Sunday, May 30, 2010

Coming Soon in "Offshore!"

Forthcoming titles in the Offshore! mystery series:

Tony Mudd investigates the death of an engineer in a rig explosion. It looks like an accident... but was it?

Top Kill
Mudd is called in when the body of an oil company president is found floating in a barrel of light sweet crude.

Junk Shot
When a roustabout is fished from the South China Sea with a bullet in his chest, Mudd finds himself tangling with a ruthless heroin-smuggling gang.

Saturday, May 29, 2010

Recommended Reading

1. I recently said that I had once thought Newt Gingrich had some integrity. I'm not sure why I thought that, but this recent interview with Nate Silver of suggest that if he is not a demagogue, he's a wacko.

Gingrich says that any reasonable standard, Obama is committed to socialism...  Not only have we taken over GM, Chrysler and AIG, but there’s a czar in the White House who believes he can establish the pay scale for 30 companies he’s never been in, for hundreds of people he’s never met. They just nationalized the student loan program...So there’s a lot of different practices that would lead us to believe this is socialist operation.

Now, does anyone in his or her right mind believe the administration intends to hold on to GM, Chrysler and AIG in perpetuity? But before we quickly vote "demagogue," consider: would a demagogue really say that even though we've lent banks hundreds of billions of dollars, those banks should retain complete freedom to pay their executives as much as they want? Only a very dumb demagogue would say that. This sounds more like someone who values theoretical purity over all else. So which is worse, a demagogue or a fanatic?

Of course, with statements like, "Two Democratic legislators in Connecticut introduced a bill that would have destroyed the Catholic Church," or "They just nationalized the student loan program," (actually, they returned it to what it was before Republicans started subsidizing the banks to do it) I start to think maybe I was too hasty in dismissing demagoguery as a possibility. But decide for yourself.

2. I sort of had Mark Lilla pegged as a standard neo-con, despite not having actually read anything by him. Turns out he writes regularly for the non-con New York Review of Books. Other people seem confused too, particularly right-wing bloggers who are enraged by an article he wrote entitled "The Tea Party Jacobins." For example, a blog called "Minnesota Conservatives" calls him "a respected intellectual," presumably meaning a conservative,  while over at "The Other McCain," Robert Stacy McCain (remember him?) refers to him as "liberal Lilla," though not for any apparent reason except that Lilla doesn't like the Tea Party.

Anyway, the article strikes me as a pretty penetrating analysis, not only of the Tea Party, but of why American democracy doesn't seem to be functioning very well right now. Read it and weep.

Thursday, May 27, 2010

NYT Reports Sky Is Falling

In a front-page story blending suppressed hysteria and gleeful Schadenfreude, New York Times reporter and Paris bureau chief Steven Erlanger says that the debt crisis in Europe has "undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II." 

Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

But who's boasting now, left-leaning cheese-eaters?

Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. In France, the figure now is 31 percent, the highest in Europe, with state pensions making up more than 44 percent of the total and health care, 30 percent.  

What? Thirty percent on health care? Oh, wait-- that's 30% of 31%, or about 9%. In fact, France spends a bit over 10% of GDP on health care in total, far less than the 16% spent by the U.S. So how can France be drowning in social expenditures, when they're spending less on health care than we are?

Simple. It's an illusion. The paragraph above is not talking about social expenditures. It's talking about public social expenditures. In France, almost all health care spending is public spending. In the U.S., less than half is. One can tell a similar story for pensions and higher education, and perhaps other things. But as the example of health care shows, the fact that certain things are provided by the private sector in the U.S. does not mean that they are provided more cheaply or effectively.

The Times story fits neatly into the current conservative story about Europe: that they are fat and lazy (well, lazy anyway-- Americans have gotten more cautious about calling other people fat), but that their day of reckoning is coming, and Obama is trying to push the U.S. into following them down the road to perdition. They, and we, need to return to traditional values of hard work and lean government.

In case you missed the point, someone at the Times made the inexplicable decision to publish an incoherent, ill-informed, and generally ludicrous Op-Ed piece by a hedge fund manager about how we're about to follow Greece if we don't cut the deficit. He doesn't specify how we should do that, but my guess is that increasing taxes on hedge-fund managers is not high on his to-do list.

By the way, here's something to keep in mind: there is no crisis in Social Security. So when the commentariat tells you in coming months that we can't hope to deal with the deficit unless we have the courage to make deep Social Security cuts, just point them to this.But you would do that without my reminding you, right?

Wednesday, May 12, 2010

Don't Know Much Accounting, But...

In an article in the forthcoming New York Times Magazine, the author of the Times's "Your Money" column writes:

Net worth is the number you get when you subtract what you owe from what you own. You start with things like cash on hand, retirement savings and home equity and subtract your mortgage, as well as credit-card, student-loan and other debts.

That, of course, is wrong. You can count the value of your house and subtract your mortgage, or you can just use the result, which is home equity. But don't subtract your mortgage twice, or your net worth will look pretty bad.

The "what you own minus what you owe" formulation is deceptive, because it invites you to confuse two different sense of "own," as here. Note how widespread (even among specialists, though I'm sure this was a momentary aberration) the confusion is about gross and net. Not to mention levels and changes: how many Americans can tell you the difference between the debt and the deficit? Add these to the list of mathematical ideas that are more important for citizens than trigonometry.