A confluence of things has recently had me thinking more about children than I normally do: one of my coworkers recently became a father, four TV shows I watch had episodes that touched on the theme of children and family, and my Chinese(-American) parents have badgered me, a single twentysomething yuppie, about "expanding the family". Combine this with some of the magazines that I read (left-of-center or hardcore progressive/liberal) and all the anti-children stuff they constantly churn out and you can forgive a guy for thinking about children more than usual.
I do want kids. And I want them for very selfish reasons. Everything we do is rooted in some form of selfishness. The person who wants kids is just as selfish as the person who doesn't want kids. But the difference between the two is that the person who doesn't want kids is adhering to a form of solipsism. But the person who wants kids is somebody whose selfishness extends to those around him. His family is an extension of himself, and thus the fruits his selfishness must also extend to them as well.
There is a very popular show on HBO called Game of Thrones, and it depicts the political machinations of the great aristocratic families of a fictional kingdom called Westeros. And one of the most important themes of the show is the importance of family and the legacy that you and your family leave behind after you die. Because, inevitably, all men, their children, and their grandchildren must die. But the family name lives on.
That desire to leave something behind when you are gone is the reason why organisms procreate. Every species on the planet is genetically driven to replicate themselves. And it's what makes people who don't want children so unique. For them, the only sense of existence is literally their own self being. They actively deny their instinctual desire to leave behind a legacy because they believe in only living for themselves. Once they are gone, the show's over for them. What good is leaving behind a legacy if you never get to see your legacy?
Another show on HBO, Veep, which is a comedic take on the inside-the-Beltway happenings revolving around a fictional Vice President and her staff, has a scene in which one of the main character reiterates her desire not to have children. It's just one minor scene, but when the entire show is about incredibly narcissistic politicians willing to go to silly lengths in order to further their own individual gain, it highlights something else.
Behind the excuses and justifications of why people don't want children, the real reason is ultimately rooted in solipsistic selfishness. And I know because I have those same impulses. There are so many things that I want to buy (a luxury condo, sports cars, tailored suits, expensive watches, pricey consumer electronics) and do (travel the world, eat at fancy restaurants, pursue beautiful women). If I were to settle down, get married, and have children, most of my time and money would be spent and invested in my family and not myself.
And there are real opportunity costs, even if you become rich later on. When the kids have flown the coop and the father has suffered his midlife crisis and buys a shiny red sports car, he finds that although he very much enjoys the car, something's missing. Because he wants to buy what the sports car represented to him when he was younger. And now he only has the car, not what it represented. That is why so many upper middle class yuppies want to "live life" in their 20s by traveling the world, partying and drinking most nights, and blowing money on outrageously extravagant things because they won't get the same thrill from doing so once they're in their 30s and 40s.
Some of them will eventually settle down. Although I predict a growing number will not. Many in the media have talked about an extended adolescence and what they're really referring to is the fact that you're not truly an adult until you take care of somebody other than yourself. Almost every day in Slate or The Atlantic, I read the self-pitying lamentations of twentysomethings who express anguish at the fact that their every need and want isn't being taken care of by other people. They are incapable of taking care of themselves, let alone another person.
Another show I watch, The Americans,
is about two Soviet spies who are embedded into American society. They
have a secret identity as KGB field agents but to the society they live
in, they are ordinary Americans with normal American children. Their
children have no idea who they really are, and the parents go to great
lengths to make sure they never find out.
In one episode,
there is a scene where the KGB officer who oversees the spies lectures
the female lead, who is emotionally stunted, about love. He asks her why
he loves his dog. He answers his own question with: "He (the dog) isn't
particularly smart. He isn't pretty. But I love him. Do you know why?
Because I take care of him. Every day. And he, in his way, is taking
care of me. If you take care of something, Elizabeth, one day you will
discover that you love this creature. And that your life would be empty
without it."
Again, I'm being heavy handed and liberally referring to TV shows. But you can see where I'm going with this. There was this one article on Slate that went in the opposite direction of what they usually publish. And it was about the love that a mother had for her daughter with Down Syndrome. Not that she wanted to have a child with Down Syndrome. She admits that had she known her daughter's condition while she was still pregnant, she would have had an abortion.
We are different people after we become parents. As so many wedding speeches love to remind us, love is patient; love is kind. And our capacity for love increases infinitely after we have children. I remember reading, a long time ago, an article where the author advocated cities to structure themselves around parents rather than yuppies. Among the arguments they made were that parents made their communities stronger. Because parents are much more likely to volunteer than the average twentysomething. And I suspect a strong reason for the increased proclivity in volunteering is because of the effect their children have had on them.
Don't get me wrong. I'm not saying all parents are like that. My parents certainly weren't. But I've worked with plenty of people who fit that mold exactly. Almost all of my coworkers are married with kids. And it's very humbling to be around them, knowing that they're working for more than just themselves.
The last show, Mad Men, is about New York ad executives in the 1960s, had their latest episode featuring the main character bonding with his middle child. Later, he is seen with a glass of whiskey in hand slumped over a bed. He tells his second wife about how he never loved his children. And although he went through the motions of what he thought being a good parent was, he essentially says he did it because it was convenient, not out of love. And then he bonds with his son over a day at the movies, suddenly feeling a great love for his son that he never felt before. And it felt like his heart was going to explode.
I am nowhere near that. I'm still stuck in solipsistic selfishness. I don't donate to charity. I don't volunteer. I'm focused mainly on building up my financial assets and I keep a list of things that I want to buy. And if I had a wife who was pregnant with a child diagnosed with Down Syndrome, I would probably advocate an abortion (slightly in contra to my previous musings on the subject). But I don't want this to be my entire life. I want children because I do want to leave behind a legacy, even if I don't get to live to see it. And I'm not saying it's a noble thing. It's completely selfish. It's just a different form of selfishness.
Tuesday, April 30, 2013
Saturday, April 27, 2013
Real Time With Bill Maher: Counterpoints (4/26/13)
This has gotta be short and sweet, as I've got some stuff to take care of this weekend. We had a good show and some good talking points. Let's hash them out.
Bill Maher 1: Isn't the fertilizer plant explosion in Texas just a wake up call to all these crazy deregulation nuts?
This is one of the perennially sore topics for libertarians. A terrible tragedy happens somewhere. The postmortem reveals that something went wrong and that the government should have investigated the issue beforehand. Cue the calls from the progressive peanut gallery for more regulation.
There are multiple problem with defending the status quo. Counterfactuals are always hard to prove: is there evidence that an investigation prior to the event would have prevented it? Opportunity costs are almost never considered: what does it cost the economy and the business to have tighter regulation/more government oversight? The emotional overrides the logical: how dare you try and trivialize the matter when the sky fell on these poor souls!
This is genuinely an ideological argument. It's next to impossible to prove the counterfactual, and the argument is never convincing unless the other party is already sympathetic to your camp. All I will say is that in the aftermath of the financial crisis, everybody supported tighter regulation on the banks. What nobody ever mentions is that there are teams of government auditors who are permanently stationed at our largest financial institutions and none of them were able to prevent the financial crisis. Giving them the power to do so effectively erodes the concept of property rights, and that is what we must keep in mind when we discuss further regulation in any matter.
Bill Maher 2: Why do chemical weapons matter? More people have died in conventional warfare but as soon as these WMDs come into play we're supposed to give a shit?
John Avlon had a very good rebuttal. The reason why conventional warfare kills more people is because we accept conventional warfare as an acceptable means to kill people. The minute we accept WMDs as an acceptable means to kill people, we will see casualties mount up at a frightening clip. It took a fleet of bombers to firebomb Dresden, but only two bombers to wipe out Hiroshima and Nagasaki.
Using chemical weapons on your own countrymen should be a red flag to anybody in the mythical international community. It is up to the powers that be (the countries with expeditionary capability) to see that such murderous regimes are proscribed and eliminated without delay. Sending a signal that these weapons are acceptable for use will only make future casualties more numerous and horrific.
Robert Traynham: We need to see the more aggressive Obama more often. When he gave that Rose Garden speech on gun control, he was visibly angry and it was effective. He needs to do that for sequestration, immigration, and other important topics.
Wrong. This is the problem with pundits in the media. Fiery speeches rile the base but backroom dealings get things done. President Obama has nothing to show for his stern lecturing on gun control in the Rose Garden. And it's doubtful that impassioned or angry pleas for change and reform will make any progress on such contentious issues such as immigration or spending.
Speeches are for actual campaign season to fire up your supporters and getting them to the ballot box. Once the election dust settles, you need to start mending fences and normalizing relationships across the aisle in order to get the business of the Federal government done.
Anna Deavere Smith and the rest of the panel: We need to have a serious discussion as to whether our civil liberties are being eroded in favor of a police state.
This point isn't going to be countered. I just want to reveal my own thoughts on the issue.
Your position on "stop and frisk" can reveal who you are very quickly. Those who see no problem with it are mostly white and middle class or higher (who are, statistically, the least likely to be stopped and frisked) and a small subset of poor, law abiding minorities trapped in bad neighborhoods. Those who have a problem with it are a more diverse set. One group opposes it on principle: it's an infringement of our civil rights to be searched on a flimsy basis of "reasonable suspicion". Another group resents it very much, because those who are stopped and frisked are most likely going to be black or brown skinned, which feeds racial emotions.
Both groups have reasonable arguments. And it reveals your priorities. There is a good deal of evidence that stop and frisk does discourage criminals from loitering and carrying contraband on the street. The real issue is how you view the false positives (those deemed worthy to be stopped and frisked and turned out to be harmless). Is it a price we pay for safer streets or an unacceptable breach of freedom?
Life is full of tradeoffs. Unlike the dreams of many upper middle class white women, you simply cannot have it all. And the security-freedom argument is arguably the most important debate to have when it comes to defining the relationship between citizens and the state.
At a state and local level, I am adamantly against such policies. Nationwide, we have seen precipitous declines in violent crimes and homicide without any major national policing initiative to take credit for it.While crime will always exist and certain areas will be more dangerous than others, the aggressive/active strategy of policing probably is only marginally more effective than simply having a decent, passive police presence.
At a national level, I am less sure of what the proper role of government is. I have almost no qualms about the aggressive use of American power abroad to police and monitor those who wish to incite terror or fear in the US, but when they actually come to our country, I am less sure of what the proper limits of policing are.
In this manner, I am probably like the rest of the panel. There should be a discussion on the security/freedom tradeoff. But, also like the rest of the panel, I have no concrete answer for policy at the Federal level.
Bill Maher 1: Isn't the fertilizer plant explosion in Texas just a wake up call to all these crazy deregulation nuts?
This is one of the perennially sore topics for libertarians. A terrible tragedy happens somewhere. The postmortem reveals that something went wrong and that the government should have investigated the issue beforehand. Cue the calls from the progressive peanut gallery for more regulation.
There are multiple problem with defending the status quo. Counterfactuals are always hard to prove: is there evidence that an investigation prior to the event would have prevented it? Opportunity costs are almost never considered: what does it cost the economy and the business to have tighter regulation/more government oversight? The emotional overrides the logical: how dare you try and trivialize the matter when the sky fell on these poor souls!
This is genuinely an ideological argument. It's next to impossible to prove the counterfactual, and the argument is never convincing unless the other party is already sympathetic to your camp. All I will say is that in the aftermath of the financial crisis, everybody supported tighter regulation on the banks. What nobody ever mentions is that there are teams of government auditors who are permanently stationed at our largest financial institutions and none of them were able to prevent the financial crisis. Giving them the power to do so effectively erodes the concept of property rights, and that is what we must keep in mind when we discuss further regulation in any matter.
Bill Maher 2: Why do chemical weapons matter? More people have died in conventional warfare but as soon as these WMDs come into play we're supposed to give a shit?
John Avlon had a very good rebuttal. The reason why conventional warfare kills more people is because we accept conventional warfare as an acceptable means to kill people. The minute we accept WMDs as an acceptable means to kill people, we will see casualties mount up at a frightening clip. It took a fleet of bombers to firebomb Dresden, but only two bombers to wipe out Hiroshima and Nagasaki.
Using chemical weapons on your own countrymen should be a red flag to anybody in the mythical international community. It is up to the powers that be (the countries with expeditionary capability) to see that such murderous regimes are proscribed and eliminated without delay. Sending a signal that these weapons are acceptable for use will only make future casualties more numerous and horrific.
Robert Traynham: We need to see the more aggressive Obama more often. When he gave that Rose Garden speech on gun control, he was visibly angry and it was effective. He needs to do that for sequestration, immigration, and other important topics.
Wrong. This is the problem with pundits in the media. Fiery speeches rile the base but backroom dealings get things done. President Obama has nothing to show for his stern lecturing on gun control in the Rose Garden. And it's doubtful that impassioned or angry pleas for change and reform will make any progress on such contentious issues such as immigration or spending.
Speeches are for actual campaign season to fire up your supporters and getting them to the ballot box. Once the election dust settles, you need to start mending fences and normalizing relationships across the aisle in order to get the business of the Federal government done.
Anna Deavere Smith and the rest of the panel: We need to have a serious discussion as to whether our civil liberties are being eroded in favor of a police state.
This point isn't going to be countered. I just want to reveal my own thoughts on the issue.
Your position on "stop and frisk" can reveal who you are very quickly. Those who see no problem with it are mostly white and middle class or higher (who are, statistically, the least likely to be stopped and frisked) and a small subset of poor, law abiding minorities trapped in bad neighborhoods. Those who have a problem with it are a more diverse set. One group opposes it on principle: it's an infringement of our civil rights to be searched on a flimsy basis of "reasonable suspicion". Another group resents it very much, because those who are stopped and frisked are most likely going to be black or brown skinned, which feeds racial emotions.
Both groups have reasonable arguments. And it reveals your priorities. There is a good deal of evidence that stop and frisk does discourage criminals from loitering and carrying contraband on the street. The real issue is how you view the false positives (those deemed worthy to be stopped and frisked and turned out to be harmless). Is it a price we pay for safer streets or an unacceptable breach of freedom?
Life is full of tradeoffs. Unlike the dreams of many upper middle class white women, you simply cannot have it all. And the security-freedom argument is arguably the most important debate to have when it comes to defining the relationship between citizens and the state.
At a state and local level, I am adamantly against such policies. Nationwide, we have seen precipitous declines in violent crimes and homicide without any major national policing initiative to take credit for it.While crime will always exist and certain areas will be more dangerous than others, the aggressive/active strategy of policing probably is only marginally more effective than simply having a decent, passive police presence.
At a national level, I am less sure of what the proper role of government is. I have almost no qualms about the aggressive use of American power abroad to police and monitor those who wish to incite terror or fear in the US, but when they actually come to our country, I am less sure of what the proper limits of policing are.
In this manner, I am probably like the rest of the panel. There should be a discussion on the security/freedom tradeoff. But, also like the rest of the panel, I have no concrete answer for policy at the Federal level.
Thursday, April 25, 2013
Another Example of Regulation and Taxes Affecting Behavior
Apple is one of the world's richest companies. In its latest filing, the company states that it has 145 billion dollars in cash or near-cash assets. As of yesterday's close, that means that roughly 38% of the company's market value is in a cash position. Which is ridiculous. So ridiculous that investors have been clamoring for the company to return that money back to shareholders. They finally started doing so in March of last year.
Last year, Apple returned 30 billion dollars back to shareholders in the form of dividends and share buybacks. Yesterday, it announced a 15% increase in its dividend and announced another round of share buybacks. But it's not going to use its 145 billion dollar cash pile to finance these new initiatives. Instead, it's going to raise the money in the corporate bond market and then distribute it back to shareholders.
The reason why it's not touching its cash pile is because most of it, approximately 105 billion dollars, is stashed in its overseas subsidiaries. If the company were to repatriate the money back to the domestic market, it would have to part ways with 35% of it thanks to the US tax code. Because money can be stored indefinitely overseas without incurring a US tax (although it must still pay taxes in the local jurisdiction), it makes much more sense for Apple to borrow the money it uses to pay back investors than it is to use the actual cash it has on hand.
This is the tragedy of US tax law. When individuals and companies spend time and money trying to minimize their tax profile, it robs time and money that could have gone towards more productive activities. Given the fact that there is no good reason for having the US collect a tax on profits earned overseas (with taxes already paid in overseas jurisdictions) and that so many companies keep cash overseas so they don't have to pay a fee to the US government to bring it back home (either to invest or to give back to shareholders), it makes our economy less dynamic, which means slower growth and fewer jobs.
Economists of all stripes will readily agree that higher taxes will reduce the incentives to save and invest. Those who are also progressive will make the argument that if the government can put money to a better, more efficient use, it should raise taxes to do so. But given the fact that we live in reality, where the Federal government has shown itself to be utterly incapable of doing anything efficiently (look as Federal bureaucrats testify before Congress that key parts of the PPACA is not going to be fully functional by the deadlines stipulated by law), it makes more sense to keep that money in the hands of the private sector.
At this point, additional taxes and regulation will first trigger a scramble for moneyed and connected interests to find ways of avoiding them. If they can't avoid them, they will simply cut back and do less. The end result is that the country collectively wastes a bunch of time and money.
Last year, Apple returned 30 billion dollars back to shareholders in the form of dividends and share buybacks. Yesterday, it announced a 15% increase in its dividend and announced another round of share buybacks. But it's not going to use its 145 billion dollar cash pile to finance these new initiatives. Instead, it's going to raise the money in the corporate bond market and then distribute it back to shareholders.
The reason why it's not touching its cash pile is because most of it, approximately 105 billion dollars, is stashed in its overseas subsidiaries. If the company were to repatriate the money back to the domestic market, it would have to part ways with 35% of it thanks to the US tax code. Because money can be stored indefinitely overseas without incurring a US tax (although it must still pay taxes in the local jurisdiction), it makes much more sense for Apple to borrow the money it uses to pay back investors than it is to use the actual cash it has on hand.
This is the tragedy of US tax law. When individuals and companies spend time and money trying to minimize their tax profile, it robs time and money that could have gone towards more productive activities. Given the fact that there is no good reason for having the US collect a tax on profits earned overseas (with taxes already paid in overseas jurisdictions) and that so many companies keep cash overseas so they don't have to pay a fee to the US government to bring it back home (either to invest or to give back to shareholders), it makes our economy less dynamic, which means slower growth and fewer jobs.
Economists of all stripes will readily agree that higher taxes will reduce the incentives to save and invest. Those who are also progressive will make the argument that if the government can put money to a better, more efficient use, it should raise taxes to do so. But given the fact that we live in reality, where the Federal government has shown itself to be utterly incapable of doing anything efficiently (look as Federal bureaucrats testify before Congress that key parts of the PPACA is not going to be fully functional by the deadlines stipulated by law), it makes more sense to keep that money in the hands of the private sector.
At this point, additional taxes and regulation will first trigger a scramble for moneyed and connected interests to find ways of avoiding them. If they can't avoid them, they will simply cut back and do less. The end result is that the country collectively wastes a bunch of time and money.
Tuesday, April 23, 2013
Putting the "Hard Work" Myth to Rest
The beauty of the modern economy is that it is built on a foundation of massive amounts of capital. The most financially successful in society are those who, through any combination of luck, willpower, and intelligence, leverage that capital as much as they can.
Nowhere is this phenomenon more apparent than in the entertainment industry. Before the invention of the radio and television, entertainers, performers, and actors were regarded mostly as oddities and grotesques. They would travel from town to town, performing for a crowd of curious people that dwindled as the novelty wore off. The hours were long. The pay uncertain. It was an extremely unglamorous profession.
Nowadays, entertainment is vastly more lucrative. The radio and television made it possible for people to broadcast their voices and actions out to millions of people all at once. Traveling from town to town was no longer necessary. All you needed was a radio transmitter or a camera to reach a vast audience. In fact, our entertainment distribution systems are so sophisticated and widespread that it's possible for a viewer watch a music video, tv show, movie, or short comedic skit on the toilet of a public restroom.
Because the barrier to gaining a massive audience (and thus advertising/endorsement dollars) has never been lower, it's created a whole subsegment within the entertainment industry called reality TV. People of no real distinguishing talent or ability have cameras following them, while producers put them in hyper-contextual circumstances and then watch what unfolds. This has given rise to the conceit of "being famous for being famous".
Perhaps the first person widely regarded for being famous for being famous is Paris Hilton. And her situation isn't hard to deconstruct. She is a young, blonde woman (always a hot commodity) who, by sheer dint of birth, happens to be the heir of a vast fortune. The only difference between her and other heiresses is that she had a sex tape. What's the hook? That she is a young, blonde woman who happens to be heir of a vast fortune who made a sex tape that got "leaked". That's the extraordinary circumstance. In an alternate reality, it would have been the b-plot of a soap opera.
What had to exist in order to make that a marketable thing? The internet, an entertainment industry (and everything that entails) increasingly reliant upon mindless content, a large audience, and a vast heritable fortune. Paris Hilton only had one of those things, the heritable fortune, and she only has that because she's the daughter of a man who's the son of another man who happens to be the son of an iconic business mogul.
She was responsible for none of that. But because she could indirectly leverage all that capital, she's now worth a hundred million dollars on her own. Before you snort and say that she's just the spoiled scion of a famous family, look at your own circumstance and see how much you owe your own good fortune to something you had nothing to do with.
The single biggest correlation with socioeconomic success is your parents. The reason why is because your parents determine which schools you go to, which neighborhood you grow up in, whether you're well fed, intellectually and socially stimulated in a positive way, etc. And they're leveraging things available in American society. The internet. TV. Public schools. Public roads. Various retail stores. Construction firms. All of these things are capital that gets leveraged into shaping your childhood and who you will become in the future.
That is the principle reason why the average person being born in America will be more materially prosperous than the average person born in Zimbabwe. That person in America, through no effort of their own, was born in vastly more fortunate circumstances and is able to leverage much more capital. Even in America, we have vastly different starting circumstances. The person who is born in the inner city has a much lower chance of socioeconomic success than the person born in an upper middle class suburban enclave.
American politicians like to talk about the American dream. And the standard refrain of the American Dream is that, in America, if you work hard and play by the rules, you can achieve all of the major benchmarks of material success (a house, a car, and a myriad of various consumer electronics). As the relative poor of America know very well, that sentiment is horseshit. Hard work doesn't guarantee anything.
When I hear a politician wailing about the travails of the working class "I met a single mother of two, who works over 80 hours a week at 3 different jobs....", I'm disinclined to listen any further. The purpose of their remarks is to engender sympathy to a person in an unfortunate situation. Why? Because they're trying to convince a group of suckers with cheap rhetoric. Because their intended audience believes that hard work is the ticket to success. It is anything but.
Throughout history, the hardest workers were usually the least fortunate members of their society. Whether you were a slave (in Egypt, Rome, Antebellum US), an early industrial age factory worker, or a single mom stuck at a dead end job, your job was to work for other people. Instead of leveraging capital, you were the capital being leveraged.
So let's put the hard work myth to rest. Chinese workers in Foxconn factories in the southern coast of China who put in 80 hours a week assembling iPhones to sell to spoiled Americans work really hard. But they're dirt poor. Meanwhile, I spend my work day in a well conditioned office at my own cubicle doing 4 hours of real, actual work per day and I make at least 15 times as much as they do.
The ticket to success is to leverage as much capital available to you in the most efficient manner possible. Sometimes that involves hard work. More often, it involves a lot of luck. Things that have nothing to do with hard work or merit, such as height, physical attractiveness, skin color, legal residency status, your parents, are much better predictors of success than the amount of hours you put in. That should put to rest to any notion that our society is a meritocracy where the only things you need to succeed are talent and hard work.
Nowhere is this phenomenon more apparent than in the entertainment industry. Before the invention of the radio and television, entertainers, performers, and actors were regarded mostly as oddities and grotesques. They would travel from town to town, performing for a crowd of curious people that dwindled as the novelty wore off. The hours were long. The pay uncertain. It was an extremely unglamorous profession.
Nowadays, entertainment is vastly more lucrative. The radio and television made it possible for people to broadcast their voices and actions out to millions of people all at once. Traveling from town to town was no longer necessary. All you needed was a radio transmitter or a camera to reach a vast audience. In fact, our entertainment distribution systems are so sophisticated and widespread that it's possible for a viewer watch a music video, tv show, movie, or short comedic skit on the toilet of a public restroom.
Because the barrier to gaining a massive audience (and thus advertising/endorsement dollars) has never been lower, it's created a whole subsegment within the entertainment industry called reality TV. People of no real distinguishing talent or ability have cameras following them, while producers put them in hyper-contextual circumstances and then watch what unfolds. This has given rise to the conceit of "being famous for being famous".
Perhaps the first person widely regarded for being famous for being famous is Paris Hilton. And her situation isn't hard to deconstruct. She is a young, blonde woman (always a hot commodity) who, by sheer dint of birth, happens to be the heir of a vast fortune. The only difference between her and other heiresses is that she had a sex tape. What's the hook? That she is a young, blonde woman who happens to be heir of a vast fortune who made a sex tape that got "leaked". That's the extraordinary circumstance. In an alternate reality, it would have been the b-plot of a soap opera.
What had to exist in order to make that a marketable thing? The internet, an entertainment industry (and everything that entails) increasingly reliant upon mindless content, a large audience, and a vast heritable fortune. Paris Hilton only had one of those things, the heritable fortune, and she only has that because she's the daughter of a man who's the son of another man who happens to be the son of an iconic business mogul.
She was responsible for none of that. But because she could indirectly leverage all that capital, she's now worth a hundred million dollars on her own. Before you snort and say that she's just the spoiled scion of a famous family, look at your own circumstance and see how much you owe your own good fortune to something you had nothing to do with.
The single biggest correlation with socioeconomic success is your parents. The reason why is because your parents determine which schools you go to, which neighborhood you grow up in, whether you're well fed, intellectually and socially stimulated in a positive way, etc. And they're leveraging things available in American society. The internet. TV. Public schools. Public roads. Various retail stores. Construction firms. All of these things are capital that gets leveraged into shaping your childhood and who you will become in the future.
That is the principle reason why the average person being born in America will be more materially prosperous than the average person born in Zimbabwe. That person in America, through no effort of their own, was born in vastly more fortunate circumstances and is able to leverage much more capital. Even in America, we have vastly different starting circumstances. The person who is born in the inner city has a much lower chance of socioeconomic success than the person born in an upper middle class suburban enclave.
American politicians like to talk about the American dream. And the standard refrain of the American Dream is that, in America, if you work hard and play by the rules, you can achieve all of the major benchmarks of material success (a house, a car, and a myriad of various consumer electronics). As the relative poor of America know very well, that sentiment is horseshit. Hard work doesn't guarantee anything.
When I hear a politician wailing about the travails of the working class "I met a single mother of two, who works over 80 hours a week at 3 different jobs....", I'm disinclined to listen any further. The purpose of their remarks is to engender sympathy to a person in an unfortunate situation. Why? Because they're trying to convince a group of suckers with cheap rhetoric. Because their intended audience believes that hard work is the ticket to success. It is anything but.
Throughout history, the hardest workers were usually the least fortunate members of their society. Whether you were a slave (in Egypt, Rome, Antebellum US), an early industrial age factory worker, or a single mom stuck at a dead end job, your job was to work for other people. Instead of leveraging capital, you were the capital being leveraged.
So let's put the hard work myth to rest. Chinese workers in Foxconn factories in the southern coast of China who put in 80 hours a week assembling iPhones to sell to spoiled Americans work really hard. But they're dirt poor. Meanwhile, I spend my work day in a well conditioned office at my own cubicle doing 4 hours of real, actual work per day and I make at least 15 times as much as they do.
The ticket to success is to leverage as much capital available to you in the most efficient manner possible. Sometimes that involves hard work. More often, it involves a lot of luck. Things that have nothing to do with hard work or merit, such as height, physical attractiveness, skin color, legal residency status, your parents, are much better predictors of success than the amount of hours you put in. That should put to rest to any notion that our society is a meritocracy where the only things you need to succeed are talent and hard work.
Saturday, April 20, 2013
Real Time With Bill Maher: Counterpoints (4/19/13)
We had a relatively strong panel this episode, with no real idiot or showboat there to ruin things. But the discussion was pretty muted, and I seriously dislike Salman Rushdie's arrogance. But let's get to the counterpoints.
Bill Maher: There is no other religion in the world today that has the ability to inspire hatred as Islam does.
This is a problematic position to have. And I wonder why it doesn't cause any cognitive dissonance because although Bill realizes that Christianity once had a similarly checkered past of violence towards other people, he dismisses it out of hand because it's not happening today. Religion doesn't kill people. People kill people. And they will use whatever they can to justify and facilitate their hatred. Instead of blaming religion, you should blame the conditions in which these people grow up in.
And just because most Muslims polled probably wouldn't care if a person who insulted the prophet Mohammed died doesn't mean something's wrong. Our political system works fine despite the fact that 40% of Republicans think that President Obama was born in another country.
Bill Maher 2: In our post 9/11 world, I feel like this incident represents a maturation of the American people in its response to acts of terrorism.
They shut down Boston and its surrounding suburbs for the entire day to catch one person, even when they were sure that they had him confined to a 20 block radius. I don't think our response matured at all. And it's a complete joke to compare this incident to 9/11, which killed 1200x more people and destroyed billions of dollars of wealth in a single day.
Bill Maher 3: How does our country have a political system where a position that 90% of the people support doesn't get turned into law?
90% of the country also wants cheaper cars, free money, prestigious jobs, and prime real estate. That doesn't mean they expect to get it or expect that they have a realistic chance of getting it. The fact of the matter is that Amy Holmes was right. Support for this position is a mile wide and an inch deep. This issue doesn't drive people to the polls because people tacitly realize that gun violence is not a huge problem in this country.
Salman Rushdie: Every other modern country in the world has simple majority rules. *glares at America*
I hate foreigners who come to our country and criticize the fact that we're different. Simple majority rules is a huge reason why other countries have political systems that are often more dysfunctional than ours. There are much weaker checks and balances and much less minority protection which is why governments overseas often have erratic changes in policy enforcement, which leads to greater instability and more economic uncertainty.
Colin Goddard: A ban on high capacity magazines would prevent the body count for mass shootings from piling up so high.
This is pretty backwards logic. The vast majority of these mass shootings occur on ostensibly "gun free" zones where other people aren't legally allowed to carry firearms. And magazines are such simple objects (literally a metal box with a spring mechanism) that it would take no time at all for a person to circumvent a low capacity magazine.
I've said it repeatedly in the past but we can't let these exceptions right the rules that other people live by. If some idiot goes on a rampage with an F350 and runs over 50 people in a crowded walkway, are we going to ban heavy duty trucks to civilian ownership? No, we would write off the incident as some mentally disturbed person trying to kill as many people as possible and then go about our business.
At the same time, when Bill Maher expressed his disbelief at Gabby Giffords still supporting individual gun ownership, it's completely baffling. If you get into a car accident, are you going to be against individual car ownership once you finish your physical rehab?
Concurrence
There is one point that Bill mentioned which I do agree on, that I feel is important enough to warrant a separate concurrence, and that's this:
Bill Maher: It is completely unfathomable that a Senator from California has the same status as a Senator from Wyoming.
I dislike the Senate. It is grossly unrepresentative of the American people. And it makes it possible for sparsely populated states to extract huge concessions from states where people actually live in. There should be an additional cost associated with living in the sticks, not a political material benefit.
We should amend the Constitution to abolish the Senate and only have the House as the legislative branch of the US. In order to give consideration to states, each state will be guaranteed at least 3 representatives. To me, this represents a much more equitable and sensible distribution of political power in the legislature, because right now small state Senators wield power disproportionate to their electorate, and it hurts the overall legislative process.
Bill Maher: There is no other religion in the world today that has the ability to inspire hatred as Islam does.
This is a problematic position to have. And I wonder why it doesn't cause any cognitive dissonance because although Bill realizes that Christianity once had a similarly checkered past of violence towards other people, he dismisses it out of hand because it's not happening today. Religion doesn't kill people. People kill people. And they will use whatever they can to justify and facilitate their hatred. Instead of blaming religion, you should blame the conditions in which these people grow up in.
And just because most Muslims polled probably wouldn't care if a person who insulted the prophet Mohammed died doesn't mean something's wrong. Our political system works fine despite the fact that 40% of Republicans think that President Obama was born in another country.
Bill Maher 2: In our post 9/11 world, I feel like this incident represents a maturation of the American people in its response to acts of terrorism.
They shut down Boston and its surrounding suburbs for the entire day to catch one person, even when they were sure that they had him confined to a 20 block radius. I don't think our response matured at all. And it's a complete joke to compare this incident to 9/11, which killed 1200x more people and destroyed billions of dollars of wealth in a single day.
Bill Maher 3: How does our country have a political system where a position that 90% of the people support doesn't get turned into law?
90% of the country also wants cheaper cars, free money, prestigious jobs, and prime real estate. That doesn't mean they expect to get it or expect that they have a realistic chance of getting it. The fact of the matter is that Amy Holmes was right. Support for this position is a mile wide and an inch deep. This issue doesn't drive people to the polls because people tacitly realize that gun violence is not a huge problem in this country.
Salman Rushdie: Every other modern country in the world has simple majority rules. *glares at America*
I hate foreigners who come to our country and criticize the fact that we're different. Simple majority rules is a huge reason why other countries have political systems that are often more dysfunctional than ours. There are much weaker checks and balances and much less minority protection which is why governments overseas often have erratic changes in policy enforcement, which leads to greater instability and more economic uncertainty.
Colin Goddard: A ban on high capacity magazines would prevent the body count for mass shootings from piling up so high.
This is pretty backwards logic. The vast majority of these mass shootings occur on ostensibly "gun free" zones where other people aren't legally allowed to carry firearms. And magazines are such simple objects (literally a metal box with a spring mechanism) that it would take no time at all for a person to circumvent a low capacity magazine.
I've said it repeatedly in the past but we can't let these exceptions right the rules that other people live by. If some idiot goes on a rampage with an F350 and runs over 50 people in a crowded walkway, are we going to ban heavy duty trucks to civilian ownership? No, we would write off the incident as some mentally disturbed person trying to kill as many people as possible and then go about our business.
At the same time, when Bill Maher expressed his disbelief at Gabby Giffords still supporting individual gun ownership, it's completely baffling. If you get into a car accident, are you going to be against individual car ownership once you finish your physical rehab?
Concurrence
There is one point that Bill mentioned which I do agree on, that I feel is important enough to warrant a separate concurrence, and that's this:
Bill Maher: It is completely unfathomable that a Senator from California has the same status as a Senator from Wyoming.
I dislike the Senate. It is grossly unrepresentative of the American people. And it makes it possible for sparsely populated states to extract huge concessions from states where people actually live in. There should be an additional cost associated with living in the sticks, not a political material benefit.
We should amend the Constitution to abolish the Senate and only have the House as the legislative branch of the US. In order to give consideration to states, each state will be guaranteed at least 3 representatives. To me, this represents a much more equitable and sensible distribution of political power in the legislature, because right now small state Senators wield power disproportionate to their electorate, and it hurts the overall legislative process.
Friday, April 19, 2013
I Love the Smell of Privilege in the Afternoon. Smells Like....vindication.
On Monday, I wrote about the real enemy of education reform and put the blame squarely on the upper middle class. And today, as fate would have it, we have a writer in the Atlantic who starts off his article all but admitting his membership in the UMC with a sop to how lucky he is and then fiercely defending the status quo of not allowing poor kids to come into his neighborhood's admittedly "good public school".
He writes:
The Atlantic writer, Theodore Ross, has an incredibly selfish motivation for deriding Yglesiastopia. In the status quo, his child is guaranteed a spot in the good public school within his residential district. How would he support a system in which his kids would have to mix in with the poor kids from the wrong side of the tracks?
I have no idea who Theodore Ross is, but I bet he's another "progressive" writer (just about every writer on The Atlantic is, this is not a huge leap of faith to make) unwittingly revealing that he and people of his ilk are just as nakedly self interested as the billionaire Republican caricatures that they love to deride.
Until we, as a society, get buy-in from people like Theodore Ross (who, for better or worse, mostly worse, is part of the opinion-shaping media) for education reforms with real teeth (vouchers, breaking collective bargaining for teachers, decoupling local property taxes from education funding), we will never see a national system that delivers the real goal of progressives: an excellent education for children of every socioeconomic background.
Oh, and one final tidbit:
He writes:
Where I take issue with Yglesias is his suggested remedy. In what he calls a "zoning-free Yglesiastopia," no weight would be given to local residency in school enrollment. Yglesiastopia must be a place with infinite resources, one in which the good schools are large enough for all, and where no allocation process whatsoever—financial, racial, ethnic, linguistic, or residential—need be implemented. Let students flock to the quality schools and the problems in our educational system will disappear. Hail Yglesiastopia!In reference to Yglesiastopia, he cites a snippet by Matt Yglesias, Slate's perennially naive economics blogger, who at least has an intellectually honest observation that good public schools with an extremely high private barrier to entry (an expensive home districted with that good public school) are effectively private institutions. Don't mistake that for giving Yglesias any credit for his position. He probably just doesn't have any kids eligible for K12 education yet. I fully expect his position to "evolve" when that happens.
The Atlantic writer, Theodore Ross, has an incredibly selfish motivation for deriding Yglesiastopia. In the status quo, his child is guaranteed a spot in the good public school within his residential district. How would he support a system in which his kids would have to mix in with the poor kids from the wrong side of the tracks?
The busing and desegregation of the 1970s, by most accounts, worked, and could again in this situation, by placing students from poor neighborhoods into my son's school. I would welcome that, assuming a place for my son remained. That's the part I shouldn't be asked to give up—a good education for my children.Yes, he's all for reforming the system and making it more equitable provided that his interests are not hampered in any way whatsoever.
I have no idea who Theodore Ross is, but I bet he's another "progressive" writer (just about every writer on The Atlantic is, this is not a huge leap of faith to make) unwittingly revealing that he and people of his ilk are just as nakedly self interested as the billionaire Republican caricatures that they love to deride.
Until we, as a society, get buy-in from people like Theodore Ross (who, for better or worse, mostly worse, is part of the opinion-shaping media) for education reforms with real teeth (vouchers, breaking collective bargaining for teachers, decoupling local property taxes from education funding), we will never see a national system that delivers the real goal of progressives: an excellent education for children of every socioeconomic background.
Oh, and one final tidbit:
And Yglesiastopia doesn't address that root problem—why there isn't high-quality education in poor neighborhoods.So really, Ross' endgame is pretty simple. Separate but equal. Keep the poor kids on their side of the tracks and away from his, just as long as they get a "good" public school. The worst kind of selfish person is the person who doesn't realize they're selfish. This is an example of that kind of person.
Wednesday, April 17, 2013
Eliminating the Corporate Income Tax
Megan McArdle, my favorite blogger, came out with a brilliant piece advocating the elimination of the corporate income tax.
Reducing or eliminating the corporate income tax has been the province of libertarian-leaning economists for a long time. But there was another dimension I hadn't considered along with eliminating the corporate income tax: treat all individual income equally regardless of source. Which means eliminating the reduced rates on qualified dividends and long term capital gains.
From a tax "fairness" standpoint, the vast majority of Americans support a somewhat progressive tax code. But given the complexity of the tax code, many of them have the sneaking suspicion that many rich people pay less in taxes (relative to their income). The two biggest contributions to this suspicion are the dividend/gains tax rates and the hideously bloated deductions and subsidies found within the Internal Revenue Code.
If you eliminate the corporate income tax and instead tax the individuals who receive the profits of the corporations, it makes it impossible for a person like Mitt Romney (with his notorious 14% effective Federal tax rate) to pay less than a middle income worker like me (with an effective Federal tax rate of 20.54%). And because we've gotten rid of the corporate income tax, we also eliminate the double-taxation that occurs when a corporation pays taxes on its profits and then also having the individual pay taxes on the after-tax dividends that the corporation then issues.
We also make it more economically efficient for firms to raise capital, eliminating the relative disadvantage companies experience when they seek to raise capital via the stock market. Because interest on capital loans are tax deductible, it usually makes it more attractive for companies to raise money on the bond market. Since there isn't a compelling economic argument in favor of companies taking on debt to raise capital instead of selling equity, eliminating corporate income taxes (and thus the capacity to deduct interest costs from the firm's tax liability) also makes a firm's capital structure less dependent on government regulation.
This also eliminates a vast portion of corporate lobbying at the Federal government. Much of the lobbying done is to carve yet another deduction or subsidy in our brobdingnagian tax code, which is currently over 3.4 million words long (about 6 times the length of Tolstoy's War and Peace). Now the only thing corporations can lobby for are changes to the Federal Register (economic regulation) and the US Code.
From a long term view, there is no significant downside to eliminating the corporate income tax. In the short run, the progressive bloggers at Slate, TNR, The Atlantic, and other assorted periodicals might have an aneurysm at the sudden increase in net worth of households who already have significant stock holdings (an all stock portfolio would see an average increase of about 25% in nominal net worth), but this is offset in the long run by making it relatively cheaper for lower income households to own stock (currently, depending on the tax bracket, it's either as cheap or significantly more expensive for middle income households to own stock).
That collective aneurysm would be fun to watch, though.
Reducing or eliminating the corporate income tax has been the province of libertarian-leaning economists for a long time. But there was another dimension I hadn't considered along with eliminating the corporate income tax: treat all individual income equally regardless of source. Which means eliminating the reduced rates on qualified dividends and long term capital gains.
From a tax "fairness" standpoint, the vast majority of Americans support a somewhat progressive tax code. But given the complexity of the tax code, many of them have the sneaking suspicion that many rich people pay less in taxes (relative to their income). The two biggest contributions to this suspicion are the dividend/gains tax rates and the hideously bloated deductions and subsidies found within the Internal Revenue Code.
If you eliminate the corporate income tax and instead tax the individuals who receive the profits of the corporations, it makes it impossible for a person like Mitt Romney (with his notorious 14% effective Federal tax rate) to pay less than a middle income worker like me (with an effective Federal tax rate of 20.54%). And because we've gotten rid of the corporate income tax, we also eliminate the double-taxation that occurs when a corporation pays taxes on its profits and then also having the individual pay taxes on the after-tax dividends that the corporation then issues.
We also make it more economically efficient for firms to raise capital, eliminating the relative disadvantage companies experience when they seek to raise capital via the stock market. Because interest on capital loans are tax deductible, it usually makes it more attractive for companies to raise money on the bond market. Since there isn't a compelling economic argument in favor of companies taking on debt to raise capital instead of selling equity, eliminating corporate income taxes (and thus the capacity to deduct interest costs from the firm's tax liability) also makes a firm's capital structure less dependent on government regulation.
This also eliminates a vast portion of corporate lobbying at the Federal government. Much of the lobbying done is to carve yet another deduction or subsidy in our brobdingnagian tax code, which is currently over 3.4 million words long (about 6 times the length of Tolstoy's War and Peace). Now the only thing corporations can lobby for are changes to the Federal Register (economic regulation) and the US Code.
From a long term view, there is no significant downside to eliminating the corporate income tax. In the short run, the progressive bloggers at Slate, TNR, The Atlantic, and other assorted periodicals might have an aneurysm at the sudden increase in net worth of households who already have significant stock holdings (an all stock portfolio would see an average increase of about 25% in nominal net worth), but this is offset in the long run by making it relatively cheaper for lower income households to own stock (currently, depending on the tax bracket, it's either as cheap or significantly more expensive for middle income households to own stock).
That collective aneurysm would be fun to watch, though.
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