13 August, 2011

August 13, 2004

Hurricane Charley makes landfall in Punta Gorda, FL and travels up FL’s Atlantic coast. It is less than 24 hours after Tropical Storm Bonnie also hit FL. Orlando’s Walt Disney World closes that day for the first time in its history.

Charley is the first hurricane to make landfall in the record breaking 2004 hurricane season.

While a relatively minor storm in that season, it has personal significance to me. My wife and I and our first daughter were staying at the Walt Disney World Resort as Charley came on shore. We decided to cut short our vacation and left the Orlando area about four hours before he arrived.

12 August, 2011

August 12, 1981

The IBM PC is born.

Millions learn how to play solitaire, VisiCalc is created, and Bill Gates Jr. becomes insanely rich.

We had a TRS-80 Model I Level II at the time, but did upgrade to a PC a couple years later. Have spent countless hours sitting in front of various monitors ever since.

GOP Debates: Round 3-Iowa

As always, the video of the entire debate is at the end.

Most of the GOP hopefuls squared off in Ames, IA last night for our third Presidential Primary debate. Like last time, the good news for many of these candidates is that very few people were likely watching. Because there wasn’t much good news in this debate other than that.

If you’re interested, you can find my thoughts on the first and second debates by following the links.

Last time I said that former Governor Mitt Romney (R-MA) was the “winner” but didn’t have the best performance. As the perceived front runner, he just has to look Presidential and not screw up. This time he was both the winner and had the best performance. His first three answers were fantastic, easily the best of the candidates. I felt that he started slipping a bit when asked about his record on taxes. Sometimes Romney reminds me of a used car salesman, and this inner voice in my head starts saying “I don’t believe what you’re saying”. That happened on that answer. And I think that answer was the tipping point for him. He was considerably less impressive after that, including flailing as usual on defending RomneyCare. And later in the debate he seemed to become the invisible man. Still, that’s a win for him. If he’s invisible it’s because no one is going after him. And if no one is going after him, he’s still going to be the front runner.

Former Senator Rick Santorum (R-PA) had his best debate by far, and at times really shone. I’ve said this now many times and it’s still true. When Santorum is good, he’s great. And when he’s not good, he’s terrible. As usual, we saw a little bit of both last night. The good news for Santorum is that for once we saw more of the good side than the bad side. I admire him for standing firm on his pro life credentials, but his no exceptions at all stance is not going to win him many votes. Still, if he’d been like this in the first two debates, the race might be a bit different. Now, though, it seems like too little too late. My big peeve with the Senator is that I believe he’s too thin skinned. And he allowed that to cause him to lose his patience with Congressman Ron Paul (R-TX-14) and Fox News’ Chris Wallace last night.

Now, it gets tricky. Other than those two, I don’t think anyone did a very good job last night. Herman Cain (R-Godfather’s Pizza) was probably the next best, but still stumbled on foreign policy, particularly Afghanistan. Wallace went after him on Cain’s statements on Muslims, and I don’t think Cain helped himself any with his answers. He clearly showed that he’s not Presidential material. I should copy-paste that last sentence. I may use it often from here on out in this post.

I guess I’d have to go with former House Speaker Newt Gingrich (R-GA-06) for the next best performance, but he bickered far too much with Chris Wallace, claiming that the debate questions were “gotcha” questions. I think they were questions these candidates are going to be asked many times over the next 15 months, and they better have good answers for them. His bit on calling Congress back to repeal Sarbanes-Oxley, ObamaCare, Frank-Dodd, the Super Committee,  and a few others fell completely flat for me. And he mentioned it twice. The second time it more than fell flat, it annoyed me. Good ideas, but we need to be honest in these debates. Most of those proposals would struggle to exceed 40 votes in the Senate right now. You can forget about 60. I’ve said this before about Newt as well. He’s a great idea man. He’s the guy you want in your company to sit around and come up with new directions for the company. But you don’t want him running it. You need someone else to say “Good idea, Newt, but…no.”

Former Governor Tim Pawlenty (R-MN) probably comes next, but his performance, especially the first hour, was dismal. In fact, he lost my support. I was very impressed with him after the first debate, not so much after the second, and he’s fallen off the map now. He and Congresswoman Michele Bachmann (R-MN-06) went after each other with ferocity and bitterness. It wasn’t pretty on either side. People had differing impressions of who pulled down whom, but both came out of it looking awful. Not saying he couldn’t change my mind again, but right now, I’m in search of a candidate. And I’m not looking towards MN to find one. When he wasn’t bickering with Bachmann he looked ok, but not the guy I remember from the first debate. His best moments last night were like the guy he was in the second debate. Not good.

Next, former Governor Jon Huntsman (R-UT). All it says by having him sixth is that the other two below him were completely terrible. There’s nothing that Huntsman says that endears him to me or makes me want to vote for him. I’m sure he was a decent governor for Utah, but there’s no doubt that he’s a big government Republican, and I don’t think he’s ready for a larger stage. Not Presidential material.

I guess I’d put Ron Paul in seventh, but again, only because he wasn’t quite as bad as Bachmann. His foreign policy ideas are frankly scary. He’s a big L libertarian, and an isolationist. And last night he was even less solid than usual on domestic policy. I think when he expresses his ideas on a national stage it hurts the entire party. He either makes us look foolish, or he hands talking points to the left. Sometimes both. I’d honestly prefer it if he were not at any future debates.

Apparently winning these debates is not a good thing. I thought Pawlenty won the first, and looked bad in the second. I thought Bachmann was the clear winner of the second and looked horrible last night. In fact, I’d go as far to say that it was one of the worst debate performances I’ve ever seen. Her bickering and sniping with Pawlenty was not useful, and really her best moment was when answering an absolutely ridiculous question by Byron York on whether she’d submit to her husband as President. The question obviously caught her off guard (as I think it did to us all), but she kept her cool, responded, made some nice key points about love, marriage, family, and children, and generally made York look like a doofus for even asking it. Bachmann has been polling well, but I believe it’s more because the “anybody but Romney” crowd has jumped on her bandwagon, not because she has much strong support. I think when Governor Rick Perry (R-TX) enters the race, and if former Governor Sarah Palin (R-AK) enters, she disappears.

I’ve said both of the last two times that I thought Palin, assuming she runs, was hurt by not being there. Last night was the opposite. For both her and Perry, it was good to not be there last night. They didn’t get pulled down into the mud, and will get the stage to themselves for a while this weekend.

I think in general the candidates all made two significant mistakes. None of them really went after Romney. I keep hammering on this. He is the perceived front runner. If you don’t go after the front runner, he will remain the front runner. Second, there was almost no mention of President Barack Obama (D-USA). Obama needs to be center stage at all of these debates. In fact, they should add an extra empty podium just for him. He’s the person all of these people are running against. They need to show his faults and make clear distinctions between what he’s done and what they would do.

The bottom line? The only candidate that was there last night that can win the GOP nomination was Mitt Romney. The others are wasting their time and ours. Our GOP nominee will be one of Romney, Perry, or Palin, and you can bet the farm on that.

11 August, 2011

August 11, 3114 BC

The most recent world cycle of Mesoamerican Long Count calendar begins.

Click pic above to see full size.

Without it, crazies would have to come up with an end of the world date other than December 21, 2012. According to mythology, the gods created the world four times, the first three being failures. The previous creation ended on on the calendar, which was August 10, 3114 BC. Therefore, since the fourth and (up to now) final creation started the next day, the calendar was reset to rather than

December 20, 2012 represents the next time we will hit on the calendar. December 21, 2012 will be and life will go on.

For those interested in understanding the periods:

Representation Long Count subdivisions Days ~ solar years 1 k'in 1 1/365 1 winal = 20 k'in 20 0.055 1 tun = 18 winal 360 0.986 1 k'atun = 20 tun 7,200 19.71 1 b'ak'tun = 20 k'atun 144,000 394.3


Other than the fact that the last creation ended at the end of the 13th b'ak'tun, there’s no good reason to assume that we couldn’t have 20 b'ak'tuns. The end of the 20th b'ak'tun will be on October 12, 4772. Will that be the end of the world, then?

Well, I don’t think that I’ll be around to see it, but I sincerely doubt it.

August 11, 2001

Around this time, the flight instructors for Zacarias Moussaoui become suspicious and fear he may be planning to hijack a commercial flight.

In addition, it is unusual that he has no aviation background, very little experience, and no pilot’s license. All other pilots at the center, even “vanity pilots”—wealthy individuals who just want the thrill of flying a large jet—have many times more flying hours than Moussaoui and are all licensed; [US CONGRESS, 10/17/2002; STAR-TRIBUNE (MINNEAPOLIS), 4/24/2005; RAKE, 5/2005]
bullet He has flown for 57 hours at flight school in Oklahoma, but not yet flown solo, which is unusual. The school’s manager of pilot training, Alan McHale, will later comment, “My worst student was a grandma, and I got her to solo after 21 hours;” [STAR-TRIBUNE (MINNEAPOLIS), 4/24/2005]
bullet He is not just buying a one-period joyride, but a whole course; [STAR-TRIBUNE (MINNEAPOLIS), 4/24/2005]
bullet He seems determined to pack a large amount of training in a short period for no apparent reason; [NEW YORK TIMES, 2/8/2002]
bullet He is “extremely” interested in the operation of the plane’s doors and control panel. [US CONGRESS, 10/17/2002] He also is very keen to learn the protocol for communicating with the flight tower, despite claiming to have no plans to become an actual pilot; [NEW YORK TIMES, 2/8/2002]
bullet He talks to some Syrian airline pilots training at the facility, and the pilots tell Nelson that Moussaoui is fluent in Arabic. Nelson, who is already worried Moussaoui might be up to no good, thinks, “One more red flag;” [STAR-TRIBUNE (MINNEAPOLIS), 4/24/2005; CNN, 3/2/2006]

10 August, 2011

Polling The President

A month ago I looked at the President’s polling numbers for the second time. I intend to do this on a semi-regular basis between now and the election.

To say that this has been a bad month for the President is an understatement. He showed little leadership during the debt ceiling standoff, and S&P and the stock market are taking him to task for it now.

As always I look at the RealClearPolitics averages. Any one pollster might have an off day, and may show some bias. The average tends to even that out. Eventually I’ll write some blog posts about that as well, but the earliest that will happen will be some time in 2012.

When I did my first look at President Barack Obama’s (D-USA) numbers, he was near his post-Osama bin Laden raid peak, which was on May 25th. May 25th had the President’s approval numbers at 52.6/42.5, a whopping 10.1 point spread. In the 77 days since then, his numbers have nearly flipped. Today, Obama’s RCP average is 43.5/51.2, a –7.7 point spread. 43.5 is the lowest his approval has been his entire Presidency, and –7.7 is the largest the spread has been by a full point. 51.2 ties the highest disapproval he’s had, set last September. He’s underwater in every recent poll, in fact the last poll having him above water was released almost a month ago, on July 11.

Last month, I noticed that Obama seemed to have reached a plateau for a while, due to an increasing number of undecideds in all the polls. The undecideds have made up their minds now, and they’ve all decided Obama’s doing a terrible job.

Consumer confidence near the end of July had rebounded a bit up to 59.5. This is still far below the magic 90 number that indicates a healthy economy.

Right Track/Wrong Track is at 20.8/71.8, a spread of –51.0, a fall of 16.4 points from where things stood just a month ago. Even worse news, the right track/wrong track numbers for the country were better on his inauguration day.

When I reviewed things a month ago, I said that things looked awful for the President. I think he’d kill now to have the numbers he had then.

August 10, 1519

Ferdinand Magellan sets sail in an attempt to sail around the world. He will take with him, five ships: the Trinidad, San Antonio, Concepcion, Santiago, and Victoria (right).

A little more than three years  later, the Victoria will be the only ship that completes the expedition, led by Magellan’s second in command after his death in the Philippines.

The CBO’s Long Term Budget Outlook

In June, the CBO released their Long Term Budget Outlook (LTBO) for the United States. It does some guesstimating on our fiscal future through the year 2085. It made the papers because it had some scary numbers, but some that weren’t so scary. People talked about it for a few days, and then forgot about it.

After a few minutes of looking at it, I determined that it might be the scariest financial document ever released by our government. Three days of in depth study on the details have not changed my mind.

After my review, I can say one thing for certain. No one in Washington examined this report in detail. No one. Had anyone done so, S&P would not have downgraded our credit rating as there would have been no need. Congress and the President would have come up with a better plan.

You think that statement is naïve? Wait until I get finished.

This will be fairly long, so for those without the patience to read the whole thing, here’s the spoiler ending. The CBO projects two scenarios, one of which is like being doused with gasoline and lit on fire, and the other is more like being covered in barbecue sauce and slow roasted.

The other point I have to make before I get started is this. CBO Director Doug Elmendorf should be embarrassed that his office put this thing out. Part of the reason it’s taken me a while to get around to writing this blog post is because there’s so much in the spreadsheet that is either nonsensical or impossible. I’ve spent the last three days trying to reconstruct where all their numbers came from, what they mean, and determine where exactly the problems exist. It has not been fun.

The LTBO examines our fiscal situation and projects it out 75 years. Of course, this should be examined with a high degree of skepticism. Economists aren’t generally very good at projecting things out even 1 year, much less 75 (and Reuters’ economists can’t even project out next week—but I digress).

The CBO makes no attempt to guess at future law changes or new programs or the possibility of some unforeseen economic boom or bust. It merely attempts to project the effect of current law and current policy.

The LTBO examines two fiscal scenarios, one they call the extended baseline which is based on current law, and one they call alternative which is based more or less on current policy.  In short, the alternative is the doomsday scenario and the extended one is the “good” version, if you can call it that.

The differences between the two scenarios amount to two significant things: continuation of the Bush tax cuts, and continuation of changes to the AMT. The AMT is is the liberals way of making sure our tax code is more “fair”. Basically the AMT says that if you make enough money, you aren’t allowed to take any deductions. It’s a fairly flat tax set around 25%, and you’re required to pay the greater of it or whatever you calculate as your regular income tax using all the deductions available to you. Your income has to reach a certain threshold for the AMT to apply to you. The problem is that the threshold is not indexed, so every couple of years, Congress has to change the AMT law so that it still only affects the high income people and not the middle class.

Neither scenario envisions any sort of entitlement reform. Both scenarios assume an average of somewhat anemic 2.28% GDP annual growth over the next 75 years. That’s disturbing enough itself. That’s the best case scenario. There are some additional tables that assume even lower economic growth down to an average of 1.33%.

The alternative scenario projects that the Bush tax cuts will remain in place for the foreseeable future and that Congress will keep adjusting the AMT. The extended scenario assumes the opposite.

In both scenarios the CBO projects GDP growth, growth of U.S. debt held by the public, and makes projections of government receipts and outlays.

Ok, enough preamble. You with me so far?

Ready for the bad news now?

We’ll start with the alternative scenario. It assumes revenue vs. GDP at roughly 18.4% throughout.

I said the report goes out to 2085, remember? Well, that’s not completely true. Under the alternative scenario the CBO stops projecting the U.S. debt after 2037, 26 years from now. There’s no point in continuing past that point. We’re at 200%. Those are end-of-the-country type numbers. The weight on the economy from that would be so high that it’s hard to see how the country would ever recover. We’d have to just default and start over. It’s likely this would happen long before 2037, and that’s a mere 26 years away. This is the douse yourself with gasoline and light a match scenario. We’ll almost certainly experience riots like what we’ve seen in Greece, Italy, and now the UK this year, only possibly worse.

Remember the alternative is the scenario that I consider far more likely. Cheery news, huh?

Then there’s the extended baseline. This is the Keynesian good news scenario and it assumes that none of the bad things that you’ve ever heard about Keynesian economics are true. It assumes that there’s a 1:1 relationship between taxation and revenue. The CBO has never heard of the Laffer curve, apparently. It’s also never heard of Hauser’s Law, either.

The extended baseline looks much more encouraging, at first glance. Publicly held debt never exceeds 87% of GDP. That’s great news. But outlays reach a mind boggling 34.1% of GDP. Huh? How is it possible to keep the debt down, then? Well, revenues under the extended baseline scenario reach 30.6% of GDP. This is where the CBO begins to engage in outright fantasy. I’m sure that most people who glanced at the CBO report saw that if we don’t make any changes to existing law that things stabilize, and it’s not that awful a situation, and didn’t look at the details.

The details show that it IS an awful situation. Possibly worse than the alternative baseline.

But there’s missing data in the spreadsheet for this one as well. And there’s no mathematical reason for this data to have been scrubbed. The tab containing the data on the AMT stops in 2035. There’s no good reason for this. The other tables show the tax revenue projections out to 2085, which means that AMT had to have been calculated out that far. Yet, for some reason the CBO elected not to show it. The only reason I can see that it was left out was to keep from terrifying people. So, I’m going to let the cat out of the bag and terrify you.

The last year for which AMT calculations are shown, 2035, estimates that 49.5 of all American households will be affected by the AMT. This would hit household income levels at about $50,000 in 2008 dollars. When I attempted to extend this table out to 2085, it becomes quickly apparent why they stopped. Based on my calculations, sometime after 2050, depending on inflation, the AMT reaches all the way down to the poverty level. And that’s how they blast through Hauser’s Law and get to 30.6% revenue.

Let me show you what this means with a simple chart showing about what you’d pay in Federal income tax. This is just the income tax, not social security, Medicare, state & local taxes. And I’m going to base it on the quintiles used by the Census Bureau and the CBO. The data is from a June 2010 CBO report that includes tax data through the year 2007.

Quintile Effective Tax Rate Now Avg. Income Tax $ Paid Effective Tax Rate ~2050 Tax $ Paid (2007 dollars) Growth
1st -6.4% $18,400 $(1,178) -6.8% $(1,178) 0%
2nd 0.1% $42,500 $425 20% $8,500 1900%
3rd 4.1% $64,500 $2,645 25% $16,125 505%
4th 7.0% $94,100 $5,834 25% $23,525 303%
5th 19.0% $264,700 $50,293 25% $66,450 32%


There are some assumptions in this table. I assumed that no matter what the AMT would never dip into the 1st quintile. That’s probably optimistic. It looks like to me that it would hit the very top end. Also, the AMT isn’t completely flat. There is an exempt level. That’s the reason for the 2nd quintile’s effective rate only going up to 20%. Yes, that’s mostly a guess, but if anything I feel I’m on the low side here. Also, I would’ve preferred to use median income over average income, but I was unable to obtain that data.

Here’s the same chart including social security and federal excise taxes, assuming those rates stay at constant 2007 levels.

Quintile Effective Tax Rate Now Avg. Income Tax $ Paid Effective Tax Rate ~2050 Tax $ Paid (2007 dollars) Growth
1st 4% $18,400 $736 4% $736 0%
2nd 10.6% $42,500 $4,505 30.5% $12,750 183%
3rd 14.3% $64,500 $9,224 35.2% $22,704 146%
4th 17.4% $94,100 $16,373 35.4% $33,311 103%
5th 25.1% $264,700 $66,440 31.1% $82,322 24%


Ok, imagine you’re a politician running for office. Go tell the guy making $42,500 that his total federal taxes are going to nearly triple. Tell the guy making $64,500 that his will more than double. Same for the guy making $94,100. Let me know how those conversations work out for you. I’m guessing you’re not going to get elected. This scenario isn’t happening. Thank God.

These are economy killing numbers. Very very few of the people would have any disposable income under this scenario. That means people who earn their livings based upon products and services paid for with disposable income would have no jobs. These are easily Great Depression type scenarios. At the very least. It’s easy to envision a Great Depression here as a best-case outcome.

And yet the CBO envisions near 4% annual growth in wages, 2.25% GDP growth, and 5% unemployment. These things are quite literally impossible.

So, which scenario is worse? Hard to say. I’d probably prefer the alternative baseline, because at least we get through the pain quicker and can move on. The truth is that both of these scenarios are beyond awful. Anyone, whether you’re a member of the Democrat, Republican, or even The Rent is Too Damn High Party should look at this and realize we need to make significant changes. Now.

I may have issues with President Barack Obama (D-USA), House Speaker John Boehner (R-OH-08), Senate Majority Leader Harry Reid (D-NV), and the rest of the gang up on Capitol Hill, but I do think they’re as good at panicking as the next guy. Anyone studying this report should be panicking. They aren’t. Therefore I stand by my earlier statement that they didn’t read it.

09 August, 2011

August 9, 1969

Helter Skelter.

Members of the “Manson family” brutally murder actress Sharon Tate & four others at Tate’s home in Benedict Canyon, Los Angeles, CA.

The next night they will repeat the process at the home of Leno and Rosemary LaBianca, killing everyone there.

Deputy District Attorney named Vincent Bugliosi will make a name for himself from the successful prosecution of this case and go on to write a book about it called Helter Skelter: The True Story of the Manson Murders.

08 August, 2011

August 8, 1974

I have never been a quitter. To leave office before my term is completed is abhorrent to every instinct in my body. But as President, I must put the interest of America first. America needs a full-time President and a full-time Congress, particularly at this time with problems we face at home and abroad.

To continue to fight through the months ahead for my personal vindication would almost totally absorb the time and attention of both the President and the Congress in a period when our entire focus should be on the great issues of peace abroad and prosperity without inflation at home.

Therefore, I shall resign the Presidency effective at noon tomorrow. Vice President Ford will be sworn in as President at that hour in this office.


Entire speech can be found here.

You can watch it here.

07 August, 2011

August 7, 1782

General George Washington orders the creation of a new medal called the Badge of Military Merit to honor soldiers wounded in battle. Today we know this medal as the Purple Heart.

The General ever desirous to cherish virtuous ambition in his soldiers, as well as to foster and encourage every species of Military merit, directs that whenever any singularly meritorious action is performed, the author of it shall be permitted to wear on his facings over the left breast, the figure of a heart in purple cloth, or silk, edged with narrow lace or binding. Not only instances of unusual gallantry, but also of extraordinary fidelity and essential service in any way shall meet with a due reward. Before this favour can be conferred on any man, the particular fact, or facts, on which it is to be grounded must be set forth to the Commander in chief accompanied with certificates from the Commanding officers of the regiment and brigade to which the Candadate [sic] for reward belonged, or other incontestable proofs, and upon granting it, the name and regiment of the person with the action so certified are to be enrolled in the book of merit which will be kept at the orderly office. Men who have merited this last distinction to be suffered to pass all guards and sentinals [sic] which officers are permitted to do. The road to glory in a patriot army and a free country is thus open to all. This order is also to have retrospect to the earliest stages of the war, and to be considered as a permanent one.