Thursday, October 27, 2011

Safety: Flying vs. Driving

I'm taking a rest from politics today to add to the never-ending debate about flying versus driving. The following appeared in the Times in 1994, though I came across it just recently:
To the editor,
The editorial "Concern Over Airline Safety (Nov. 16, 1994) perpetuates a myth that has surfaced periodically for years. That is that "flying is still safer than driving to the airport."
Not true. The only acceptable method to compare risk between air travel and automobile travel is based on the number of deaths per hour of exposure.
Data from a respected safety analyst, Trevor Kletz, show that air travel has a fatal-accident frequency rate four times higher than that for driving a car. For airplane travel there are approximately 2.4 deaths per million hours of exposure; for travel by car the figure is 0.6 deaths per million hours of exposure.
Simply put, for the same number of hours riding in a car or riding in an airplane, you are four times more likely to be killed in an airplane than in a car.
President Safety Engineering Labs Inc.
Detroit, Nov. 22, 1994

Here is my take on this. I don't agree that "this is the only acceptable method to compare risk," though it is a method. You have to ask what it is you must or want to worry about.
1. If you must go from NY to Chicago, say, and you are concerned about your safety, then you should fly. Here's a simple estimate: A good flying time, NY -> O'Hare, is about 2:15. The driving distance is about 800 miles. Even if you averaged 65 MPH that's still over 12 hours of driving, or more than 4 times as much exposure than in a plane. Since a plane is only 4 times more dangerous per hour, then there you have it: fly. 
2. On the other hand, calculations of risk for flying are averages over all carriers and all routes. Presumably this includes Berzerkistan (a Doonesbury creation) Airways flights from a primitive airport north of Irkutsk to the cliffside airport just outside Lima Peru, during Monsoon season. The figures for car travel might also include the short-lived driving career of Sam "five-more-for-the-road" Teetotaler who only drove (past tense) at night. The difference is, you have little control over a flight other than the choice of carrier (and not always that); in a car, on the other hand, you can control how you drive: your physical condition and that of your car, as well as the hours during which you drive. You can actually improve your odds considerably when you drive by being very careful.
3. If you are worried about worrying (this is not a joke), then you have to think carefully about how you worry. It is not unreasonable to fear flying, so if you do, and if the prospect of flying is likely to ruin your trip, then drive or take a train. On the other hand, if you worry about driving and find flying exciting (as I do), then fly.
4. If you are concerned about ecology/energy the situation is complicated. The US government ( and gives the following BTU/Passenger-Mile figures:
                 Auto          3600
                 Air             4000
                 Rail           3000
(I have no idea if these are correct -- they are what the Feds tell us.)
The problem with these figures is that they were obtained by dividing the BTU/Mile averages for cars, planes and trains by some sort of estimate of passengers per vehicle. This can be tricky. The "average" car can seat probably 5 people but rarely does. The average plane these days is pretty much packed, but not so the average intercity train. Thus, these estimates are debatable. I'd prefer to tax carbon, let gas prices rise, and let the market sort it out. I also don't have much hope that a realistic energy policy will emerge from our government in the foreseeable future.

Tuesday, October 25, 2011

Perry's "flat tax"

First of all, you can reject Perry's tax plan simply because it doesn't tax capital gains. Any plan that taxes income from work but doesn't tax income from investment is a scheme to transfer money from working people to fat cat investors.

This is not to say that working people don't own stock, simply that such a tax effectively takes money from people whose principal source of income is productive work and gives it to people whose main income is derived from playing with money.

Republican like to describe investors -- all investors, it would seem -- as job creators. This is a false generalization. For example, Mitt Romney headed a rapacious company -- Bain Capital -- whose main activity was buying and looting companies for their cash. Jobs at "Bainified" companies were either terminated or shipped overseas. When Romney ran against Ted Kennedy, he started the race way ahead, but when people in Massachusetts found out about Bain, Romney went down like a lead balloon.  Of course,  Romney at least had a company. Large numbers of "investors" are speculators, who buy and sell stock without any interaction with the companies involved. Many make thousands of trades a week (or even per day) and are solely interested in taking in dollars. They are social and economic parasites who should pay more not less tax than people who actually do productive labor.

As far as the rest of Perry's plan is concerned, we don't know enough details. (Cain, by contrast, has no details: his website and public utterances are total gobbledygook, unintelligible to either economists or linguists.). Perry claims that taxpayers will have a choice of filing under his plan or using the old tax structure. This seems disingenuous because wealthy people will clearly pay less under a flat tax of 20%. If everyone else pays at most what they are paying now, the government will clearly be collecting far less that it currently does, even though Perry suggests his plan is revenue neutral, which is mathematically impossible. My suspicion is that either Perry hopes that people will end up filing under his plan in order to avoid the "complications" (read: math) of the current tax code, or that he really doesn't intend to give the choice option for more than a year or so.

Other aspects of the plan are unclear at this time. He claims that taxpayers will get a $12,500 personal exemption. That would be much more reasonable than Cain's nasty plan, but I couldn't find a specific statement from Perry that this would be for each person in a family. If a family of 4 were to get a $50,000 exemption from income tax that would be decent. I can't see how he can do this and also cut taxes for wealthy people, and still afford to run any sort of government -- maybe he doesn't intend to.

There is a preliminary estimate of how various taxpayers would fare under Perry's plan in the NY Times; here's a link. The figures make it clear that the personal exemption would help middle class families with children. Retired people would also be helped  -- provided Perry doesn't eliminate Social Security and Medicare, in which case it would be a total disaster for seniors. The people who would be helped the most are the wealthy -- as usual for Republican plans.

Perry makes noises about cutting programs that we citizens directly pay for -- sometimes called "entitlements" -- but it is unclear how he will cut them. He has said some scary things about Social Security and Medicare, and he doesn't like unions, consumer protection, and environmental laws. Sounds like life under the Texas governor would be nasty, brutish and short -- at least for people of modest wealth.

If your taxes go down somewhat, but important services related to education, health and safety are drastically cut, how is your life better?

Given the fact that the Republicans have been the Party for The Rich (PTR as I hope we will start calling it) for more that a century, we will not see any of their presidential candidates deviate from their policy of taking from the poor and middle class and giving to the rich. In the case of their tax plans, the Devil is not just in the details but in their whole philosophy.

Friday, October 21, 2011


Thanks to Mike for pointing out that Citgroup agreed to pay $1/4 billion, not $1/4 trillion. I corrected that in the last blog.

(Not the first mathematical mistake I've made. In two consecutive years -- a long time ago --  I made mistakes on my income tax in favor of the IRS - which they pointed out, to my embarrassment.  My wife took over doing taxes after that.)

Thursday, October 20, 2011

Lest we forget Citigroup

It's easy to forget how thoroughly awfully the big banks and investment houses behaved in the years and months preceding the Great Financial Debacle of 2008. Right-wing revisionism has tried desperately to change the story, blaming Fannie Mae and Freddie Mac, ObamaCare, and Dodd Frank for the Great Recession and the miseries that ensued and are still with us.

So, as a return to reality, note that the parent of my least favorite bank, Citigroup, has agreed to pay more than $1/4 billion dollars in a civil suit claiming fraud in the issuing and sale of subprime mortgage securities (read the story here). This is only one company and only one lawsuit. There were no criminal prosecutions, even though fraud is, according to my understanding, still a crime.

I suppose the Republicans have some sort of spin on this, perhaps blaming the Occupy Wall Street class warriors retroactively, or maybe the job-killing consumer-protection movement, or maybe even the EPA: Anything but the truth about greed and corporate immorality.

Wednesday, October 19, 2011

Stop this flat tax nonsense

It's time that everyone who can do a bit of math and who has sympathy with the lower and middle classes starts to speak out about this "flat tax" nonsense. A flat tax of the kind being proposed by the Party for The Rich (PTR, formerly GOP) would create the largest transfer of wealth to the rich and away from everyone else in the history of this country -- perhaps in the history of any country. The numbers are clear and irrefutable. In fact, the only arguments that its supporters can muster are that it's simple to compute and that it's called "fair" by rich people.

Talk about fairness when your flat tax proposal exempts the first $40,000 of income, and taxes capital gains at the same rate as earned income. 

Talk about fairness when your sales tax includes purchases of stocks and bonds.

Talk about fairness when your sales tax isn't a VAT tax, which effectively doubles its rate on manufactured items.

For gosh sake, all you "populists" and union members and Move-On people, and Occupiers: Start talking about the math -- it's a no-brainer.

Anyone who supports a flat tax is either rich, wants to give away his money, or doesn't understand it.

Tuesday, October 18, 2011

Student loans and more advocacy points for Occupy Wall Street

Recently there have been "demands" to forgive student loans: here's one from The Guardian. I think this is a rather bad idea. If providing free college education is a national goal, like healthcare, then there has to be some rational planning. You can't just throw money at anyone and everyone who wants to go to some college. What about those who have paid off their loans, or who are working hard to avoid having to borrow? What programs should be acceptable at which schools, and which students stand a chance of success?

What might be a reasonable step, and an idea which the Occupy Wall Street movement might take up, is to limit the interest charged on any and all federally-backed student loans to the lowest rate of interest charged to any American bank. If Bank America or Citi can borrow at near zero interest rates directly or indirectly from the Fed, and invest in T-bills (see here, for example) instead of businesses, then students should be able to borrow money for their education at the same rate. What's fair is fair.

Here are other ideas that readers have suggested the OWS movement might endorse with near unanimity: 

Remove the cap on earnings subject to Social Security.

Put everyone on Medicare. Charge accordingly, but eliminate the private insurance companies and allow government to negotiate hospital charges and pharmaceutical costs for its citizens.

Monday, October 17, 2011

Occupy Wall Street and propaganda

The Occupy Wall Street movement (OWS)  has so far had a pretty good shelf life. The reason is clear: it represents a huge base of legitimate resentment. In spite of all the public relations resources that large banks, insurance companies and investment houses can command, the basic fact is that the vast majority of the population (here and abroad)  knows that the terrible world-wide near-depression which started around 2008 was the result of greed and carelessness centered around Wall Street. This culpability has been documented over and over by books (e.g. The Big Short by "Moneyball" auther Michael Lewis), movies (e.g. the Academy-Award-winning documentary Inside Job), and articles (almost all reporting outside Rupert Murdoch's  Wall Street Journal).

It was probably a good idea for OWS to have a vague and diverse message in these early days. People should be allowed to come up with their own reasons for resenting Wall Street, and think about them and what they would like to see in the way of control and restitution. In this way a large mass movement can be gotten together -- at least initially.

The problem is that the forces representing Wall Street and its interests are extremely powerful, with immense resources. Wall Street was, for decades, a financial prop for the right wing in general, and conservative interests in general. However, when the narrowness, self-interest, and actual harm of its policies, as embodied by the adminstration of G.W. Bush, became obvious to nearly everyone, they were smart enough to desert the sinking ship, and shift their support to the Democrats and the election of Barack Obama in 2008. When they were rewarded with key sympathizers Paulson, Summers and Geitner achieving strong infuence in the new administration, they went back to work undermining reform by backing attacks on Obama, healthcare, and consumer/environmental protection. The massive funding of the "make Obama fail" movement by the Koch brothers (among many other wealthy right-wing sources of money, and the entire Republican Party) is now everywhere.

And, right on schedule, the attacks on OWS are being stepped up. Photos and accounts of sex, drugs and rock and roll are being trotted out, along with images of inane signs and videos of incidents of various kinds of idiocy.

This is the way it always works. When I took part in the early anti-war demonstrations in the Boston area, I'd be surrounded by pretty serious marchers, including grand-parent types, men and women with babies on shoulders or in strollers, and people and puppets decked out as Nixon and Kissinger. There was also a small contingent of marchers who had beards and long hair -- stjill pretty scary, I guess, even for the middle 60's in America. As we trudged along, the mid-day population of the bars emptied out, with red-eyed folks, heaping all sorts of nasty insults on the streams of passers by. The next day the Boston Globe featured articles describing hundreds of "hippies", probably on drugs, screaming obscenities -- accounts totally at odds with reality, but presented credulously  by the Globe reporters.

The interests that want to destroy any kind of people's movement love to use divisiveness to break its back. When OWS points out that 1% of the population controls 40% of its wealth, its enemies respond by claiming 53% pay taxes and 47% don't. The idiocy of this supposedly countering pseudo statistic (which neglects FICA, and ignores the many who are too poor to pay income taxes) doesn't prevent it from being dutifully and uncritically reported by the news media.

The time is rapidly approaching when OWS must present some sort of unifying position on economic issues, and must have spokespeople to enunciate carefully and reasonably this position. There are many items its members can mostly agree on, though there are probably none on which all will agree. But that's OK: only someone who doesn't understand democracy will insist that nothing can be advocated unless everyone agrees to it; such a position is worse than a filibuster, after all.

Here are some examples of very popular ideas.

1. Ending the economic favoritism that enables banks to borrow at near zero interest rates and use this money to invest in Treasury Bills.

2. Forcing banks to renegotiate "underwater" mortgages (mortgages on houses worth less than than the money owed).

3. Enacting laws forcing banks that were bailed out to actually lend money.

4. Passing a Financial Services Tax (what I call the Parasite Tax) that would put a small tax on both sides of every stock transaction. This is purely a tax on speculators, not wealth or job creators.

5. Taxing capital gains as ordinary or "earned" income.

6. Strengthening not weakening the Dodd-Frank financial regulation act.

7. Investigating seriously the roles of financial executives in the subprime mortgage debacle.

8. Extension of unemployment benefits for  "long" periods  (at least a year at a time).

It is hard to believe that at least these items would not be agreed upon by 90% of the OWS supporters. There is no need to make further general statements about the nature of capitalism or other divisive issues.

If you have further suggestions please use the comments section to list them.

Saturday, October 8, 2011

Pay by check!

When banks moved their customers from paper checks to debit cards, they saved a bundle; for example, VISA (founded by Bank of America) estimated that member banks saved more than a buck and a half per check when customers used a debit card instead.

I learned these and other interesting facts about the history of checks and debit cards from a recent article "Charging for Debit Cards is Robbery" written by Lloyd Constantine, the lead attorney in a successful 1996 anti-trust suit against Visa and MasterCard. This suit resulted in a big cut in the fees the banks charged retailers. However, customers were still being socked for a debit fee amounting to about 44 cents per transaction. Recently, acting through Dodd-Frank, the Fed determined that a more reasonable amount would be a quarter of that. Probably because of complaints from the banks, the fee was settled on at 22 - 24 cents per transaction. Compared with checks, this is a tremendous benefit to the banks, but compared to the amount of money they lost through their own greed, and compared to what they think they can get away with, it is not nearly enough.

Now, my next-to-least  favorite, Bank of America, wants to charge $5 a month when customers use its debit cards in retail stores. -- the ATMs would still be free if you use those from BoA.  This is their end run around the the Fed and Dodd-Frank. Nearly a century ago the courts decided that very similar fee that the banks charged for checks in retail sales was illegal. This should be illegal too, but so far there has not been a court case, and customers of BoA will be stuck paying that fee. Other big banks are likely to follow BoA's lead. Smaller banks may resist and thereby pick up some customers from the biggies. (BTW, I dislike CitiBank even more than BoA, but more about that some other time.)

What we should do if our bank socks us with this debit card fee is to pay by check. Yes, it may cost a dime a check, but for the $5.00 per month debit card fee you can write 50 -- yes 50! -- checks each month. If lots of BoA customers start doing this it will certainly catch BoA's attention, and send a warning signal to other banks. Stores won't like it, since it will slow down cash registers. But then maybe the stores will put some pressure on the banks and the Fed to roll back the debit card robbery.

There are two other points to note here. The first is that banks will charge whatever the traffic will bear; if the charges are illegal, they will collect them until it is proven so by a lawsuit. When one type of charge they levy is disallowed, they will institute another. However, successful lawsuits with big penalties can slow them down, and so can consumer actions like writing checks and changing banks.

The second point is that consumer protection laws like Dodd-Frank can help us fight against the greed of many financial institutions. That's why the big banks and financial houses, and their servants in the Republican party,  hate Dodd-Frank and other consumer protections, and want them removed or drastically weakened. It's all about money, and its flow from us (99%) to them (1%).

Spread the word: If you have a Bank of America account, start writing checks in stores instead of using your debit card, and consider changing banks.

(Thanks to Maxine B. for calling my attention to the Times article and for suggesting that we fight back by using checks instead of debit cards.)

Friday, October 7, 2011

National Security "Death Panels"

After cross-posting my last blog on al-Awlaki, the blog Winning Progressive mentions the following article from Reuters about secret death panels that select names for assasination:

Thursday, October 6, 2011

The killing of Anwar al-Awlaki

First of all, I am neither a pacifist nor an absolute opponent of the death penalty. But, I am a strict advocate of due process and the rule of law. Here are the main points as I see them.

1. Al-Awlaki was born here and hence was a U.S. citizen. As such, he had due-process rights guaranteed by our Constitution. As far as I know, al-Awlaki was never tried, in person or in absentia, for any crime.

2. Al-Awlaki made it clear by personal statements on many occasions that he was a member of, and fully supported, the terrorist group al-Qaeda. There is hardly any doubt that al-Qaeda was and is a perpetrator of lethal damage against the U.S. and other countries. There is little doubt that al-Awlaki advocated and encouraged these attacks.

3. The U.S. killed al-Awlaki in Yemen, in a surprise drone attack, an attack that killed several other people nearby. This is typical of recent American anti-terrorist activities in places throughout the world, including Yemen, Afghanistan and Pakistan -- and probably other countries as well.

4. We've known about al-Awlaki for at least a decade; there are FBI files dating back to before the 9/11 attacks. While his earlier activities may have been (deliberately) ambiguous, his advocacy for the al-Qaeda cause has been clear in recent years.

So, why couldn't al-Awlaki have been tried -- even in absentia -- for treason, and had his citizenship stripped from him? There was certainly no press for time, since he's been wanted for several years now. Obama and his National Security Council authorized his murder about a year ago. Even formally (without constitutional challenge) this would have been legal only if he were an "imminent threat" to national security. Why advocacy of the terrorist cause, hardly a new or strikingly effective action, would be an imminent threat is unclear. It was hardly a secret that we were after him. Why couldn't his case have been taken up legally years ago?

Unlike many cases of people accused of capital crimes (including treason), there is and was no doubt of guilt here: Al-Awlaki personally made public his support of al-Qaeda and its objectives, and publicly recruited for the murderous organization. Given this, why couldn't Obama's administration manage to go through legal channels instead having the President simply "authorized" his termination?

What's getting scarier and scarier is the power that a succession of presidents has been claiming. We are not at war with Yemen, or Afghanistan; in fact, we are not at war with any country at the moment. (We weren't at war with Libya either, BTW.) We are supposedly at war with "terrorism", though strict -- or even not so strict -- constructionists of the Constitution might wonder how that could come about. Presidents have the constitutional power to grant amnesty, but I've never heard of a constitutional power -- short of a declaration of war -- to grant a license to kill, especially to off an American citizen.

Nations have the right to defend themselves against horrible people who think nothing about putting deadly bombs in crowded public places. If they are caught in the act, they should be stopped by any means consistent with public safety -- and this may mean mowing them down with gunfire. However, absent the compelling need for immediate life-preserving action, we have to be governed by laws.

Monday, October 3, 2011

Healthcare costs stable but premiums rise + Occupy Wall Street

Events have made blog writing difficult for me in recent weeks, but I hope to be back blogging now on a more regular basis.

Merrill Goozner in his e-newsletter Gooz News (he also write for The Fiscal Times) points out the following:

"The private insurance industry is covering fewer people and facing just a 4 percent increase in costs. Yet  it is raising premiums 9 percent. No wonder profits are rising smartly."

As usual, the knee-jerk right is blaming Obama and healthcare reform for this 9% increase without any apparent reason except the need to attack Obama for everything.

Also, apparently, the "Occupy Wall Street" movement in NYC is spreading to other cities. There's one here called "Occupy Boston." I'm sure that many of the people in this nascent movement are very well-informed and articulate about the issues and solutions involved in making Wall Street pay for the disaster it inflicted on us; nevertheless the press has largely riduculed the group as a whole as offering little  in the way of facts or concrete suggestions. Even if this were the case initially, it no longer is, since other groups, including labor unions have begun joining up. Let's hope that as more people join up with the miovement the reporters will take more effort to read the petitions and manifestos being distributed.

One thing that the movement should start pushing for is a "Financial Transactions" or "Tobin tax"  -- which even the conservative French premier Nicholas Sarkozy joins the AFL-CIO in supporting: click here. I have discussed this in at least one previous blog : The Parasite Tax. This might be a nice rallying point, and could turn out to be as popular with large cross-sections of Americans as the millionaires' tax.