Thursday, March 31, 2005

As if Michael Schiavo weren't enough of a monster...

Remember that he's already denying Terri a Christian burial, which her parents want. That's apparently not enough. The AP reports:
Terri Schiavo's ashes will be buried in an undisclosed location near Philadelphia so that her immediate family doesn't show up and turn the burial into a media spectacle, a member of the Schiavo family said Thursday.

"If Mike knew they would come in peace, he would have no problem with it," Scott Schiavo, Michael Schiavo's brother, said during an interview at his home.

After an autopsy, Michael Schiavo plans to have his wife's body cremated and her ashes brought to Pennsylvania, where she grew up. Scott Schiavo said the ashes would be buried in a plot left by an aunt and uncle, but the family does not plan on providing the specficic location for the burial — underscoring the bitterness of the dispute.
Even after her death, this pig is doing everything to spite her family. Spite is all it is, not this excuse that the Schindlers (who I call Terri's real family, not adulterer Michael). He's denied them her life, he's denied them her body, and for Pete's sake, he denied them the right to be there as she drew her last breaths. Hell, the only reason he agreed to an autopsy is the immense public pressure. So now he must retaliate by denying Terri's family the right to attend her "burial," claiming they wouldn't come in peace though she's their own daughter?

And he wonders why he's getting so many death threats.

Thou shalt not commit adultery, Michael. I'll say this one nice thing, I guess. He's such scum that I figured he'd marry his girlfriend the same day. Or maybe he has.

If there's a problem with U.S. debt, it's not nationality

Don Boudreaux has it exactly right:
The real problem is neither the nationality of America's creditors nor the size of the current-account deficit. It's government irresponsibility -- irresponsibility that results in excessive government spending and sub-optimal means of financing this spending.

There's something surreal about serious people discussing serious proposals for how the government can solve these problems. The vast, twisted set of political institutions that separate power from responsibility, and separate individual choices from individual consequences, is the ultimate source of whatever genuine problems exist – namely, here, outlandish government spending and excessive deficit financing. Concerns about the current-account deficit or about the nationality of Uncle Sam's creditors are red herrings.
I won't even try to summarize it; just go read it.

Another win for big government

Today, the New York Metropolitan Transit Authority's board unanimously voted to accept the New York Jets $720 million bid for the West Side railyards, the site of the proposed West Side Stadium. Three non-voting board members opposed the bid, to no avail.

What's unbelievable is that the board rejected Cablevision's $760 million bid, calling it "not credible." And the Jets' bid is at all credible? Cablevision's proposal to buy and develop the lands is 100% funded by Cablevision. The Jets will buy the railyards themselves, yes, but their complete plans to build the stadium and develop the surroundings are possible only because of $600 million from taxpayers. Once again, we have the old "full faith and credit" lie of big government: "full faith and credit" only because the taxpayer's wallet backs it!

Even the New York Times admits the stadium's projected cost is now $2 billion. At first, it was a billion-dollar stadium. Then a few months ago, it was $1.3 billion. When will the madness stop?

This is my prediction. If the stadium proponents win, sometime during its construction, the Jets will claim they're out of money and can't afford to finish the stadium. Bloomberg (assuming he wins re-election this year) will say that we can't leave the stadium half-finished, especially when it's for "the public benefit." Then the city and state governments will pony up whatever money is needed.

The Times article notes that the state budget currently being deliberated in Albany does not include New York state's share of the stadium: $300 million in tax dollars to help finance it, with NYC putting up an equal $300 million. Hey, why worry when you have the taxpayers as an unlimited credit card?

Terri, rest in peace

The AP reports that Michael Schiavo's monstrosity extended even to preventing Terri's parents from being at her side to the end. [Minor change here, the original wording implied he let them stay at her side.]
The feud between the parents, Bob and Mary Schindler, and their son-in-law continued even after her death: The Schindlers' spiritual advisers said the couple had been at their daughter's besides minutes before the end came, but were not there at the moment of her death because Michael Schiavo did not want them in the room.

"And so his heartless cruelty continues until this very last moment," said the Rev. Frank Pavone. He added: "This is not only a death, with all the sadness that brings, but this is a killing, and for that we not only grieve that Terri has passed but we grieve that our nation has allowed such an atrocity as this and we pray that it will never happen again."
I was hoping for a miracle. It's difficult to understand why God lets things happen, but we can only press on with our faith, believing there's a higher purpose we can't yet fathom.

I still ask: even if Terri didn't want to live that way, do you really think she wanted to die that way?

Wednesday, March 30, 2005

A note to Combustible Knowledge

I haven't seen a way to contact you, so if it's all right, I'll thank you in public for linking to a couple of my blog entries. I greatly appreciate being linked to, and it makes me feel "welcome" as a new blogger.

Taxes, taxes everywhere

A friend sent me this last night, adding, "Your governor must be pissing himself happy over this one." I haven't seen this discussed in the blogosphere.
ALBANY, N.Y. -- A telecommuter who lives out of state while working by computer for a New York employer must pay New York tax on his full income, the state's highest court ruled Tuesday in a case that could have wide implications in the growing practice.

The Court of Appeals said that computer programmer Thomas Huckaby who lives in Nashville, Tenn., owed New York income tax for his full salary, not just the time he spent working at his employer's New York offices.

Huckaby paid tax on about 25 percent of his income over two years for the time he spent working in New York state. But the court upheld a state tax department ruling that all his income should be taxed. That amounts to $4,387 plus interest. However, the ruling could lead to much greater income for the state as it is applied to the growing field of telecommuting.
The money-grubbing state just can't keep its hands off your paycheck, can it?

New York Gov. George Pataki can go to hell, as far as I'm concerned. I thought Guiliani would be a fine successor if no other good candidate ran -- until I saw Giuliani's commercial this morning on Fox News, drumming up support for the bad idea called the West Side Stadium. Sorry, he permanently lost my vote when I saw his pro-stadium commercial this morning on Fox News. I just can't support someone who thinks throwing $600 million into a sports stadium will "jump-start" the local economy. Read my lips, Rudy: that's $600 million you're taking from people. Ever read Bastiat, Rudy? You might create jobs with that $600 million, but that's $600 million less that would have been spent elsewhere. And believe me, if the free market saw potential in investing $600 million there, major investors would have done it long ago. The fact that the Jets have to get government funding shows that private investors aren't too sure it'll be profitable.

Come to think of it, if I can find "What Is Seen and What Is Not Seen" in a little pamphlet, I'll send a copy to him at his consulting office.

I don't know where NY Attorney General Elliot Spitzer stands on the stadium, but he can't be worse than Pataki when it comes to taxing and spending. The New York Post today had a great name for Pataki (Republican), Assembly Speaker Sheldon Silver (a Democrat) and Senate Majority Leader Joe Bruno (Republican): the Axis of Taxes. I myself call Pataki, Silver and Bruno the Taxing Triumvirate. Taxing not only in dipping their hands into every paycheck, but in how they vex us taxpayers.

Their latest conspiracy is to boost the Metro Transit Authority's share of the sales tax. My personal belief is that any government money to support the MTA is wrong: like any private business, it should be supported strictly from the sale of its products. If that means subway and train fares jumping 50%, so be it. (This goes for the U.S. Postal Service, too. It should receive zero funding and instead derive revenue strictly from its postage and services.) It's the fair thing to do, because I find it morally reprehensible to tax everyone for something that not everyone uses. I've been taking the Metro-North railroad into Manhattan lately, then riding the subway to get here and there, so I'm finally getting something out of all the taxes I've been paying. But why should I and others who infrequently use the MTA help subsidize it for regular train-goers and subway riders?

Meanwhile, ultra-liberal Fernando Ferrer opposes the West Side Stadium. In the 2001 NYC mayoral race, Democrat-turned-Republican Mike Bloomberg was still obvious as a liberal. It's just that Ferrer was too liberal to be elected, even in New York City. Still, a liberal's liberal like Ferrer daring to question the spending of $600 million in tax dollars, while Republican superstars like Giuliani think the stadium will pay for itself?

Ignorance of history

I think I've mentioned before that I don't watch much TV, and very little TV news. But while I was waiting this morning in the staffing service's reception area, they had Fox News on.

Senator James Sasser, I believe, was on the morning lineup. I didn't quite catch it when someone called him by name. Really, news channels ought to have name banners up all the time, in case you tune in late. Anyhow, the guest was a former senator who also served as ambassador to China, and Sasser fits. I took note of his absurd remarks once he downplayed the emergence of "democracy" in the Middle East. (I prefer to say "self-rule" because pure democracy is tyranny of the majority). One of his reasons? He claimed that Hitler was elected democratically. Ah yes, the old fallacy that you can't let people elect their own leaders, because they might elect a dictator.

This has been blogged about ever since Ted Rall's rubbish cartoon comparing George W. Bush to Hitler, with the bogus claim that they're alike because both were elected "democratically." Well, no matter what Sasser, Rall and other historical revisionists claim, Hitler was never "elected democratically" -- and let me give my own little rundown of the history.

The Nazis were elected by a plurality, not a majority. They simply had the most seats in the Reichstag, whose seats were apportioned among the various political parties by how much of the popular vote each party won. In the 1930 elections, the Nazis won 18% of the popular vote, making them the second-largest party. However, not being a majority, they had to cope and negotiate with the other factions.

In the March 1932 presidential election, Hitler received only 30% of the vote, while President Hindenburg received 49%. However, winning required a true majority of the vote, so a runoff election was held in April. Hindenburg had a clear victory with 53 percent. In July that same year, the Nazis won 230 out of 608 total seats. They were still not a majority, but they had become the largest political party and could try to exert real power. In the November 1932 elections, though, after all the political struggles and stalemates, they lost 34 seats.

After a two-month stint with the ineffective Kurt von Schleicher as chancellor, President Hindenburg and his advisors decided to name Hitler to the post. They believed they could control him, assuming he'd have to join coalitions and work with other factions -- after all, the Nazis weren't a majority. But Hindenberg was a bit senile and depended greatly on his naïve aides, and as the saying goes, the rest is history. The Reichstag eventually passed the "Enabling Law," effectively giving Hitler dictator powers. It allowed him to pass laws without needing the Reichstag, solidifying the appointed Hitler's totalitarian rule.

So the next time someone claims that Hitler was elected democratically, tell him he's full of it. I wish the Fox News anchor or the other guest had called Sasser on his ignorance of history.

Going on interviews while noticing my former employer's shakeup

I've been busy during the first half of this week, so sorry about the light blogging. I've been interviewing at a couple of places and tending to necessities of real life.

Incidentally, since I'm currently in-between jobs, I'm all ears if someone knows of a good staffing service that deals with New York City, Westchester County, and the western edge of Connecticut (like Greenwich and Stamford). I have a B.A. in economics, good analytical, math and writing skills, and lots of IT experience (I consider myself quite expert in Windows and Office). After almost a couple of years at Morgan Stanley (working in operations at a retail branch), it was time to go when they cut my hours. It wasn't my first "real" post-grad job after returning to college and completing my degree, but it paid the bills and was an easy job while I waited for my "big break."

The New York Times has an update on the Morgan Stanley management fracas: a third top executive has resigned. Yesterday, Chief Executive Philip Purcell changed the top management structure by replacing the president with two "co-presidents." That prompted two top executives, the heads of the Institutional Equity Division and Institutional Securities Group, to resign.

I'm not really going to comment on the particulars of this corporate intrigue, but I'll say this. I believe that company executives are worthy of their hire, if they produce results. Right now there are a former Morgan Stanley chairman and former president, backed by some big shareholders, who are less than pleased with the company's direction. They're bluntly saying Purcell should go. Do they think Purcell is rearranging the top management structure like FDR was trying to stack the Supreme Court? Maybe, maybe not. Nevertheless I think Purcell had better take care, lest the shareholders get "annoyed" if he gets more lucrative rewards for what they perceive as poor performance. As I recall, last year he received $2 million in stock options alone.

Meanwhile, at least at our branch, operations personnel haven't received a pay raise in over three years, coming up on four. I'm not calling specifically for "efficiency wages," but Morgan Stanley will continue to lose good people (from all rungs of the corporate ladder, operations up to presidents of entire divisions) if they don't get on the ball.

Update: corrected "Individual Investor Group" to just "company" (the IIG is the division where I worked).

Tuesday, March 29, 2005

That's gratitude for you!

"Bush offers help to Indonesia quake victims"

Earlier the AP news story title said the U.S. "vows" support to Indonesia. Isn't it amazing that Indonesia denied our use of their airspace for our pilots' training (forcing some to be grounded, because pilots must train a minimum amount), yet when they experience another natural disaster, we're right there with assistance? What nation would continually offer a helping hand after being questioned, criticized, and then spat on? (And that's just by the UN. The real fun starts when the aid recipients complain about how we're helping them.)

Only America. Only America is expected to respond to every major disaster across the globe, then turn the other cheek and smile when we're insulted for doing no more than trying to help.

What would Bastiat say? Part II

"Liberté, egalité...pfft, je voulez seulement le 35-heure semaine!"

Last week I noted that France is finally terminating its 35-hour work week. I like using that particular verb, because to me it implies killing that madness, not just ending it. Russell Roberts at Cafe Hayek has a terrific explanation of why a cap on maximum working hours is doomed to fail:
Suppose you want to create jobs in your society. Does it seem logical that to create more jobs, you need to restrict the effort of the people who already have jobs? Well, sort of. If it currently takes 100 people to do a certain task, then cutting their work effort in half would then require 200 people to get the job done.

The logic at first glance seems pretty appealing. On a certain level, it seems undeniable. Yes, there might be problems in monitoring how hard people work. But you can see the surface appeal of the basic proposition. It's just basic arithmetic. Half of 200 is 100.
Read the rest, it's really a wonderful, down-to-earth explanation. It's all about what I think is the real I word in economics: incentive. Incentive is why the 1990 luxury tax actually lost net revenue. Oh, I'm sure the Joint Tax Commission tried to account for some reduced purchases of expensive cars, boats and jewelry, but even so, they clearly underestimated the effect. Incentive is why you can never assume that you can change one piece of public policy, and everything else will stay the same. As Dr. Roberts said further:
What seemed so obvious at first to be undeniably true because of arithmetic—cutting the amount of work effort in half would seem to require doubling the number of workers—actually turns out to be false. So what would you call this fallacy? The arithmetic fallacy. Or maybe the vertical demand curve fallacy. Or maybe the Ceteris isn't Paribus Fallacy.
But even if all else were equal, a cap on the work week wouldn't create employment anyway. I once again ask my favorite question in all economics: what would Bastiat say? Let me take a stab at it, paraphrasing "What Is Seen" (with all due and profuse apologies):

"Well, then, suppose I hire seven men to dig a ditch on my land. It will be completed in a week if each works 40 hours. Just as I conclude this agreement, the legislature decrees no man may work more than 35 hours, regardless that he is willing. My original contract is broken, and one of two things must happen: I must hire an eighth man so that my ditch is dug in the planned week, or using those seven men, it will take one-seventh more time to dig my ditch. On what basis do you dare to affirm that this created any employment? Do you not see that it is only a simple transfer of labor? Since I must have my ditch dug in a week, an eighth man has a new job, it is true; but now seven men have each lost five hours of labor, and this is just as true. The eighth man may now labor for 35 hours, but the original seven men have together lost those 35 hours. All that one can say is that the eighth man with a job is what is seen; the seven men who have lost labor are what is not seen."

Let's imagine I'm a shop owner who's hired a few people. (I've helped a family member manage a retail store and know all about needing additional help.) If they're suddenly legislated to 35-hour weeks instead of the 40 hours I need from them, I'll have to hire someone part-time for 15 hours. But just one person will still require more administrative overhead: I'd have to spend more time on that person's payroll and tax records, not to mention determining when everyone else would work. So as Bastiat might tell us is a best case scenario, there's no increase in labor, only a transfer. As a shopkeeper in the real world might tell us, there's no increase in labor, and he loses time attending to paperwork for the new employee.

Update: I noticed I was wrong in the extra time required; it's one-seventh more, not one-eighth. Let me also add that there are costs merely from enforcing this cap on working hours, not just to government, but to employers too. Many companies in France have security guards to check people's briefcases and bags on their way out, and the guards naturally cost money to employ. Maybe some guards are merely moonlighting; they need the part-time income to compensate for losing hours at their main jobs.

Monday, March 28, 2005

I've never said our troops were saints, but...

I could never have sympathy for our "prisoners" in Iraq, i.e. insurgent terrorists who were caught shooting at our forces, trying to bomb our forces, etc. However, I'll strike a deal with Bob Herbert and his fellow bleeding hearts: let's see them devote as much energy to Daniel Pearl, Nicholas Berg, Paul Johnson, and Shosei Koda -- maybe then I'll feel bad about Arkan Mohammed Ali's alleged torture.

I'm not saying our troops never tortured anyone, nor am I saying any torture is fine. But if a prisoner can divulge precious information, I have no problem with "methods" being employed to extract such information. Torture isn't the nicest thing to do, nor does it enhance our reputation. Then again, that assumes we gave a damn about enhancing our reputation in France, Germany, Iran, Syria, Libya... So I really don't weep when a prisoner is "humiliated" after being captured for attacking our forces. Michelle Malkin recently blogged about an "enemy combatant" who was released from Gitmo -- and promptly returned to fighting U.S. forces, even taking two Chinese civilians hostage. At least that piece of scum died, but it's a pity he didn't die the first time around. He's not the only one we've released, only to have to fight again: Ms. Malkin linked to Daniel Pipes' blog, which has information on other Gitmo "detainees" who were freed and immediately returned to their terrorist ways.

Frankly, Ali is lucky we took the trouble to capture him. Heaven knows that he and his fellow terrorists wouldn't have been so merciful. Their use of roadside bombs is not just cowardly, but indicative of their intent to take no prisoners. They want strictly to kill, not capture, unless one of our personnel can prove useful.

The ridiculous complaints about how "inhumanely" we treat prisoners reminds me of one of my father's war stories. He was stationed at the Panama Canal for most of World War II, then after he was shipped back to the States, he spent the rest of his service at an Army base (in Massachusetts, I think). I do know that German POWs were being held there. Some served the officers at mealtime, but I don't know if they were "allowed" or it was a way of making them useful. Once our personnel had finished their meals, these POWs had their turn to eat.

One day, my father saw a POW open a tin can of pineapple, dump the entire contents onto a plate, then start consuming it all like it was no big deal. A whole can of pineapple. Never mind that an enemy soldier, someone who had been shooting at our boys, was eating nutritious, rationed food that we needed for ourselves -- it was food most civilians had trouble getting!

The United States, with exceedingly few exceptions, treats our prisoners with more humanity than anyone else. So why do the New York Times and others paint us as the bad guys?

Sunday, March 27, 2005

Why China won't let the dollar slide too far

Combustible Knowledge properly accuses the Honolulu Advertiser of cowardice:
...what the editorial staff is saying is that China has the U.S. by the balls because they are holders of a large amount of U.S. debt and that we should tread carefully. The implicit message is the same old liberal philosophy: to appease. It's a good thing that Condi has more balls than the editorial staffs of the Honolulu Advertiser and the Star Bulletin.
I'm not the first to observe that China's leadership is smart, very smart. They're looking decades ahead, when most of our own leaders barely look past the next election. There's a very simple reason that China, Japan and South Korea will do what it takes to preserve a strong dollar: they know doing so is in their self-interest. Ideally it's the Fed who should maintain our dollar's strength, but China, Japan and South Korea will step in if necessary, because a weak dollar will hurt them too.

Huge dollar holdings are a two-edged sword. Some have suggested that since China pegs the yuan to the dollar, China benefits from the dollar's depreciation over the last few years (a weaker currency promotes exports and discourages imports). That much is true, but there's an unseen effect.

China would take a huge hit on its dollar-based investments. At the end of 2004, China had approximately $600 billion in foreign exchange reserves, second only to Japan in size. Not all are in dollars, but China has more than a few nickels in U.S. Treasury securities, and it's even started investing in asset-backed securities. The bottom line is that China needs a strong dollar to maintain the value of its dollar-denominated investments. It's also to China's advantage to promote, or at least maintain, confidence in the dollar. When the dollar depreciates, it becomes harder for China's central bank to main the yuan-dollar peg: it must selling more and more yuan to buy dollars (increasing the dollar's exchange rate versus the yuan). China's central bank can't just print more yuan: woe to the country that tries to inflate its way out of a monetary or fiscal problem.

The dollar had a scare recently when South Korea announced it would diversity its reserve holdings. Now, China has more dollar-denominated holdings than South Korea, so it obviously has more to lose than South Korea when the dollar depreciates. Also, though Japan is the world's top holder of dollar-denominated assets, and China is a somewhat distant second, the yen isn't pegged to the dollar like the yuan is -- so China has more reason than anyone (except the U.S. of course) to defend the dollar's value. In fact, China plugging the leaking dollar dam happened last November 25th. When China Business News reported that China would cut its holdings of U.S. Treasury securities, it precipitated a relatively big dollar slide. China's central bank promptly responded by initiating damage control. One of its top officials denied he knew anything about that, and since he's someone "in the know," the implication is that it was just a rumor.

It worked, not with the euro, but at least with the yen (still, China trades much more with Japan than Europe). On the 26th, the New York Times reported that the dollar had hit a low of 102.18 yen on the 25th, but it had recovered to 102.59 yen. Federal Reserve data don't show an exchange rate for the 25th (or a couple of other days that the dollar seems to have hit lows), but since that bottoming out, the dollar has overall recovered quite a bit. My own gut feeling is that the Bank of Japan sees 100 as a benchmark, the point where they will definitely intervene, but they're being too cautious. Are they waiting to see how much the Fed will tighten monetary policy?

The dollar's performance against the euro since then has been a different story, quite a roller coaster ride. But I don't think it's that the dollar is too weak against the euro so much as the euro is too strong. I'm a bit of a monetarist in believing the European Central Bank should initiate loose monetary policy and kickstart the EU's stagnated economies. This, though, would need simultaneous tax cuts to have any real effect. But these would be short-term boosts, and not enough to overcome their severe demographic problem that's worse than American baby boomers' impending retirement. Several European nations, like France and Germany, have shrinking populations. Under two births per woman just isn't enough. Japan is in the same rut, perhaps even worse.

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Happy Resurrection Day

Let me edit slightly what I wrote; it was a bit clumsily phrased. I'm a Christian, and today is my faith's most important commemorative day. I'm reminded that, though it might appear the darkest time when evil itself has triumphed over the Son of God, all you have to do is wait a couple of days for God to pull another miracle.

Saturday, March 26, 2005

Who else thinks starving is an easy death?

One of my friends asked me today about Terri Schiavo's condition. Earlier today, the AP reported that her tongue and eyes were bleeding, because of her severe dehydration.

Michael Schiavo denies that, claiming she's "resting comfortably." Every instinct in me wants to call him a lying pig. How can someone literally starving to death be "resting comfortably"?

What convinces me further of Michael's sinister motives is that he wants Terri -- who was a practicing Catholic -- cremated immediately. He has refused to allow an autopsy, which makes me wonder: are the rumors true that her heart didn't stop by the alleged bulimia, but by a blow to the head? An autopsy might reveal such things.

My father died of stomach and liver cancer back in 2000. His living will specified no extreme measures, so he spent his last days at home. My mother last saw him ambulatory on Friday night, before his long and painful weekend. When she checked on him Saturday morning, he was lying in his bed, unable to move or speak, let alone drink or eat. He was, however, alert and able to move his eyes, trying to give my mother signals. The part-time nurse said he'd been stricken by a stroke, induced by the shock of all his systems starting to shut down. I will always be grateful to our neighbor and my closest friends and their families, for all the help and love they gave my mother, because I wasn't there. My mother just couldn't keep him comfortable by herself.

He passed away Sunday night, but not before indicating extreme thirst. My mother was dipping a sponge in water and trying to keep his mouth moist. At one point, he mustered up the strength to suck hard on it. He was so thirsty, and after only two days!

Michael Schiavo, you say that Terri wouldn't want to live this way. Do you think she wanted to die this way?

Another liberal in Congress doesn't "get it" on Social Security

An AP story today described another state-worshipper who both misrepresents and lies about the nature of Social Security privatization:
"This would have dire consequences including major borrowing and massive benefit cuts. It would mean the dismantling of Social Security as we know it," Rep. Sandy Levin said in the Democratic Party's weekly radio address.
The borrowing and benefit cuts are if we keep Social Security as it is, with current workers supporting current retirees, not if we privatize. There's $1.7 trillion in the "trust fund" that we'll have to start paying back in 2017, not 2018 as had been previously projected. The latest Trustees' report admits that at the bottom of page 2, and that the "trust fund" will be exhausted in 2042. But as anyone who understands the real nature of those "Treasury obligations" will remind you, the trust fund is hardly this huge pile of savings that Krugman & Co. would have you believe. It's a loan we made to ourselves, at 3%-something annual interest.

It's true that if we privatize Social Security, the loss of payroll tax revenue means we'll have to use alternate funding for those retirees not affected by privatization (current retirees, and those 55 and older who are still working). I don't quite buy the argument that there's eventually no cost, that privatization will pay for itself. But worst case, privatization is still cheaper than the constant hiking of payroll taxes -- and better than the alternative of benefit cuts.

It's an undeniable fact that keeping Social Security as it is, with the continuous demographic shift in our society, will require raising taxes and/or cutting benefits. If you bet on what Krugman, Pelosi, Harry Reid and all these others are stating, that we only need to "strengthen Social Security" with just a little tweaking...well, like Marlon Brando said in Guys and Dolls, you'll wind up with cider in your ear.

At least those of us supporting privatization are honest. We never said that retirement accounts were a free lunch or panacea. We're just saying that for the same money, real investment will give a much better return, and it has the moral superiority of your account being yours, not the government's. (It also promotes more fiscal responsibility because Congress won't be able to borrow Social Security payroll taxes as fast as they come in.) Nobody will be "left behind" because even the Cato plan has a safety net. What's there to lose?

I'll tell you who can lose: Congress, which won't be able to loot the trust fund (a point Donald Luskin made on his recent Kudlow & Co. appearance). Paul Krugman and his fellow state-worshippers will lose, because everyone at every income level will start to save real wealth for themselves, not for the government.

Notice how the Social Security Administration describes your "participation":
Participation in the Social Security program is mandatory with respect to the payment of Social Security taxes. Unless specifically exempt by law, everyone working in the United States is required to pay Social Security taxes on earnings from employment. These earnings are subject to Social Security tax without regard to the citizenship or place of residence of either the employer or the employee.
You're required to pay in, but do you notice what's missing? Take a close look. There's not one word about the federal government being required to pay us any benefits in return. That's because it isn't required to pay us anything at all! Participation is strictly one-sided. Like Michael Tanner said in the Great Social Security Debate, the Supreme Court ruled in Fleming v. Nestor that there's no implicit obligation for the federal government to pay us anything, though we're coerced into giving up our payroll taxes. We're only supplicants, empowered no more than to go "hat in hand" to Congress and hope they'll have something to pay us with -- which will be by breaking the backs of those current working, until the Ponzi scheme pyramid comes crashing down.

Friday, March 25, 2005

Outrageous! The Easter Bunny got beat up?

From the AP:
BAY CITY, Mich. - The Easter Bunny is hopping mad. Bryan Johnson, who portrays the furry character at the Bay City Mall, says he was pummeled in an unprovoked attack on the job. Police say the attacker was a 12-year-old boy who sat on Johnson's lap the day before the March 18 incident.

Johnson, 18, suffered a bloody nose. He kept his cool during the attack, deeming it inappropriate for the Easter Bunny to fight back. But he's not willing to forgive and forget.

"They (the sheriff's deputies) told me it was up to me, and I feel that the boy should be prosecuted," Johnson told The Bay City Times.

Johnson told Bay County Sheriff's deputies that the boy hit him in the face at least six times before running away.

Bay County Sheriff John E. Miller said the youth has been in trouble in the past. The case will be forwarded to the Bay County prosecutor's office next week for action, he said.
Throw the book at this little bastard. He's only 12, but teach him early that you can't do things like that to people. Sadly, what will probably happen is that he'll spend a few days in juvenile detention, then go home to parents who likely don't care.

Now this is the Times we know!

With Paul Krugman on vacation, someone had to step in and write an op-ed full of Marxist anti-capitalist rhetoric, especially class warfare and bleeding heart "Only government can take care of the poor" liberalism. Not to fear, here's Bob Herbert to act as his cha'Dich. (That's Klingon for, roughly, a "second," someone who fights in your stead.)
So very little attention is being paid to pending budget proposals that are scandalously unfair, but that pretty accurately reflect the kind of country the U.S. has become.
Unfair? Oh, I forgot. Liberals think it's "unfair" when I actually get to keep the wealth I earned, instead of the majority of society taking it away and giving it to others. Even if I dispose of some charitably (which is according to my ascertainment of potential recipients' worth), that's not good enough. Liberals don't think you're capable of determining what to do with your own money, something exemplified by Paul Krugman every time he rails against Social Security privatization. This paternalism also happens to be the basis of socialism's state-planning.
President Bush believes in an "ownership" society, which means that except for the wealthy, you're on your own. The president's budget would cut funding for Medicaid, food stamps, education, transportation, health care for veterans, law enforcement, medical research and safety inspections for food and drugs. And, of course, it contains big new tax cuts for the wealthy.
First, why is it such a bad thing for people to be on their own, with the government letting them stand on their own two feet? Why do liberals perenially dredge up the fallacial idea that success in a free market comes at the expense of others? It doesn't.

Donald Luskin recently posted an excellent explanation of liberals' "budget bunk" claims: these cuts are hardly the draconian measures that liberals would have you believe. Mr. Luskin has also noted, more than once, something I've tried to tell my liberal friends since 2001: a lot of Bush's budget "cuts" aren't even real cuts, but reductions in the rate of spending growth for these programs. That can still be a bad thing, though, because there's a lot of federal fat that needs serious trimming, not just cuts in how fast these programs are growing.

And once again, I'll refer to my entry explaining why you can't soak the rich -- not to say the rich shouldn't pay any taxes and the lower income brackets should bear all tax burdens, but a heavily progressive tax on the rich will also hurt the poor.
These are the new American priorities. Republicans will tell you they were ratified in the last presidential election. We may be locked in a long and costly war, and federal deficits may be spiraling toward the moon, but the era of shared sacrifices is over. This is the era of entrenched exploitation. All sacrifices will be made by working people and the poor, and the vast bulk of the benefits will accrue to the rich.
Krugman had better watch out, because Herbert is outdoing him on the class warfare schtick!

"Long and costly war"? Two years in Iraq, 25 million people free, Saddam brought to justice... Compare that to World War II, which was a longer and costlier war. I guess Herbert doesn't think we should have fought that one, either, because it was too long and cost too much. I'm not saying that our current deficits don't matter, but they're not as bad as they've been in the past.

And if Herbert doesn't think everybody got a tax cut, he'd better look again. Dr. Antler didn't have to fudge any numbers -- his data are straight from the CBO. What's wrong with the upper incomes receiving tax breaks, anyway, since they pay the bulk of taxes?

Now regarding the federal budget deficit, the only true measure of its extent is as a percentage of the economy. Let's take a look at those numbers. (Budget data is from the CBO, GDP data is from the Bureau of Economic Analysis.)

                Budget             Full
Year GDP deficit % of deficit % of
(bil $) GDP (bil $) GDP
1962 585.6 -7.1 -1.21 -5.9 -1.01
1963 617.7 -4.8 -0.78 -4.0 -0.65
1964 663.6 -5.9 -0.89 -6.5 -0.98
1965 719.1 -1.4 -0.19 -1.6 -0.22
1966 787.8 -3.7 -0.47 -3.1 -0.39
1967 832.6 -8.6 -1.03 -12.6 -1.51
1968 910.0 -25.2 -2.77 -27.7 -3.04
1969 984.6 3.2 0.33 -0.5 -0.05
1970 1038.5 -2.8 -0.27 -8.7 -0.84
1971 1127.1 -23.0 -2.04 -26.1 -2.32
1972 1238.3 -23.4 -1.89 -26.1 -2.11
1973 1382.7 -14.9 -1.08 -15.2 -1.10
1974 1500.0 -6.1 -0.41 -7.2 -0.48
1975 1638.3 -53.2 -3.25 -54.1 -3.30
1976 1825.3 -73.7 -4.04 -69.4 -3.80
1977 2030.9 -53.7 -2.64 -49.9 -2.46
1978 2294.7 -59.2 -2.58 -55.4 -2.41
1979 2563.3 -40.7 -1.59 -39.6 -1.54
1980 2789.5 -73.8 -2.65 -73.1 -2.62
1981 3128.4 -79.0 -2.53 -73.9 -2.36
1982 3255.0 -128.0 -3.93 -120.6 -3.71
1983 3536.7 -207.8 -5.88 -207.7 -5.87
1984 3933.2 -185.4 -4.71 -185.3 -4.71
1985 4220.3 -212.3 -5.03 -221.5 -5.25
1986 4462.8 -221.2 -4.96 -237.9 -5.33
1987 4739.5 -149.7 -3.16 -168.4 -3.55
1988 5103.8 -155.2 -3.04 -192.3 -3.77
1989 5484.4 -152.6 -2.78 -205.4 -3.75
1990 5803.1 -221.1 -3.81 -277.7 -4.79
1991 5995.9 -269.3 -4.49 -321.5 -5.36
1992 6337.7 -290.3 -4.58 -340.4 -5.37
1993 6657.4 -255.1 -3.83 -300.4 -4.51
1994 7072.2 -203.2 -2.87 -258.9 -3.66
1995 7397.7 -164.0 -2.22 -226.4 -3.06
1996 7816.9 -107.5 -1.38 -174.1 -2.23
1997 8304.3 -21.9 -0.26 -103.3 -1.24
1998 8747.0 69.2 0.79 -30.0 -0.34
1999 9268.4 125.5 1.35 1.9 0.02
2000 9817.0 236.2 2.41 86.3 0.88
2001 10128.0 128.2 1.27 -32.5 -0.32
2002 10487.0 -157.8 -1.50 -317.5 -3.03
2003 11004.0 -377.6 -3.43 -538.4 -4.89
2004 11733.5 -412.1 -3.51 -567.4 -4.84
There are two accountings of the federal budget deficit: the official deficit, which includes Social Security revenues, and the actual deficit, which does not include Social Security revenues. Regardless of which number, we've still had higher budget deficits in the past. Either way, Herbert's worry that "federal deficits may be spiraling to the moon" is completely unfounded.

I wonder, did his great-grandfather (maybe great-great-grandfather) worry about the huge budget deficits in 1918 and 1919? Did they harp that the U.S. was headed for a "fiscal train wreck"? After all, the federal government took in only $3.6 and $5.1 billion (respectively) in tax revenues, yet it spent $12.7 and $18.5 billion (respectively). Did Herbert's grandfather worry about the huge budget deficits during World War II? The federal budget deficits in 1943, 1944 and 1945 were, respectively, 30%, 22.7% and 21.5% of GDP.

Herbert continued on, accusing Bush of having no sympathy for the poor, which is completely absurd. Bush donated $10,000 to tsunami relief efforts, and he has a history of donating a lot to charity. I don't agree with President Bush and Congress "donating" our tax revenues, which is not charity, but that's another story.

Herbert even referenced the Center on Budget and Policy Priorities, a socialist thinktank that actually links to Robert Schiller's so-called analysis of "life-cycle personal accounts" as applied to Social Security -- which Donald Luskin recently debunked as "bogus research." All you have to do is skim through the CBPP's Social Security updates to see their agenda: they'd rather keep everybody equal and equally poor, rather than risk a single person get ahead, even though "getting ahead" isn't necessarily at the expense of everyone else.

The CBPP even quotes Peter Orszag as saying, "Social Security is like a car with a flat tire. We should fix the tire...not borrow the money to buy a [new] car." I like that analogy, actually. But Orszag doesn't realize that the problem isn't the tire, it's the car. With the demographic shift in our society, that's like a car with a suspension problem: one corner keeps getting heavier, and heavier, making the replacement tire go flat sooner than the next one. The next replacement goes flat even sooner, and so on. Meanwhile, you're spending so much time buying new tires that you might as well have bought a good car in the first place. Nobody said a new car was cheap, just better because it's less expensive in the long run.

Another ignorant thing that Herbert said:
The advances in areas like education, antipoverty programs, health services, environmental protection and food safety were achieved after struggles that, in some cases, took many decades. To slide backward now (hurting millions of people in the process) because of a desire to siphon funds from those programs and hand them over as tax cuts to the wealthiest members of our society, is obscene.
What Herbert doesn't realize is that advances against poverty and disease were made possible by technology, not government. So as a wealthy society, why is it so bad to transfer the "helping hand" from government, who has proven time and time again it spends money inefficiently, back to private hands that know best how to give charitably? Or should we just move Bob Herbert to the top of the list of state-worshipping devout? And I ask again, what's so "obscene" about tax cuts for everyone, including those at the top who pay the bulk of taxes?

Of all the things, Herbert quoted Herbert Hoover: "The only trouble with capitalism is capitalists -- they are too damn greedy." This was fairly obscure, as well as meaningless once you see who Hoover really was. Then David M. Kennedy included it in his 1999 book, Freedom From Fear: The American People in Depression and War, and it became fashionable for liberals to quote. The first problem with that quote is that it's a stupid truism like Warhol's "If anything is art then nothing is art." Neither oft-quoted statement is that clever once one thinks a little about it, and neither is that original. A few years ago, William F. Buckley recounted a friend saying that, with no mention of Hoover, with the preface, "The trouble with Communism is Communism." Actually his friend had that almost right: the trouble with communism is communists. But I think Buckley was a little off: while capitalists won't necessarily act honorably just because they're engaged in capitalism, who is to say they'll act dishonorably just because they're engaged in capitalism? There's nothing intrinsic about "capitalist" behavior that induces honorable or dishonorable behavior.

The second problem with quoting Hoover is the very fact that it's quoting Hoover. Hoover was hardly a believer in free markets and limited government. Despite any connotations that Herbert would have you think about Hoover being a Republican, Hoover was a "progressive," which is a euphemism for "liberal." When I hear the "All in the Family" theme song, which says "We could use a man like Herbert Hoover again," I cringe and say to myself, "Heavens no!" Hoover wasn't that far from FDR in his statist belief that big government could step in to solve society's problems. Think of Hoover as a 1920s Arlen Specter with Ralph Nader views on free trade. It was Hoover who approved and signed the Hawley-Smooth Tariffs of 1930, which were a big part of wrecking the global economy. Our trading partners' subsequent retaliation exacerbated the Depression, which presented a challenge for FDR: how to make things even worse? After the Depression hit, Hoover tried massive spending increases on "public works" to alleviate it, which has led some to call him "the first Keynesian president." FDR's banking "reforms" and innumerable "employment" programs merely continued the policies that Hoover began. Ironically, FDR during the 1932 election had accused Hoover of taxing and spending too much. Yes, FDR of all people really did say that: he campaigned on a platform of lower taxes, limited government, and sound gold-backed money.

Well, Herbert and Herbert, the problem with capitalism is when the socialist comes along, and to paraphrase Ronald Reagan, proclaims himself "the state" and that he's here to help, then starts helping himself to what the "capitalists" earned. It doesn't matter to the socialist that the "capitalists" might have already been giving to charity, or that the nature of "capitalism" creates jobs -- what do Krugman and Herbert think happens when output capital is returned as input, and the business thereby expands? But when the socialist comes along and takes from the "capitalists," that's less capital for them to invest back in their businesses. That means the business expands by less than potential, which means fewer jobs are created than potential. Moreover, the "capitalists" are left there wondering, "Tell me again why we worked so hard for the government to take so much of it?" This is why I've turned to supply-side economics, because I believe that taxation necessarily inhibits business expansion and costs jobs -- it inhibits the creation of more wealth for everyone.

I for one can't wait for Krugman to get back. With Herbert throwing out such groundless Marxist rhetoric, Krugman will have to outdo himself to stay competitive as a Times op-ed columnist. Be careful, Paul: I don't know if you have the same kind of tenure at the Times!

Thursday, March 24, 2005

I was Googling "eidelblog"

I wanted to see who's talking about me, and I came across this:
I’m no blind follower of PK (Although I haven’t had the audacity to contradict him in this blog), but Mr. Eidelbus’ response completely misses Krugman’s point. That’s because Krugman wasn’t rambling incoherently: he was actually revealing a major problem in the way Michael Tanner had been discussing Social Security. Tanner wanted to say that there was no trust fund, but that there was still a looming Social Security crisis, and Krugman eloquently called him on it.
First, it's not "audacity" to point out bad economics. It doesn't make any difference that Krugman won the John Bates Clark Medal, that he's said to be considered each year for the Nobel. You shouldn't be afraid to point out bad economics.

Second, this fellow misrepresents what I said. I didn't say Krugman "rambled incoherently" when he said this about the payroll tax. I said he "rambled incoherently" and then started talking about the payroll tax as "just another tax." Come on, RA, are you writing for the Times or CBS that you must put words into my mouth?

Third, though RA went on about mixing up all the different types of tax revenue, my original point still stands: Social Security's funding has always supposed to come from payroll taxes. That's why we can talk about its "surplus," because it has (or is supposed to have) a separate accounting. There was the exception of the early 1980s, but what was the solution? An increase in the payroll tax. Not an increase in the income tax, not a stipulation that the General Fund would be used to offset any deficit, but an increase in the payroll tax.

Social Security and Medicare are funded separately, which is how the "trust fund" exists at all. If that's no longer the case, then our government is perpetuating a fraud worth trillions of dollars.

It's also fraud to claim that the system is solvent though the federal government has to use other sources of tax revenue to shore it up. Once again, if we're going to raise other taxes to compensate for insufficient payroll taxes, can Krugman and others at least be honest about it? Can they at least admit that we have to raise taxes (or, I suppose, borrow money) if we're not going to cut benefits?

Finally, why does this guy think Tanner's statements are mutually exclusive?
You can’t have it both ways: you can’t say that we have specifically a Social Security crisis, but also say that there is no Trust Fund. Tanner claimed that there was no trust fund because Social Security’s income had been taken by the rest of the government. He also said that Social Security’s income exceeded its outgo beginning in the year 2018, and that thus we desperately needed reform.
Both statements are true. There is no "trust fund," because by law, the Treasury got their hands on the money. It's a crisis because at some point, we will need to dip into trust fund and repay this "loan to ourselves." They're not IOUs, but I-Owe-Me.

I didn't "wake up," no matter what this "Rational Action" twerp thinks. He's apparently not familiar with Krugman's talking style, how sometimes he'll split phrases and go off on weird tangents -- or as someone described him to me, "like a meth addict."

Indeed, this anonymous fellow had only this to say about the debate. I had this, this, and this too. If I had been falling asleep, I guess I'd have produced a precise transcript!

Did I mention I never learned shorthand? I was writing as fast as I could, abbreviating some words, but trying to be as precise as possible in quoting.


The New York Society for Ethical Culture posted their transcript of the Great Social Security Debate. Notice that I said their transcript, not the transcript or a transcript.

They corrected at least two things, when the moderator introduced Krugman as a winner of the "John Clark Bates medal" and a "co-op columnist for the New York Times." They were corrected in the final transcript, with no mention whatsoever of the changes made.

I was there. While I already said my quoting may not be perfect, I remember distinctly that the moderator made those two verbal gaffes, and that's why I took such pain to write them down so exactly. If they edited those, what else might they have edited in the "transcript"?

As George Orwell wrote in 1984, "Those who control the past control the future." I will not let these liberal state-worshipping socialists control the past.

When government keeps you poor

A New York Post editorial criticizes the New York City Council for passing a broad law meant to single out one particular business:
Legislation meant to block hotels in the city from converting more than 20 percent of their room space to condominiums was laid before the council.

The intent, of course, is to thwart an effort to turn most of the once-prosperous Plaza hotel into condo units.

But why should the council care what the hotel owners do with their private property? Besides, wouldn't luxury condos of that sort turn a pretty property-tax penny for a fiscally stressed city?

Shouldn't the council welcome investment of that sort?

Don't be silly.

The council cares only for itself, and the special interests who become so useful at election times. In this case, the lawmakers are kissing up to the city's hotel-workers union — which is dead set against the conversion plan.
I've previously mentioned Kelo v. City of New London, now being heard by the U.S. Supreme Court. The state of Connecticut is trying to force private property owners to sell to developers, who will establish businesses that will generate more tax revenue. It's one of the most shameful crimes against the Constitution I've ever heard of, because the Fifth Amendment's power of "eminent domain" never meant a forcible transfer from private hands to private hands.0

Well, the New York City Council is exercising a different type of property control: you keep the land and building, we just tell you what to do with it. The City Council couldn't care less that it would generate more tax revenue if the Plaza owners could exercise their full private property rights. The council doesn't care about private property rights, and why should they care about maximizing tax revenues when they don't have to personally make up any budget deficits?

On the other hand, union lobbyists' "contributions" during election season are something very much worth caring about.

Used car salesmen can be very wily -- we must keep our wits about us

A friend sent me this, and I have to lie down now from laughing so hard.

Click here (Quicktime required), and may the force be with you!

Wednesday, March 23, 2005

A bumper sticker I love

(click the image to go to the merchant's site)

I don't know that my heroes have always been cowboys, but one of my biggest heroes is this cowboy.

My father came to revere FDR and the New Deal, but he repatriated our family to the U.S. in 1983. It was the perfect time, when Reagan helped us rediscover our optimism, our faith, and our strength. My father still kept some liberal leanings, but he epitomized the Reagan Democrat.

John Edwards' hypocrisy

From the AP:
John Edwards, former senator and vice presidential candidate, has a new part-time job as head of the University of North Carolina law school's new Center on Poverty, Work and Opportunity.

Edwards, who represented North Carolina for one term in the Senate, began work Tuesday by moderating a panel discussion on the importance of savings and assets in moving families out of poverty.

"We have millions of Americans who work full time and still live in poverty, and that is absolutely wrong," said Edwards, a Democrat.
It's not "wrong" per se, but a fact of life. That doesn't mean we can't extend a helping hand, however. That sounds like a worthy cause, doesn't it? A "Center on Poverty, Work and Opportunity," with emphasis on helping impoverished families save and accumulate assets.

From its name, I presume that John Edwards will work toward Social Security privatization. After all, it is the way for lower-income people to save money that is theirs. That's the ultimate way for poor people to build up their own assets.

Oh, but John Edwards doesn't support Social Security privatization. He'd rather have poor people stay poor, and be supplicants (as Michael Tanner of Cato said) to the government for their retirement.

Will John Edwards support free trade, which benefits poor people the most? First, free trade creates jobs, and better ones to help poor people out of poverty. NAFTA did push some jobs to Mexico, but the U.S. had a net gain in jobs -- and mostly higher-paying ones at that. That's because it allows us to do more productive, better-paying work that Mexicans, Chinese, et al, cannot do as well. Meanwhile, our trading partners produce things more efficiently -- more cheaply -- than we can, and they trade for the things we produce better. And the low prices benefit poor people more than others.

Oh, but John Edwards doesn't support free trade. Not real free trade, no. He voted for the farce of "permanent normal trade relations" with China and Vietnam, but he believes free trade puts Americans at a disadvantage and even "hurts" them. And just what would this "National venture capital fund" do? Evidently it will use tax dollars, so I'd like to know just how you'll take people's money and redistribute it to Americans "hurt by trade" -- how would you determine who's worthy, and how much each receives? And more fundamentally, how do you justify forcibly taking money from one person and giving it to another?

Look at John Edwards' switch-hitting: he actually came out somewhat for NAFTA before he came out against it. That's worthy of John Kerry.

Well, maybe John Edwards supports across-the-board tax cuts for businesses, so that they can afford to expand? More jobs mean more opportunity for poor people, instead of wasteful government spending. But no, John Edwards doesn't believe in tax cuts for businesses. The Kerry-Edwards plan proposed tax credits, and only to certain businesses. It also proposed cutting "the corporate tax rate by 5 percent – providing a tax cut for 99 percent of taxpaying corporations," but paid for by a tax hike on the remaining 1%.

As Bastiat would remind us (go here and scroll down to 1.56), that is not the creation of wealth, but merely a transfer. These "tax credits" are a euphemism for subsidy, whereas a true tax cut is an incentive giving real economic benefit to everyone. The plan's provided scenario is mind-boggling in its ignorance of economics:
For example, a medium-sized manufacturing company employs 1,000 workers. If this company hires an additional 100 employees at $40,000 – bringing the total to 1,100 workers – they would get a tax cut of $3,060 per worker $306,000 in total.
So the Kerry-Edwards plan was to pay the payroll taxes of certain businesses...just where did the Dynamic Duo think that money would come from? And it is a transfer at best, because the requisite tax increases are a disincentive for the other businesses that must pay them. Also, why do Kerry and Edwards believe it's ok to discriminate against big businesses, like Wal-Mart? It seems to be solely because they're "big." What is intrinsically wrong with a big business, whether or not it uses "economy of scale" to the consumer's advantage? It's still people, and people working.

Why are liberals like John Edwards so against Social Security privatization, free trade, and real tax cuts for all businesses? Well, it doesn't matter that these are the most economically effective measures to benefit the poor, as well as the rest of society. That's just it: liberals oppose any public policies that would help the poor if such policies might possibly benefit one "rich" person, no matter how small the extent. Can't cut income taxes, that would help the "rich"; can't cut capital gains taxes, that would help the "rich"; can't cut property taxes, that would help the "rich" too. But the fact remains that we're all in this economy together, and I for one declare that "trickle-down" does work. Read carefully what I say in my entry there: I'm not saying the rich shouldn't pay any taxes while the rest of us do, but a heavily progressive tax structure eventually hurts poor people too.

I wonder about something. John Edwards is a multi-millionaire trial lawyer. Since he thinks millionaires don't pay enough taxes, will he donate his $40,000 annual salary from the UNC to the U.S. Treasury? Has he started to calculate what is his own "fair share" of taxes and start paying that, regardless of current tax law? Will he sign a pledge stating he will never "evade" taxes via tax-free investments, like munis?

Or he could demonstrate his compassion for the poor by donating his $40,000 annual salary from this "Center" to a charitable cause. If he will or already donates extensively, please correct me: I will applaud anyone, even a liberal, who puts his money where his mouth is. On the other hand, I will not refrain from criticizing liberals who want to tax some people to benefit others, without putting up their own money first.

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Don't drink that water, monsieur

From the AP:
Paris city authorities began distributing thousands of specially-designed glass carafes in a campaign to wean the public off bottled mineral water and back onto the tap.

Reacting to polls showing that 51 percent of the two million Parisians buy their drinking water in shops, the city hall and publicly-owned water company Eau de Paris argue that the piped alternative is cheaper, more ecologically sound, and just as healthy.
I've never been to Paris, or anywhere in Europe, for that matter. Since my father repatriated the family to the U.S. 22 year ago, I haven't been outside the U.S., except for afternoons in Mexico and Canada. I'm just not inclined to travel that far, except to visit my friends in California and Utah. If there were a city abroad I'd like to visit, however, it would be Rome. My mother never had a high opinion of Paris, calling it dirty. I don't know about Parisian water quality now, but my late father told me that when he was in Paris, he came to believe wine was so popular because it was far preferable to the tap water: he said there were "tiny little white things floating around in it."

The article mentioned that a lot of people stood in line for a long time, to get "free" carafes:
Hundreds joined a long queue at the esplanade in front of the Hotel de Ville where Parisians could present a coupon downloaded from the Internet or cut from a local newspaper in return for a carafe marked with the Eau de Paris logo and an Eiffel Tower...

Some 30,000 carafes -- created by designer Pierre Cardin -- have been manufactured. A third were being handed to the public Tuesday -- which is World Water Day -- and the rest will be distributed to cafes and restaurants.

"People say the taste is better when you buy it, but I think that is rubbish. And this way I get a free carafe," said Jacques-Yves Bezal, who was waiting in line.
"Free" indeed! It's the same ridiculous mindset that thinks socialized health care is free. I don't suppose Jacques-Yves ever considered that "publicly-owned water company Eau de Paris" gets its money from the government? And where does the government get its money? Should M. Cardin have rendered his design services gratis, somehow I doubt he picked up the tab to manufacture the 30,000 carafes.

Maybe Jacques-Yves doesn't even work and therefore doesn't pay taxes. After all, he can afford to queue for just for a silly "free" carafe. Even though I'm not working right now, my time is still more valuable than that. My time has a higher opportunity cost than what I judge the carafe's worth to be, even if it's Pierre Cardin-designed.

I myself drink anywhere from a half-gallon to a full gallon of water per day. I buy bottled water in 2.5-gallon containers, which is worthwhile to me. Tap water has an odd taste to me, even after filtering it twice (faucet-mounted filter and Brita pitcher). It's because of the old pipes where I live, and the heavy mineral content of the underground water sources here. It's almost ironic, because the water sources around me are part of New York City's water sources.

My father found water in the San Francisco peninsula too chlorinated for him to drink. I never noticed, but I was only 10 when we moved, and my taste buds hadn't fully developed. When we moved to the Salt Lake valley, he could drink that water; we didn't even need to use a filter.

An unfair bidding war?

It is still far from clear that the bidding process on the Far West Side's railyards, the proposed stadium site, is a fair one.
When I saw that summary of a New York Times editorial, I expected a rehash of how Cablevision is supposedly the big opponent of the proposed West Side Stadium. I have always opposed the stadium for strictly economic reasons.

Surprisingly, though, the article details the advantage New York City has:
Further, the Jets are still expecting at least $600 million in city and state assistance to build a platform over the yards and a roof for the stadium. That's an enormous amount of public money for a team playing in one of the most lucrative sports markets on the globe. The Jets have also been assured of getting the zoning needed for the stadium and that the team won't have to pay the freight if there turn out to be environmental problems at the site that need to be fixed. These sweeteners, which considerably detract from the value of the team's offer, were not available to other bidders.

Small wonder, then, that there were only three bids. The only one other than the Jets' that has a fighting chance came from the stadium project's archenemy, Cablevision, which owns Madison Square Garden. If nothing else, the company deserves credit for helping the M.T.A. see the light and encouraging the public to ask questions about the entire stadium deal.
I'm speechless: not only does the Times not criticize Cablevision, not only does it suggest the bidding war is unfair because of City Hall's muscle, the Times praises Cablevision for raising questions about the stadium? Whoever wrote this editorial probably won't last long.

It's only noon, and I might need a drink already. On an issue for which I criticize the New York Post, I'm agreeing with an unsigned New York Times editorial.

The New York Post, despite a conservative and pro-Bush reputation, has no problem supporting big government using taxpayer money for a stadium that only a relative few will use. But this is the same Post that unhesitatingly endorsed Chuck Schumer last year, either, citing what he's done for New York. In other words, "He brought home the bacon, let's send him back for more." Fiscal gluttony, after one's appetite is whetted by a taste of the public treasury's trough, is the process that turns "limited government conservative" Dr. Jekyll into "big-government conservative" Mr. Hyde.

Tuesday, March 22, 2005

The winning number is...13! Oops, I meant 12

Lottery snafu irks hundreds in New York:
The way it's set up, the Daily News includes a seven-game ticket in its Sunday edition. Every day, it prints a list of 10 numbers to be scratched off the corresponding day's game, out of 15 possible spaces. If three of the revealed spaces show the same dollar amount, the contestant wins that money.

In Saturday's game, the number 13 was printed instead of the correct number, 12, in the list of scratch-off numbers.

The Daily News apologized to readers for publishing the wrong number and said it was putting up more than $1 million in cash as a prize pool for those affected by the error. A special drawing will have five $100,000 winners, five $10,000 winners and 12,790 other cash winners, the newspaper said in a statement Monday

D.L. Blair, the judging agency for the scratch-off game, transmitted the wrong number to the Daily News, newspaper spokeswoman Eileen Murphy said. The paper has no way of checking whether the numbers are correct, she said.
I don't subscribe to or buy the Daily News, but I expect there's a clause in the rules disclaiming responsibility for misprints. With 12,800 tickets, if the Daily News tried to pay each one, that's potentially $1.28 billion -- and still $128 million if only one in 10 winners claimed the $100,000 prize. It's just impossible for everyone to get paid, but at least the Daily News and D.L. Blair are trying to make good.

Now, think of the people who had the correct number after all and threw their tickets away, thinking they didn't win.

Dale Franks of Q and O on Terri

Wise words indeed:
I'm troubled by the fact that Ms. Schiavo is not in a coma, or on life support, and we are ordering her to be bumped off. I'm bothered by how easily the right to die becomes the right to kill. I'm bothered by the fact that perhaps someone who let it be known to her husband that she would rather die than live in a PVS is being forced to live for more than a decade. It bothers me that the parents have offered to pay for Ms. Schiavo's treatment and allow Mr. Schiavo to keep the money and he refuses.
Her husband didn't start trying to starve her until he met his girlfriend in 1997, which as I said in my previous post is sinister. My father always warned me to beware of concidences.

I have to disagree on a couple of things, though:
It bothers me that elected representatives condemn Mr. Schiavo for having a girlfriend and children by her, as if he was supposed to put his life on hold while his wife remains in a PVS.
But she's not a vegetable, and even if she were, what happened to the "in sickness and in health" portion of the traditional wedding vow? It doesn't say, "Unless you're brain damaged, in which case I'll have your feeding terminated once I hook up with another woman."
It bothers me that the pro-life people are essentially calling Mr. Schiavo and his supporters murderers. It bothers me that those on Mr. Schiavo's side consider their opponents to be ignorant Christers who want to pull us back into the Dark Ages.

In fact, everything about this case bothers me. I can't think of a single thing I like.
I'm a Christian, and I do think this is cold, calculated murder. Method and opportunity are evident: the only question is motive.

Terri Schiavo: what mainstream media doesn't say

Via Tim Blair, the real story of how Michael Schiavo apparently denied rehabilitative care to Terri after her brain damage.
However, once Michael pocketed the money, rather than using it to treat and rehabilitate Terri, he began to deny her both medical treatment and therapy.

Prior to the withdrawal of medical treatment and rehab, Terri made progress - even walking with assistance. Once the award was in place, Michael began bullying health providers to ensure that no therapeutic or medical interventions were undertaken. In fact, one nurse—noting Terri's hand contractures—placed rolled-up washcloths in her hands to prevent further contractures and pressure ulcers, which can result from such a condition. Michael ripped the cloths from Terri's hands and screamed at the nurse.
This is the first time I ever heard that she was once walking with assistance. Who still thinks she's a vegetable?
Michael claims that he tried every possible intervention by pointing to his authorization of an experimental treatment using brain implants - which failed. However, if you look at the timeline of Terri's fight, you will note that this procedure predated the Court award. Once the court award was in his pocket no other treatment was approved - including treatment for life-threatening sepsis. Moreover, why did he limit intervention to an experimental procedure rather than attempting tried and true therapies, which could have improved Terri's ability to swallow, walk and talk?
The more details I become aware of, the more I think something really sinister is going on here.

No more Mr. Nice Guy

Fred Barnes in a Wall Street Journal op-ed today had great commentary about President Bush's cowboy diplomacy:
The president's idea is simple: No more Mr. Nice Guy. He believes international organizations have failed largely and must be challenged and reformed. He was miffed when outgoing U.N. Ambassador John Danforth rushed to the defense of Kofi Annan in the midst of the Oil for Food scandal. Mr. Annan opposed the war in Iraq and even declared it illegal. More important, he's viewed by Mr. Bush as part of the problem at the U.N.

Assuming Mr. Wolfowitz is confirmed as president by World Bank leaders, he'll bring impressive credentials and strong opinions. He's experienced in Third World development issues, having been ambassador to Indonesia and assistant secretary of state for East Asia. He's also a champion of democracy and free markets as indispensable weapons in the fight to eradicate poverty. What Mr. Bush admires is his fearlessness and willingness to take on the status quo. The president wants results at the World Bank, a senior aide said. Mr. Bush thinks there has been too much stress on process, not enough on results. "Process trumps results" at the World Bank, the aide said. The yardsticks for success are out of whack. The only one that matters, in Mr. Bush's view, is how much poverty has been reduced. "Wolfowitz will bring a sharp focus to results," the aide said. That's his agenda.

Mr. Bolton will bring a sharp focus to corruption, waste and left-wing ideology at the U.N.--precisely the matters the U.N. would rather not dwell on...

France: adieu to the 35-hour work week

The AP reports that France is poised to undo one of the reasons its economy is so stagnated. I've heard anecdotes of young executives having their briefcases searched upon leaving the office, just in case they -- gosh -- sneak out work so they can get things done at home!

Pay attention to the first soundbite:
"Work is not the only thing in my life," she said, suggesting she might quit rather than work more hours.
She'll quit, and do what? Go on the government dole?

France recently hit 10% unemployment. Imagine how much higher it would be if so many French companies didn't have to hire one extra worker for every eight that formerly worked 39 hours.
Amid soaring unemployment and stagnating wages, the reform is supported by jobseekers and even by factory workers, according to a survey that pollsters CSA published last month — and by 46 percent of the overall population, with 43 percent opposed.
Still, many French workers are loath to give up their shorter hours, even for more cash. Some 56 percent of salaried employees oppose the government's plan, according to the CSA survey, while 36 percent approve.

On March 10, almost a million people took part in strikes and protests over the working time reform — as well as other threats to workers' benefits and public sector pay.
They're not lazy. They're just afraid to compete against others who are willing to work.

Monday, March 21, 2005

The national debt, 50 years from now

Skeptical Optimist Steve Conover takes a look at the national debt over the next half-century. One of his scenarios assumes steady (which could even be average) numbers similar to today's GDP growth: 3.3% GDP growth, tax levels of 16.8% of GDP, 2.2% inflation, 4.0% average interest on the debt, and 5.2% growth in government spending. According to Mr. Conover's model, with those numbers, by 2055 the national debt will fall from 66% of GDP to 41% of GDP.

Update: I should add my answer to Mr. Conover's question, "Is sustained growth of 3.3% attainable? Are the inflation and spending assumptions sustainable?" I say, yes and yes. An average growth rate of 3.3% is perfectly normal growth, and not so high that the Fed will have to tinker much with inflation. Fiscal discipline, however, has to come from within the hearts of our government officials. In short, I think those are perfectly reasonable assumptions. It's true that this scenario presumes lenders' continued (constant?) willingness to continue loaning us money. However, as long as we remain the most creditworthy of the large economies, as long as the EU and Japan remain stagnant, our creditors will have no problem lending to us. One of my own ideas is that the limit on U.S. debt isn't whether the rest of the world is willing to lend to us, but whether they have any savings left to lend to us.

Another thing I'd like to update with is my frank admission that with Republicans controlling the executive and legislative branches, the federal budget has increased by a lot more than 5.2% annually. I really, really hope President Bush can use his veto pen and finally get Congressional spending under control.

However, I still find Mr. Conover's projection startling, and I think it's a real victory for supply-side economists. It's also a huge slap in the face to the new "fiscally conservative" Democrats. And to Paul Krugman, too, who's hardly a fiscal conservative but perenially insists we're headed for a "fiscal train wreck."

I've noted before that John Stuart Mill said, "War is an ugly thing, but not the ugliest of things." And my own twist is, "Debt is an undesirable thing, but not the most undesirable of things." Nobody goes into debt for simply the sake of having debt, but prudent debt isn't intrinsically bad. As long as banks and other countries are willing to lend money to our different tiers of government, we can achieve faster economic growth than what we pay in interest. That's the whole idea behind borrowing: the benefits exceed the cost of interest.

Mr. Conover's scenario might seem impossible. Each year, government spending increases 5.2%, government pays 4% interest on the national debt, the economy grows at a 3.3%, yet the national debt falls as a percentage of GDP. This is because GDP growth is measured in real terms, adjusted for inflation. Debt and interest payments are in nominal terms, not adjusted for inflation. So if the economy grows 3% and inflation is 2%, nominal growth is 5%, and enough to pay on a 4% bond. Also, government spending is also in nominal terms: Mr. Conover's scenario uses inflation plus 3%, so actually government is growing less than the economy. All you need is for real GDP growth to exceed the inflation-adjusted values of interest payments and government spending increases.

There's another reason the national debt can still shrink as a percentage of GDP, but I'm not sure how or if Mr. Conover accounts for it. I once said: "Raising taxes is not the solution you anti-supply-siders think it is. You completely ignore the 'I' word in economics. Keynes had it wrong: it's not inflation. It's incentive." [Update: corrected my own quote, oops] Taxes are, by nature, a disincentive to creating wealth. The whole idea behind supply-side economics, especially the Laffer Curve, is that cutting taxes gives people an incentive to work more and create more. Now, most Americans are so detached from their governments that a budget deficit, i.e. borrowing money, may not be as much of a disincentive as higher taxes are. We're fine so long as our economic growth exceeds our interest payments, that's a good thing.

There are still some Americans who embody Ricardian Equivalence, but very few. Ricardo theorized that it's the same effect if a government borrows or raises taxes: when people see their government taking on debt, they save more in anticipation of having to pay higher taxes so that government can pay off the debt. Since their savings are part of what government borrows, it's the same as if government increased taxes. I think that was true of most Americans once upon a time, but not today. I don't see that Americans today save more, consciously or not, even when budget deficits increase. Americans save so little compared to the rest of the world (by any standard, whether the BEA household rate or the Fed's flow of funds rate). Most of our debt is financed from anywhere but home, especially China, Japan and South Korea.

I'm only a humble foot soldier in the supply-side movement, but this is where I think Ricardo went wrong in his equivalence: he didn't account for incentive. Let's say I make $50,000 a year and save $1000 each year (2%). After an increase in the federal budget deficit, my own taxes will have to go up, say, $50, as my share of the increased interest payments. Let's even say Ricardian Equivalence happens, and that I save an extra $50 in anticipation. Why doesn't the government just tax me $50 more in the first place? It's incentive: supply siders say that with higher taxes, people overall are inclined to work less and produce less. People notice higher taxes more than budget deficits.

(This is actually leading to a very wacky idea that I need to talk to real economists about. Stay tuned for details.)

I've sometimes thought about the reverse of Ricardian Equivalence: when there's a government surplus, will people save even less, because they see that government won't have to borrow as much? I'd like to hear criticism of this idea, because I've never heard anyone talk about "Reverse Ricardian Equivalence" (my term for it). I just e-mailed Dr. Ikeda, one of my old professors, about it.

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Terri Schiavo

I suppose it was inevitable that I'd offer my own thoughts. I can't see how so many people say Terri Schiavo should die with dignity, when the only thing she needs to stay alive is a feeding tube. It's not like she's on life support, nor a "persistent vegetative state" like some claim. There are rehab patients who are in worst situations, yet their families want to keep them alive, hoping and praying for a miracle.

Michael Schiavo has recently said there's little left of the money awarded to Terri from the malpractice lawsuit. I personally believe that it has always been about money, and I suspect he's been rushing in the last few years because he knew that the award money would run out. Does he "need" Terri to die now so he can get money from any life insurance policy on her?

A couple of years ago, Michael always refused to comment on whether his wife has life insurance. Today, he states flatly he won't get any life insurance money. If he wouldn't (or couldn't comment) two years ago, why can he today?

Furthermore, I've read enough legalese to know that "I won't get any life insurance money" is not the same as "She doesn't have a life insurance policy." To my knowledge (and I'd like to be corrected if I'm in error), Michael has never specifically stated whether Terri has or had a life insurance policy. Did she have a policy, perhaps, and the insurance provider cancelled the policy?

On his radio show this afternoon, Sean Hannity played an audio tape of the sounds Terri makes. She sounds like someone severely brain damaged who is cognizant of her surroundings and trying to communicate. Hannity's guest, whose name I didn't get but Hannity introduced him as a doctor who's been considered for the Nobel, said Terri doesn't make these sounds reflexively, but in response to her father and others talking to her. These were not random sounds, at least to me. If anything, it reminds me of when my sister got in a car accident and had to have her broken jaw wired shut. She tried to talk but could only make unintelligible sounds -- like Terri.

Hannity made a very good point: the court is using hearsay to determine Terri's beliefs. Michael and his brother are the only two who have said Terri did not want to persist in this kind of state (though it's hardly vegetative!). Terri's family have said that Terri never said anything to them about that, and that Terri left nothing in writing that was corroborated by witnesses. A caller said that Terri's family would of course challenge Michael and his brother, because they have an agenda. Indeed -- and Michael has an agenda too.

Michael says he will donate any remaining money to charity, but is he also including any life insurance money? Michael has been offered $1 million to "walk away" and relinquish guardianship of Terri. He has refused, but I feel it's just to save face. Putting it in economic terms, the cost of eternal infamy is greater than $1 million. Were the offer, say, $100 million, I wouldn't be surprised if he accepted it. He could retire to the Caymans in anonymity.

I'm not saying, Michael, that you should or should not keep your wife's feeding tube in. What I will tell you is that the proper thing to do was divorce Terri before shacking up with another woman and having two children with her.

"In sickness or in health, for richer or poorer, till death do us part." I guess Michael's vow was amended to include, "Except when you get brain-damaged."

"Insanely stupid"

Like many people, I'm getting a bit more than annoyed with Blogger's recent problems. I may have to look at other options very soon, because I'm not enjoying redoing this post. I'll have to start copying the HTML to Notepad before hitting the publish button, just in case.

Don Boudreaux is blunt, but correct, in describing socialized medicine:
How on earth can a system that invites consumers to treat a scarce good as if it were free possibly work? Isn't it inevitable – isn’t it utterly unavoidable – that any such system will suffer dysfunctions and troubles that make consumers worse off rather than better off? The story linked to above details some of the predicable maladies now infecting Canada's insanely stupid health-care system.
The CBS News article that Dr. Boudreaux links to says one of the most astounding things I've ever read:
Canada and North Korea are the only countries with laws banning the purchase of insurance for hospitalization or surgery.
I think socialized medicine can work, just not effectively. It could even survive indefinitely, but it requires that the people are kept sufficiently indoctrinated by the state -- especially with constant reminders that it's "free." I've always opposed socialized medicine, and even as a teenager, I knew enough about human nature to see its big problem. When people think it's free, they'll go to doctors more often, and for things they can do themselves.

I guess one good thing came out of Blogger losing my first post. In getting the link to Dr. Boudreaux's entry, I saw his great follow-up about a restored scene from the 1978 "Superman": Jor-el tells his son that he can't be Superman all day, because people would always ask him for help, even for things they can do themselves. "It is their habit to abuse their resources in such a way."

So when socialized medicine encourages everyone to take advantage of "free" health care, it takes doctors' attention away from patients who really need it. As Mises wrote about extensively, the price system allocates scarce resources; in a free market, a high price means that resources will transfer to those who value them the most. Now, if there's an increase in the demand for medical services, a free market would see an increase in the supply of doctors. But since the need for more doctors is artificial, it takes those laborers away from other industries where they're needed.

The Canadian Medical Association and Rush Limbaugh once argued about socialized medicine. (No, I'm not a dittohead by a long shot, but Rush can be surprisingly correct. Remember that he said "Take a stand for the Constitution" when opposing President Bush and Congress on the Medicare drug entitlement.) Notice what the CMA's summarized argument boiled down to: "Medical care in Canada is hardly 'too expensive'; it's provided free and covered by taxes."

"But it's free!" reminds me of an "I Love Lucy" episode, when the gang moved out to Connecticut. Lucy and Ricky hatched this plan (pun intended) to raise chickens for extra income. After a fiasco of 500 baby chicks in their house, they traded them in for full-grown hens. As I recall, at the first egg breakfast, Ricky complained how much they lost on the trade. Then Lucy replied, "At least we're getting our breakfast for nothing." Ricky said his trademark "Ha!" and said each egg they were eating cost some high price -- I don't recall what, but it was dollars per egg, high even by today's prices. Lucy responded with her own trademark "Eeyoooo" and scrunched up face.

However, Ricky had his economics a little confused. What he stated was the average cost to produce each egg, meaning it was based on the total production cost thus far -- including the fixed costs of the chickens and their coop. The marginal cost of each egg would be much lower, though. Maybe not on par with a large chicken farm, but certainly lower.

Still, Ricky's point was sound: breakfast was hardly free. Neither is socialized medicine.

The lady doth admit too much, methinks

Caroline Seipp wrote back in 2003, "Maureen Dowd can be funny when writing about movies or fashion. But she should stay out of politics." I'm still trying to figure out why the New York Times accepted this column from her. Printed in the Travel section, it's 700 words wasted on Spring Break nonsense, even worse than her usual columns about nothing. But she did relate this, among other anecdotes:
Another year we went to Tampa. It was so awful that my only memory is of a local guy complaining to his friends about me: "You tell this girl dirt's brown, she's gonna argue with ya."
And what do you know, she grew up and eventually got a job, "paid to be a baby curmudgeon" -- where it turned out "growing up" isn't even a job requirement. Let's not forget, Dowd imagines herself "as Emma Peel in a black leather catsuit" (Dowd is known for being private about her personal life, then she goes to the extreme and gives us far too much information). She also described in another column how President Bush gave her a Clark Gable wink. Maybe she's thinking of him as Rhett Butler? She might be Irish, but she's no Scarlett O'Hara. Besides, whatever "Gone with the Wind" fantasies she may harbor, I'd cast President Bush as Leslie Howard's character: Ashley Wilkes, the good and decent man, admittedly not perfect, whom Scarlett wanted but could never have.

And by the way, Ms. Dowd: Paul Wolfowitz is eminently qualified to head the World Bank. After decades of "economists" and UN lackeys, it's time for a diplomat to sort out the mess. I have wished him good luck.