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April 01, 2015

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How do you fix social problems?

Charities.

And to think that most of the posters here support a President who would decrease the tax deduction for charitable contributions.

Boggles the mind, doesn't it?

You're changing the blog way too frigging fast. The last one was posted March 30 and the new one is here April first. I had a bunch of comments on the blog and no doubt some replies to make to commenters regarding Reagan era revenue increases, etc..

Thanks for telling me there's a book about the Nortons. John R. Norton III bailed out Ed Robson in the 80s when he started Sun Lakes by leasing the land Ed owned and farming it. He became a partner in Robson Communities. I liked John Norton, although I never shared his beliefs:-)

A new reply to wkg regarding average weekly wages (comparisons between Phoenix and other cities) has been added here:

http://www.roguecolumnist.com/rogue_columnist/2015/03/growthgasm-no-faking.html#more

INPHX-
President Obama proposed a charitable tax deduction of 28% for individuals earning more than $200,000 annually. This is down from the current top bracket of a 40% deduction for individuals earning $400,001+.
Interestingly the current tax deduction for those who earn less than $87,850 is 25% and decreases dramatically down to only a 10% deduction if you are poor.
Why is that low-income people don’t get a 40% rate on their donations?

I say, if an individual who earns $200,000 a year needs to take more than a 28% deduction, then it ain’t “CHARITY”.
http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=40#.VR1L7uGLXSh

@Emil. In reply at

http://www.roguecolumnist.com/rogue_columnist/2015/03/growthgasm-no-faking.html

RC has been moving along at a quick pace.

Suzanne:

You should receive a tax deduction at whatever income tax rate you pay. If you're at a 40% marginal INCOME rate, you should get a 40% EXPENSE deduction for charitable contribution. The contribution is a deduction form income, so it should be reap the same tax benefit that additional income is taxed at.


If you decrease the tax benefit, simple economics would dictate that cotributions will be less. Period.

I'm all for raising it for the poor. The heck with a deduction, give them a credit.

Not exactly INPHX. The marginal tax rate for individuals with income of $400,001+ in 2015 is only 33% not 40%.
http://www.bankrate.com/finance/taxes/tax-brackets.aspx

What's a charity? Depends.

http://www.salon.com/2013/12/14/the_wealthy_give_to_charity_elite_schools_and_operas_partner/

Suzanne:

Fair enough.

All I'm saying is that whatever marginal tax bracket someone is in, charitable contributions should reduce their taxable income directly and thus save tax dollars at that marginal rate.

Quite honestly, I can't imagine what kind of cold harded villian would be against that. If anything, I would eliminate the 50% of AGI cap on charitable contributions and even provide a direct tax CREDIT (not a deduction) for the first $1,000.00 (or so) of charitable contributions for ANYONE.

INPHX- hi. Om Shalom. I left a post ffor you on the Nixon thread. Hope you're well.

boor:

I don't know exactly when Robert Reich completelty lost his mind; it might have been about the time he started at Berkeley (sp?)

Here:

http://money.cnn.com/2015/04/01/pf/college/stanford-financial-aid/

That should take care of the university issue.

On the operas and whatnot, I'm sure he'd prefer higher taxes to fund them. That way, the money gets funneled through 3 or 4 government agencies before it gets to the charity.

You sure wouldn't want folks to be able to fund them directly, without all that funneling, now would you?

Cause then, gee, people could support the ones they enjoyed and the others would fall by the wayside.

Sounds a liitle like capitalism, doesn't it? People voting with their wallets.

Heaven help us.

Dawgzy:

I replied in that post.

INPHX. We've got to stop meeting this way. Zesty rejoinder in Milhouse thread. All the best

INPHX_. Since I've gotten to know you so well, a confession is in order. Ever try to get into Stanford? I did. Thin envelope. What you cite doesn't benefit too many people. 1 in 20 these days with the chances of getting in boosted by access to excellent public high schools or prep schools. The elite schools want to recruit the brightest people- good for them. My girlfriend in Chicago came out of a prairie town in Western Minnesota, got a free ride at U of M honors college then got recruited by University of Chicago GRITS (Grassroots Intensive Talent Search) program in '67- free ride to the best school around. They were trying to do a social good, because David Rockefeller et al wanted to get into heaven, they also wanted to enhance their prestige by getting her near perfect SATs into the mix. Stanford wants to increase class and racial diversity if they can get the big brains in the process. It's a commodity that their tens of billions in endowments can afford. In the larger scheme, it's an anomaly.
The cost of quality higher education is expanding far more rapidly than the cost of inflation. In the larger scheme of things elite schools' free rides do not even begin offset the reduction in access to middle class and below students.
Speaking of Berkeley, it was once part of a system that made high quality education available to any California kid who qualified. This brought in (shudder) lots of working class kids with brains and political ideas. Governor Reagan stated to increase fees as opposed to tuition) to set the $ bar higher. As this trend continued. UCBerkeley education at some point became something that fewer working people could afford, and (this is the beauty part) it became something that was quality and prestigious for students from increasingly wealthy families WHILE IT WAS STLL HEAVILY SUBSIDIZED BY TAXPAYERS. That's how it works.
By the way Stanford free ride produced the somewhat dangerous Richard Sherman. More of this, please, Robber Barons.
I remember writing a check for a quarter of graduate school at UCSF. (My undergraduate expenses there had been nominal.) The cost? $150 because I worked for one of the school's hospitals. MMMM...Sweet welfare. I'm just another grifter.
Excluding myself, public higher education in California strengthened that state. Its why Flynn (sp?) Foundation wants to pay to keep smart kids in Arizona universities. Stop brain drain.

Recently added to the previous thread:

* A new comment to phxSUNSfan (and anyone interested in what is politically possible today versus yesterday in Arizona)

* A new comment to INPHX (and anyone interested in federal tax burdens and fairness)

http://www.roguecolumnist.com/rogue_columnist/2015/03/still-nixon-to-kick-around.html

I still plan to add something about Reagan era tax cuts and revenue increases as time permits.

Regarding Reagan era tax cuts and revenue increases, a new comment has been added to the previous thread:

http://www.roguecolumnist.com/rogue_columnist/2015/03/still-nixon-to-kick-around.html

Incidentally, the comment demonstrates conclusively and in the most straightforward fashion imaginable that Reagan era tax cuts resulted in DECREASED federal revenues. For the click-averse, here is the full text of the brief comment:

Regarding Reagan-era tax cuts and federal revenue increases:

Bruce Bartlett, an American historian whose area of expertise is supply-side economics, who served as a domestic policy adviser to Ronald Reagan and as a Treasury official under George H. W. Bush, estimates that "Reagan took back about half the 1981 tax cut with subsequent tax increases". Article with tables and figures:

http://capitalgainsandgames.com/blog/bruce-bartlett/2154/reagans-forgotten-tax-record

Reagan was elected in November 1980 and was sworn in January 1981. Federal fiscal year 1981 began October 1, 1980, so it overlaps closely with Reagan's first calender year as a sitting president.

The big Reagan income tax cut occurred early (1981) and the Reagan tax increases occurred later and the biggest didn't begin to take effect until 1984 or so.

Federal revenues from FY 1981 through 1985 were anemic. In inflation adjusted dollars using 2009 as a base year for dollars, receipts decreased and didn't recover to the FY 1981 level until 1985. They didn't surpass the 1981 level until 1986.

That pretty much disproves the idea that tax cuts resulted in revenue increases. See Table 1.3:

https://www.whitehouse.gov/omb/budget/Historicals

New reply to phxSUNSfan questioning the Midwest migrants turned Arizona red thesis, added here:

http://www.roguecolumnist.com/rogue_columnist/2015/03/still-nixon-to-kick-around.html

Emil:

Perhaps you'd like to share the inflation rate in the early 80's with the group.

Tax receipts went up during Reagan's terms. Period. To twist the data using constant 2009 dollars thrown back to the early 80's (with double digit inflation) is just not reasonable.

From table 1-3 in current dollars:

1979 463
1980 517
1981 599
1982 617
1983 600
1984 666
1985 734
1986 769
1987 854
1988 909

Basically doubled from 1979 to 1988.

Back of the envelope, inflation (using the CPI, which is way too aggressive for tax revenue) from 1980 to 1988 was about 38%. So take that roughly 100% increase from 1979 and carve out 38% for inflation. Heck, use 50% for inflation, and you've still got a 50% "real" increase.

http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

Now, 1980-1988 average annual GDP growth. ADJUSTED FOR INFLATION

3.9%

http://www.forbes.com/sites/kylesmith/2014/09/11/sorry-obama-fans-reagan-did-better-on-jobs-and-growth/

and that includes the residue Reagan picked up from President Carter (man, it still hurts to type that)

To quote the article, the US added the entire West Germany economy to our GNP over those eight years.


And just in case you missed it, during Reagan's run, the freakin' fed wasn't doing everything in its power to keep interest rates at close to zero.

Look. I get it. Reagan says if you lower tax rates, the economy will grow, which will in turn give you more tax receipts, and give you more jobs, and more productivity, and MORE.

And then he does it.

Here's the REAL rub.

Why didn't they go down? Like, way,way down? Like the percentages that he cut the income tax rates? Hmmm??

And of course, I would be remiss in a posting about Reagan not to point out my favorite speech of his (although it's hard to pick). So take a minute, put down Krugman and the Times, sit back, and enjoy:

http://www.historyplace.com/speeches/reagan-d-day.htm

In 1984, he won 49 of 50 states and 98% of the electoral college.

Think ANYONE will ever do that again?

Terrific story, Jon -- this is the kind of Christianity that usually gets no attention or garners no tweets. Thanks also for the depth of field on Valley Seed Co.

Inphx glad to hear u have a hero to worship.
Reagan like Clinton did NOT get my vote.
Both were adept bullshiters.
And so there is no one running for president now that will get my vote.
Vote for Edward Abbey
Cal
Your Republican pal from the great Sonoran Desert.
What's left of it.

Way off topic – RC has the Control X option – and if he exercises, I can understand.

The issue is the Metro Phoenix economy –the use of the word “Phoenix” will mean the Metro not the City. If I refer to the “City” that would mean the City of Phoenix only.

RC frequently stresses that Phoenix does not have a real economy. Without going into the reasons, let me say: “I agree totally”.

The objective of this post is: “What would Phoenix be like if it had a real economy?” My ideas on the characteristics. I’m borrowing a lot of ideas from Jane Jacobs and her book: “Cities and the Wealth of Nations” (highly recommended).

First: It would be diversified. There would be no over-dependence on any particular segment. The ideal Phoenix would have a lot more “manufacturing”. A manufactured product would be one that can be “packaged” and sold around the country and world. Understand that many of today’s products are not tangible. Examples would be Micrcosoft’s operating systems, or a TV feed out of NYC. But it’s important that you get paid for the product.

Second: the products would be diversified over many categories. So our imaginary Phoenix would produce Electronic consumer products and their components, Cars, Rail system components (including engines, cars, rails, singling, etc.), furniture, clothing, building materials, industrial control systems, computer and switching equipment,…. (one could go on forever – you get the idea).

Third: manufacturing product expansion would be based on the principle of “import replacement”. Rather than risking a lot of capital on a new product or service, the best expansion is into things Phoenix imports from elsewhere. Since that includes about everything currently – that shouldn’t be too hard narrow down.

Forth: the operations would be locally owned and operated. While this is many times not really all that practical – for example there are maybe 10 car manufacturers in the world today and creating a new one is virtually impossible. On the flip side – a car plant represents an enormous investment and really isn’t all that transient. Better yet, a car plant buys almost all its parts from smallish local operations.

Fifth: services to locals would be by locally owned providers. That is banking, insurance, health care, restaurants, retail stores, entertainment,….

Sixth (if the water can be found): agriculture would expand in a big way. Not just the growing of it, but the processing, packaging, branding, marketing, etc. First objective to localize much of the production of food products; then more for export – preferably as branded items.

Well that's ecnough for now.

Wkg Ur not off topic on this blog. Ur right on topic. but since I do not have the wherewithall to intelligently go on for paragraphs re your post I'll keep it simple. Read Killing the Hidden Waters and Desert Cadillac. The science is right down your arroyo.

Cal,
Can you name a politician who is not adept at "bullshitting"? I thought that was part of the job description.

@Cal. Yep. Too many people and not enough water are real problems.

A few months ago I was part of a mural project, a project that was depicting the history of Phoenix. Along with the murals there were some speaking events with Phoenix historians, authors and various other "movers and shakers". Grady Gammage Jr was a speaker and had some interesting ideas about Phoenix. First he let us know that he's in process of writing a book about just how sustainable Phoenix is, contrary to other dire reports, and most specifically, as a rebuttal to Bird On Fire by Andrew Ross. Second he said Phoenix is now "Phoenix 3.0". Phoenix 1.0 was agriculture, 2.0 was housing, and 3.0 was Tech, education and healthcare. To here him tell it, Phoenix was diversified enough and everything was just "fine". His evidence was: we have Intel! (Chandler), ASU! (Tempe), and the soon-to-be Bio campus! next to the Mayo Clinic (Phoenix technically or should i say barely?) And to top it off he bragged about CAP and that we have plenty of water. Plenty. This was all before the Duce Man took the helm, though I'm sure this sunny boosterism hasn't changed.

INPHX, it's clear that you don't understand the difference between real and nominal dollars, why adjusting for inflation is not only reasonable but necessary, and how that adjustment is carried out.

If my business receipts double in a year but inflation renders the new dollars half as valuable, then my nominal growth rate is 100 percent, but my real growth in business revenues is zero.

In order to express dollar amounts from different years in comparable terms, you need to convert them into the dollars of a single year, which is called the base year. You do that by taking the known, historical inflation for each year and making a simple arithmetic adjustment relative to the base year.

In the present case the base year is 2009. That's a good base year because inflation/ deflation was close to zero for that fiscal year. There is nothing magical about 2009; it's just fairly recent year which makes an uncontroversial base year. You can apply a base year to convert dollars from the 80s, 70s, 60s, etc., with equal legitimacy.

It is your "table napkin" methods and your reasoning that are askew. The basic Treasury data, adjusted for known inflation rates for the years in question, clearly show that federal receipts DECREASED in real terms, did not recover to FY 1981 levels until 1985, and did not significantly surpass 1981 levels until FY 1986.

More on your other errors next comment.

Part II

INPHX makes a couple more errors. One is conflating federal revenues with economic GDP. GDP can grow in real terms even while federal revenues decline.

In Reagan's case his early tax cut kneecapped revenues, while his mammoth deficit spending goosed the economy. It's both a repudiation of supply-side theories about tax cuts increasing revenue, and a confirmation of Keynesian theories about the stimulus effect of deficit spending. I'm stuck on mobile today but if you check Table 1.2 (I think) you can see deficits as a percentage of GDP by year.

You also err in your range of dates. I've already explained "federal fiscal year" above, so please pay attention this time.

FY 1979 began October 1, 1978 and ended September 30, 1979. Reagan was sworn into office in January 1981. The fiscal year which most closely overlaps Reagan's first calendar year in office is FY 1981, which began October 1, 1980. You can't measure Reagan's early revenues, even in nominal terms, by including Carter years.

Furthermore we know that Reagan's income tax cut was passed in 1981 and that his later tax increases began to kick in most substantially starting in 1984. So if we want to assess the effect of supply-side tax cuts on revenue, we should concentrate on the early years and not the last years. As conclusively shown above, revenue levels began decreasing in real terms from FY 1981 and did not recover to 1981 levels until FY 1985.

P.S. This particular edition of the Historical Tables uses FY 2009 as the base year for all constant dollar (inflation adjusted) conversions in all tables, all years, and all topics for which real dollar figures are offered, not just for Reagan era revenues.

A poltician not adept at moving his lips? Ev Mecham!
Grady is a nice guy but he reminds of the attorney that told me Phoenix water supply could support 30 millon people for a 100 years.
For California and to a slightly less extent AZ, it's all about snow packs and less people.
The agribusiness as currently exists is killing the planet. I stick to my belief that Arizona, Nevada and New Mexico need Millons less folks and less Agribusiness.
The current AZ heat wave sent many winter vistors on their way to Frys Gas pumps and out of town North bound. The silence is returning thanks to the great sun god.


.
Side-note: I've posted a mea culpa to phxSUNSfan re the Midwest migrant political debate, here:

http://www.roguecolumnist.com/rogue_columnist/2015/03/still-nixon-to-kick-around.html

I am thinking that Emile is correct.
Just because tax receipts or GDP increase, does not mean that revenue increases. An increase in tax receipts may only reflect an increase in the population of tax payers (which did increase), not how much tax they paid.

Suzanne, revenues federal revenues ARE tax receipts (plus a few things like national park fees, etc.). Federal tax receipts decreased in real terms from FY 1981 and did not recover to 1981 levels until FY 1985.

Typo correction: just "federal revenues" not "revenues federal revenues" in my reply to Suzanne above.

Emil,

Sorry, but I don't think INPHX cares to recognize his errors, because they repudiate the entire purpose of supply side economics as practiced by the political economists such at Stephen Moore and company.

That is simply to confirm the rich won the war, and now the average american is finally waking up to this fact.

As it gets worse, we will face a much more contentious political system, and the kids are going to roast the old rich folks, because they will have no real reason to support this system.

Something to make the Keynesian stimulus thing clearer vis a vis Reagan and the growth in GDP:

Buying goods and services drives economic growth, because when more of these are demanded, producers tend to produce more; and an increase in total goods and services produced is the definition of economic (GDP) growth.

There are two components of national demand for goods and services: private sector demand, and public sector (government) demand.

When Reagan cut taxes in 1981 the private sector got more money to spend on goods and services, and the federal government got that much less to spend (since it was deprived of those tax receipts). All else remaining equal, this means that total national demand for goods and services would have remained unchanged, since the private increase in funds was offset by the public (government) decrease in funds.

But all else did not remain equal. The government, far from cutting spending to offset its own loss of tax revenue, actually increased spending , funding the difference with borrowing (deficit spending). This allowed total demand (private and government) to increase, thus goosing producers to produce more (and not incidentally hiring more employees to accomplish this).

@D: if you’re perplexed by Mr. Gammage’s statements, so am I. We’ve already seen how sustainable Phoenix 1.0 and Phoenix 2.0 were.

Re; Phoenix 3.0 focusing on Eds and Meds and Tech: good luck.

The biggest scam running, Higher Ed is “fixin” to burst (as we’d say in the South). A separate topic I like to get into at some future point – but way out of the ballpark now.

Concerning Meds: this is almost a classic “I’ll trade my service for your service”. Actually, good as far as it goes. Does my increased productivity due my health off-set the costs? This is a diminishing returns issue. From a personal view – it certainly does. From a societal view’ maybe not so clear cut. We’re running into some really hard issues. Is really right to lavish the finest of medical care to geezers (I can say that – I am one) while poor kids visit a charity clinic at Urban Ministries? An easy answer might be: “well we’re the richest nation on earth (maybe). We can afford both.” Yes. We are rich. We can afford a lot of things – but we can’t afford everything.

In any case the “meds industry” is one that is being pursued by every city in the country. Phoenix, as far as I know, would not be considered a center for drug development, medical instruments, exceptional care that fat-cats from all over the world fly into to partake of or any other product or service that might be considered an export.

Concerning Tech: No offense – but Phoenix could hardly be considered a Tech mecca. I don’t want to scoff at the Intel plant – but it’s the equivalent of a call center – albeit with better wages. And it could be gone tomorrow. Perhaps I’m just misinformed. Where did Motorola go?


P.S. One caveat. I simplified one aspect of the Keynesian explanation above, for clarify.

When Reagan cut taxes, the wealthy got the biggest rebates. Even if the federal government had cut spending to offset its tax receipt losses, total demand would likely have decreased since wealthy households receiving tax rebates (so to speak) would spend only a part of this windfall on consumption, using the rest for financial speculation. So under such circumstances total demand would have decreased, not stayed the same, and GDP would have shrunk or at best stagnated.

Concern Troll, I have a better opinion of INPHX than that. It seems to me as though part of his reaction is the result of lack of understanding of certain technical issues, together with the momentum of habit. I have reasonable confidence in his eventually coming to reason on this particular point. As for changing his entire political philosophy, it didn't develop overnight and it won't be radically changed from the outside overnight. He's here considering divergent views and seems to participate in conversations in fairly good faith most of the time. He might be testing his own views as well as ours, to an extent.

@Emil: you’ve said this “wealthy households receiving tax rebates (so to speak) would spend only a part of this windfall on consumption, using the rest for financial speculation. So under such circumstances total demand would have decreased, not stayed the same, and GDP would have shrunk or at best stagnated…” several times (more or less).

I don’t get it. Here’s why. Simplified case: working class/middle class get rebates and spends. Wealthy get rebate and deposit in bank – unspent. But here’s the thing: the bank loans the money to people who will spend it. I don’t see how total spending goes down.

P.S. The first major cut in personal income tax rates occurred in the 1960s, when a top rate of 91 percent was decreased to 70 percent and other brackets were revised.

However, in Kennedy's day supply side economics "got no respect" and it was well understood that cutting tax rates required closing loopholes, eliminating or reducing deductions, or broadening the tax base (or some combination of measures designed to offset the loss of revenue from tax rate cuts).

Fair question, wkg. The answer is twofold.

First, banks primarily loan money for personal consumption through credit card debt, which is something consumers decide unilaterally by using their cards more. As for business loans, businesses usually seek to increase debt in response to an increase in demand for their goods and services, because they need more employees or equipment or office space to meet perceived opportunities.

But here we're talking about an increase in total national demand that won't occur until spending increases. So consumption generally has to have already increased before such loans are sought.

Second, not all financial speculation involves commercial banks. But that is a technical issue we need not consider.

Businesses sometimes also increase loan levels to update equipment during periods of rapidly changing technological development; but that cannot be assumed in the general case.

P.S. "such loans" = business loans.

@Emil: not to beat a dead horse - since I've raised the issue before. That is the stimulous effect of federal spending is mainifest. No argument from me or any rational person I would know.

But here's the thing: we're not so good at the "other half" of the Kenesian cycle - that is running surpluses when the economy is "normal".

Troll added this link in recent times:

http://www.voxeu.org/sites/default/files/file/Geneva13.pdf

Read it an weep. (Troll you can kick in whenever you want). The "advanced economies" of the world are racing each other to financial collapse.

wkg, I believe the race downhill has been going on for the last 50 years.

Bearing Fruit in the desert?
Here's a picture of the desert's revenge

http://www.huffingtonpost.com/2015/04/02/gulf-sandstorm-photos_n_6992196.html?cps=gravity_2684_-5659850451684694192

make sure your still suit is in working order.

Surpluses are to be run when the economy is overheating, not when it is normal. The idea is to stimulate through deficit spending during recessions but relieve inflationary pressures by running a surplus during overheated economic booms. Since there haven't been to many such booms lately the absence of surpluses (except during Clinton's second term) isn't surprising.

I'll admit that since the seventies Congress and the executive have gotten out of the habit of running essentially balanced budgets during normal periods of economic growth.

First there were two OPEC caused oil shocks during the 70s. Then major recession at the start of the 80s. Reagan wanted increased military spending but didn't want to pay for it. Another fat income tax rate cut as Bush Sr. came into office didn't help Treasury balance the budget. Clinton raised taxes and not only brought the budget into balance but ran surpluses for a few years. Then a recession at the start of Bush Jr. and the kool-ade drinker cuts taxes and starts two expensive wars. Obama inherits a world-wide recession and financial crisis and a domestic housing crash which makes the S&L failures look like child's play. The country has finally achieved a wobbly recovery and, understandably, balancing the budget is low on his short-term agenda.

And here we are.

"to many" = too many

Can't read your PDF link while on mobile, wkg. I've said about enough for today anyway.

Speaking of things that went terribly wrong, haven't been fixed, and probably predict the mechanisms of the next big crisis, at least in broad terms, check this out (from Wiki):


In 2005 former bank regulator William K. Black listed a number of lessons that should have been learned from the S&L Crisis that have not been translated into effective governmental action:

1. Fraud matters, and control frauds pose unique risks.

2. It is important to understand fraud mechanisms. Economists grossly underestimate its prevalence and impact, and prosecutors have difficulties finding it, even without the political pressure from politicians who receive campaign contributions from the banking industry.

3. Control fraud can occur in waves created by poorly designed deregulation that creates a criminogenic environment.

4. Waves of control fraud cause immense damage.

5. Control frauds convert conventional restraints on abuse into aids to fraud.

6. Conflicts of interest matter.

7. Deposit insurance was not essential to S&L control frauds.

8. There are not enough trained investigators in the regulatory agencies to protect against control frauds.

9. Regulatory and presidential leadership is important.

10. Ethics and social forces are restraints on fraud and abuse.

11. Deregulation matters and assets matter.

The SEC should have a chief criminologist.

13. Control frauds defeat corporate governance protections and reforms.

14. Stock options increase looting by control frauds.

15. The "reinventing government" movement should deal effectively with control frauds.

California's snow pack problem?
Watch Documentary When the Mountain Calls, Nepal, Tibet, Bhutan.

P.S. The tail end of the Vietnam War and LBJ's Great Society spending probably didn't help balance the budget either. I don't have my tables handy on mobile but my definition of essentially balanced budget might have to be stretched to include deficits that don't increase debt as a percentage of GDP.

Cal, I have a (probably impractical) notion about how to solve America's clean energy problems. The country needs energy that is not only clean but also available day or night, cloudy or sunny, which can not only run all the time but can also be efficiently be brought online and turned off again to meet fluctuating peak hours energy needs with supplementary energy.

The only thing that really fits the bill at the present stage of development is hydroelectric. The problem is that most river sources right for this either are already tapped or else would be politically or environmentally problematic to construct needed dams.

I have a crazy notion that the ocean contains plenty of potential energy that could be tapped at numerous coastal areas if canals were dug to allow gravity to move large volumes of water naturally, to plants constructed nearby.

Some of that energy could also be used to power desalination plants using this same ocean water as input.

@Emil: a combo that works pretty good here in the Southeast:Nuclear and "pmped" hydroelectric. With a nuclear plant, you don't want to mess with the power output. Best to put it on line and let it run full out 24/7.

A "pumped hydro" plant is a pair of lakes: one on top of a large hill or small mountain and another at the base. Off peak, you pump water from the lower resevour to the top one. On peak, you let the water run down hill, generating electrical power.

An excellent book for all things energy related: "Energy for Future Presidents" by Richard Muller

Tidal power hasn't worked out all that well to date.

Wkg, thanks for that interesting reply. Still on mobile so research capacity is limited, but a couple of points:

(1) I'm not talking about tidal power, which is an attempt to harness energy in the natural ebb and flow of tides. I'm talking about digging a short canal from the ocean shore inland, which is also graded to allow gravity to naturally move large volumes of ocean water "downhill" to a hydroelectric plant. The water could be desalinated either before or after it generates electricity. If before, this would avoid potential problems from the corrosive aspects of salt water on hydroelectric power plant equipment. The desalination process itself could still be powered by the hydroelectric energy generated further down the line, except for the obviously needed initial jump start.

(2) The dual lake system you described has two major problems. First, using electrical energy to pump water uphill is expensive and adds to the total cost of energy generation. Second, it costs more energy to pump water uphill than can be gained by letting it flow back downhill. The uphill trip has to overcome gravity as well as various frictional forces (not just between water and pipe but also within the pumping motor and in the electrical generation & power distribution used to create electrical power and get it to the pump. The trip down uses gravity but still faces energy losses to friction.

P.S. Nuclear may be fine as a primary power source, provided certain economies of scale are observed (the French have done pretty well); but in practice it faces both political and physical challenges. You have to dispose of the waste and doing that safely is expensive as well as facing NIMBY problems. There are also many places where earthquakes, hurricanes and tornados subject nuclear plants themselves to dangerous or expensive vulnerabilities. SoCal fault lines come immediately to mind.

Also, water gravity fed to the desalination plant, once processed, could have a dual output: part could be piped or trucked away as drinking water; and part could be gravity fed into an artificial reservoir whose design allowed the water stored therein to be gravity fed to the hydroelectric power generation plant nearby, at whatever pressure and speed is desirable. (Large volumes of stored water produce high pressures and thus high potential energies near the bottom of the storage reservoir.). Once used to generate hydroelectric power the output water from the power plant could probably be rediverted to drinking water with limited processing.

Wkg, the funny part is that we will simply cut enough to preserve the value of the dollar, while allowing millions of people to sit around instead of engaged in useful work.

I believe it is called retirement.

What is really funny is that we are going to be staring at our belly buttons for decades due to the retirement bubble, and watching people slowly leave the economy for their consuming years.

The real irony is the boomers have wrecked the carefully built retirement system left by folks who lived through the Great Depression, and now will find that they are severely constrained by their lack of income, and even more constrained by a crappy labor market.

To me, that is the ultimate revenge, you bought it you got it.

On the irony front, my retirement is pretty secure at 48, but I didn't buy in to spending every and then blaming poor folks for the taxes necessary to support the society.

Emil, brilliant concept. Jerry Brown can use all the help he can get. besides California's imposed water restrictions they are planning on a significant number of Desalination plants. (probably to late to talk about Malthus).
I believe that man's engineerinng brilliance has lead us to the edge of destruction.

Concern Troll, robot production is about to accelerate by moores law. Soon no need for human labor and eventually human engineering or even humans. The war of the machines. Any humans left will once again be Hunter Gatherers.

Nah, Cal, the masters need to keep the worker bees busy.

Because if they are not busy, or otherwise occupied, they just might replace the masters.

After all, in a world of paper capital surplus, what is the value of capital?

Just paper, and we make more.

Now, smart labor, that is going to be remunerative. Robots are pretty dumb.

Quite frankly, robots will serve the rich, but when they break, they will need to be fixed. And then the entire world will keep turning.

The funniest part is what will the rich do with their spare time?

After all, what do think will soak their time up? There are only so many races at Ascot. There is only so much clothing.

Something tells me the biggest problem will be time that weighs on people without much purpose. Now the poor, they don't have those top level problems, they have survival problems.

@Emil: you are right - the complete cycle of a pumped hydro system is a loss. Here't the reason it works economically:

the pumping is accomphlished overnight using very low cost nuclear power. Cost - 2.0 cents per kWatt-hour +/-

round trip losses up and down the hill = 20% +/-

Cost of generated power when generating = 2.5 cents / kW-hour +/-

But the 2.5 cents is a lot less than 7 or 8 cents per kw-hour output of a newish gas fired combustion turbine.

An aside: i had the idea once that wind turbines should merely pump water up into something very much like water tower. When demand for electricity high, release the water and generate. well did a little back of the napkin calculations and the idea not as good as i thouht. Here are a couple of numbers:

1 gallon water = 231 cubic inches and 8.333 lbs wight

1 foot-lb= 0.000377 Watt-hours.

amuse yourself with some analysis. spreadsheet recommended.


Concern Troll for the Rich I give you the Hunger Games. Will make Racing at Ascot boring. And the rich will always need clothing as they are the Naked Uglies.
And what makes you think Robots will always be dumb.
The science fiction I started reading in the forties is now mostly fact.

Wkg and Emil U genius' keep working on it. But my bet is on a significantly reduced population. Solution, wars and superbugs.

@Emil: still thinking thru the "gravity" system. Two issues I've hit and can't think my way around:
1. After the first half cycle of the system, all the lower resevours are filled with water (salty or desalinated). All that water needs to be pumped out to allow the next cycle. Very similar to "pumped hydro" system (20% losses).
2. given that the desalination process occurs at some level well below sea level, implies that some electolysis or reverse-osmossis process is used. These must be very costly to run - otherwise they'd be quite common.


@Emil - on nuclear

Re: “faces both political and physical challenges”. Economic ones too – particularly with natural gas being cheap as it is.

Re: “to dispose of the waste and doing that safely is expensive as well as facing NIMBY problems” Certainly is expensive, especially with the Feds in charge. Fighter planes are not the only thing that they can screw up. Safe storage is not all that difficult a technical problem.

Re: “There are also many places where earthquakes, hurricanes and tornados subject nuclear plants themselves to dangerous or expensive vulnerabilities.” Yep; and everything else too. There’s no free lunch – life is a crap shoot. The most creditable numbers I have seen estimate the death toll due to the Fukushima failure is 100 deaths. We’ll never know who they are because they are mixed in with a much larger number of cancer related deaths due to other reasons. That’s pretty bad. But consider 15,000 died in a few hours due the tsunami itself.

WKGINBHAM, some help. Clarence E Duttons, Report on the Geology of the High Plains of Utah.
Meanwhile the Southwest is continually ravaged by what Bernard Devoto called "The economy of liquidation"

While U number boys are at it. What's the wotld ratio of deaths to births. and how many are dying daily due to war conflict, disease and starvation.

How many Neighborhood Ministries will it take to save the human race.

At Troll Re: “The real irony is the boomers have wrecked the carefully built retirement system left by folks who lived through the Great Depression…..” I’d argue just how “carefully built” it was. If I were in a particularly crappy mood I’d go into a full RANT on the Ponzi Scheme aspects of the program, or maybe about Madinov’s (or something like that – you know who I mean) carefully crafted investment program.

While we Boomers had some say in the matter, I think everyone involved have be complicit in “kicking the can down the street” solution.

Went back to look at the CBO report again. It’s not SS that’s wrecking the budget – it’s medical and net interest costs.

Clearly some combination of spending cuts and tax (or quasi-tax) increases are necessary.

WKG, I thought the right wing kook conspirators discovered that Obama was working on reducing medical costs with his death camps for the elderly.

Thanks for the interesting replies. wkg.


Re the gravity pumping: The graded canal allows gravity to transport seawater, which (probably after desalination) flows by gravity into large artificial reservoirs. The "downhill" grade doesn't need to be large. Once in the reservoir the water does its own pumping to get it to the hydroelectric intake. A column of water of sufficient height is extremely heavy and only needs an outlet to flow at speed and in volume. Meanwhile the reservoir is being continually refilled.

Re the cost of desalination: reverse osmosis IS both cheap and common:

"The laws of physics determine a minimum energy consumption for sea water desalination around 1 kWh/m 3 , excluding pre-filtering and intake/outfall pumping. Under 2 kWh/m 3 has been achieved with existing reverse osmosis membrane technology, leaving limited scope for further energy reductions."

Note that one cubic meter of water is about 264 gallons.

That's from the Wiki article on desalination. Well worth perusing since it turns out there are about a million methods of desalination and a great deal of active research, innovation, and technical advance. (P.S. I don't see what below sea level has to do with choice of desalination techniques.)

Also note that an artificial reservoir has much more storage than a water tower.

Of course, this could easily still be pie in the sky, but I think the idea worth exploring.

Cal, great website that displays some of your figures and a whole lot of others, with real-time updates. From the website:

(YTD = year to date)

Births 35.6 million ytd
Deaths 14.7 m ytd
Net population growth. 20.9 m ytd

(Deaths today so far. 17,400)

Deaths caused by unsafe water. 462,000 ytd

Deaths caused by communicable diseases. 3.3 m ytd


http://m.worldometers.info/

Emil very good. Thank U.

I know I bring up Malthus a lot. but in Jon's Front pages there is a good read. "Blood Cries Out: Murder and Malthus in Africa's Great Lakes. "

Concern Troll wrote:

"The funniest part is what will the rich do with their spare time? After all, what do they think will soak their time up? There are only so many races at Ascot. There are only so many clothes."

This makes no sense. There is so much to learn and think about in the worlds of politics, economics, a wide variety of sciences, philosophy, history, and mathematics; art and music as enjoyments, objects of study, and areas of performance and composition; hobbies galore from astronomy to computers to geology and gemology, stamps, coins and antiquities of all varieties; theater and concerts; literature both as reading and as something to compose; travel to beautiful and interesting places; water sports including sailing and yachting; aviation; scuba and reef diving; and all this barely scratches the surface.

A whole lifetime of leisure and the financial means to enjoy it could not come close to exhausting the possibilities.

The people so often sleepy, weary, enigmatic,
is a vast huddle with many units saying:

"I earn my living.
I make enough to get by
and it takes all my time.
If I had more time
I could do more for myself
and maybe for others.
I could read and study
and talk things over
and find out about things.
It takes time.
I wish I had the time."

. . . .

Once having marched
Over the margins of animal necessity,
Over the grim line of sheer subsistence
Then man came To the deeper rituals of his bones,
To the lights lighter than any bones,
To the time for thinking things over,
To the dance, the song, the story,
Or the hours given over to dreaming,
Once having so marched.

From: The People, Yes by Carl Sandburg

http://glenavalon.com/peopleyes.html

Incidentally, that's a book length poem (300 pages) published in 1936 at the height of the Great Depression.

When it comes to "modern" poetry Sandburg is a titan in my book. Plain-spoken yet elegantly poetic. Writing that spans the vast scope of history and individual yearning and weaves the former from the latter. Doesn't rhyme but there is never any doubt that you're reading poetry, not prose broken into artificial lines or funny punctuation, spelling or other gimmicks.

What do the wealthy do? If i had a few thousand I could spare I would escape to Alger for a few weeks and head immediately to the Lower Depths Bistro.

Emil:

Tax receipts, accounting for inflation during the 9 year span that we're including, just about doubled from 1979 to 1988.

What did tax RATES do over those 9 years?

Cal,

Pepe le Moko?

http://m.imdb.com/title/tt0029855/

INPHX, tax receipts, accounting for inflation, were the same in 1985 as in 1981. This covers the period of Reagan's (not Carter's!) presidency when his tax cut of 1981 (not his later tax increases) had the chance to work their magic.

I am not going to repeat myself ad infinitum. In the vulgar popular idiom, you need to" pull your head out".

Also note that there's a reason why George H.W. Bush almost immediately broke his" Read my lips: no new taxes" campaign pledge. That reason is piss-poor tax receipts and big fat deficits following Reagan's second huge cut in personal income tax rates (for the top brackets!) which took effect just as Bush came into office. (And which no doubt contributed strongly to the recession which followed by decreasing total national demand for goods and services).

I find I owe our host Rogue Columnist an apology. Very early on I became side-tracked by the "old business" portion of the agenda. Then I blithely moved into other byways, without the least suspicion that I had missed something important. Tonight it suddenly occurred to me to read the current blog.

I found moving tributes to the dead, talk of living in Christ, rainbow symbolism, and much other sober and earnest subject matter. To say the least I was chagrined.

@Emil: thanks for the tip to look at Wiki for info on reverse-osmosis. Remarkable progress since the last time I looked into it (many years ago). Numbers look promising.

I was much taken with the problem of “urban heat island” problem of Phoenix. One of the many things that can be done to address it would be the addition of street-side trees. Additionally they would provide for a more pleasant walking environment and street-scape beauty.

Such a plan would use significant amounts of water. At least, I think it would be significant. I don’t know what metro-wide water usage is now – so maybe it’s not as significant as I think.

Here’s the plan. Plant dwarf citrus trees in large concrete planters. Planters = 6 feet diameter and 5 feet tall. Water/tree/day = 2.5 to 5.0 gallons per day.
At $3/cubic meter: cost of water at plant = 1.14 cents per gal
Cost of water with transportation cost from Gulf of California = 4 cents per gal
Cost of water/tree/day = 10-20 cents per day
All of this assumes volunteer labor for driving the truck to the Gulf and watering the trees and everything else.

The numbers seem to put the idea into the region of being worth looking into.

@RC: ditto Emil’s remarks above.

Your posting is a very difficult one to comment on. I have very ambivalent thoughts about righting the wrongs that Kit Danley and Neighborhood Ministries are trying to address. Very difficult and complex issues.

I should perhaps add that, being heavily preoccupied at the time, I glanced at the blog just long enough to conclude (erroneously as it turns out) that it was merely the latest in a series of fairly ordinary reminiscences about local nurseries. If I'd had the slightest intimation that it was something deeply personal and time sensitive, I would never have posted my irritable initial comment complaining about a too sudden transition to a new blog topic.

Thank you, Emil. I appreciate that.

To everyone: My general intention is for the comments to be an open as possible. Thus, unless you are a troll, you may go off topic on any given thread. These often turn into valuable conversations. In this, I am much more liberal than many bloggers, who simply don't publish comments that are off-topic or not to their liking.

However, I write RC for the columns and appreciate it when you read them. Readership keeps growing and few readers comment. If the topic of a given column isn't of interest, maybe you would be better served going to another blog to comment that day.

The best comments add value and are related to the column.

all the blogs I have visited do not have the diversity and thoughtful commenting that occurs here. Jons subject matter may appear to be one main issue but it usually has subtlety points that can lead to good conversation.
And the front pages at this time are excellent reads. I particularly enjoyed the population on photos article. And the water issues posted on Front pages.
And i enjoy the debates that occur as it makes me research stuff and think harder about what I believe, even at almost 75 I still learn something new every day.
zo keep writing Jon and Uall keep comin back.

Emil, pepe le moko.
out of print
but I got a copy for $34
cheaper than a ticket to Alger

Arizona is really low on the fruit tree of financial literacy.
http://wallethub.com/edu/most-and-least-financially-literate-states/3337/

I'm so mad about this that I' w ant to kick someone on welfare. I probably won't be able to find any, anymore- maybe to the market to find somebody on food stamps. They're not allowed to kick back, right?
"The Pentagon's 10 billion dollar gamble gone bad." LA Times 4/5
Of course this is just what someone could dig up. Or am I glad there's not more out there? Of course there isn't.
Someday my prince will come on a white horse and he'll get everyone who's getting a handout. I'll help if it's safe.

U OK Dawgzy?

In Arizona if your are handicapped and unable to work and have stage 3 cancer and your monthly income is $ 770 a month and your living expenses are $750 per month, not counting food you can qualify for $16 dollars in food stamps.
Thank god for places like Neighborhood Ministries.

That's $16 dollars a month in food stamps

DeVoto! You continue to amaze me cal:

http://en.wikipedia.org/wiki/Bernard_DeVoto

His wife was no slouch either (link in story). He has been on my to read list as Stegner was his biographer. Despite his Utah roots, he was Catholic (you almost forget they were there before the Mormons). And the FBI didn't like him -- more reason to read him:

http://www.hcn.org/issues/13/407

Hi, Cal. I'm fine. just condensing my themes. You are perceptive; dawgzy's mood could be better. It gets a bit tiring holding two points of view while trying to reconcile them: 1) 😀 things still might get better, Phoenix and the USA still might improve by my lights; 2) 😨it's over. The situation is so rigged in all directions that the only sane response is to watch it unfold as a fascinating, if disheartening, drama. If I had to bet, on which will hold up, I'd have to choose #2 (so to speak.)

Dawgzy, "Improvement" is tricky word. Right now I'm caught up in Reading David Gessner's book on Abbey an Stegner while perusing the new issues of Adbusters and The Believer. To stay on line I hang in there with Albert Camus.You just got to keep rolling the stone.

Cal- you calling me a sissy? Heh Heh.
You're right. Will meditate on that. A big stone got rolled away 1982 years ago yesterday , if the legend's correct. Still waiting from some help there. (BTW, Leon Russell'ss "Roll away the Stone" Best theology to come out of Oklahoma ever.) Will stick with the Greek guy. Seems to fit better with the life that I'm living. Thanks for you words.

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