Politics, Economics and other Stuff

Low yield weapon and counterforce objectives

US Price level history 1913-1950: not like today's CPI dynamics

Given the price level instability (and it's not a random walk in levels or rates), it's astounding anyone made it out alive.  A Federal Reserve failure of grand proportions.  Also a failure of the political system.  The question is why did the political system fail so grandly, especially with FDR in charge after 1932 (and supposedly trying to manage the monetary system to hit targets, not chaining decisions to a suboptimal automatism like the gold standard).  

Also, New Deal inflation never even gets above 5% year-over-year:

Time to start blogging again?

It would get me off Twitter.  

Hello Again

I have 'Stuff' to write about.  

Cargo Cults and Ideologies of Knowledge

I've been thinking about this due to my existence in a regulated industry....not that I've written anything.  I started the post in Oct 2016, but then couldn't face the pain of actually writing it.  

The GOP's 'Border Adjusted' Corporate Income Tax Proposal

I've been caught 100% off guard by the GOP's 'border adjusted' corporate income Tax proposal.  I knew it was floating around and I'd heard the tag lines, but I'd was not taking it seriously.  Now it may be for real, in some form, but not the advertised form?  I see that Trump wants changes from the Ryan version.

In any case, I need to do some reading.  There is surprisingly (unsurprisingly?) very little out there on the topic and headline tax guys are rushing to write papers.  

For starters, I understand how border adjustments work in VAT systems, but the GOP proposal is different, if I understand it correctly, like a VAT but with deducibility of labor costs (and some capital costs??? -- here things seem to get hard to understand).  I don't yet know how to think about this.  Also, importantly, implementation is based on what accounting systems actually do and can be made to do given incentives to structure income into tax accounting buckets, and given how the tax system builds on existing accounting and tax history.  

And the politics looks brutal for the GOP coalition, unless the incidence shift to Democratic groups (always possible).  

Here one discussion (MNC = multinationals):  

First, this tax system is very difficult to explain to public or, even, experts. This
creates a risk that loopholes will be easier to design due to the deliberate
exploitation of the system’s complexity by savvy tax planners and lobbyists. Yet if
the system is implemented in a more theoretically pure form, without opening the
door to loopholes, it is not clear that the MNC business community would support
the proposed changes. The net effect would be a tax increase for the intangible intensive
MNCs that had previously succeeded in achieving single-digit tax rates by
gaming the old system (and shifting U.S. profits abroad). It is also a tax increase for
highly-leveraged firms, since debt-financed investments would no longer be
subsidized. Retailers that import into the US and manufacturers that import parts
are likely to object to a new tax system that means they cannot deduct their cost of
goods sold.

Second, there is an increased likelihood that many profitable firms would show
losses. This is especially the case for exporters, since they may have deductible
expenses, but no taxable revenue. Exporting firms with persistent losses will find
the credits do them no good, which would affect export incentives. While
economists would support a refund system in order to keep tax neutral, there is a
large potential for fraud, and politically it seems unlikely that the government could
issue large checks to profitable corporations on a permanent basis. The alternative
suggested by the Blueprint is unlimited carry-forwards, but this doesn’t solve the
problem for businesses with losses that may not be offset. Exporting companies
could of course merge with non-exporters in order for the losses to be more useful,
but inducing a slew of tax-motivated mergers would be inefficient.

...there are myriad technical problems that remain to be worked out. For
example, financial institutions require separate treatment. The pure form of this tax
leaves out financial flows entirely. An augmented form of the tax can capture
financial transactions in the base, but this would introduce complexity as all
companies would need to keep track of financial transactions, as well as whether the
transactions occurred with foreign companies. There is also substantial ambiguity
between what transactions are real and what are financial, and such ambiguity
raises both technical considerations as well as opportunities for tax avoidance

Indeed, the corporate rate chosen is intellectually incoherent. One of the purported
advantages of a destination-basis corporate cash flow tax is that it is supposed to
curb profit shifting by removing the incentive for shifting profits and activities
abroad. But, if that is the case, why is the rate cut needed? If tax burdens truly
depend only on the location of immobile customers, why not keep the corporate rate
at the same level as the top personal rate? The usual argument for the lower rate
relies on the international mobility of income and competitiveness concerns. If such
concerns are moot, then there is no reason to tax at a low rate.

Further, the discrepancy between the top personal rate and the business rate will
create new avoidance opportunities as wealthy individual seek to earn their income
in tax-preferred ways, reducing their labor compensation in favor of business
income. Companies would be inclined to tilt executives compensation toward stock options
and away from salary income, and high-income earners would be inclined to
earn income through their businesses in pass-through form.

The Ryan proposal exempts the normal return from capital, giving these returns
zero-tax treatment. Further, excess returns (profits above the normal level) are
taxed through the business tax system, but at rates far lower than the top personal
income tax rate. The theoretical rationale for justifying such a favorable tax
treatment for rents (excess profits) is simply absent. From an efficiency or an equity
perspective, taxing rents at a higher rate makes sense.

Recent evidence from Treasury suggests that now about 75% of the corporate tax
base is rents/extra-normal profits; this fraction has been steadily increasing. If
destination-based taxes are meant to fall solely on rent, this implies a higher ideal
optimal tax rate, since taxing rents is far more efficient than taxing labor or capital.

Burning Coal in History

I'm in one of my pre-Christmas drive escapist reading binges. How I deal with stress.  

I like this one:

Unusually large and locally variable carbon isotope excursions coincident with mass extinctions at the end of the Permian Period (253 Ma) and Guadalupian Epoch (260 Ma) can be attributed to methane outbursts to the atmosphere. Methane has isotopic values (δ¹³C) low enough to reduce to feasible amounts the carbon required for isotopic mass balance. The duration of the carbon isotopic excursions and inferred methane releases are here constrained to <10,000 yr by counting annual varves in lake deposits and by estimating peat accumulation rates. On paleogeographic maps, the most marked carbon isotope excursions form linear arrays back to plausible methane sources: end‐Permian Siberian Traps and Longwood‐Bluff intrusions of New Zealand and end‐Guadalupian Emeishan Traps of China. Intrusion of coal seams by feeder dikes to flood basalts could create successive thermogenic methane outbursts of the observed timing and magnitude, but these are unreasonably short times for replenishment of marine or permafrost sources of methane. Methane released by fracturing and heating of coal during intrusion of large igneous provinces may have been a planetary hazard comparable with bolide impact.

Also a reminder the the LPE is the most imporant/biggest extinction ever, though wiki may be overstating the a bit here (note 'up to' -- species numbers are not very observable and need to be inferred, as does a lot of timing, so we're looking at some thing more like 90% of all marine species gone in < 10,000 years):

occurred about 252 Ma (million years) ago,^[4] forming the boundary between the Permian and Triassic geologic periods, as well as the Paleozoic and Mesozoic eras. It is the Earth's most severe known extinction event, with up to 96% of all marine species^[5][6] and 70% of terrestrial vertebrate species becoming extinct.^[7] It is the only known mass extinction of insects.^[8][9] Some 57% of all families and 83% of all genera became extinct. Because so much biodiversity was lost, the recovery of life on Earth took significantly longer than after any other extinction event,^[5] possibly up to 10 million years. 

Cartoons help (how do they get journal space for cartoons???):

 

Real Life Latte Production

Saturn

Older photo, but still cool.  

Bookcase Progress

Two other walls went up too, not quite done.  

The buy more bookcases project

What happens when you look for a book in the remaining book boxes.  Yes, I should fix that closet door that's off the hinges...needs some new parts.  

Big Book Dig

Many/most of my books have been boxed since 2004 or 2009...so I'm making a stab at getting them out of boxes and sorted.  My wife wants bookcases too, which may take longer.  

In any case, I have good stuff!  Here the preliminary haul of geosciences books, and I don't even like geology (though I like climate physics and do okay with geophysics and some geochemistry).  One astrochemistry book here, since it is relevant.  I think there is more in still unopened boxes.  Ah, just found a small pile I'd overlooked, 2nd photo.    

It is sad how badly science (or anything) is taught in the Fairfax County public schools (outside of I assume JHMS).  And the kids resist 'enrichment'.

 

Energy loss via neutrino escape can exceed radiation losses

Janka, Explosion Mechanisms of Core-Collapse Supernovae, 2012. 

A key aspect of the carbon burning stage.  

Pair production neutrino decoupling is also important for timing/controlling primordial neucleosynthesis.

Just if you thought neutrino physics wasn't important for the real world we stand on (since these two processes pretty much cover the creation of all non hydrogen elements).  

Gardening with Deer

I ordered an automatic deer sprayer.  See if that helps.  

German Military WWII Losses by Front

These figures are actually a bit more uncertain than you'd expect (with record keeping not keeping up with German losses in the end).  Via wiki, numbers seem about right (but I've not checked the sourcing or methods).  A ratio of a bit over seven for East vs. Western/Southern losses.  German military losses here include Germans from non-1937 border German population, including Austria (~230,000) and Eastern Germans (400,000-550,000).  Again, only 'military' losses.  

 

Trends II

Trends

Plasma actuators!

Plasma actuators seem like the could be very exciting technology.  'Stuff I missed.'

Neighborhood building

Went for a local walk with my wife over the weekend. Standard new house size is now around 6,000 sqft.  

Party Politics is Local and History Dependent

Party politics is local and history dependent, both for the electorate and the parties.  And this is for heavily 'nationalized' German state elections.  Whata the Green party is doing to the SPD (not counting the Linke doing the same thing in SA to the SPD, history is different there) in BW is also demonstrating why the CDU worries about it's right flank so much (for instance AfD).  And looking at the results, I'd not been paying attention, this looks like more great coalition land, this time state level.  AfD is eating up the room you need to govern.  Not good.  

Die Prognose Forschungsgruppe Wahlen für Rheinland-Pfalz:

SPD: 37,5 Prozent
CDU: 32,5 Prozent
AfD: 11 Prozent
FPD: 6 Prozent
Grüne: 5,5 Prozent
Linke: 3 Prozent
Andere: 4,5 Prozent

Die Prognose von infratest dimap für Sachsen-Anhalt:

CDU: 29 Prozent
AfD: 23 Prozent
Linke: 17 Prozent
SPD: 11,5 Prozent
Grüne: 5,5 Prozent
FDP: 5 Prozent
Andere: 9 Prozent

Laut den ersten Hochrechnungen für Baden-Württemberg liegen die Grünen weit vor der CDU:

Grüne: 32,3 Prozent
CDU: 27,5 Prozent
SPD: 13 Prozent
FDP: 8 Prozent
Linke: 3 Prozent
AfD: 12,5 Prozent
Andere: 3,7 Prozent

Wolves in Europe/Germany/Poland

Looking for German-Polish population history, I found instead...European wolf demographics.  French Alps are pretty much ground zero for Western European wolves, not clear to me why that is.  Surprising to me wolves are making it in Eastern Germany, but not in the Austrian Alps (yet?).  Is this different history of hunting along with different hunting today.  Lots of wolves in the Balkans.  Also, wolves in central Italy!  Who knew?  Not me.  

The 1937 Border Today

One of the several things that surprised me about the population density map for Europe I posted a few days ago is that you can very clearly see where Germany's 1937 border in Poland was.  Not clear to me what's going on here...for one thing, the population density in the ex-German part of Poland (using the 1937 border, there are others), looks similar to that seen to the West of the Oder.  So it's not like these areas are any more depopulated that the rest of the East German rural landscape.  The simplest explanation is that Polish and German rural policies were sufficiently different sufficiently long that the population densities were different enough pre-1937 to persist to today, albeit with population transfers in and out of the now ex-German part of Poland.  But for some reason people have not moved to the rural west in Poland...which is surprising.  The area around Posen/Poznan looks like it is high density, so this may not be a 19th century effect, since Posen was German from 1793 onward (but policy may have been different than further West -- still, about 1/3 German, 2/3 Polish population by some counts, not sure how that breaks down for urban/rural differences).  

There's also some higher density rural life going on in southeastern Bavaria into Oberösterreich that's news to me.  Also interesting is the high rural population density in norther Switzerland.  There was a lot of talk when I grew up of 'strukturschwaeche Grenzrandgebiete', and you can clearly see that here...I assume this is post-1945 and just persists to today, but it might be more complex.  

Algae Control?

Cutting back on light exposure time and turning up light intensity, and cutting out fertilization (and carbon addition) seems to have helped.  May take a few months for plants to recover.  We'll see.  Sort of the typical first planted tank cycle?  Update #1: yes, that's a photo of my algae, but it's the good kind.  Not posting photos of the bad stuff.  

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