Philip Greenspun’s Weblog

A friend visiting from California today was deploring the condition of her home state. “When I was going to California public schools in the 1960s, they were some of the best in the nation, at least as good as my son’s elite private school is today.” She thought the rest of the state government services had fallen apart too. What was her explanation for the problem? “The schools don’t get the funding they need,” she said, “and neither does the rest of the state”. An ardent supporter of Barack Obama, she blamed California Republicans for the mournful state of affairs. I asked her how it was possible that the state government was underfunded. California collects a higher percentage of its residents’ income in taxes than other U.S. states and at least as much as it was collecting in the 1960s, surely (source). If at least as much money is going in at the top, how can the problem be a simple one of “not enough money”?

Her explanation was simple: illegal immigrants. They burdened the school systems with their prodigious birthrate. They got paid under the table and therefore did not pay taxes.

I pointed out that even an immigrant paid in cash paid sales tax. Los Angeles has the highest sales tax rate in the U.S., at 9.75 percent (combining state and local). An immigrant who rented an apartment paid property tax through his or her landlord. An immigrant who drove a car paid state and federal gas taxes as well as registration fees. An immigrant who uses someone else’s Social Security number is paying payroll taxes and having income tax withheld.

A Sacramento Bee article supports her argument to some extent, noting that one third of California’s schoolchildren are themselves illegal immigrants. The parents of these kids no doubt have, on average, some lower wage jobs. But the entire U.S. economy in the supposedly glorious public school days of the 1960s consisted of what are, by current standards, lower wage jobs. How come we could afford to educate a laborer’s children in 1965 but we can’t afford to do it in 2009? The immigration status of the parent or child should not affect the cost to teach the child to read, write, and do math.

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A friend who lives on Martha’s Vineyard chastised me for questioning Ted Kennedy’s beatification. “Everyone on Martha’s Vineyard knows the real story about Chappaquiddick,” this lifelong Democrat said. “He was with a married woman in the front seat and had no idea that Mary Jo had crawled into the back seat and fell asleep. His evasiveness after the accident was to protect the reputation of the married woman. Ted Kennedy never had any idea that anyone was in the back seat.” How did he ever find out? “When he phoned his family and friends later that night, they must have told him that Mary Jo had been in the back.” The death of Mary Jo, the failure of Ted Kennedy to summon help, and the lack of any explanation to Mary Jo’s family, thus stems not from a lack of gentlemanly conduct, but from an excess.

[This Google Map shows the section of very rough dirt road that Ted Kennedy traveled to get to the Dike Bridge. Even today, in an era of near-infinite property taxes, the road is painfully bumpy and washboardy. A person would have to be virtually comatose not to wake up while in the back seat of a car on this road, yet the Wikipedia page on Mary Jo notes that she “rarely drank much.”]

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Here’s an interesting article on a self-paced online college education, offered at a flat $99 per month (i.e., an extremely energetic person could earn a bachelor’s degree in one month for $99).

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Just finished A Crack in the Edge of the World: America and the Great California Earthquake of 1906. The book does not draw comparisons with the 2005 flooding of New Orleans by Hurricane Katrina, but is made much more timely because of that event.

Here are a few interesting facts from the book:

• Los Angeles was a small town at the time of the earthquake, but afterwards investors were reluctant to put all of their eggs in the shaking basket of San Francisco. It was the 1906 quake that made LA the capital of the American West.
• Insurance companies were at least as badly behaved back then as they are now, coming up with all kinds of excuses for not paying. Most of the damage in San Francisco was caused by fire, which was insured. The insurers argued that the damage was caused by the shaking of the earth, which was not covered, and would try to pay between 0% and 90% of the value of the loss. German and Austrian insurance companies simply stopped answering the phone and their mail and didn’t bother to pay.
• The U.S. government very quickly mobilized all of its available resources, especially Army troops, tents, and rations, to fight the fires and shelter the homeless. There was virtually nothing more that the government could have done. The military began effective assistance within hours of the quake.
• The citizens of San Francisco, who were bright, creative, and energetic, were able to live in tent cities while rebuilding relatively quickly.
• A grand urban plan that would have made San Francisco into one of the most beautiful cities on the planet was chucked in favor of the most expedient rebuilding possible. A handful of roads were widened but no grand avenues were constructed.
• If you missed the 1906 event you may yet have your chance to experience a similar quake in a similar place. The San Andreas Fault has built up roughly as much unreleased stress as was released in the 1906 quake. It could happen tomorrow…

The book is kind of rambling and the author’s Krakatoa: The Day the World Exploded: August 27, 1883 is more interesting. Americans and Californians, however, will find plenty of food for thought in this book. Comparing the 1906 earthquake and Katrina, one is forced to draw the following conclusions:

• Americans have gotten less capable in the last 100 years
• The American government has gotten less capable in the last 100 years
• New Orleans will likely never regain its relative prominence among Gulf Coast cities.

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I met a woman the other day with a full-time job in the health care industry. She noted that her 14-year-old boy was just starting his first year of high school and that he had never been to school before. As she worked full-time, did her husband stay home to teach the kid? No. They couldn’t afford to give up his $10,000+/month income, plus great benefits and a pension. Had she been home-schooling the kid? “No! My husband doesn’t believe in home-schooling. Our son has been unschooled. He does whatever interests him and sometimes asks us questions. The only thing that we’ve done is work with him using some standard math textbooks starting at age 9.” How come the kid was going to high school now? “It was his decision. He really wants to try it out. We did not want him to go.”

What did her husband do that he was so adamantly opposed to sending his child to a traditional school? “He’s been a public school teacher for 15 years.”

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I’ve recently been asking folks “Where are the antiwar protesters now that we need them?” (i.e., now that our economy has collapsed and we can’t really afford to rebuild the U.S., much less Iraq and Afghanistan). One of my neighbors from Cambridge said that she for one was still against the war(s). She cited the cost and said that if we weren’t meddling overseas we would easily be able to fund health care for all U.S. residents. I asked her how that could be true given the enormous and growing percentage of the U.S. GDP consumed by health care. She said “military spending is much higher than health care spending.” My memory was that health care is consuming about 18 percent of GDP and the military between 4 and 5 percent. Even cutting military spending to zero would only just barely pay for universal insurance into the present system and a couple of years of inflation, or so I thought.

The picture turns out to be a little more complex. http://en.wikipedia.org/wiki/Military_budget_of_the_United_States says that budgeted military spending is in fact 4.7 percent of GDP. However, our adventures in Iraq and Afghanistan, as well as some veterans benefits, are paid for separately. We are actually spending closer to 7 percent of GDP on our military.

It might be interesting to compare these numbers to productive investment in the U.S. Total research and development spending, for example, is about 2.7 percent of GDP (source). In other words, the non-budgeted costs of running the military are comparable to the total amount that we’re investing in the R&D that is supposed to maintain our competitive edge over China and other low-wage countries (without such an edge, as far as I can tell from freshman econ, there is no reason that an American worker should earn more than a Chinese worker, a salary that would not result in a very comfortable lifestyle here).

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The government just spent billions of dollars on Cash for Clunkers and the results have come in. People traded in 10-year-old American-made cars for brand new Japanese and Korean cars. According to newspapers, the White House is saying that this will save jobs here in the U.S. I’m not sure how this is possible. A consumer driving a 10-year-old American car periodically buys replacement parts, mostly likely still made here in the U.S., and pays a mechanic, almost certainly still working here in the U.S., to install the parts. A consumer driving a new Japanese or Korean car has surely saved some jobs in Japan or Korea. He has also enriched the owner of a car dealership. But wouldn’t the net number of U.S. jobs fall when the old car needing periodic service is replaced with a new imported car that won’t need significant service for 5-10 years?

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Richard Egan, an MIT graduate and former Marine Corps helicopter pilot, died yesterday. With Roger Marino, he had founded EMC, the most successful technology company remaining in Massachusetts. Through creative design and problem-solving, he created tens of thousands of jobs worldwide and enabled the construction of information systems that save people a lot of time and effort. He was known in Massachusetts for giving friends and employees helicopter rides from the company parking lot.

Egan seems not to have been a saint. In 2006, the Bush Administration IRS forced him to pay a lot of taxes that the accounting firm KPMG had tried to shelter with an exotic Irish-based scheme. With or without that tax shelter, however, the guy paid tens if not hundreds of millions of dollars of taxes over his lifetime and the people that he employed were nicked for billions more.

We should mourn Egan if only because we will need another 5000 guys like him if we are ever to pay off the debt that our local, state, and federal governments are accumulating on our behalf.

More: AP story; local newspaper story; Boston Globe (note that the Globe reporters have not been as kind to Egan as they have been to Ted Kennedy; Egan being disciplined for being AWOL at age 18 gets a larger percentage of coverage than does Ted Kennedy’s killing of Mary Jo Kopechne when he was 37 years old, married with three children).

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Today’s New York Times has an article about New York City paying teachers not to teach, at a cost to taxpayers of $200 million per year. Note that this is separate from the “rubber room” where teachers who’ve been accused of wrongdoing or incompetence sit, often for years, costing taxpayers additional millions of dollars (story; Daily News story estimating cost at $65 million/year; full text of an August 31, 2009 New Yorker magazine article with detailed explanations of the city’s attempt to remove incompetent teachers).

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From Forbes: “Ted Kennedy’s Soviet Gambit”.

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