Monthly Archives: January 2003

Dubya’s Dividend Delight By Michael

Dubya’s Dividend Delight By Michael Kinsley

One reason the tax code is so complex is that it is clotted with special favors. The complexity serves both to extend the favor and to protect it, since, as Bob Dylan has noted, you can’t criticize what you don’t understand. The Bush proposal to stop–or sorta stop–taxing stock dividends is a good example.

Services or Serfaces

Services or Serfaces
I am rather dubious about this move to make everything a service, like, for example, software.

It certainly has its advantages, you can buy only what you need when you need it. You don’t have to pay for a bunch of overhead to get started.

On the downside, it restricts your flexibility. If you own the software you use, and the systems that run them, you can always choose to defer upgrades in order to free resources for other purposes, such as paying salaries through a tight period, or buying up a struggling competitor. If you are paying month to month or year to year though, you have no choice but to pay up or go through the disruption of finding a substitute. If you pay up, you have less money for other purposes, and you may miss opportunities, or be forced to lay-off people, and risk loosing the knowlege the carry around with them in their heads.

It isn’t just software though. Consider the lean supply chains many manufacturing companies run these days. Parts and materials are delivered just in time and in just the right quantity, like a service. It works great, until something goes wrong, like say, a lockout at all westcoast docks. Pretty soon companies are idling plants and falling short on product shipments because they can’t get the parts they need.

And it isn’t just companies. Think about leasing your car. Low payments, a new car every three years. But what happens if you loose your job? Suddenly you are stuck paying for something you are going to have to replace before the end of its useful life.

Rent is similar, though a mortgage isn’t much better.

The problem with service models is that they are build on certain assumptions. They work fine if you fit those assumptions, but they become increacingly problematic when you stray from those assumtions. This can work well when things are predictable and routine, but it can leave you vulnerable in a crisis, because you have no buffer.

A prudent practice might be to plow some of the short term savings from using services into a rainy day account that can be tapped in a crisis.

So, I have just argued that a services model deprives you of flexibility in a crisis, but that is a rather lopsided picture, because, in reality, the services model can offer flexibility. It can be easier to make a radical change if you don’t have sunk costs. Someone leasing a car might be able to terminate the lease and switch to public transport.

(Yes, i realize these ideas are incomplete. I’m sure I’ll have more to say at some point.)

The end of American democracy

The end of American democracy

There are a number of things that make me feel rather bleak about the future of American democracy. In no particular order:

  1. Our president was not elected by a majority of voters
  2. Only about 1/2 of eligible American citizens voted in the last presidential election.
  3. Less than 1/4 of eligible citizens voted for our president
  4. Our president is mediocre at best.
  5. Our president’s father was a US president
  6. Our president’s father was mediocre at best.
  7. Our president, and his father, are both named George, (as in “King George III”, not as in “George Washington”).
  8. Far too many Americans seem to have forgotten about King George III, making it difficult for them to see the similarities to George Bush Jr.
  9. Churches are allowed to accumulate wealth in this country without paying taxes. They are allowed to accumulate wealth unchecked. With wealth comes power, and as the power of churches grow, our secular democracy is threatened.
  10. Our president tells us that our enemies hate our freedom, then he goes and appoints a man connected with a variety of felonies, a man convicted of crimes that show a profound disrespect for our system of government, to create a domestic surveillance system that would make communist east germany at the height of the cold war utterly jealous.
  11. Attacks on American soil have left Americans scared, and far to willing to trade their genuine freedom for a false sense of security.
  12. Not only is our president undermining the civil service rules that were designed to prevent political patronage (read “buying votes on credit and then paying for them with tax dollars”), he is funneling tax dollars to religious organizations.
  13. Certain republican controlled states are using dubious jim crow-like restrictions to keep minorities away from the polls.
  14. People who are troubled by these events are still complaining about them, rather than contacting their elected representatives, much less organizing.
  15. People who should be troubled by these events (read “just about everybody”), aren’t.

I have more reasons for pessimism, and some reasons for guarded optimism. Perhaps I’ll post more later.