Mr. President more at home with "eye-for-an-eye"

I am getting tired of hearing about Mr. President and his relationship with God and religion. But, reading the AP report titled Obama tells questioner he's 'Christian by choice', I noticed he said:

"So I came to my Christian faith later in life, and it was because the precepts of Jesus Christ spoke to me in terms of the kind of life that I would want to lead - being my brothers' and sisters' keeper, treating others as they would treat me," he continued.

emphasis mine

That sounds more like the good old an eye for an eye we know than the Golden Rule.

Interesting.

You are not a home-owner

Say there is a house you would like to live in, but you do not have the $300,000 that would pay for the house and the $10,000 that would pay for the assorted lawyers' fees, inspection fees, processing fees, and you do not have the $25,000 that would cost to modestly furnish this house.

You have two options.

The option almost everyone seems to have forgotten about is to find another place you can RENT!

Another option is to find someone else who will buy the house for you, and allow you to live there. A rich uncle is one option. However, not everyone has a rich uncle.

Therefore, a lot of people go to a financial institution which will pay for the house and allow you to live there so long as you make monthly payments.

It seems, everyone, from various Presidents down, is confusing a those financial institutions with a rich uncle.

See, some —by no means all— rich uncles will not only pay for the house but also won't ask anything in return.

A financial institution is not such a rich uncle: The institution is in the business to make a profit.

When they agree to pay for most of the price of the house, you agree to keep making payments every month to them until both the amount you borrowed and all associated interest is paid off.

You are not really a home-owner until that day arrives.

You are just a borrower who secured a loan by using the property you live in as a collateral.

Neither the financial bank nor the tax-payers are your rich uncle who might let you have the house even if you do not pay your debt.

The bank has the right the sell the property if you fail to make payments. The tax-payers, well, why should they be involved in this private transaction?

Think about the converse: If you can sell your house for twice the purchasing price, pay off the bank and make out like a bandit, would you send all of your capital gains to the U.S. Treasury?

Then, why do you expect others, especially those who have chosen to rent rather than buy or those who are making their mortgage payments like clockwork to step in and protect your lifestyle?

The only thing that will reinvigorate the housing market in the long run is for the government to let it find its bottom without artificially restricting the supply of real estate. That is, the exact opposite of what government mortgage assistance programs are trying to achieve.

Now that's rich: The difference between income and wealth

The President and his people are intent on confounding income and wealth. They keep talking about the Bush tax-cuts for the Rich, and define as rich any individual who makes at least $200,000/year.

Of course, this is silly.

Being rich and earning a lot are not the same thing.

You become rich if you can accumulate a lot of wealth.

One way of accumulating wealth (and, the primary way in the U.S. as opposed to, say, in Russia or Saudi Arabia) is to work hard, provide something of value, and convince others to give you a lot of money in return for the goods and services you provide.

The only way you can add to your wealth out of your income is if you get to keep enough of it.

Imagine a bathtub. Your income is the water coming out of the tap. Your wealth is the amount of water in the tub. Clearly, you cannot take a bubble bath if all you get out of the tap is mere drops or the drain is completely open.

You cannot become rich if most of your income is taken away from you as soon as you earn it.

The already rich such as Warren Buffett don't care as much about this stuff. First, they already have their bubble bath all set up with candles and scents. Second, they also have an über fancy tap that can channel the water to all sorts of other places if someone tries to mess with the flow or the drain.

So, confounding the definition of rich with hard-worker only hurts people who are not yet rich but are trying to accumulate.

From Mr. Presidents point of view, this makes sense. After all, according to 2008 data from the IRS, there were only about 13,000 filers with taxable income of at least $10,000,000/year and only about 320,000 filers with taxable income of $1,000,000/year.

In comparison, there are 4 million filers with taxable incomes in the $200,000–$1,000,000 range and 18 million in the $100,000–1,000,000 range.

Let's suppose the President can milk an extra $1,000,000 from everyone making more than $10 million. The additional tax revenue would only be $13 billion.

Of course, they can't milk that much extra. Because these are the people who can adjust the easiest to higher tax rates and avoid them.

If they can milk an extra $5,000/year from the people in the $200,000–$1,000,000 range, however, they could get an additional tax revenue of $20 billion. And, these people would not have as many options to escape the additional tax burden.

This explains why inevitably the burden of higher government spending will have to fall on the hard-working people who are just trying to accumulate some wealth rather than the Obamas or the Buffetts of the world.

There just are not enough people with taxable incomes above $200,000: Even if you could convince all of them to work just as hard and make just as much and report just as much and require them to turn over all but about $30,000 a year of their income to the government, the most you can get out of them is a little less than $2 trillion.

As I mentioned before Mr. President took office:

This kind of back-of-the-envelope crunching of numbers is useful in establishing if the numbers work. After this exercise, I am left with the distinct impression that the Senator's numbers do not: That is, he cannot accomplish what he wants with just a modest tax increase on the rich. For any modest tax increase to raise a lot of revenue, he would have to include the 41 million taxpayers in the $75,000 - $200,000 brackets as well.

In doing so, his policies will prevent a lot of Americans (and a lot of people in the rest of the world) from becoming rich.

The people who are already rich and who are well connected to be able to shape where government money goes will remain relatively unscathed.

Republican "civil war" benefits the GOP

I had not paid much attention to the primaries this week, so I really did not have much of an idea of what was going to happen in New York and Delaware.

When I checked the results, I was surprised by the intense excitement in media circles about the winners of the Republican primaries in those states.

Today, I decided to find out more about the candidates in the Senate race in Delaware. The screenshot below shows the home page of one of the candidates' web sites.

Can you guess whose web site this is?

Yup, it's Chris Coons'. The Senate candidate for the Democratic Party.

When the site first opened up, I thought I had accidentally gone to Christine O'Donnell's web site:

Did you notice that both sites' home pages feature nice pictures of Ms. O'Donnell?

On the web and on TV, pundits are going on about how Ms. O'Donnell cannot win against Mr. Coons.

It seems Mr. Coons is not so sure.

From where I stand, it looks like the Democratic Party's strategy is to help Republican candidates win.

They are conveying the message that this new batch of candidates represent a break with the Republican establishment.

Assuming the electorate had real reasons that led to the Republicans losing their majorities in the House and the Senate in 2006 and losing the presidency in 2008, isn't that exactly the message the GOP would want to impart on the electorate?

It does not matter who is spreading the message that the GOP candidates this November are not the ones that were complicit in the policies and actions that led to voter dissatisfaction with the GOP.

The GOP as a brand cannot succeed with the message We'll take you back to 2005!

It is in their best interest for the electorate to believe that they are breaking with the past.

The GOP's claims to that effect are now orders of magnitude more credible given that their opponents agree with and push the same message.

How can the Democrats and media pundits succeed in tying the new GOP candidates such as Ms. O'Donnell to President Bush's policies when they trumpet Karl Rove is openly criticizing and arguing against those candidates?

It seems the Democrats have chosen to give the Republicans a hand in the once seemingly insurmountable challenge of redefining their brand with repudiating themselves.

It is as if the Architect planned it all.

Where Muslims are still free

Looking out the window in my girlfriend's apartment, I noticed that the Empire State Building's lit green tonight, on September 10, 2010.

A check of the Empire State Building Lighting Schedule verified what I had guessed:

09/10/2010 Green/Green/Green Eid-al-Fitr

A few miles from the building itself, right across from the Seacacus Junction train station is a billboard inviting Americans to learn about Islam. It looks like this is a national, and not a localized campaign.

Yeah, there is a crazy man with a congregation of 50 people down in Florida and in his quest to garner as much media attention as he can, he has decided to burn some Qur'ans. There some idiots in the media who think this man is worthy of the air time they have devoted him. Keep in mind that these are the same idiots who brought us around the clock coverage of The Raëleans' human cloning fantasies.

On the other hand, there is Imam Rauf whose stated aims of bringing piece and harmony between Muslims and non-Muslims was recently flatly contradicted by his performance on Larry King Live. From the transcript:

RAUF: There is a certain anger here, no doubt. But if you don't do this right, anger will explode in the Muslim world. If this is not handled correctly, this crisis could become much bigger than the Danish cartoon crisis, which resulted in attacks on Danish embassies in various parts of the Muslim world. And we have a much larger footprint in the Muslim world. If we don't handle this crisis correctly, it could become something which could really become very, very, very dangerous indeed.

The same article of the U.S. Constitution that guarantees Imam Rauf the right to practice any which religion he likes in whatever way he wants to (a right most Muslims in the world do not have), also guarantees the people who do not want a Ground Zero Mosque to speak out.

By refusing to listen to his fellow citizens on the grounds that some radical Muslim somewhere in the world may do something nasty if Imam Rauf decides to move his mosque out of respect for the feelings of his countrymen and women, Imam Rauf displays a fundamental lack of understanding of why the Constitution of the United States of America continues to inspire millions who seek freedom.

See also Where Muslims are free as well as If We Don't Build It, They Will Kill You? by Claudia Rosett.

Is any war good?

As James Taranto reports, The Former Enron Adviser is talking about the Miracle of the 1940s. Taranto correctly notes:

World War II is sometimes called a "good war," meaning that few dispute American intervention was necessary or that we fought on the right side. But this easy moral clarity is possible only because the Axis actions that started the war were unambiguously evil.

His remarks reminded me of an email exchange I had had with a student in my Intermediate Microeconomics class in 2006:

I do have a question regarding the broken window fallacy. Would the initiation of a war (WWII, Iraq war, etc...) fall under that concept?

No war creates more wealth than it destroys, keeping everything else constant. However, you have to take into account what would have happened in the absence of the particular war. That is, given that Hitler existed, and had already attacked and a started several wars, one has to then ask would the world would have been better off if he had not been confronted.

I ask because it's obvious that there is an opportunity cost for the invaded country, but there is much benefit to any parties' economies overall?

In my humble opinion, war results in a clear net loss in the present to both countries. However, a given war might change institutions enough to offset the present losses to both countries through future gains in economic growth through trade (consider if Japan would have experienced the same growth and development under the rule of an emperor).

Clearly, all of this reasoning involves a lot of speculation about what might have happened had there not been a second world war, and as such is very much open to debate. On the other hand, democracy and market economies allow far more good ideas to survive than dictatorial rule, so that's where I am coming from.

Hope this helps.

Sinan Unur

The little people can be trusted to choose

I do not understand you Mr. President

The President gave a speech today. At one point, he said:

Some powerful interests who had been dominating the agenda in Washington for a very long time and they're not always happy with me. They talk about me like a dog.

When I heard that on CNN, I was confused.

As one of the people who talks about his plans and policies, I have no idea what talking about him like a dog means.

Being completely unable to figure out what he meant by that statement, I had to ask Google.

Clearly, he did not mean dog literally, as in a member of the genus Canis (probably descended from the common wolf) that has been domesticated by man since prehistoric times.

The only use of the word dog that might be applicable to the President comes far down the list, from Wikipedia:

In engineering a dog is a tool that prevents movement or imparts movement by offering physical obstruction or engagement of some kind. It may hold another object in place by blocking it, clamping it, or otherwise obstructing its movement.

That's right: His policies are literally standing in the way of the U.S. economy. I am so glad I figured out what the President meant!

Response to ClimateGate emails from University of East Anglia

From Bishop Hill and Anthony Watts

Anthony notes:

Of course, here in the USA, where there is a keen interest in this issue, announcing going into Labor Day would be a good choice as it is the last big holiday of summer. And indeed, it seems to have worked well, because this Google News search on the terms University East Anglia response climate emails yields not a single news story about it.

The full response is available: The Independent Climate Change E-mails Review – July 2010.

4. The University welcomes the findings that:

On the specific allegations made against the behaviour of CRU scientists, we find that their rigour and honesty as scientists are not in doubt

We do not find that their behaviour has prejudiced the balance of advice given to policy makers. In particular, we did not find any evidence of behaviour that might undermine the conclusions of the IPCC assessments.

That last part is especially cute: We do not find that their behaviour has prejudiced the balance of advice given to policy makers. Well, that's like saying applying additional heat did not increase the temperature of boiling water.

Why do the R and the D?

LA Times is helpfully mesmerizing when it comes to the President's plans for the economy:

Reporting from Washington — President Obama will ask Congress to pass a $100-billion plan to expand and permanently extend the tax credits for businesses that invest in research and development, part of a larger plan for spurring the economy that he is to unveil in greater detail Wednesday.

The esteemed journalists at the LAT might be too detached from reality to understand this, but the President's proposal is simply a means of throwing money at certain companies.

To see this, ask why companies engage in research (the R) and development (the D).

Companies put money into researching new ways of doing things or new products and put more money into developing products based on that research if, and only if they expect to make money selling the end product.

They do not engage in the R and the D to get tax credits.

Sure, some companies will repackage existing research projects to get some tax credits and some companies will engage in some new "research" to do the same, but, ultimately, it all boils down to if I sink $10 million into figuring out a way of making a better widget, will I make my money back?

Of course, the answers to that question are only marginally related to tax credits.

To paraphrase, the real question is, assuming that I will come up with a product or service consumers want after sinking $10 million into the R and the D, will there be any consumers who can afford my product, will they be willing to spend that money on my product, and how much will I be taxed?

Business people tend to understand this.

If you run a coffee shop, and the government gives you shiny new coffee makers, well, by itself, that makes no impact on the long term scope and viability of the business.

You are not going to go out and hire more people just because you got a brand new shiny coffee makers from the Government.

You will only do that if you expect to make and keep more money from selling more coffee.

Even a law school graduate ought to be able to see this.

The un-American

If you, as I did, had high hopes for George Clooney's The American … Well, prepare to be disappointed.

The movie is not the delectable Michael Clayton meets The Matador meets The Bourne Identity I had fantasized about.

It is a pointless, meandering, pretentious imitation of French movies from decades gone by. It seems more like an excuse for George Clooney to dabble in pleasures of the flesh than a real movie. I guess Mr. Clooney is making films now.

If that's your thing, fine.

The most enjoyable part of the movie for me was listening to all the senior gentlemen curse up and down Roger Ebert's family tree (he gave the movie four stars) while they stood at the urinals.

Me, I should have read Wesley Morris's review instead.

All the king's men couldn't put Humpty together again

Well, let's make that all the President's people.

In some circles, not the smallest of which is the President's policy circle, there is this notion that the economy is an engine that has stalled and needs some kickstartin' by smart people with degrees who know what they are doing.

So, a lot of smart people with degrees are going around kicking the snot out of the economy.

The economy, is not an engine. The economy is the totality of all economic decisions and actions made by millions and millions of individuals each of who tries to figure out the right course for his or her particular situation.

In making their decisions, these individuals, not cogs in a machine, have to take their expectations regarding the future into account.

However, when you look at the President's policy people, they act as if the Rational Expectations Revolution never happened.

I understand why: People who are not smart enough to figure out the math get intimidated very easily and fail to pay attention to the underlying arguments behind fascinating concepts such as Sunspot Equilibria and path dependence and instead try to relive the Great Depression they have yakked so much about to be able to get the degrees that certify them as smart people.

There are two broad categories of expectations right now: First, if you think you might succeed at producing something which would provide value to a lot of people, your expectation is that you will have to give up the returns from your willingness to take that risk to fund the debt service and income redistribution objectives of governments at all levels, lead, of course, by the Federal Government.

Second, if you don't expect to do well, well, you are hearing every day that the government will give you more unemployment benefits, free health care, free child care, affordable housing, free or subsidized training, free or subsidized computers, internet connections etc.

The former expectation provides a disincentive to actually taking risks by people who might consider starting new businesses. The latter raises the lowest wage at which people will accept a job and thereby raises costs of production.

Against this backdrop, the President and his circle of smart people will degrees cluelessly signal that they will kick profitable businesses and productive individuals some more to get them going.

I am saying nothing new. Hayek explained this more than 35 years ago:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, dizzy with success, to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

Commandments versus choices

Too many people focus too much attention to the government's budget deficit. The deficit —the shortfall between the government's revenues this year (i.e. the money it extracts from its citizens) and the government's expenditures this year, is not a trivial issue, but focusing on it obscures the real problem.

The real problem is the total size of the government.

When talking about the deficit, the President likes to pretend every item in the government's budget is a commandment and not a choice.

That leaves taking more from the citizens as the only viable option for reducing the government's deficit.

What matters is the size of the government.

Government programs are not holy commandments that must be financed no matter what the cost to the citizens.

Citizens can force politicians to make choices by limiting the size of the government.

The inimitable Walter Williams has some ideas:

The true economic calamity won't hit the country until 2030 or 2040. By that time, both today's politicians and seniors will be dead so why should they make sacrifices now to prevent an economic calamity decades off into the future? Seniors might protest my cynicism but they can easily prove me wrong by waging an effective campaign to end handouts based on superannuation.

An honor killing by any other name

I had not realized there was some debate about what to call "honor killings." I have been awakened out of my ignorance thanks to UC Berkeley grad student Rochelle Terman and the Muslim World Journal of Human Rights.

From her recent article, To Specify or Single Out: Should We Use the Term "Honor Killing"?:

While some aver that the term honor killing is an appropriate description of a unique and particular crime, others deem it as rather a racist and misleading phrase used to promote violent stereotypes of particular communities, particularly Muslim minorities in North America and Europe.

I recommend Ms. Terman and her colleagues to read some Turkish newspapers and also debate the naming of such phenomena as "rage killings" and "provocation rapes".

Honor killings against women, at least as understood in Turkey, come in two kinds: In the spontaneous case, a male who is involved with a female, for example her brother or her husband, is so perturbed by the "promiscuous" behavior of the female that he attacks and kills the female and anybody else who happens to be around.

In the more planned cases, a family council, consisting of the older men and women in the family, get together and assign one or more male members of the family the duty of clearing their honor by killing a female relative whose behavior is seen as staining the family's honor. If the woman's "crime" is to have been seen with or have had sex with a male who is not her husband, that man might also be targeted (in which case, the crime usually starts a blood feud between the families).

It is important to note that judges sometimes give (or, used to give, I do not follow this stuff closely) more lenient sentences to defendants for the crime of a spontaneous honor killing than murder — treating it somewhat like manslaughter.

Woman kills own daughter so her son does not have to

Here is an example of a premeditated honor killing I found using a simple web search: A Turkish woman who killed her own daughter so that her son would not have to do it to clear the family's honor. She apparently won a prize in an inmate letter-writing contest in 2007 (see news report in Turkish.)

It looks like the actual crime happened in 2005.

Serpil U adlı kadın, evli ve 1 çocuk annesi kızı Verda B (24) ile başka erkeklerle ilişkisi olduğu gerekçesiyle tartışmaya başladı. Tartışmanın büyümesi üzerine Serpil U, kızı Verda B'u bıçakladı. Verda B olay yerinde hayatını kaybederken, anne Serpil U, polisi arayarak kızını öldürdüğünü bildirdi.

Serpil U had an argument with her 24 year old daughter Verda B who herself was married and a mother of one. The cause of the argument was Verda's "relations" with other men. The argument got out of hand. Serpil U stabbed her daughter Verda B. Verda B died on the scene. Mother Serpil U then called the police and reported that she had killed her daughter.

The latter news story mentions that the mother was convicted of premeditated murder and planned the whole thing so that her son would not have to go to prison.

In fact, the term used for such killings in Turkish is namus cinayeti. While namus is usually translated as honor, honor is just a subset of its meaning.

Notwithstanding Ms. Terman's observation that:

there is a trend among advocacy organizations in the North American and European Diaspora to avoid, ignore, or rebuke the term honor killings as a misleading label that is racist, xenophobic, and/or harmful to Muslim populations.

and regardless of what the Diaspora wants us to call such crimes, they are ugly and there is no reason for them to be tolerated or treated as anything other than premeditated murder.

PS: I did not actually read Ms. Terman's paper. I do not intend to. My reaction is based on reading the abstract and thinking Sheeesh!