I want to furnish an addendum to a post I made earlier, pursuant to Charles Kuffner's fine critique of it. When I made fun of the liberal use of the word Fascist, I was not trying to imply that liberals have cornered the market on name-calling. They certainly haven't, and it's one of the reasons that I can't listen to a Rush Limbaugh; all the ranting about the Feminazis distracts me from. . . well, whatever the hell his message is.
I was making fun of the use of this particular word, which is thrown around with great abandon, even though the peope who use it usually don't know what it means. I am not surprised that regimes practicing Fascist ideology are not very nice, any more than I am surprised that regimes attempting to implement Marxism-Leninism are not very nice. I find both political philosophies appalling for essentially the same reason. That does not, however, mean that I can use the word Communist, or Fascist, as interchangeable with "someone who is not very nice". Communism, and Fascism, are specific things. You can't expect me to respect, much less applaud, the willful misuse of a language I'm pretty fond of. (That being English, not invective).
Well all get carried away. I've taken the pledge not to call certain names; and I try, in general, not to call names at all unless they're meant in good fun (like my liberal friends I call Communists), or they're pretty close to accurate (like my liberal friends I call Communists*.) My readers are free to call me on it if I stray. But I reserve the right to hurl all the negative words in my lexicon at ideas I dislike.
So that's my position paper on name calling. Hope it cools the passions of my passionate emailers on both sides.
Swen Swenson, who seems to rise around the same time I do, wants to know what I'm doing searching on Guns, Babes, and Full Auto. The answer is, I'm not -- my nameless Googler simply appeared as one of my hits on my bravenet counter, to which I am, I confess, addicted.
The only word that can describe this proposal is insane. The Eurocrats have decided to tax digital content delivered from the US, requiring sellers to register and add the VAT onto everything they deliver. Good luck. Reports of the demise of internet privacy are greatly exaggerated, thanks to the arrival of new products like Triangle Boy. First they have to find the seller, then they have to prove a sale took place, and finally, they have to have some sort of arrangement to enforce the tax with the host country. . . and helloooo, Turks and Caicos!
I think -- I hope -- that the Eurocrats are fighting a losing battle to preserve their confiscatory taxation and bloated spending. But perhaps this is just the triumph of hope over experience. . .
Second of all, I want to note, in a brief rejoinder to both articles, that while Greenspan is in favor of balanced budgets and eliminating debt, his policy statements make clear that he is more in favor of smaller government. That's why he told Clinton to balance the budget -- which was not, as his liberal interpreters have claimed, a mandate to raise taxes, but a suggestion to cut spending. That is why he supported Bush's tax cut; because while in an ideal world, he would prefer to have used that money to pay down the debt, it became clear to him that Congress was going to use the money to increase entitlement spending in order to pay of key constituencies. That is why he was in favor of the tax cut; he believed that the choice was not between cutting taxes and balancing the budget, but between cutting taxes and increasing spending. Noting the spending binge our boys in Washington just went on with the terrorism and farm bills as soon as the nation took it's collective eye off the bottom line, it's hard to doubt that he was right.
Third, this is also the argument against "triggers" that end the tax cuts if the deficit dwindles, because it eviscerates the restraints on government growth imposed by the tax cuts. Have a program you like? Don't worry about it -- spend away! You'll pop a trigger, taxes will go up on people who don't vote for you anyway, and you won't even get blamed for raising taxes in order to increase that spending!
I hate deficits, but not because of some wishy-washy theory about economic growth. Deficits of the size we're talking about running are not, IMHO, going to have an appreciable effect on GDP. Deficits are bad because they allow politicians to give voters goodies now while handing the bill to their children or grandchildren. Nonetheless, if it is a choice between a small deficit, and the spending spree Congress was prepared to go on with my tax dollars, I'll take the deficit any time.
And here's why: government programs never, ever die. Jonathan Rausch's superlative book, Government's End describes why: they develop constituencies that vote on a specific program, while few programs are large enough to develop significant constituencies against them. Meanwhile, as P.J. O'Rourke describes in Parliament of Whores, the programs grow, because that is what they are designed to do. Look at the farm bill -- we killed it in the 90's and it just got record funding. The only way to stop the process is to force politicians to make actual budgetary choices by restraining their revenue.
But I digress. What I was trying to talk about was Greenspan, and everyone jumping all over him. Fourth of all, the man's been telling us we were in a bubble for years, and we didn't listen -- now we're mad he's right. It's not his fault. Yes, he pumped credit into the economy when it least needed it, thus feeding the bubble. And partly this was because he overestimated the palliative effect that the New Economy would have on inflation, but then so did the rest of us. And mostly he did it because he had to -- because the Fed was afraid that people would cause a run on the banks prior to Y2K, queuing up for money. They didn't, but he didn't have his crystal ball handy to predict it. He did a pretty good job with the information he had. Why is it that the people who made him into some sort of a God two years ago are now the most eager to pull down the idol so they can spit on it?
(Incidentally, Chait's article isn't that mean about Greenspan. I'm just tired of all the people who loved him one minute and now would like to see him burned in effigy, and the article set me off.)
It turns out that Citigroup managed to hedge its exposure to Enron, unlike every other bank that did business with them. The article suggests that the hedging instruments were somehow suspicious, because the interest rates were too low, but from what I can tell (not much), it arrives at this instrument by comparing apples to oranges: long term corporate bonds to shorter term credit-linked notes.
Interesting is what the article leaves out: that Citigroup employs Bob Rubin, who approached the administration on Enron's behalf right before the pyramid collapsed. Personally, I doubt there was anything unethical; it seems to have been good banking sense to lay of risk. Nonetheless, this non-story seems to my (admittedly jaundiced eyes) to be at least as compelling as the Bush-Enron connection. I had an earlier email on this from J. Bowen over at No More Watermelons, but forgot to post it.
Fritz Hollings thinks that we should appoint a special prosecutor to investigate Bush and Enron because. . . ummm. . . well, just because there isn't any evidence of wrongdoing doesn't mean we shouldn't have an investigation! The Washington Post delivers the appropriate smackdown.
Over on Instapundit, a lively section on the utter hypocrisy of congress in lambasting Enron when they themselves are unaccountable, practically invented shoddy accounting, and routinely vote themselves goodies they haven't earned. Which brings to mind the subject of what I found so distasteful in the Clinton Administration.
It wasn't because they were Democrats. How far apart, after all, were Gore and Bush really? The only issue I cared about in the last election was getting more strict constructionists on the Supreme Court. So while I would have voted for Bush anyway, I wouldn't have felt such visceral dislike for Gore (a desperate fear of listening to four more years of those monotonic, hectoring speeches, yes, but not dislike) if it hadn't been for the Clinton Administration's repeated insistence that rules just didn't apply to them.
I was in utter sympathy for the idea that Clinton shouldn't have to answer questions on his sex life. Until, that is, a lawyer friend pointed out that he'd signed the law that said you have to answer questions like that. Hoist on his own petard, and well he should be. As far as I was concerned, at that point he was the only one in the country who should have to answer questions like that.
When a black reporter asked Gore why, if he was so concerned about the African-American community, he didn't support vouchers, he launched into typical blather. When she followed up by asking "if vouchers are such a bad idea, how come your kids are in private school", he responded by saying, in effect, that theory is nice but he wouldn't let that get in the way of his kids' education. He arranged the Russia-Iran arms deal in direct contravention of a law he authored while he was a Senator. This is not the hypocrisy that is the tribute vice pays to virtue; this is refusal to abide by the consequences of the laws you enact. An adolescent's fantasy of how the world should work. It is to the eternal credit of the Republicans that when their leaders strayed from the strict sexual code they had set up, they bounced him faster than you could say "scandal". Politically astute, also, and possibly this is the only reason they did it. Nonetheless, it showed a willingness to publicly abide by their own standards.
I'm sure that there are Democrats out there with their own version of Republican hypocrisy; if I find it compelling, I'll yell about them too. Because, while lawmakers will always abrogate certain privileges unto themselves, it is dangerous to let them get above the law.
An Open Letter to the People Who Keep Sending me Email addressed to Jane Galt:
I want to first thank you for the warm regard you have shown me over the years. Not a morning goes by when I don't open my inbox to a flood of correspondance from well-wishers all over the globe, some in places, and at internet sites, of which I have never heard. In this dark period of my life, it is always good to know that one has dear friends striving to keep one abreast of all the latest developments in financial opportunities, nutritional supplements, and Barely Legal Teenage Girls.
Unfortunately, the flood tide of your kind, kind interest has rendered me unable to respond to each email as I would like, or even to devote sufficient time to assessing the many opportunities you have offered me. I believe that if we set a few simple ground rules for our correspondance, we will both get more out of it. I wish that I could email each of you separately, but since I am currently receiving between 50-100 of your thoughtful notes a day, I find myself unable to address each one individually. Instead I have summarized some of my key concerns:
1. I am not interested in Barely Legal Teenage Girls.
2. I do not have a penis. If I did, I would not risk it with quack remedies, even if those remedies promised to make it up to 30% larger without chemicals or vacuum pumps.
3. I do not have a home. I do not have a mortgage. In fact, I live with my parents. I am twenty-nine years old, and I'm living with Mom and Dad, complete with fights about whose turn it is to take out the garbage and Why I Haven't Given them Grandchildren. I want to thank you for providing the daily reminders of my plight which have, at each reading, re-fired my resolve to get a real job. However, until I do, I still do not have a house. You may direct any solicitations regarding mortgages, home equity lines, home repairs, or the many benefits of genuine Sears aluminum siding, to my parents, although I warn you that since they have an apartment, they will probably not be buying any aluminum siding.
4. I am not interested in Barely Legal Teenage Girls even if they have just procured their first webcam.
5. When you send me emails regarding my damaged credit, this makes me nervous. I wonder how you know about my credit, and indeed, who else has this information. I wonder if a few childish indiscretions will keep me from the home-ownership that might permit me to enjoy the home equity lines, repairs, and genuine Sears aluminum siding which you have discussed in such glowing terms. I brood. I realize you think of me as a soulless creature with little time for anything except home repairs and Barely Legal Teenage Girls, but this is not the case. I have dreams. Dreams which may never be realized if I don't shake the depression into which your repeated exhortations about my credit have plunged me. Please stop sending them until such time as I can afford a therapist and/or Prozac.
6. I understand that when you send me emails about surefire ways to make money from home, you are just trying to help me out of my current financial straits. However, as I mentioned before, home is not a place where I currently desire to spend the larger part of my day. If you have any ways to make money from, say, a comfortable hotel suite on the Riviera, I would like to get those emails instead.
7. I am 6'2 and within the normal weight range for that height. While I have heard that you can never be too rich or too thin, I fear that if I lost Up to 100 pounds in 3 months, the only job I would be able to maintain would be as an extra in an Oxfam commercial. If I have to choose between being rich and thin, I choose rich. You can always buy a better body.
8. I thank you for your attention to my education. I have read your missives with great interest. I admit to great curiosity as to how you can provide a University Diploma for $500, when mine took four years, $50,000 of student loans, and liver surgery. I regret that I am unable to utilize this service, but as you can see, I am already well supplied with both degrees, and the attendant debt. Reading about people who got their degrees for 1/100th of the price of mine fill me with a mindless rage that only lessens my predisposition to partake of either home repairs or Barely Legal Teenage Girls.
9. I'm a heterosexual woman. No matter how hot and horny they are, I just can't make myself care about the Barely Legal Teenage Girls, although they would probably make better company than my parents and my Aunt Margaret. Please do contact me if you come across any Independantly Wealthy Biathlete Physicists.
10. You may have noted in earlier items that I do not have a job. Thus, I do not pay taxes. I know that when you send me ideas on how to Pay Absolutely No Income Tax! you are just trying to get me to look on the bright side, but I find that it simply kicks off the no job. . . depression. . . no job cycle to which I referred earlier.
11. Of course, I wouldn't mind larger breasts, but I might want to use these later and frankly, I'm afraid of what your creams might do to my parents' grandchildren -- and consequently, what they might do to me. Thank you anyway.
I appreciate your taking the time to read this. As long as we keep these rules in mind, I believe we can look forward to a long, beautiful relationship.
On a lighter note, Dave Tepper thinks that the next trend in blogging, when diagramming sentences passes, will be calculating integrals. Not if I have anything to say about it, it won't -- I flunked out somewhere around Taylor Polynomials. Besides which, it seems Dave is blogging other women. I'll. . . I'll beat him about the head with an unabated ablative absolute, that's what I'll do!
Okay, I'm not ashamed to admit it -- I cried when I saw that tattered flag waving and understood, for the first time, exactly what Francis Scott Key was writing about. And I cried even harder when I saw that unbroken flag rise up the flagpole. And I thought, take that, Osama. That flag will be flying long after the world has forgotten your name.
Judging from the parade of former Winter Olympics sites, there are only about six countries capable of hosting the Winter Olympics. Is this odd, or what?
I just watched a cop sing God Bless America for the opening ceremony. God damn, I love this country. I love the constitution and the Declaration of Independance and the Gettysburg Address and the Emancipation Proclamation; and the guy who said "I regret that I have but one life to live for my country", and the guy who said "I Have a Dream"; and all the average people out there trying to do the best they can with what they have, and making an effort to be fairer and decenter to their enemies than any people in history have ever been; and I love the idea that you can become a nation just by having an idea. There may be better places to live at some time in the future, and better times to live in, but there is no better place or time in history, and I'm awfully glad I live here. Just. . . awfully glad.
Charles Dodgson has a magnificent piece on the utter moral bankruptcy of, among others, our favorite villains the Enron execs. It also includes an eye-opening bit on Harvard. I have only one quarrel: why the random attack on Bush at the end? (I've said it before; Democrats just love the sound of the "E" word with the "B" word, and if the polls are any evidence, it's only hurting them with the rest of the country). I reprint the entire thing, to avoid the possibility that I'm selectively quoting the bits that support my argument:
If that explanation appeals to you, then you might want to consider in that light the career of another overgrown collegian. The one whose father let Ken Lay overnight in the White House, and appointed Lay to a trusteeship on his presidential library. The one whose own presidential campaign traveled on Enron's corporate jets (you know, the ones they haven't sold yet). The present resident of the White House, George W. Bush.
Dubya's enough in tune with the general fratboy weltanshauung that he once told a female Yale graduate that "something had been lost" when the school, his own alma mater, had begun to admit women. And he certainly seems into aggressive accounting.
His political party nearly turned Arkansas upside down looking for shady deals by Clinton's former associates --- the theory apparently being that those would somehow shed light on Clinton's own character. Perhaps there was something to that...
He rode on their corporate jets. . . and? If all the presidents start getting judged on the basis of the actions of their families or friends, the Democrats are going to have some 'splainin to do. Something was lost when Yale went co-ed. Something was also gained, but it's not the same place. And it's not exactly abnormal to think that everything was better when you were twenty. The accounting link is to our favorite non-accountant, Paul Krugman. And we all know what I think about his numbers.
I'd like to call a halt to the scandal wars. This doesn't even rise to the level of the Whitewater scandal. There at least there were criminal allegations. Here, it's just "I don't like Bush and I don't like Ken Lay and look! They're friends!" I mean, come on. As a political matter, I think that the last thing Democrats would want to do is start judging a President by his friends.
I'm not always an enormous fan of John Derbyshire, but this column on capitalism and risk is really extraordinarily good. He takes a solid, common sense approach to Enron/Anderson:
Not that there isn't anything that might be done to lengthen the odds against con men. I think a few more "Chinese walls" could be established without adding to the regulatory burden. It seems crazy to me that someone on the fifth floor of a securities firm can be offering investors advice on the value of securities that someone down on the mezzanine was responsible for underwriting or bringing to market. I think it's double crazy that a firm whose employees are writing code for a company's systems can be responsible for auditing those systems. (I would have loved to be responsible for auditing my own systems! How come nobody ever asked me?) There are some clean, simple things that might be done. I'd also like to see suggestions for enforcing the Mr. Wu principle: that if your business fails, you end up personally broke. That doesn't seem to happen any more in the U.S. — not, at any rate, without the intervention of law enforcement (and not much even then).
I applaud that last bit, especially. What's so appalling is not that Enron failed -- it's that the accounting managers and mail clerks are sucking up the damage, while Ken Lay and the executives shield assets abroad. I've worked for several failed companies, and in any of the ones worth working for, our discombobulation was surpassed only by the financial ruin of the founders as they plowed everything they had into keeping the company -- and us -- alive.
He also points out, brilliantly, that you can't separate capitalism and risk. Read the whole thing, though -- it's worth it.
Charles Kuffner responds to my post on liberals who don't know the meaning of the word "Fascist" by rejoindering, first, that genocide certainly doesn't speak well for Fascism: "That sure is a ringing endorsement for fascism, I gotta say. Sorta like the old joke 'Other than that, Mrs. Lincoln, how did you like the play?' " This entirely mises the point. Genocide, or even racism, are not, contrary to popular belief, central to Fascism. They were simply coincident with Fascism. So genocide isn't to "fascism's credit" any more than what Americans did to the natives was an inevitably byproduct of Democracy.
He also points out that libertarians and conservatives are also guilty of name calling. Too true. This is why I have called for an end to the use of Taliban, Nazi, or Stalinist as descriptive terms for anyone other than members of the Taliban, the Nazi party, or adherents of Stalinist Marxism-Leninism. But again, Kuffner misses the point:
I wonder what the response would be if I said to these folks "The primary definition of 'jackboot' is 'a heavy military boot made of glossy black leather extending above the knee and worn especially during the 17th and 18th centuries'. What, specifically, do you have against jackboots?"
The conservative would at least accurately be able to identify what a jackboot is. They wouldn't stand there dumbly while they cast about for some definition of Fascist other than "Nazi" and some definition of "Nazi" other than genocidal. Most serious libertarians have a pretty good working knowledge of various political science concepts such Fascism, Socialism, Social Democracy, Communism, Imperialism, Capitalism, etc -- which is, in my judgement, not matched on the Left.
Considering hardcore libertarians as the conservative equivalent of the anti-globalisation protesters (I know right/left doesn't quite work here, but I think it's fair to say that while both are arguing for fairly radical sociopolitical change, the righties are adamant on property rights, whereas the lefties are extremely redistributive.) The righties, generally, understand the other side better than the other side understands them. So while there is name calling on both sides, the lefties seem dumber to me, because while the righties are engaging in childish exaggeration, the lefties are engaging in childish exaggeration with words they don't know the meaning of.
There is finally the matter of degree. Jackboot is not in nearly as wide currency as fascist or Nazi. Kuffner cites two conservative publications, one of which has a rhetorical style heavy on the name-calling I dislike. He neglects to mention the other sites his search brings up:
1) Sites selling or describing military gear 2) An article from Wired magazine about internet regulation 3) Sites about East Timor 4) Some name-calling tiff a university student union in Melbourne had with management. 5) Historical sites about Nazi Germany
However, repeating Kuffner's search on Merriam-Webster for fascist instead of jackboot yields the following:
Both searches top 20 hit, by my count, four name-calling pieces of the right (jackboot) or left (fascist) persuasion, at least one name-calling site from the other side, a number of historical or otherwise factual sites. However, Fascism is a major historical movement. Jackboots are a minor item of apparel. I would have expected the jackboot namecalling to outweigh fascist namecalling in sample frequency. That it doesn't indicates a much higher use of fascist to call names. So perhaps we can call it a draw.
I wasn't supporting conservative name calling. I think it's dumb. I just think it's even dumber to combine polemic with the use of words you don't understand.
An editorial in the Wall Street Journal today points out that one of the reasons that Enron employees were playing Stock Market Roulette with their 401(k)'s is that companies are afraid to offer their employees professional investment advice for fear of being sued. Now, in general, I'm a fan of the random walk theory of markets, which says, among other things, that most people are unlikely to beat the market in the long run -- most actively managed mutual funds, in fact, underperform the S&P 500 index by a considerable margin. So my esteem for professional investment advisors is, shall we say, mixed. Nonetheless, they do fulfill certain valuable functions, among which is educating investment consumers on the subject of risk.
Most investors don't have an appropriate understanding of the risk in the market. It's for damn sure that the Enron employees didn't, because no competent investment advisor would have suggested that anyone have 60% of their portfolio, plus their job, tied up in one company. A little financial planning could have gone a long way for the Enron employees -- and for anyone else who isn't diversified. But they didn't get it, because no company wanted to be liable for its employees bad luck or bad decisions.
So here's the difference between a conservative and a liberal approach. A liberal wants to make a law saying that people shouldn't be allowed to have that much of their portfolio in one company. Well, all those Microsoft millionaire secretaries might have something to say about that, but even aside from that, this protects against only one very targeted risk -- the risk that your company goes bankrupt. But a lot of employees are inappropriately underdiversified by industry. It works like this: you work for Enron, so you figure you should buy what you know, which is to say energy stocks. If the whole sector tanks, you lose your job and portfolio, a lot like what the Enron employees are going through now. The conservative solution -- take away the regulatory and legal barriers that prevent people from making good decisions -- would prevent both scenarios.
It might cause others; there are, I am sure, arguments on both sides. But I think the fundamental difference I am drawing is sound: when things go wrong, the Democrats want a law against it. Republicans are much more friendly to enabling self-organizing systems. Which is why they wanted to make it easier for consumers to get information, while the Demcrats wanted to make sure that the consumers wouldn't need any information because they couldn't make any choices.
From the excellent Random Jottings, a thought for the day (note that I don't have the thought for the day, because I'm hoping to have more than one):
Your brain comprises about 3% of your body weight and uses about 14% of your energy intake.
Keep this in mind when you hear grey-beard Chomskyites condemn America and the West for using more than their 'fair share' of the world's resources. We are the brains of the world. We are the ones creating the advances that give us the hope of eliminating the ancient ills; plague, war and famine. In fact we have eliminated them wherever Western Civilization is allowed to flourish. We didn't do it on a starvation diet.
Your brain burns calories like a bonfire. It's an extremely expensive luxury that doesn't pay off right away. (That's why high intelligence isn't usually an evolutionary option.) But the payoff, when it comes, is big. We in the West, and especially America, should be eating the biggest slice of the pie. It's part of the job. It's our responsibility.
Addendum: High technology itself is a sort of voracious brain that can only exist on top of a very large and healthy industrial body. It's the apex of a very broad pyramid; for every visionary at the top, there are thousands of burger-flippers and siding salesmen at the bottom.
Europe might take issue that all this wealth is our fair share. But they'd find it hard to deny (if they were self-honest, a dubious proposition) that we've got that much stuff because we make that much stuff. And that without our wealth, all the technological goodies they so enjoy wouldn't exist.
Over at the generally excellent What She Really Thinks, Ginger Stampley criticizes the article Dick Morris wrote for the Wall Street Journal about the Clinton Administrations' failure to address terrorism. Specifically, she disagrees with his assertion that Clinton should have signed a law requiring that driver's license expiration dates be set to expire on the same day as immigration visas for foreign nationals.
Morris is right that the system, if in place and working, might have caught Mohammed Atta. (So would a number of other ideas involving wiring together various government computer systems. A lot of people disliked them and still do.) But what he misses is who else would have been caught: foreign students and nonimmigrant workers, hundreds of thousands of whom were working, or planning to work, in information technology.
You want a powerful pro-immigration lobby, try the software industry. No development manager worth his salt will put up with the INS sending his lead programmer back to India or China because of a paperwork snafu. Mere technicalities shouldn't be allowed to get in the way of the march of the New Economy!
I spent most of my working life, pre-MBA, in the technology industry. I am heartily sympathetic to the difficulties experienced by holders of the H-1 visa. Anyone who knows me knows that I believe deeply in more open immigration laws for everyone (coupled with sharply reduced social services to minimize costs).
But we aren't arguing about how many visas we should have. What Ms. Stampley is arguing is that it was right for Clinton to eviscerate immigration enforcement to prevent criminals from being caught. Which, unless they hailed from the Cuban Worker's Paradise, is what he did. This is wrong. If the law is wrong, take it off the books. Having laws that aren't enforced weakens ones that are, by making the rule of law an arbitrary thing.
She also says that a law making the licenses co-expire with the visas would inevitably make mistakes. Certainly it would. But that is not an a priori reason for not having the law; it's a cost that must be weighed against the putative benefits. If the government can't do something because it can't guarantee that no innocent person will ever be adversely affected, it can't do anything. Which is largely fine by me -- but not, to judge from her other posts, by Ms. Stampley.
They've arrested three people in connection with the kidnapping of David Pearl. And they've arrested them in Pakistan, where we can presumably expect to find Human Rights Watch observers making sure the alleged kidnappers get three squares and a fleece-lined blindfold. They may be a little disappointed, as my impression is that the Pakistani police don't require any of those new-fangled torture warrants Alan Dershowitz keeps talking about.
Some guy just tried to hijack a plane going from Miami to Buenos Aires. The passengers and flight attendants subdued him with a fire ax. Then the passengers, whom he had tried to subdue, gave him medical attention until they reached Buenos Aires. To quote the eternal verities of the Muppet Show: "It is at times like these that I am proud to be an American Bald Eagle."
Hmmm. . . long distance flight, loaded with fuel. But it looks like they were halfway through the flight when this Uruguayan tried to storm the cockpit, which he couldn't get into because United has reinforced the doors. So maybe he just wanted to go somewhere besides Buenos Aires, or demand Equal Babes for Moody Loners, or something.
Question, though -- if this guy was acting alone, why would he think that he had a snowball's chance in hell? The entire country is primed for a "Let's Roll" moment the minute anyone even raises his voice to the stewardess. Sheila Jackson Lee, take notice.
I'm fascinated by this WaPo editorial calling for a gun ban, because it doesn't allege any actual harm has been caused by carrying a guns -- it simply assumes that the harm is obvious, without bothering to back it up with facts. The only safety incident they could come up with is that someone left a gun in a restaurant 3 years ago. Since I'm assuming that if anyone had been actually harmed by the gun carrying, they would have noted this, this amounts to saying that people shouldn't carry guns because the Washington Post doesn't like them. Well, if you're a regular reader you know what I think of that argument.
Jonah Goldberg has a terrific article on the debasement of the English language by PoMo and other academic fads. He points out that even in 1946, Orwell noted that 'Fascist' had become a catchphrase for "people I don't like". For amusement, try this parlor game I developed in college:
1) Find a liberal 2) Get him to say someone is a 'fascist' 3) Then say, "Other than one fascist's regimes penchant for genocide, what specifically do you have against fascism?"
Over 10 years, and I have yet to meet one who has any idea what Fascism actually is.
This is why you will notice that I am agitating for the total elimination of the use of 'Taliban', 'Nazi', or 'Stalinist' to describe anyone except"
a) Members of the Taliban b) Members of the Nazi party c) People who subscribe to the particular variant of Marxism-Leninism elucidated (insofar as he could be said to be lucid) by Josef Stalin.
Probably I am a violator on at least one count. But I hereby vow to go, and sin no more.
Interesting searches that bring up my site: Today's exhibit is "What kind of habitat does a virus live in?" The answer, presumably, is in a libertarian one. . .
Reader Glenn Thomson sends a link to the groveling article by the head of Ernst and Young that I gleefully shredded just as soon as I was sure that E & Y no longer had any strategy consulting jobs available. It's a fascinating insight into the mind of a Big Five accounting CEO.
My next question (for pros like Patrick Ruffini) is whether congressmen and Senators have to disclose every single contact they've ever had with anyone who works with a company that is regulated by a committee they're on. Because if not, I think the Bush Whitehouse should ask the GAO to sue to find out who in the Senate has been meeting with whom. . .
Okay, am I crazy, or is this crap about the American team not being allowed to carry the flag that was flying at the WTC just a way for the IOC to suck up to anyone who advocates killing Americans? Perhaps I'm paranoid. But how come the IOC can ban South Africa as a way of speaking out against racism, but can't allow athletes to carry a flag as a way to speak out against killing innocent civilians? I understand that they're allowing it to be hoisted over the stadium, and maybe there's some procedural rule I don't understand, but why would the IOC forbid this?
You thought your accounting was bad? It seems an FX trader took Allied Irish Bank for $750 million. That's $750,000,000. It's worse than Nick Leeson, who was just a venal idiot trying to cover his ass -- which, come to think of it, describes the Enron execs as well. At least they thought they could make it all back. This guy just defrauded Allied Irish of the largest sum in banking history.
Some salient facts: -- The fraud was committed by using standard hedging arrangements -- but half of the hedge was a fictitious purchase -- The size of the take means that this guy must have entered into contracts worth $750 billion -- The perp fled when they called him at home to ask him about his odd trades. -- Allied Irish is a medium commercial bank, for which trades of this size are flabbergastingly large, yet no one noticed. -- There seems to have been collusion with the control department -- the watchdogs for banks who keep the people who handle the money from insider trading. These departments have always been a prime source of misbehavior. -- Allied Irish makes up 12% of the Irish stock exchange, which plummeted today. Allied says everything is fine, but if everything isn't, this will be worse for Ireland than Enron is for us.
I sense that we are in for a few more nasty disclosures before we're through.
Update Steven Den Beste also picked this up, and asked the vital question: who was the auditor? No, not Anderson -- PWC. Hello, Glass-Steagall.
I just wanted to jump on the bandwagon and direct everyone to William Quick's excellent post on Israel. A choice excerpt:
It doesn't matter whether Europe is puzzled (or scornful), or Islam is angry, or Asia doesn't care. We will not permit the destruction of Israel, nor will our support of her waver. "Never again" is not some faded, hopeful wish. It is the bedrock promise of the state of Israel. It is also the debt of the civilized world, whether the civilized world wishes to acknowledge it or not, keeping in mind that we may not have entirely clean hands in the matter ourselves. The contention of some that FDR could have done more to mitigate the genocide is controversial, but the possibility certainly must be acknowledged. In any event, the debt remains, and we will enforce it with American will and power, because we are America.
The whole thing is this good, so if you haven't read it, go over and do it now.
But that has not been the case. The probable reason is that years of Israeli occupation have changed the nature of Palestinian society, robbing it of both hope and, I would insist, rationality. It is now behaving as the Japanese did toward the end of World War II when, in desperation, they sent pilots crashing into U.S. ships. These kamikaze attacks were both effective and terrifying, but they were also a clear sign that Japan had gone nuts.
The kamikaze attacks were an important element in the dehumanizing of Japan. They encouraged, maybe the right word is "permitted," the use of the atomic bomb. After all, the enemy was not rational. It was barbaric. It would never surrender. It would fight to the last square inch. Better to incinerate them all.
In a similar manner, suicide bombings have transformed the image of Palestinians. Now, in the view of many, they are similar to the people my guide once so excoriated and insulted -- so different, so primitive, so cruel and indifferent to human life that they celebrate the suicide of a loved one and the simultaneous murder of innocent people. This is the awful legacy of Yasser Arafat's inaction and reluctance to condemn these attacks: He has vindicated the ugly views of my first Israeli guide.
I've figured out what it is that annoys me about Paul Krugman. It's not his politics. While Richard Cohen's columns occasionally rile me to the point of screaming "faughh!" while I hurl the paper from me with great force, I don't find them annoying -- I just disagree, violently, with the conclusions therein.
But Paul Krugman annoys me.
And now I know why. It isn't that he disagrees with me -- it's that he pretends he's stupid, in this disingenuous, aren't-I-cute? voice, so that he can score cheap rhetorical points. I say cheap because whereas good rhetoric hits home, even if you don't agree with the viewpoint, his zingers lack zing if you have the faintest idea what he's talking about.
Which Krugman does. So he's saying things that he knows are dumb because he thinks that his dumb readers will be taken in by them. He did it when he compared Enron to the Asian currency crisis, an area where he has special expertise. He did it when he pretended that he thought he was qualified to offer opinions on accounting, an area where he doesn't. And in today's column for the New York Times he combines both follies: making comparisons which even he must recognize are stupid, in an area where he is less than qualified to comment.
He compares, for example, Bush's budget to mark-to-market accounting. Specifically, he says that the too-high projections were just like mark-to-market accounting, and that this accounting was what brought Enron down. Now I agree that Bush's projections were overly roseate, as were Gore's. Bush wanted to spend the never-never revenue on tax cuts; Gore on a prescription drug plan for which he ludicrously lowballed the cost estimates, a very badly designed tax cut which Krugman knows was awful, and various other social spending for his favorite groups. The choice between the two is a political one, not of which one had the most "realistic budget numbers".
That aside, mark-to-market accounting is the practice of revaluing certain assets to reflect their market value rather than their historical cost, which is how most assets appear on the balance sheet. Because these assets are traded in a public, liquid market, this is thought to be a better reflection of their value. In fact, it was originally meant to prevent companies from hiding huge losses by refusing to sell or write down bad assets, as the Japanese banks continue to do. Enron's problem, I think we can all agree, was not that it too readily disclosed changes in its fortunes. It did count earnings before it had cash in hand -- but it counted them because the earnings were based on the current value of futures contracts it had, contracts which had a market value that represented the best guess of experienced traders as to their capitalized revenue. Did Enron play fast and loose with the rules? Who knows? We'll find out soon. But the FASB guidelines for reporting the value of commodity contracts were not the cause of the meltdown.
As for Bush. . . Mark to market accounting has, as far as I have been able to tell, no relationship to Bush's campaign budget except that Paul Krugman likes the sounds of the words "Enron" and "Bush" when you say them together, fast.
He does the same with one time charges, in which companies who have to take a large loss charge as many expenses as possible to whatever caused the loss (a tornado wiping out a factory, for example), so that when their earnings go back all the analysts clap their hands and giggle and say "well done!" He says that this is what the Bush Administration is doing with the defense budget. But the analogy to one time charges would be more compelling if taxpayers were equity analysts who pore over financial statements, or even if the majority of taxpayers balanced their checkbooks; if the "one time charge" were, say, one time rather than a continuing item; or if he claimed that Bush was taking a small negative hit now so that he could bask in surpluses next year. Uhhhh. . . What he is really saying is that the Administration is larding the defense budget because the public is currently open to defense expenditures. Probably true. Probably his friends the Democratic senators will lard it even further with projects for friends in their home states. But larding the defense budget is not the same thing as taking a big, one-time charge. As far as I can tell, the only relationship is that we all know accounting is bad, so Krugman likes saying "Accounting" and "Bush" together, fast. . .
Why is Krugman doing this? Because he believes it? No, he's not stupid. But he thinks we'll believe it, and probably he's right. How many New York Times readers can read a balance sheet, much less explain the various accounting rules behind it?
And this is where that aren't-I-cute? voice comes in. Just in case we do catch him, Krugman wraps up with this "Shucks we're just folks" paragraph, written in the grating tones of a high school debater:
the military buildup seems to have little to do with the actual threat, unless you think that Al Qaeda's next move will be a frontal assault by several heavy armored divisions. We non-defense experts are a bit puzzled about why an attack by maniacs armed with box cutters justifies spending $15 billion on 70-ton artillery pieces, or developing three different advanced fighters (before Sept. 11 even administration officials suggested that this was too many)."
That puzzlement is supposed to be the voice of Krugman-as-Socrates, innocently casting the light of reason over us by virtue of a simple seeming question. Except that his writing isn't deceptively simple; it's deceptively simplistic. Krugman doesn't fail to understand how the artillery pieces are related to the box cutters. He may not agree with it, but he understands it. Krugman isn't as stupid as he acts. He just thinks his readers are.
On Monday, President Bush sent Congress a new budget plan, which has little extra money for anything other than national security and tax cuts.
Some 300 world leaders were held spellbound on Sunday night by former President Bill Clinton, the ultimate Davos Man.
On this day in history:
1937: President Roosevelt proposed increasing the number of Supreme Court justices; critics charged Roosevelt was attempting to "pack" the court. (See this front page.) 1900: Adlai Ewing Stevenson, the American politician and diplomat, was born. (Read about his life.) 1887: Harper's Weekly featured a cartoon about technology.
These being the news columns. How come when Bush presents a budget it has "little extra money", whereas when President Roosevelt tries to appoint his own majority to the supreme court, it's "critics charge"? Besides, didn't anything ever happen to Republicans?
It seems that one of our young ladies has caught the eye of a young man whose idea of romance is to stand like a large lump of flesh, staring at her back until she tells him to go away. Today, however, he was finally moved to press his suit. He cross the room. . . approached her. . . looked at her with a longing gaze. . . and said "Is that a printer?"
I'm trying to think whether I've been the victim of a worse pickup line, but none are currently springing to mind.
If there's anything more fun than economics -- it's economist jokes!
A sample:
A boy was crossing a road one day when a frog called out to him and said, "If you kiss me, I'll turn into a beautiful princess." He bent over, picked up the frog and put it in his pocket. The frog spoke up again and said, "If you kiss me and turn me back into a beautiful princess, I will stay with you for one week." The boy took the frog out of his pocket, smiled at it, and returned it to his pocket. The frog then cried out, "If you kiss me and turn me back into a princess, I'll stay with you and do ANYTHING you want." Again the boy took the frog out, smiled at it and put it back into his pocket. Finally, the frog asked, "What is the matter? I've told you I'm a beautiful princess, that I'll stay with you for a week and do anything you want. Why won't you kiss me?" The boy said, "Look, I'm an economist. I don't have time for a girlfriend, but a talking frog is cool."
Bye, bye, Instapundit readers. . . I've enjoyed your stay. . . y'all come back now, you hear?. . . don't forget to write. . . I'll miss you. . . don't be a stranger. . .
Meanwhile, on the editorial page of the Wall Street Journal, the head of Ernst and Young sets what may be some sort of corporate record for literary manic-depression. Mr. Turley runs the complete range from anger at those meanie regulators to whining threats about the dire consequences of crossing him, to abject groveling. In fact, it brings back fond memories of my college boyfriend, whose radical anger at the white male power structure devolved, over the course of our relationship, to anger at the non-him power structure, which as you can imagine was quite large. But I digress.
I regret that I can't offer the link whereby you might feast your eyes on Mr. Turley's hissyfit-in-black-and-white, but I think that this passage sums it up:
A client recently asked me what I thought to be the worst possible outcome of the current situation. I told him it would be the implosion of Arthur Andersen, which would create an immediate supply/demand mismatch in the audit profession, coupled with legislation by Congress that unduly restricted the profession -- making it unappealing for students to enter the profession or long-time auditors to stay in it. Add to this the imposition of too many requirements on audit committees, and we could end up with nobody wanting to do audits and nobody wanting to serve on audit committees.
That's my nightmare. The client looked at me, concerned, and said, "This could happen."
But people who know me say I'm an undying optimist. I am. And I believe that with all the people looking at my profession, people who are searching for solutions, we won't make the mistakes that would lead to my nightmare, but instead will take the right steps to ensure a stronger profession, better financial reporting and stronger capital markets.
The drama! The melancholy! The tears we fight back as we think of Mr. Turley, standing alone against the darkness! But he is undaunted, his valor undimmed by the high tide of misdirected anger focused on him and his firm! I am overcome! I am amazed!
I am going to be sick.
But thank you anyway, Mr. Turley. I haven't had quite so much fun since granny got her hand caught in the wringer.
Waaaay back in January I explained why the Keynesian economics of which media types are so enamored is wrong. Now Robert Bartley of the Wall Street Journal does so even more thoroughly, although without the biting wit. A must read for those interested in learning a little more about economics.
MICHAEL KINSLEY PROVIDES some welcome comic relief on the World Economic Forum. It's makes a nice break from making fun of guys dressed up as sock puppets to protest Pets.com.
Whew! Traffic has spiked, and so has the email -- all weighing in on the question of whether or not we should regulate guns like cars. From the nay side comes reader Jonathan Gewirtz:
- As for treating guns like cars, how about going the other way -- eliminate driver licensing? Driver licensing is mainly a form of taxation and personal ID/tracking. It doesn't keep bad drivers off the roads. Let's license neither gun possession/carrying nor driving; let criminal and civil penalties for misconduct deter malicious nd irresponsible behavior.
Actually, I disagree that licensing doesn't keep bad drivers off the road. It doesn't keep all bad drivers off the road, but if you've ever been to a third world country, you know how much worse it can get. The traffic fatalities in countries where anyone can get a license by bringing the examiner a carton of cigarettes are astronomical compared to ours (although, of course, you have to factor in seatbelt usage and vehicle age/maintenance -- but this isn't an easy factor, as older cars are often bigger and safer.) Civil penalties only work if you have enough money to pay them -- ask anyone who's been hit by an uninsured driver. Criminal penalties are not an effective deterrent if the person doesn't realize that they're doing something dangerous. In my, admittedly limited experience, most people who haven't fired a gun have no idea how hard it is to point and shoot. They won't correctly assess the risk of their hitting an innocent bystander. Plus I think it's dangerous to criminalize accidentally shooting bystanders during an act of self-defense.
Meanwhile, over at Coyote at the Dog Show, points out that unlike driving, the right to bear arms is a constitutional right. True. But constitutional rights are not unlimited; the famous example is that the right to freedom of speech does not give you the right to shout fire in a crowded theater. This passes my test of a tangible, immediate negative externality. Constitutional rights can be regulated, so long as the regulation is narrowly constructed to resolve a particular, definite harm. (I'm not a lawyer, and I don't know the legal language. But this is the synopsis I've gotten from lawyers whose smarts and judgement I trust.) He also worries about the possibility that the tests will turn into an effective barrier to gun ownership. I worry about that to. But I think that if we started from a premise of an individual right to bear arms, the court has demonstrated in first amendment cases that they can keep regulation minimal and non-intrusive over a sustained period. Of course, I think it's likely to be a long while before we start from the premise that there's an individual right to bear arms, so I can make these confident predictions.
Finally, Eugene Volokh offers a link to this terrific site, the relevant piece of which I have quoted here:
There are plenty of thoughtful arguments in favor of various restrictions on guns, but one of the oddest arguments from the pro-gun-control forces is "Why not regulate guns like cars?" The implicit argument here is "Why not require licenses, registration, tests, and so on for gun possession?"
(See, e.g., Chicago's Million Moms March on Mother's Day, PR Newswire, Apr. 27, 2000, quoting Million March organizer Donna Dees-Thomases as saying "We want Congress to create a meaningful gun policy in this country that treats guns like cars"; Partnership for Prevention's New Report to Congress Recommends Gun Owner Licensing and Gun Registration, U.S. Newswire, Mar. 24, 2000, quoting Handgun Control, Inc. president Michael Barnes as saying "For years now, we have been calling on Congress to treat guns like cars by a system of licensing and registration.").
This argument is odd because cars are basically regulated as follows:
1) No federal licensing or registration.
2) Any person may use a car on his own private property without any license or registration. See, e.g., California Vehicle Code §§ 360, 12500 (driver's license required for driving on "highways," defined as places that are "publicly maintained and open to the use of the public for purposes of vehicular travel"); California Vehicle Code § 4000 (same as to registration).
3) Any adult may get a license to use a car in public places by passing a fairly simple test that virtually everyone can pass.
This is pretty much how many gun rights advocates would like to see guns regulated: No need to register or get a license to have a gun at home, and a simple, routine test through which any law-abiding citizen can get a state license to carry a gun in public. Gun control advocates would in reality prefer a much more onerous system of regulations for guns than for cars.
Of course, one can certainly argue that guns should be regulated more heavily than cars; thoughtful gun control advocates do indeed do this. But then one should candidly admit that one is demanding specially burdensome regulation for guns -- and not claim to be "merely asking that guns be regulated like cars."
Andrew Hofer rips apart the environmental study showing the US ranking after Botswana and Slovakia in environmental health. He does what he does so well -- goes after the numbers and the horrendous methodology, at one point catching the authors saying, effectively, "this data is useless. But we had to use it to make our point."
Anyone who has been to the gaping ravages in the landscape of Eastern Europe wrought by industrial bosses intent on taking a shortcut to the worker's paradaise couldn't possibly argue that any country there ranks above us in environmental health. This alone should have clued me in that the article was a crock, but alas, I wasn't paying attention. That's what's so marvelous about blogdom -- someone's always picking up on something you missed. Collectively, we're all smarter.
I just love watching my hit counter now. I can watch my projected hits rise by the minute. Thanks to Professor Reynolds and all his lovely, lovely readers who made this possible.
Swen Swenson from Coyote at the Dog Show writes in with a host of criticisms, all valid, some dead on, and I want to respond (I'm combining two emails for maximum grovel effect):
In addition to being a blog monster, I'm a certified NRA hunter safety instructor. I've just finished reading your response to 'Myria' and, while I appreciate your sentiment, I must respond to several points:
"You tell them that all guns, except revolvers and muzzle loaders, were semi-automatic. Despite the fact that they have never held a gun, they refuse to believe you."
They shouldn't. In addition to revolvers and muzzle loaders, the popular action types include single shots, double barrels, bolt actions, lever actions, and pump actions. Autoloaders (semi-autos) comprise a small minority of all firearms in civilian ownership.
He's right, and I was sloppy. In my defense, I was quoting a conversation I'd had about handguns, with someone who later told me that all rifles were bolt actions like the one he'd used at camp when he was 12 and refused to believe that semi-automatic non-military weapons existed despite my offer to show him guns with magazines that fired a single shot. But still, I was sloppy.
"I think good gun law would also restrict certain types of guns from public places. High penetration rounds -- not in high density areas. You don't get to protect yourself by drilling one through the walls into some poor kid's bedroom."
No small arms ammunition of which I'm aware will penetrate 2 feet of stone, or even half a foot of stone. Not even the monstrous .50 Browning armor piercing. Most small arms ammunition is designed to penetrate one critter, two or four-legged, and efficiently expend all its energy therein. Anything more is useless. Anything less is worse than useless. Only the Glaser and Magsafe are designed to penetrate less. Only a few specialized rounds are designed to penetrate more and, sigh.. they are already illegal for civilian ownership.
Any law that further restricts the penetration of ammunition would logically go after the most penetrative ammunition, that used in high-powered rifles. The stuff hunters use. I'm told your gangbangers don't use the '06 much but hunters do. Let's not go there. The 'high-penetration rounds' bit is a red herring. It's intended to go after hunters, not gangbangers.
Seems I fell for standard misinformation. No excuse, but I'm willing to learn from my mistakes. But I do want to point out that I wasn't advocating making any ammunition illegal, or preventing its sale anywhere -- just telling people to chamber something a little lighter when they're in city limits.
"Ditto automatic weapons. Whether or not you think that people should have a right to own machine guns, I think most sensible people would agree that a right to carry around a fully automatic weapon in crowded public places is an invitation to disaster."
For all practical purposes full auto weapons have been outlawed for civilian ownership in the US since 1934. The only people who legally carry full auto weapons on the street are police. I agree that this is an invitation to disaster.
Well, here's the thing: I don't think they should be illegal. I just think it should be illegal to carry them in the city, where there isn't any safe place to discharge one. I'd really like to see guidelines for density use of weapons.
This is probably what Myria was talking about when she argued against 'reasonable restrictions'. Your proposed restrictions seem reasonable. They are not. They have either already been done: machineguns are outlawed. Or they are totally impractical, bullets that won't penetrate are useless.
The only reason I'm advocating the driver's license approach is that I'm advocating removing all of the other laws that currently prevent well-meaning law-abiding citizens from carrying guns. In the transition, I fear that uneducated consumers might decide to tote an Uzi in downtown Chicago. For all I know an Uzi is appropriate to self-defense in rural Montana. But in a dense area it's crazy. I think this point may have been lost; it may have seemed that I was advocating adding to exisitng gun laws, rather than replacing the lot of them with a simple demand that you be trained before you carry a gun in a public place. So to sum up my position:
1) You should pass an exam demonstrating that you know how to maintain the weapon, and can hit what you're aiming at at a reasonable distance. This obviously precludes people with certain disorders from public (as opposed to shooting range) firearms use: blindness, Parkinson's (if their hands shake badly), severe dementia or retardation. 2) In high density areas, we should develope guidelines for what guns and ammunition can safely be used, assuming that the person has been trained in proper firearm safety and operation. The beauty of (1) is that we now get to assume this. 3) All other gun laws should be done away with.
You've got to understand where we gun nuts are coming from. All of the gun control laws - some 20,000 of them - were proposed as 'reasonable restrictions' - 'just between us folks of good will.' We are rapidly running out of patience with that argument. As with the 'high penetration rounds' issue, the folks who propose such things are often not acting in good will. One example: Gun control laws were the backbone of Jim Crow, it took the Deacons arming themselves to put a stop to the Klan. You won't read much about that in the history books. Now, they certainly have you fooled if you are afraid of those 'high penetration rounds' coming through 2 feet of stone!
I confess, I fell for the propaganda. As I said in response to the earlier email from Myria, I understand perfectly the tactical reasons that the NRA is against mandatory training. I agree with them -- accepting a new law without undoing old ones is foolish. But if you could exchange a good mandatory training program for, say, doing away with New York and Chicago's (two name but two) near-total ban on guns, I'd think it was a deal well made. Which is why I know that the gun control groups would never go for it.
There's no such thing as an 'effective gun law', in the sense of a law that the lawless will obey. The malevolent, ignorant or not, will not obey restrictions, reasonable or not. If you could take away all their guns, and you can't, they would use machetes, clubs, or ball bats, or sharp sticks, or rocks, or.. airplanes. You are far better off defending yourself with a gun than you would be going mano e mano with ball bats against some 250# goblin. Disarming the general population doesn't work any better than disarming airline passengers, it only makes them easier to victimize.
No, you won't prevent criminals from carrying any gun they want, though I think a well armed population might reduce the incentive for doing so. The laws I propose are not in any way based on the supposition that we can reduce crime by imposing gun laws. They are based on the supposition that they present a minimalist way to ensure that normal people have the tools to safely use weapons in public spaces.
I looked at my hit counter and saw a threefold spike in 10 minutes, which could only mean -- I've been InstaPundited. Welcome, new readers! Stay around and look a while -- I hope you like what you see.
Today's Issue:How can companies declare huge profits and still have no tax bill?
Many people look at the fact that companies declare profits on their financial statements, but not on their taxes, as evidence that chicanery is afoot. And to some extent they're right, some of the time. But not as often as you think. There are fundamental differences in the way that corporations account for their earnings for taxes and for their financial statements. We all know that I want to abolish the damn thing entirely, but if we're going to have it, we're going to need to keep financial accounting and tax accounting separate.
This seems dishonest, but let's think about the purpose of the two types of accounting:
Financial Accounting is the kind that produces financial statements and annual reports -- the type that shareholders use to determine what a company is worth. Its object is to present a true picture of the value of the company.
Tax Accounting is the kind that produces your tax bill. Its purpose is to figure out approximately how much money you made during the year (taxable income, and how much you had to pay out in order to make that money (deductible expenses), subtract your deductible expense from your taxable income and tax the bejeesus out of what's left.
So let's look at a situation where the two might differ:
Say you have a company that signs an ironclad contract to build a building for $8 million dollars. You've got all the stuff, you're ready to go, and the contract is final -- there's no way that the buyer can renege unless they go belly-up. For all intents and purposes, that money is guaranteed. Your shareholders want to know about this. They want to see that income hit the bottom line so that they can appropriately value the stock.
But you don't have the money yet. If the IRS made you pay taxes on it, you'd have to declare bankruptcy, because you haven't gotten your hands on the cash. So while reporting that deal as revenue produces financially true statements, it doesn't tell the IRS how much money you can or should pay them.
Now, companies certainly take advantage of this. And there are arguments that certain types of manipulative securities and other items should have to be the same on the financial statements as for taxes. (I won't confuse you -- or me -- with the details.) However, the only place this is currently true is with inventory accounting, which I may explain another time if I run out of witty quips on slime molds or paddleball. The point is, that the reasoning behind the split between financial accounting and tax accounting is sound. So the next time you hear people saying X company had record profits but paid no taxes, you'll be able to tell them that this isn't as obviously wrong as it seems.
I have to say, it baffles me when gun-freedom advocates invoke cars as a metaphor for guns. Consider that in order to drive, one must have passed a driver's-education class, be licensed by the state, and carry liability insurance for any damage you may cause while operating your vehicle. In addition, your car must be registered by the state and must pass an annual inspection to ensure that it is in safe driving condition. You must prove that you are licensed and insured in order to buy a car. Finally, the state can revoke your license to drive if you demonstrate that you are sufficiently irresponsible or dangerous when behind the wheel.
So, you know, if you really want guns and gun ownership to be treated in the same fashion as cars and car ownership, I can't say that the gun-control lobby will be unhappy with you.
Oh, I think they would. Because the fundamental aim of the more prominent groups is to outlaw handguns entirely, and in some cases long guns as well. The fundamental vision of the gun control groups is that there is no legitimate right to self defense with a weapon. That's why they publicize studies saying that compliance is the best option. That's why they want handguns, which have few sporting purposes, banned.
They are also incredibly elitist. Almost none of the gun control proponents I know (and I know a lot!) really think that they are dangerous with a gun. They don't like them, perhaps, but they don't actually think that they themselves can't be trusted with them. Neither are their friends the problem. It's the people on the other side of town, people of a different income level or ideology, who are dangerous. Which is when I start my "And yet you think these people should vote speech, which leads to extremely confused assertions that voting is much less dangerous than guns, assertions which ultimately trail off and are replaced with a vehement 'You can't be serious!'. Or they reveal their underlying belief that people who disagree with them, or are poorer or southern or whatever -- well, they're not advocating that we herd them into ghettos and forbid them to breed, but we shouldn't rule it out, either.
My "driver's license" approach is not based on limiting who can have guns -- it's based on making sure that they know how to safely use them. I would eliminate all discretionary laws -- not something the activists favor. I would eliminate all restrictions on weapons ownership which do not stem directly from negative externalities -- you can't fire that howitzer in an urban neighborhood, sir, but if you've got enough acreage, go ahead! So long, of course, as the noise level doesn't bother the neighbors. And I would require those externalities to be measurable: which is to say that the possibility that you might accidentally shoot someone at some unspecified time in the future is not a negative externality. The probability that if you fire a rocket launcher in New York City, you will kill someone, is.
I've had gun control proponents tell me that the disturbed peace of mind your neighbors get from knowing you have a gun is a genuine negative externality. Perhaps so. But if the legal system takes into account your peace of mind in deciding whether your neighbor can have a gun, it's also going to be able to take notice of your neighbors peace of mind when you decide to practice Santeria or have a quiet orgy. But religion's a constitutional right, I hear them cry. And then, embarassed silence.
(I realize in reading this that this sounds as if I swashbuckle around winning arguments left and right. I'm not trying to convey the impression that I'm some sort of a latter-day Clarence Darrow. I'm just compressing for dramatic effect the hours of drunken wrangling that precede my small, telling points.)
Okay, whatever I'm doing wrong, I'll stop, I promise, if the Blogger gods will tell me. One more fubar post repeated:
Justin in time, Happy Fun Pundit answers all our questions about the Democratic tax plan. I can't tell you how relieved I am -- I thought they were engaging in venal politicking against the national interest, but now I realize that I was confused by the apparent illogic and my silly reliance on "economists".
We've all explained Enron. But none so well as Dave Barry (via Joanne Jacobs Tee-hee-hee! I love that man.
Q. Why didn't Wall Street realize that Enron was a fraud?
A. Because Wall Street relies on ``stock analysts.'' These are people who do research on companies and then, no matter what they find, even if the company has burned to the ground, enthusiastically recommend that investors buy the stock. They are just a bunch of cockeyed optimists, those stock analysts. When the Titanic was in its death throes, with the propellers sticking straight up into the air, there was a stock analyst clinging to a railing, asking people around him where he could buy a ticket for the return trip.
Charles Johnson talks intelligently about the Israeli settlements. A friend sees them, and I agree, as a desperate way for Israel to worsen the Palestinians' BATNA (Best Alternative To Negotiated Agreement) just as Palestine works to worsen Israel's. Here's the awful conclusion I've come to recently: there is no way for Israel to survive other than to kick the Palestinians out. The Palestinian nation will not settle for any solution that does not make inevitable Israel's ultimate demise. John Derbyshire thinks that demise is already invevitable. I think the only way to make it work is for Israel to seal the borders. I think that this will happen. And I think that the Palestinians will find that they like being part of Jordan a lot less than they like being a part of Israel.
The military cleric attending to the Gitmo prisoners says they aren't complaining about the conditions. If true, this puts them in the same position as those dopy feminists who argue that women are too stupid to know when they're being discriminated against -- a fine pro-woman position.
Meanwhile, Perry DeHaviland wants to build the biggest buildings in the world to replace the WTC. While I heartily applaud the idea of a big, in-your-face refutation of the terrorists, in this case I have to disagree, for two reasons.
He makes fun of Ed Koch. My Dad worked for Ed Koch, and while you may not like his politics, he fits my definition of an honest politician -- which is to say that he's genuinely interested in figuring out what works, rather than what sounds good to the uneducated masses. I know someone will argue with me, but darn it -- I just like the guy.
The WTC towers were a boondoggle. Buildings that tall are a fire hazard, almost impossible to evacuate, and extremely cost inefficient because of how much space you have to devote to the elevators and other physical plant -- plus the buildings don't last as long because of structural stress, unless you overbuild them, which further reduces profitability. Note that they were built by the Port Authority -- by then everyone else had figured out that super-tall buildings weren't profitable. Which is why the current tallest building is another government sponsored boondoggle in Kuala Lampur. So while I support rebuilding the site, I think it should be something that a private developer could profitably build. As a good libertarian, y'know. ;-)
Over on Libertarian Samizdata, David Carr has a compelling explanation of why such an overwhelming majority of writer and artistic types are socialists. Because it seems grossly unfair that no one wants to buy their work, and because there's always a much greater supply than demand of labor for these professions.
Yet I think there's also an element of self deception in two ways. There is the adamant refusal to believe that their work might be bad (I worked in publishing. It's awful. There are people who should have all writing implements taken away and their typewriters or computers smashed. Among my favorites were the guy selling me an illiterate opus about an angel coming to a garage in New Jersey who felt compelled to inform me in his cover letter that "This is not a true story"; and the gentleman who had composed an entire novel based around -- no, you won't believe me, but I swear to you on my honor that it is the unvarnished truth -- an entire novel based around Microsoft Word 2.0 clipart.)
There is also the self-lie that what they do is every bit as hard as digging ditches or word processing. Okay, it's not the same. You may work as many hours, and you may work as physically hard. But you do not suffer the mind-numbing, soul-sucking boredom that makes every hour a screaming agony. The fact that your average laborer is not as bright as you does not mean that he finds lifting things eight hours a day, 365 days a year, fulfilling. He's bored. It sucks. And unlike you, holding onto the vision of success and fame, all he has to look forward to is 40 more years of this, followed by a couple of years in Florida and hopefully, a painless death. The reason there's such an oversupply of writers, artists and musicians is that these things are fun. As witness all the bloggers giving away their thoughts for free. (That doesn't, incidentally, mean that you should ignore the tip jar over there. Don't make me post the pictures of the bullmastiff with the soulful, hungry eyes.)
Also witness that the price to be paid for getting a soft job as a writer in the workers paradise is that you aren't allowed to write, paint, or compose about anything except tractors and metal presses, and the masses gazing boldly into the bright socialist future. Starvation suddenly doesn't sound so bad.
The post below is FUBAR. And can't be erased. So here it is again.
New Kid on the Block
I just discovered A Coyote at the Dog Show and I highly encourage everyone else to do so. He's in Wyoming, where I spent a couple of summers in high school, and where I found an unusually high quotient of cool people -- possibly why the blog is so good. Or maybe it's just the reason I get misty when I turn on the country station and hear "Sweet Wyoming Home" . . .
Which is more relevant to the average American, movie trivia or remembering the date of the Battle of Waterloo? Which was more fun to learn? I’m afraid that a focus on rote memorization of dates has been the biggest downfall of academic history. What does it matter that the 1700’s were the ‘age of discovery,’ if you don’t understand that it was the fluorescence of astronomy, thus navigation, and transportation technology, particularly ship building, that allowed this to happen? If you understand the 'what' and ‘why,’ the ‘who’ and ‘when’ will follow.
Okay, I agree to a point. But only to a point. Just as you don't have to be a lightning calculator to master higher mathematics, you don't have to memorize every little date to have a good grasp on history. But math teachers in New York have now decided to avoid teaching calculation altogether because it's easier to give the kids calculators. They want to focus on "concepts". Well, how do you grasp the "concept" of quadratic equations if you can't add?
The nineteen year old, very bright and competent office girl with whom I took the quiz had no idea when the Civil War happened -- she couldn't even make a guess. She was unaware that Russia had had a revolution. She thought WWI had ended in 1937, which is probably why she couldn't figure out when Hitler became Chancellor of Germany -- her exact words being "Was that his title?". Does it matter whether she thinks the Civil War ended in 1865 or 1868? Not really. But the whole sweep of history is to her as a closed book. Without a pretty good approximation of when things happened -- within, say, 25 years -- you can't grasp the processes of history, because every event is an isolated occurrance. Come to think of it, this may be the problem with the anti-globalization nuts -- they've been taught everything with no context. It's certainly the problem with my coworker, who thinks that AIDS in Africa is a CIA plot because she thinks that's more plausible than a virus spontaneously mutating, and that Aristotle stole all his ideas from an Egyptian library which wasn't built until after his death. So while, yes, I think just memorizing dates is fruitless, equally so is teaching people stories without a timeline. It's hard to understand that "flourescence" if you think it took place in 1950 or 100 BC.
Other good stuff, with which I won't argue:
On the moral superiority of vegetarians: "the only people more annoying are organic vegetarians." Wait -- you've forgotten the vegans. A friend who became a neurosurgeon reported that a growing problem in neurology during his residency was the children of hippy vegans who refuse to feed their children any animal products -- despite the fact that this inevitably leads to physical and neurological disorders. You can raise a child quite healthily on a lacto/ova-vegetarian diet, but not on one totally based on vegetable matter -- there's some protein they need, or a vitamin or something.
I find the PETA types especially amusing -- most of them are a little to the left of Noam Chomsky, and violently pro-choice, yet won't eat (unfertilized) eggs. I also find their belief that if we didn't eat meat, the chickens cows could run free and wild, to be hours of fun for the entire family. "They should be in their natural habitat," said the girl wearing burlap shoes. "They've been bred by humans for thousands of years," quoth I. "Their natural habitat is a farmyard". This caused her to display some decidedly un-pacifist leanings.
On the arrows in The Lord of the Rings: they're apparently genuine authentic European neolithic. Yes, the movie makers were obessessed, and a good thing too.
You should go read the whole thing. But don't call him Tony. You'll regret it.
I just discovered A Coyote at the Dog Show and I highly encourage everyone else to do so. He's in Wyoming, where I spent a couple of summers in high school, and where I found an unusually high quotient of cool people -- possibly why the blog is so good. Or maybe it's just the reason I get misty when I turn on the country station and hear "Sweet Wyoming Home" . . .
Some of the good stuff involves my blog -- specifically, he makes fun of the New York Times History Quiz I posted:
Which is more relevant to the average American, movie trivia or remembering the date of the Battle of Waterloo? Which was more fun to learn? I’m afraid that a focus on rote memorization of dates has been the biggest downfall of academic history. What does it matter that the 1700’s were the ‘age of discovery,’ if you don’t understand that it was the fluorescence of astronomy, thus navigation, and transportation technology, particularly ship building, that allowed this to happen? If you understand the 'what' and ‘why,’ the ‘who’ and ‘when’ will follow.
Okay, I agree to a point. But only to a point. Just as you don't have to be a lightning calculator to master higher mathematics, you don't have to memorize every little date to have a good grasp on history. But math teachers in New York have now decided to avoid teaching calculation altogether because it's easier to give the kids calculators. They want to focus on "concepts". Well, how do you grasp the "concept" of quadratic equations if you can't add?
The nineteen year old, very bright and competent office girl I took the quiz had no idea when the Civil War happened -- she couldn't even make a guess. She was unaware that Russia had had a revolution. She thought WWI had ended in 1937, which is probably why she couldn't figure out when Hitler became Chancellor of Germany -- her exact words being "Was that his title?". Does it matter whether she thinks the Civil War ended in 1865 or 1868? Not really. But the whole sweep of history is to her as a closed book. Without a pretty good approximation of when things happened -- within, say, 25 years -- you can't grasp the processes of history, because every event is an isolated occurrance. Come to think of it, this may be the problem with the anti-globalization nuts -- they've been taught everything with no context. It's certainly the problem with my coworker, who thinks that AIDS in Africa is a CIA plot because she thinks that's more plausible than a virus spontaneously mutating, and Other good stuff, with which I won't argue:
On the moral superiority of vegetarians: "the only people more annoying are organic vegetarians." Wait -- you've forgotten the vegans. A friend who became a neurosurgeon reported that a growing problem in neurology during his residency was the children of hippy vegans who refuse to feed their children any animal products -- despite the fact that this inevitably leads to physical and neurological disorders. You can raise a child quite healthily on a lacto/ova-vegetarian diet, but not on one totally based on vegetable matter -- there's some protein they need, or a vitamin or something.
I find the PETA types especially amusing -- most of them are a little to the left of Noam Chomsky, and violently pro-choice, yet won't eat (unfertilized) eggs. I also find their belief that if we didn't eat meat, the chickens cows could run free and wild, to be hours of fun for the entire family. "They should be in their natural habitat," said the girl wearing burlap shoes. "They've been bred by humans for thousands of years," quoth I. "Their natural habitat is a farmyard". This caused her to display some decidedly un-pacifist leanings.
On the arrows in The Lord of the Rings: they're apparently genuine authentic European neolithic. Yes, the movie makers were obessessed, and a good thing too.
How about a ratings system for our newspapers -- a little icon that tells you how far left or right the article tilts. I wanted to post it on the page, but my html skills basically suck, so here it is. And think how much the Times would save by only needing one icon template?
Well the new color combination is here. And to those of you who said it looks girlie. . . well, pooh to you.
The dog and I went for a long walk today. And I think we've all learned an important lesson, which is that you shouldn't walk a dog in a fur coat no matter how cold it is out. The dog thought there was a large furry beast for him to play with (the coat, not me -- it's my mother's silver fox coat, which I borrowed because it's deliciously warm and makes me look like a brush mop with legs.) We had a wonderful time -- there was a road race in the park, which seemed to inspire Finnegan to drag me on a nice long run through the walkways. Three older women went gaga over the coat and told me that I should hold onto it and make it an heirloom. I didn't run into any anti-globalization PETA types to tell me that I shouldn't wear fur, which is a pity, because I had a long lecture all prepared about what it means to be on top of the food chain. All I got was a glorious sunny day, lovely people with their lovely dogs to talk through, a tramp through the underbrush with my dog who was so happy his whole body wriggled with joy, and a great deal of excercise. You can't have everything.
I have to go have lunch with my family now -- mmmm Chinese. I'll be posting around 2:00 for those of you who just can't get enough of my dry wit and/or bubbly personality. The rest of you can come back just to validate my sense of self worth, which is intricately tied up with my hit counter.
