9/11 September 16, 2003January 22, 2017 Tom: ‘The duplicity of your 9/11 column is unparalleled. You have classlessly heaped your political bigotry on the backs of 3000 innocent victims. They did not perish so that you might seek partisan advantage. You are worthy of equal parts pity and revulsion.’ ☞ Oh, give me a break, Tom. Or else write at least as strong a letter to everyone associated with choosing to hold the 2004 Republican Convention in New York on September 11. (Or was that, in your view, just coincidence?) I know that holding a nationally televised convention can’t compete for importance with a paragraph in my Internet column but still, I can tell you this: it was done with a lot more forethought and motive. I wrote: ‘No one can rightly blame President Bush for September 11. But I sure wish he hadn’t ignored the direct warning he got January 7, 2001.’ I believe both those sentences are fair. I’m sorry that some found the timing inappropriate. Tom R: ‘I find that this is a particularly bad day to question Bush’s intentions and effectiveness at protecting us. And I say that, even though I agree with you. I think talk is cheap when we talk about heeding the warnings. Sure, there were dire warnings, but there are many dire warnings every day, as I read in a New Yorker article a few months ago. The problem is that there is too much information to sift through to know which to act on.’ ☞ As hard as it is to sift through a thousand dire warnings, what about this: what about when, in your key CIA briefing shortly before you assume office, the head of the CIA sifts through it for you and boils it all down to just two or three really, really important, ‘tremendous,’ ‘immediate’ threats? Would that not catch your attention if you were about to assume responsibility for the safety of 280 million people? Derek A: ‘To insinuate that Bush could have stopped the attacks is way out of bounds. First off he wasn’t even President on Jan. 7, 2001. Second, the ongoing events of Clinton/Gore?? How many terrorist attacks did it take for Clinton to do anything (overtly) about terrorists?’ ☞ It’s true he wasn’t President on January 7. But surely he knew he would be President 13 days later – no? As for President Clinton’s unsuccessful efforts to deal with bin Laden . . . according to Bob Woodward’s Bush At War, those failed attempts were part of the briefing. Faced with a ‘tremendous,’ ‘immediate’ threat to the United States, and knowledge of the thus-far failed efforts to avert it, would it not have been your inclination to improve and redouble these efforts rather than shut them down? Derek continues: ‘One last thing. I am sure you would demand full disclosure of financial analysts on CNBC, but you rarely mention your position with the Democratic national party. This should be stated in EVERY column so readers know where this commentary is coming from. I guess I should not expect such honesty from someone who works for the Clinton/McAuliffe team.’ ☞ Busted! I am treasurer of the DNC (as has been disclosed in the site BIO every day for the past four years). That said, I would hate to have anyone think what I write here is ‘official’ in any way. It is not, and none of it is seen by anyone at the DNC before it appears. The truth is, I would be writing the very same things (and would have a lot more time to write them) if I held no such position. CONVERT TO A ROTH IRA? J Sheff: ‘I assume that the current top Federal Tax Rate is as low as I will see it in my lifetime (I’m 62 now and retired). Ditto for state taxes (I live in California). I’m afraid that they may be quite a bit higher in five or six years and after, when I will have to start withdrawing from my tax-deferred accounts for living expenses. If this is the case, would it not be wise to convert as much of my tax-deferred accounts to Roth IRAs as I have cash to pay the taxes in 2003?’ ☞ I doubt the top bracket would rise above 40%, and the California rate rise by more than 2%, so the difference will not be huge . . . but why not? It’s basically a way to increase the size of your retirement assets (you are in effect investing more by paying the tax on them now). Especially if the Roth is invested conservatively (e.g., TIPS and such), it could make sense to do this. For eligibility, and other good Roth IRA info, click here.
“The OC” September 15, 2003January 22, 2017 Today’s reading assignment: Click here. This is the story of Orange County. I somehow doubt FOX (‘we distort, you decide’) will broadcast this. BUT WHO’S COUNTING? And just to keep you up to date, here was the National Debt as of last Thursday: $6,810,434,342,743.91. Don’t be distracted by the 91 cents – it’s the $6.8 trillion that we need to focus on. And the $582 billion by which it was grown so far this fiscal year. (To a government accountant, New Year’s Eve falls on September 30. October 1 is the start of 2004 – Happy New Year!) Note that, just as the Orange County government is completely controlled by Republicans, so is the United States government. Are we sure it was wise to make such massive tax cuts for the top 1% (those who earn, last I saw, $373,000 a year or more)? In this extraordinary time of war, reservists have been asked to leave their families for a year, risk – and in all too many cases lose – their lives and limbs . . . jobs have been lost, health care has gone unattended, veterans’ benefits scaled back, after-school programs pinched . . . and the top 1% have been asked to sacrifice nothing. Quite the opposite. They have been asked to accept hundreds of billions of dollars in tax relief that many of them did not ask for and none of them need. It is so staggeringly wrong-headed, people can’t imagine it can be this simple. But it is this simple. WE PAY YOU? Geoffrey Falk: ‘Maybe I missed something – but we are ‘paying you?’ I feel kind of bad since I just dial up your web page and get to read it for free!’ ☞ I’m not certain, but I think Mr. Hoffer was joking. Tomorrow: 9/11
Your Feedback On Taxes September 12, 2003January 22, 2017 Craig Gawel: ‘Mike Baute seems to feel overtaxed. In fact, the taxes in this country are lower than most western industrial nations. Go to worldwide-tax.com and you can see that Germany has a top rate of 48.5% (with 12.8% Social security), Finland is 37.5% (with 7.2% SS and 23% employer contribution to SS), England ‘s top rate is 40% for incomes over 28,400 Pounds, and even Italy (which I thought had lower rates than the U. S.) is 45.1% (with 9% SS 30-37% employer SS).’ Mike Baute: ‘Your questions are not silly, but they hardly answer my questions. I asked you two things that are also not silly: (a) Why do you think the Government will spend more productively than the earner; and (b) Why don’t you speak to how tax relief is spent by the recipient?’ ☞ (a) Because I don’t think the earner will spend it to build roads, control air traffic, finance a military, fund college scholarships, subsidize scientific research, provide health care to the old and the poor . . . and on and on and on. (b) Most tax relief recipients will use it to pay down debt or buy stuff – which is why I’m not against some tax relief for most people. But the bulk of the Bush tax relief doesn’t go to most people, it goes to folks making hundreds of thousands or millions or tens of millions of dollars a year. Here’s how I’m spending mine: I’m buying foreign bonds to round out my portfolio and take advantage of what will be a declining dollar. How does that help create U.S. jobs? John Stone: ‘Whether it’s Alabama or California there always seems to be a big disconnect for conservatives when it comes to government services: They always want them without having to pay for them. In our recall election in California, Tom McClintock, the self-styled fiscal conservative, brags that in his elected career he never once voted for a tax increase. He does this despite the fact that every paycheck he has ever received since graduating from UCLA came from the government. I don’t recall his turning down any pay raises, or offering to pay the tax-supported part of his educational costs.’ Don: ‘Poor people get to live in a really great country. They get all kinds of government services without having to pay for those services – or, at least, they’re largely subsidized by rich people paying big-bucks taxes. That’s why I’m not very sympathetic with the idea that every tweak to the tax system has to give more to the poor. They’re already getting a lot.’ ☞ ‘Are there no prisons? Are there no poorhouses?’ I’m sure Don means well, but I couldn’t help thinking that he falls a bit closer to Scrooge than Marley, and that at the end of the day most of us would rather be Marley – even Scrooge. R. Adam Smith: ‘A tax table I recently saw in the Wall Street Journal indicated that the top 10% of earners (which I would define as the rich) paid 67% of all income taxes. Since Democrats are always arguing that the rich should pay more, how much of the total burden should ‘the rich’ pay – 90%, 99%, 100%? 67% sounds like a fair amount to me.’ ☞ I look at it this way. How much tax, beyond sales tax, FICA, all those phone bill taxes property tax, and so on, should a family of four with $36,000 in income pay? I don’t know – but not much, if anything at all. Now . . . how much tax should someone who earned $86 million pay? In 2000 there were 400 Americans who earned that much or more. That year, because so much of their income was either capital gains or tax-free bonds, their average federal tax burden, including FICA, was 22.3%. Was it really necessary or wise or fair to cut their taxes? Had the Bush tax cuts now in effect been in effect then, they would have lowered that burden to 17.5%, saving them an average of $8.3 million each. To me, it was terribly unwise fiscal policy, terrible social policy, to go deeper into debt to give them those tax cuts. (The cuts that apply to income below $100,000 or $200,000, I have much less trouble with.) I’ll save a small fortune this year thanks to George Bush. (It’s been an unusually good year.) But why is this a good use of the nation’s limited resources? I already had the world’s most blessed life. The wonderful woman who comes in once or twice a week to clean for us – 90 minutes each way on public transportation – pays little or no income tax (she does pay FICA). Yet somehow I don’t feel she’s getting the better end of the bargain, or that we’re being exploited. George Hoffer: ‘Look – whether or not you agree with the President’s policies is irrelevant. We’re paying you to tell us how to profit from rising deficits, (overly?) ambitious foreign intervention, and the like. How do I make money from the coming fiscal train wreck?’ ☞ It’s easier to know what not to do than what to do. I’d be leery of any long-term bonds that are not inflation-adjusted. I’d be leery of stocks. I own some, but am heavily in safe, liquid investments. I’d be leery of real estate in many areas. If you’re 25 or 30 and in it for the long-term, just keep investing in stocks, adding to your holdings every month. But don’t expect great results for a while. Then again, even if I’m right and the market as a whole is no bargain, when did the market ever start listening to me?
9 – 11 September 11, 2003January 22, 2017 A sad day. The only person we knew directly who perished two years ago was our friend Rob Deraney. But Rob was a particularly great guy, and actually the one who introduced Charles and me a decade ago, so it’s especially poignant to have lost him. No one can rightly blame President Bush for September 11. But I sure wish he hadn’t ignored the direct warning he got January 7, 2001, at Blair House, from the head of the CIA – that bin Laden represented a ‘tremendous’ and ‘immediate’ threat to the United States. In hindsight – always so much easier than real life – if he hadn’t ignored that warning, and hadn’t shelved what had been the ongoing Clinton/Gore efforts to thwart al-Qaeda . . . well, who knows? And what if we had concentrated our resources on Afghanistan and al-Qaeda a little longer, until we had made more headway, before alienating so much of the rest of the world by rushing into Iraq? Could waiting six months have increased our success against al-Qaeda while, at the same time, increasing world support for our effort in Iraq? THE WORLD’S LEADER You probably saw Tuesday’s New York Times editorial on the President, but if not, click here. (As an incentive to our Republican readers, we will be tracking the click-throughs and adding a free month to the subscription of any red-state reader who goes there.) Tomorrow: Your feedback on taxes. Still coming: John Adams, the other view, by Richard Rosenthal.
Feedback September 10, 2003January 22, 2017 MORE GOOGLE MAGIC In the ever-present Google toolbar you set up a couple of weeks ago, just type a stock symbol and word ‘quote’ – e.g., PCL quote – and, when you click the ‘I’m Feeling Lucky’ shamrock (an optional icon that’s easy to add to the toolbar), up comes the stock quote, charts, and related info. It even works with obscure stocks. ALABAMA Fred: ‘Please don’t talk about things when you don’t know the facts. The Alabama tax reform is actually a tax increase on the poor. Sure, the Governor wants to lower the state income tax on the poor, but he more than makes up for it by doubling car tags, adding an 8-10% tax on all services (and it’s the poor who can’t afford new cars or appliances, they have to pay to get their existing ones fixed). He is also doubling taxes on new cars, home purchases and deeds, so I hope the poor aren’t planning on getting ahead anytime soon.’ ☞ Well, to close the budget deficit, some taxes and fees may have to go up, whether or not he raised the income tax exemption for a family of four from $4,600 to $17,000. So I’m glad he’s proposed at least that. But even that seems likely to go down in defeat by the Republicans. Fred would argue that no taxes and fees need be raised. ‘Alabama’s budget increased from $12 billion to $17 billion in the last 5 years (during a recession), thanks to possibly the most corrupt state legislature in the nation. The new funds will not get anywhere near education or other needs in this state. By the way, I’m a liberal Democrat (voted for Nader and will vote for Dean) so don’t think I’m in bed with the Republicans. I just think that Alabama should get its internal house in order before asking the residents to cough up another billion.’ ☞ If the extra $5 billion a year is doing nothing for anyone (are we sure?), I’d say that’s all the more reason a family of four earning $5,000 or $10,000 shouldn’t have to pay income tax. SEABISCUIT Kathi Derevan: ‘As good as the movie is, the book is 100 times better. I thought I had no interest in horse racing. The book is riveting. The horse races described in the book leave you sweaty and short of breath. Also, much more detail (of course) about the life and times, and the milieu into which Seabiscuit rode . . .’ TAXES Mike Baute: ‘[You write that under the Bush tax cuts, a rich person might get $1 million tax cut.] Do you think the government could or would spend the money more productively than its earner? We have noticed you never speak of ‘How the Tax Relief is Spent?’ & how this benefits the economy. Since you feel undertaxed why not donate to the Government of your choice. You can start a Movement!! Personally, we haven’t felt undertaxed at any time in the last 5 decades. Nor do we feel undertaxed in this decade. As soon as we feel undertaxed we will welcome your suggestions for disposing of the excess refund.’ ☞ Okay . . . but then why collect any taxes? And why not collect it ALL from the middle class and lower-middle class and none of it from the rich? If you agree these questions are silly, then it’s simply a matter of degree. You apparently feel the rich were the best place to cut $1 trillion in taxes over the next decade – even though we’ll have to borrow it all to pay for it – and that this is somehow good economics and/or socially just. Why?
The Fog of War and Tax Policy September 9, 2003February 23, 2017 A movie none of us has yet seen, but I would like to (it opens December 26), is ‘The Fog of War: Eleven Lessons from the Life of Robert S. McNamara.’ I remember when then Defense Secretary McNamara – one of the ‘best and the brightest’ (the Donald Rumsfeld of his day, only less smug) – came to Harvard to defend his policies in Vietnam. It was still relatively early in the war, and I was one of those who trusted the government to be making the right choices. What information did I have on which to put my 20-year-old judgment ahead of McNamara’s? This guy was clearly brilliant, clearly decent. And – as it turns out, he says now – clearly wrong. ‘We acted according to what we thought were the principles of the nation,’ he says. ‘We made our decisions in light of those values. Yet we were wrong, terribly wrong.’ This is not to say that Iraq and Vietnam are the same. When those 19 Iraqi hijackers killed 3,000 Americans, we were completely right to declare war on terrorism. (OK, they were 19 Saudis, not Iraqis, but REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, REDACTED, and a majority of the American public somehow got the false impression that Saddam Hussein had a hand in the attack.) But I would argue that in alienating so much of the rest of the world with our arrogance before September 11 – and then after – the Bush team did not serve us well. And now another plug for Al Franken’s book, Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right. It turns out, the Right have not been completely square with us. A review from the right, September 5, 2003 Reviewer: A reader from Greensboro, NC I hate to admit it, but this book really illustrates the poor research and constant mistruths that come from my party. Coulter is a disgrace to not just the right but America and all it stands for. Hannity and Colmes should be re-named to the Sean Hannity Show because Alan Colmes simply is not as vociferous as his counterpart and it hurts the left. I’m Republican but more importantly I’m a proud American. I would prefer to hear fair and balanced because it is good for public discourse but it simply is not happening and never will. He who yells loudest is usually the one heard. I was really disheartened to learn the truths about Al Gore and Love Canal, the Internet and Love Story. Franken illustrates the truth about the lies that were told by the media that negatively affected Gore’s run for the presidency. It is worth buying this book just to read about this alone. Some that read this review may question my loyalty to the GOP. At times I do myself. I simply wish that everyone would put the country first rather than their agenda. After completing the book I’m a little more than disillusioned with the lies in the media. We should stand for it no longer. This is an excellent book for everyone! That was the first of 470 reader reviews that came up when I went to Amazon to look yesterday. But it leaves one to wonder . . . where do these mistruths come from? Do they spring from the rightwing media itself? Or are they orchestrated? Some of the mistruths come from the very top. Then-candidate Bush looked into the camera and – defending his proposed tax cut for the wealthy – said, ‘by far, the vast majority of the help goes to the people at the bottom end of the economic ladder.’ That was simply untrue – a multi-centi-billion-dollar lie. But he seemed so amiable, and Gore’s character had been so called into question (Love Canal, the Internet, Love Story…), that much of America believed him. In pushing through the most recent cuts, the President characterized them as “little bitty” and told us that they were designed for maximum impact in creating jobs. That, too, was untrue. Yet the whole administration was saying it . . . all the while using the famous $1,083 “average” that taxpayers would save to help sell it. They never pointed out that this $1,083 was an average. That rich folks saving tens of thousands of dollars a year – in some cases, millions – while 50% of Americans saved less than $100. (Remember that when Bill Gates walks into a crowd of homeless people, they all become, on average, centi-millionaires.) Bill Spaced: “Your readers may not believe this (nor might you), but I don’t remember what the tax break for the rich *was* … was it the estate tax, or something else (or both)?” ☞ Here’s the nub of it: Cut top bracket from 39.6% to 35%. Cut dividend rate from 39.6% to 15%. Cut cap gains from 20% to 15%. Cut estate tax from 55% to 0% by 2010 (theoretically). So say you’re the average Joe who lives in Florida and has $75 million in stocks and mutual funds that in a typical year throw off $2 million in dividends and $5 million in long-term capital gains. OK? First off, Governor Jeb cut your “intangible property tax” in half (Florida has no income tax), saving you $250,000 or so. And President George cut your federal income tax by a further $750,000. Total savings: $1 million a year. (And that’s just while you’re alive.) This may sound fanciful – who has $75 million in securities? But as mentioned a few weeks ago, in the year 2000 there were 400 Americans who reported annual income – income! – of $86 million or more. (Many reported much, much more.) So please don’t tell me that Florida Joe, with his piddling hypothetical $7 million in dividends and capital gains, is such a big deal. He needs little bitty tax relief just like everybody else.
See Biscuit September 8, 2003January 22, 2017 Am I the last one in the world to see “Seabiscuit” – or are you? If it’s you, please withdraw $10 from your money market fund . . . the after-tax interest on which this year would net you only a nickel anyway . . . and see it. It’s a wonderful movie. Set in a time when the contrast between rich and poor was particularly stark (because poverty had come to those who had not expected it), it is a movie about underdogs. Does anyone go to see it and root for War Admiral to beat Seabiscuit? Or for Mr. Riddle, War Admiral’s wealthy owner, to get a tax cut? See it, and consider the governor of Alabama, Bob Riley, who is being run out of the Republican Party for daring to suggest that his state’s 5% top income tax bracket be raised to 6%. He would use this increase to close Alabama’s budget deficit . . . to increase Alabama’s worst-in-the-nation education funding . . . and to make the tax more progressive. Currently, a family of four begins paying Alabama income tax when its annual income reaches $4,600. Governor Riley would raise that threshold to $17,000. ‘It’s been incredibly awkward,’ Saturday’s New York Times quoted the state Republican chairman, Marty Connors, ‘but what am I supposed to do? Throw away 20 years of Republican ideology for something like this?’ Yes, well that would be a good start. Tomorrow: Another Movie
Of Subbookkeepers, Old Folks, and Dirty Power September 5, 2003January 22, 2017 BOREALIS RESPONDS Yesterday, one of you sent an expert’s thoughts on the Borealis electric motor technology. Sure, the Chorus Motor may work in theory, he said. But the expensive inverter required makes it impractical. (Please don’t ask me what an inverter is.) Herewith, Borealis spokesperson Chris Bourne’s reply: The assumption that we need an expensive inverter is wrong. Everything in Chorus is built from standard parts available off-the-shelf. Most of the complexity is in the software, but of course an 18-phase motor is physically more complex than a 3-phase motor as well. But there are some serious cost trade-offs. One is the cost of transistors. Each phase needs a transistor, but in a 3-phase motor they are much larger transistors than in an 18-phase motor. Large transistors are disproportionately expensive compared to smaller ones and the larger the motor, the more economical a Chorus drive becomes. We bring down the cost of power silicon and because we are using harmonic waveforms as well as pure waveform, we don’t mind that the power is dirty – even square wave power can be used. [Is This like being able to pour bourbon into a diesel engine? – A.T.] In any case our alleged “scam” was operating at the Birmingham UK Drives and Controls show this Summer, going head to head against the exact same motor frame in the form it is sold by a leading motor company, and beating it hands down for start-up torque while maintaining high efficiency for continuous running. The reason it’s a tough sell is because of people like Mr. Boothe’s father – the industry is full of closed minds who know that there is nothing new under the sun in motor drives. They can’t bear to think they might have missed something. Yes, it is well known that changing the winding configurations dynamically can be beneficial. But he is not going far enough. He is rooted in 3-phase technology and he is so sure it can’t be done economically that he doesn’t bother to follow through on the mathematics and costings at phase counts above 3 – he just assumes it must be more expensive. We’ve found a way of reaping the benefits without building an expensive motor. I find it odd that people say “oh of course, that’s well known” and “it must therefore be a scam” at the same time. Mr Boothe’s only real objection is that it will be a hard sell. Since he doesn’t know how the changes are done, he doesn’t know how much it will cost. Nevertheless, that’s enough to label us a scam! ☞ Isn’t this fun? You have all promised to buy no more of this crazy speculation than you can painlessly afford to lose – so I won’t feel bad when you lose it. And in case it proves not to be a scam . . . well, be still my heart. Truthfully, I don’t believe it is a scam – at least not in the sense that, say, the Patent Office has not really issued the patents Borealis claims it has (although I have not personally checked). Or in the sense that the company doesn’t believe what it says (although there is always that chance). What I have no way of knowing is whether their supposed revolutionary technologies will actually work and prove commercial. One has to assume not. But one can hope, can’t one? (Meanwhile, BOREF closed yesterday at $7, valuing the entire company and all its allegedly world-changing technology at almost as much as a fancy new corporate jet.) AND NOW BACK TO SOMETHING IMPORTANT Jay Glynn (building on yesterday‘s strengths): ‘Did you know that the longest common one-syllable word is screeched? That the only English word with a triple letter is goddessship? Or that subbookkeeper is the only word with four double letter pairs in a row? And what about ultrarevolutionaries? You got it – each of the five vowels is used twice.’ OLD FOLKS Forwarded by my pal Ed Harrington: ‘For those of us getting along in years, here is a little secret for building your arm and shoulder muscles. You might want to adopt this regimen! Three days a week works well. Begin by standing outside behind the house, with a 5-pound potato sack in each hand, extend your arms straight out from your sides and hold them there as long as you can. If you can reach a full minute, relax. After a few weeks, move up to 10-pound potato sacks and then 50-pound potato sacks, and eventually try to get to where you can lift a 100-pound potato sack in each hand and hold your arms straight for more than a full minute. After you feel confident at that level, start putting a couple of potatoes in each of the sacks, but be careful not to overdo it.’ Perhaps more practical advice from yesterday’s Wall Street Journal: Studies suggest that pets can help lengthen people’s lives. ‘Kathleen Neuhoff, a veterinarian in Mishawaka, Ind., tells the story of her grandmother, who announced one day that she planned to be dead within a month. She remained in bed, waiting for the end. Her loved ones decided to get her a dog, which gave her a purpose. She walked the dog every day, and lived six more years.’
Googling a Chorus of Consonants September 4, 2003February 23, 2017 I can think of an English word with eight consonants and only one vowel. Can you? (Oddball questions like this are one of my strengths.) Can you think of one with nine? I can’t. Caption of an Alex Gregory New Yorker cartoon (one young woman at dinner with another): ‘I started my vegetarianism for health reasons, then it became a moral choice, and now it’s just to annoy people.’ I see that Borealis closed at $6.50 yesterday, and Cool Chips at $15.50. So Borealis, which owns 65% of Cool Chips, is valued at $32.5 million (5 million shares outstanding times $6.50 each) and Cool Chips is valued at $124 million (about 8 million shares outstanding at $15.50 each). Both stocks may well be worth zero (everyone’s the same height lying down). But it doesn’t make sense for 65% of Cool Chips to be worth $32.5 million when 100% of it is worth $124 million. Tim Carrigan: ‘I’m not a big Rush Limbaugh fan myself, but I was kind of offended when I read your comment that ‘ditto heads who are brave enough to think for themselves’ would read Franken’s book. If I don’t care to read it, does that mean you consider me a coward who can’t think for myself?’ ☞ Not a bit. But if you were a self-proclaimed ditto head (as so many Limbaugh listeners are), and you did read Al’s book, I would consider you brave. Matt Boothe: ‘After reading Kevin Crawford’s concerns about Borealis, I asked my father to take a look at some of the information on its Chorus Motors subsidiary. My father is the president of Embedded Power Control, Inc. a tiny consulting firm specializing in power electronics and motor drives. Before striking out on his own, he worked for twenty-something years at GE designing AC and DC motor drives. In short, he doesn’t think the idea is revolutionary. Here’s how he put it: This is mostly a scam. It is well known that changing the winding configurations dynamically can sometimes be beneficial. I was looking at a University of Wisconsin paper relating to that (for EVs) not long ago. This company doesn’t mention how the configuration changes are done, but to do what they say would require a very complex inverter. ‘Allow me to translate. The inverter is the controller – the box of electronics that makes the motor turn at the correct speed or produce the correct torque. A complex inverter is an expensive inverter. An expensive inverter is going to be a tough sell in the marketplace. I didn’t ask him about Borealis’s two other revolutionary technologies, Cool Chips and Power Chips, because he has no special expertise in that area.’ ☞ I have expertise in none of these areas. But is it conceivable that in huge quantity, inverters could be cheap? Or that they have thought of this problem and found a way around it? As always, I would never bet money on this extreme speculation you cannot painlessly afford to lose. Anton Konikoff: ‘A neat Google trick: If you use a tilde (~) before a search term, you can find search results that are RELATED to the query as opposed to exact matches. For example, if you are looking for a place to eat in Wichita, you can type in wichita ~food. Google will show restaurants and other places to eat in the area, even if their websites do not contain the term ‘food.’ And here’s another tip: With Google Directory, you can drill down to a specific category via a directory tree-style structure. Google makes it easy to find GOOD QUALITY sites – they are arranged in the order of PageRank (Google’s measure of website importance) as opposed to alphabetically.’
Social Security September 3, 2003February 23, 2017 Beth: ‘I read your article in Sunday’s PARADE about fixing Social Security. Not long ago I received an e-mail suggesting that one sure way to assure Social Security got fixed quickly would be to require Senators and Representatives (who apparently have their own much better retirement system) to become part of the Social Security system. Would that really work, assuming it could be done?’ ☞ There’s a myth careening circulating endlessly around the Internet – perhaps you’ve received it – that suggests our representatives in Washington would fix Social Security pretty darn quick if THEY had to pay into it. Instead, it says, they retire with more than $15,000 a month (!!!!) EVEN IF THEY’VE SERVED JUST A SINGLE TERM! The truth, however, is that Congressfolk DO pay into Social Security, and have been doing so since 1983. They also pay into a pension plan. It provides no benefit unless they’ve served at least 5 years – at which point they’d get about $1,600 a month. It provides retirement with full pay after 40 years. But after 40 years in Congress, they might not have too many years left to receive it. So it’s not true Congress doesn’t want to fix Social Security. It’s just that they are afraid, if they even suggest it, they will lose their jobs. David Nanney: ‘I would like to make one suggestion for solving the ‘Social Security Crisis’ that you did not mention in PARADE. If I could sign a paper releasing the Social Security Administration from EVER providing ANY benefits to me, but, NEVER taking another penny from my check AND returning EVERY PENNY taken from my checks since I began working, I’d sign it tomorrow. I can do a more superior job of investing my money than the government without any doubt.’ ☞ Here’s the thing: you’re right! As long as we can abandon all the 80- and 90- and 100-year-olds now getting Social Security (and somehow find the cash to refund all you’ve paid in, as you request), the problem is solved. But if we can’t abandon them, then we have to keep their checks flowing, which means taxing working Americans – you – to do it. The one silver lining is that, the way this works, when YOU are 95, there will be workers not abandoning you, either. You might not need help from anyone . . . but conceivably, thru one vicissitude or another, you might. Mary McLaughlin: ‘We have a problem with Social Security because people that never paid into Social Security are receiving Social Security. It is the right time to privatize Social Security, so that if the individual should pass away the money will go to the name shown on documents. I cannot collect on the money my husband paid into Social Security, because my earnings were greater. But a widow that has never worked does collect. This is wrong.’ ☞ My view is that a wealthy, compassionate society needs a ‘safety net’ for its elderly. If you accept that premise, then you will inevitably have serious inequities – for example, one widow getting a much better deal than another. Or the raw deal for smokers (who pay as much into the system as everyone else, but then, as a class, because they live significantly less long, receive far less in benefits). Wilbur Gearity: ‘I am disappointed that you promote the political illusion that Social Security is a retirement system rather than the grandiose Ponzi scheme that it actually is. As I am sure you are aware, a Ponzi scheme requires a continuing flow of new ‘investors’ to pay off earlier ones. It is doomed to failure because at some point it is impossible to get sufficient new ‘investors’ to successfully pay the increasing pool of established ones.’ ☞ I do know what a Ponzi scheme is, but because you also know what it is, you know the analogy is not fair. It’s certainly reasonable to assume, or at least to hope, that each generation will produce children and grandchildren who are productively employed. If so, one way or another (or in a combination of ways), they may provide some minimal standard of living for the elderly, just as they would hope their children and grandchildren would do for them. It’s true that as lives have lengthened and families shrunk, some adjustments are required. That’s what the article advocated: a relatively painless three-part fix: eliminate the cap, currently $87,000, on which income is taxed, but make the tax rate on that excess income a modest 1.5%; because we’re living longer and stronger, raise the age at which full benefits may be collected (currently 65 years and 2 months, slated to reach 67 by 2024) by one more year (to 68 by 2036); tie a retiree’s initial benefits to price inflation instead of wage inflation, at least in part – a technical adjustment that would have a big impact. Wilbur continued: ‘Please explain how one raids a Trust Fund that is composed of nothing but IOU’s (Treasury Bonds that cannot be bought and sold in the financial markets).’ ☞ These IOUs are counted as part of the National Debt. If we pay down the debt – as Republicans once actually wanted to do – we put ourselves in better and better shape to handle the baby boom bulge. If, instead, we ADD trillions of dollars to the National Debt, as we did under Reagan/Bush and now are doing again under Bush/Cheney, we weaken our ability to meet these obligations (and much else). The Clinton/Gore slogan was ‘Save Social Security First.’ The idea was to run a true balanced budget, using today’s Social Security surplus (because today we collect even more in FICA than we pay out in benefits) to pay down the National Debt. That way, there’d be plenty of national financial strength and borrowing power to handle the Social Security claims of the Baby Boom bulge. Instead, Bush chose a modest tax cut for the middle class (which one could argue was OK, especially in the face of a recession) and a massive tax cut for those earning millions of dollars a year. Terrible for the country, though nice for the rich. ‘If this is class warfare, then my class is winning.’ – Warren Buffett