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In The Pipeline
The Belmont Club rounds up some news stories about what's wrong with the United Nations.
I am outraged at the lack of outrage against the UN.
The United Nations ought to be totally dismantled. It is corrupt from the bottom through the highest levels. Atrocities far worse than Abu Ghraib are committed regularly under its banner. Shut it down.
Let's not forget the role of Kofi Annan's son in this mess.
I could dismiss this entire comment by simply identifying the fallacy — tu quoque — but it's worthwhile to respond in detail.
This is exactly what I'm outraged about. The whole e-mail is an attempt to establish moral equivalence between something I'm mad about and something he's mad about. There can be no moral equivalence here:
We've got human rights hypocrisy, hundreds of thousands of deaths, tens of billions of dollars stolen, bribery, obstruction, rape and pedophelia… versus what, exactly, Tim? Aren't you moved by any of this? Aren't you angry at the UN?
Even if every sleazy allegation ever directed at Halliburton is true, aren't the plain facts about the United Nations even worse? Come on, it's not even close; they're orders of magnitude apart.
The comparison doesn't matter anyway. I'm not a relativist; I do not need to compare the UN against something else in order to condemn it. The alleged evils of Halliburton or the US military or government are quite simply irrelevant to the judging of the United Nations. I condemn it on its own merits — or in this case, lack thereof.
P.S., it's not a good idea to goad a libertarian into a debate about the dissolution of the US government. I'd like to get rid of so much of it that only the Founding Fathers would recognize what would remain; we'll leave it at that.
But wait, there's more!
Words fail me. I can only describe that with profanity. Read the article.
More Government Spending!
President Bush has signed a bill increasing the public debt limit from $7.384 trillion to $8.184 trillion. The extra $800 billion should last for about two weeks years.
The vote in the House split exactly on party lines. (The vote in the Senate isn't summarized so nicely and I don't care to do it myself.) Of course, this doesn't make me believe for an instant that Democrats are the paragons of fiscal responsibility. (It's all posturing for the next election so they can make accusations of fiscal irresponsibility. There can be no doubt about the passage of a bill like this; Democrats would have voted for it if there wasn't a Republican majority.) To the extent Democrats want to balance the budget, they want to raise taxes, not cut spending. Republicans are in no mood for spending cuts either, but to their credit at least they want to lower taxes.
That sounds odd, doesn't it? It's as if I'm less bothered by deficits than by taxes. Of course I'd be happiest with a budget that was balanced through spending cuts, but since that's even less likely than the U.N. coming clean about oil-for-food, I'll try to make do in a second-best world. And in that world, I do prefer deficits to taxes. Why?
The lower my taxes are today, the more I can afford to deposit in sundry tax-advantaged retirement accounts. As every piece of financial advice ever written says, you can easily end up with more money through small but earlier contributions vs. large but later contributions.
I'm happy to sock away a bunch of marginal dollars in retirement accounts, but then there's a hard bend in my dollar utility curve. If there's no tax advantage to waiting, I want to hold my dollars today. Do I worry about eventual higher taxes to pay for current deficits? Sure, a little. But that's a long time in the future, and it would have to pass the political barrier of a large voting demographic retiring.
I also subscribe to the belief that my own investments will yield higher than the rate on government debt, so I'd rather invest now and pay taxes later. It does bother me that inflation causes outsize capital gains, in effect subjecting my principal to taxation, but that's not a huge effect unless inflation takes off.
A more speculative reason to prefer deficits to taxes is that large deficit numbers may dissuade some politicians from embarking on new or increased spending programs. In practice, this doesn't appear to work very well.
Spreading the Bloggy Love
I just heard from an old college buddy who has started blogging. There's not much on Michael Riley's blog just yet, but he says he's planning to write a lot about "the proper Christian view on government", so if you've been scratching your head over the election and wondering what the deeply religious are thinking, his blog might be one to watch.
Michael and I have some significant philosophical differences — that's why I was always invited to discussion groups, to keep things interesting — but he does like capitalism so he's clearly got some good in him. ;)
Michael, have fun blogging, and enjoy the Arbytelanch. Yeah, both readers. (Actually I don't have any counters, server stats, or referrer logs so I have absolutely no idea how many readers I have.)
I went to the symphony Saturday night, primarily to hear the performance of Rachmaninoff's Rhapsody on a Theme of Paganini. Long-time readers may remember I'm learning to play the piano, and have been learning to play the 18th Variation from that piece.
Hearing it performed has motivated me to finish learning it. I hadn't been in a hurry — in fact I've been downright lazy — until now. But having spent a lot of time at it recently, I'm struck by a few things:
It's dramatically easier for me to learn my right hand than my left. (I am right-handed.) It takes me about twice as long to learn anything on the left hand.
It's very hard to integrate both hands. Playing both is, for some reason, very different from playing either alone. The whole is not the sum of the parts. After learning each independently I have to learn almost from scratch how to play them together.
I can't read. I'm getting much better at glancing at music and knowing which keys to play, but my speed is nowhere near real-time. And I discovered this evening that I'd been making a few mistakes. There are a couple cases of triplets on one hand not lining up exactly with notes on ther other hand. I had been playing things as if they were simultaneous, when they're supposed to be very slightly apart. That's going to a trick to re-learn.
Care for Chronic Conditions
Apropos my health insurance essay, I was asked to say more about medical care for people with chronic conditions.
To the extent insurance companies are successful at basing premiums on risk, in contrast to other potential ways of grouping such as by employer or by age (which is only one of many risk factors), people with chronic conditions will not be insured for those conditions.
There will be no market for insurance against an risk with probability 1. Premiums have to be higher than claims, and if everyone's making claims, the cost of administering the insurance is simply unnecessary. It's cheaper to pay out-of-pocket. It may be reasonable to obtain insurance that specifically excludes the chronic condition, but covers other risks. However, that isn't what the query is really about.
The real question is: How will those with chronic conditions pay for their medical care, if not through insurance?
The answer is: If they can't afford it themselves, they'll rely on charity.
That's terrible, you may think. Well, how are the chronically ill paying for health care today?
If through insurance, it's only due to the fact that other people are overpaying relative to their risk, subsidizing the chronically ill. That isn't fair to the healthy. It's particularly unfair to the poor, who might have to go without insurance due to the cost of the subsidy but who could have afforded insurance otherwise. (Which "victim group" is more important, the poor or the sick? Justify your answer to those in the opposite group.)
If through a government program, the chronically ill are already relying on "charity", although it would be better characterized as legalized theft. Voluntary charity is clearly morally superior to theft. Opposition to it must be based not on morality, but on on the fear that charities wouldn't raise enough money. How much money are we talking about? In 2003, the government spent $435 billion on Medicare and Medicaid payments. With roughly 215 million adults (an estimate for the number of taxpayers), that's over $2000 each. A lot of money. But whatever the amount you actually pay, think about the following questions.
If the government programs were ended and your taxes were correspondingly cut (say, by $2000), would you give it all to charity? No, you prefer the system as it is? You'd rather force yourself to give to charity rather than giving voluntarily? Why — because you're angry at people who would take the tax cut and not give to charity, when you'd do precisely the same thing? Pot. Kettle. Black.
Hypocrisy aside, I believe the criticism is valid — I don't think private charity would raise $435 billion annually. I also don't think it would need to. Because these government programs are viewed as an entitlement, rather than as charity or (more honestly) as theft, there's no incentive to limit consumption. A recipient of charity is modest, and the charity itself would be interested in seeing its money well-spent, not giving a virtual blank check for care. I do not know how much money this would save, but I am certain it would save some.
Voluntary charity is ethical and would save money. The obstacle is fear that despite the savings, it wouldn't raise enough money to pay for the level of care people want to enjoy. I suggest that despite this, it is the right direction to go. Someone has to say it: Health care is not a right.
I ♥ those crazy Japanese.
First they sell us the Pop-Up Pirate game, a favorite around the office. (Engineers are like children, only larger.)
Then my co-worker Dave goes to Japan and takes this shocking (if under-lit) photograph of a Pop-Up Pirate arcade game:
After much searching, I found a better picture of the game here, in a photodiary of someone's trip to Japan. (It's at the very bottom of the page.) "How cool is that?" Very cool. Arrrresome.
Disturbingly, I also found a story (which I'll not link to) of Pop-Up Pirate turned into a drinking game. Sounds fun, but with my history it could only end badly. Ah, who'm I kidding? Who wants to join me?
The Japanese marketing juggernaut has also created the Hello Kitty® Toaster, a toaster that sears the image of the cutesy cat onto every single piece of toast you make! Now available in the United States, I first saw one on the shelves a few weeks ago. I was dumbstruck, and stood there for a while, amazed.
Health Insurance Essay
I've finally finished my health insurance essay.
Enjoy. And feel free to write me about it. I'd much rather get insulting e-mail about economics than about any other <cough> topic.
Insurance appears to be a strong topic in the blogosphere these days. Jane says this is interesting, which links to this and this. They all leave me pretty uninspired. If that's what's going around on the upper echelon of the blogosphere, well… Carnival, here I come!
Light blogging for a couple days. I'm doing lots of writing at work this week, and it's very important, so I don't want to risk writing a lot at home also and getting temporarily burned out. My piece on insurance is getting put on the back burner again. But I had a pretty good run over the weekend, eh arrr?
Notes to Self:
It's strange that something that affects so few people gets a response, while timeless, universal, profound economic truths get nothing.
Here's a Reuters article accusing Philip Morris of hiding its research into the health effects of smoking. The company says these are old, recycled charges. What's really interesting is what the researchers from the medical journal had to say.
(Which journal? The Lancet, the same journal whose claim that 100,000 died as a result of the invasion of Iraq has been thoroughly debunked.)
This time they've destroyed their credibility all by themselves. I don't have to do any real work, all I have to do is point out the obvious:
Second-hand smoke is even more harmful than smoking directly? Since every smoker is also a second-hand smoker by virtue of breathing the air near themselves, am I to believe that the enormous health differences between smokers and second-hand smokers are a result of the smaller harm of direct smoking, while the tiny health differences between nonsmokers and second-hand smokers are due to the large harm of second-hand smoking?
These people take themselves seriously. The mind reels.
With President Bush beating the "Ownership Society" drums, the blogosphere has been abuzz with talk about Social Security reform, and particularly with private accounts. These would work by taking some small portion of the current payroll taxes and channeling them into individual accounts. I want to discuss two aspects of this basic scheme: (1) it is forced savings, and (2) the economic effect.
Start here for links to thinkers from many different ideological backgrounds.
I don't like forced savings. The government doesn't know when or how much I should save. But I grant that it's an obvious partial solution to the moral hazard created by a safety net. What's interesting here is that the "forced" part already exists, in the form of payroll taxes. The argument isn't about introducing force, but about changing the force that's already there.
I'm already a voracious saver — one-third of my gross income — so my pattern of savings won't be much affected by the proposed changes to Social Security. I hope this distance makes me more objective.
Today, I pay my payroll taxes and I never see the money again. I don't expect to get anything back from the Social Security system when I retire. If it exists at all by then, it will be means-tested, and I will be too wealthy to qualify. Yes, it will punish everyone who saved responsibly, and will be a windfall for the irresponsible. I'll pay into it for my entire working life and never get a penny back. People who favor Social Security owe me an explanation for this blatant robbery.
Forced savings into an individually owned account would be an improvement over the existing system because I would then get some of my own money back, instead of none of it. That's all there is to it. (The "transition costs" argument is bogus; there's no net cost at all, but the government would have to start borrowing sooner rather than later.)
I would rather not be forced to save. I would love to opt out of Social Security, and so would lots of other people my age. I wonder if our representatives in Congress are listening…
A federalist direction would also be welcome. Why should Social Security be a national program, instead of allowing different states to experiment with different systems? If a safety net is politically necessary, let's at least allow different kinds to be tried.
I do not promote the argument that Social Security privatization is desirable because of the higher rate of return in the stock market versus government bonds. Don Lloyd exposes some of what's wrong with that argument (though I would quibble a bit with his examples).
So long as a Social Security surplus exists, investment in the stock market could be a benefit. Government spending is consumption spending, and consumption spending doesn't grow the economy. If the surplus were invested in the capital markets it would increase productive spending, either by existing or new businesses, and this would grow the economy.
It's important to see that the benefit here is due to a reduction of overall government spending. If the government would respond to the unavailability of some of the former surplus by borrowing more instead of spending less, it would be a wash. The opportunity for benefit also disappears when Social Security goes into deficit, because then the government would surely borrow.
Would the infusion of funds into the stock market cause a speculative bubble or a business cycle? No, and no. The capital market infusion from private accounts would be counteracted by increased government borrowing. There would be no net economic effect. Only in the unlikely case of a reduction in overall government spending would there be one, and it would be a benefit.
My greatest fear in private accounts would be the limitations imposed by the government on what investment vehicles are acceptable. If the options were too narrow, that could create a bubble, but I think that is unlikely. More serious would be the enormous voting power of the managers of the funds approved for private accounts. For this reason it is very important to have many options, and to be able to invest outside of mutual funds. (I expect to be disappointed on this matter.)
Somewhat relatedly, it's worth stating my profound opposition to any Social Security reform that would make government the owner of stocks. The government absolutely must not have voting power over shares. That way lies fascism, and CalPERS has already started throwing its weight around.
That Explains a Lot
This is my co-worker Zubin. Everyone wears a costume for Halloween, except Zubin, who removed his to reveal his true self.
Let's all be supportive.
More Evil Teasing
One good turn deserves another.
It was Tim's birthday over last weekend. That's a good excuse to pull a prank. (We don't need much.) There was even some precedent for this — on Kim's birthday, her team pulled a prank on her, grilling her mercilessly during a meeting before bringing out the cake.
Tim participated in that, so it was especially satisfying to roast him in the same way. Several people from his team and from my team organized a fake meeting to discuss some alleged problems we had just discovered, that would require work in some of the tools he owns.
I regret I can't go into details about the nonsense we fed him to make him worried. I can't talk about our future products. But we did an extremely good job making up things that sounded vaguely threatening, and we assigned him to investigate a bunch of things. Several times we almost lost control and started laughing while telling him all the stuff he'd have to worry about.
It helped that he was out sick the day before we did this. He thought we had already discussed it, so that he was the only one who didn't understand the details of what was wrong. If he had probed us for more information, the farce would have been exposed.
He bought it. There was only one thing he challenged, but I countered by changing the subject. We led him on for a half-hour, making stuff up on the fly, squirming in the effort of making him squirm. It was tremendously fun.
Nobody thought it would take a half-hour. It took so long because Tim's manager — who tolerated this, if not quite sanctioned it — was stuck in another meeting. Kim also missed most of the banter because she was responsible for bringing the cake and manager to the conference room. But eventually they arrived, we sang Happy Birthday, and patted ourselves on the back for an evil deed well done.
I thank my co-conspirators for their participation.
Why Nice Guys Finish Last
I recently made an important observation about relationships. I apologize in advance for the sweeping generalizations, but in this explanation I'm going for clarity through economy of words. Of course this doesn't apply to everyone, or apply all the time, but I do believe it's a real factor in relationships.
First, the inflammatory and hyperbolic conclusion: Nice guys finish last because they listen to women. Women drive away nice guys, despite their oft-stated and even honestly believed preference for Nice Guys over Bad Boys.
I'll clarify and illustrate this principle by sharing some personal experiences. I'll use the names Katie and Kyle, and write in the present tense, though the experiences I drew from span several relationships.
Katie is likable and popular. She's very busy, with people always inviting her to do things. Kyle meets her and is smitten. He joins the thrall of people inviting her to do things. This is difficult for Katie. She doesn't like saying "no" to people, she doesn't want to disappoint them. She's very conscious about making people sad, and tries to mitigate this by saying "maybe" to most invitations. This way she can avoid the disappointment of refusal, and can avoid the higher expectations of commitment. (This strategy is unkind and causes substantial anguish, but that's not the topic I want to pursue here.)
This is a competitive situation. The most persistent will succeed and will win Katie's time, because eventually she will say yes to a few things. For Kyle this is quite troublesome, even if the others are not suitors but merely friends, because he desires a disproportionately large share of her time. Katie, it must be mentioned, has no particular desire for the trappings of a relationship. She's already busy and popular and having a great time… and a relationship would mean saying "no" to everyone else. "No" isn't comfortable.
Kyle is a Nice Guy. An over-the-top Nice Guy. So much so that Katie is uncomfortable letting Kyle do Nice Guy Things because she's not reciprocating, and feels as if she's taking advantage of him, and doesn't want to encourage him. None of this discourages Kyle in the slightest, because he is pig-headed … a glutton for punishment … well, a guy … determined and confident.
This Nice Guyness makes Kyle aware of Katie's distress and he backs off a little, as a nice guy should. The competition swoops in, and many things that he wanted to do with Katie, others do with Katie. Kyle is dissatisfied and suggests he ought to be more aggressive.
Katie says she doesn't want Kyle to be more aggressive. She doesn't want the pressure. She doesn't want to have to say "no". In other words, Katie has asked Kyle to drop out of the competition.
What is the long-term result? If Kyle acts like a Nice Guy, like a friend, he becomes a friend. One of many. Permanently. Eventually Katie will be interested in a relationship, but not with him. She'll discover an interest in a relationship sometime in the future when a more aggressive man, a Bad Boy, treats her like a woman instead of as a friend. And then it's too late for Kyle. He never knew when she became receptive. She probably didn't know when it happened, either — and even if she did, she wouldn't think of him, because he's a friend.
Katie has asked Kyle to forfeit the future chance of a relationship. She isn't aware she has done this. The nice guy she wants becomes a friend, and the bad boy she doesn't becomes a boyfriend.
Some women understand this process. A good friend of Katie's told Kyle to stop being so deferential and just do it. Treat her as if she's already yours, and she will become yours. It is easier to ask forgiveness than permission. Be a Bad Boy. This advice is very uncomfortable. Shouldn't the guy be working to discover Katie's desires rather than creating them himself? Wouldn't that be manipulative?
Would it make Katie uncomfortable? Absolutely. But she's going to be uncomfortable anyway — even if Kyle gives up, it's a very small impact to her total number of invitations. The question becomes an estimation. What is the weight of saying "no" to so many people against the weight of having the sort of relationship most women would envy?
In any real situation, the circumstances are complex and the decision is not simple. Setting that aside, however, I think the issues raised here are an important aspect in understanding why nice guys do so often finish last.
P.S. I'm not soliciting advice and I will not entertain speculation on the real-life referents of my examples.
Financial Public Service Announcement
It's Buried Treasure Day on the Cap'n's ship. Ye should be wantin' to bury some treasure in tax-advantaged accounts to be metaphorically givin' the heave-ho to the IRS.
(IOW: I've been fussing with my investments recently and would like to pass along some information.)
This is your reminder that the 401(k) contribution limit is increasing from $13000 (2004) to $14000 (2005). If you've been out to sea like the Cap'n, you may even be surprised to learn that 2004's limit is higher than 2003's and that as a result you weren't even funding to this year's maximum. There's still time to adjust your (ahem, my) payroll deduction to catch up.
The Roth IRA contribution limit is also increasing, from $3000 (2004) to $4000 (2005).
A more literal bit of buried treasure news is that gold prices recently reached 16-year highs. The increasingly precious metal has been an excellent investment over the past few years as the US$ has declined. That's a trend I expect to continue. (Though before you take my advice, realize it's worth what you paid for it.)
Two important pieces of Intel news. Intel doubled its dividend for the second time this year, bringing the yield to an underwhelming but no longer pathetic 1.40%. Intel also named Paul Otellini to succeed Craig Barrett as CEO. The first I regard as a good thing for shareholders, the second I decline to comment on.
What to Do with Arafat?
It's better this way, Loren — I wouldn't have had a picture.
The Failure of Campaign Finance Reform
Can we all agree that campaign finance reform was a failure? Bush and Kerry spent over $675 million in this election cycle, compared to total spending of only $343 million in 2000. That's right, spending doubled! And this doesn't include the spending from the many officially-unaffiliated but clearly partisan 527 groups. (I believe the phrase is "web of connections.")
No matter the restrictions, candidates have no trouble raising and spending money for their campaigns. People continue to do it outside the campaigns, too. Yet these restrictions are a clear infringement on the rights of politically-active individuals and associations of individuals.
Campaign finance reform didn't work. It's time to repeal McCain-Feingold and give everyone their freedom back.
Fallujah: What if Zarqawi Escapes?
The time has come to finally capture Fallujah.
With Muqtada al-Sadr long since neutralized, Abu Musab al-Zarqawi is the clear head of the remaining insurgency. What if he escapes, as Osama bin Laden did?
I don't think it matters much, just as I don't think bin Laden matters much anymore. How can I say that? Because we are safe unless opposed by some one or some group with both the intent and the capability to harm us.
The destruction of al Qaeda has been extremely successful. Three-quarters of its leadership has been captured or killed, its training camps shut down, and its finances and communication disrupted. That they did not attack us in an attempt to disrupt our election is, I think, the clearest evidence that al Qaeda is critically wounded. Imagine how much more powerful bin Laden's peek-a-boo video would have been had it followed even a modest but successful attack.
Yes, bin Laden still intends to harm us. But his capability to do so is seriously in question. To that extent, his relevance is diminished. (Even speaking of bin Laden personally is an incorrect focus, his organization is the proper unit to consider… and it's hurting.)
Likewise, if Zarqawi escapes during the reduction of Fallujah, he will have abandoned his supplies and organization. His major assets gone, he will be much less dangerous.
This is the root of why I've never been moved by arguments that we're only breeding more terrorists by interfering in the region. Most of them hated us already; their intentions haven't changed. By joining the insurgency they acquire some modest capabilities, true, but at the same time they become targets. Their reach does not extend to our lands, but our troops can certainly reach theirs. I am pleased that the region's most dangerous elements can be dealt with by our military in a setting where they are overwhelmingly outmatched.
It is a very cold calculation, but the more Jihadi seductees we can kill, the less influence they will wield in a democratic Iraq. We're targeting exactly those people who are the greatest threat to us and to the society we intend to establish there.
Most blogs have a little whining every once in a while, right?
I've had a fairly crummy couple of days, so I haven't felt like blogging. (Or writing anything at all.) Which is a shame, because I've got several items in the queue.
Woe is me, pearls / pork chop, yadda yadda. I should be back to normal in a few days. Until then I don't think I'll write much. And I'll be a little grouchy, so be gentle.
Evil Thought of the Week: It would be better if people could own individual stocks in their Health Savings Accounts. I'd love to buy tobacco stocks in mine.
Well done. You've strengthened your hold on both chambers of Congress and have re-elected President Bush. This time there can be no cries of "selected, not elected" — the margin was convincing. You do indeed have a mandate.
Don't blow it. Don't get cocky. I expect you to accomplish three things over the next four years:
You got walloped. Do you understand how that happened? It's your extremism. (Pot, kettle, I know… but follow along for a minute.) You didn't disown the moonbat fringe — the Bu$Hitler, (p)Resident-Select of AmeriKKKa, Halliburton!, Diebold!, ooooil!, lied/died!, Michael Moore crowd. That may have solidified the base, but it drove away moderates. Sure the youth voters may have enjoyed it, but their turnout as a proportion of total turnout was no higher than historically.
John Kerry could have gone on the record stating that he saw the same intelligence that Bush did, that he also believed Iraq was developing WMDs, and that he — no, all of us — were wrong, but not liars. That single stroke would have made moderates feel welcome. The fringe? They weren't going to vote for Bush anyway — ABB, remember?
With apologies to Bill Engvall, here's your sign.
The Democratic party is pandering to its extremists while hemorrhaging its moderates. That is exactly backward. You must be moderate and throw an occasional bone to the extremists. Understand this map. That's what happens. You lost even though you had the media in your pocket.
I probably would have voted for Joe Lieberman. I didn't like Bush, but the opposition wasn't serious about the War on Terrorism.
I'm very happy to be wrong about one thing. There wre no terrorist attacks to influence the election. Privately, I expected there to be. This is the clearest empirical proof that al Qaeda has been broken. They would have struck if they could have.
Sure, there was an Osama video, but it was met by the electorate with a collective yawn.
Oregon voter turnout was 80.65%, and Washington County turnout was 81.25%.
The race for State Representative (29th) deserves special mention even though it isn't my district, because I endorsed (L) Tom Cox.
He did not win, which is as expected. But he got 9.50% of the vote, the highest percentage of any third-party race in the state, spoiling the reelection of (R) Gallegos and throwing it to (D) Riley. This is what third party candidates are supposed to do. Local Republicans will think twice before nominating a tax-raiser again.