Bruce Krasting dissects the recent transactions of the Social Security Trust Fund in a post which can be summarized:

• the assets are real
• the debts are real
• the problems are real

If you don’t believe that the problems posed by the SSTF are real, consider the political implications of default. Ain’t gonna happen.

He follows up with some very interesting observations on the accounting of the fund:

I conclude that the TF is costing us much more than just the payroll taxes that are collected. To get a real sense of the cost you have to add in the interest. Our economy has to pay that as well. The total interest tab in 2010 will be ~$118 billion. The average yield on the portfolio is 4.7%. The recent fair market rate on an eight-year average life Treasury investment would be about 2.2%. The Fund is enjoying an above market yield of 2.5% currently. That comes to $63 billion a year. The formula that sets the interest rates is now 50 years old. It should be reviewed. It is no longer a viable methodology. Our short term financial position is being impaired so that SS can “look better” long term. We are kidding ourselves.

From Calculated Risk:

In 2005 the so-called “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” was enacted. Since then the number of bankruptcy filings has increased steadily.

The accompanying chart actually illustrates that, following a spike of personal bankruptcies, presumably in anticipation of the new legislation, the number of personal bankruptcies fell sharply. To my eye when the legislation was enacted the number of personal bankruptcies did decline sharply but that has been followed by steady increases. I’m not sure how to disaggregate time-shifting, reversion to trend, and the economic downturn in this area.

One of these days I’ve got to write a forms criticism of blog posts in the political blogosphere. Most of mine are, in fact, newspaper columns but the majority of blog posts are either links, leitmotif links (a distinct form), fiskings, and diatribes and rants. There are also different forms in use in blog comments including the counter-post, the non sequitur, and the advertisment.

I find some of the forms in use in blog comments extremely irritating but none is so irritating to me as the cognitive dissonant troll. There are several different varieties of troll. The plain, ordinary garden variety is a comment made with the sole purpose of inciting a flamewar but there are other varieties as well. For example, a concern troll is a troll that poses as a serious commenter, frequently claiming to share the point of view of the original post but with certain concerns. The actual intent of the concern troll is to sow fear, uncertainty, and doubt.

The specific subspecies of troll I’m referring to is sort of the reverse of the concern troll. What I’m referring to as the “cognitive dissonant troll” is a commenter who responds to a post in angry, even offensive terms, e.g. “this opinion is so stupid that only an idiot could possibly hold it”. However, when the meat of the response is analyzed it’s clear that the commenter actually agrees with the opinion that’s being expressed but can’t bring him- or herself to say so but for some reason or other feels the need to agree in an angry and frequently offensive tone, making an essentially incoherent argument.

Recently, in one thread I made a mild suggestion of counter-evidence to the original author’s proposition, complete with logic, evidence, and all that good stuff. The angry response from another commenter was that I obviously didn’t know what the heck I was talking about (oddly, the commenter included no references, evidence, or facts, only assertions) then proceeded to accept in detail all of the points that I had made in my original comment.

It’s the sort of thing that discourages me from reading comments at all.

Paul Caron notes that even though (according to the Case-Shiller index) housing values have fallen 16% property taxes have risen 4.2%. The explanation offered in Mr. Caron’s comments to the effect that reassessments aren’t generally done annually would explain taxes remaining the same in the face of falling values but I don’t see how it explains taxes rising.

Let me offer a few possible explanations:

1. It may be that the states that have seen tax increases have Prop. 13-type provisions in place. Those can result in enormous sudden increases in property tax revenues since the tax is increased only when properties are sold.
2. Tax revenues are based on value, rates, and the number of houses being taxed. One of the (in my view adverse) consequences of the homebuyer’s subsidy was that it tended to increase the total number of houses.
3. It may be that state and local governments, heavily dependent on real estate taxes, have increased marginal rates in reaction to revenue shortfalls elsewhere. I haven’t seen that around here (yet) but it’s certainly possible.

The chart above comes from the Irvine Housing Blog via Barry Ritholtz who adds:

Note what they call a bear rally is actually just the result of government programs, mortgage mods, HAMP, etc.

What is the empirical evidence that we are nearing the “capitulation” stage rather than still in, say, the “denial” stage? As counter-evidence I would submit the Case-Shiller composite index for the last twenty years. If you give the composite any credit at all doesn’t the bump over the last few months look more like the “bear rally” whose end marks the start of the denial stage than the fear or capitulation stage?

I suppose it depends on where you think housing prices should actually be.

Bonus questions:

1. Were wages and employment boosted by the housing bubble?
2. If the answer to the question above is “Yes”, why shouldn’t wages and employment exhibit the same behavior as shown in the graph above?
3. Is that being seen?

Think that a move to LED-based lighting would reduce energy consumption? Think again:

SOLID-STATE lighting, the latest idea to brighten up the world while saving the planet, promises illumination for a fraction of the energy used by incandescent or fluorescent bulbs. A win all round, then: lower electricity bills and (since lighting consumes 6.5% of the world’s energy supply) less climate-changing carbon dioxide belching from power stations.

Well, no. Not if history is any guide. Solid-state lamps, which use souped-up versions of the light-emitting diodes that shine from the faces of digital clocks and flash irritatingly on the front panels of audio and video equipment, will indeed make lighting better. But precedent suggests that this will serve merely to increase the demand for light. The consequence may not be just more light for the same amount of energy, but an actual increase in energy consumption, rather than the decrease hoped for by those promoting new forms of lighting.

This is yet another example of the Jevons Paradox: the more efficient the utilization of a resource is, the more of it is consumed.

This is a recipe that I make fairly frequently, usually when eggplant is on sale. It’s tasty and quick and easy to make.

1 large eggplant, peeled and cut crossways into 1 inch slices
3 oz. pepperoni, sliced very thin
3 oz. mozzarella (or fontina) cheese, grated
pizza sauce
olive oil

Preheat your oven to 400°F. Line a baking dish that has at least two-inch sides and is large enough to hold the eggplant slices in a single layer with aluminum foil. Spray or paint the foil with olive oil. Arrange the eggplant slices in the baking dish as closely together as possible without overlapping them. Spray or paint the eggplant slices with olive oil and roast, uncovered, in the oven for 15 minutes. Turn the eggplant slices over and return them to the oven. Roast for an additional 15 minutes until the eggplant is slightly browned and beginning to soften up.

Now arrange your “pizza”! Re-arrange the eggplant slices so they’re as close together as possible. I usually try to arrange them in a rough rectangle. Put pepperoni slices over the eggplant to cover the entire surface of the “pizza”. Sprinkle the grated cheese over the entire surface of the “pizza”. Spread the “pizza” with pizza sauce, canned or homemade (I like Pastorelli’s but homemade marinara is, obviously, the best).

Bake in the oven for an additional half hour until the cheese is melted and just starting to brown. This could be an entire dinner for two people or, if you augmented it with a green salad and some bread, you could probably serve more.

If you don’t care for pepperoni, you can use whatever topping you do like. If you use Italian sausage, cook the sausage thoroughly before spreading it over the eggplant. A mixture of Italian sausage, onions, and mushrooms is particularly good (my wife can’t eat green peppers).

I’ve just published a foreign policy-related post at Outside the Beltway:

“China in the News”

Update

I think it’s okay if I post a synopsis over here. Over the last week or so I’ve seen a number of interesting stories that have featured China and none of which have received much play over here.

Chinese Troops in Kashmir
Chinese-Phillipine Relationship Strained by Hostage Deaths—eight Hong Kong tourists killed by dimissed policeman in Philippines. Chinese are upset about it.
China Cuts Exports of Rare Earths—China, which produces 95% of the world’s rare earths, has decided to curtail its exports
Where’s Zhou—odd rumors of a Chinese banker’s disappeance

Rather clearly China is becoming a major player but for some reason or other these stories haven’t gotten much traction here. Probably because you can’t lay the blame on Democrats or Republicans.

The Watcher’s Council has announced its winners for last week. First place in the Council category was The Razor with Tolerating Intolerance.

First place in the non-Council category was Buckhorn Road with Hey, Union soldier! What have you done for me lately?, very well worth reading.

Full results are here.