Uneven Justice

Today's New York Times has articles about Blackwater settling a case involving "unauthorized sales of satellite phones in Sudan; unauthorized military training provided to foreign governments, including Canada’s; illegal possession of automatic weapons; and other violations." Their penalty, a fine and probation.

Another article says that despite the fact that "corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government," nobody ever gets charged, much less goes to jail.

“A lot of people on the street, they’re wondering how a company can commit serious violations of securities laws and yet no individuals seem to be involved and no individual responsibility was assessed,” Senator Jack Reed, Democrat of Rhode Island and chairman of a subcommittee that oversees securities regulation, said at a recent hearing.

When banks can defraud homeowners and then use robosigners to foreclose on them, pharmaceutical companies can defraud medicare, and security companies can ignore the laws and run their own foreign policy but we throw kids in jail for smoking pot something is seriously wrong with our priorities. Seems to me that someone needs to stand up for personal responsibility and accountability.

The Leisure Trap

An opinion piece by Tim Kreider in the New York Times warns us all about the "busy trap." Busy the author tells us is way to avoid emptiness and feel important. It deprives us of the fun of leisure, hours spent drinking pink alcohol with friends, looking at clouds, and whatnot.

I would seem to be a prime exhibit for his argument. I often have a list of chores a mile long, which I can't complete because I'm busy working and shuttling kids to chess, tutoring, piano lessons, and soccer. Once upon a time I had a thriving software company, which I sold, replacing my job with one far less demanding. In doing so I should have created lots of time for fun.

I look at busyness differently than he does, however. To me being busy just means that there are more interesting and important things to do than I can fit into the limited amount of time that I have. Sure, I could choose to be busy ogling girls but instead I choose to shuttle my children to music lessons, cook great food, workout, and learn new languages. Either way, I spend the same amount of time every day as Mr. Kreider I just choose to spend my time differently than he does.

Mr. Kreider, says he supposes that on his deathbed he'll regret "that I didn’t work harder and say everything I had to say," but goes on to say he'll probably regret not spending time on leisure more. My experience is different. Already at 47 I regret not having worked harder and learned more in college. Sometimes, when I see how meaningful my wife's work is (saving lives and pushing back the frontiers of science) I wish that I'd been willing to work hard enough to go to medical school when I had that opportunity. While I've heard that almost nobody lies on their deathbed bemoaning the fact that they had not worked one more hour I'll bet just as few lie on their deathbed wishing they'd played one more hour of Farmville or spent one more hour lying on their couch drinking lemonade.

Krieder does have one thing right, but he labels it incorrectly. Almost all of his examples of leisure are of things done with friends and there is no questions that time spent socially is superior to time spent alone, but being social doesn't have to mean doing things that are unproductive. Trying to spend more time with others is a laudable goal.

I spend plenty of time doing things that have no immediate benefit to myself, my family, or society, including checking Facebook and playing Jewels but in the grand set of tradeoffs that I make when deciding how to spend my time I hope that I can forgo the immediate gratification of leisure and spend more time doing things that improve myself, my family, and the world because I hope my life's meaning is based on more than how many cool, minty, pink cocktails I've consumed with friends.

The Big Understatement

Many people have made much about the lower effective tax rates paid by the rich who can easily shift income from the regular rate to the lower capital gains rate, but much has been ignored in this debate. I will forgo talking about how the problem is understated because in the debate payroll taxes are ignored in this post and focus on the fact that the tax rates we talk about for the rich are rates on taxable income.  What we ignore in the discussion, simply because it is hard to quantify is how much lower the tax rates of the rich are because they are better than the average taxpayer at turning taxable income into non-taxable income.

Recently I've read article that contain examples of ways in which this works. Let's look at an article about a tax avoidance strategy that is used by one of the funds that Romney has some of his retirement savings invested in. For now I'm going to ignore the actual strategy and concentrate on a line that was not meant to be a focus of the article: "BCIP Trust Associates III, a Bain fund that holds $5 million to $25 million of Mr. Romney’s retirement savings."  The earnings on between $5 and $25 million that Mitt has stuffed into that one account are not included in taxable income.

Wait, it get's better (for Mitt) "Mr. Romney’s I.R.A. holdings, in 25 funds, total from $21 million to $102 million, according to his financial disclosure forms." So, when you see that Mitt paid a tax rate of 14.9% remember that the earnings on between $21 million and $102 million were not included in the base on which that percentage was calculated.  Most of us can not stuff tens of millions into retirement accounts and shield substantial portions of our income from all taxation. Where is the outrage over the ability not just for the top earners to pay a lower rate than the average person but over their ability to make so much of their income not count toward the base on which that rate is taxed?

Post-script: The rest of the article is well worth reading. Here are a few choice quotations and a link:

"The technique in question allows nonprofit institutions and large retirement funds to exploit the advantages of shell companies set up in tax havens like the Cayman Islands by investing money with private equity firms like Bain Capital, which Mr. Romney ran."

"For instance, an investor could put $1 in an I.R.A. and purchase a partnership interest of Bain Capital in the Cayman Islands, which, in turn, borrows $1,000 to buy 1,001 shares of a company near bankruptcy that Bain has just purchased. If the shares go to $100, the investor then has $99,100 after he pays off the $1,000 loan. Such a transaction would be walloped by the unrelated business tax if done on shore."

Romney’s Returns Revive Scrutiny of Lawful Offshore Tax Shelters

Opposed to "ObamaCare?" Be careful what you wish for.

If you are opposed to the Affordable Care Act (a.k.a. Obamacare) you may be hoping that the supreme court rules it unconstitutional. I believe that would be a disaster for many: those with pre-existing conditions who can not give coverage, people who can not switch employers or become entrepreneurs lest they lose coverage, young adults who can not stay on their parents' policies while in college. However, let's assume that disaster comes to pass - the supreme court makes us revert to the status quo of two years ago - what will the long term consequences be?

Well, remember that Obama Care was a response to a set of problems - rising health care costs leading companies to drop coverage and individuals to be priced out of the market leading to many more uninsured people, college kids that could not get coverage, sick people that could not get coverage at any price. All of those problems would come roaring back. Once the supreme court says we can't force people to buy coverage those pressures would build until the public demanded a fix. The logical fix would be to tax everyone and provide universal single payer coverage (a.k.a. Medicare for all).  I for one think that's a good solution, but if you oppose ObamaCare I doubt that you do.

Religious Freedom vs. Women's Health

I am listening to NPR discussing the Blunt amendment trying to allow a religious exemption to providing healthcare. My comment was: Why has nobody mentioned that we routinely restrict religious freedom in other ways. Rastafarians can't smoke pot, Fundamentalist Mormons and Muslims can't practice polygamy, etc. Where is the Republican outrage over those restrictions?

Fox News blathered about school prayer being reconsidered in the wake of yesterday's tragic shooting in Ohio. I would suggest that strong gun control laws might be more effective.

School Choice

I live in one of the best public school districts in Michigan, rated 9 out of 10 stars by greatschools.org. Yet every day I drive my youngest child to an school in a district where the median income is about half that of where I live and the district rating is three stars. The school that my youngest son attends faces some problems: so many students are from poor homes that they just provide every child with a free breakfast and lunch, they were so short on funds for books in kindergarten that they sent home photocopied pages some weeks, students with less than stable home lives come to school unprepared and with behavioral issues.

My middle son also attends a school of choice, but it is in our district. In fact it is in the building that was my oldest son's neighborhood elementary school.

Recently I've seen several articles that decry school choice because it destroys neighborhood schools and many charters are unregulated and no more successful than the public schools which they replace. So, why do I choose to send two of my three kids to schools of choice?

School choice allows my youngest to learn in an immersion Chinese program. Research shows that learning a foreign language before the age of twelve is more effective than learning it later in life and has a host of benefits in general cognitive development. My middle son learns in a Montessori program that suits his learning style far better than a traditional classroom does.

School choice allows my middle son a learning environment better suited to his needs. It also allows students from other districts to be in his classes, making his school more diverse while affording them an opportunity they might not otherwise have.

What about the downsides of school choice mentioned above? I actually believe that they don't exist. My kids schools are regulated just like all other public schools.  Neighborhood schools that are failing should be revamped instead of closed. The fact that they are closed is a consequence of a choice (a poor one in my opinion) that our society has made.  In fact, instead of detracting from an inner city school system Post Oak Elementary pulled my youngest son from a relatively affluent district. My son brought with him two motivated, educated parents who can donate money for books and time for tutoring. He will ace the standardized tests.

My youngest son is learning Chinese. Additionally, I am pleased to report he ahead of where his brothers were at the same age in math and (on average) in reading.  He enriches an impoverished district in many ways and it enriches him.  Deregulation and closure of failing schools are awful problems but please don't conflate them with school choice.  Taking away my choice won't solve those problems.