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January 31, 2004

Hussein's Bribery Exposed

Via a Gweilo Diaries article comes this ABC News piece about corruption and bribery occurring under the U.N. oil-for-food program in Iraq. I'm sure the U.N. will be shocked, shocked, to learn that their well-meaning program had been hijacked and used for evil.

Here is MEMRI's translation of the original article from the Iraqi press.

January 29, 2004

Piracy Increasing

The Cap'n's crack team of analysts (viz., analysts who are on crack; they haven't any actual skill) are closely monitoring this news that piracy is on the rise. Literal piracy, on the oceans, with boats and cannon and swords and parrots and vibrating wood — not that two-bit poor-imitation copyright violation gutlessness. <ptooie!>

Reason #4687 to support the War Against Terrorism: With the U.S. Navy away, it's fun to be a pirate today! Arrr!

Hat tip to Dan for alerting me to this important news.

Starting a Meme

Spooky. The February 2004 issue of Wired has not just one, but two articles about subjects that I've discussed in my essays.

Clearly I'm the trendsetter, and they're just imitating me. I'm flattered. :)

Lawrence Lessig writes about two obstacles to beneficial drug price discrimination. I don't agree with everything in that article, but I can't resist commenting on his statement that "[politicians] know that there won't be a rally on Capitol Hill in favor of price discrimination." That's a great idea. All it needs is someone to organize it. (Someone with more spare time than me, obviously.) I call dibs on the position of Chief Rabble-Rouser.

Daniel Pink writes about how globalization is affecting India. The article pays lip service to the economic issues involved, but doesn't go into them in any kind of depth. It's much more focused on the human angle of the story, or somesuch excuse. Still, it's an interesting read.

If you want the light stuff, read Wired… but if you want the heavy stuff, read Arbyte. Arrr!

January 27, 2004

A Couple Quick Links

Skip Oliva, who has earned my great respect for attacking antitrust in the courts, has posted a wonderfully pithy article on the reality of the income tax as a wealth redistribution engine.

Steven Den Beste wrote a fabulous response to an essay (which has since been taken down) in which he (SDB) discusses the continuous revolution in American political thought and the robustness of our political system. RTWT. This is great, too.

Roberts Repeats Self

PCR repeats himself again. He hasn't answered my argument yet, so I have little sympathy. These are the questions I'd like him — or more generally, any advocate of protectionism (<cough> that's an invitation to e-mail me) — to answer:

  • Do you accept or reject the idea that labor is fundamentally scarce?
  • Do you accept or reject the productivity theory of wages?
  • Do you accept or reject economic competition as a principle — despite the risk that you might be outcompeted in some particular instances?
  • If you generally accept it, what makes international trade a special case?
  • What political interventions(s) do you advocate, specifically?
  • Will they benefit American companies and workers, or foreign competitors?

Please consider my essays on the subject to be prerequisite reading. Plus, you'll know why I'm interested in those specific questions.

January 26, 2004

Don Lloyd is Blogging

Don Lloyd has joined the Catallarchy group blog. (Thanks for the note, Jonathan.) His inaugural post is about drug reimportation.

Good to see you blogging, Don! I suspected it was only a matter of time. :)

I've exchanged lots of e-mail with Don, and that e-mail is mostly responsible for motivating me to start writing the series on pricing I've been working on for the past couple months. (Which, incidentally, I'll soon have time to work on again…)

Given the opportunity, I must mention that Don posted an puzzle about stock ownership on the SI message board a while ago. It has relevance the issue of option expensing. I think Don enjoys arguing that options shouldn't be expensed as much as I do.

January 24, 2004

A Very Taxing Bonus

Shocking! Outrageous!

I'm relatively ignorant about taxes. This is a deliberate decision — it's depressing to educate myself about taxes. I don't want to deal with it. Not at all. Not even with software. Every year I gather my paperwork and drop it off at H&R Block, and let them deal with it.

Yet I still retain a morbid curiosity.

Today I received a bonus check. (Not because I'm special, it's a standard part of total compensation.) I read somewhere, painfully, that bonuses have taxes withheld at higher rates than ordinary wages. I decided to look at the numbers and was shocked and outraged at how large those numbers are.

I've put together some figures by looking at the taxes portion of my pay stub. Some of the taxes are based on total pay, and others are based on federal taxable gross (which is net of things like 401(k) deductions.)

Tax% of Federal
Taxable Gross
% of Total Pay
Fed Withholding25.0
OR Withholding9.0
Fed MED / EE1.45
Fed OASDI / Dis6.2

The federal withholding has fallen over time: It was 28% in 2001, 27% in 2002, and changed from 27% to 25% during 2003. I seem to recall various Republicans pushing through tax reductions over this period. Thanks! (For your next trick, how about some spending reductions so I don't end up paying for everything through inflation?)

Knowing that the withholding on bonuses is higher than on regular pay, and being a saver who can afford it, I hatched an Evil Scheme™ late last year to annoy the tax collector. I increased my 401(k) deduction to the maximum possible, 50%, for the period when this bonus would be paid. That has the effect of shrinking my federal taxable gross and therefore the amount of tax withheld. It shrunk my withholding from (34×1.0) + 7.65 = 41.65% of total pay to (34×0.5) + 7.75 = 24.65% of total pay.

This maneuver lets me keep 17% of my bonus money today instead of the government holding on to it (read: spending it) until April 2005. The disadvantage is that the only thing I can do with that 17% is to put it in my 401(k). I'm planning to buy a new car sometime this year, and I'd much rather spend it on that — but the nanny state won't let me! It has the gall to presume to know what's best for me. I guarantee I have much better information about my own financial situation and plans than the government does!

After outright seizing a quarter of my paycheck, the government exerts its control over the next 17%, too. Whatever happened to my money being my money?

January 18, 2004

Where's the Cap'n?

You may have noticed that I haven't been posting very much recently. In fact it's probably the most depressing part of your day. You open your web browser, which dutifully and automatically loads Cap'n Arbyte's (it is your homepage, after all) and you stare, slack-jawed and betrayed, when you recognize that nothing has changed.

I'm sorry.

I've been working a lot.

But it's lots of fun. :)

Things probably won't be back to normal until next weekend. Until then I think I'll go into "linker" mode and just point to a few random things I find that I think are worth reading. Let's start with these:

Greenpeace co-founder Dr. Patrick Moore has announced that "The environmental movement I helped found has lost its objectivity, morality and humanity."

Curious about Bush's immigration policy? Citizen Smash rounds up the blogosphere reaction. And there's a lot of it

SDB has been on a roll lately; one of his recent articles is a strong reminder of why we're at war and what it's all about.

January 15, 2004

Greenspan at the Bundesbank

On January 13th, Alan Greenspan spoke at the Bundesbank. The first part of his address was fairly technical and discussed international financial markets. The final third of his speech included this remarkable section (transcript my own, emphasis added):

Clearly ideas shape societies and economies. Indeed I have maintained over the years that the most profoundly important debate between conflicting theories of optimum economic organization during the 20th century were settled, presumably definitively, here, more than a decade ago, in the aftermath of the dismantling of the Berlin Wall.

Aside from the Soviet Union itself, the economies of the Soviet Bloc had been in the pre-war period similar in many relevant respects to the market-based economies of the West. Over the first four decades of post-war Europe, both types of economies developed side-by-side with limited interaction.

It was as close to a controlled experiment in the viability of economic systems as could ever be implemented. The results evident with the dismantling of the Wall were unequivocally in favor of market economies. The consequences were far-reaching. The long-standing debate between the virtues of economies organized around free markets and those governed by centrally-planned socialism, one must assume, is essentially at an end.

To be sure, a few still support an old-fashioned socialism, but for the vast majority of previous adherents, it's now a highly diluted socialism, an amalgam of social equity and market efficiency, often called market socialism. The verdict on rigid central planning has been rendered and it is generally appreciated to have been unqualifiedly negative. There was no eulogy for central planning. It just ceased to be mentioned, and a large majority of developing nations quietly shifted from socialism to more market-oriented economies.

Europe has accepted market capitalism in large part as the most effective means for creating material affluence. It does so, however, with residual misgivings. The differences between the United States and continental Europe were captured most clearly for me in a soliloquy attributed to a very prominent European leader several years ago. He asked, "What is the market? It is the law of the jungle, the law of nature. And what is civilization? It is the struggle against nature."

While acknowledging the ability of competition to promote growth, many such observers nonetheless remain concerned that economic actors, to achieve that growth, are required to behave in a manner governed by the law of the jungle and are hence driven to an excess of materialism. In contrast to these skeptics, others, especially in the United States, believe the gains in material wealth resulting from market-driven outcomes facilitate the pursuit of broader values. They support a system based on voluntary choice in a free marketplace. The crux of the largely laissez-faire argument is that because unencumbered competitive markets reflect the value preferences of consumers, the resulting price signals direct a nation's savings into those capital assets that maximize the production of goods and services most valued by consumers.

Incomes earned from that production are determined for the most part by how successfully the participants in an economy contribute to the welfare of consumers, the presumed purpose of a society's economy.

This portion of his speech reminded me a great deal of the youthful Alan Greenspan who blasted the antitrust laws and fiercely supported the gold standard. Perhaps a little of that fire is still within him.

UPDATE 2004-01-18 06:53:29 UTC: The complete transcript of Greenspan's speech is online now.

January 12, 2004

My Reply to Roberts

I've written a direct reply to Paul Craig Roberts on the issue of free trade.

So much for my prediction that this wouldn't be a very productive blogging week. Given my record, I shall endeavor to make pessimistic predictions more often. :)

January 09, 2004

George Reisman Responds to Roberts


Dr. George Reisman, my favorite living economist, voice of clarity and reason, has replied to Schumer and Roberts on the Mises website:

Thus, here we are with American software engineers and American radiologists being replaced by much lower-paid Asian software engineers and radiologists. What causes them to be replaced is that they are unwilling to accept wages as low as their Asian competitors. The fact that they are replaced rather than accept the wage cuts needed to be competitive implies that they choose to move to alternative lines of work, which, while offering less money than the jobs they have lost, do not require reductions as severe as those needed to be competitive in the jobs now filled by Asians. The former software engineers take jobs that offer $100,000 or perhaps just $50,000 instead of the $150,000 that they had been earning. The former radiologists leave radiology and enter other branches of medicine at lower, but still considerable pay, in the process increasing the supply of physicians and reducing their rates in those other lines — a path to more affordable medical care, it would seem.

To understand what is present, all one need do is to generalize the situation. Imagine that in case after case Americans are confronted with lower-cost competitors, which causes a decline in their money incomes. But the decline in their money incomes is always less than the reduction in costs achieved by the competitors. Now all one need do is realize that the cost reductions achieved by the competitors show up as price reductions in the things Americans buy. And those price reductions, founded on cost reductions greater than the decline in American incomes, will also be greater than the decline in American incomes. In other words, American real incomes, as opposed to their nominal incomes, rise. Ricardo's principles both of comparative advantage and the distinction between value and riches are at work.

That's it, that's the aggregate-level argument in just two paragraphs! In his article Reisman does not address why even the disaffected software engineers and radiologists should support this process, or why they'll definitely be able to find other jobs, but I'm happy to provide backup on those points.

Reisman has a marvelous talent for writing. There's nothing dismal in this science when he's writing about it:

The economic development of China, India, and all other areas of the present-day third world, their full integration into a system of global division of labor and their attainment of "first-world" status, is earnestly to be desired not only by the populations of those countries, whose standards of living would obviously be enormously increased, but no less by the populations of today's first-world countries, whose standards of living would also be very greatly increased. What would be achieved, along with the benefits of comparative advantage, is the maximum possible economies of scale in every branch of production, given the world's population. Above all, every branch of science, technology, invention, and business innovation would be pursued by a far larger number of highly intelligent and motivated individuals than is now the case. The result must be far more rapid economic progress across the entire globe, raising the living standards of all far above the living standards of today's most advanced countries.

Reisman's gargantuan book Capitalism is available as a free download on his website, as are many of Ludwig von Mises's books along with other important works.

January 08, 2004

Roberts on Globalization -- Again!

Via an article on EconLog I learned that Paul Craig Roberts has published another article arguing against globalization. This new article has absolutely no new content, it's just a restatement of the position he's held for some time:

Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive: in today's case, to a relatively few countries with abundant cheap labor. In this situation, there are no longer shared gains - some countries win and others lose. [source]

Arnold Kling dismisses him:

This is absolutely false. Ricardian comparative advantage can exist within a country. It can exist with mobile factors of production. [source]

My apologies to Arnold, but — not so fast!

Roberts isn't claiming that comparative advantage cannot exist within a country, or is incompatible with mobile factors of production. That's a straw man. He's only claiming that factor mobility can impair comparative advantage and the resulting decline in trade can actually harm one of the ex-traders. Roberts is right about that.

Last October I published an essay arguing that globalization is good that includes a simple numeric example demonstrating the effect Roberts is claiming. (Read from the beginning, through the section headed Factor Mobility. While you're at it, read the whole thing. It's good.)

What Roberts is wrong about is his view that national trade policy should be structured to impede the free movement of factors of production. My position is that factor mobility should nevertheless be unimpeded.

Mobile factors of production tend to go to those places where they are the most productive, where they produce the most output at the least cost. For the government to impede this process is to forcibly prevent this efficiency, holding down total production and making the world poorer than it otherwise would have been. Stated another way, it is to forcibly prevent individuals from acting as peaceful profit-maximizers.

The moral reason to support free trade, including factor mobility, is that it avoids the initiation of physical force. The economic reason, subordinate to the moral one, is that free trade (which implicitly means larger markets) increases the degree of specialization in the economy which enhances both productivity and comparative advantage and therefore trade. Factor mobility raises the basic level of production, and then increased specialization causes growth from that already higher level.

(That specialization creates comparative advantage and trade is clear — witness the existence of industry "centers" such as Silicon Valley, instead of diffuse employment across the whole country. I discuss this in more detail in my pro-globalization essay.)

Unemployment is caused by excessive wage rates, which may be caused by (as Arnold mentions) fiscal and monetary policy. Globalization may cause rebalancing of employment among the industries, but not unemployment on net, because overproduction is impossible — there is always demand for labor. I discuss that matter at great length in my pro-globalization essay.

I have no sympathy for Roberts's example American software engineers making $150K/yr being replaced by Indian engineers making $20K/yr. What that example says to me is that the American engineers had been grossly overpaid. Their employer should be free to accept the competing bids of the Indian engineers on precisely the same grounds that you as an individual consumer should be allowed to shop around for the lowest prices on the things you buy. The fact that the American engineers grew accustomed to a $150K/yr lifestyle does not entitle them to it. However, such a lavish income should make it financially comfortable for them to acquire new skills and apply for a new job. In my pro-globalization essay essay I argue why even the people directly harmed by the original factor mobility, such as these engineers, should support globalization.

Have you followed the links to that essay yet? Globalization is good! I don't know how many more times or how many more ways I can say it.

UPDATE 2004-01-08 02:34:30 UTC: It appears that the Schumer/Roberts Op-Ed has generated a lot of blogosphere response. (I'm not the only one who found it to be Shocking! Outrageous!) Truck and Barter has a lot of links.

January 07, 2004

Mood and Mental Stimulation

I've been lethargic for the past few days. I haven't been in a productive mood despite having ample leisure time. Truth be told, I haven't felt like blogging very much. There's no need to worry — I understand this mood.

I've known since I was a college student that my attitude is strongly impacted by my environment. I need a lot of mental stimulation in order to stay happy. While I was working over the past few weeks, I had a tremendous burst of productivity because everyone else was on vacation and therefore couldn't bug me about anything. No interruptions! It was wonderful. I was positively giddy at work, and there are a few witnesses who can vouch for that.

So, what happened? I finished my task and for the first time in what seems like months, there's nothing urgent that requires my attention. For a week or two, I have the luxury of working on things that don't have looming deadlines. It's almost leisurely… but I crave excitement. This situation hurts my work productivity a little, but it hurts my mood and my leisure productivity a lot. I get lethargic and sometimes depressed, and then don't spend my leisure time on worthwhile things like blogging.

My prediction for the next week or so is that I won't be blogging very much, precisely because work will be less stressful. After this short lull, work will return to typically stressful conditions which should be measurable by a concomitant increase in blogging activity.

I frequently wonder if this personality quirk means that retirement will be very difficult for me. My hope is that by the time I approach retirement age medical technology will have advanced so far that I won't have any physical reason to retire. I'll just keep working. :)

January 06, 2004

A Mountain of Debt

This is depressing:

What's surprising about the nation's debt is that it has continued to rise despite record numbers of mortgage refinancing from 2001 to 2003, many of them yielding cash that consumers have used to pay down credit card balances.

Consumer bankruptcies have exceeded 1 million a year since 1996, hitting a record of 1.54 million in 2002. Bankruptcy filings totaled 1.25 million during the first nine months of 2003 and could set a new record when full-year tabulations are done by the Washington-based American Bankruptcy Institute. [source]

I know it's perilous to make financial predictions, but let me have just a little bit of peril.

Please remove your AFDB for a moment, to enhance reception.

The end of 30-year treasury bond issuance, the willingness of the Fed to hold interest rates at 45-year lows, Fed Governor Bernanke's startling way of talking down of the dollar, the enormous deficit spending of the Bush administration, and same administration's in-words-only support of a strong dollar are all related.

The plan <furtive glance> is to take advantage of the US dollar's role as the world's reserve currency to go massively into debt at low interest rates and then to steeply devalue the dollar in order to to repay those debts in a depreciated currency. It's a gargantuan swindle at the expense of foreign holders of dollars. <evil cackle> Domestic holders of dollars will be stung by the resulting inflation, but have (unwittingly) hit upon the winning strategy — by also going into debt as individuals, the increased quantity of money will make their debts easier to repay in real terms.

The thing that doesn't fit is that all the common measures of money supply (M1, M2, M3, and MZM) began to fall — which is bizarre even in the absence of a conspiracy theory — in Q3'03. Why apply the brakes? Or have people simply stopped borrowing? (Did they figure out the swindle?)

Maybe someone with experience looking at monetary figures would comment, and reassure me that the currency manipulation going on today isn't as nakedly wicked as it seems? :)

UPDATE 2004-01-06 07:19:06 UTC: There are black helicopters circling my house right now. I'm hoping they're here for a Friedmanesque money drop, but if you don't hear from me for a while, it must have been for something else.

January 04, 2004

Pricing and the Myth of the Single Market Price

(Part of a series of articles on pricing.)

Last time I discussed how the factor of time interacts with large-scale production and prevents prices from falling to the seller's marginal utility, and that the time preference of buyers is in harmony with the seller's desire to maximize revenue.

It is an obvious fact, but worthy of emphasis, that prices are set by people. There are different ways to set a price — through an auction, by haggling, simply announcing a price, etc. — but in all cases prices are set and changed by people making judgments based on the information they have. Information about present conditions and predictions about future conditions are both extremely important.

At this point it is necessary to dispel one of the unfortunately widespread misconceptions about prices: The idea that there is, or should be, a single market price for all equivalent units of a good or service. Single market prices are mythical, they exist only by an arbitrarily narrow consideration of the scope of a market. I do not mean to deny the pedagogical usefulness of the idea, which clearly has enormous value, but I do object to the widespread omission of reminders that it is a simplifying assumption that seldom holds in the real world.

Think about the last time you bought even a very homogeneous good like gasoline. You've surely observed that different stations charge different prices for the same grade of gasoline — even stations on the same road only a few blocks apart, or merely across the street. Their prices are sure to be similar, but seldom identical. There is no single market price.

(Indeed, if many different gasoline stations charged identical prices, conspiracy-minded people would accuse them of collusion. If a single market price indicates "collusion", while the lack of one indicates a failure of markets to be "efficient", then all possible outcomes are unacceptable. When no outcome is acceptable, it is your theory — not reality — that is wrong.)

Financial markets are another excellent example. The price of a stock changes continuously during the day, and the changes are extremely rapid. There is no price stability. Ten transactions for stock in the same company could occur within the span of one minute, each at a different price. These prices are all most certainly market prices, but it is utter nonsense to describe any of them as the market price. There is no single market price.

Transportation costs create another example to chase away the illusion of a single market price. Identical goods are often more expensive in Alaska and Hawaii than in the continental United States, because the cost of transportation affects the final price.

Defenders of the single-market-price religion would counter that Alaska and Hawaii shouldn't be considered part of the same market as the continental United States. They would also claim that stock prices are stable over a suitably small interval of time, and that each gasoline station constitutes its own market. (Think I'm exaggerating? Last year the FTC launched an antitrust case over the super-premium ice cream market.) These excuses are nothing more than deliberate myopia, an arbitrary narrowness in considering what constitutes a market, providing no value beyond putting some lipstick on the single-market-price pig.

The Alaska/Hawaii case does have a veneer of credibility, so I do have some sympathy for it, but ultimately it is arbitrary as well. If location is a factor in determining what a market is, we're on a slippery slope. Even after dropping Alaska and Hawaii, why consider the entire continental U.S. the same market? Why not divide also at the Mississippi river, and again at the Mason-Dixon line? Why not along the borders of every state? Every county? Every road? Then we reach the conclusion that every gasoline station is a separate market, the ridiculousness of which has already been mentioned.

Reality does not consist of discrete markets. Substitutes and alternatives are pervasive on every scale.

I hope I have succeeded in overcoming the educational/institutional bias toward single market prices. In the next installment I will discuss why a single market price is undesirable in some circumstances.

The Spirit has Landed

Looks like the Spirit is alive and talking back to us from the surface of Mars. Great work, guys! Watch JPL for updates.

January 02, 2004

Resolve to Save Money

One item that will be — or should be — on most peoples' lists of New Year's Resolutions is: save more money. It may be worded in other ways, like "get out of debt" or "pay off my credit cards" or "live within my means", but the idea is widespread. This is why:

Debt Service Payments as % of Disposable Income

That graph has changed quite a bit since the last time I used it. I don't know what's responsible for the differences. Did economagic change the way they're calculating this, or change which series they're using for the underlying data? If you know what happened, I'd very much like to hear.

Using economagic's 09/2003 figures for consumer credit and population, the average amount of non-mortgage debt per person in the United States is $6745.40. Debt is easy and popular to get into, but it's also extremely expensive.

I have a very old-fashioned attitude toward purchasing: If I can't pay for something with money I've already saved, I don't buy it. It's only reasonable to take out a loan for extremely large purchases like a home or car.

I experienced something of a culture shock when I was shopping online for a new laptop a few months ago. When I was customizing components, the price differences were given in full dollar amounts and also by how much they would affect the monthly payment. Monthly payment!? For a computer? Who would pay for a computer on an installment plan? I guess most people don't think that's weird. They must not understand how expensive credit really is.

Let's say you have a $5000 credit card balance at 10%, but your budget is very tight so you only pay the minimum. Unfortunately, little surprises pop up once in a while and you don't have any savings, so you have to put those on the credit card. You're not making any progress paying off the balance, but at least you're not sliding further into debt. If this situation persists for 10 years, you'll have paid $5000 just in interest. At the end of the decade you'll be financially exactly where you started: $5000 in debt with no savings!

If you had $5000 in savings to begin with, you could have paid off your credit card balance immediately. The payments you would have made toward your credit card bill go instead toward replenishing your savings. At the end of the decade you'd have no debt and $5000 in savings. You started with a $5000 debt and $5000 in savings, so you've improved your situation by $5000 over the decade.

The difference between these scenarios is the existence of prior savings. Yes, building up savings means deferring consumption. You must be willing to buy things only when you can truly afford them, instead of as soon as you desire them. It means having a lower standard of living for a while. But in the long run, a commitment to building up savings is one of the best financial attitudes you can have. It's the difference between earning interest and paying interest throughout your life.

When I graduated from college, I lived very cheaply. I didn't even consider buying a new car — my existing one was almost 10 years old, and bought used, but it was still running fine and the insurance was cheap. I didn't buy a new computer, I just kept the one I had in college. I stayed in a relatively cheap apartment. I didn't get a cell phone or subscribe to cable or satellite TV. I rented some low-quality furniture. I went on few vacations and they never cost more than $500. I lived well below my means and built up savings. I did not contribute to any retirement plans because I needed to save cash I could actually use.

Eventually, my landlord decided to raise my rent. I didn't like that idea at all, and responded by moving out and buying a house. This move was only possible because I had made the deliberate decision to live far below my means to save as much money as possible. I had barely enough to cover the down payment and buy furniture, but I was able to do it without carrying a credit card balance.

With the home purchase behind me, I've relaxed my spending somewhat and improved my standard of living, but I'm still saving a lot. What for? I plan to buy a new car in the next year or so, and to start a family within the next several years. Cars and kids are expensive. I plan to afford these things out of savings instead of on credit.

While I'm on the subject of savings, I have to criticize government-sponsored retirement savings plans like IRAs and 401ks. They're very badly structured. The low contribution limits encourage people to save for their retirement steadily during their lives, instead of concentrating retirement savings during the years immediately prior to retirement. That's wrong, it's not how people would choose to save in the absence of government meddling.

People would prefer to save for a house when they're young, save for their children's education as they get older, and save for retirement after their children have become independent. People would naturally save throughout their lives, but the goal of that savings would change over time. By encouraging retirement savings during periods when people would ordinarily save for other purposes, that money and the investment earnings it generates are unavailable for those other purposes. This makes people more likely to go into debt while they're younger to pay for them. It's ridiculous to be in debt and pay interest when you have substantial (retirement) savings — but that's what the government encourages.

January 01, 2004

Oh No It's Snow!

Batten down the hatches, me hearties, and check out the ultra-alarmist text in bold from today's weather advisory:







Like, ohmigod, we're all gonna die! Aieeee!!!

(Hat-tip to Dave for alerting me to this important weather advisory.)

Tiny Island