Category: Uncategorized

One subject that has come up in this election cycle is the purportedly Great Age of American Manufacturing and Middle Class Jobs that prevailed back in the 1970s. But what was it actually like back then? I recently did some work in Detroit on an inter partes review. One of the Detroit-based patent litigators with whom I was working was on the scene in the 1970s with summer jobs in two Ford plants. Other than pride in having built a lot of Fairmonts, what does he remember? “You couldn’t be fired unless you hit someone. You didn’t have to do anything. The worst that could happen to you was that you’d be reassigned to a different job.” When experts came in to evaluate how fast the line should move, everyone was told by union bosses to slow down. “They saw everything in slow-motion,” he said.

Meanwhile, what does it look like now that we’re getting our cars from factories in the South, in Mexico, and in Asia? Here’s a photo of peak morning rush hour traffic in Southfield, a suburban business hub:

Full post, including comments

Ignited’s Shaken’ not Stirred! (a.k.a. “Hurricane Hunter”) displays the ribbons won competing in National Association of Canine Scentwork trials. (Photos by her proud mother.)

In other dog-related news, walking Mindy the Crippler the other day we encountered a woman with a 12-year-old standard poodle. Responding to an observation that the poodle, playing with Mindy, seemed to be in good shape, the woman said “I hope that she stays in good health for many more years. She is the center of my life.” So that Mindy’s self-esteem isn’t wounded, we’re training the kids to say “Mindy, you are the center of our life.”

Full post, including comments

“Just Like Trump, I Avoided Paying Federal Taxes” (nytimes) is an inadvertently interesting article. The author describes an asset purchased in 1987 and sold recently (after a 1031 exchange). He talks about paying taxes on 30 years of what the IRS considers to be capital gains: “I sold the building this year and owe the capital gains tax. Fine. … If you’re paying taxes, you’re making money.”

The owner of a 17-unit apartment building, he distinguishes himself from Donald Trump, not because Trump built the world’s 7th tallest building, but because he is more virtuous: “I’m like Mr. Trump that way. But I’m paying.” (he apparently has access to Trump’s tax returns!)

What’s the interesting part of this? It shows how Americans in the media business can’t think with numbers, especially when it comes to inflation. The BLS CPI calculator shows that $1,000 in 1987 has the same purchasing power as $2,120 today. If this guy bought an asset for $1,000 in 1987 and sold it recently for $2,120 he would owe substantial capital gains tax on an asset that, in real (inflation-adjusted) terms, was worth the same as 30 years ago. Thus it is plainly not true that “If you’re paying taxes, you’re making money.”

Full post, including comments

“Helicopter struck by suspected drunk driver near Gallup” describes a good day for Airbus (formerly “Eurocopter”) and a bad one for everyone else. It looks as though an Astar medevac helicopter got tangled up in a secondary accident. Not sure if this can compensate for the slowdown in the offshore oil rig transportation market, but at least someone in the parts sales department is going to be busy.

Full post, including comments

“Porn Star Becomes Latest Trump Accuser — Day After Launching Online Sex Store” concerns Jessica Drake, a woman whose job was having sex for money, purportedly receiving an offer back in 2005 to have sex for money ($10,000). The story has become more newsworthy than you might expect (e.g., in the Boston Globe) because Donald Trump was allegedly one of the people who offered to pay her for having sex in 2005. At least 10 of my Facebook friends have linked to stories about Ms. Drake (though none have offered their opinion regarding the quality of her acting or where her films fit into the history of American cinema).

I don’t presume to know the truth of events that occurred in private 11 years ago, and I was not previously acquainted with this young star or her work, but let’s look at whether the $10,000 would have been fair compensation.

How much could Ms. Drake have gotten paid for having sex with Trump under the California Child Support guidelines? Forbes says that Trump is worth $3.7 billion (source). His tax returns are likely complex, but family court judges are encouraged to ignore reported income when a self-employed defendant is sued and are especially encouraged to ignore IRS-allowed deductions such as for depreciation. Assume that Ms. Drake persuades a family court to impute a 5 percent return on investment to Mr. Trump. His imputed income would then be $185 million per year or $15,416,667 per month. If we assume that Ms. Drake became pregnant with just one fetus, rather than twins, she would be entitled to $847,712 per month in tax-free child support ($183,105,792 over 18 years). That’s assuming that she took care of the child 100 percent of the time.

What if Ms. Drake felt that a child in her life would be an impediment to her career in the adult film industry? In jurisdictions such as California where child support is unlimited it is reasonably common for women, represented by attorneys, to market abortions at a discount to the net present value of the child support that would be owed if the baby were carried to term (see “Child Support Litigation without a Marriage”). With $183 million on the table as a starting number, $50 million in immediate cash after three months of pregnancy and a Non-Invasive Prenatal Paternity test does not seem like an unreasonable estimate.

[Note that the purported offer was made in the Lake Tahoe region. The above analysis assumes that Ms. Drake would have been smart enough not to have sex in Nevada and thus open the door to venue litigation. Under Nevada family law, the child would have had a cash value of only about $13,000 per year times 18 years = $234,000.]

[And what if Ms. Drake had been blessed with twins following a one-night sexual encounter? The cashflow generated by two children would be $1,356,339 per month under the California guidelines. That’s $292,969,224 ($293 million) over 18 years.]

Related:

• Where New York Times readers don’t want to follow Europe: Legalized prostitution

Full post, including comments

While visiting the San Francisco Bay area I talked to a woman who had gotten there from Boston in a Tesla X. Most of the time she enjoyed a comfortable battery charge margin. However, on one of the trip days she arrived at a charging station in Nevada and it was out of service. She called Tesla and they directed her to the next one along her route. She arrived there with a 3 percent charge.

Once in the Bay Area she arrived at a supercharger station to find all spots occupied and three cars ahead of her in line. “It was like the 1970s with gas lines.”

Related:

• Smug, Rich Bastard for a Weekend (Tesla X review)
• “Electric Car Owners Struggle to Find a Charge” (Scientific American)

Full post, including comments

“AT&T Agrees to Buy Time Warner for Around $80 Billion” (nytimes) confuses me. If you have a company full of experts on how to run telecommunications networks, market mobile phones to consumers, etc., what is the business rationale for acquiring a movie studio and some cable TV channels? How will the two seemingly at-best-loosely-related enterprises produce more profit for investors if combined into one monster corporate entity? Time Warner has HBO and AT&T has cable wires to some homes, but is there an Econ 101 argument where somehow there is more overall profit in the same company owning both the channel and the wire? Where does it stop? Should AT&T also buy Samsung because the wire terminates in a Samsung TV? Buy the apartment complex because the Samsung TV is mounted on an apartment wall? Buy Apple because consumers use iPhones on their mobile network?

Full post, including comments

I met a combination of old friends and readers during a recent trip to Silicon Valley. Software engineers here in Boston never have trouble earning enough to put food on the table, but they seem to struggle with finding a meaningful job. In Silicon Valley, however, it seems that there are a lot of opportunities to work on flagship products for companies that are household names. A former student showed me what he had accomplished by taking my iPhone 6 Plus (now partially disabled due to iOS 10 freezes; e.g., I had to power it down and restart to get the camera to display something other than a blank black screen) and showing me the “People” album in which on-phone software (i.e., not in-cloud software) had sorted my images according to facial similarity. Another friend explained his role in facilitating the use of GPUs by machine learning software. A reader talked about the features of Adobe Photoshop that he had built.

Despite the higher value of what they are creating, the material lifestyle of Silicon Valley engineers is not better than what a Bostonian counterpart would enjoy. Two-career couples might live in a one-bedroom apartment in Redwood City, for example, and commute down to Menlo Park or Palo Alto. Higher salaries are consumed by the higher California tax rates (13.3 percent is the maximum state income tax rate; a Silicon Valley engineer might see a marginal rate of 11.3 percent) and the higher cost of living. Leisure time is constrained and/or consumed by epic traffic jams (weeknight extended family dinner in Oakland? Could be a 1.5-hour trip for someone starting in Palo Alto).

My conclusion: a software engineers who want to consume more can save themselves the move from Boston to Silicon Valley; software engineers who want to do something that others might notice should probably move out there.

Full post, including comments

Photo nerds: The New York Times has an interview with William Eggleston, who brought what look like color snapshots to the Museum of Modern Art and similar venues back in the 1970s (Wikipedia).

What did Americans do before they had smartphones?

Of yet another famous photo — depicting a longhaired girl lying on the grass, eyes closed, a camera in her left hand — he tells me she wasn’t sleeping, she was on Quaaludes.

sic transit gloria mundi

When I show him Kim Kardashian West’s Instagram, he says, “I don’t know who that is. I’ve never even heard that name. I mean, she’s famous like me?”

Alcohol does reduce productivity:

I ask if his drinking ever got in the way of his photography. “I’ve never been able to take a picture after a drink,” he says. “It just doesn’t work. Maybe — I don’t know what it is. It’s not like I’m too drunk to take a picture. I just — the whole idea of it just goes away after one or two drinks.”

(see Why can’t a country’s productivity be predicted by alcohol consumption?)

Related:

• a 47-minute BBC documentary on Eggleston

Full post, including comments

After a visit to Facebook I want to establish a new phrase for the English language: open-pit coding (see “open-pit mining“).

The current Silicon Valley best practice seems to be a big room filled with desks and chairs. There are not private offices. There are no cubicles. There are few dividers of any kind. At least for Facebook, this cannot be because it is cheap. They hired Frank Gehry to build a space that is essentially an aircraft hangar with cafeterias both ends. If they cared about cost they would have hired a hangar company to build it.

Here are some snapshots from the Facebook campus. Note the Burning Man play structure in the roof garden. Also note that it is impossible to walk more than about three minutes without passing either a smoothie bar, a kitchen stocked full of snacks, or a full-fledged restaurant. Our lunch began with a rooftop smoothie and continued indoors with dim sum. We then walked to the other end of the big new building for the salad bar. Ribs at the BBQ shack were next. Finally there was the ice cream parlor and bakery.  “We had lunch in five restaurants,” I explained later to friends. Donald Trump said in the first debate, regarding who might have had sufficient computer skills to crack into an email server, that “It also could be somebody sitting on their bed that weighs 400 pounds, OK?” I wonder if the Silicon Valley leaders are creating factories for these 400-lb. software and system experts.

As far as decor goes, Facebook has an in-house poster-printing facility whose output adorns most walls. Although I don’t recall seeing any black employees, “Black Lives Matter” posters are prominent and sometimes dominant. The only posterable wall that I found without a Black Lives Matter poster was one (pictured below) that celebrates same-sex marriage.

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

Readers: What do you think about the open-pit coding office design? Can this be the way to get the best work out of people? Is the reason the ease of collaboration? Or the fact that people whose screens are exposed to the rest of the team won’t get sucked into non-work-related Internet activities (e.g., signalling virtue by denouncing Donald Trump on Facebook).

Full post, including comments