Admittedly armchair economics - taxes and jobs

Tax policy should always be on the table. I'm tired of listening to people who admittedly have the job of fighting tax increases. I'll do my job, and dig past the repeated boilerplate about taxes killing investment and hiring.

American business have practically zero interest rates and historically low tax rates. And yet businesses are (perhaps rationally) not hiring. No wonder - the customer that represents 25% of the economy said it is tightening their belt, and probably going to fire a bunch of employees and close many positions held by current retirees. (That's the government - local, state, and federal.)

Let's step aside from the somewhat artificial government/private sector separation. Lewis Black put it best here (starting around 0:41): whether it's government, or the private sector, there are people who do the job, and there are rules that are either followed or broken.

So let's ditch whether a job is public sector or private sector for a second. Fiscal tightening is probably going to be bad for employment in the near to mid-term, whatever its impact longer term on the economic health of the country.

I'm wondering if it's possible to construct a tax that incentivizes hiring and capital investment now, rather than later. I'm going to avoid changing taxes on earned income, and explore policies to move money that is sitting in cash/short-term bonds.

Let's say, hypothetically, I'm a major company in America, continuing to make significant profits and sitting on a pretty hefty cash reserve. Policy is enacted such that my effective cost to hire and buy equipment will increase next year and stay higher. This gives me an incentive to do as much purchasing and hiring this year as seems reasonably prudent. Maybe there's equipment that I need. Maybe I need to hire to replace retiring employees.

How would this be done? There are carrots, and there are sticks.

Carrots are gifts above and beyond what is currently given. It might be a direct tax break for hiring or captial spending. It might be targeted subsidies for industries that can scale up quickly (construction, as opposed to, say, advanced research).

Sticks would involve taking away existing breaks, or imposing completely new taxes. It could involve ending the current tax credit for hiring new employees. It could be an increase in Medicare contributions to apply to new hires after a certain date, or an increase in sales tax. It could be a change in depreciation rules for capital purchases. It could be a change in environmental or labor regulations that will exempt those hired before a certain date.

Naturally, it wouldn't make sense to make the trigger date too soon. For example, if the sticks came with hiring in one week, there wouldn't be time to really increase hiring and purchasing before the cost of hiring/purchasing increased, which could, indeed, hinder recovery. But it wouldn't make sense to make it so far into the future that the change was discounted - actuarily as well as psychologically - to the point that it didn not change behavior. One to three years seems reasonable; perhaps over a longer period and involving increases over a period of time.

Carrots require more government spending and breaks, and probably more deficits. It's a bit odd that the party most concerned with government spending wants more work on one side of the ledger, and in a way that could potentially increase deficits.

I'm not exploring the moral fairness angle, or the effectiveness long-term of such policies. I'm also not exploring the political tractability of such a proposal (though it might be better than it seems at first glance, if one chooses to fight for it). I'm just wondering how it could be done.

Too often the focus is on changes on taxes on earned or unearned income. But if the goal is to change the behavior of companies that have cash on hand, then the tools used have to operate on that cash, and not only on the promise or reality of future profits.

Would love some informed, well-reasoned thoughts on this.

Why you should hug a math major today (and maybe even scientists and engineers)

I've been working on Slader, a website where you answer math questions and get paid a bit per solution. There's more comprehensive information in a review here, if you're interested.

Anyway, it occurred to me that the math majors/grad students I know are absolutely, totally nuts.

Look, I like LaTeX. It makes things pretty, especially equations. I've had to use quite a bit of it to write papers which, though scientifically moribund, were at least formatted (roughly) according to ApJ standards.

But you math people are totally ridiculous.

I remember one of my suitemates (let's call him "Jeff", because that's actually his name) had to write homework solutions in LaTeX. This was for an upper-division math class taught by a very assertive (though quite nice) Chinese professor. (Direct quote from the professor in my multivariable math class explaining derivatives: "e^x is like a strong child; you hit it and it stays the same. ln x is like a weak child; it dies and gets buried underground.)

So I'm sure he, and the other math majors I know, had to do LaTeX all the time.

Anyway, I just solved a part of a calculus problem. It involves determining where a function is concave up. It's part 1 of five. After completing it, I realized that it was totally not worth 75 cents.

Here's what the solution looks like:

Now wait a minute, you might say. That looks not bad. Well, it's actually quite bad, as in I did a crappy job. It's sparse on the explanations. I should add in subsections indicating that you need to test for the cases when x>0 and x<0. But I got tired. And here's why. Here's the LaTeX source code that I used to actually write the solution.

Now this isn't bad if you're a computer scientist, or a mathematician, or an engineer. But I taught high school for the last year. I have no fucking clue how people handle coding all day. Maybe it's like French; I don't know how the hell it works, but I guess if you do it long enough, it makes sense to you, even if it makes you seem mechanical (programming) or pretentious (French).

Anyway, I have a whole new sympathy for math people who do this every goddamn day, for many hours of said goddamn day. So go hug one. Maybe it will help with the carpal tunnel and eyestrain.

Random calculations for my physics class: estimate of the force from a Saturn V rocket

I'm running for office, again!

My fellow Americans.
As none of you may know, I have, in anticipation of a recall election, decided to run for the highest office in the land – I want to be your next mayor of San Gabriel. While Mr. Hwang reinforces existing negative stereotypes about Asians’ singleminded focus on money and dangerous driving, I promise to give you completely new reasons to regard us with scorn and horror.

Some voices in my head have asked, “Ryan, why would you want to run for mayor?” To answer this, let me tell you a story. A few years ago, I was a lowly graduate student in an obscure school, studying something involving very high things. A guest, Dr. Janna Levin, had a pizza lunch with me and my fellow peons. One particularly interesting question asked was, “If you could be anything except an astronomer, what would you be?” I recall that my answer was “local public official, because it combines the best combination of power and lack of accountability”.

It was then that I realized that in four years, after I grew tired of mooching off my parents, I would embark upon this glorious crusade to ensure an absolute lack of change in how things are done.

This election, we have heard candidates from the left and the right promise change, bemoan the status quo, and spend so much money on television advertisements that I’m actually starting to miss the stupid Geico crying pig commercials.

I am here to reassure you that, as mayor, I won’t change a damn thing. All these candidates who promise change never ask you, the voter, you, the ATM machine, whether you really want change. We (weeeeeeeeeeee!) do not ask ourselves that question enough – though my personal record is 834 times in a day.

If things changed for the better, what would we complain about? Who would be blame for our own failings? Most importantly, who would we feel smarter than? We need our current dysfunctional state of government because it salves our ego, absolves us of personal responsibility, and provides an economic stimulus to the nationally vital late night comedian industry.
And, of course, things could always change for the worse. We could have zombies roaming the streets, the result of an experiment involving so-called “health care”. We could have translucent golems prowling our neighborhoods, scaring our children, the result of so-called “recycling plastic bottles”. We could realize that we are bankrupt, thanks to so-called “transparency” and “standard accounting practices”, rather than live in the only mildly uncomfortable state of suspecting, but not knowing, that we’re all going to have to work until we’re dead.

Remember that it can always get worse. Remember that, and let it infect your dreams. Let it dominate your waking thoughts. For this is what these “change” people offer.

Friends, Bro-mans, and Country Chickeners, lend me your fears!

I promise to reinforce the status quo as vigorously as any 19th century Austrian diplomat. I promise that local government will continue to muck around, displaying no initiative or creativity. I definitely will guarantee no attempts to improve schools – after all, children are the cheap labor of the future, and you can’t have their heads filled with arithmetic, or questions, or, God forbid, ANSWERS. It’s how the Greatest Generation dealt with the Boomers, and it’s how we’ll maintain an 18th century standard of living.

In closing, let me just say that, as mayor, I will be exactly what you expect from local officials – corrupt, incompetent, and crazy. (Shut up.) Who’s talking during my speech? (You are, idiot.) No you’re an idiot.

Anyway, vote for me. Remember – a vote for me isn’t a vote against hope; it’s a vote for fear.

The Last Dream

This is actually taken from a dream I had last night. Not "Kublai Khan", but it was vivid enough that I thought I'd try to recreate it.

“David.”

I wanted to tell him that, growing up together, he had always inspired me with his confidence, his athleticism, how effortlessly he had made friends and moved between disparate groups.

I wanted to tell him how much it hurt to see him playing the part of a broken man, and the terror I felt at the thought that it was not an act, an annoying personality quirk that sought recognition through pity, but that it was actually true – that he believed, truly, that he was a worthless has-been, powered only by bitterness and inertia.

So much that could’ve been said. Perhaps some magic combination of words would inspire him to fight, to rise, however slowly, from a tar pit of self-loathing, to save himself, and, because we who lived with him knew he was once the best of us, save all of us.

But all I could say was

“David. My father is dying.”

If he had transformed into a sympathetic, older brother figure of ancient days, I would’ve wept, fallen to my knees, and prayed to God.

If he had grown angry, violent even, and become the noble maelstrom that had dominated the football fields and filled us with such awe and fear with his ferocity, his grace, and his miraculous one-man plays, I would’ve welcomed the hail of abuse and rage, pleaded for mercy, and followed him without question into whatever war he would wage against the wretched world.

But he sat there, unchanged, somewhere between frustration, impotence, and death.

I left him there in his metal folding chair. If I needed him, I knew he would still be on his throne of mediocrity.

I picked up a wind-beaten stick. I breathed the desert air, acrid and heavy. I moved the stick above my head, around, an ancient, unknown ritual, forgotten a hundred generations ago, but invoked now to summon the last of the power of ancient gods to return our champion to us.



In the distance, a muezzin called, singing in a high, plaintive voice. It sounded as if he was telling us that the day had expired, and the sun would never again return.