Does Greek exit from the Eurozone show the strength of the euro idea?

We’ve endured five years of hearing about Greece, whose population is about the same as the Chicago metropolitan area. Self-appointed experts have said that the exit of Greece would show the failure of the euro concept. Wikipedia, however, shows that there are 19 countries in the monetary union. One failure out of 19 over a 16-year period could also be characterized as “success,” no?

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Fluoridated water: “Often in error, never in doubt”?

“Fluoridation May Not Prevent Cavities, Scientific Review Shows” is a Newsweek report on the extent to which fluoridating water is a good idea. During my childhood (1970s!), people who were against fluoridated water were considered extremists and scoffed at by the educated elite (i.e., they occupied the same position in society as climate change deniers do today).

Could this be yet another example of people calling themselves scientists who are “often in error, but never in doubt”?

Related:

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How the general public perceives light aircraft reliability

I was down at SIMCOM for Pilatus PC-12 recurrent training and, for the benefit of my pilot friends, posted the following on Facebook:

The plane is not performing very well here in Orlando. We have suffered a hung start, a hot start, five engine failures shortly after takeoff, a trim runaway, one engine failure a few miles from the airport, etc.

This was essentially more serious problems than the total number experienced by the Wright Brothers (book review) during their decades as aviation pioneers. From a statistical perspective, this would have been bad luck even in a piston aircraft (this article shows that for the newest piston engines the in-flight shutdown rate (includes failures and precautionary shutdowns on twins) was just 0.6 per 100,000 flight hours and is never worse than 10 per 100,000 flight hours even for older designs (9 per 100,000 is what the airlines got from their DC-3s)). The PT6 turboprop gets shut down about once every 400,000 hours, which means one would expect the above number of failures after 2.4 million hours of flying (2400 years of being an airline pilot).

Here are the comments, some from people with high levels of education and success (MIT professors, dotcom-to-IPO founders, etc.):

  • That sounds awful!
  • maybe stay on the ground for a while
  • Sorry to hear!
  • too many people are depending on you — would feel better if you were to spend the day at Dolphin Cove at Seaworld or Animal Kingdom at Disney (not a theme park fan, but highly recommend those 2 destinations)
  • Yikes! Be careful Philip, don’t push your luck.
  • That’s more than enough evidence you should have a mechanic go over it before flying it again, isn’t it?
  • Please be careful!
  • Fly safe. To paraphrase Satchel Paige: “Never run for a plane; there will always be another one.”
  • Yuck
  • Sounds like a mechanical problem.
  • Be careful

It is no wonder that people are reluctant to go for a ride in a Cessna, Cirrus, or Robinson if this is what they think is a normal day in an aircraft that is not being operated Part 121 (airline).

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Paid Maternity Leave: Employers or Taxpayers should Pay?

Hillary Clinton went on record on Mother’s Day advocating for paid maternity leave (video). Future President Clinton doesn’t explain who should write the checks to people who aren’t working, but the implication is that it should be employers. Let’s assume that if a professional politician is saying something it is a message that Americans are enthusiastic about hearing.

But if this is so important to the country, why shouldn’t taxpayers pay? If we make employers pay, won’t that discourage them from hiring women who either are or could become pregnant? Would you want to hire a woman with an 8-month belly knowing that, over the next five months you’ll pay for five months of work and get one month of productivity?

People who advocate for paid maternity leave justify the idea on the grounds that the U.S. needs more taxpayers to keep the various Ponzi schemes run by local, state, and federal governments going. Who will pay the Social Security and Medicare taxes if not the yet-to-be-born? Who will fill the canyons that we have cut through the pension funds of New Jersey, Illinois, and various cities if not the yet-to-be-born?

If that is truly the justification for subsidizing the fertile, why is it Walmart’s job yet again to do the subsidizing? If all of us benefit as citizens from having 500 million people in the U.S. rather than 320 million, shouldn’t we all pay?

Nobody seems to mention the potential citizen-to-citizen equity issue. Childless citizens are already paying for income tax credits, child care tax credits, and the world’s most expensive K-12 education system for which they have no personal use (plus free community college for other citizens’ children and subsidized state universities). Once the new requirements for employers are in place these childless citizens will have to work a little harder all year so that those who are blessed with children can have paid time off.

Let’s consider two single co-workers in Massachusetts, Jen and Sue. Both earn $100,000 per year, $68,000 after taxes. Jen is infertile. Sue goes to a bar and has sex with a dermatologist earning $500,000 per year. Sue is now entitled to 23 years of child support, which should work out to roughly $75,000 per year tax-free (see the Massachusetts chapter of Real World Divorce). As soon as the baby emerges, Sue can file as head of household and her take-home pay goes to $69,000 per year. She’ll also be entitled to a $3,000 per year tax credit for child care if she decides to continue working. Sue’s spending power now goes up to $147,000 per year, 2.16X her childless co-worker’s. At least for four years, until the child is eligible for the free pre-K programs that the government wants to offer, she’ll have about $20,000 per year in expenses but that should drop down closer to $5,000 per year once the child is in K-12 (see William Comanor’s analysis in previous posting). Even if we were to assume the $20,000 per year cost continued for all 23 years, and further assume that the father couldn’t be saddled with these costs on top of the child support (as is typical; see the Kosow v. Shuman case in the chapter), the worker who had sex with the dermatologist can out-spend the childless worker by 1.87:1. When they have identical skills and W2 incomes, can it be fair for the lonely childless person who can spend $68,000 per year to subsidize the co-worker who can spend $127,000 per year and is blessed with the company of a child?

Let’s look at what would happen in Wisconsin at a lower income level. Melissa and Brenda both earn $50,000 per year. Melissa is infertile. Brenda has sex with a married plumber earning $140,000 per year. Brenda is entitled to $23,800 per year (17 percent of the plumber’s income; see Wisconsin chapter) in tax-free child support. Melissa will take home $36,738 per year. Brenda will take home $37,763 per year, which gives her a total spending power of $61,563, a 1.68:1 ratio compared to Melissa. Day care costs about $10,000 per year in Wisconsin so, after adjusting for the $3,000 per year tax credit, Brenda will have to spend about $7,000 per year on day care for 4-5 years if she wants to keep her job. Suppose that Brenda finds it tough to make ends meet on $61,563 per year? She has sex with the school principal of her first child’s kindergarten. He earns $130,000 per year (Wisconsin State Journal), which means that the resulting child will generate tax-free revenue of $22,100 per year. Now Brenda will have a total spending power of $38,613 from wages (one more dependent) plus $45,900 from child support for a total of $84,513, very comfortably above the median Wisconsin household pre-tax income of $49,000 per year. When they have identical skills and jobs, is it fair that Melissa have to work harder to help out Brenda, whose spending power is 2.3X her own?

Let’s suppose that we do think it is fair for childless workers to subsidize workers with children, even when those children are yielding a substantial profit. And let’s suppose that the goal is to get Americans to have more children so that they can grow up to pay for public employee pensions and federal entitlements. Are we subsidizing Americans with children intelligently?

The child dependent tax credit is the same in Year 0 when a child can be expensive and hard to care for as it is in Year 17 when the child may have a job and actually be contributing to the family income. A typical American will also enjoy a higher income from wages when children are 17 than when children are born, simply due to normal career advances. Behavioral economists, such Daniel Kahneman, have found that people respond very weakly to incentives that are 18 years in the future. Wouldn’t it make sense to front-load some of the cash benefits that the childless give, filtered through the government, to those with children? K-12 schooling is the most expensive thing that the government does for Americans with children and it is back-loaded, without any benefit for the first five years of childhood. Why not take all of the tax credits and deductions that we currently give to American parents over 18 years and cram them into the first five? If a higher fertility rate is the goal, perhaps also eliminate public subsidies for college (most of which is pocketed by colleges through higher tuition) and spend the money during this 0-5 period? Young people, just starting out in their careers, should be a lot more motivated to have children if they know that nearly all of their pre-K expenses will be covered by the government. If the kids get a little more costly later…. well, they’ll deal with that when the time comes.

Thoughts from readers?

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If Puerto Rico owes 70% of GDP, why is that a crisis?

“Puerto Rico Releases Report Calling For Concessions From Creditors” is a Wall Street Journal story that says “The U.S. commonwealth owes about $72 billion, nearly 70% of its economic output.” Puerto Ricans don’t have to pay federal tax so they aren’t responsible for federal debt. Thus the territory is less indebted, as a percentage of GDP, than the U.S. as a whole (chart for U.S.). If the U.S. debt isn’t a crisis, why is the Puerto Rican debt a crisis?

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Perceived Housing Crisis Due to Shortage of American Communities Where Anyone Would Want to Live?

“Affordable Housing, Racial Isolation” is a New York Times editorial about how decades of government intervention in what had been a housing market (costing taxpayers $trillions) has resulted in more racial segregation than if the government hadn’t waded in. The Times, naturally, suggests that the remedy for this failed government program is more government programs (i.e., certainly don’t give poor people cash and let them buy whatever they think has the most value to them).

A lot of cities, including Boston and New York, have what folks who profess concern about lower socioeconomic classes characterize as a “housing crisis.” The solution thus far is to give a handful of fortunate people multi-million dollar apartments for free or a tiny fraction of the market rent. But that leaves out a lot of people who would like to live in a $3 million Manhattan or $2 million Cambridge apartment. I’m wondering if the real problem is that only a few parts of the U.S. are places where anyone would want to live. In how many neighborhoods can you (a) walk to everything you need, (b) not be visually assaulted by hideously ugly buildings and concrete road infrastructure, and (c) enjoy a community/social experience without too much effort? For Latin Americans, as noted in my non-profit ideas page, the answer is “almost any colonial town or city.”

The typical neighborhood in the U.S. does not suffer from sky-high housing prices. The “housing crisis” might simply be that hardly anyone rational would want to live in the typical neighborhood in the U.S., which puts crazy pricing pressure on the few nice places.

Could we deploy the trillions of tax dollars that the central planners currently spend on housing for the worthy poor toward making more communities desirable instead? With a dramatic increase in supply the market price of an apartment in a neighborhood worth living in would fall all by itself.

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Goods direct from China: wish.com

A newspaper article about wish.com inspired me to try out this shop-direct-from-China service. As noted in my recent posting about Apple, computer nerds are predisposed to think that a distributed computer network will result in disintermediation, e.g., with consumers buying from manufacturers rather than retailers.

Here’s what I learned…

  • the process does work in that ordered items arrived in the mail 7-10 days later
  • the Chinese word for “polyester” is “silk” (three “silk neckties” ordered from the site arrived with fabric tags saying that they were made from polyester)
  • stuff direct from China isn’t all that much cheaper than stuff on sale at a department store or at Amazon

Comparing what I got from wish.com to what I get from amazon.com, I am reminded of Richard Pryor’s comment in Live on the Sunset Strip:

I went to Arizona State Penitentiary to do a film with Gene Wilder [Stir Crazy] … and it was really strange because it is 80 percent black people in there … [and] there are no black people in Arizona. … [I thought that imprisoned black men were being persecuted by Whitey; they were] nice people just got a bad break. … I was there six weeks and I talked to some of brothers there. Thank God we got penitentiaries. [video clip]

Bottom line on wish.com: Thank God we got retailers!

 

 

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Crony Capitalist Stoners in Massachusetts

“Mass. has Banked Over $3M in Dispensary Fees & Not a Single Marijuana Seed Has Been Planted” and “The First Medical Marijuana Dispensary in Mass. Will Open Today” suggest that the new industry of legalized marijuana in Massachusetts is going to be dominated by crony capitalists. It looks as though virtually anyone in the state would qualify for medical marijuana (list of qualifying conditions) since PTSD is on the list (“I can’t recover from the trauma of not being to purchase marijuana legally.”) as well as “chronic pain.” I’ll be interested to see (assuming that glaucoma does not prevent me from seeing) if the prices are much higher than in California and Colorado.

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Supreme Court same-sex marriage opinion

In looking through the Supreme Court’s opinion on same-sex marriage, I’m trying to figure out how their reasoning compares to my own posting in support of same-sex marriage.

The majority point out that

the annals of human history reveal the transcendent importance of marriage. [Angelika Graswald would agree, but perhaps for different reasons]

The ancient origins of marriage confirm its centrality, but it has not stood in isolation from developments in law and society. The history of marriage is one of both continuity and change. That institution—even as confined to opposite-sex relations—has evolved over time.

A third basis for protecting the right to marry is that it safeguards children and families and thus draws meaning from related rights of childrearing, procreation, and education.

Without the recognition, stability, and predictability marriage offers, their children suffer the stigma of knowing their families are somehow lesser.

Fourth and finally, this Court’s cases and the Nation’s traditions make clear that marriage is a keystone of our social order. Alexis de Tocqueville recognized this truth on his travels through the United States almost two centuries ago: … In [an 1888 case] the Court echoed de Tocqueville, explaining that marriage is “the foundation of the family and of society, without which there would be neither civilization nor progress.”

These aspects of marital status include: … child custody, support, and visitation rules [Bizarrely included because the federal Family Support Act of 1988 explicitly require that states make it just as profitable to collect child support after a one-night encounter as after a 10-year marriage; every jurisdiction nationwide also has the same rules for custody and visitation regardless of the existence of a marriage between the litigants; see the “History of Divorce” chapter.]

Roberts notes that

[Marriage] arose in the nature of things to meet a vital need: ensuring that children are conceived by a mother and father committed to raising them in the stable conditions of a lifelong relationship.

Therefore, for the good of children and society, sexual relations that can lead to procreation should occur only between a man and a woman committed to a lasting bond.

As the majority notes, some aspects of marriage have changed over time. Arranged marriages have largely given way to pairings based on romantic love. States have replaced coverture, the doctrine by which a married man and woman became a single legal entity, with laws that respect each participant’s separate status. Racial restrictions on marriage, which “arose as an incident to slavery” to promote “White Supremacy,” were repealed by many States and ultimately struck down by this Court. [Left out one big change: marriage can be dissolved any time by one party unilaterally]

Scalia says

Who ever thought that intimacy and spirituality [whatever that means] were freedoms? And if intimacy is, one would think Freedom of Intimacy is abridged rather than expanded by marriage. Ask the nearest hippie. Expression, sure enough, is a freedom, but anyone in a long-lasting marriage will attest that that happy state constricts, rather than expands, what one can prudently say.

Thomas restricts his opinion to narrow legal questions and doesn’t shed any light on what he might think of as “marriage.”

Alito points out that

If this traditional understanding of the purpose of marriage does not ring true to all ears today, that is probably because the tie between marriage and procreation has frayed. Today, for instance, more than 40% of all children in this country are born to unmarried women. This development undoubtedly is both a cause and a result of changes in our society’s understanding of marriage.

Today’s decision usurps the constitutional right of the people to decide whether to keep or alter the traditional understanding of marriage. The decision will also have other important consequences.

Except to a limited extent for Scalia and Alito, the Supreme Court in making this ruling inhabited a parallel universe in which no-fault divorce did not exist, in which states did not provide multi-million-dollar financial incentives for breaking up a child’s home (see Real World Divorce), and in which certainly nobody would get married in order then to pick up a green card through the Violence Against Women Act. Many of the quotes are from the 19th century. The Supreme Court exhibits a lordly indifference to family law and to their brethen who are divorce litigators. The word “divorce” does not occur in the opinion (except as part of a cited book title), though it is the only time that courts get significantly involved as a result of a marriage. The word “alimony” does not occur. The multi-billion dollar child support industry is mentioned just once, without a note that Census data show that 93 percent of the recipients are of one gender or that guidelines make it twice as profitable to have three children with three different co-parents compared to having three children with one sex partner. If there are any Americans who get married for financial reasons, or with an eye toward a near-term divorce lawsuit targeting their spouse’s premarital property and future income, we can’t learn of their existence from reading this opinion.

The Supreme Court has thus invited all American couples, regardless of their birth genders or current genders, to join a 19th century world of “for better or for worse and til death do us part” marriage (chart).

The divorce litigators whom we interviewed were similarly welcoming, but for different reasons (from History of Divorce):

“When I read arguments by opponents of gay marriage,” said one attorney, “I don’t recognize their description of straight marriage as some sort of sanctified institution. With no-fault statutes that kept the old alimony, property division, and child support rules, straight people made a mockery of civil marriage a long time ago. Marriage today is a way for a smart person with a low income to make money from a stupid person with a high income. What difference does it make whether the gold digger and mark are of the same sex?”

Readers: What will be the implications of this decision, aside from the obvious additional marriages and divorces in some of the fringe states? And what’s next for marriage? Can the majority’s reasoning be applied to further expand marriage, e.g., to polygamous unions?

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Book Review: Dead Wake… The Last Crossing of the Lusitania

Dead Wake: The Last Crossing of the Lusitania includes more detail than you would expect to want about a ship that sank 100 years ago (Wikipedia), but Erik Larson makes it work. The magnificent cruise ship sank just after the Germans decided to start sinking merchant ships anywhere near England, a precursor of the total war that would characterize World War II. Larson describes the debate within the German military regarding the morality and wisdom of attacking civilian ships where the loss of civilian lives was inevitable. Larson says that the decision in favor of unlimited war was primarily due to popular support for submarine warfare, which the German public saw as offering a path around the stalemate in the trenches.

The significance of the event in retrospect is unclear. The U.S. did not enter World War I until two years after the sinking. If the U.S. hadn’t entered the war, however, German submarines might in fact have succeeded in crippling England. Larson says that a ship departing England early in 1917 had a roughly 1 in 4 chance of being torpedoed.

The book has a little something for everyone. There is naval architecture, social life about a transatlantic liner, family life, life on board a submarine, and a lot about English code-breaking capabilities (just as in World War II, far ahead of corresponding American efforts).

Recommended if you like history.

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