The Really Big Picture April 16, 2009March 13, 2017 THAT OLD FOOD’S STILL GOOD James Valente: “Thought you would find stilltasty.com right up your alley. Just enter a food and it will tell you the best way to store it to maximize the time it will keep and exactly how long it will keep. I’ve tried it twice – with refrigerated yogurt and ham from the deli – and both times it was accurate and I avoided the dreaded ‘does this smell bad or is it just in my head’ dance.” ☞ As a guy who yesterday ate sausages marked “sell or freeze by October 18, 2008,” not being able to remember when or whether I had ever even put then IN the freezer, this site is right up my alley. Enjoy! AN IVY LEAGUE EDUCATION FOR FREE* Stephen Willey: “Thousands of free video lectures from the world’s top scholars.” ☞ This is another example of how we can live better, richer lives even as our consumption of energy and raw materials, of necessity, becomes more frugal and efficient. And you can listen to these lectures while taking a walk, something no tuition-paying Yalie can do. *with degree: $200,000 additional A STRAIGHTFORWARD LIGHT BULB COMPARISON/SUMMARY Here. PHOTOS OF REALLY BIG LIGHT BULBS Here – taken with the Hubble telescope. My favorite (scroll down) is of the Sombrero Galaxy, 28 million light years from Earth, that they say contains “800 billion suns and is 50,000 light years across.” I hear stuff like this and can only think of that line at the end of Casablanca where Rick tells Ilsa, “ . . . it doesn’t take much to see that the problems of three little people don’t amount to a hill of beans . . . ” He wasn’t talking cosmology, but his tone of voice – frustrated that she was looking at things too narrowly – would have fit that context, too.
An Uplifting Song for Tax Day But Not Double Tax Day, Especially If You're Still Breathing April 15, 2009March 13, 2017 REMINDER Today’s the last day to print and mail Form 4868, giving you up to six additional months to file – though not to pay – your income tax. (If you don’t accompany the form with any outstanding balance due, you’ll incur interest and penalties.) STAND BY ME This just builds and builds. If you have five minutes, it will make you smile – even on tax day. DNDN Dan: ‘Is DNDN a happy memory for you or a sore subject?’ ☞ Well, if Dendreon‘s new drug meaningfully extends the lives of prostate cancer sufferers, how can that be anything but happy? And that is certainly what the market concluded from the results released yesterday. I had been short the stock – I attached a strong caveat when I told you this – because a hugely smart, hugely successful friend had studied this new drug every which way from Sunday and was certain it would fail to gain approval. From nothing, on his wits alone, specializing in pharmaceutical stocks, he had made many tens of millions of dollars. He is really good at this, and really does his homework. (And he still thinks something odd may be operating here; that even if it does gain approval, as it now likely will, it’s not going to deliver the results people hope.) But the stock – which had been $3 or $4 for months and months, and which he thought would approach zero on yesterday morning’s announcement – topped out at $22 instead. The lesson here cannot be repeated too often: never, ever bet the farm on anything, no matter how sure, no matter how conservative (was there ever a record more steady than Bernie Madoff’s?), no matter what. I lost money on some DNDN puts (I should have owned calls!), but I’m not a farm-better, so life goes on. ESTATE TAX: DOUBLE TAXATION If you don’t find this topic as fascinating as I do, rejoice in your mental health and skip all but this summary: It’s a shame anyone has to be taxed on anything, but perhaps least painful to be taxed when you’re dead – and only on whatever you had ‘left over’ when you died. Or if you view the estate tax as a tax on heirs, consider this: If they had earned $20 million by the sweat of their brow, it would have been taxed at a 39.6% rate under Clinton and now again, more or less, under Obama. So is a slightly higher rate unreasonable – 45% instead of 39.6% – considering that, far from working for it, the money simply arrived in the mail? Remember, this is after the first $3.5 million passes to them exempt from any tax (or $7 million if the decedent utilized a by-pass trust . . . or the full $20 million if you are the decedent’s spouse). That said . . . here goes: Mary Erskine: ‘It’s not double taxation: for a great number of large estates, a large portion of the estate is a capital gain that was never subject to capital gains tax since the assets were never sold.’ ☞ Right. That was the point made Friday. I should have linked it to yesterday‘s entry. Tom M.: ‘You don’t get it – the reason estate tax is wrong has nothing to do with taxes – it’s because estate ‘tax’ is the blatant seizure of private property by the Federal government. Go ask small farmers how they cope with estate tax. But it’s nothing new, the federal government seized the land originally from the Indians, they’re just continuing the practice.’ ☞ This is just factually wrong. For starters, there’s this small distinction: The Indians did not vote for the government that seized their land. But we taxpayers elected the government that enacted the estate tax, and some who are subject to it even grudgingly support it. But leaving that aside, small farmers would not be touched by the estate tax President Obama has endorsed retaining. That’s because a small farm is 160 acres or 320 acres, and at $5,000 an acre (up perhaps fivefold in the last 20 years, incidentally), that’s still well below the $3.5 million exemption, let alone the effective $7 million exemption with a by-pass trust. Even at 640 acres – a full square mile – there’d likely be no tax; and if you know farming, you know small farms are usually not a mile long and a mile wide. (The average farm in 2007, according to this, was about 450 acres – even figuring gigantic corporate farms into the average. The average household net worth even of ‘large’ farmers in 2000, according to this, was only $1.4 million.) Paul Ward: ‘Debates about the federal estate tax tend to be manichean. As a lawyer and CPA who has worked closely with estate and inheritance tax issues for many years, I have reached some conclusions about this tax: “1. The estate tax is very, very good for lawyers and accountants. [True! One more reason to simplify it?] “2. People who think of themselves as middle-class really, really hate the idea of the federal government taking half of their estates after they die. Many millionaires think of themselves as middle-class. This includes many farmers and ranchers, many of whom live in those states with the Democratic senators who voted for a lower tax rate. [True! But with a $3.5 million exemption, adjusted for inflation, as many propose – and with the basic by-pass trust that doubles the exemption to $7 million – only those with estates above $7 million, net of whatever they chose to give to charity, would pay even a single penny of this tax . . . which leaves out almost every farmer and rancher in America. So it’s more perception than reality.] “3. Because the law allows for a stepped-up basis [meaning that your heirs inherit property not as if they bought it at the low price you paid, exposing them to a big capital gain when they sell, but can claim a cost-basis as of the value as of the day you died], there should be some type of inheritance tax on the appreciation. Canada imposes capital gains tax instead of a transfer tax on gifts and inheritances. This seems to me a better system. [Well, but it would cut the top rate from 45% to, currently, 15%. With multi-trillion-dollar deficits, should we be doing that?] “4. The U.S. has one of the highest estate tax rates in the world. [But it was cut from 60% to 55% to 45% – which I support – so that’s something. And an awful lot of billionaires seem happy to be living here despite the high rate.] “5. Many mega-wealthy people (Buffett, Soros, etc.) trumpet their support of the estate tax while using private foundations to shelter their assets from the tax while maintaining family control. These foundations must pay out a mere 5% of assets each year (the 5% includes accountant, lawyer and family member trustee fees!). [I’m not sure the world is worse off for having the Ford Foundation or the Rockefeller Foundation or the Gates Foundation, et al, or that it would be better off if they were required by law to pay out a higher proportion of their assets every year.] “6. If a retirement account is part of an estate, it is subject to income and estate taxes. This can result in near-total confiscation. [If it’s a Roth IRA, it’s only subject to estate tax. If it’s a traditional IRA, most people will have been required to – and almost all would have been allowed to – spend most of it on their retirement prior to their death. And the beneficiary of the remainder could be one or more charitable organizations, exempting it from both income and estate tax. True, if someone with an estate above $7 million wanted to leave nothing at all to charity, then the remainder of their traditional IRA would be very heavily taxed. But the purpose of an IRA is to help fund your retirement, so the only modification I would make is to include only the after-tax portion of the IRA in your estate. Does that make sense?] “7. In states like New York with high inheritance tax rates, the marginal federal and state rate on an estate can exceed 55%. People will take great measures to avoid such a tax rate. [True. A flip side to this though is that at 55%, the ‘cost’ of giving a big chunk to charity is only 45%. Cut the tax rate to, say, 15%, and the cost of charitable giving rises to 85%. So while one benefit of lowering the rate would be to give less incentive to avoid the tax, a side-effect could be to lower the incentive to fund non-profits. But remember, only about 15,000 estates in 2008 incurred any tax liability at all – and that was before the exemption rose from $2 million to $3.5 million. And those 15,000 didn’t pay 55% on their entire estate – even in New York – only on the portion in excess of the exemption that they chose not to give to worthy causes.] “8. I view the estate tax as a very inefficient tax . The resources people spend to minimize or avoid it are tremendous. These efforts are often wasteful and could be more productively employed elsewhere. I think it is naive to say as you do that the tax should be made ‘less porous.’ [You may have me there. We could likely figure out how to do it; but getting it enacted into law would be hard. This is certainly the argument for cutting the top rate as part of a deal to reduce porosity. But the bill I was decrying, to lower the rate from 45% to 35%, came with no such deal.] “9. Your dismissal of the idea that a lower rate could bring in more money indicates the estate tax debate for you is not really about raising more money. It’s really about ideology. [I’m not trying to raise more money, I’m trying to avoid raising less – and avoid reducing the incentive to make charitable bequests. But I hear you, appreciate the discussion, and even went to look up ‘manichean.’]“ ☞ If all this gives you a headache, go back up to the top and listen to that song.
Boozy Nine Year Olds Avoiding Estate Tax In West Branch Iowa April 14, 2009March 13, 2017 LONGEVITY Jonathan Pond: “I have always thought the livingto100.com site would be a good teaching device. I got the idea when my youngest daughter saw wanted to fill out the questionnaire. I said: ‘Fill it out as if you are doing everything bad for your health’ – drugs, booze, bad diet, no exercise, smoking, and so on. She did, and this nine year old was shocked to learn that her life expectancy was 17.” Kevin Poyant: “Martin E. P. Seligman, Ph.D., discusses the power of positive thinking on the first page of his book, Authentic Happiness: ‘These two nuns, along with 178 of their sisters, thereby became subjects in the most remarkable study of happiness and longevity ever done . . . It was discovered that 90 percent of the most cheerful quarter was alive at age eight-five versus only 34 percent of the least cheerful quarter. Similarly, 54 percent of the most cheerful quarter was alive at age ninety-four, as opposed to the 11 percent of the least cheerful quarter.’ Pretty good reasons and odds to think positively! ( or become a nun!).” Peter Kaczowka: “The best single predictor of longevity, even more than gender, is a person’s wealth and income. This is confirmed by many studies including this one. You can best help us live longer with good investment advice. Enough with the longevity snake oil pitches, already.” DOUBLE TAXATION Don B.: “Estate tax is double taxation. Assets are purchased on an after tax basis.” ☞ So what? Even if that were true – and as Tim argues below, it’s a stretch – what difference does it make? You were fortunate enough to leave a $500 million estate, or a $6 billion estate – and roughly half of whatever portion you choose not to leave to charity (or to your spouse) gets thrown back into the pot. Life is tough. But this country was pretty good to you; you amassed the fortune even knowing full well there was such a tax (indeed, it was higher during the years you decided to go to the trouble of amassing it); and if we don’t get the revenue from your estate, we will have to get it elsewhere. Life is tough for you – we concede that. (For one thing, as Tim points out: you’re dead.) But life is tough for a lot of people. Tim Nieman: “Is it even fair to define the estate tax as double-taxation? Most transactions where money passes from one entity to another are taxed – income, sales, etc. When someone dies, the estate transfers to a new entity. The original taxed party is not paying taxes again (they’re dead!) – the new recipient is paying. And further, the recipient has typically done little to ‘earn’ that money – it’s a freebie. They pay taxes on the newfound wealth once. It seems to me that it’s ‘double-taxation’ only if the same party has to pay twice.” because I’ve already paid taxes on the income. One may oppose estate taxes, but double-taxation is a weak argument for doing so.” ☞ Tim goes on to say that property tax, to follow the opponents’ logic, is even worse. You have to pay taxes on the same asset over and over and over again – an asset purchased with cash you paid income tax to accumulate. So “get over it,” billionheirs. Now is not the time to lower your tax rate from 45% to 35%. Uncle Sam has more urgent priorities. J.G.: “The flaw I think in the higher estate tax is that no one will pay it, they will have every incentive to plan around it. I would bet a 20% estate tax would collect many multiples more in absolute dollars than the 45% rate. Just my 2 cents (which will be down to 1.1 cents under your plan).” ☞ No one is talking about raising the estate tax rate – it’s down from 60% top rate in 1976 to 45% now. (And this 45% is only after exempting 100% of charitable donations, and exempting 100% of spousal transfers unless you’re gay, and exempting 100% of the first $3.5 million). If cutting the rate would raise more money, because people would stop planning around it, maybe we should talk about making it harder to plan around. Regular folks can’t plan around sales tax or property tax or the taxes taken out of their paychecks; maybe estate taxes should be made less porous? THE WORD FROM WEST BRANCH, IOWA A letter to the editor of the Muscatine Journal: The idea of same-sex marriage just isn’t scary anymore. Opponents will have a difficult time whipping up the usual fear-mongering on this issue. It used to be that most Americans didn’t know any gay people (or, more accurately, they didn’t know they knew any.) It was easy to believe negative stereotypes. But today almost everyone knows and likes a gay person — a gay friend, relative or co-worker. A waiter at my favorite restaurant is gay. He has a sparkling personality and a big smile. The Realtor who helped us buy our house is gay. We watch Ellen DeGeneres’ talk show. We watch Jodie Foster movies. We watch Neil Patrick Harris’ CBS comedy show “How I Met Your Mother,” and watch reruns of “Frasier” with David Hyde Pierce. We watch Anderson Cooper on CNN, listen to Suze Orman’s financial advice, and enjoy Nate Berkus’ decorating tips on “Oprah.” Gay people are everywhere today, and we like them. A lot. How can we tell people we like that we are opposed to letting them marry the person they love? That’s cruel. There are enough marriage licenses for everyone. John and Kaye Andremar West Branch, Iowa A STORM IS GATHERING Have you seen the TV commercial with people disturbed about gay marriage? As mentioned here last week, they’re not really disturbed – they’re actors pretending to be disturbed. Two minutes into this Rachel Maddow clip you can see them auditioning.
The Formula that Wrecked Wall Street April 13, 2009March 13, 2017 ALABAMA Remember the governor the Bush Justice Department hauled off to prison for seven years? Fred C.: “I’ve been waiting for you to give the latest on [former Governor] Don Siegelman here in Alabama. After all of your rants the past year about how he was treated, a Federal appeals court has upheld nearly all of the charges and he will be reporting back to jail shortly. As a longtime resident of Alabama I, along with most people of the state, realized in the beginning that the evidence against Mr. Siegelman was overwhelming (and I voted for him 3 times!). Now, it’s very possible that Karl Rove ordered a ‘hit’ on Siegelman and that there was plenty of prosecutorial misconduct, but he was clearly guilty! The “60 Minutes” and other reports notwithstanding, justice has been served. You’ve helped in my conversion from a moderate to a liberal, just wish you would be a bit more balanced.” ☞ I try to be fair – now you want me to be balanced, too? Sheesh! The reason I felt so comfortable railing about this case – and the reason I think you may still be a little off base – were all the Republicans quoted in the “60 Minutes” piece. E.g.: “I haven’t seen a case with this many red flags on it that pointed towards a real injustice being done,” says Grant Woods, the former Republican attorney general of Arizona. Woods is one of the 52 former state attorneys-general, of both parties, who’ve asked Congress to investigate the Siegelman case. “I personally believe that what happened here is that they targeted Don Siegelman because they could not beat him fair and square. This was a Republican state and he was the one Democrat they could never get rid of,” Woods says. . . . Now a Republican lawyer from Alabama, Jill Simpson, has come forward to claim that the Siegelman prosecution was part of a five-year secret campaign to ruin the governor. Simpson told 60 Minutes she did what’s called “opposition research” for the Republican party. She says during a meeting in 2001, Karl Rove, President Bush’s senior political advisor, asked her to try to catch Siegelman cheating on his wife. “Karl Rove asked you to take pictures of Siegelman?” Pelley asks. “Yes,” Simpson replies. “In a compromising, sexual position with one of his aides,” Pelley clarifies. “Yes, if I could,” Simpson says. She says she spied on Siegelman for months but saw nothing. Even though she was working as a Republican campaign operative, Simpson says she wanted to talk to 60 Minutes because Siegelman’s prison sentence bothers her conscience. ☞ So I’m still a little unsure Siegelman should be in prison for seven years* even as former Senator Ted Stevens of Alaska serves no prison time for his alleged $250,000 situation. Coincidentally, both cases involved roughly the same amount of money. One difference: no one alleges Siegelman took a single penny of that $250,000; it went to help fund a campaign the Governor was pushing to help fund education through a lottery. By contrast, Stevens’s alleged $250,000 went into his house. Rereading the full 60 Minutes transcript, it’s just dazzling to consider the difference between Karl Rove’s Justice Department and Eric Holder’s. One more reason to be proud of the new Administration. *The good news is that, although the Appeals Court found against Siegelman on most counts, they also opened the door to “resentencing,” so he is likely to get out with “time served.” If not, further appeals are likely and, it would certainly seem, justified. OUR HERO: HOW JACK BOGLE WOULD IMPROVE YOUR RETIREMENT This guy, who founded Vanguard, has done more for the average investor than just about anybody. Here’s a colorful write-up of his latest crusade. (He would greatly simplify all the various retirement regulations and make efforts to reduce the typical plan’s expenses.) CORRELATION: THE MATH MUDDLE UNDERLYING THE MESS This article – “Recipe for Disaster, the Formula that Killed Wall Street” – is deeply interesting for those trying to understand how such a calamity could have occurred. (In thumbnail: One really smart guy came up with one really nifty formula that the entire global financial world adopted without recognizing – or with choosing not to recognize – its limitations.) Even if you don’t have time to read it, you may find this part – explaining the essence of “correlation” – edifying on the concept of correlation: To understand the mathematics of correlation better, consider something simple, like a kid in an elementary school: Let’s call her Alice. The probability that her parents will get divorced this year is about 5 percent, the risk of her getting head lice is about 5 percent, the chance of her seeing a teacher slip on a banana peel is about 5 percent, and the likelihood of her winning the class spelling bee is about 5 percent. If investors were trading securities based on the chances of those things happening only to Alice, they would all trade at more or less the same price. But something important happens when we start looking at two kids rather than one—not just Alice but also the girl she sits next to, Britney. If Britney’s parents get divorced, what are the chances that Alice’s parents will get divorced, too? Still about 5 percent: The correlation there is close to zero. But if Britney gets head lice, the chance that Alice will get head lice is much higher, about 50 percent—which means the correlation is probably up in the 0.5 range. If Britney sees a teacher slip on a banana peel, what is the chance that Alice will see it, too? Very high indeed, since they sit next to each other: It could be as much as 95 percent, which means the correlation is close to 1. And if Britney wins the class spelling bee, the chance of Alice winning it is zero, which means the correlation is negative: -1. ☞ You need to read the whole article to see how this relates to what happened in the mortgage securtization fiasco.
Black on Moyers April 10, 2009January 3, 2017 AXP AND WFC As of last night they’re are up 60% since I mentioned them a month ago. Mindful of the remaining risks – and chastened by not having suggested selling half your FMD after it had doubled (agh!!!!) – you’re on your own from here. Sell half? THE ESTATE TAX IS NOT DOUBLE TAXATION Stephen Gilbert: “I think the vote to lower the estate tax was enabled by the failure of the media to report on the issue in an informed way. Like any issue involving money, they don’t seem to understand it. When the tax opponents say that estates have been taxed already, and that an estate tax is ‘double taxation,’ they ignore the significant, if not overwhelming, proportion of large estates that is made up of appreciated assets, appreciation which has never been taxed and never will be. Appreciated assets are passed on to their heirs with a tax basis of their value at time of death. (IRC § 1014(a).) They can then be sold immediately with no income tax owed. Why is it that ‘death tax’ opponents never mention this? Are they unaware of this, or do they just not care? I guess the best bet is that they don’t know what they’re talking about. ‘Never attribute to malice what can be explained by stupidity.*’” DISPOSABLE E-ADDRESSES Hal Brunette: “I read with interest your anecdote about the RealAge website, especially your comment about using a generally ignored email address. I used to use that method, until I discovered spamgourmet.com. It’s a really slick service that shines in exactly this scenario. I’ve been using it since 2005 with great results. Here’s how it works.” REAL EXERCISE Peter Kronenberg: “Coincidentally, right after I read [yesterday’s] column, I got an email from Barnes and Noble offering The RealAge® Workout for $4.98.” ☞ To wit: “With his bestselling books, Dr. Michael F. Roizen has helped people reverse their chronological aging by ten, fifteen, and up to twenty-nine years. Now, with The RealAge® Workout, he explains the importance of gradually phasing exercise into your everyday routine, because even the smallest changes in behavior can make you feel, look, and be younger. . . ” Of course, it’s not enough to buy the book, or even to read it. You actually have to work out. Rats. LIVING TO 100 Jonathan D. Pond: “You and your readers might find this site helpful in determining life expectancy and, more importantly, getting guidance on doing stuff to extend it. Alternatively, if you worry that you might outlive your money, you can choose some “fun” activities to shorten it, like engaging in promiscuous sex and/or drinking a quart of scotch a day: livingto100.com. This was developed by my friend Tom Perls, world renowned gerontologist. It is based on his work as lead researcher on the New England Centenarian Study. Your email address is not required.” ☞ This one has me living a LONG time. OPTIMISM AND HEALTH Dr. Richard Feinberg: “Thought it might be useful to provide some info about the relationship between optimism and health. This is an area in which I specialize. So far we have only proved that there is a correlation between having a positive outlook and improved health. In other words, it has not yet been shown that being optimistic in and of itself leads to better health outcomes. Current thinking tends to discount the idea that optimism somehow produces a miracle happy juice. The proposed hypothesis is that the hidden key to optimists’ better health is their propensity to engage with the world in ways that leads to better health behaviors. That would include a whole variety of possibilities including following your doctor’s orders because you believe that doing so will help, or showing persistence, particularly in the face of adversity. For instance, some folks will just accept a first evaluation from their doctor, no matter what, while others may seek out second or third opinions when justified. Believing you can bounce back when facing adversity will help, but only if you engage in the healthy behaviors that will support recovery.” ☞ That’s all very nice, but based on my zero credentials and complete lack of firsthand scientific evidence, I’m telling you: thinking positively is good for your health. (See? This is a faith-based column after all.) WILLIAM BLACK ON BILL MOYERS This scathing TV interview is disturbing, to say the least, but is a point of view at least worthy of consideration. (One expert I know who thinks Black is largely on target notes that he lumps “banks” into one category, when in fact some are sound and stuck with prudent lending practices.)
What Were These Democrats Thinking? April 9, 2009January 3, 2017 ESTATE TAX MADNESS As described here, ten Democratic Senators joined all 41 Republicans in a dreadful vote to lower the estate tax on billionheirs from 45% to 35%. They were led by Blanche Lincoln of Arkansas (home to the multibillion dollar Wal*Mart family fortune). Fortunately, this measure is almost certain not to become law. But c’mon, Max Baucus and Jon Tester of Montana, Evan Bayh of Indiana, Maria Cantwell and Patty Murray of Washington, Mary Landrieu of Louisiana, Ben Nelson of Nebraska, Bill Nelson of Florida and Mark Pryor of Arkansas – several of whom I know and have supported – what could you possibly have been thinking? Where would you find the cash to make up for this lost revenue? From cutting health care? From cutting education? From cutting food stamps? From raising taxes on the middle class? From borrowing more from future generations? What were you thinking? IOWA MARRIAGE Joel Grow: “Though I am a straight guy, I sit here at work and weep over the beauty and eloquence of of the governor’s wise and noble words.” T.: “A year ago we went to a (heterosexual) wedding in Belgium. The couple got married twice: at City Hall in the morning and then later at a Catholic church. Neither institution recognized the other’s authority. This is not a new idea, but to see it in practice leaves you saying, ‘well of course! the separation of church and state.’ It’s unfortunate how America comes up with these revolutionary ideas and then leaves them to founder.” ☞ Meanwhile, the religious right is launching a $1.5 million TV ad campaign to scare people about “the gathering storm” of gay marriage. Lightning rends the ominous sky as real people (well, actors, actually) express real concerns (well, but based on false premises, actually) designed to thwart equal Social Security survivor benefits, and so on, for committed same-sex couples. Here is the ad. And here is a rebuttal. REALAGE Dr. Richard Feinberg: “You should know that Realage.com [to which you linked yesterday] sells its info to drug companies. Essentially it acts as a middleman between the site’s users and pharmaceutical companies and products. Some folks defend this practice, but at the very least, this policy should be disclosed to users. Here is the New York Times article [describing their business model].” ☞ Indeed. I should have been clearer that that’s why I used a dormant e-address in filling out the questionnaire. It was valid, so I could retrieve my results. But I never otherwise look at mail to this address, so will be spare whatever email assaults may be unleashed. Artie: “Let’s say you were a marketing manager for a website whose purpose it was to obtain personal health information from visitors and sell it to pharmaceutical companies to use in direct email campaigns. You hit on the idea of calculating visitors’ real ages (whatever that means), as opposed to their chronological ages. You obviously want to maximize your number of visitors, right? More visitors = more sales = more $$$. Given that motivation, do you think that their “real age” algorithms, whatever they are, stand more of a chance of being biased towards providing visitors with the impression that they are effectively younger than their chronological age, or with the impression that they are even older than they thought they were? Had realage informed you that you were 7 years older than you thought you were, would you have written about their site? I’m not saying that you may not be in far better shape than the average person of your age; only that realage has a substantial motivation to bias their responses so that visitors leave their site thinking that they are younger than their chronological age. On the back end, of course, that may make them a harder sell for the drug companies, but that’s someone else’s problem. Realage’s task is to deliver the visitors’ data and contact information.” ☞ You might be right. But would it really matter that much whether realage says I’m in “9-years-younger-than-average health” for my age or just 3 years? (Why not 11?) Call me naïve, but I think there’s at least a reasonable chance they tried to design it without bias. (And positive thinking keeps you young.) As it happens, I included a similar – albeit far more primitive – Life Expectancy module in my Managing Your Money software years ago. It was based on what I learned writing a book about insurance. Checking it just now, I see it has me living 9 years longer than the average life expectancy for a male my age. This is mostly coincidence, no doubt (as I say, the algorithms we used were really primitive). But it still gives me hope. And don’t hope and positive thinking make for better health?
Live Longer Til Death Do You Part? April 8, 2009March 13, 2017 THE TURKISH FUND It’s down 63% over the past year and sells at a 17% discount to its net asset value (I always prefer getting a discount than paying a premium) . . . President Obama just shone a bit of positive light on the country before leaving for his surprise visit to Iraq . . . and Leila Heckman, who specializes in these things, rates Turkey a relative bargain these days . . . so I bought a little TKF yesterday at $5.47. Then I went to a fundraiser a few hours later where I met a guy who manages a small international fund (“about a billion dollars,” he apologized). “Oh, really?” I asked. “What do you think of the Turkish Fund?” Turns out he started the Turkish Fund in 1988. I took that as a sign.* *Of what, only time will tell. REALAGE.COM Judging from my photo on this page I’m barely old enough to vote. It is a very old photo. But what’s my real age? According to realage.com, I am nine years younger than the Department of Motor Vehicles thinks I am. This is, apparently, because I floss. You should run through the realage.com questionnaire. It could give you information and motivation to live an even healthier, longer life. Which is good for me, because it extends the potential length of your subscription. (To avoid being swamped with health-related emails in the months to come, I gave realage an e-address I could check for the results but that I don’t normally use.) A WELL-KNOWN RELIGIOUS CONSERVATIVE ON MARRIAGE Cal Thomas writes of the unanimous Iowa Supreme Court decision: . . . As Iowa and other courts continue to dismantle the foundations of our nation without the approval of its citizens (each time the public gets an opportunity to vote on marriage, it votes to uphold the male-female version), they have an obligation to say where they intend to take us. What is the new standard for human relationships? Or do we make this up as we go, bowing to whatever pressure group makes the most noise? To those on the political and religious right who are intent on continuing the battle to preserve “traditional marriage” in a nation that is rapidly discarding its traditions, I would ask this question: What poses a greater threat to our remaining moral underpinnings? Is it two homosexuals living together, or is it the number of heterosexuals who are divorcing and the increasing number of children born to unmarried women, now at nearly 40 percent, according to the Centers for Disease Control and Prevention? Most of those who are disturbed about same-sex marriage are not as exercised about preserving heterosexual marriage. That’s because it doesn’t raise money and won’t get them on TV. Some preachers would rather demonize gays than oppose heterosexuals who violate their vows by divorcing, often causing harm to their children. That’s because so many in their congregations have been divorced and preaching against divorce might cause some to leave and take their contributions with them. The battle over same-sex marriage is on the way to being lost. For conservatives who still have faith in the political system to reverse the momentum, you are—to recall Harold Hill—“closing your eyes to a situation you do not wish to acknowledge.” ☞ Here’s the thing. The rights of a minority should not be subject to a majority vote. It’s called the tyranny of the majority, and is something the founders designed our Constitution to prevent. So when six Iowa Supreme Court Justices – two of them appointed by Republican governors – rule discrimination unconstitutional (granted, the Iowa Constitution, not the Federal one), it should mean something, even to conservatives like Cal Thomas. And when the Vermont Legislature so heavily favors equal rights that it overrides gubernatorial veto (as happened yesterday), that should mean something, too. Here’s how Iowa Governor Chet Culver put it yesterday, separating Church and State: CHET CULVER’S STATEMENT I have carefully reviewed the Iowa Supreme Court’s unanimous decision on civil marriage and discussed it with the Attorney General. Let me begin by saying that I recognize that the issue of same-gender civil marriage is one that evokes strongly held beliefs and strong emotions both for and against. These beliefs and feelings need to be respected. I hope that the views of those on all sides will be treated respectfully and will not be subjected to name-calling or fear-mongering, but instead will lead to rational discussion. At the outset, I want to emphasize that the question before the Iowa Supreme Court was one of civil marriage only – a state-recognized legal status constituting a civil contract. Civil marriage always has been, and will continue to be, separate from religious marriage that takes place in churches and places of worship. As I have stated before, I personally believe that marriage is between a man and a woman. This is a tenet of my personal faith. The Iowa Supreme Court’s decision has, in fact, reaffirmed that churches across Iowa will continue to have the right to recognize the sanctity of religious marriage in accordance with their own traditions and church doctrines. The Supreme Court’s decision does not require that churches recognize marriages between persons of the same gender or officiate over such unions. The Court does not have, nor should any court ever have, that kind of power over our religious lives. Our churches and places of worship are free to decide for themselves, as they were before, who may enter the sacred covenant of marriage. As the Supreme Court’s decision states, ‘The sanctity of all religious marriages celebrated in the future will have the same meaning as those celebrated in the past.’ Yet, the Supreme Court of Iowa, in a unanimous decision, has clearly stated that the Constitution of our state, which guarantees equal protection of the law to all Iowans, requires the State of Iowa to recognize the civil marriage contract of two people of the same gender. The Court also concluded that the denial of this right constitutes discrimination. Therefore, after careful consideration and a thorough reading of the Court’s decision, I am reluctant to support amending the Iowa Constitution to add a provision that our Supreme Court has said is unlawful and discriminatory. As Governor, I must respect the authority of the Iowa Supreme Court, and have a duty to uphold the Constitution of the State of Iowa. I also fully respect the right of all Iowans to live under the full protection of Iowa’s Constitution. I urge Iowans who hold beliefs on all sides of this issue to exhibit respect and good will. Our state faces many serious challenges. We are in the midst of a serious economic recession. Tens of thousands of our fellow Iowans are without work. We have suffered the worst natural disasters and most difficult recovery our state has ever faced. We must join together and redouble our efforts to work toward solutions that will help Iowans in this time of uncertainty. That is where, I believe, my focus and energies should lie. Let us not lose sight of the fact that we are all Iowans, all neighbors, united in the promise and faith of a brighter future for our state. Let us all work together toward that common goal. ☞ Well said, no?
That Dutch Department Store April 7, 2009March 13, 2017 FOREVER STAMPS and MARRIAGE Chip Ellis: “When every penny counts, please remind your readers that they should be buying forever stamps before Monday, May 11 at 42 cents. Otherwise, they will be spending 44 cents for the same First Class mail service (and likely more in later years). Of course you and I need not worry about rushing to the post office or going onto www.usps.com – we bought enough of these forever stamps to last most of our lives when the stamps were initially issued (considering your past history with tuna fish, I know I am confident that you will not be buying stamps for some time). By the way, the Justice who wrote the Iowa marriage opinion was appointed by a Republican Governor.” ☞ I can’t comment on my forever-stamp inventory, for fear of attracting burglars . . . though come to think of it, with email and on-line bill payment, who uses stamps anymore? It’s been forever since I’ve needed one. As to the marriage opinion, I believe two of the six unanimous votes were cast by Republican-appointed justices. Hats off to them both. INFINITIVES and ROTH Christian Svendsgaard: “In many (most?) foreign languages, infinitives are a single word and can’t be split. English uses two words JUST SO that we can split them with a bold adverb.” Joe Devney: “I’m a professional writer and editor. I was not taught the ‘Never split an infinitive’ rule in grade school. And since then the rule has been thoroughly debunked in editing and linguistics classes I have taken. Its origin is philosophical, and goes back to, as I recall, the seventeenth century. Some scholars at the time saw Latin as the ideal language, and thought that English should be more like Latin. An infinitive in Latin cannot be split because it is a single word. But English does not work like that, and Captain Kirk’s ‘to boldly go’ is perfectly fine. Steven Pinker of Harvard wrote about this issue, broadening it to ‘split verbs.’ He says that Justice Roberts is a stickler for this meaningless rule, and stumbled over President Obama’s oath because couldn’t get himself to say ‘will faithfully execute.’ ” Bob Felgar: “Split infinitives are a result of the imposition of Latinate syntax on a Germanic language: in Latin, infinitives can’t be split, as in amare (“to love”), but in English of course infinitives have a preposition and a verb and thus can be, so this is a non-issue. Also, is it much of an objection to the Roth conversion that you lose the opportunity forever to invest the money you will owe the IRS?” ☞ No. The true benefit of a Roth IRA is that you are allowed to shelter more each year than with a traditional IRA. The amount is the same, but with a Roth it’s pre-tax money, so it “costs” you more at the outset but has that much more of an after-tax return at the other end. Also: withdrawals from a Roth are more flexible and freer of paperwork. HEMA Peter Thibeau: “HEMA is a Dutch department store. The first store opened on November 4, 1926, in Amsterdam. Now there are 150 stores all over the Netherlands. Take a look at HEMA’s product page. You can’t order anything (it’s in Dutch, anyway) but just wait a couple of seconds and watch what happens. Don’t click on any of the item pictures, just wait and see what happens.” FAVICON David Plumb: “Great Favicon!” ☞ I didn’t even know what a favicon was, or that I lacked one, until one of you – Gary Diehl – kindly told me, designed one for me, and told me how to stick it onto your computer screen.
John Mauldin on “The Dow” April 6, 2009March 13, 2017 CONFICKER If you saw Lesley Stahl’s piece on 60 Minutes a week ago, you are nervous about a virus called Conficker. James Musters: “To test a stand-alone PC to see if it is infected with Conficker, click here. You should see six icons in two rows of three. If you see all six then you don’t have the Conficker virus.” LOVE My friend Don, a U.S. citizen, may have to emigrate. His letter in Saturday’s Washington Post: To Live With ‘The Love of My Life’ Saturday, April 4, 2009; A14 Thanks for the March 16 editorial “Separation Anxiety.” When many people hear the word immigration, all they think about is illegal immigrants. I am a gay man in a five-year relationship with a foreign-born partner who is in this country legally. His visa expires next year, and we will have to go live in exile to remain together. All I want as a U.S. citizen is the same right that a heterosexual citizen has – to sponsor the love of my life so we can live here together. This issue is really about the rights of U.S. citizens, not about immigration. For me and my partner, the clock is ticking. DON GEORGE Atlanta AND MARRIAGE Iowa’s Supreme Court came down unanimously in favor of marriage last week – 6-0. Here is what the state’s Senate Majority Leader and House Speaker said in joint response: Thanks to today’s decision, Iowa continues to be a leader in guaranteeing all of our citizens’ equal rights. The court has ruled today that when two Iowans promise to share their lives together, state law will respect that commitment, regardless of whether the couple is gay or straight. When all is said and done, we believe the only lasting question about today’s events will be why it took us so long. It is a tough question to answer because treating everyone fairly is really a matter of Iowa common sense and Iowa common decency. Today, the Iowa Supreme Court has reaffirmed those Iowa values by ruling that gay and lesbian Iowans have all the same rights and responsibilities of citizenship as any other Iowan. Iowa has always been a leader in the area of civil rights. In 1839, the Iowa Supreme Court rejected slavery in a decision that found that a slave named Ralph became free when he stepped on Iowa soil, 26 years before the end of the Civil War decided the issue. In 1868, the Iowa Supreme Court ruled that racially segregated “separate but equal” schools had no place in Iowa, 85 years before the U.S. Supreme Court reached the same decision. In 1873, the Iowa Supreme Court ruled against racial discrimination in public accommodations, 91 years before the U.S. Supreme Court reached the same decision. In 1869, Iowa became the first state in the union to admit women to the practice of law. In the case of recognizing loving relationships between two adults, the Iowa Supreme Court is once again taking a leadership position on civil rights. Today, we congratulate the thousands of Iowans who now can express their love for each other and have it recognized by our laws. ☞ The Majority Leader and Speaker are both Democrats. The Republican House and Senate leader both expressed “disappointment” over the ruling. (It is not known how their counterparts responded to the rulings in 1839, 1868, 1869, and 1873.) INFLATION Joey: “If you really think the possibility of inflation is looming (as well as Treasury yields), buy RYJUX. It goes up as rates go up.” ☞ It’s hard to have inflation when demand is down and the supply of idle hands and idle production lines is up. So timing is everything, and way beyond my level of clairvoyance. But with so much (necessary) dollar-printing going on, it’s hard not to see inflation, and depreciation of the dollar, occurring at some point. Meanwhile, you are paying RYJUX 1.4% a year in fees while you wait . . . which is not to say “don’t buy it,” only to say, “nothing’s easy.” JOHN MAULDIN ON THE DOW His latest letter will fascinate any student of the market. How has the Dow really done since 1928? (Not as well as you might think.) And how would it have done had Dow Jones not periodically tinkered with it, replacing losers with winner? (Better – the losers tended to outperform the winners.)
Kill-a-Watt Gadget; German Mortgages; the GOP Plan April 3, 2009March 13, 2017 Did you watch last night’s news? I am so proud of our President and First Lady. We have a long way to go, and there will be setbacks; maybe even big ones. But things are looking up. And it’s nice to have most of the world cheering for us again. Meanwhile, the loyal opposition is sticking to its guns: THIS IS NOT A PARODY House GOP Offers More Detailed Alternative Budget Plan Revision Proposes Deep Tax Cuts and Slash in Medicare, Medicaid Programs By Lori Montgomery Washington Post Staff Writer Wednesday, April 1, 2009; 2:37 PM After getting blasted last week for presenting a budget plan light on details, House Republicans today unveiled a more complete proposal that would cut taxes for business and the wealthy, freeze most government spending for five years, halt spending approved in the economic stimulus package and slash federal health programs for the poor and elderly . . . ☞ Slashing health care for the poor and elderly is a no-brainer – it’s what Jesus would have done. But if you think cutting taxes is a good way to get us out of this mess, please answer these five questions, posed here a few weeks ago. And if you think it’s a good idea for the government to freeze, rather than grow, spending in the face of a collapse in private demand, please answer this question: huh? LEDs v CFLs Richard Factor: “My experience with CFLs has been generally good, but not without a number of failures. I have a simple way to deal with them – here. [He photographs the bulbs with the receipt, marking the bulb bases themselves with the store and date.] I’ve also tried out a couple of LED bulbs. So far so remarkable! I don’t remember if you’ve mentioned the ‘Kill A Watt’ gadget that allows you to measure the power you use/waste, but it’s inexpensive and extremely useful. I review it here.” MORTGAGES AS INFLATION HEDGES Chris Brown: “I love the notion [in yesterday’s column] of a mortgage as an inflation hedge. I read recently that during the Weimar Republic, all of the mortgages in Germany could have been paid off for one U.S. cent. There should be a law against adjustable-rate mortgages with interest rates at these levels!” ☞ I.e.: with rates so low, choose a fixed-rate mortgage instead. (And don’t expect these low rates to last forever; with the possibility of inflation looming, it may become harder to find investors willing to lend for 30 years at a low fixed rate.) CONVERTING TO A ROTH IRA IN NY Bob: “One other advantage: If you live in NY State and are over 59.5, the first $20,000 each year is state-tax free, saving about 8%, or $1,600. I currently take out $20,000 per year from my SEP over to my Roth and just pay the Federal tax out of other assets.” SPLIT INFINITIVES Roberta T.: “The construction you cite as an unavoidable split infinitive (“the goal is to not let the banks fail”) can be corrected by a very slight revision: ‘the goal is to keep the banks from failing.’ Not that I’m one of those infinitive-splitter militants, but your example doesn’t prove your point.” Michael Joblin: “The goal is to avert bank failures.” ☞ Elegantly put, both. COLBERT ON GLENN BECK In case you missed it.