So if this presidential season isn't strange enough, it appears Donald Trump and Bernie Sanders might stage a debate, even though Mr. Sanders has little chance of getting the nomination at this point.
While many would say Mr. Trump and Mr. Sanders are on opposite ends of the political spectrum, I wonder if a debate might end up being fairly friendly.
Start with the fact that both candidates will want to take shots at Hillary Clinton, providing one common platform.
Add the fact that both oppose free trade and both argue that the rich aren't paying enough in taxes and you have the potential for a fairly friendly discussion.
Thursday, May 26, 2016
Wednesday, May 18, 2016
The Mission Impossible Effect
A couple years ago I remember reading about something called the "CSI effect" or "CSI syndome". Prosecutors in criminal cases have trouble with juries which have watched TV shows like CSI and believe that the show accurately reflects police forensic practice. Juries have questioned the lack of DNA or other detailed forensic evidence which police departments often do not gather. This is partly because real police departments have limited budgets (probably smaller than the TV show's budget) and partly because TV shows routinely stretch the truth -- sorry, the police can't run compuerized facial recognition on a witness drawing and get a unique hit on a suspect.
I just started reading the book Among the Truthers by Jonathan Kay. The book is a description of consipiracy theorists in the United States including 9/11 Truthers, Obama Birthers, and others. A couple of the 9/11 Truthers he talks about in the first chapter talk about the US government planning and executing, or at least orchestrating, the 9/11 attacks.
It occurs to me that the assumption that the US government (or some group of officials) can pull off such a complex operation without anything leaking needs a name. I suggest "The Mission Impossible Effect", referring to the 1960s TV series (not the recent movies). In each show they create a complex plan involving half a dozen people and precise timing, getting it to come off successfully each time. It seems too many people assume that the US government can really pull off such complex operations with perfect secrecy.
In reality, it takes little research to show instead that government agencies are populated by real human beings, political and bureaucratic infighting, bumbling, and incompetence. The CIA had a hand in a few foreign coups, but couldn't kill Castro. The US government apparently orchestrated 9/11 to take control of Mideast oil but left the followup takeover (the apparent purpose of the Iraq war) to inexperienced political appointees.
I can't say for certain that the US government didn't orchestrate 9/11, but given its track record I find it hard to believe that something which would have taken a lot of people to pull off (from planting explosives in the Twin Towers to the missile it's claimed hit the Pentagon rather than an airplane) could have been executed without anything going wrong. But read enough political thrillers or watch enough Mission Impossbile and it's easy to believe that organizations can plan and execute complex operations without a hitch.
I just started reading the book Among the Truthers by Jonathan Kay. The book is a description of consipiracy theorists in the United States including 9/11 Truthers, Obama Birthers, and others. A couple of the 9/11 Truthers he talks about in the first chapter talk about the US government planning and executing, or at least orchestrating, the 9/11 attacks.
It occurs to me that the assumption that the US government (or some group of officials) can pull off such a complex operation without anything leaking needs a name. I suggest "The Mission Impossible Effect", referring to the 1960s TV series (not the recent movies). In each show they create a complex plan involving half a dozen people and precise timing, getting it to come off successfully each time. It seems too many people assume that the US government can really pull off such complex operations with perfect secrecy.
In reality, it takes little research to show instead that government agencies are populated by real human beings, political and bureaucratic infighting, bumbling, and incompetence. The CIA had a hand in a few foreign coups, but couldn't kill Castro. The US government apparently orchestrated 9/11 to take control of Mideast oil but left the followup takeover (the apparent purpose of the Iraq war) to inexperienced political appointees.
I can't say for certain that the US government didn't orchestrate 9/11, but given its track record I find it hard to believe that something which would have taken a lot of people to pull off (from planting explosives in the Twin Towers to the missile it's claimed hit the Pentagon rather than an airplane) could have been executed without anything going wrong. But read enough political thrillers or watch enough Mission Impossbile and it's easy to believe that organizations can plan and execute complex operations without a hitch.
Tuesday, May 17, 2016
Attacking Trump
One thing abundantly clear during this presidential campaign is the media doesn't like Donald Trump. The Economist magazine has had at least one anti-Trump article each week for the last 2-3 months, including May 7th's cover predicting doom for America:
But with Mr. Trump's nomination pretty much a formality, it's time to find a scandal. The New York Times recently added its contribution with a piece about Mr. Trump's poor treatment of women. Unfortunately, shortly after publication the primary "poorly treated woman" came out and said she was misquoted and she has no complaints about Donald Trump.
So Donald Trump's ability to avoid or ignore scandal continues. He continues to say and do things which would have caused any other candidate to backpedal, apologize profusely, then quit the race. The media attempts to paint Trump supporters as male, poor, and uneducated, but has to backpedal on that when it turns out Mr. Trump's New York support doesn't match that stereotype (see http://www.nytimes.com/interactive/2016/04/19/us/elections/new-york-primary-republican-exit-polls.html).
So we wait to see what happens in the general election. It looks like Trump and Clinton unless something goes really wrong with one of the campaigns. No spoiler third party candidate is announced and it only becomes harder for third party candidates to get on the ballot as time goes on. I doubt there will be any major scandal to change the lineup -- the Republicans have been trying for years to find a scandal which will take down Hillary Clinton, and if the New York Times article is the worst they can come up with about Donald Trump, the election will come down to which one can get the most votes.
But with Mr. Trump's nomination pretty much a formality, it's time to find a scandal. The New York Times recently added its contribution with a piece about Mr. Trump's poor treatment of women. Unfortunately, shortly after publication the primary "poorly treated woman" came out and said she was misquoted and she has no complaints about Donald Trump.
So Donald Trump's ability to avoid or ignore scandal continues. He continues to say and do things which would have caused any other candidate to backpedal, apologize profusely, then quit the race. The media attempts to paint Trump supporters as male, poor, and uneducated, but has to backpedal on that when it turns out Mr. Trump's New York support doesn't match that stereotype (see http://www.nytimes.com/interactive/2016/04/19/us/elections/new-york-primary-republican-exit-polls.html).
So we wait to see what happens in the general election. It looks like Trump and Clinton unless something goes really wrong with one of the campaigns. No spoiler third party candidate is announced and it only becomes harder for third party candidates to get on the ballot as time goes on. I doubt there will be any major scandal to change the lineup -- the Republicans have been trying for years to find a scandal which will take down Hillary Clinton, and if the New York Times article is the worst they can come up with about Donald Trump, the election will come down to which one can get the most votes.
Wednesday, May 11, 2016
Equality of the sexes?
Harvard recently took action against single sex organizations -- there have long been complaints about social organizations for men only. So Harvard put major restrictions on members of these organizations. But Harvard set the rule for members of any single sex organization, not just those for men only. The reaction was quick -- women protesting against the action, claiming they need their women only organizations and that they need their "safe spaces": Harvard women protest school's crackdown on single-sex groups.
This reaction does show the reality of portions (not all) of the feminist / women's rights movement. There is a desire to break down men only institutions, claiming that they discriminate against women. But women only institutions appear to be perfectly fine. This occurs in other parts of society. Gyms and fitness centers for men only are no longer acceptable, but "Curves Women's Gym" seems to be perfectly acceptable.
Another example where "equal rights" really means "special privileges".
This reaction does show the reality of portions (not all) of the feminist / women's rights movement. There is a desire to break down men only institutions, claiming that they discriminate against women. But women only institutions appear to be perfectly fine. This occurs in other parts of society. Gyms and fitness centers for men only are no longer acceptable, but "Curves Women's Gym" seems to be perfectly acceptable.
Another example where "equal rights" really means "special privileges".
Tuesday, May 10, 2016
More automation means more work
I was thinking a little about claims that artificial intelligence (AI) is taking over more and more decision making and that this time, technology really is going to permanently eliminate a significant percentage of jobs. I then thought a bit about how technology has changed the way we perform certain common tasks -- are AI and automation really taking over?
Let's look at retail sales. If you go back 200 odd years, retail stores looked quite different from today. Merchandise was often behind a counter and the clerk had to gather merchandise at the request of the customer. Of course, some of this was required since most products weren't packaged in nice boxes or bags which a customer could select from a shelf.
Then retailing changed. Instead of the clerk collecting items on request, the customer collected items off of shelves and took them to a counter to be listed and paid for. Note that on the one hand the customer has a bit more flexibility when shopping, but on the other hand the customer has now been made to do part of the work previously done by a clerk.
Similar changes continue to happen. Discount grocery stores experiment with customers bagging their own groceries. Most recently, self checkout lanes have become common. On the one hand, it reduces the number of people the store has to pay, but this is at the expense of the customer doing the work of checking out (and generally takes longer, self checkout scanners are slower because each item must be bagged before the next can be scanned).
Banks took the same route with ATM machines, reducing the number of tellers in banks but also speeding up customer transactions, I haven't stood in line for 10 minutes for an ATM, I routinely did in banks before ATMs. Yet the customer must also do more of the work involved in the transaction.
With the push for a $15.00 minimum wage there are reports that fast food restaurants are moving toward automated ordering stations. Of course, fast food restaurants have already made people pour their own drinks (which on the one hand saves labor, on the other hand customers seem to prefer getting their own drink). Again, automated ordering means that the restaurant can save money, but the customer has to do the work of ordering.
So on the one hand we see the advance of automation and a reduction in retail employment. This has resulted in lower prices as stores don't have to pay as many people, yet at the added cost that the customer must do part of the work previously done by employees of the store.
Let's look at retail sales. If you go back 200 odd years, retail stores looked quite different from today. Merchandise was often behind a counter and the clerk had to gather merchandise at the request of the customer. Of course, some of this was required since most products weren't packaged in nice boxes or bags which a customer could select from a shelf.
Then retailing changed. Instead of the clerk collecting items on request, the customer collected items off of shelves and took them to a counter to be listed and paid for. Note that on the one hand the customer has a bit more flexibility when shopping, but on the other hand the customer has now been made to do part of the work previously done by a clerk.
Similar changes continue to happen. Discount grocery stores experiment with customers bagging their own groceries. Most recently, self checkout lanes have become common. On the one hand, it reduces the number of people the store has to pay, but this is at the expense of the customer doing the work of checking out (and generally takes longer, self checkout scanners are slower because each item must be bagged before the next can be scanned).
Banks took the same route with ATM machines, reducing the number of tellers in banks but also speeding up customer transactions, I haven't stood in line for 10 minutes for an ATM, I routinely did in banks before ATMs. Yet the customer must also do more of the work involved in the transaction.
With the push for a $15.00 minimum wage there are reports that fast food restaurants are moving toward automated ordering stations. Of course, fast food restaurants have already made people pour their own drinks (which on the one hand saves labor, on the other hand customers seem to prefer getting their own drink). Again, automated ordering means that the restaurant can save money, but the customer has to do the work of ordering.
So on the one hand we see the advance of automation and a reduction in retail employment. This has resulted in lower prices as stores don't have to pay as many people, yet at the added cost that the customer must do part of the work previously done by employees of the store.
Saturday, April 11, 2015
Employee stock plans and paying too much tax
NOTE: This is by no means tax advice. It's largely so I can bitch a little and see if I can figure out what's going on while I try to get my taxes right.
Many companies (including mine) offer an employee stock purchase plan (ESPP). Stock purchase plans provide employees with a way to purchase stock at a discount (and if done right, get an almost guaranteed profit).
The way most stock plans work is that some percentage of the employee's income is deducted and put into a special stock purchase account. Most plans use a period of 6 months, beginning August 1 and ending February 1 (or vice versa). Under the plan, the employee's deducted money is used to buy company stock. The stock is purchased at 85% of the lower of the price at the start and end of the period. This is a good deal. If the stock goes up over the 6 months, the employee buys stock at 85% of the lower start-of-period price (a gain of over 15%). If the stock went down, the employee still has an immediate 15% gain if the stock is sold immediately. Of course, taxes are lower if the employee holds on to the stock for at least a year, but at the risk the stock will go down, wiping out any gains. So many employees sell their stock as soon as it is granted (locking in the gain).
The problem I've found with employee stock plans comes at tax time. The moderately complex tax rules combine with really poor information to make it very easy to pay too much tax. This year it appears the IRS has new rules which make it even more likely too much tax will be paid.
The tax issue begins with how the stock plan is taxed. This discussion assumes the stock is sold immediately (so short term gains). I have a few shares of stock which qualify for long term gains but haven't had to figure those out.
Assume stock is purchased for the ESPP and then sold. There are several amounts involved. First is the amount of employee money used to purchase the stock. Second is the market price when the stock was purchased. for instance, suppose the stock went down in price over the plan period and was at $100 per share when stock was purchased. The employee pays $85 (15% less) for the stock. Suppose the employee then sells the stock for $101 per share. What happens tax wise and what is reported to the emplyee?
Tax wise, $15 per share (the purchase discount) is considered ordinary income. This amount is included in the employee's W-2, however it is not separated out. I discovered this because my W-2 wages are more than the total wages of my last paycheck by exactly the amount of the ESPP discount.
So the purchase discount ($15 per share) is ordinary income AND has been reported to the IRS as income. When I later sell the stock for $101, I have an additional gain of $1 per share (minus commissions). This is a short term capital gain, reported on schedule D and form 8949 (with box A checked).
So now turn to my brokerage 1099 form which now reports the basis and sale price of stock (and is reported to the IRS). The 1099 reports the amount received from the stock sale, however under IRS rules reports the purchase price ($85 per share) as the "cost or other basis", not the $100 per share which is the actual basis (since the $15 per share difference has been reported as W-2 wages). The broker CANNOT report $100 per share as the basis, even though this is the actual basis.
This leaves several areas of confusion. First, anybody who copies 1099 basis and sale amounts onto their tax form is being double taxed for the 15% discount. Instead, you need to be smart enough to use the actual basis ($100 per share). Second, we need to hope the IRS is smart enough to figure this out, especially because as far as I can tell the IRS is not specifically told that the $15 per share discount has been included in income (perhaps this is requirement though). Third, it's my understanding that the discount (15%) amount is not included on the W-2 if you don't sell the stock that year. So I'm not sure what's reported if I hold the stock into the next year (but less than 12 months). It's more confusing if I sell the stock after I've left the company. Is something still added to my W-2? Do I get a special W-2 just for stock gains if I sell in the next calendar year? Finally, if the stock is held long term (I have some ESPP stock I've held for 13 years and counting), there are other odd tax rules which I haven't figured out. I think some of the income (15% discount) turns into long term gains but am not sure. I'll find out if I ever sell that stock.
Note the above references to 15% or $15 assume that the stock went down during the ESPP 6 month period. If the stock went up the discount (and income gain) could be a much higher percentage. If the stock started at $100 and was at $150 at the end of the period, it would still be purchased at $85. The income gain is then $65 per share and the cost basis for any sale $150. But the 1099 still reports $85 per share (and the possible double taxation is that much higher.
Tax reporting rules have generally made it easier to do your taxes. The brokerage must now track your cost basis and report it along with the sale price. But for ESPP plans the reported basis is not the correct figure, and teasing out the correct information can be challenging.
Many companies (including mine) offer an employee stock purchase plan (ESPP). Stock purchase plans provide employees with a way to purchase stock at a discount (and if done right, get an almost guaranteed profit).
The way most stock plans work is that some percentage of the employee's income is deducted and put into a special stock purchase account. Most plans use a period of 6 months, beginning August 1 and ending February 1 (or vice versa). Under the plan, the employee's deducted money is used to buy company stock. The stock is purchased at 85% of the lower of the price at the start and end of the period. This is a good deal. If the stock goes up over the 6 months, the employee buys stock at 85% of the lower start-of-period price (a gain of over 15%). If the stock went down, the employee still has an immediate 15% gain if the stock is sold immediately. Of course, taxes are lower if the employee holds on to the stock for at least a year, but at the risk the stock will go down, wiping out any gains. So many employees sell their stock as soon as it is granted (locking in the gain).
The problem I've found with employee stock plans comes at tax time. The moderately complex tax rules combine with really poor information to make it very easy to pay too much tax. This year it appears the IRS has new rules which make it even more likely too much tax will be paid.
The tax issue begins with how the stock plan is taxed. This discussion assumes the stock is sold immediately (so short term gains). I have a few shares of stock which qualify for long term gains but haven't had to figure those out.
Assume stock is purchased for the ESPP and then sold. There are several amounts involved. First is the amount of employee money used to purchase the stock. Second is the market price when the stock was purchased. for instance, suppose the stock went down in price over the plan period and was at $100 per share when stock was purchased. The employee pays $85 (15% less) for the stock. Suppose the employee then sells the stock for $101 per share. What happens tax wise and what is reported to the emplyee?
Tax wise, $15 per share (the purchase discount) is considered ordinary income. This amount is included in the employee's W-2, however it is not separated out. I discovered this because my W-2 wages are more than the total wages of my last paycheck by exactly the amount of the ESPP discount.
So the purchase discount ($15 per share) is ordinary income AND has been reported to the IRS as income. When I later sell the stock for $101, I have an additional gain of $1 per share (minus commissions). This is a short term capital gain, reported on schedule D and form 8949 (with box A checked).
So now turn to my brokerage 1099 form which now reports the basis and sale price of stock (and is reported to the IRS). The 1099 reports the amount received from the stock sale, however under IRS rules reports the purchase price ($85 per share) as the "cost or other basis", not the $100 per share which is the actual basis (since the $15 per share difference has been reported as W-2 wages). The broker CANNOT report $100 per share as the basis, even though this is the actual basis.
This leaves several areas of confusion. First, anybody who copies 1099 basis and sale amounts onto their tax form is being double taxed for the 15% discount. Instead, you need to be smart enough to use the actual basis ($100 per share). Second, we need to hope the IRS is smart enough to figure this out, especially because as far as I can tell the IRS is not specifically told that the $15 per share discount has been included in income (perhaps this is requirement though). Third, it's my understanding that the discount (15%) amount is not included on the W-2 if you don't sell the stock that year. So I'm not sure what's reported if I hold the stock into the next year (but less than 12 months). It's more confusing if I sell the stock after I've left the company. Is something still added to my W-2? Do I get a special W-2 just for stock gains if I sell in the next calendar year? Finally, if the stock is held long term (I have some ESPP stock I've held for 13 years and counting), there are other odd tax rules which I haven't figured out. I think some of the income (15% discount) turns into long term gains but am not sure. I'll find out if I ever sell that stock.
Note the above references to 15% or $15 assume that the stock went down during the ESPP 6 month period. If the stock went up the discount (and income gain) could be a much higher percentage. If the stock started at $100 and was at $150 at the end of the period, it would still be purchased at $85. The income gain is then $65 per share and the cost basis for any sale $150. But the 1099 still reports $85 per share (and the possible double taxation is that much higher.
Tax reporting rules have generally made it easier to do your taxes. The brokerage must now track your cost basis and report it along with the sale price. But for ESPP plans the reported basis is not the correct figure, and teasing out the correct information can be challenging.
Wednesday, April 8, 2015
The Rolling Stone Rape Story
Columbia Journalism School has released its report on the Rolling Stone article about campus rape featuring "Jackie"'s story of a gang rape at a fraternity at the University of Virginia. While the report outlines the original story and its problems and then discusses what Rolling Stone did wrong, it skirts the real reason why the story was published. Much of the reporting of the report and the fact that the fraternity involved is suing Rolling Stone give many reasons why the story was run and failed, but they seem to skirt around the real reason for the story.
Briefly, I think Sabrina Erdely and Rolling Stone anticipated fame and fortune. Ms Erdely started out wanting to write a story about the "rape culture" on college campuses. Jackie's account was perfect for her story:
Briefly, I think Sabrina Erdely and Rolling Stone anticipated fame and fortune. Ms Erdely started out wanting to write a story about the "rape culture" on college campuses. Jackie's account was perfect for her story:
- Jackie reported a violent rape. Many college "rape" cases which have been in the news are easily labelled a change of heart afterwards or consensual acts which went too far. Jackie's description was of being forcibly held down.
- The rape happened in a fraternity. Fraternities have long been blamed for excesses at colleges. It was additionally associated with initiation into the fraternity, further validating fraternity stereotypes.
- Afterwards Jackie's friends were uncaring and more concerned with their social lives and not alienating the fraternities.
- The university is more concerned with its own good name and not getting negative press than with Jackie.
So here is somebody giving the ideal story of the "rape culture." Awards, a Pulitzer, fame, and magazine sales beckoned. So when Jackie was difficult and when the story couldn't be independently verified, the lure of fame and fortune overrode any doubts. This wasn't a case of giving too much deference to the victim of a rape. It was not wanting to push too hard in case facts came out which contradicted the story.
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