Wednesday, May 19, 2010

Driving without drinking

So, sometimes, The New York Times actually posts something a little dead-on, like this letter from January 1st, 2008:
To the Editor:

In “Let’s Raise a Glass to Fairness” (Economic Scene, Dec. 26), David Leonhardt suggests that the argument for raising the federal tax on wine, unchanged at $1.07 a gallon since the early 1990s, is stronger than the argument for raising the tobacco tax. He points out all the ills associated with drinking abuse, including the some 17,000 Americans who die annually in alcohol-related traffic accidents.

It would seem that a far more appropriate tax to increase would be the federal gas tax, unchanged since 1993, at 18.4 cents a gallon.

Raising that tax would reflect all of the more than 42,000 traffic-related deaths each year, whether the result of drinking, fatigue, negligence or other causes. Irvin Dawid

Palo Alto, Calif., Dec. 26, 2007
In all fairness, Leonhardt makes something of a fair point. Alcohol probably does have a lot of social consequences. But those consequences, and their costs, are probably best dealt with locally, rather than through crushing federal taxes that go to nothing in particular. The same goes for other vices, like addiction to sugary meals such Captain Crunch.

Driving, on the other hand, wreaks global havoc. It is also expensive, and communities pay many confiscatory taxes to support its costs.

Want to reduce some of those costs? Make the drinking age 16 and the driving age 21.

Real anti-authoritarians take on Glenn Beck

A rather amusing letter appeared on counterpunch concerning Glenn Beck's mentally ill rants. Apparently he (mis)used one of their books as a prop.

Religion: CNN accidentally posts something thoughtful

Today many U.S. Catholics and Jews think like Protestants. They believe that religion is something we choose as individuals rather than inherit as communities, and they view it primarily in terms of faith rather than practice. None of this comes from either the Catholic brain of Aquinas or the Jewish mind of Maimonedes. The progenitor of this faith-based understanding of religion (who also happens to be the patron saint of religion rulings at the U.S. Supreme Court) is the American Protestant thinker William James, who famously defined religion as "the feelings, acts, and experiences of individual men in their solitude, so far as they apprehend themselves to stand in relation to whatever they may consider the divine.”
Do 6 Catholics + 3 Jews = 9 Protestants? by CNN religious sophist Stephen Prothero

Sunday, May 09, 2010

Down syndrome in the Heartland

I was Googling for yearly statistics on obesity at the urban level, which is shockingly hard to find. So there I was, mindin' my own Google results, when I ran into the article Sprawl and Obesity in Chicago: Why All the Fuss? (which, by the way, was completely irrelevant to what I was looking for). I clicked on it, and then saw, after I clicked on it, that right there in the bloody title of the search result was appended the words "by Wendell Cox." I learned several years ago that Wendell Cox probably ranks somewhere between a snake oil salesman and an 8-ball in his ability to offer intelligent original research. To say the least, the above headline probably says it all to any halfway discerning reader that this guy is probably a shill for shortsighted industrial interests (namely cars and smog producers). What Cox throbs most for is spinning transit use as a wasteful subsidy borne by an increasingly put-upon middle class. He does have two talents though: trying to look clever by asking dismissive rhetorical questions ("sun light: who needs it?") and putting a scholarly spin on naked political propaganda. What Wendell lacks for in intellectual honesty, he makes up for in proliferation.

People's Republic of New France
United States of America

(thanks Wikipedia for preserving the above abortion for all eternity; even if, as is common on Wikipedia, the above version is flawed because Alberta is a red state)
But all that's really besides the point. My real agenda here is making fun of the site that hosted the above URL: the Heartland Institute. Everyone knows there's a mass media narrative in America about coastal big city urban elites thumbing their effete, snobbish, latte-dipped noses at those real Americans living in places like, uh, well, it doesn't really matter where they live. Needless to say, real Americans are too pure and wholesome to live in big cities, even if big cities are possibly the economic engines paying for bridges and signs in real America. They also don't live in rural places like Vermont and western Massachusetts, which are full of hippies and bourgeois types who tolerate America-destroying forces like immigration and ethnic diversity. Basically, real Americans don't live in the states where the United States was born, places like Massachusetts and Pennsylvania, regardless of what those crybabies at say. Indeed, real Americans live in the Midwest, which wasn't even made up of states in 1791, and the deep South, which supported American independence rather grudgingly if the musical 1776 is to be believed (and it probably is). Such jokes seem dated now, now that Barack Obama was elected and fixed the whole world, but the legendary Jesusland map kind of says it all.

There's a religious aspect to this. Having internalized the above, which resulted in gaining a justified sense of moral superiority over the rest of humanity, The Heartland Institute found something missing: idols (e.g., saints or ikons — something to give a sensual meaning to the existence of the earthly truth). Any new religion inevitably finds itself looking to the past to seek out paragons of virtue because we inevitably don't remember the flaws of our historical and mythological leaders. Who remembers that Heracles and Moses were both murderers? Who remembers that Thomas Jefferson kept slaves? Who remembers that Ayn Rand was a truculent, fascistic, sniveling twat?

However, picking idols is no easy task. Not just anyone can be chosen. American Christians often find Jesus to be a poor idol indeed because he really doesn't live up to many of the beliefs they hold most dear. Thankfully, the Heartlandites have other choices. Theirs is an ideology very much the opposite of Jesus's ideology. Flawed as Jesus the man might have been, and we really don't know how flawed he was because of our scant records, Jesus of the Gospels favored the weak over the strong, the poor over the rich, and the sinner of the saint — if Christian theology has any elegance, it's that occasional point that maybe it's the fallen who need grace most of all. But Real Americans will have none of that crap. The Heartlandites are for markets, guns, property. More earthly models had to be chosen, ones that fit Real American preconceptions about themselves

To that end, the Heartlandites created an animated banner at the top of their web site to alternate through their idols.
This lead to some curious choices, many of whom have little or nothing to do with each other:
  • John Locke —moral and political philosopher; proto-liberal who favored limits on monarchical power
    • Market activities: sold future generations on charlatan contractarian philosophy, which echoes down to this day in the works of writers like John Rawls
  • Crispus Attucks — actually, nobody really knows anything about him, except that he died in the Boston Massacre and might have had dark skin
  • Benjamin Franklin — American inventor and politician (Americans get mocked for lack of civil knowledge of other cultures, but Americans who travel abroad frequently find Europeans telling them that Benny was America's best president); born in puritanical Boston, migrated to Philadelphia, where he spent a life rich in intellectual pursuits
    • Market activities: freely initiated the exchange of money for sex
  • Thomas Paine — anti-authoritarian liberal writer, active in both the United States War for Independence and the French Revolution; anti-slavery and arguably pro-gender equality
    • Market activities: wrote stuff, TLDR
  • Thomas Jefferson — wrote the Declaration of Independence, which was fine-tuned by Franklin; third President of the United States who favored anti-mercantile policies and distrusted financial markets
    • Market activities: monopolized the loins of at least one slave for a fixed period of time, no doubt in a mutually beneficial exchange of services; as President, purchased a lot of rather marginally useful land from the French, who had only recently stolen it back from the Spanish
  • James Madison — wrote some early American political propaganda; fourth President of the United States
  • Booker T. Washington — token black man (in case Crispus doesn't cover all the bases)
    • Market activities: credited with being the first inventive black man in American history (Benjamin Bannecker is forgotten)
  • Ayn Rand — Russian fascist
    • Market activities: author of some really crappy books
  • Milton Friedman —right-wing liberal economist
Of course, not many of them even come from the "Heartland" of the United States. Most of the American idols come from the coasts, especially Virginia. Milton Friedman may be the only true Heartlandite in the bunch, since he was seated at the University of Chicago for decades.

Saturday, May 08, 2010

Financial Leverage

I love this description of the 1929 Wall Street trust as described in John Kenneth Galbraith's The Great Crash 1929 (1988 revision published by Houghton Mifflin Company, page 57-58):
The principle of leverage is the same for an investment trust as in the game of crack-the-whip. By the application of well-known physical laws, a modest movement near the point of origin is translated into a major jolt on the extreme periphery. In an investment trust leverage was achieved by issuing bonds, preferred stock, as well as common stock to purchase, more or less exclusively, a portfolio of common stocks. When the common stock so purchased rose in value, a tendency which was always assumed, the value of the bonds and preferred stock of the trust was largely unaffected. These securities had a fixed value derived from a specified return. Most or all of the gain from rising portfolio values was concentrated on the common stock of the investment trust which, as a result, rose marvelously.

Consider, by way of illustration, the case of an investment trust organized in early 1929 with a capital of $150 million — a plausible size by them. Let it be assumed, further, that a third of the capital was realized from the sale of bonds, a third from preferred stock, and the rest from the sale of the common stock. If this $150 million were invested, and if the securities so purchased showed a normal appreciate, the portfolio value would have increased by midsummer by about 50 per cent. The assets would be worth $225 million. The bonds and preferred stock woulds till be worth only $100 million; their earnings would not have increased, and they could claim no greater share of the assets in the hypothetical event of a liquidation of the company. The remaining $125 million, therefore, would underlie the value of the common stock of the trust. The latter, in other words, would have increased in asset value from $50 million to $125 million, or by 50 per cent in the value of the assets of the trust as a whole.

This was the magic of leverage, but this was not all of it. Were the common stock of the trust, which had so miraculously increased in value, held by still another trust with similar leverage, the common stock of that trust would get an increase of between 700 and 800 per cent from the original 50 per cent advance. And so forth. In 1929 the discovery of the wonders of the geometric series struck Wall Street with a force comparable to the invention of the wheel. There was a rush to sponsor investment trusts which would sponsor investment trusts, which would, in turn, sponsor investment trusts. The miracle of leverage, moreover, made this a relatively costless operation to the ultimate man behind all of the trusts. Having launched one trust and retained a share of the common stock, the capital gains from leverage made it relatively easy to swing a second and larger one which enhanced the gains and made possible and third and still bigger trust.