit. Boosting the economy costs money which means more spending and bigger deficit, but a economy back on track produces more jobs, stuff, gdp, revenue...everything! If we can get the economy back up, then that will do more to help the deficit/debt picture than would cutting the military budget by 50% and eliminating social security! Again, this is not like a household. When a household is in debt, and having income issues, then cutting back is probably the best thing...because it is the only thing. If a household member decides to buy a 50" 3D LED television it isn't going to help that person improve their financial situation. If the government pours the percent equivalent into the economy boosting consumption, that does improve the government's financial situation.

The Tax Cut Argument

I'm really, really, sick of hearing about tax cuts for rich people meaning more jobs from small businesses. There is no reason to suspect those things are connected. In fact, it makes much, much more sense for the opposite to be true. Just think of what can happen with more/less money...

When people get tax cuts:

1. Poor tend to spend the money: food, clothing, bills, entertainment, whatever. They don't have much so giving them more will increase what they spend.

2. Middle class is a broad ranging group, but some will spend more, some will save more (debt reduction counts for saving so far as the economy is concerned). Middle class small business owners (the vast majority of small business owners) that operate debt free may be able to expand business somehow, say marketing or more R&D. There is an outside possibility that they could afford to directly hire, but probably not. Still this is a group that can really help out the economy if given tax cuts.

3. Rich is tricky for a few reasons. First, pinpointing where "rich" begins is a bit tricky, but I'll go with the $250k/year group. Second, many, many rich people are just rich. They don't own business, many don't even work! Some rich, however, are business owners and do "create jobs" so the question becomes what is the utility of giving them extra money...

It's important to note first that when the above $250k tax bracket is cut by say 1% that someone making $260,000/year only sees a tax reduction of $100/year. That's not enough to do anything meaningful with and is likely to disappear into some savings/investment account without any notice by the tax payer. So there isn't any real meaningful difference until you get to people making significantly more than the break point. Then, you have to figure what the incentives are.

If a very successful business owner is receiving $500k/year compensation, and they get an extra $25k back in taxes (that same 1%), then they could, arguably, hire a worker ($12.50/hr full time). But if that was worthwhile, wouldn't they already be hiring that worker with some of the take home they are already receiving? What kind of crappy successful business person would see investing in a new employee as worthwhile but refuse to do so when they are already getting $500k compensation? If it is worthwhile (that is, it will pay off) then it is the proper business decision anyway, and the individual clearly has the wherewithal to do it as is!

More, if a business person is really motivated to make as much money as possible, (and this is the assumption) wouldn't raising their taxes, then, force them to work harder to bring their after tax income up? Wouldn't tax increases mean that they would need to invest more, hire more, expand more so that they could make the same as if taxes were lower?

It makes less sense every time I hear it. If business owners become successful due to that combination of smarts and greed, then higher taxes should force them to work harder. Lower taxes would mean they need to work less/expand less/hire less.

I feel the same way about cap gains taxes: if cap gains taxes go up people need to invest more to earn the same rate of return...higher taxes should be an incentive to invest more, not less.

I wish someone could explain to me why this thinking is wrong and cutting taxes for rich people means unicorns for everyone, but it looks like the history of tax cutting for rich people actually bolsters my position.

Rule Number 1:

People are stupid.

While this is true of all of us (myself included, and anyone else who finds it funny), it is more true of some than others. Take the GOP controlled Texas legislature's response to a common problem...

Problem: not enough money coming in from taxes due to economic slump and excessive tax cuts.

Not the smart solution: cutting funding for education.

Really not the smart solution: cutting funding for education when your state is already LAST IN THE NATION!

Education is the only thing that can make us great. It is our future. You want a strong economy in 20 years? You need a well educated population to make it. Stupid, thy name is "Texas Legislature." In all fairness, this seems to be the response of most state legislatures, but particularly ones controlled by Republicans.

Prediction...

I predict that if the Republicans take control of the House, that they will not care one bit about the deficit, but will care very deeply about cutting the taxes of the rich...and probably impeaching the president on some made up crap.

Doctor Pay

As a followup to my neat idea from the other day is medical doctors' salaries. We have very expensive health care in the US. One of the reasons is we must pay very high salaries to doctors.

People generally don't mind MD's making lots of money. But in this country MD's pretty much need to make a lot of money to justify the insane outlay that is paying for medical school.

Ok, Neat Idea

I think so anyway. Of course, it is mine (posted as part of a comment on this Ezra post), so...

The "problem" with quantitative easing is that it doesn't directly create jobs. It just makes money more available, and the idea is that those who have access will start spending more, which will increase demand, which means that companies will need to hire more to boost supply making nice positive feedback.

So how about doing things that more strongly encourage extra spending?

I would like to see a quantitative easing program that bought people's debt (especially student loans), then continued accepting payments as before but refunded some fraction--say 50-100%--into an account tied to a government issued debit card. The account would be cleared away each billing period, so if someone didn't spend it all, it balance would revert to the government.

Now, this isn't a dollar for dollar increase, as people could easily shift their normal spending to this account, but it has a few advantages. First, it allows people to have extra money each month, some fraction of which they are likely to sepend. Second, the account clearing out means that people will be motivated to spend more and faster so that they do not lose it. Third, and this is my favorite point, it directly helps people over banks...particularly if student loans are the purchase of choice.

On top of this, it could be done in a way to maximize spending. My student loan payment minimum is ~$350 /month, but I tend to pay it off faster than that would do. If the government plan stipulated that the accounts would only be active for one or two years, and that balances remaining would not be forgiven (i.e. you pay off the remaining debt as you would normally) then there would be an added incentive to pay it off even faster. This is true even at the expense of savings. With deposit interest rates low, I am much better off paying off extra student loan debt than I am saving extra. If the government were to buy that loan then pay me back my own payments that would become even more true. The incentive would be to pour as much money as possible into that debt, and then to spend as much of the return that I could manage. This would reduce my debt load much faster than I can afford to do now, and would also dramatically increase my spending.

The only real problems I see with this are 1) that it won't do as much to help rich people (they don't have loans because they can afford college) which I like, but the current political environment seems to equate not giving rich people more money with socialism, and 2) that it would not help many poor people (they don't have loans because so few go to college). It also doesn't help much for people that are unemployed as they don't have money to spend. Of course on those last two points: if it works well and leads to a large increase in demand, jobs would return.

These same things could be applied to other debt forms, but I have more of an issue with the fed buying people's (including my) houses than I do with them buying educations, which I think the government should provide anyway.

Load of Crap

Also, not presented with any meaningful commentary of course. But part of a NY Times article on Obama courting liberals is this turd:

Third Way, an organization of centrist Democrats, produced a study showing that liberals are the smallest share of the electorate and not enough to keep Congress in Democratic hands. Citing Gallup polling data, the study said self-described conservatives made up 42 percent of the electorate, compared with moderates who make up 35 percent and liberals who make up 20 percent, a shift of several points to the right in the last two years.

That, of course, has no meaning. It would be one thing if how people self-identified actually lined up with how U.S. congresscritters legislated, but it doesn't. My mom self-identifies as a moderate. She is more liberal than probably 80% of the House and 90% of the Senate. She is, however, exactly as she describes, pretty much dead center of the nation.

This horseshit pushed by Third Way is largely responsible for the clusterfuck in DC. People are mostly moderate so they say so. The words "Conservative" and "Liberal" don't mean politically conservative or liberal. This is pretty easy to figure: a large majority wanted a public option, a large majority likes social security and medicare, a large majority believes the rich should be more heavily taxed than they are, a large majority believes we should pay workers honest wages and make sure their work environments are safe, a large majority believes that companies should not be allowed to pollute. Those are all "Liberal" political opinions held by people who statistically must describe themselves as liberal...and moderate and even conservative. (No, I'm not looking up all the polling data to link.)

That someone would describe themselves as conservative, while taking advantage of medicare and not wanting to see it cut should tell politicians that the political designations of conservative vs liberal are pretty fucking meaningless. Unfortunately it seems not to work that way.

People want what they want, but rather than find that out and see about giving it to them we obsess over designations that are almost completely disconnected from their meaning on another level. Probably 90% of my political beliefs fit with the majority in this country. The remaining 10% is probably 70:30 left:right, but if I were to position myself in the US Senate it would probably be about where Bernie Sanders is (way left of "center") and in the House probably between Nancy Pelosi and Dennis Kucinich (again, way left of "center"). In the U.S. as a whole, however, I'm probably at about the 65% point overall (I balance out some pretty hard left beliefs on tax policy with some pretty right ones on personal responsibility).

Quick Guide

Just a handy little rundown of how the left is being fucked over by the Obama administration--and some "Democrats" in the Senate (comes from this post).

Healthcare advocates are disappointed because of the lack of a a public option; women's rights advocates seethe at the very mention of the name of Stupak; environmental advocates have their own issues regarding the administration's handling of the crisis in the gulf; the LGBT community is incensed by the repeated mixed messages of a president who claims to want to end DADT, but fails to take the numerous opportunities available to him to do just that; advocates for the Latino community are disappointed about the inaction on immigration issues and the DREAM act; peace activists are dumbfounded by the escalation in Afghanistan; civil libertarians are outraged by the fact that the administration is claiming executive powers that in some cases seem to surpass those demanded by President Bush. If you have a pet issue and you lean to the left, chances are that the administration has done something to tick you off.

Still no explanation as to why this is the way things are, or if people with the power really believe that punching hippies is so worthwhile that they should do it at the expense of the nation (and at the expense of popular positions).

Finally!

DOJ is going after war criminals!

...Unfortunately, they are still ignoring the (alleged) ones in the George W. Bush administration. Fortunately for all of us, they are looking for help:

How to Report a Human Rights Violator

The Human Rights and Special Prosecutions Section actively seeks out information that may assist the U.S. Government in identifying human rights violators who may have entered the United States.

If you know of anyone in the United States or of any U.S. citizen anywhere in the world who may have been involved in perpetrating human rights violations abroad, please contact HRSP either by email at hrsptips@usdoj.gov or by postal mail at:

Human Rights and Special Prosecutions Section (Tips), Criminal Division United States Department of Justice, 950 Pennsylvania Avenue, N.W., Washington, DC 20530-0001

You do not have to identify yourself when providing information. Please provide as much detail as possible, such as:

* the suspect's name, place and date of birth,

* physical description, and current location;

* the suspect's alleged human rights violations including the locations and dates of those activities;

* how you learned of the suspect’s alleged activities and when and where you saw the suspect.

We are unable to reply to every submission; however, your information will be reviewed promptly by HRSP.

Information on non-U.S. citizen suspects living in the United States may be provided to Immigration and Customs Enforcement in the Department of Homeland Security, at 1-866-347-2423 (a toll-free call).

So do your patriotic duty (Asst Attorney General Lanny Breuer said "It's something we have to do. We owe it to our citizens and we owe it to the world.") and report Human Rights Violators. And remember: torture is a violation of human rights.

Professional Left Writer Done With Washington

How long until someone in the administration comments on what an irresponsible whiner this damn hippie is?

Dead Animals Mean Food

Moral and health hazards abound when looking into what to eat. That we eat too much meat in this country, is not controversial. That we have a lot of industrial agriculture that is not good for the environment or for animals is also pretty well understood. It has become an increasingly commonly held belief that farm subsidies are antiquated and mostly neither a good use of money nor a producer of good results.

One of the moral issues that I tend to get prickly about is vegetarianism...particularly veganism. Our health would be better if we ate more veggies, and it would probably be better still if we were all vegetarians subsisting on legumes, whole grains, fruits, veggies, dairy and eggs. Of course, that doesn't mean that a vegetarian diet is best for the world or the environment, and certainly not one that results in no dead animals for our food. Even vegan diets are responsible for the killing of many millions of animals as the direct result of farming.

More subtle is that meat can actually be a very ecologically efficient food source. The way much of it is produced in the US, it is not, however. There are a couple reasons. One is we eat too much meat, and so need to produce too much, and the cost/time efficient methods to do so are not ecologically efficient and so we are where we are. Another reason (outline in the post, which is reviewing this book) is that we have made some of the ecologically efficient methods illegal--particularly feeding waste to pigs.

Until we fix industrial agriculture, it will be hard to determine what is the "best" diet for us to have. Still, that doesn't mean we should just keep on as is. Strong pushes to increase fruit and vegetable consumption and to reduce meat consumption are very good ideas. Moral grandstanding by vegans is probably counterproductive, particularly when done by the poorly informed.

Yea, but No...

I really don't like arguments that are true, but so incomplete that they may as well be false, which is why I'm not so fond of this Orszag article in the NY Times. I think my biggest gripe is with this line (and his subsequent arguments):

Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.

The problem, of course, is that it's kind of garbage. Yes, if the tax cuts expire demand could go down a bit more, but it also might not. Savings rates have jumped dramatically, and if people are already saving as much as possible, then there might not be much cutting back to do, and ending the tax cuts will only reduce savings rates. Not that anyone has actually studied anything here. The problem is that it seems everyone takes the "ending the tax cuts will make the economy worse" meme at face value. People who want to end the tax cut point out that other stimulus would be much better.

I'm hardly Greenspan in terms of my views on fiscal discipline or the economy, and I don't think that ending the tax cuts would have no effect, but it is not clear to me that it would be more than a blip. If our economy is already pricing the tax cuts ending into it's behavior, then there will be no difference. If uncertainty is making things worse, then it is better to end them now (that would be more certain than a temporary extension).

Capital Gains and Inflation

Stealing the title from Matt. Also commenting on that theme; this is also a followup on the last post...

Inflation is a double edged sword. Higher inflation reduces the value of any saved cash, but it also reduces the real value of any debt. Investments that hedge against inflation are, therefore, things that have a value that is linked to inflation.

Real estate is an inflation hedge because if inflation happens, my house gets more expensive in dollar terms, even if it's "value" remains the same, but the amount that I paid for it and my monthly mortgage payment so long as I have one don't change a bit.

The downside of inflation is that the cash I have stashed in the bank is worth less.

Taxing Capital Gains

I'm pretty sure that I understand capital gains tax arguments in exactly the opposite way that they tend to be presented--i.e. that low cap gains tax stimulates investment thus spurring the economy. The way I see it, the higher the cap gains tax is the more an individual must invest to have the same dollar return on investment, and it is the dollar return that people want and need. The percentage is only relevant to the extent that larger percentage returns equal more dollars.

I agree much more strongly with the idea that it is largely people who live off capital gains (i.e. the rich) who want who want lower cap gains taxes, and this is because at that level of wealth, there is a pretty good chance that near 100% of wealth is already tied up in investments and that no additional diversion (or at leas not a substantial one) can be made to offset higher capital gains taxes.

Basically: higher capital gains taxes should create more investment (from working people saving for retirement), boosting the economy, and that it will come at the expense of people who are living off of capital gains.

New (to me) Idea from a Politician!

Interesting proposal here. Similar to cramdown (bankruptcy modification of a mortgage to a lower principle value) but with an added benefit to banks to help them offset the immediate loss. I think it will work in places where people would like to stay but can't afford. It wouldn't work so well in places where there are no jobs and people want to relocate.

As an aside, however, I would like to say that upping the duration of a mortgage from 30 to 50 years really doesn't help much. For a $150k mortgage at 5.25% interest the mortgage payment on a 30 yr loan is $828.31, at 50 years it only goes down to $707.82. Now an extra $100 a month is a fair amount to a lot of people, but the extra 20 years it takes to pay off is, to me anyway, much bigger. The main reason is that interest alone is $656.25, so if you got a 10,000 year loan you would still be paying $656.25 per month.

For very long term loans a small increase in the payment can make a large difference in the time to pay it off. In the example above, an extra $50 per month on the 30 year loan would reduce the total time to pay off by nearly four years.

President Obama = Charlie Brown

And he just keeps thinking that Lucy isn't going to pull the football away. At least, that's the message I get from this.

The White House is struggling with whether to propose ideas that would appeal to Republicans, and thus get support on Capitol Hill—such as tax cuts—or whether to promote ideas that officials believe could have more economic impact but might hit political resistance, such as more aid for states and more infrastructure funding.

It's really simple, and I thought Obama was supposed to be smart: he can send the most right wing bill in the world to congress and he will receive ZERO Republican votes for it. They don't care what's in the bill. They are fighting him.

Iraq War Over...Still Killing Troops and Civilians In Afghanistan

So now that we pacifists have won the day and no more war evah*, I just wanted to put a handful of links to various retrospectives.

Someone who was right.
Someone who was wrong and admits it.
Someone else who was wrong and admits it (longer winded).
Someone who was wrong and is trying to excuse it.
Along with someone who is calling that bullshit.

As for me. I was pissed as hell back in 2002-3 that the entire of our government and the vast majority of media was so gun-ho to go to war in Iraq. I wasn't entirely up on the history of the region, I didn't care for Sadam, and I was even willing to concede that he maybe had some chemical or biological weapons. I still thought it was a bad idea, a distraction, a waste of money, and likely to cause a great deal of suffering. Mostly, I was pissed at how my opinion was deemed fringe and wrong by so many "Serious People" who were wrong wrong WRONG!

Now many of those who were right back then are pretty keen to get the hell out of Afghanistan, while many of those who were wrong and have since admitted it are pretty keen to...get the hell out of Afghanistan. Of course, we aren't going to do that, because the "Serious People" in government, even those, like Obama, who thought Iraq was wrong, think that we must stay in Afghanistan...I guess because there are people there who don't like us that we haven't killed yet or something.

*by "evah" I mean we will constantly be at war for the rest of my life, but we are going to pretend that we are a peaceful nation because we have (probably) stopped killing people in Iraq.

I Don't See Any There There

I know that Democrats generally love pointing out when some GOPer or other right-winger fights hard against something but then, after it gets through anyway, takes advantage (lots of US Reps that voted against stimulus at ribbon cuttings paid for by stimulus, and now the Koch brothers).

I understand a level of frustration with that, but I don't really think it's terribly wrong. Frankly, with zero GOP support, there was no real reason for Dems to have any of the stim funds go to GOP districts (to the extent that funds could be diverted). It would have been wrong, but so was the unified GOP opposition. As for the Koch brothers? I oppose the mortgage interest tax deduction, but I will certainly get all of my tax refund that results from it. I would be very happy if it were to end, or at least be limited, but I will take full advantage while it exists.

Taking advantage of a system that you don't like is not, necessarily hypocritical. It's fair. I would be perfectly happy paying higher taxes, but only if everyone else is subject to the same tax system. What is done with tax dollars has some lesser relevance.

I neither feel obligated to disregard advantages that I don't like, nor do I see anything wrong with that sentiment, in myself or others.

Thinking of Siding With Global Warming Deniers

Not because they are remotely correct, of course, but more because we are unlikely to be able to ameliorate global climate change in any way shape or form. There is just too much CO2 in the atmosphere to counter in a meaningful time frame.

Things are most likely going to get bad. 50 years from now it will be better to be on the "we wanted to do something about this but you wouldn't let us" side than it will to be on the "we got our way and the shit still hit the fan" side. Seriously. At this point it's really about who will have the better "I told you so" argument in several decades.

I'm still pro-conservation and pro-renewable energy, but those are good ideas no matter what the earth's climate does. We don't have unlimited fossil fuels, so we're best off weaning ourselves from them even though it won't actually reduce CO2 or cause global warming to be thwarted. I'm also not a big fan of waste, so reducing, reusing, and recycling play well with me. I'm also kind of cheap so a house that is more efficient to heat and cool is a winner as far as I'm concerned.

So global warming is a real and increasing threat to humanity, but since we aren't going to do anything that will substantially change that, I would at least like the opportunity to say "told ya so" within my lifetime, so fire up the burners!

Chamber of Commerse is Full of Idiots

At least that's the rough reading of this post.

The very frustrating aspect of reading through is that he isn't entirely wrong, but he fails to address the latent bias that produces the various choices men and women make differently. It is stated as though it is just the status quo and tough shit.

First, while it is not entirely clear, it does not seem the post is talking about women choosing low paying fields (like elementary school teacher) while men choose high paying ones (like rocket scientist) which would be a really bad argument, and is the tack taken by some of the critics I read. Rather, it is alluding to women making "life choices" that reduce their pay--like fewer working hours due to children.

I'll admit I mostly agree with that sentiment, particularly as someone who has made job choices not designed to maximize my earning potential. I think that men are more fixated on making money than are women. I think that fixation (or "fetish") does lead to making more money. I also think that we live in a society that discourages women from fixating on making more money. There are a whole slew of ways to look at this and to approach it.

The Chamber Post is essentially saying that the choice is wholly owned by women and men and that if women make less it is the fault of the women. I think that the choice is foisted on women (and men) by societal norms and that women make less because our society has deemed that women shouldn't be the moneymakers.

So long as all people are happy with whatever result may be I don't see as how it matters much. But some people are really unhappy with the status quo. Others don't care so much. My problem is that it becomes extraordinarily difficult to price out the type of choice I am referring to, and, even more difficult to figure out how to price that out in such a way that we can still factor in women and men whose choices are in larger part owned by societal norms.

The closest I've seen was something I discussed a while back. The paper concluded (among other things) that the "real" pay gap was ~$0.05. That is women make $0.95 for every $1.00 men make if the playing field is completely leveled--including choices like who works more hours and first choice spouse...at least as I understand it.

So there is only one pay number that can be generated without much extra effort (the 77 cents on the dollar one) and without charging into controversy headlong. The problem is that the controversy avoided still exists and is real.

I do not believe that a woman's pay aggregate number will ever be equal to a man's for the simple reason that women and men will never have identical roles in society. I could be wrong, I would like to be, but I don't see the perception of women having a more important role in the family and household going away any time soon.

To restate: it doesn't matter if men and women have full equality, and are perceived entirely as equals in the workplace, women will not ever make as much as men if women are yet perceived as more important than men at home.

43% People are "Single"...not Single

I really don't like hairs split like this. I realize that, for purposes of taxes and some legal definition, there has to be a legal event that removes a person's single status, but, really, based on that definition the vast majority of gay people are single (all of them are by federal law...I have faith that this is not going to be the case in 2-9 years) and lots of people in long term, committed relationships are "single".

I am aware that the article later explains and even goes on to separate out the "living alone" numbers from that, but the picture and the opening line would imply that nearly half of the country is not involved in a relationship.

As an aside, the last bit--88 single men to 100 single women--is way off the actual split and would imply that the number of "singles" that are elderly is quite large. In the US M:F under 65 is close to 1:1--and actually ~1.02:1--while over 65 that ratio goes to 0.75:1. Incidentally, I do like the CIA world fact book.

Funny

At least, I thought so.

An Interesting Plan

Is sort of outlined late in this piece. By "Interesting" of course I mean "really fucking cynical and depressing."

It gets at a lot of the "depressed Dems" issues--which are the real reason that Republicans have a chance at taking over the House this fall--but it goes further to basically say that this is the Obama administration's plan. That they intended to have the house switch so that they could paint a better picture of Republicans as bad at governing, win big in 2012 and then have real achievements in term 2.

That would be a plan worthy of Machiavelli. I don't necessarily believe it, and I am still left overly frustrated by the behavior of Democratic politicians. (I really, really, really wish that Republicans could represent me, because they are fucking effective legislators, even as they are horrible at governance.)

Words With Power

I think that it's pretty fucking stupid that words have such power over people that the use of some of them requires a full on apology or censorship or the like.

That said I am fully aware that words have power. Not so much the words themselves, but rather the way in which we shape and use them. Unfortunately, the N-word (which I can't use, even in this context, being white and all) is one that has spent so much time used to hurt and belittle blacks in this country, that any use is suspect and tends to demonstrate at the least racial insensitivity.

As one who appreciates words as powerful tools for conveying information and emotion, I am not exactly thrilled that some word--any word--is out of bounds. That said, about the only times I can think that use of the N-word is appropriate for conveying information or emotion pretty much isolate it from my lexicon anyway.

(If you are curious the 3 ways I can think of are: literary works--including film--conveyance of anti-black sentiment--i.e. racism--and possibly writings/communications like this one, though as most people know what "N-word" means it is actually seldom necessary even then...though I do feel silly writing "N-word.")

Can't Let Gibbs Go...

Here is Glenn Greenwald's take.

Memo to Gibbs:

That really wasn't a very bright thing to say.

I'll let someone else point out why in detail, but suffice to say: the left wing in this country is not the problem, the right is (particularly the more right wing Democrats), and the failure of the White House and the President to make that painfully clear is what will hurt elective prospects this fall the most.

Just a Quick Follow Up

To the last post...

If progressives and liberals keep voting for Democrats NO MATTER WHAT THEY DO IN OFFICE, then the whole incentive for Democrats becomes: make more right-wing people happy. It is really that simple. If progressive Democrats concede that they are so afraid of Republican rule that they will vote for Democrats no matter what, they have given up any ability to dictate legislation, because Democrats already have their vote, they only need to work for more conservative voters which means their legislating will need to be more conservative.

Tough to Figure

I enjoy skimming Daily Kos. The site is concerned with electing "more and better Democrats." There are certainly policy discussions that go on, and lots of petitioning readers to email/call/write their representatives on particular issues. The site is definitely on the progressive side of things.

The amusing/annoying thing about the site, possibly related to the primary goal, is a tendency to shout down those who get so fed up that they vent the possibility or even reality of not voting for some (often Obama) Democrat (see parts of this thread). Lots of commenters try and pass off the progressive failings of the present administration and Congress as not their fault. As though Obama's continued mediocrity could be entirely blamed on the Senate, or that the ineffectual "big legislation" that has been passed has been some praiseworthy progressive victory.

Republicans are, in my opinion, worse than Democrats. But they are more effective at getting their legislation passed. Hell, we got GOP health care without a single GOP vote (on final passage)! Now that is some impressive legislating!

By contrast what fucking good does voting for Democrats accomplish? Doubling down on Afghanistan (Way to go Bush...I mean Obama!). Continued indefinite detention at Gitmo along with no prosecution of torture (Congrats on getting your way Cheney...thanks to Obama!). More and better chasing after government whistle blowers (can't have people finding out about laws being broken or failures of the government/military now can we?). And a brand new assassination of Americans abroad program (who wouldn't be excited?!?). And those are the things that Obama is in no way shape or form constrained by Congress on, with the assassination program being a bright and shiny Obama original!

To the folks at Kos who believe that Republicans would be so much worse I say: "Yea? So?"

What I do not understand is that Democrats (including Obama), if they want to retain power and be reelected, need to be viewed as capable of doing something. Republicans may stand on a platform that I disagree with, but even I, at this point, would prefer a government that does something over nothing. Good or bad, right or wrong. I am not the arbiter of that which would be best for this nation. The GOP is at least willing to enact their agenda. The Democrats do not provide any substantial counter to that right now. To me, it seems that only Republicans are willing to try.

I'm not likely to vote for them, and I don't like their policy, but if the GOP wins back the House this fall, it will be because voters like me don't see much point in giving Democrats "power". When my option is to vote the lesser of two evils, I see nothing wrong with voting "Present." Democrats--including Obama--should be aware that they lose more than they gain by being weak and ineffectual.

Want to Reduce Spending?

I say eliminate the Senate. I know, I know, it would put 100 Senators plus the thousands of staffers out of work, but in Senate salary alone it's a savings of $20 million annually! It isn't like they are terribly useful.

How to Tax

The government needs revenue. It must acquire that somehow. That somehow is taxes. What would be the most "fair" method to tax by? I have my opinion, but here is my overview...

1. Income taxes: taxes on all income.

2. Wage taxes: taxes only on income earned by working.

3. Consumption taxes: value added taxes (VAT) and sales taxes.

4. Corporate taxes: taxing business (profit).

5. Tariffs: taxes on import/export of trade goods.

6. Property taxes: taxing ownership of somethings.

7. Estate taxes: taxing transfer by deed.

Numbers 2 and 3 are inherently regressive taxes. The rest can be progressive, flat or regressive depending on how they are set up. In many states property taxes are flat. Income taxes are generally set up to be progressive. The Estate tax is very progressive (though becomming less meaningful every alteration). It's hard to gauge the exact nature of corporate taxes and tariffs, and it isn't going to get you a good answer to ask. Still my ranking of like to dislike...

1. Estate tax. This is a great tax, that shouldn't really bug conservatives (though it does). It lets someone who has worked hard to build up a fortune keep it. But once they die their mostly good for nothing offspring (see: Walton family) have to pay a pretty hefty tax on what they are deeded. Progressive, decent revenue source, truly does not hurt anyone (the farmer issue is b.s.).

2. I like income tax. A lot. I would particularly like income tax to treat capital gains as normal income rather than in the bizarre way that it does in the US. Easy to make progressive. Generally pretty fair: everyone gets taxed according to their means (well not really, at present low to mid-income people are overtaxed, but ideally--with a good progressive tax scheme--it could be that way). Mostly it produces a lot of money in a relatively simple fashion. It's still way too damned complex, but so long as we have an elected government that won't change.

3. Corporate taxes. This is the first one that I am a bit ambivalent about. I think that it is a good way to get to a lot of revenue, some of which would otherwise be tax sheltered by people who have enough money to do that. I also think that it can stifle growth some. This is a tax I think needs lots of work to be really good, but that it can be really good. As it is too many big companies pay too little, while many smaller companies end up paying too much.

4. Consumption taxes I'm pretty ok with. I think VAT would be best, but even a simple sales tax is not a bad thing. Particularly one that does not apply to certain necessities (like non-junk food). While it does hit poor people harder, exempting food is a good way to minimize that. Specifying food that does and doesn't count, and having lots of other goods producers lobbying to be considered a necessity complicates things. VAT helps somewhat by having more tax on higher margin items...also by burying the tax to most people, it becomes easier to raise by 0.1% points every now and again. Most people wouldn't even notice. Of course, that is also a reason not to like it. Note: gas taxes are a special consumption tax.

5. Tariffs, I see, as more an international, economic negotiation tool than one for generating revenue. It could be simply because that is really how we use them. Kind of neutral except I don't think that protectionist taxes are a particularly good idea as they can (and do) end up hurting export oriented domestic business.

6. I generally don't like property taxes. Odd, as they have a possibility of being progressive to an extent nothing else on this list does (cap gains income is easier to shelter even with an ideal progressive income tax scheme). An ideal property tax system probably would be the most progressive system we could have, but I don't see it as a remotely real possibility. In the mean time, I do feel like if I purchase something, it is mine. I don't mind a small amount of property taxes to fund certain infrastructure issues (power, sewer, trash, roads), but I am strongly opposed to their, in some places dominant, use to fund schools. The quality of public schools should not be tied to the value of the neighborhoods that surround them. It's possible that I would like these better if they were state levied and redistributed according to need.

7. I detest wage taxes. Working people pay wage taxes. Rich people living off of interest and dividends and other capital gains do not pay any wage tax. Federal wage taxes are even worse since they have a dollar cut off and therefore wage earners are taxed in a regressive style. PA's state "income" tax is in fact a wage tax. As are the city taxes around here. Working people have to pay more than trust fund babies. Not fair, and morally reprehensible.

Conventional Idiocy

The Democrats are likely to lose seats this election. They are also likely to retain control of both houses of Congress. After the elections we will probably hear plenty (if we watch/read the news) about how Republicans have won. But Republicans are not likely to win this election. They are very likely to lose by less than they did in the past couple.

The Senate is messed up, so I'll ignore that.

The US House of Representatives completely turns over every two years. That means that the House is a good gauge of who the American people want governing them (kind of, gerrymandered districts actually mean that the US is more Democratic than the House, but eh?). If Democrats hold the House in the fall then it is the Democrats who have "won" the election. It is Democrats who have the support of the American people.

No matter how many seats the GOP picks up in November, if it is not enough to give them the majority in the House then the American people will have said: "We want Democrats in control."

It is possible the House turns over. Unfortunately, even if it doesn't we are likely to hear about what a big night it will have been for the GOP. And next to no one will admit the truth: Americans prefer to be governed by the Majority holder of the US House of Representatives.

Curiouser and Curiouser

There seem to be some trains of thought on a collision course on the political left right now.

Train 1 left Boston about 15 years back traveling at near light speed toward the center of the country. It passed that about two years back and has slowed a bit but but really isn't looking back at the carnage left behind.

Train 2 tends to meander aimlessly at something between 20 and -40 mph. Currently it resides somewhere left of center, maybe, but probably not.

Train 1 is run by the heads of the Democratic party. Clinton, ran it for a bit. Now it is the Obama administration. Same train though. Lots of the "liberal" bloggers used to criticize this train as not being useful and causing more harm than good and not representing the people. They got tickets these past few years, however, and despite the fact that the train hasn't really changed direction or really even slowed much, they tend now to label the people who continue to criticize as not helping out.

Train 2 isn't really run by anyone, which explains why it meanders and changes velocity. This train formerly held most of the liberal/progressive blogosphere. There are still a few on board. It does have lots of independents. People who just want a government that functions (whether big or small) and for it mostly to not interfere with their personal lives. There are no tea baggers on board.

These holdover progressives and "independents" are not exactly tickled with the present administration (and those that pay attention are near apoplectic with Congress) but are largely being told that this administration is as good as we can hope for right now and so we should help out and keep working to get more (and better) Democrats elected.

But why? So that a Republican "Health Care" bill can be hailed as a progressive victory? So that we can continue to pour resources into creating death in Afghanistan? So that our (and others') civil liberties can continue to be trampled on? If this is the best that we can get with Democrats controlling everything, then what's the point in helping them?

We are living in a time that requires serious people in office. We do not have them. Even our president, who seemed as though he would be, is not. He is either weak and ineffective or he is obsessed with stupid things like the news cycle and that odd notion of perception (as opposed to reality) just like every other politician. Either way, he isn't likely to get my vote right now. Even if he ends up running against Sarah Palin (the embodiment of "moran").

I'll vote case by case and person by person. My congress critter hasn't been winning me over recently (took down his online contact page). My Senator has lost in the primary so I'll likely throw the new guy a bone there.

It isn't that I think Republicans would be better. I think they would be significantly worse. I don't think that things will get better if Democrats are taught a lesson by my not voting for them. But things are not actually getting better now. I'm just nearing the point that I'm willing to toss in the towel and let the country go to hell. I don't think I can bring myself to care enough. If the people in this country show up to vote Republicans back in power then our nation will get exactly what it deserves. It is the fault of Democrats--chiefly the current administration--if that happens.

When the hopes and dreams of the people who voted for you get tossed aside so thoughtlessly, then you don't deserve the support of those people any more. Shame on this administration and this Congress. And shame on anyone who works to defend their foolishness.

Depressing

UK slashing funding for science research. I wonder what all these science hating conservatives are going to do when China surpasses us in science research and development. I'm guessing start a war, but that's only because that's where the evidence points.

Ok, I want one...

Well, really I just want enough other people to want one, but I think that it will take a bit more than pure performance for any but the biggest gearheads. I think that, at some point, if they want to create mass appeal/desire, they should do this with something a bit sexier than a 1972 Datsun.

I kinda like the look, and I've always been keen on cars that don't look like much but that can blow your doors off, but I'm certainly odd in that regard. Most people want cars that look fast, even if they aren't so much.

Frustrating...

...not surprising, but frustrating never the less. Toyota/Tesla partnership is serious because they are going to make an Electric SUV!!

The single biggest problem with transportation efficiency in this country is the size and weight of the vehicles that travel our streets. A bus or a truck that transports goods mitigates the efficiency issue with quantity (though rail is still more efficient...for both). If we could get 1700 lb cars with modern engines we could be seeing 50-70 mpg. Do the same thing with electric and you can 1) reduce the weight further, and 2) make the total efficiency equation even better.

The fact that people in this country still demand SUV's is very frustrating to me. I would love to see a vehicle weight tax. $2/lb over, say 3000 lbs. There is no good reason to have a vehicle that weighs more for 99.9% of this country. Not one.

When Winners Sulk

The losers win. This piece by Digby is an astoundingly good description of the way most of us Americans perceive winning and what that means.

The Democrats won big in 2006 and bigger in 2008. Victories giving them control of both houses of congress (and super large majorities in both) as well as the presidency. Any and all failures to accomplish things are theirs. Not Republicans. No matter how much it is the truth that bizzare rules and reprehensible behavior among the opposition is, in fact, to blame for the lack of accomplishment, that is not the way we collectively perceive things.

Democrats have control of pretty much everything (and to a much greater extent than Republicans ever have) and have accomplished next to nothing. Republicans are clearly winning, and Democrats are clearly useless, and in a country that values winning over losing more than it does right over wrong, votes are likely to go to the winners, i.e. Republicans.

Along those lines, any time I read (or hear) some "liberal" pundit crow about how the health care--actually health insurance--legislation as some major accomplishment I want to claw my eyes (or ears) out. That any Democrat would want to claim that the Republican legislation which passed was a win is not just a shame, it's a concession that only Republicans can win. Even when they all oppose and fight against it, Republicans still got their legislation passed. Democrats are pathetic losers, even when they "win".

Credit Unions

I like credit unions (not for profit financial institutions). They tend to have less troublesome--i.e. evil--practices. The benefits of being not for profit are: no taxes, better rates (deposit and lending).

It's pretty easy to figure. Imagine a bank and a credit union with the same depositor base. Both set a rate for a new car loan for a specific person at 6.25%. Both institutions have employees to pay, and insurance to buy, and other expenses (building, electronic transactions, etc.). To simplify let's just say that those expenses are the same for both, which is reasonable since we are trying to compare to similar sized institutions. Exactly what that will take away is hard to say, but as it doesn't really matter, let's say the leftovers on the loan is 2.5%. With a credit union all of that will go to the depositors as interest. The goal of the bank, however, is profit.

So for the bank, some of those leftovers are going to be profit. Since a bank is for profit, those profits are taxed, so those taxes also come out of that extra (technically they come out of the profits, but the profits are set greater to accommodate the tax burden). If depositors at a bank are lucky, then they get about a quarter to the dollar of a good credit union.

Now credit unions can also lower lending rates, which would reduce deposit interest, but would benefit customers in a different way. The result is the same: banks absolutely, positively, cannot compete in a rational market.

So banks try and make the market as irrational as possible. Laws are written so that credit union charters are granted very narrowly so that credit unions cannot grow or spread too much. Credit unions are made to have restrictions on who can join. Credit unions are not allowed access to the fed for their money but must often go to banks for their short term loans.

As such I love to see banks fail when going up against credit unions. More, I can't stand the dumb ass tax argument. Credit unions are tax free because of their not for profit status, not because banks have been relatively successful--to date--in pinning them to small isolated customer bases. So long as a credit union remains not for profit, they will retain their tax free status and should be allowed to grow as large as the market will bear. Right?

Functional Banks

Banking serves an important role in the economy: it distributes money efficiently (when it works). People who have extra money put it into a bank, and that bank loans it out to others who need money (for things like cars, houses, ginormous tv's...). People who borrow money pay interest and the people who deposit (lend) money receive some portion of that interest. The difference goes to the bank, which uses it to pay employees, maintain infrastructure, et cetera.

When working well there isn't much extra past that because if there were, then some other bank would pay better rates to depositors and depositors would take their money and put it there. Banking should not be a very profitable industry, and it isn't. That's where investment banking comes in.

Investment banking supposedly does something similar (for our economy) to what regular banks do, but borrowers (and "depositors") are bigger and sometimes so are their risks. Investment banks sell securities to investors. Those securities are essentially loans to others. Investment banks are serving as intermediaries (like regular banks) but with no risk. If a loan (security) fails to pay out or plummets in value, it is the investor that is out the money. Investment banks do not make money off interest, but rather fees.

If a loan fails, the bank is out $, which motivates it to determine that the borrower is not likely to run out and that the collateral is sound.

For an investment bank, there is no such motivation. There is, however, a duty to give accurate and complete information to their clients (investors). But the motivation is to make that information as complicated and difficult to understand as possible so that they can sell any investment (good, bad, or otherwise), and so that they can hide true costs and pocket larger fees through the sales.

Pretty much all of the failures that occurred with respect to the financial crisis are due to investment banking. It is true that conventional banks were part of that, but that was simply a function of this murky securities market, and the wall separating the two (part of Glass-Steagall) being eliminated.

Since Glass-Steagall is not being restored, I fully expect this to repeat itself.

Lion Burgers...Seriously.

I was reading Tea and Food where I followed a link to this nugget: "US Restaurant to Serve World Cup Lion Burgers." This is not a marketing gimmick (well, it is, but...) but actual lion meat ground up (with some beef), cooked, and served on a bun.

I find this decision by the restaurant a bit odd, due to the response which should have been obvious (bomb threat not withstanding), but I don't have a personal problem with it. My feelings are pretty well summed up by (Tea and Food blogger) Aaron Kagan:

If you're not opposed to eating animals in general, why is this so bad? If they're raised (and presumably slaughtered) humanely and are bred in captivity and not removed from the ecosystem that depends on them, why is eating a lion worse than eating a cow? Is it a matter of intelligence of the animal? If so, it may be that pigs are smarter than lions, but it doesn't make news when we eat them.

Still I really liked (Tea and Food writer) Aaron's friend's explanation about why he thinks this is horrible. It's wordy, and I only post long posts when the words are mine, so go read the whole thing but the gist is:

The fact that a lion could tear me to shreds in a fight - it not only instills me with a sense of fear but a sense of deep respect. The idea of raising these beautiful and mysterious creatures to kill and eat in a commonplace burger feels on a visceral level like cheating. It's cheating nature. It's cheating life. It's ruining the mystery.

College Debt

I just finished reading this story about just plain stupid college debt.

I think the government should fully fund education through to BA/BS, with some requirement for a year or two of community service that could be accomplished in many ways. Graduate degrees could be funded with some additional service requirement: 5 yrs rural/at need practice for an MD/JD, teaching or some additional service for other graduate degrees. The catch is that this would only apply to state schools.

The woman in the story went to NYU. I lost most of my sympathy right there. I have very little pity for people who chose exorbitantly priced private universities in general, less if they finance through debt, and then get in trouble. I agree with the author that schools, like NYU, should help to keep their students out of this kind of trouble, but, really, NYU is priced for children of millionaires, with some token poorer students on a full ride to mix things up. Families in the middle are really quite screwed.

Hence public universities. They've gone up a whole bunch in cost as well the past couple decades, but a year at SUNY [city] is going to be half the cost or less of one at NYU. Because debt tends to finance the last bit, there is a good chance that half the cost would translate to a quarter or less of the debt.

There is also the complaint that she got this astounding debt while earning a religious and women's studies degree, which doesn't have the same earning potential as an engineering or science degree. That doesn't bother me too much as I don't think we should have differential pricing (or creditworthiness) based on major, and I do think that majors with lower earning potential are still valuable. Of course I also think we should pay teachers $100k/year and that banksters should have earnings well below that. So while it may be nice to live in my fantasy world it isn't real life.

In the real world some majors earn more than others. More importantly, some families can afford more than others. Higher education pricing is exacerbating that gap rather than reducing it. Making it easier to wipe out student loan debt may help. So too would limiting payments as a fraction of income. But any solution I would like would only apply to debt acquired at a public institution. It's all and good if some over proud high school student and his/her parents get all excited about Harvard, but hell if I think tax dollars should accommodate that education.

"Some Dreams Are Bad Dreams"

After hearing a very poor graduation speech Wednesday, I read a very good one today. Two big messages:

"Some dreams are bad dreams."

Do not live each day as though it is your last.

The two things do go together. Lots of personal triumphs are the realization of dreams that hurt other people (financially, emotionally, or physically). Actions have consequences. If this is your last day then they don't. It may be worth turning that around and asking people to live as if each day was the last for another person, but probably not. It's a good speech. Go. Read.

Frustrating Conversations

In speaking with someone regarding the AZ law I had mentioned that the sheriff from the Tuscon area (Pima county) has, as part of his jurisdiction, a decent stretch of the Mexico-US border, and that he opposes the new law. At the same time the Phoenix area Sheriff (Maricopa county) who supports the law is a ways in from the border. I was told that I was wrong and was ranted at for having an opinion but not even knowing the geography. The geography, by the way, is shown above. How wrong was I? A little. I would have place Phoenix closer to Flagstaff, and the edge of Maricopa county is only ~40 miles from the boarder at closest approach even though Phoenix is more like 130 miles.

I recognize that illegal immigration is not confined to the border, but the border is the point of conflict. That is the line that drug smugglers are trying to get across. That is where security forces will be working. That is where the rancher was killed (maybe by an illegal immigrant). I recognize that Tuscon is super liberal and all, but I'm pretty sure that their sheriff wants low crime, not high, and that he is far more likely to have to deal with boarder related crime, and that his opinion on the matter, therefore, holds a bit more sway to me. I'll grant that if it were the other way around I would likely make a different argument (something along the lines of how the Maricopa sheriff seems to strive for attention like Sarah Palin, and that he doesn't seem to care so much about solving the problem as bitching about it), but I digress.

I didn't know the AZ geography perfectly, but I had it right so far as the point I was making goes. Criticism leveled against what I had wrong is more an indication that the counter position is weak, or that the person who is posing it cannot adequately express its strengths.

Also, for the record, I think that Bush's push for immigration reform was good. It was one of the very small number of things that I agreed with him on (and strongly agreed at that). It was not derailed by Democrats, but by Republicans like Tancredo.

Sentence Failure

In the effort to condense complex ideas and thoughts into something for this blog I (often) end up with impossible to decipher sentences. There were a few in the gender discrimination article. Mostly what I wanted to say is that the pay gap is a symptom of gender discrimination, but not in a "evil sexist companies" way.

Evidence to my perspective popped up on CNN today in this article on women making more money than their (male) spouses. Until that article is not newsworthy, or even odd seeming to many people, there will be a pay gap. That has less to do with evil sexist hiring/salary practices and more to do with the way that we perceive roles for men and women as a society. That the article is news is still a problem, but what it says indicates that things are getting better.

This perception issue resonates across all gender issues (including the violent/angry sexism which is still around).

Vitamin D

The main reason anyone doesn't get enough is because we (collectively) spend too much time not outside. On top of that we tend to slather on loads of sunscreen when we do go out meaning that we don't get our Vitamin D even then. Now this study saying infants are Vitamin D deprived, especially breast fed infants.

That breast fed infants are not getting enough Vitamin D should tell people that we are insanely over paranoid about going outside and the possibility of getting burned. Not that we should have to give an infant a dietary supplement. I know that there are dangers of overexposure to UV and that it is worse than it was 1000 years ago, but it is also overblown. If you are sensible about going outside--don't be outside in the sun from 12-3 unless you have to and then keep covered first use sunscreen second, don't wait until mid summer and 90 degree weather to get sun, if you skin starts to feel warm get in or under cover, ...--then there shouldn't be a problem.

It only takes 15 minutes of exposure to get your Vitamin D. Supplementing this is insanity, not good practice.

Hornet's Nest Being Kicked

When it comes to the gender pay gap, I'm very conflicted, mostly because I'm male.

First off, according to the linked report there are "legitimate" things that cover a good portion of the difference (80%). The remainder, the authors say, can be reasonably contributed to gender discrimination. Seeing as the resulting gender pay difference is only 5% one year out of college (women make 95% of what men make in the same professions), I'll buy that.

I will, unfortunately, follow that with: it isn't really possible to control for everything: imagine two companies that do the same thing, but one pays employees 20% more and is 90% male while the other pays less and is 50% male. Even if size and all other perks are the same, the former company is male dominated and might have a harder time attracting and keeping women (even if they were to favorably hire them). Of course, this is still gender discrimination, as the other company is effectively taking advantage of the fact that they can get top tier women at 80% the price by having more of them to start out with. This is still a problem.

I suppose what I never feel is well addressed is the question "What does 'gender discrimination' mean specifically?" The authors don't really answer that question effectively and that means their solutions to closing the pay gap end up short. So while many of their solutions make sense and are good, some, however, seem based on their own acceptance of societal gender discrimination.

Particularly when it comes to a few issues. So long as child care is perceived as benefiting women's employment it is likely to hurt their paychecks with respect to men's. Same with family leave. Same with using hours as the primary measure of productivity. Simply proposing these things as solutions is conceding that women can't achieve the same pay level without these aids which men don't need that cost companies money. I don't believe that.

I don't expect to be paid as much if I don't work as many hours as someone else. I don't expect to be paid as much if I require more time off per year for family or medical emergencies. I wouldn't expect to be paid as much if I have a child and make (use of) the company provided day care.

But those are all related to societal gender discrimination, not workplace. We happen to live in a society that believes men are more valuable in the workplace in part because it believes men are less valuable at home and as parents.

It is very likely that workplace gender discrimination is still prevalent (particularly going back in time) but so long as it is socially ingrained it won't go away. Things that force the issue do--rightly or wrongly--make men angry. If we can reach a point where men see things like day care at work and family leave as being of great benefit to them, and if we can reach a point where a man who is a stay-at-home dad taking care of the house and kids is not thought of as "unmanly" and if we can reach a point where a woman who works is not considered a horrible mother and if we can reach a point that a woman who marries down the economic ladder does not seem odd, then we will be able to have gender pay equity.

It is possible, of course, that forcing pay equity through pro female gender discrimination is an effective and good method to doing this. But pretending that those solutions are somehow fair in a world that they are required only to produce fairness for women, and not that they are a different form of gender discrimination required because of the gender discrimination that is societal is just dishonest.

Housing and Inflation

Been playing with this.

I don't generally believe that thinking of a house as an investment is the right way to think. I mean, it is one, but it's not really a good one. When house prices are not being boosted by bankers gone wild they only grow at the same rate as wages (which is approximately that of inflation...most of the time). But what they really do is hedge your monthly living expenses against inflation.

If I buy a house now on a 30 year mortgage, my "rent" will stay static for 30 years then drop precipitously. Taxes are likely to change, so that isn't completely right, but that change is small compared to rents. Rents, like houses, tend to inflate with wages, but unlike houses, rents are locked in a year at a time. So next year, rent goes up, my mortgage doesn't. Same the year after and the year after that.

If I can have a mortgage payment that is only a little more than an equivalent rent (my mortgage is about the same or a little less than an equivalent rent) then I start gaining on the up front costs of purchasing after a few years. This is true whether or not the "value" of my house is increasing at a similar rate, or at all, and maybe even if it is falling.

People who plan on moving every 2-5 years don't necessarily get this benefit since the upfront costs to purchase takes a few years to wipe out and in the present economy will likely take a bit longer than normal.

To me this is one of the most important reasons to purchase. I like reading Patrick.net, but many of the rent vs own arguments I see there relate to immediate financials and not long term. If I can purchase a place at $2k/mo (mortgage + taxes + pmi/other) and rent the exact same place for $1700/mo it may look like renting is better (especially when factoring in closing costs), but that only holds for the short term.

This argument, of course, falls flat if we face deflation rather than inflation. So it is still a gamble, but even if you only listen to inflation skeptics (those that don't think we are likely to see high inflation starting in a year to a few years) you won't find many people arguing that we are likely to see much deflation, and that what we do see won't last. In fact many of the same people who have been arguing against buying houses (prices still need to come down!) also argue for buying gold! When it comes to a good hedge against inflation, historically, stocks do better than gold. Investments, however, are with extra money (what you don't need to live on) a is a way to use your monthly shelter payment (rent) as an additional hedge against inflation, and also maybe even as an investment (albeit a weak one).

This argument also falls flat if you buy a house at the wrong time and place, like, say 4 years ago in California. People who bought at the peak of the market may never recover their investment. Of course, people buying then were having to pay much more than what the equivalent rent would be.

The Theme Is: Education

I quickly glanced down a list of jobs paying $30-$40/hr and one thing was very clear: you need an education to get them.

Just a quick note, full time at $30/hr is ~$60k/yr. What isn't clear is how the hourly rate is figured. Does the $30/hr that a kindergarten teacher make only count the hours that they have students in class? That doesn't necessarily translate to how much they actually work, and it does leave out the gaping hole in their income that results from nearly four months unpaid. Does "post secondary" mean professor or just lecturer, and if the latter, does that only count the 8-20 hrs/week that they actually spend in a classroom and holding office hours?

Still, the message is clear if already well known: you are better off with a college degree.

Green is Cheap

I really don't think this message penetrates very well. I think mostly because of the very, very intense marketing we experience in this country. If you want to live "green" then: stop buying shit! Yes, also, don't live in a huge home. Don't fertilize the hell out of your yard. Don't leave your house lit up like Christmas every night. Keep the thermostat below 70 (or even better: 65) in the winter and above 75 (or even 80) in the summer. Don't take baths, and take fast showers.

But really, it is buying shit (particularly disposable shit but really pretty much anything) that is the problem. It has to be made, it has to be transported, it has to be disposed of. All of those things contribute carbon. That is true of food, furniture, toilet paper, baby wipes, every damned thing.

Of course, if people listened to that it would put an even bigger hurt on our economy, and frankly, most Americans don't really want to live "green" lifestyles as they kind of suck... I mean the nations with the lowest carbon footprints (per capita) tend to be among the world's poorest. Americans with the lowest carbon footprint also tend to be very poor (homeless, carless, and living in an urban setting).

No matter how "green" I become, I am responsible for a hell of a lot more carbon than an impoverished Bangladeshi. That would be true even if I were better than 95% of Americans (I'm not). Of course I'm orders of magnitude better than our nation's millionaires and billionaires.

Ok, So the Fix Is?

After bitching about Jamie Oliver, and reading Marc Ambinder's article on obesity, I figured that I should propose something that accomplishes what Jamie seems to be trying but that would actually work.

The obesity epidemic is huge, and the causes are varied and large themselves, as Marc very effectively points out. The solution, unfortunately, must be equal to it. As much as I dislike Marc's quick postulation about surgery for all, it--unlike Jamie's posturing--is a proposal that could really work. I don't like it though. Here are some other (maybe less unlikely to occur) things that together would do wonders:

1. End farm subsidies (at least increase subsidies for healthier farm products to match corn).
2. Tax soda (heavily) and pretty much any snack food and convenience food (chips, cookies, frozen pizza, dear God Hot Pockets!). More simply: tax anything that isn't produce (fresh, dried frozen or canned), or good grain products (whole grain breads, pasta, rice). Meat can be tax free as the ended subsidies will likely increase it's cost substantially. Really though, taxing soda and candy is a must.
3. Gas tax (min $2/gallon). People will drive less. This may also mean they will walk more. Also transportation costs will go up and so will the price of food shipped from further away, particularly for multi-shipped food (grain to mil, mill to cow, cow to slaughter/butcher, butcher to grocers). Many transport issues are actually not too bad other than the last one or two, but still...
4. Subsidize: public transit, biking lanes/trails, walking oriented development and growth.

There are two things making us fat: our diet and our activity level. We can't force people to exercise (or not eat cake) but we can make better eating cheaper and crappy eating more expensive, and we can make it easier for people to walk or bicycle, as opposed to driving. These things take a great deal of political will to happen, however, one that seems lacking today.

LHC Rap...Yes, it Sucks.

Not going to link the video. I mostly want to agree with Thoreau. The rap is bad. Very bad. It would be fine if done for something like Sesame Street, but the concepts are a bit to advanced (even when presented in simple terms as is done) for elementary school and younger children. It would be good as a intro to some high concepts in like a high school or college physics class, if it weren't for the fact that it is a horrible rap.

Many science dorks (myself included) will find it funny and cute. But it is not going to do science or scientists any favors used as general public outreach.

It's German for "The, Goldman Sachs, The!"

I would love for Goldman Sachs to die a flaming death, but in the unlikely event that they do, it will probably be a slow bleed. Propped up as much and as long as possible by their buddies in Treasury and at the Fed. At least long enough for all the principles to get their billions out and stick the rest of the stock holders with a massive loss.

Jamie Oliver - Spoiled Ignoramus

I'm not much of a Jamie Oliver fan. Not because of his food, but because he just comes off kind of ignorant and haughty. I, therefore, am tickled by his Food Revolution fall on his face. I first saw the clip on Colbert where he grinds up and seives chicken gunk (bones, cartilage, fat, skin, some scraps of meat) to fry then asks kids whether they want some of those chicken nuggets, and they all do!

I was happy. The main reason was that grossing people out of eating some foods--while effective on some level--is a bad idea. Plenty of people, were they to go to a slaughterhouse, would swear off meat. Most of those would return to eating meat within a week. More, how many people refuse to eat things that are good because of some arbitrary perception that it is gross? Grossing people out just doesn't work: people will go back to eating some things, and will use that as an excuse to not eat others.

On tom pf that, this chicken nugget thing to me was encouraging waste rather than healthy eating. It would be better if we ate more of each animal, fewer animals overall, and threw less away.

After reading the link, I got a bit more angry. It kind of distills Jamie down to his essence. Yes, it would be good for people to eat better, for many reasons. But many (probably most) people lack the time and money to have good quality meals on a regular basis, whether home made or premade (like Kashi). Good food is expensive, time consuming, or both. Jamie's attitude is more than a little arrogant. I like to cook, but I don't do so every day, because I am tired and don't have that much time. I probably do have the money to eat well even when I'm not cooking but I don't because I think it's too expensive. Plenty of people have less free time and money than me. Jamie Oliver is an ass.

Valuing Housing

For all I've read about mortgages being under water and house values falling I find it odd how arbitrary house "values" are.

A house is nominally worth what people will pay for it. But the only way to find out what a house is really worth to someone is to sell it. Even then, you are only finding out what that house is worth to a single person (or family) in some limited fashion (timing and who offers/can pay the most). In a case like an appraisal the value of the house is also arbitrary but in a different fashion. Look at other houses, see sale prices, figure differences, attach dollar figure to differences, take temperature of market and determine if adjustment is needed...get number, say that is what the house is worth.

The case of selling demonstrates the value of the home to just the specific buyer and seller combination in a purchase that has more emotion involved than other buying/selling decisions. The case of appraisal demonstrates the value that some third party guesses for the house.

One of the major deciding factors for a home price is the monthly payment. People tend to pay what they can afford and what they can afford is a monthly payment, not the total price.

This is why things like the negative amortization ARMs were able to drive house prices up, they drove monthly payments down. Having more DINKs (dual income no kids) also drives housing price up because they have more income and can afford a higher monthly payment. The later, however, will produce sustainable higher prices so long as the fraction of two income families remains constant or increases (it cannot do sustained growth as at some point the DINC fraction would get saturated). The former is doomed to failure.

Still, it is the monthly payment that people can afford and not the whole house. As such, along with bizarre financing and more income things like taxes, interest rates, down payment requirements, all alter the "value" of a house. So my house is not worth $100k or $200k but worth what I can and will pay per month for it, whatever that works out too, all things considered.

Despite lots of advantages, I was still a little wary about buying when I did because interest rates were very low, which inflated prices. The housing tax credit also increased prices, though less than it is now since it was not available to everyone then. On the other hand prices were depressed and I did qualify for the (very stupid) tax credit.

I'll do work on my house over the years and that may make it worth more or less. But my house has no meaningful value until and unless I (try to) sell it. Granted this is not entirely true as my property taxes are based on an imaginary value, but that value is as much political as real and the numbers there are laughable.

One particular place where this imaginary number was made meaningful was with HELOCs (home equity lines of credit). All of a sudden people could get a lot of real money (debt) based on the imaginary value of their home, and many people took out up to 100% of the value. I think that HELOCs are not bad, but they should be capped at something reasonable (50-80% of the lower of mortgaged or appraised value).

Ok, this is getting rambling, and has been a draft too long. I'm posting. May revise/tear down later.

Don't Get the Disgust

Over KFC's new "sandwich" the Double Down. It's really no different than eating chicken cordon bleu: a fried chicken cutlet wrapped around cheese and pig (ham). I suppose everyone is grossed out by the idea of meat as bread, but that's really more of a mental block than something that is actually disgusting. I can't see there being all this news if the double down was exactly the same but a bun was added around the outside of it. It's two pieces of fried chicken with cheese and bacon.

If this was served on a plate with the cheese and bacon on top of the chicken and along side some potato salad (or mac and cheese) and green beans, it'd be a $15 dinner and people would be saying how it was comfort food or some shit.

On top of all this the noteworthy lack of carbs in this means that, for a sizable chunk of our population, it counts as diet food!

I guess the main thing that bothers me is that the press coverage (like that of the ipad and Tiger Woods) of this is just stupid. It's a novelty item that should be relegated to a quick mention between real news.

Maybe if there was a piece of lettuce in there folks would back off, but then CNN wouldn't be giving KFC so much free advertising. So way to go KFC! Shame on you news media!