Philip Greenspun’s Weblog

The Sunday New York Times business section carries an article about tax shelters in the Netherlands for people such as writers, artists, musicians, and other entities who get most of their income from royalties; in the aggregate, these folks are able to escape tax on approximately $1 trillion in annual income.  With a little creative accounting and legal work, the effective tax rate can be reduced to 1.5 percent.  Bono and U2, the billionaire advocates for greater aid by rich world governments to people in poor countries, have not had to worry about this until recently.  Ireland has long exempted all income by musicians, writers, and artists.  Bono was thus out there advocating the spending of tax revenues to which he himself had not contributed.  Ireland is going to start taxing royalty income over $320,000 per person per year, which has led Bono and U2 to migrate their royalty-generating properties to the Netherlands.  The article talks about how Bono is taking criticism as a hypocrite for advocating massive tax-funded relief schemes when he himself has never paid any taxes.

Is Bono unusual for voting his pocketbook?

I thought about the people I know who are relatively well-off.  They are more or less evenly divided between Republican and Democrat, but the division is not random.  Those who get their money every year as a salary tend to be Democrats.  Those who start small businesses and get their money in big lumps as capital gains when they sell those businesses tend to support the Republicans.  If you are a W2 employee with a high income, it turns out that it doesn’t cost you much to rail against Bush’s idiocy and the unfairness of heterosexual-only marriage.  Proposed tax rates on ordinary income are very similar from the two parties.  On the other hand, the Reagan capital gains tax cuts were dramatic, making it much more lucrative to start, grow, and eventually sell a company.  A small business guy who says “I hate the Republicans” is saying “I am so enthusiastic about the teaching of Evolution in Kansas schools that I want to pay twice as much in taxes.”

Politicial scientists have found that the correlation between income and party affiliation isn’t all that strong, but they were looking at ordinary income where the tax policies of the parties aren’t very different.  I wonder if people who made most of their money via capital gains disproportionately support the Republicans….

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I spent the weekend in Los Angeles where it was 70 degrees with calm winds and sunshine.  Here are some disconnected impressions…

• stuck in traffic on I-10 out of Santa Monica; turned out that a Ford SUV had rolled over
• cousin left work at 2 pm in an attempt to find his way home without using the 405; a construction crane had fallen at 1 pm and blocked all five northbound lanes; traffic was snarled city-wide until after midnight.  All of the cars on the highway managed to swerve and avoid the crane, but a jet fuel tanker and an SUV were not so nimble and collided.
• leafed through the Sunday Los Angeles Times; the book review section was the thinnest part of the paper and the Op-Ed page carried an article in favoring of opening up the U.S. Presidency to immigrants, citing Arnold Schwarzenegger as the sort of presidential candidate we were being deprived of by the stipulations in our current Constitution
• having breakfast with a former student and asking him whether he thought it would be nice to live in Santa Monica:  “Santa Monica is where the police from all over Los Angeles dump their homeless people.  It is legal to sleep in parks in Santa Monica, which means that hundreds of homeless people live here.  I live in Manhattan Beach, surrounded by rich 32-year-old divorcees.  Their ex-husbands are directors who’ve moved on to the next trophy wives.”
• constant helicopter traffic up and down the beach
• alternating of self-storage facilities and sex shops for five miles along Santa Monica Boulevard
• a mid-air collision of two vintage biplanes on Saturday; the more heavily damaged plane landed in shallow water and the 82-year-old pilot waded to shore unharmed
• “I don’t have to work all that hard; my wife was one of the creators of a reasonably popular TV series.”
• flew in a DA40/G1000 around the most crowded skies in the world, but never had to adjust for another airplane until landing
• drove down the 405 to the Long Beach airport (JetBlue) at 5:35 am on a Monday morning; traffic was moving but heavy across all five lanes
• had to get up a few times during the 5-hour flight home and stretch; realized that long airplane flights are easiest for young flexible folks (i.e., don’t put off that round-the-world trip until you’re 65 unless you’re planning to go First Class with flat beds)

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An article by Niall Ferguson and Moritz Schularick in today’s Wall Street Journal says that the only way to understand the U.S. economy is by rolling it up with the Chinese economy, with which we do an enormous import/export business.  By itself, the U.S. economy has grossly inflated asset values, non-existent personal savings, and ridiculously low interest rates.  What happens when we add in China? First off, you get 25% of the world’s people, 33% of the world’s GDP, and 60% of the world’s GDP growth over the past five years.  More interestingly, the Chinese portion of the heavily mixed combined economy do the savings and supply the educated low-cost labor force.  This explains why the cost of capital (interest rate) is so low and why the returns to capital (corporate profits) are so high.  It also explains why wages aren’t going up as fast as productivity and profits.

Are there any clouds on the horizon?  The authors identify two:  (1) restrictions on imports from China by the U.S. Congress; (2) lack of success by the Chinese in keeping consumer price inflation low over there.

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According to Joseph Stiglitz, the Nobel-winning economist quoted in today’s Wall Street Journal, our attempt to make Iraq safe for democracy is going to cost $1 trillion, assuming troops are withdrawn by 2010.  Can we compare Iraq to Vietnam then?  Not economically.  The same article says that the Vietnam War cost only $660 billion in today’s dollars.

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If you want to sell someone a personal locator beacon, have them read Miracle in the Andes by Nando Parrado.  These are the same events recounted in the book Alive, but told from a personal perspective.  The author was on a flight from Uruguay to Chile in a chartered-from-the-military Fairchild turboprop with a service ceiling of 22,500′, i.e., barely high enough to clear the Andes and not high enough to fly over the weather.  They were forced to set down in Mendoza, Argentina on the first day of the trip.  On the second day, the pilots were pressured into continuing across the Andes in the afternoon by an Argentine law that prohibited foreign military planes from spending more than 24 hours in Argentina.  The Andes are steep and windy, which produces severe turbulence and downdrafts on the lee side of the ridge.  Sure enough, the plane was pushed down on the east side of a 17,000′ mountain ridge and came to rest at 12,000′ above sea level.  There the survivors spent the next ten weeks until Parrado and a comrade climbed up the mountain and then down and west for 50 miles until reaching some Chilean peasants.  Chilean Air Force helicopters ultimately were able to pull 14 additional survivors out of the crash site.

In an interview appended to the audio version of the book, Parrado says that the crash made him terribly afraid of flying.  A friend with a single-engine airplane took him up and the fear began to melt away.  Parrado ultimately earned a private pilot’s certificate and today flies all over the world on commercial airliners without fear.

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Jimmy Carter and his new book, Palestine: Peace Not Apartheid, came up at a party last night.  The gathering was fairly typical for my circle in Cambridge.  About a third of the folks there were Jewish.  The average age was 30s and the average education level somewhere between master’s and medical doctor.  Most of the folks were right-thinking kind-hearted sorts, who’d like to see a legally married gay couple in every 10th suburban house, a Prius in every garage, and organic produce on every table.  For the gentiles at the gathering, Jimmy Carter was a hero, slightly ahead of Clinton in the pantheon of ex-presidents, and his latest book only increased his stature.  Jimmy Carter never had a unkind word for anyone and, for many decades in and out of politics, managed to find the good in everyone with whom he interacted, domestically and internationally.  For the gentiles, Jimmy Carter was entitled to wear the badge of “Nicest Guy in the World” (formerly belonging to Jesus?).  If Jimmy Carter had surveyed the world’s regions and chosen to single out Israel for condemnation, that was only because Israel was in fact the world’s most evil state filled with the world’s most evil people.

For the Jews at the party, there wasn’t a strong feeling of kinship with Israeli Jews.  They were American-born, descendants of the last waves of Jewish emigration to the U.S., roughly 100 years ago.  Nonetheless, for the Jews at the party, Jimmy Carter was a garden-variety Jew hater and the book was prima facie evidence of his Jew-hatred.  Why would he bother to take the time if he didn’t hate Jews?

The gentiles took issue with this.  Jimmy Carter, a Jew-hater?  He has many (American) Jewish friends, surely.  Can’t someone hate Israel without hating Jews?

Upon further reflection, I had something of an epiphany.  Jew-haters very seldom have hated the Jews whom they knew.  Even in 1930s Germany, most Germans were as least neutrally disposed towards the Jews whom they had met in their towns.  The Jew who ran the clothing store was okay; it was the rich Jews in Berlin who were ruining Germany.  The world was national then, so the distant Jews whom one would tend to hate would be Jews elsewhere in one’s own nation.  Our economy and media are global now, however.  The idea of the “neighborhood Jew” should extend farther.  You would think that  Jew at your company or school was okay.  And Jewish entertainers on TV, such as Seinfeld, were okay.  And in fact, if you’re an enlightened non-prejudiced liberal person, maybe all American Jews are okay.  Where could a thoughtful well-educated Jew hater now find Jews whom it would be safe to hate?  Israel.

If you’re European and want to hate Jews, you don’t have a choice but to hate Israeli Jews, since your parents and grandparents killed all of the folks who would have been your Jewish neighbors and countrymen.  If you’re American, it isn’t politically correct to rave about the Jews in Manhattan and Washington who wield behind-the-scenes power in finance and politics.   Jimmy Carter is therefore pretty much the best that we could expect of a elite American aggravated by the existence of Jews.

It is beyond the scope of this posting to determine whether or not Israel truly is the most evil country in the world, who is at fault in the Arab-Jewish war that was declared in 1948 and shows no sign of ending any time soon, or how much the Palestinians have suffered from being on one side of the front lines of this war.  What is interesting to me is how my liberal Jewish friends are going to continue to hold onto their liberal political affiliations now that the greatest of American liberals turns out to have adopted most of Yasser Arafat’s ideas.

A 40-year-old single moderately observant Jewish friend of mine said that she was tired of Jewish men, but having trouble meeting non-Jewish guys who shared her fondness for Israel, which she has visited several times.  I suggested a Republican Party fundraiser…

[Disclaimer:  Everyone in the discussion had read newspaper articles about Jimmy Carter and his book, but nobody had actually read the book!]

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We’ve bought a couple of very nice computers from Silicon Mechanics recently.  They are cheap, compact, and hold lots of hard drives.  We bought them mostly for scratchpad NFS servers and also figured that we’d use them somehow for our photo database.  Trying to save some $$, we configured each with only 4 GB of RAM.  As it happens, we were able to replace a very complex collection of multiple computers, each with multiple processes, with just a single Silicon Mechanics machine with eight hard drives in rat-simple hardware RAID 5 and two dual-core Opteron CPUs.  The machine does pretty much nothing except run 8 lighttpd processes, each of which runs a single thread and serves multiple Web clients via async I/O.  Jin set all of this up based mostly on comments here in this Weblog on an earlier posting.

Now that we’ve disabled the operating system writing “most recently read” times for every file served (“atime”), the server is acceptably fast.  However, it is running disk-bound, with the RAID drives at 65 percent utilization, i.e., not much room for growth.

Our old SQUID server had 8 GB of RAM and was limited to serving thumbnail images.  I suspect that if did obvious simple thing and filled this new computer up with 16 or 32 GB of RAM, we would have superb performance.  But I’m wondering if we can’t save a few $$ and cheat a bit by controlling the Linux Virtual File System (VFS) cache.  Right now we are not doing any caching in lighttpd, nor does the underlying ext3 system cache.  This is by design.  We want to keep only one copy of any given photo in RAM cluster-wide.  I.e., we want the only copy to be in Linux VFS.  We think we could get by with less RAM if we prevented Linux from pushing thumbnails out of the cache when pulling a medium or large JPEG from the RAID.  In other words, we’d like to say “preserve 2 GB of the machine’s RAM for caching files of the form *-sm.jpg”, in effect having two caches for files, one for thumbnails and one for all other files.

Can this be done without massive amounts of C-code hacking and making it hard to upgrade the OS version?

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As of today, I have an Airplane Multi-Engine rating on my Flight Instructor certificate.  It seems like a good time to solicit comments on this multi-engine training page.  What do the pilots here think the lesson plans need in terms of improvements?

Now we just need to find a rich fool to buy a DA42 and lease it to East Coast Aero Club…

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From the January 15, 2007 New Yorker magazine, page 54, in an article on a poorly performing school in Denver, Colorado….  Norberto is a junior in high school.  His “elder relations” advise him against college:  “If you study too much, you forget to get married until you’re so old that nobody wants you.”

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Apple introduces its first phone today.  It is a bit tough to tell from looking at Apple’s Web site, but it appears that this is yet another smartphone that is not a flip-phone.  In other words, if it brushes up against something in your pocket it will make or answer unwanted calls.  Basically all Japanese phones are flip-phones and it baffles me as to how American consumers are denied the simple interface of “open to make or answer a call; flip closed to hang up”.

Apple gives us an MP3 player, which other brands of smart phones have had for several years.  What I want is a phone that won’t make calls from inside my pocket.

 [The Web site is http://www.apple.com/iphone/ ; be forewarned that this is unviewable in MSIE on XP and it crashed Firefox on XP at first.]

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