Sunday, April 29, 2018

Palpable Energy

The ancient freezer's thick walls and door--
yes, they don't make 'em like that anymore.
I stopped by St. Pius Catholic Church to pick up the brown-bag lunches. Rain or shine, St. Pius members spend Saturday mornings assembling 100 brown bags for the people who come to Sandwiches on Sunday.

For 15 years churches take turns making hot lunches for all comers at the community center on Sunday; the brown bags are handed to diners as they exit.

Like last year, it was Children's Day at the community center. The parking lot and gates were blocked off, but the City staff let us in around the back.

We fed about 50 people today and thanked the City staff for their help. At a very basic level this must be what is meant by public-private partnerships.

At the Children's Day celebration the energy and bonhomie were palpable.

Saturday, April 28, 2018

Its Name Was Its Destiny

In news that you may have missed, one planet in our solar system is covered with sewer gas clouds. Of course, that planet is Uranus.
a study in Nature Astronomy reveal[ed] that the cloud tops of Uranus are made principally of hydrogen sulfide, the gas that is principally responsible for the foul smell of rotten eggs and, yes, human flatulence.
Some mainstream publications described the finding more crudely.

I like it when they use accessible language.

Friday, April 27, 2018

The Ear Knows

(Economist image)
One inviolate rule of grammar has been the prohibition of split infinitives. The Economist's new style guide proclaims a new rule: [bold added]
to boldly go where grammarians have feared to tread....Infinitives may be split.
The old rule hasn't been around that long, however. The earliest written reference is attributed to writer John Comly, who declared in 1803:
An adverb should not be placed between a verb of the infinitive mood and the preposition ‘to’ which governs it.
Once every three or four months your humble blogger is compelled to rephrase a split infinitive because, well, it's against the rule. But the fix often butchers the meaning, not to mention the rhythm of the phrase:
But the lazy remedy, merely to move a modifier one word left or right, is worse. Constantly to do this results in an odd, jarring rhythm. (Robert Burns wrote “to nobly stem tyrannic pride” because it has a pleasingly punchy beat to it.) And the “move it left or right” manoeuvre often means that the modifier ends up modifying the wrong thing, or creating an ambiguity.
(Rephrasing Star Trek's "to boldly go" as the discordant "boldly to go" or almost-the-same-but-not-quite "to go boldly" illustrates the problem.)

The ear knows.

Thursday, April 26, 2018

That Paradisiacal Day

New gene-based treatments for cancer show immense promise----and have immense costs:
Novartis AG listed its newly approved cell therapy for cancer at $475,000, while Gilead Sciences Inc. priced its rival drug at $373,000.

But the price of the drugs is just the beginning, hospitals and insurers say. Administering these therapies can add hundreds of thousands of dollars to the tab, including lengthy hospital stays and use of other services and medicines.
(WSJ graphic)
The Wall Street Journal estimates that the full cost of these state-of-the-art treatments ranges between $464,000 and $968,000. For rich people and their families there's little question that most, if not all, will opt for the treatment even if success is not guaranteed.

However, many cancer patients either won't have the money or will choose not to diminish their estate by up to a million dollars to extend their lives for an uncertain period.

Cancer newly afflicts over a million Americans each year:
In 2018, an estimated 1,735,350 new cases of cancer will be diagnosed in the United States and 609,640 people will die from the disease.
It will be years before the costs will have come down sufficiently to make a dent in the number of cancer deaths. Until then, dear reader, diet, exercise, and get regular check-ups so that you will make it to that paradisiacal day.

Wednesday, April 25, 2018

One Gig Politician

Tending to a stabbing victim after the sweep (Chron photo)
When an organization needs someone to shake things up, it often calls in an outsider (any allusion to national politics is imagined by you, dear reader). What can help the shaking is if the outsider has no interest in staying on, i.e., he or she wants to get in, accomplish concrete goals, then get out.

Interim SF Mayor Mark Farrell (whom I underestimated in January) is ridding the Mission District of homeless encampments . [bold added]
An army of cleaners, counselors and police descended upon the Mission District at dawn Wednesday — and by lunchtime, they had rendered the gentrifying district entirely free of homeless tent camps for the first time in recent memory.

And with that, San Francisco’s mayor had fired the first shot in what he said will be unending salvos of enforcement efforts in the coming weeks to try to rid city streets of tent encampments.
(According to the article, last summer the area had 287 tents.) I applaud Mark Farrell's determination. And he says he's not running for Mayor in 2018 or 2019.
“This is just the beginning,” Farrell said. “Tents should not be part of the permanent landscape in San Francisco. If, at the end of the day, a person resists everything we offer them in counseling, housing and other services, they shouldn’t be allowed to keep tents on the sidewalk.

“Maybe it takes a mayor not running for office to do it, but we need to clean up our streets throughout the city. We haven’t been pushing hard enough. We will now.”

Making this push, he said, is just part of what he characterized as a “sprint to the finish” of his short term as mayor, before someone wins June’s special election to fill out the late Mayor Ed Lee’s term. It is not, he insisted, part of positioning for a full-term run for mayor in 2019 — which he has repeatedly said he will not do.
Silicon Valley discovered that sometimes projects get done quicker and better in the gig economy. Maybe the same is true for gig politicians.

Tuesday, April 24, 2018

Heading for the Exits

The 1978 thriller is about a terrorist threat
to the San Andreas fault.
Economists Arthur Laffer and Stephen Moore predict an acceleration of out-migration from high-tax blue states: [bold added]
In the years to come, millions of people, thousands of businesses, and tens of billions of dollars of net income will flee high-tax blue states for low-tax red states. This migration has been happening for years. But the Trump tax bill’s cap on the deduction for state and local taxes, or SALT, will accelerate the pace. The losers will be most of the Northeast, along with California. The winners are likely to be states like Arizona, Nevada, Tennessee, Texas and Utah.
We have waved farewell to dozens of friends and co-workers who have cashed out of their Bay Area homes and moved to warmer climes where their retirement dollars go much farther. The "goodbye, California" phenomenon has become marked.

As the writers note, the Tax Cut and Jobs Act will increase the exodus:
Now that the SALT subsidy is gone, how bad will it get for high-tax blue states? Very bad. We estimate, based on the historical relationship between tax rates and migration patterns, that the pace of out-migration from California and New York will soon double—with about 800,000 net out-migrants each of the next three years. Our calculations suggest that Connecticut, New Jersey and Minnesota combined will hemorrhage another roughly 500,000 people in the same period.
The slight silver lining is that people who want to buy a home should see more supply as emigrants list their properties. Also, the TCJA drastically reduces the income tax subsidy on interest and property taxes for high-end homes, leading to less demand.

More supply and less demand? Even non-economists can predict that today's Chronicle headline will not be repeated much longer: Bay Area home prices soar to new record

Monday, April 23, 2018

A Short History of Liberalism

The Economist produces an entertaining short history of liberalism, What Have Liberals Ever Done for Us?

If liberals were true to their founding principles, I would happily join their ranks.

Note: transcript below the fold.

Sunday, April 22, 2018

Shepherd or Sheep

On Sunday both father and baby daughter were baptized. I had attended hundreds of baptisms but had never seen that pairing before.

It was also Good Shepherd Sunday, in which the Gospel reading was John 10 ("Jesus said, 'I am the good shepherd. The good shepherd lays down his life for the sheep.'") Also read, of course, was Psalm 23 ("The Lord is my Shepherd").

During the sermon the priest asked if we were shepherd or sheep. (Sheep are followers, and it's not an insult to be a follower of Christ, i.e., a sheep led by a Shepherd.) A parishioner from New Zealand rose to announce that we were omitting a crucial component of the sheep-shepherd dynamic, namely, the sheepdog. Sheepdogs bring in a whole new set of metaphors and images. My head began to hurt. Sometimes one can carry on a metaphor too long.

Still unsure of whether I was a sheep or shepherd or sheepdog, I made my way to the Parish Hall for the post-Baptism feast. Filled with food and happiness, I bleated my approval.

Saturday, April 21, 2018

You Can Afford It

When average, middle-class houses in our town began selling for a cool $1 million, we thought insanity had gripped the real-estate market. The insanity has doubled.

The 4-bedroom 1,950 square-foot house (pictured) was listed for $1.7 million and sold for $2.16 million.

It doesn't happen often, but we've seen Peninsula home prices fall at least twice over the past 40 years.

When a market is this heated, it's possible we've reached a market blowoff, soon to be followed by a fall.

Tax Commentary:
Those of us who have lived in our homes for more than 20 years are sitting on capital gains larger than the $250,000/$500,000 sale-of-home income tax exclusion. (Yes, few feel sorry for people with these problems.)

While it's generally sound policy to ignore the effect of income taxes in sell decisions, taxes in this case are large enough to keep some older homes off the market. For example, if married taxpayers have an after-exclusion gain of $1.5 million on the sale of their home, Federal and California income taxes could be about $400,000, adjusted by what else is going on in their returns.

It would be much better for tax-planning purposes to leave the older home in the estate and have it stepped up to fair market value after the taxpayers' death. (Under current law there will be no estate-tax consequence if the couple dies with less than $23.6 million of assets. I'm leaving out complexity--see your tax lawyer!). The beneficiaries, i.e., children, grandchildren, etc. can then sell the house with little or no income taxes due.

There are financial structures (reverse mortgages, installment sales, leases) that allow the homeowners to receive cash and pay the income tax on their homes during their lifetime. There are costs and risks associated with these maneuvers, however. As I said above, see your tax lawyer! You can afford it.

Friday, April 20, 2018

Stopping Things From Getting Worse

Helpful for me, this time
If it seems to be a "normal" cold or flu I don't like to go to the doctor. She'll just tell me to get bed rest and drink plenty of fluids.

In this instance, after two weeks of coughing and mucus (too much information?)--but without a fever--I finally went to see her. She prescribed an antibiotic. After 21 days I finally feel better.

Older friends and relatives have put off seeing a doctor until their condition became much worse than it had to be. I have to face the fact that now I'm one of those older guys.

It's not about being hypochondriacal, just being realistic about my age. It's not about not being able to tough it out; it's stopping things from getting worse.

Thursday, April 19, 2018

Villain or Hero: It's Up To You

Philip Zimbardo today (Chron photo)
The study is so old that it was discussed in Psych 101 when I was in college. The study had so great an impact that it is still referenced today in popular, as well as professional, literature.

Philip Zimbardo's 1971 Stanford Prison Experiment assigned students the roles of either prison guard or inmate. The two-week experiment was halted after six days due to the sadistic behavior of the guards and the traumatic effects on the prisoners. In a short period of time Dr. Zimbardo showed that even intelligent, rational students of supposedly good character could be induced to behave very badly.

What made him famous is not how he wishes to be remembered. Philip Zimbardo has spent the past decade studying heroism science. [bold added]
The key to “awakening everyone’s heroic instincts,” Zimbardo said, is twofold: first, redefining who a hero is. “We must debunk the myth of a ‘heroic elect,’ ” he said, and instead “promote the idea that heroes are ordinary people who take extraordinary action.”

Second, it’s about having a “growth mind-set” — a popular psychology buzz phrase coined by Zimbardo’s famous colleague and former student, Stanford psychologist Carol Dweck, for one’s belief that our abilities and aptitudes aren’t static but can be developed over time. “Heroism begins in the mind, with thinking of yourself as a hero,” Zimbardo said.
Philip Zimbardo forced us to look at unsavory truths. Now he is showing how to overcome those tendencies and be better people. May we be as driven and productive when we are 85.

Wednesday, April 18, 2018

Tax Day, 2018

The blog post from six years ago applies word-for-word, with just the reference to the years needing updating. Pathetic.
On many April 14th's we've burnt the midnight oil preparing our tax returns, and this year is no exception. For the 2017 tax return we're still awaiting a Form K-1 from a pass-through entity and will file Federal Form 4868 that will extend the deadline to October 15th.

Filing an extension postpones the need for doing some of the detailed work, but the lion's share still has to be done to determine whether and how much to pay with extension Form 4868. We also need to take a quick look at 2018 because estimated taxes are due the same day.

Thanks to April 15th falling on a Sunday, and Emancipation Day (April 16th) being a public holiday in the District of Columbia, tax-filers have a couple of days grace to work out the numbers. Too bad for residents of DC, though: now that everyone else in America has discovered that DC's special status allows everyone to file and pay one day later every six years, DC will never be granted Statehood. But don't feel bad for them: booming job and housing markets, as well as very low unemployment, ease the pain.

Tuesday, April 17, 2018

First Among Ladies

Two future Presidents and one First Lady, 1947 (Time)
Barbara Bush was the last of the "traditional" First Ladies, that is, she didn't have a career outside the home. Neither did she care to look the part of a lawyer or a librarian--in fact she "famously wore fake pearls and a $29 pair of shoes to her husband's Presidential inauguration" in 1989.

Barbara Pierce Bush was the daughter of Marvin Pierce, the publisher of women's magazines Redbook and McCall's, each a big deal pre-Internet. Her ancestor was Thomas Pierce, who was a resident of Charleston, MA in 1634 (Thomas wasn't on the Mayflower).

She was so blue-blooded that looking like a blue-blood didn't matter to her at all.


Monday, April 16, 2018

Counselor, Heed Thyself

A friend with whom I have some business dealings gave me the bad news; he halted chemotherapy because the treatments haven't worked. No, the doctors haven't yet given a prognosis.

He wanted to talk about business. Okay.

He will call the lawyer. He'll forward the data to the tax accountant, after which I'll handle discussions. For computer issues he will talk to the IT guy. My friend was filling his calendar with detail.

After he was done talking, I assured him that I'll take care of any administrative matters that he's unable to finish.

Then I said, please think about saying things that you've always meant to say to your children and grandchildren. That's what's important. The legal and accounting stuff I can handle.

He got emotional, and we hung up a few seconds later.

Another way to show your love
I don't regret giving him advice, but I do feel guilty because I have done little to prepare for my own demise. Financial affairs are in minimally adequate shape---there's a will, a trust, and named beneficiaries where needed---but there's nothing about who I was, what I've learned, my dreams and regrets, or my hopes for those who will come after me. If they never met me, they won't know me at all.

Now that I'm mostly retired I have time to work on completing these important but (so far) not urgent tasks. As my friend showed, they may be more urgent than I think.

Note: the NIH's National Cancer Institute ( has published an informative booklet for friends and family: When Someone You Love Has Advanced Cancer.

Sunday, April 15, 2018

C. S. Lewis

(Image from NPR-UK)
Many English-speaking Christians in the quest to understand their faith eventually find their way to the writings of C.S. Lewis, best known as the author of the Chronicles of Narnia fantasy series. Lewis is also a widely read Christian apologist (an apologist is someone who defends a philosophical doctrine, not someone asking forgiveness), penning dozens of essays and allegorical works that attempt to elucidate Christianity.

His ruminations concerning the nature of man, sin, and morality might seem a little circumlocutious in the age of Twitter but are well worth a read for those who wish to advocate their faith with more than pithy slogans and bon mots.

C.S. Lewis is distinguished in another way; like millions of young men he experienced the horrors of World War I, yet he was among the few who turned toward faith instead of succumbing to disillusionment and anomie.
It was a terrible war, the most brutal and destructive conflict the world had ever seen...On average, roughly 6,000 men were killed every day of the war. Before it was over, 9.5 million soldiers lay dead, millions more wounded. About half of the British soldiers fighting in France became a casualty of some sort. Lewis lost most of his closest friends in the final year of the conflict.

Yet the war and its aftermath seem to have stirred Lewis’s spiritual longings. On a train ride to a London hospital to recover from his wounds, he was seized by a sense of the transcendent as he beheld the natural beauty of the English countryside.
After an esteemed career of teaching at Oxford and Cambridge he died a week shy of his 65th birthday on November 22, 1963, his death completely overshadowed by JFK's assassination. C.S. Lewis, who said that what we deem important in this life is really unimportant---and vice versa---would have appreciated the irony.

Saturday, April 14, 2018

Deconflicting With the Russians, Not So His Critics

The April 7th Syrian attack on their own people (Xinhua)
Our reality-show President--and I mean that in the nicest way--had to show that he was different from his predecessor. After repeated warnings to the Syrians against the use of chemical weapons, the U.S. was boxed in a corner. It had to respond to the April 7th attack that killed 40-70 non-combatants (let's discount the argument that it was a false flag operation, i.e., the Syrian government didn't do it, which both Russia and Syria claim).

The response had to be meaningful "without triggering a broader conflict with Russia and Iran." [bold added]
For the U.S. and its allies, the solution was to strike three targets, including a scientific research center in Damascus and a weapons-storage site west of Homs where no Russians were believed to be present...

The U.S. didn’t notify the Russians about the targets, but it reduced the risk of a clash with the Russian air force by letting their commanders know what airspace American and allied forces would be using—a process the Pentagon dubs “deconfliction."

The effort to avoid a clash with Russian forces appeared to succeed. The Pentagon said it didn’t detect the firing of any Russian surface-to-air missiles, though Syrian surface-to-air missile batteries were fired.

Still, the limited nature of the military intervention is likely to yield only limited gains, experts said.
Mr. Trump has many in Washington believing that he is crazy because of his hyperbolic tweets, criticism of his own staff, personnel turnover, and reaction to seemingly trivial events and statements.

Yet he backs off from crossing bright red lines, for example, when a Federal judge stays an Executive order Mr. Trump abides the stay while at the same time issuing fierce, often personal, criticism of the judge (Andrew Jackson famously defied Supreme Court rulings, an action Mr. Trump has not yet emulated).

Not attacking the Russians is another red line he didn't cross.

Note that after the joint operation with the U.K. and France the President composed a tweet meant to drive his critics into a frenzy.

Friday, April 13, 2018

War Finds You

Missiles over Damascus (AP via Chronicle)
President Trump announced airstrikes against Syria today,
a reprisal for an attack last week that killed at least 43 civilians and injured hundreds more.

The decision to strike was aimed at cutting off the production and use of chemical weapons in the country, President Donald Trump said at the White House on Friday night.
The Economist headline from two weeks ago, Why Donald Trump is unlikely to start a catastrophic conflict, is not greatly reassuring, but we'll take it.
it is still hard to imagine Mr Trump starting a war unless he thought he would gain from it personally, and he would not gain from a bloodbath.
Faint praise.

Thursday, April 12, 2018

Pardon My Scooter

Two Bird scooters parked on Market (Chronicle photo)
Another headline that distinguishes San Francisco from other American cities:

As complaints roll in, San Francisco considers action over wave of motorized scooters
hundreds of motorized stand-up scooters meant to be shared for short rides....appeared suddenly, and since their arrival, they’ve drawn praise from early users and a flood of complaints from people who don’t like one of the slender two-wheelers’ biggest features: They can be parked anywhere.
Three scooter-sharing startups are testing their product on the streets of San Francisco:
Three companies — LimeBike, based in San Mateo; Bird Rides, headquartered in Venice (Los Angeles County); and Spin, located in San Francisco — own the scooters and lease them to people who unlock them with a mobile phone app. For now, all three charge the same rates: a flat $1 fee to unlock the scooter plus 15 cents per minute of use.

The companies scatter the fully charged scooters around the city at locations where they believe they’ll be used. The scooters are popular with people trying to get from BART to work, heading to a meeting a few blocks away, or visiting the city and observing the sights.
1) Positive: San Francisco is a good place to test the idea. Thousands of workers take BART, Cal-train, or a bus into the City but must transfer to Muni for the last leg. Compared to Muni's $2.50 adult fare, the scooter rental is a bargain.
2) Positive: Bay Area workers are accustomed to trying new technology and new business models.
3) Negative: Unable to do anything about the homeless, residents and workers are likely redirecting some of their frustration to the scooters parked all over the sidewalks.
4) Negative: This business seems to have limited upside. A new scooter costs around $300, and a regular user would probably buy a foldable version that he can take up to the office. People traveling in groups are unlikely to be frequent customers; neither are people over 50.

Wednesday, April 11, 2018

Needed: Extra Checks and Pens

Humorist Joe Queenan makes fun of an IRS instruction (see image right):
So if you owe more than $100 million in taxes, the IRS says to send in two or more checks, each for less than $100 million. Otherwise they’re going to return your check uncashed.

Like a lot of self-employed people, I lose track of my income. I earn an extra $45 million here, an extra $72 million there, but I forget to write it down. Then, come Tax Day: kerpowee!!
John Paulson supported Donald Trump, but the new
tax bill didn't help him at all. (UPI photo)
Joe wouldn't be so quick with his mockery if he knew that there are real people who are suffering with this problem.
John Paulson won fame after he made one of the greatest financial bets of all time. What comes next? One of the largest-ever personal tax bills.

By April 17, the hedge-fund manager must make federal and state tax payments of about $1 billion, on top of roughly $500 million in taxes he paid late last year, said people close to the firm.
Mr Paulson made $billions during the subprime crisis of 2008-2009 but has been able to defer most of the taxes to this year. Meanwhile his fortunes have turned.
he’s also not as flush as the heady days of 2008. In fact, after a string of poor results, a bad bet on pharmaceutical stocks and client defections, Mr. Paulson has been selling various investments to cover the bill. He’s also in the process of cutting costs and shrinking his firm, including laying off senior traders.

Seven years ago, Mr. Paulson was managing $38 billion and was firmly among Wall Street’s elite. Today, Paulson & Co. is managing under $9 billion—most of it Mr. Paulson’s own assets, said the people close to the firm. That’s one reason this particular IRS deadline stings.
Isn't it always the case? You have to cough up $1 billion at the most inconvenient time.

Meanwhile Mr. Paulson should make sure he's got extra checks and pens on hand.

Tuesday, April 10, 2018

The Challenge Will be to Keep it Funny

Roseanne's 2018 cast (eonline)
Like most subjects these days the revival of Roseanne was forced Manichean-ly (maniacally?) through the prism of whether it was pro- or anti-Trump. (Star Roseanne Barr is one of the few celebrities who had spoken favorably about the President.)

The pilot episode attracted 18.4 million viewers, which enabled ABC to win the week. As expected, there were political jokes, but unlike other heavy-handed comedies the pro-Trump Roseanne character gave as good as she got.

Two weeks later the hoopla has diminished. Viewership dropped to 13.5 million, still #1 and still considered a ratings hit (it's already been renewed for next season). The apolitical plot concerned whether Roseanne's older daughter would become a surrogate mother and earn a badly needed $50,000.

I'm glad that Roseanne isn't scripted like All in the Family, which had a usually-hilarious debate on the controversial topic of the week. The show is like All in The Family, though, in that it's centered on the lives of a white working class family whose characters struggle paycheck to paycheck. There's a laugh a minute, but pathos lurks in the background.

I suspect that the show will end up being a richly textured look at working-class America, maybe with a little politics to fire up viewers occasionally. The challenge will be to keep it funny.

Monday, April 09, 2018

Where Everyone Knows Your Name

Chelsea Square Diner (Economist photo)
Sitting alone in a late-night diner is a common, uniquely American experience. At some point in their lives everyone has made their way to the coffee-stained counters and booths that once reeked of tobacco. Everyone has been a business traveler on a budget, a swing-shifter on the way home, or a lonely single in need of some human contact.

Economist writer Tara Burton sat in one of these American (actually, New York) institutions for a day and chronicled the comings-and-goings of its denizens, most of whom the staff know by name.

Though the diners are slowly winking out of existence ("Ten years ago there were 1,000 diners in New York. Now there are fewer than 400") they meet a deeply felt need for enough people that some will be around for a long time. As Lynn, the producer of classical CD's, reflects, “I spend more time here than with my own family.” .

She is not alone.

Edward Hopper, Nighthawks (1942), Art Institute of Chicago

Sunday, April 08, 2018

Quiet Evening

The lagoon at night (Flickr-A. Tsai)
Lately I've been taking nighttime strolls. After 9 p.m the traffic is almost non-existent--as is crime, by the way--in our Peninsula town-cum-island. Initially I loaded my iPhone with podcasts to pass the time but have recently preferred light jazz, classical, or no sound at all.

The rhythms of the walk, and the sounds of breathing, elicit clarity.

Astrophysicist Alan Lightman also wanders about Pole Island, Maine, "searching for stars".
“If one listens,” he tells us, “there’s always music on this island. The waves rolling into the shore make cascades of sound, sometimes regular rhythms and sometimes duples and triples and offbeat syncopations—all set against the arpeggios and glissandos of the birds.”
Mr. Lightman has his feet on the ground and cannot bring himself to conclude that God exists absent hard evidence. Nevertheless, he laments “I wish I believed.” He might be surprised to learn how often believers say the same thing.

Saturday, April 07, 2018

Jerry Brown Turns 80

Jerry Brown at 41
In a mostly overlooked milestone, California Governor Jerry Brown turned 80 today. [bold added]
The leader of one of the world’s largest economies will become an octogenarian, the oldest governor in the land and the longest-serving governor of California.
I liked him during his first go-round as governor during the 1970's. He espoused a then-unusual combination of staunch fiscal conservatism and liberal social causes like environmentalism and gay rights. He mastered the symbolism of politics, eschewing the governor's mansion for a small apartment and a chauffeured limo for his own Plymouth sedan. (It didn't hurt that he dated rock superstar Linda Ronstadt while in office.)

In the past year California has become the vanguard of the so-called "cold civil war" being waged against the Trump Administration, with Jerry Brown as its leader. If anything, Jerry Brown at 80 has become even more outspoken than Jerry Brown at 40.

I disagree with many of his policies, especially high-speed rail, but I wish him a long, healthy, and fruitful life, tilting for windmills.

Friday, April 06, 2018

Tariffs: Never say Never

Conventional wisdom: tariffs hurt those imposing them.
What if someone violates a written agreement? The dispute-resolution process is a matter of common sense. First, the parties should talk to each other. Perhaps one wasn't aware that it had breached the agreement, or the other mistook a permissible act for a violation. If talks fail, the lawyers get involved, with a mixture of threats and offers to renegotiate. Finally, the courts decide.

But what if there are no courts (with the authority to impose their decision)? Then the parties must come up with a solution that has a reasonable chance of being adhered to voluntarily.

Such is the situation that the United States is facing vis-à-vis China. It's very clear that China has materially violated the WTO agreement it signed 17 years ago.
What is needed is a change in Chinese behavior to conform to the rules Beijing accepted when it joined the World Trade Organization in 2001.

The most important issue is the demand that U.S. companies transfer their technology to Chinese counterparts as a condition of doing business in China. American businesses that want to produce or sell in China are often required to enter into a joint venture with a Chinese firm that then has access to U.S. technology....

The Chinese government acknowledges that WTO rules forbid making the transfer of technology a condition for access to a nation’s economy. But it argues that the practice is “voluntary” because American firms aren’t forced to do business in China—their other option is to stay out of the country. American companies and officials say it’s a form of extortion because U.S. firms should have access to the Chinese market, as they do to markets in Europe and elsewhere, without losing their intellectual property....

Other trade issues should be easy to resolve. The U.S. would like China to reduce its excess capacity in steel and other industries and to stop selling the resulting products on the global market at below cost, in violation of WTO rules. Mr. Trump’s tariffs on steel are a way of putting extra pressure on China to accelerate its reduction of excess capacity.
President Trump's imposition of tariffs and China's retaliatory response have raised the specter of a trade war that has spooked financial markets.

In high-school American history we had it drummed into our skulls that the Smoot-Hawley Tariff Act of 1930 brought on the Great Depression. Free-trade-good-tariffs-bad is more widely accepted than motherhood and apple pie.

1) How come the Chinese don't buy into the free-trade mantra, i.e., they are so stupid that they impose tariffs and other tariff-like barriers to imports? Don't the Chinese see that's why they [sarc!] have been so unsuccessful?
2) Assuming talks have failed to change Chinese behavior, what are steps, preferable to tariffs, that the U.S. could take?

By the way I still am hopeful that the skirmish over tariffs is part of the overall strategy to denuclearize North Korea.

Thursday, April 05, 2018

Naming the Players

A contest easier to understand and more quickly resolved
Economist Tyler Cowen opined (see yesterday's comment) that Washington, DC, and the San Francisco Bay Area are "power centers" on a collision course. This is an example of the "coming clash of the titans" (CCOT) type of prediction.

One sees the CCOT most commonly in sports; for example, Las Vegas bookmakers favor the Houston Astros to meet the New York Yankees in the 2018 World Series, though neither team, at 5-1 odds, can be considered a heavy favorite. A better sports example is professional basketball, where most experts thought a fourth straight championship match-up between the Golden State Warriors and the Cleveland Cavaliers was inevitable; both teams have performed worse than expected this year, and a Warriors-Cavaliers Finals is far from assured.

In the business world your humble blogger recalls 1970's newspaper and magazine features about the looming battle between AT&T and IBM, as communications and computers began to converge. Both companies were so dominant in their respective fields that the Justice Department pursued antitrust actions against both. AT&T was broken up in 1982, and IBM, which introduced the PC in 1981, lost control of its invention to Microsoft and Intel. Today Microsoft and Intel are each more valuable than AT&T or IBM, and the clash of the 1970s-tech titans never occurred.

In 1835 Alexis de Tocqueville foresaw that Russia and the United States would battle for world supremacy.
Their starting-point is different, and their courses are not the same; yet each of them seems marked out by the will of Heaven to sway the destinies of half the globe.
For half a century de Tocqueville's prediction was spectacularly true, though today the principal rivalry seems to be between America and China.

Picking #1 is hard enough, picking both #1 and #2 is tougher.

Wednesday, April 04, 2018

SF vs DC

Economist Tyler Cowen makes an observation, then a prediction.

The observation: [bold added]
today’s America has two fundamental and really quite different cultural and intellectual centers: Washington and its environs, and the Bay Area (including Silicon Valley, San Francisco and, if I may cheat a little, Seattle).
His prediction is conflict:
To date, these two new cultural and intellectual centers have proceeded on largely separate tracks, each with its own strengths and weaknesses, ignoring each other as much as possible....

But that won’t be the case going forward. The law-making and regulatory state will expand to cover more of tech, and tech has scaled so effectively that its products -- such as autonomous cars or the possible ability to influence elections -- are running into more legal and political issues.
Professor Cowen, given the space constraints of a newspaper column, had to make his case for American bi-polarity without delving into too much detail. History has shown that there are always tensions between power centers, be it New York v. Washington, San Francisco v. Washington, or even San Francisco v. Los Angeles.

In his particular example there are also strong ideological commonalities. The Bay Area supports powerful government, as long as the latter advocates, for example, the climate-change agenda, diversity of race and sex (but not ideology), gun confiscation, and immigration non-enforcement. During the Obama years big tech freely (except possibly for Apple) turned over the tools of the surveillance state to Washington ostensibly for security reasons, with the furtherance of the progressive agenda as an ancillary benefit.

If Tyler Cowen is right, the looming battle between SF and DC will be a "rude awakening," but IMHO the American people will have more to lose if there is no conflict at all.

Tuesday, April 03, 2018

Don't Be Shocked

(Image from Financial Review)
A wealth shock in your 50's can shorten your life, according to a recent study: [bold added]
Overall, wealth shock was tied with a 50 percent greater risk of dying....About 1 in 4 people in the study had a wealth shock, which researchers defined as a loss of 75 percent or more in net worth over two years. The average loss was about $100,000.
A wealth shock can arise from different, albeit related, reasons, for example, job loss, a family breakup, foreclosure, or illness. The undaunted may try to get a job and work their way out of the financial hole, but there are medical perils from working, too.

Stanford professor Jeffrey Pfeffer says "The Workplace Is Killing People and Nobody Cares". His argument is simple:
1) "A large fraction — some estimates are 75 percent — of the disease burden in the U.S. is from chronic diseases."
2) "diabetes, cardiovascular disease and metabolic syndrome — and many health-relevant individual behaviors such as overeating and underexercising and drug and alcohol abuse — come from stress.'
3) "the biggest source of stress is the workplace."
Dr. Pfeffer (hey, it was there, so I took it) cautions that in working long hours "we have come to normalize the unacceptable."

The only easy paths to wealth and a stress-free life, IMHO, are the time-honored: being born, or marrying, into riches.

The rest of us need to save our pennies from an early age and live a lifestyle below our income. Social status may suffer, but there will be a cushion that will help weather life's shocks.

Monday, April 02, 2018

Be Quiet (for Your Own Good), Mr. President

Donald Trump and Willie Brown, among others, in a
1996 episode of "Suddenly Susan" (Getty Images)
Former SF Mayor and California Assembly Speaker Willie Brown has advice for Donald Trump: [bold added]
Just when you think all is quiet, he erupts. Just when you think he is going to erupt, he goes quiet.

Take the self-control he’s shown in the aftermath of porn star Stormy Daniels’ “60 Minutes” interview. If he would conduct himself in that fashion on other matters, he’d be well on his way to re-election.

His reaction was perfect: Stone silence. Not a single tweet.

For once, he’s figured out that the story will fade away if he just shuts up.
In recent years Willie Brown has been more of an analyst than a partisan.

Sunday, April 01, 2018

Easter, 8 AM

White is the liturgical color of Easter.
At the 8 AM service the preacher said something that I hadn't realized in over 50 (cough) years of listening to Easter sermons: "It begins and ends in the garden." The beginning, the Fall, occurred in the Garden of Eden. The betrayal, the night before the Crucifixion, occured in the Garden of Gethsemane. And the empty tomb--the symbol of the fear, mystery, and wonder of Christianity--was in the midst of a garden.
Abstention is out, sugar is in.
He asked her, “Woman, why are you crying? Who is it you are looking for?” Thinking he was the gardener, she said, “Sir, if you have carried him away, tell me where you have put him, and I will get him.” Jesus said to her, “Mary.” She turned toward him and cried out in Aramaic, “Rabboni!” (which means “Teacher”).----John 20:15-16
Happy Easter!