The refrain is just the preamble of the U.S. Constitution put to music. I like it as an anthem because it puts the emphasis on the Constitution where it should be. Of course, it may lack gravitas. 

As long as we’re at it, I think we should replace the socialist originated “Pledge of Allegiance” with a recitation of the key paragraph of the Declaration of Independence. It should run something like this:

We hold these truths to be self-evident,
 
that all men are created equal,
 
that they are endowed by their Creator
 
with certain unalienable Rights,
 
that among these are
 
Life, Liberty and the pursuit of Happiness.
 
That to secure these rights,
 
Governments are instituted among Men,
 
deriving their just powers from the consent of the governed,
 
So say we all!

We could call it the “American Affirmation”. (That last line comes from the New England town-meeting tradition and would be particularly fun at sporting events.)

I’ve always found the Pledge of Allegiance to be a little too creepily authoritarian. I think it a little too European for my taste. One of the key facets of American exceptionalism is that we are bound together by ideas and principles instead of territory or ethnicity. Swearing allegiance to a particular government represented by a particular flag doesn’t really represent our true bond.

Changing both the anthem and the pledge wouldn’t be a major break from tradition. The pledge was only made official in 1942 and The Star Spangled Banner in 1931.

How you can tell the difference between how the GOVERNMENT operates (with your tax dollars at risk) and how an INDIVIDUAL would choose, if it were their own money? Here is a classic example.

The old US post office in Chicago is a giant structure rising over I-290 (the main highway into the city coming in from the East) that has been abandoned since 1995, when a new post office was built.

While the Chicago real estate market absolutely boomed through the period from perhaps 2000 through the 2007-8 crash, the US government was unable to execute a deal of any sort. There were various plans to do so, but they didn’t reach a deal, and anyone who knows a government bureaucrat knows it is better to be “safe than sorry”. If the terms weren’t perfect and there was some controversy, just let it lapse, and who cares, your pay is the same, either way.

So here we are - in mid 2009 - when the commercial real estate market is at an absolute and total nadir. I am not a real estate expert but I would have to say that it is the worst market, timing wise, in my entire lifetime.

So NOW, in the worst market in decades, perhaps since the Great Depression, the US Government is choosing to auction off this post office building. Here is a link to the auction site. The suggested minimum bid is $300,000, when they were entertaining offers as high as $300 million per this Chicago Tribune article that were never consummated.

While I don’t know what they will get for the building (the auction is in late August) anyone with even the most basic sense of the real estate market will tell you that they are executing this auction at the worst time possible.

Ask yourself this question - will the government hold anyone accountable for the lost taxpayer revenues between what the building WOULD have reaped had they been able to sell it ANYTIME between 1995 and the real estate crash? Of course not. They don’t actually care enough about your dollars to judge performance on that basis.

And this is why putting more assets and activities in the hands of the US government will inevitably lead to waste and lost opportunities on an ever grander scale.

Cross posted at LITGM

PANAMA AND ESCAPING HIGH US COSTS

One element that is generally not well considered in our health care debate is the fact that individuals will react (over time) to market signals and attempt to make rational financial decisions. A recent article from Business Week called “Panama - It’s the New Florida” with the tag line

Quality health care and low costs are luring lots of U.S. professionals

is useful to provide some background on this issue.

This article uses hyperbole - the total population of Panama is a bit over 3 million and U.S. residents are a small fraction of that total, while Florida has a population of 18 million - but the thinking is spot on, long term.

They mention a US citizen who has Parkinson’s disease and says

Researching rates in Seattle, she found that nurses run $25 an hour. In Panama City, where she has lived since 2007, they cost $25 a day.

Going overseas for medical work has a long tradition; generally it was the wealthy from Middle Eastern countries who came to Europe or the USA to receive advanced treatments. In recent years citizens of many nations featuring socialized medicine such as Canada travel overseas or to the United States to bypass waiting lists for critical procedures.

COST OF HEALTH INSURANCE

The most likely individuals to leave based on economics are those who retire early (like those in the article) and are ineligible for Medicare, which starts at 65. According to this survey (which is quite interesting, I recommend you click through and read it) - here are some numbers based on 2006 premiums and the survey was published in December, 2007:

- the average cost for a family aged 55-59 is $7881 / year
- the average cost for a family aged 60-64 is $9201 / year

HOWEVER, the average policy cost varies significantly, by state. The study doesn’t break out what a family policy for ages 55-59 or 60-64 would be in a high cost state, so I am going to “guesstimate”.

The average policy cost overall for a family is $5799 / year (across all age ranges). The lowest state is about 50% of the total (it was Wisconsin), and even throwing out Massachusetts (which had a change in 2007) the next highest was New York at about 250% of the average.

Thus if you extrapolate your age AND the fact that you come from a high cost state, you can figure the following:

- the average cost for a family aged 55-59 could be as high as $20,000 / year
- the average cost for a family aged 60-65 could be as high as $23,000 / year

Let’s say you retire at 55 and are in good health and live in New York, where the weather is crappy and the cost of living is high (since I live in Chicago and the weather is even crappier, I can say that). If you are in decent health, why pay $20,000 / year when you could go away and “pay as you go” somewhere like Panama where they have decent health care options. Once you are over 65 and your health starts declining (and getting more expensive), you could always move back to the US and get on Medicare at which point you won’t care much about the costs.

IMPACT OF BEHAVIOR ON FINANCIAL VIABILITY

For any kind of “all-in” group health insurance scheme to work financially, there has to be subsidization of the poor from the wealthy. The system needs the high earners to contribute more than they consume, especially if they are relatively healthy and thus not consuming expensive services.

However, these high income professionals who are NOT utilizing health benefits to an excessive degree would be ABSOLUTELY the ones most likely to look for alternatives to avoid being a captive individual subsidizing the system. This Panama article, while it does not focus on health care exclusively, is pointing out exactly those most likely to leave.

As for the tax impact, at a high level if you are self-employed you can deduct your health insurance premiums against your gross income (which reduces it effectively by your overall tax rate, say 30%) but if you are not self employed then you can only deduct it to the extent that it exceeds 7.5% of your adjusted gross income.

Thus estimates that show the US health care costs (and revenues) and neglect to take into account that the most mobile and wealthy citizens have CHOICES of where to live will not predict accurately what will in fact happen.

While US citizens may not typically migrate overseas, this is an established solution to high taxes in other countries. The UK, for instance, has always had a large population outflow of retirees, especially to Spain. Much of this is due to the fact that UK taxes are punishing (and the weather isn’t so great) and UK citizens are adventurous enough to leave the country of their birth in order to improve their standard of living.

Countries outside the US also will respond to these opportunities. Panama and Costa Rica are attempting to be more friendly to US retirees because they know that they represent an opportunity for their economy. If health care can be brought up somewhere close to US standards (basically by walling off poorer locals or migrants) for at least preventative and maintenance care (if not for high tech procedures) then they will be able to draw in those individuals who can bring their wealth overseas and also bask in the beautiful weather and scenery.

I remember when I was traveling in Australia once and sitting on a plane next to an elderly gentleman and he looked over at me and asked me if I was emigrating. I honestly was taken aback - I had never thought about moving overseas. Perhaps the US citizenry will start taking a wider view of living outside of the USA if taxes and regulations become too punishing.

Cross posted at LITGM

(Click to display a larger version of the photo.)

UPDATE: Some Independence Day thoughts from Cassandra. Worth reading more than once.

Romano summarizes the historian’s argument that America’s revolutionaries shaped Enlightenment thinking to define a unique synthesis that became American values - among these are “a reverence for principles, particularly individual liberty, a dedication to reason and the rational solution, a belief in order and at the same time constant change, [and] a talent for practicality.” This he contrasts with Obama’s nuance: “Obama plainly agrees with some of those views, but he proved subtler on his five-day international trip. He signaled what makes us wonderful without declaring that we’re wonderful. Leaving business moguls and Americanists at home, he relied on an entourage of ideas. The New York Times and others have joked that Obama increasingly sounds like a professor in chief, and there’s truth to that.” (Are these guys ever embarrassed by this level of purple?)

Romano then describes Obama’s Cairo speech as a “teach-in” which “combined the best of rhetoric and philosophy.” Indeed, “Obama’s most singular philosophical breakthrough was to artfully project the cosmopolitan idea that the U.S. president must care about non-Americans,” indeed, “to an extraordinary extent, Obama effectively announced that the U.S. president, because of the United States’ effect on and involvement with the rest of the world, must think of other global citizens as constituents.” His “teach-in” might be misleading. For instance, while it is probably true few presidents have thought of the citizens of other countries as “constituents,” they have thought of them as worth spending our nation’s money, lives, and affection on. The twentieth century is sprinkled with proof that that was how American presidents thought. For instance, how does Romano think American presidents viewed the Marshall Plan? Does he think the Berlin Airlift, undertaken to bring food to people who were not too long before the enemy, didn’t recognize America’s strength gave it a larger responsibility?

We are a country founded on ideas. One of the most important is the value of each and every “other” - a tradition often seen in religious terms in which the soul is emphasized. Such reverence may sometimes use a more Deist vocabulary, but it has long been a central tenet of American thought. Of course, it is the product of centuries in which we have moved from tribal cultures to ones in which that respect for the other can lead to the rule of law. This universalization was perhaps most strongly influenced by a religious vision which has permeated our history and many previous president’s thinking: seeing others as constituents is a weak substitute for this vitalizing belief.

So, I thought I’d see what the historian himself said. Goetzmann makes the great, old argument that “the main theme of colonial experience in North America had been a quest for liberty.” Liberty & freedom - interwoven as David Hackett Fischer so beautifully shows. That passage Romano quotes begins: “the leaders of the American revolutionary generation, then, despite their self-conscious awareness of the ideological experiment to which they were pledging their lives, their fortunes, and their sacred honor, made no pretense to originality. Their real genius lay in being forcefully dedicated but characteristic men of their time who put to work the best the enlightenment had to offer before their world disappeared forever.” (18) Goetzmann’s point, it seems to me, is a pattern we saw earlier in Winthrop and later in Lincoln; they saw their duty to represent a profound and terribly important - even transcendent - idea.

That idea impelled them to take to pen and rifle 233 years ago; after the revolution, they remained loyal to this calling. If they could embody that idea in a constitution and it could characterize the nation’s action and history, it would gain validity. They felt a grave responsibility to something more important than they and grander even than the nation they were defining. At the service of that idea, George Washington did what few in history have done. He saw the office as greater than he was. Today we can be thankful he and his generation were willing to take those risks for that idea and were willing to submerge their egos in that cause. Nor should we be alone in our gratitude. It should be shared by the many countries who internalized our founders’ example. They have found fault with parts of our constitution, none follow it exactly. But, then, our founders didn’t establish a Utopia, they wouldn’t have been foolish enough to think they could. Besides, different nations have different cultures, different ways of expressing that respect for one another and respect for others’ ability to reason their way to a vote. Those ideas made the twentieth century American - not because of our wealth or our power but because by the end of it, many nations had internalized that idea. Some countries created a democracy using their own culture; some merely gave it lip service. But most had come to see rights implicit in the nature of man. We can see that Honduras, with its own past and its own cultural temptations, tried to make that concept unshakable by those who would wrest power from the people and keep it in the executive. We remain, today as Thomas Paine argued we were then, representative of an idea. Our celebration is for our country, but also for the idea of our country. If we have a president who sometimes thinks the man is larger than the office, we have seen precedents in men like Washington, who thought differently. And it is they who defined our system, we can hope, beyond the petty and passing ambitions of any one group or person.

Goetzmann takes us back to that time:

By 1776, the war, which had already begun in April 1775 at Lexington and Concord had turned into something quite different from a legal struggle. It had become the philosopher’s war, an ideological conflict that was made to represent the culmination of the Enlightenment struggle for the rights of man in a better environment shorn of the last vestiges of decadent feudalism. What better place than America - “Nature’s Nation” - for the opening struggle in the great cause of liberty that Paine so optimistically declared “the birthday of a new world.” The American Revolution as it developed through seven long years of war had become an adventure of the mind and a scene of creation, as well as a grim struggle of body against body.

Those men protected and kept the best of the Enlightenment alive. Goetzmann argues America accepted and gave openly; these ideas came from “(1) the history of classical antiquity, (2) the English legal tradition, (3) Calvinistic thought of all shades, (4) a Catonic image derived from contemporary British political and social dissenters, (5) the fundamental ideas and methodology of the Scientific Revolution, (6) the writings of John Locke, and (7) a full spectrum of Enlightenment thought.” The importance of these influences draws us back to our debt to England, to history, to Christianity, to reason. Perhaps I’m simplifying or misreading Goetzmann - I haven’t gotten far into the book. But I am sure Romano is. And these currents are seldom given credit in speeches such as Obama’s, though they often were in Bush’s.

Historians value history; perhaps our “professor in chief” need not. Twice lately (here and here) Victor Davis Hanson has criticized the history within the very speech Romano praises. Hanson “suggested that almost all Obama’s historical references were wrong or distorted.” The speech, clearly modeled on Winthrop’s classic sermon, that Bush gave to the Palestinians early in his first term was not dissected in such a way; indeed, few seemed to understand it - which means, I suspect, that few knew their history as well as they should. Obama, on the other hand, is praised by Romano, who argues that Obama is “like no president before him,” for he “has notified the rest of the world that the United States will continue to export its philosophy, ethos, and political theory — but through conversation, not declamation, seeking free adoption, not grudging acquiescence.” Unfazed by such reservations as Hanson’s, Romano concludes with the fulsome: “Philosopher prez and cosmopolitan in chief. After all this time, you figure, we were entitled to one. It looks as if we’ve got him.”

Romano writes in a journal aimed principally at college administrators; he argues that Obama’s speech is more subtle and thoughtful than a noted historian’s approach. (Goetzmann had garnered a Pulitzer before I took his class - and that was over thirty years ago.) Hanson, another academic who has a reputation in his field although his prodigious output in the last few years demonstrates a wide-ranging and engaged mind, has not penetrated the cosmopolitan thinking of the White House, as Robert Gibbs’ response to a question indicates: “I’m not familiar with the work of the esteemed historian. I haven’t seen it. I can assure you that not knowing who this historian is, I’ll put my money on our speechwriters.”

Some day, perhaps, academics will blush to remember what they praised and what they criticized. Or, perhaps, some day, history will be sufficiently airbrushed so as not to detract from Obama’s speech. They did so much 233 years ago, surely we can do our part - keep track of our history, know it even when the schools don’t teach it and academics ignore it. In the end, I think I’ll bet on some of those academics. And I’ll bet on Goetzmann’s America: one whose “unity and national character arose, from a generous, indeed limitless, cosmopolitanism that embraced men and ideas from all nations.” I don’t know if he minds the dismissive category in which Romano puts him - “a current specimen of the highly appreciative Americanist.” However, being “highly appreciative” is the appropriate and proportional attitude. Many of us - and many before us - led happier, more productive, richer lives because these ideas were protected and nurtured by the founders. They gave us the open market place, with all it implied - rationality, the supremacy of truth - in all its manifestations - political, religious, economic. Goetzmann quotes Jefferson:

We are all Republicans, we are all Federalists. If there be any among us who would wish to dissolve this Union or to change its republican form, let them stand undisturbed as monuments of the safety with which error of opinion may be tolerated where reason is left fee to combat it. I know, indeed, that some honest men fear that a republican government cannot be strong. . . I believe this on the contrary, the strongest government on earth. I believe it the only one where every man, at the call of the law, would fly to the standard of the law, and would meet invasions of the public order as his own personal concern. Sometimes it is said that man cannot be trusted with the government of himself. Can he, then, be trusted with the government of other? Or have we found angels in the form of kings to govern him? Let history answer this question.

And that reminds us of the lovely sense of harmony and rationality that underlies Jefferson’s vision as he describes religion in Virginia:

Reason and free enquiry are the only effectual agents against error. Give a loose to them, they will support the true religion, by bringing every false one to their tribunal, to the test of their investigation. They are the natural enemies of error, and of error only.

So, between Obama and Hanson, the past and present, optimism and cynicism, the endless dialogues of a democracy continue. And, I can be grateful - as I wasn’t always then - that Goetzmann chose the path he did. He mixed art and history and philosophy and literature, moving across the boundaries of disciplines. If that approach (endlessly proliferating “studies”) produced some of the worst in academia, he showed it could also lead to a richly rewarding synthesis.

A joint venture between Russia’s Gazpom and Nigeria’s NNPC resulted in a company named “Nigaz.” [h/t Instapundit] They got into this trouble due to the Russian style of making acronyms using the  syllables of words instead of the first letter. This style was very popular in socialist movements prior to WWII, which is were we got Nazi, Gestopo and Checka. This style remain popular in formally communist countries and in Asia whose ideographic languages do not lend themselves to initialisms e.g. the Pokemon children’s game comes from the romanized Japanese POket MONster. 

This style of acronym has a specific name but I can’t remember it and I find it in any online or offline reference. This will bug me  all day!

If you know the word I’m am looking for pitch in and save my sanity!

[Update: Wikipedia suggest either a "portmanteau word"  or "syllabic abbreviation" but I can't shake the feeling that their is a specific word with latin or greek roots. *Sigh*]

A recent article, with published photo, in the “PM Network“, showed the extreme limits of someone swallowing the methodology hook, line and sinker. I kept the caption with the photo but here is the text:

Companies want specific industry or technical experience rather than project management experience, which surprises me.

Let’s think about this astonishing statement, for a minute. When a company is hiring a candidate for projects, and they have multiple candidates to choose from (which is pretty much the norm with today’s economy), why WOULDN’T they look for someone from their industry (say, energy), with a specific technical capability (perhaps engineering), along with project management experience.

Project management expertise is mostly a social skill (ability to communicate, lead) along with some tools (planning diagrams, checklists, budgets, and an overall plan) that can be picked up and refined over the years. However, specific industry skills often take years or decades to hone, and technical expertise is often acquired through college or through dedicated programs with direct experience.

The fact that this project manager felt he could just walk in the door at a company and pick up their entire industry and the technical nature of the project as an afterthought is just striking. This shows how desperate companies must have been for talent during the booming economic years - because this model of hiring and planning is clearly less efficient than finding someone with project management expertise AND technical and industry skills appropriate to the job.

I am not trying to “pick on” this guy - many people are out of work today through no fault of their own and the job market now is extremely difficult, or nearly even frozen. I am just surprised that he would say out loud that he is SURPRISED that companies would look for a candidate who had deeper and more relevant expertise and wasn’t just a “generic” project manager.

Maybe “the face of stupidity” is too harsh, but at least “the face of naivete” or perhaps “a clear sign at how desperate managers were to hire staff in the last economic boom”.

Cross posted at LITGM

But beyond humor that misses, with some audiences or with all, what characterizes snark? Two things, I think. One is that it is an appeal to emotion - it is a statement with a particular affect, and the affect is an appeal to an attitude in which both writer and reader participate, but they participate in an exclusionary way. This is what makes it a branch of irony. Instead of arguing to everyone on the basis of shared reason so that, at least in principle, everyone could be included in the shared sentiment, snark depends upon exclusion. It is a refusal to offer a public argument, with the possibility of reasoned inclusion, and instead depends upon prior shared views that merely exclude because snark does not make an attempt to persuade. It is ‘affectively exclusionary’ in the language of moral psychology.
 
[...]
 
Two, because snark depends upon a prior shared commitment, it is a form of question-begging argument. Not precisely a form of argument, because it is about affect, not reason. So, more precisely, snark is the affective cognate of a question-begging argument, in which the sentiment of the conclusion assumes the sentiment of the premise. It assumes that one already shares the attitudes necessary to … share the attitudes.

-Kenneth Anderson

(Studio version, official video.)

Spent a week in a dusty library
Waiting for some words to jump at me
We met by a trick of fate
French navy my sailor mate
We met by the moon on a silvery lake
You came my way
Said, I want you to stay

You and your dietary restrictions
Said you loved me with a lot of convention
I was waiting to be struck by lightning
Waiting for somebody exciting
Like you
Oh, the thing that you do
You make me go ooooo
With the things that you do (you do, you do)

I wanted to control it
But love, I couldn’t hold it
I wanted to control it
But love, I couldn’t hold it

I’ll be criticized for lending out my art
I was criticized for letting you break my heart
Why would I stand disappointed looks
Fooling all but I’m all on tender hooks

oooo with the looks
Oh tender boy,
oooo, with the looks, the looks, the looks

I wanted to control it
But love, I couldn’t hold it
I wanted to control it
But love, I couldn’t hold it

Relationships were something I used to do
Convince me they are better for me and you
We met by a trick of fate
French navy, my sailor

I wanted to control it
But love, I couldn’t hold it
I wanted to control it
But love, I couldn’t hold it

This bill, should it become law, will have enormous impact on the lives of all Americans and on future generations. There was no particular reason why it had to be voted on last Friday, except possibly for Nancy Pelosi’s vacation plans. It says much about the character of the majority of members of this House that they passed it without reading and understanding it.

What would we think of a financial manager/advisor who invested all of a family’s money into a particular investment without doing serious due diligence–who, for example, put all the money into purchasing a fast-food franchise without bothering to read either the prospectus or the franchise agreement? How about “violation of fiduciary responsibility?” What this House has done is similar in principle, though obviously much further-reaching in its implications.

Dear liberal and “progressive” friends: When you talk about drastically expanding the role of government in American society, remember that “government” is not some abstract and benign entity. Are you really comfortable having every detail of your life planned for you by people who take their responsibilities with as little seriousness as that demonstrated by the House last week?

If government by the people is “democracy,” and government by an elite is “aristocracy”…I wonder what the proper Greek would be for “government by clowns”?

In the upper left - this is a photo of a house in a VERY expensive part of River North, an old brownstone. But looking in the window I see… one of those “skull” vodka bottles - It is called “Crystal Head Vodka” and the link, strangely enough, comes to a sales pitch by Dan Akroyd.

In the upper right, a photo of Coyote Ugly, in River North, now defunct. Their web site mentions that many of their bars closed across the USA, but they still seem to be around in others. Strangely enough, someone walked up to me on the street and asked if I knew where Coyote Ugly was, and I did, and I also told him it was closed and directed him and his buddy to Hooters nearby. Very odd that I was the one of one thousand people who would know the answer to that question. Even funnier is the fact that at first the Coyote Ugly sign in the window said it was “closed for remodeling” - Ha Ha how would you even remodel that crappy place? Would you perhaps clean the floor or something? It was just benches and a bar. Maybe they’d fix that dentist chair that the girls spun guys around in.

In the lower left, a photo of perhaps the worst remodeling job I have ever seen. This is a main street, Ohio in fact, and someone put the crappiest addition ever atop a brick building, and then festooned it with antennas. Why do we even pretend to have zoning laws? Worst yet, it looks awful from above, and unfortunately I can see it in all its glory every day right outside my balcony.

In the lower right, we walked by the Lincoln Restaurant, on the corner of Lincoln and Irving Park Road, and they have BANJO MONDAYS! Now that is a demographic I didn’t think was that popular in Chicago, but what the heck do I know, after all people drink PBR, too, and think that is cool nowadays.

Cross posted at LITGM

The best that can be said about our president’s involvement in this issue is that it risks transforming a difficult situation into a disaster. Absent US pressure (never mind US support) the Honduran political scene would likely return to something like normal, with popular and media focus shifting from the deposed Zelaya to the coming elections. By getting involved in support of Zelaya we probably make a drawn-out crisis inevitable, and we green light further subversion of Honduran democracy by Chavez and Ortega. In the worst case a military insurgency or civil war supported by the dictators is conceivable. That would be a catastrophe.

Honduras is small, poor, weak, generally pro-USA and depends heavily on our trade and goodwill. The Obama administration may figure that it can push the Honduran government around, and that may be true. But why should we get involved at all? Obama could say that he supports Hondurans’ right to representative government, and that we will help if asked, and leave it at that. That would be prudent. Why does he instead prefer to step into mud of unknown depth?

I think the likely answer to this question is either that the Obama people don’t know what they are doing or that they are acting out of ideological bias. Ordinarily I would assume incompetence, and I think that Obama is indeed incompetent. But as with Obama’s hostile treatment of Israel — another small, pro-American country — the Obama administration’s incompetence in Central America follows a clear ideological pattern. Anyone who does not see by now that Obama is a determined leftist radical with a transformative national agenda that most Americans don’t want is either blind or not paying attention.

Seablogger puts it well WRT Honduras:

The terrible precedent will in fact be set if this would-be dictator and ally of Hugo Chavez is returned to power through US meddling, just days after Obama spurned any meddling with Iran.
 
Obama’s true affinities are now exposed for all to see. Take a look, Obama voters. Do you really want the US aligned with Castro and Chavez — actually doing their bidding? Do you want the US siding with the blood-stained regime in Teheran, for the sake of imaginary future diplomacy?

(See the Seablogger post for full context of the above quote.)

We are on course for disaster, all because so many American voters have had it so good for so long that they thought it would always be so, and that they could afford to throw away their votes on an attractive cipher.

UPDATE: See also this post at Power Line, and Babalu is on fire with many excellent posts about Honduras.

UPDATE 2: Caroline Glick reaches similar conclusions:

The only reasonable answer to all of these questions is that far from being nonideological, Obama’s foreign policy is the most ideologically driven since Carter’s tenure in office. If when Obama came into office there was a question about whether he was a foreign policy pragmatist or an ideologue, his behavior in his first six months in office has dispelled all doubt. Obama is moved by a radical, anti-American ideology that motivates him to dismiss the importance of democracy and side with anti-American dictators against US allies.

UPDATE 3: Andy McCarthy on Obama and Iran:

The key to understanding Obama, on Iran as on other matters, is that he is a power-politician of the hard Left : He is steeped in Leftist ideology, fueled in anger and resentment over what he chooses to see in America’s history, but a “pragmatist” in the sense that where ideology and power collide (as they are apt to do when your ideology becomes less popular the more people understand it), Obama will always give ground on ideology (as little as circumstances allow) in order to maintain his grip on power.
 
[...]
 
It’s a mistake to perceive this as “weakness” in Obama. It would have been weakness for him to flit over to the freedom fighters’ side the minute it seemed politically expedient. He hasn’t done that, and he won’t. Obama has a preferred outcome here, one that is more in line with his worldview, and it is not victory for the freedom fighters. He is hanging as tough as political pragmatism allows, and by doing so he is making his preferred outcome more likely. That’s not weakness, it’s strength — and strength of the sort that ought to frighten us.

They were excellent. I never saw them play before, but I had their first album, Crazy Rhythms, which I probably got in 1981 or 1982. “Have”, actually. It must be in the basement with the rest of my vinyl.

They played mostly songs from later albums which I did not know. Then, for an encore they did “Boxcars” by REM, “Fa Cé-La” off of the first album, then a killer cover of What Goes On by the Velvet Underground. I was thinking, the only way they can top that is with a Stones cover. What a musical genius I am. The crowd shouted them back for a second encore and they did “Paint it, Black”.

I was hoping they would do Moscow Nights, but I cannot complain.

The crowd was sitting down in the seats. Then near the end of the set, this skinny, intense, young guy comes running down front and starts dancing frantically all by himself. The ice is broken, the space in front of the stage and the aisles fill up with people.

A beautiful, cool evening in Chicago, at the Pritzker Bandshell in the very lovely Millenium Park. It was a large, happy, well-behaved crowd. It is good to see a band like the Feelies getting that much love. They were never big “back in the day”. They are a great band and they deserve the affection and the big turnout.

UPDATE: Greg Kot’s review from the Trib.

UPDATE II: Thank you, mysterious gangly kid! — Agreed. (Lots of photos)

One of my favorite quotes (I don’t even know if it’s true) is supposedly from Jack Welch and it is about how he got rid of his forecasting department:

We might be surprised, but we won’t be surprised we’re surprised

Businesses are often surprised by changes to the environment, even while they tout their ability to master the situation. One company I used to work with had a joint venture with CISCO in the dot.com era - at the time CISCO was touting their advanced financial capabilities, their ability to close the books a few days after quarter end, and most importantly their supply chain mastery that allowed them to accurately forecast demand. Almost immediately after that period of boasting, CISCO had a big inventory write down since they built too far ahead of demand and had to scrap the unsold goods and materials.

To some extent the entire economic situation that we are currently embroiled in relates to a failure to predict the future or forecast accurately - demand was over-estimated, pricing power was over-estimated, and liquidity that was taken for granted vanished in an instant.

While businesses have to face up to their failures (by publishing financial results filled with losses, getting acquired, or going out of business), what about the journalists and “talking heads” on TV who cover foreign affairs?

How many of them predicted that Iran would break out into a mini-revolution? The Iranian regime seemed solid and their hold on the electorate strong; I don’t remember talk of widespread unrest, and also of the potential of new communication tools like Twitter to widen the impact of these protests.

Failing to predict critical events is commonplace; less frequent is the media owning up to their limited powers to see the future and the fact that many of their talking heads don’t provide much insight. The 24 hour news channels are a void of chatter, scrolling news tickers, and loud updates.

They should take a cue from the Jack Welch quote above and either get much better at what they do (unlikely) or more importantly note their inability to provide much more than real time (at best) views of what has already occurred.

Cross posted at LITGM

Given the recent financial events that have hit Wall Street, real estate, and the average American consumer, the purpose of this post is to look at how our largest states have responded to this fiscal crisis with regards to tax policy. Let’s start with California.

For some background - here is a high level overview of state income taxes (circa 2006, hasn’t changed much since then on a relative basis). If you go to this section at LITGM you can see all of the tax posts we have put up over the years that cover similar topics.

California:

California is governed by a solid Democratic majority with a Republican governor. The California situation is different than most states in that a 2/3 majority is needed for tax increases, meaning that tax increases are difficult to pass through the legislature. California also has a “proposition” culture, where items are put directly to the voters (such as the famous “Proposition 13” which limited growth in property taxes).

California has a very high “graduated” state income tax (meaning that it is tied to the Federal tax liability, with some exceptions) and this forms a significant portion of their total tax collections. Per this very helpful site, in 2008 47.5% of their total tax revenues came from the state income tax, above the average of 35.7% for all states as a whole. However, this percentage is lower than its total impact - some states (like Illinois) have an essentially “flat” 3% state income tax (at 32% of Illinois state tax burden), but California’s is graduated so that they are taking 9.3% on all “taxable income” > $47,000 and another 1% on all income > $1,000,000, making their total tax burden at 10.3% for the highest earners. California is proposing to increase this rate (highest in the US of major states) by an additional 0.25% with their latest budget proposals, to a high of 10.55% (the 0.25% increase was part of Proposition 1A, which was defeated).

Reliance on a high, graduated state income tax is a two-edged sword - during “boom” times (such as the latest economic expansion) high income payers contribute a disproportionate amount to the budget (relative to other states) - but when the stock option gains evaporated starting in 2008, this portion of the state receipts is hit harder than other sorts of taxes (sales taxes, property taxes, gasoline taxes) because income and gains can fall rapidly which immediately reduces collections.

California immediate reached for the lever of increasing sales taxes as soon as the recession hit, raising the state portion from 7.25% to 8.25%, with local additions rising it up to 10.25% in some areas. Raising sales taxes is generally viewed as a “regressive” tax measure, because it hits the poorest hardest because they consume a higher percentage of their total earnings than the rich (the 1% increase was also defeated with proposition 1A).

California also has a very high corporate tax, at 8.84%, which makes up 10% of their total tax receipts. This rate is the highest in the nation, making it a dis-incentive for businesses to move into the state (unless they are able to reduce their Federal tax burden, which will result in tax relief, through various tax strategies).

The Tax Foundation (a non-profit group) wrote an excellent analysis of the California tax situation here. Per the Tax Foundation:

These tax increases are estimated to raise $10 billion, with the extensions from Proposition 1A generating a further $6 billion. California has been struggling to close a $40 billion budget gap between desired spending and expected revenues in its $92 billion 2009-10 budget.

Proposition 1A was defeated, leaving the state’s finances in a precarious state as far as balance of payments, although the state faced a huge budget gap in any case.

The overall California situation for taxes is as follows:

1) California is extremely unfriendly to businesses, with the highest Corporate tax rate in the nation. As the Tax Foundation noted, Nevada is next door with a Corporate tax rate of zero, as opposed to 8.84%, along with an infinitely friendlier overall business climate
2) California depends on extremely high individual earners and a high income tax rate for their budget - but these earnings can change rapidly with the evaporation of capital gains and those earners can move their domicile to other states (Nevada, Florida, Texas) with much more favorable state income tax rates
3) the California state sales tax is very high and regressive, since this falls disproportionally on the poor
4) one area of relative favor for California from a state tax revenue perspective is that state property tax collections are low, a legacy of Proposition 13. California was ranked #10 (in 2006) in overall property tax collections, still high relative to other states but less than half of the New Jersey costs

Even with these extremely burdensome tax levels, state government spending galloped far in advance of collections, leaving a gigantic budget deficit. A recent string of proposals to “fix” the budget gap were defeated in May 2009. As of today, the Democratic assembly has decided to push forward a budget that contains tax increases without the required 2/3 votes, which the Governor says he plans to veto, or the state will start issuing IOU’s. Per the article in Business Week

The main culprit is the recession, which caused a 34 percent plunge in personal income tax revenue during the first five months of the year.

California now has an “A” rating on their debt, lowest in the nation, per this Reuters article. The state has $57 billion in bonds outstanding, and one way that they may pay bills in the short term is to go into the bond reserves for debt, which is likely to reduce their debt rating further (particularly for those issues), which also increases their long term interest rate burden since they will need to raise rates to raise the same amount of debt. Per the article, the debt rating agencies (Moody’s and S&P) are on an alert for a “multi-notch” downgrade, if these events occur.

Generally it is safe to summarize that the state has installed an unsustainable array of programs balanced on very high state income, state corporate and state sales taxes. These rates are amongst the highest in the nation and from all outward indications (to prospective businesses or residents) they are going to continue to rise. Their debt burden, per above, appears to be unsustainable and they have the lowest ratings in the nation, with rates subject to fall further should they take steps that amount to “raiding” their pre-funded debt to pay current obligations.

Keep watching to see how this turns out. For US competitiveness, this is a grave threat, because California used to be a driver of entrepreneurship and great companies. While there are many reasons for the decline, an intentionally non-competitive tax policy (driving away businesses and high-income residents) and loading the state with debt to support a massive array of public programs that are unsustainable.

It is also safe to say the for future potential residents the Democratically controlled legislature continues to push for tax increases, meaning that the future will look more and more like the past, and flashing a big red warning light to anyone contemplating an investment or move to the state.

One favorable kudos for California is that they have a great web site and a series of PDF’s and charts for their 2009-10 state budget - go here and read through it if you have the time.

Cross posted at LITGM

Ms. Fitzgerald, an associate professor of sociology at Fort Lewis College in Durango, still lives the unwired life with her own family now, growing most of her own food and drinking and bathing in filtered rainwater.
 
Rain dependency has its ups and downs, Ms. Fitzgerald said. Her home is also completely solar-powered, which means that the pumps to push water from the rain tanks are solar-powered, too. A cloudy, rainy spring this year was good for tanks, bad for pumps.

*Sigh* Somebody actually designed a solar powered system to pump water out of a rain filled system. Somebody voted for Obama. 

The entire point of energy systems is to shift work in time and space to when and where we need it. Weather-dependent energy sources can’t shift work in time and space. Instead, the work happens when and where the weather wants it to happen. Weather-dependent energy systems cannot perform this most basic task of shifting work and that is why they are worthless for any large-scale use. 

I mean, if weather-dependent power can’t meet the needs of a hippy college professor, why do people think we can run factories, transportation and hospitals with it? 

[By the way, the water rights laws of the American West might seem bizarre but they do make sense in the context of the region's historical development.]