Listening to Myself

Monday, November 22, 2004

The Republic of Davis

Again, Davis is on the leading edge - they are considering a rule that would mandate not only 25% of new housing be built for low income households (which already exists), but that 25% would be built for middle income households (in Davis, that's from 72K to 96K income annually). They would also cap growth at 250 units a year.

Subsidized homes for people who make almost $100,000 a year... it's rather mind-boggling. I guess it will all work out, so long as people can still afford to buy the remaining 50% market rate portion of the project. I wonder though, how long will it take before the people who can afford the ever increasing market rate will decide to take a pass on Davis, and head for other cities instead. Davis is great and all, but if to buy a home you will also have to pay for subsidizing the other 50% of the homes in the development, that's going to get expensive.. and is it really worth it to live in Davis?

And if the prices keep going up and up, will they then have to mandate that another 25% be sold to the next income bracket up? This just doesn't seem like a sustainable solution, especially if you are only building 250 units a year.

Sacramento Bee article, via California Insider.

Friday, November 19, 2004

This does not sound promising

It sounds like the Bush team is trying to rein in people's expectations for real tax reform and simplification. According to the Washington Post:

Instead the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said.

It sounds like they have some potentially useful reforms in mind, but I am very concerned about how they are planning on paying for it. What also strikes me as strange is that as "Pamela F. Olson, a former Bush Treasury official in close contact with administration tax planners, said the president will pursue a tax system where all income -- whether from wages, dividends, capital gains or interest -- is taxed only once. " So if they repeal the deduction for state and local taxes, aren't they now taxing income twice there? And why the heck would anyone think that repealing the deduction for employer-provided health insurance is a good idea? That just seems akin to attaching a giant "kick me" sign to the whole idea of tax reform. Are they trying to make the jobs of Paul Krugman, et. al. easier?

Or perhaps this is all an insanely clever ploy where they put something out that sounds really politically untenable, then switch it for something more radical, but without the same tax hikes on moderate income folks. All I know is that this is the beginning of a very long process (probably longer than this last election cycle, even!) and we probably won't see the conclusion until 2006 at the earliest.

Thursday, November 18, 2004

Moving On

According to this Contra Costa Times article, 25% of all Californians and a third of Californians under the age of 35 are considering moving elsewhere in the state or out of state. That seems to me to be a pretty big chunk of people, although I'd be curious to see stats on that for other states.

At least I'm not alone I suppose...

So then, the question becomes: Where do you go?

Nick Gillespie has a very interesting article over at Reason, titled "Jayhawk Down: Economic freedom may be just another word for nothing else to do". Forbes just put together a new "U.S. Economic Freedom Index," and found that Kansas is the top ranking state in terms of economic freedom (based on a weighted average of 150 defining characteristics), whereas California and New York are 49th and 50th, respectively. So why do so many people live in New York and California if they are such troublesome places to live? Gillespie conjectures that for most people and businesses, economic freedom is simply not a big consideration in choosing where to live. Rather, we choose based on culture and percieved economic and entertainment opportunities.

Living in Huntsville [Texas] and, less dramatically, in Oxford [Ohio] taught me that the price of a house didn't simply reflect the cost of living but also the demand for living in a given area. If you can't move a five bedroom house at $100,000, there ain't a lot of living going on.

Gillespie himself has had a rather interesting wander through different areas of the US, both large and small. And where is he living now? In Washington D.C., where his rent on a 3 bedroom apartment is about a $1000 more than his mortgage payment for the 5 bedroom, 3500 sq. foot home he recently sold in Ohio.

So I wonder, just how many of those Californians will actually end up moving?

California Housing

From the SF Chronicle this morning:

In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.

In the past five years, the median price for a single-family home in California has more than doubled, rising from $185,000 to $405,000, according to real estate information firm DataQuick. Prices in the Bay Area have jumped about 78 percent in the same period -- from $306,000 to $544,000 -- making it one of the most expensive places to live in the country.

It's a pretty ugly situation. The article offered two suggestions for mitigating this problem -- changing the property tax distribution so that cities aren't so reliant on sales tax revenues, and lessening the environmental and premitting/zoning restrictions to allow housing to be built more easily. I wonder how effective either of these tactics would be though. And what do you do in areas that are pretty much built out with low density housing, like the San Jose/Silicon Valley area?

Marginal Revolution had an interesting post that I think is somewhat related to this. He is discussing the growth of wealth and its effects on poverty, and he wonders:

I wonder whether increasing wealth will ever eliminate the case (sound or not) for, say, welfare payments or the public funding of education.  Won't the U.S. at some point, however near or distant, become rich enough so that government won't have to...fill in the rest of the sentence yourself...?  Or does growing wealth jack up land prices so much that subsistence becomes increasingly harder to achieve?  I'm not talking about a relative status effect here, or changing expectations as to what is a decent life (though those factors play a role too).  To some extent higher real wages also boost the cost of producing human beings (i.e., raising children), analogous to William Baumol's "cost disease."  You can raise a family of seven in Mexico on one thousand dollars a year, just try that in Fairfax County.  And might further economic growth only exacerbate this contrast?

It seems like that might be what we are seeing here - I wonder if it is really possible to build enough housing (and at low enough prices) so that the 86% of renters surveyed in the article who would like to buy housing could actually do so. Even if the restrictions on building were entirely lifted, could enough houses be built near enough to employment centers that people could own a home and still be somewhat near their job?

As Will Rogers once said... ""Buy land. They ain't making any more of the stuff."

And in searching for this quote, I found another good Will Rogers quote that I hadn't seen before - "The difference between death and taxes is death doesn't get worse every time Congress meets." (From Zaadz)

I love the internet.

Monday, November 15, 2004

Taxes, continued...

My favorite paragraph from a NY Times article in today's online edition:

Both the president and Congress now use the income tax the way my mother once employed chicken soup: as a magic elixir to solve all the nation's economic and social difficulties. The result is extraordinary complexity. In 1940 the instructions to the Form 1040 were about four pages. Today they are more than 100 pages, and the form itself contains more than 10 schedules and more than 20 worksheets. The complete tax code totals about 2.8 million words - about four times longer than "War and Peace" (and considerably harder to parse).

The author of this article thinks we should add a 14% national sales tax, with no income tax for people who make less than $100,000. People who make over $100,000 (AGI) would pay a 25% rate, but would retain many of the current basic deductions for things like charities, mortgage interest, and state/local taxes. The author argues this would continue to be a progressive system, and I suppose it would... but that 14% VAT would add up fast, and would be particularly painful in states like California. I don't relish the idea of paying 22.75% extra on every purchase I make, even if it would mean that I wouldn't have to file at the end of the year. Even if the amount of tax paid is less overall, there is a huge psychological barrier there in this system and I wonder if that would suppress consumption.

But on the other hand, perhaps that wouldn't be the worse thing in the world... with the US comsumption rates so high and our savings rates so low. I can't imagine it would do good things to the world economy though, at least in the short term!

I like that people are thinking about all of this though, I think it bodes well for some sort of change.

Studying Taxation

I have to wonder if studying taxation right now is really a wise choice. I have been reading a number of articles discussing Bush's call for tax reform and this morning it hit me that something might actually change, and perhaps even change dramatically. If so, a great deal of what I'm learning right now could be largely moot in a couple of years.

I wonder how likely significant change is though, given how entrenched all the various lobbying interests are in the Capitol. It would be a significant lessening of the lobbyist's power if they didn't have the minutae of tax code to tinker with anymore. The most recent tax bill passed by Congress and the President in October was a maze of special credits and tax breaks for a huge variety of industries and could be held as evidence that the Republicans are not particularly interested in tax simplification and reform when they are in power.

But still, as Sullivan argues fairly convincingly in a recent article, tax reform is something that unites the Republican party - the libertarians, the fiscal conservatives, and social conservatives. So perhaps there is a chance for fundamental change, especially if Bush throws all his weight behind it.

Personally, I think tax reform and simplification is a fantastic idea, especially after studying the federal tax system for the past couple months. It is a deranged and ridiculously complex system that is begs for a fundamental reevaluation and change. I am not studying taxation because I admire the current system, I am studying taxation because it seems to me to be a fundamental part of making any sort of financial plans. Tax is so tricky and filled with "gotchas" that it seems like you need a good grasp of the system in order to make sure you don't get stuck with unexpected tax costs. If all this could be simplified though, it could change the focus of financial planning significantly.

Maybe I should examine what classes I need to take in order to become an accountant.

Friday, November 12, 2004

Political Capital

Now we know exactly what Bush can get with his political capital!

Wednesday, November 10, 2004

And how does this make sense?

So yesterday was the 66th anniversary of Kristallnacht, and a Norwegian anti-racist group forbade Jews from participating in their march in memory of that night. This group stated that they could not guarantee the safety of the Jewish marchers, who wanted to march while carrying the Star of David and Israeli flags. No, they were not concerned about people outside the march behaving agressively towards the Jews, they were concerned about the members of the anti-racist group!

And in other news, a European free speech group condemned the recently murdered Theo Van Gogh (murdered by an Islamic fascist who was opposed Van Gogh's film on the rights and treatment of some women under Islam) for excessively excercising his right to free speech. Then they all but accuse the man of having arranged his murder so as to promote his latest film.

And then there's the mural that someone made in Amsterdam to memorialize Theo Van Gogh with the text "Thou Shalt not Kill" on it - the text later had to be removed, as people complained that it was overly judgemental and racist.

How completely bizarre. Have these anti-racist and pro-free speech groups completely lost their sense of perspective? Has perspective drowned an a vast sea of moral relativism? How is it that these groups don't see the irony of what they are doing?

And I wonder, how many people in the US fail to see the irony here as well?

Monday, November 08, 2004


I have a list in the right margin of the books I am currently reading. I am considering doing a dump from my Access database of all the books I've read since 6/98, but that's rather personal and I'm not sure how I feel about that. It might be interesting to put it out there though and see if anyone notices.

I think I'll probably also put in periodic book reviews as well, as it is a good way to make myself pull together my thoughts about a particular book.

Now I Understand...

I think I get it now. Bush really is a uniter, it is the staffers that divide. See, Bush unites and gets a clean conscience, while Rove feeds the fire and reassures a segment of the "base".

I would think this tactic would work a lot better before the advent of near instanteous communication so that the message could be more narrowly targeted, but I guess it works well enough these days too... if I didn't, I'm sure Rove wouldn't do it.

Now what I want to know if this means that Bush is willing to spend political capital on this issue as well, or is this something they plan to leave to Congress? At least Rove is signalling that he only wants the admendment to include text referring to marriage, unlike the version of the admendment that was bandied about over the summer.

Friday, November 05, 2004

The Election

First off, I voted for Kerry. I didn't vote for Kerry because I strongly believed in what he was proposing (which I found rather hard to get straight), but rather I was hoping that a gridlocked Congress might stop spending so much money. I also hoped that having someone different in the White House would help improve our international relations. I also voted for Kerry out of frustration for the current situation in Iraq, and because I feel like the war on terror could have been fought more aggressively in Afganistan before turning to Iraq. I also like the idea of having someone of a more intellectual bent in the White House - as a bit of a policy wonk myself, I appreciate others who have an eye for detail and research. I admit, all of these reasons are not exactly great reasons for voting for (or against) a president.

Despite having voted for Kerry, I actually feel pleased, and in fact a bit relieved that Bush won. I was really surprised by my feelings, as I am very concerned about many of the moves Bush made towards the social conservatives during the election period as well as other issues previously mentioned. I've spent some time thinking about this over the past couple days, and I think it comes down to this: I think that Bush is, at his core, a pretty standard small government type Republican, much like recent previous Republican presidents and nominees. Even though Bush identifies himself as a born-again Christian, I don't think he has the same agenda many of the social conservatives do. For that matter, Jimmy Carter was a born-again Christian too, and I don't think he has much in common with the extreme social conservatives either.

I feel like this is further evidenced by Bush's press conference on Thursday. He stated "I earned capital in the campaign, political capital, and now I intend to spend it." and then went on to describe his primary goals for his next four years. The goals were traditional, mainstream Republican goals like simplifying the tax code (in a revenue neutral way, even) and reforming Social Security - no mention of marriage, abortion, or other social goals. Bush seems to be much more interested in spending his political capital on economic issues rather than social issues, which I think is in line with his personal priorities. As someone with vaguely libertarian sentiments, I can definitely get behind the goals Bush outlined at his press conference. I just hope he can get Congress to do it in a way that will reduce the financial burden on future generations. I also hope that the social conservatives in Congress won't try to force Bush to spend some of that political capital on their goals, but I'm sure that's a hope in vain.

Time will tell though, time will tell. One final thought: Bush won this election, by 3.5 million votes. Yes, I know it all comes down to the electoral college, but I still think the popular vote matters. A greater percentage of voters turned out this year than in any election since 1968. This is a legitimate and substantial win, and I think that in itself makes me feel more kindly towards the president. I'm willing to give the president a second chance with this new term, and I think I'm willing to start over to a certain extent. I think it will be a far more useful and productive way of viewing the next four years.

Blogging Etiquette

So how do you go about telling people about your blog? Do you drop it in casual conversation? Do you send an email out to all your friends and family?

And really... do I want anyone I know reading this? Hmm.

I just did a quick search on google to see if there was anything pertinent out there, and I came up with a few things, but nothing terribly useful. (Big surprise there, I suppose)

I did find a couple interesting articles on blogging mistakes and how to get and retain readers. For my own future reference (as I have no readers other than my husband - hi hon!) here are a couple links on the subject.

Do you tell your family?

Proper Blogging Etiquette, mostly about how to bring in readers

Blogging Do's and Don'ts

12 Steps to Better Blogging


I love the modern era! All these bells and whistles, just so that I can talk to myself.

And there's improvements too - now I can archive my conversations with myself, and I have a much smaller chance of being overheard here than I do when I'm walking down the street.

What more could I want?