Friday, May 09, 2008
Around and about...
With Beer to Eternity. Bill Bramanti, 67, of Chicago, plans to be buried in a custom built silver casket designed as giant can of his favorite beer, Pabst Blue Ribbon. "I'm going to use it as a cooler until I really need it," he said. "You see, I'm going to get my money's worth..."
Clever criminal of the week. "Police didn't have to do much guesswork to identify a suspect in the armed robbery of an Athens, Ga., convenience store ... Demetrius Robinson filled out a job application while waiting for an opportunity to rob the Golden Pantry store last week. He left his real name and his uncle's phone number on the application... "
Woman bites dog. "I ended up biting the pit bull on the nose ... I didn't plan it, that's what happened. I broke the skin and had pit bull blood in my mouth..."
Green transportation -- the electric Uno. "The bike is fairly easy to ride, but takes a bit of getting used to because you have to learn to trust it."
With Beer to Eternity. Bill Bramanti, 67, of Chicago, plans to be buried in a custom built silver casket designed as giant can of his favorite beer, Pabst Blue Ribbon. "I'm going to use it as a cooler until I really need it," he said. "You see, I'm going to get my money's worth..."
What kind of "specially made shoes" make your feet smaller? "A German court has ruled that car maker Volvo has to pay compensation to a man who claimed his size 12 feet were too big to use the accelerator on his new car ... Under a court-supervised settlement, Herzog obtained a £1,350 refund to pay for a specially made pair of shoes that allowed him to squeeze his foot into the space. He was also compensated for the time spent changing back into street shoes each time he got out of the car ..." (The teeny vehicle.)
On the one hand ... but then on the other... Jens Wilhelms, 27, survived a 25ft plunge down an elevetor shaft when his fall was broken by landing on a 57-year-old woman who had fallen down it the day before and was lying there unconscious. He was unhurt and called out rescue services who took the woman to hospital. "Doctors said she is in a critical condition after sustaining injuries in her original fall, and then again when Wilhelms landed on her ... but it also probably saved her life that he fell on her", because that's how they found she was there and saved her from dying of internal bleeding.
Road kill on the grill, and in the fridge and freezer. Fergus Drennan, 36, vows to live naturally for the next year eating only wild foods he scavenges gathers by hand within a ten-mile radius of his home near Canterbury. That would be the like of fruits, berries, and dead animals he comes upon, including road kill.
"A bird!" he shouts. "It's not even been dead that long; you can tell from the rigor mortis. It's so cute, isn't it?" ... "One of the few things that I tend to avoid are cats and dogs," he explains. "In theory, I'd have no problem with eating them. But they've always got name tags on their collars..." Drennan is on a mission to convert Britons to his way of thinking....I don't know about that. Drennan refrigerates and freezes his finds at home, and on his web site he offers up recipies for delicious cooking and grilling ... But just how "wild" is kitchen roasting a defrosted possum that was squashed by a van?
Clever criminal of the week. "Police didn't have to do much guesswork to identify a suspect in the armed robbery of an Athens, Ga., convenience store ... Demetrius Robinson filled out a job application while waiting for an opportunity to rob the Golden Pantry store last week. He left his real name and his uncle's phone number on the application... "
Woman bites dog. "I ended up biting the pit bull on the nose ... I didn't plan it, that's what happened. I broke the skin and had pit bull blood in my mouth..."
Green transportation -- the electric Uno. "The bike is fairly easy to ride, but takes a bit of getting used to because you have to learn to trust it."
Wednesday, May 07, 2008
You thought the 2007 federal budget deficit was only $163 billion? How about $2.4 trillion by the accounting rules the private sector uses!
The US government's budget deficit for 2007 was $163 billion as officially reported by the Treasury -- the number given in the news that everyone writes editorials and op-eds about. And most observers have described it as good news, since as a percentage of GDP it is the smallest in six years and well below the average for the last 35 years. The White House and Congress take credit!
But wait ... the Treasury has also published another set of numbers on its web site, in its 2007 Financial Report of the United States Government, that give a very different figure for the increase in its net liabilities for 2007, albeit one that receives very little publicity: More than $2.4 trillion. Yes, with a "t".
How can two such hugely different numbers -- one almost 15 times larger than the other -- be provided by the US Treasury for the same thing? The answer lies in accounting methods: the difference between cash and accrual accounting.
Cash accounting is what the government uses for its books. This computes net income or deficit by counting only cash income "in" and cash expenditures "out" during the year.
Accrual accounting, in contrast, also counts legally incurred rights to receive future income and obligations to make future expenditures that accrue during the accounting period.
Accrual accounting is used in the private sector -- in fact, cash accounting is illegal for most businesses much larger than a newsstand. The reasons should be obvious, but a simple example can make them clear.
Say you are a business manager and make a deal for the business under which it receives a net $1 million cash payment this year. That looks good! But wait ... suppose that to get this payment up front you commit the business to make a $10 million payment to the other party ten years from now.
Using accrual accounting the $1 million of cash received up front is offset by the present value of the $10 million commitment to pay in the future -- which is that amount reduced by the market rate of interest for that long. If the interest rate is 5%, the present value of $10 million payable ten years from now is $6 million.
So when using accrual accounting -- as required by law and your accounting firm -- you are seen accurately to have created a $5 million loss for the business. You have some explaining to do to your boss.
But imagine that instead you use cash accounting. Then the $1 million that comes in today boosts the business's income and profits by fully that much while the attached $10 million liability is ignored. The business's owners don't know about the liability because it's not reported on the books. They give you a fat profit-sharing bonus, you take it, retire, and are long gone when the $10 million bill lands on them and everyone else in the business as a surprise -- bam! -- in the future. (Say: "Enron", which used sophisticated illegal techniques to do just this, report income on the books while keeping attached future liabilities off them.)
Yes, many people will then become very upset -- but you'll have gotten yours and be gone. All those angry people will be somebody else's problem.
Now imagine that instead you are the U.S. Congress. You exempt the federal government -- that is, yourself -- from using the accrual accounting methods that you impose by law on everybody else, and have it simply use cash accounting for programs such as Social Security, Medicare, Medicaid, federal and military pensions, and so forth.
Thus, for Social Security and Medicare for instance, you have the government count all the FICA taxes it receives in their name in income, and you use them to declare "Deficit reduced to only $163 billion!" -- while ignoring the more than $2 trillion of attached liabilities for Social Security and Medicare, present value, that accrue in the single year. (Say: "Mother of Mega-Enron", but all very simple and entirely legal, because you are Congress and you write the law.)
Here are the actual numbers for Social Security and Medicare from the Treasury.
Of course, those numbers are only for Social Security and Medicare. Add to them the reported increase in other on-balance sheet liabilities of $290 billion, and the one-year in increase in the net liabilities of the federal government becomes $2.384 trillion. (And there's more, the real final number is bigger yet -- I'm not counting off-balance sheet liabilities for the likes of Medicaid, federal and military pensions and such because I don't want to become too depressed to continue).
For some perspective on the size of these numbers...
[] All federal income taxes, individual and corporate combined, in 2007 totaled $1.534 trillion. So to cover the accrual-rules single-year deficit for 2007 would have required income tax collections to have been increased to more than 2.5 times what they were (with the increase -- more than 1.5 times all income taxes collected today -- somehow "saved" in an interest-paying account in some unimaginable way).
[] The total U.S. national debt held by the public, accumulated since George Washington was inaugurated as President over 219 years ago, is $5.2 trillion. The off-the books accruing liability of the U.S. government now grows by that amount every two-and-a-half years.
Which brings us to another point, the national debt. Those who take the 2007 deficit number of $163 billion at face value are likely to do the same with the conventional national debt numbers of $5.2 trillion for debt held by the public, and $9.4 trillion including "intra-governmental debt holdings" such as bonds held in the Social Security trust fund and other such government accounts.
But the real total accrued national debt including the "implicit debt" of accruing social insurance liabilities, federal pensions and other items, is more than $53 trillion, says the Financial Report, and is growing by well more than $2 trillion annually. This implicit debt is every bit as real as the conventional national debt, if you believe the US government is obligated to pay off on the promises it has made to its citizens.
These numbers are so huge that when I mention them even generally well-informed people, including financial professionals, most often simply don't believe them. Yet they are published by the US Treasury itself every year. (It's amusing to watch people actually get angry about "George Bush's deficits" of $163 billion or so -- then go totally blank when deficits of $2.4 trillion are mentioned.)
Rationalizations appear, like: "Well, those aren't real numbers because they are over 75 years and anything can happen by then."
Not true! The government will have to start paying these liabilities with cash in a very real way starting in within 10 years. Standard & Poors projects that starting then, in only the ten years from 2017 to 2027, on current law the credit rating of the US government will plunge from AAA to "junk" . The decline of the US government's credit rating starting is 2017 is projected by Moody's too. (So much for the "risk free" US Treasury bond.) Folks, 2017 is only nine years away -- and 2027 is only 19 years away, less than two-thirds of the length of the typical home mortgage.
Another common rationalization is: "Well, there's nothing to do about it because Medicare is soooo complex nobody knows what to do about it, and Social Security is so small compared to it that there's no point in doing anything about it."
Not true again, on both counts. By the 2030s, if retirees are to be paid as promised (with the national credit collapse projected by S&P and Moody's avoided) tax increases equivalent to an over-50% across-the-board income tax increase will have to be imposed. About one-third of this will be attributable to Social Security (to finance paying down the trust fund bonds). And that will be just the start.
A 50% across-the-board income tax increase is no small thing! It's about 10 times the size of the Clinton tax increase of 1993 that passed the Democratic House and Senate by one vote. And one-third of a tax increase this size is no small thing. If we could alleviate it now -- and we could, for Social Security unlike Medicare is a simple program -- it would be no small benefit for the future. As to the other two-thirds of that tax bill for Medicare and all ... well ... if you really don't have any idea what to do about it, it's time to start thinking about it! The year 2030 is only 22 years from now, not so very far away.
So why, in this election year, are the leaders of both political parties striving to make the deficit even worse -- with more tax cuts (from Republicans) and more unfinanced spending on new entitlements (national health insurance for all, with no new taxes on anybody with income under $200,000, from Democrats)?
Because that's how they win elections. Republicans promise tax cuts, Democrats promise more unfinanced spending -- and if either admitted to the public the reality of $2 trillion+ annual deficits and income taxes going up 50% in the foreseeable future just to keep the nation from going broke meeting their old promises, neither party could do it. (You want "change" from your politicians? Admitting this reality would be change! Arguing over a summer gas tax holiday is not change.)
So, no matter how bitterly partisan politics may be today, one thing both parties agree upon in perfect bi-partisan harmony is: "Shhhh, nobody mentions accrual basis accounting for us."
And 20-odd years from now when the financial hammer comes down on the nation, with taxes going way up just to keep benefits that are already being slashed from being slashed faster, many millions of voters will be angry indeed.
But today's politicians will have gotten theirs and be gone. It will all be somebody else's problem.
The US government's budget deficit for 2007 was $163 billion as officially reported by the Treasury -- the number given in the news that everyone writes editorials and op-eds about. And most observers have described it as good news, since as a percentage of GDP it is the smallest in six years and well below the average for the last 35 years. The White House and Congress take credit!
But wait ... the Treasury has also published another set of numbers on its web site, in its 2007 Financial Report of the United States Government, that give a very different figure for the increase in its net liabilities for 2007, albeit one that receives very little publicity: More than $2.4 trillion. Yes, with a "t".
How can two such hugely different numbers -- one almost 15 times larger than the other -- be provided by the US Treasury for the same thing? The answer lies in accounting methods: the difference between cash and accrual accounting.
Cash accounting is what the government uses for its books. This computes net income or deficit by counting only cash income "in" and cash expenditures "out" during the year.
Accrual accounting, in contrast, also counts legally incurred rights to receive future income and obligations to make future expenditures that accrue during the accounting period.
Accrual accounting is used in the private sector -- in fact, cash accounting is illegal for most businesses much larger than a newsstand. The reasons should be obvious, but a simple example can make them clear.
Say you are a business manager and make a deal for the business under which it receives a net $1 million cash payment this year. That looks good! But wait ... suppose that to get this payment up front you commit the business to make a $10 million payment to the other party ten years from now.
Using accrual accounting the $1 million of cash received up front is offset by the present value of the $10 million commitment to pay in the future -- which is that amount reduced by the market rate of interest for that long. If the interest rate is 5%, the present value of $10 million payable ten years from now is $6 million.
So when using accrual accounting -- as required by law and your accounting firm -- you are seen accurately to have created a $5 million loss for the business. You have some explaining to do to your boss.
But imagine that instead you use cash accounting. Then the $1 million that comes in today boosts the business's income and profits by fully that much while the attached $10 million liability is ignored. The business's owners don't know about the liability because it's not reported on the books. They give you a fat profit-sharing bonus, you take it, retire, and are long gone when the $10 million bill lands on them and everyone else in the business as a surprise -- bam! -- in the future. (Say: "Enron", which used sophisticated illegal techniques to do just this, report income on the books while keeping attached future liabilities off them.)
Yes, many people will then become very upset -- but you'll have gotten yours and be gone. All those angry people will be somebody else's problem.
Now imagine that instead you are the U.S. Congress. You exempt the federal government -- that is, yourself -- from using the accrual accounting methods that you impose by law on everybody else, and have it simply use cash accounting for programs such as Social Security, Medicare, Medicaid, federal and military pensions, and so forth.
Thus, for Social Security and Medicare for instance, you have the government count all the FICA taxes it receives in their name in income, and you use them to declare "Deficit reduced to only $163 billion!" -- while ignoring the more than $2 trillion of attached liabilities for Social Security and Medicare, present value, that accrue in the single year. (Say: "Mother of Mega-Enron", but all very simple and entirely legal, because you are Congress and you write the law.)
Here are the actual numbers for Social Security and Medicare from the Treasury.
Of course, those numbers are only for Social Security and Medicare. Add to them the reported increase in other on-balance sheet liabilities of $290 billion, and the one-year in increase in the net liabilities of the federal government becomes $2.384 trillion. (And there's more, the real final number is bigger yet -- I'm not counting off-balance sheet liabilities for the likes of Medicaid, federal and military pensions and such because I don't want to become too depressed to continue).
For some perspective on the size of these numbers...
[] All federal income taxes, individual and corporate combined, in 2007 totaled $1.534 trillion. So to cover the accrual-rules single-year deficit for 2007 would have required income tax collections to have been increased to more than 2.5 times what they were (with the increase -- more than 1.5 times all income taxes collected today -- somehow "saved" in an interest-paying account in some unimaginable way).
[] The total U.S. national debt held by the public, accumulated since George Washington was inaugurated as President over 219 years ago, is $5.2 trillion. The off-the books accruing liability of the U.S. government now grows by that amount every two-and-a-half years.
Which brings us to another point, the national debt. Those who take the 2007 deficit number of $163 billion at face value are likely to do the same with the conventional national debt numbers of $5.2 trillion for debt held by the public, and $9.4 trillion including "intra-governmental debt holdings" such as bonds held in the Social Security trust fund and other such government accounts.
But the real total accrued national debt including the "implicit debt" of accruing social insurance liabilities, federal pensions and other items, is more than $53 trillion, says the Financial Report, and is growing by well more than $2 trillion annually. This implicit debt is every bit as real as the conventional national debt, if you believe the US government is obligated to pay off on the promises it has made to its citizens.
These numbers are so huge that when I mention them even generally well-informed people, including financial professionals, most often simply don't believe them. Yet they are published by the US Treasury itself every year. (It's amusing to watch people actually get angry about "George Bush's deficits" of $163 billion or so -- then go totally blank when deficits of $2.4 trillion are mentioned.)
Rationalizations appear, like: "Well, those aren't real numbers because they are over 75 years and anything can happen by then."
Not true! The government will have to start paying these liabilities with cash in a very real way starting in within 10 years. Standard & Poors projects that starting then, in only the ten years from 2017 to 2027, on current law the credit rating of the US government will plunge from AAA to "junk" . The decline of the US government's credit rating starting is 2017 is projected by Moody's too. (So much for the "risk free" US Treasury bond.) Folks, 2017 is only nine years away -- and 2027 is only 19 years away, less than two-thirds of the length of the typical home mortgage.
Another common rationalization is: "Well, there's nothing to do about it because Medicare is soooo complex nobody knows what to do about it, and Social Security is so small compared to it that there's no point in doing anything about it."
Not true again, on both counts. By the 2030s, if retirees are to be paid as promised (with the national credit collapse projected by S&P and Moody's avoided) tax increases equivalent to an over-50% across-the-board income tax increase will have to be imposed. About one-third of this will be attributable to Social Security (to finance paying down the trust fund bonds). And that will be just the start.
A 50% across-the-board income tax increase is no small thing! It's about 10 times the size of the Clinton tax increase of 1993 that passed the Democratic House and Senate by one vote. And one-third of a tax increase this size is no small thing. If we could alleviate it now -- and we could, for Social Security unlike Medicare is a simple program -- it would be no small benefit for the future. As to the other two-thirds of that tax bill for Medicare and all ... well ... if you really don't have any idea what to do about it, it's time to start thinking about it! The year 2030 is only 22 years from now, not so very far away.
So why, in this election year, are the leaders of both political parties striving to make the deficit even worse -- with more tax cuts (from Republicans) and more unfinanced spending on new entitlements (national health insurance for all, with no new taxes on anybody with income under $200,000, from Democrats)?
Because that's how they win elections. Republicans promise tax cuts, Democrats promise more unfinanced spending -- and if either admitted to the public the reality of $2 trillion+ annual deficits and income taxes going up 50% in the foreseeable future just to keep the nation from going broke meeting their old promises, neither party could do it. (You want "change" from your politicians? Admitting this reality would be change! Arguing over a summer gas tax holiday is not change.)
So, no matter how bitterly partisan politics may be today, one thing both parties agree upon in perfect bi-partisan harmony is: "Shhhh, nobody mentions accrual basis accounting for us."
And 20-odd years from now when the financial hammer comes down on the nation, with taxes going way up just to keep benefits that are already being slashed from being slashed faster, many millions of voters will be angry indeed.
But today's politicians will have gotten theirs and be gone. It will all be somebody else's problem.
Monday, May 05, 2008
The fun of writing op-eds for the New York Times -- and its special sensitivity to the word "Gee".
Boris Johnson has been elected Mayor of London. Boris is far more entertaining than any American politician dares to be, and in addition to being an M.P. was editor of the Spectator -- in which, a while back, he wrote about his experience writing an op-ed piece for the New York Times...
Boris Johnson has been elected Mayor of London. Boris is far more entertaining than any American politician dares to be, and in addition to being an M.P. was editor of the Spectator -- in which, a while back, he wrote about his experience writing an op-ed piece for the New York Times...
"Booris," said Tobin [the Times editor], "'we love it! Everybody loves it. But we have, uh, a few issues of political correctness that I have to go through with you." There followed a bizarre hour-long negotiation with New York, as I sat in the Grays Road carpark, and Tobin read out the politically correct version of my piece...Boris' full report. The Times op-ed.
I had said something to the effect that you don't make international law by giving new squash courts to the President of Guinea. This now read "the President of Chile." Come again? I said. Qué?
"Uh, Boris," said Tobin, "it's just easier in principle if we don't say anything deprecatory about a black African country, and since Guinea and Chile are both members of the UN Security Council, and since it doesn't affect your point, we would like to say Chile."
How craven and mealy-mouthed can you get? Why is a mild insult more bearable because it is directed at a crisis-ridden Latin American country, rather than a crisis-ridden African country? Is it, heaven forfend, because one country is Hispanic and the other is black? ... [etc.]
In the whole poker game, I took only one trick. Tobin had told me at the outset that he had "issues" with my introductory sentence... I began the piece with the words, "Gee, thanks, guys," and Tobin wanted those words removed. For the life of me, I couldn’t see why.
"OK, Booris, I’ll tell you what the problem is. Our problem is that 'Gee' is an abbreviation for Jesus. For a century this has been a Jewish-owned paper, and we have to be extremely sensitive about anything that might offend Christian sensibilities. "We can say 'God', 'God' is fine, but we have to be very careful about anything that involves the name of the Lord and Saviour."...
Saturday, May 03, 2008
Happy Birthday, Spam!
The date should be circled in black on your computer’s calendar: internet spam is 30 years old today.The infamous, if historic, message itself.
On May 3 1978, Gary Thuerk, a marketing man for DEC, a now-defunct American computer company, sent what is thought to be the world’s first junk e-mail. The unsolicited message was delivered to 393 users of Arpanet, the US government network that would become the internet... [Times of London]
Thursday, May 01, 2008
Historical perspective for the day
"It’s true, of course, that twentieth-century state societies, having developed potent technologies of mass killing, have broken all historical records for violent deaths.So much for the Garden of Eden
"But this is because they enjoy the advantage of having by far the largest populations of potential victims in human history; the actual percentage of the population that died violently was on the average higher in traditional pre-state societies than it was even in Poland during the Second World War or Cambodia under Pol Pot." [Jared Diamond]
Wednesday, April 30, 2008
It's better to leave your heart in San Francisco...
"Hmmm ... It's still there."
"They turned it into a newt!"
Penis Theft Panic Hits City.
KINSHASA -- Police in the Congo have arrested 13 suspected sorcerers accused of using black magic to steal or shrink men's penises after a wave of panic and attempted lynchings triggered by the alleged witchcraft...
"I'm tempted to say it's one huge joke," Police Chief Oleko said. "But when you try to tell the victims that their penises are still there, they tell you that it's become tiny ..." [Reuters]
"Hmmm ... It's still there."
"They turned it into a newt!"
Wednesday, September 19, 2007
The Lost Paradise of Paul Krugman
Now that the Times' pay wall is down, we can read all about it.
"I was born in 1953 ... the political and economic environment of my youth stands revealed as a paradise lost..."
I was born in 1953 too. The political and economic environment of my teens and twenties was: Summer race riots in the inner cities ... student strikes on campus ... "hey, hey, LBJ, how many kids did you kill today" ... political assassinations and shootings ... the weather underground and other domestic terrorists bombing buildings (one a block from where I'm writing this) and robbing banks ... the National Guard shooting down students on campus ... thousands of Soviet nuclear weapons aimed at the west and US ... defense spending 50% more of GDP than now ... Spiro Agnew directing the political discourse ... Nixon on the way to impeachment ... wage and price controls ... gasoline rationing and wait lines ... stagflation ... double-digit inflation ... 17% interest rates ... 10% unemployment as the highest since the Depression, etc. and so on.
Ah, such a paradise, now all lost...
(OK, there also was a legal drinking age of 18, unapologetic sex drugs and rock & roll, Joe Namath posing in panty hose after winning the big one, all the fun days off thanks to the student strikes ... so maybe it was a kind of paradise lost for me. But why do I think that's not the paradise PK is talking about?)
"The Great Compression: The middle-class society I grew up in didn’t evolve gradually or automatically. It was created, in a remarkably short period of time, by FDR and the New Deal. As the chart shows, income inequality declined drastically from the late 1930s to the mid 1940s ..."
The Great Depression and World War II being New Deal policies of FDR.
Oh, if only we could return to such income-equalizing New Deal policies today.
(Great Depression and World War II? What were they? Not worth a mention in the story of the 1930s and 1940s. Never mind.)
___
Update: Tom Maguire sends some unexpected traffic to this moribund blog by remembering something I'd forgotten myself -- I'd posted a bit more and maybe better about Krugman's oddly Depression-less Compression previously. He then goes on to do a nice job of citing Krugman's own sources contradicting Krugman's claims himself. (Thanks, Tom. And as P.T. Barnum would say if he was still around, "As long as they get the link right, they can't do anything wrong with the name.")
Now that the Times' pay wall is down, we can read all about it.
"I was born in 1953 ... the political and economic environment of my youth stands revealed as a paradise lost..."
I was born in 1953 too. The political and economic environment of my teens and twenties was: Summer race riots in the inner cities ... student strikes on campus ... "hey, hey, LBJ, how many kids did you kill today" ... political assassinations and shootings ... the weather underground and other domestic terrorists bombing buildings (one a block from where I'm writing this) and robbing banks ... the National Guard shooting down students on campus ... thousands of Soviet nuclear weapons aimed at the west and US ... defense spending 50% more of GDP than now ... Spiro Agnew directing the political discourse ... Nixon on the way to impeachment ... wage and price controls ... gasoline rationing and wait lines ... stagflation ... double-digit inflation ... 17% interest rates ... 10% unemployment as the highest since the Depression, etc. and so on.
Ah, such a paradise, now all lost...
(OK, there also was a legal drinking age of 18, unapologetic sex drugs and rock & roll, Joe Namath posing in panty hose after winning the big one, all the fun days off thanks to the student strikes ... so maybe it was a kind of paradise lost for me. But why do I think that's not the paradise PK is talking about?)
"The Great Compression: The middle-class society I grew up in didn’t evolve gradually or automatically. It was created, in a remarkably short period of time, by FDR and the New Deal. As the chart shows, income inequality declined drastically from the late 1930s to the mid 1940s ..."
The Great Depression and World War II being New Deal policies of FDR.
Oh, if only we could return to such income-equalizing New Deal policies today.
(Great Depression and World War II? What were they? Not worth a mention in the story of the 1930s and 1940s. Never mind.)
___
Update: Tom Maguire sends some unexpected traffic to this moribund blog by remembering something I'd forgotten myself -- I'd posted a bit more and maybe better about Krugman's oddly Depression-less Compression previously. He then goes on to do a nice job of citing Krugman's own sources contradicting Krugman's claims himself. (Thanks, Tom. And as P.T. Barnum would say if he was still around, "As long as they get the link right, they can't do anything wrong with the name.")
Thursday, August 09, 2007
The Milgram Experiment recreated today.
Ouch.
Combine that with people not knowing black from white and it's enough to make one wonder about the human race.
Ouch.
Combine that with people not knowing black from white and it's enough to make one wonder about the human race.
Wednesday, June 06, 2007
Bastiat never heard of Social Security or Medicare.
But he sure got it right when he wrote: "Government is the great fiction through which everybody endeavors to live at the expense of everybody else".
The whole modern developed world proves it so.
Standard and Poor's projects future national credit ratings on the basis of current policies and promises...
In The Long Run, We Are All Debt: Aging Societies And Sovereign Ratings
Japan isn't on the chart because its rating has already started falling.
This little blog remains on hiatus. I am kind of hoping to get it back up and running in the forseeable future, but one never knows.
In the meantime I thought I'd put up something fun to think about, especially if you are planning on retiring in about 10 or 15 years.
Until later...
But he sure got it right when he wrote: "Government is the great fiction through which everybody endeavors to live at the expense of everybody else".
The whole modern developed world proves it so.
Standard and Poor's projects future national credit ratings on the basis of current policies and promises...
In The Long Run, We Are All Debt: Aging Societies And Sovereign Ratings
Japan isn't on the chart because its rating has already started falling.
This little blog remains on hiatus. I am kind of hoping to get it back up and running in the forseeable future, but one never knows.
In the meantime I thought I'd put up something fun to think about, especially if you are planning on retiring in about 10 or 15 years.
Until later...
Thursday, April 06, 2006
Thank you to all...
For all the kind words and thoughts received here via comments and e-mail. They are sincerely appreciated.
On the Internet, even more than elsewhere in life, sometimes you don't know who your friends are.
As to the future of this little blog, I'd like to get it moving again, but take self-employment and trying to raise three kids, then add an extra layer of family responsibilities ... priorities, priorities ... it may be some while.
Until then, thank you again to all.
See you later.
For all the kind words and thoughts received here via comments and e-mail. They are sincerely appreciated.
On the Internet, even more than elsewhere in life, sometimes you don't know who your friends are.
As to the future of this little blog, I'd like to get it moving again, but take self-employment and trying to raise three kids, then add an extra layer of family responsibilities ... priorities, priorities ... it may be some while.
Until then, thank you again to all.
See you later.
Wednesday, February 15, 2006
There's an old saying that you don't become a man until your father dies.
I don't know about that, but there may not be any posting here for a while.
I don't know about that, but there may not be any posting here for a while.
Tuesday, February 14, 2006
Big people make for small snowstorms.
The weekend storm dropped more snow on New York City than any other in at least 137 years, since they began recording such events here in 1869. Yet the general feeling around is that the storm wasn't so bad -- not nearly as bad as the blizzards of years ago.
An explanation from the Times....
The weekend storm dropped more snow on New York City than any other in at least 137 years, since they began recording such events here in 1869. Yet the general feeling around is that the storm wasn't so bad -- not nearly as bad as the blizzards of years ago.
An explanation from the Times....
people were shorter then, so the drifts may well have seemed deeper. Seriously.So economists now are into the psychology of snowstorms. They're really getting about, are they not?
In 1947, New Yorkers were, on average, more than an inch shorter than they are today. In 1888, when the blizzard that is branded on the city's collective memory as the Greatest of All Time hit New York, people were, on average, about three inches shorter.
"That would affect people's impressions of getting through deep snow," said Richard H. Steckel, an economics professor at Ohio State University, who has analyzed changes in human height.
Monday, February 13, 2006
Happy Valenswine's Day, you swine.
You know who you are...
You know who you are...
If February 14 is a Hallmark holiday, the 13th should be sponsored by Victoria's Secret.
The night before Valentine's Day, as hush-hush tradition goes, is when every cheater in Manhattan will be out wining and dining his or her other significant other. Call it Valenswine's Day.You can't take your mistress or boy toy out on the big day itself, for fear of getting busted - but on the 13th, anything goes. Said to be an old British custom, the practice is alive and well right here in New York.
"When I first started in the business, I said, 'This is very strange; the 13th is so busy,'" recalls Four Seasons restaurant manager Julian Niccolini, who says that night's often even busier than the holiday itself.
"Then I figured it out. The 13th is when people go out with their girl, and the 14th is when they go out with who they have to go out with."...
"This is the day we sell the most champagne, the most expensive bottles of wine," he says, adding that it also tends to be a much livelier bunch than on the 14th itself...
A middle-aged, divorced New York professional, who asked to remain anonymous for obvious reasons, concurs. He dated two women for years on end, without either being the wiser - thanks largely to the benefit of having two offices in two different cities (also known as the 50-mile rule, defined as the principle that your spouse and your lover should never live closer than that to one another).
"I think it's a common thing," he says of the February 13th tradition. "If you're dating more than one person at a time, you have to go out the day before and the day after."
"The day of," he says sagely, "you go out with your daughters." [NY Post]
Odd Google search referral of the day.
The Google search "case for hybrid car subsidies" produces this site, Scrivener.net, as its #1 referral (of 390,000) on the subject, quoting "There's a moral here: Beware tax subsidies, they may not be what they seem", from the recent post here on "How a tax credit can increase the cost of hybrid cars".
So it seems that either the search algorithms still need work on telling "for" from "against", or the oil companies have gotten to the guys out in Mountain View.
Saturday, February 11, 2006
The joys of family life.
What children, the point of it all, bring us...
Divorce?
Google searches bringing people to this site aren't encouraging...
Get intimate with a live chicken?
What children, the point of it all, bring us...
Depression may be lifelong parent trapWell, already there, so how to make the most of the situation now?
[A new study] finds parents have significantly higher levels of depression than adults who do not have children. Even more surprising, the symptoms of depression do not go away when the kids grow up and move out of the house...
...there is no type of parent that reports less depression than non-parents... [FSU].
Divorce?
A judge has ordered a soon-to-be divorced couple to live unhappily ever after in the Borough Park home they shared for 18 years - by having a wall built smack dab in the middle of their dining room...Stay married forever?
Simon Taub was granted permission during divorce proceedings in August to divide the home with sheetrock walls, so he wouldn't have to relinquish it to wife, Chana Taub ... "I don't wish this on anybody," said Chana... [NYDN]
Couple celebrate with 50-year-old tinned chickenYeah, that's what I'll be doing after paying to send three kids through college.
A Manchester couple celebrated 50 years of marriage by eating a tin of chicken they were given on their wedding day... [Ananova]
Google searches bringing people to this site aren't encouraging...
"Husband chooses jail to escape nagging wife"What to do???
Get intimate with a live chicken?
They look happy, don't they?A retired nurse saved her brother's chicken, Boo Boo, by administering mouth-to-beak resuscitation last week after the fowl was found floating face down in the family's pond...
"I breathed into its beak, and its dadgum eyes popped open," Morris said... [CNN]
Story updates
Remember...
The gay penguins of Bremerhaven? ... Update.
Death by flying shrimp? ... Update.
Senatorial comity.
Dear Senator Obama:
I would like to apologize to you for assuming that your private assurances to me regarding your desire to cooperate in our efforts to negotiate bipartisan lobbying reform legislation were sincere ... Thank you for disabusing me of such notions ...
I’m embarrassed to admit that after all these years in politics I failed to interpret your previous assurances as typical rhetorical gloss routinely used in politics to make self-interested partisan posturing appear more noble. Again, sorry for the confusion, but please be assured I won’t make the same mistake again....
I understand how important the opportunity to lead your party’s effort to exploit this issue must seem to a freshman Senator, and I hold no hard feelings over your earlier disingenuousness. Again, I have been around long enough to appreciate that in politics the public interest isn’t always a priority for every one of us.
Good luck to you, Senator.
Sincerely,
John McCain
United States Senate
Thursday, February 09, 2006
The sensitive to religion New York Times.
My hometown broadsheet, editorializing about Those Danish Cartoons, states that responsible newpapers like itself...
They never cease to amaze.
As if that's not enough, the article then goes on to charge hypocrisy about the whole thing ... on the part of the Bush Adminsitration.
My hometown broadsheet, editorializing about Those Danish Cartoons, states that responsible newpapers like itself...
have reported on the cartoons but refrained from showing them. That seems a reasonable choice for news organizations that usually refrain from gratuitous assaults on religious symbols, especially since the cartoons are so easy to describe in words.It then promtly illustrates its own story on the Danish cartoons by showing a picture (click the link) of the famous, or infamous, "Dung Mary"...
a collage of the Virgin Mary with cutouts from pornographic magazines and shellacked clumps of elephant dungOne guesses the editors must have felt those words weren't an adequate description, making the picture non-gratuitous.
They never cease to amaze.
As if that's not enough, the article then goes on to charge hypocrisy about the whole thing ... on the part of the Bush Adminsitration.
... apparently without having a clue about itself.political hypocrisy [is] now endemic in the culture wars. Last week a State Department spokesman, Sean McCormack, simultaneously condemned the cartoons as "unacceptable" and spoke up for free speech, while the Joint Chiefs of Staff were firing off a letter to The Washington Post about a cartoon it ran in which Defense Secretary Donald H. Rumsfeld, in the guise of a doctor, says to a heavily bandaged soldier who has lost his arms and legs, "I'm listing your condition as 'battle hardened.'" The letter called the cartoon, by Tom Toles, "reprehensible" and offensive to soldiers.
The good news and the bad news about the budget deficit.
First the good news: The projected increase in the budget deficit this year, to $400+ billion from $319 billion last year, doesn't matter.
Also, the cost of the Bush tax cuts ... of the Iraq war ... of the all those earmarks Congress doles out for its own benefit that the pork busters are so upset about ... they don't matter. The cost of cleaning up Katrina, and fighting in Iraq, and bailing out collapsing pension plans through the PBGC -- of all the items currently on the political agenda for rest of decade, taken all together, they don't matter. So don't worry about them!
So says Douglas Holtz-Eakin, the departing head of the Congressional Budget Office (in the WSJ)...
"I think this is self-evident," says Mr. Holtz-Eakin, chuckling. "... I wake up every morning saying it doesn't matter what happens in the next five years, and people say I am really weird."Now the bad news: The reason why they all don't matter is that their cost is trivially small compared to the that of the mountain-sized avalanche of retirement entitlements that's heading to hit us around 15 years from now...
Holtz-Eakin again:
"The thing that I found most amazing is everybody thought the war in Iraq was a much bigger expenditure than the [Medicare] drug benefit. How could you possibly believe that? The war in Iraq, $6 billion to $7 billion a month, maybe $70 billion, $75 billion, a year, something like that. And the drug benefit is forever."The accrued cost of the Medicare drug benefit is $8 trillion (with a "t") so far, after only two years, says the Treasury. The Iraq war, at $7 billion a month, would have to last almost 100 years to match this two-year cost of the drug benefit -- which is only a small part of Medicare.
A little more perspective: The cost of the Bush tax cuts in 2006 will be about $250 billion (according to enemies of the tax cuts, who give them little credit for spurring the economy and thus reducing their own cost, such as the Citizens for Tax Justice (.pdf)).
Meanwhile, the Treasury says the annual deficit is actually more than $3 trillion when computed on an accrual basis to include the current-value cost of unfunded accruing promises to retirees. Now "more than $3 trillion" is more than 12 times greater than $250 billion -- so the tax cuts account for about 8% of the actual debt the government is running up, worst case. They just don't matter that much in the overall fiscal situation.
Those who find this hard to believe can take a look at GAO's year 2000 budget projections. These (.pdf) were made pre-Bush, pre-9/11, pre-recession, counting zero tax cuts and assuming the boom economy and budget surpluses would last for years to come. The conclusion: The 75-year projection is cut off a little more than half-way through as the government collapses under the weight of annual deficits that reach 20% of GDP -- more than the size of the entire government today -- and are rocketing straight up, driven by costs of Social Security and Medicare that have reached 20% of GDP and rising. Hey, the economy and government collapse without Bush -- how much harm can he have done? ;-)
Not that Bush hasn't committed fiscal sin: his drug benefit's annual accruing cost is now over $560 billion -- more than twice the cost of his tax cuts -- says the Treasury. Who knows that?
The most recent Analytical Perspectives on the Budget gives the current value of the unfunded liability for Social Security as being $12.8 trillion, and for Medicare as "a staggering $68.4 trillion". Who knows that?
Almost nobody knows it. But why? Nothing is a secret -- it's all well published.
The first answer is that the politicians of both parties can agree on one thing -- they sure aren't going to talk about it. "The political system doesn't reward painful choices", as Holtz-Eakin notes. So the Republicans sure aren't going to mention that the tax cuts they all want will only increase a $3 trillion deficit, while the Democrats are hardly going to mention that the entitlements they use as the foundation of their party are on course to bankrupting the country. But politicians ... you never expect the truth from them.
The major fault here is that free press is silent about the silence of the politicians -- and is indeed itself constantly exorcised over trivialities of the budget process while being blind to the big picture. Or perhaps, since the press like any business provides pretty much what its customers want, it is just human nature for us all to be distracted by minutia until an avalanche hits. Either way, the average person is simply never told, and so doesn't know.
Take for example a recent post by the esteemed Jane Galt, endorsing an article in The Economist damning the Bush budgets in 1,100 words for such grave sins as...
a 2006 deficit projection [of] $423 billion, or 3.2% of America’s GDP.... which actually is rather reasonable by historical standards. In fact, a 3.2%-of-GDP deficit would be the median for the last quarter century, 13th largest of the last 25 years. Moreover, deficits equal to a percentage of GDP smaller than the GDP growth rate can easily be sustained forever. So what's to be so upset about there?
... and also ...
for all their rhetoric, so far the Republicans have barely touched domestic discretionary spending... just as if savings from cuts in discretionary spending could ever possibly amount to a significant portion of GDP.
Yet in 1,100 words there is not one of a $68.4 trillion liability for Medicare, or of a $3 trillion+ annual accrual basis deficit today (though that is more than seven times larger than $423 deficit that is lamented).
Oh, well ... everybody's going to find out about all this around 15 years from now, the hard way.
Until then remember this: the only thing that seriously matters for the budget is entitlements, and "entitlements" is spelled M-E-D-I-C-A-R-E, which amounts to about 80% of them.