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Official Juniorbird.com General Election 2010 Endorsements

Election time is upon us. Both parties have girded up their loins — one for a counterattack, the other to face certain disaster with aplomb — and we’re down to it. As in past years, and the recent primaries, I’m happy to do my part to reduce your free will by suggesting how you might vote here.

Overall, what I want out of my elected officials is simple: to fix this mess we’re in before I’m canning the fruit that falls in our backyard off the neighbors’ tree in order to stave off starvation. I expect specifics on policies, why they’ll work, and how they relate to what’s going on now. And that’s about it. Yes, I’m a lefty, but I’d rather that things actually get better than any particular valence of political outcome. The only major wrinkles I’m going to throw in here are:

With all this in mind, here are my endorsements:

National Offices

Senator – Barbara Boxer (D). Fiorina comes into this race with two big problems: her record at HP, which was filled with major missteps; and her endorsement of policies that meet the national mainstream of Republican thought for this election cycle, but which are, however, well to the right of anything that California has voted for in the recent past. Fiorina’s pledge to not raise taxes, period, worries me; the cuts required to balance the Federal budget are truly deep and large (the Republicans have not to this point seemed to show the cojones to truly try them) and I have serious doubts that anyone would actually implement them. That makes this pledge equivalent to no plan to balance the budget at all. Fiorina also supports Arizona’s immigration law, which seems out of place in California, with our farms so dependent on dubiously-legal migrant labor. Let’s not shut down our entire agricultural economy by accident! She also supports Prop 23, which, as we’ll get to soon, is a strikingly awful idea.

In contrast, Boxer has recast herself, over the past 4-6 years, as California’s smart, insightful Senator, essential after Feinstein unexpectedly became a lap dog for George W. Bush. Let’s keep Boxer in office.

US Representative, 36th District – Jane Harman (D). Jane Harman has done a great job for our district for a long time now. Her record speaks for itself. Her opponent, Mattie Fein, is a recent transplant from Florida, with little to no background in this legislative district. Fein’s personal history shows substantial financial irresponsibility, including defaulting on two mortgages, multiple tax liens, and some funny business with donating money to her own campaign just this year. Compared to Jane Harman, she’s vague on the issues. It’s disappointing that this is the best the Republicans can do in this district, which has shown itself prepared to vote for one of the most conservative Democrats in the House over and over again.

Statewide Offices

Governor – Jerry Brown (D). I came into this less than thrilled with the idea of a retread, but Brown’s impressed me. He has pretty specific policy plans, which is a reliable way to get on my good side. He also scores well on his ability to fix what I believe is our #1 problem: our budget mess.

Fundamentally, we’re in trouble because there are a variety of interests in Sacramento that are unwilling to work together, from legislators to unions to lobbyists to administrators. Our Governor must be able to somehow work with all of these groups and drive them forward in some way. Brown’s record shows that he can do this. Brown also scores well on my #2 priority, driving forward with new green technology both to make California cleaner and to create a basis for economic growth.

At the same time, I’m deeply unimpressed by the Republican candidate, Meg Whitman. She came into this race with a big handicap: her poor jobs running FTD and eBay. That second requires qualification, given how well eBay has done, so let me say this: I think eBay was run very well in the ’90s and early ’00s, but, as the company matured, it lost its ability to do interesting things and grow. The eBay of today is essentially the same eBay there was 10 years ago, while the Internet has moved on and the company has lost the dominance it had at the time; that’s a failure of strategy, if you ask me. There have also been failures of execution, particularly with the Skype acquisition, which was structured so badly (they didn’t acquire the core technology, only had a short license to it!) as to be the business equivalent of burning a pile of money, except without the novelty value. This destroyed billions of cash and shareholder value. Me, I would’ve fired Meg Whitman for that. As for FTD, she literally ran away from it when she realized what bad trouble it was in and how many stakeholders she had to actually collaborate with to make changes there. This experience seems to me to be analogous to what she’d have to do in CA, so her failure there worries me deeply.

Whitman has a wide-ranging set of policy positions (or, at least she has to the extent that I can navigate her truly awful site). She’s vaguer on her plans to implement most of these positions than Brown is. Worse, her key plans to balance the budget seem to play to Brown’s strengths, not hers. She wants to cut pensions, salaries, and headcounts in state employment; this requires her to negotiate with unions, an area in which she has little experience. (It’s also worth noting that California has some of the lowest per-capita spending on government administration, after years of staff cuts by other governors, so it’s not clear what fat is left to trim. The same goes for her plans to divert education money from administration to classroom; our spending per pupil is so low that there may not be money to divert.)

Whitman, like many Republicans, also wants to cut Welfare, but seems to have forgotten that the Republicans reformed Welfare in the ’90s, and there’s not much left to cut anymore. Finally, she fails badly on my #2 priority, by supporting the “suspension” of AB 32 that essentially is equivalent to a repeal (more on that below).

Does she have good ideas? Some. Is there any evidence that she can execute on them? No. We elected this same story 8 years ago, and it didn’t work out for us at all.

 

Lieutenant Governor – Gavin Newsom (D). This endorsement actually gave me some pause, as I think Maldonado’s done a good job in Sacramento to this point. He’s certainly a man who actually moves the legislative process along, which is rare enough in this state. Unfortunately, he’s against higher taxes, and, as we already found out, higher taxes are good for California. In addition, if we can pass Proposition 25, then it becomes the responsibility of the minority party, whoever they are, to participate in the process; they can’t just hold it up. With Prop 25, our priority has to be someone with vision and leadership. Newsom has been a very effective and innovative leader in San Francisco, and will do good things for our state.

Secretary of State – Debra Bowen (D). Bowen has done a great job over the past 4 years putting business resources online and making it easier to do business in this state. She’s earned another term. Her Republican opponent, Damon Dunn, wants to do exit interviews of companies leaving California — clever, but something that Schwarzenegger already has done. Rehashing old ideas won’t do it; why not come up with a new one? Dunn also wants to require photo ID to vote, which may sound nice to some but has been ruled unconstitutional in the past. If you know something won’t pass legal muster, then don’t pretend you’ll do it. (If you don’t know a voter ID law won’t pass legal muster, you shouldn’t be running for Secretary of State.)

Controller – John Chiang (D). Another “let’s keep the incumbent who’s doing good work” recommendation. Chiang has kept the boat afloat even in our current budget disaster — who knows how he did it, but California’s bonds are BBB-rated, not junk. Let’s keep this up.

Treasurer – Bill Lockyer (D). Can you see a trend of keeping effective elected officials in? Lockyer has managed our state’s pension funds well (it’s not his fault they’re underfunded), moderating losses and practicing socially-responsible investing. He was also a vigorous opponent of the truly awful 2009 budget. He’s a responsible guy. His opponent, Mimi Walters, is on the wrong side of the tax issue — she’s a one-issue tax-cut person, which, as already reviewed, would hurt California.

Attorney General – Steve Cooley (R). Cooley and Harris are both extremely-qualified candidates who have turned around up poorly-operating DA systems. Cooley gets the nod here substantially on regional grounds — that is, I can see what a great job he’s done in LA and am confident he’d do well statewide. He’s more of a moderate than some have made him out to be, with a restrained take on three strikes, and has instituted a system for fairly sharing evidence with defense attorneys that’s a national model; he has prosecuted environmental crimes at the Port less than I’d like, but his shift of money towards serious crime prosecution was a needed response to the underfunding of that area under his predecessor. I’m disturbed that he said he’d sue to overturn Obamacare, but, to be honest, I’m sure that we will sue to do that if Whitman wins and we won’t if Brown wins in the Governor’s race, Cooley or Harris notwithstanding.

Insurance Commissioner – Dave Jones (D). Another tough call with two qualified candidates. Healthcare insurance reform is the next great frontier here, however, and health and insurance issues are what Jones has focused on during his time in Sacramento. This is the experience we need. Republican Villines has great ideas to moderate insurance companies’ costs, and some dedication to consumers as well, but lacks the deep background.

State Senator, 28th District – Jenny Oropeza (D). Unfortunately, Oropeza, the incumbent who had been effective in Sacramento, recently passed away. Her death came too close to the election for her to be replaced on the ballot. By law, a vote for her would trigger a special election to replace her. The citizens of the 28th district deserve a real choice and that special election will deliver that choice — we’ll get to see the nominees from each party. Vote for Oropeza to trigger that election.

State Assemblyperson, 53rd District – Betsy Butler (D). I’m actually kind of sure that Betsy Butler worked for a client of a company that employed me a long time ago; if that was her, then she’s really nice. That’s great, but the thing that counts on a statewide basis is the issues. One issue that I’ve figured out to my satisfaction is that California would do well to get away from a fixation on tax cuts. Betsy’s Republican opponent, Nathan Mintz, is endorsed by the Howard Jarvis Taxpayers’ Association, a one-issue group that works only to cut taxes (and not to pay for tax cuts in any way). That’s a strike against him. He also shares this strange fixation that many on the right have about making some law against “Sanctuary Cities.” Somehow, these people — many of them, like Mintz, potential legislators who need to understand these things — fail to grok that a “Sanctuary City” has only made a statement that they won’t enforce laws that they have no legal obligation to enforce, which no city has traditionally been asked to enforce before, and which the vast majority of cities nationwide make no effort to enforce, because they’re not their laws. I’m not sure how one cracks down on such a city, since they’re not disregarding any law they’re responsible for enforcing. That’s another strike against him, and two is enough for me here.

Judicial Positions – None. If you’re following along in your Voter Guide, then you’ll see all sorts of judges here. I don’t take a position on these races for three reasons:

  1. I find it difficult to get the information needed to assess the candidates
  2. If I could find the information, I’m not sure that I’d be qualified to interpret it
  3. I’m not sure that judges should be elected; to some extent, you want them free from worries that somebody will or won’t like their rulings

Superintendent of Public Instruction – Larry Aceves. Both Aceves and his opponent, Tom Torlakson, are strong candidates, I’m inclined towards Aceves thanks to his record of actually running a school district, which would be a change. I’m also inclined to go against the teachers’ union, which endorses Torlakson, here — not because I think that teachers should be “punished” in some way for the current state of education (I definitely don’t think this!), but because I deplore the fact that teachers’ unions have failed to lead the national discussion of school reform. The teachers themselves need to come up with new solutions that meet the perceived needs of their customers, parents and society at large, rather than worrying about the uncomfortable (and, often, ineffective) solutions being proposed today.

Local Offices

County Assessor – John Wong. John Noguez, Wong’s opponent, is endorsed by the Howard Jarvis Taxpayers’ Association, which I ranted against above. It strikes me that there’s some conflict in being endorsed by such a group when you’re actually the tax collector. So, Wong it is.

Propositions

Proposition 19 – No. This is the famous proposition to legalize marijuana. First, let me state that I think that the War on Drugs isn’t working, and that we really should consider legalizing and taxing many drugs, especially including marijuana. However, this is not the way to do it.

First of all, California has a very important, reasonably well-functioning medical marijuana system. Medical marijuana is an issue close to my heart — I’ve had friends who’ve only been able to eat during their cancer treatments because of pot (other delivery methods of THC didn’t work), and who’ve found marijuana to be one of their only effective pain medications, against medically-valid conditions that cause substantial ongoing pain. These people need their pot. The Federal government has been hands-off to people like this having access to marijuana. Unfortunately, they’ve stated they won’t be so accepting of people using the drug recreationally. Unless somehow grow and distribution systems are kept completely separate for recreational and medical use, this means that a Federal crackdown could deprive cancer patients of their THC. That’s not an acceptable risk.

Second, this law doesn’t do much to actually regulate and tax marijuana; it simply allows any jurisdiction with the ability to regulate and tax the right to pass a law that regulates or taxes marijuana. That means that we can’t know what local laws will end up being like, what crazy-quilt pattern of jurisdictions will or won’t permit smoking marijuana, or whether or not we’ll actually get any tax money from it (for instance, this law doesn’t actually tax marijuana on a statewide level; we’d need a separate 2/3 vote to do that; the claims of tax revenue are only of potential revenue, not actual).

Put these two together, and I think a “no” is justified. If you’re interested in legalizing marijuana, let’s either do it in a law that includes state taxes, or wait for the Federal government to come around a bit on enforcement. And, for God’s sake, stop expecting me to approve of your habit.

Proposition 20 – No. We don’t even know if the citizen’s commission that has just started to do redistricting really works at all on the state level; why give them another job already? Let’s see how the commission works out, and then think about whether or not we should expand this system. Also, redistricting is a critical problem statewide — the last redistricting drew many safe seats, giving us a lot of elected officials who can be sure of being re-elected if they advocate for the right thing, and who don’t need to worry about what actually gets done in Sacramento. We need redistricting to fix that. That same problem doesn’t (yet) exist nationally.

Proposition 21 – No. It sounds great to set aside money for parks. Heck, this is a clever way to do that. I even really like the idea and would happily pay the fee myself. But a big part of the reason that we’re in this big budget mess is that an enormous portion (Schwarzenegger once claimed 90%) of the state’s General Fund is non-discretionary — that is, nothing we send our lawmakers to Sacramento to do will change how that money is allotted. Much of that money has been set aside by well-intentioned laws like this one, laws that leave next to no opportunity for the state to respond to emerging needs. Voting “no” here is a first step to getting the budget mess back on track.

Proposition 22 – No. It’s deplorable that the state basically steals money from cities every year to make ends meet. (Deplorable, but a predictable outcome of Prop 13, which took away the only taxing authority that many local governments had.) It would be good to prevent this diversion to state government coffers. However, Prop 22 is a law requiring the state to give local governments money that the state collects on their behalf… plus a dozen-billion-dollar-plus giveaway to local redevelopment agencies. Redevelopment is good. Redevelopment agencies, however, often seem to be bad. Until we fix the CRAs, this is a very bad idea. Also, everything I said above about how these set-asides are destroying the budget and strangling kittens.

Proposition 23 – No. In the strongest terms, no. This is a truly disgusting effort by out-of-state oil companies to bypass rules that Californians have put in place to improve California’s environment and invest in long-term job and economic growth. These Texas corporations have couched their mendacious plot in the language of “setting aside a job-losing regulation until the economy improves…” but have set that standard for “improved economy” at “the lowest single-quarter unemployment rate that California has seen in recent times, sustained for two whole years in a row.” That’s not a standard that’s likely to be met, ever, so Prop 23 is tantamount to repeal of California’s AB 32, an innovative law that set aside substantial funds to incentivize businesses to create green jobs in California. A vote for this law shuts down the potential for long-term green jobs in our state, in favor of adding more oil jobs in Texas. That’s all there is to it. I’ve got family in Texas, and I love ‘em, but I don’t need to give ‘em our jobs.

Proposition 24 – Yes. This proposition undoes a stupid deal our legislators made. You’ve gotta give businesses credit for this one — they played their hands well. Back when the original deal was made, the state needed cash, now; the state offered to let these businesses pay their taxes early, in return for tax breaks, to get cash now instead of later; the businesses asked for perpetual lower taxes instead of breaks that were related to the size of the monies they prepaid; California said yes. Let’s all have a good laugh at our idiot legislators, and then let’s pass this Proposition and make that giveaway proportionate to the size of the taxes prepaid, plus a bonus for pre-paying. Oh, have I mentioned later that higher taxes appear to help business in California?

Proposition 25 – Yes. In California, 2/3 of the legislature needs to vote for a budget for it to pass. This hurdle, higher than that faced by 47 other state legislatures, is a big reason why we haven’t passed a budget on time in 25 out of the last 30 years. Every time we don’t pass a budget, the state has to pay everyone from large vendors to janitors with IOUs. Banks hate taking IOUs, so this can be tantamount to not paying people.

Prop 25 lowers this hurdle to a simple majority. That’ll mean that budgets pass. It will also mean that the minority party needs to participate in lawmaking, or be left behind, instead of yelling about how awful the budget is; currently, they can hold things up so long as they represent more than 1/3 of the Assembly. It won’t mean that it’s easier to raise taxes, contrary to what the ads against 25 say; the constitution still will require a 2/3 majority for a tax increase.

Prop 25 also has the nice side effect that it makes legislators permanently forfeit pay and benefits for all the days when they haven’t passed a budget. That sounds like a good way to make Sacramento work!

Proposition 26 – No. OK, so there’s a 2/3 majority required to pass a new tax. However, this isn’t required for fees. Should taxes and fees be treated the same? Well, a tax is imposed on everyone, so you can’t avoid it; a fee is imposed only on people who use a service, so you absolutely can opt out of paying a fee by simply not using whatever service is associated with that fee. The 2/3 requirement has kept many new bonds from being issued; a city in the LA area failed to issue a school bond a few years ago because something like only 66.4% of the people in the city voted for the bond. Prop 26 essentially means no new fees, which puts us in an interesting position if we actually want to continue delivering services. Fees are one of the only revenue tools available to local government, so this proposition will make cities and counties even more reliant on Sacramento for funding, and less responsive to their constituencies.

Prop 26 also includes submarine language that prevents even free-market solutions, such as tradeable credits towards things like pollution, from being issued. It’s a bad law; vote no.

Proposition 27 – No. Prop 27 eliminates the stupid redistricting commission. The only thing worse than that damn fool redistricting commission idea that they put in with Prop 11 is how redistricting worked before they had that commission. Would it be better to have something smart, like a computer program + human review, handle redistricting? Yes. But is almost literally anything better than letting the Legislature draw their own districts, which is what they did before Prop 11? Absolutely. Including putting monkeys or toddlers in charge. Let’s just see how this one works for a little while, eh?

So that’s this election. I encourage you to vote this slate. And, if you decide not to vote this slate, I encourage you not to vote at all.








Ready for Halloween!

My wife and I were both born to sensible parents, not prone to excessive pomp and circumstance around any holiday season at all. You would think this would be ideal for a couple of kids who were, by all accounts, independent and all growed-up even from the youngest of ages; somehow, we both came out loving nothing so much as festive holiday decoration and amusements.

One of our favorite such decorations and amusements is a gingerbread kit from the 99 cents store. They’ve one for every season, and they’re both fun and delicious! What could be better? Here’s our rendition of the Wilton Halloween Cookie House, with one front and one side prepared by Courtney, the other front and other side prepared by me (try to figure out who made which!):

Courtney's Front.
Courtney's Side
Wade's Side
Wade's Front

OK, artistes we’re not. But we made piping bags! For a pair like us — with the hand-eye coordination of the average 4-year-old — this is Matisse.








Death and Taxes

So, I’ve been looking into all of our candidates, and the positions generally cleave down a simple line. Sure, there are differences on a variety of important issues and many, many details, but one key factor stands out: do we need tax cuts to help business or not? If you believe that the answer is yes, then you’re almost required to vote for one candidate; if you believe taxes aren’t a major issue, then it’s likely that the candidate on the other side is more appealing.

Now, there’s a lot of rhetoric on either side of the issue. I’m going to try to bypass a lot of the economic theory disagreements and start from a basic question: are our taxes on business high or not? (tl;dr: no, in fact high taxes are good for California.)

My approach to this question is going to be a little weird: I’m going to proceed from the insight that, in the past, California was a highly-competitive state. Companies chose to locate here, we were a center of innovation, we had the best universities in the world, and our economy was larger than most countries’. Starting with aerospace in the 1950s, through semiconductors in the ’70s, computers in the ’80s, biotechnology in the ’90s, and the Internet in the ’00s, we’ve been leading members of the economy not just of the United States but of the whole world.

Clearly, back in some good old days, things were going well. We made the right moves to incubate all of these industries and take a leading role in their growth. In fact, it seems reasonable to me to assert that whatever we were doing back then was a best practice that we should seek to emulate, unless we can come up with a specific reason not to.

So, are our taxes higher now than they were then? If so, logic might suggest that we should cut them. If not, logic might suggest that our problems stem from areas other than taxes.

Are Our Taxes High?

I chose to measure taxes on business as a % of state GDP. This has the advantage of putting the amount of money collected in context, while still being pretty easy to understand. (My tax numbers come from the US Census Bureau, and go back to 1963.)

So, here’s California’s state taxes:

allstates

The green line is California. The magenta line is the average of all states. The pink line is the long-term average of the magenta line, with the dashed pink lines showing 1 standard deviation above and below that line. Here we can see that California seems to have somewhat higher taxes, although, taking the long-term average of the California tax vs. that long-term average of all states’ taxes, California’s taxes are only about 4% higher. (That’s not 4% of GDP, that’s 4% of the total tax level, or about 0.2% of GDP. The scale of the chart to the left exaggerates the difference.) (Oh, and what’s a standard deviation? Well, 60-some percent of the points you have in most any set of data will fit within one standard deviation of the average. Standard deviation’s an attempt to say whether or not a data point is average. A point within two standard deviations is, statistically, probably average. A point within one standard deviation is, statistically, probably really really average. So, everything within those dotted lines is probably pretty much the same.)

Now, as I said above, I want to compare to past, successful times in California, not to practices in other states that may or may not work. So, I re-graphed California’s tax levels as the difference between that year’s tax level and the long-term average tax level.

taxlevels

The blue line is obviously the tax level. For context, I’ve got dotted lines at one standard deviation above and one standard deviation below. As you can see, most every year of taxes is within one standard deviation, or, as they say in the math business, “the same.” (In fact, if I’d put in two standard deviations, only the top and bottom peaks in that line would actually fall outside that level — again, from a mathematical point of view, the tax level has remained about the same.) However, the upward trend is undeniable. Compared to past California taxes, we’re about the same but increasing.

But Wait…

So I wanted to compare California to past glory days: that demands a standard for glory. I’m defining glory as “being the best damn state in the Union.” In economic terms, I want to see when California’s share of the US GDP was maximized. So, let’s overlay that on the graph we just saw (State GDP numbers from the BEA):

taxsuccess

The new red line is that standard for glory; again, I have dashed lines at one standard deviation out. As with the tax line above, I’m showing the difference from the long-run average share of US GDP; when the line is above 0, California’s doing better than average, when it’s below, worse. Here we see something funny: the state’s share of US GDP seems to have an upward trend, just as the share of taxes has an upward trend… that is, higher taxes don’t seem to hold back the state’s awesomeness.

This eyeball result surprised me a little, so I double-checked it. Turns out the math proves that impression out. The r-squared of these results, a statistical measure of how highly related the two numbers are, is 0.53 on a scale of 0 (not at all) to 1 (completely) — that’s not tremendously high, but it is noticeable. Even more, the direction of that correlation is positive — that is, for each increase in tax, you get a commensurate increase in share of US GDP.

Another way of saying that is: California seems to be most successful when taxes are high.

Are Some Taxes High?

OK, but we hear a lot about capital gains taxes and about death taxes and things like that. Is it possible that the problem isn’t the overall business tax level, but on specific components of the tax that businesspeople would be exposed to. My data set breaks down taxes by type, so, let’s take a look:

taxbreakdown

This graph just shows the breakdown of total taxes by tax type. At the top, in brown, is the “death tax” — as we can see, not much. The yellow Select Sales Tax is sales taxes on specific items, mostly gas and sin taxes. At the bottom is the light blue property tax, not a big part of overall taxes for businesses even before Prop 13. Unfortunately, two big tax components are subsumed in other, larger components, and I don’t have the data to break them out:

  • Gross Receipts tax is part of General Sales Tax. This tax is significant just because California subjects many small businesses to this tax, while other states don’t. I may or may not deal with that in another blog entry, but it’s interesting to know.
  • Capital Gains Tax and Personal Income Tax are both in the blue of Individual Income Tax.

Anyway, as we can see, there’s been a long-term trend to collect fewer regressive sales taxes, and an increase in collection of the Income Tax group of items. Since I don’t have the breakdown, I can’t tell you if this means new income taxes, or just that capital gains have become large thanks to a booming economy and a vigorous investment capital market.

But, Once Again, Wait…

However, we can ask, just like we did for the overall tax levels: do these tax components lead to awesomeness or not? After all, we could find ourselves in a situation in which some taxes were higher than they should be, and others lower, and thus taxes need to re-balanced within an overall tax level, for maximum efficiency.

So, I did the same thing as the above: I looked at the correlation between each individual tax level and that year’s CA share of US GDP:

r_unlagged

Obviously, that’s Greek to 90% of my readers. Let’s just say that this shows a strong correlation. (Severance tax is at 0 because it’s so low in CA to be measured here.) This further suggests that lower taxes lead to a higher share of US GDP. Except, upon further thought, looking at current-year correlations doesn’t make sense: after all, higher current-year taxes should lead to lower current-year investment which leads to lower future growth and thus lower future share of US GDP, not lower current share of US GDP. So, I re-ran the correlation, seeing how one year’s taxes affected the next year’s share of US GDP:

r_1yrlag

OK, again we have a pretty good predictor, except you’ll see that the column under Coefficients has changed sign from negative to positive. That’s pretty important, because the coefficient tells us the direction of the relationship. In the first correlation, we see negative coefficients; that means, for each one percent increase in taxes, you see that level of decrease in share of GDP. But, looking at future returns — as I understand the argument for lower taxes suggests we should — we see that a one percent increase in taxes leads to the coefficient’s level of increase in share of GDP. That is, higher taxes lead to higher future GDP.

Just to double-check, I used share of US GDP four years in the future, instead of just 1 year:

r_4yrlag

The result is: about the same; higher taxes lead to higher future share of GDP. It’s notable that every single kind of tax has a positive coefficient — there doesn’t even seem to be one that pulls down future share of GDP. In fact — fun fact here — the negative Intercept coefficient suggests that, if we set taxes to 0, we’d get negative growth over the long term.

So, What’s The Skinny On Taxes?

Given the data here, it’s reasonable to interpret things thusly:

  1. California’s strength is in industries that are complicated and involve a lot of intellectual property development (see: aerospace, semiconductors, computers, biotech, internet, as described above)
  2. It takes substantial cash investments to develop this IP
  3. Therefore, California does well when it taxes highly enough to be able to make these investments
  4. Further, despite the state’s current parlous, um, state, California has invested its tax collections well enough in the past that these taxes have enabled business growth, not business closure
  5. And, thus, logically, we shouldn’t cut taxes, but instead need to get our spending house in order, to ensure that we continue to make these smart investments and enable future business growth in the way that we’ve enabled past business growth

So, does this mean that I’m for higher taxes across-the-board? No. But, I will say, that California’s strength depends on the government taxing and investing for long-term growth, not on the government getting out of the way.

There may be other states where things should be libertarian, or just lower tax to stimulate some kinds of business growth; that doesn’t seem to be the way in which California has been competitive in the past. And, since we’ve been exceptionally competitive, shouldn’t we follow our own example first, before we try to be some other state? It’s logical enough that there should be some long-term successful strategy in which some states have higher taxes and invest those taxes in complex, investment-heavy businesses, while other states have low taxes and therefore attract the kinds of businesses that appreciate low-tax, low-investment environments. Let’s have our strategy. That’s how all businesses, and most stand-out states and nations, succeed.








Welcome Home

Back in 1995 I was looking for a summer internship when somehow my job qualification “good with computers” somehow got translated into “can design a Web site.” Which was a little aggressive in those days, back before there were, say, books on how to do a Web site. Nonetheless, I learned how to code HTML and produced what they called, back in those days, a “home page,” by the end of the summer, just in time for my other internship to end.

It was a great page. I wish I’d made a screenshot. Gray background (I don’t think you could change the color back then!), black type, blue underlined links, a few centered photos… good times. Later, I added tables to actually put one thing next to the other thing, visually. And tiled backgrounds with swirls and colors. Technology raced ahead.

Including the advent of the animated GIF: spinning globes. I called it the World Wade Web. It was filled with pun.

And boring as all get-out after about a week. Who needs a site that’s the same every day?

Apparently me. After a few years of keeping two blogs (this one and (this one)[http://wadearmstrong.com/archives.php]), I realized I just didn’t have that much content in me. So, my namesake WadeArmstrong.com sat and got old and boring, which was a waste of a high Google result for my name.

But, with all of my stuff spread out over so many services online, I started to feel there was no place that held it all together. So, my new home page: WadeArmstrong.com. Where I’ve gone back to 1995 to try to hold all my Web 2.0 together. Make it your start page today!








Hooverville

You remember those old movies from the 1930s? Filled with frugal people and their quaint lifestyles? I’m starting to worry that it’s not all memories. First it was the Murphy beds everywhere — two big Murphy bed-only stores popping up near us, and then the Murphy bed at the condo we stayed at in Palm Springs — which, let’s face it, I hadn’t until then encountered a single Murphy bed during my life. Then it was the gigantic, aisle-dominating displays of canning-related goods at Bed, Bath and Beyond. Seriously, they probably had more canning stuff than Tupperware.

Yep, we’re back in the bad old days, that’s for sure. No more throwing away our leftovers or sleeping in rooms entirely separate from those in which we spend our waking hours; it’s time to cut back! 1930 has returned. Fiscal prudence is good, but I’d hoped not to have to make myself master of botulism or sleep inside the wall.

I suppose that leaves us at a good place to talk about the imminent election, coming up in only a month. See, I’m frustrated: I don’t understand why anyone’s ok with the really, really miserable economy we have right now. Worse, from the point of view of the work I do, I feel like it’s headed further downhill. That’s really bad. While I greatly admire the resourcefulness and persistence of the Greatest Generation, I don’t think we all need to learn the same lessons as them in exactly the same way. It would be nice to be prosperous.

Now, I have a number of ideas of why things have turned out this way. But it’s election season, and I do think it’s probably time for me to be a bit more open-minded. So, I’m planning to spend the next month getting a better idea of what the various people I can vote for (or against!) are offering.

My perspective — as you might guess from the opening up above — is that the economy is problem #1. Further, I think that big issues, like the environment, education, China, and Iran, can all be looked at usefully through the lens of “gosh, the economy’s sure screwed up, what can we do over the short, medium, and long term to fix it?” Because ultimately we want to be rich, comfortable, and not blown up, and two out of three doesn’t really do it.

My perspective is further affected by the facts that:

  1. I’m a big stats geek, so I expect numbers to add up and events predicted to be actually likely
  2. I help people plan big, complicated things like designing and launching a new product or a new business every day, so I expect any plan to be full of specifics (or it doesn’t count as a plan)

I think that pretty much tells me what I’m looking for: people who have a specific, measurable, reality-based (in that it makes basic assumptions that can be measured and which are true right now) plan. People with proposals that aren’t specific or aren’t new also aren’t welcome.

And that’s really what I stand for here. I think everyone out there, from our President to the party not in power to our country’s bureaucracy has royally screwed up the current economic situation. Despite being a lifelong Democratic voter who thinks that the Republican party is racist, I’m prepared to vote for whoever I think will actually fix things. So, let’s see if I get impressed by any of these clowns out there. Because I want to get things fixed before this turns into a situation in which I can may leftovers and the wife and I pull our bed down from the wall every night and tie up our pillows to lift the whole thing back in, in the morning.








Was headed for bed, but, in the midst of cleaning up around the house, discovered a bottle of a g

Was headed for bed, but, in the midst of cleaning up around the house, discovered a bottle of a good tequila and a single malt with just a drop left at the bottom. Both had been sitting around a while, so I’m going to go ahead and finish both off. It’d be wrong to waste them, but keeping an orderly house without the dregs of this and that sitting around for months is very, very important. The challenges of being an adult, you know.








Just learned from Intervention that the center of crack use in LA is… my old shortcut to ge

Just learned from Intervention that the center of crack use in LA is… my old shortcut to get to SC. Specifically, the part where I used to say “gosh, this is so interesting to look at, I should bring my camera and park around here and take some photos. 800 gang members per square mile. Just didn’t get around to the shoot. Mmm-hmm. 








Who’s the Smartest Man in the House?

Often, when we’re around the house and trying to make a decision, we ask ourselves: who is the one around here we should be listening to? Who, really, is the smartest man in the house?

(Of course, usually Courtney wins “smartest one in the house”, because, if you know us all, she’s… well, the smartest. But she’s outnumbered by us men, and, you know men, we’re competitive, so we want to know who wins from our gender!)

The candidates are:

  • Me
  • Jake, the dog
  • Junior, the bird, and namesake of this blog
  • Have Fun Man, a cup carved from coconut that we got on our Carnival Cruise, and who wears his opinions on his sleeve. While I know you haven’t heard much about Have Fun Man in this forum, he plays a very important role in this household: every time we have any kind of found money, he holds it for us; and every time one of us is mean to the other, we put a commensurate amount of money in Have Fun Man to make up for it.

The best way to figure it out seemed to be to evaluate our players on a series of critical questions. Here’s how it breaks down:

IMG_4767
Jake
Junior
Have Fun Man
Winner
Who’s the first to find their way out of a maze? Great sense of direction. Prefers to lie in the sun to movement. Will chew through walls. Immobile. Juniorbird
Who’s the best at convincing others to do their bidding? Applies logic. Deep brown eyes looking up at you + paw on your thigh Apply VOLUME! Have fun! Jake
Who’s best at math? MBA, A+ in college Calculus Can count up to total number of toys owned, to make sure they’re there, and does every time anybody cleans the house. Likes to chew on role of calculator tape. Keeps track of every penny put inside him. Have Fun Man
Who knows first when someone’s coming home, before they’re there? Slightly deaf and usually staring at a computer monitor. Comes to door and starts barking at least a block away. Begins screaming shortly after dog starts barking. Looks out the door all day long! Jake
Who is best at making others feel happy? Supportive, understanding, and enabling. Will lay on your chest for hours as you quietly sob. Are you sad? Let me be sad too! We’ll wail together! AAAAAAAaa
aaaaaaaaaaaooo
oooooorrrrrrrrrR
AAAAAAAA
Solution to your problems: have fun! Have Fun Man
Who is holding the most money right now? $3 $0, and, if he had any, would give it to his mother $0, and, if he had any, would shred it $87 Have Fun Man
Who talks the loudest? Would prefer to whisper, all things being equal. Bark sounds like that of an 80lb dog. Literally, the loudest animal one can legally own. Scream loud enough that you can feel it. Trademark statement “Have Fun!” not spoken, but emblazoned below smile. Juniorbird
Who has the best attitude? Plan for the worst! Deep, sad brown eyes speak to past lives of torment (as opposed to current life of soft pillows, cozy blankets). Hello? Come here! Love me! LOVE MEEEEEEEEE! AAAAAA! Have fun! Have Fun Man
Who is neatest and cleanest in the house? Good at dishes, but neglects other rooms. Strews his toys everywhere. Likes to shred wood, throw it everywhere. Keeps all his money neatly under his coconut hat. Have Fun Man
Who offers the greatest ratio of care given to care needed? About 1/2 About 1/100 About 100/1 0/very slight Jake
Who’s the best at sports Has a black belt in Tae Kwon Do. However, once pulled groin muscle trying (and failing) to land a jumping back kick on a heavy bag. Once jumped clean through a windowscreen. Never learned to fly. Doesn’t much move Jake
Who’s best at staying calm? Clear-headed in a crisis. Calm unless it’s the mailman! Views and amplifies whatever stress level you show. Never ruffled, ever. Have Fun Man
Who is the handiest one in the house? Once took 4 hours to hang a screen door. Can make impressive piles of pillows and blankets. Used to have a lock on his cage, but disassembled it. No arms, hands, etc. Juniorbird
Who has the best hair? For work, a conservative part; when going out, tends towards a fauxhawk. Very short hair; once told by a groomer, “No, this one doesn’t need a haircut.” Crest clearly communicates his mood (photo shows “Hello!”). Lift hairstyle to access money. Have Fun Man
Score: 0! 4 3 7 Have Fun Man

It’s pretty clear: the smartest man in the house is Have Fun Man. Good thing I bought Have Fun Man, and the delicious drink contained therein, for Courtney when we were on our cruise, or I’d be looking bad here!