Category Archives: politics

The dime of America

I take it as a near-certainty that, assuming we’re still using physical currency throughout my life, some denomination of that currency will eventually feature Ronald Reagan.  But where will he go?  You can’t really evict Jefferson or Washington or Lincoln.  Alexander Hamilton and Andrew Jackson seem more vulnerable, but somehow it’s the coins that really read as “inner-circle President” — would Reagan’s boosters really settle for grubby green pieces of linen, that get filthy and torn?

But here’s what would work.  Put Reagan on the dime.  Instead of Roosevelt?  No — in addition to Roosevelt.  Nobody cares about the shrubbery on the back of the dime.  Roosevelt on the obverse, Reagan on the reverse.  The two radical revisions of the American idea that shaped the 20th century, separated only by a thin disc of copper.  A government big enough to crush Hitler versus a government small enough to drown in a bathtub.  Now that’s a coin.  Flipping that coin has stakes.

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Rolling the dice on Iran

David Sanger in today’s NYT on the Iran deal:

Mr. Obama will be long out of office before any reasonable assessment can be made as to whether that roll of the dice paid off.

Which is true!  But something else that’s true: not having a deal would also be a roll of the dice.  We’re naturally biased to think of the status quo as the safest course.  But why?  There’s no course of political action that leads to a certain outcome.  We’re rolling the dice no matter what; all we get to do is choose which dice.

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The soundness of the Wisconsin Retirement System

A while back I was talking to some hedge fund dudes with tangential involvement with institutional pensions, and I asked them, “hedge fund dudes, how come the Wisconsin Retirement System has done so well through the crisis while other state pension systems are colossally FUBAR?” and they said “the real reason is that decisions about the pension aren’t made by a bunch of legislators with political commitment, there’s a non-political board and most of the important decisions are made by financial professionals.”

This week the state legislature tried to replace that board with one composed solely of legislators.  The change, after public outcry, has now been rolled back.  Yay for my retirement, I guess?

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Should we fire people who pick the wrong Final Four?

A thought experiment touched off by Cathy’s latest post on value-added modeling.

Suppose I’m in charge of a big financial firm and I made every trader who worked for me fill out an NCAA tournament bracket.  Then, every year, I fired the people whose brackets ended up in the lowest quintile.

This makes sense, right?  Successful prediction of college basketball games involves a lot of the same skills you want traders to have:  an ability to aggregate information about uncertain outcomes, fluency in quantitative reasoning, a certain degree of strategic thinking (what choices do you make if your objective is to minimize the probability that your bracket is in the bottom 20%?  What if your fellow traders are also following the same strategy…?)  You might even do a study that finds that firms whose traders did better at bracket prediction actually ended up with better returns 5 years later.  Even if the effect is small, that might add up to a lot of money.  Yes, the measure isn’t perfect, but why wouldn’t I want to fire the people who, on average, are likely to make less money for my firm?

And yet we wouldn’t do this, right?  Just because we think it would be obnoxious to fire people based on a measure predominantly not under their control.  At least we think this when it comes to high-paid financial professionals.  Somehow, when it comes to schoolteachers, we think about it differently.

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More pie than plate, Dane County edition

One chapter of How Not To Be Wrong, called “More Pie Than Plate” (excerpted in Slate here) is about the perils you are subject to when you talk about percentages of numbers (like “net new jobs”) that may be negative.

Various people, since the book came out, have complained that How Not To Be Wrong is a leftist tract, intended to smear Republicans as being bad at math.  I do not in fact think Republicans are bad at math and it sort of depresses me to feel my book reads that way to those people.  What’s true is that, in “More Pie Than Plate,”  I tear down an old Mitt Romney ad and a Scott Walker press release.  But the example I lead with is a claim almost always put forward by liberal types:  that the whole of the post-recession rebound has accrued to the 1%.  Not really true!

Long intro to this: I get to polish my “calling out liberal claims” cred by objecting to this, from the Milwaukee Journal-Sentinel:

UW-Madison, the fourth-largest academic research institution in the country with $1.1 billion of annual research spending, has helped spur strong job growth in surrounding Dane County. In fact, employment gains there during the last 10 years far outstrip those in any other Wisconsin county, accounting for more than half of the state’s 36,941 net new private-sector jobs.

I’m pro-UW and pro-Dane County, obviously, but people need to stop reporting percentages of net job gains.  What’s more — the reason job gains here outstrip other counties is that it’s the second-biggest county in the state, with a half-million people.  Credit to the Journal-Sentinel; at least they included a table, so you can see for yourself that lots of other counties experienced healthy job growth over the decade.

But just as I was ready to placate my conservative critics, Rick Perry went to Iowa and said:

“In the last 14 years, Texas has created almost one-third of all the new jobs in America.”

Dane County and Rick Perry, you both have to stop reporting percentages of net job gains.

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Ordinary business expense

From today’s NYT:

But even if Hyundai is eventually forced to pay the full amount of the damages, the punishment could be substantially reduced through a tax loophole that permits the company to save millions of dollars by deducting any court-ordered punitive damages as an ordinary business expense. The result, critics say, is that taxpayers are in effect subsidizing corporate misconduct.

What’s terrible about this isn’t that companies are allowed to claim the fines they pay for malfeasance are an ordinary business expense.  What’s terrible is that it’s true.

Update:  I misspoke, as a commenter points out.  A “fine” — that is, a penalty you pay to the government — is not deductible.  What may be deductible are punitive damages, paid to people you injured or whose river you despoiled.  Prepare your return accordingly!

Full professors make more money than bus drivers

Former Republican Congressional candidate and current UW-Madison history professor John Sharpless stands up for us against the Governor:

He said he arrives no later than 9 a.m. and leaves no earlier than 5 p.m. During that time, he said he’s either teaching, preparing lectures, doing research, attending required committee meetings, advising students and managing teaching assistants. Sharpless added that he often spends his evenings reading and grading papers.

“None of this seems like work to a guy like Walker because he lives a different life,” he said. “And I’m not going to make fun of what he does. I’m sure being a governor is a lot of work. He has to spend a lot of time in Iowa and South Carolina and North Carolina and courting other Republican big-wigs. That taxes the man horribly.”

But just to make it clear he’s still on board with GOP, he drops this in:

“I will retire with a salary that’s less than a Madison bus driver,” he said.

UW-Madison salaries are public records, so I can tell you that Sharpless’s is just under $80,000.  In 2012, only 9 employees of Metro made more than $70K.  And the ones who made that much, I’m pretty sure, are the ones who worked tons of overtime.

In other words, what Sharpless said is likely true in the strict sense of

“There exists a Madison bus driver whose salary this year exceeds mine”

but gives the wrong impression about typical full professors in the history department and typical bus drivers.

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Death to the 529 / long live the 529

Obama flip-flops faster than I can blog!  Prezzo has already walked back his proposal to change the 529 college-saving tax break, but I have a post about it queued up, and by gum I’m gonna publish it.

Here’s the plan that just got shelved.  From now on, capital gains on contributions you stow in a 529 plan won’t be tax free anymore — they’ll just be tax-deferred, as with a retirement plan.  In essence, it takes away a tax break whose benefit flows predominantly to high-income families (some 529 money is held by middle-income parents, but under Obama’s plan the $500 or so they’d lose on their 529 was more than offset by an AOTC expansion.)

OK, this Congress is as likely to roll back a tax break for high earners as they are to rename Reagan National Airport after Pete Seeger, so this isn’t actually happening, but I’m just saying, that’s the plan.

People are mad, and feel like they’ve been bait-and-switched. My FB feed, populated by dutiful savers like me, is full of ire. Mark Kantrowitz, in the New York Times:

He went as far as saying that the proposal could be characterized as a broken promise. “People saved money in 529 plans because of the expectation that the favorable tax treatment would continue,” he said.

But why does the New York Times let Mark Kantrowitz say this when it’s plainly not true? I saved money in a 529 plan. And the favorable tax treatment for that money will continue. When I take it out, I won’t pay a dime on any capital gains.

For money I put in later, it’s another story. But so what? If something’s on sale today, nobody’s breaking a promise to me when it’s not on sale tomorrow. I guess it’s strictly true that the proposal “could be characterized as a broken promise.” But it would be better to say it “could be characterized as a broken promise by people who don’t mind characterizing things as different things.”

A broken promise would look more like a state government defaulting on money it owes the thousands of middle-class taxpayers whose pensions it mismanaged.

 

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Loudly and bravely

Wallace Shawn:

As I write these words, in New York City in 1985, more and more people who grew up around me are making this decision; they are throwing away their moral chains and learning to enjoy their true situation:  Yes, they are admitting loudly and bravely, We live in beautiful homes, we’re surrounded by beautiful gardens, our children are playing with wonderful toys, and our kitchen shelves are filled with wonderful food.  And if there are people out there who are envious of us and who might even be tempted to break into our homes and take what we have, well then, part of our good fortune is that we can afford to pay guards to protect us.  And if those who protect us need to hit people in the face with the butts of their rifles, or if they need perhaps even to turn around and shoot, they have our permission, and we only hope they’ll do what they do with diligence and skill.

The amazing thing I’ve noticed about these friends of mine who’ve made that choice is that as soon as they’ve made it, they begin to blossom, to flower, because they are no longer hiding, from themselves or anyone else, the true facts about their own lives.

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Drowned out

Conservative blogger Glenn Reynolds is mad mad mad mad mad about .. well, I’ll let him tell it:

After years of effort, the European Space Agency’s lander Philae landed on a comet 300 million miles away. At first, people were excited. Then some women noticed that one of the space scientists, Matt Taylor, was wearing a shirt, made for him by a female “close pal,” featuring comic-book depictions of semi-naked women.  And suddenly, the triumph of the comet landing was drowned out by shouts of feminist outrage about … what people were wearing.

Drowned out!

Let’s sit with that a minute.  I just searched for “Philae” on Twitter and you know how many tweets I had to scroll through before I found one that mentioned Matt Taylor and his shirt?  32.  That sounds about right — I’d say 3% of the coverage I saw of the comet landing had to do with Matt Taylor’s shirt, and 97% had to do with the fact that we awesomely landed a robot on a comet.

But for Reynolds, the 3% drowns out the 97%.  3% is too much.  1% is too much!  Any little speck of feminist content is like the pea under the mattress for these guys. They can’t rest because the 3% is digging into them, it keeps them up all night, the feminism is still there, I can feel it, make it stop make it stop!

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