Month: January 2016

“Negotiating the Whirlwind” (New Yorker, December 21&28, 2015) celebrates John Kerry, but it is interesting even for folks who are not John Kerry fans due to the examples of what goes on within the State Department.

What kind of achievements can be specifically celebrated?

With the King gone, the Saudi advisers, despite their ritual expressions of distaste for Iran, agreed to be in the same room with Zarif at future meetings in Vienna. This would not be first-level news around the world, necessarily, and the war went on, and the waves of refugees kept arriving in Jordan and Turkey and on the shores of Lesvos. But, for Kerry, these were the kinds of moves—a pawn seizing a center square—that just might lead to an endgame.

(Note that Saudi Arabia and Iran severed diplomatic relations a few weeks after this magazine was printed.)

What are the results when the government spends 8X as much operating an airliner than do the airlines? (See TIME article from 2013 on the $43,000/hour operating cost to the taxpayers for a 757)

As Secretary of State, however, Kerry spends much of his life onboard a worse-for-wear government jet, a Boeing 757. Both Kerry and Clinton have often had the humbling experience of the plane breaking down: a blown tire, a leak in an auxiliary fuel tank, “electronic problems.”

The article contains some bonus material. Are you unsure how to think about the reign of King Bush II? About the achievements of Hillary Clinton? The New Yorker will tell you what to think:

In 2004, when Kerry lost the Presidential race to George W. Bush, who is widely considered the worst President of the modern era, he refused to challenge the results, despite his suspicion that in certain states, particularly Ohio, where the Electoral College count hinged, proxies for Bush had rigged many voting machines. But he could not suffer the defeat in complete silence. He was outraged that Bush, who had won a stateside berth in the Texas Air National Guard during the Vietnam War, used campaign surrogates, the so-called Swift Boat Veterans for Truth, to slime his military record. [2nd paragraph, emphasis added]

As a diplomat, Hillary Clinton wins credit inside the Administration for visiting a hundred and twelve countries and helping to transform America’s image in the world after the catastrophic Bush years. She led efforts to open relations with Burma, brokered a 2012 ceasefire between Israel and Hamas in Gaza, and drafted economic sanctions on Iran.

The article agrees with one of the attorneys we interviewed for Real World Divorce, that “there are easier and quicker ways for an American to make money than by working”:

[Kerry] married twice into substantial fortunes.

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“The Siege of Miami” is a New Yorker article about flooding in Miami. Here’s one point that seems worth discussing..

“I believe in human innovation,” Levine responded. “If, thirty or forty years ago, I’d told you that you were going to be able to communicate with your friends around the world by looking at your watch or with an iPad or an iPhone, you would think I was out of my mind.” Thirty or forty years from now, he said, “We’re going to have innovative solutions to fight back against sea-level rise that we cannot even imagine today.”

What do readers think? I tend to be optimistic about technology for improving electric motors, batteries, windmills, and other items associated with cutting CO2 emissions. But flood control and pumps would seem to me to fall into the same category as building bridges, which Americans are getting worse over at over time (see “Longfellow Bridge repairs will now take about as long as the original construction” and “U.S. versus German infrastructure spending and results“).

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Haeir is supposedly going to buy GE’s appliance business for $5.4 billion. The Wall Street Journal says that “GE Appliances and Lighting, of which appliances is the lion’s share, were $8.4 billion in 2014.”

One thing that I can’t figure out is if the sale is of a division that makes and sells appliances only in the U.S. or if it is a division that makes and sells appliances worldwide. Let’s assume that this is a U.S.-only division. I still don’t see how it can be worth only $5.4 billion.

The Census Bureau says that there are approximately 134 million households in the U.S. Thus the appliances division is selling for $40 per U.S. household. How can it be the case that GE can’t extract at least $40 in profit over the next 5-10 years from each American household? We bought a house that came with a GE refrigerator. When something went wrong with the icemaker it was about $450 to fix. Isn’t there $40 of profit just in that one repair?

GE seems to have roughly 20 percent of the U.S. appliance market (source), which would make the $5.4 billion acquisition equivalent to something like $200 in profit per household with GE appliances, but that still seems low.

[Separately, just two months after the ice maker repair, the same five-year-old side-by-side GE fridge stopped cooling, thus ruining everything in our freezer and refrigerator. It is running continuously and yet only about 32F in the freezer compartment and 50-55F in the fridge part, with frost all over the back plate of the freezer. I have unplugged it for an overnight rest in hopes that the problem was a frozen evaporator coil and it will start working again by itself. But maybe GE will get to make another profitable service visit?]

Related:

• Now I get to pay some of GE’s bills
• The bad old days (of two refrigerator doors)

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Back in 1998, I published “Tuition-free MIT” and noted various benefits of structuring a college to live off endowment rather than tuition. Nearly 20 years later, it seems that at least some folks at Harvard are taking up the idea: “A Push to Make Harvard Free Also Questions the Role of Race in Admissions” (nytimes; as a sign of the zeitgeist it is mostly about race rather than $$ and academic performance).

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A Boston Globe story on an upgraded GPS system caught me by surprise. Apparently by the year 2022 we’ll have the “GPS OCX” system that, in theory, won’t let a 10-year-old from China send all of the cars in a major metropolitan area in the same direction at roughly the same time, thus causing massive traffic jams.

[The Globe reports that the upgrade is taking longer than it took to build the original GPS system, consistent with our local Longfellow Bridge project, and will cost 3-4X what was originally budgeted. But that would make it above-average for a military program, according to John Lehman, the Reagan-era Secretary of the Navy (WSJ article: “With so many layers and offices needed to concur on every decision, it now takes an average of 22½ years from the start of a weapons program to first deployment, instead of the four years it took to deploy the Minuteman ICBM and Polaris submarine missile system in the Cold War era. … it takes only seven years for Chinese and Russian procurement systems to produce the advanced ships and fighters of the so-called fifth generation … Today’s procurement consists of beauty contests to see who gets a 30- to 50-year competition-free monopoly.”).]

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Our elected officials have given us Massachusetts taxpayers the opportunity to pay some of General Electric’s bills. “GE confirms it’s heading to Boston” (Boston Globe, January 13, 2016):

General Electric Co., one of the most storied names in corporate America, said Wednesday it will relocate its global headquarters to Boston.

The decision marks the end of a high-stakes competition to woo GE from its longtime campus in suburban Connecticut, besting New York, Providence, and other cities, and further solidifies the region’s reputation as a magnet for innovation.

GE said it will have roughly 800 people in Boston: 200 from corporate staff and 600 digital industrial product managers, designers and developers split among various divisions.

GE has not yet picked a site for its new offices, but is focused on the Seaport area. [sort of a new downtown area, across the water from Logan Airport and featuring lightning-quick trips to the airport]

City officials said they are prepared to offer as much as $25 million in property tax relief. The state package could be valued as high as $120 million and could include a variety of benefits, such as grants, tax incentives, infrastructure improvements, and help with real estate acquisition costs.

So we get to buy GE a building because “at nearly $150 billion a year in revenue, GE ranks eighth on the Fortune 500” they apparently don’t have the cash to buy one themselves. It is good to know that we beat Providence (“the economy is so bad in Rhode Island right now that the Mafia had to lay off three judges”), but it seems abusive to tax $21.50/hour workers (our state’s median wage) to pay $181,250 per job to have some GE folks here.

Those 200 corporate staffers will be doing a lot of flying out of Hanscom Field (currently 368 operations per day) unless their special deal with the state government includes discounted landing fees at Logan Airport.

How about the GE spouses? If they are considering suing a GE executive, should they do it now in Connecticut or wait until the couple is subject to Massachusetts law? The states are similar in that both are among the most favorable in the U.S. for plaintiffs hoping to profit from a marriage and/or custody of children and both states set up a winner-take-all battle in which one spouse will typically get the house, children, and profitable child support. Both states are good from the point of view of a plaintiff who needs a judge to find a prenuptial agreement invalid to unlock savings accumulated prior to the marriage. Both states are good for plaintiffs who hope to get a judge to order a defendant to pay the legal fees on both sides.

If it has been a short-term marriage with children, a lawsuit is probably more lucrative if filed in Massachusetts. From the Connecticut chapter of Real World Divorce:

Connecticut has a similar system to Massachusetts in that the guidelines in theory apply only up to a certain income ($4000 per week or $208,000 per year) but judges routinely extrapolate the percentage to higher incomes. Child support is not nearly as profitable in Connecticut, however, because the amounts are smaller and the percentages are based on after-tax income rather than pre-tax income. For example, the $208,000 per year after-tax top-of-the-guideline defendant would pay 11.83 percent of “net income” or $473 per week ($24,596 per year). To earn $208,000 per year after taxes in Connecticut, a person would have to earn $365,000 per year pre-tax. In Massachusetts, that would yield $40,000 per year at the top of the guidelines plus 11 percent of the income over $250,000 per year, i.e., another $12,650 per year for a total of $52,650. Combining this with the 23-year period versus the 18-year period, the same child has 2.74X the cash value in Massachusetts compared to Connecticut. …

As in Massachusetts, a Connecticut child support recipient need not personally take care of a child in order to profit from child support. Roisman says that judges will separately order a defendant to pay for day care or other commercial child child care expenses.

Despite the penchant for extrapolation, Roisman thought that it would be challenging for a plaintiff to get more than $200,000 per year in child support, no matter how wealthy the defendant.

Connecticut is similar to Massachusetts in the philosophy that a stay-at-home parent is entitled to continue that lifestyle at a former spouse’s expense:

Roisman would expect the mother [following a 10-year marriage] to receive alimony for as long as 16 years (until the 2-year-old is in college). “There is no formula for alimony, but you can’t expect that mother to go to work with a two-year-old. The alimony amount would be larger at first and would give the mother an opportunity for advanced education. The court would look at the father’s expenses to maintain his apartment, the mother’s expenses, etc. There is no limit to the number of years, unlike in Massachusetts.”

As noted in that last sentence, staying in Connecticut may be better for the spouse who hopes to profit from alimony. Massachusetts in theory limits alimony payments following a defendant reaching full Social Security retirement age (not always enforced by judges) and, for a marriage of 10 years plus 1 day, alimony would be for no more than 7 years (statute). [Don’t let GE relocate you to Germany, where it might well be 0 years! Texas is also bad…]

How about those of us who don’t work for GE and aren’t married to anyone at GE? I think that we will end up paying more than the $145 million in subsidies. Once the 800 GE employees come into the heart of the city and drive up real estate prices (since let’s hope that they aren’t dumb enough to try to commute), we’ll be told that there is a housing affordability crises. Taxpayers will need to fund 800 new units of affordable (i.e., more or less free) housing in central Boston at roughly $1 million per unit. Let’s say that the real estate demand from the GE folks drives up rents and purchase prices for other residents (since most don’t qualify for free government-provided housing and it is difficult to get approval to build new projects in Boston). Assume an average of $1000 per year for 50,000 units? So over 20 years this will end up costing us $2 billion plus whatever time and frustration we have to deal with due to the increased traffic and public transit congestion.

How much of that do we get back in tax revenue? We can assume that these GE folks earn an average of $200,000 per year? And they’ll pay about 10 percent of their income in state and local taxes? (the state’s tax burden is 10.3%). That’s $16 million per year. So after 125 years the folks who already live here come out ahead? That doesn’t seem right but I’m not sure what else is missing. The extra taxes paid due to local vendors enjoying higher sales now that GE is here?

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Erika Christakis made Yale students feel unsafe by suggesting that they could wear the Halloween costume of their choice (previous posting). Now this person (I don’t want to be cisgender-normative and assume that Christakis identifies with a particular gender) is making the rest of us feel unsafe with “The New Preschool Is Crushing Kids” (Atlantic, Jan/Feb 2016). What are we getting for all of the money that we are investing in preschool?

A major evaluation of Tennessee’s publicly funded preschool system, published in September, found that although children who had attended preschool initially exhibited more “school readiness” skills when they entered kindergarten than did their non-preschool-attending peers, by the time they were in first grade their attitudes toward school were deteriorating. And by second grade they performed worse on tests measuring literacy, language, and math skills. The researchers told New York magazine that overreliance on direct instruction and repetitive, poorly structured pedagogy were likely culprits; children who’d been subjected to the same insipid tasks year after year after year were understandably losing their enthusiasm for learning.

The author blames the attempt to teach reading at an earlier age than industrial child care operations in other countries. Yet bright children can read at 18 months (John Stuart Mill could read Greek at age 3! He then went on to learn a bunch more stuff.) and reading unlocks a lot of doors for a child. So perhaps the problem is more the way that American preschools try to teach reading, i.e., at a slow enough pace that even a child in the 25th percentile of ability could follow along.

[Separately, the Yale controversy is the gift that keeps on giving. A Facebook friend was complaining that, due to the increasingly bureaucratic and litigious nature of the U.S., United Airlines was now insisting that children through age 15 traveling solo be signed up for the $150 “unaccompanied minor” handholding service. In his view this was an unreasonable grab for cash. It was immediately pointed out to him that “Perhaps they will need to extend this out to 22 or 23 for Yale undergrads…”]

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Folks:

I’m coming to the horrifying conclusion that we do actually need desktop applications and Microsoft….

I’m trying to print a group of email messages from Gmail. I want these printed to PDF and, ideally, including attachments. I would have thought that I could select the messages in question, e.g., everything with a particular label, and click “print all to PDF” but there is no such option. Yahoo Mail, despite the $365 million paid to the CEO, doesn’t have this feature either. Thunderbird is awesomely easy to connect to Gmail but what it does is offer to print one message at a time and the attachment won’t be opened up and included.

Outlook 2016 is a nightmare to hook up to Gmail. Microsoft doesn’t have an “I am a Gmail-using idiot so set everything up for me” option (you end up having to type custom port numbers and select security protocols by name). Outlook 2016 also doesn’t comply with Google’s latest security requirements so you need to go deep into the Gmail settings and allow lower security clients. When you’re all done, at least for those of us who have Acrobat Pro installed, you’re rewarded with options to push an entire folder or group of selected messages out to PDF. It isn’t perfect because it seems to make one PDF per message and then gather them all into a portfolio. There is no option to have just one big file. (This third party tool may make it easier to deal with the output.)

Does anyone have a better idea?

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This New York Times video re-enacts part of the deposition of a $940/hour (presumably American-educated) expert witness.

Related:

• Smartest Kids in the World Review

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I didn’t watch the broadcast but the official transcript of President Obama’s State of the Union speech is available on our government-sponsored news site. Some parts that I found interesting…

Let me start with the economy, and a basic fact: the United States of America, right now, has the strongest, most durable economy in the world. We’re in the middle of the longest streak of private-sector job creation in history. More than 14 million new jobs; the strongest two years of job growth since the ’90s; an unemployment rate cut in half.

I’m guessing that the TV show did not present the falling labor force participation rate in the U.S. or the flat rate in Singapore (note: Americans produce about 65 percent as much, per capita, as people in Singapore (CIA)).

In the coming years, we should build on that progress, by providing Pre-K for all,

… so that they will do worse in school starting in second grade (Atlantic).

Health care inflation has slowed. And our businesses have created jobs every single month since [Obamacare] became law.

With immigration swelling the population numbers, if businesses weren’t creating jobs every month there would be a catastrophic decline in the labor force participation rate! (i.e., the economy needs to create jobs every month to accommodate the new arrivals (chart)).

That spirit of discovery is in our DNA. We’re Thomas Edison and the Wright Brothers and George Washington Carver. We’re Grace Hopper and Katherine Johnson and Sally Ride. We’re every immigrant and entrepreneur from Boston to Austin to Silicon Valley racing to shape a better world.

Perhaps Obama is auditioning for a place on the next Turkish Airlines commercial. And Grace Hopper’s efforts on COBOL certainly helped a lot of older programmers keep their jobs circa 1997-1999. But, when we adjust for population size, can Americans claim to excel in the “spirit of discovery” compared to other groups? And does a spirit of discovery lead to long-term economic success? The Portuguese and Spaniards discovered a lot more of Planet Earth than have Americans and yet they have not been prospering recently.

We’ve launched next-generation manufacturing hubs, and online tools that give an entrepreneur everything he or she needs to start a business in a single day.

Could it be that the “online tool” he is talking about is a pharmacy selling Clomid? And the business yields a tax-free return starting either after about three months or after nine? If not, Obama’s statement is hard to square with the fact that the U.S. is not among the top 10 countries for “economic freedom.”

Last year, Vice President Biden said that with a new moonshot, America can cure cancer.

Nixon was right back in 1971!

Look, if anybody still wants to dispute the science around climate change, have at it.

Lesson for listeners: Millions of people will listen to you talking in an authoritative tone about science even if there is no evidence of you having taken a college-level science or math class.

The United States of America is the most powerful nation on Earth. Period. It’s not even close. We spend more on our military than the next eight nations combined.

Why do we have enemies then? If money buys effective military power, shouldn’t all of our enemies have been defeated by now?

The Middle East is going through a transformation that will play out for a generation, rooted in conflicts that date back millennia.

If their conflicts date back millennia, why would you admit millions of these folks to the U.S. as immigrants and expect them to stop fighting?

For more than a year, America has led a coalition of more than 60 countries to cut off ISIL’s financing, disrupt their plots, stop the flow of terrorist fighters, and stamp out their vicious ideology. With nearly 10,000 air strikes, we are taking out their leadership, their oil, their training camps, and their weapons.

These guys are tough enough to out-fight the military forces of 60 countries and to survive in spite of 10,000 air strikes.

If this Congress is serious about winning this war, and wants to send a message to our troops and the world, you should finally authorize the use of military force against ISIL.

Our military dropped bombs 10,000 times on people without authorization from Congress?

That’s how we forged a Trans-Pacific Partnership to open markets, protect workers and the environment, and advance American leadership in Asia. It cuts 18,000 taxes on products Made in America, and supports more good jobs.

My friend who runs a software-heavy company certainly would agree with this, as long as Obama meant “supports more good jobs in Vietnam.” The CEO recently fired all of the California-based programmers and replaced them with programmers in Hanoi.

Fifty years of isolating Cuba had failed to promote democracy, setting us back in Latin America.

The Castro brothers apparently weren’t afraid of our expensive military.

Right now, we are on track to end the scourge of HIV/AIDS…

… because there is no way that HIV can evolve to become resistant to whatever drugs we develop. It didn’t happen with bacteria and antibiotics so it won’t happen with a virus. (And did Obama show a picture of the American scientist who discovered HIV?)

That is why I will keep working to shut down the prison at Guantanamo: it’s expensive, it’s unnecessary, and it only serves as a recruitment brochure for our enemies.

If he has been president for 7 years, with a Congress controlled by his own party for at least part of that time, why hasn’t he succeeded in shutting down Guantanamo? And can it be reopened as a Club Med for Bostonians? The overnight low will be 15 degrees tomorrow!

That’s why we need to reject any politics that targets people because of race or religion.

There will be no more affirmative action or other race-based policies then?

I see it in the American who served his time, and dreams of starting over – and the business owner who gives him that second chance.

… because his criminal record makes him ineligible for a lot of government jobs (“Christmas Spirit: Statute of limitations on teenage misbehavior?”) that would pay better (CATO).

Readers: What interested you about the speech and/or any responses from other politicians?

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