Sunday, September 30, 2007
Friday, September 28, 2007
Thursday, September 27, 2007
Wednesday, September 26, 2007
"So, and if I am right, the former vice president will then complete a year in which An Inconvenient Truth has been awarded an Oscar and he has authored a best seller. Roll it round your tongue again: an Oscar, a best seller, and a Nobel Prize in the space of 12 months or so. Not bad. And meanwhile, the field of Democratic candidates looks—how shall one put it?—a trifle etiolated. Sen. Clinton may have succeeded in getting people to call her "Hillary" and to have made them feel resigned to her front-runnership, but what kind of achievement is that? Sen. Obama cannot possibly believe, and doesn't even act as if he believes, that he can be elected president of the United States next year. John Edwards is a good man who is in politics for good reasons, but there is something about his populism that doesn't quite—what's the word?—translate.
Apart from the awards, not only could Gore claim that he had been a fairly effective senator and a reasonably competent vice president, he could also present himself in zeitgeist terms as the candidate who was on the right side of the two great overarching questions: the climate crisis and the war in Mesopotamia. Should I add that, whether or not he really won the Electoral College in 2000, he did manage to collect the majority of the popular vote? Several people, some of them well-informed, have been saying to me that Gore will wait until the Nobel committee's announcement before he makes up his mind. Should he make up his mind to run, he could alter the entire equation."
I think I saw this prediction before.
A) BESTOW IT - 34% B) BRAND IT - 47% C) BANISH IT - 19%.
Tuesday, September 25, 2007
Monday, September 24, 2007
'Bill O'Reilly reported that he "had a great time, and all the people up there are tremendously respectful," adding: "I couldn't get over the fact that there was no difference between Sylvia's restaurant and any other restaurant in New York City. I mean, it was exactly the same, even though it's run by blacks, primarily black patronship." Later, during a discussion with National Public Radio senior correspondent and Fox News contributor Juan Williams about the effect of rap on culture, O'Reilly asserted: "There wasn't one person in Sylvia's who was screaming, 'M-Fer, I want more iced tea.' You know, I mean, everybody was -- it was like going into an Italian restaurant in an all-white suburb in the sense of people were sitting there, and they were ordering and having fun. And there wasn't any kind of craziness at all."'
Classic. Borat nodded approvingly.
Sunday, September 23, 2007
"We observe that areas that spend 30 percent more than other areas do not get better outcomes. It is possible that randomly cutting 30 percent of spending in high spending areas would not affect outcomes. But this is not likely. Cutting spending by 30 percent would almost surely eliminate some valuable services as well as some less valuable ones. One could make up for the loss of valuable services by providing other services that are low cost but not currently provided. Overall health might not be affected, but money would be saved. Better still would be to selectively eliminate the care that has little value and provide the other services that are valuable but are not currently provided. This would leave us spending less and with better health. I believe we can do this, but the task is harder than it seems at first pass. We don’t do ourselves any favors by pretending it is easy."
Friday, September 21, 2007
"A natural place for a Democratic president to start looking for candidates would be to choose a justice in the model of Breyer, Ginsburg or Souter. But liberal interest groups are unlikely to be satisfied with a justice in their molds for the simple reason that none of them are considered liberal enough."
I can imagine liberal folks won't be keen on a Souter replica, but Breyer or Ginsberg, especially Ginsberg. Am I missing something?
Thursday, September 20, 2007
“We have steadily reduced the annual rate of growth in non-security discretionary spending.”
Now I have already explained why this sort of statement is stupid before but let me rehash: The government could be characterized as an insurance company with a side business in defense. Outlays disproportionately go to Defense, Medicaid, Medicare, and Social Security (Homeland Security has a healthy and growing budget but it is still relatively small). Only defense is discretionary, which obviously has grown significantly, ergo "non-security spending". The entitlement program outlays are non-discretionary. The only way there will be a "cut in the rate of growth" in entitlement spending is if all of a sudden it becomes really cheap to treat seniors or everybody dies before they are eligible for Social Security; or, you change the relevant statutes that determine entitlement benefits. In fact, the administration did reform Medicare benefits, it added them thus making Medicare more costly. To say that you have decreased discretionary spending is a worthless claim. This administration hasn't done squat in terms of reining in spending.
"The only way to avoid being seized by one of the many militias that terrorize Iraq is to travel with your own militia."
"Iraq" is a fiction; what exists are bands of petty countries, each fighting for dominance.
"The IRS would send prefilled tax forms to 40 million workers who take the standard deduction and have a bank account. They would simply have to sign and return it, which Obama estimates would save more than $2 billion in tax preparer fees, 200 million hours of work and "an incalculable amount of headache and heartburn."
Andrew Sullivan's blog title reads- "Obama's Tax Pander." The first line of his post reads- "He'll get the government to do your taxes for you!" I don't think this is all that controversial. A lot of Americans don't itemize because they have nothing to deduct. The government has already witheld their taxes and computed the liability. The reason why one might oppose such a policy is that you don't want people completely detached from the effects of fiscal policy. That said, this doesn't seem all that controversial to me.
Wednesday, September 19, 2007
"Today, we have a mortgage interest deduction, but it only goes to people who itemize on their taxes. Like so much in our tax code, this tilts the scales toward the well-off. Only a third of homeowners take advantage of this credit."
Ok, I'm with him on that. Tax deductions will always benefit those who are taxed the most, the wealthy. But read on.
"I’ll create a mortgage interest credit so that both itemizers and non-itemizers get a break. This will immediately benefit 10 million homeowners in America. The vast majority of these are folks who make under $50,000 per year, who will get a break of 10 percent of their mortgage interest rate. For most middle class families, this will add up to about $500 each year. This credit will also extend a hand to many of the millions of Americans who are stuck in the subprime crisis by giving them some breathing room to refinance or sell their homes."
How about instead of instituting fairness through more complexity in the tax code do it through simplicity, scrap the mortgage interest deduction. Is subsidizing home-ownership more compelling than say, health care? Or wage subsidies so that people can make their own choice on how to spend their money?
Conservatives have maintained that consumer directed health care will lead to super savvy health care consumers who are able to bargain down costs and skimp on only inefficient care and revolutionize medicine as we know it. This premise has motivated the health care reforms that the Bush Administration has pushed, namely, Health Savings Accounts. Liberals have rightly pointed out that this is all a bit pie in the sky. Health care is such a complex field that is unlikely that consumers will get it right and that they will likely skimp on important care yielding unfortunate health outcomes. Or to put in other words, putting medical decisions in the hands of consumers is too risky. To validate this claim liberals often cite the Rand study. In the Rand study, patients were randomly assinged health plans that differed in the level of cost sharing. It is true that the Rand study showed that those that had higher levels indiscriminately skimped on medical treatments that were both effective and ineffective. This is true but ultimately in spite of the reduced care, those patients that had higher cost sharing did not demonstrate statistically significant differences in health outcome. While this does not necessarily support the conclusion that cost sharing will rid health care of all its woes, it does seem to disabuse the notion that cost sharing will harm the consumer. The consumer won't get better care or worse care, just less of it.
Tuesday, September 18, 2007
"Wanted--A Brentwood EcoZoomBox: Here's a lucrative market niche none of the auto manufacturers seem to have spotted: There is a huge pent-up demand among the West Side L.A. parents I meet for a) a minivan, meaning something like a front-drive SUV but with a Honda-Elementish low floor and ride height; b) big enough to have 7 seats; c) hip enough for a mom to be able to drive it and get admiring glances; d) hybrid, in a way that advertises its hybridness to the world (meaning essentially that it would be available only as a a hybrid). It wouldn't have to get 40 m.p.g. It could get 22 m.p.g.--as long is it got certifiably better m.p.g. than the non-hybrid equivalent. The point isn't to save the planet so much as to advertise how the planet might be saved--not necessarily a hypocritical posture... Since top mileage would not be a requirement, it could also be e) fast. ... This combination seems eminently do-able, but there's nothing I see on the market now that fills the bill. The Prius meets (c) and (d) but not (a) or (b)."
"And to show Congress just how serious I am, on the first day of my administration, I will submit legislation that ends health care coverage for the president, all members of Congress, and all senior political appointees in both branches of government on July 20th, 2009 - unless we have passed universal health care reform.
I wonder when he speaks of joining the special interests if working for Fortress Investments counts. I guess it was to learn about poverty (at $500k a year- part-time no less, that's a pretty sweet gig), like how to foreclose on a Katrina victim's home.
Monday, September 17, 2007
"Hillary offers her health care plan, and Giuliani criticizes it, Romney criticizes it... I'd be surprised if we didn't have reaction quotes from McCain and Thompson shortly. This is a bit like last week with the MoveOn.org ad. The GOP candidates' comments are all fine, but notice that the forces on the left create the issue, and the Republican candidates respond. One is left wondering what it would take for a Republican candidate to throw down a gauntlet or put out an argument or idea that everyone else would have to respond to..."
Thus far, on the issues that matter (Mainly, Iraq and Health Care) the republican candidates have opted for truly banal statements as opposed to anything substantive. I don't really anticipate Thompson or McCain to come up with a health care proposal that goes beyond "let's extend the tax exemption to small businesses". This is small beer, indeed. And I don't really think that the candidates will be able to break out of this box as long as they confine themselves on some of the republican tax dogma. For instance, let's say Giuliani were to propose a revenue neutral carbon tax, well, Grover Norquist and company would jump down his throat for proposing a new tax. Never mind that such a proposal would be revenue neutral with an offset in either income or payroll taxes. The Anti-tax pledge that I believe all of the major candidates have signed onto is not even limited to tax rates but extends to deductions and credits. I doubt this will change until Republicans get whupped in '08 and possibly in '10.
-courtesy of Ezra Klein.
This is a good first step but it is all too modest. There is little sense in the health care exemption. By having one it simply necessitates higher marginal rates for the same people that are most likely to benefit from exempting health care from income taxes. How about we just get rid of the exemption and reduce marginal rates by the amount of revenue gained by getting rid of the exemption?
Sunday, September 16, 2007
Friday, September 14, 2007
Ezra Klein, for those of you who don't know, is a super smart liberal blogger and also writes for the American Prospect. While I applaud Ezra for engaging the other side, I don't think there is much worthy of engaging with at the National Review. The state of conservative commentary is much like the movement in general these days, piss poor. If you look at the National Review, and I say this in utter dissapointment as a conservative, the state of the magazine with few exceptions is hackish, reactionary, and dull. It is the former as opposed to the latter two that principally concern me. Conservativism is inherently reactionary. A central tenet of conservatism is the preference for existing institutions over new ones as they have demonstrated a degree of fitness that is evident in their mere existence. But there has been too much capitulation and cheerleading within the conservative movement, and this is especially so in the movement's flagship publication: the National Review. There are some good writers, Ramesh Ponurru springs to mind, but for the most part it is an uninspired and increasingly hackish lot. Larry Kudlow is a sycophant. Reading one of his columns will simply make you dumb. And the business of foreign policy, the notion of extending liberty is consonant to conservatism but the promotion of democracy where underlying institutions do not exist is a project that conservatives typically have not countenanced. The National Review boasts no shortage of boosters for these types of efforts whether it be the Michael Ledeen who I think is a bonafide loon or Cliff May. I don't even want to touch on the Weekly Standard which is expensive toilet paper that is running out of countries to propose invading. In the competition of ideas, the major conservative publications are no longer relevant.
Thursday, September 13, 2007
"She's famous because she's the woman who ran the worst campaign in presidential history,** and he's famous because he's the guy who beat the worst campaign in presidential history." ... **--Bush, 1992.
First, let me go into some terms. When we think of pensions there are two types: defined benefit and defined contribution. Really the word pension conjures up the former to a much greater extent than the latter. A defined benefit pension is something that is decreasingly available but once was the norm. A defined benefit pension is at its name would imply: the benefits are defined. Say I worked for General Motors for 30 years as an arc welder and my final salary was $100,000. GM's defined pension plan as bargained for entitles me to say 65% of my salary from the date of my retirement to death. I would expect that there is some inflation adjustment. Now, General Motors doesn't do this out of the goodness of their heart but rather this is a supplementary form of compensation that comes at the expense of your wages. They are in essence saving and investing on your behalf. Now it sounds like a great deal, and it is for the worker, but it has some overwhelming downsides which is why the defined benefit is today largely extinct. The first basic problem is that a defined benefit pension is not portable, it was intended for an era when workers worked for the same company for their career. The other problem is that you are essentially up a river if your employer has failed to fund the pension fund adequately, this has been a problem for all defined benefit pensions whether they be offered by a private company, Social Security, or your local government (especially local governments).
A defined contribution pension is as its name would indicate: the contributions are defined, not the benefits. The 401(k), 403(b), Traditional IRA, Thrift Savings Plans are all forms of defined contribution pensions. You are able to set aside up to 15% of your pretax income in a tax deferred account and your employer can match up to 6% of your salary in the form of a tax deferred contribution. The virtue of a defined contribution pension is that you can take it with you, at a minimum what you have set aside (typically there is a schedule for the vesting of your employer contribution). The other virtue is that you don't have to worry about your employer inadequately funding it. Its core problem lies in the fact that employee is assuming some of the risk (that said, you don't have to worry about your employer shafting you, so risk is really in the eye of the beholder). How should you invest it? What happens when you retire, do you annuitize or simply draw down periodically?
How does this relate to Social Security? Well, Social Security is a defined benefit pension plan and it suffers the same problem that most defined benefit plans have: it's underfunded. Now, some will contest that the problem does not begin until 2040 when the trust fund is depleted. After all it says so according to the Social Security's Actuarial report. Well yes, and no. The actuarial projections are based on social security claims as payable under law. Right now, payroll tax revenues (the dedicated revenue source for social security) coming in are greater than social security benefits going out. If you account on a cash basis you would then show a surplus. But the problem is with pensions you account on an accrual basis. And there is a compelling logic to this. The revenues that are coming in are not only to cover present liabilities (i.e. Social Security checks being cut today) but also to cover future liabilities incurred today (i.e. to be able to cut Social Security checks to those who are paying payroll taxes now), thus when you prepare a financial statement you are to book the revenues in excess of your present outgoing benefits as a liability. The government doesn't do this. Every year for the past several decades, the congress has taken the surplus revenues from Social Security and uses it to plug in gaps in the General Budget. In return for pilfering the Social Security trust fund the Department of Treasury issues a special bond to the Social Security Administration and these bonds accrue interest. This has the effect of understating the true nature of the Government deficit. The unified deficit (=General Fund deficit + the social security surplus) is a good deal higher than the number the press touts whenever it reports the deficit numbers.
So how does this relate to Joe Biden and Social Security, well Sen. Biden was complaining that every year we raid the trust fund and spend all types of random crap and our day will come a lot sooner than people talk about. Sen. Biden's solution was to "stop raiding the trust fund". Well, congress has had the opportunity to show their restraint and has never been able to do so. Sen. Biden gets two points for honesty if not for the substance of his proposal. The principle virtue of Personal Retirement Accounts, or privatizing a part of Social Security was that while we are still collecting more than we pay out there would have been a mechanism to prevent the Social Security surplus from being frittered away.
" Yes, I believe we do. I think that we tend to think of education as K through 12, maybe college and in some rare cases, graduate school. We should think of education as a birth-to-death experience in America. That means we get the kids as early as we possibly can, we head start basically 3- to 4-year-olds. That's not young enough. We can start much earlier, much more intensely but particularly focus on at-risk kids. Better training for those who teach in early childhood, better health care and nutrition, support for those kids. I think that there's some very specific things we should do in K through 12 such as provide bonus pay—raise teacher pay, generally. Provide bonus pay to teachers that will go to the most difficult places. And we've got to I think dramatically change No Child Left Behind. I just talked about college. Let me go to the last element which is the one that I haven't heard of, there's talk about. We know if you graduate from college this year that the information you learned, a huge amount will be outdated in five or 10 years, we have to be the most creative, innovative, best educated work force on the planet, so we need an infrastructure for continuing education after high school, college, or graduate school, whichever is the last part of your formal education. So we continue to learn. Now, I wish I could tell you I have a specific proposal on this. I don't, not yet. But I do believe that because—basically it's ad hoc now. We leave it to individuals or their employers the enormous responsibility of ensuring that 45-year-old workers or 50-year-old workers in America are up-to-date and best trained, best educated they can possibly be and I think we have to develop a national infrastructure for making sure people continue to learn as they age."
The man positively scares me. Now, part of this is simply paranoia as Edwards does not come out and say he believes there needs to be a "birth-to-death" entitlement to education but he sure seems to be gesturing in that general direction. I do think there is a very compelling logic to expanding access to preschool as the earlier the intervention the more effective it is (sadly the converse is true as well and later interventions are largely worthless). But this notion that there needs to be some "national infrastructure for making sure people continue to learn as they age" is frightening to me. There are oodles of vocational and technological education providers, not to mention for-profit and online providers (think of University of Phoenix) and one of the vastly underrappreciated resources, your local community college, which often excels at providing courses in marketable skills. Having taken courses from pretty much every type of educational provider (both for-profit and non-profit) the quality of instruction can be quite high and it is certainly widely available thanks to these "internets". Some people refuse to undergo continuing education simply because they don't like learning. That's unfortunate but I don't understand how you can actually do anything to change their minds (apparently promotions, greater pay, better job security and that it is often that you don't actually have to go to work while training [read: boondoggle potential] are inadequate incentives). And to me it does seem appropriate that the onus for continuing education is placed on employers and the employees themselves, namely, the parties who derive an immediate benefit from their continued educational efforts.
Wednesday, September 12, 2007
"Be that as it may, I think Hanson's observation that "humans long ago evolved a tendency to use medicine to 'show that we care,' rather than just to get healthy" partially explains why things like the UK's National Health Service generate so much bang for the buck. In effect, a highly centralized state run health care system is able to put a cap on how much demonstrative caring can be done through the health care system. Nobody's going to say to his or her spouse, "well, sure we could afford the procedure, but it doesn't really stand up to cost-benefit analysis compared to spending the money on organic produce for the kids" but if bureaucrats stand in your way well, then, that's hardly your fault."
This is I think the chief virtue of a single payer plan which is it provides a clean and simple manner (if designed properly) to contain costs. I don't think such a plan is likely in our political systesm, especially when you look to Obama or Edwards' plans and is likely to simply replicate the deficiencies of our present system while sacrificing the benefits (namely innovation).
Tuesday, September 11, 2007
He lists three core reasons, the last of which intrigues me especially:
1. Superior Marketing
2. The elasticity of the conflict (i.e. the notion of a war on terror)
3. privatization of the conflict.
I don't know to what extent the last one actually explains the current acceptance or reluctance to alter the status quo. Clearly the lives lost have been far too many (one being too many). That said, in terms of historical norms of armed combat, Iraq casualties are strikingly few. That said Blackwater and security firms of the like do lose men in combat (under contract) and this does not figure into public calculus.
hat tip: Ross Douthat
I think I can hear Green Cowboy projectile vomiting.
"Here Mr Clemens seems to gesture toward perhaps the biggest and most controversial idea in development circles. Why would anyone with a robust sense of reality simply assume that each national jurisdiction contains the seeds of a viable economy? If we insist on thinking of development as a matter of national growth, we may well consign most of the bottom billion, and their children and their grandchildren, to unrelenting poverty trapped within their UN-recognised national prisons. Our real moral concern should not be the Central African Republic, but its unfortunate denizens. The best thing for their prospects may simply be to get out--to leave for a place where growth has already commenced. The West's many attempts to jumpstart growth where the world's poorest already reside has yet to work. So why does the international community insist on betting the poor's lives on the gamble that it will, finally, some day?"
Monday, September 10, 2007
Sunday, September 09, 2007
Ed Glaeser writes about possible solutions as well. He seems to be advocating something along the lines of the "Kling Debt-Equity Swap". He dismisses Dean Baker's "Own-to-Rent" policy which would prevent lenders from foreclosing on borrowers but borrowers would lose their equity interest while being allowed to remain in "their" home as a renter.
Friday, September 07, 2007
- "Creating moral hazard
- Costing the government a scary enormous amount of money
- Outraging voters as the government taxes people in modest homes in order to allow people who bought more home than they can afford in those houses. Whether or not you think that this is common among those who have gotten themselves into subprime trouble, or even admire the redistributive justice of it all, this is a real sentiment out there, and politicians have to deal with it."
"These are reasonable goals. Against this, one has to weigh the fact that major crises are better averted earlier than later. But I am not yet clear on whether the mortgage market requires massive intervention, or just continual finesse."
Thursday, September 06, 2007
"I think that the fundamental problem in this case—one I haven’t seen discussed very much—is that people bought more house than they could afford. No amount of financial wizardry is going to change that fundamental point."
I think the reason that it isn't discussed more is that a "solution" to the subprime mess is a phenomenal way to pander/buy votes.
Wednesday, September 05, 2007
Here is Larry Summers in the Financial Times on climate change and the possible remedies. Here is a bit from the Summers article:
"Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. "
Where have you heard that before?
Tuesday, September 04, 2007
If my preference is to work 30 hours a week for $45,000, rather than 40 hours for $60,000, and I am compelled to work the longer week, GDP is higher and I am worse off.
If I get worse health care paying $5,000 a year for a private sector health insurance policy than the same amount in taxes for a public system, GDP is the same but I am worse off.
If Consolidated Crappola, Inc. dumps toxic material into the air that worsens my emphysema, in contrast to a regulatory regime that reduced emissions and my adverse symptoms, GDP might be lower while I am better off.
So short of a treatise, GDP glosses over differences in the value of public and private consumption, discounts the value of public amenities, and implicitly assigns a negative value to leisure time.
- Max Sawicky
I ultimately disagree but this is the argument put as best I've seen.
Monday, September 03, 2007
"3. In 1997 the economy peaked at US$8.5 billion, exports at US$3.4 billion and employment at 1.4 million. At that stage we were: -
a. The largest exporter of tobacco in the world after the USA.
b. The sixth largest producer of gold.
c. The biggest market for South Africa in Africa.
d. The second largest economy in the region and with the third highest GDP per capita.
e. Life expectancy was about 60 years and we had a literacy rate of 85 per cent with 95 per cent of all children of school going age in school.
f. Inflation was 12 per cent.
g. The exchange rate was 12 to 1 against the US dollar.
Zimbabwe today has an economy that has shrunk by half to just over US$4 billion, exports by two thirds to US$1.4 billion. Employment has declined by 45 per cent and industry by 60 per cent. Agricultural output this year will be 70 per cent down on the level achieved in 1997. Mining output is down and falling rapidly. Tourist arrivals have fallen from over 1.2 million in 1997 to less than 300,000 this year.
Life expectancy has halved, income per capita has also declined substantially. National population has fallen from an anticipated 16 or 17 million to just over 10 million today with 4 million Zimbabweans outside the country and some 2 to 3 million incremental deaths over and above normal mortality. 60 per cent of all children are not in school and all State controlled institutions are in dire straights.
For a country not at war or under sanctions, these are the most precipitous declines in economic and social welfare ever witnessed. They represent a calamitous state of affairs with no sign of any resumption of either stability or recovery. In fact the decline has accelerated in recent months very dramatically.
The US dollar is now trading at 20 million old Zimbabwe dollars to one in the open market compared to 1 to 2 in 1980 and 12 to 1 in 1997. Nothing tells you more about the collapse in the economy than that single statistic."Let's see if Chavez can do the same for Venezuela.
hat tip: Megan McArdle