Do they still line up kids at school and give them shots?

I have forgotten the state capitals, but one intact memory of elementary school in Bethesda, Maryland is lining up to get shots (vaccines?) from some sort of “gun”. These were administered roughly every 15 seconds either by the school nurse or a county health worker. It went so fast that I wonder if we were all effectively sharing one needle (HIV and hepatitis were not concerns for schoolchildren circa 1970).

The other day I was waiting for a friend at CVS so decided to use the time to get my “free” (i.e., included in my $ 10,000/year Obamacare policy) flu shot. Ten minutes later my friend showed up. It took roughly another ten minutes before the shot was “ready.” It turned out that three health care professionals had to process various forms on a computer screen, get a one-page questionnaire from me, and finally deliver the shot with a simple needle (less than one minute). A licensed pharmacist was required as part of the paperwork pipeline.

Here’s what I got in hardcopy:

  1. Two-page document regarding the vaccine (Flucelvax Quad). It says “This is an OFF-WHITE SYRINGE.”
  2. CVS Health Notice of Privacy Practices, a two-page document in 6 pt type. It is a paper copy that, among other things, says “You have the right to obtain a paper copy of our current Notice at any time.” It also says what will happen if I am or become “an inmate of a correctional institution.”
  3. A five-page “Vaccine Information Statement” that discusses the side effects (overlaps to some extent with Document #1)
  4. A Vaccine Consent and Administration Record
  5. A three-foot-long receipt for $ 0.00 (coupons following)
  6. A $ 5 off any $ 25 purchase special coupon specific to having gotten a “free” flu shot (i.e., for giving CVS the opportunity to bill the health insurer)

Is there now this much paperwork and process attached to what was, in my youth, a 15-second paperwork-free experience?

[I posted a shorter version of the above on Facebook and it generated the predictable encomiums about the wisdom of Obamacare requiring insurance companies to pay for flu shots:

I think the insurance companies cover shots as a preventative measure, hoping we won’t incur more healthcare expenses related to the flu we’d contract if we didn’t take the shot.

It should be free and universal. That will save the most money, and the evidence for that is stone-cold solid.

In other words, the central planners working for the government are smarter than the actuaries who work at insurers, which didn’t previously pay for flu shots. I decided to poke at this assumption a bit with “If it made actuarial sense to do this, why wouldn’t the UK bureaucrats be smart enough to figure it out? They don’t offer free flu shots to everyone. (source) Are the U.S. central planners smarter than the UK ones who’ve been doing it for decades?” That proved to be an impossible conundrum!]

Philip Greenspun’s Weblog

Why do people vote to have the government make them do something that they would never do voluntarily?

Another Election Day question…

“Marco Rubio: Tax Reform Should Help American Families” (nytimes) tries to sell the latest Republican tax proposal on the grounds that, compared to the current system, there will be more handouts for Americans with children under age 18. The discussion is framed by pointing out what money-sinks children can be:

According to federal data adjusted for inflation, from 1960 to 2015 the average annual cost of raising a child in a middle-income family rose by over $ 11,000. It’s now estimated that middle-class parents will spend more than $ 230,000 over the course of their son or daughter’s childhood — and that doesn’t even include college tuition.

[The Senator and the NYT Editors don’t explain the arithmetic here. The cost is $ 11,000 per year higher over 18 years. That’s a total of $ 198,000. If we subtract that from the current cost of $ 230,000 we find that the cost to parents back in 1960 was only about $ 32,000 in today’s mini-dollars. Does that make sense given that food and clothing are cheaper than ever? (and, of course, the paper does not have the bad taste to point out that an American who has sex with a dermatologist can get $ 230,000 per year in tax-free child support, depending on the state) Senator Rubio also claims that this $ 230,000 is more than it costs to buy a house, which sounds wrong to those of us living in on the sacred coasts of righteousness, but is close to being true nationwide according to realtor data (median existing single-family home sold for $ 246,800 in September 2017; used condos sold for a median price of $ 231,800).]

The article goes on to say that some Americans aren’t having as many babies as they would in a world where children were cost-free (i.e., paid for by someone else). This is a serious problem in a country with a population of 325 million that, apparently, seeks to overtake China and India.

My comment:

“Having kids is one of life’s greatest experiences.” [the article’s first sentence]

Hard to argue with this, but then why can’t we parents pay for our own kids instead of asking childless Americans to pay yet more for them? The childless already pay for a share of K-12, right? When we go to a restaurant with our kids ([a] mercifully infrequent [event]) we don’t say “This must be one of life’s greatest experiences for the childless people in this restaurant” and then go around asking other diners to chip in for our meal. Yet that is exactly what the government is doing via a tax code that makes the childless give up a higher percentage of their income.

Given that there are more voters (the childless and those with adult children) who will pay for this compared to the number who will enjoyed the reduced tax rates, I’m wondering why this is a selling point.

Childless Americans don’t voluntarily go around to those with children and offer money, do they? If not, why would a majority of childless Americans vote to have the government take money from them and give it to Americans with minor children?

Most of the top-rated comments on the piece demand yet more handouts or complain that others are richer:

So if you value families, Senator, how about paid family leave, quality prenatal care and healthcare throughout a child’s life, and universal childcare and preschool? And how about quality K-12 schools and educational opportunities, not just for the elites but for all Americans, investing in the future of our country?

The mom’s [sic] I talk to tell me that daycare runs about $ 15,000 a year per child. If we really want to help families, how about funding daycare like those awful freedom robbing socialist European countries do? We can’t do that here because that would entail federal spending and the federal government isn’t supposed to spend money on the little people. We give them paltry tax breaks which doesn’t cover the cost of daycare or health insurance and other socialist programs that all other modern industrialized nations provide.

For someone who is currently deciding on whether or not to have a second child this article really angers me. My husband and I make a good living, but we are both self employed. Our insurance is going up next year and premiums will be over 1k a month. We don’t quality for tax credits for health care and we would have an out of pocket cost of over 7k for having another baby. This is on a silver plan. After having a baby we would need extra childcare which would cost us at least 1200 a month on top of preschool cost for our son. We don’t need a measly $ 2k tax credit, we need affordable childcare, affordable healthcare and paid parental leave. Being from a Northern European country originally, my husband and I have decided to move to Europe in 2019. Unfortunately, the United States is not a good place to raise a family.

A $ 2,000 tax credit won’t do much. If you really want to help working families, provide them with affordable healthcare, childcare, and education. That will require a tax increase on the wealthy, not the huge tax breaks you’re giving them now.

If your party would do something about the problems you mention here, like a mandatory living wage, daycare as part of public education (thus free), paid family leave, free community college, a functioning healthcare insurance system as opposed to sabotaging it), perhaps things would be a lot better.

And kids over 18 going to college, while still dependents, don’t qualify for the child tax credit making the loss of the personal exemptions even more onerous to the family finances. [at least in Massachusetts the child support profits can continue to flow until age 23]

Keep the inheritance tax – families with that much money do not need our help.

You mention student loans in the very first para. Why not do something about the cost of college education as your Democratic colleagues want to do? Affordable college education can not only help parents but will make the country competitive in a global market.

As someone graduating college and looking to embark on my own “American Dream” the increasing pricetag of raising kids is a point of real concern for me. Because having children is a top priority in my life I want to do so without continual financial anxieties, yet with the new proposed tax plan and the current infrastructure, it seems to be increasingly difficult. It affects my career choice, place of residence, pregnancy timing and everyday spending.

The last one is my favorite. The author identifies him/herself as “Luke Yeager” from Boulder, Colorado and therefore the implication is that someone named “Luke” will be pregnant. He/she says “having children is a top priority in my life,” but not such a high priority that Luke wants to work to support the prospective brats: “I want to do so without continual financial anxieties.” Maybe Colorado doesn’t offer free housing to those with kids and zero income? Luke needs to come to Massachusetts and discover the miracle of means-tested public housing (sometimes in newly constructed luxury commercial apartment buildings), Masshealth (our Medicaid), food stamps, etc. We will be happy to pay for as many children as his pregnancies produce. If he and his adult partner have two children and don’t want to stay home all day playing Xbox they can earn up to $ 78,150 per year and remain in Boston public housing (chart).

There are a few NYT readers guilty of “maybe we don’t have infinite money” thoughtcrime:

Households of childless couples or single men and women already have their taxes used for public education and related expenses which are significant. Yes, I can see the collective good there. But to add further tax burdens/costs to those who, by great measure, choose not to have children out of being financially responsible and realistic of their earning powers to have to finance the raising of children by shouldering further tax breaks for those that choose (or recklessly) have children is starting to approach a point of grossly unfair. Add food assistance programs and healthcare….we’re talking real money. The single or childless household is being unfairly burdened.

In general, individuals and societies who can most easily afford more children tend to have fewer of them and vice versa. Thus, I question the proposed correlation between fertility rates and taxes. More importantly, we have an appalling rate of child poverty in this country (about 20%). Supporting the education and welfare of these children should be the top priority, not encouraging everyone to have more of them.

i’m all for helping to defray the cost of child-rearing, but as a happily single and childless fully self-employed adult, i need some help with payroll taxes, too. right now, i have zero confidence that i will ever live to collect social security. lifting the income cap on the payroll tax would save that program for all american workers, those with children and those without.

The article concludes with “Raising children is the most important job we will ever have.” (he does not cite Bill Burr on how it is also the toughest)

Readers: What do you think? Is it strange that people vote to have the government make everyone do something that practical nobody does voluntarily? (and Happy Election Day if you’re voting!)

Philip Greenspun’s Weblog

If Americans won’t learn about their computers, what hope is there to get them interested in STEM?

Before the current rage for encouraging women and dark-skinned Americans to take up dreary STEM majors and jobs there was a rage for encouraging all Americans, regardless of gender ID or skin color, to toil in the sci-tech mines.

I’m wondering if we have objective evidence of the futility of these efforts from the observed complete lack of interest of Americans in how everyday machines work.

What’s the greatest technological advance that has happened within a middle-aged American’s lifetime? As a computer programmer, I’m going to argue that it is the realization in silicon of the ideas of Alonzo Church, Emil Post, and Alan Turing. These machines are readily available to most Americans: the notebook computer, the desktop computer, the smartphone (plus hundreds of others strewn around the house and car, but they are tougher to poke at). There are great free online tutorials explaining every aspect of these machines from the sandy beach up. But how many people voluntarily learn about wafer fabrication? About transistors and digital logic? About machine language and compilers? About operating systems? To a first approximation, nobody cares. If Americans don’t care about this machine that has transformed their lives, why would it work to exhort them to care about more esoteric subjects?

Separately, I’m wondering if we can measure a falling curiosity about how automobiles work. Back in the 1970s I remember that a lot of people were interested to learn about the cycles of a four-stroke engine, the mechanisms within the transmission, steering, and brakes of a car, etc. Bookstores featured books on these subjects reasonably prominently and these were separate from the practical “here’s how you can fix it yourself” books. I wonder if today’s Honda Accord owner has the same level of knowledge about the vehicle that the average Chevrolet Nova owner had back in the 1970s (and what a great car the Nova was!).

Readers: if the building blocks of computers and computer networking aren’t interesting enough for people to crack a book or browse a web page on the subject, what hope is there to increase the number of Americans interested in the building blocks of other stuff?


Philip Greenspun’s Weblog

If employers want 50 percent women, is it obvious that they must pay them more?

The Google Heretic is the gift that keeps on giving for anyone publishing a blog.

The Heretic’s memo and firing wouldn’t have happened but for Google’s desire to have a workforce that is “representative” of the general population, i.e., roughly 50 percent women. Despite management’s noble sentiments and the preponderance of Hillary supporters within the company, Google failed at their stated goal. This led the former science grad student (and current heretic) to turn to his science journals while it led me to ask “Why not pay women more if you’re so keen on hiring them?”

Supposedly it is illegal to pay women more simply because they are women. I’m not sure if this is true in practice because we are told by various politicians that employers pay women less because they are women.

I’m wondering if the sex discrimination laws that were enacted to help women get higher pay are now working to reduce female pay below market-clearing levels.

BLS data show that male labor force participation rate for ages 25-54 was 88 percent in 2014. Female labor force participation rate the same age range only 74 percent. With approximately equal numbers of men and women in this age group, there will be 88 men for every 74 women in the labor force, right? If every employer wants to have a 50/50 gender ID distribution not all of them can succeed. In a market economy, the typical way in which a scarce resource is allocated is via pricing. Women should be worth more in the labor market than men and companies such as Google would have to outbid other firms that seek gender ID balance in order to achieve it.

Readers: What am I missing? Now that being seen as pro-women is a business necessity, given the relative scarcity of women in the American labor force, are laws requiring equal pay to men and women working against women?

Philip Greenspun’s Weblog

Grabbing land from the Mexicans and then trading with them

From American Ulysses: A Life of Ulysses S. Grant by Ronald White…

Before the conflict in Texas erupted, Mexicans regarded the United States highly. Many politicians wished to emulate American democratic institutions. But Americans did not appreciate how much more difficult and complex Mexico’s path to becoming a nation was as it sought to shed the bonds of imperial Spain. From the Mexican perspective, America’s determination to tear Texas from Mexico initiated generations of distrust.

These letters [to Julia, his future wife, in 1846] reveal his observant, artistic eye. While some soldiers wrote home disparagingly of Mexico, he marveled about Monterrey: “This is the most beautiful spot that it has been my fortune to see in this world.” With feeling, he described the “beautiful city enclosed on three sides by the mountains with a pass through them to the right and to the left.

Grant would come to believe the Mexican War was unjust—a large nation attacking a small nation—but he had high praise for the American army. “The men engaged in the Mexican War were brave, and the officers of the regular army, from highest to lowest, were educated in their profession,” he declared. “A more efficient army for its number and armament I do not believe ever fought a battle.”

The Mexican War of 1846–1848, largely forgotten today, was the second costliest war in American history in terms of the percentage of soldiers who died. Of the 78,718 American soldiers who served, 13,283 died, constituting a casualty rate of 16.87 percent. By comparison, the casualty rate was 2.5 percent in World War I and World War II, 0.1 percent in Korea and Vietnam, and 21 percent for the Civil War. Of the casualties, 11,562 died of illness, disease, and accidents. Thirty-nine men Grant had known at West Point died. Four members of his 1843 class lost their lives.

What did we get as a reward for our aggression?

On February 2, 1848, Trist concluded a peace treaty that the commissioners signed at Guadalupe Hidalgo. The Senate ratified it on March 10, confirming American claims to Texas and setting the boundary at the Rio Grande. The Mexican government ceded to the United States New Mexico and Upper California, which included present-day Arizona and New Mexico, as well as parts of Nevada, Utah, and Colorado. In exchange, the United States paid Mexico $ 15 million and assumed claims against Mexico by United States citizens. The Mexican Congress ratified the treaty on May 25. United States troops began leaving Mexico five days later.

After the Civil War and the Presidency, it was time to think about commerce with Mexico:

Traveling with friend and diplomat Matías Romero, Grant became convinced that investment of foreign capital would “put the people on their feet” so that “Mexico would become a rich country, a good neighbor, and the two Republics would profit by contact.

Think that the debate over the pros ad cons of NAFTA and free trade with Mexico are new?

Knowing of Grant’s interest in Mexico, in early 1882 Chester Arthur—president of the United States since the death of James Garfield by an assassin’s bullet in September 1881—invited Grant to become U.S. commissioner to draw up a commercial treaty with Mexico. Mexico appointed Matías Romero as one of its two commissioners. The commissioners quickly agreed on terms of a free trade treaty that would remove tariffs on U.S. and Mexican products. The treaty of reciprocity was signed on January 20, 1883, but needed to be approved by the senates of both countries. The treaty was defeated in both countries.

In the United States, protectionists decried the free trade provisions. Some in the United States and Mexico charged that Grant and Romero were involved primarily for their own pecuniary gain.

More: read American Ulysses: A Life of Ulysses S. Grant

Philip Greenspun’s Weblog

How Do You Like THEM Apples?

Well, now that I’ve recovered from the 20 minutes of the DNC I watched tonight (including Earth’s Worst Rendition of “Bridge Over Troubled Water”), I thought I’d toss one last post into the hopper to end the day: Apple. They report after the close tomorrow, and I’ve got a big short position in them. My […]
Slope of Hope

The Three SP500 Rectangles and How to Trade Them

As we begin June 2016, the S&P 500 has formed three clear Rectangles on the daily chart.

What does this mean and how are we planning our next series of trades right now?

As we focus specifically on price, we see THREE Rectangles or consolidation patterns highlighted above.

The first rectangle is the longest and tallest and took half of 2015 to develop before a breakdown lower.

As I’ve been highlighting in my member reports and analysis, we’re expecting a repeat phase of the late 2015 pattern.  So far, that’s precisely what we’re seeing.

In late 2015, price hovered between the 2,020 and 2,100 levels in a three-month trading range.

Another breakdown took us to 1,800 ahead of a “Repeat Pattern” back to the highs into 2,100 where we are now.

In simplest planning terms, we’re going to keep trading the bounces WITHIN the range while price is between the similar 2,100 (resistance) and 2,040 (support) smaller rectangle currently.

Any upside breakout – ideally above the 2015 high – could set the stage for a powerful bullish “short-squeeze” impulse higher.

Otherwise, another breakdown under 2,040 that continues under 2,000 could be the catalyst for a third collapse lower.

Three Rectangles; Three Collapses?

If history repeats, we’ll see a downward swing into June/July… but if this time is different, we’ll jump back on the bullish bandwagon to new all-time highs.

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Corey Rosenbloom, CMT
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Afraid to Blog

Rates are Rising, Just Not All of Them

Written By: DragonFly Capital


One of the hottest debates through 2015, after the Fed said they were going to eventually start removing stimulus and raising interest rates, was whether or not interest rates were going to go up. Every economist predicted that they would. Many traders however suggested that the price evidence said they would not.

In the end the Fed did raise rates, but not until late December. A beautiful merry Christmas gift to the market. And what happened? Short term rates did rise. But long term rates have barely moved. Bond market and interest rate traders will have no problem with this.

The Federal Reserve controls the extreme short end of the market. The overnight risk free rate, Fed Funds. When the Fed says that they are raising rates this is what they mean. And when they say they intend to keep doing so it is to keep raising the Fed Funds rate.


Long term rates are another story. They are, for the most part, out of the control of the Fed in the short run. That is because long term rates are simplistically a combination of a discounted long term risk free rate and inflation expectations. So with inflation expectations falling in the market place long term rates stand a real chance of falling further.

The chart above shows the price of 30 year Treasury Bonds over the last 20 years. Recall that bond prices rise when yields, or interest rates, fall. Clearly prices are continuing to rise. Looking at the far right of the chart prices look set up to head higher in the very short term.

So the Fed has said interest rates are going to rise. And Treasury Bonds are saying that interest rates are going to fall. Which is right? Both can be. So if you have been confused by the debate over rising interest rates, make sure your first question is which rates are you talking about. Short term or long term. It makes a difference.

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Federal government spends more money debating backup cameras for cars than it would have cost to install them?

The federal government has been planning since the reign of King Bush II to require that automakers include a backup camera as standard equipment (to cut down on the roughly 17,000 people per year who are injured in “backover” accidents). I’m helping a friend who is shopping for a new car (she needs to move her two kids and maybe some extra children a few miles within a city so naturally her first choice is a pavement-melting SUV) and decided to check to see if all new 2014 cars would have backup cameras. This April 15, 2013 story says that the Obama Administration is still debating the rule.

Given the pace at which technology becomes cheaper and government workers become more expensive I’m wondering if now we are actually spending more as a society on arguing about these cameras than they would have cost to install. It seems that perhaps 30 percent of new cars won’t have the cameras in 2014.

If the camera and screen add $ 50 to the cost of making a car and the 2012 sales rate of 14.5 million is sustained, that is $ 217.5 million that would be spent on the backup cameras for those vehicles that lack them. The U.S. Department of Transportation budget was $ 79 billion in 2011 (Wikipedia) but it is tough to know how much of that was spent on making rules for backup cameras. Given that members of Congress are engaged in this debate and also journalists and members of the public, and that the debate has been ongoing for at least 10 years (George W. Bush signed the law (text of H.R. 1216, the Cameron Gulbransen Kids Transportation Safety Act of 2007) requiring cameras back in 2008, but presumably the law came out of a previous debate), it doesn’t seem inconceivable that $ 217.5 million has been spent arguing. Let’s not forget travel expenses for advocates of the law who flew to Washington, D.C. to try to get audiences with bureaucrats and members of Congress.

What do folks think? Will Americans spend more arguing about this hardware than the Chinese will charge us to build a year’s worth of the devices?

[Note that this is not an argument against the spirit of the 2007/2008 law. The automobile market is already so heavily regulated and, in some cases subsidized with federal tax dollars, that there is not really an obvious argument to be made against any additional regulation. As a parent I certainly don’t want any of my kids to be backed over because a car maker saw an opportunity to sell a $ 2000 option package and a consumer didn’t have the $ 2000 to spend on the package that included the camera. I think the cameras will pay for themselves over time, even if no lives were saved, because drivers won’t back over/into as much stuff (economic analyses of the law that I’ve seen concentrate on the cost of each life actually saved, but ignore the costs of property damage and injuries). I would, however, say that this does show a weakness in the American political system. Congress could write “There shall be a backup camera in every car starting in 2011, covering at least whatever a driver can’t see with the mirrors, and the screen will be at least 3″ diagonally.” Instead the law will say “This authorizes bureaucrats to engage in an endless debate, during every minute of which they draw fat salary and pension benefits at taxpayer expense, about the best way to regulate each and every detail of backup cameras. If they can’t conclude their debate by 2010 then they can pay themselves for an additional five or ten years to continue studying the issue and talking to their pals in the auto industry.”]

Philip Greenspun’s Weblog

Stories That Will Continue to Get Far Too Little Attention As Long As Obama Allows Them To. [Appended]

* Don’t forget about the Consumer Financial Protection Bureau: Paul Krugman has the goods on a story that’s getting far too little attention: In filibustering Richard Cordray, Obama’s choice to head the consumer protection bureau, and demanding major changes to the agency, Republicans are trying to transform it into something that’s essentially unable to carry out its mission.

How can the G.O.P. be so determined to make America safe for financial fraud, with the 2008 crisis still so fresh in our memory? In part it’s because Republicans are deep in denial about what actually happened to our financial system and economy. […] Just four years after runaway bankers brought the world economy to its knees, Senate Republicans are using every means at their disposal, violating all the usual norms of politics in the process, in an attempt to give the bankers a chance to do it all over again.

Krugman notes that Cordray has drawn praise even from the bankers, which I’ve seen elsewhere, too. So: Do the financial institutions even favor what the GOP is up to here?

Worth some more reporting, I’d say.

— Greg Sargent, Washington Post, today

One of the most dismaying and frustrating of Obama’s first-term communication failures was, for me, his utter absence of any real attempt to apprise the public of the existence of the Consumer Financial Protection Bureau, what its mandate is, and that (and how) the congressional Republicans have concertedly tried to undermine it, via Senate filibuster of any nominee–not just, first Elizabeth Warren, and then Richard Cordray, but, by their own admission, any nominee–to head this bureau, and by attempts to fail to appropriate operating funds for it.

Eight days from now, in his State of the Union address, Obama will have a terrific opportunity to educate the public about all this.  All this.  By which I mean: Not just a clause or a sentence near the end of the speech, alluding to it in listing this, that, and the other thing, but instead an actual explanation of it and of the undermining of it by the Repubs. Near the opening of the speech, before viewers click to whatever because they, like me, want to avoid gagging at the extremely tired James Baker’s great-idea-for-staging-at-Reagan’s-State-of-the-Union-addresses-and-used-by-every-president-sinnce-then real-Americans-as-props thing. (Talking about a program to help oil-company workers? Cue two oil-company workers flanking the First Lady, sitting in the first row. You know what I’m talking about.  Ad nauseum.)  

But since the invites of real Americans surely have already been sent out, and there’s no stopping that juggernaut anyway, however more eyes it causes to roll each year, I suggest the addition of some real Americans who already have benefited from the Bureau’s actions.  

I also, by the way, suggest the addition of a real American or two who, because of the provision in Dodd-Frank–or maybe it was a separate statute, all its own, effective in August 2011 but enacted in 2010 by a Dem-controlled Senate and Dem-controlled House; I’m not sure–that ended what millions of Americans fondly came to call the $ 400 Starbucks/McDonalds/Dunkin’Donuts coffee/sandwich/dessert, the result of inadvertent, momentary checking-account overdrafts when the mortgage payment, the doctor’s co-pay, and payment for the brake job the SUV all just by chance happened to post to your checking account moments before you swiped that ATM/credit/debit card at the Starbuck, McDonald’s or Dunkin’ Donuts.  I’ll nominate myself for an invite on that one, even though I’ve never actually owned an SUV and don’t like them much.  

No, that doesn’t involve something that changed the state of the union this past year.  But it’s long past time for our Dem politicians to start pointing out things of exactly this sort, and to ask what exactly the congressional Republicans have done along those lines since Jan. 2011. And to start educating the public about what the specifics of what they’ve done to undermine protections against financial-industry abuse, whether legal or illegal.

Stories that will continue to get far too little attention as long as Obama allows them to. Or until maybe Prof. Krugman becomes President Krugman–which sounds like a plan, to me!

UPDATE: Oh, dear.  Turns out that Mitt Romney isn’t the only one who wasn’t familiar with the pre-Aug. 2011 $ 400 McDonald’s sandwich paid for (many times over) with ATM card payment charges (a.k.a., multiple overdraft fees within a period of 30 seconds.)  Regular reader coberly wasn’t either.  So he and I just exchanged the following comments in the Comments thread:



You did not exactly take advantage of your own opportunity to explain the Starbucks $ 400 dessert, but I can guess.

Back when it might have been a problem for me, I kept track of the checks I wrote and did not write them for any more than I had in the bank. I think this prevented even “inadvertent” overdrafts.


Ah. Actually, I just threw that in there to be funny.  Or to try to be. (It’s not really a funny subject, so maybe I shouldn’t have tried.)  But unless you keep a lot of cash in your checking account or tie it automatically to a savings account, or were extremely careful to keep track of your checking account–and a lot of people have more than one checking account–you would, before that law came into effect in 2011, have to keep enough money in your account to include an  overdraft fee of $ 36 (or whatever) each for a single inadvertent overdraft, or you would find yourself charged repeated overdraft fees in a single day for every charge that came in until you realized you were overdrawn.  

The new law applies only to debit/credit card/ATM transactions, not to actual checks, so you still have to be careful about checks, especially since you can’t be sure when they’ll be cashed.

It also helps if you can add and subtract, I’ve learned the hard way.  One of my tax-law profs. used to say that his wife was always the one to actually do their income tax returns. The guy was friggin’ brilliant in discussing legal theory and tax strategy–best as I could tell, anyway–but swore that he couldn’t do actual math, or even competently use a calculator, worth a damn.  Makes me feel better when I recall that. (Calculators sorta throw me off, too, since I can’t figure out what all those funny-looking math symbols are.  Like the + and – signs.)

Back in the pre-Dodd-Frank days, there were looooads of stories on the web and elsewhere about this kind of thing.  So I assumed everyone was familiar with the issue.  Not so, though. So I thought I’d add this explanation.

Angry Bear

The Supreme Court’s corporate monsters–if money buys them “free speech” rights, can it help them avoid giving others human rights?

by Linda Beale

The Supreme Court’s corporate monsters–if money buys them “free speech” rights, can it help them avoid giving others human rights?

The Supreme Court decided in Citizens United that corporations could intevene to influence elections–giving money and aide to their selected candidates. This was an inordinate broadening of corporate “personhood”, claimed to be necessary under the warped First Amendment precedents of the Supreme Court that count “money” as speech and thus consider that limitations on money spent to influence elections as a limitation on speech.

Yet most economists and tax professors argue against the corporate tax–which has been in place longer than the individual income tax–on the grounds that taxes distort and that the claimed “double taxation” of corporate income distorts the allocation of capital. See, e.g., Tax Foundation, 2004 paper on integrating corporate and personal income taxes; seminal 1985 integration piece from NBER. Much of the argument boils down to an a prior assumption that “only people can pay taxes.”
(Of course, we used to think that only people could engage in campaign speech or bribe politicians for quid pro quo policies or otherwise influence the course of society. We were naive.)

As a result of this “received wisdom” about economics and corporate taxes–mostly based on the mathematically correct but practically challenged Chicago School approach to understanding economic systems (by assuming away most of the real world, including life, death, and everything in between)– corporate lobbyists and their allies in Congress have been pushing for decades to eliminate corporate taxation through integration of the corporate and individual tax schemes or at a minimum to drastically reduce the liability of corporations for federal income taxes.
Every presidential candidate has one scheme or another to reduce corporate taxes, with even Obama falling prey to the continuing influence of the Wall Street facilitators like Timothy Geithner in the Treasury and Larry Summers. See Citizens for Tax Justice, President’s Framework Fails to Raise Revenue (pointing out that there is no reason not to fix the loopholes in corporate tax to help address the deficit without having to lower corporate rates, and noting that although Obama at least called for making his rate reduction framework for so-called corporate tax reform revenue neutral, his plan fails to raise about a trillion dollars to make up for the corporate taxes that it gives up). As CTJ notes, many organizations have called for the opposite–to raise revenues from corporations that have been paying very little in taxes, especially since the 2003 Bush “reforms” that granted most of the items on corporations’ wish list for tax cuts.

Last year, 250 organizations, including organizations from every state in the U.S., joined us in urging Congress to enact a corporate tax reform that raises revenue. These organizations believe that it’s outrageous that Congress is debating cuts in public services like Medicare and Medicaid to address an alleged budget crisis and yet no attempt will be made to raise more revenue from profitable corporations. Id.

Nonetheless, most candidates call for making the corporate income tax territorial and thus making it even more lucrative for US multinationals to move more of their corporate businesses (and jobs) abroad. Most call for reducing the rates on corporations to a historically unprecedentedly low level–making it even more likely that the US trade deficit and corresponding budget deficit will continue to grow, even at a time when these self-nominated fiscal “conservatives” are claiming that the current deficit requires monumental sacrifices from ordinary people in the way of reduced medical care and old age security (the effort to cut back drastically on the benefits payable under Medicare and Social Security).

Most treat the owners of corporate equity as though they were some kind of revered engine of growth, when in fact they are usually merely rich people who are interested in reaping as high a profit as possible from sales of corporate shares but very little interested in entrepreneurship, and as likely to engage in quick trades (the profits of which go into their pockets and not into the working capital of the corproations) as to hold long-term based on analysis of corporate business fundamentals. Most don’t accompany their form of integration with eliminating the category distinction between capital gains and ordinary income.

Most “corporate reform” plans call for continuing most of the absurd provisions that have larded the pockets of corporate management over the last few decades, such as

  • accelerated depreciation and expensing (including all the depletion allowances for the heavily subsidized oil and gas extractive industry, even while it complains about the petty little incentives put in place in recent years for environmentally sound energy generation–accelerated expensing creates “phantom” deductions that reduce taxable income well below economic profits), and
  • the “research & development” credit, which was first enacted as a stimulus that was to be in place for a very short period of time but has been extended in fits–even retroactively for several years–as corporations demand making every single “stimulus” tax break they get permanent.

(As readers of this blog know, I see little merit in the R&D credit. Corporations can already deduct way too much “phantom” expenses–excess interest expense that allows them to operate with too much leverage, facilitating equity firm buyouts by leveraging up the purchased entity to pay off the equity strippers. Further, as with so many of the GOP’s favorite programs of tax subsidies for multinationals and the upper crust, it hasn’t bothered to conduct studies to see if the R&D credit indeed results in more research done in this country. Clearly, a retroactively enacted credit does NOT incentivize research.

Probably the times it’s been enacted without being retroactive haven’t either–it takes extensive labs and equipment to do research, and such labs and equipment have to be purchased far ahead of when they pay off. Most of the R&D that the credit supports is likely to be of the “tweak-a-patent” variety that seeks merely to find a way to extend a monopoly profit from a particular profit–something the patent law should frown upon.)
So the drumbeat for lower corporate taxes–at a time when corporations are paying less as a proportion of GDP than they did in the time of our most sustained economic growth–continues unabated from the right joined by only slightly less enthousiastic accompaniment at the White House and think tanks like the Tax Policy Institute.

Meanwhile, the Supreme Court, having anointed corporations with a kind of personhood that lets them intervene in elections even though they have no vote, has taken for consideration a case that challenges the rights of individuals to hold corporations accountable as people are held accountable for human rights violations. The case is Kiobel v Royal Dutch Petroleum (2d Cir. 2010), in which Nigerian plaintiffs seek to hold Royal Dutch/Shell liable for violating the Alien Tort Statute (“ATS”), 28 U.S.C. § 1350, which upholds international norms of human rights.

The Second Circuit held that US courts cannot entertain such suits, holding that jurisdiction under the Alien Tort Statute against corporations requires an international norm approving sanctioning corporations for torts and that requires more than the mere fact that most countries treat corporations under their domestic law as capable of committing torts. The court in the Second Circuit opinion makes a point much like economists tend to make about taxes–essentially implying that “only people commit heinous acts”.

From the beginning, however, the principle of individual liability for violations of international law has been limited to natural persons—not “juridical” persons such as corporations—because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an “international crime” has rested solely with the individual men and women who have perpetrated it. Second Circuit in Riobel.

While people are the “deciders” of corporate decisions, nonetheless the corporate form permits corporations to engage in conduct that individuals alone cannot engage in–from amassing huge resources to carrying out massive enterprises that pollute and steal human dignity. To ignore that reality of corporate wrongdoing, especially in an age that has anointed corporate personhood with rights that seem furthest from ones that corporate entities should be permitted to enjoy, would be folly.

For further discussion of the implications of the case, see Peter Weiss, Should corporations have more leeway to kill than people do?, New York Times (Feb. 24, 2012).
Suffice it to say that this case raises the specter of full-blown corporatism overtaking the entire U.S. economic and social system. If the Supreme Court accompanies its “personhood for free speech/election intervention rights” with “not people so can’t be touched for human rights violations”, there will be even fewer ways to hold multinationals accountable, and they will forge even stronger relationships with autocratic dictators who treat their citizens like slaves and their environments like garbage pits. Meanwhile corporations will continue to intervene in our elections at will (usually the will of their ultra-wealthy managerial class), using the extraordinary power of the resources at their command.

We will all be the worse for any decision that would allow multinationals to expand their quasi-sovereign rights without saddling them with a strong obligation to comply with international norms respecting human rights. Rights without obligations are invitations to corruption.

crossposted with ataxingmatter

Angry Bear