David D. Friedman's Blog, page 22

July 22, 2011

Social Security, the Debt Ceiling, and Obama

I recently came across an interesting piece, going into some detail on the accounting status of the Social Security Trust fund and its relation to the debt ceiling. If it is correct, Obama's claim that running into the debt ceiling could prevent the payment of Social Security checks is either a deliberate falsehood or evidence of striking ignorance. It is not a subject on which I have any expertise, however, and I would be interested in comments from any reader who knows more about it than I do.
The argument is quite simple. Social Security's past surpluses were borrowed and spent by the federal government, creating a federal debt to the Social Security administration in the form of Social Security Trust Fund special bonds, a  liability that counts as part of the national debt. 
Suppose that next month's Social Security revenue is less than Social Security obligations by, say, $20 billion, the number Obama used to CBS Evening News anchor Scott Pelley. The SSA cashes in $20 billion of special bonds, which under current law the treasury is required to redeem, and uses the money to send out social security checks. Cashing in those checks lowers the national debt by $20 billion, so the treasury is now free to borrow $20 billion without exceeding the debt limit, leaving it with the same amount of money to pay other obligations that it would have if the SSA had not needed the money.
If that account is correct, it looks very much as though the President was deliberately misrepresenting the situation, taking advantage of the ignorance of his audience to frighten seniors into supporting whatever policies he proposes to solve the current debt limit problem.
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Published on July 22, 2011 07:58

July 20, 2011

Gang of Six Plan: Right Answer or Smoke and Mirrors?

It's a real question; I haven't looked into the details of the plan and any serious effort to do so would probably take a good deal of work. The plan as described seems to me a sensible compromise along the lines I suggested in an earlier post: "Raise" taxes only by eliminating tax expenditures, features of the tax code designed to subsidize particular taxpayers and activities. And the gang of six proposal claims to do it by broadening the base enough to  lower marginal rates, thus reducing the inefficient incentives due to the tax system.
What I don't know is how much substance there is to the proposal, in particular to the expenditure cuts. Does it go beyond "spend $X less on program Y," which is likely to get changed at the point when it is supposed to be implemented and supporters of program Y point out all the terrible consequences—as has happened repeatedly with bogus medicare cuts? Or is more of it along the lines of "raise the age of eligibility for Social Security by a month a year for the next twenty-four years," which one can imagine actually happening and which would have a significant effect?
Any readers who have looked more carefully at the proposals than I have and would like to comment?
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Published on July 20, 2011 11:57

Murdoch Musings

I continue to be intrigued by the ongoing flap over Rupert Murdoch's media empire. A few more or less random thoughts:
1. Murdoch claims that, prior to the recent explosion, he was unaware of the hacking at News of the World—despite the fact that two people had been arrested and, I gather, convicted in the case. How believable is the claim?
I don't know the answer, in part because I don't have much feel for how an organization that big is run, how much information makes it to the very top level, how much is handled further down. According to Murdoch, the paper represented only about 1% of his media holdings, I think measured by income, which makes the claim at least somewhat plausible.
2. How likely is it that the facts of what News of the World reporters had been doing, in particular facts that had become public prior to the recent flap, would have surprised Murdoch? 
My suspicion is that he would take it for granted (as I do) that reporters routinely skirt the edge of the law and not uncommonly break it in the course of doing the job they are hired to do. It would be surprising if they didn't bribe police officers, sometimes with cash, to tip them off on potential news stories. The police have the information, it is valuable to reporters, markets tend to move resources to those who most value them. It would be surprising if they didn't often take advantage of illegal but easy opportunities to obtain information—for instance by getting at poorly protected voice mail messages. Nobody in the U.S. seems to be very surprised to discover that police officers spend a good deal of  time in donut shops eating free donuts—and providing the shops with free crime prevention.
Obviously this question is related to the previous one. The less surprising what was going on was, the less the reason to report it up the corporate hierarchy to the top. Especially if the people at the top were unlikely to try to stop it and had good reasons to maintain deniability with regard to knowing about it.
And it isn't hard to believe that a cover-up by someone a couple of levels below Murdoch, in a position to get the police to fail to investigate the case more thoroughly, would have included  an internal as well as external cover-up. "Police say nothing that serious happened, a couple of our people pushed too far over the line, being taken care of."
3. How much of what was being done at the News of the World was being done at non-Murdoch papers? Presumably the Murdoch people have been looking for evidence, and if they found any we would have heard about it, or soon will. 
4. Perhaps the hardest things for Murdoch to have been ignorant of were the payouts to victims of hacking to settle their claims, some of which were quite substantial. But out of court settlements, including ones where the payer/potential defendant does not admit guilt and the details of the controversy are kept private, are legal and not that uncommon in civil cases. In criminal cases they are illegal, but hard to prevent if a case raises both civil and criminal issues. For an earlier and pretty high-profile example, consider the Michael Jackson abuse controversy, where, as best I recall, criminal charges got dropped after a civil settlement, presumably because the witnesses were no longer willing to testify.
5. Finally, the paranoid thought—was the pie in the face incident a set-up? It clearly benefited Murdoch, both because it made him the victim and because of his wife's dramatic response. Setting it up would be very risky, since discovery would be a catastrophe. But if the wife just happened to know someone she was sure she could trust to do it and keep his mouth shut ...  .
6. Other thoughts from readers?
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Published on July 20, 2011 11:00

Mailforge v Eudora

As I mentioned in an earlier post (for details read the comment thread), I recently switched my email program from Eudora, which I had used for many years but which is not supported by Lion, the newest version of OSX, to MailForge, a Mozilla email program designed to feel like Eudora. Lion is being released today, so it seems an appropriate time to record the result of the experiment.
When MailForge works it works better than Eudora did, but there are a variety of minor ways in which it doesn't work, although none so far that is a real killer. Having downloaded mail once, it refuses to do it again until I quit and reload the program, at which point it turns out that there is additional mail to be downloaded. I have it set to automatically open a mailbox with new mail in it, but it doesn't. It has an address book to which I can add a group of email addresses with a nickname but as far as I can tell doing so has no effect; the new group does not appear in the address book thereafter.
To be fair, some of these problems might be due to Eudora files that I imported into MailForge; after most of twenty years of copying files from one machine to another, some—I am thinking in particular of some of the filters I looked at—pretty clearly had been corrupted in one way or another. Initially filtering didn't work; after I went through the filters removing the corrupt ones it did. I should do something similar with my address book and see if it fixes that problem.
And, to be fair, when MailForge works it is faster and smoother than Eudora was. With my old Eudora, if I selected a group of emails and hit delete, sometimes they vanished, sometimes I got an error message. With MailForge they vanish. And I am pretty sure that the actual download of the email is faster. 
But I expect that there are more glitches waiting to bite me, that the reports which made me initially unsure whether MailForge was the right solution—roughly speaking that it wasn't yet quite ready for prime time—were correct. Whether I would have been better off with my alternate plan of converting to Thunderbird, a better developed fork off the same open source project but one not designed specifically for Eudora users, I don't know.
Next project: Take a look at Lion and see whether I want the upgrade. If I do, wait a few weeks on general principles and get it. While resisting all temptation to replace my perfectly good, indeed beautiful, elegant, amazingly tiny, MacBook Air, with the faster model Apple has just released—this time with a lighted keyboard.
I don't suppose my son needs a slightly used ultralight to take off to college ...  .
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Published on July 20, 2011 07:56

July 18, 2011

Murdoch, Media, Cops and Politics

In an earlier post, I proposed the current Murdoch flap as a potential miniseries with an ending out of modern fantasy fiction. This time I want to look at it from a more serious point of view, to try to figure out why it happened and what the longer run implications are.
The simple answer is that it happened because Murdoch got unlucky—a number of stories broke involving illegal activities by people in his employ, some of which involved not only lawbreaking but lawbreaking of a particularly offensive sort. Once it was clear he was in trouble, the pressure on people inside and outside his organization to continue covering up other past offenses became less, leading to a potential cascade.
All of that may explain the timing, why it happened when it did. But I suspect there was a deeper cause, one that will be relevant to future political press magnates as well, may even imply that there will be no future press magnates on the scale of Rupert Murdoch. We may be watching the extinction of the last dinosaur.
I start with the question of why Murdoch had as much power as he did, power not only over political actors but, as the evidence strongly suggests, over law enforcement as well.
I do not think the answer is money, although of course he had a lot of money and used it. I am not sure exactly where Murdoch ranked in the list of "X richest men," but he was not in the latest Forbes top twenty. He had more influence than people who were considerably richer than he was. Why?
In the case of influence over politicians, the answer is obvious. Electoral support from a popular newspaper or TV station is worth votes. So is the willingness of major media to slant stories in your favor, to deflect attention from your errors and misdeeds and focus it on your successes while applying the opposite policy to your opponents. Murdoch had something valuable to offer politicians; it is hardly surprising if they were willing to do him favors in exchange.
The same applies to his relations with the police. There is evidence that journalists paid police for information. But even without such payments, media coverage of police actions matters, can matter a lot, to the police. How and whether their actions are covered by the media may determine whether a particular police official looks like Sherlock Holmes or Inspector Clouseau, competent professional or  bumbling amateur. If the police end up killing innocent people, as happens all too often, or failing to catch guilty people or prevent their crimes, how and whether the story gets covered matters.
From the standpoint of economics, all of this is a consequence of rational ignorance. If believing the truth about politicians and police was a matter of great importance to every voter, the voters could presumably find reliable sources of information with which to do it, as they often do find such information with regard to matters controlled by private choice, such as what car to buy or what grocery store has the best prices today. 
But for purposes of public choices, news is mostly entertainment not information—for the good reason that, considered as information, it is not very valuable. Each voter knows that his vote has a trivial effect on electoral outcomes, hence making sure he casts it for the right, or at least less bad, candidate is not worth much. Getting a good story is, often if not always, more important than getting a true story, and under those circumstances the authors of news stories have considerable ability to influence what their readers believe is true.
Which implies that someone with control of a lot of the media can be expected to have quite a lot influence over politicians and law enforcement. Rupert Murdoch did. What changed?
What changed, not in the short run but the long, was the technology of spreading information, specifically the growth of the Internet. I take the role of the Drudge Report in breaking the Monica Lewinsky story as a useful marker. In the old days, judging by what we now know about the sex lives of various past politicians, the major media would have discretely chosen not to cover the case, there woul have been rumors in minor media, and the scandal would never have gotten as far as it did. But as news is increasingly spread through decentralized mechanisms hard for any single actor or organization to control, the power of media organization declines. Even if they still have as many readers as before, there are now other places to read things, making it increasingly difficult for them to control the flow of information.
If I am correct in this analysis—I am not sure I am, but it seems plausible—the timing of the Rupert Murdoch flap was an accident. That it happened was not. The development of alternate sources of public information was gradually weakening Rupert Murdoch's ability to get politicians and law enforcement people to do favors for him in exchange for his doing favors for them, reducing both his political power and his ability to have his people get away with doing illegal and potentially unpopular things in the course of gathering the news. Eventually his power dipped below the level necessary to sustain his policies, and everything blew up.
That, at least, is my current theory.
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Published on July 18, 2011 21:06

July 16, 2011

Witch or Saint: A Story Seed

This morning, for no good reason, I have been thinking of an idea for a story which I am very unlikely to ever write, and it occurred to me that someone else might. 
The setting is the trial of Joan of Arc. The protagonist is one of the English prosecutors, an intelligent, deeply believing catholic clergyman who has the job of proving that Joan is a witch in order that she can be burned at the stake. The problem is that he has concluded that not only is she not a witch, she is a saint, whom God, for his own mysterious reasons, has provided to the wrong side. It follows that if he goes on to carry out his assignment he will be committing a sin for which he will deserve, and get, an eternity in hell. He is a loyal Englishman but the price of loyalty is in this case rather high.
I do not know where the story goes from there. Suicide is a mortal sin, so not a very attractive solution to his problem. The best solution I have thought of so far is for him to report the problem to a superior who takes his secular obligations more seriously and his religious obligations less, make it plain that he intends to go public with his conclusions, go from there to a priest to whom he can make confession, then go home and wait for the assassin to show up.
But there are surely other, and possibly better, ways the plot could go.

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Published on July 16, 2011 08:30

July 15, 2011

In Search of Bogus History

For no particular reason, I was recently thinking about the subject of bogus history—historical "facts" that are very widely believed and flatly false. The example I started with is one of some current political interest, the belief that Herbert Hoover responded to the beginning of the Great Depression by cutting government expenditure. As I pointed out some time back in response to such a claim, it's the precise opposite of what really happened. By the end of his term, Hoover had increased federal expenditure by about 50% in nominal terms, 100% in real terms (i.e. allowing for the fall in prices), 200% measured as a share of national income (which, of course, had fallen). By that standard, he makes Obama and Bush look like skinflints.
For a second and unrelated example, consider the standard story of Columbus—that he heroically stood up for the scientific truth of a spherical earth against a flat earth orthodoxy, sailing west in defiance of warnings that he would fall off the edge. 
That again is almost precisely backwards, since in that controversy Columbus was the one holding out against the (accurate) scientific knowledge of the day. A spherical earth had been the accepted scientific doctrine for well over a thousand years and the Greeks had produced a reasonably accurate estimate of its size. Combine that with what was known about the width of Asia—by the end of the 15th c. quite a lot of people had gotten to China and back—and it was possible to calculate about how far Columbus had to travel to reach "the indies" by sailing west. In fact, he barely made it to the Americas, the width of a continent and the Pacific ocean short of where he claimed to be going. His justification consisted of fudging both numbers—claiming the earth to be much smaller than it was, the width of Asia much longer. Details available from Admiral of the Ocean Sea by Samuel Eliot Morrison. I'm going by memory, but reasonably sure of my facts.
What are other such examples—historical beliefs widely held and demonstrably false? Medieval witch hunts might be a candidate, large scale persecution of witches having started long after the end of the Middle Ages and being based, I think, on beliefs that the medieval church considered heretical. And I gather that the Spanish Inquisition has an undeserved reputation in that context, that being concerned with the serious issue of secret Muslims and Jews it regarded witchcraft accusations as a distraction to be dealt with by applying serious standards of evidence. And, from one of my areas of interest, there is the myth that medieval food was overspiced to hide the taste of spoiled meat. 
But can anyone here offer examples as clear cut as my first two?
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Published on July 15, 2011 05:40

July 14, 2011

The Fall of the House of Murdoch

As anyone who reads UK news and many who do not by now know, there has been an enormous flap over media mogul Robert Murdoch, set off by revelations that people working for one of his newspapers had been acquiring information in ways that were not only illegal but arguably very reprehensible—in one case apparently destroying evidence relevant to a murder investigation in the process of accessing the voicemail of the victim. Results at this point include his shutting down the newspaper in question, cancelling, at least for the moment, his attempt to expand his ownership of an important satellite TV firm, and much else.
And as anyone who interacts much with people from the U.K. probably also knows, Murdoch is not merely a random media mogul. He is viewed by everyone in Britain left of center, and probably some who are not, as the diabolical ally of Margaret Thatcher and several of her successors in their project to destroy Britain. Hence quite a lot public gloating at his difficulties.
Which started me thinking about the miniseries.
The puzzle is why all of this happened when it did. The various misdeeds occurred years ago, and although not all were revealed publicly, enough were to send two of the people responsible to jail. The most offensive—the hacking into a child murder victim's voice mail—only became generally known recently, and seems to have been the spark that set off the current conflagration. But if I read the accounts correctly, pretty much everything important was known to at least some people other than Murdoch's, and in most cases to some law enforcement people—one part of the scandal is the strong suggestion of corruption or incompetence by Scotland Yard. So why now?
The obvious explanation is that it is not an accident. Someone has been plotting against Murdoch, accumulating scraps of evidence, lining up allies, getting everything prepared—and the trap has now been sprung. But who?
There is a simple and obvious answer, although for some reason it does not appear to have occurred to anyone else. Early in Murdoch's rise to power he clashed with, and I gather ultimately defeated, his predecessor, media mogul Robert Maxwell. Men like that hold grudges.
Maxwell was born in 1923, so is not yet ninety, so not too old for political and financial intrigue. It is true that he is reported to have died about twenty years ago. But it was a very convenient time for him to die, since his empire was collapsing around him, so perhaps one ought not to rely too confidently on his being actually dead.
The plot outline for the miniseries is now clear. Robert Maxwell, having faked his own death, has been patiently intriguing for twenty years from the shadow of the grave to get his revenge on the man who supplanted him. The plot has finally reached its culmination, leaving Murdoch struggling for financial and political survival.
Only in the final episode do we discover the real truth about Maxwell. Considered as a plot device, faking your own death is so Twentieth Century. Nowadays we have ... other alternatives.
———

(The assistance of research by posters in the newsgroup alt.fan.cecil-adams, none of whom have any responsibility for my conclusions, gratefully acknowledged.)
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Published on July 14, 2011 19:39

Bogus Links

If you click on "links to this post" at the bottom of my previous post, you get a long list of purported links. So far as I can tell, almost all of them are bogus—they don't actually have anything to do with the post. I don't know if they are due to some sort of glitch in the software that produces the link or if they are an attempt to get traffic to their blog by pretending to connect to mine.
Does anyone here know what is going on? Is there something I can do about it easier than going through the whole list trashing all the bogus ones, which could take quite a while?
For what it is worth, the chief offenders appear to be:
Anti-DismalTruth to PowerMTEF is the Bayesian Heresy

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Published on July 14, 2011 05:32

July 9, 2011

OS Time Machine: A Modest Proposal

The latest version of OSX, due out shortly, does not include Rosetta, software included in past versions to make it possible to run programs written for older versions of the hardware. One result is that Eudora, the Email program which I have been using for almost twenty years and on which I have an enormous collection of past correspondence, will stop working when and if I update the operating system. The obvious solution is to move all of my accumulated email to a more up to date email program, probably Thunderbird. So far my attempts to do so have been unsuccessful—mailboxes copy over, but their content does not. Until I can solve that problem, I do not plan to update to Lion.
There is, however, another and more elegant way in which the problem could be solved. While I cannot run a program that worked under OSX10.2 but broke under 10.3, I can and occasionally do run programs under OS9, using a free third party emulator and Apple system software to which I have a license based on my ownership of the long obsolete machine it originally ran on.
What open source volunteers did for SheepShaver, Apple programmers, with vastly greater resources and unlimited access to Apple's own past software, could surely do better. Emulation is a well developed technology; I can switch among the current version of OSX, either of two versions of Windows (in Parallels), or OS9 in Sheepshaver, without ever having to reboot my machine. It is true that emulation carries some penalty in speed—but I would expect that to be more than outweighed by running software designed for machines of five or ten years ago on current hardware. Maintaining, in effect, multiple copies of Apple's system software on one machine would tie up a certain amount of hard drive storage—but modern machines have very large hard drives.
Apple's current approach to backup is an elegant program named Time Machine. Instead of giving you a  backup of your hard drive as it was at some point in the past, it gives what its name implies, access to the state of your drive as it existed a day ago, a week ago, a month ago. That could be very convenient when you discover that it was last month that you accidentally deleted a document you now need or made changes you would now like to undo. 
What I am proposing is the OS equivalent. Most users most of the time would be running the latest version of the operating system. If I want to run Eudora, I enter OS Time Machine, scroll back to OSX 10.6, and am good to go. If I want to entertain myself with Warlords II, a game that I and other members of my family spent quite a lot of time playing a very long time ago, I scroll back to OS9, perhaps even OS8, and play it. If I want to access documents written with WriteNow, my and family's favorite word processor for many years but now many years unsupported, or on AppleWorks, which at the moment still runs on current software but not very well, those too would be easy options. Emulation is not, of course, perfect; their might be occasional glitches. But it ought to be adequate for most purposes.
And very cool.
When I mentioned the idea to my wife, she pointed out a further advantage. Home computers such as the TRS80 and the Apple II first became widely available more than thirty years ago. That means that at this point, there are quite a lot of people in their fifties, some in their sixties or older, who have been routinely using computers for most of their adult life, not even including those who started out earlier on mainframes. 
As people get older, they tend to become more conservative. At twenty, learning a new program to do something your old program already does,  perhaps do it a little better or with a few more bells and whistles, feels like an adventure, a challenge. At sixty it may feel more like a chore. Once OS Time Machine is incorporated in the Macintosh system software, you never have to do it again. If the new program has new features you want, you buy it and learn it. If the advantages of the new are outweighed by the very large advantage of software you have been using for years and are intimately familiar with, or if the changes actually make the new software less suitable for your purposes than the old, you don't. I expect there are already enough cybergeezers to make up a significant market niche, and the number can only increase.
Over time, OS Time Machine could introduce additional features. Double click on a program that no longer runs on the latest version of the OS, and it automatically shifts you back to the most recent version under which it did run before loading the program.
So far as I can see, the proposal is technically doable, although it would of course cost Apple something in programmer time and other expenses. The strongest argument I can see against it is that it would increase the complexity of the Macintosh software universe by keeping more old programs in use, programs that users might, perhaps unreasonably, expect Apple itself to support, a cost that might more than outweigh the benefits.
But I hope not.
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Published on July 09, 2011 07:18

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