BoldedNot bold

Some thoughts on wealth

In my synagogue, there are some very wealthy people.  When I went to San Francisco recently, I ran into some very wealthy people.  In my neighborhood, where houses sell for a million dollars each, there are some very wealthy people.

I am nowhere near ready to go buy a million dollar house, and probably, I never will.  I drive a 1998 plymouth voyager with 140,000 miles on it.  My house needs to be repainted, and I can't afford to do that.  Although I probably ought to get a loan, get it done, and then sell the house and find something much smaller.  When I had 4 children living under my roof, I needed a house that big.  Now, it is just my long-suffering wife and me.

However, in many respects, I am an extraordinarily wealthy man.  I had one of the finest educations that money could buy - I went to Overlake School, which was expensive.  That's where I learned BASIC, and in the mid 1970s, high school students were not programming - in anything.  Then I went to Harvey Mudd College, where I got my B.S. in physics and my exposure to FORTRAN (which should be in all caps, because it is an acronym), pascal, ALGOL, 6502 assembler, VAX assembler.  Now, I am a linux system administrator, and I am a hot commodity.  Even if some draconian government took away everything everubody owned, I still have the skill: in a few years, I could catch up.

In other respects, I am an extremely wealthy man.  There is a man who is busking at the corner of Fairview and Virginia - in the dark, in the rain.  He's not homeless, because he is trying to make up his rent.  But it seems as if he is in a precarious position.  For one thing, his favorite spot is a traffic island - not the safest place to be.  He's lonely.  He broke up with a woman several years ago, and he still grieves.  By way of contrast, I have a loving wife (why, I don't know, but she loves me), a warm home, no concerns about food, or health care.  Tommy Bahama even gives me an ORCA card so I can go pretty much anywhere I want to go (except Eatonville) for free (Tommy Bahama is a great place to work - if you can get a job there, go for it!).

On the other hand, I feel a tremendous sense of responsibility that I am failing to meet.  I have 4 grandchildren that I would like to send to college.  The thing that makes me valuable is that I know things that most people don't know.  That's why you go to college.  My parents sent me to college - it was the greatest gift they ever gave me - and I returned the favor for Sarah and Daniel.  I didn't return the favor for Chris and John, and now I

A pissed off linux system administrator writes to the Federal Communications Commission about the merger between Charter and Time-Warner

Ms. Lemme, Ms. Glauberman, Mr. Copeland, and Transaction Team,

I want to communicate with the FCC in regards to the proposed Charter-Time Warner merger. Unfortunately, I'm having much trouble navigating the FCC's web site. I found https://apps.fcc.gov/edocs_public/attachmatch/DA-15-733A1.pdf which is utterly incomprehensible. For example, the document says "We urge parties to use the Electronic Comment Filing System (“ECFS”) to file ex parte submissions." but it doesn't say where to find the Electronic Comment Filing System and it doesn't say what ex parte means. Furthermore, although the document lists your names and E-mail addresses, it goes on to say "(5) each Commissioner or Commission employee who attended or otherwise participated in the ex parte meeting." ​but it doesn't say who were the commissioners or commission employees who attended the meeting​. Hopefully, you have the meeting minutes and can forward this message on to them.

If you take a look at the Federal Communications Act of 1934, the first section of the act says:

"For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nationwide, and worldwide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, and for the purpose of securing a more effective execution of this policy by centralizing authority theretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the 'Federal Communications Commission', which shall be constituted as hereinafter provided, and which shall execute and enforce the provisions of this Act."[1]

Note that it says all of the people (emphasis mine). I suspect that the vast majority of American do not know what ex parte means. I happen to know what it means: 1) on or from one side or party only —used of legal proceedings 2) from a one-sided or partisan point of view, because I looked it up in a dictionary.

When I read documents like this, I realize that the government is in the thrall of entities (since the Citizens United decision, I'm not sure if corporations are people or if people are corporations, so I use the word entities) with sufficient money to hire lawyers to write this stuff.


I am not a lawyer. I'm a linux system administrator. I know full well about the technologies involved in running an internet service provider - the capital costs of stringing the wire, the cost of the infrastructure at each house or business, and the infrastructure at the data centers and points of presence where the providers cross connect. I know the cost of support people who actually know what they're talking about, compared with the cost of support people who ask you to reboot.

I also know, from economics class in high school, that better service and lower costs come from competition. Time Warner - Charter merger doesn't increase competition, it reduces it. No capitalist in his or her right mind would do something to increase competition. I am trying to visualize a CEO getting up at a shareholder meeting and say "We just increased competition by 50%, which means we're going to have to reduce our prices and our profits to compete". It boggles the mind.

Time Warner and Charter will argue that by merging, they get economies of scale. They will, a little. For example, right now, each company has its own, well paid CEO. Once they merge, they will need only one well paid CEO. I suspect that the CEO that's forced out won't be on the street corner, begging for change, but then, I've never asked somebody begging for change if they used to be a CEO. Right now, they have two marketing departments, two planning departments, two customer support centers. After the merger, they will need only one marketing department, one planning department, and one customer support center. Of course, they will have more customers, so the customer support people will either be more overworked than they are now, or else the company will have to hire more customer support people, so I don't think there is going to be much saving there. Furthermore, they still have to wire up every house in America. Because of less competition, the company will be less likely to gain a marginal competitive advantage by wiring up poor neighborhoods. So they're really not going to save as much money as they claim they are going to.

Finally, there is a question in my mind if the merger is even going to "work". I read an article in the Harvard Business Review, which I would consider to be an authoritative source, that 90% of all mergers fail. What I foresee happening is that the companies will take on a lot of corporate debt in order to accomplish the merger, they will pay a small fortune (or maybe a large fortune - I don't know how to quantify "fortune") for lawyers and accountants and consultants to make the deal happen. That money could have gone into investment in infrastructure, salaries for employees, or dividends for shareholders. The corporate debt will have to paid, and the cost of the debt service will be a drag on profits.

In other words, my ex parte submission is that Charter and Time Warner are run by a bunch of greedy idiots.


I want you to reject the merger in the interests of their customers and their competitors.

If you have any questions or responses to my comments, please feel free to contact me at the addresses below. Thank you for your consideration.

Sincerely yours,


Jeff Silverman



--
Jeff Silverman, linux sysadmin
nine two four twentieth avenue east
Seattle, WA, nine eight one one two -3507
(253) 459-2318
jeffsilverm@gmail.c0m (note the zero!)
http://www.commercialventvac.com
See my portfolio of writings and talks

Some thoughts on the transfer of wealth

Senator Bernie Sanders has some interesting, "socialist", ideas.  He is in favor of single payer health insurance.  He is in favor of having the federal government subsidize college education.  He is in favor of rebuilding the nation's infrastructure.  Let's think about these ideas in terms of transfer of wealth.

A transfer of wealth occurs when the government adopts policies which favor one constituency over another.  For example, the government decides it needs fewer military bases, so it has to decide which bases to close.  Ideally, the Department of Defense would make that decision based on efficiency and logic, but the world isn't like that.  Senators and Congressmen get together and work out deals to save bases in their districts.  Some of these deal can get quite interesting - for example, Fort Lewis and McChord Air Force Base merged to become Joint Base Lewis-McChord or JBLM. That's actually a regression - the Air Force used to be part of the Army before it became a separate service.  However, when the announcement was made, property values in the area dropped, because people who lived and worked on the bases were going to leave the area.  On the other hand, some bases were left untouched, and there the property values rose.  A transfer of wealth.

This is not necessarily a bad thing.  This is what governments do.

So we can look at various current and proposed government policies with an eye towards what does the policy does in terms of transferring wealth from one group to another.

• Currently, the interest paid on mortgages is tax deductible.  The interest paid on credit cards is not tax deductible.  Why?  It takes a modicum of wealth to buy a house.  Actually, in the Seattle area, it takes more than a modicum.  There are houses in my neighborhood that sell for over a million dollars.  The people who are buying these houses are not poor people.  They have mortgages and the interest they pay on those mortgages are deductible, so that reduces their taxes.  Because they are wealthy, they pay taxes at a higher rate, so the deduction is quite valuable.  By way of contrast, poor people cannot pay taxes.  When they have a financial emergency, such as their car breaking down, they have to borrow to resolve the issue, so they use a credit card, or worse, a loan shark.  None of this interest is deductible.  Although the taxes on poor people is at a relatively low rate, why not give them a hand and make credit card interest deductible?  Furthermore, everybody needs a place to live, so why is interest expense deductible but rent is not?  When you are poor, even a few dollars can be a big help.  This policy transfers wealth from the poor to the rich.
• Capital gains tax.  Most tax filers will pay 15% on long term capital gains (see the Motley Fool.  The highest rates that high earners will pay is 40%.   At first glance, that would seem to penalize the wealthy - because the tax rates are progressive, those high earners are taxed at a higher rate.  Seems fair to me.  But, most wealthy people do not get wealthy because they earn a lot of money.  Bill Gates and Warren Buffet didn't get rich on their salaries.  They made their money because the prices of their stocks went through the roof.  When Mr. Gates was the CEO of Microsoft, he made a relatively modest $200,000/year, the same as President Reagan (the president had a cooler private airplane).  Why do we tax capital gains at a lower rate?  The conventional wisdom is that we want to encourage investment.  However, most people know, or ought to know, that the secret to becoming wealthy is to invest.  So we don't really need to encourage people to invest.  The rules on capital gains favor the wealthy.
• Single payer health insurance.  I am a linux system administrator, and that makes me a valuable commodity.  So I get paid well, and I get employer paid health insurance.  Because the employer is part of a group, their insurance premium is relatively low.  Those poor guys slaving over the deep-fat fryer at McDonald's are not getting employer pair health insurance.  Before the Affordable Care Act (Obamacare), they had to buy insurance on the individual market, which is very expensive.  Transfer of wealth from the poor to the wealthy. Furthermore, the insurance companies would play games with one another to avoid payment. For example, if two pedestrians bumped into one another and one was injured, the insurance company might sue the other person's insurance company. Lawsuits are horrifically expensive and time consuming.  Inefficient.  By way of contrast, with a single payer system, everybody just gets covered.  No more expensive lawsuits, much less administrative overhead.  Furthermore, there is a deep, dark secret about the way insurance works.  Insurance is the business of spreading risk.  The bigger the risk pool, the closer everybody's spending to the average.  We know that Americans spend about $6000/per/year on health care costs.  When I was unemployed and covered by COBRA, my premiums were about double that.  Fortunately, I had enough savings so that I could cover it.  But if I am not working, then I am not earning anything and eventually, I can't cover the premium any more.  Now I am working again, and I am covered under an employer paid insurance plan, which costs much less because the company is spreading the risk over a larger pool.  Transfer of wealth from the poor to the wealthy.
• Government payment of tuition at higher education.  My siblings and I are incredibly fortunate. Just incredible.  My parents were wealthy enough that all three of us could get undergraduate degrees with virtually no student debt.  My parents also believed very much in the value of education, so from an early age, we were encouraged to do well in school.   My parents are also not drug addicts, gamblers, or abusive.  Well, there is nothing that the government can do about bad parenting, but the government can do something about the wealthy part.  The government could pay for children's college education.  This is actually not much of a stretch.  Every child in this country has public school K-12, paid for by taxpayers.  Transfer of wealth from the wealthy to the poor.  Why is this such a problem?  Because...
• Here in the State of Washington, it became obvious to the Supreme court that the State was not spending enough on K-12 education, in the famous McCleary decision.   Because the State wasn't contributing enough, each school district held operating levies to partly fund the cost of the schools.  In wealthy districts, such as Bellevue and Redmond, they could raise a lot of money for schools.  In poor districts, such as Algona (Algona is the poorest town in King County), not so much.  Because Bellevue and Redmond had more money to spend on their schools, their children got better educations, and the good people of Bellevue and Redmond didn't have to pay for the educations of children in Algona.  Transfer of wealth from the poor to the wealthy.
• The fiasco in Flint, Michigan.  Flint used to be a big manufacturing town, with lots of good paying jobs for machinists and others who worked in the factories there.  However, the jobs went overseas, and the townspeople of Flint left to find other work.  The people remaining are poor.  The problem is that cities can't just downsize like that - they still have to pay for infrastructure and the bonds that they levied when times were good.  Flint went bankrupt, and the State of Michigan took over.  To save money, they disconnected their water system from Detroit and connected it to the Flint river.  The Flint river has poor quality water, which caused lead to leach from the pipes and go into the brains of people who drank the water.  Complaints were made that the water tasted bad and looked funny.  They were ignored.  Furthermore, the water district is supposed to sample the water periodically and look for contaminants, such as lead.  If you run a water district, then you are supposed to know this.  The people who ran Flint's water didn't do the required monitoring, to save money.  Now, the people of Flint have heavy metal poisoning, and it isn't clear as I write this (4-February-2016) what the State of Michigan is going to do about that.

But don't take my word for it.  Look at government policies that you care about and see where the transfer of wealth is.  Do the same kind of analysis I've done - look at who benefits, and who pays. 

Senator Sanders has made inequality in wealth his major issue.  He is railing at a system that consistently screws poor people.   Donald Trump, by way of contrast, is making great strides yelling about how the government screws everybody.  Trump is correct, however, he has over simplified the issue, because the government is screwing some people more than others.  None of the other candidates seems to have much to say about the issues.  Sarah Palin presents a use case for funding higher education by the federal government, but she's not a candidate.  Sanders, Trump, and Palin all speak from their hearts, they all clearly believe in what they talk about.

I have not decided if I support Senator Sanders or not.  I agree with the Senator on a lot of issues, and so I ought to support him.  However, the mass media are unwilling or unable to do the kind of nuanced policy analysis that I have just gone through (and you've had the patience to read), and I am rank amature policy wonk.  They don't teach policy analysis in schools.  It is easy to ignore Sanders because he forces people to think. Hillary Clinton, by way of contrast, has more experience in foreign affairs, but I don't see much of her talking about the issues that I care about.  It's not an easy decision also because there are some people that absolutely hate Mrs. Clinton.  I don't know why.

I get 'way too much E-mail about politics and I am sick of it

Today, I got 103 E-mails.  11 were from Hillary Clinton or Chelsea Clinton or Bill Clinton.  It's nice to see a family working together.  I don't any E-mails from the wives or children of any of the other candidates.  I don't get any E-mails from Frank Fiorina, either.  According to wikipedia, the Mr. and Mrs. Fiorina are worth $59M so he doesn't have to work: he could write E-mails to support his wife.

I got 13 E-mail messages from Bernie Sanders.

 I got 27 E-mails from various Republican candidates which is a little odd because I am a liberal.  The mail servers don't know that, of course.

The remaining E-mails come from various PACs and superPACs that I have never heard of, except for the fact that they send me E-mails.  PACs are interesting: they don't have to report where the money comes from, and they don't have to report where the money goes to.  I'll bet that if somebody sent them a million dollars, they'd damm well know where the money goes, and I'll bet further that whoever got the money would know damm well where the money comes from.  I wouldn't give that kind of money away without some sort of quid pro quo.  Of course, I wouldn't give that money kind of money away unless I actually had that kind of money, which I don't, so that's somewhat moot.


The Citizen's United decision, which sucks, actually makes legal sense to me.  Everybody should have the right to say whatever they want.  If I were to get on a soap box (does anybody know what a soap box is?) on a street corner, I could speak for as loud and as long as I please.  Nobody would ask me who was supporting me, and legally, I don't have to tell them.  First amendment rights are first amendment rights.  Of course, your First Amendment rights also give you the freedom to advocate overthrowing the government by violent means.  Note that you can't legally overthrow the government, but you can advocate it if you want to.  Unfortunately, you have the freedom to say stupid things, which is why we have suffer Donald Trump and Sarah Palin.  But the TV networks and the press are free to apply editorial discretion and not publish that stuff.

Hello, World

In C
#include

int main ( int argc, char **argv)
{
printf ("Hello, World\n");
}

In python
#! /usr/bin/python
#
print "Hello, World\n"

In English
Hello, world