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"One should either write ruthlessly what one believes to be the truth, or else shut up."

Arthur Koestler 

Tuesday
Jan152013

Tax the Rich

I thought this video shows some aspects of the fallacy of taxing the rich. Of course everyone is in favor of the rich paying taxes, the real question is how much and what the marginal tax rate is. As I will point out tomorrow, money is fungible. If money is taken away from anyone, this money can not be spent privately. To a degree, taxes are a "zero sum game."

 

Monday
Jan142013

Be Happy: Reduce Your Expectations

There were two ways to be happy: improve your reality, or lower your expectations ― Jodi Picoult, Nineteen Minutes.

We are headed toward a period where we all need to lower our expectations. A long, slow, steady decline is the best we can expect. There are several reasons for this.

The main reason I think we are due for a drop in our standard of living is our dependence on oil. Oil has served the US well over the last century. It has provided the US with an unprecedented freedom in mobility. Most of the great human advances have settled around better transportation. Something as basic as the stirrup had a great effect on history. The sociological implications of the car on American mating rituals has been huge. 

But we have been using up oil faster than new oil is being discovered—even if the Russian theory is correct and oil is seeping up from the depths and oil is not dead dinosaurs. I have been reading books about what is called "peak oil." In particular I read Kunstler's book, The Long Emergency. While I accept the basic premise of peak oil, I was not impressed with peak oil advocates’ reasoning, especially Kunstler's. What they overlook is that other sources on energy can be used to make fuel. The process to make liquid coal has been known for a century and was used extensively by Nazi Germany and Apartheid South Africa. The US can do the same. 

However, there are big drawbacks. It will be a lot more expensive than it has been in the past. Tyler Cowen describes this process in his book, The Great Stagflation. It is only natural that the first things that are harvested are the easiest, the "low hanging fruit" as Cowen calls it. That fruit is long gone. In additional it will be less environmental clean than oil.

What does this mean for you and me? 

Two car families will become one-car families. One-car families will become public transportation users. Since the US is built around the car this will be difficult. In the future the first question in looking at a house will not be "How are the schools?" It will be, "Where are the bus lines?" 

The US must live within its means, and that means more busses and fewer cars. But this does not mean the dystopian future predicted in various bad novels, and a few good ones, and by "peak oil" advocates will occur. The US is headed for declining standards of living as the price of fuel goes up, as it must, but not  Mad Max Beyond the Thunderdome.

So if you are looking for a house to buy, look for a house that has a space for a garden and is a short walking distance to a bus line or shopping. Right now few buyers are looking for this combination. This will change. 

There was an old English proverb I read years ago: income £ 20, expenses £ 19 6p, happiness; income £ 20, expenses £ 20 6p, unhappiness. 

Lower your expectations.

Live within your means. 

Sunday
Jan132013

A Great Prank

I especially liked the lady that kept opening the drive thru window as if the situation would change if she did so. 

Saturday
Jan122013

Be Happy

There were two ways to be happy: improve your reality, or lower your expectations ― Jodi Picoult, Nineteen Minutes.

One of my Pet Peeves is the "Name it and claim it" religious crowd and their New Age compatriots.  The idea that God must do what you say has to be one of the most evil ideas in the pop religion field today. The New Age idea is that by the magic of the mind we can change reality. No we can't. 

This is not to say that I am against prayer or “positive thinking.” I think these are underused techniques. But the point of each is not magic: prayer changes the one who prays, and positive thinking changes the one who thinks positively. Changing one's self is the whole point. If you change, your situation changes

Let me give you a concrete example. 

Plant fruit trees and a garden. I cannot think of a better way to improve your situation.  I wish I could do this, but living at 6700 ft. on a pile of rocks precludes it. But this is my choice. 

A lot of work but worth it. Imagine the back line of your property lined with fruit trees. Yes, it will take years for them to mature, but aren't you a forward looking person? You should be. Even if you sell the property, it will bring more with fruit trees. You should leave your property better than when you acquired it.  Find out what grows in your area. Often the recommendation is to plant them in threes for pollination. 

Concentrate on high value foods like berries; also concentrate on high-producing but easy to grow foods like zucchini and tomatoes. 

Yes you will produce more than you need. But I understand that there are ways to store food. Be creative: one of my fondest memories of my uncle Jake was the zucchini bread he would bring when he came to visit. 

Visualizing food, or a garden, will not cause it to miraculously appear in your yard. I can almost guarantee that a prayer for food will not be answered if you were capable of planting food and did not do so. In addition you can be the answer to prayer for others whose situation is dire as you share the bounty that God has given you. As the Christian song says, "We are His hands and feet." 

Prayer and positive thinking can change your reality, but only as much as these things change you. 

On Monday I will talk about the second half of Picoult's observation, lower expectations. 

Friday
Jan112013

If He’s Still Hungry, the Country Is Doomed!

The more I read about the fiscal cliff deal made at the last minute, the worse it looks. The devil, or God, is in the details. For every $40 in tax increases there was $1 in spending cuts, basically a rounding error. There was a lot of corporate pork for well-connected campaign contributors like the movie industry. I wonder how much it cost the algae growers of America for their subsidy? Since these subsidies were used to make the tax increases look less, the actual numbers were like this: for every $80 in tax increases on real people there where $40 in subsidies to various Fat Cats and Lord High Mucky Mucks and $1 in spending cuts, er, reductions in hypothetical spending…there were no actual cuts. 

There were also some stealth tax increases that we are only now finding out about. I read one estimate that charitable contributions will go down by $800 million next year as wealthy people realize that they can no longer write off charitable contributions, losing up to 80% of the deduction

I am still guardedly pessimistic that in two months there will actually be spending cuts associated with the needed increase in the debt ceiling. We will see if the Republicans are playing to their base by blowing smoke out of a body orifice. 

Here is what Mark Steyn said in his book, After America:

The prevailing political realities of the United States do not allow for any meaningful course correction. And, without meaningful course correction, America is doomed.

What Steyn means by this is not Mad Max Beyond the Thunderdome, but an end to those things that made America, America, and made people like Steyn immigrate. Here is Steyn’s waggish summary of the bill: 

A space alien on Planet Zongo whose cable package includes Meet the Press could watch ten minutes of these pseudo-cliffhangers and figure out how they always end, every time: Spending goes up, and the revenue gap widens. This latest painstakingly negotiated bipartisan deal to restore fiscal responsibility actually includes a third of a trillion dollars in new spending. A third of a trillion! $330,000,000,000! Fancy that! In most countries, a third of a trillion would be a lot of money. But in the U.S. it’s chump change so footling it’s barely mentioned in the news reports. Then there’s the usual sweetheart deals for those with Washington’s ear: $59 million for algae producers, a $20 million tax break if a Hollywood producer shoots part of a movie in a “depressed area” as opposed to a non-depressed area, like Canada. I’m pitching a script to Paramount called “The Algae That Ate Detroit.”

Sounds like one of the novelty songs in my collection, “The Cockroach that Ate Cincinnati” or “The Eggplant that Ate Chicago.”  Yes, these are real songs. The chorus of “Eggplant” even now echoes in my mind: “If he's still hungry, our whole country’s doomed.” 

I will conclude this post with a clip from the co-chairs of the Bowles-Simpson Commission on the latest deal.