Category Archives: Grayarea

Here we go

I’ve just watched the closing arguments presented by Trump and Clinton. They’ve been flying around the country in a mad dash to collect each possible vote. I feel much the way I felt before the first debate between the two candidates.

In a nut shell, my feeling is that preparation and experience must count for something. I don’t even know if most voters are thinking in these terms, but when I hear Donald Trump try to explain what he intends to do as president, it seems to be a strange melange of imagery. It is a pep talk couched in an extremely dark and dystopian perception of the current and future situation in the US economy and our place in the world.

Hillary Clinton has had numerous punches land on her during this campaign. She has demonstrated a strong jaw, to push this metaphor. I don’t think all of the attacks against her have been particularly fair, but some of them have merit and some really don’t. For example there are still a number of people who seem to believe that Hillary somehow directly caused people to die in Benghazi. Considerable time and effort has also been spent advancing conspiracies about the Clinton Global Initiative – an organization that has had a pretty solid record of doing good work and helping a lot of people around the world.

Why countries with questionable human rights records would donate *that much cash to CGI? It’s a legit question. On the other hand, what we are talking about here isn’t illegal unless there are some specific instances where US policy was changed as a direct response to these donations; access doesn’t count as illegal. As a side note, a donation to CGI would be the most indirect type of bribe possible. Bill and Hillary don’t draw salaries and they don’t spend the money on themselves. It’s as if we are accusing CGI of accepting bribes in the form of millions of doses of HIV medications for children. This would apparently be done in exchange for US foreign policy influence. That is just a weird assertion.

Then there are the emails. What I find most interesting about the accusations about her email server is that they do not serve to explain exactly what was done. There was a serious mistake made in deleting a large number of e-mails after a subpoena was issued. The explanation for this is actually pretty believable. It is also clear that the emails in question didn’t occur during the time of the Benghazi incident – which was what the original investigation was about.

We often forget that this was a server for personal use and not for classified information. There was indeed sensitive information found on the server, which is serious, but not surprising that a small amount of sensitive information goes over the wrong channels occasionally. Furthermore, a large percentage of this sensitive information was classified after the fact. Clinton has challenged the classification of these documents and would generally prefer that they were published.

Back to the “illegal server” though. Alternatives to this server would be gmail, yahoo, hotmail, etc. Any of these choices would have been perfectly acceptable. There is some irony in the fact that Podesta’s gmail account was hacked by (apparently) Russian operatives and no such breech of Hillary’s personal email has turned up in any leaks since then. It seems to me that we would certainly have read them by now.

In this election, the lies you are willing to believe determine who your candidate is, but I’d say a few things about the Donald that go beyond conspiracies and unproven allegations. My opinion of Trump is based in large part on his record of self-aggrandizing and looking out for his own best interests.

The Trump foundation is much smaller than CGI, but it clearly has been used inappropriately. It is also true that Trump has no intention of putting his business operations into a blind trust. The reason that this is important to me is that I don’t trust him to make decisions on public policy that would hurt his own financial concerns or those of his children. If you are Donald Trump, this doesn’t feel like a conflict of interest. He is a supply-side politician and therefore, what is good for him, is also good for the country. His international concerns could very easily create a conflict of interest though. Do you play hardball with a foreign leader, if it could tank an important deal, or to you tread more softly? It’s just not a good situation.

Most important to me though are the vacuous promises he is making. It is difficult to take him seriously when he starts literally promising his supporters everything they have ever dreamed for this country and for their futures. He’s extremely vague about his Isis strategy except that he wouldn’t have warned civilians that an attack on Mosul was imminent. He doesn’t share details on how slashing taxes will reduce the national debt. How do you replace the ACA with something that covers everyone, but is wonderful instead of a disaster. Virtually everything he has weighed in on can be reduced to an arbitrary promise to fix something whether it’s broken or not. Nobody really believes that he has a deep understanding of these issues, but it is always easy enough to vote for a tax cut.

I worry a bit about the state of our divided country after this election. Part of me would rest easier with a Trump victory simply because I think that Democrats are better sports. However, I don’t think that my fear of Trump supporters causing civil unrest is a valid excuse to cast a vote for the guy – quite the opposite.

My prediction for today’s election is that Clinton will win a narrow victory, and that Trump will not quietly end his campaign. I think he has fed on the adoration of his fans and now he craves it. To concede the election graciously would be incongruous with the way he has burned everything down over the past 500 days or so. Especially most recently, he has been shouting about the rigged nature of the election itself. I’m not sure how you walk this rhetoric back. I don’t know how he would go about defusing the political explosives he has set over the past weeks and months.

The Death Tax

I had an interesting conversation recently with a conservative figure who took aim at the estate tax. I try not to be too dismissive of folks I’m not normally inclined to agree with. Occasionally, I encounter a point of view that I hadn’t considered before and my position becomes a little less entrenched, or perhaps more nuanced as a result. This really wasn’t one of those times.

The goal of the estate tax is not even veiled in fake rationale. The idea is to break up the trend of accumulated wealth from generation to generation. As we have seen, the amassed fortunes over time are trending toward a concentration of wealth. This is not really consistent with what we assume to be an economy that is effective at broadly distributing economic opportunities and rewards for hard work and success.

The kind of opposition we usually see to the estate tax stems from a few key arguments. There is a strong feeling among opponents that taxes have already been paid on the money that is in the estate and that taxing them again would be immoral regardless of how much wealth we are talking about. This “already taxed” concept is reinforced by the fact that the estate is responsible for paying the tax and not the heirs. The net effect is that there is less to distribute after taxes of about 40% are paid on the value over the $5.34 million threshold. This happens regardless of how many heirs there are.

Another common argument is about family farms. The story goes that if a farm that is worth more than the threshold, it will more likely go under because the heirs can’t afford to pay off the tax bill on the farm.

The reality is that there are some modulating controls in place. When you die, up to $5.34 million of net value of your estate after exemptions is protected from the tax. Family farms are also eligible for value reductions in order to make it less likely that the estate tax would be a problem. Married couples are usually able to protect twice the net value from the tax man by allowing the surviving husband or wife to bring forward the exemption of their deceased spouse.

As for the money having already been taxed. The simple fact is that there are very few ways that significant amounts of cash may be transferred from one person to another that don’t involve some of that money going to the government as taxes. If someone buys a carton of milk, they are buying it with money that’s already been taxed.

The economy is a system. It’s a system that has been modulated over the years for various reasons. Some of the changes have had negative effects and some have made things work better. What is the purpose of the economy? Should the system create economic prosperity for the broadest number of people? Should it allow wealth go grow and concentrate in order to sustain enormous private investments in technology and automation? I won’t attempt to answer that here. Rather than stop writing though, let’s say that however we choose to optimize things, the result should ensure that prosperity is at least an option for every person.

Traditional video games provide a useful model of how prestige and success are acquired in a gamified world. Things get harder as you work your way through levels and more powerful bosses. Forward progress is hampered by greater challenges

The baseline package for middle-class to upper-middle-class life is similar to this gaming model. You have to hustle to make a living. Success is fostered by a good education, a stable home environment, some aptitude at interpersonal skill, and it doesn’t hurt to be attractive or a bit taller than your peers. Generally though, you rise up through the ranks, competing with everyone else to get noticed. You obtain credentials, experience and, if you stay out of trouble, you can earn a comfortable living and even retire at a fairly young age. It can get much worse than that, but it can also get much, much better.

Some individuals truly excel at earning a living, even with modest beginnings. The self-made story is the example we turn to when we visualize the ultimate success in our economy. These people epitomize the righteous intersection of opportunity and preparation and the result can be impressive financial rewards. Artists, business leaders, inventors, surgeons, lawyers, models, actors, comedians and writers can all excel at their craft in countless ways, rising to the top of their field and making a fortune. Reaching this potential may require significant personal sacrifice and discipline.

An interesting thing happens with money though. There is an inflection point at which your savings can earn enough dividends and interest to support you more-or-less in perpetuity. Finding that point is a personal journey because expenses can go as high as you want, and so it is also possible to live a life burning through more cash every month than most people earn in a year.

In the 1990’s Donald Trump famously had to dig himself out of near financial ruin. His creditors allowed him a $65 million line of credit but under the agreement his personal expenses were limited to $450,000 per month. This burn rate is from more than 20 years ago and is more than 100 times the income of the average household today.

We do have a name for a financial status called “independently wealthy” even though we don’t have a number to assign to it.  What it means, is that you have enough money to live comfortably without working. Let’s try to put a stake in the ground and define that term using some common ideas that may be flawed an arbitrary, but perhaps useful.

The average household income in 2013 was $51,939. Having a million dollars in securities that track the S&P 500 should be able to generate that kind of income passively from dividends and interest with no personal labor required. This comes with the added benefit of having a lower tax rate than a typical worker would incur from their paychecks. This passive income is based on a conservative return on investment as opposed to the average return which has been higher in recent years.

The point is that if you can scrape together a million dollars, the money, with a few caveats, can be expected to produce as much income every year as the average family earns and will allow for a modest rise in inflation. If you don’t retire, but remain at work, you can reinvest all that income and it will grow quite rapidly. All you need to do, is leave it alone. Better yet, you can keep saving.

One million dollars is in securities is not an easy thing to get hold of. For most people, it would be a lifelong pursuit. In fact, According to the Wall Street Journal, the combined value of all household assets in the US isn’t more than about $85 trillion – and that isn’t all cash. For every family to have a million-dollar nest egg working for them, it would have a total value of 50% more than all of the personal assets that exist in the US today.

The estate tax is an example of our system attempting to make a correction. If you accumulate enough wealth in your lifetime, that is great, but you can’t take it with you, and you can’t shuffle your heirs to the front of the line without sacrificing a significant chunk of your estate to pay for services like education, infrastructure, the military and the other obligations of the federal government.

Even where the estate tax comes into play, the heirs of the very wealthy may well sit down at a game that has already been won on their behalf. They can, more or less, play with the credits earned by their parents. And, while nothing is perfectly fair in life, this is pretty clearly weighted in favor of the rich. Would the world be a better place if every single one of us had to start life doing the hardest, most backbreaking jobs, earning promotions and working our own way to economic independence? Maybe so, but we will never know.

Having said that, in a system that makes the accumulation of wealth easier, not harder as you acquire more, some controls should probably be established. If for no other reason, then let’s at least consider that we don’t want to face the consequences of a society that appears to be permanently and hopelessly bifurcated by wealth inequality. This would be a recipe for a revolution.

Arm Wrestling Over the Supreme Court

Chuck Grassley

I can’t help doing a little back of the napkin calculation about why the republicans have decided to dismiss any notion of a hearing on Barack Obama’s supreme court nominee. At first, I thought that this would surely come back to bite them at some point in the future, but then I thought about it a little more.

There hasn’t ever really been a situation when a president who had an opportunity to nominate a supreme court justice during the first few months of their 8th year in office has not done so. So the question arises, how long before such a situation would likely emerge again?

We’ve had 112 justices since 1789 and that ends up being roughly one vacancy every couple of years. In other words, on average, every eight years, random chance might cause a vacancy during an election year. For one to happen during a president’s 8th year in office, that is going to be less frequent.

So even if the Republicans take control of the white house in 2017, it’ll be at least 8 years, if the candidate gets a second term, but there is only a 50% chance of a vacancy happening in that year, so if they won two successive 8-year terms, they would stand a better chance of seeing the situation, but this seems unlikely for a variety of reasons.

The reality is that we are looking at a whole generation before the shoe would be on the other foot and they might face the same scenario that they see today being thrown back at them. The cold facts are in their favor. They can block the nomination on the grounds of it being the last year of the president’s 8-years in office and they will likely never have to face the music we are now dancing to.

A Chat with an anti-ACA Republican.

I was fortunate enough to recently have a brief exchange with a Republican candidate for US Senate in Oregon. For being so busy, she spent some time with me discussing the problems she sees with the ACA. She is only one person, but she touched on a number of themes that may help me to understand why it is so hard to find common ground.

Let’s say for argument’s sake, that nobody wants to see the poor or children go without needed health care. Let’s also assume that nobody wants to see emergency medical care or chronic illness bankrupt anyone. Pleasantly, this seemed to hold true for the would-be Senator. The biggest rift between our points of view appeared to be the extent to which we believe this actually happens.

She seemed to believe that being uninsured is a simple economic trade off. From her vantage point, being uninsured is a matter to be resolved between you and your doctor and would not accept the notion that substantive differences in outcomes are likely or even possible based on the question of insurance. In her mind, If an uninsured person accidentally shoots himself, and requires life-saving treatment, a few things will occur:

1) That individual will get all the care they need
2) If they can’t afford treatment, it may just take a long time to pay off
3) If the person is really poor, then the hospital will most likely just waive their fees or negotiate a discount and care for them anyway

She also kept telling me that organizations like Christian Health Ministries do a much better job than either the government, or traditional insurance companies.

She did acknowledge that there is a bankruptcy risk imposed by healthcare costs, but only hypothetically. She doesn’t approve of skipping out on your bill unless you are really poor and even then she felt strongly that there are plenty of options.

So what’s the problem? I think from her vantage point, there is no problem except maybe the cost of healthcare. Furthermore, the only thing that should be appropriate to control costs would be the free market; the government would have no business being involved in the solution.

The assumptions she makes are at least partially, if anecdotally, true.

I had a question about this though. Assuming the system operates in this way, why is it that our friend who shoots himself gets admitted into the hospital even if he has no means to pay for his care? Compassion and good will? Actually, it is called the Emergency Medical Treatment and Active Labor Act. It was put in place by the government actually to address a specific problem which was that hospitals were dumping uninsured patients to other facilities when they suspected or learned that the patient had no means to pay for care.

What is really interesting about this, is that the statistics showed that many patients who were moved or rerouted based on economic concerns were about 2 times as likely to die than those who were cared for and not transferred or re-routed.

Isn’t this government overreach as well? Many claimed so. Yet without this legislation, treating the poor was a losing proposition. If this is really about rejecting socialism, why should hospitals be forced to deliver care to people who can’t pay? If you don’t think hospitals should turn out non paying customers, you are actually a little bit of a socialist. You simply prefer the costs to be hidden in your doctor bill and not your tax bill.

Ranch Dressing


I almost put this in the bad person category for the sarcastic reference to diversity. I think she’s implying that chicken and waffles is ethnic food… which is actually part of the problem of getting kids to eat anything that they don’t already like from home. In the end, I didn’t think that it was supposed to be mean, so I’ll take it at face value.

The post did get me thinking a little. First of all, is it true that grade school cafeterias prohibit ranch dressing? Second, how bad is it for our kids?

For the first question, a quick Google search doesn’t seem to support the idea that ranch dressing is banned in very many schools, but I suppose it is possible that this particular school or district has banned Ranch for a specific reason.

So for the second question, I did some searching. I found that 1 oz of real ranch dressing has practically no protein, almost 16 grams of fat and about 150 calories. A ladle use to serve it up is about two ounces and it is assumed that each kid takes 1.75 oz. They literally dish it out by the teenth!

Meanwhile, a 4pc. Chicken McNuggets has 40 more calories, but only 12g of fat plus 10g of protein. McNuggets may actually be healthier. I know some districts are trying, but I think school lunches have been a bit of a joke ever since Ronald Reagan declared Ketchup a vegetable.

Now, not that it is consequential, but you would have to eat exactly twice the maple syrup to get the same calories of the fat-laden ranch dressing we are talking about. They are both bad for you, but ounce for ounce, ranch is the worst.

The thread started getting a little sancimonious and headed toward: “Why aren’t school lunches more healthy anyway?” Here were a couple of followup post…

Fresh fruits and veggies from local farms? I love the idea. Some school districts are even lucky enough to be near actual farms. I think it would be great if schools made healthier meals than the parents of these kids typically make. Even better if the schools could get kids to actually eat those veggies. But hey, fresh food is expensive, it doesn’t keep as long as prepared food and – except in fairy land – a lot of kids will just scrape that stuff off of their plates.

In my opinion, it seems like we are asking a lot of a system that we complain about, but never want to pay for. Maybe you think you can make your kid a nutritious and well balanced meal that they will actually eat* for a buck o five a day, but figure in the time to lovingly prepare, shop for and plan and multiply this by thousands of school kids every day and what should it cost? Schools get something like 27 cents for each paid meal and about $2.85 for each free meal from the federal government. Often, this gets sourced out, but it’s very complex. 

It’s something to think about when folks in washington are looking to tighten their belts by limiting SNAP eligibility (which automatically qualifies kids for free or reduced price lunches and breakfast).

Facebook Shares – Dr. Starner Jones Edition

Here’s one forwarded by my friend. It was posted by an account named Obama Makes Me Puke

Dear Sirs:

During my last night’s shift in the ER, I had the pleasure of evaluating a patient with a shiny new gold tooth, multiple elaborate tattoos, a very expensive brand of tennis shoes and a new cellular telephone equipped with her favorite R&B tune for a ringtone. Glancing over the chart, one could not help noticing her payer status: Medicaid. She smokes more than one costly pack of cigarettes every day and, somehow, still has money to buy beer.

And our Congress expects me to pay for this woman’s health care? Our nation’s health care crisis is not a shortage of quality hospitals, doctors or nurses. It is a crisis of culture — a culture in which it is perfectly acceptable to spend money on vices while refusing to take care of one’s self or, heaven forbid, purchase health insurance. A culture that thinks “I can do whatever I want to because someone else will always take care of me”. Life is really not that hard. Most of us reap what we sow.

Don’t you agree?

Jackson, MS

The Breakdown:

This is a real letter to the Editor and it was written in August of 2009. It seems less about Obamacare and more about whether or not a specific individual should be entitled to be on any public support for their healthcare. The comments on this post were all over the board. Of course grandma is exempt from this discussion, we are only talking about people where there is some evidence that they have made some bad financial or health choices in their lives. I’d imagine that Dr. Jones would find that treating the uninsured in the emergency room if they don’t have insurance is equally repulsive as providing Medicaid. I can’t help but wonder how many cigarettes and gold teeth it would take to pay for a decent health insurance plan.

Anyway, let’s assume Dr. Jones has his heart in the right place. What does he want? Does he really think that people on Medicaid (because they have no money) should be held to a higher standard in terms of life choices than the general public? Are vices to be viewed as some sort of privilege or is it merely that we can’t control them in other people who are not in some way dependent on certain types of benefits from society?

“Eat all the garbage you want so long as taxpayers aren’t footing the bill for your health care premiums.”

“Smoke up and drink up so long as you have a good paying job (that comes with health insurance of its own).”

The useful question for me is whether there is a way to humanely use public policy to encourage people to make better choices. Suppose for a minute that Obamacare does go into effect. The biggest part of the program is about spreading the risk… insuring healthy people (and charging them) to help take care of the unhealthy ones.  So at least the new policy partly takes care of Dr. Jones’s issue about taxpayers paying for those who make enough to afford insurance.

Here are some other ideas that come to mind:

1) Ensure that all eligible health plans include smoking cessation, addiction treatment and access to nutritionists.

2) Include blood screenings as a part of  each health plan and make them mandatory for those who would take the premium discounts.

3) Create tax incentives in the form of lower premiums for those who verifiably do not smoke or drink alcohol

4) For those who do not have income sufficient to pay any premiums under the new plan, we could provide incentives for weight loss or smoking cessation as tax credits (again, this would have to be verified for example by a physician)

Policies like these above seem somewhat un-American in a historical sense, but I think that Dr. Jones’s opinions are shared by many. Not everyone is going to make good choices. Some people will get sick as a result. Most of us can agree that it is unpleasant to have to care for an individual who doesn’t want to take care of him or herself – they may even be a self-destructive person. Most of us can also agree that refusing to provide healthcare for a person who has no means to pay for it is also undesirable. Some of us will put qualifiers on this, but when push comes to shove, people I know find that letting poor people die because they are poor and irresponsible is a bridge too far.

In his letter, Dr. Jones was opposed to paying for the healthcare of an apparently irresponsible person with tax money. He didn’t propose anything specific about what to *do with the individual in question as an alternative to treating them. He spent most of the letter discussing their behavior. It would seem that changing the behavior would be a better result – and I agree with that.

So how do we do that?

Facebook and communication

A friend of mine recently posted an interesting comment on Facebook. It was a remark suggesting that maybe this wasn’t the best medium to take on serious issues (such as gun control). and that pithy comments  can do more to alienate people than to foster meaningful dialogue.

I’ll be taking a look at this in future posts. This is an issue that is probably one that we are all grappling with indirectly. When I think about how many people I know – but only because of my contact with them on Facebook, I am beginning to realize that the notion of the FB post is somewhat lossy and superficial and I wonder how well I really know anyone out there in the cyber world.

What is it I am looking for; what am I selling and who is buying?