Kilroy Was Here
September 14, 2005
The Real Blame Game
Over at Jane Galt's website, Jane boils down the solution to poverty into one magic formula:
If poor people did just four things, the poverty rate would be a fraction of what it currently is. Those four things are:
- Finish high school
- Get married before having children
- Have no more than two children
- Work full time
This is such a simplistic look at poverty (especially poverty among black Americans) that I loathe to even address it; however, let me list some things that might have more of an effect on interurban poverty than above.
- Low Housing Values - "Blacks' confinement to segregated neighborhoods systematically reduces their access to investment opportunities. The middle class invests the largest share of its wealth in housing equity, which amounts to 43% of white assets and 63% percent of black assets. Confined to less-desired neighborhoods, blacks attain a much lower average rate of return on their housing investment than do whites. The current generation of black homeowners has, as of 1990, suffered a cumulative loss of $58 billion for this reason.Because creditworthiness depends on wealth, blacks' lower home values mean they are less able to obtain credit on favorable terms than otherwise equally qualified whites: The current generation of blacks has suffered a cumulative loss of $24 billion due to denial of mortgages and higher mortgage interest rates. (See Melvin Oliver & Thomas Shapiro, Black Wealth/White)"
- Low Tax Base but Higher Tax Rates - "Black/multiethnic suburbs pay tax rates that are, on average, about 65% higher than those of white suburbs, even after differences in affluence are taken into account." (Thomas J. Phelan & Mark Schneider, Race, Ethnicity, and Class in American Suburbs, 31 Urb. Aff. Rev. 659, 673 (1996))"
- Poor Public Services - "Even middle-class suburban blacks suffer from segregation. They enjoy lower-quality public services, and report lower satisfaction with those services, when they live in majority-black suburbs, compared to living in consolidated metropolitan areas where they are a minority. (Ruth Hoogland DeHoog et al., Metropolitan Fragmentation and Suburban Ghettos: Some Empirical Observations on Institutional Racism, 13 J. Urb. Aff. 479, 488-90 (1991))"
- Low Business Ownership - "Lack of access to credit is a major cause of low rates of black entrepreneurship. (see Low Housing Values above) Among all privately owned U.S. businesses, half were started by their owners; the other half were inherited or purchased. By contrast, 94% of black-owned businesses are self-started (centuries of discrimination and segregation have left blacks with little to inherit). Business startups depend heavily on personal and family wealth, which is leveraged into lines of credit. Residential segregation, by depressing housing appreciation and reducing access to credit, therefore depresses black business startups, upon which blacks disproportionately rely to get into business. See Thomas D. Boston, Affirmative Action and Black Entrepreneurship (1999), pp. 76-79
- Poor Job Opportunities - "Most job growth has occurred in predominantly white suburbs. The cost per mile of travelling to work is at least fifty percent higher for African-Americans than for whites. Often, public transportation does not cross city boundaries. Housing discrimination imposes barriers on blacks to moving where the jobs are located. These factors lead to fewer job opportunities and substantial depression in urban African-American wages. See Harry Holzer and Keith Ihlanfeldt, "Spatial Factors and the Employment of Blacks" New England Econ. Rev. (1996)
These are real problems that demand some governmental policy initiatives to address. Unfortunately, whites continue to engage in 'the blame game'.
Antiblack antipathy preceded segregation, but is reinforced by the reactions of segregated populations to economic disadvantage. Whites often attribute oppositional behavior to supposed racial characteristics rather than to the condition of segregation and disadvantage, reinforcing negative racial stereotypes. See Glenn Loury, The Anatomy of Racial Inequality (2002).
December 15, 2004
The Kilroy Platform: Moral Values, pt1
Over at the Washington Monthly, Amy Sullivan brings up the taboo topic of abortion.
I'll second her general theme. The Democrats need to do something about their abortion position. And with that, I propose the first nail in the moral values plank of the Kilroy Platform: The Abortion Prevention Act
Democrats of all types realize that, in 99.9% of all cases, abortion is a tragedy, an emotional roller coaster that plays with the hearts and souls of families nationwide.
Unlike Republicans, we also realize that government action, in the forms of laws and imprisonment, will do little to prevent abortion. Instead, our government needs a coherent strategy to reduce this tragedy. This strategy should consider the following:
Sex Education The Kilroy Platform believes strongly that all teenagers need detailed sex education stressing abstinance and contraception. While, of course, we do not want teenagers to have sex, and we will encourage them to wait until they are mature enough to accept possible consequences, we realize that shouting at teenagers will not necessarily prevent them from sexual experimentation.
For that reason, we believe strongly in the education of contraception for our teenagers. Teenagers should be taught the different types of contraception, their use, and their effectiveness.
The Kilroy Platform realizes that this is less than ideal, but if the choice is between more abortions or more detailed sexual education, the Kilroy Platform chooses the latter.
Available Contraception The Kilroy Platform believes strongly in making safe contraception readily available. This should include contraception for teenagers, and subsidized contraception for the poor. Of course, we would strongly advise teenagers to not participate in sexual intercourse; however, if they do, we must reduce teenage pregnancy.
Easy Adoption The Kilroy Platform believes that adoption is too hard in this country and too costly. We must make it easier for childless families to adopt and for those who need to put their child up for adoption to do so. Bureacracy must be slashed in this arena.
Ultimately, the Kilroy Platform stresses that the best way to prevent abortion is to prevent unwanted pregnancies. We feel that this is where the most common ground lies. Those extremists who are unwilling to make these charges are less concerned with preventing abortion and more concerned with moral control of the public. We find this view to be undemocratic.
Trouble, Trouble, Boil, and Bubble
Matthew Yglesias examines the housing market.
Shifts in the fundamentals that increase home prices should increase rental prices proportionally, but buy prices have increased faster. If demand for home purchases is rising faster than demand for home rentals, it seems to me that that can only mean that people are buying houses as speculative commodities -- spending more than the house is really worth to them in the expectation that it's value will only increase in the future.
I agree completely. The Rent to Equity ratio of houses has rarely, if ever, been higher. Furthermore, the advent of ARM, interest-only, and no money down mortgages is significantly increasing speculation in the market. I have heard that as many as 15% of mortgages are risky and a spike in interest rates could result in significant sell off.
Furthermore, human bias's are fueling this binge. People tend to invest based upon the recent past, rather than the long term past. If you look at housing markets over the last 30 years, rather than the last 5-7 years, housing prices have rarely appreciated at a rate greater than inflation (California is CPI +2%, Oklahoma is CPI - 1.0%). However, in the hot markets (SF, NY, San Diego, etc.), the last 5-10 years have seen much higher returns. People tend to extrapolate from 5 rather than 30 years, and it gets them in trouble.
Second, as was brought up in MY's comments, real estate is really multiple markets, not one big market. Unfortunately, many people are taking the results in very land-restricted areas (SF, San Diego, Seattle, NYC) and applying those returns to places where land is cheap and development is easy (Henderson, NV, Phoenix, AZ, El Paso, TX, etc.) So a lot of folks are investing in real estate in places where the fundamentals are far worse than they're assuming.
I could go on and on. In summary, if you're looking to buy a place to live, real estate might be a good investment, but if you're looking at real estate as a speculative short term investment, or an investment who's income will cover the leverage you've placed yourself under, you're playing with fire.
December 02, 2004
There's a Bear in the Woods
Kevin Drum recently posted a comparison of the current Islamic fundamentalist movement with fascism of the late 30s, and communism of the late 40s.
What's the point of these historical highlights? Just this: in the five years before 1941, world events made the danger from fascism so clear that when the Japanese bombed Pearl Harbor even diehard Republican isolationists didn't hesitate to declare war. The argument was over.
Likewise, by 1949 world events had made Soviet aggression clear to all but the farthest reaches of the left. Truman won the debate within his party largely because the threat was so plain that only a small minority could continue to ignore it.
But world events today are nowhere near so clear. 9/11 was a wakeup call, but in the three years since then what's happened that's the equivalent of even a single one of the events described above? There have been some scattered bombings, but barely more than before 9/11. North Korea and Iran appear to be building nuclear bombs, but they've been doing that for over a decade. The Middle East is dominated by brutal totalitarian regimes, but that's been true for as long as there's been a Middle East — and in any case the United States actively supports many of them.
In fact, let me be the first to suggest that the real generational danger to United States peace and security is not Islamic fundamentalism, but Russian nationalism.
Russia is currently becoming more and more anti-Democratic. Russia is backing anti-Democratic measures in the Ukraine. There are lots and lots of small, failing former Soviet States around Russia to invade. The citizenry is souring on capitalism and longs for return to a great nation. Russia has people that really know how to run a police state. Russia, China, and India will all be struggling to be the dominant power in Asia.
Oh yeah, and Russia has nukes.
By 2010, Russia could absorb Eastern Ukraine, Georgia, etc, start building up against China, force the Persian Gulf region to offer up natural resources.
And this time, Russia won't be burdened by a failed economic ideology. They won't be trying to prove that communism is right. They'll just want to win by being the most powerful country in the world.
And with us distracted by a technologically backward, economically weak, idealogically crippled Islamic terrorism, we won't even see this coming.
November 24, 2004
Leave municipal bonds alone!
In today's Daily Howler, Bob Sommersby brings up the tax rate of Teresa Heinz Kerry.
JOHNSTON (10/17/04): Teresa Heinz Kerry reported income of just over $5 million last year, slightly more than half of it from investments in tax-exempt municipal and state bonds, her 2003 income tax return shows, confirming her status as the wealthiest spouse of any major party nominee in United States history...
The two-page document...showed total income of $5,073,554 last year. Her primary source of income was the tax-exempt bonds, investments that generally produce a lower interest rate, but those in the highest tax brackets can often pocket more cash if they choose municipals.
Ms. Heinz Kerry paid a federal tax of $628,401, which is 12.3 percent of her total income and 27.4 percent of her adjusted gross income.
As regular readers will know, I'm a big fan of a progressive tax system, but let's get crazy about municipal, or tax free bonds.
First, tax-free bonds are good things. They finance essential public infrastructure (hospitals, roads, libraries) and allow these institutions access to lower rates of debt.
Second, tax-free bonds are not tax-free. Rather, the investor in tax-free bonds accepts a lower rate of interest in lieu of paying taxes.
Let's take Ms. Heinz Kerry's example.
She earned $2.5 million in interest on an estimated $50 million investment in tax-free bonds. (I'm guessing she's getting 5% tax free on her money.)
If she would have invested that money in taxable corporate bonds, she would have earned $500,000 to $1 million dollars more on her money. (I'm guessing Teresa Heinz Kerry could have gotten 6% to 7% on her money at similar rated corporate bonds.)
That extra $500,000 or $1 million is the 'tax' she paid on that income. If you included that money into her ~$600,000 she paid in taxes, Teresa Heinz Kerry would have an effective federal tax rate of somewhere between 20% and 27%.
More importantly, that forfieted income is, for all intent purposes, the very same thing as a tax. It goes to fund public infrastructure. It's money that would have gone to the investor otherwise. Basically, it's a pretty good thing.
Now, this is a way for Teresa Kerry Heinz to avoid paying the top (38%) tax rate. She pays somewhere in the range of 20-35%, depending on the comparable taxable investments. But that's what the market bears.
That 15% dividend tax rate though. That's just evil! More on that later.
November 07, 2004
The Kilroy Platform: Fair Taxes for All
My dear American friends:
America needs your help. We are at war. Our economy is sputtering. Wages are flat or declining.
Right now, as our children graduate from high school and college, there are not enough new jobs for them. Right now, as our brothers and sisters are being laid off from manufacturing firms, there are not enough new jobs for them. Over the last year, for every 2 jobs our economy has added, our schools have added 3 people looking for work. This cannot continue.
As it was during the Civil War, during the Great Depression, during World War II, our great nation has once again reached a watershed--a crossroads where we need the sacrifice of our citizens in order to prevail.
And our platform is asking you for your help. For those of you who are making more than $200,000 a year, America needs your help. We need you to give more to this country.
If you believe, as we do, that our forefathers, our soldiers, our country has given far more to us than we can ever repay, then join with us to help this country in its time of need.
The Kilroy Platform understands that even the most efficient and effective government needs resources to fund it. It is our sacred duty to do our part in funding our military, our currency, our government.
But we should do so fairly.
Right now, the Republican government punishes work and rewards leisure. Those dollars that are earned by sweat can be taxed as high as 35%. Those dollars that are earned by signing the backs of dividend checks or capital gains are taxed at no higher than 15%.
That is unfair. Why should we punish people for working? Our country was founded on the work ethic: that our national character is stronger when each of us is working to make our lives better.
Why is the dollar that the fireman, the teacher, the policeman, the autoworker, the nurse, the doctor, the lawyer, earn through the practice of their craft taxed higher than the dollar earned by the wealthy endorsing their checks?
A country that rewards work should not have a tax system that punishes work.
Now, the Kilroy Platform understands that investment is needed to create jobs and run the country.
Because of that we do not believe that dollars earned from investing should be taxed higher than dollars earned from working.
They should be taxed the same. All income, whether it's source come from labor, wealth, the lottery, or inheritance, should be taxed at the same rate.
We do not believe that labor is more or less important than investing or inheriting. All sources of income motivate people. As a result, they should all be taxed the same.
The Kilroy Platform is not advocating a flat tax. We still believe a progressive tax system is a fairer system of taxation.
Not all dollars are equal. The dollar that's used to buy milk for your children and pay for your mortgage are more important than the dollars we use to buy yachts and Jaguars. Since we have to fund the government, we would rather fund the government with dollars that might be used to buy yachts rather than dollars used to buy bread. As a result, we feel that a progressive tax system is the fairest way to do this.
But we don't feel that we should change the tax rates just because a dollar comes from labor rather than leisure. We need to reward work, not punish it.
The Kilroy Platform
Well, after the drubbing at the polls last week, I, like many other people, have been thinking about the Democratic party. After reading this open letter to the Democratic Party, I've decided to put my thoughts down on paper.
These are all first draft thoughts, so please forgive me for my lack rhetorical flourish. And to the three people who actually read this, if you see any logical inconsistency or really bad idea let me know in the comments.
Based on the exit polls, there are basically four issues that I'll initially address: the Economy, Terrorism, Iraq, and Values. After that, (if I get that far), I'll try and address other issues.
Overall, the Kilroy Platform focuses on fairness, responsibilty, security, and communty. Ultimately, I feel like these are the core values of the American people, so I'll try and weave these throughout my thoughts.
Thanks in advance for your patience and help.
October 02, 2004
Wisdom is a Virtue
The President campaigns on the Character Platform. As his debate performance shows, the President focuses on stength, courage, leadership, consistency, etc. In fact, the current George Bush campaign site headlines "Clarity and Strength".
But when we think about character, it's good to go back to the godfather of virtue, Aristotle. Aristotle was big on the virtues, but he realized that in order to achieve eudaimonia, the virtues must be guided by practical reason, by the ability to make good judgements.
In other words, while strength and courage are indeed admirable traits, strength without wisdom is like angelic tongues without love -- merely a resounding gong or claning cymbal.
So when we judge the character of the presidential candidates, when we judge their vitures, we should first judge their wisdom, their judgements.
Which is Senator Kerry brings up a good point in condemning the judgement of the President in preparing for the War in Iraq, and in planning for rebuilding Iraq. Character is more than courage, consistency, and clarity.
Character is wisdom.
September 13, 2004
Give Us A King
Today, in Slate magazine, Steven Waldman writes on the trend of Republicans' rhetoric that George W. Bush was chosen by God to be President.
Yet it's hard to recall another instance of a presidential campaign so confidently promulgating the idea that its candidate had divine endorsement. The potentially dangerous implication is that since God put George W. Bush in the White House, opposing him is opposing Him. A person could get smited for that.
And, even an atheist such as I has chafed under this type of rhetoric. (I mean, we live in a democracy; don't the people choose our President?)
But Waldman brings up an interesting point towards the end of his article:
Of course, it's always possible God did put George W. Bush in the White House. But if He did, it doesn't theologically follow that He wants him to have a second term. Even those who believe that God controls world events usually concede it is hard for humans to divine the intent of the Divine.
After all, in the Bible, God is described as doing things for all sorts of inexplicable reasons—sometimes as a reward to the people, and sometimes as a punishment.
And this reminded me of Chapther 8 out of the book of Samuel. In Samuel, the Israelites, disappointed in the behavior of their judges, ask Samuel for a King.
6 But the thing displeased Samuel, when they said, Give us a king to judge us. And Samuel prayed unto the LORD.
7 And the LORD said unto Samuel, Hearken unto the voice of the people in all that they say unto thee: for they have not rejected thee, but they have rejected me, that I should not reign over them.
8 According to all the works which they have done since the day that I brought them up out of Egypt even unto this day, wherewith they have forsaken me, and served other gods, so do they also unto thee.
So, God gets a little pissed off about this King thing, and He tells Samuel to warn them about the type of King they could get. God curses the Israelites by answering their prayers.
Of course, the Israelites don't listen.
11 And he said, This will be the manner of the king that shall reign over you: He will take your sons, and appoint them for himself, for his chariots, and to be his horsemen; and some shall run before his chariots.
12 And he will appoint him captains over thousands, and captains over fifties; and will set them to ear his ground, and to reap his harvest, and to make his instruments of war, and instruments of his chariots.
13 And he will take your daughters to be confectionaries, and to be cooks, and to be bakers.
14 And he will take your fields, and your vineyards, and your oliveyards, even the best of them, and give them to his servants.
15 And he will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants.
16 And he will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work.
17 He will take the tenth of your sheep: and ye shall be his servants.
18 And ye shall cry out in that day because of your king which ye shall have chosen you; and the LORD will not hear you in that day.
19 Nevertheless the people refused to obey the voice of Samuel; and they said, Nay; but we will have a king over us;
20 That we also may be like all the nations; and that our king may judge us, and go out before us, and fight our battles.
21 And Samuel heard all the words of the people, and he rehearsed them in the ears of the LORD.
22 And the LORD said to Samuel, Hearken unto their voice, and make them a king.
When I read this passage, I felt chilled. For, lo, my brothers, doth the tribe of Americans repeat the errors of the Israelites. Forgoing the learnings of their ancestors, they, too, anoint themselves a King.
And, again, the King they choose takes the Sons and Daugthers of America to squander in his chariots and in his battles.