In the 11/23/2009 New Yorker James Surowiecki points out that "the government helped pay for the debt binge that created the mess in the first place, thanks to a tax system that actually subsidizes borrowing."
His point is, I think, to argue that there is a "debt bias" in the tax code, and that the debt bias - among other things - creates an illusory social benefit. For example, with respect to "tax shield" provided by home mortgage interest deductions, seller's know a buyer's ability to buy is extended by the tax benefits they can claim, and so they tax a bite out of the shield by increasing their sales prices. The deduction "simply inflates house prices."
That's good as far as it goes.
But isn't it a little contradictory to say there is a debt bias? If the market drives away the advantages the tax code puts on debt, shouldn't there be some point at which the advantage is priced out of the market, and the decision to buy or rent equalized. Similarly, isn't there a point at which the value of a corporate tax break for interest deductions is offset by a lower dividend tax rate that might prefer to raise lots of amounts of capital through shareholder contributions over incurring obligations of debt? In other words, doesn't the market price out bias?
That's not to say there wasn't a distortion created by a tax break, but that's not the same as saying the market priced the distortion away. In fact, there is a body of thought that simply says the tax gimmicry that tends to favor one decision (like to take on debt) over another (life to raise capital) only works for a time. That's the reason why economists say the effects of tax breaks are temporary. If you really think about it, tax breaks get compounded into the market fairly quickly. For example, when President Clinton enacted the 2001 tax relief - and allowed a $250,000 exclusion from capital gains on the sale of a principal residence - the probable effect was to raise the price of homes. This was a good thing for sellers at the time. Later sellers simply bought and sold homes that were inflated by the value of the break. The net effect of the break to them would have been zilch.
It's not at all clear to me why a debt bias, as it is, "means the over-all tax rate is higher." Is this to suggest that corporate tax rates must be raised to counter the effect of the tax break for debt? I'm not sure that's the case. That maybe ignores the other preferences built into the code: the loss of corporate tax through use of limited liability companies taxed as partnerships, REITs, S-Corporations, business trusts and the like. Whatever he may say, corporate tax rates have stayed remarkably stable since about 1988 (after dropping from a top marginal rate of 46% in 1988).
Also, claiming there is a debt bias ignores the various preferences for capital gains (especially the preferences that drive capital investments chasing lower gains rates) and - particular to the residential market - their effect on homebuilding. Mr. Surowiecki is right to say debt drives economically inefficient home purchases, and other inefficiencies, but only partly so. Low capital gains rates play a pretty big role here too.
If that's the case, there is a much bigger problem here than his article suggests. The fix is not simply to eliminate debt bias. If taking the mortgage interest deduction away is impalpable, consider combining that with eliminate capital gains rates, taking away the residence exclusion, eliminate the deduction for state and local taxes. I suggest the author's fix would not be a fix, and that a real fix isn't something we are ready for. Or something we're much used to doing at all.
Saturday, November 21, 2009
Wednesday, November 11, 2009
A Message of Love
As Kraxy Krazy as in some say it with a brick would say. Let's set the stage.
This morning Jamie McCourt speaks in the LA Times: "until now she hasn't said anything publicly since being fired by her husband as Dodgers CEO, being labelled an adulterer in the process and pounded in court filings."
I have to say I am no fan of the McCourts. Frank McCourt strikes me as a bit more than slick. And in the past the Mrs suffered as a result.
But today I find my opinion changed. Clearly she is a beauty, and she is smart. She is also - apparently - very socially astute. Certainly enough to turn LA's record to her advantage.
As she opens: "Jamie says [her children] are the ones who have been really hit hard ... 'I want my kids to look back and say she took the high road. It's hard, but that's what I'm going to try and do.'" "Boys tend to defend their mother, but they're caught between a rock and a hard place." Bringing the kids to her side. Exactly what every good mom (and lawyer) knows to be true: the kids go with the dam.
With every statement, a strike. Jamie (I am now going to presume a first name basis) knows enough to turn each thing to an advantage. Is Mr McCourt going to play the same game? "He will respectfully decline comment." Nice, a one sided fight in the news. I could look forward to seeing her beat him in the press.
How was their marriage? Not quite perfect. "I met Frank when I was 17, dated him for eight years and was married to him almost 30 years." Almost. Nice.
Is Frank retaliating against loyalists in the Dodger's organization? "It bothers me that people not working for tons of money in most cases were let go when all they cared about was helping the Dodgers to get a [World Series] ring."
Adultery? "Absolutely not ... I have never been with another man until the marriage broke up. Ever. Ever." Emphatically qualified. She is born to do interviews like this. She is an animal, a natural. She's been crossed and she is out to get even. "I'm not ever going to talk about my private life, that's craziness."
Love of the game? "I don't need to be the controlling interest. I just love baseball so much and want to stay a part of it and lend my expertize in any way can."
The ostentatious pre-split life? "I'm with you. Frank is a real estate guy."' Nuff said.
On the fans: "I can't speak for Frank ... I like to think that you try to blend what fans can afford with what the game should be and still have quality players."
Future contributions to the Dodgers: "When you have partners and you have equity, you have an opportunity and the wherewithal to have an expended budget for player compensation."
On her contributions to the club: "I was running the team from day to day. I was handling everything from catsup dispenser to whether Joe Torre should be hired." She hired Joe Torre. Very good.
Future of the Team: "Our first order of business is to win the World Series."
Ticket prices: "That wa big fight with me and Frank. I haven't wanted to raise ticket prices for several years. It was a big debate. You don't have to be a brain surgeon to know this isn't the time to raise ticket prices."
Let's be clear. Jamie is worth every cent of $400,000 a month plus flowers. Plus the Maccabiah games. And negotiated swimming time. I'd give her the Dodgers in a heartbeat. As an independent analysis, we are told, found, "It was clear that Jamie believed that the success of the relationship is the key to all doors. She believes that the partnership is at risk because Frank 'doesn't get it.' He doesn't value her talents, listens to her only on his terms and shows little respect/acknowledgement for her in public. Jamie says that she can be a bigger asset to them if Frank could get by this need to dominate the public stage and better understand her business value." Jeesh. They could have been talking about all of us. A guy just can't forget that popularity is the grace of the person standing by him.
This morning Jamie McCourt speaks in the LA Times: "until now she hasn't said anything publicly since being fired by her husband as Dodgers CEO, being labelled an adulterer in the process and pounded in court filings."
I have to say I am no fan of the McCourts. Frank McCourt strikes me as a bit more than slick. And in the past the Mrs suffered as a result.
But today I find my opinion changed. Clearly she is a beauty, and she is smart. She is also - apparently - very socially astute. Certainly enough to turn LA's record to her advantage.
As she opens: "Jamie says [her children] are the ones who have been really hit hard ... 'I want my kids to look back and say she took the high road. It's hard, but that's what I'm going to try and do.'" "Boys tend to defend their mother, but they're caught between a rock and a hard place." Bringing the kids to her side. Exactly what every good mom (and lawyer) knows to be true: the kids go with the dam.
With every statement, a strike. Jamie (I am now going to presume a first name basis) knows enough to turn each thing to an advantage. Is Mr McCourt going to play the same game? "He will respectfully decline comment." Nice, a one sided fight in the news. I could look forward to seeing her beat him in the press.
How was their marriage? Not quite perfect. "I met Frank when I was 17, dated him for eight years and was married to him almost 30 years." Almost. Nice.
Is Frank retaliating against loyalists in the Dodger's organization? "It bothers me that people not working for tons of money in most cases were let go when all they cared about was helping the Dodgers to get a [World Series] ring."
Adultery? "Absolutely not ... I have never been with another man until the marriage broke up. Ever. Ever." Emphatically qualified. She is born to do interviews like this. She is an animal, a natural. She's been crossed and she is out to get even. "I'm not ever going to talk about my private life, that's craziness."
Love of the game? "I don't need to be the controlling interest. I just love baseball so much and want to stay a part of it and lend my expertize in any way can."
The ostentatious pre-split life? "I'm with you. Frank is a real estate guy."' Nuff said.
On the fans: "I can't speak for Frank ... I like to think that you try to blend what fans can afford with what the game should be and still have quality players."
Future contributions to the Dodgers: "When you have partners and you have equity, you have an opportunity and the wherewithal to have an expended budget for player compensation."
On her contributions to the club: "I was running the team from day to day. I was handling everything from catsup dispenser to whether Joe Torre should be hired." She hired Joe Torre. Very good.
Future of the Team: "Our first order of business is to win the World Series."
Ticket prices: "That wa big fight with me and Frank. I haven't wanted to raise ticket prices for several years. It was a big debate. You don't have to be a brain surgeon to know this isn't the time to raise ticket prices."
Let's be clear. Jamie is worth every cent of $400,000 a month plus flowers. Plus the Maccabiah games. And negotiated swimming time. I'd give her the Dodgers in a heartbeat. As an independent analysis, we are told, found, "It was clear that Jamie believed that the success of the relationship is the key to all doors. She believes that the partnership is at risk because Frank 'doesn't get it.' He doesn't value her talents, listens to her only on his terms and shows little respect/acknowledgement for her in public. Jamie says that she can be a bigger asset to them if Frank could get by this need to dominate the public stage and better understand her business value." Jeesh. They could have been talking about all of us. A guy just can't forget that popularity is the grace of the person standing by him.
First Attempt At Audiobook
I've been on a Charles Dickens kick recently. I have searched for some time for an author who could write well both from the head and the heart. I'm not sure why I had not read Dickens when I was younger. A part of me is glad that I waited, for hs words are the words of life. It is good to save certain things for later.
I also recently acquired an iPod. Naturally wanting to find an agreeable intersection between these two media I searched for and found Dickens on the iTunes store. Yesterday I downloaded a full copy of "Sketches by Boz" and looked forward to putting on my headbuds as I lay down to rest at the end of a very long day.
Did I mention the Boz was recorded by Babblebooks?
What a complete shock to begin to listen to the first story and to hear what sounded like a person with an electro-larynx and no personality atonally reading words that it did not understand into a recorder. I say it because although the vioce sounds vaguely human, it is clearly a reading machine.
Reading is a skill that only humans possess. It is one of the skills, like reading a map, that humans do well and machines do not do well. Machines lack the intuition - the fuzzy logic - to make sense of the world as we do.
A machine should not be allowed to read Charles Dickens. Babblebooks has made a mistake. I imagine it is the product of some techno geek - perhaps an MIT student's senior project - who thinks that making machine read classics available to the masses is doing a service to mankind. Let's be clear, the point of a book is more than the words on the page. A human voice brings warmth to the reading, and allows the reader and the read to to establish a connection to pass thoughts from voice to mind. Man is a gregarious animal and is hard-wired to enjoy time spent with another human. A book, the connection between humans over a written page, is truly a wonderful thing.
Babblebooks is based on a horribly technical view of what reading is, an overly Utilitarian notion of the value of words and their meaning. Words have meaning, but they also have structure within sentences and sentences within the paragraphs of a page. Sentences may yield to the strict rules of punctuation, but they also have context. A human reader can understand the flow of the story as it crosses a page and can imbue imbue its voice with that flow and the meaning that follows. A machine simply cannot do that. Dickens should be read by an Englishman. I would like to hear him read by the same people who read the weekly Economist.
Stay away from Babblebooks. Babblebooks is performing a more than a disservice, it is insulting great works.
I am going to see is I can get iTunes to delete Babblebooks from any personal preferences that I can generate on the ITunes store.
I also recently acquired an iPod. Naturally wanting to find an agreeable intersection between these two media I searched for and found Dickens on the iTunes store. Yesterday I downloaded a full copy of "Sketches by Boz" and looked forward to putting on my headbuds as I lay down to rest at the end of a very long day.
Did I mention the Boz was recorded by Babblebooks?
What a complete shock to begin to listen to the first story and to hear what sounded like a person with an electro-larynx and no personality atonally reading words that it did not understand into a recorder. I say it because although the vioce sounds vaguely human, it is clearly a reading machine.
Reading is a skill that only humans possess. It is one of the skills, like reading a map, that humans do well and machines do not do well. Machines lack the intuition - the fuzzy logic - to make sense of the world as we do.
A machine should not be allowed to read Charles Dickens. Babblebooks has made a mistake. I imagine it is the product of some techno geek - perhaps an MIT student's senior project - who thinks that making machine read classics available to the masses is doing a service to mankind. Let's be clear, the point of a book is more than the words on the page. A human voice brings warmth to the reading, and allows the reader and the read to to establish a connection to pass thoughts from voice to mind. Man is a gregarious animal and is hard-wired to enjoy time spent with another human. A book, the connection between humans over a written page, is truly a wonderful thing.
Babblebooks is based on a horribly technical view of what reading is, an overly Utilitarian notion of the value of words and their meaning. Words have meaning, but they also have structure within sentences and sentences within the paragraphs of a page. Sentences may yield to the strict rules of punctuation, but they also have context. A human reader can understand the flow of the story as it crosses a page and can imbue imbue its voice with that flow and the meaning that follows. A machine simply cannot do that. Dickens should be read by an Englishman. I would like to hear him read by the same people who read the weekly Economist.
Stay away from Babblebooks. Babblebooks is performing a more than a disservice, it is insulting great works.
I am going to see is I can get iTunes to delete Babblebooks from any personal preferences that I can generate on the ITunes store.
Monday, November 9, 2009
Quote 3 of 3
The supposed Evreemonde descends, and the seamstress is lifted out next after him. He has not relinquished her patient hand in getting out, but still holds it as he promised. He gently places her with her back to the crashing engine that constantly whirrs up and falls, and she looks into his face and thanks him.
...
'It is a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to, than I have ever known."
...
'It is a far, far better thing that I do, than I have ever done; it is a far, far better rest that I go to, than I have ever known."
Quote 2 of 3
'If I may ride with you, Citizen Evreemonde, will you let me hold your hand? I am not afraid, but I am little and weak, and it will give me more courage.'
As the patient eyes were lifted to his face, he saw a sudden doubt in them, and then astonishment. He pressed the work-worn, hunger-worn young finders, and touched his lips.
'Are you dying for him?' she whispered.
'And his wife and child, Hush! Yes.'
'O you will let me hold your brave hand, stranger?'
'Hush! Yes, my poor sister; to the last.'
Fifty Two. Id.
As the patient eyes were lifted to his face, he saw a sudden doubt in them, and then astonishment. He pressed the work-worn, hunger-worn young finders, and touched his lips.
'Are you dying for him?' she whispered.
'And his wife and child, Hush! Yes.'
'O you will let me hold your brave hand, stranger?'
'Hush! Yes, my poor sister; to the last.'
Fifty Two. Id.
Quote 1 of 3
The great grindstone, Earth, had turned when Mr Lorry looked out again, and the sun was red on the court-yard. But, the lesser grindstone stood alone there in the calm morning air, with a red upon it that the sun had never given, and would never take away. The Grindstone. From "A Tale of Two Cities" Penguin Classics 2003 (but first published in 1859).
Sunday, November 8, 2009
ID Theft
A friend's Sprint ID was stolen recently. Apparently this is not new. Reports are that Sprint's internal security is relatively easy to circumvent. Once a user's ID is captured, new phone lines are ordered and charges are made.
I'm not sure why anyone would want to order additional phone lines. I suspect this is similar to postage stamp theft. Stamps are easy to steal and easy to use. They are a simple form of cash substitute. Steal a bunch of phones, register a free account, and sell the phones with free phone service.
I'm not sure why anyone would want to order additional phone lines. I suspect this is similar to postage stamp theft. Stamps are easy to steal and easy to use. They are a simple form of cash substitute. Steal a bunch of phones, register a free account, and sell the phones with free phone service.
Friday, November 6, 2009
Chilling With the Past
I always thought Big Country's "In a Big Country" was a great song. But this tribute version from Bruce Watson just gives me the willies:
Wednesday, November 4, 2009
For the Record
It took Google less than a second to find over 800,000 reasons why U2 sucks.
"Results 1 - 10 of about 880,000 for reasons why u2 sucks. (0.22 seconds)"
"Results 1 - 10 of about 880,000 for reasons why u2 sucks. (0.22 seconds)"
Sunday, November 1, 2009
Water
Here in LA, each tribal subcultures holds fast to the notion that their particular interest trumps all. I have a more generalized notion. I am not a surfer, but I surf. I think I can surf better than most "surfers" - at least the ones I see around here. No doubt, having grown up with some who could have turned pro (and some who did) I know my place in the order of things.
Rather than stake my claim (badly) to one piece of turf, I conceive of myself as an all around waterman - an older (and truer - I do it too) ideal. The next series of posts are a video representation of what I mean.
Here is where the modern sport is widely recognized to have started. Okay I agree this is a surf centric piece.
Here is some classic surf footage - I can't resist:
A crossover shot - Aaron Piersol bodysurfing:
More bodysurfing:
Women paddling across the Molokai Channel:
Outrigger Sailing (too bad the sound was disabled):
Spearfish (wish the sound was disabled):
Kauai Surfer Girl:
Something a little more competitive:
Janet Evans dominating a bunch of very strong Europeans (it's really a shame there isn't a better video of this because this is a great sports feat):
WOW:
Rather than stake my claim (badly) to one piece of turf, I conceive of myself as an all around waterman - an older (and truer - I do it too) ideal. The next series of posts are a video representation of what I mean.
Here is where the modern sport is widely recognized to have started. Okay I agree this is a surf centric piece.
Here is some classic surf footage - I can't resist:
A crossover shot - Aaron Piersol bodysurfing:
More bodysurfing:
Women paddling across the Molokai Channel:
Outrigger Sailing (too bad the sound was disabled):
Spearfish (wish the sound was disabled):
Kauai Surfer Girl:
Something a little more competitive:
Janet Evans dominating a bunch of very strong Europeans (it's really a shame there isn't a better video of this because this is a great sports feat):
WOW:
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