Tom Tomorrow on Social Security reform

Rearranging the map

If the size of countries matched their populations, the Chinese, the world’s most numerous people, would occupy the territory of Russia, the world’s largest country in area.  The Indians would occupy Canada, the Canadians would occupy Pakistan, the Pakistanis would occupy Australia, and the Australians would live in Spain.  North and South Koreans would relocate to southern Africa, but would still be neighbors.

Here is what the world would look like.

Double click to enlarge

The United States is one of the few countries whose relative size matches its population.  Others are Brazil, Ireland and Yemen.  Click on Rearranged World for details and commentary.

What worries small business owners the most

What worries small business owners the most is not government regulation, not high taxes, not the cost of wages and benefits.  What worries small business owners the most is lack of sales.

Here are the figures, as compiled by the National Federation of Independent Business.

Scanned but not searched

I flew out to California last week to visit my brother over the Thanksgiving holidays, and went through the Transportation Security Administration’s new scanners on the way out from Rochester.  Going through the scanner didn’t bother me, and the TSA seems to have learned to move people through the lines at a more rapid place.  I don’t know, and don’t much care, what the person on the other end the scan saw on the view screen.  I am a grumpy 73-year-old man, not a modest 17-year-old girl.

The “enhanced searches” of passengers who are randomly selected or opt out of the scanning process are another matter.  I didn’t experience or witness any of these, but there are a lot of reports of women being groped by men, small children subjected to intimate searches by strangers, and people with physical handicaps subject to gross humiliation.

My questions about the whole-body scanners stem from the fact that the Department of Homeland Security has adopted this expensive new technology based on manufacturers’ claims, without independent testing.  Michael Chertoff, the former Secretary of Homeland Security, now represents these manufacturers through his consulting firm; this does not increase my confidence.

I wonder how rigorously the scanners are tested to make sure passengers are not subject to excess radiation.  I once had a good friend who tested radiation equipment in hospitals, to make sure the exact required dose of radiation was delivered every time.  If he had once made a mistake, he would never have been able to work again.  Are airport scanners, which are subject to much heavier use, subject to the same rigorous testing?  I seldom travel by air more than once a year, but I would worry if I were a regular traveler.

Jim Hightower’s advice

Never buy a pit bull from a one-armed man.

Never sign anything by neon.

Always drink upstream from the herd.

Daredevil bicyclist in scenic Scotland

[Hat tip to Jason Kottke]

The Olympics analogy

I have an extremely learned friend, a great Plato scholar, who has a low opinion of populism and egalitarianism.  He once challenged my beliefs with the following question: –

In the Olympic games, does everybody perform the same, or do some people manifest superiority?

In the Olympic games, does everybody win a prize, or are the prizes reserved for the best?

I tried to reply with questions of my own.  What follows is an improved versions of my reply.  The nice thing about having your own web log is that it is never too late to say what I should have said at the time.

In the Olympic games, does everybody in a race start at the same starting line, or can you buy the right to a head start?

In the Olympic games, does everybody get a chance to compete, or do members of certain races, religions and ethnic groups have to compete in separate games for lesser prizes?

In the Olympic games, do you have to compete to win, or are the sons and daughters of gold medalists automatically given medals of their own?

Are the Olympic games a voluntary contest in which those who come in first get medals, or is it an involuntary contest in which those who come in last, or even second, are punished?

Small thanks

I have many things for which to be thankful.  I have never in my life had to worry about where my next meal was coming from or whether I would have a roof over my head.  I have never been without friends.  I have good health for somebody my age (73).  I live in a free country under the rule of law.  I live in an age when the great mass people can devote themselves to other things besides working to survive.  Above all, I am thankful for the gift of life itself.

But this post is not about these things.  It is about the small things I have to be thankful for.

I am thankful for automobiles that don’t rust out.  When I first came to Rochester, the city and county governments used to spread large amounts of road salt in the winter.  Natives and long-time residents told me it was important to get a good rust-proofing service; I, foolishly, used an inexpensive service instead, to my regret.  Road salt is less of a problem now than it was then, but the plastic body of my Saturn doesn’t rust anyhow.

I am thankful for automobiles that always start in the winter.  I can remember when this was a big issue.  I would run my car in neutral when I got home, and before I tried to start the car, in hope of recharging the battery enough to get a good start.  Now, with alternators as standard equipment, that recharging takes care of itself.  I am thankful for automobiles that get good traction on ice-covered and snow-covered streets, for right-side rear view mirrors and for rear-window defrosters.  I am thankful for idiot bells that let me know when I am getting out of the car with my lights still on or my key still in the ignition; this idiot needs the reminder.

I am thankful for ballpoint pens that don’t leak over my shirts when I accidentally put them in the washer.

I am thankful bookstores such as Barnes & Noble and Borders provide chairs so I can sit and read.  They don’t lose money by allowing me to read their books free; I spend more there than I otherwise would.

I am thankful for painless dentistry.  As a boy, I once had a tooth extracted without anesthetic.  The dentist used what looked like a pair of pliers.  He pulled and pulled and pulled, then had to stop and catch his breath before going back and finally getting it out.

I am thankful for plastic bottles shaped with grips.

I am thankful for thermostats.  My parents had a coal furnace, and we had to be constantly thinking not letting the fire go out, but also banking the furnace so as not to waste coal.  One of my chores, since both of my parents worked outside the home, was to go right home when school let out and shovel fresh coal in the furnance.  Now I have a gas furnace that doesn’t have to be monitored at all, and a thermostat which I can turn up or down when I feel too hot or too cold.

I am thankful for luggage with wheels.  I can remember walking through airports and, before that, train stations carrying suitcases that felt like they would pull my arms out of their sockets.

I am thankful for search engines since as Google that allow me to find information in two minutes that I would have had to spend an afternoon in library to get, if I could find it at all.  I am thankful for web hosts such as WordPress that allow me to have my own web log, free of charge and without needing to be computer-savvy.  I am thankful for being able to communicate with friends in distant places through e-mail. Not to mention spam filters which free me from having to continually purge my e-mail and web log comments.

I am thankful for direct-dial long-distance telephone service.  I can talk to people in distant states and even foreign countries at an affordable price and without having to deal with an operator.  And for telephone answering machines.  When I was a boy, telephone service was like Internet service today.  Most people had it, but a large minority didn’t.

And not all telephone users had private telephone lines. Basic telephone service in those days consisted of a party line, networking a number of households; the phones of everybody on the line rang on every call, but you were supposed to recognize the distinctive ring of your own line and not listen in to others’ calls.

Microwave ovens are a great boon to a lazy cook like me.  I do almost all my cooking nowadays, which consists mostly of frozen dinners, in the microwave.

Barry Commoner’s Laws of Ecology

Everything is connected to everything else.

Everything has to go somewhere.  Nothing ever goes away because there is no such place as away.

Everything is always changing.

There is no such thing as a free lunch.

Everything has limits.

Skateboarders of Kabul

[Hat tip to Jason Kottke]

Andy Jackson and the battle of New Orleans

When I was a boy learning American history in grade school 60 or so years ago, we were taught how in 1815, Andrew Jackson and his unlettered Tennessee militia in the Battle of New Orleans defeated the British regulars through their superior marksmanship.

Our imagination was captured by the story of how American common sense and self-reliance defeated European training and discipline.  The song by Jimmy Driftwood became popular later, but it expressed how we boys saw things.

Recently I learned what Paul Harvey would have called “the rest of the story” in the opening chapter of a Pulitzer-winning history entitled What Hath God Wrought: The Transformation of America 1815-1848 by David Walker Howe.  The marksmanship of the Tennessee militia was not especially accurate or devastating.  The mass slaughter of the British troops was from the superior accuracy of the American artillery.  The cannons, firing grapeshot, were cast in government armories and fired by expertly trained gunners.

The Tennessee militia were not particularly accurate in their shooting, not because they were bad marksmen, but because most of them carried muskets instead of rifles.  Members of the Tennessee militia lost an informal marksmanship contest to New Orleans city militiamen because the New Orleans marksmen had rifles.  There also were Kentucky militia who were even more poorly armed, and they broke and ran in the face of the British troops.

We Americans remember the battle of New Orleans because it was our only victorious major land battle in the War of 1812.  During most of the war, the trained, professional British army marched up and down the country at will, easily defeating the untrained, amateur American militia.  On the other hand, as Howe noted, we Americans more than held our own in the war at sea because of the superior American gunnery – in other words, because of our industrial and technological capability.

We celebrate the frontier marksmen over the trained artillery gunners because we conflate education and training with aristocratic privilege.  Of course the artillerymen didn’t win the battle all by themselves either.  The Tennessee militia’s hardihood and General Jackson’s forceful leadership were admirable and important – just not substitutes for professionalism and expert technique.

The recession ended in June 2009

The age of the kilo-page

I recently learned a new expression – “kilo-page” – which means a thousand pages, as in, “The financial reform bill is more than a kilo-page.”  My rule of thumb is that a kilo-page law is not understandable, and that a law that is not understandable defeats the whole purpose of the rule of law, which is to have impartial rules for the common good that everybody follows.  A kilo-page law is an open invitation to the powerful to manipulate the system for their own benefit.

I came across the expression in the comment thread on a web log post entitled Scandinavian Simplicity by an economist named Scott Sumner.  Sumner makes the point that Sweden recently issued a single-page regulation – that everyone who gets a mortgage loan must make a 15 percent down payment – that will do more for financial stability than the whole 1000-plus pages of the U.S. financial “reform” bill.  The actual expression “kilo-page” was coined by another economist, named Bryan Caplan.

Hat tip to Marginal Revolution.

President Obama negotiates with the GOP

Military spending and Eisenhower’s warning

General Eisenhower with the 101st Airborne on the evening prior to D-Day

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron. […] Is there no other way the world may live?”

–Dwight David Eisenhower, “The Chance for Peace,” speech given to the American Society of Newspaper Editors, Apr. 16, 1953.

via Harper’s Magazine.  [Hat tip to Don Montana]

President Eisenhower, along with many conservative Republican businessmen of his era, feared that U.S. military spending would spiral out of control and that the United States would become a garrison state.  As a former five-star general himself, he was not in awe of the Pentagon, and actually succeeded in getting the military budget under control. As he left office, he commented, “God help this country when someone sits in this chair who doesn’t know the military as well as I do.”

The following chart shows the ups and downs of the U.S. military spending before and after Eisenhower.

Inflation through the ages

These charts are from a clipping of a Wall Street Journal reprint of an article in Forbes magazine’s March 1, 1975, issue.  I saved the article because I thought it was so interesting, and I still think it is interesting.

The price index was compiled by an Oxford economic historian named E.H. Phelps Brown from records of prices of food, cloth and fuel in Oxford, England, over the centuries.  It shows that inflation is not a normal state of affairs.  Prices have fluctuated around a base level except during two periods of history, the 16th century and the 20th century.

Phelps Brown also compiled a record of wages in both money terms and real terms – not just what a carpenter at Oxford was paid, but what he could buy with his wages.  The record showed that, in modern times, wages go down as well as up.  During the 16th century, the wages of an Oxford carpenter doubled in terms of pennies, but fell by two-thirds in terms of what he could buy.  It was not until 1880 that Oxford carpenters regained the lost ground.

Click on Measuring Worth for the U.S. Consumer Price Index starting in 1774 and continuing into the present.  In 2009, the CPI dropped for the first time since 1949 and is expected to fall again this year.

A very bad wizard

In L. Frank Baum’s story, the Wizard of Oz promises Dorothy and her friends, the scarecrow, the tin woodman and the cowardly lion that if they succeed in their quest, he will grant the scarecrow’s wish for a brain, the tin woodman’s wish for a heart, the cowardly lion’s wish for a lion’s courage and Dorothy’s wish for a way back to Kansas.

When they succeed, however, the Wizard is unable to grant their wishes. Instead he gives them other things he says are just as good. The scarecrow gets a college diploma, the tin woodman a flowery valentine card and the cowardly lion a military medal.  Only Dorothy can’t be helped because the way back to Kansas is something real.

President Obama promised his followers that, if they succeeded in putting him in office, he would make an all-out effort to achieve certain goals – a public option for health care as an alternative to private health insurance, a “cramdown” allowing federal bankruptcy judges to reset mortgages, the preservation of Social Security.  But when they achieved their quest, they were given other things that President Obama says are just as good – the Affordable Care Act, the Home Affordable Modification Program, the Deficit Reduction Commission.

In the story, the scarecrow manifested brains, the tin woodman heart and the lion courage in their actions, not as a gift from a wizard.  And Dorothy was able to browbeat the wizard into taking her along in his balloon ride back to our world.

The lesson is that we the people should not depend on the gift of a charismatic political figure.  If we want a full employment economy, if we want to curb the power of Wall Street over the government, if we want affordable health insurance, if we want to stop the erosion of labor rights and the social safety net, we need to create a political force that has to be reckoned with no matter who is in office, as the abolitionists, the suffragettes, the labor movement and the civil rights movement did in earlier eras.

Because President Obama may well be a very good man, but he certainly is a very bad Wizard.

The incredible grocery shrink ray

A mysterious force in grocery stores causes contents of containers to continually shrink.

1.75 ounces shrinks to 1.5 ounces

Gretchen Rubin’s secrets of adulthood

The days are long, but the years are short.

Someplace, keep an empty shelf.

Turning the computer on and off a few times often fixes a glitch.

It’s okay to ask for help.

You can choose what you do, but you can’t choose what you like to do.

Happiness doesn’t always make you feel happy.

What you do every day matters more than what you do once in a while.

You don’t have to be good at everything.

Soap and water remove most stains.

It’s important to be nice to everyone.

You know as much as most people.

Over-the-counter medicines are very effective.

Eat better, eat less, exercise more.

What’s fun for other people may not be fun for you — and vice versa.

People actually prefer that you buy wedding gifts off their register.

House plants and photo albums are a lot of trouble.

If you’re not failing, you’re not trying hard enough.

No deposit, no return.

Nature’s underwater deceiver

Click on Mimic Octopus Wiki for more about one of nature’s wonders.

Hat tip to Marginal Revolution.

The crime of torture is bipartisan

When George W. Bush was in office, he denied that the United States government engaged in torture.  Under his administration, eleven National Guard soldiers were court-martialed, convicted, sent to military prison and dishonorably discharged for engaging in torture.

Now, in his memoir, President Bush says his administration did torture – or at least do things that are defined as torture when foreign governments do it – and he is proud of it.  He said it was legal because one of his legal advisers told him it was legal.

My guess is that Lynndie England and Charles Graner, who are still serving time for acts of torture, thought that what they were doing was legal.  If that is an excuse, shouldn’t they go free?

President Barack Obama denies that the United States government engages in torture any more.  But he refuses to permit an investigation of the Bush administration’s crimes, or to permit independent human rights organizations to inspect secret prisons such as the one outside Bagram Air Base in Afghanistan.

I wonder what he will say about torture in his memoirs.

“Inside Job” is an excellent movie

Last night I saw an Charles Ferguson’s “Inside Job,” a documentary movie on the Wall Street crisis.  It is excellent journalism and excellent cinema.   Most people who see this movie will leave it not just angry, but better-informed.  Ferguson both names the culprits behind the crisis, and clearly explains the deeper systemic problems.

Ferguson makes the point that there has been no criminal prosecution of financial manipulators, unlike in the lesser savings and loan crisis of an earlier era.  Maybe there is not only such a thing as “too big to fail,” but “too powerful to prosecute.”  The Charles Keatings of that era had much less clout than the Henry Paulsons of today.

Ferguson does not go easy on the Bush administration, but he shows origins of Wall Street’s capture of the government in the Reagan and Clinton administrations and its continuation in the Obama administration which, as in so much else, continues the Bush policies with many of the Bush appointees.

He shows the conflicts of interest among top economists, who receive big consulting and directors’ fees from the financial industry they supposedly are analyzing impartially.  Long ago there was a scandal when radio disc jockeys accepted payola from record companies to play certain records.  We ought to be equally scandalized about payola to academics.  But in fact, these economists are still treated with respect by officialdom and the press, while the economists whose warnings proved true are still regarded as marginal figures.

How do you define the elite?

Charles Murray wrote an op-ed article in the Washington Post a couple of weeks back about how our political discourse is dominated by an elite cut off from the experience of ordinary Americans.  He defined this elite in cultural terms.  They are likely to watch “Mad Men” rather than “The Price Is Right” on TV, and go backpacking rather than drive a recreational vehicle.

I think he is right to say an elite exists, but he doesn’t quite get around to mentioning its defining characteristic.  The list below provides a hint as to what the characteristic is.

Annual hauls by selected talkers:

Rush Limbaugh $58.7 million

Glenn Beck $33 million

Sean Hannity $22 million

Bill O’Reilly $20 million

Jon Stewart $15 million

Don Imus $11 million

Keith Olbermann $7.5 million

Laura Ingraham $7 million

Stephen Colbert $5 million

Arianna Huffington $5 million

Chris Matthews $4.5 million

Rachel Maddow $2 million

Jon Meacham $2 million

via Daily Howler.

Pretty soon President Obama’s deficit commission will make its report.  Its membership is stacked with critics of Social Security  It is expected to recommend changing the formula for calculating Social Security benefits and raising the age for maximum benefits.

I expect the majority of self-identified conservatives in Washington to respond with a renewed all-out assault on Social Security. I expect the majority of self-identified liberals in Washington to express minor caveats but add that some sacrifice is necessary for fiscal austerity.  I doubt if many who talk like this have in mind 80-year-old widows whose Social Security is their sole income, or unemployed 55-year-olds who will never hold another full-time job in their lives, or 60-year-olds who are marking time until they no longer have to come home from work with aching feet and backs.  The sacrifice is the sacrifice of their own mild feelings of compassion.

It is common to speak, as Charles Murray does, of a liberal elite, but the word “liberal” has changed its meaning over time.  “Liberal” no longer means someone who supports the interests of working people.  I know more self-identified liberals who march in Gay Pride parades (which is fine) than in Labor Day parades.

What is a college degree worth, really?

Everybody from Barack Obama to Bill Gates is pushing the idea that sending more people to college is the key to our nation’s economic future.  I would never deny that education is a good thing.  I would agree, up to a point, that education is a good economic investment, but that requires a certain amount of qualification.

The latest figures show that the United States has 317,000 college-educated waiters and waitresses, 80,000 college-educated bartenders, and 18,000 college-educated parking lot attendants.  There are 8,000 waiters and waitresses and 5,000 janitors and cleaners with doctoral or equivalent degrees.  In all, 17 million American college graduates are working in jobs that don’t require education beyond high school.   When I go out with philosophy professor friends, we sometimes run into their former students waiting on tables or tending bar.

Now these college graduates may not be working as waitresses, bartenders, parking lot attendants or janitors all their lives.  It’s traditional in the United States for successful people to begin their careers in lowly jobs.  It’s still true that, on average, college graduates are better off than those with lesser schooling.  And of course education – whether classroom instruction or independent study – has a value that can’t be measured in money.

On the other hand it costs a lot more than it once did to get a college education.  The average graduate comes out of college owing tens of thousands of dollars in college loans; one in five of those loans are in default.  And among older workers, college graduates have a harder time than others breaking out of long-term unemployment.  The payoff from a college education doesn’t always equal the cost.

We don’t have a problem with structural unemployment, people unemployed because they don’t quality for the jobs available.  Rather we have the reverse, people unemployed because they are overqualified for the jobs available. [Added 11/13/10.  We hear a lot about structural unemployment, people unemployed because they underqualified.  But not only are there large numbers of people who are overqualified for the jobs they hold, there are those who are rejected for jobs because they are overqualified.]

The question is to what extent getting a college degree adds value to the economy, and to what extent it merely helps the individual in an economic arms race.  A college degree may give you a better chance than a high school graduate or dropout of getting a good job, but college degrees for everyone won’t prevent those jobs from going away.

And – just saying – the history of other countries shows that when revolutionary or fascist movements arise, they are generally led by unemployed college graduates.

Fairy gold and economic stimulus

Poul Anderson wrote a short story 26 years ago entitled “Fairy Gold” which illustrated how economic stimulus is supposed to work better than anything else I know of.

Poul Anderson

The situation was that a brave but penniless young man wanted to join a voyage of merchant adventurers, but lacked the money to buy a share of the expedition.  His sweetheart wanted him to stay home and work in the pottery shop which she inherited from her grandfather.  Unexpectedly, a bunch of elves maneuvered him into fighting an ogre and at sundown, as a reward for his victory, gave him a a five-pound gold coin, with the warning to spend it quickly.

The young man exchanged the enormous coin for regular money with a banker, and bought himself a share of the ship’s expedition.  The banker exchanged the gold for diamonds at a profit; the jeweler bought pearls from the ship’s captain.  The captain gave the gold to a beautiful aging courtesan, whom he loved, and she bought the shop from the young man’s sweetheart in order to have an income when her beauty faded.  Without responsibility for the shop, the young woman saw no impediment to joining the young man on the expedition.  She rushed to join him, just as the sun came up and the gold coin evaporated, because it was fairy gold.  But although it wasn’t real, everyone concerned was better off for having had it.

Last week the Federal Reserve Board conjured up $600 billion out of nothing, which it will use to buy government bonds.  The board hopes the $600 billion will go sloshing through the economy, and create effects similar to the fairy gold in Poul Anderson’s story.

Maybe it will.  It certainly is not going to evaporate at sunrise.  But it may not go circulating through the economy, either, as might have been the case in earlier recessions.  All classes of people and institutions are in debt – individuals, businesses, local governments, banks.  The prudent thing for them to do if a little extra money comes into their hands is to put it away.  Or invest it in a foreign country, where interest rates, unlike in the United States, are higher than near-zero.

Financial legerdemain got us into the mess we’re in.  I don’t think we can count on financial legerdemain to get us out.