Disability

It was suggested to me to go on disability when I was diagnosed. I bristled at the idea, I felt like I was still a useful person and could work, if I could find a job. Eventually, I did get a job and I’ve been working ever since. I think the main idea for me going on disability at the time was that I could go on medicare. Looking back, I probably couldn’t have gotten disability benefits at all, or if I did, it would have taken quite a while for them to kick in.

I think a lot of my reaction came from growing up with lots of stories of fraudsters trying to get out of work. My mother faced a seemingly never-ending stream of people faking injuries and incapacitation.  I was doing some research into disability insurance when all of those stories came flooding back to me. One of the advice forums about disability insurance was filled with dodgy claims. The most egregious was a guy claiming PTSD from being fired from his last job. Really?

I know I shouldn’t let it get to me, but I really don’t want to be lumped in with people like that. I’ll admit to having days where I don’t think I’ll be able to keep working and I understand the temptation to give up and claim disability. Two things have kept me from going there. First of all, there would be a substantial pay cut. I have insurance, but it would still be a 30% cut in pay. The way disability insurance works, they will pay you a certain percentage of your salary and when you go on social security disability, they will pay the difference between what SS pays and the percentage of your pay. The main reason I dont want to go on disability ‘s that I just don’t believe that everyone else should pay because I have a hard time at work. So far, my awful days come and then they go. I can work, and I’m pretty damn good at what I do. If I get to the point where I just can’t work at all, I’ll have to go on disability. Let’s hope that day never comes….

 

PTSD from getting fired? I’m still pissed about that…

Thinking in aggregates (corporations aren’t people)

Mit Romney has been getting some press for his “Corporations are people” blurb. Lots of people are mocking him, pointing out the obvious, that corporations are not people. The irony is that the people mocking him are missing the point. Not only that, they are assuming that corporations are people after a fashion. Let me explain…

What Romney was trying to say was that corporations are made up of people and anything that is done to a corporation eventually ends up affecting the people that make up that corporation. The people mocking him are essentially assuming that a corporation is a stand alone entity. They think they can tax it and regulate its speech without affecting actual people. To my mind it is yet another example of being sucked into the fallacy of aggregates being tangible things. And like all of the other examples of that fallacy, acting against that fiction causes problems for actual people.

Paul Krugman is another great example. Whenever he claims that an alien invasion, or 9/11 would be good for us, he is thinking of GDP. GDP is an aggregate of production in a country. It is a loose proxy for economic activity. What he overlooks, and we should never forget, is that GDP is an aggregate measure that doesn’t tell us the first thing about prosperity. Trying to boost GDP can in fact have effects, and it might even make that measurement go up, but what does it really mean for all of us? If GDP gets a boost from rebuilding from a disaster, will anyone care?

I myself am guilty of talking about aggregates. How often do I rail against “the government” as if it were a single, monolithic thing? I should be more precise and bemoan the laws passed by congress, the unilateral action of the executive team in the White House, or the actions of the board of the Federal Reserve. It’s important to remember just how few people are actually moving things around for the rest of us. All of those groups try to co-opt us by saying that they are doing what they do for “the American people.” As if there were a simple group mind that is happy with the same things. They do what they do for the benefit of what they think the American people are, but how often do you or I agree with them?

And of course the most common aggregate fallacy of them all is all of the talk about “the economy.” There is no such thing. We are the economy. Each one of us, each action we take, every transaction we do, every act of cooperation with someone else, that’s what the economy is. There is no way we can sum all of that up with a single concept let alone a word. When you look at it like that, phrases like “The economy is depressed,” or, “The economy needs to be boosted” stop making sense. We need to respect the enormity of what we are summing up in that aggregate. The idea that a single action can improve all of the things that make up the economy is pure hubris.

Things are complicated. We like to sum things up for the sake of being concise, but we quickly lose what is actually being discussed. Language has a funny way of shaping our thoughts, we need to be careful about lumping too much into neat, orderly concepts because that rarely exists in the real world.

Competing currencies (Good news from Zimbabwe)

Zimbabwe has been the poster child of central bank excess but this article from the Globe and Mail talks about how they have gotten out of their inflation hole and has given them a chance to get back to normal. They still have lots of trouble, but at least their currency isn’t hamstringing them any longer. How did they rebound from 89.7 sextillion percent inflation? They abandoned their currency. They allowed people to use whatever they wanted as money.

The effect has been dramatic. Folks use The Rand, the dollar, the pound, the euro, and the kwacha and things are functioning again. It has removed the Zimbabwean central bank from the equation and has forced the government to spend only what it has on hand. The government has abetted this by first announcing that the Zimbabwean currency was no longer valid and then allowing people to use whatever they want.

Backing a currency with gold or silver has a lot of logistical issues regardless of the wisdom of it. Competing currencies are a valid alternative to enforce discipline on central banks. If we can’t control them, we should at least have the ability to leave them when we want to.

Krugman Stimulus (updated, not Krugman)

UPDATED!!! This wasn’t Krugman, but see below…

 

“People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.”

-Paul Krugman

 

Paul Krugman is an ass. Yes, he is the Nobel Laureate columnist for the New York Times. Yes, he has forgotten more economics than I’ll ever know. But yes, he is an ass.

A prime tenet of Keynesian economics is that spending is what makes an economy go. Recessions are caused by a drop in spending. The theory then says that to get out of a recession, you need to increase spending. If the private sector won’t do it, by God the government will. It doesn’t matter who is doing the spending, what is being bought, or even why people spend, as long as they spend everything is good.

Hence, big ticket items like wars and cleanup after disasters are seen as opportunities in the Keynesian model. Rational people understand that wealth doesn’t come from things being destroyed. Nor does it come from making things that blow up and blow people up. Normally, a reductio ad absudum critique of this theory goes something like this, well, why don’t we destroy vast swaths of property and rebuild, that will surely do wonders for the economy!

Instead of refuting this argument, Krugman has doubled down and said that yes, that is the idea. He seems to regret that the earthquake didn’t cause more damage, probably because he’s a patriot and is only looking out for the good of the country. It has certainly worked for Haiti and Japan. Aren’t we jealous of the opportunities those countries have gotten? Krugman is currently being savaged on Twitter, here are some of my favorite riffs on the destruction breeds prosperity theme:

 

From the #Krugmanstimulus feed:

The Iranians don’t hate Jews, they’re just trying to stimulate the Israeli economy.

Army Air FOrce General Curtis LeMay given lifetime achievement award for #Krugmanstimulus.

When God unleased the 10 plagues, He was actually trying to boost the Egyptian economy.

They should let students play grand theft auto in economics classes so they’ll understand the application of #krugmanstimulus.

The US should invade Europe, that way it can stimulate both the American economy and the Eurozone.

#politicalmath has some amazing ones:

“And I looked, and behold a pale horse: and his name that sat on him was Krugman, and Stimulus followed with him.

“It’s a liquidity trap! Commence attack on our own main reactor! Admiral Krugman Ackbar

The Unibomber was just trying to create some job openings.

 

This stuff just writes itself. Krugman had also just recently said the the world’s economic problems could be solved if the nations of the earth thought they were going to be invaded by aliens. No really, he thinks that the militarization of the world would be great. Take all of our resources and turn them into armaments. We’d be rich! This is what passes for economics, this is the kind of though that went into our stimulus efforts. Is it any wonder they don’t work? I’m hoping that Krugman (the world’s most popular advocate of Keynesianism) has done enough damage to discredit that line of economic thought. If this doesn’t do it, what will? The Onion understands Keynesian economics, why doesn’t everyone?

 

 

UPDATE:

 

OK, so the comment has been shown to be a fake. Krugman did not actually say that things would have been better if there was more damage. He did say that an alien invasion would help, and he did say that 9/11 would be good for economy too so I think this critique still stands.

 

 

 

 

 

Amy Winehouse (alcohol)

The news and internet were all a-twitter when Amy Winehouse died. Lots of shaking of the head and “I told you so’s” were going around. The general assumption was that she finally OD’d on whatever it was she was taking. The initial autopsy was inconclusive. That just set off more snark, “They just aren’t sure which drug killed her..” was a common joke running around. Now that the toxicology reports have come back inconclusive as well, I’m not hearing anything about it.

I assume that if she actually did OD on something it would show up in both the toxicology and probably the autopsy. Is there a recreational drug out there that kills you and leaves no obvious trace? So if she didn’t OD, what killed her? Her family thinks that the stress of quitting drinking cold turkey did her in.

People forget just how nasty alcohol is. It’s bad enough when you’re drinking and wrecking everyone’s lives, but even stopping drinking can be dangerous. Her family had begged her to quit gradually in order to avoid the worst of withdrawal symptoms but she decided that it was either cold turkey or nothing. In hindsight, that wasn’t a very good decision, but I can see her reasoning. If you really do have a drinking problem, having “just a little” isn’t always possible.

 

We still don’t know what happened but it does look like Amy died from her abuse as opposed to a specific event. It’s also plausible that her effort to quit is what got her in the end. Alcohol is just as dangerous as any other addicting drug, we should never forget that.

Warren Buffet and taxes

An editorial that Warren Buffet wrote has been making the rounds recently. I can’t link to it since it’s at the NYT behind a paywall, but the essence is this; Warren Buffet doesn’t think that he pays enough in taxes, he doesn’t think the “super rich” pay enough in taxes, he doesn’t think it will adversely affect either the rich or business, so why not raise the tax rate and stop “coddling” the rich?

He does also say that a lot of the super rich people he knows donate a significant amount of money to charitable causes as well. He said his tax bill last year was over 6 million, but he thinks it should be higher. He claims that over 250,000 people make over a million dollars a year. Let’s bump that to 300,000 and then assume that, on average, they paid 12 million a year in taxes. That would give us 360 billion dollars. Quite a chunk of change, it’s enough that it could take care of around of a third of the debt incurred annually by the US government.

Here’s a thought experiment. Imagine that Warren Buffet convinced all those people to put up that money, but instead of giving it to the IRS, they gave it to charitable causes instead. Would that be better or worse?

 

360 billion dollars. You could give the poorest 20 million people in the US $18,000 in direct aid. Or maybe buy 3.6 million houses worth $100,000. Or maybe take that $360 billion and create business with them and provide who knows how many jobs and income opportunities. Now compare that to cutting the deficit by a third for a single year. Which one of these things would have the most impact?

“But those people won’t do that.” That’s the typical response. The alternative that Buffet offers is that the IRS just take the money instead. Because they do not willingly give up that money, people feel justified in taking it from them. Taking money simply because they have it doesn’t exactly give you the moral high ground. I shouldn’t have to say this, but I always do; the ends do not justify the means. Even if that money were used for the best things in the world, it does not justify forcibly taking it. I think this is made even more clear when we realize that that money would be taken so that a relative handful of people can spend it in politically expedient ways. Is there any reason to believe that money will be spent more wisely than before?

Some people will say I’m “defending the rich,” or some such silliness. I am trying to point out that volunteering other people’s money doesn’t take much imagination or courage. In the end, it won’t actually solve much either. 360 billion sounds like a lot, but when you give it to an origination that has wracked up 14 trillion in debt, it doesn’t go very far. It goes about 2.5% into the debt payment. If you injected it into the economy directly, much more would happen.

Warren Buffet is free to send the IRS any amount over his tax bill that he wants. If some of his friends feel the same way, they can do the same. He really shouldn’t assume that the money would be used well or given freely though.

Mobile savvy

I was at dinner the other night with some family members and the topic of Trukee California came up (don’t ask). Both my brother and I had been there but there was some question about where it was and some of the details about it. We both got out our phones to look it up, but we did it in very different ways.

I started to type it into a Google search, like I always do. Nathan simply picked up his phone and said “Trukee California” into it and got the search result. It occurred to me that I don’t actually use my phone for much and when I do, I essentially use it like a small computer. I could have search by voice on mine (it’s offered by Google) but it never occurred to me to do something like that. I might own the technology, but I’m not really fully invested in the capabilities of my mobile devices. Nathan’s life has revolved around his phone for years. I get the distinct impression that he could live without a computer just fine, but if his phone went missing he’d be lost. It would be the opposite for me.

I’d like to get more into my mobile devices, but I’m not sure how I’m going to do it. Maybe with just enough time It’ll become second nature to me. Maybe I just need to get out more and spend some time away form the computer…

What happens when the Fed has an auction and nobody shows up?

Yesterday, yields on treasuries jumped from 3.51% to 3.78%. That hasn’t happened since 1980. What happened? Well, the big news is that the Chinese didn’t show up. So they didn’t buy any of our debt. Neither did pension funds or insurance companies. Uh oh. This could be bad. If what we have to pay to service our debt goes up too much, we will be in much worse shape than before. Our interest payments will eat up more and more of our budget. Here’s to hoping that we can keep those prices down…

Things seem to be falling apart

Wow wee, that was a rough couple of days. I’m sure there’s going to be more panic selling the rest of this week too. The strange thing is that the downgrade doesn’t seem to have hurt treasuries, people seem to be flocking to them as a safe haven even though those are the things that are no supposedly less safe. Weird.

We’re also waiting for Europe to finally fall over under its own weight. Of the countries in the eurozone, only Germany looks OK. Now Italy, France, and Belgium are drawing attention along with the usual suspects of Ireland, Greece, Spain, and Portugal. Of course American banks are covering the European banks…

This latest market crash makes me glad I’m not in mutual funds. When the market tanks, so do the funds. The problem is that there isn’t a good way to know if your fund is going to rebound, if they have chosen poorly, or how they will rebalance their portfolio. All of my retirement is in individual stocks. We always hear that is more risky than mutual funds. Maybe it is under normal situations, you never know when a seemingly healthy company can go south. But when the market tanks, it is far easier to make decisions on what to let go, what to keep, and what to buy. I did unload a few stocks when it was clear that things were going to go down. My portfolio has dropped in value of course, but I know that what I have kept is going to be OK. It is reassuring to look at my stocks and know why I have invested in them instead of gnashing my teeth over what idiots the fund managers are. I’m the only idiot running my account and I’m glad for it right now.