Taking the midnight train

Road trip to NY for Christmas!

3d printing news

My son's 3d printer just got a brain transplant. XYZ printing jumped the shark when their 1.2.3 firmware for the Davinci 1.0 printer instituted 'phone home' code that would make it refuse to print if your cartridges didn't match their central database. Sorry fellas, we have a need to print in colors you don't sell. We'd have continued buying the colors you did sell because you make good hardware for the money and we believe in supporting that.

I just finished doing a brain transplant and the arduino due brains powering the printer no longer thinks that it's an XYZ brand printer. Instead it's a repetier, open source printer. As a bonus, we should be getting better control of our printing, which means setup will take longer but the results should be improved so long as we know what we're doing. Whether that will happen remains to be seen.

Me and my colony

It has long seemed self-evident to me but I'm not finding others talking about it so maybe this is unusual enough to write about.

Legally, we're all essentially pregnant, or at least siamese twins. That might need some unpacking.

One of the toughest legal questions around has to do with what to do when there's two inseparable individuals that legally fall into different categories, one guilty of a crime and the other innocent, or at least materially less culpable. Case law is not clear on this because it's such a rare condition that it's never come up in a common law country.

In the case of pregnancy, you have two genetically distinct humans with unequal rights. Sometimes the unborn is given a right to life. Other times no rights are assigned. Other times it's something of a case of chattel where the mother-to-be can kill the infant but nobody else can such as the case where it's a double homicide if a pregnant woman is killed but abortion is legal.

Everybody, however, hosts colonies of creatures on and inside our bodies. These colonies have no rights. In a lot of cases, the colonies are beneficial. Without our gut bacteria, we'd all be in significant digestive distress, very unpleasant distress. Other times, they get annoying, such as the various cold and flu viruses that lay us low periodically. There are mostly social sanctions in place for humans who cooperate in spreading those around and like the case of a worker sneezing into a food tray at a cafeteria there can be legal sanctions in terms of fines and operations shut downs for inadequate hygiene.

The most extreme of these legal sanctions is reserved for our hitch-hiking killers. Typhoid Mary, America's first documented asymptomatic carrier of the typhoid virus was isolated twice over the disease, the first time for three years, the second for the rest of her life. Strangely enough, her first major victim cluster was where I grew up, Mamaroneck, NY. Who knew?

Typhoid Mary was diagnosed with an infection of typhoid in her gallbladder but she refused to have the infected organ removed and without that removal she remained a public health hazard and was isolated until she died because she was so irresponsible after her first release from isolation as to change her name and continue seeking employment as a cook while refusing to wash her hands because, in her mind, she posed no threat.

The law could not force the removal of her infected organ. It could imprison her, and did. That's a very relevant distinction today. There is a difference between me and my colonies of various hitchhikers. I have rights and they don't. When they are not too noxious, they benefit from a sort of penumbra of rights. It's too difficult to separate us and they benefit. But if they are too noxious, if they even might be too noxious, I suffer a diminishment of rights. The penumbra goes the other way.

Which way the penumbra effect goes is a difficult question, one that we will never answer in a proper way so long as we do not explicitly lay out the facts as they are, that with every individual is a non-rights bearing set of organism colonies intimately locked in an embrace with our own biology. This is a legitimately hard question for which we have no final answers at the present, just a competing collection of unhappy feelings at whatever solutions are proposed by our political class, whether the disquiet at the laxity of the CDC or the outrage at the state quarantine orders nobody's entirely happy.

Making Picketty's R > G work for the poor

Thomas Piketty's Capital in the 21st Century tells us that the rate of return for capital exceeds the rate of economic growth. Putting aside the many problems of the book, this, in itself, is not very controversial. It's an expected result when you have a shortage of capital compared to the labor prepared to use it. But it is a result that can be reversed by increasing the available capital pool.

Bitcoin and the rest of the alt-coin world are an opportunity to do this. A bitcoin might be $380 today but the smallest unit is the satoshi, a fraction equal to 1/100,000,000th of that. People will pay tens or hundreds of satoshis just to get you to look at an ad for a few seconds. With some applied effort at a public library, it's possible to get perhaps 40k satoshi in a day (not easy but possible) in this way so even if you're in a jobs wasteland with no employment prospects, this option is still available for you. Those satoshi are loanable funds over at BTCJam and other P2P lending sites but unlikely to trigger the first world welfare state's various poverty traps that keep the poor down. Returns are advertised at just under 20% for a doubling time of three and three quarters years.

In short, you have a road out of poverty that doesn't require any action on the part of the government other than the willingness not to investigate the blockchain so closely that we enter the unjust world of Javert. This is possible because it's so cheap to move bitcoins around that even the poor in the US can be part time capitalists. They have the money.

Is anyone telling them this?

Judas in University Administration

It started this morning (as it often does) with Instapundit's item on bogus sexual assault numbers which pointed to Mark Perry's analysis that the rate of sexual assault (1 in 5 during university) combined with the rate of reporting (12%) didn't work. It isn't even politics, but just poor math that means at least one of those two White House numbers are wrong.

This was shortly followed by a piece examining the left's creeping totalitarianism on due process. What caught my attention is the phrase that Harvard could withstand the loss of federal funds while they fought for due process. It occurs to me that the amount of federal funds at risk, the endowment of the university, the male population being betrayed by university administration is all public information. You could make a judas index to measure how much money your rights are worth betraying.

There could be an app for that. It would be pretty useful when it comes time to pick schools.

How Big is Bitcoin? Monday October 20, 2014

For this post all values are rounded.

As of today bitcoin has created
13,400,725 coins in circulation

At time of writing 1 bitcoin was $385 USD

This puts the total value of the coins at $5.2 billion USD and is roughly equivalent to what the federal reserve calls M0. For USD M0 is $3.9 trillion at present.

If Bitcoin were an economy, it would be the 162nd largest in the world slightly larger than Jersey and slightly smaller than Burundi.

Formal Proof Jackassery

Out on the 'net, A Formal Proof that Neil deGrasse Tyson is a Jackass

Would you believe that I came across this on a random page with the link running, in effect, as a classified ad? The Internet is a wondrous thing.

In favor of a sustainable living wage

Right now we're living through a time of massive imbalance in the global labor market. The number of people who are available for work outsourced from around the globe has exploded and continues to grow larger. This is happening because poor economic policies are in retreat in the developing world and pro-globalization policy adoption remains high, continually feeding more and more people from India, China, and smaller developing nations into the global labor market as they walk down the path of converting their farmer/peasant heavy populations to first world levels. This massive imbalance has created a market signal reducing salaries below living wage levels at the bottom end of the labor market. Until that signal resolves in increased demand for labor, it leaves more people stuck in dead-end rural situations, urban workforces constantly in emergency mode, trying to scrape by, and lower standards of living for virtually everybody who is a worker all over the world.

There is a way to create a living wage consistent with free market principles. I call it the sustainable living wage. It's based on the idea that increasing the demand for labor and reducing the supply of labor both cause a natural rise in wages that need not be artificially mandated by legislation, and is not subject to evasion by paying people a lower wage "under the table". In a sustainable living wage environment, workers have better things to do than play black market games with skinflint employers. Down the road, somebody else is paying better.

A living wage based on forcing, by law, employers to raise wages beyond the market clearing price will, over time, always lead to substituting capital for labor and other methods of getting around the law such as falsely reporting working time and hiring "under the table". It also promotes acceptance of inflation in the employing class as that erodes the economic penalty of minimum wages. Inflation is probably the worst economic blow that an otherwise normal government can strike against the poor while calculating that it won't get called out for it.

A sustainable living wage, in order to be sustainable, must not create these perverse labor substitution incentives for employers which is what too often happens with traditional efforts to raise a minimum wage to a living wage. In the real world either the rise is so small as to be ineffective at its stated goals or it prompts employers to take a look at substituting capital for labor. When this substitution effect happens, a minimum wage practically acts as an indirect legal subsidy for machinery manufacturers, throwing more work their way and tossing lower end workers out of a job. These indirect subsidies are social injustice writ large.

The other side of the coin is reducing the supply of labor. This is about increasing the supply of people who make some or all their money as capitalists. It also implies moving from a small number of very wealthy investors to a large number of relatively well off people as the capital source for businesses. It means taking some money and succeeding in actively investing it for a profit to the point where it can substitute for some of your labor income, allowing you to shift from full time membership in the laboring class to being a part time capitalist, part time worker and eventually full time capitalist.

Necessarily, this also means reducing labor force participation in a good way. Economic prognosticators are going to need a better metric to not only capture whether labor force participation is changing but why it is changing. The person that reduces their hours from full to part time because they're making up the difference and more in loan interest they're lending out to others right now looks the same as the person that has their hours reduced by their employer because they want to avoid costly benefit obligations. That's a very small chunk of the labor force right now in the upper middle class. It will grow in the future.

Flipping the party

Republicans are used to unfair hit pieces that blow mistakes up into evidence of conscious evil. New York's Mayor de Blasio is likely less accustomed. Apparently he's part of a line of lefty animal killers:

Yet another defenseless creature was slaughtered by a left-wing politician, the New York Post revealed on Thursday. Adorable groundhog Staten Island Chuck was “chucked” to his death during an appearance with New York City Mayor Bill de Blasio, a raging liberal, back in February. Officials sought to cover up the creature’s demise, so as not to fuel public outrage over the disturbing trend of liberal politicians murdering cute animals. They even lied about the true identity of the victim.

 We're still in the field of good clean fun mocking the phenomenon. The number of low information voters fooled into taking this seriously as evidence in a left-wing war on animals is likely to be very low. We are, however edging towards it not being a joke and having the right join the left in the type of unfair assaults that have been predominantly running from the left to the right for as long as I've been alive. It'll be a shame when it happens but not much of a surprise.

Militia Software - I

It seems pretty likely that a number of foreign governments are running cell phone interceptor towers in DC. Were our government on the ball, I would expect these towers to be taken down quickly and consequences issued either in diplomatic expulsions, EMP shenanigans, or some other nasty deterrent that would ensure the safety of our government's communications from prying foreign governments. This apparently has not happened, with the towers being discovered by a private company touting an expensive anti-interception phone technology who reported it to the FCC and let the rest of us know via press release.

An individual firm or even the spy chasers have a limited number of people to run around and seek out these interceptor towers. But making a phone app that identifies local towers and alarms on the appearance of new ones shouldn't be that hard or expensive. Widely release that app and you have a way to pick up the spies no matter where they are. Applications like Llama provide a functional model for finding signal and AntennaSearch provides a database to filter out existing towers.

This is a militia activity that is in response to a real threat actually being deployed against the US. You don't have to run around in camo or make any large sacrifice, just run an app occasionally on the smartphone you already own. It will make it hazardous for foreign enemies to deploy the technology against us. It will also catch domestic enemies deploying the technology in violation of the law. Legitimate use by law enforcement will have paperwork filed and the reports of this software will file will hit that paperwork and not raise alarms.

9/11 is not for muslim whining

A 9/11 muslim whine fest offended me today. It seems that Islam has an image problem in the US. Boo hoo. Today was not the day to publish that. It's tone deaf and likely to make american opinion of muslims worse. It's sort of a japanese journalist like picking December 7th to discuss anti-japanese sentiment, a problem that's only ever potentially there because the japanese are generally not dumb enough to do such a thing. 

In any case, if you want to measure hate over time, you're best bet isn't surveys but crime reports. Anti-religious hate crimes have been broken out and reported for years and we have good data for 1996-2012. Here are the trend lines for all the sub-groups. 

Hate is up for catholic, atheist, and multi-religious categories. Everybody else is flat to down. As always, anti-jewish hate crimes predominate the numbers but they've got the best trend line of the bunch so maybe in a few decades the jews won't be number one anymore. I'm sure they're looking forward to it. 

The muslim trend line is generally flat except for a 9/11 related, one year bump (481 incidents). Most of that went away but the baseline moved up from around 30 incidents a year to perhaps 140 give or take with arguably a slight down trend between 2002 and 2012. This is not the picture of growing anti-muslim persecution the article hints at with its talk of a recent bias crime spike. 

9/11 is not the time for a story hook of anti-muslim bias that isn't even accurate. 

Political science with scientific rigor? Hah!

Fred Schwarz writes in NRO's The Corner that The American Political Science Association (APSA) is pretending that what it is doing is "science applied to politics". This sort of thing always ruffles my feathers because it's clearly just going through the scientific motions without actually bothering to establish the required base of knowledge that any scientific examination would require.  Here's the comment I left there. 

Statistical rigor? These are pretensions. We are missing some of the very basic prerequisites to achieve any sort of scientific examination of the american political scene. 
Try to find:
1. A comprehensive list of all governments in the US (according to the contradictory definitions of our collective 51 sovereign entities that can, and do, define them).
2. The jurisdictional bounds of all governments
3. A list of what each government does
4. A comprehensive list of the officeholders for all governments
You cannot write, scientifically, about who is doing government, much less politics, what they are doing, and where they are doing it with any sort of numerical precision without these prerequisites, and a number of other basics besides. For instance any comprehensive scientific fiscal analysis would require a meta chart of accounts so you could do apples to apples fiscal comparisons across governments. We can't do that either. 
There are practical consequences for this lack of scientific rigor prerequisites. People get arrested for accidentally driving into a gun hostile jurisdiction. There's no app for that but with items 1, 2, and some simple survey work, one could be made. A police militarization app could be similarly constructed. The list of practical improvements possible is rather long. 

Nanotube capacitors starting to enter the market

In 2006, MIT wrote up the invention of carbon nanotube improved capacitors, saying that if all goes well, the technology should enter the market within five to ten years time. I love reading about potentially disruptive technologies in materials and low level, common components. They really are the hope for us to get enough breathing room to fix the massive financial mess we're all busy digging ourselves into across the first world. But there's a long distance between technology in the lab and technology for sale in real products that make a difference so I filed it in my "check every couple of years" mental category and moved on. I should have checked more often.

The technology is starting to enter the market now, shipping first products in spring of 2013 and it's a major game changer for the economy, one that most people haven't mapped out the implications of yet. The technology was spun out of MIT into FastCAP Systems and they are now offering product to, of all things, the oil and gas drilling field, allowing for the elimination of batteries entirely in the advanced technology of measuring while drilling (MWD) and logging while drilling (LWD) or a doubling of system lifetime when used in conjunction with batteries. These "extreme environment ultracapacitors" are safer than their competition, lithium batteries, as they simply don't explode. Their shipping technology operating temperatures are rated to 150C, which is quite impressive.

But conventional oil and gas drilling is a means to an end for FastCAP as their aim is to reduce drilling expenses and increase drill capacity to viably tap geothermal energy as their technology has been recently validated at Sandia National Labs in use at 200C and the company seems to be going for 250C as a next step. This translates out to MWD/LWD operations out to 8km depths and the ability to extend modern techniques of horizontal drilling to greater depths than before.

All of a sudden, widespread geothermal energy doesn't look as impractical as it did yesterday.

Ni Hao Y'All

I've been remarking for a couple of years that the flow of jobs will reverse and poor areas in the US will start to see work moving from China. What I had in mind was returning US companies. But there seems to be an unexpected bonus. The Chinese are coming.

I should have seen it from the first. If it's cheaper for a US company to build something in the US, it's going to be just as advantageous for China's private businesses to do the same. So why not expand abroad and reduce their political risk while improving their profitability?

Fixing the data loss loophole

The US Congress could, with a pretty small outlay of money, set up a web portal with an API that would allow all executive branches to report data losses within a few days of when they happened. And then we should require that they report within 5 days. We could call it Lois' law. 

Most recently this would have had the effect of chopping two years off the timeline of the IRS scandal and perhaps made it a live issue for the 2012 campaign. Big data analytics might also be deployed on this database to find "data loss hot spots" and better direct where to deploy investigative efforts. The bonus, a lot of hard drives are over $100 dollars so just destroying one is a crime sporting a ten year prison term. You have a lot of leverage at that point to play 'make a deal' in order to get at the underlying politically motivated crimes. 

Bitcoin as US currency warfare

Still noodling around with bitcoin and learning more about the phenomenon. One of the puzzlers that a number of people are scratching their head about is the cautious support that bitcoin seems to be getting in the US. Why would an inherently deflationary currency attract support from a government that seems so strongly committed to inflating its currency into a creeping devaluation. 

The answer came in an hour long talk with Andreas Antonopoulos that was up on youtube. He forthrightly predicted that bitcoin was eroding all currencies but that the dollar would be the last to fall. In the 'devil take the hindmost' currency world we inhabit, that makes bitcoin an ally of the Fed for now. 

Things do seem to be playing out that way as China subsequently made moves against bitcoin even as it also made moves to work with Russia to supplant the dollar. 

How big is bitcoin? Saturday June 21, 2014

For this post all values are rounded.

As of today bitcoin has created
12,922,000 coins in circulation

At time of writing 1 bitcoin was $594 USD

This puts the total value of the coins at $7.7 billion USD and is roughly equivalent to what the federal reserve calls M0. For USD M0 is $3.9 trillion at present.

If Bitcoin were an economy, it would be the 149th largest in the world slightly larger than Montenegro and slightly smaller than Mauritania.

Ethereum - Bitcoin on steroids

Bitcoin was only the beginning

Ethereum is bitcoin style disruption (blockchain technology) that is generic across anything writable in software. That's huge.

Etherum is not ripe. It's not something you want to devote a lot of resources to but it is something you want to keep your eyes on to monitor because any successful etherum software can disrupt any field of endeavor as bitcoin is disrupting banking. Look to hear about ethereum in a mainstream news outlet near you in mid 2015.

What is Bitcoin?

Bitcoin is not what you think it is.  This is the sort of thing that comes out when you listen to Bitcoin insiders who actually build the software that makes Bitcoin a thing.

Everyone in this room understands that Bitcoin is not a currency. It is a value transfer network with a decentralized consensus mechanism. 

Translating from techno-geek to poli-geek, Bitcoin makes voluntary polities. In plain english it allows people to congregate into one or more novel, voluntary associations, entering and exiting them at will.

The point of doing that is to establish convenient states of "we" as in we dollar spenders, we mastercard holders, and even we believers in this or that social habit or norm. This is incredibly valuable. It allows participants to exchange value within an enhanced trust set of rules. In the real world, this is a more granular edition of what european countries faced when they looked at joining the euro zone. A number of countries for whom joining was economically a bad idea did it anyway because they saw advantage in adopting a shared identity. Greek euro bonds suddenly sold at nearly the same low interest rates as German euro bonds. The market priced nation state bonds by the identity, and the repayment risk, of the most trustworthy of the big euro economies for years. It took the admission of a massive violation of trust and the rules of the euro (Greece's accounting fraud scandal) before national bond pricing was restored.

In this view, nation-states create a massive bundle of shared values, and a number of them are expressed through the currency. Bitcoin as software allows anyone to express shared values, sometimes economic, sometimes as expressions of solidarity. The politics of which shared values will be expressed is independent of the software. It pretty much can be anything.

Tea Party Comprehensive Immigration Reform

I'm an immigrant, but not much of one. We left Romania, legally, in 1971 through the grace of God and Richard Nixon. Essentially I was part of the communist slave trade because we were in bondage and, arriving in the US, we became free.

My aunt argued against it. Why she argued against it and why she was wrong provides the core of a Tea Party immigration policy that is in the United States' interest, comprehensive, and humane.

There are people who fall in love from afar. My father is like that with the USA. My family's tale of immigration starts with my grandmother running from an intolerable personal situation and my grandfather following her. My two aunts were born in the US. My family returned to Romania in a case of pretty bad timing, just in time for the bottom to drop out as the Great Depression started soon after. My father grew up on stories of America and what it was like there and when my aunts became adults, they eventually got their US passports and left.

The soft costs of immigration to the immigrant and family ripple across a generation or two. There is a loss of social context, a feeling of not entirely belonging. You're the outsider, the stranger. Both cultures are home but neither culture entirely fits. Unless you are like my grandmother and desperate or like my father and in love, these soft costs dominate the equation and people just don't move very often.

Essentially my father was an american long before he set foot on US soil. He loves this country, became naturalized, learned english, had a long career as a civil engineer, and did his best to make America a better place. He's the sort of immigrant that contributed far more than he took and is a significant chunk of the conservative movement. He's also a minority of immigrants crossing the border today. Such love affairs have always been a minority but they are an important minority to recognize and embrace because they falsify the narrative of the Tea Party's enemies that it is cruel and unfeeling and only interested in simplistic solutions that have no soul.

The desperate, on the other hand, are dangerous. Desperate people can swamp a boat, collapse a bridge, trample people to death. Talk to anybody who does work in crowd control and they'll tell you desperate people in large numbers can be scary dangerous. The crowd control professionals have all sorts of multi-layer strategies to prevent, reduce, channel, and contain the consequences of crowds gone wrong (desperation is shorthand for a number of emotions, the common point being that they shut down rational thought and good sense).

Piketty's Introduction - Part IV

This is a four part series going through Thomas Piketty's Capital in the 21st Century the parts can be found here:
Part I, Part II, Part III, Part IV

After only suspecting it from press accounts, picking up Piketty's Capital in the Twenty-First Century has convinced me by the second paragraph of its introduction that it desperately needs a thorough fisking. I'm picking up here from page 23 on the introduction.

On page 24 Piketty might be pulling a bit of linguistic sleight of hand mixing labor with remuneration. As Piketty defines it on page 18, labor is "wages, salaries, bonuses, earnings from nonwage labor, and other remuneration statutorily classified as labor related." A large chunk of these high remuneration packages are set as stock options which, at least under highly influential New York law are not wages. Is Piketty going to be correcting for that in the US and UK data where such forms of compensation are more prevalent? Again, early in the book, but it will be really easy not to make that adjustment but for a book that is so generously footnoted, it's disappointing that a note doesn't cover the issue here. Curing the disconnect between remuneration and firm performance would seem to encourage a shift to non-labor remuneration in the form of stock options. This is unlikely to be an attractive solution for Piketty but why wouldn't that help cure one of his divergent forces on inequality? 

Piketty's first chart appears on this page, a chart showing income inequality in the United States from 1910-2010. I think it is relevant to match Piketty's data with the number of people who actually had to file. 

Clearly the early data is very sparse, in 1913 as low as 2% of households filed. Is it coincidental that the WW II era explosion of number of returns coincides with Piketty's chart  that features a remarkably sharp decline in inequality? Or has Piketty pushed his chart beyond the reasonable limits of available data? 

I don't have any particular insight into the sparseness of data for Piketty's second chart but the first chart tells me that somebody should check the numbers and ask the relevant question, whether the early portion of the data is as questionable as his first chart looks to my eyes. Piketty himself notes that his data is not as widespread as he would like it to be. It would have been responsible to add a line between the years of robust data availability and the zones where caution is warranted. It is a responsibility that Piketty seems uninterested in meeting. Perhaps such things will be added in a 2nd edition. 

On page 27, Piketty errs when he says "the fundamental R > G inequality, the main force of divergence in my theory, has nothing to do with any market imperfection." There is a market imperfection. It is real. By saying that there is no market imperfection, Piketty is implicitly excluding the laboring class from joining the investor class and making an artificial barrier into a natural barrier. The laborer shall be the laborer and never a capitalist. The world does not work this way. 

Piketty has to explain Andrew Carnegie, who started as a telegrapher and became one of his age's foremost capitalists as well as all the other famous and not so famous self-made men who have made the transition. From all I have read, he never addresses this change of role potential. 

Piketty claims that the rapid growth of population in the US from 3M at the time of the Declaration of Independence, and the rapid growth of territory from the 13 colonies to the addition of Alaska and Hawaii in the 1950s make the US experience a non-generalizable outlier and that the correct model to look at the general world case is slow to expand France which only doubled its population during the same time period. The territory changes of France with the addition and subtraction of its colonial possessions is tastefully left out of the discussion. It likely would only confuse the narrative. 

Of course by a priori excluding the US example as a model going forward, Piketty is cheating. He does not bother to prove his justification for excluding the US. It's just declare it as a non-generalizable outlier and move on. 

I do agree with Piketty on the importance of gathering data and using the real world to inform and judge theories. A pretty theory that doesn't work and thus should be jettisoned is a global attitude that would have saved us from the gulag and would resolve the present problems of both North Korea and Cuba. But Piketty is only imperfectly applying his own standards here. He should be held strictly to them. For instance, he declares that the changes in US territory and demography lead it to be "no longer the same country". So how many countries is it and what is the data for each of those virtual countries? There is no data presented. 

Does R > G indicate a shortage of capital or a surplus of capital? It would seem obvious to me that this status indicates a shortage, but the cure that Piketty prescribes would indicate that he believes that it indicates a surplus. You raise taxes on what you want less of. Perhaps I simply misunderstand and R > G can happen whether capital is in surplus or shortage, ie there is no relationship. I do not see how that can be true but I'm willing to be persuaded if Piketty ever gets around to addressing a small matter such as this. 

This concludes my examination of Piketty's Introduction to Capital in the Twenty-First Century. I picked up the project because I had a surplus of time on my hands as I was waiting for some very long database reindexes. If this occurs again, I may pick up the book and proceed further but for now this will be the end of this series. 

Piketty's Introduction - Part III

This is a four part series going through Thomas Piketty's Capital in the 21st Century the parts can be found here:
Part I, Part II, Part III, Part IV

After only suspecting it from press accounts, picking up Piketty's Capital in the Twenty-First Century has convinced me by the second paragraph of its introduction that it desperately needs a thorough fisking. I'm picking up here from page 15 on the introduction.

On page 15 there's an interesting concept introduced of "inequalities at the global level" that leaves me scratching my head. China "may well prove to be a potent force for reducing inequalities on the global level" but isn't China's turning towards capitalism mean that its headed towards more inequality? What is different (superior?) about the Chinese road towards the market? Before Deng, what was China's role regarding inequality on a global level? I would hope that Piketty explores this more fully later. We'll see.

The idea that you can make any sort of straight line trends in global economics last 35 years, much less 85 years with a straight face is in my mind, well, naive at best. But Piketty goes for it even as he makes sure to inject enough uncertainty in his projections to make this statement meaningful. In other words, he's dog whistling about the world ending up being owned due to the straight line projection across several decades. If anybody of influence were to call him on this, no doubt he would retreat, and quickly. From the media appearances I've observed, he's obviously not enough of an idiot to defend such a declaration, though he is enough of one to have made it in the first place.

An interesting assumption embedded in Piketty's snark about Solow and Kuznets "balanced growth path" is that the rich world is advanced in the sense that Solow and Kuznets meant. That's not actually proven. For instance in the 1970s, the US made a retrograde move that established an oligarchy in bond rating agencies, one that continues to this day. How many other retrograde moves have been made and what does that mean in the sense of the Kuznets curve? There's plenty of pages to go and perhaps Piketty addresses this later but it is as absurd to assume that capitalism is a one way road. As Newsweek famously observed in 2009 "we are all socialists now." Has this socialism turned back the clock on the Kuznets curve? Is that even on Piketty's radar?

The 19th century economists, especially Marx, underestimated the mobility of people to change roles when the legal system permits them to and the economic system incentivises them to. Our economy would be more balanced if we made these role transitions easier. In reality the forces influencing these role transitions are decidedly mixed with considerable government pressure making them harder. We have, just to take one example, qualified investor rules limiting certain investment opportunities only to the well off that are completely out of place in a world that has undergone an information revolution.

There's a four page run where Piketty is acknowledging his colleagues and making a few technical points. Nothing to complain about there, and thank goodness for pacing issues in this analysis.

But page 20 has a bit of interesting caution to not accept any economic determinism, walking back Piketty's page 15 straight line analysis about who will own the world in 2050 or 2100. Piketty anticipates critics and refutes himself.

Piketty asserts that "there is no natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently." This is wrong as there is a powerful one, human nature. Those who are rich tend towards complacency and those who are poor tend towards activity. You have to work hard to beat the poor down into giving up, especially in a world of cheap information and huge gaping holes of unfulfilled goods and services. As this is a major result of the study that the book is based on, Piketty is in trouble long before he pulls out his first spreadsheet because, like Marx, he doesn't get people right. Let us hope it is with less momentous consequences.

It is really breathtaking, Piketty's idea that the market has little to do with the catch up in economies that are happening in a number of formerly poor economies. A key portion of the "process of the diffusion and sharing of knowledge" that is driving that catch up is that markets work and it is wise to dismantle the legal structures that prohibited or restricted markets in these countries. But for Piketty, that sort of knowledge diffusion is a priori not important.

In the forces of convergence section, there is a great elephant of a void, one that is quite noticeable if you don't have Piketty's sort of ideological blinders on. Over time, if you are prudent, you can move from being a laborer to a capitalist, and it would be normal that there are a large number of people who gain income from doing both and shifting emphasis from one to another as a counterbalancing force, chasing the better deal.

If capitalist activities are where the money is, there would be a natural tendency to increase effort in those areas and to divert income to investments, bidding up the prices and thus reducing the returns on capital. The sort of world where there's a tiny class of investors and everybody else gets all their income from labor is simply not today's world. This is exactly the sort of evolution that supports the Kuznets curve. That we're presently sabotaging this evolution via a huge creation of moral hazard by central banks and other policy stupidities does not change the underlying reality that humans tend to follow the money when it comes to earning their daily bread and Piketty's book is largely devoted to the proposition that they do not.

If you give short shrift to and do not accurately list the forces for convergence, of course they will look weak and easily overcome by forces for divergence. Again, this is an argument that does not depend on Piketty's statistics being in error, though the argument would be consistent with the errors that the FT found in its analysis.

Once again, I have reached the point where it is too long to go much further on a blog post and will try to pick things up again later.

Piketty's Introduction - Part II

This is a four part series going through Thomas Piketty's Capital in the 21st Century the parts can be found here:
Part I, Part II, Part III, Part IV

After only suspecting it from press accounts, picking up Piketty's Capital in the Twenty-First Century has convinced me by the second paragraph of its introduction that it desperately needs a thorough fisking. I'm picking up here from page 7 on the introduction.

Wages are not hard linked to economic growth in capitalism. Wages are an epiphenomenon of the supply and demand of labor. With the countryside emptying out in a rush during the early industrial revolution, capital and labor became strongly unbalanced. The reasons for this were good. Increased yields from new technology led to less starvation and less need for farm labor. Unsurprisingly this led to low and stagnant wages at the urban receiving end until this huge wave of labor was absorbed and capital pools grew to a level that led to the bidding up of wages as capitalists had to start to compete for workers in a more serious way. Nobody who has gotten past undergraduate economics should be surprised, yet Professor Piketty seems surprised writing about the period "[t]his long period of wage stagnation, which we observe in Britain as well as France, stands out all the more because economic growth was accelerating in this period." This seems to be coming from a milieu of social justice and not economics. That would be fine if this were not an economics book. Or is it?

On page 9, Piketty passes over one of the greatest failures of Marx, the pretense that his vision of communism was scientific. A scientific communism is a communism that runs an experiment and when the experiment fails, it stops. Marxism never stops. It just gets new excuses.

It's only page 10 and Piketty seems to be undermining one of his previous statements that inequality inevitably leads to violence with the observation that inequality still was increasing in WW I but since wages were catching up, the spectre of proletarian revolution was receding in the advanced industrialized world. Is this what he means by "modern" economic growth? There's nothing particularly modern about absorbing and correcting a surplus of labor with the creation of new enterprises to occupy them.

Piketty is once again unduly kind to Marx by excusing his failure on a lack of statistical information. "If only the [great man] had known" is the cry of suckers who believe in failed systems and Piketty is engaging in that a bit here. It is particularly relevant to note that Marx's labor theory of value does not work. Marx raised important questions. So can a five year old. Such an act, unaccompanied by correct answers is not the stuff of greatness. Here Marx, have a cookie for asking an interesting question. Now go stand in the corner of historical villainy for making the gulag possible. Piketty has lousy taste.

Accumulated wealth is ultimately of two sources, gathered and/or maintained by violence or gathered/maintained by skill. The former is to be condemned and fought against. The latter is intergenerationally unreliable (ie over the scale of time that generates social instability). Societal measures should target only the first. Piketty's preferred solution to the problem targets both. People do not go out into the streets to fight against Bill Gates riches in relevant numbers because manifestly he is doing a world of good, as do many of his peers. The Democrat party's obsession with the Koch brothers is relevant here. Explaining both why the Democrats have made them their great white whale and why ultimately it's not giving them the political traction they hoped.

Piketty is in love with statistics and so I see why he might think that income tax is "useful for establishing classifications and promoting knowledge as well as democratic transparency" in his discussion on Kuznets. The usefulness of this information is a bit counterbalanced by the enabling effect on envy and the almost inevitable reduction of societal solidarity. Pity he doesn't mention those effects. They must not fit his narrative. In a book devoted to the ill effects of inequality, it's a little surprising that he's overlooking this contribution to those ill effects.

Kuznets, with his eponymous curve, seems to be the big elephant that Piketty is aiming at. He calls it "magical", a term not usually professionally complimentary. Kuznets must be discredited for Piketty's thesis of dangerously growing inequality to have a chance. The Kuznets curve was "a product of the Cold War" which implies but does not say that it is wrong. The moon landing was a product of the Cold War. Does Piketty cast doubt on that because of its provenance too? Let's try it on for size, the "magical Kuznets curve" matched by the magical moon landing? I think not.

The Kuznets curve will stand or fall as we end up in a sufficiently long period without huge exogenous shocks that mask the effect if it's present. Piketty's snark doesn't move the conversation along.

Once again this is getting too long for a blog post. If I keep up this pace of analysis, I will be posting another 81 posts on this book. I may have to take lessons from Stephen Green towards the end. I don't think I'm going to make it in six more days. As annoying as finding these problems in Piketty's work, the thing is intellectually stimulating, probably in ways that Piketty didn't intend. For instance, it seems like under Piketty's analysis of global inequality, communism was anti-egalitarian. Now that would be an interesting interview question for Piketty but unlikely one that he would face.

Piketty's Introduction - Part I

This is a four part series going through Thomas Piketty's Capital in the 21st Century the parts can be found here:
Part I, Part II, Part III, Part IV

Piketty's introduction is the first problem with the book. He manages to get through paragraph one without serious problems but can't manage to extend that record to paragraph two.

Piketty claims

Modern economic growth and the diffusion of knowledge have made it possible to avoid the Marxist apocalypse but have not modified the deep structures of capital and inequality. 

But that's just not right. What is it about modern economic growth that makes it Marx bane as opposed to pre-modern economic growth? Piketty doesn't say up front. Perhaps later, but there doesn't seem to be much discussion of it uncovered by a Google search. The concept of a magical 'modern' economic growth doesn't make much sense. The diffusion of knowledge makes a very vague reference to the real issue of R > G but not in a particularly helpful way. Isn't the very existence of deep structures of capital and inequality the question that Piketty is putatively seeking to answer, ie whether Marx was right all along?

It's only the introduction but it's not looking good so far. Piketty has already revealed that he is assuming his conclusions.

It gets worse

When the rate of return on capital exceeds the rate of growth of output and income... capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based. 

This is simply not true. You have to have an additional factor for an undermining effect to take place. You have to limit the conversion of individuals who live via labor to individuals who earn a living via capital. There are plenty of people who work to pull up the ladder that enables this conversion but they do not generally reside among the advocates of laissez faire. Piketty's advertised solution, a heavy wealth tax, pulls up the ladder quite effectively. This makes Piketty a decided villain by his own R > G standards.

An illustration should suffice. Take a room full of poor entrepreneurs. Add exactly one money bags investor. The economy will rely on the investor to supply virtually all the capital. Assume that out of 100 business proposals he funds 10 and being the only game in town he does so at quite advantageous terms to himself. 1 is a 100x investment success, 6 are variously successful averaging 4x return, and 3 go bust. The return to capital is clearly going to be greater than economic growth in this situation. But the 100x successful business yields enough money in the heretofore poor entrepreneurs hands that he can fund a venture all by himself and the 6 entrepreneurs can fund another 2 if they act together. The next funding round sees essentially 4 money bags and more businesses being funded. Each subsequent round will see less and less lopsided terms being granted the entrepreneurs. After all, they can play one investor off against another. More and more of the poor entrepreneurs will either propose or be part of a successful team. More and more deals will be self-financed. Eventually you get to a balance. This is the deep structure of capitalism and it is very different from what Piketty is assuming.

Now add Piketty's famous wealth tax and what happens. The money bags won't be investing in 10 businesses, but 7, the balance of his funds being absorbed by tax shelters and lobbying for loopholes in the wealth tax (which empirical observation leads us to guess that he will get but that it absorbs a large amount of time, effort, and money). The 100x entrepreneur winner in the first round might still be comfortable but likely not enough to fund the same sort of venture as before and the medium sized winners are fewer and even less capable of enlarging the pool of investors and increasing the fairness of terms in the next round of investment in business.

Piketty is trying to claim a moral high ground as early as page 1 but unfortunately for him, he is a policy villain. He seems to ignore that R > G is a price signal. This price signal is an encouragement to enter the field of capitalist and invest. Taxing the wealthy is a strong signal not to invest too much, diverting resources.

Piketty claims that "violent political conflict" is something that "inequality inevitably instigates". I look forward to seeing the data that proves this claim because I do not believe it to be true. Comfortable members of the middle class are not going to be going out into the streets because the rich are getting more comfortable faster. They are especially not going to be doing it when the path to their own riches clearly remains open if they wish to exert themselves. Inequality, per se, does not lead to violence. Additional factors have to be present.

I'll leave a placeholder here regarding Piketty's discussion on oil prices and urban land as he explicitly says that he'll provide a nuanced discussion later. Suffice to say his introductory remarks do not instill confidence. That the Chinese have (wisely or foolishly) built many empty cities demonstrates that increasing the supply of urban land is not that difficult. As for oil, there is a ceiling price to oil, and it's dropping. Fischer Tropsch plants can convert other hydrocarbons to liquid fuels. So long as the extensive investment costs can be recovered, a persistent level of high oil prices is simply not going to happen and that is putting aside the more exotic substitute goods of electric and fuel cell powered vehicles.

We are barely into page 7 of a 35 page introduction and this is already getting long for a blog post so I will stop here and add a 'part I' to my title.

Update: Piketty partially addresses the issue of substitute goods in footnote 3. I say partially because he claims that finding these substitute goods "can take decades to accomplish" which is weasel wording at best. Modern economies research pieces of substitute goods, often decades before they are generally needed and leave the results in patent offices and scientific journal, dormant until we approach the conditions where they become practical whereupon the vision of riches leads to their resurrection more often than not. Large price swings actually create a positive influence in this process as can be seen in the fits and starts refinement process that has made Fischer Tropsch a practical substitute good for drilling oil. At this point, it is only the long lead times for recouping investment and the uncertainty of how quickly other substitute goods for transportation fuel will emerge that are holding back this technology.

it's become clear to me that footnotes are where Piketty is going to be burying the inconvenient facts he must cover to save his reputation while minimizing the number of people who actually walk away with an appreciation of those facts. This is not quite an approach that is devoted to the honest search for truth.

The weakness of Piketty's critics

I have not had the opportunity to read all of Piketty's critics so it is quite possible that I am unjust but the ones that have gotten the most play are weak critiques to my view and are doomed to failure because they grant Piketty too much credit. The FT critique, which I find interesting, is useless without challenging Piketty much earlier in the book, which they fail to do. The numbers work is great, as is to some extent Piketty's. The fatal problem with Piketty was alway going to be elsewhere.

I'm going to be doing a bit of fisking on Piketty's book. I think I can manage it if I write while I read. Absent that, somebody would have to pay me for the necessary time and then I would put out a much better product. Since the likelihood of manna from heaven is slight, I'm just going to have to risk critiquing as I go along and retracting/correcting if later chapters fill the gaps and errors I spot.

Library Follies

My local library highly estimates the reading ability of Lake County, IN library patrons. They made Thomas Piketty's Capital in the Twenty First Century a seven day loan book. Not counting footnotes, it's a 577 page book.

I'll give it a shot.

FileMaker Pro Advanced 11 Business Productivity Kit 3.0

Filemaker has not updated their Business Productivity Kit since Filemaker 11 but I have a license for that program and, if you ask nicely, they'll email you a download link to it. I'm currently updating the email campaign solution in FMP12 format and am looking forward to create something internal for a Citizen Intelligence campaign with it.

World's first climate refugee loses his case

Ioane Teitiota is the world's only climate refugee, or is he? In 2010 he overstayed his visa in NZ where he's been living since 2007. He applied for climate refugee status and has just lost his appeal to be granted climate refugee status from Kiribati. He is considering appealing to the NZ Supreme Court and, if that fails, to the UN Human Rights Committee.

If this reads like a scam looking to take advantage of an ill defined process to draw out deportation proceedings and get extra time in the 1st world, you're reading it just as I am. By now, we were supposed to have 50 million climate refugees coming from global warming. Instead we have Mr Teitiota. I'm perfectly happy that we don't have the problem. I just wonder where is the accountability and where is the increased skepticism of further claims by the United Nations?

A conservative approach to problems

The US is a common law nation. We replace bits and pieces of the common law with legislation but when you strip all that away, the common law is what is left. I'm a great believer in primum non nocere, "first do no harm". So when I look at politics, at government, the first thing to ask is whether the current state of affairs created by legislation is better or worse than the common law. If it is worse, then we would be improving things by stripping out the law and returning to the status quo ante of the common law, even if the common law has not been enforced in living memory.

This leads me to ask a lot of simple questions and to hope that there were a way to automate and flag when laws actually net out to a worse result than what would happen by readopting the common law and using modern tools to enforce it. This is the sort of thing that would ideally be measured in an automated fashion to get a first order approximation and then where the results are close, a more detailed examination would proceed.

For example, how bad do the results of a police force have to be before restoring the original 'hue and cry' system would be an improvement? Are there any actual jurisdictions where this situation is a reality? How good would a modern hue and cry system be? How would such a system affect community, impede or enhance commerce, or provide justice? We don't know because we're not asking the questions.

In the vast majority of cases, the answer is going to come back that statutory law is an improvement but merely by routinely asking the question, you set a floor on performance, a standard by which government is not allowed to go below without pretty drastic consequences. And that's not a bad thing to have.

I need a license for what?

The Town of Munster in Lake county, Indiana has a bit of a training issue on how they handle their solicitation licensing. I had heard that there was a local anti-solicitation ordinance and was driving by town hall anyway so I stopped by to figure out what was going on. The ordinance itself is pretty unobjectionable. In Munster if you're going to be asking for money, you need to get a background check and let the town know what you're doing and you're limited to going to the front door. You're not allowed to go wandering around private property.

I was directed to an office and asked if starting conversations and talking to people door to door would need notice and was informed that not only that it needed notice but that I needed to pay a fee as well. The explanation was vague and unsatisfying but they were at least savvy enough to suggest I look up the law on the town website as I had 1st amendment concerns. I stopped off at the police department and they called what I was doing a gray area and that in case of complaints (which they apparently get every day), I would get a warning to stop and then a citation for a few hundred dollars.

In the end, reading the ordinance made it clear that there was no need to apply for one. The town fathers hadn't flipped their lids and violated the Constitution. The higher ups knew what they were doing. They just aren't training their front line people to be clear about what's going on and their printed materials lack the text of the law so you have to do just a bit of digging. I wonder how many people just forked over the license fee?

America's biggest serial killer

The Gosnell movie that Kickstarter tried to censor is in its final fundraising push on Indiegogo. The promo video does an excellent job laying out the issues. 

America's biggest serial killer is not something to overlook. Thanks to crowdfunding, it looks like it won't be.

HT: National Review

Is China in need of a short, victorious war?

In 1904, Russia's Interior Minister, Vyacheslav Plehve wrote "To avert a revolution, we need a small victorious war." In the face of growing economic troubles from slowing growth to a credit bubble to a real estate bubble, is the People's Republic of China cribbing notes from Plehve?

No sane military planner in the neighborhood of east Asia has neglected to plan for the collapse of North Korea. It's been clear for decades that the communist monarchy has past the point where peaceful reform without a disruptive revolution was likely to succeed. But it's only now that China's plans for such an event have seen the light of day. The plans, leaked to Japanese media, lay out how and what China would do in case of North Korean regime collapse.

Speculation that this is a signal to the world that China is planning regime change is provocative but well within the realm of possibility. The question is why? The DPRK could suffer forever without the prospect of a humanitarian intervention by the PRC. What is China's interest to create such a crisis? And that question brings us back to Plehve. Russia's attempt to create that small victorious war failed, and revolution followed soon thereafter.

If China feels a need for a patriotic release valve, where can it get its war with the least amount of negative consequences? Who is least likely to have friends, raise the least amount of fuss when their natural resources are exploited for the benefit of China, and generally provide a distracting soap opera to give Beijing time? All signs point to Korea for a location. With the current US administration in retreat over Russia's moves in Ukraine, the likelihood of US action in Korea is as low as it has ever been, and perhaps lower.

Shared space map

There is a business opportunity just waiting for someone to pick up in NW Indiana. Here's a map of coworking locations in the area. There is a huge desert of them in North and North West Indiana. 

But just going to show that things are moving along pretty fast these days, it turns out that just down the road from me they're organizing a coworking space that shrinks the desert a bit.

local blogging

I'm adding local to my tag list because I'm finding that I'm running across more local interest observations. The first one is shortly to follow.

Some "What's Next" ideas for GOP healthcare reform

Democrats are scrambling to avoid a well deserved pasting in the 2014 fall elections and have come up with a strategy to ask "what's next" and put the GOP on the defensive. But that's only going to work if the GOP doesn't have a ready answer to the question. Here are a few candidates:

1. Big bang reform didn't work so now it's time to do small, incremental reforms where if it works, we've made things better and if it doesn't, we can quickly pull back before we wreck the whole system. 
2. The AMA invented the CPT in 1966 and charges royalties. The US Congress adopted CPT as a standard but didn't buy it to make it a copyright free government document. You still have to pay a license fee, for digital copies that's a per user fee and the fee is high. We need to liberate the CPT so that we harness the spirit of price comparison and getting the best deal that exists in most of our commercial lives. Finding out that your $3k MRI can be gotten for $500 down the street can be the difference between limping along in pain and getting the treatment you need. By using Congress' power to set weights and measures we can make that happen and it doesn't have to be that expensive. 
3. We are two years away from a legally mandated 20+% cut in disability insurance payments. In part this is because of the unprecedented wave of convenient disability cases flooding the system. The fiscal crisis was tough. I think we should have compassion for people who panicked and made a wrong move. We need to pass legislation giving people amnesty and a pathway back into the workforce so that the truly disabled do not have to pay the price for a bad economy. 

Simple Question

With the rise of military policing, I've noticed something missing in the discussion, a comparison of law enforcement models. Nobody seems to be answering the question, for every particular jurisdiction, which of the three models available is best for fighting crime in that jurisdiction. The three models, in order of their invention, are hue and cry, peace officers, and military style policing. If you think the model list is too short, feel free to add to it in comments.

It's such a simple question, but nobody's asking it, nobody's answering it, and nobody's making adjustments to policing models in a systematic, scientific way. This is not rocket science. You don't need above average intelligence to do this task but people talk about the future where we'll have nothing to do and no way to earn our daily bread.

We won!

I participated in the first ever NW Indiana Startup Weekend this past weekend. My team won. We now have a year of free office space and a lunch with a VC to pitch the idea to fund it.

Multiplying fishes

We got 4.5 times the expected Pacific salmon run this year due to one weird trick. We (and by we I mean an eco entrepreneur named Russ George and a BC indian tribe, the Haida) strategically distributed 120 tons of iron sulfate in the Pacific and created an ocean paradise for the salmon to feed on. 12 men and one boat worked in 2012 to set up that feeding ground to reduce the traditional levels of starvation among migratory fish going out into the resource poor Pacific Ocean. Open-sea mariculture has been hemmed in by unfortunate treaty language that fails to distinguish between pollution and setting out fish food. The 2012 experiment results are in.

The SE Alaska Pink catch in the fall of 2013 was a stunning 226.3 million fish. This when a high number of 50 million fish were expected. Those extra ocean pasture fed fish came back because their pasture was enjoying the richest plankton blooms ever, thanks to me a[nd] 11 shipmates and our work in the summer of 2012. IT JUST WORKS.

As a side effect of the process, a great deal of carbon dioxide was sequestered as the diatoms that did not get eaten by the fish died a natural death and sank to the bottom.

Environmentalists are beside themselves with fury. They're more interested in establishing a precautionary principle regulatory framework that would have led to many tons fewer fish to feed families across North America this year if not banning the process altogether. Their global campaign made the Haida blink and Mr. George has been fired.

We can't have fish multiplying beyond all reason and solving our global food problems while knocking down CO2 levels. That might reduce the need for environmental NGOs to study the problem.

Posted Social Security report alpha 6

I mentioned that I would be putting up a report. This is one of a long backlog of reports that have been waiting on me finding technical talent to program. I've decided to shift strategy and put up report alphas and just manually update. This usually has massive scaling problems as the number of pages goes up which is why I've been avoiding this approach.

In any case, here's the first Citizen Intelligence report.

Will you get all promised Social Security Benefits? Here's a hint, for most americans, the answer is no under current law. Males born in 1955 or later and females born in 1952 or later have a pretty hefty Social Security cut written into the present law.

This is a manual report at present. I need to work out a scalable way to take e-mails so that I can send out the yearly updates for this report when the new trustees report means updated data. Ultimately, this report will be a module to be plugged into the yet-to-be-created Citizen Intelligence oversight dashboard.

Insurance does not mean health care

Four decades ago, the US fell into a trap. We essentially adopted government pricing healthcare. It had become clear that the Treasury couldn't handle traditional fee for service medicine. With the government paying, too few made the effort to drive a good bargain. So the government took on the huge job of putting out a fee schedule. Private insurance followed the government's lead because, frankly, it was a big cost saver not to have to do the work themselves.

The problem is that the government got the prices wrong. Specifically the payment ratio of primary care codes to specialist care codes has been off. Primary care codes have been too low to attract enough primary care doctors. This has distorted US medical care. Both right and left know that these ratios are not correct. It's not a matter of partisan difference. We just don't know where to get the money to pay the primary care doctors enough to attract enough doctors to make the system work right.

The US is too poor to do everything else we've committed to and to do this right as well. As a consequence we just have lived with too few primary care doctors. Enter Obamacare.

A number of California uninsured have been assisted by their free clinics to get on the exchanges but after a few months are right back at the free clinics. Doctors who are supposed to be in their networks are either not taking new patients or deny that they even accept their insurance. But the free clinic isn't allowed to take them either. They now have insurance and free clinics are for the uninsured.

For now, human compassion has led them to be accepted. But the bureaucratic rules won't be flouted forever as budgets get stretched and the theory that health insurance equals access to health care is exposed as the fraud it always was. The free clinics will be threatened with a loss of money if they keep allowing insured patients to use their services.

Not every Obamacare story is a horror show. But we simply don't have the data to exclude the horrifying possibility that after a half century of pushing for something like Obamacare, liberals have, on net, made things worse on the health care front. That's a travesty.

Christ is Risen

For the Easter season, romanians say to each other in greeting "Christ is risen" and respond "Truly He is risen". It's an eastern tradition that runs across many churches. 

So to all of you, friends, and future friends, acquaintances, and enemies I hope to make peace with, to everybody reading I say to you Christ is risen and wish you all the good things that are promised with that statement. 

How not to improve government

"Proof The Feds Are Stalling On Oil And Gas" is a boring article that isn't going to change anything about how the US Federal government handles drilling permits on federal land. It won't change anything because the approach used skips right past the foundations and prerequisites and goes straight to the charges.

To have effective, durable change, we would need to map out the entire process for drilling on federal land as a part of a larger project identifying what government does from soup to nuts. We need to insist on commitments for performance for each of them and normalize an expectation that the least efficient and effective things that government does will be heavily scrutinized for alternate arrangements.

Slow rolling permits is not something the bureaucracy is going to be happy to do when they know that to delay legitimate requests puts them at risk for unemployment. But that's not the world we live in. The world we live in has articles decrying oil drilling delays in an oil drillers website while the public blissfully goes about its business, in general rationally ignorant of the whole issue.

There needs to be a better way.

Don't skip looking up the law

The Pennsylvania special ed student who recording a bullying episode and was threatened with a wiretapping felony charge has been making the rounds. What nobody seems to be mentioning is that what he did was perfectly legal. The school officials, the police, the judge, and even all the hyperventilating commenters all seem to have skipped looking up the law.

Title 18 Section 5704 Subsection 17

Any victim, witness or private detective licensed under the act of August 21, 1953 (P.L.1273, No.361), known as The Private Detective Act of 1953, to intercept the contents of any wire, electronic or oral communication, if that person is under a reasonable suspicion that the intercepted party is committing, about to commit or has committed a crime of violence and there is reason to believe that evidence of the crime of violence may be obtained from the interception.

I'm not a lawyer. I just know how to use Google fairly decently. Bullying is a crime of violence.

The law seems pretty clear. So why did the school officials, the cop, and the judge all fail to do their basic duty? Why aren't we calling them on not enforcing the law?

The only silver lining in this whole mess is that the judge is elected and could get booted for this.

Catholic Death Penalty

The argument in the Catholic Church regarding the death penalty has always proceeded on terms that are not that clear to many outsiders. The essence of the argument for invalidating the traditional permission for the death penalty is that something fundamental has changed about modern penal systems, that for the first time ever we can prevent crime and that it is safe to keep heinous criminals alive and thus the death penalty should be abolished.

The counter in Catholic circles has always been that it is simply not true, that nothing fundamental has changed. It has always bothered me that neither side seems eager to tear the covers off what modern prisons are really like and honestly, openly monitor matters. Here's a data point on the pro-death penalty side. Murder spree conducted by sex offenders wearing GPS ankle bracelets.

Can we trust the state to actually keep us safe? That's an open question.

The known unknowns of taxation

Donald Rumsfeld is at it again. Like many of us, Rumsfeld has no idea whether he's actually paid his taxes accurately.

Sell Nevada

Michael Munger comes up with a very nice snapshot of the problem of too much federal land, especially out west.

Essentially the entire state of Nevada is owned by the federal government. And it seems like they're managing federal lands poorly all over the US. Utah has gone so far as to issue an ultimatum that the federal government has until the end of 2014 to hand over control to the state or else. Several other states are considering similar legislation.

It's pretty unclear whether state transfer laws are constitutional or just crazy talk. But we're likely to hear a great deal more about later this year.

We don't deserve better than Sebellius

Kathleen Sibellius' term as HHS Secretary has been a disaster according to Newt Gingrich. But I have to disagree with Nick Gillespie that we deserved better than Sibellius' incompetence. We don't deserve better. This is what we've chosen, Democrats and Republicans, over the course of decades.

Inefficiency and incompetence can strike everywhere. In a large, bureaucratized environment, humans are particularly vulnerable to these problems. Exceeding our government oversight capacity by growing government to its present size increases our vulnerability even more because fundamentally the fear of bankruptcy and ruin makes private oversight about 2% better, project after project, year after year.

Every little two bit program that is solving a problem publicly that could have been solved privately sucks up oversight time that should have been focused on the roll out of the ACA. This sort of oversight failure of a big government project is guaranteed to happen again. That's the nature of humanity. But it doesn't have to happen so often. We've grown our government so large that I would say it's guaranteed to be happening right now. It just hasn't been discovered yet.

Virtuous Capitalists

Are entrepreneurs virtuous? Here's an excellent (if long) video that lays out the issues.

The short version is that yes, entrepreneurs are virtuous when they profit from creating value, new products, services, as well as converging prices through arbitrage. Entrepreneurs are not virtuous when they rent seek, creating a legal system that forces people to give them money (or more money) based on a political decision influenced by lobbyists.

The weakness is that you can make good money by rent seeking in a debased political system that permits it. Any firm focused on creating value can add to its accounting profits by adding lobbyists to rent seek on behalf of the firm. This means that they are vulnerable to hostile takeover. The vulnerability to vicious rent seekers is only repaired by healing the political system so the rent seeking is denied in the political process.

Klavan's Revolting Truth: Obamacare Edition

With Kathleen Sebelius resignation becoming public today, now's a good time for an Obamacare analysis. Andrew Klavan is happy to oblige. 

Tech Crassness

At the time Dr. Kermit Gosnell was caught, prosecuted, and convicted for removing live children from women and then killing them, the line went out that Gosnell's moral confusion was an outlier, that the pro-choice side stood as one with the pro-life side in condemning Gosnell and that there would be nobody trying to whitewash or minimize Gosnell's crimes.

Kickstarter has demonstrated that this was aspirational at best and that the pro-choice side has a problem. Slate's not exactly a right wing news source but they see the problem of a discriminatory review process just fine. For those who are unfamiliar with Kickstarter, a successful fundraising project might have dozens of short videos talking about details of the project. Kickstarter pretty clearly laid down the line that talking details about Kermit Gosnell could get the entire project pulled, or at least pulled from the internal search engine. In a time limited process like Kickstarter, getting pulled from the search engine can mean the difference between getting funded and getting nothing. The filmmakers were right to seek a different platform where they would not have to pull their punches in their crucial communications during the fundraising campaign out of fear that a reviewer with the same sort of moral confusion that led to Gosnell's life sentence would pull their project.

Update: The film was successfully funded via Indiegogo

Social Security bust

Is the US government going to keep its word to you, personally, regarding your old age pension and health care? Actuarial Study 120 plus the yearly Trustees Report from the Social Security/Medicare trustees are your keys to finding out.

Once you spend an hour or two figuring it out the first time, sorting out the yearly changes isn't too hard. But who spends those research hours? Virtually nobody, that's who. This is why I'm working on a report so you just sign up and every year get the answer based on the official numbers you've already paid to have compiled but aren't going to go out. If you'd like to sign up, say so in comments.

The basic information needed is pretty simple. What year were you born and what sex are you? Table 6 yields life expectancy figures based on sex and the summary in the Trustees Report for the latest year gives you the best guess on what year the funds run out of money and your payouts get reduced and by how much. Plug in your birth year and look it up in the right table and you're done.

According to the latest (2013) report Social Security goes belly up in 2033, 19 years from now. If you have a life expectancy of 19 or greater, you're going to have to save extra money to make up for the shortfall.

The government doesn't give up to date mortality tables for every year. They just give them for every 10 years and then projected mortality tables in the future. So you can look up the 2010 tables and the 2020 tables and blend them to get a slightly better figure. Excel is very good at this. It does occasionally make a difference.

Back from vacation

I went to Disney World with my family last week. We really needed the vacation. I'm back and rested and will be resuming regular blogging. 

I'm actually happy I missed the past week. Catching up led to several face palm moments at the crassness and stupidity. 

Even Google Thinks I Should Fly

I just did a trip plan to see what my alternatives are. It looks like Google's getting into flying directions

Maybe I should reconsider driving? Maybe not.

Besides, renting a minivan and driving the five of us down is significantly cheaper. As a bonus I get to add a few more states on my quest to visit all 50 states.

Social Security Report

Social Security provides two different pensions, disability (DI) and old age and survivor (OAS). Both pensions under current law are scheduled for draconian cuts. The DI pension system is due to be cut 20% in two years, 2016. The OAS pension system is due to be cut by 25% in nineteen years, 2033. The numbers come from the yearly Social Security Trustees Report.

I'm interested if people would sign up for a once-a-year report on this from Citizen Intelligence. It would require your personal date of birth to run the calculations of how these benefit cuts would affect you personally.

White Advantage

It appears that whites don't care when other whites have friendships and support networks with blacks. This allows whites to have broader support networks without undermining their in-group solidarity. Blacks apparently behave differently, imposing a penalty on their racial fellows for having friends outside their race. An indifference to racial solidarity and discipline is an economic advantage.

The abstract doesn't cover why this broad racial advantage for whites exists and what happens when you throw asians in the mix.

From a political standpoint, Democrats identifying the GOP as the "white people's party" may be tapping into this racial discipline effect in ways that have not been studied up to this point. It would be interesting to see if there's a liberal/conservative divide in the racial solidarity dropoff of having white liberal vs white conservative friends.

Is Pope Francis Racist?

Pope Francis is not racist. But you'd be forgiven for wondering if you'd pay attention to what happened to Congressman Paul Ryan. Ryan, a Catholic, obviously has been paying attention to Pope Francis' call that we all get out of our comfortable lives and personally encounter and help the poor. The left went into full throated accusations that Ryan was racist. But if Ryan is racist for saying that suburbanites should go into the inner city and get personally involved in improving things, what does that make Pope Francis for saying the same?

Ryan's accusers have to either make the case that there's some fundamental difference between Congressman Ryan's call that properly focuses on the US and Pope Francis' call that asks for all of us to do the same thing throughout the world. If they can't, then they either have to admit that Ryan wasn't racist or extend their attack to the Pope.