Author: cdwan

Pensions

The situation with the state employees pensions in Wisconsin and other states is deplorable. What’s really terrifying is how poorly people seem to understood the basics of what’s going on, why it matters, and why the proposed solutions have absolutely nothing to do with reality. This is yet another case of cheap misdirection and power grab.

A friend describes it better than I can. Go read her thoughts. I’ll wait. I’ll also excerpt:

It’s pretty straight forward. State unions entrusted the management of their pension plans to the state to manage. The state outsourced it to a company that bought the Wall Street line of fast, easy money. The market crashed. The money taken from the State unions went *poof*. Now the states have, instead of firing the money managers and pressing the Federal Government to force regulations to protect their future obligations, decided to Union-bust.

So the financial burden, in this case, comes from the state obligation to cover the existing pension payments to existing pensioners. The fund (the union’s money, taken from state employee paychecks) was mismanaged and lost a lot of value. The state promised to be a backstop for that fund, since they were managing it. They failed in that management responsibility and can’t afford to be the backstop.

So, bust up the unions. Makes *total* sense.

Union busting is all well and good, done in isolation. A lot of unions seem to have forgotten that while they may need to gather in force in order to match the power of the owners, the path of mutual benefit is superior to the path of mutual destruction. If it’s really the case that a union is just a protectionist mob – then yes – by all means – bust it. Please also go after a monopoly or two while you’re at it.

However in this case, the real culprits are (in approximately this order):

– The wall street greedheads who pawned off known bad debt as “no risk” investment grade “pensioner and fixed income” quality CDOs on the pension fund managers.

– The pension fund managers who bought it, exposing their “no risk, seriously, this is our retirement account” state government customers to the worst sort of bad debt.

– The federal and state officials who failed to regulate any of this.

——— above this line, the individuals involved have already received large bonuses and commendations for their excellent work handling all parts of the crisis, nobody has gone to jail, and nobody has been fired. —–

– The federal and state officials who, at some level, should have been using the two years bought by the Obama stimulus to come up with some sort of plan to raise revenue or cut expenses.

Um, that’s it. I can’t really bring myself to blame the greedy and agressive unions for anything, particularly since they’ve already offered fairly large financial concessions to address the actual budget shortfalls.

Online Honesty

I’m a fan of honesty and openness. It’s simpler and much less stressful to only have to remember a single narrative or persona, no matter who I’m talking to. I also no longer believe in long term online secrecy. Once you post a picture, a letter, or whatever – that’s forever. Putting something online is a public action. It’s a visible statement in the public square – and the internet is our ubiquitous camera.

You should know: This will be entered on your permanent record.

Sites like the wayback machine ensure that more is kept than is lost. I use them for trivial stuff like getting old versions of hardware manuals. It’s also the case that however much you want to delete that old blog post – you probably can’t. I’ll be able to find it. If I can find it, you can bet that a determined lawyer or (heaven forbid) a national interest can probably do it faster.

That’s part of the reason that I have a blog that includes the same name that’s on my driver’s license. It reminds me that there is no such thing as “friends locked” or private posts. If I wanted a private journal, I would use paper and pen – or perhaps a text editor on my laptop. I don’t particularly want a private journal. I find that it focuses my thinking when I write for other people.

"Important issues should be presented in writing. Nothing so sharpens the thought process a writing down one's arguments. Weaknesses overlooked in oral discussion become painfully obvious on the written page." - H. Rickover

Let’s be clear: I’m not one of the Radical Honesty nut jobs. They seem to substitute a tasteless and rude bluntness ‘tactless and rude’ over ‘honest.’ Blurting out every little thought that crossed my mind wouldn’t be some sort of enlightened state. It would be Asperger’s syndrome. “Editing myself,” by falling silent rather than saying “I think you’re ugly,” is not somehow “lying.” Lying is lying.

As more and more of the world is defined as “public,” we’ll have to get used to the idea that more and more of our actions are subject to recording and fact checking. Right now it’s just beginning. Yes, your tweets can get you fired. Yes, your facebook posts can incite revolution.

There is power and wonder down this road – but we’re all going to have to get a bit better at honesty.

Oil prices

It appears that the oil market has finally noticed the “instability” in the middle east. Friedman had a brilliantly clear editorial yesterday that I want to excerpt wholesale. Instead of that, you should go read it. I’ll just share his closing paragraph:

Seeing the Arab democracy movements in Egypt and elsewhere succeed in modernizing their countries would be hugely beneficial to them and to the world. We must do whatever we can to help. But no one should have any illusions about how difficult and convulsive the Arabs’ return to history is going to be. Let’s root for it, without being in the middle of it.

I wonder if that’s even possible anymore – for America to be passionate and influential, but without honestly believing that she is the core player in every world event. The revolutions going on in Egypt, Bahrain, Libya, and others are not fundamentally about us. Does our pride support that idea?

Trimming the fat

Elected officials at the national and state levels are finally dealing with unbalanced budgets. This is, on the whole, a good thing. However, they’re doing it wrong – and making a mess at the same time. Here’s how to do it right, simply, without all the partisan rancor.

First off: yes they have a mandate to fix the budget. However, no they do not have a mandate to rewrite all of our social priorities at the same time. So, stop talking about labor unions, abortion, public radio, privately held utilities, and whatever other hobby horse you always carry around.

Here’s my proposal: Across the board reductions in spending, coupled with across the board tax increases. No exceptions at the top level. It is the job of the administrators at lower levels to make their departments work with less money. If they cannot do so, replace them. At a very high level, turn both the “income” and “expense” knobs until you’re satisfied with the total. Then pause and see what you did. Let it run a year. Adjust as necessary.

I don’t know whether the right number is a 10% budget cut and a 10% tax increase, or some other numbers. However, once it’s just those two numbers – then we have a math problem to solve. Math is easy. Social problems, by contrast, are hard. Budgets are about math – they should be easy.

The important thing about this proposal is that at no point did I have to argue about abortion. That’s key, because we’re never going to solve the abortion argument. We’re particularly not going to do it during a budget debate, under a continuing resolution, with partisan commentators screaming from both sides. So, rather than writing big, complex measures that eliminate particular (small) programs like Planned Parenthood or NPR – let’s write a simple proposal that cuts those programs by the same amount as we’re cutting the military and the transportation departments.

I understand that some people will turn any event at all into an opportunity to go after their pet issue. However, that just muddies the waters. I know that labor unions are big and divisive- but this is not the opportunity to finally bust them once and for all. Seriously – why is Wisconsin talking about collective bargaining rights at all? Isn’t this a budget measure? You want to talk about the budget? Let’s talk about the budget.

The second part of my proposal works out to “do your job.” Department heads should be responsible for a quick synthesis of what happens under some proposed reduction. Go to the department of defense and say “You’re getting a 10% budget reduction. Find a way to deal with that, and tell me the repercussions of your plan.” Do the same with education, with treasury, and with the rest. Any department that claims that a 10% budget reduction makes it entirely impossible to do anything of value at all should have its boss replaced immediately. The circumcision principle states that you can take 10% off the top of anything and it’ll still work (though the guillotine conundrum suggests an important exception). More seriously, if we put all the capable administrators to work at the same time – we’ll get a lot more done than trying to have a few politicians fix everything, from the top down.

The real reason we’re talking about this right now is that the financial recession of the last few years has forced a lot of Americans to address their personal spending gaps, lack of savings, huge debt, and so on. We’ve all taken a hard look at our finances – and that’s not a comfortable conversation most of the time. Coupled with a popular feeling that if I’m getting screwed, then someone must be taking advantage of me, – it has boiled up into a nice succinct talking point. It works out to “you had to do this for your family, so now we’re doing it for the government.”

The budget has been out of balance since I’ve been aware that there was a budget. This is not new, and the world won’t end this year if they just pass a continuing resolution. However, if we’re gonna do it – let’s do it right.

Finally: I want to impose some broad, simple rules and let the market work it out. I specifically do not want government tinkering around and doing complex social engineering. Does that make me a conservative?

Hospitality

Taking a break from the heavy, political stuff for an evening. I’m on the road today, staying at my favorite Bed and Breakfast in Baltimore. It’s so comfortable and nice that I just want to talk about hospitality for a bit.

Generally, I’m a Marriott guy. There’s nothing particularly unique or awesome about Marriotts – except that they are consistent. I travel a fair amount, and when I travel, principle number one is “don’t screw up my trip.” That translates roughly into “no surprises.” I do enjoy having adventures, but particularly on business travel – those adventures must not be of the form, “I had to sleep in the car.” I prioritize the likelihood of having my reservation correct and complete far higher than almost any amenity you might care to name. I couldn’t give less of a damn about a hot tub (I can’t have my friends over to the hotel for a hot tub party anyway). Plush linens are noticeable for the couple of minutes before falling asleep. You get the picture.

Negative amenities exist too. Consider having the waitstaff sing you “happy birthday” at a restaurant. Ever notice how nobody requests that for themselves? Some hotels have negative amenities that are just like that. No, thanks, I don’t want everyone in the lobby to know that I’m a platinum elite awesome travel dood. No. Shoo.

There is also something to be said for playing the ‘points’ game with particular chains. A couple of trips per month adds up to some fairly hefty discounts over time. The down side is that the “rewards” in every rewards program are for exactly what the weary business traveller does not want: More travel.

Anyway, the place I’m staying today is on the far opposite side of the spectrum. It’s a bed and breakfast in a unique building, owned and run by a couple of nice guys. My suite is the “Room at the Edge of the World,” so named in part because it has big windows looking out to the bay. I usually request this room because there’s a little fish in a bowl who lives in here. Cheesy as it may be, I sort of look forward to seeing the fish. “Hello Columbus,” I say when I arrive. The furniture is eccentric, stylish, and comfortable. They usually have warm cookies available in the afternoon – and the breakfasts are terrific. The guys remember me in a general sort of way, and seem to honestly care that I feel safe and comfortable. That’s the core of hospitality to me: Doing what is reasonably within your power to help a guest have a good time – on their own terms.

As with other social thing, this concept is all too frequently submerged in a muck of form but no substance. “Gentleman” springs to mind as a word that has been so abused that it may never regain whatever lustre it once had. Hospitality is, in particular, not about spending a lot of money. Frequently just noticing that your guest is exhausted but too polite to say so, and quietly canceling a plan can be the kindest gesture a host can make.

The place is The Inn at 2920. Check it out if you need a place to stay in the Charm City.

Outbreaks of democracy

A large slice of the middle east appears to have decided that they are going to rule themselves. At the very least, large and predominantly peaceful crowds seem to be overturning decades long dictatorships in more countries than I can keep track of on one hand. This is both wonderful, and also quite scary.

First off, I think that we might finally be seeing the power of peer to peer communication in action. Historically, and still today in places like Burma and North Korea, those in power can simply close the windows and clean house. Note that this is not the sanitized American version of “clean house” where we have a decent sized rally and then complain that The Media undercounted our crowd, and the coverage was biased on a couple of our national news chains. I’m talking about the sort of housecleaning where – once the press is allowed back in, there are a lot of people missing and clean-up crews are putting whitewash over blood stains. It seems that it’s hard, anymore, to achieve the level of information blackout necessary for solders and police (who are, at root, simply people) to be willing to commit atrocities. I never realized that putting a camera on a phone would do so much for the world power balance. Following Nick Kristof’s twitter feed has convinced me that Twitter might actually be good for something besides brutish self aggrandizement after all.

Secondly, we’re seeing the instability of the role of the US in the world. I think that this is also a good thing – though it’s going to be less comfortable in the short term. Our existing strategic alliances are, naturally, with those in power. Bahrain is a great example: Even though it’s a tiny island nation – it’s host to the 5th Fleet of the US Navy, and a large US airbase. While we “support the people” of Bahrain, we also support having a place to park and refuel our ships and airplanes. There are undoubtedly several very nervous thumbs on a variety of “delete all the files” buttons at that airbase right now. One does not simply walk out of a major staging point and leave it for the locals. This means that the US needs to be rather careful in terms of picking sides in all of these fights. While Obama has taken some flak for being vague in his diplomatic pronouncements – I think he’s actually handled it pretty well so far.

This was, frankly, easier when the revolution was not televised. This is one of the things we’ll have to get used to in the brave new era of no big secrets.

Patriotism

A recent post, on The Pain, When Will It End said this:

I’m also fascinated by, and admire, the relationship between the Egyptian people and its army—the passionate respect of the people for its army, the loyalty of the army to the people--so unlike our own rote obeisance to Supporting the Troops by purchasing magnetic ribbons.

We’ve got a lot of rites of passage and hollow symbols in America these days. Politicians can’t be seen in public without The Lapel Pin Indicating That I Am Not A Communist. Displaying those totems is neither necessary nor sufficient to be patriotic. It’s like the relationship between regular church attendance and being a good person. Sure, some decent people do it and some jerks do not – but there are counterexamples on both sides.

It turns out that patriotism, support for the troops, solidarity, and all those things have less to do with absolutism than with flexibility and a willingness to admit that you might be wrong.

When I have the chance, I train in Jiu Jitsu at the Hybrid Training Center in Virginia Beach. This is a mixed martial arts gym populated by some of the toughest and most authentically patriotic people I’ve ever met. Air Force and Navy mingle freely – as do special forces veterans and civilians.

At the height of the health care debate last year, I was down there, warming up with the guys, preparing to take class. One of the senior instructors wandered over and asked: “Hey Boston, what’s this health care thing that Obama is trying to sell us?” After a couple of protestations that I didn’t think it was wise to talk politics before we beat the tar out of each other (especially given that this guy is really pretty tough by any standards) – I opened up. I did my best to share my understanding. A small crowd gathered, still stretching and warming up, with some of them jumping in with ideas and observations.

I knew for certain that I was doomed.

It’s no exaggeration to say that I was all alone on the liberal side of the fence in that crowd. I was a New England intellectual, hanging out in a mostly-military fight school in southern Virginia. I’ve got a highly developed system for surviving as a travelling martial artist. That system revolves around the core axiom shut the hell up. If you shut up and work hard, most of the time, you do okay. In this instance, I took a risk and I talked.

Here’s the magic though – they met me halfway. We communicated, and where there were differences we had a respectful understanding that the problem was probably not that one of us secretly hated America. The problem, as we rolled ideas around, was probably either in some detail of the plan, in our understanding of it, or perhaps in our differing social situations. There was an awareness all around that something could be good for some of us, bad for others, and still be a part of an excellent solution.

At no point in the entire conversation – or the ensuing ass-kicking – did I feel any stress to change my political views because of physical intimidation. I did feel somewhat pressured to adjust my ground game. That’s a different story.

That’s very close to my ideal of patriotic dialogue in the United States: Patriots have the courage to engage our national problems directly – with open minds and forceful, respectful dialogue – with no implied threats or sham symbolism. They accept that the goal is not for the red team or the blue team, in particular, to win. The goal is the good of the nation, and the world at large. Because we think hard and fight hard, we can leave this place just a bit better than we found it.

Go USA

A thought kept cropping up today, so I figured I would share:

GO USA.

I’m not being at all cynical or snide here. This is some real, fundamental, patriotism. Perhaps context is in order: Last night I got on the radio and just TALKED. I ripped on various governmental agencies for … basically … disagreeing with me. I called for changes to the laws of some of our towns and states. I mocked the majority religion in my very own country. I wasn’t allowed to sell stuff, to issue direct calls to action, or to cuss. That’s chump change: I mocked authority on the air for a full hour. Afterwards I laughed and walked to my car and drove home.

In Iran, Iraq, Bahrain, and lots of other places – I would have been silenced before I began. In some of these places, I would have been killed.

Whatever we may say about our screwed up system and its screwed up partisans, let it be noted that there is no gun to my head. There is no gun to Bill O’Reilly’s head, and there is no gun to the head of any of the opposition. We are talking, and that’s perhaps more important than exactly what we are talking about.

It turns out that, to my complete surprise, I am a massive 1st amendment junkie. The first time I got in the studio – it took only a short time to realize that my words were being amplified. Sent into the community and out onto the web. When I post here on the blog – you have to click a link or something to “listen.” On the radio, people hitting “scan” might just stumble across me. The first time a caller rang the phone and wanted to respond to something that I had said – it was like a drug. I was initiating conversation. I was speaking, and even in the small community that can be reached by Brown Student Radio – there are people out there.

This is not a fluke of the current political climate, and it’s not an accident of any sort. The “freedom of speech” is core, critical, and fundamental to our society.

So go USA. Sometimes, we get things very, very right.

Same sex marriage

I was on the radio show again tonight, and we spent some time talking about same sex marriage. This is an issue on the legislative docket in Rhode Island right now, and it’s been the topic of a few shows.

First off, one might wonder why an atheist radio show would care about same sex marriage. Couldn’t we just, like, go off by ourselves and not believe in God? The answer is that, really, I would love to. I’m not all that worried about other people’s beliefs, per se. If we could get to the point where we had removed the majority of the institutionalized bigotry and intolerance that uses a thin veneer of religiosity to stay alive – I would love to hang up my combative hat and talk philosophy. However, what we’re really talking about is whether it’s okay to deny a fundamental civil liberty to a decent fraction of the population. Where the rubber meets the road, I’m worried about civil liberties, rationality in public health decisions, and so on. I no longer believe that religion is the cause of most of this … but it is certainly the excuse.

The question we asked callers was “how does allowing same sex marriages affect your heterosexual marriage? For all the talk about same sex marriage “devaluing” and ruining the institution of marriage – I expect some sort of detail to back it up. I’ve been married for more than a decade. In my experience, the marriages of my neighbors have almost no effect on me. I live next door to a woman who is raising two kids, solo, after her husband left her. I live across the street from a couple in their 60’s whose grandchildren come to visit from time to time. Neither of those relationships is like mine, but neither of them effects me all that much either. In Minnesota, I lived across the street from a couple of gay men in a long term relationship. They were fine neighbors. I also lived next door to a Yeshiva, a school for orthodox Jewish boys. They were fine too. In East Providence, I was frequently on the edge of calling the police over the sounds coming out of a perfectly heterosexual house. Even with that, there was no real effect on my marriage besides some good conversations about when to get involved in what was obviously some level of domestic abuse.

So the question was: “Why does it matter?” Sadly, we had only one caller who tried to answer – and he went with a combination of the “slippery slope” and the “word is and always has been defined this way” arguments. The latter works out to “nothing should ever change.” To that I say “society changes, and we can do better this year than last year.” When the US constitution was written, slavery was law and women didn’t have the vote. We’ve gotten past both of those mistakes. Let’s get past this one too.

The “slippery slope,” argument is ridiculous in a way that I failed to address on the air. I found myself yelling at the steering wheel on the way home over this one. The caller said, specifically, “if we let men marry men, what’s to stop someone from marrying their daughter, or their dog?”

Here’s the thing: We are not anywhere near the slippery slope.

When we talk about same sex marriage, we’re talking about the very most rational and stable members of the gay community. These are the folks who want to settle down, publicly commit to a long term relationship, use words like “father in law” or “brother in law” to talk about their partner’s family, and generally do all of the totally ordinary and boring stuff that heterosexuals take for granted in a lifetime-committed relationship. Nobody is talking about sexual promiscuity and serious deviancy here. If we were, then heterosexual marriage ought to be hauled on the carpet for some of the stuff I saw at college parties.

Don’t even get me started about Jersey Shore.

Food

After yesterday’s post, there was some good discussion in a couple of different fora. Some of the more interesting observations came off of the afterthoughts.

I said: I think that there are some things that are too important to society to have them serve as engines of profit. I include the basics: housing, medical care, basic food provision for the masses, basic education, and so on. Note that this doesn’t mean “let’s make them into pure social programs.” I’m a big believer in market forces. It’s just that if housing is important enough to regulate – then don’t regulate it for the benefit / profit of the wealthy … regulate it for the the benefit of the majority.

To which my friend Scott said: I don't understand the tendency to think that market forces (motive for profit) shouldn't be employed for "the basics" as you say -- a shortage of food makes the price go up and a farmer than can produce more of it and does so in order to make a profit.

Another friend, Lyell, jumped in and gave exactly the right answer: If you had farmers leaving the industry after every little food shortage (market forces, ya'll!), you'd have far, far fewer products on the shelves and much more volatility in the ability to feed the entire population.

I’ll expand on that: It takes a long time and a lot of work to get a farm running. It takes a long time to produce a single crop, once you have that farm in place. It doesn’t take all that long to ship the food around, but it’s important to know whether you’re planning to eat it fresh or preserved in some way. By contrast with those long-view items you’ve the inescapable fact that every person on earth has to eat, nearly every day. Civilization is a thin veneer, perhaps three meals thick, on top of chaos. It only takes a day or two of being unable to feed a family before even the most law abiding of citizens will go out and start doing very non-law-abiding things. We all have a strong, shared social interest in (to keep it in economic terms) low volatility in the food supply.

One can argue about the merits of various schemes accomplish that stability – but I’ll go out on a limb and say that if you’re opposed to a stable food supply – then you and I don’t have much to talk about, politics-wise.

Put another way: No matter your political affiliation, you want sufficient food to be available, at reasonable prices, every day, in every single city across the country. At a microeconomic level I support allowing the market to float and set prices on various products. I like the idea of being able to choose to pay a little more at Whole Paycheck, or to save a few bucks at the discount place nearby. However, at a larger scale it would be madness to have something as critical as the freakin’ food supply run entirely without some level of regulation and government support.

That support can take the form of price supports for slow growing crops (so that farmers will take the risk of actually planting them, year over year). It can take the form of tax deductions to help food producers stay in business through hard times. It can take the form of straight out subsidies – though those are harder for me to justify.

The point is that with none of those protections – we take unacceptable risks as a society.

At no point here am I suggesting “free gub’mint food for everybody!” That doesn’t work either. Put away your cries of “socialist.”

The main thing that I want to protect against is the idea that the greedheads, fast twitch traders, finance guys, and other margin humping types will somehow, for the first time in their existence, be motivated by a social benefit. Altruistic people are generally out-competed in today’s free market – which is well and good – provided that we keep them away from the core underpinnings of civil society. I’m certain that there’s the potential to extract massive profits from the baseline food production industry. It could be driven into a speculative bubble and then cashed out. We’ve got tons of history that shows that the best finance people will, very consistently, assign zero weight to the risk of food riots in American cities. Especially if those notional riots were to occur anytime after the annual bonus season.

You know for a fact that it won’t be the marketeers whose kids go to bed hungry.

Fortunately, a housing market collapse is a lot slower than a food supply collapse. We can sit in our homes and watch their notional values crumble (value that never really existed anyway) – but at least we can still live in the tangible asset while that happens. Renters are slightly more screwed – but only slightly.