Friday, July 30, 2010
It must be difficult to come up with topics for two columns per week. Some weeks the ideas may not be there; other weeks the ideas may flow freely but the writing does not. On the other hand, the columnist doesn't have to pound the beat the way a reporter does, and the columnist can fire away with her opinions, so many reporters think having a column is a good gig. Consequently, I don't have much sympathy for the howler of a column that Washington Post business columnist Steven Pearlstein put to paper on July 28.
His premise is that the U.S. economy needs a tax increase. He never really explains why, other than to mention in passing "an investment agenda to match the global challenges we face." Unless he takes as given that all the government spending that's done is necessary, it's not clear why he doesn't consider the possibility of redirecting spending toward this "investment agenda," whatever that is. But that's neither here nor there. Pearlstein could certainly make a reasonable argument that the current political climate, in which the idea of any tax increase is anathema, is unhealthy. The 2010 top marginal tax rate for personal income is 35%, scheduled to increase to 39.6% next year. I have no idea whether 35% is "better" than 39.6%, or even how to define "better" in this context, because much of tax policy is a matter of opinion. Sure, higher marginal rates discourage employment decisions on the margin, but tax revenue is needed to run a government, and reasonable people can disagree about the right size of government and the best way to raise the required revenue.
Here are the real howelers in the Pearlstein column: first, "raising marginal tax rates on the rich wouldn't be a huge deal." He cites economist Douglas Holtz-Eakin to say that "excluding upper-bracket households [which Pearlstein doesn't define] from a one-year tax-cut extension would only reduce employment by 300,000 in 2012." I guess whether one thinks an addition 300,000 people out of work is worthy of the "only" in that sentence is a matter of opinion, but when the unemployment rate is pushing 10% it's hard to see an increase in that number to be a good thing.
Second, Pearlstein cites with approval testimony from Len Burman of the Tax Policy Center, a creation of the Urban Institute and the Brookings Institution. "Burman's point was that spending by rich people wouldn't change much even after a modest tax increase because so much of their income is saved rather than spent." Ow! I got whiplash from that sentence! True, consumption spending as a percentage of income falls with income. But "rich" people don't put the money under the mattress, they invest it. The money ends up in the form of mortgage loans, or corporate stock or bond purchases, or venture capital funding. A tax increase, modest or not, takes some of this money out of the hands of the "rich" and puts it in the hands of Uncle Sam. Whether that's good or bad depends, in part, on what private investments the government spending crowds out.
Third, to support the proposition that government spending is better for the economy than an equivalent tax cut, he cites a January 2010 Congressional Budget Office report to say that a million dollars in increased unemployment assistance would lead to between six and fifteen additional jobs.* It's a jobs-creation machine! (True, it's not a very efficient one, if each job created costs roughly $100,000 per year, in perpetuity.) This is the kind of number that should make even the laziest columnist go dig into the document to find out what magic is behind the calculation, but Pearlstein takes it as gospel.
Finally, "it's hard to understand why a profitable company, seeing an opportunity to expand, would forgo hiring because the profits generated by new workers would be taxed at 40 percent rather than 35 percent." Sadly, this guy has a Pulitzer Prize for his business column. It's pretty obvious that after-tax profits of 65 percent are higher than those of 60 percent, so any venture that's close to break-even won't be made at the higher tax rate. As an example, suppose a small business making iPad apps thought of a new product. To get it to market, the firm would need to hire an additional programmer at $100,000 per year, and it would take a year to get the product to market, with no additional costs. Expected sales are $180,000. At a 35% tax rate, the expected gain is $117,000, while at a 40% tax rate the expected gain is $108,000. If the firm's opportunity cost of capital is more than 8% (accountants like to use the term "hurdle rate," which reflects the fact that the firm needs to be compensated for the risk of the venture), the tax increase will mean that the firm will not hire the programmer. Again, I'm not making a value judgment about whether the benefits of the additional tax revenue outweigh the costs to businesses and individuals, but to say that there is no tradeoff to be made is indefensible.
Again, this doesn't mean that Pearlstein is wrong to believe that modest tax increases on wealthy people will have modest adverse effects, and that the benefit to the economy outweighs those adverse effects. But Pearlstein hasn't made that case and, really, his readers deserve better analysis.
* See Table 1, p. 18, and the text on the subsequent pages. Pearlstein uses the last column, which is the cumulative effect on employment between 2010 and 2015. The methodology is opaque, but the CBO seems to be assuming that the effect on employment comes because the unemployed will spend the additional money on goods and services, thereby stimulating demand for those goods and services, thereby increasing hiring. This can only be true if the CBO also assumes the money borrowed for such spending is never repaid (or is repaid after 2015; note that "repayment" can take the form of higher taxes in future years); otherwise, the increased spending by the unemployed merely crowds out private consumption and investment, a point which the CBO studiously ignores.
Wednesday, July 28, 2010
As the high temperature on Sunday skirted 100, I've been unhappy about the situation, to put it mildly. No Aetherwebs is annoying; no television an inconvenience; no telephone service is something of a blessing, for the most part. However, no air conditioning and no refrigeration is a health hazard.
Having already gone through two-plus days of no power while snowed in this past February, I think I've done my fair share of living the primative life for quite some time. Although I worried about freezing to death in February, at least I didn't have to throw away huge quantities of spoiled food.
One might reasonably conclude that the power company doesn't take adequate steps to prevent wide-scale outages.
With apologies to anyone who might be reading this who lives in a Third World country, I must say I'm pretty tired of dealing with a Third World power grid.
[Later: It could have been worse, I suppose. The power was restored - for the first time - around 3 a.m. Tuesday morning, which means about 36 hours all told. (It went out and back again two more times. I'm going to have to check whether my UPS has a way to disable the alarm.) Others are still out, so I thank my lucky stars to be among those with current. And I salute those men and women who are actually out there, day and night, futzing with high voltages to get my house back into the late 19th century. ]
Monday, July 26, 2010
Miss Mathilda Islay has opened a small gallery, entitled the Ancestral Delights Gallery.
Miss Islay [and I have berated myself for not grabbing that surname for an alt!] says:
Announcing the grand opening of Ancestral Delights Gallery, where history is a pleasure!
ADG is an exploration of the past through erotic art, from the sensual to the humorous. With works dating from 5,000 BCE to the Edwardian era, there is much to be learned about our ancestors, and even ourselves, by way of examining the myriad expressions of sexuality throughout the ages.
Come to purchase the paintings, vases, sculpture, and jewelry or just enjoy the scenery and available refreshments.
All age appropriate (mature) and respectful visitors are welcome!
As I strive to keep this Journal work-appropriate, I have forgone pictures of any of the artwork. Suffice it to say that these works put an end to the notion that Victorians invented the intimate act. This blushing maiden studied the paintings, swooned, then recovered to study them some more. "You mean to say that one places...that is to say, the gentleman...oh my!"*
I partook of the refreshments; namely, a large and tasty chocolate muffin. I will leave it to wiser heads than mine to decide whether there was any symbolism involved.
*One of the artists seemed to delight in exaggerating the size of the gentleman's...the gentleman's...well, you know what I mean. At least, I certainly hope it was an exaggeration.
Sunday, July 25, 2010
Displaying the warmth for which Caledon is known, friends and fellow citizens rushed to see if they could help. When I arrived and parked the airship over the school house in Stormhold, and grabbed the pair of binoculars sitting next to the command console, this is what I saw:
Dean Hamer was defending the school from the three interlopers, who spoke no English; communication with them was through a translation device. As the three commandos conferred, more Caledonians arrived in a show of solidarity.
The Vicereine, Kamilah Hauptmann, arrived, unruffled as usual, sipping a cup of tea as she observed the scene unfolding.
In the end, cooler heads prevailed, and the merry band went on their way.
[Author's note: Mr. Geoffrey Xenobuilder suggested that the uniforms were from the television show Stargate. Their profiles suggested they were from Eastern Europe, and their demeanor suggested they were quite young.]
Saturday, July 24, 2010
This was where the poorest of the working class operated, in tiny shops pressed close against one another, with living quarters above. It was a rough-and-tumble neighborhood in broad daylight; after dark, it was no place to be, especially for a woman.
I had come to seek the advice of one Dr. Rhynold Beck, a medical man who chose to live and do business in Shanghai. Whether this was altruism on his part, a desire to serve the destitute Chinese who would otherwise lack modern medical treatment, or a need to hide in an area of Steelhead where not many Westerners would choose to go and where outsiders could be quickly seen and identified, I could not say. I had heard Dr. Beck was involved with the Chinese gangs (called "tongs" in their tongue, or so I am told), and it takes a brave man indeed to challenge their orders.
I had met Beck once before, in my quest to find The Scientist. This time I was again seeking information from the doctor on a matter I am not yet at liberty to divulge. [That's the kind of cheap literary trick Conan Doyle played all the freaking time. Watson would mention the "case of the giant Sumatran rat" as an off-the-cuff remark, while adding that he couldn't talk about it, it was too terrible for his readers to hear, it would cause a Royal scandal, etc. Methinks it just authorial laziness, although it's possible I'm just projecting. - RJ]
I sidled past the blacksmith's shop, the shop selling Chinese herbs and spices, and the butcher shop (the latter smelling strongly of meat and offal that had been in the hot sun far too long). All around me I heard sounds of people moving in the shadows though I saw not a soul. I kept a firm grip on Dame Ordinal's Clock-winding Pistol, hoping that its sheer size and deadly appearance would deter any would-be thieves; if the occasion arose to fire the gun, I had no illusions that I could escape before I ran out of ammunition.
At last, I found the shingle advertising Dr. Beck's practice. I knocked on the door, but received no answer. Gingerly, I pushed on the door, which was partially off its hinges, as though it had been the recent recipient of several heavy blows. The door opened into a single room, obviously empty.
There stood a crude operating table, medical supplies, some records in file drawers, and a desk. I shuddered at the thought of having to lie on that table and be operated on under these conditions, but I supposed it was better than no medical care at all. Once again I wondered about Dr. Beck's motives.
The doctor's desk had on it a note in large, bold handwriting: "Gone to Babbage - Beck." My mission was in vain, it seemed. Sighing heavily, I picked up paper and pen. I dipped the pen in the inkwell and scrawled a brief note to the doctor.
I crept out of the surgery and, still brandishing the gun as a talisman, slowly made my way toward the lights of Steelhead's capital.
Thursday, July 22, 2010
Mr. Skyward is the proprietor of the Steamboat Energy Co., and the building below is listed as the Caledon Downs Annex.
A small change in the landscape occurred as well: the small waterfall behind my house apparently eroded some land, creating a stream to the lake on the Downs/Glengarry/Tamrannoch border.
Soon I shall be entirely at the mercy of boats and airships to get in and out of the house!
On the bright side, that will help keep down the population of drifters who are able to find the place.
Wednesday, July 21, 2010
I loved the mechanical caterpillar:
Below is the "Hydro-Teslatron," a recreation of an exhibit in Niagara Falls, celebrating both the harnessing of the waterfall for electrical power and the contributions of Nikola Tesla to electricity.
The Steamlands have some of the most talented people anywhere on the grid!
Tuesday, July 20, 2010
One could stop for refreshment.
And, of course, it wouldn't be New Babbage if there weren't a functioning engine powering the whole thing.
At the Steelhead camp, the theme was "automated Pinocchio," and the various rooms told the story:
Monday, July 19, 2010
Saturday morning found both of us at the Team Caledon site in the RFL Remember sim, dressed in our lag-reducing (hah!) Caledon RFL t-shirts, donated by a kind soul who shall remain nameless - mainly because I can't remember who it was - and looking very un-Victorian. Note my swank Caledon tartan scarf, worn despite the oppressive heat.
We gathered with a number of other Caledonians (and a few folk who stopped to be with us for a while, which was quite nice of them). We had little flags to wave and a nice waving animation to go with it, courtesy of Mr. Vivito Volare, whose better half is, of course, Co-Captain of Caledon's RFL team. For the Survivors lap and the Caregivers lap, we energetically cheered the runners who passed by the camp. Below, some of the well-wishers, including Miss DME herself, Miss CronoCloud Creegan, and Mrs. Fogwoman Volare.
Below, Mr. Rachire Andel and Mr. Wrath Constantine, ready to bunny-hop down the track.
Mrs. Volare and, in the background, Mr. Volare.
A closer view of Mr. Volare, looking like a clank version of the Monopoly game gentleman.
Mr. Jorge Serapis.
Her Lyonesse, Kamilah Hauptmann.
Assorted Caledonians cheering.
We were visited by a number of luminaries from years past, including Dame Lapin Paris (pictured below), the 2007 (I think) Caledon RFL captain, whom I had never before met. Dame Lapin, Her Grace Lavendar Beaumont, Miss MaeraLeFey Messmer, and 2008 Caledon RFL captain Sir Erasmus Margulis all were on hand for at least a portion of the dear.
More cheering as dark fell on the track.
See the complete set of pictures from the Relay on Flickr .)
After the first two laps, it was time for the Team lap. Kathy and I set out with several other Caledonians, whereupon we promptly became separated, first from the rest of the team and the from one another. Lag seemed marginally better this year than last (though some on ISC chat opined otherwise), but was still deadly in places. I made my lap, then retired from the course.
(Last year, I slogged through as many laps as I could, which was still, admittedly, not so very many, and had aching shoulders for the next week, mainly from mashing the "forward" key down for hours at a time. Not this year, thank you very much.)
Caledon had another fine year, along with the rest of the Steamlands. In the top 15 runners, we had Darlingmonster Ember (31.32 laps), Aevalle Galicia (30.97), Bram Hallison (28.94), Wrath Constantine (28.38), Rachire Andel (28.03), Fogwoman Gray(-Volare) (27.65), Random Wezzog (26.18), Vivito Volare (25.71), Avariel Falcon (25.18), and Annechen Lowey (22.68). Congratulations to Mrs. Volare and Mr. Lucien Brentano for a hugely successful RFL season. (Now get some rest). Congratulations as well to all the runners, particularly those who slogged it out for hours at a time.
Sunday, July 18, 2010
Of course there are clanks:
And a factory where wishes are made. Who knew?
Friday, July 16, 2010
But, indeed, I had not been deceived: a young Gorean lady was walking through the Downs. I almost asked if she was lost, but the heat, the comfortable chair, and the beverage all conspired to restrain my manners.
She seemed harmless enough, if a bit underdressed. For a moment I wondered if this was the long-awaited Gorean retaliation for the Jameson girls' adventure in Gor-land. It seemed unlikely. She passed, and I returned to silent contemplation.
Wednesday, July 14, 2010
Chuck Norris is well-preserved: I understand that he is still alive in the 21st century, when he would be about 150 years old. In any event, Chuck pays on time; so should you. (Well, even if the logic isn't compelling, it's the polite thing to do.)
Mr. Denver Hax may have departed the shores of Caledon, but he is not forgotten. (And who could forget the nightmare that was Mondserrat?) To ensure that the good people of Caledon do not forget, he has left behind this mysterious monolith. Upon entering the ground of the mansion, one feels a strange...attraction to the monolith.
On the Guvnah's desk is the Skull of Rumors - and what rumors they are! Scurrilous, I tell you!
Monday, July 12, 2010
A large crowd gathered in the forest to await the results. [Editrix's note: I was feeling under the weather, or I would have been there as well. - RJ] Caledon RFL Co-Captain, Mrs. Fogwoman Volare, was the mistress of ceremonies.
Miss Darlingmonster Ember and Miss Garnet Psaltery, both looking quite spectacular:
Captain Starling Alecto, Mr. Claymore Macbain (dressed in his wee tartan), Miss Stereo Nacht, and Mr. Jorge Serapis:
Mr. Geoggrey Xenobuilder, Miss Riven Homewood, and Mr. Red Quixote:
Mr. Carl Metropolitan and Mr. Excalibur Longstaff:
Your humble Journalist, with Mr. Nicolas Verne (looking very...familiar, as though he might be Herr Baron Klaus Wulfenbach's twin):
Captain Wrath Constantine and our newly-crowned Miss Caledon, Aevalle Galicia:
Mr. Rudolfo Woodget:
Miss Gerr Huntress and Captain Rachire Andel:
Mrs. Volare read the results as follows:
- The Fort at Cape Wrath
- The Clocktower at Cape Wrath
- Iron Cloud Fortress
- (tie) Caledon Oxbridge and Steam Sky City
- (tie) The Observatory at Caledon Highlands and the Cavorite Mines
- Air Kraken
- the Village of Brigadoon
- the Caledon Library System
These were met with a great deal of applause and enthusiasm. The careful reader will note that the Eight Wonders just became the Ten Wonders; such is the magic of Caledon.
The above pictures, along with a few others, may be seen at this Aetheric site.
As evening fell, the business at hand turned to an Auction of various items to benefit RFL. I could stay for only the first two items, which were a set of men's hats by Miss Regan Straaf, and an exquisite Steampunk guitar - complete with rotating gears and vacuum tubes! - by Mr. Red Quixote. Miss Psaltery (I believe) won the hats, while a fierce bidding war that brought the total to 1500 Lindens was won by Miss Autopilotpatty Poppy. Later, Miss Psaltery and Mr. Denny Kozlov were to have auctioned themselves - or, more properly put, dates with themselves, as the Guvnah frowns upon involuntary servitude.