Year: 2010

Credit Where Credit is Due

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The White House has come out against letting auto dealers cheat their customers.

To quote the first few ‘graphs of the official statement:

Later this afternoon, the Senate will vote on a motion to instruct conferees on the Brownback Amendment. That basically means members of the Senate will cast a nonbinding vote on whether or not they think the House and Senate conferees should consider carving out a loophole for auto dealers that make auto loans from the financial reform bill.

The President has been clear on this issue, repeatedly urging members of the Senate to fight efforts of the special interests and their lobbyists to weaken consumer protections. The fact is, auto dealer-lending is an $850 billion industry, which is larger than the entire credit card industry and they make nearly 80 percent of the automobile loans in our country.

Is there any question that these lenders should be subject to the same standards as any local or community bank that provides loans?

This is the right thing to do.

Hoisted from the comments

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In a discussion of raising marginal tax rates, reader DJ wrote:

Interestingly enough, raising taxes on the rich does not result in prosperity either, it only serves to drive the economic activity out of the country derived from the holdings of the rich. The 90% tax rate in the depression only served to drive milliona[i]res out of the country.

Note here, that on the basis of his comments, DJ knows what he’s talking about and has a good grasp of the facts.

The fact that he made this comment is an indication of the truth of the old Mark Twain quote, “A lie can travel half way around the world while the truth is putting on its shoes.“

DJ has assumed that self serving statements from people who don’t want their taxes raised actually have a basis in reality.

The myth that rich people did, and will again, “go Gault,” is just that, a myth.

First, and most importantly, the 90+% tax rate was not implemented until 1944-1945 (and then again in 1951-63, not times of slow GDP growth).

Second, there is no evidence that millionaire’s fled the country during the depression. The case is generally made that the recession of 1937 was caused by this, but only by people like Amity Shlaes (who is not to be trusted, see below) in her execrable book The Forgotten Man.

They suggest that because Roosevelt pursued tax evaders, it triggered the recession of 1937, because they went “Gault” and withdrew their money from the economy and put it in their mattresses.

Of course, the fact that neither Keynes, who blamed the tightening of fiscal policy by the government (which did include a tax hike) nor Friedman who blamed the tightening of monetary policy by the Fed, viewed this argument with anything but scorn, and this is the alpha to omega of honest economic thought.

Additionally, in order for people to flee the US income tax (after the first $91,400) you have to renounce your citizenship, which also precludes the ability to make campaign donations, which makes the regulatory arbitrage that generates this income, particularly in finance, which is where most of the tax rates increase would fall.

Essentially, if they leave the country and renounce their citizenship, the government guaranteed infinite ATM that they have goes away, because the Congress will no longer feel compelled to do their bidding.

I would also note that while the top 1% of earners account for 23.5% of income (2007), they account for less than 20% of spending (2008, they do quintiles, so it’s an approximation, and I don’t want to tease it out any further), so a dollar going to a rich pig™ is much less stimulative than a dollar going to a dollar going to someone in the bottom 4/5 of the population.

There is a legitimate question as to whether or not we should raise taxes on the rich today because we are still in a depressed economy, though I favor it.

That being said, many of our long-term structural problems come from the fact that income distribution is increasingly unequal, and the the use of high marginal tax rates is one of the best ways to change this.

I would also note that if the “geniuses” at Lehman, Bear Stearns, and Citi withhold their ideas for “financial innovation” as a result, we are all the better for that.

As to Amity Shlaes, who is typical of the people supporting the “going Gault” hypothesis, and arguably one of the most prominent proponents:

  • She has no background in economics (degree in English)
  • She is in idiot who lets her ideology dictate the facts (she was fired by the Financial Times for repeatedly submitting stories about the heroism and competence of Bush and His Evil Minions™ during Katrina).
  • In order for her to justify her conclusions about 1937, she states as fact things that are unequivocally false.

Anti-Vacc Fraud Doc Gets Medical License Pulled

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The General Medical Council, the physicians’ regulatory body in the UK, has revoked the medical licens(c)e of Andrew Wakefield and his colleague John Walker-Smith, though the 3rd participant in the study, was exhonerated when it was determined that he stopped doing tests when he determined that they were unethical.

The first two “doctors” subjected children to excruciating tests like lumbar puncture without any review from ethics committees,

For a devastating cartoon version of the facts, which details how Wakefield did this because he was bought and paid for, see here.

Unfortunately, it is highly unlikely that he will get what he really deserves, which is a very long time in gaol.

Earlier posts on the subject.

Speaking of Series Finalies

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My wife is watching the last episode of 24 as I type this.

I consider it to be poorly written torture and espionage porn, though it is well directed, its pacing reminds me of the first Taking of Pelham 123 movie with Walter Matthau and Robert Shaw, which is high praise from me.

Still, I don’t watch it, after about 5 minutes, I find myself numb.

Apologies to Declan McCullagh

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In an earlier post, regarding an article where a quote:

“Don’t be silly,” McLaughlin responds. “No one’s backed away from anything. . . . Isn’t . . . the author of the article, an anti [net neutrality] zealot?”

I put 2 and 2 together, and got 5. I said that it was clearly CNET reporter Declan McCullagh.

Well, it was not Mr. McCullagh.

It was someone else, and here is (my best guess) his article.

It sounded as if was something that came from Mr. McCullagh, who is a somewhat-saner-than-Rand-Paul libertarian, but I was wrong.

I had an exchange with the author, Roger Parloff, who told me who the author was, and that he felt that naming the author would require space for a response, which would have crowded out other information in an article with a limited length.

Perhaps the solution here is for online articles from dead tree publications, Fortune Magazine in this case, would be better served by providing links under such circumstances.

It’s bloggy, but I’ve always been a fan of hyperlinks, or their old school predecessor, the footnote.

In any case, I was wrong, and I apologize to my reader(s) and Mr. McCullagh.

Deep Thought

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I never watched, nor was interested in watching, the television show Lost.

I don’t know what happened, but I have read that some fanboi (and fangrrl) have been profoundly disappointed.

I feel some schadenfreude at all the fans who were disappointed by the series finale.

I guess that makes me a bad person.

Not Sure What this Means

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Or if it means anything, but a Republican candidate, Charles Djou,won the special election in Hawaii’s 1st district, largely because it was winner take all election, and two Democrats split the vote:

In Hawaii, Djou received 67,610 votes, or 39.4 percent. He was trailed by Hanabusa, who received 52,802 votes, or 30.8 percent. Case received 47,391 votes, or 27.6 percent.

I would add to this the fact that Djou courted the teabaggers, and it increasingly looks like those folks have run out their string, and people are realizing that there is an awful lot of racism at the bottom of that cesspool.

I find the election results in PA-12, John Murtha’s old district, a week ago, where a Democrat won despite being behind in the polls a bit more indicative, but I am not an unbiased observer.

Nevada Banns Chicken Suits from Polling Places

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The headline is actually rather more interesting than the story.

You see, like most states, Nevada bans electioneering within a certain distance, 100 feet in this case.

This applies to things like campaign T-shirts, buttons, etc.

Well, because of Republican front runner Sue Lowden’s statements about bartering chickens for medical services, state elections officials have banned chicken costumes and chicken memorabilia from the “no electioneering” zone:

Nevada banned people wearing chicken costumes from polling places around the state on Friday.

The state election commission does not want the costumes or other poultry-related memorabilia to prevent mocking of Republican Senate candidate Sue Lowden, who wants to unseat Senate Majority Leader Harry Reid (D).

I approve of their decision. The presence of chicken related items is electioneering in this context, so their decision is correct in both the strict legal sense, and in the more general context.

Still, it’s a weird hed, ain’t it?

Lies Conservatives Give Us

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Like the one that higher marginal tax rates stunts the economy and hurt the ordinary people.

Paul Krugman looks at the data, and notices that median family income stalled out once we started cutting the top tax rate:

You can see why: the facts are embarrassing. Here’s a rough-cut version. The blue line, left scale, shows median family income in 2008 dollars; the red line, right scale, shows the top marginal tax rate, a rough indicator of the overall stance of policy. Basically, US postwar economic history falls into two parts: an era of high taxes on the rich and extensive regulation, during which living standards experienced extraordinary growth; and an era of low taxes on the rich and deregulation, during which living standards for most Americans rose fitfully at best.

I would also add that the flattening of income growth also happened as more and more of these families became two earner families.

So the addition of the 2nd earner also masked a very real drop in wages of ordinary people.

We want the marginal rate back above 75, and we want the lower taxes on unearned income, capital gains and dividends, to be reversed.

Money does not trickle down, it bubbles up, and money that goes to paying billions to hedge fund managers and other criminals is money that is taken from ordinary families who play by the rules and work for a living.

Dutch Hammer First Nail in JSF Coffin

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The Dutch Parliament has voted to cancel its procurement of the F-35 Lightning II JSF (also here):

Proposal 1 (SP):
The government not be permitted to contract any new obligations with the JSF program

Proposal 2 (Labour)
Cancelling the contract for the First LRIP3 test aircraft and get the money back from the US for the long lead items. Not buying/ signing contract for the Second LRIP4 test aircraft. Cancelling the participation in the MOU-IOT&E (Initial Operational Test and Evaluation)

Proposal 3 (Green Left)
Because the Evaluations of the F16 replacement in 2002 and in 2008 were based on wrong estimates and unreliable data, there needs to be a new evaluation done with new RFPs (Requests for Proposal).

All three proposals were approved by the Netherlands Parliament.

The Dutch were perhaps the heavily involved nation after the British on this program, and the fact that these motions passed, at least passed a 1st reading is telling.

This happened because the MPs believe that they program is late and over budget to such a degree that any program of offsets or technology transfer does not matter because the cost and schedule issues puts them in a situation with a hollow force that they cannot afford to actually operate the aircraft, or, for that matter, their military.

They understand the budget requirements of the Euro zone, and they realize that they are not willing to cut their social safety net, among the most generous in Europe, to support mindless wasteful military spending.

More, “Looking Forward, Not Backward,” from the Obama DoJ

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There will be no criminal prosecutions of the people who created the clusterf%$# that took down AIG:

Federal prosecutors will not bring criminal charges against current and former American International Group Inc. executives for their role surrounding financial contracts that nearly brought down the insurer about two years ago, according to people familiar with the matter.

The decision brings to a close a criminal investigation that, while mostly under wraps, was widely followed. The September 2008 bailout of AIG was one of the biggest and most shocking of the financial crisis, as trading by a noninsurance unit brought down one of the most iconic financial companies world-wide.

The probe focused on Joseph Cassano, who headed a London-based unit of AIG called Financial Products, people familiar with the matter have said. Other executives at the unit, Andrew Forster and Tom Athan, also were targets of the investigation, these people said.

Seriously, at this point, we should be referring anything with the slightest possibility of conviction to a grand jury for indictment.

Anything else encourages more wrongdoing by the Wall Street boys, much in the same way that Obama’s policy of not prosecuting torturer, but pursuing the whistle-blowers encouraging more torture.

I Suppose that this Was Inevitable

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Could it be ………… Satan?

GameStation, a UK video games retailer, has entered the final frontier of click-through licensing, it has added ownership of users immortal souls as one of the conditions of the agreement:

Popular UK video games retail company GameStation has claimed that the retailer legally owns the ‘immortal souls’ of thousands of online shoppers thanks to a clause in the ‘Terms and Conditions’ documents, which, sadly most customers don’t read before purchasing an item online.

GameStation reported that, as a part of the April Fool’s day gag, the retailer changed the online ‘Terms and Conditions’ form and added the so-called ‘Immortal Soul’ clause, which read that “By placing an order via this web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant us a non transferable option to claim, for now and for ever more, your immortal soul.”

Unsurprisingly, very few people notices, and very few opted out of this requirement:

GameStation also offered customers a chance to reclaim their souls by clicking on the ‘opt out’ button at the end of the document.

However, out of the 8500 customers that visited the retail site on that day, only 12 percent of them managed to read the ‘Immortal Soul’ clause and swiftly saved their souls from damnation by opting out.

I think that it is clear that to the degree that Satan exists in the manner of Zoroastrian/Christian concept,* he is kicking himself for not having come up with this earlier.

*The idea of Satan being an entity in direct opposition to God is largely a Zoroastrian concept, which was adopted by Christianity. In Judaism, Satan is a title which means adversary, though perhaps a better translation is prosecutor, and is more the inclination to do evil than the guy with the horns and tail.

Remember the Laptop Spycam Cased in Lower Merion, PA

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I’ve been kind of remiss in all of this, but the final analysis is that someone working at the Lower Merion school district) there took thousands of pictures of minors without any justification. (Background here)

Basically, the school supplied laptops took thousands of pictures of children to whom the computers were assigned, including some that involved children in a state of partial undress, and the school district’s information systems coordinator took the 5th when questioned.

As always, there are emails:

Back at district offices, the Robbins motion says, employees with access to the images marveled at the tracking software. It was like a window into “a little LMSD soap opera,” a staffer is quoted as saying in an e-mail to Carol Cafiero, the administrator running the program.

“I know, I love it,” she is quoted as having replied.

What’s more, the behavior is so egregious that the school district’s insurer is balking at covering legal fees:

A New York insurer that issued a $1 million liability policy to the Lower Merion School District is balking at the school board’s request that it cover any legal costs and payments associated with the civil rights lawsuit challenging the district’s secret laptop tracking program.

In a suit filed in federal district court in Philadelphia, Graphic Arts Mutual Insurance Company contends that none of the seven claims made by Harriton High School sophomore Blake Robbins in his invasion of privacy lawsuit amount to “personal injury” as defined in the coverage that the district bought last year.

So, a vice principal got a copy of some of the pictures, of a kid eating Mike & Ikes candy, which she thought were drugs, the school district scrambled to buy insurance, and the behavior seems to have been egregious enough that the insurer is claiming, albeit indirectly, that the Lower Merion SD’s claim is fraud.

This is pretty much what an independent investigation of this cluster f%$# determined too.

What is abundantly clear is that the taking of these pictures constituted an invasion of privacy, that there was a reasonable expectation that this created what is technically child porn, and that a significant number of school staff, both in and out of the Information Systems department, knew that this was going on.

No prosecutions yet, but there should be.

Yet Another Service Sabotaging Itself

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In this case, it’s the Marine Corps, which is slipping the date of the 1st flight of its CH-53K heavy lift helo by 2 years for no apparent reason:

The first flight of the U.S. Marine Corps’ heavy lifter CH-53K helicopter has slipped two years to 2013, while its initial operational capability (IOC) has slid three years to 2018, officials have confirmed to AVIATION WEEK.

The date slips come as no surprise to the Marines and the CH-53K program office at Naval Air Systems Command (Navair). In January 2009, program manager Capt. Rick Muldoon submitted a Program Deviation Report for the aircraft’s critical design review (CDR) to the Pentagon acquisition headquarters. The CDR is now slated for September, representing a year’s delay.

There is no indication of technical problems or of development issues that would justify this.

So, why is this happening?

It appears that it is happening because the helo largely meets or exceeds the payload and range capabilities, though not the speed, of the V-22 Osprey and as such, it is a threat to Marine Corps procurement plans for the tilt rotor and foreign sales:

Why slow the program? When delivered, the new fly-by-wire CH-53K will, in theory, transport 27,000 pounds of external cargo out to a range of 110 nautical miles, nearly tripling the thirty-year old CH-53E’s lift capability under similar environmental conditions–all while fitting under the same shipboard footprint.

The CH-53K will also provide unparalleled lift under high and hot conditions while maintainability and reliability enhancements to the CH-53K will decrease recurring operating costs over the current CH-53E (the CH-53K aims at a more reasonable $10,000 dollars per flight hour while the CH-53E costs twice that). Survivability and force protection enhancements will also increase protection dramatically, for both aircrew and passengers. What’s not to like?

The CH-53K was an unsung showpiece for those preaching the virtues of incremental development, and, as a result, appetite for the platform has grown by about 30 percent, with the program of record expected to increase from156 aircraft to 200.

But, in the process, the CH-53K has become something of a MV-22-killer. Is this the problem?

Ummm ……… Yes?

The CH-53K is steadily eating away at the V-22 Osprey market. In late 2009, the Marine Corps decided to go with the CH-53Ks to replace their 40-year old CH-53D fleet (MV-22 Ospreys were originally slated to replace the CH-53D). At about the same time, Israel decided to forego the Osprey for the CH-53K, killing the Osprey’s best hope of snaring an international buyer. And with the Osprey 65% availability and the MV-22s high operating costs of about $11,000 dollars an hour, the CH-53K posed a serious threat to the MV-22 program.

Even worse, studies from the Pentagon demonstrated that a CH-53K-equipped big-deck amphib provided a lot more logistical support for embarked Marines than the MV-22, suggesting the mix of embarked MV-22s and CH-53Ks needed tweaking (and possibly fewer MV-22s).

(emphasis mine)

Much in the same way that the USAF is scrambling to retire legacy F-16s and F-15s so as to make the F-35 JSF a dire need, the Marine Corps is slow walking the CH-53K in an attempt to protect their orders, and possibly encourage foreign orders, for the ruinously expensive Osprey.

The program is being delayed because it is too successful.

This is what is wrong with defense procurement in the US Military in a nutshell.