States Are in Trouble

July 24, 2008

From Today’s WSJ: States Slammed by Tax Shortfalls

The stumbling U.S. economy is forcing states to slash spending and cut jobs in order to close a projected $40 billion shortfall in the current fiscal year.

…Unlike the federal government, most states are required to balance their budgets. Most have so far resisted tax increases, instead opting for raising prices on things like tolls and college tuition, and cutting back on services like education and health care. Some chose one-time measures such as tapping rainy-day funds that were built up in flusher times.

The housing slump, now well into its second year, is the primary culprit. The decline in home sales has cut into real-estate transfer taxes. Construction spending and employment has declined. Fewer home sales have resulted in lower sales of home furnishings and washing machines, eating into sales taxes.

Of course, for many states, today’s budget woes stem at least partly from expanding their services during good times and not planning enough for the inevitable downturn.


Ahh! The last sentence is only partly true: I would say that at least 95% of the state’ budget woes stem from expanding government too much in the good times of the past few years. This is cold and cynical but here’s my analysis of the current situation:

Many states (New York, New Jersey, California, Maryland, Massachussets all come to mind) have horribly irresponsible governments. These states are run by liberals who use any chance they get to increase the size and scope of the state government. They got their chance too: all of these states participated in the housing bubble. This created a temporary surge in tax revenues. These states increased services and made promises with the expectation that the good times would last forever. Anybody with half a brain (much more than anyone in the New York State Senate has) could have seen that this was a bubble and was not going to end well.

Now that the shit is hitting the fan and the bubble is busting, legislatures in these states are acting like their problems were inevitable. The irony is, if these states raise taxes and fees, they will further encourage the people who live there to get out and move to more responsible states where taxes are lower.

The tendancy of democratically elected governments to overspend (and over-promise) in the good times is a key reason why inflation/debasing of the currency is a virtual guarantee.


Toxic Energy at Work

January 18, 2008


I normally don’t write about work because it could get me in trouble. But this rant is mostly harmless so I should be ok.


My job at the bank is mostly “back office”; everyone on my floor is in a similar capacity. On my floor, there aren’t many people who actually seem enthusiastic about their work. In fact, many people mope around and seem to be half asleep. I am very fortunate that my direct group is nothing like this, but I feel sorry for my colleagues who aren’t so lucky.

I’ve been thinking about this because I’ve been observing how a “new hire” is being assimilated into one of the groups that sits near me. She has spent the entire week looking over people’s shoulders, presumably learning about systems and work she is supposed to assume. There is zero enthusiasm coming from the people in her group. It’s as if they are saying “here’s a nasty process that isn’t important but you will need to do it. Moreover, it’s so tedious that I can barely muster the energy to explain it to you.” Imagine starting a new job and experiencing this type of toxic and soporific energy from your new colleagues!!

Aside from the negativity of this approach, there is also a laziness and impracticality of training people this way – I suspect most people would agree. If you’re going to give me a process that needs to be done on a recurring basis, freaking sit down and type up documentation! It’s quite clear why the trainer wouldn’t want to do this… it’s hard work to document a process. It requires you to actually think about it. Worse, it requires you to be organized and think about the big picture. Instead of this method, I constantly see people being trained by watching someone else flip through Excel files.

What about this instead: when a person is given a process to own, hand them a detailed document which explains the necessary steps and where to find all source files, etc. Make sure you include an overview section that succinctly says what the process is supposed to accomplish. Then let the person spend a few hours going through the document and the associated files. The trainer should be available to enthusiastically answer any questions the person will have along the way. This way, the questions will be informed and pointed. I guarantee this would be a far, far more productive way of training someone.

So, as I gear up to leave my job for grad school this summer, I plan to hand documents to anybody I’m training on my processes. If I have to train someone on things which are tedious and dull, I will have a big cup of coffee beforehand so I sound enthusiastic and high-energy.

Bottom Line: if you are bored by your job, get a new one… or at least try your best to hide it!

Social Security Trust Fund Is a Joke

November 17, 2007

Yesterday’s mail brought my annual Social Security statement.  It shows how much money I’ve paid in and how much I would get if I were to become permanently disabled.  It also includes some lies about the Social Security Trust Fund:

In 2017 we will begin paying more in benefits than we collect in taxes.  Without changes, by 2041 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 75 cents for each dollar of scheduled benefits.  We need to resolve these issues soon to make sure Social Security continues to provide a foundation of protection for future generations.

This statement is very misleading – in reality, the Social Security crisis begins in the year 2017 because there are no actual economic assets in the Social Security Trust Fund.  The Social Security Trust Fund is merely an accounting entry; it shows what the Treasury has borrowed from Social Security.

“In 2017 we will begin paying more in benefits than we collect in taxes.”  So what happens then?  Well, the Social Security Administration will cash in the IOU’s from the Treasury in order to pay benefits.  Since there’s no actual cash set aside to pay, the Treasury will have to get the money from somewhere…either by raising taxes, borrowing from the Chinese, cutting expenditures, or simply printing money.

Good timing that today Paul Krugman would write a column arguing that “Social Security isn’t a big problem that demands a solution; it’s a small problem way down the list of major issues facing America…”

Krugman criticizes Obama for calling the Social Security situation a “crisis.”   After all, this is the type of language used by the Bush Administration a few years ago when they were trying to privatize the whole thing. 

As far as I can tell, acknowledging that Social Security is in crisis (which it is) is not tantamount to calling for privatization… it’s simply acknowledging the above-mentioned reality.

Bad Experience at the Movies

August 4, 2007

This afternoon I went by myself to see a 4pm movie at the AMC Loews theater on 3rd Ave & 12st:

I got there at 3:40 and I took a seat in a row about seven rows from the front. When I sat down there was nobody to the left, right, or front of me. I tried to focus on my Week magazine and block out the advertisements on the screen. Even though the movie wasn’t supposed to start for at least fifteen minutes, the commercials were so loud it was impossible to do anything but watch them.

A few minutes later, a crowd of people descended on my row. Shortly thereafter, an obese woman flopped herself down in the chair directly in front of me, causing her seat-back to slam into my knees. This injustice was a little bit painful but mostly just irritating — what’s worse is that after she settled in, her seat had reclined about two feet into my space. I had no legroom at all at this point.

The only thing saving me was that the seat directly to my right was empty; I shifted my legs over there and got my legroom back. At this point, the previews were over and the movie started. Three minutes later, a man decides to squeeze past everybody in my row and take my legroom seat. So I sat the only way I could: straight back with my legs directly in front of me. Of course, since I was near the front, this meant I couldn’t see the screen without tilting my head back a little bit. I was already thinking about busting out of there when the new guy decides he wants to steal my legroom: he does this by moving his hairy leg so that it was touching mine. That was it — I walked out of there and got my $11 back.

I wouldn’t be surprised if the designers of the seats for AMC/Loews also work for United Airlines! At least UAL serves a purpose… going to the movies is supposed to be fun and relaxing, not stressful and painful! Assuming I have the choice, I will avoid theaters like that at all costs. I’ll stick to the Regal theater in Union Square if I ever go to the movies again.

I walked out of AMC/Loews and decided I’d see what was happening at the Union Square Barnes & Noble. The store was more crowded than I had ever seen it; almost all the isles were filled with people sitting on the floor, using the bookshelves as back rests:

I was thinking about browsing for books on those shelves but I just laughed and got the hell out of there! Now I understand why people with means always get out of NYC in August!!

DRM Controversy

June 2, 2007


When you buy a song or a software program, who really owns it? You or the company who sold it to you?

Songs purchased from Itunes or other sites often come with Digital Rights Management which puts all sorts of restrictions on what you can do with the file. For example, you can’t just give it away to all your friends or download it to 300 Ipods.

DRM restrictions are so annoying to me that I refuse to buy any music if it comes with them. I believe that if I buy a song, it is mine and I should be able to do whatever I want with it. As far as I’m concerned, there is no fundamental difference between digital files and CD’s. Sure, it’s way easier to distribute electronic files than it was to make CD copies but that is beside the point. Steve Jobs certainly agrees and has been trying (with some success) to get the record companies that supply music to Itunes to drop their demands that the music come with DRM protections. So, for music, I think DRM will eventually go away.

For software though, it seems to be here to stay. Have you ever tried to download Turbo Tax, Microsoft Office or Windows on more than one computer? Well, you can’t… you have to buy a second copy at full price. This is annoying but tolerable.

What’s far worse is usage restrictions on software that you already have downloaded on your computer. Last year, at great expense to my then-employer, I enrolled in the Becker CPA review course. It comes with software which has review questions and practice tests. You have exactly one year to use the software after you download it onto your computer. After that, it stops working and there’s nothing you can do about it. To get it reactivated, I was offered a “returning student discount” of $450!

What an insult!! We are talking about basic software, not an online course. What if book publishers put limitations on how long you could read a book before the internal explosive mechanism destroyed it? Obviously, nobody would buy books from that publisher! There is no fundamental difference here. If they wanted to put time restrictions on the practice questions, they should have put the entire thing online. Your access to the website would expire after one year. This is my software and I should be able to use it forever.