The politics of tax policy

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This NY Times article reviews the growing consensus within the Bush Administration that something needs to be done with the federal government’s absurdly complex and special interest-riddled income tax system. There is no real economic analysis of the alternatives here, just a review of the political implications of such a movement. The most hopeful quote in the article comes from a Democrat:

“It strikes me that there’s consensus in the country, and hopefully in Washington, that the tax system is too complex, that it’s full of loopholes that are exploited by special interests and that we need to simplify them,” said Senator-elect Barack Obama of Illinois, a Democrat who won easy election to an open seat.
Mr. Obama, speaking on “This Week” on ABC, said, “If we can arrive at a tax simplification agenda that is not resulting in a shift toward a more regressive tax system, but is instead genuinely making it simpler for ordinary Americans to file their tax returns without a lot of paperwork and gobbledygook, then I think that’s something we could work together on.”

Amen.

Trying to avoid living like a poor student at 70

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Ben Stein writes this personal finance op-ed for the NY Sunday Times in which he illuminates the mounting retirement finance problem that is confronting the Baby Boomer generation:

This is the bore of the gun pointed right between the eyes of the baby boomers. With the low interest rates of today and tomorrow, with the lavish way we have come to expect to live, with a stock market that is sluggish, let us say, what on earth are we going to do about retirement?
Unfortunately, this is not just a paranoid fantasy about my own life. This is going to be the reality of millions, maybe tens of millions of baby boomers unless they get their backsides into gear and make some serious changes in their lives.
You can look at it anecdotally, or you can look at it statistically. Anecdotally: If you are a woman in your mid-50’s living on a salary of $150,000 a year, and if you wish to maintain your living standard when you retire at age 65, you will need about $200,000 a year to live on, assuming inflation raises prices by 3 percent a year. If you assume you will get about $15,000 a year from Social Security, you will need about another $185,000 a year. To have that much income with today’s interest rates, you will probably need about $4.6 million in the bank. Do you have it?
Or, we can look at it statistically. About 77 million baby boomers are racing toward retirement. That’s people roughly between 40 and 60 years old. More than 34 percent of the ones over 55 report having financial savings (not counting their home equity) of less than $50,000. Only 21 percent have more than $100,000. The average Social Security benefit as of 2003 was only $895 a month. Only roughly one in eight workers as of 2001 had a pension with a defined benefit (as opposed to a defined contribution).
We can look at it another way. If you had to retire in 10 years with (now let’s be really generous here) twice the savings you now have, and would receive interest of 4 percent on it, how close would you be to having a living income, i.e. an income you could live on at your present style of life? Be honest.
You can look at it still another way. The average family in the New York area earns roughly (and I mean really roughly) $50,000 a year. You would need to have at least $1.25 million in principal to yield that income at 4 percent. Do you have it?

And the solution?

Major league retirement planning right here and now. Right this second. Make a plan with an adviser you trust and for whom you have gotten superb references. Make it a plan with a lot of diversification of stocks, bonds, mutual funds, foreign, domestic, emerging, variable annuities (but study them carefully – there are immense variations among them), real estate and even cash.
The plan has to allow for expensive, long-term medical care. It has to provide for the possibility of losing your job at some point before you reach retirement age. The plan cannot count on miracle cures from the federal government. The federal government is just a means of transferring money from wage earners to retirees – and the wage earners are not going to want to bankrupt themselves for the baby boomers (who got all of the good music anyway).

Read the entire piece.

2004 Weekly local football review

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Broncos 33 Texans 13. After a month of strong performances, the Texans looked absolutely awful against the Broncos. The offensive line play was horrible, and David Carr — who does not throw particularly well under pressure — was mediocre (22/41 for 245 yds, no turnovers) as he was sacked four times. Meanwhile, the offense’s incompetence left the Texans’ shaky defense over-exposed, and Broncos’ QB Jake Plummer took advantage, flinging four TD passes on the day. Just to give you an idea of how bad it was, the Texans’ best player — receiver Andre Johnson — had three catches for 28 yards. Things don’t get any easier for the 4-4 Texans as they travel to Indianapolis next week to be lit up by Peyton Manning and Co., and then return to Reliant Stadium for games against Green Bay and Tennessee the following two weeks.
Bengals 26 Cowboys 3. Not to be outdone, the Cowboys looked even worse than the Texans as the Bengals pummeled them in Cincy. Making things worse was that the Bengals were wearing possibly the worst looking uniforms in NFL history while administering this whipping on the Pokes. Cowboys QB Vinnie Testaverde looked all of his 41 years, spraying three interceptions to go along with a fumble in the pocket. The 3-6 Cowboys are a horrible football team right now. An over-the-hill QB, no top flight running back, and a questionable defensive secondary. This could end up being the Big Tuna‘s worst professional football team since his first Giants team in 1983, which finished 3-12-1. The Pokes get Philly at home and Baltimore on the road in their next two games before hosting the Bears in what is stacking up to be a forgettable Turkey Day game.
Oklahoma 42 Texas Aggies 35. Like a champion heavyweight fighter, the Sooners got off the mat before a wild crowd in College Station after the Aggies had taken 14 point leads on three occasions in the first half. OU systematically took the lead in the third quarter, and then hung on for dear life as a final Hail Mary pass fell just short of an Aggie receiver at the buzzer. OU’s Jason White showed again that he is a marvelous college QB, as he shredded the Aggie secondary for five TD passes. This was simply a whale of a college football game in which the Aggies threw the kitchen sink at the Sooners, scoring TD’s on a fake punt and a fake field goal. Meanwhile, both teams’ secondaries looked a bit shell-shocked as both teams combined for almost 700 yards of passing yardage. OU has two relatively easy games (Nebraska and Baylor) before the Big 12 Championship game against one of the Big 12 weak sisters, so it is looking like OU and USC will meet in the BCS National Championship game. The Sooners are a top flight team, but my sense is that Coach Stoops will really have to coach around their defensive limitations to beat USC. Meanwhile, The 6-3 Aggies have no time to feel sorry for themselves, as they face tough Texas Tech in College Station next Saturday before their finale in Austin against the Longhorns on the day after Thanksgiving.
Texas Longhorns 56 Oklahoma State 35. A tale of two halves. As my wife and I went into a charity gala dinner on Saturday night, I turned off my car radio with the score Oklahoma State 35 Texas 7 with just a minute left in the first half. After the salad at dinner, a friend with a son text messaging him from the game told me it was 35-21. Then, midway through the entree, it was tied, and just as we were getting dessert, Texas was leading 49-35. You gotta love college football. The 8-1 Horns play at Kansas next Saturday before entertaining the Aggies in their finale on the day after Thanksgiving. The Horns are finally looking like a BCS bowl team to me.
Houston 34 East Carolina 24. The Coogs continued their mini-recovery after a 1-6 start by beating mediocre East Carolina at Robertson Stadium in Houston. The Coogs were behind 17-14 at halftime, but put this one away by scoring 20 straight points in a 10 minute span at the end of the third quarter and beginning of the fourth. The 3-6 Cougars have two tough games remaining, next Saturday at 5-3 Alabama-Birmingham and then the following week at home against nationally-ranked and Louisville (6-1), so a 3-8 finish for the Coogs is still a distinct possibility.
Fresno State 52 Rice 21. The bottom has fallen out of the season for the Owls, who are now 3-6 and bleeding badly. Fresno just manhandled the Owls at Rice Stadium in Houston, as the Owls trailed 28-7 at the half and 52-7 after three quarters. Rice (3-6) should get ready for more of the same next week as they must go to El Paso to take on the Mike Price-revived UTEP(6-2)squad before finishing at home the following week against 4-5 La Tech.
By the way, in a reflection of the continued polarization of college football, the Longhorn and Aggie games on Saturday drew a combined total of about 165,000 fans. UH and Rice’s games drew a combined total of barely 30,000.
And, as usual, Kevin Whited has his excellent review of Big 12 games over at PubliusTx.net.

Michel Halbouty, RIP

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One of the characters the local business community that make Houston a special place — Michel T. Halbouty — died on Saturday in Houston after a long battle with cancer. He was 95 at the time of his death. His obituary is here.
As founder, president and chairman of Michel T. Halbouty Energy Co. in Houston, Mr. Halbouty was one of Houston’s famed wildcatters who made and lost millions in the wild and wooly Texas oil and gas business over the past 70 years.
With his trademark bushy mustache, Mr. Halbouty cut quite a swath in business circles. An expert in Gulf Coast salt dome prospecting, Mr. Halbouty was inducted into the Texas Science Hall of Fame in 2002 for his contributions to geoscience. He authored four books and more than 300 articles on geology and petroleum engineering, and among the well-known oil and gas fields that Mr. Halbouty either discovered or developed were the South Boling Field in Wharton County, the South Liberty Field in Liberty County, the West Saratoga Field in Hardin County, the Pheasant Field in Matagorda County, and the Fostoria Field in Montgomery County.
Mr. Halbouty was also an important figure in the development of Texas A&M University over the past two generations. After graduating from A&M in 1930 with a degree in petroleum engineering, Mr. Halbouty earned masters’ degrees in geology and petroleum engineering the following year, and, in 1956, was the first recipient of Texas A&M?s professional degree in geological engineering. Mr. Halbouty was also a recipient of distinguished alumni awards from the A&M Association of Former Students and A&M?s Dwight Look College of Engineering. He was a an A&M Visiting Centennial Professor and a founding member of the President?s Endowed Scholars Program. For his service and contributions to the university, the building that houses the A&M’s department of geology and geophysics is named for him.
Finally, Mr. Halbouty is widely credited with persuading former president George H.W. Bush to locate his presidential library on the Texas A&M University campus in College Station.
Mr. Halbouty was also widely involved in civic affairs in the Houston area. Mr. Halbouty also served on the boards of the Houston Symphony Society, Houston Grand Opera, Greater Houston Council of Camp Fire Girls, Texas Children’s Hospital, and Houston’s Museum of Fine Arts.
Funeral services for Mr. Halbouty are pending.

Another Mark Cuban first

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Mark Cuban is the young and dynamic owner of the National Basketball Association’s Dallas Mavericks, which he has reshaped into one of the NBA’s winningest franchises over the past several seasons.
Cuban is a live wire, and he undoubtedly leads the NBA in the past few seasons in the amount of fines that the NBA front office has levied against an owner for criticism of various aspects of the league, particularly in the area of referee evaluation.
For several months, Mark has been running an interesting blog called Blog Maverick. In another first, Mark notes in this blog post that the NBA front office has fined him again, this time for criticizing the league in a blog post.

John Edwards’ political future, RIP?

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No astute political analyst am I, this Economist article reflects my amateur political analysis towards John Edwards’ political future:

Mr Edwards is well on the way to becoming a man with a brilliant future behind him. What did he add to the Democratic ticket other than a boyish smile and a well-honed stump speech? He failed to deliver either of the Carolinas to the party (even though he was born in the southern one and represented the northern one in the Senate). He has no clear ideological constituency.

In addition to the foregoing, Edwards’ Senate seat was won by a Republican, he was surprisingly poor in his debate performance against Dick Cheney, and he made an incredibly inept gaffe late in the campaign after the death of Christopher Reeve. In view of all of this, my sense is that a decent case can be made that Edwards cost Kerry the election in a reasonably close race. That’s not much of a foundation upon which to build a political future.

The Disease of the Century

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Colleen Carroll Campbell, a fellow at the Ethics and Public Policy Center, is the author of The New Faithful: Why Young Adults Are Embracing Christian Orthodoxy (Loyola, 2002). She is working on a book based on her father’s experience of Alzheimer’s disease, and this New Atlantis article provides an outstanding overview of her research into the subject. There is no question that Alzheimer’s is becoming an increasingly important health care issue:

. . . [E]very once in awhile, we face a situation that forces us to collectively consider what it means to be human persons who grow old, suffer, and die.
The looming Alzheimer’s epidemic is just such a situation. This disease embodies everything we fear most about aging — weakness and dependence, humiliation and oblivion. Its insidious onset and relentless progression have penetrated our collective consciousness, and nearly half of Americans over the age of 35 know someone personally whose brain has been ravaged by it. As Americans are living longer and more physicians are recognizing dementia as a disease to be diagnosed, Alzheimer’s is claiming more victims. Some 4.5 million Americans suffer from Alzheimer’s today, more than double the number who had the disease in 1980. Alzheimer’s has become the eighth-leading cause of death in America, and its impact is expected to mushroom as 77 million Baby Boomers head into retirement. By 2050, if no cure is found, 16 million Americans could have Alzheimer’s. As they bid their long goodbye — Alzheimer’s can take up to 20 years to run its devastating course — we will no longer be able to ignore the human questions raised by this disease. Such questions, about the basis of our human dignity and our identity as persons, cannot be answered by science or technology. We must grapple with them the old-fashioned way, drawing on both reflection and lived experience to find the meaning in this way of dying.

For anyone dealing with the onset of dementia in a loved one, this piece is essential reading. Read the entire article.

Cancer in the House

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Jamie Malanowski, a New York-based writer, pens this Washington Monthly op-ed on Houston congressman Tom DeLay and provides the following overview to a discussion of the various ethics complaints and criminal investigations that are currently dogging Mr. DeLay:

Tom DeLay is the most odious character in American politics today. He does not lack for competition, of course, but what sets him apart is that all of his perversions have been accomplished under the radar screen. Apart from his colorful name ?the Hammer,? DeLay has no public identity, and even that nickname will more likely inspire people outside the Beltway to think of old jocks like Fred Williamson or Dave Schultz than the beady-eyed former exterminator who terrifies Capitol Hill. . . Tom DeLay is a cancer cell, silently metastasizing.

Statesmanship is not a word that comes to mind when thinking about Tom DeLay.

Liberal Dutch question Muslim assimilation

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This Economist article addresses the second political murder in the Netherlands in the space of two years. The murder of outspoken and provocative film director, Theo van Gogh, by a Muslim radical has shocked Dutch society, which has long been the European epitome of tolerant and liberal values. Dutch people fear that they may now live in a place where violence has become a way of settling differences of opinion, especially over rocky relations with a growing Muslim minority. The article is an insightful account of the difficulties that even the most liberal Western culture faces in assimiliating intolerant Muslim fascism.

Lance Berkman suffers ACL injury

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Lance Berkman — the Stros’ best hitter over the past four seasons — has torn the anterior cruciate ligament in his right knee and will undergo surgery at Methodist Hospital in Houston within the next ten days. Although the Stros’ initial announcement this afternoon did not disclose how Berkman suffered the injury, it was disclosed later that Berkman suffered the injury playing flag football.
Normal recovery time from this type of injury is at least six months, so it is unlikely that Berkman will be ready for the start of the 2005 regular season. May or June is probably more realistic.
Just to give you an idea of how just how good a player Berkman is, Over the past 4 years, Berkman ranks 6th in the majors in runs created against average (“RCAA”, explained here):

1 Barry Bonds 597

2 Todd Helton 284

3 Albert Pujols 281

4 Jim Thome 250

5 Manny Ramirez 240

6 Lance Berkman 236

7 Jason Giambi 225

8 Alex Rodriguez 218

9 Jim Edmonds 216

10 Gary Sheffield 210

That’s pretty heady company.