Thursday, December 20, 2012

This is Tricky

So if a [chain] restaurant messes with tips in such a way as to pay more people the $2.13 minimum for tipped staff, it is evil and wrong, but if a coop does it, that's just fine and they are good?!?

It seems to me that they could just pay all staff minimum wage, still accept tips and then split those up (along with some other profit share).  I mean, it isn't illegal for a (full) minimum wage employee to also get tips.  Just look at coffee shops, or Oregon/California/anywhere else where the state has mandated everyone gets at least the state minimum wage.  Is it illegal for them to pool the tips and divide it among all if they are not using that as a loophole to pay employees less? 

I'm sure that there is more to the laws than that of which I am aware, but it seems to me that there is a simple solution here, and no-one should be bitching/cheering for low paid employees.

Odd, Liberal Policy Makes the Deficit Smaller

Oh, and the economy bigger...

I only selected the most liberal positions [available] and got a huge boost in the economy and a budget surplus in 3 years.  Weird.  Hell, even if I keep the defense spending where it is I get surpluses. 

Yes, there are conservative positions in there too, but they don't boost the economy or cut the deficit by as much, and they hurt the poor while benefiting the rich (including defense contractors).

Note: letting all the Bush tax cuts expire--though keeping the wage tax cut and all the stimulus spending, incl. tax cuts--has a large effect.  I also got rid of all the allowed tax deductions, raised the gas tax, implemented carbon tax, added a public option, sped up the health care excise tax, and raised the SS taxes as much as it allowed.  I ignored the 15% tax expenditure thing, mostly because I ended the other deductions, and want to encourage the rich to donate to charity at higher levels.

On the other hand, if you select all the conservative options, the economy recovers more slowly, and you are still running deficits at the end of the timeline (2021). 

The biggest "conservative" item is probably the VAT, which is only conservative, in that it is a regressive tax.  Some liberals kind of like VATs because they are more behind the scenes and people have notions (delusions) that they can be increased and made more progressive more simply than income taxes.  Without the VAT, however, the "conservative" options lead to higher deficits than current law (which is something that all smart people already know).

Friday, December 14, 2012

Asked and Answered:

Another horrible gun tragedy and representative CNN commenter asks:
If this person didn't have a gun you honestly believe he wouldn't have found a way to hurt someone?
Ok, first, obviously, this question is stupid on it's face as "hurt someone" is somehow supposed to be as bad as "killing many people including many children"?  How much of a heartless ass do you have to be to even posit that?  Don't answer.  Instead let's rephrase:
If this person didn't have a gun you honestly believe he wouldn't have found a way to [kill a bunch of people including lots of children]?
This one is easy: "Yes, yes I do."  Okay, are there really people out there who are so stupid to believe that if this person had shown up with a knife that the results would have been the same?!?

Then there are the people who believe arming the teacher(s) would fix this, which assumes 1) that the teachers would all think bringing a loaded gun into a classroom was a good idea and 2) that in such a situation having civilians with handguns shooting also would somehow make things better.

Gun advocates are simply insane/idiotic/evil/all-of-the-above. 

Hear Hear!

I support solar panels for everyone

Thursday, December 13, 2012

Yea But Not Just That

Atrios' answer to Paul Waldman's question is correct, but there is actually a meaningful economic point to being more concerned about marginal rates than just total tax bill.  The reasoning is incentives, and the idea is sound enough, but it is just really stupid to apply it to the US and our current tax code.

Basically, if someone pulling in $500k/year and paying $130k in taxes works a bit harder, and makes an extra $50k, then the extra taxes are (essentially) that times their marginal rate and that's it.  If you adjust things so that their taxes go up to $200k, but their marginal rate remains exactly the same, then their incentive to work harder and make more is unchanged.  If, on the other hand, you keep the loopholes, but increase the marginal rates to offset the same difference, now, the incentive to working and earning more has been reduced (possibly by a lot).

The problem with this argument in the US is that the incentives are already very backwards.  As much as the federal income tax is progressive, most state taxes are flat to regressive, same with city, and wage taxes are--by virtue of SS not applying to anything over $106k--regressive.  On top of that many social insurance programs provide diminishing benefits as income increases, which sets up some points where the effective marginal tax rate exceeds 100%, and that is all at lower incomes.  The result of all this is that marginal effective rate is pretty flat (~40%) for everyone except the very poor (where effective marginal rates are near 100%) and the very wealthy (where it is 15%).

An extreme show of the negative incentives at low income is in the chart below, where a single mom with $29k in income has to more than double that to regain the same standard of living.

I would like to note that the presentation that comes from (PA sec of public welfare) is, despite this very nice graph, not really good.  The problem with our tax and transfer programs is that they are very complex, and feature abrupt ends to many benefits.  But this is the case because the better (simple, gradually diminishing benefits that leaves no cliff) solution is not politically viable.

A simple cash transfer program through the tax code would be great, but people have strong objections to giving no-strings-attached money to [poor] people.  So we have to give food stamps (that can't be used to buy clothing/housing) and then a housing program (that doesn't help with health care) and then a special insurance program...  On top of that they have hard cutoffs, because "clearly someone making $x per year doesn't need help with [y]" but since non-heartless, non-assholes want to provide as much help as possible, that assistance is provided right up to the cutoff (also, with something like medicaid, it is really hard to taper it off without making it insanely complex...and without being a total prick). 

Wednesday, December 12, 2012

Mark Bittman Doesn't Understand Farming

Another infuriating article by Mark Bittman.  Ok, yes, herb-, pest-, fung-icides are bad and dangerous and can cause problems myriad.  But organic farmers also use herb-, pest-, fung-icides, just "organic" ones.  These are not as well tested, they are in some cases known to be more toxic than the non-organic versions (I linked this before but am too lazy to find it now), and they have much less regulation attached to them.  Since they tend to be less potent they also must be applied in larger quantities.

So, no, switching from standard to organic doesn't necessarily improve your health prospects, and it may reduce them.  It does reduce your exposure to "chemicals" but we don't know what the trade-off is, and we don't know if it is better or worse.

The sustainable/natural agriculture movement in this country is very frustrating from a scientific point of view.  The hysteria surrounding things like GMOs and conventional farming is damaging to the prospects of sustainable/healthy agriculture.

Monday, December 10, 2012

Housing Recovery

On one side there are vast sums of money to be made in housing.  On the other the time scale is still too long for most investment types, particularly larger scale, so something like buying cheap houses, renting them for a few years, then selling them to realize huge capital gains is a really smart strategy.

I just don't think it will go as well as the bankers think.  If an individual wants to buy and manage 2 or three renal properties themselves, that can work (easier in some cities than others).  If a block of investors wants to buy and manage an apartment complex and/or a neighborhood worth of houses (well concentrated) then that can work.  But if a huge investment group wants to buy and manage dozens to hundreds of homes in disparate locations across the country?  That's a disaster waiting to happen.

The problem is location and distribution of profits.  One person can manage a small number of houses, provided all profits are going back to that one person.  An investment company, however, needs to be profitable while paying someone a salary to manage those houses.  This is normally done in rental markets with volume.  An apartment complex allows a small number of people to manage maybe hundreds of units.  Even accounting for empties this isn't too hard to manage a profit with. 

That same handful of people can't manage houses located hundreds of miles apart in different cites/states.  Also, you can't really cut back on management in such a way that 100 properties have the same total management costs.  So now the cost of management goes up by 10-fold, and it is that much harder to be profitable.  It isn't impossible, and come sale time, could still result in lots of money, but to manage the properties in the meantime probably means an operating loss for the investment company.

"Franchising" out the rental properties may be a solution to prevent/minimize losses without sacrificing management of properties (individuals bid on managing properties and get to take all the income from said properties over a 5 year period...think you can manage an average profit $700/month over 5 years, maybe you'll pay $12k upfront to do so).  This doesn't really do much for upfront investors, however, and so it seems very likely that poor to non-existent management will happen in many cases (I'm pretty sure that tenants being treated horribly is Atrios's fear here).

Friday, December 07, 2012

Revolving Credit Mystery (to me)

I'm sure someone knows, but if someone routinely charges $1500/month on his credit card and pays it off entirely each month, does that count as debt and savings?  I'm sure it all works out in the wash, but I am curious nevertheless.  If someone else charges $500 a month and pays it all off does she somehow get noted as saving* less since she is paying off less "debt" each month?

I guess I really want to know about how the balances work.  I'll be charging more this month than next, but because of that I will pay off more next month than this.  Because the charging and the payment are in different months, do I get noted as running net savings/debt in given months based on that.  If I were to increase spending each month by 0.5% would that show as me constantly increasing my debt load even though I am paying it off every month? 

Also, would I know the answers if I actually read the whole report?

*paying off debt counts as savings

Scientists vs. Non-Scientists

I think that is the biggest problem when it comes to the consistently overly conservative reports on the effects of climate change (global warming).  The IPCC probably does do a very good job of reporting the science, but scientists (due in part to our inherently conservative bent and in part to things like peer review, and the very fuzzy nature of projections) are likely to shy away from more dire least within journals, and maybe meetings.

Non-scientists, however, simply don't understand scientists.  Scientists want to keep the uncertainty in measurements and predictions as low as possible--or, another way of putting it, to have as high a confidence as possible. But that focus can be problematic when new data doesn't match existing.  There can be an urge to dismiss outlying data, to assume that if something is significantly different than what others have found, it is likely to be wrong.  Prediction in particular is a very difficult area to deal with, especially when those predictions relate to complex systems and long time scales.  Very small changes in initial settings can lead to very large changes in the results. This isn't normally wrong.  Typically, the odds are that if your data is different from all existing data, you messed something up. 

The political particulars of global warming impose another constraint--one that causes a systematic push towards more conservative reporting.  No one wants to get it wrong on the high side and give fodder to the anti-science, anti-gloabal warming crowd (not that they really need anything since they tend to make up crap even without).  (Also, no one wants to be chicken little or the boy who cried wolf.) 

So things are worse than most predictions.  Al Gore was right, but he's fat and claimed he invented the internet so no one should listen to him.  On the other hand the world may end in a couple weeks here when the long count runs out and we won't have to worry about the inevitable humanitarian crisis to come after all.

Wednesday, December 05, 2012

Coins and Bills

In the face of the manufactured crisis that is the austerity bomb, it looks like at least a few people are hoping to convince Congress to switch our $1 cash form from a bill to a coin.  I am wholly in support, of course (I also think we should add a $2 coin to the mix, the combination would mean this article is crap, as seigniorage would be much greater, and usage of the $2 would be likely higher than the $1).

Really, though, if someone wants to argue for making/saving money with the mint the most obvious solution is to stop minting the penny, and even more so, the nickel.  Both of those cost more to make than the face value.  If we stopped making them we would save money.

There are weak, but understandable arguments for keeping the $1 bill--I disagree with them but they exist--the arguments against killing the penny on the other hand (or the nickel, but you hear more about ending the penny) are some combination of paranoid, and/or stupid (I was going to add selfish, but those are pretty much also stupid).