Things to Come

Pennsylvania is ending defined benefit pension plans for public school teachers and state public employees. From CNNMoney:

Governor Tom Wolf signed a bill Monday, making it the ninth state to replace the pension with a “hybrid” retirement plan. It goes into effect in 2019.

The new plan combines elements of a traditional pension and a 401(k)-style account.

Overall, new workers will contribute more of their salary, work longer, and likely receive a smaller payout in retirement than under the current system, according to a report from the state’s Independent Fiscal Office.

But Pennsylvania’s pension system is currently one of the most underfunded in the country and is in need of reform. The bill had bipartisan support.

I presume I don’t need to tell you which state has the worst underfunded public pension fund. That only nine states have adopted these “hybrid” plans tells you how difficult they are politically.

Not only is this an idea whose time has come it’s an idea whose time is long overdue. At this point only 4% of U. S. companies offer defined benefit pension plans only. Another 14% offer hybrids. The overwhelming preponderance of company pensions these days are 401(K)s.

The Illinois legislature has been raiding the public pension plans for decades. So has the Chicago City Council. That’s not the only reason that Illinois and Chicago are in such bad fiscal shape but it’s an important one. Politicians can resist everything except temptation and those pension funds were wearing such short skirts.

Expect more states to do the unthinkable and behave more like the private sector.

1 comment

When Troop Levels Aren’t Decided Politically

When I read this article at Reuters, reporting that President Trump had authorized the Pentagon to determine the troop levels necessary in Afghanistan:

U.S. President Donald Trump has given Defense Secretary Jim Mattis the authority to set troop levels in Afghanistan, a U.S. official told Reuters on Tuesday, opening the door for future troop increases requested by the U.S. commander.

The official, who spoke on condition of anonymity, said no immediate decision had been made about the troop levels, which are now set at about 8,400.

The Pentagon declined to comment.

The decision is similar to one announced in April that applied to U.S. troop levels in Iraq and Syria, and came as Mattis warned Congress the U.S.-backed Afghan forces were not beating the Taliban despite more than 15 years of war.

“We are not winning in Afghanistan right now,” Mattis said in testimony to the Senate Armed Services Committee earlier on Tuesday. “And we will correct this as soon as possible.”

it occurred to me that I couldn’t remember an instance of the Pentagon ever determining that more troops were being deployed than circumstances warranted. Can anyone? Presumably, we can expect more troops sent to Afghanistan soon.

It’s not merely that we’re not “winning in Afghanistan”. It’s that after fifteen years and several thousand U. S. casualties the situation in Afghanistan is actually deteriorating:

The Afghan government was assessed by the U.S. military to control or influence just 59.7 percent of Afghanistan’s 407 districts as of Feb. 20, a nearly 11 percentage-point decrease from the same time in 2016, according to data released by the U.S. Special Inspector General for Afghanistan Reconstruction.

I would be more comfortable with increasing troop levels in Afghanistan if I thought the counter-insurgency objective presently being pursued there were achievable. I don’t. I think it’s a fool’s errand.

5 comments

The Health Benefits of Dog Ownership

If the claims in this NPR article are true, I may live forever:

Dog owners often say the best thing about dogs is their unconditional love.

But new research suggests there’s another benefit, too. Dog owners walk more.

In a study published Monday in the journal BMC Public Health, dog owners on average walked 22 minutes more per day compared to people who didn’t own a dog.

And they weren’t just dawdling.

“Not only did we see an increase in exercise, but also the exercise was at a moderate pace,” explains study author Daniel Mills of the University of Lincoln, in the United Kingdom.

I walk my dogs three to five miles a day, 365 days a year, regardless of snow nor rain nor heat nor gloom of night.

4 comments

Gimme That Old Time Religion

From time to time I’ve used the phrase “American civil religion” here at The Glittering Eye. If you’ve been curious or skeptical about the phrase, this piece by Walter A. McDougall at The American Interest puts the idea into some historical context and provides some intellectual heft:

Gorski labels its dominant strain “prophetic republicanism,” which he describes as a more nuanced version of what Bellah called civic republicanism or covenantal religion back in the 1970s. More nuanced because the loudest voices today no longer emanate from the “vital center” of ACR, but rather from two of its extremes. The first trumpets religious nationalism, a toxic brew of apocalyptic zeal, which idolizes the United States as a uniquely virtuous Christian nation endowed by Almighty God with a mission to battle falsehood and evil until the end times. The other trumpets radical secularism, a toxic blend of cultural elitism and militant atheism, which damns the United States as a deeply flawed nation that progressive politics can fix only if atavistic religion is driven from the public square. The upshot, Gorski contends, has been a polarizing culture war that has tormented Americans at least since the 1990s. In other words, the author does not see ACR declining so much as evolving, but also drifting ever further into polarized and polarizing heterodoxy.

If Chesterton was right and the United States is a “country founded on a creed”, without ties of blood or shared history we need that civil religion to bind us together and neither of those two polarized versions will do the trick.

0 comments

Who’s Ignoring Medicare?

My immediate reaction on reading James Capretta’s post at RealClearHealth, “Medicare Can’t Be Ignored Forever”:

For now, Medicare is not part of the national conversation on health care. While campaigning, Donald Trump promised not to touch Medicare, and, in his first budget, he basically kept that commitment to voters. In addition, Congress and the new administration are consumed with rolling back key elements of the Affordable Care Act (ACA) and replacing them with different provisions. Medicare does not feature prominently in that debate.

was to wonder what planet he’s been on? While it may be the case that the Congressional Republicans want to ignore Medicare because they don’t care to engage in failure-oriented activities, it’s certainly part of the “national conversation”. I suggest googling “Medicare for all” to get an idea.

That is not to argue that Medicare for all is workable or economically practical or even politically possible. But just because you don’t want to talk about something does not mean it’s not being talked about.

4 comments

Naval Strategy in the South China Sea

You might want to take a look at Navy Lt. Brett Wesley’s post on countering China’s strategy in the South China Sea at RealClearDefense. Here’s a snippet:

As students of Soviet naval doctrine, the Chinese People’s Liberation Army (PLA) and Navy (PLAN) have adopted an A2/AD [ed. antiaccess/area denial] approach to the United States in the Pacific (Chinese military strategists term the concept “counter-intervention doctrine”). 2 Following the success of the United States in Operation Desert Storm and advancements in precision strike by air and naval assets, China’s military strategy focused on preventing a similar scenario from playing out near its shores. Although China has drastically increased its navy’s blue-water capabilities over the past decade, the PLAN currently has no intention of facing the U.S. Navy in the open ocean. Recent developments in the South China Sea reveal the challenges the United States will face in any future conflict and the role naval intelligence must play to accurately assess the threat and provide creative and effective solutions.

His proposed strategy consists of the following bullet points:

  • Increase Maritime Domain Awareness.
  • Improve Regional A2/AD Capabilities.
  • Expand Intelligence Sharing with Key Partners.

I suspect he doesn’t realize how revolutionary that strategy would be. For the last 70 years we’ve pursued a strategy of carrying all the weight ourselves for weak allies. That worked as long as our economy was growing robustly. It doesn’t look nearly as sustainable now.

My questions are twofold. First, would it work? The Chinese have read Thucydides. They see themselves in the role of the rising power. They also appear to believe that foreign policy like trade are zero sum games, i.e. for them to win we have to lose.

Second, is it necessary? I think the Chinese are playing the world’s highest stakes game of brinksmanship. Maybe my knowledge is dated but I think the Chinese are punching above their weight. We should assess their actual capabilities and act appropriately.

0 comments

What Infrastructure Problem?

While I have a great deal of sympathy with Jeffrey Harding’s conclusion, expressed in his post at An Independent Mind, that our infrastructure deficiencies and the prospects for an infrastructure-building program’s giving the economy a boost are grossly exaggerated:

Here is the reality: America’s infrastructure is not crumbling, massive spending won’t create any permanent jobs, and productivity is not suffering because of our infrastructure. These are economic myths that lobbyists, infrastructure contractors, and the ASCE perpetuate to get fat contracts.

and I find his method, pointing out the mismatch between the gravest problems and the supposed benefits, interesting:

If the ASCE’s assumption that poor infrastructure is impeding progress, then we should look at the LA metropolitan area where traffic congestion is the worst in the world to see if they are correct. Based on their logic, LA’s economy should be suffering. But it is not. In fact, if you compare LA’s GDP to the rise in total US GDP, LA’s upward trend is almost identical if not rising even faster.

Sadly, it suffers from a failing known as the tertium non datur fallacy. It fails to acknowledge that it is possible that Los Angeles has the worst infrastructure in the country but that it is growing rapidly economically due to other factors.

I think he’s tilting at windmills here. There’s a substantial fraction of Americans and also a substantial fraction of economists who believe that how you spend money is unimportant as long as you spend enough of it in terms of boosting the economy. They will not be dissuaded.

My own view is that when national economies were more like little islands, your income and mine were more closely linked, and the U. S. was a developing country rather than a developed one, the prospects for Keynesian stimulus being effective were much better. Now when a poorly constructed and dilatory stimulus bill finally passes the Congress it’s far more likely to crowd out private investment than should have been the case, because so much of what we buy comes from China or elsewhere, and because the spending tends to be concentrated in so few hands the best case is probably that fiscal stimulus in the United States will stimulate the economy in Shenzhen or Bangalore.

1 comment

Should the Fed’s Mandate Be Changed?

While I agree with the premise of a recent New York Times editorial—that federal government and Federal Reserve policies should do more to promote wage growth:

Cutting taxes on the wealthy, especially by rescinding health insurance for millions, and deregulating Wall Street — the centerpieces of the Trump agenda — help those who need no help while depriving the government of resources that could help create well-paying jobs and bolster people’s incomes. Such trickle-down economics encourages business polices that make the work force less secure.

At the same time, the Federal Reserve, apparently concluding that the economy is at or near “full employment,” appears ready to cool it down with still higher interest rates. The thought is that the jobless rate, 4.3 percent, cannot go any lower without causing excessive inflation — even though economic growth has been modest, job growth has slowed in recent months, and inflation remains below the Fed’s 2 percent target.

The upshot is that both fiscal and monetary policy are moving in ways to inhibit wage growth when it is desperately needed.

there are issues with the means that they advocate and with their criticism of the Federal Reserve in particular. The Federal Reserve has multiple mandates but raising wages isn’t one of them. What is generally called “the dual mandate” consists of maintaining stable prices and maximizing employment. Those objectives may be at odds but aren’t necessarily so.

Wages are the price of labor. Giving the Fed the mandate of raising wages would give the Fed the directly contradictory objectives of maintaining stable wage rates and increasing wage rates. I think there are very good arguments for changing the Fed’s mandate but that’s probably not the direction in which the mandate should be changed. For example, I wish the Fed would devote much, much more attention to regulating banks, something outside the dual mandate but part of its responsibilities nonetheless, than it does now. If the Fed hadn’t been asleep at the switch, the financial crisis might never have happened. A decade after the crisis how many banks remain insolvent? Insolvency is the dirty little secret of our banking system.

Will the NYT editors’ preferred strategy for increasing wages, raising the minimum wage to $15, increase aggregate wages? The argument that it will appears to be unique to the editors of the New York Times. The argument has been that it will benefit those who earn minimum wage, something that’s obviously true, but I don’t think it’s nearly as obvious that raising the minimum wage will increase aggregate wages. That depends on several factors including both employment effects and multipliers and I don’t believe that either I or the editors of the New York Times know.

About .7% of workers earn at or below minimum wage but 42% of workers earn below $15/hour. The employment effects of a $15 minimum wage would probably be negligible in San Francisco but it could throw thousands or millions of workers who don’t work in San Francisco out of work. I just don’t know.

2 comments

Wasn’t There a Television Series About This?

Imagine that there as a cyberweapon that could shut down the power grid. If this article at The Washington Post is to be believed, the Russians have one:

Hackers allied with the Russian government have devised a cyberweapon that has the potential to be the most disruptive yet against electric systems that Americans depend on for daily life, according to U.S. researchers.

The malware, which researchers have dubbed CrashOverride, is known to have disrupted only one energy system — in Ukraine in December. In that incident, the hackers briefly shut down one-fifth of the electric power generated in Kiev.

But with modifications, it could be deployed against U.S. electric transmission and distribution systems to devastating effect, said Sergio Caltagirone, director of threat intelligence for Dragos, a cybersecurity firm that studied the malware and issued a report on Monday.

And Russian government hackers have already shown their interest in targeting U.S. energy and other utility systems, researchers said.

“It’s the culmination of over a decade of theory and attack scenarios,” Caltagirone warned. “It’s a game changer.”

There are several things that should always be kept in mind about cyberweapons:

  1. Developing genuinely sophisticated cyberweapons is expensive. It’s not something that a clever kid will do in his spare time in his mom’s basement.
  2. That means it requires state sponsorship.
  3. Once you’ve released a cyberweapon into the wild, it’s in the wild. Your control over where it goes then and what may be done with it is greatly diminished.
  4. It’s a lot cheaper to reverse engineer a sophisticated cyberweapon than it is to develop one in the first place. It is something that can be done by a clever kid working in her spare time in her dad’s basement.

Remember that global ransomware attack that took place last month? Multiple reports say that that the malware used started out in life as something created by a government, assumed to be North Korea. It was then adapted by private individuals for their own nefarious purposes and the rest is criminal history.

That’s why I think that, although researching new, sophisticated malware techniques makes sense for us as well as for the Russians, actually using them borders them on the insane. By the very nature of our society we are extremely vulnerable to attack. Why give more people the weapons to do it with than is absolutely necessary?

1 comment

Replacing Old Technology With Worse Technology

Back in 2014 I purchased a Kindle HD color tablet/reader. I don’t recall the exact model number—I think it’s called a “Third Generation”. It’s given me excellent service; I couldn’t be more pleased with it.

As is generally the case with this sort of technology little by little its battery is holding a charge for an ever shorter period. Now it needs to be recharged roughly every other day whether used or not as long as it’s powered on which is most of the time.

I’ve looked at the successor products from Amazon and at every tablet on the market and I’m saddened to report that they’re all inferior. None of them have the screen resolution of my three year old Kindle. And it’s not a minor difference. Most of the tablets have screen resolutions half that of my old Kindle. The best have three quarters its resolution. It’s clear to me that keeping my old tablet is a better choice for me than replacing it with the latest and allegedly greatest.

I’m not sure what I’ll do when my Kindle HD nears the end of its battery life. I’ve looked at the instructions on Youtube for replacing the battery and, while I could do it, I’ll probably seek out someone more adroit than I to change it for me. It’s a tedious, involved, exacting process and one better suited for younger eyes than mine.

I’m not sure what the point of this post is. Maybe it’s just to air a grievance. Maybe it’s to disabuse any of you of the notion that technology is always replaced with better technology. That simply isn’t so. I could present a dozen examples of that. This is only the latest.

11 comments