What will rural American taxpayers get in return for spending on infrastructure?

In my view, the biggest financial implication of the Biden/Harris victory is the transfer of funds from rural Americans to urban Americans. Big Government spends nearly all of its money in cities so a bigger government accelerates the process of looting from rural Americans to enrich those who live in cities, e.g., with free public housing, improved transportation systems, fancier hospitals, etc.

“Over budget and behind schedule: Why the Bay Area can’t get big transportation projects right” (San Jose Mercury News, June 27, 2021) has some interesting data:

In 1998, Caltrans estimated that a new eastern span of the Bay Bridge would cost $1.4 billion and take four years to build. The actual cost was $6.4 billion; plagued by design controversies, brittle steel rods and more, the project lasted 11 years.

The Transbay Transit Center in downtown San Francisco cost nearly twice as much as its initial budget and opened two years behind schedule — then had to close for another nine months to repair cracked steel beams that were not built to code.

Construction has not yet begun on the project extending BART service through downtown San Jose, but its price tag has risen twice over the last three years, to $6.9 billion, while its projected opening date has slipped by three to four years.

Now, with lawmakers in Washington announcing a deal for a huge increase in federal infrastructure spending, and officials in the Bay Area eyeing the next big round of “mega-projects” — including a second transbay BART tube, the extension of Caltrain service into downtown San Francisco and a long list of other plans that by one estimate could total $100 billion — there is mounting pressure to get our act together.

The high cost of transportation projects is not unique to the Bay Area. It’s a nationwide problem, with the United States frequently spending far more per mile of new subway construction, for instance, than other countries around the world.

Take the six-mile, four-station South Bay BART extension, for instance. The design for its 4.7-mile tunnel beneath downtown San Jose is based on a construction method pioneered in Barcelona that was meant to lower costs and minimize disruptions at street level during construction.

The Spanish project cost less than $250 million per mile, according to SPUR. The BART extension is set to cost well over $1 billion per mile.

The rest of the article isn’t so interesting. After decades of failure, it is obvious that Americans can reorganize government so that we will do everything efficiently going forward. (If it is that easy, why not reorganize ourselves to be able to build integrated circuits with competitive quality and price compared to what the Taiwanese are able to do? Then we wouldn’t have a chip shortage shutting down our car factories.)

I find it fascinating that so many Americans are still so enthusiastic about infrastructure spending when building infrastructure is one of the things that we are worst at. Even when urban dwellers can stick rural Americans with the bill, one would think that they’d prefer instead to loot out the rural Americans in some other way that would deliver greater benefits to city residents.

Related:

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The one actual Black guy talks to the white diversity say-gooders

A friend is the One Black Guy at a Maskachusetts tech company. The white say-gooders in management describe their heartfelt yearning for more diversity at the company. Business is great now that so many non-online things have been rendered illegal by state governors. Thus, it is time to hire some entry-level programmers. Management described plans to recruit from elite schools such as Harvard and Yale. One Black Guy: “If we’re serious about making this company more diverse, why not hire someone from Bunker Hill [Community College] who might turn out to be great? It’s only an entry-level job and we can’t know whether someone from Harvard is actually going to do well.” This suggestion turned out not to be helpful…

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Has anyone tried a book scanning service for Kondoization or pre-move preparation?

We have a lot of books that aren’t quite important enough to pack and move from Maskachusetts to the Florida Free State, but that don’t seem ready for the dumpster. For example, some rarely used dessert cookbooks (they were great when I was a 16-year-old and could eat 6,000 calories per day! Note that Maida Heatter lived to 102, dying shortly before coronapanic.) Also, the textbooks that I was using at the same time as these dessert cookbooks. What if one day I want to look at an intro calculus text that doesn’t approach integration from a social justice point of view nor remind the reader that Taylor series were developed by a woman (if Brook Taylor identified as a “man”, why did he/she/ze/they call him/her/zir/them-self “Brook”?)?

Paging through these tomes with Adobe Scan on one’s phone would be tedious indeed. There are, however, some companies that specialize in inexpensive scanning of books. In a process that should delight Marie Kondo, the physical book is destroyed in the process (Kondo doesn’t have anything to say on the subject of digital clutter). The binding is cut so that the freed pages can be automatically fed into a scanner. 1dollarscan.com seems impossibly cheap. At 300 DPI, they say that they charge $1 for every 100 pages and the price triplesfor 600 DPI. OCR is an extra $1/100 pages. As is changing the PDF file name(!). So a 400-page cookbook at 300 DPI could be only $4 (OCR it yourself if you’re an Acrobat Pro subscriber; open it up and then change the filename).

USPS has pretty low rates for shipping books (“Media Mail”). I’m wondering if it would make sense to send 50 percent of our library to the dumpster, 30 percent to a destructive book scanning service, and 20 percent to the Florida Free State where the books can serve as a background to people staring at phones.

Readers: Has anyone tried 1DollarScan or a competitor?

Related:

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Let’s meet at Oshkosh!

I hope that everyone is going to EAA AirVenture (“Oshkosh”), a safe space for pilots of light aircraft where nobody will say “That is a stupid hobby.”

I’m giving two talks:

  • introduction to helicopter aerodynamics and operations (targeted at those with some airplane flying experience), at 8:30 am on Wednesday, July 28, at 8:30 am, Forum Stage 6
  • Instrument Flying Ground School, Lesson 1 (using the materials previously offered here) where lessons 2 and 3 will follow as free Zoom classes. Wednesday, July 28, at 10:00 am, Forum Stage 6.

I’ll also be at the Cirrus Owners and Pilots Association dinner, Monday, July 26 at 5 pm at the Hilton Garden Inn. You might still be able to register. Warning: in previous years this was a typically dull non-profit org event in which the featured speakers talked about the organization’s administration rather than the activity that the organization supposedly fosters. One of my pilot friends refused to return even though I offered to pay for his ticket.

If you’re new to the magic of AirVenture/Oshkosh, see a lunchtime talk from our MIT ground school class:

This year the event is free for children under 18 and Delta variant COVID is free for both the vaccinated and unvaccinated. Visitors from California can double-mask (see “L.A. County again requiring masks indoors starting Saturday amid coronavirus spike”).

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Osborne 1 computer potentially up for grabs

We’re trying to clear out the house for our escape to the Florida Free State. One item that must go is an Osborne 1, a portable computer from 1981. I wish that I could say that it had been mine ($1,795 in 1981, about $5,606 in today’s Bidie Bucks), but in fact I was not prescient enough to put all of my time and effort into PCs. I always wanted to use the computers with the best (most efficient) programming tools and at least a medium amount of computing power. That meant, in 1981, a refrigerator-sized Lisp Machine. I did not deny that the tiny PC acorn could one day become a mighty oak, but did not want to work directly with acorns.

I’ve got this on eBay right now. But if there are no bids I will send it, free of charge, to any reader who wants it. I will even pay for packing and shipping, as long as you aren’t an Act 20 tax refugee in Puerto Rico or similarly expensive to reach by UPS.

I can get it to say “put in a floppy disk” but not to boot once the floppy is inserted.

How did I get it if I wasn’t smart enough to realize the promise of the PC back when PCs were feeble? A much smarter friend was clearing out his unnecessarily big house and gave it to me.

Speaking of PCs, my latest purchase is a Seagate 16 TB Exos disk drive. What kind of a loser buys a mechanical hard drive in our Brave New World of SSD? A loser who wants every possible version of every file backed up for decades to come via Windows File History. (What if the drive fails? See What’s a good online backup service? (Crashplan can do only 10 GB per day)) Since we’ve been looking at exponential growth recently in the context of taxes (see Effect on children’s wealth when parents move to Florida), let’s consider the growth from the Osborne 1 to 16 TB. Each floppy disk held 90 KB of data. Today’s hard drive holds 180 million times more than the floppy drive of 40 years ago. That’s roughly 60 percent annual growth over 40 years to go from pathetic/feeble to awesome.

What’s more shocking? It was the same engineer responsible for the floppy inside the Osborne 1 and the Seagate 16 TB drive: Alana Shugart (a feminine pioneer in magnetic storage and a relentless smasher of gender barriers).

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Government gives Americans 3,600 new reasons to fight over custody starting today

Today is the first day when a “parent” can get a $3,600 per child fully refundable tax credit from the U.S. government. This is a fully refundable credit, i.e., it turns into $300 per month Given that roughly half of American children don’t live with two biological parents, that means that the cash implications of winning “primary parent” status are more significant than ever. If there are two children, for example, and the parents have equal incomes, a 60/40 parenting split might result in a 2:1 different in spending power between the winner parent and the loser parent (state-by-state differences in child support formulae are substantial).

For plaintiffs who were on the fence regarding making a domestic violence allegation, for example, in hopes of enhancing prospects for obtaining primary custody, now there is an additional $7,200/year at stake (comparable to working 1,000 extra hours per year at the current federal minimum wage). For comparison, $7,200 per year is more than a Swedish plaintiff could obtain by having sex with the richest billionaire in Sweden. It is also more than a plaintiff could obtain by having sex with the richest defendant in Germany.

(The current wave of inflation that is washing over the U.S. also makes family court litigation more critical. See “Profits from Marriage and Child Support Depend Heavily on Inflation Rates” within the Quirks chapter:

Nominal rather than real (inflation-adjusted) investment income is included in every state’s child support formula. Consider a defendant with $2 million in premarital savings and a 2-percent real return on those savings. With inflation at 1 percent, the nominal return will be 3 percent or $60,000 per year. If inflation goes back up to a Jimmy Carter-era 10 percent, the nominal return will be 12 percent and investment income for child support purposes will be $240,000 per year, four times as high despite the fact that the real return on investment is the same. The effect of inflation in Wisconsin, for example, with its 25 percent of gross income rule for two kids, is an increase in the child support plaintiff’s share of investment income from $15,000 per year up to $60,000, far exceeding the $40,000 in real return.

The value of property division can also be boosted by inflation. Consider a jurisdiction where a divorce plaintiff is entitled to a roughly 50 percent share of any appreciation in the value of premarital savings. If the real value doesn’t change, but inflation is 10 percent per year, the separate property will double in nominal value over a 7-year period. A plaintiff who sues for divorce after 7 years will thus obtain 25 percent of the value of the property by collecting 50 percent of the appreciation. In a no-inflation environment, the share would be 0 rather than 25 percent.

If we’re going to have inflation plus extra government-sent rewards to the parent who wins custody, might the second best career choice in the Biden era be divorce litigator? (first best, of course, is child support plaintiff after having sex with a high-income partner!))

Related:

  • “New $3,000 child tax credit could raise issues for divorced parents” (CNBC, a little out of sync with the fact that never-married-to-begin-with is a common status for plaintiffs and defendants in U.S. family courts)
  • A section asking whether it makes sense to run a court system to pick winner and loser parents: What does [Linda Nielsen, professor of Psychology at Wake Forest University] think of the winner/loser custody system that prevails in most U.S. states? “A lot of social scientists say that a court cannot possibly pull together enough custody evaluators and psychology experts to accurately predict what is going to be the best parenting plan for each child in a particular family ” responded Nielsen. “The premise that custody evaluators can always give an objective recommendation is flawed. It is not like a driving test or a math test. There may be no standard set of credentials for custody evaluators. There is not necessarily consistency from one evaluator to another and many of the measures used in these evaluations were not designed for that purpose.. A psychologist can’t walk into an intact family, do an assessment and determine which parent is better for which child at which age in that family – or who will be the better parent four years from now. So why bring that difficult task into family court?” Nielsen says that a deeper problem with courts picking the “better parent” at the time of divorce may be that the judge is answering the wrong question. “It doesn’t matter who is a better parent at the time of the divorce,” says Nielsen. “I ask students [in a Wake Forest University Department of Psychology course] ‘Was your mother or father the better parent when you were 6, 10, 16 years old? Now answer the same question for your brother or sister. The answer is different at each age and, with siblings, depending on the personality of the siblings and the parents. The importance or effectiveness of each parent will go up and down as the child ages, which is one reason that children who are in shared parenting arrangements do better than children who spend less than 35 percent of their time with one parent.”
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Jet traffic jam on the way to hear Bill Gates talk about climate change

“FAA Throttles Bizjet Traffic To Idaho Billionaires’ Conference” (AVweb):

There were so many business jets headed to the 38th annual Allen and Company conference in Sun Valley that the agency had to throttle traffic to Friedman Memorial Airport, which is 13 miles south of the famed resort town.

Like many small mountain airports, Friedman has a single runway (13/31 7550 x 100) and while that seems ample, it’s also at 5318 feet. Idaho is also in the middle of a historic heat wave so density altitude has been a lot higher than that during the heat of the day. Despite the constraints, dozens of aircraft, from Citations to Global 7500s were funneled into the facility and crammed onto the ramp. Keynote speaker was Bill Gates, who delivered a speech on climate change.

Some good life advice from my own March 2016 trip to Sun Valley:

And we made it out of Idaho at a near-jet speed:

The approach plate for KSUN:

Note the 1600′ minimum ceiling required, i.e., better than VFR minimums to do an instrument approach. There is a somewhat lower procedure available, but only to those whose aircraft have heroic climb rates.

Related:

  • “Bill Gates joins Blackstone in bid to buy British private jet services firm” (Guardian): … an approach to buy Signature, which handles more than 1.6m private jet flights a year. … According to a study by academics at Lund University, Gates is one of the world’s biggest “super-emitters” due to his regular private jet travel. He took 59 flights in one year travelling more than 200,000 miles, according to the report, which estimated that Gates’ private jet travel emitted about 1,600 tonnes of carbon dioxide. That compares with a global average of less than five tonnes per person.
  • U.S. local and federal governments respond to an urgent safety situation (it is a mystery to me how we haven’t lost a billionaire or two if they’re actually using the airport closest to Sun Valley)
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Effect on children’s wealth when parents move to Florida

Happy Bastille Day! Let’s look at the likelihood of kids being able to afford that trip to Paris…

Taxes weren’t a factor in our decision to relocate to Florida, but it is interesting to look at how a parental move to Florida can affect the wealth of children. I built a spreadsheet positing an already-sort-of-rich Massachusetts resident who moves to Florida 30 years prior to his/her/zir/their death (e.g., will live in Florida from 52 until 82, the median age at death of a COVID-19 victim here in Maskachusetts). The assumption is that this person will pay the top rates for any progressive taxation scheme. Since big numbers are tough to work with, I looked at the effect on the margin. The parent decides not to buy a $100,000 C8 Corvette (marked up from the $60,000 list price in our “no-inflation society” (TM)) and instead invests the money in the stock of a standard C corporation, to be saved for the benefit of the children. Keep in mind that this is a post-tax $100,000, which might have required earning $200,000 pre-tax (or, for those who prefer not to work, having sex with someone who earns a reasonably high income; see Real World Divorce for state-by-state child support profit calculations).

I started by assuming that the government isn’t lying to us and therefore use an inflation rate of 3 percent. If we assume real profits of 4 percent, that gives us a nominal return of 7 percent. The company pays 24.6 percent state and federal corporate income tax (Tax Foundation/OECD). We assume that these dividends are qualified and therefore a federal tax of 23.8 percent is due (20% plus Obamacare surtax). Maskachusetts income tax is 5 percent vs. 0 percent in FL. We assume that there is some way to invest these dividends and get a 5 percent annual return. When the 82-year-old is killed by Delta Epsilon Zeta variant COVID, Massachusetts estate tax takes 16 percent of the accumulated total while the Feds take 40 percent. Florida has no estate tax. Thanks partly to the miracle of compound interest and partly to the miracle of inflation, the $100,000 invested would have turned into $956,012 in a no-tax environment. In the Florida environment, however, it turns into $391,526 at death. In the Massachusetts environment, $275,287. Children end up 42 percent richer if the parent moves.

(You can check my calculations in this Google spreadsheet (downloads in Excel format; also available as a Web page).)

What’s the effective tax rate? In “I Can Afford Higher Taxes. But They’ll Make Me Work Less.” (NYT, 2010), Harvard professor Greg Mankiw calculated the total marginal tax rate on additional earnings for him was 90 percent (assuming that his goal was to help out his children). If we look the profits in nominal terms, subtracting the original $100,000 investment, we find that there was $291,526 profit in Florida compared to $856,012 in the no-tax case. Florida didn’t take anything, but the Feds and maybe some states via corporate income tax took 66 percent. In MA, the nominal profit was $175,287, resulting in a tax rate of 80 percent. What if we look at this in real terms, though. The $100,000 would have grown to $242,726 just from inflation alone. If we subtract this from the MA net of $275,287, the result is a total tax rate of 95 percent, since the real after-tax profit was only $32,561. The tax rate for the Florida residency case comes up to 79 percent of real after-tax profits (again, because of Federal taxation, not because Florida has an income or estate tax).

What if we assume the same real return on investment for corporations, but set inflation at 8 percent and therefore nominal earnings are 12 percent? The effective tax rate for a Floridian is remarkably stable, moving up to only 81 percent (from 79 percent). The effective tax rate for the person who lives and dies in Massachusetts, however, is 98.6 percent. (See revised spreadsheet (or as a Web page).)

What if the parent is a genius at picking stocks and he/she/ze/they selects only those with 8 percent real earnings (11 percent nominal)? The numbers are fairly stable, with the Florida corpse being worth 43 percent more. The Massachusetts real tax rate falls to 88.5 percent (from 95 percent).

Loosely related, a statute celebrating the “world’s first commercial airline flight,” which operated from St. Petersburg to Tampa beginning in 1914. The airline was started by Thomas W. Benoist, who died in an accident in 1917… stepping off a streetcar.

Wikipedia says that the signs should be amended to read “first fixed-wing scheduled airline” because the Germans were operating Zeppelins earlier. (The photo is from the St. Petersburg Pier, June 2021.)

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Fireworks anxiety supplants Coronapanic for one weekend here in Maskachusetts

We were out on the highway over the July 4th weekend for a quite-possibly-illegal visit to New Hampshire (“Live Free or Die” on the license plates, but the state was about average in terms of restrictions on residents justified in the name of COVID-19 (ranking)).

For 16 months, Maskachusetts has used its enormous highway signs to hector residents regarding the need to wear masks and/or the need to go through an elaborate online process to reserve a vaccine (it is apparently too challenging to run a vaccine clinic at a rest stop and change the sign from “go to a URL” to “go to a rest stop”). Over the July 4th weekend, however, the signs were changed to hector residents residents regarding the potential of imprisonment and/or fines if they set off fireworks (even sparklers are illegal in MA). A few days later, the signs were back to telling residents to visit a URL to begin the process of ascending into the ranks of the vaccinated.

From a ski resort in NH:

Sabbaday Falls after the big rain:

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Did lockdowns turn richer Americans into dragons hoarding gold?

Americans who were at least moderately rich, e.g., incomes above $100,000 per year, prospered financially through a year of lockdown. They got paid the same or more. They didn’t have to spend money or time commuting. Their stock market and real estate holdings zoomed (so to speak) up. Since they couldn’t buy restaurant meals or travel, their earnings piled up. (See “During Covid-19, Most Americans Got Richer—Especially the Rich” (WSJ): “U.S. households gained $13.5 trillion in wealth in 2020. … More than 70% of the increase in household wealth went to the top 20% of income earners. About a third went to the top 1%.”)

Where have we previously seen someone who stays in one place for a year or more while surrounded by valuable items? Beowulf! At the end of the poem (more than 1,000 years old), our hero confronts a dragon whose lived experience for 300 years has been #StayHomeSaveLives while his/her/zir/their golden treasure appreciates. Mx. Dragon is almost as stuffed with cash as a Seattle divorce plaintiff, but never spends any of it.

Related:

  • “Dragonomics: Smaug and Climate Change” (Richard Fahey, a grad student in English at University of Notre Dame): “I would suggest that Smaug may be productively read as a representation of climate change, in the sense that the dragon is a force of smoke and heat which destroys ecosystems and disrupts the environment in much deeper and more long-lasting ways. … At the center of our modern struggles with dragonomics, I would argue, the problem of avarice endures. It is greed, especially from the fossil fuel lobby and the major energy companies (many linked to nations themselves), which have stalled and prevented developments in renewable energies in order to reduce our carbon footprint. … Dragonomics is not simply about making money, it is about plundering it and more importantly hoarding it.”
  • source of image above

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