Houses Should Depreciate

Conventional wisdom says that houses increase in value over time, but this is an oversimplification. Houses last for a long time, but at best they should hold their value. New technologies are periodically invented that become standard on new houses but are difficult to retrofit into old houses. Over long periods of time, even solidly built houses wear out.

Land increases and decreases in value according to supply, demand and external factors. Someone builds a park nearby, it goes up. Someone builds a pig farm nearby, it goes down. Jobs are created nearby, it goes up. Jobs leave, it goes down.

Inflation increases the apparent value of houses, but not enough to explain what we observe, unless official inflation rates are understated (not an implausible assertion).

A housing bubble (like the recent one) can be considered a kind of inflation. Low interest rates and increased mortgage availability allowed people to afford to spend more on houses, and they competed with each other, driving prices up. Now that we have too many houses, lots of foreclosures and a recession (which occurred in that order) prices are dropping.

Manufactured housing depreciates. It is often cheaper and less sturdy, but it doesn't have to be. A "Katrina House" can be just as strong as a conventional house. What's the difference?

These explanations are unsatisfying. Something's missing. Is it psychology--we think housing appreciates, so our expectation creates the reality? Are people richer than they were 30 years ago?

Vampire Romance

I'm watching Let The Right One In, a Swedish movie from 2008 about those awkward years where the kids at school bully you and your first crush drinks blood to survive. It's slow moving and subtitled, but there are lots of interesting cultural differences--haircuts, clothing, music, behavior. In an American movie, the locals in the bar wouldn't have been friendly to the new guy in town. Eli shows regret after a kill. There isn't much gore. It's like a movie made 20 years ago.

Wikipedia says that there's going to be an American version in 2010. Get ready for a flood of vampire-themed coming of age movies.

The bully doesn't seem very intimidating to me, but it's been a long time since I was 12.

I've never seen a bunch of cats win a fight against a vampire before. I wonder how they filmed that. I wonder what will happen when someone who has just been turned goes to the national health care system. "Take a number and have a seat..." I wonder how the two bite marks in the neck stop gushing blood long enough to scab over. Maybe a working NHCS is part of suspension of disbelief. It does make the scabbed bite marks seem less unlikely.

It makes sense for vampires to live someplace with long winters.

Some of these humans seem to have never seen a vampire movie before.

I'd expect a vampire who goes for long periods of time between feedings to be more careful not to waste blood getting it on other peoples' clothes.

Apparently this eternal 12-year-old isn't able to think long-term about things like investing in a blood bank.

I like how the violence is downplayed. The pool scene in particular is good. I'm not sure that "kill all the bullies" is the best long-term survival strategy, but it has its advantages.

I wonder if Eli's first "helper" was recruited at age 12 too. Kids are so dumb. I guess that's why we call them "kids".

Taxation and Fairness

When discussing taxation, much ado is made about fairness. Most agree that "everyone should pay their fair share" but to different people that's a different amount. Some say that people should pay the same percentage of their income. Others say that people should pay the same percentage of their spending. Advocates for the poor say that the current system of progressive taxation (so named because it was championed by the Progressive movement of the early 1900s) is the most fair, because the poor have hardly any money already. (Calling Progressive policies progressive is a claim that I am not going to address in this post.)

In my opinion, the only fair tax is a head tax: every person pays the same. Since (without making the tax so high that some can't pay) this is not sufficient to pay for the government programs we need (much less the government programs we don't need) we should set aside our differing notions of fairness and look at what is practical.

There are many practical reasons why it's a bad idea for only rich people to pay taxes. If politicians are elected in order to hand money to the majority, the system will collapse. If the rich feel oppressed, they will leave and tax revenue will collapse. If it's more profitable to not work than to work, the economy will collapse.

If the poor and the middle class are taxed they will have financial incentive to vote for fiscally responsible government. To make this incentive more direct, taxation should not be concealed via payroll taxes, sales taxes, inflation or some other mechanism. Paying taxes should be as visible as possible: a check that you write (or an electronic funds transfer that you initiate) to the government at least yearly, better yet quarterly, and maybe even monthly. Treat it like any other bill, and people will take action to control it the same way we take action to control our other bills.

To make it easier to pay taxes quarterly or monthly the income tax system should be streamlined. This is worth doing anyway and should have been done long ago. (A positive side effect of massive tax simplification is that the IRS can be downsized, saving lots of money.) The current income tax system has thousands of exemptions, deductions and credits, and rather than cherry-pick which should be eliminated, it would be more fair to eliminate all of them and only add in the handful that are really needed, if any. I'm not even sure that the standard deduction is needed, but that's a topic for another post.

Measuring Freedom's Value

This idea is not original to me.

How many dead people is freedom worth? Thousands of people have already given their lives for it. How many is too many? To be more specific, if we knew ahead of time that we could save 10 million lives by giving up our freedom of speech, would you choose to do so?

What about freedom of assembly, freedom of religion, freedom from unlawful search and seizure, freedom from cruel and unusual punishment, and so on?

This sounds very abstract, but it becomes less so when we consider laws designed to protect us. For example, the US Supreme Court has ruled that police checkpoints (where the police stop every motorist in search of drunken drivers, or illegal immigrants, or something like that) do violate the 4th Amerndment to the Constitution, but are OK anyway when they're in the public interest. I don't know how many deaths have been prevented by sobriety checkpoints, but it's probably been at least 10. Is that enough?

Periodically we hear (usually in the context of some new safety law) the phrase "If it saves even one life it will be worth it." I'm skeptical. Everybody dies, and postponing death for one person by a few years, even by a few decades, does not have infinite value.

In 2008 the US Congress passed the Consumer Product Safety Improvement Act (CPSIA). Intended to remove sources of lead from the mouths of young children, its side effects include driving out of business "tens of thousands" of companies, including thrift stores. I consider myself part of the anti-lead-in-babies camp, but that is a little drastic, especially in these difficult economic times. Nobody even knows if CPSIA will save any lives at all (it was passed in a fit of hysteria over Chinese imports, with very little scientific justification), but only one Congressman out of all of them voted against it.

What I conclude from all this is that people don't actually value freedom very much at all.

Earth Day

Today is Earth Day. It's also Lenin's birthday. I don't observe either, for the same reason: people are more important than ideology.

It is unfortunate that the modern environmentalist movement has embraced the methods of Lenin, which brought about the deaths of millions and the political subjugation of millions more. Let's be clear: those negative things were not the goals of Lenin, they were the inevitable by-products of centralized decision-making. Whenever leaders try to dictate from afar how we should live, rights are trampled and people die.

There is no danger that we will destroy the biosphere with greenhouse gas emissions. Humanity will survive climate change more easily in the future than it has in the past. We should support measures that increase freedom and oppose proposals to decrease it.

Life

I finally saw the season finale (possibly the series finale if it's not renewed) of the TV show Life, and it blew my socks off. Now I want to Netflix the DVDs and watch the whole thing from the beginning. This is made easier by the fact that there are only 32 episodes. I love it when a great show is canceled before it jumps the shark.

Abolish corporate income taxes

Corporate income taxes should be abolished. Here's why:

1. To a company, tax is one of many costs that get rolled into the price of a product. Customers ultimately pay in the end, making corporate taxes equivalent to a (complicated) sales tax, which is regressive: poor people pay more than rich people as a percentage of their income. Eliminating these taxes would disproportionately help poor people.

2. It would stimulate the economy by lowering compliance costs. Companies wouldn't employ people to do their taxes. Companies wouldn't do complicated things to hide income from the tax man like they do now.

3. It would give local companies an advantage, providing jobs and improving the economy.

4. It would decrease corruption. Currently, companies give campaign contributions (a.k.a. bribes) to politicians in exchange for favors such as tax exemptions. Reduce the favors politicians can give and you reduce political corruption.

5. Corporate income taxes don't actually bring in much revenue (compared to other income sources), making it easier for the benefits to outweigh the costs.

Artificial Wombs

A Louisiana lawmaker has proposed a new law that will make it illegal to:

create or attempt to create a human-animal hybrid, . . . transfer or attempt to transfer a human embryo into a non-human womb . . . (or) transfer or attempt to transfer a non-human embryo into a human womb.

I understand how discomforting it can be to think of mommy as moommy, but consider the many benefits of artificial womb technology:

• People would still be people. You're not less human if you were a preemie and spent your first three months in a life support chamber.
• Abortion would almost disappear. People could put an unwanted baby up for adoption as soon as they learn they are pregnant. People who want to adopt a baby could ensure that it has the best prenatal care available.
• Women with medical conditions that require powerful drugs would not have to choose between their own lives and the lives of their unborn offspring.
• Artificial wombs would protect fetuses from the risks of everyday life, such as car accidents.
• High-risk pregnancies could be monitored by medical professionals 24/7.
• Premature births would have better outcomes if a baby could be transplanted into an artificial womb and provided with a normal gestation time.
• If for purely legitimate purposes we needed to raise a large army of clone warriors loyal only to me, we would be able to do so.
• Some fertility problems could be mitigated.
  
• Once the technology becomes safer than traditional pregnancy, it frees women from some of the negative side effects of pregnancy.
  

Artificial womb technology has many benefits and few drawbacks. Even if it were only used to save lives that would otherwise be lost, it would be worth it, but the long term potential is even greater.

Efficient decision making

Small organizations tend to be more efficient than large ones because in a large group it is easier to separate decisions from their consequences. In general we make better decisions when the consequences affect us and we make poorer decisions when they don't.

When I buy a car for myself, I have many reasons to do a good job. If I get a car that breaks down too much I'm inconvenienced. If I negotiate poorly then I spend more money. If I don't get the features I need then I won't be able to use those features.

When I buy a car with someone else's money for someone else to use I have less reason to do my homework. Maybe I'll buy whatever my buddy the used car salesman suggests. Maybe I won't haggle. Maybe I won't bother to take a test drive.

People have a right to make bad decisions. Maybe you'd rather buy a Corvette than a Corolla; people legitimately disagree about things like that. Companies can make bad decisions too; it's their money to waste. Government, though, is a special case, because it doesn't spend its own money.

Inefficiency in GM, or AT&T, or Microsoft, or any other big company doesn't bother me much. I'm free to not give them my money. But if I tried that with the government, sooner or later unhappy men with guns would show up at my door.

What's the solution? I don't know. It's easy to say "government should be as small as possible" but it's not that simple. Nothing's simple.

First Post

Human beings crave simplicity. We want simple explanations for the complex things we observe, but simple answers are seldom accurate.

For some reason this fascinates me.