Tuesday, August 23, 2011

He doesn't seem that smart for a rich guy

Warren Buffet wrote an op ed in the NY Times last week (http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-super-rich.html?_r=1&smid=tw-nytimesbusiness&seid=auto) about raising taxes on the rich. I replied on my NABE group's LinkedIn wall with the following:

Mr. Buffet's statement however, is outrageous. His inductive reasoning that just because he has never seen it it must not exist is childlike at best, though methinks he sounds like a fool.

Mr. Buffet is not thinking like an economist, that is, thinking about the margins. Saying that a raise from 15% to 25% does nothing begs the question, what about 25 to 26? Then 26 to 27? The only logical conclusion one can reach based on Mr. Buffet's broad idea that taxes on potential gains have no effect on capital investment is that people would still invest if the tax rate was 100%! Surely Mr. Buffet himself would not invest if any gains he made were to be taken from him by the tax man. Again, one can think about the margins and work backwards from 100. A 99% tax rate would get more investment than a 100% rate, all else equal. 98% more still. And so on and so on down to 0, which would surely get the most investment.

People can genuinely debate how many individuals are affected by a change in any given level of taxation, but to take the ridiculous stance that raising and/or lowering taxes from any level does nothing is to defy common sense.

Thursday, August 4, 2011

Another troubling sign that the U.S. is moving towards a Police State


6 Police officers in Fullerton, CA beat a schizophrenic man to death after he fled during questioning. The officers are currently on paid administrative leave.

I am glad the people of Fullerton are trying to hold these officers accountable. A badge does not make you above the law. We want our police to serve and protect, not engage in mob behavior whenever a suspect upsets them. It seems like there is a story about police officers killing someone every month. Why do we keep letting this happen?

Tuesday, July 19, 2011

Obamacare will lowers costs? LOL, yeah right

From an article in the NY Times today (http://www.nytimes.com/2011/07/20/health/policy/20health.html?_r=1&hp), the Institute of Medicine has submitted a report to Kathleen Sebelius, the secretary of health and human services, about what services should be covered FREE of charge to ALL holders of health insurance. To quote from the article:

"The new health care law says insurers must cover “preventive health services” and cannot charge for them. Ms. Sebelius will decide on a minimum package of essential health benefits and her decision will not require further action by Congress."

So Ms. Sebelius gets to decide what everyone has to pay for when it comes to insurance. And the law is also making you buy insurance. So basically Ms. Sebelius gets to control your health insurance spending. Land of the free?

So what fantastic procedures does the Institute of Medicine think we should all pay for? (if you honestly think that any of these things are going to be provided to you for "free" and not result in higher premiums you are incredibly naive)

From the article:

"In addition to contraceptive services for women, the panel recommended that the government require health plans to cover screening to detect domestic violence; screening for H.I.V., the virus that causes AIDS; and counseling and equipment to promote breastfeeding, including the free rental of breast pumps.

The panel also said all insurers should be required to cover screening for gestational diabetes in pregnant women; DNA testing for the human papillomavirus as part of cervical cancer screening; and annual preventive care visits. Such visits could include prenatal care and preconception care, to make sure women are healthy when they become pregnant.

To reduce unintended pregnancies, the panel said, insurers should cover the full range of contraceptive methods approved by the Food and Drug Administration, as well as sterilization procedures and “education and counseling for all women with reproductive capacity.”"

Screening to detect domestic violence? Breast pumps? Education and counseling for all women with reproductive capacity (Isn't that basically every woman?)? What the hell is all this?! And why do I have to pay for it when I am damn sure that I am never going to use a breast pump? (well, pretty sure)

And before you say, hey, maybe all of this stuff won't make it into the final list of services, read this:

"“This report is historic,” Ms. Sebelius said on Tuesday in accepting the recommendations. “Before today, guidelines regarding women’s health and preventive care did not exist. These recommendations are based on science and existing literature.”"

Based on science huh? And existing literature. Well that's good, I guess. But you know what they didn't consider?

"The chairwoman of the panel, Dr. Linda Rosenstock, dean of the School of Public Health at the University of California, Los Angeles, said, “We did not consider cost or cost-effectiveness in our deliberations.” "

Excuse me? You didn't consider cost in your recommendations? What?! Is that possible? Well I guess if cost is just a minor detail not worth consideration we might as well just throw everything under preventative care and it will all be free right Dr. Linda Rosenstock and Ms. Sebelius? Free health care for all!!! No one pays a dime for anything!!!! Yay!!!!

How can anyone possibly think Obamacare is going to lower costs when COSTS AREN'T EVEN CONSIDERED???????

What a freaking JOKE! But unfortunately the joke is on us.

Monday, July 18, 2011

Does raising the minimum wage increase unempolyment?

There is an intense debate going on at Cafe Hayek (http://cafehayek.com/2011/07/open-letter-to-david-sirota.html/comment-page-1#comment-231283) about whether raising the minimum wage increases unemployment. Mr. David Sirota from the Huffinton Post doesn't seem to think it matters at all, while Don Boudreaux, John Stossel, and myself among others think it does matter on the margins. My 2 cents concerning the debate is below.

"One simple question I have for Mr. Sirota is whether he believes that raising the minimum wage from its current level to say $100/hr would cause an increase in unemployment. I doubt that anyone would think that it would not. So it seems to me that the real question is not whether raising the minimum wage increases unemployment but by how much and at what threshold. Is $5.15 to $7.50 enough? $7.50 to $10.00? $10.00 to $13.00? To argue that the wage level doesn’t matter at all, which is what Mr. Sirota appears to do, goes against not only sound economic theory, but common sense."

Friday, July 8, 2011

D.C. city council looking to destory lives

Here is a great clip from reason TV about the dangers of government regulation and how governments often spin increased regulation as being beneficial to consumers.


I would love to hear a D.C. councilman explain to me how reducing the number of cabs is going to benefit consumers. What a joke.

Sunday, June 19, 2011

You're a lawyer? Really??


There is an interesting Op Ed in the NY Times today titled "Get Radical: Raise Social Security". Radical indeed. The author, a Mr. Thomas Geoghegan, who once dreamed of being a pension lawyer (rent seeking much...), claims that the U.S. social security system is vastly underfunded compared to most developing countries and that we owe it to our elderly to raise the payouts by raising taxes. I disagree with him 100%, which is no surprise, but what is surprising is how poor his argument is.

He claims that 34% of Americans have nothing saved for retirement. Ok, maybe so, but what age groups do these 34% come from? Is this 34% of Americans over the age of 50, which would make this a relevant statistic, or is this 34% of all Americans, in which case 75% of the 34% may be under the age of 40, giving them 20 plus years to save money for retirement, or at least accumulate more than a $1. He doesn't say, but my guess is that it is closer to the latter case, in which case the statistic is irrelevant.

Mr. Geoghegan also thinks that we should fund occasional nights out on the town for the elderly, as if this is the moral thing to do. Well I don't consider buying elderly people bottles of Jim Beam to be particularly patriotic nor a duty of mine, but he is welcome to spend his money to fund a happy hour for all of the retirees in his neighborhood if he likes.

Mr. Geoghegan then states this fantastic non sequitur:

"The most paralyzing half-truth in this country is that people hate taxes. People are willing to pay taxes that they spend on themselves. Two-thirds of those surveyed in a CBS/New York Times poll in January were willing to pay more taxes to save Social Security at its modest level. To “save” it, most of us don’t need to pay. We could lift the cap on high earners, the 6 percent of workers who make over $106,800 a year."

So he cites a survey showing that 66% of Americans are willing to pay more taxes to save Social Security as an example of spending money on themselves, and then immediately follows it with a claim that in fact most of those people wouldn't even have to pay more taxes to save Social Security since we could just tax the "high" earners. So he thinks people would willingly pay more taxes, but lucky for them the rich can just pick up the tab. Huh? Methinks that the people who said yes to paying more taxes were thinking the same thing as Mr. Geoghegan "sure, put more tax dollars towards Social Security, as long as those damn rich people pay for it, of which I am not a part of".

In the next couple of lines, he says:

"If earnings above the cap were subject to the payroll tax with no increase in benefits to high earners, there would be no deficit in the Social Security trust fund in 2037, as projected."

So by his own argument the people paying extra taxes aren't receiving any of the extra benefits. Yet he cited a survey showing that people are willing to pay extra taxes if the taxes benefit themselves as supporting evidence for his plan. And this guy is a lawyer?

I should have known not to expect much from a piece that starts with "As a labor lawyer...."

Friday, June 10, 2011

Pima County police are out of control


Clarence Dupnik (he already sounds incompetent huh?) and his police force killed an innocent man in May with a military like swat team raid. The victim's 4 year old child and wife were in the house with him at the time.

Police in this country are out of control. They think that the laws do not apply to them and that being judge and juror, and in this case executioner, is in their job description. Maybe it is all of the cop shows on TV that have made law enforcement personnel get the idea that they are real life super hero vigilantes a la Batman and that they are allowed to operate on that razors edge between criminal and law abiding citizen. Well they aren't, and the frequent occurrence of incidents like this shows that too often they are wrong and botch things up, sometimes with fatal consequences. In this case they appear to be not only incompetent, but cruel as well, as they allowed the victim to bleed out for an hour before announcing him dead all the while refusing to allow him medical treatment.

Dupnik and his department deserve to be thoroughly investigated and prosecuted if necessary and I hope that the people of Pima County make sure that they are. There is no excuse for this kind of behavior towards an innocent U.S. citizen.

Tuesday, May 31, 2011

Throw away your cell phone! And don't eat pickles either!

Today the Cancer research arm of the the WHO added cell phones to it's list of items that are "possibly carcinogenic to humans", giving it a 2B classification.


Cell phones are now classified with lead, Chloroform, and DDT among others. That sounds dangerous. So I guess we all need to start using Bluetooth or talking into our phone like a walkie-talkie, otherwise we are all destined for brain tumors.

Or maybe not. Because you know what else is classified as a 2B? Coffee. And pickled vegetables. And I do not think that anyone looks at a pickle and goes, "you know what, I better not. I have had enough carcinogens in my diet today."

It's a shame that all of the media outlets jumped on this story and made it sound as if cell phones are right up there with nuclear waste and cigarette smoking when it comes to causing cancer. They are not. In fact, here is an excerpt from an article today on Yahoo!:

"Anything is a possible carcinogen," said Donald Berry, a professor of biostatistics at the M.D. Anderson Cancer Center at the University of Texas. He was not linked to the WHO cancer group. "This is not something I worry about and it will not in any way change how I use my cellphone," he said — from his cellphone.

So relax, exercise a little prudence and be cautious if you must, but don't throw your cell phone away and certainly do not stop enjoying a crunchy dill pickle now and then.

Thursday, May 26, 2011

How much money per student do schools need?

An article this morning from the associated press highlights school budget cuts in a few states including Texas, California, and Florida.


The Florida blurb caught my eye because it provides some actual numbers, which I used to do a back of the envelope calculation about school spending. The article says that the Florida Legislature has approved a budged that will cut school spending by about $540, or 7.9%, per student. Using these numbers I calculate that the pre-cut spending per student is $6,835 and that the after cut will be $6,295. Is this not enough money per student to provide an effective education?

I am not sure how much it costs to run a school, but I can come up with some fairly realistic numbers, at least in my mind, that make $6,235 per student seem like plenty of money. Lets assume a class size of 20 students in a 100 classroom school for a total student body of 2000, which was about the size of my public high school. Using the $6295, each classroom would have a $125,900 budget/year. I put $65,000 of that towards the teachers salary (which I believe is on the high end), and then another $17,000 for teacher benefits, for a total compensation of $82,000. This leaves me with $43,900.

The building has to be paid for, so lets say each teacher "rents" their classroom for $2,000 per month, which includes all utilities and overhead (including salaries for a principal, vice principal, and some support staff) for the building. With 100 classrooms this would come to $2.4 million per year. Again, I am not sure if that is enough, but it seems like a school district should be able to come up with a 100 classroom school for $2.4 million per year.

Subtracting the building costs, there is now $19,900 left. The teaches would be given a supply/field trip allowance of $250/student, which amounts to $5000. The remaining $14,900 could be used to help support athletic programs, computer labs, additional supplies, or other miscellaneous costs that I have not accounted for.

None of these numbers seem completely outrageous to me. And if I am off a little bit, I have left $1.49 million unaccounted for to correct for that. So it appears to me that a school district should be able to provide a pretty good education with well compensated teachers and reasonably sized classrooms for $6,235 per student.

So why don't they?

Tuesday, May 17, 2011

Police officers aren't above the law

Another story showing why all citizens should support the monitoring of police officers.

A story in today's Philadelphia Daily News shows why it's so important that citizens be allowed to videotape cops - it can be citizens' only way to fight back against police abuse of power.

This incident happened several weeks ago in Philadelphia to Mark Fiorino, a 25-year-old IT worker who carries a gun on his hip at all times for self defense. He got the gun after several friends were mugged.

But he didn't count on attacks by police:

On a mild February afternoon, Fiorino, 25, decided to walk to an AutoZone on Frankford Avenue in Northeast Philly with the .40-caliber Glock he legally owns holstered in plain view on his left hip. His stroll ended when someone called out from behind: "Yo, Junior, what are you doing?"

Fiorino wheeled and saw Sgt. Michael Dougherty aiming a handgun at him.

A link to the full article is below, but I am sure you can guess what happened.

An especially wacky statement from the article:

"It was a setup. He's done this kind of thing before," said Evers, the police spokesman, referring to Fiorino's encounters with authorities. "He did it intentionally, and he audiotaped it."

The citizen set up the cops by legally carrying a hand gun in public? All the police officer had to do was ask to see Fiorino's license and then wish him a nice day and the setup would have been foiled! Doggone it if only! Instead the officer made himself and the Philly Police Department look ridiculous, rude, and ignorant of their own laws.

It is a very dangerous thing when law abiding citizens can be accused by police officers of "setting them up". Obeying the insane amount of laws that are out there on a daily basis is not an easy task to begin with. We shouldn't also have to be worried about our good behavior being misrepresented by shoddy police departments to make themselves look less boneheaded.

Full article is here:

Sunday, March 13, 2011

Raise teacher salaries?

Mr. Kristof of the NY Times suggests that the U.S. needs to raise teacher's salaries, not lower them. Here is a link to his article, with my submitted comment below.


One problem with raising the salary for teachers is that the labor market for teachers is already saturated. I personally know several unemployed teachers who have been looking for teaching jobs for a couple of years now, mostly in the K - 6 range. With several teachers in waiting for each job out there, where is the incentive to raise pay? Perhaps getting rid of teachers unions, which I am a proponent of, would free up job openings for more qualified teachers who currently can't break in due to the unions. More effective teachers free of the union pay shackle may demand higher salaries. It may also lower the amount of people currently waiting for teaching jobs as well, since maybe a large quantity of equally ineffective teachers are waiting in the wings to replace the current ones.

I think Mr. Kristof is right that he says that we need more effective teachers and perhaps better pay is a way to get them. But when many school districts are filling all of their positions and more with the current salary offerings I don't think the answer to the problem is as simple as raising pay.