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30 April 2008

Your Liberal Media At Work

At some point the chattering classes will wake up and realize that the so-called liberal media has an awfully soft heart when it comes to neo-conservatives. One case in point is the Book Review section of the New York Times. This is supposedly an exemplary purview of the so-called liberals—a weekly rundown of important books by important authors and, of course, reviewed by important authors.

Two weeks ago, the Book Review ran a long, fawning review by Niall Ferguson of a book by Philip Bobbitt. This was the book featured on the cover of the Book Review section. Both Ferguson and Bobbitt are the sort who, when faced with a relatively small band of murderous thugs, would undo the niceties of modern democratic societies that distinguish them from societies run by tyrants and thugs—privacy, jury trials, limits on searches and seizures in criminal cases. Or, to put it another way, they would destroy much of what makes modern civilizations civilized in order to save them.

Now the Times is not completely in thrall to those who read Leviathan and consider it to be the alpha and omega for the powers of the sovereign. Indeed, Sunday's Book Review had this rejoinder:

There was a dark, even Strangelovian wit to your choice for the April 13 Book Review cover. You ran a review by a neoimperialist who praises a book by an "Atlantic man" (also a "Homo atlanticus redux") who is "dapper," related to Lyndon Baines Johnson, and whose book will be "read with pleasure by men of a certain age, class and education from Manhattan's Upper East Side to London's West End." And what does this "most profound book" recommend? Why, intensive surveillance and torture! This "superbly intelligent" volume is evidently a "manifesto for a new Atlanticism" that will be "garlanded with prizes." What rare entertainment on your part! Wickedly funny and marvelous stuff, really.

The writer of the letter is Richard Vallely, whose work on American politics, while hardly the stuff of a future Fifth International, is consistently well-informed and well-reasoned. In a sane polity, thinkers like Valelly would be getting publicity tours for their books and plum review assignments and op-ed slots for their other work, and bloody-minded sorts like Bobbitt and Ferguson would have to resort to pithy letters to the editor.

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Posted by Tim W at 4/30/2008 11:02:00 AM

29 April 2008

The Great Missile Defense Boondoggle

This excellent Bulletin of the Atomic Scientists article by Theodore Postol and George Lewis explains, in detailed fashion, why missile defenses, particularly the kind bandied about by the Bush administration, are doomed to fail.

Why the United States has spent tens of billions of dollars on this boondoggle is an exercise left to the reader.

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Posted by Tim W at 4/29/2008 08:21:00 PM

Like This Would Work

Here comes John McCain's flack, with a simply splendid idea to solve the American care crisis.

Republican John McCain wants to change how people get their health insurance, shifting away from job-based coverage to an open market where people can choose from competing policies.

McCain said Tuesday he would offer families a $5,000 tax credit to help buy insurance policies. Everyone would get the credit, whether he or she keeps a policy through an employer or shops for a new one.

"You simply choose the insurance provider that suits you best," McCain said in a speech Tuesday at the H. Lee Moffitt Cancer Center & Research Institute in Tampa.

"The health plan you chose would be as good as any that an employer could choose for you. It would be yours and your family's health care plan, and yours to keep," he said.

Advisers called the speech a major policy address though McCain has talked about the same ideas for several months.

You see, the current system, in which insurance companies compete on price and services to be selected by employers, is somehow fatally flawed. And the way to fix it is to have the same sort of competition go on with consumers instead of corporate human resource departments as the targets of the advertising and promotion.

Indeed, why should decisions like this be delegated to people whose profession it is to make these sorts of decisions every day?

And we know that heavy promotion of prescription drugs to consumers never results in bad drugs being foisted on the public, or consumers spending more than they ought to.

(Never mind that Health Savings Accounts, which are supposed to to be the centerpiece of this revolution towards "consumer-driven health care" are unpopular enough that even George Bush, their public champion, only used one in two years of the last five.)

Even better is how the federal government would pay for this.

To pay for the tax credit, McCain would eliminate the tax exemption for people whose employers pay a portion of their coverage, raising an estimated $3.6 trillion in revenues, [McCain adviser Doug] Holtz-Eakin said. Companies that provide coverage to workers still would get tax breaks. McCain would also cut costs by limiting health care lawsuits.

$3.6 trillion? Total federal government receipts, excluding Social Security and Medicare taxes, are only $1.6 trillion per year. Perhaps the $3.6 trillion figure is some sort of multiyear amalgam.

The tax exemption for health insurance is an offset against taxable income. Let us assume that the typical taxpayer is in the 25% federal tax bracket. To offset a $5,000 tax credit would mean that the exemption is $20,000 per year.

It's not.

No wonder McCain still needs to be educated on economics and stuff.

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Posted by Tim W at 4/29/2008 07:41:00 PM

28 April 2008

Capital Idea

At Eschaton, Atrios writes that talk of capital gains tax hikes ought not to worry the middle class, although the pundits will surely say it will.

With talk of raising the capital gains tax in the air, you're going to hear a lot of conservatives and mainstream media folks blather on about how much this kind of thing is going to be so bad for the "middle class" or "even working folk" because everyone is invested in the stock market through 401K plans, etc. But the capital gains tax rate will never apply to that money. More than that, any capital gains from those plans will be, upon withdrawal, taxed at the income tax rate which for most people will be higher than the current 15% capital gains rate. So wealthier people who have direct investments in stocks and whatnot get to pay 15% on their capital gains, while the rest of us in lowly 401K land will likely be paying a higher rate.

This is right, as far as it goes. What needs to repeated is just how skewed capital gain income is to the very, very rich. In 2005, fully 56% of long-term capital gains were reported by the 0.3% of taxpayers with over $1,000,000 in taxable income for the year. And that figure is representative of all recent years for which the IRS has reported statistics.

In other words, capital gains cuts matter very little to the vast majority of "investors" but they matter very much to 303,000 truly lucky duckies, who have been able to convince politicians of both parties that capital gains cuts somehow help small investors.

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Posted by Tim W at 4/28/2008 02:19:00 AM

26 April 2008

New Frontiers in Geography

In a story about parking in Boston and the utter lack of accountability to the supposed limit on commercial parking spaces, we find the following sentence:

Suffolk County, which encompasses most of Boston, received a D grade last year from the American Lung Association in its "State of the Air" report, which showed seven days of unhealthy ozone levels.

I have no idea what that is supposed to mean. Suffolk County comprises Boston, Chelsea, Revere, and Winthrop. So, if "encompasses most of Boston" means that bits of Boston are not included in the county, then the crack staff of the Globe is far off. And if it means that most of the Boston area is in Suffolk County, then it is further off.

The most charitable reading is that the story meant to explain that the City of Boston is the largest part of Suffolk County—but even that reading shows that the crack staff of the Globe is having a difficult time understanding what "encompass" actually means.

Worse for the readers, the story claims that commuting by car in Boston has tripled since 1985. That does not seem even remotely possible. Indeed, non-car commuting for Boston residents did not change at all from 1990 to 2000. (I sus;pect that the Globe is comparing statistics from 1985 for those living in the City of Boston and from a recent year for those working in the City of Boston.

There would be a good story in these numbers if the reporter asked the right sort of questions—why are there so few carpoolers in Boston? How do we increase public transit use? Is it really necessary to spend literally tens of billions of dollars to subsidize those who need to drive into a congested city when there are easy alternatives?

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Posted by Tim W at 4/26/2008 08:20:00 AM

19 April 2008

Now They Tell Us

I hate daylight savings time.

Not because it is a hassle, but because I feel poorly enough in the winter when it is dark in the morning and dark in the afternoon and not all that light in between. When daylight savings time starts, the light in the morning that I was starting to appreciate is now a whole hour later—and it takes several more weeks of dark mornings for me to recover my (relative sanity). And it is worse now that daylight savings time starts earlier in the year—in previous years, I at least got the reprieve of standard time that lasted until early April.

Now comes news that daylight savings time makes no economic sense at all. Better late than never, I suppose.

Having the entire state switch to daylight-saving time each year, rather than stay on standard time, costs Indiana households an additional $8.6 million in electricity bills. [The researchers] conclude that the reduced cost of lighting in afternoons during daylight-saving time is more than offset by the higher air-conditioning costs on hot afternoons and increased heating costs on cool mornings.

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Posted by Tim W at 4/19/2008 11:12:00 PM

Great Moments in Comparative Religion

This is what happens when neither reporters nor editors have any idea how to check the alleged facts in their stories.

Earlier this week, the Boston Globe led its Food section with a story on a local company that makes the ersatz fruit slices that are particularly popular during Passover. Alas, there are at least two bizarre mistakes in the piece that make one wonder whether anyone at the Globe has any conception about what is kosher and what is treif.

[General manager Rick] Hiera boasts that the local product is superior ... because of the fruit-juice flavor made at a "flavor house" halfway across the country (he won't disclose which one), because of the gelling agent agar (he says other companies use pectin, which makes the candy stick to your teeth) ...

So far, so good. But things get worse quickly.

The slices are kosher year-round, but to make it kosher specifically for Passover, the plant replaces the corn syrup ingredient with potato or tapioca syrup. (Corn syrup usually isn't kosher for Passover because its production isn't supervised by a rabbi.) The company also shrinks the number of flavors it makes from 13 to four during the holiday season to ensure all ingredients are wheat-free. The Passover slices come in cherry, orange, lemon, and lime.

At the factory, the day starts at 6 a.m. with fruit-slice makers boiling the sugar and gelatin mix in a stainless-steel cooking kettle only to immediately cool it.

The reason that corn syrup "usually isn't kosher for Passover" is that Ashkenazi Jews, who vastly outnumber Sephardic Jews in North America, generally regard corn, rice, peanuts and legumes as chometz during Passover because they are often used to make bread. (In Israel, corn products can and often do get certified as kosher for Passover because these grains are regarded differently.) It has nothing to do with rabbinical supervision—a rabbi could run the syrup plant and it would still be chometz to Ashkenazi Jews. A call to one of literally hundreds of local experts—rabbis, say, or professors of religion—would have cleared that up.

And if you want to describe agar as gelatinous, that is fine. But it is not gelatin.

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Posted by Tim W at 4/19/2008 10:51:00 PM

13 April 2008

Stupid Transportation Tricks

An impassioned reader asks the Boston Globe why the Massachusetts Bay Transportation Authority (MBTA is not considering expanding the heavily used garage at Alewife station.

"Re: 'Desperately seeking parking' [March 30] and the complaint from William Elliott of Acton about his problems finding a garage, the T's Joe Pesaturo is misstating the facts if he says the reason for no increase in the size of the Alewife garage is, as you quote him, 'the T is not in a financial position to acquire land for parking,'" Sue Bass wrote in an e-mail.

"In fact, the Alewife garage, though it now is only five levels, was designed to accommodate seven levels of parking. The elevator shaft, stairs, etc., go up that far—in fact, the existing elevators have blank buttons that could be used for levels six and seven.

"The T should have increased the size of the garage 15 years ago when level five started being used a lot. The argument I've heard from T planners is that the adjoining communities would protest—but I doubt that's true.

"Belmont and Arlington would use the garage a lot, if there were room; Cambridge and Somerville suffer from people driving through because they can't get into the garage. The intersection of routes 2 and 16 is jammed, all right, but getting people off the roads and onto the T would reduce the crunch, not worsen it."

Pesaturo, the MBTA's spokesman, responded: "While the garage was designed to accommodate two additional levels, no structural analysis or code review has been done to verify if the existing structure can still meet that objective.

"The existing top deck has about 650 spaces, so the potential expansion would be for approximately 1,300 spaces.

"At current construction industry pricing, the estimated project cost would be in the range of $30 [million] to $35 million. Burdened with a current debt load of more than $5 billion, the T has little financial capacity for expansion projects."

Well, at least the MBTA spokesperson is no longer claiming that more land is somehow the constraint. But the idea that the structure would not accommodate two more levels is a bit dubious: the original structural engineers seem sanguine enough about the precautions taken to ensure that the loads were properly accommodated.

The spokesman does ignore that the MBTA spent $3.6 million to address flooding and other issues at the garage, issues that more decks and appropriate design might alleviate.

But, worst of all, the idea that the MBTA could not service $30 million to $35 million of bonds is a bit silly—parking garages at busy transit stations are sure sources of revenue. Let us assume that the MBTA maintains its current parking rates ($5 per car) for the new 1300 spaces, and that each space is occupied once per weekday and once per weekend. (This is probably a very conservative estimate.) So each space generates $1,560 of revenue per year, for $2,028,000 per year for the 1300 new spaces.

If the MBTA can float debt at 4% per annum (its fixed-rate swap on recent recent 15-year floating rate debt backed by sales tax receipts was 3.84%), then we can figure its annual debt service by considering the term of the underlying debt. For bonds that amortize over 30 years, the annual debt service on $30,000,000 would be about $1,726,000. For the $35,000,000 figure, the annual debt service would be about $2,014,000. The MBTA has not floated 40-year debt in a while, but it would provide additional leeway on the debt service in exchange for a higher interest component.

Of course, the MBTA hires a contractor to manage the garage, so the entire $5 is not available for its use. But certainly the MBTA would demand a substantial cut of the added revenues, and its absolute share could increase over time, because $5 now for parking will be equivalent to a higher number in future years. And this ignores the added ridership (and fair income) that would come with additional parking spaces at a garage that has to turn away commuters most mornings.

(Note that this does not involve any financial shenanigans that the MBTA has employed in the past, such as leasing its rolling stock to banks to get a little cash at the time of its acquisition.)

In short, the idea that the MBTA is somehow constrained from financing an addition to the Alewife garage is not as obvious as the MBTA would like us to think.

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Posted by Tim W at 4/13/2008 12:10:00 PM

Department of Cry Me a River

The lead article of one of the sections of the New York Times last week touched on one of the defining issues of our generation. Yes, the problems that rich New Yorkers have when they try to garden at their upstate summer homes are surely worthy of almost two whole pages in the newspaper, although some might wonder why the editors relegated this concern to the "Escapes" section.

To ... ardent gardeners, the flower beds and vegetable plots of their second homes are a sublime refuge, a place to leave the workaday world behind. Outsiders might view these primarily untended plots as the weekend equivalent of work camps, full of a slate of catch-up chores and the unceasing demands of hundreds of little vegetative voices: water me, feed me, weed me, protect me. They’d be right. Second-home gardeners do have it rough.

Yes, the rest of you wage-slaves trying to cope with heating costs or layoffs or simply making ends meet don't have it rough the way that the upper crust does.

Meet your so-called liberal media.

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Posted by Tim W at 4/13/2008 11:44:00 AM

05 April 2008

Doctor? No.

I meant to post this fascinating article from Barron's Online about that supposed paragon of intellectual rigor, Alan Greenspan.

At most institutions of higher learning, doctoral theses are available to the public for a host of reasons, not the least of which is that they are supposed to advance the understanding of one or more problems in a particular field. But when your name is Alan Greenspan, things are apparently different.

Greenspan, who left the Fed in 2006 but is still consulted as a genius, might find a metallic exoskeleton exceptionally comforting come May, when the University of Texas Press publishes an unflattering book by Robert Auerbach entitled Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank.

Auerbach, a veteran Fed basher, portrays Greenspan as a real-life Professor Marvel—who, through double-talk or "garblement," transformed himself into a mighty economic wizard á la Oz. Auerbach strongly implies that Greenspan's 1977 Ph.D. from New York University was obtained in a few months with little more rigor than a matchbook-cover art degree and that Greenspan has kept his Ph.D. thesis secret in order to protect his vaunted academic reputation.

Greenspan appears to have taken only a few months to obtain his NYU doctorate in '77.

Although Auerbach's evidence is circumstantial, it certainly is provocative. For years, NYU told the public that, at Greenspan's request, the thesis was locked away from public view in a vault at its Bobst Library. Auerbach himself was told this in January 2004 when he tried to obtain a copy.

"Normally," writes Auerbach, "a Ph.D. dissertation in a field such as economics must be in a form sophisticated enough to be usable in research, must make a contribution to the existing body of knowledge, and must be original, unpublished work. When approved, the Ph.D. candidate is normally required to supply a bound copy of the dissertation, which remains in the university's library and is available for future researchers to consult."

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Posted by Tim W at 4/05/2008 07:18:00 PM

02 April 2008

I Have Heard this Story Before

I think that I know the ending of this one. Financial institutions tell everyone that they really, really know what they are doing. Then they foul up, egregiously. And taxpayers wind up bailing them out.

Just some more detail from the WSJ: Mortgage Securities Back Fed Loan to Bear Stearns.

The securities backing a $29 billion Federal Reserve loan to Bear Stearns Cos. consist primarily of "mortgage-backed securities and related hedge investments," the Treasury Department said.


The Fed has declined to provide any underlying detail so far.

JPMorgan will take the first $1 billion in losses on the $30 billion portfolio, and the U.S. taxpayers will pay for the remaining losses (if any).

Yes, it is a good thing that the soi-disant grown-ups are fouling up the government again. Of course, they are the same people who do not believe in government, so there is no reason to think that they have any incentive to show that the government can do things right.

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Posted by Tim W at 4/02/2008 09:36:00 AM

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