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Date: 2005/12/06 15:57:36, Link
Author: haceaton
The name "Darwin" has been in the top 1000 male baby names for almost every year that there are statistics for. It reached a whopping 300th most popular in 1935 but has been near 900th more recently.

My baby boy is expected next month and I was hoping to find a name to honor my great uncle: Homer W. Smith. He made quite some contributions in evolution research and understanding renal physiology but the name "Homer" is very unpopular these days for obvious reasons.

But I really like the sound of "Darwin" and so does my wife. Independent of Erasmus and Charles Darwin, it's just a great sounding boy's name. Most of my family and friends think that such a name would constantly lead to controversy and offend too many people. This strikes me as odd since it's just a name of an honorable and accomplished scientist. I certainly don't get offended or pass judgement on anyone for their name, so why should others?

So their must be something like 150,000 or so "Darwins" in the U.S., but I've never met one. Does having that name cause problems? Any Darwins (or others with opinions) out there who could comment?

Date: 2005/12/07 01:52:00, Link
Author: haceaton
No, I live in Maryland but there are Fundamentalist Christians in just about every state.

Date: 2006/01/04 13:44:20, Link
Author: haceaton
Flint said:
Quote
By economic principle, those who have more money are producing more of value - that is, more stuff that other people are willing to pay for.


Let's take Paris Hilton for example. It's true she produces porn, stupid TV shows and other stuff "of value" but suppose she didn't and instead did nothing but eat the food brought by her servants and agree to let her accountant execute a simple strategy (to be described). Suppose further a total abolishment of the estate tax as Bush would like (and although it's oh-so-hard to figure out what effects this might have, I'm going to make a wild guess how it could affect dear Paris).

So her strategy is to inherit her billion(s), invest in a broad mix of stocks and securities worldwide, taking care to choose those that either pay no dividends or very low dividends. She could hope that Bush would get his "no taxes on captial gains" wet dreams but until then she will only sell the losers as necessary. She uses her portfolio to secure loans for whatever spending needs she might have. As fully secured loans she gets a pretty good interest rate, but let's be really generous and say 10% per annum. Now suppose she spends a mere $10 million annually just for a modest living style (I know, it's really hard to go a year on a mere $10 million, but she's playing the miser in order to get really rich). Suppose on average her $1 billion portfolio gains in value at 6.5%, well below the historic stock market average return of  8.7%. She spends $10 million on snacks and such and another $1 million on interest (actually she usually just lets the interest accrue and pledges more stocks as necessary). Her accountant might even sell the odd loser stock (accruing a capital loss carry over) and make a loan payment or two. With a bit of loss-carry-over she can even sell a few winners now and again just to keep her interests costs down. Note that she never pays taxes 'cause she's got no income. Say she does this for another 50 years and dies. She's got loans totaling just over $11.6 billion assuming she's never made interest payments. No matter, her portfolio is worth $21.9 billion. Say she has a child who inherits these assets and debts. Through the magic of resetting the cost basis at the time of death, there are no capital gains for her heir to pay taxes on, (s)he just sells $11.6 billion of the stocks, pays off the loans and starts over.

This (jiggered, the actually results of a real strategy like this are way better than the bogus numbers I've used above) example clearly illustrates the wisdom of a few of Flint's ideas: (1) nobody can figure out what the heck tax policy effects might be, especially not a layman*, (2) Rich folks like Paris are super productive and all rich people like them have more money 'cause they've produced more value, and (3) There is no moral element *at all* to any economic policy.

*The layman might be tempted to think that any policy formulated by wealthy elites would result in the wealthy elite become richer in relative terms than everyone else, but that would just be a dumb guess with no basis in reality.

Date: 2006/01/05 05:06:46, Link
Author: haceaton
Flint:
Quote

nobody can figure out what the heck tax policy effects might be

Quote

No, I didn't say this. I was talking about the effects of LOTS of tax policies, all at once, on the national economy.


Can you explain how tax policies are applied singly, not all at once so that you can understand their effects? I didn't think so.

In terms of the national economy, I agree nobody can understand all of the effects on the national economy, but you can understand a few important ones. For instances virtually every policy that Bush has advocated can, will and has had the effect of making the rich richer at a faster rate than everyone else. That's not their only effect but it is one significant effect. I think maybe this is an effect that is meaningless to you. It seems like the only effects you're concerned with are the GDP and its first derivative. However, as a moral issue, some people care how the money is distributed. The "biggest economic boom" in history may have occured during the late 90's by your view, but median household income (in the U.S.) went up a lot faster during the 50's. Hint: a lot more of the 90's boom went to the super-rich which is why the median didn't rise that much.

This whole side-thread started because you expressed derision with someone who held an opinion on some economic policy while admitting no formal training in economics. The odd thing is that you've since been arguing that those with expertice really don't know very well what effects different policies will have either. I disagree, I think many policy formulators have a pretty good idea what effects their policies while have (probably not the global consequences but at least the most basic consequence that they care about). They know it will make them and their supporters even richer in relative terms which is what they care about.

Quote
But what you're doing is like pointing to helium balloons as "proof" that the observation that dropped items fall is foolish.


Paris was a bad example because, as I admitted, she does produce "value". I tired to abstract it by saying "what if" she didn't does those value added activities. The trouble is that the tens of thousands of rich oafs that actually don't do anything except get richer are not well know by the public, so they make rather abstract examples. But I have to disagree with your analogy to my point. I'd guess that about half of the rich people are rich due to their "value" contributions to the economy and the other half were born in to it or just had it fall in their lap. In terms of total dollars this is a big deal. To extend your analogy it would be as if 20% of the mass of the earth were helium balloons floating up which you'd like to describe as inconsequential because they were only a few thousand balloons with all that mass.

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I was careful not to speak about economic policy, only about economic activity.


Sorry, my bad. I'm glad you've cleared up that you agree that economic policy decisions are often moral decisions. Kinda suggests that maybe laymen with no formal economic training might not be so absurd to voice opinions on these moral matters.

Date: 2006/01/05 16:39:13, Link
Author: haceaton
Flint:
Quote
Personally, if I'm making $X a year and I'm comfortable, I don't become any less comfortable to discover that someone else is making $100X a year. Nor do I feel poorer to learn that tax cuts have raised them to $120X a year. But I understand that some people pay attention to these ratios, and DO feel poorer.


Usually the amount people pay attention to this is proportional to how rich they are. Thus the Walton family spent over $3 million lobbying for a permanent estate tax cut, because it is a big deal to them if they can be the group that has 20% more (even though they already have more than they could ever spend). Besides the pure perception issues, an accelerating highly skewed distribution of wealth will have long-term unhealthy consequences for the nation.

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Here's an example: we have a factory chuffing pollution into the air. We want it stopped. Now, should we levy a fine for polluting of $X, or should we sell the polluter a pollution license for $X? Most people find the former morally satisfying and the latter morally appalling, yet economically (from the perspective of the polluter), there's no difference. $X has been added to the cost of doing business.


Funny that those business for whom it "makes no difference" are pouring millions of dollars into lobbying for laws to allow purchasing pollution tax credits. Since it makes no difference, why do these highly educated people (some with on-staff economists no less) waste their money in this fashion? Personally as a policy matter I favor the criminal approach - throw the polluter (the CEO who orders it done) into jail. They can go ahead and factor in that cost in their decision making.

Quote
My writing skills must be terrible, if one reader sees me arguing certainty whereas another sees me as arguing purest guesswork.


No, it's your smug style. You began this all by indicate it was a matter of ignorance that a layperson questioned the  appropriateness of policy ideas such as tax reductions for the wealthy, etc. This implies that you think you know what global economic effects these policies will have and that they are "good". At the same time you admit no economist has a real good idea of how these policies actually work in the real world, except for that they do know the immediate effects on the people that matter (i.e. the rich). This is why Dean sees you as having mathematical certainty (you smuggly *know* that certain policies will have "rising tide" effects), while I attack your smugness because you admit they're based on the shakiest of econometric models. Heck, you even wrote (seriously) that Walmart's strategy is to have the lowest prices. Bzzzzt! Their strategy is to make the most money for themselves; low average prices to gain customers and ultra-low costs through any cost shifting they can get away with (whether legal or not) are only the tactics used to execute that strategy.

Quote
Efficiency can be defined fairly rigorously


Ok, I'll bite. Please provide a mathematical definition for efficiency of a market and provide the units (you can claim it's dimensionless if you like). Now tell me the numerical value for the efficiency of the market for, say, General Motors common stock. Provide the estimates of error for your efficiency value and please explain how you arrived at them. Remember, this is "like addition" so it should be cake for you.

Finally, I'd like to comment that you've got the usual conservative straw-man list of "which is fair?" tax strategies; none of them are fair if they're based on income. As I pointed out with the Paris example, for those with large amounts of capital they can continue to grow and spend their money without ever incurring any tax liability at all.

A fair tax scheme might be one in which every person pays a fixed fraction of the values of all of their assets each year, coupled with a VAT tax to cover consumption.

Date: 2006/01/10 13:59:05, Link
Author: haceaton
Flint:
Quote
From what I have read about WalMart (quite a bit), you are simply wrong. WalMart makes lots of money. What do they DO with that money? Do they pay their upper management exorbitant salaries? No. Do they pay out high dividends to their stockholders? No. Do they pay decent wages or bonuses to their rank and file? No. So where DOES the money go? By observation, WalMart converts their cost savings (however achieved) into lower prices. By comparative industrial standards, they aren't doing this to get personally rich. Their profit margins aren't exceptional. So you have fallen one step short here.


Really, are you that naive? It doesn't take a genius to realize that *margin* is not profit. Margin times volume = profit. Walmart, like all good profit making enterprises seeks to maximize total profit. They do this by trying to find the peak in the total profit curve. Evidently, they believe this peak lies at lower prices than they have yet been able to achieve. Bully for them, they may well be right. I think many other capitalist (e.g. record companies) drive their prices way too high just for the huge margins and make themselves poorer in the process.

Bill Gates once had a wet dream where he would monopolize the market for banking and transaction clearing software so he could make virtually all commerce clear through servers that he would control. I'm sure he intended to charge very low per-transaction clearing fees, while netting a few trillion profit anually. This is no joke, he really believed it. He underestimated his monopoly power and essentially got nowhere with this plan. But at least he wasn't stupid like you and thought the way to achieve massive wealth was by maximizing his profit margin. This despite the fact that he has monopoly power within his market and does use outsized margins to his advantage in his main business.

Really Flint, for a guy that argues that the rest of us are economic dolts, you're looking pretty pathetic. Since you're interested in the subject of Walmart and have read, but misunderstood, what they were up to, let me give you a highly simplified tutorial:

(1) Maximize corporate income (volume x margin)
  (a) raise volume through lower prices
  (b) use whatever techniques necessary to keep the best margin possible while doing this. Strategies
       include: (i) economies of scale (ii) market power (iii) government subsidy (iv) theft (v) fraud
       (vi) conspiracy.
(2) Pay minimum taxes.
  (a) Use creative "accounting" to show minimal profits to the IRS, while a different creative "accounting"
        to show shareholders maximal profits.
  (b) Obtain wherever possible tax credits, deferments, etc.
(3) Never, ever pay a dividend. Dividends are taxed and it is challenging to give them only to the "right" shareholders.
(4) Do not pay employees decent wages or give any benefits you can avoid. These just raise costs.
(5) Do not pay management oversized salaries.
  (a) salaries are taxed as income, you don't keep as much this way.
  (b) Not all of management "deserve" to dip into the money stream. Only a special few may
        drink from the well.
(6) Walmart's expanding profits (NOT MARGIN; PROFITS) will result in rising market valuation - this is where the real money is made.
     (a) Favorable tax treatment for "capital gains"
     (b) Unlimited upside, only requires a greater fool to pay a higher price. Fools are born at an
          alarming rate, so this is a slam-dunk.
(7) Use stock options to inflate the float while directing the new shares to the special few. Ordinary shareholders
     will fall for this dilutional sucker-punch every time.
(8) Use the magic of every share of stock is worth what the last trade price (i.e. the excepted standard for stock
    valuation) to convince bankers that your newly minted stock is worth a bundle.
(9) Borrow as needed against this "equity".
(10) Get all offspring listed in Forbes World's Richest People.
(11) Lobby like #### to repeal the inheritance tax so the family can keep it all in perpetuity.
(12) Lather, Rinse Repeat.

This is why the Waltons are filthy rich and you are not. You have no idea how the game is played. Seriously, if you are wondering why the energy and chemical moguls are lobbying hard for trading pollution credits, then you really ought to ask yourself "What do they know that I don't know ?" Instead you think you're smarter than them. Nothing could be further from the truth.

Date: 2006/01/10 18:33:56, Link
Author: haceaton
Quote
Do you sincerely feel I don't follow this?


Certainly you must have in EC101. Why you dropped the ball in order to criticize my position that the Walmart owners are out to maximize their wealth, I don't know, so I appologize for calling you stupid. But the argument you made relied on this error so you should either make a good argument or concede that Walmart is run to make the most money.

Quote
So the question is, could WalMart increase total profits by raising their prices?


Maybe, but I would say that they (Walmart management) doesn't think so. Since you disagree, what do you think is their motivation for low prices that makes them break the law, act unethically, etc.?

I would argue that the evidence points to a desire to make money; Sam Walton amassed an enormous fortune and this did not happen by accident or dumb luck, it was a systematic effort on his part; and he's surely taken better advantage of "the system" than Al Capone ever did or could.

I'm not fixated on Walmart, it was an example that you and others were using and I felt you were mis-characterizing. So I added my two cents. The same arguments can be made for many large corporations.

As for evil, no I don't think Walmart or the people that run it are evil. Greedy, yes. Unethical, yes. But this sort of greed and ethical lapses is very common in the business world - it is far from unique to Walmart. As you point out Walmart is vilified because of its success, not because it is peculiarly unethical. Heck, it probably even started out as a totally ethical, honest enterprise.

I would describe the pathology more like a drug addiction than "evil". Because the punishments are usually light to none and there is still the thrill of more money especially when you have too much, so the corporate tycoons really can't help themselves. I'd like to think I wouldn't do the same in their shoes, but it's easy to see how it happens.

Certainly there are many good, honest and ethical politicians. It's just that there are a lot more who aren't. The same with corporate executives. So we end up with laws that strongly favor the wealthy. I have no illusions that it will ever be any different, but I make it a point to try to "do the right thing" in politics anyway. I do believe we have a seriously broken system where corporations have the rights of citizens (free speech, etc.) without the responsibility (no such thing as corporate three strikes you're out or corporate life-imprisonment). It is what leads to the light punishments, resulting temptations and wealth addicted corporate chieftans.

Let me say two things before I go on: (1) I respect most of what you've said in on-topic (i.e. TOE) posts on PT and (2) I agree completely with:
Quote
Some days, I feel truly sorry for our grandchildren.


It surprised me that you said this because nearly all of economic theory seems to be based on the idea that unbounded growth is a necessity.

Quote
the Big Guys have all the politicians in their pockets, and are manipulating government regulation so that it protects them and their profits at our expense.


Hey that's pretty close! They may not have the politicians in their pocket, but they would like to. That is why they spend their hard earned money lobbying: to buy influence. [ What do you think paid lobbying is for?] Why do they want rules for pollution credit trading? Indeed it is to protect their profits. If they absolutely can't pollute then their costs will rise, their margins will shrink, and their market will shrink too. They won't make as much money so it is "not in their interest" to not pollute. The environmentalists don't want any pollution, and they have bought some influence too. So it's much "better" for the corporate mogul who wants to protect his profits to have predictable costs in the form of pollution credit trading than to run the risk of real severe and unpredicatable penalties in criminal or tort claims. The good news is that there are some ethical people running some corporations (Toyota comes to mind) that instead want to invest in finding ways to reduce pollution even though it reduces their profits. But you can identify those companies that want to pollute instead by how they lobby the congress.

Date: 2006/01/11 07:45:11, Link
Author: haceaton
Quote
First, it can reasonably be said that ALL for-profit businesses are out to maximize their wealth as a primary goal. I don't know why you would consider this a bad thing per se.

I'm going to take this that you have conceded the point that Walmart's strategy is to maximize its wealth and that minimizing prices is a tactic used to achieve it.

I never said that maximizing wealth is a bad thing. If you bound the maximum by ethical consideration then there is nothing wrong with it. When ethical considerations are put aside in order to reach an unbounded (by ethics) maximum wealth, then it is a bad thing.

Quote
Would you fall over backwards in astonishment if news were to come out that Toyota has been cooking the books?

No. I didn't use Toyota as a catch-all example of corporate ethics, only as a pollution example. But I can see where what I wrote suggested broader ethics than what I intended.

Quote
I just don't believe there ever has been a "golden age" when politicians or businesses were more honest

Neither do. I never suggested such a thing.


Quote
I regard it [Walmart] as being as honest and ethical as (say) General Motors, or Sears or any other large business. And a LOT better than the Enrons of the world.

I agree with this, but their honesty and ethics level is too low.

Quote
Do you post on PT also?

I have, but not too often. Look for harry eaton rather than haceaton.

Quote
Incidentally, diluting stock as you described is a very serious SEC no-no.

I'm not talking about unregistered securites (a no-no that is also seldom severely punished). I'm talking about having a shareholder vote where they agree to increase the shares outdanding (for example it is often pitched to allow for a stock split). This is perfectly legal and is used to "recharge" the bank of stock held by the company to issue "incentive" options. Ordinary shareholders should seldom agree to this (at least with the typical vague, non-binding reasons given in the proxy card for increasing the outstanding shares) but they routinely do.

Quote
Recently the accounting rules were changed (admittedly over stuck-pig protests) to consider options differently

Sort of. Companies can still elect to use the method of APB 25, the so-called "intrinsic value" method of valuing options  grants which is an absurd fiction. It is interesting that the tycoons are so worried about the effect this accounting change will have on the markets. Personally I think it won't matter much; the well informed could figure it out before and the rubes will continue to be rubes.

Quote
Keeping two sets of books, one for the SEC and one for the public, lands you in jail...

I'm not talking about two separate sets of books, I'm talking about how they are accounting for the IRS vs reporting to shareholders. There is growing creativity by most corporations in this area these days, and most of it is "legitimate" at least until the IRS updates their rules. But no worries, the IRS is always a step behind.

Quote
if they pay high dividends, they are ripping us off. If they don't pay any dividends, they're ripping us off.

Why would you think this? I certainly don't view either strategy as "ripping off" anyone. Personally I don't see why investors would buy the stock of companies that have a firm policy of never paying any dividend. I guess it's for the hope of stock re-purchase plans. [In the short term, it is the hope of rising prices of course, but absent any bonafide connection between the stock and real money it is purely a game of hypotheticals.] I described the motivation of management to not pay dividends not as a rip-off but as a way for the top management to maximize their personal wealth.

The rip-off comes in the form of diluting shareholder value through option compensation grants. In principle it should result in reduced stock prices. In practice it hasn't but then maybe it's just a matter time since the expansive use of options grants is a relatively new phenomenon.

Date: 2006/01/13 12:37:08, Link
Author: haceaton
Quote
by definition faith has nothing to do with evidence


I found this parenthetical statement interesting. I'm not sure I agree with it, but I guess it depends on your definition of faith. If you can lose faith, then maybe that loss has a basis in evidence and so faith does depend on evidence.

I am an atheist, but I have faith that the scientific method is the best method we will ever have for learning about and understanding things in the world/universe. My faith is based on experience. I have faith that most scientists won't publish fraudulent papers and I further have faith that most of those who do (at least if they have interesting implications) will eventually be discovered.

I can't possibly replicate all experiments myself in order to prove various scientific facts and laws, but I accept the well-accepted ones that have a large body of published experiments/observations on faith. But this faith was earned and based on experience/evidence.

Many religious people have a faith based on authority, history, popularity etc. (e.g. their parents told them so from infancy, so it must be true.). They often claim that these are not evidences, yet sometimes religious people lose their faith based on life experiences, research etc.

I find it interesting that bible says that God requires man to have faith in him without proof, yet the bible has many stories where Jesus performed miracles which seem to me for the sole purpose of providing proof of his powers.

Date: 2006/01/13 15:37:45, Link
Author: haceaton
Quote
The usage followed by religious people would make such a substitution meaningless.


Have you ever known or heard of a religious person who has had their [religious] faith "shaken", or "lost"?

If so, and religious faith has no basis in evidence, do you know what might have caused the change in faith? Presumably it can't be any earthly events. Have these people reported that God spoke to them and that shook their fiath?

I do know a few people that have lost faith and a few others that have had their faith "challanged", but survived. In all cases they reported to me that events in their lives [or those of their loved ones] was responsible for the change in faith. If religious faith did not depend in the first place on any evidence or experience, how did earthly events cause changes in this faith?

Also consider the flip side: people who have faith. Did they aquire this faith without any experience, teaching, or study? Since it was not based on "evidence" how did it come about? Consider the person who had never heard of God, never had any religious thoughts, feelings or experiences, yet one day claimed they they had faith in god based on nothing happening at all. That would be strange wouldn't it? Suppose instead they said God sent an angel that spoke to them which was the source of their faith. Wasn't this experience evidence of God that led to their faith?

A fundamentalist Christian friend of mine once said something to me that I found absurd. He told me "don't you think you should belive in God just in case there really is one! No joke, I think he thought saying that might help me believe. To me it is absurd to think that somebody could decide to believe something (have faith) with no experience, or indoctrination to base it on.

I'll agree that most likely we'll get nowhere asking believers to search for the basis of their faith, but I have faith that everyone does have a basis, and this basis can be considered evidence. e.g. "My parents, priest, and friends told me and they have taught me all the other things about  life and the world that have guided me" would be evidence (of the weakest kind) to hang their faith on.

Date: 2006/01/23 14:57:30, Link
Author: haceaton
For the record we made Darwin his middle name, but we 're calling him by his middle name. :)

I think having an uncommon name is good, but while I'm plenty political I wouldn't want my son to go into politics. Science would be much preferable but it will be up to him.

My fundie friends are fairly aghast at his (middle) name and have chided me that this will guarantee that he becomes a creationist.

Somehow I don't think so...

Date: 2006/04/18 16:24:36, Link
Author: haceaton
Quote
Yup. All those wonderful people who now vote for George Bush and who want ID taught in schools


Allow me to point out that Maryland is not a Bush supporting state. We're heavily Democratic and both of our senators had the guts to vote against giving Bush Iraq war powers.

Date: 2006/05/04 17:31:29, Link
Author: haceaton
I can't comment on the book, but for some strange reason Mike Duggins from Campus Crusade for Christ sent me a letter today asking me to help fund a counter-point campaign.

It came with a "Business Reply Mail" envelope, but sadly rule 917.243(b) of the US postal service won't allow me to glue it to a brick, so I'll have to see just how much weight I can stuff inside of the darn thing.

Date: 2006/05/17 17:18:20, Link
Author: haceaton
Quote
Information-Theoretic Conjecture — $1000 Cash Prize
I’m offering the first person who completely resolves the following conjecture $1000 cash. I need a complete error-free proof and I need to be able to use it in my writings (of course, I’ll give full credit to the mathematician who proves it).


I wonder if he'll pay off to the first person who disproves his conjecture?

 

 

 

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