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Wednesday, November 27, 2013

Flaws in Obamacase

Mr. Sununu is right. Obamacare is flawed (Obsmacare fail isn't the site --it's the law. Boston Globe, November 25, 2013).
The flaws are due to the compromises that had to be made in order to get the big insurance companies on board so they wouldn't destroy it as they did the earlier Clinton proposals.
A flawless plan would have been to expand Medicare for all.
I would like to hear what Mr. Sununu would propose. It has been over 50 years since universal health care was introduce in Britain after World War II. Over 50 years for the magic of markets to bring universal health care to all Americans. Clearly markets have failed. What is Mr. Sununu's solution?

Sent to Boston Globe

Saturday, November 23, 2013

Fixing Social Security

I am a progressive but I do not take a hard line about making changes in Social Security. I just object strongly to the changes that the President has proposed (Paul Krugman, Expanding Social Security. New York Times, November 22, 2013).).

Although Social Security does not contribute to the deficit, it is not yet on a firm financial basis.There are several ways to improve its finances but the one proposed: adopting the chained-CPI is the one that will harm the poorest recipients most. Chained-CPI does not reflect the reality of price changes that affect seniors. It severely underestimates them.
A better change, on the input side, would be to remove or raise the cap on Social Security earnings.

Paying out, we could change the tax treatment of Social Security earnings. Rich Americans only pay income tax on 85% of their Social Security income. One hundred percent of Social Security income should be included in gross income. The impact on low income seniors would be negligible; on rich Americans it would be a modest increase in taxes.

Paying out, we can also look at the payout rate. Despite being regressive at the paying in stage, Social Security is quite progressive when paying out.  Right now the Social Security formula for computing one's pension depends on Average Lifetime Earnings (ALE). Each year's earnings are converted into constant dollars and then a monthly average is calculated. Based on this, Social Security pays you:
- 90 percent of the first $767 of monthly ALE
- 32 percent of monthly ALE between $768 and $4,624,
- 15 percent of monthly  ALE above $4,625 to the cap of $9,475.
Changing the breakpoints, increasing the number of breakpoints (say new breakpoints at $3,000, at $6,000, and at $8000), or reducing the percentage payout at the highest level would maintain payouts for the poorest in our society, but reduce expenditures to those who can most afford it.

Both of these would affect higher income recipients while leaving the poorest unscathed.

Sent to New York Times

Wednesday, November 20, 2013

Failed Tax Incentives

 Boston Globe letter

They cut it way back.
This was my original:

I rarely agree with Mr. Jacoby, but his column today was right on the money (The bitter pill of failed state tax incentives. Boston Globe, November 6, 2013: A15).

Giving tax breaks to big business (like BioTech firms, Theatrical Producers, Movie Makers, Insurance Companies, etc.) to encourage them to locate in a given area is a beggar-thy-neighbor proposition. Often, as in New London, CT, the jobs never materialize, or they last only a short time as in Devens, MA and Providence, RI.

Some years back, the legislature passed an inter-state compact (National Popular Vote) to bypass the Electoral College to ensure that the President is elected by all the people. We urgently need an inter-state, inter-city, inter-town compact that will disallow these ridiculous handouts to the wealthy top managers of corporations seeking tax breaks.
Alternatively, perhaps the Federal Government could ban the practice nationwide by invoking the Commerce Cause.

It is past time to say "No" to the corporate welfare bums (Quote from former Canadian New Democratic Party leader, David Lewis).

Friday, November 15, 2013

There is a role for adjuncts in the academic community. When the University's local environment contains a person with a special expertise. In such a case, the education experience of the students is deepened by having such a person teach a course in her/his specialty.
However the practice of employing adjuncts as major contributors to the University's teaching function is appalling. As well as the economic and psychological divide described by Mr. Hoeller (New York Times, November 13, 2013: A26) there are two other dysfunctional consequences.
First there is a smaller pool of talent on campus to draw on for administrative duties. However, those who think that the University has too many administrators would probably not see this as a disadvantage if it resulted in a reduction of he administrative echelon.
Second, the University is in the business of creating as well as disseminating knowledge. Have a large number of faculty whose responsibilities do not include research diminishes the research production and hence the development of intellectual seed corn for the nation's future.
We mus return to the days of specialist adjuncts rather than those who are generalists even if they are better teachers than the tenure stream faculty.

Sent to New York Times

Sunday, November 10, 2013

Efficient Markets and Food Labels

You are wrong to endorse the voluntary disclosure of Genetically Modified ingredients in the food we eat (Labels for Controversial Ingredients. New York Times, November 8, 2013: A28).
The underlying condition for effective markets is full information.
Consumers need to be told in order to make an informed choice. That is what the free market demands.

Sent to New York Times