Thursday, December 31, 2009

John Coleman

John Coleman was for the last 55 years a practicing meteorologist. He is also the founder of the weather channel. He thinks all the paranoia about global warming is bunk. He does not dismiss the idea that we should manage our resources carefully or that it is a good idea that we should look for alternative sources of energy. What he rejects is the nonsense that people like Gore spew out more as theology than science. This is worth seeing.

Wednesday, December 30, 2009

Up In the Air and Sherlock Holmes

We saw two of the Christmas movies this week - Sherlock Holmes and Up in the Air. I expected a lot out of both but was satisfied with only one - Sherlock Holmes.

I must admit I came to Holmes with a bit of trepidation. I think of Holmes in the Conan Doyle motif or with the picture of Basil Rathbone. Robert Downey and Jude Law are not Rathbone and Nigel Bruce. But the movie is very engaging. It has an interesting story, interesting characters and great visual effects. Downey and Law work well together and the other characters are great supplements to the plot and the tone of the film.

Up in the Air is about an outplacement consultant who has constructed a life flying tons of miles. His greatest goal in life seems to be getting to 10 million miles on American airlines. His company hires a young MBA who decides that the way to do outplacement counseling is to use video chat. She is cold and precise. It sets up a good contrast between the distant Clooney and the young MBA. The plot gets more interesting when he encounters a sexy fellow traveler who has about the same number of gold cards. It gets even more interesting when Clooney's sister is about to get married and he helps solve a problem for a reluctant groom. But the movie is ultimately disappointing. The MBA's project fails and Clooney who finally has decided that 10 million miles on American is not all there is to life - finds that he cannot get back into the concept of relating to people. As we talked about the movie after we saw it we constructed about half a dozen alternative plots which could have made the movie more satisfying. But what we were left with was a good initial idea for a plot with some interesting characters who were left without much substance to work from.

I hope Downey comes back in this role - a sequel would be wonderful. Clooney should get back to what he does well, act in well developed stories.

The Absurd State of the Modern Language Association

if you want to worry about the state of political correctness in higher education today you need only look at the recent confab of the Modern Language Association.

Higher education in the US and around the world is going through one of the toughest times in the last several decades to what did the MLA discuss? They adopted a resolution which called for tenure for all professors - “and expressing the view that “[a]ll higher education employees should have appropriate forms of job security, due process, a living wage and access to health care benefits” Cary Nelson, a professor of English at the University of Illinois, spoke on the resolution with the following expertise on the current state of the language “It ain’t a high bar, but many are below it,”- Gee professor Nelson - I are really impressed. At a time when many universities in the country have tenure rates of seventy to eighty percent, John Franklin Crawford (a retired professor) worried about “the prospect of real catastrophe” if academics of all stripes don’t band together to fight against the "adjunctification" of higher education.

They avoided even a mild resolution on Ward Churchill the fraud from the University of Colorado who was dismissed for cause. Grover Furr, a professor at the distinguished Montclair State,offered the following defense of Churchill's antics “He is allowed to say disgusting and horrible things … and not be penalized by a governmental institution” Oh wait,Churchill was the employee of a governmental institution (the University of Colorado) and he seems to have obtained his position using fraudulent credentials.

This kind of thing would be humorous if it were not an indication of the oddities in a good part of the academic community.

Monday, December 28, 2009

What is the Difference between Michael Brown and Janet Napolitano?

There are two that come to mind which are obvious - first, neither seems qualified to their job. Brown was head of the Arabian Horse Association and Napolitano served as a counsel to Anita Hill. Second, both were in positions of critical responsibility for their fellow citizens. Napolitano seems to have the same kind of denial that Brown did. She first commented on how well her department functioned (the system worked) and then a day or so later - when the obvious flaws in their performance were pointed out - she changed her tune.

Oh there is one more difference. Brown eventually was forced out. It is not clear whether Napolitano will be granted the same treatment.

Friday, December 25, 2009

Posada de los Gringos

When my wife and I first moved back to California, we started a tradition called Posada de los Gringos. Traditionally a Posada (which means an inn) is celebrated in Mexico and symbolizes the travels of Mary and Joseph. The last night is the 24th. of December.

We had just bought a house and my wife and I did not want to cook on Christmas Eve. We went to a church service and then wanted to have dinner out. But on Christmas Eve in the area near Curtis Park in Sacramento there were no restaurants open - except a little place called Caballo Blanco. They were famous for the potato tacos. We began to eat there every Christmas Eve after church. That tradition continues today. Last night we went to a place close to where we now live and had our son and one of our grandsons with us. As you can see he took the tradition very seriously. It is good to have family traditions.

Thursday, December 24, 2009

This is your brain on crack

US Senator Sheldon Whitehouse in a speech on the Senate floor (what once was the greatest deliberative body in the world) seems to believe that the ONLY reason to oppose a bill that no one has read is to defeat the President in his goals. That is so absurd it is laughable. But Senator Whitehouse seems to believe it.

Dear Senator Whitehouse in the spirit of Christmas let me list just 10 of the reasons for opposing either the Senate or the House bill:

1) Show me any other area of the economy where government control has improved it.
2) Look at the lines and care lapses in single payor countries.
3) I am not a fan of British teeth (thanks to the national health care system).
4) You did nothing to curtail the costs of your buddies the trial lawyers in either bill - wouldn't that help to reduce costs.
5) Have you actually read the bill?
6) Military music is to music as military justice is to justice as national health care is to health care. (Thanks to Robert Sherrill)
7) The tax increases in the bill will continue to delay full recovery in the economy.
8) The design of the Medicare panels seems to violate basic principles of separation of powers.
9) I do not want to deprive the Speaker of the House of her botox treatments.
10) According to a number of distinguished legal scholars, the bill is unconstitutional - requiring Americans to buy something for which there is no enumerated power in the Constitution. Evidently, Senator Whitehouse has also not read that document either.

Wednesday, December 23, 2009

The Sarah Palin Interview

I admit this is not exactly timely. But last night I saw the Oprah interview with Sarah Palin. I had several impressions:

1) Palin is a lot more intelligent than she was portrayed in the media when she was a candidate for VP. During the campaign I got the impression that the media thought it was there job to play gotcha with Palin - and for the most part they succeeded. But based on her comments last night and what she had to say during the campaign I believe she was at least as qualified as our current VP - whose gaffes are legendary but not covered much by the media.
2) With the book, she has better handlers Whether we like it or not all politicians have handlers - people who brief them on what might happen and what the issues might be. That is also true on book tours and all sorts of other media events. It is clear that her publishers have a much better idea than the McCain staff about how to market Palin. McCain's staff was inept on many fronts - but I think they under-estimated Palin's appeal. I also think the egos of the handlers that she worked with in the campaign were very much in the way of trying to achieve their objective which presumably was to help McCain/Palin to get elected.
3)I like a lot of her values. She has some good firm notions of right and wrong and forgiveness and a whole bunch of other things that are important. I thought her comments on the father of her grandchild were right on target.
4) My vote in the last election (I chose not to vote for either major candidate) was a correct one. In 2008 I decided not to vote because I thought McCain was simply not wired right to be president (and the wires may be fraying a bit); Obama was an ideologue who would be considerably farther left than where he campaigned and was too inexperienced to accomplish what needed to be done (that one seems to have rung true also); Biden was simply silly - what at one point in our history was called a political fop (again the last year has reinforced that view - a fop in the 19th century was one who was too concerned with appearances - Biden simply takes that trend and applies it to politics. In the original use of the term a fop was harmless - with a political fop a lot of harm can happen; and Palin did not have a broad enough world view to handle the next job up. Last night a lot of her views were well informed but they also reflected a small town view of the world which would not serve any president well.
5) Oprah was a bit too respectful. I have not seen a lot of Oprah but I suspect that may be her interview style. She asked good questions but a lot of them sounded like something I would expect out of People Magazine - that short breathless kind of journalism which assumes some level of common insider knowledge. That's not journalism but I thought she covered a lot of topics in an hour. Katie Couric gets paid to be a "serious" journalist - I think Oprah (who comes from the same side of the political fence) is much more skilled. Neither should be called an investigative journalist - but then Oprah never claimed she was.
6) My feeling about Palin has not changed. I choose not to vote for Palin and I still think that was a right judgment. But my guess is that she will not choose to exercise her role from a position in politics and that if she chooses to be a media person (aka Huffington or O'Reilly) she is likely to be very successful. I am not sure we need more of those people (although that may seem off for someone who does a blog that is partially on politics).

The Best Congress Taxpayers can Rent

CBS calls out the graft in the health bill - the lubricant that was "necessary" to get the bill past. Katie Couric says it will help the two Nelsons and Dodd and Landrieu in their re-elections. Are we that dumb?

Saturday, December 19, 2009

Great news for the country

Personally, I am hoping for a couple of days of this. It sounds about right after the snow job they have been giving us the last few weeks.

Friday, December 18, 2009

Your Congress at Work

On Wednesday, the US House of Representatives gave final passage to a spending bill which added $9000 for in new national debt for each US citizen. It was intended to "stimulate" the economy. But like most things in this Congress the details do not conform to the reality.

Included among the 5000 earmarks was $100,000 for the Jamestown library. Unfortunately, the city of Jamestown, S.C., which asked for the dough (actually only half of that) did not get it. (Jamestown, S.C. is a dandy little town of 97 people - so the beneficence of Congress was offering the equivalent of one computer for each person in town. But the great wonders of drunken Congressmen (they must have been drunk to do something like this) offered the boodle to Jamestown, California. (population 2100). The one in South Carolina is the one near Winona.

Aren't you proud of these bozos. I say vote the rascals out and let the residents of both Jamestowns buy their own computers.

The Exceptional Leadership of the California Congressional Delegation

The democrats on the California congressional delegation have issued a joint letter to the Senate regarding a provision in the Senate health care bill which would increase competitive forces in the health insurance markets. They make the case that the bill, which would allow consumers to buy insurance across state lines, is a bad thing. What nonsense.

But then you go on to read their real justification - keeping state regulation and the complex system which increases costs.

After reading their letter in full it kind of makes you wonder whether their real intent is to improve the healthcare system or to increase the role of government in our lives. Actually, knowing what I do about the California delegation, it does not make me wonder it simply confirms something I already understood.

Thursday, December 17, 2009

Al Gore on Drugs

This is Al Gore's idea of poetry.

I do not want the Earth to warm
I do not want to do it harm
I do not want the Earth to heat
I fear the flames will hurt my feet
The time has come for me to rhyme
To save the Earth, I’m just in time

To save the planet from this flame
Aloft I, in my private plane
Hysterically my warnings shriek
Sounding not unlike some goofy freak
Fake data backs my warming shtick
The temp curve is a hockey stick

I can help relieve your guilt
Because you see, my fortune’s built
On carbon offsets that I sell
Before the world turns to hell
You’d best send money, for a tree
That I will plant in Zimbabwe

To Paraphrase Robert Sherril's famous quote about military justice (military justice is to justice as military music is to music)
Al Gore's poetry is to poetry as Al Gore's documentaries are to accuracy. (Note the photo is not after he read his "poetry."

Monday, December 14, 2009

The More on Federal Salaries

The earlier post on federal salary increases did not include two elements. First, there has been a huge jump in federal employees making more than $170,000 salaries. For example, there was but one U.S. Department of Transportation when the current recession began. Today, 18 months later, there are more than 1,600 career employees making that much at Transportation. That is a pretty big jump by any measure. At the same time in the original story one justification made for the differential in salaries was the higher percentage of federal employees who are professionals/scientists/engineers.

What amused me about the second comment was the notion about where employees are clustered. The differential between $41,000 in the private sector and $71,000 in the public sector would require that the feds employ almost twice the number of high income employees to get that differential. To suggest that government employs technical and highly educated people at a rate twice that of the private sector is simply nonsense.

The four maps in this post are from a site called JobBait which does some mapping on employment. It shows some interesting data. The four maps show, from left to right, changes in employment in healthcare, education,manufacturing and government. Notice a couple of things about the maps. Growth in the last 12 months has been primarily in sectors which use as a primary resource - government funding. Green means growth, red decline and black decline by more than 8%. Second, although the government numbers are red for California, when you look at particular numbers for state government that is one of the sectors of growth for the California economy. That long term trend for the state suggests problems ahead. (Big problems.)

Understanding default rates in student loans

The feds have suggested that accounting for student loans now be based on a three year rather than a two year average. While the better count would be for the life of the loan - the longer standard makes sense. All of the rates of default, among the sectors of higher education increased. In the traditional four year institutions (public and private) the new data raises defaults to around 7%. But for the for profit sector the increase is a bit more dramatic. The rate increases from 11% to 21%. Even for some of the flagship proprietaries the rate increases significantly.

The new data made me want to explore one claim which many in the proprietary sector make - that they are the taxpaying sector. Here is the data from the Apollo Corporation - which is Phoenix's parent. The data is from the financial filings of Apollo Corporation and from their federal student aid data. It does not include the amount of money that students took out in federal loans (about $3.8 billion) or the cost to the federal government for defaults on those loans, which in the case of Phoenix amount to 15.9%.

The chart is not meant to pick on one institution. (Indeed, Phoenix's default rate is significantly below the proprietary sector as a whole and less than a third of what many proprietaries have.) But it does point up two issues. First, all of higher education could improve their record on getting students to repay their loans. Second, the claim by the proprietary sector as the "taxpaying" sector is bunk.

Sunday, December 13, 2009

Simple rules of Net Manners

This afternoon we were in a Starbucks and sat next to a person who had a bluetooth headset and was evidently talking on Skype. She yabbered on about all sorts of things at a relatively high volume. What was odd about the experience was that unless you stared you could not see the little ear bud from which she was talking. So you had this impression that she was actually in a place talking to herself.

I guess I think those kinds of conversations should be moderated a lot more than this nimrod thought she should. I was not really interested in hearing her gossip at lots of decibels. I began to take a picture of her and found she was shy - I thought that was odd after she had spent the last fifteen minutes assaulting us with all of her banalities.

The Leviathan Congress

Everyone agrees that the way the national championships in football is decided is silly. This year there are three teams who are not playing for the national championship that are undefeated. The system grew up as a result of coaches and athletic directors in the NCAA devised the method ultimately to share the wealth in bowl games and to choose a national champion. Since it was first developed in the late 1990s there have been a series of decisions - based on polls and computer ranking system - that have been questionable.

Rep. Joe Barton from Texas, who is a republican(with a 96% ACA rating), has proposed that Congress regulate the BCS system. At a hearing earlier in the year he described the system thusly "It's like communism. You can't fix it."

I'm confused. I agree that the BCS rating system is horrible, but since when should Congress regulate the operations of this kind of private entity? Can Rep. Barton find any place in Article 1, Section 8 of the Constitution that says Congress shall have the power to regulate college football or even sports?

A lot of conservatives rail against the efforts by the left to control our lives. From my perspective the disease seems to be in the institution not based simply on political philosophy.

Saturday, December 12, 2009

Don't do as I do

USA today had a front page story about compensation changes in the federal government. At a time when the federal government is bleeding deficits and the nation's economy is in the worst state since the great depression what do you think is going on with pay for federal employees. The number of employees making more than six figures jumped from 14% to 19% of the federal workforce. The increases do not include data for bonuses and overtime.

Last year when many public employees in the country were either facing furloughs or pay reductions or both, federal employees enjoyed a 3% pay increase in 2008 and a 3.9% increase in 2009. That is in addition to the step increases that are built into the pay system. According to the story, the highest paid employees are getting the largest share of the booty.

One might argue that federal employees should enjoy these increases because they are paid less than employees in the private sector. The Office of Personnel Management which keeps data on these things excludes the White House, postal service, uniformed military personnel and employees from the intelligence agencies. The average federal worker gets paid $71,206 compared to the average in the private sector of $40,331.

Friday, December 11, 2009

The New Socialism

Charles Krauthammer often has an interesting take on things - this morning he argues that the Administration's use of EPA regulation over carbon emissions is a naked assertion of executive power. He says "If you want to revolutionize society -- as will drastic carbon regulation and taxation in an energy economy that is 85 percent carbon-based -- you do it through Congress reflecting popular will. Not by administrative fiat of EPA bureaucrats." The proposed EPA regulation will reach into every aspect of American life allowing the substitution of bureaucratic judgment for popular will That sounds about right and he argues that the Congress should reign in the EPA on this. That is unlikely with the way Congress works today.

Wednesday, December 09, 2009

Thomas Malthus and Sociologists

A new article in Wired interviews a sociology professor from Whitman College on why people in America are increasingly less supportive of initiatives to combat global warming (or as it has been altered "climate change"). The webpage for the professor describes her work in the following way - "At Whitman, I am a member of both Sociology and Environmental Studies. Within the field of Environmental Sociology, I am particularly interested in the intersection of social inequality (e.g. gender, race, class) and environmental problems. This area is also known as environmental justice. "

She comments "In addition to being a major environmental problem, global climate change is a highly significant global environmental justice issue (Athanasiou & Baer, 2002; Baer et al., 2000; Agarwal & Narain, 1991; Donohoe, 2003; Pettit, 2004; Roberts, 2001)." So almost regardless of the science, this is about justice or (not to put words in the professor's mouth) equity.

In the lead article which Wired seems to have found interest the professor argues "Existing research assumes that a lack of information about the causes of global warming is the primary reason for the public’s failure to respond—an orientation that Harriet Bulkeley (2000) calls the “information-deficit model.” In essence the information deficit model assumes that skeptics about the vast array of global warming theories are simply uninformed. Certainly professors like Richard Lindzen, who is an MIT climatologist, would not be included in that group. But in the Wired article the professor goes on to suggest that a lot of the change in opinion has been caused by conspiracy - we're being duped by Exxon Mobil and others.

The professor then goes on to demonstrate her "research" with a series of interviews. My favorite exchange was "Researcher: I want to ask you about some different things that have happened here in Bygdaby(a city in Norway) that I have noticed since I arrived in November, and one of them is that there hasn’t been any snow. What do you think of that? Hilde: Yes we think it’s a bit odd, you know. The way I remember winters, or winters before, you know there was always lots of snow, and it was cold the entire winter, you know." Now that is compelling research.

Then the article gets to the crux of this issue, the author's initial premise has been shattered - people know about the problem (they are not in information deficit) - but she is concerned that even with the knowledge they are not prone to act with the same level of alarm that she is "As I became increasingly convinced that the people I spoke with were well informed about global climate change, my research questions shifted. I began asking myself a different set of questions: How did people manage to produce an everyday reality in which this critically serious problem remained invisible? What difference did it make that people who knew about global warming failed to take action?" No value laden words in those statements.

When Malthus penned his essay on population he had some pretty convincing data - that Britain would run out of food unless it controlled population. His motives were not clear - he was appealing to parliament to not extend the equivalent of welfare. And his data, which came from Benjamin Franklin, had a number of flaws. Finally, he did not anticipate the power of ingenuity. The invention of the steel plow pre-dates Malthus' work by five years. And with the steel plow yield per acre increased significantly.

Each generation is blessed with one or more Malthusian projections. And each generation has found that the linear absolutist logic of these scenarios is always wrong. Dressing it up in pseudo-scientific language does not make it any more compelling. Perhaps that might not be as satisfying an explanation as some high sounding term but based on the experience since 1798, it seems a lot more reliable than listening to sociologists with a pre-conceived picture of the world.

Tuesday, December 08, 2009

The Shape of Taxes - What's Right?

Mark Perry at AEI took some recent Tax Foundation data and converted it to a graph.

Perry argues that the increasing number of people who file zero balance returns is a good thing. I am not so sure. Ultimately, any tax system needs to be broad enough so that most people participate in it. There should be equity considerations in any tax system but if half the people don't pay a tax - then it is very easy for the half that don't to be convinced that the half that do can accept even greater burdens. That same thing may be true when the number is slightly higher than a third as it is today. At the beginning of the Reagan administration that number was about half of what it is today for the top 1%. It is not clear where the right number should be - it should probably have some relationship to the percentage of income earned. According to the CIA Factbook the highest 10% of earners garner about 30% of the income, while the lowest 10% hold 2%. If you convert that to the calculation for income according to the IRS, the top 1% earned 23% of the AGI.

The second chart should also be troubling. As the graph points out, the top one percent of taxpayers pay a bit more than 40% of the total burden under the income tax. And the bottom 95% pay slightly less than 40%. Thus, the remaining 4% pay an additional 20% - or 5% of the taxpayers pay 60% of the income tax.

Monday, December 07, 2009

What animates some people

Snow on Tarmac
Originally uploaded by drtaxsacto
Last night we were supposed to get a heavy and cold storm in our neighborhood. About 2:30 in the morning we awoke and saw snow coming down - not sticking - but coming down. In the morning we rushed out to view what we had not seen in more than 20 years. While it was interesting and exciting, I would be just as glad if we did not see the white stuff this close again for another two decades.

Changing Fortunes

I am not especially a fan of either of these politicians but I was struck with how close their numbers are in two polls that were released this week. Things can change for both. If the President continues to ignore the deficit, his numbers are likely to decline further (which for a first year president have been pretty fast indeed.) If Palin makes some more outrageous statements her numbers could head south too. I suspect that the dueling 46% disapproves do not include many crossovers Obama to Palin.

Thursday, December 03, 2009

How a Tablet Would Work

There has been a lot of chatter around the expected Apple Tablet. But Sports Illustrated demonstrated on You-Tube how such a device might be used to enhance their magazine. Their video has a dozen features which would re-vitalize how people use the media. The video is well worth watching. And then the wait begins.

Tuesday, December 01, 2009

Cute ad that makes a point

This is an ad at the start of the Senate debate on Obamacare which is a takeoff on the Mac-PC ads but its point is important.

Sunday, November 29, 2009


English has tenses for a reason. The subjunctive is used when something is not real or actual. We were in Starbucks this morning and they have wishes up including this one " I wish every day was a holiday"

Obviously every day is not a holiday, even in the past. The wish should be " I wish every day were a holiday." Small point but if there were not a good reason for expressing the difference our language would be the poorer.

Saturday, November 28, 2009

Doing the Right Thing

Tonight Rick Neuheisel the UCLA coach took a time out when his team was down by two touchdowns and there 54 seconds left to play. Had he not done that he could have, in theory, recovered the ball with two seconds left. Pete Carroll did the right thing and and had his QB throw a 48 yard pass to Damien WIlliams for a TD. The Trojans ended up winning by an extra touchdown. Neuheisel should not have called the time out when it was clear that all he was doing was delaying the game. Bill Plascke called it right when he said coach Rick should have gotten one instead of taking one.

Friday, November 27, 2009

Dickensean Devotee

I am a devotee of Charles Dickens. I especially like A Christmas Carol - which is the novella that Dickens wrote about the time he visited the US. I've got the story in print and most of the video versions of it. My personal favorite is Alistair Sim - which was produced by Jack Warner and seems to have started from the premise that a movie should mostly accurately reflect the original underlying work.

The other versions that I know about include = A Christmas Carol (1938) starring Reginald Owen, Gene Lockhart, Kathleen Lockhart, June Lockhart, Leo G. Carroll, and Terry Kilburn. 69 min.; A Christmas Carol (1951) starring Alastair Sim, Meryvn Johns, Michael Hordern and Glyn Dearman 86 min. ;Scrooge (1970) starring Albert Finney, Sir Alec Guinness, Edith Evans and Kenneth More. 115 min.; A Christmas Carol (1984) starring George C. Scott, David Warner, Susannah York, Frank Finlay, Edward Woodward and Nigel Davenport. 100 min.; Scrooged (1988) starring Bill Murray, John Forsythe, Karen Allen, Carol Kane, and Bobcat Goldthwait. 111 min.;A Christmas Carol (1999) starring Patrick Stewart, Nick Adams, Desmond Barrit, Charlotte Brittain, Tom Brown, Kenny Doughty, Laura Fraser, Richard E. Grant, Joel Grey, Roger Hammond, Celia Imrie, Ian McNeice, John Mills, and Saskia Reeves. 93 min. Sim still sets the style standard for most of the performances - the nuances in his characterization can be seen in most of the other versions, except perhaps the Bill Murray one which is unique.

I mention this because I went to see the 3D version of the story released by Disney this season yesterday. This one stars Jim Carey in a motion capture version. I saw the non-3D version when the movie first came out. The 3D version is a real addition, an enhanced experience. There were some changes in this script - including a chase sequence in the third part of the story (the ghost of Christmas future) which was added to show off the technology. I think the writers kept mostly to the substance of the story. The technology used to make the movie is very good.

I am interested in the economics of the movie business because my son in law is a finance guy for Disney. As of last week the movie had done about $80 million but I think the studio thought it might get a second wind from the holiday traffic. The estimated total as of yesterday added another $10 million (to $90 total). In yesterday's 4:30 showing the crowd was small. Evidently the technology to make this kind of movie successful is pretty expensive (the estimated cost of making the movie was about $200 million).

For me Christmas would not be Christmas without a dose of Dickens. It will be interesting to see if the movie picks up in the next couple of weeks. I think this version is a good one and well worth seeing.

Thursday, November 26, 2009

Traveling Gyms - comparing bargains

We are in the LA area for a couple of days and in recent years one of the requirements of any hotel stay is a gym where I can work out. This time we stayed at a Comfort Inn in Eagle Rock which was about half the price of the Hilton in Pasadena but it had one defect - the gym is off site. It turns out that the gym is a 24 Hour Fitness facility in Pasadena.

I went there yesterday. When I am on the road, even with family, I try to get in about an hour (at least) on aerobic activity. The 24 hour facility in Pasadena is pretty good - although there are a lot of defects. First, the equipment was not as clean as my home gym. Second, I did not know that amenities that I expect from my home gym (towels and soap for example) are not free. Third, although they offer rental lockers - none of them worked. (One did but it was full and I did not want to put someone else's stuff in another place). The locker room is OK (in a basement) but a bit below my usual standards. Fourth, although there was a parking validation - it still cost me five bucks. So the free ended up costing me $8 for a lock, $3.25 for a towel and $5 for validated parking. (So net $16.25)

Today I went to a place where my mother in law goes. It is called Break Thru Fitness and it is on Del Mar and Lake. Parking is free, ditto for towels and soap. The guest fee is $20 - but free parking and all the other amenities included. So the net is $3.75 more. But the place is spic and span clean. The locker room is nicely done.

In the end while the net cost of Break Thru is modestly more expensive for a visitor, the total experience was much better. I found both places had pretty nice people behind the counter. Obviously, I would not need a lock every day nor would I need to buy a towel each day. So if you look at the two day cost 24 hour is much cheaper. But as noted above the experience at Break Thru is so much better.

In the scope of things - this is not the most important comparison I have ever worked out but as my mother in law used to say to her daughters - sometimes a free dinner can be too expensive.

Monday, November 23, 2009

Eternal Truth

A friend sent me this with the note -" it is impossible to overstate the importance of data." That reminded me of an incident when I was at the University of the Pacific. When I was an undergraduate one of my two leading professors was a leader in the American Political Science Association for the Western States. The APSA was going through a schism between the quants and the non-quants. Some in the field of political science argued that political science would only be a science when everything was proven by data. My professor thought that data could not substitute for thought. We went to the WPSA (the western meeting of the APSA that year) and a graduate student from Berkeley presented a paper where he suggested with a high degree of confidence (the statistical kind not the one involving thinking) that based on his study of the voting behavior of members of congress that in the period between 1955 and 1960 (about six or eight years before the meeting) that congressmen from rural southern districts were more likely than congressmen from northern urban districts to be supportive of increases in agricultural subsidies and military expenditures and less likely to be supportive of issues involving civil rights.

The poor guy left his paper, which he had been reading from on the podium. My professor came up to the podium after the presentation and picked the paper up like it was toxic waste with the comment "That was a very interesting diversion, but now let's get back to some thinking about political science." Half the room was ready to lynch my professor and half thought that the graduate student who had presented was stating what any observer would have concluded with a little bit of careful thought.

Art Savage

Art Savage, who brought the Rivercats to Sacramento, died over the weekend. I met him a couple of times at Rivercats luncheons. From those encounters he had several great qualities. First, he seemed to enjoy baseball - the experience at Raley Field seems to have been designed by someone who appreciates baseball. Raley Field is a fans field. Second, there seemed to be a lot of room around him for accomplishment. Sacramento, in the first ten seasons, had some remarkable accomplishments. We've won the PCL and the Brickyard Showdown twice, and eight divisional titles. But in each of those years Mr. Savage was visible but not at all like many team owners who seem to think that in addition to owning a business they are somehow part of the team. Third, he had a sense of the community. Independence Field - which was his dream to create a baseball venue for disabled players - came about because he encouraged all of the fans (with a substantial boost from his own resources) to create the dream. The Rivercats foundation makes real contributions to the community. Perhaps the best fund-raiser for a local charity was one a couple of years ago where they announced in the first inning that until the ballpark raised X amount of dollars that they would continue to play Kenny G between the innings. That was funny but also successful. Finally, Savage accomplished a feat without the public subsidy that some team owners (like the Kings owners - the Maloofs) claim they cannot live without. The owners of these businesses want to require taxpayers to pay for their stadiums under the false logic of a mix of civic pride and jobs creation. Savage built Raley Field and improved civic pride of West Sacramento, and indeed the region, without needing the subsidy. His model should be instructive to others who think they cannot run a private business without socializing some of the costs.

The Twelve Days of Christmas Taxes (Tim Burton In Washington)

The Heritage Foundation has produced a web memo which details the tax proposals currently on the table. Never mind that with just the House proposal that our marginal rates in this country would rise above France, Italy and Spain when state and local taxes are taken into account. I know it is well past Halloween but this list should scare you.

An income surtax on taxpayers earning more than $500,000 a year,[1]
An excise tax on high-cost "Cadillac" health insurance plans that cost more than $8,500 a year for individuals or $21,000 for families,[2]
An excise tax on medical devices such as wheelchairs, breast pumps, and syringes used by diabetics for insulin injections,[3]
A cap on the exclusion of employer-provided health insurance without offsetting tax cuts,[4]
A limit on itemized deductions for taxpayers with a top income tax rate greater than 28 percent,[5]
A windfall profits tax on health insurance companies,[6]
A value-added tax, which would tax the value added to a product at each stage of production,[7]
An increase in the Medicare portion of the payroll tax to 3.4 percent for incomes great than $200,000 a year ($250,000 for married filers),[8]
An excise tax on sugar-sweetened beverages including non-diet soda and sports drinks,[9]
Higher taxes on alcoholic beverages including beer, wine, and spirits,[10]
A tax on individuals without acceptable health care coverage of up to 2.5 percent of their adjusted gross income,[11]
A limit on contributions to health savings accounts,[12]
An 8 percent tax on all wages paid by employers that do not provide their employees health insurance that satisfies the requirements defined by the Secretary of Health and Human Services,[13]
A limit on contributions to flexible spending arrangements,[14]
Elimination of the deduction for expenses associated with Medicare Part D subsidies,[15]
An increase in taxes on international businesses,[16]
Elimination of the tax credits paper companies take for biofuels they create in their production process--the so-called "Black Liquor credit,"[17]
Fees on insured and self-insured health plans,[18]
A limit or repeal of the itemized deduction for medical expenses,[19]
A limit on the Qualified Medical Expense definition,[20]
An increase in the payroll taxes on students,[21]
An extension of the Medicare payroll tax to all state and local government employees,[22]
An increase in taxes on hospitals,[23]
An increase in the estate tax,[24]
Increased efforts to close the mythical "tax gap,"[25]
A 5 percent tax on cosmetic surgery and similar procedures such as Botox treatments, tummy tucks, and face lifts,[26]
A tax on drug companies,[27]
An increase in the corporate tax on providers of health insurance,[28] and
A $500,000 deduction limitation for the compensation paid by health insurance companies to their officers, employees, and directors.[29]

Sunday, November 22, 2009

Two Reviews for the Price of One

Yesterday, while my wife was in Babys R Us, I went to the AT&T store to replace my bluetooth headset. I had been using a Jawbone 2. It was supposed to be the best bluetooth on the market. But I had never had very satisfactory service out of it. It is very hard to turn on and not easy to figure out whether your headset is on. No I am not one of those dorks that keeps the damn thing in my ear all the time but when I am traveling I use a bluetooth headset when I am driving and also when I am tired at the end of the day.

A friend who I work with had just bought a Plantronics Voyager so I wanted to look at the alternative. I went into the AT&T store and was "checked in" by a guy. I asked him about a Plantronics bluetooth and he pointed me to all the models. But no sales clerk seemed interested in taking my dough. There was a Plantronics headset on the counter and I said I would like to buy one and the guy at the cash register asked me where I was in the queue. At that I walked out. I then thought of the Best Buy which is close to the AT&T store.

I parked and then went to the phone section. In about 30 seconds I found a clerk and said I was interested in a Plantronics bluetooth. He asked why. I said I had a Jawbone and did not like it. He said Plantronics had similar noise canceling features. He then showed me two types - one over the ear and the other in your ear. I decided on the in the ear model because it has a traveling charger (Great IDEA!!!). The clerk asked me if he could pair it with my phone. He then did that. I was out of the store in about 4 minutes flat.

I am not likely to go back to the AT&T store again. The clerk at Best Buy knew his stuff and was helpful.

Blind Side

Blind Side is a movie about a series of contradictions. A wife from a rich family in Tennessee finds a kid who is essentially homeless and takes him in and regardless of any criticism she receives she keeps thinking about how to make the kid's life better off. Sounds kind of syrupy doesn't it? Well the story is true. I had read about the woman and the kid - who it turns out is also a football player. Most of these "true story" films are silly but this one is well worth watching. Sandra Bullock (who plays the mom) and Quinton Aaron (who plays the kid) and the rest of the cast are superb - they are first and foremost believable. The movie is inspiring. I really enjoyed it.

Friday, November 20, 2009

Satchel Paige to Steve Ballmer

According to TechFlash, shareholders questioned Balmer about Microsoft's slipping reputation among college students and Apple's apparent gains among the same segment of consumers. "I'm just wondering why your marketing group can't do something to try to rein in this next generation, because you've got a real bad image out there," one shareholder reportedly said.

Balmer responded that "opportunities for improvement" did exist and acknowledged that there "is a group of people with whom our market share is less." He ultimately played down Apple's growing market share, reportedly adding, "it is important to remember that 96 times out of 100 worldwide, people choose a PC with Windows, that's a good thing."

But like most of Ballmer's statements they should have been checked for accuracy. Two things should be noted. Between Apple and Linux - the current market share is about 6% but when you look at satisfaction Windows in all its various lives is not loved by many. Mac and to a lesser extent Linux draw fierce partisans. And they are both growing. Several major makers of PCs have decided that they should offer options in operating systems for their models. Does that mean MSFT products are no longer useful? Of course not. But does it mean that the dominant market share is secure? Were I Ballmer I would be worried. Their attempts to catch up in a number of areas (You might call the Zune the MSFT music player the Area 51 of Music Players) has had limited success. The other trend which should concern them is whether operating systems are becoming commoditized. Is the value of the franchise - even at 93% as valuable as it once was with more and more net based applications - probably not. I use Microsoft products every day. But I use less of Powerpoint and less of Word and none of the operating system than I did a decade ago. That may be what the shareholders are really worried about - but then as he is called on the net "monkey boy" does not seem to get that transition. He spends a lot of time looking over his shoulder and as Satchel Paige said ""Don't look back. Something might be gaining on you."

Health Insurance Bribes (Reid's Louisiana Purchase)

Mary Landrieu is a senator from Louisiana and has been suggesting she will not vote for the health care bill. Here is a provision that ABC News says is going to secure her vote. The provision was added by Senator Harry Reid. The language only applies to the state of Louisiana.


Section 1905 of the Social Security Act (42 U.S.C. 1396d), as amended by sections 2001(a)(3) and
2001(b)(2), is amended— (1) in subsection (b), in the first sentence, by striking ‘‘subsection (y)’’ and inserting ‘‘subsections (y) and (aa)’’; and (2) by adding at the end the following new subsection:

‘‘(aa)(1) Notwithstanding subsection (b), beginning January 1, 2011, the Federal medical assistance percentage for a fiscal year for a disaster-recovery FMAP adjustment State shall be equal to the following:
‘(A) In the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the fiscal year without regard to this subsection and subsection (y), increased by 50 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5.

‘‘(B) In the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal medical assistance percentage determined for the preceding fiscal year under this subsection for the State, increased by 25 percent of the number of percentage points by which the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection.

‘‘(2) In this subsection, the term ‘disaster-recovery FMAP adjustment State’ means a State that is one of
the 50 States or the District of Columbia, for which, at any time during the preceding 7 fiscal years, the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act and determined as a result of such disaster that every county or parish in the State warrant individual and public assistance or public assistance from the Federal Government under such Act and for which— ‘‘(A) in the case of the first fiscal year (or part of a fiscal year) for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year after the application of only subsection (a) of section 5001 of Public Law 111–5 (if applicable to the preceding fiscal year) and without regard to this subsection, subsection (y), and subsections (b) and (c) of section 5001 of Public Law 111–5, by at least 3 percentage points; and ‘‘(B) in the case of the second or any succeeding fiscal year for which this subsection applies to the State, the Federal medical assistance percentage determined for the State for the fiscal year without regard to this subsection and subsection (y), is less than the Federal medical assistance percentage determined for the State for the preceding fiscal year under this subsection by at least 3 percentage points.

‘‘(3) The Federal medical assistance percentage determined for a disaster-recovery FMAP adjustment State under paragraph (1) shall apply for purposes of this title (other than with respect to disproportionate share hospital payments described in section 1923 and payments under this title that are based on the enhanced FMAP described in 2105(b)) and shall not apply with respect to payments under title IV (other than under part E of title IV) or payments under title XXI.’’.

The cost of this bribe is $100 million - but who cares it is not Harry Reid's money - it's yours. The WP suggests that the net cost of the health care bill will actually reduce the deficit - based on the combination of program cuts and tax increases less the $800 million+ in new spending. Don't believe it. This may buy her vote but it may not buy Senator Landrieu's re-election.

Ecumenical Glasses

Rowan WIlliams the Archbishop of the Anglican Communion is in Rome and was quoted in the NYT as saying “The ecumenical glass is genuinely half full.” One could argue that the Pope's recent invitation to dissident Anglicans came in part because the Rev. Williams and the leadership of the American Anglicans have been busy draining the glass as fast as they can.

The Episcopal tradition includes something called discernment - that allows change but is inclusive of a variety of points of view. But the denomination has been less willing to think in this truly ecumenical way for quite a long time. A good deal of doctrine has been made up by majority rule and a good portion of Anglicans are chafing under that new regime.

The Anglicans, after a long discussion, decided that it was appropriate to ordain women to the priesthood. For most American Anglicans that was a reasonable decision. But then the leaders of the denomination moved toward the ordination of homosexuals and sanctioning gay marriage. I suspect that had the American communion had some patience with their fellow parishioners who were opposed that they could have thought the issues out through the process of discernment. But the majority wanted to push the issue through.

Now the denomination is trying to repair the breech by demanding that all churches affirm that the ECUSA (national church) owns their facilities. The same thing is happening in other protestant denominations. Ultimately, that will not be good for congregation building.

Tuesday, November 17, 2009

From the Social Security Trustees Report – with no editorial comment but one….

Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 16 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

The Medicare Report shows that the HI Trust Fund could be brought into actuarial balance over the next 75 years by changes equivalent to an immediate 134 percent increase in the payroll tax (from a rate of 2.9 percent to 6.78 percent), or an immediate 53 percent reduction in program outlays, or some combination of the two. Larger changes would be required to make the program solvent beyond the 75-year horizon.

Editorial Comment – Is it really time to authorize a new trillion dollar entitlement in a period where the trustees of the Social Security System tell us that they will again have to either significantly increase taxes or decrease benefits or both to keep the two current systems solvent?

Sunday, November 15, 2009

The New California Motto - Amitto

I am a native Californian. My state has always been a place where risk taking and discovery are an essential part of our psyche. But I look at the superlatives of the state and believe that Eureka no longer fits the state. Instead of Eureka, we should change it to Amitto - I've lost it.

Witness the following:

#1 - California has a number of superlatives about it now - the worst credit rating among the states; the fourth highest unemployment rate in the country; at the beginning of the year the third highest level of deficit (as a percentage of total spending) and a continuing inability to balance our budget; the second highest foreclosure rate and the highest rates for sales and income taxes in the country.
#2 - Even though our ports contribute significantly to our economic prosperity and our position in global markets, the state's leadership seems to treat them as almost toxic assets. Members of the legislature, including most recently Dean Florez, have used the ports as a PR device to show their political sensitivity.
#3 - We've let a three inch, inconsequential fish (the delta smelt) paralyze us into creating a new dust bowl in the central valley of the state. Water shipments to farmers in one of the richest agricultural regions in the world have been curtailed by as much as 90% based on shoddy environmental evidence.
#4 - Our state budget priorities are out of whack - we now spend more on prisons than higher education. We face yet another significant budget deficit. That goes along with a bizarre tax system which is driving high income tax payers out of the state.
#5 - A distinguished panel of Californians studied the tax system and came up with a good report on how to reduce the revenue volatility in the system. The report was not perfect but it was a great start. But it seems to be dead on arrival - no intention to move the discussion forward. The business community, which pays heavily under the current system, dismissed the ideas without any serious consideration.
#6 - We've furloughed state employees to save money making state services less available and making the job of public service even less desirable. At the same time we have allowed a couple of public employee unions and sometimes the trial lawyers to have an absolute veto on key items in the legislature.

The list could go on - but that gives you an idea of why the motto change is appropriate. My other question would be when can we recover, as a 1970s writer once called it "The Last Days of the Late Great State?" As a native Californian I wish I could say.

Saturday, November 14, 2009

Yo la tengo - Funny

A techie friend sent me the link to this video which I thought was very well done - and funny.

Friday, November 13, 2009

The Reality Sinks in....

Recent polling by Gallup suggests that a majority of Americans now think healthcare is NOT a federal responsibility. As the details of the Pelosi and Reid plans leak out, that is not surprising.

Thursday, November 12, 2009

Therapeutic Terrorism

The stories about accused mass murdered Nidal Malik Hasan vary. He seems to have studied under a radical muslim cleric when he was at Walter Reed. There are other indicators that Major Hasan was trying to carry out a radical act. According to some press reports he gave away his belongings before entering the readiness center at Ft. Hood. He seems to have dressed in the traditional white. He seems to have bought the two handguns he used outside of the base. But in an effort to almost overbalance the coverage here against his growing faith in Islam - we seem to be wanting to construct a psychological profile of this guy. Anyone who commits an act like the one Hasan did has some screws loose. But without a detailed evaluation all of the "expert" commentary about who Major Hasan was at the time of the shootings is nonsense.

I would prefer for the news to be just that - here is what happened. GIve the the details that you know. But we consistently prattle on about this or that psychological theory. How about Joe Friday news? - nothing but the facts. His inevitable trial will allow the exposition of all the other stuff. For now we should be concentrating on the losses for the families at Ft. Hood (first) and trying to discover(second), if indeed this was an act of domestic terrorism, how to prevent a future one.

Wednesday, November 11, 2009

Pew (both center and condition)

"Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers." So says Susan Urahn of the Pew Center. The Pew Center issued a report on the finances of all 50 state but concentrated on nine including Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. They including California are about a third of the total US population

California's problems come from a variety of problems including poor money management and the economic downturn and foreclosures. But according to Pew they are not solved. California's foreclosure rate is lower than Florida, Arizona and Arizona. Our revenue drop is more than the US but less than Oregon, Michigan and New Jersey. Gee that really gives me comfort.

Monday, November 09, 2009

The Economics of Health Care Bureaucracy

In the American Economic Review in 1968 William Niskanen (the former leader of the Cato Institute) wrote an article on the peculiar economics of bureaucracies. Niskanen argued that bureaucrats work to maximize their budgets while entrepreneurs work to maximize outputs. When downturns occur, because the bureaucrats don't care as much about their service provision, the first thing they reduce is service. Entrepreneurs, because they directly benefit from the growth of the firm, reduce services last. A firm that is run by managers would be expected, because of the less direct benefit to managers for better growth, are expected to act more like bureaucracies.

A demonstration of that came last fall when the public segments of higher education in California lost the first of two pretty substantial portions of their budget. Both immediately announced a significant reduction in the number of spaces offered to students. The independent colleges and universities, although they had suffered economic challenges, did everything to maintain enrollments.

As I have thought about the health care debates, I have wondered which model would apply to the House bill or other alternatives. A good portion of the health care industry is run out of either government or large bureaucracies. While Niskanen argued that there were slight differences between bureaucracies and manager led firms,both reduce their commitment to protecting the level of service over entrepreneurial firms. It is pretty clear however that applying Niskanen's theory to the public option suggests that services would be reduced first over other alternatives for saving money - more cost, less service; not exactly a good combination.

Tax dollars at work

The Connecticut legislature has spent most of the year trying to work the state out of a deficit. The members of the legislature engage in serious debate and discussion. See the attached picture.

The Men Who Stare at Goats

The Men Who Stare at Goats is a quirky movie. It is about an alleged special unit in the Army designed to use psychic powers. A reporter for the Ann Arbor paper interviews a local person who puts him on to a story of the unit. His marriage breaks up and so he decides to pursue the story. He travels to Iraq and meets a couple of the key players who had been in the unit. One of them takes him on a trip through the desert. Sound a bit odd?

Well, yes, it should. But like a lot of other movies that George Clooney has been in recently, it is very funny. Not slapstick, although there is some, but funny as in tightly woven line of humor. I really enjoyed the movie.

Sunday, November 08, 2009

So what happens next

The earlier post on the health bill vote did not speculate on what happens next. As I see it there are three possibilities.

#1 - A bill close to the President's vision gets adopted. The president invested a lot of his political capital yesterday in the bill and got it passed but with two significant caveats. First, 39 members of his party deserted him - that is not a small number. Second to the the bill the majority got some back by adding the abortion amendments in (which will be dropped if there is a conference committee). But the possibility that the House bill will become the final one are very close to zero. What is unclear is whether the Reid Opt Out option is a viable alternative. I think it is not. But we have not seen the final Senate bill yet to understand whether the majority in the senate can surmount the blockage up to 60 votes. If this scenario were to be real - I suspect it will take some time to get to an agreement. So don't expect a bill until after the start of 2010.

#2 - The initiative by the President is stopped in the Senate. At this point there are five or six democrats who are unlikely to vote for a bill with a high price tag and a public option. I am reasonably convinced that the opt out option is not enough to bring them back. So far the leadership of the Senate, including Senator Baucus have been unwilling to seek legitimate GOP support. Even the vote of Senator Snowe is unlikely to stay if a public option is present. If the president's numbers continue to deteriorate and the direction of the country polling continues to go against the administration the number of nervous democrats could increase. In spite of the brave denunciations by the President's mouthpiece, Tuesday's elections did include a vote on the president and he lost big time - he invested a lot in NJ and VA and lost both races.

#3 - The Sausage Alternative - I suspect the President may get a bit more pragmatic if the Senate process begins to bog down. He may compromise for any bill which appears to move things forward. If the democrats are smart (and so far they have not shown a lot of creativity on this issue) they will try to bring in some GOP members (more than the one member from Louisiana who voted for the bill yesterday). Originally the Administration has concentrated on strategy and not policy. They want the whole loaf. And if things begin to bog down they will have to make a choice - do they think ideological purity will yield more to them in 2010 and beyond? If they move more to figuring out what will be perceived as forward movement, they could coax some GOP members to think with them.

I am not sure which of the three alternatives is the most likely, we will have to watch developments over the next couple of weeks to see what develops. So far the House leadership and the Administration have assumed that hardball is the best strategy (and possibly the best policy). That opinion could change very quickly.

The Health Care Vote

There are only two things I can say about the health care bill vote in the house yesterday. First, the partisan split is interesting. 39 democrats voted against it while only one member of the GOP voted for the bill. The narrow split (220-215) suggests that the $1.1 trillion cost and the public option are in deep trouble in the Senate. But second, as you count the vote in the Senate the waivering democrats will be given little comfort. That suggests to me that either the senate bill will be significantly modified or it may forestall passage of a final bill.

It is clear that the President is deeply committed to the approach in the House bill. It is also clear that the American people are deeply suspect of that approach. Some democratic leaders were proclaiming that this is akin to Medicare and Social Security - and with the current financial state of both those programs that may not be a positive connection.

Wednesday, November 04, 2009

Tone deaf

The NYT has a story about the democrats response to the losses in the VA and NJ governor's races. The Times story says
"party strategists said their judgment was that voters remained very uneasy about the economy and did not see Democrats producing on the health, energy and national security changes they promised when voters swept them to power only a year ago." I am not sure that is what the voters were actually saying yesterday.

The exit polls are pretty clear. Those who were concerned about the direction of the country voted against the democratic candidates. President Obama campaigned vigorously in both New Jersey and Virginia and voters voted against the candidates he endorsed. Representative Frank Kratovil Jr.said “We have to do something, but it has to be right.” Well, duh.

One member of congress that I worked for said politicians only have to do three things. First, they have to be for everything that is good. Second, they have to be against everything that is bad. But third, and this is the hard one, they have to understand the difference between the first and the second requirements. Evidently the dems haven't mastered that skill yet.

Tuesday, November 03, 2009

The Elections in NJ and Virginia had nothing to do with the President's Standing and other myths

Yeah, right. If you believe that you must also believe that Tinkerbell is real. In both Governor's races the President put his prestige on the line. He and his representatives were in both states a lot. In New Jersey the President visited into strongholds of democratic support in two areas on November 1. He and the first lady also made a series of visits to Virginia. Most news sources before the election argued that the President had made a substantial personal commitment in both races. The NYT described the victory by McDonnell as "decisive" and as a "sharp reversal" from the previous eight years. They also quoted exit polls which showed a significant shift among independent voters who went strongly for Obama in 2008 and strongly against Corzine and Deeds in 2009. The LA Times was so disoriented that its headline was the two democrat congressional victories. Down about a dozen paragraphs into the story, the Virginia governor's race is covered.

The new governor in Virginia won by an impressive 18 points. Chris Christi won by six, in a state where organizationally the dems are far in the lead. The exit polls seem to indicate that between 85 and 90% of the voters who think the direction of the country is wrong voted to McDonnell or Christi. The combined GOP vote (the GOP and CON lines) totaled 51% in the NY 23rd. If I were Bill Owens I would not rest easy.

Does this mean the President is losing his base? Yes and No. On this election night, were I a democrat elected to a traditionally GOP house seat, I would be worried. But if I were a GOP member of congress I would not begin to pick out majority offices just yet. It is clear the people are grumpy. The WP said McDonnell won his race by by "focusing almost exclusively on jobs, transportation and other kitchen table issues." That should be a strong message that all the extra stuff that the GOP added to the campaign tools were not helpful in electing people. But the polling also seems to have said that the president's health care plan is also a loser. It turned voters off. It is clear that the President has lost some of his luster. But it is not clear that the GOP has a coherent answer. Deeds was a lackluster candidate. Corzine was both corrupt and a tax raiser of immense proportions. So the claim that the elections were influenced by local factors is also correct. But CNN's Wolf Blitzer outlandish claim that the results did not reflect on the position of the president is just silly.

Thanks for Nothing

The Internal Revenue Service offers advice to help taxpayers complete their returns. But the quality of their advice is a bit less than perfect. In the most recent year the error rate was 41%. Gee, if I ask the IRS for help I have an almost 50% chance of not getting good advice. Even in their best year, almost a third of their advice is inaccurate.

The explanation of that very high rate is pretty simple. It is not that the IRS people need more training. It is simply that the tax code itself is riddled with complexities that almost no one, even an IRS employee trained to explain it, can understand it.

Sunday, November 01, 2009

Rethinking the Fall of the Wall

An enduring image of twenty years ago was the fall of the Berlin Wall which separated East Germany from the West. Time's November 9 issue includes an article that President Reagan's role in bringing down the wall (and the fall of communism) remains "exaggerated, manipulated and misunderstood." The article was adapted from a recent book by Romesh Ratnesar. Ratesnar argues that the eventual change came about from a number of factors. That is obviously true. And indeed, President Reagan mixed diplomacy with tough talk. But part of the reason that Reagan was able to be successful diplomatically was because he could back up his diplomacy with substance.

Ratesnar makes the point that the wall "fell of its own weight." That is utter nonsense. The soviet economic system was driven to ruin because of at least three factors. First, was the fraud that was the system. All the five year plans were piffle dust. But second, technology began to allow people to communicate even with the restrictions that the soviets tried to impose. That also led to increased trade which was facilitated by the Reagan administration's strong stance on opening trade. But finally, the race for defense that Reagan got the soviets to participate in helped to destabilize the system.

Obviously, the aging of the dictators that ran the system and their increasing incompetence helped move the process along. But to deny the central role that President Reagan had in helping to end the oppressive system of soviet communism is revisionism without basis.

Ratesnar's conclusions are sounder than his analysis. He argues that even if the President wants to make peace with the Mullahs "there is no guarantee that he will succeed." He goes on to suggest that "Reagan's gift was his ability to speak candidly about the realities of his age while still presenting and working toward an optimistic vision of the future." You might summarize by saying that for the most part Reagan followed Teddy Roosevelt - he spoke softly and carried a big stick.

Friday, October 30, 2009

Economics 1A and Washington BS

The Obama administration today claimed that they had either created or helped to forestall the loss of 650,000 jobs with the stimulus money. They had the Vice President trot out this nonsense, with a joke that Reagan used to tell (although Biden claimed it was from his grandfather). When you push on the number it becomes all those jobs that were created as a result of a) more money to local and state government (an assumption that without the dough the jobs would have been lost) or to contractors who are using stimulus money to do projects. One other Administration official claimed that the actual number of jobs created or saved was 1 million.

Here are some questions that anyone should expect to be answered by the Administration - don't hold your breath.

1) Take them at their word for the higher number - is it reasonable to pay almost $80,000 per job? Have they done any estimates of how long these supposed jobs will last? Do they have any idea about the potential hiccup that happens when the stimulus dries up? One estimate by John Taylor at Stanford, suggests that the effects of the stimulus on GDP growth has been almost impossible to see.
2) Did they miss the session on opportunity costs? What might have happened in job creation both in the short term and long term if the government had not borrowed massive amounts to fund jobs that may or may not have been lost? Have they bothered to look at the short term costs versus the long term costs of less deficit financed funding. Considered another way the stimulus package added a bit more than $2500 per capita to the debt that faces every American.
3) The unemployment rate in the country (which is a trailing indicator) is approaching 10% - does that mean the Administration argues that the number of unemployed would have increased by 1,000,000 if the stimulus had not been in place? The most recent BLS numbers suggest that we have about 15 million unemployed - so the million more would add another 6% to the figure.

Wednesday, October 28, 2009

Poor old Ken Feinberg

The US now has more czars than Russia ever did. One of them is Ken Feinberg who is the Administration's pay czar. Feinberg does not have the best PR sense - he recently commented " "The private marketplace should be able to have the flexibility to adopt these programs on their own." - when responding to a question about whether it is appropriate to yank some perks for the execs in the bailout companies who received government money (and ultimately whether it is appropriate to extend his inane rules to companies operating in the private sector). I believe there are two issues here. Should Mr. Feinberg or any other government official have anything to say about private sector pay? The answer is NO. At the same time, we should ask should Mr. Feinberg have anything to say about compensation for executives who agreed to take the public money to help bail them out? There the answer is a resounding YES.

The WSJ says he is destroying the capitalist system. I say baloney. I am a strong believer in the market system and furthermore believe that compensation will help to attract the best people to run firms. But that is not the question raised by Mr. Feinberg's new limitations on executive compensation. The seven companies who have received TARP money did so because they said they needed it. OK, so when you use other people's money, even the people's money, you might get some new rules. Some of the other firms that took this dough had the brains to pay it back before Mr. Feinberg could slap his new requirements on them. Were the administration to try to extend their new rules to private sector firms we should all be up in arms. But since these "leaders" have tasted at the government teat, they should get to live by the new rules.

Too much time on their hands

Governor Schwarzenegger vetoed a bill by a San Francisco assembly member and some loons in the city by the bay are trying to suggest that the veto message has a hidden message in it. If you read the phrase created by the initial letters on the left hand column it is possible to come up with a vulgar phrase.

I am sure anyone with time on their hands could come up with other phrases by looking at the letter through a prism or by counting the fifth letter of every third word. But the point being made by the governor is one he has made repeatedly. The cryptographers should a) get a life and b) get to work on issues that really matter for the state.

Tuesday, October 27, 2009

Honesty and Inevitability

The healthcare reform debate has been marked by a very high level of interest by the American people. The most recent Survey USA poll suggests that 73% of those polled are following the issue with "a lot of attention." For any issue that is a remarkable statement. Another indicator is that of those who favor the President's plan (or some variety of the public option) 79% of those strongly favor the option. Of those who oppose the public option 86% strongly oppose it. In spite of the levels of interest the political class seems intent on trying to manipulate opinion rather than trying to discern what is moving the American people.

A really interesting article in the New England Journal of Medicine found that "public support for change is shaped by the interaction of three factors: people's perception of problems that affect the country, their assessment of their own current life situation and their worries about the future." Those highly critical of the current system favor the system should face major change. There seems to be pretty widespread support for an expanded federal role in health care - including a mandate for coverage.

Rasmussen suggests that 57% say a health care plan will increase costs while 53% say it will reduce quality. Remember that of the people with health insurance the vast majority are satisfied with their plan. A large majority argue that they would oppose a plan for government health care if it would mean that employers would drop their current programs.

Gallup's most recent poll found that an increasing margin of voters (now 49%) think a federal plan will result in worse health care. 70% think quality of care would diminish and 75% think costs would climb. 50% think a final bill should include a public option while 46% think it should not. That is hardly the mandate that Senator Reid claimed in offering his opt out public option.

But then we find that the Christian Science Monitor claims that "the public generally supports the public option." From my review of the polling I think the CSM is blowing smoke. According to the experts that have looked at the polling more closely than I "You can move the public opinion needle significantly with changes in wording or emphasis." (Karlyn Bowman, a polling expert at the American Enterprise Institute)

I have a pretty strong belief in the intelligence of the American voter. But I believe politicians still want to try to manipulate opinion to fit their narrow beliefs. Were the politicians intent on understanding the will of the people they might be able to craft a pretty good bill. If they continue headlong in their pursuit of their own agendas one of two results will happen. First, we could end up with no change. As an alternative we could end up a lot worse than we are today. Neither is a very good option but when you begin with an ego problem like Reid and others seem to have, the possibility for a positive result seems limited.

Monday, October 26, 2009

Balance for the President

The President found time to go to Copenhagen to argue for Chicago getting the Olympics. Yet, according to some sources he can't find the time on November 9 to go to Berlin to celebrate the 20th Anniversary of the Fall of the Berlin Wall. While I can understand the notion of civic pride as the reason for going to Copenhagen, I cannot understand why a more important event with a more important set of allies cannot be similarly noted.