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Andrew Tobias

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Andrew Tobias
Andrew Tobias

Money and Other Subjects

Year: 2012

700 Million Views

March 1, 2012March 27, 2017

Short takes:

“Bin Laden is dead and Detroit is alive.” How’s that for a bumper sticker?

As seen at TED: “The future is not what it used to be.”

TED lectures (18 minutes or less) have been viewed 700 million times in the last 5 years. Download free on your iPhone.

Eat less meat (especially red meat): “It’s good for the planet, good for the cows, good for your finances, good for your heart.”

Something unexpected:

I got my picture taken with George W. Bush last week wearing a Barack Obama 2012 tie. (I was wearing it, not he.)

If you lost your camera or photo stick – or found someone else’s:

Here. (They’ve had more than 400 success stories.)

Make your own ice cream sandwiches:

First you choose your cookie (chocolate chip, red velvet, snickerdoodle, oatmeal raisin, or – my choice – “potato chip”) and then you choose your ice cream flavor (I chose caramelized bacon). Oh. My. God. Reviewed here.

World’s sexiest breast-cancer screening app (show your sister or gay brother):

Here.

Tomorrow: Guessing the Weight of an Ox

EcoFuel Africa And Other Links Worth Clicking

February 29, 2012March 27, 2017

TED

So I’m at TED. Pretty remarkable people. My random dinner companions last night (“is this seat free?”) were a tall thin Ugandan who doesn’t know how old he is (a Tutsi whose family was originally from Rwanda, he was born sometime during the Ugandan civil war, so between 1982 and 1986; his family are nomads, but he somehow got an education, became a CPA for a Ugandan bank; left to found EcoFuel Africa . . . a Bulgarian who was born under communism but decided she wanted to go to college in the U.S., read a great deal of Charles Dickens to improve her English, took the SATs – in Bulgaria – wrote letters to 100 different U.S. colleges, was offered full scholarship by 12 including Harvard; is now a Palo Alto venture capitalist . . . and a satellite salesman from the Isle of Mann (yes, they still have cats) who happily gave up his low Manx tax rate, he says, for the privilege of being a U.S. citizen (and whose wife, an astronaut, has flown two NASA missions).

You’ll forgive my being a little dizzy. There are CEOs here, musicians, a poet laureate, a space archaeologist (they find ancient Egyptian cities via satellite), a body architect, a former Supreme Court Justice, and a video sculptor who put one of his friends in a blender. (Watch what happens when you turn it on.)

Also, the author of the previously-plugged Abundance, which sets my happy gene to resonating; the afore-plugged Atul Gawande (he, of the hospital checklists, and more); the afore-plugged Philip K. Howard (The Death of Common Sense); and 1400 more.

Yikes.

Not attending (to my knowledge):

SATAN

But Rick Santorum worries he’s headed our way.

CATHOLICS

John Grund: “One more Catholic teaching that conservatives reject: A no-exceptions ban on torture. Compare the church’s position and Rick Santorum’s (via Andrew Sullivan): here.”

Of Gold and TIPS

February 28, 2012March 27, 2017

Tom Mathies: “If an Andy Day is coming up you can just link to this adaptation from Warren Buffett’s latest shareholder letter. You won’t be surprised by his comments on gold.”

☞ I’m not. Nor am I surprised by his quoting Shelby Cullom Davis: “Bonds promoted as offering risk-free returns are now priced to deliver return-free risk.”

But while I own no bonds,* I’m not out of gold. It’s up a lot since suggested here in 2009 and 2010 – and even up nicely since this comment last May. I hang on to much of it because – just as Warren likes to keep $20 billion cash on hand to feel comfortable – I don’t mind tying up a little of my vast fortune (which rivals his down to all but the last several zeroes) in gold, lest paper currencies continue to lose their value.

* I’m even out of the TIPS that have appreciated so nicely – because they have appreciated so nicely. When first suggested, they yielded a ridiculously good 4.25% above inflation. Today, depending on their maturity, they yield little or nothing above inflation (and, because they sell at a premium, may actually carry a small negative yield). Going forward, they may not hedge inflation as well as stocks or real estate (click that Warren Buffett link).

7 MINUTES WITH CAPTAIN SULLENBERGER

Watch and listen, second-by-second. Wow. (Thanks, Alan S.)

Let’s . . .

February 27, 2012March 27, 2017

SEX ED: LET’S HEAR IT FOR TEXAS!

According to this infographic, ‘abstinence-only’ states lead the nation in teen pregnancies; states that teach comprehensive sex-ed have the fewest. More than 96% of Texas school districts teach ‘abstinence only.’ Texas leads the nation in teen pregnancies – 62 per 1,000. Your teenage daughter is only half as likely to get pregnant if her school has comprehensive sex ed, versus ‘abstinence only.’ If you want her to get pregnant while in high school, consider a move to Texas.

ROMNEY: LET’S TANK OUR ECONOMY

Listen. Austerity is not the path to growth. (If you don’t get that, read Krugman on Europe’s woes.) And neither are tax cuts. (If you don’t get that, note that Bush’s tax cuts were followed by a near depression; whereas Clinton’s tax hikes were followed by the creation of 23 million jobs.) Yet Romney – in his oddly-sited speech on the 30-yard line of an empty 65,000-seat stadium – pledged sharp cuts in personal and corporate tax rates (and to lower the estate tax on billionheirs from 45% to zero), which he would fully pay for . . . somehow.

How? We know it’s not by cuts to the social safety net – he’s told us he’s not worried about the poor, because there is that safety net, and that he plans to augment it if there are holes in it. That will cost more money, not less.

So how? By eliminating the home mortgage deduction? That should help buoy the struggling housing (NOT!).* By eliminating the charitable deduction? Great idea: let’s make it more expensive to give to charity – our nonprofits are just rolling in cash (not), so discouraging contributions is a great idea (NOT!!!). By cutting the military? Well, yes, but I’m guessing that’s not his plan; and even if it is, doing it responsibly would not yield nearly enough savings to pay for his tax cuts.

And why make them? Tax rates are already so low, it’s more fanciful than ever to think that further tax cuts for the best off would buoy the economy.**

INSTEAD: LET’S RENEW AMERICA

What would buoy the economy is massive sustained investment to renew our infrastructure, putting unemployed people to work building new things and renewing old (like 154,000 substandard bridges and who knows how many 19th Century sewage systems) that we need to last for the next 100 years.

That kind of job-creating, economy-priming public investment requires public revenue. Taxes.

And (while I’m on a roll) what would buoy the economy further, by inspiring confidence, is a long-term, balanced plan – along the lines of the Simpson-Bowles recommendations – that in the ‘out years’ would begin to bend our revenue curve up and our spending curve down. (This is, roughly, that $4 trillion ‘grand bargain’ President Obama was working toward the last time the Republicans threatened not to lift the debt ceiling.)

To those who believe not a penny in concessions can be made on entitlements, even as part of a balanced plan, I offer bad news and good news. The bad news is that: get over it. We have to do this. The good news is that if we do – showing ourselves and the global markets that we have a path to fiscal health – we may experience the kind of growth and prosperity that will one day allow us to undo whatever mid-Century belt-tightening had been planned. (Right? Say – to take one example – that as part of a balanced deal we keep the early-retirement age for Social Security at 62, but extend the full-benefits age, currently slated to hit 67 in 2027, by one month per year, reaching 69 for those retiring in 2051. Okay? In the first place, that would give today’s 29-year-olds 40 years to plan for the adjustment. And – and here’s the thing – someplace along the way, perhaps even before 2027, the promise of technology and productivity being what they are, we might just be able to reverse course and start lowering the retirement age. But for now, we need to assure ourselves and the world we can set a responsible course.)

*Some distant day we should begin to do that. But so gradually, and with so much lead time – perhaps a decade or more – that the market has time to absorb the shock.

**The one exception that both parties rightly embrace is to cut the 35% corporate tax rate by means of removing loopholes. Definitely worth trying, albeit easier said than done.

Two Clips

February 24, 2012March 27, 2017

Had Democrats warned of catastrophe in 2000 and 2004 – “if Bush is elected, he will lead us into needless war! we will face financial collapse and depression!” – we’d have been (rightly, I think) embarrassed for being too shrill. Never mind that the result of those elections was needless war and barely averted financial collapse and depression. No?

Well, in these must-watch four-minutes Wednesday, Jon Stewart aired the apocalyptic Republican predictions – offered as certainties – as to what would happen if Obama were elected in 2008 . . . (he was; none of them came true; quite the opposite) . . . followed by the apocalyptic predictions – again offered as certainties – they are making about his reelection now.

Funny and telling. Devastating, really. Send it to friends who watch Fox.

And then send them the must-watch seven-minute interview with Reagan economist Bruce Bartlett that ended the show. Bartlett worked in the Bush-41 Treasury Department and served on the staff of Congressman Ron Paul. His new book is praised by The American Conservative, The Economist, and The Financial Times.

These two clips – and the time it will take you to forward them – will gobble 15 minutes. But a lot is at stake here. They’re worth the time.

Stocks, Regs, and Taxes Where are Eisenhower and Jefferson When We Need Them?

February 23, 2012March 27, 2017

STOCKS

It never gets old. As this chart shows, the stock market does so much better when we elect Democrats. And going forward, why wouldn’t that rule of thumb hold? Romney and Santorum want to plunge the country into austerity – now, before the economy has recovered. Why would that help the stock market? Obama wants to invest in the future – in education and innovation and infrastructure and energy independence. Why wouldn’t that help the stock market?

REGULATION

As much as I join everyone else in wanting us to repeal stupid regulation (yesterday’s post), let’s not forget what a relatively good job the Obama Administration has been doing on that front. (As I pointed out here a couple of months ago.)

TAXES

Taxes should be proportioned to what may be annually spared by the individual. – Thomas Jefferson to James Madison, 1784

So how much might a guy who makes, say, $20 million annually spare?

The answer that Eisenhower gave: $18 million. We had just come off an expensive war (sound familiar?), deeply in debt (sound familiar?), and so the top federal tax bracket was set at 90% on earned income, dividends, short-term capital gains, and interest; at 77% on estates; and at 36% on long-term capital gains. (On corporations, the rate was 52%.)

The answer today’s Republicans give: certainly not more than $7 million, and preferably less. Where Eisenhower’s top rate was 90%, today’s is 35%. Where his estate tax rate was 77%, today’s is 45% – which Romney and Santorum would cut to . . . zero. Where the top rate on dividends was 90%, today’s is 15%. Where the top corporate rate was 52% (on income above $25,000), today’s is 35%. And where the top long-term capital gains rate was 36%, today’s is 15%.

How – today’s Republicans ask – could a man or woman with a $20 million capital gain spare more than $3 million of it? Even that, they fear, is too much.

Jefferson had further thoughts:

As [taxes] fall principally on the rich, it is a general desire to make them contribute the whole money we want, if possible. And we have a hope that they will furnish enough for the expenses of government and the interest of our whole public debt, foreign and domestic. – Thomas Jefferson to Comte de Moustier, 1790. ME 8:110

Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings. – Thomas Jefferson to Thaddeus Kosciusko, 1811. ME 13:41

☞ Thanks to Allen Brand for sending me these. My point is not that we should go back to Eisenhower’s rates. Or to Jefferson’s idea that taxes would be paid by the rich alone.

My point is that those who believe the Founding Fathers would have been on the side of Tea Party may be misguided. Taxation without representation is indeed an outrage. But when Eisenhower and Congress passed the rates they did, we had representation. And when Bill Clinton raised taxes on the best off (to a 39.6% top rate), it wasn’t all that bad for the rich. The country enjoyed tremendous prosperity – the rich, too – the stock market did well (see the first item above) and our national balance sheet was strengthened. Have a nice day.

Helping and Hurting

February 22, 2012March 27, 2017

GOVERNMENT HELPING YOUR BUSINESS

Do you own one? Just launched: BusinessUSA. Check it out.

GOVERNMENT HURTING YOUR BUSINESS

Years ago, I blurbed the very first hardcover edition of Philip K. Howard’s The Death of Common Sense. Now comes the cover of The Economist. Some of its prescriptions are easier said than done. But they’re worth being said – and pondered – anyway.

The Economist
Feb 16, 2012

Law and common sense
Over-regulated America

This week’s cover package [below] is on over-regulation in America. Our cover leader draws on the ideas of Philip Howard, a passionate advocate for simpler laws. For readers who want to read more, here’s an essay Mr Howard wrote in December on “Results-Based Regulation”. And here’s a column we published a couple of years ago on his book “Life Without Lawyers”.

Over-regulated America
The home of laissez-faire is being suffocated by excessive and badly written regulation

Feb 18th 2012
from the print edition

AMERICANS love to laugh at ridiculous regulations. A Florida law requires vending-machine labels to urge the public to file a report if the label is not there. The Federal Railroad Administration insists that all trains must be painted with an “F” at the front, so you can tell which end is which. Bureaucratic busybodies in Bethesda, Maryland, have shut down children’s lemonade stands because the enterprising young moppets did not have trading licences. The list goes hilariously on.

But red tape in America is no laughing matter. The problem is not the rules that are self-evidently absurd. It is the ones that sound reasonable on their own but impose a huge burden collectively. America is meant to be the home of laissez-faire. Unlike Europeans, whose lives have long been circumscribed by meddling governments and diktats from Brussels, Americans are supposed to be free to choose, for better or for worse. Yet for some time America has been straying from this ideal.

Consider the Dodd-Frank law of 2010. Its aim was noble: to prevent another financial crisis. Its strategy was sensible, too: improve transparency, stop banks from taking excessive risks, prevent abusive financial practices and end “too big to fail” by authorising regulators to seize any big, tottering financial firm and wind it down. This newspaper supported these goals at the time, and we still do. But Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volcker rule”, which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 subquestions.

Hardly anyone has actually read Dodd-Frank, besides the Chinese government and our correspondent in New York (see article). Those who have struggle to make sense of it, not least because so much detail has yet to be filled in: of the 400 rules it mandates, only 93 have been finalised. So financial firms in America must prepare to comply with a law that is partly unintelligible and partly unknowable.

Flaming water-skis

Dodd-Frank is part of a wider trend. Governments of both parties keep adding stacks of rules, few of which are ever rescinded. Republicans write rules to thwart terrorists, which make flying in America an ordeal and prompt legions of brainy migrants to move to Canada instead. Democrats write rules to expand the welfare state. Barack Obama’s health-care reform of 2010 had many virtues, especially its attempt to make health insurance universal. But it does little to reduce the system’s staggering and increasing complexity. Every hour spent treating a patient in America creates at least 30 minutes of paperwork, and often a whole hour. Next year the number of federally mandated categories of illness and injury for which hospitals may claim reimbursement will rise from 18,000 to 140,000. There are nine codes relating to injuries caused by parrots, and three relating to burns from flaming water-skis.

Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.

The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse.

Complexity costs money. Sarbanes-Oxley, a law aimed at preventing Enron-style frauds, has made it so difficult to list shares on an American stockmarket that firms increasingly look elsewhere or stay private. America’s share of initial public offerings fell from 67% in 2002 (when Sarbox passed) to 16% last year, despite some benign tweaks to the law. A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.

A plea for simplicity

Democrats pay lip service to the need to slim the rulebook—Mr Obama’s regulations tsar is supposed to ensure that new rules are cost-effective. But the administration has a bias towards overstating benefits and underestimating costs (see article). Republicans bluster that they will repeal Obamacare and Dodd-Frank and abolish whole government agencies, but give only a sketchy idea of what should replace them.

America needs a smarter approach to regulation. First, all important rules should be subjected to cost-benefit analysis by an independent watchdog. The results should be made public before the rule is enacted. All big regulations should also come with sunset clauses, so that they expire after, say, ten years unless Congress explicitly re-authorises them.

More important, rules need to be much simpler. When regulators try to write an all-purpose instruction manual, the truly important dos and don’ts are lost in an ocean of verbiage. Far better to lay down broad goals and prescribe only what is strictly necessary to achieve them. Legislators should pass simple rules, and leave regulators to enforce them.

Would this hand too much power to unelected bureaucrats? Not if they are made more accountable. Unreasonable judgments should be subject to swift appeal. Regulators who make bad decisions should be easily sackable. None of this will resolve the inevitable difficulties of regulating a complex modern society. But it would mitigate a real danger: that regulation may crush the life out of America’s economy.

From Bill Clinton’s Lips To Your Ears

February 21, 2012March 27, 2017

10 CATHOLIC TEACHINGS CONSERVATIVES REJECT

Worth noting.

3 WEBSITES

If you share my interest in reelecting the President, I commend a former president’s recent book – Back to Work, by Bill Clinton, whether in hardcover, e-book, or audiobook (read by the author). I’ve been listening to the audio version. Because President Clinton lays things out so clearly, he may help you get through to that aunt of yours. You know the one I mean.

Just a click away, meanwhile, are KeepingHisWord.com, KeepingGOPHonest.com, and AttackWatch.com.

Up with the President’s Budget

February 20, 2012March 27, 2017

Today is President’s Day.

THE PRESIDENT’S BUDGET

A dynamic infographic from the New York Times – interesting to play with. (Better still if for each item one could right-click for a general description of what the money is spent on and why/how it is being increased or decreased.)

UP

One hesitates to recommend a TV show based on how good it’s been in the past – what if the next one, that your readers first watch, fails to make the same grade? – but if you have a TiVo or a DVR, for heaven’s sake set it to record UP With Chris Hayes on MSNBC every Saturday and Sunday morning. It is perhaps the smartest, most substantive thing around. If you don’t record it, you’ll actually have to get up at eight to watch it (and be interrupted by commercials) which is, obviously, ridiculous.*

*Or I guess you can watch specific segments, like this Occupy Wall Street segment, directly on the UP website.

RAVIOLI

While we’re setting our DVRs . . . I meant to tip you to last night’s debut of My Grandmother’s Ravioli. I don’t get the cooking channel myself, so I haven’t seen it. (I cook Like A Guy™.) Indeed, my microwave digital touch pad now recognizes only “7,” which limits me to dishes that can be prepared in either 7, 77, or 777 seconds (the latter, for a full roasted pig) or any of those cook times at a power level of 7 (which actually makes almost anything possible). Not having seen the show or tried any of its (or any other show’s) recipes, I can’t say for certain you’ll become a fan. But if you liked Mo Rocca on the SuperBowl, how can you not like his grandmother’s ravioli?

WHITNEY

Denying who you are is not healthy. I had not known this about Whitney Houston. Sad.

Joy, Parody, Progress, ‘Hijinks’ Though 'Lowjinks' Might Be a Better Word for It

February 17, 2012March 27, 2017

SOLAR BOTTLE LIGHTS

The reasons to take 3 minutes with this clip? Well, it’s joyful. It’s ingenious. And, boy, does it ever confirm the Theory of Relativity. Wherein I have long held the obvious (one of my specialties): that happiness depends less on how much you have than on the direction you’re headed. To folks accustomed to sweltering in darkness, sweltering in light – and free light, at that, after the $1-or-so cost of installation – brings broad, happy smiles.

DOWNTOWN UPSTAIRS ABBEY

I’ve not yet found time to watch Downton Abbey, but just now did find seven minutes to watch the parody. And eight more for the sequel.

JAPAN: PROGRESS

Robert Goldman: “I guess I shouldn’t complain about cleaning the garage or taking out the trash. Click here to see the incredible progress being made eleven months after the tsunami and earthquake ravaged Japan.”

☞ But also scroll to the end to read some of the comments. It’s still an awful situation.

IOWA, MAINE . . .

Jim Johnson: “When I was a Graduate Teaching Assistant, our Department Chair held a meeting every semester to instruct on policy. He was obsessed with student cheating and spent a good deal of his time talking about how to detect it. At one meeting, a fellow grad student whispered to me, ‘He’s so concerned with cheating it makes me wonder how he got through school.’ Somehow, the Republicans’ obsession with voter fraud reminds me of that story – especially after your story yesterday about Romney and Maine.”

JVC: “Documented and publicized vote-counting hijinks in Iowa and Maine? From the very party trying systematically to disenfranchise voters across the country on the pretext of combatting ‘voter fraud,’ which we know is essentially non-existent? I don’t hear anyone putting those things together, but perhaps they should.”

Have a great weekend.

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