Thursday, February 28, 2013

Let's Pay Teachers What They are Worth (exactly what we are paying them now)

The most popular post that I have by far is about mothers not being worth $100,000.  It probably made some people mad, but my wife and mother still talk to me.  So today, I am going to tackle another shibboleth. Teachers, specifically public school teachers.  I attended school in 4 different districts growing up.  If there was one universal theme that I remember from all of them, it is that teachers weren't paid enough.  They even went on strike one day, for the children.

I have several friends who are teachers.  If there is one universal theme that can be had from them it is that teachers aren't paid enough.  So, I feel safe in saying that for the last 30-50 years, teachers don't think they are paid enough.  I say that is a big fat pile of steaming cow dung. Before you tar and feather me, hear me out first.  One piece of glurge you may have received in you inbox is this diatribe:

Teachers’ hefty salaries are driving up taxes, and they only work 9 or 10 months a year. It’s time we put things in perspective and pay them for what they do – babysit.  We can get that for less than minimum wage.
That’s right. Let’s give them $3 an hour and only the hours they worked; not any of that silly planning time, or any time they spend before or after school. That would be $19.50 a day (7:45 to 3:00 PM with 45 min. off for lunch and plan– that equals 6 1/2 hours).
Each parent should pay $19.50 a day for these teachers to baby-sit their children. Now how many students do they teach in a day…maybe 30? So that’s $19.50 x 30 = $585.00 a day.
However, remember they only work 180 days a year. I am not going to pay them for any vacations.
LET’S SEE…That’s $585 X 180= $105,300 per year. (Hold on. My calculator needs new batteries.)
What about those special education teachers and the ones with master’s degrees? Well, we could pay them minimum wage ($7.75), and just to be fair, round it off to $8.00 an hour. That would be $8 X 6 1/2 hours X 30 children X 180 days = $280,800 per year.
Wait a minute — there’s something wrong here. There sure is.
The average teacher’s salary (nationwide) is $50,000. $50,000/180 days = $277.77/per day/30 students=$9.25/6.5 hours = $1.42 per hour per student– a very inexpensive baby-sitter and they even EDUCATE your kids!)

Someone was having a little fun and tried their hand at sarcasm.  Of course in their zeal to make teaching look like a simple business where they are getting shafted by averaging $50K a year while giving services worth $105K made me laugh.  Whoever wrote this failed any business classes they took.  If you are going to do a teacher=business comparison, you have to go the whole way.  So to start with I put the above numbers into a spreadsheet:

Students 30
1st Student (per hour rate) $3.00
Additional Students (per hour rate) $3.00
Hourly Rate $90.00
Hours worked per day 6.5
Billed amount per day $585.00
Days per year 180
Total Classroom Revenue $105,300.00

No, funny math, I agree that their calculations are correct.  For the total revenue.  Except that I thought I would adjust it a bit. First off, I am not a scrooge, so I'll pay them for a full 8 hours (there are lots of full time jobs that don't pay for the casual overtime you put in so I'm not shorting teachers any more than society is shorting other non-hourly workers).  I am also going to pay them for 20 extra days in the year, so 200 days total work days.

Now the per kid charge I have to disagree with.  Since the author uses babysitting as the yardstick, I'll do the same.  Most babysitters (and day cares) have a first child charge, and then it is discounted for each additional child.  Now normally they do this by family, but in this case, people are not individually choosing the teacher, the state is.  So I'll assume that the state gets billed $5 for the first child and $2 for each additional child.

So, my analysis looks a little different, but close enough for a starting point:

Email Reputo
Students 30 30
1st Student (per hour rate) 3 $5.00
Additional Students (per hour rate) 3 $2.00
Hourly Rate $90.00 $63.00
Hours worked per day 6.5 8
Billed amount per day $585.00 $504.00
Days per year 180 200
Total Classroom Revenue $105,300.00 $100,800.00

If you are satisfied with that, then pat yourself on the back and keep believing that the average public school teacher is worth $100,000.  Except remember, we are comparing this to a business, so the teacher is a revenue source, none of the expenses have been added in.  The building space can be looked at similar to office building prices (especially since you have use of the library, cafeteria, and playground). School supplies are needed for each student including textbooks, computers, library books, etc. There are support staff that handle all of the office stuff and janitors who clean up. Administrators are needed (because everyone needs a boss). Teachers do get a sweet deal in benefits, thanks to the unions negotiations.  So, here is what I think is reasonable (if you disagree, give me some information of why you do, and I'll change the numbers around):

Email Reputo
Building Rental per month (includes heating, cooling, plumbing, maintenance, grounds keeping, use of library, cafeteria, and gym facilities) $0.00 $2,000.00
School Supplies per student per month (paper, pencils, computers, curriculum, testing, library books, PE equipment, etc.) $0.00 $200.00
Support Staff (1@ $40,000 per 4 teachers) $0.00 $10,000.00
Administrator (1 @ $100,000 per 20 teachers) $0.00 $5,000.00
Benefits (Pension, health insurance, employer portion SS/Medicare, etc.) $0.00 $25,000.00
Total Expenses $0.00 $66,400.00
Salary of Teacher $105,300.00 $34,400.00

Uh-oh.  $34,400 is a lot less than the $50,000 average.  But even then, these numbers aren't realistic.  According to the Census Bureau, there are roughly 55 million K-12 students and only 3 million K-8 teachers.  To be conservative, lets ignore the high school teachers.  That is only 19 students per teacher, not 30.  If we assumed another 1 million high school teachers than we drop down to 14 students per teacher (coincidentally, I had several classes that had this few students and a couple with even less).  So, to be realistic, I'll cut the number of students to 20.

Teachers that I know also put in more than 8 hours a day, so I'll assume an average of 9.  Plus I'll assume they work an average of 220 days a year. I'll keep the $5/$2 split for kids, except that we have one more expense to add in if we are going to stay with the babysitting motif. Day cares have a minimum number of staff required for the number of kids - somewhere around 1:7.  So, in each classroom, a fine needs to be assessed, per student, per day for the overage.

Email Reputo Realistic
Students 30 30 20
1st Student (per hour rate) 3 $5.00 $5.00
Additional Students (per hour rate) 3 $2.00 $2.00
Hourly Rate $90.00 $63.00 $43.00
Hours worked per day 6.5 8 9
Billed amount per day $585.00 $504.00 $387.00
Days per year 180 200 220
Total Classroom Revenue $105,300.00 $100,800.00 $85,140.00
Building Rental per month (includes heating, cooling, plumbing, maintenance, grounds keeping, use of library, cafeteria, and gym facilities) $0.00 $2,000.00 $2,000.00
School Supplies per student per month (paper, pencils, computers, curriculum, testing, library books, PE equipment, etc.) $0.00 $200.00 $200.00
Support Staff (1@ $40,000 per 4 teachers) $0.00 $10,000.00 $10,000.00
Administrator (1 @ $100,000 per 20 teachers) $0.00 $5,000.00 $5,000.00
Benefits (Pension, health insurance, employer portion SS/Medicare, etc.) $0.00 $25,000.00 $25,000.00
Total Expenses $0.00 $66,400.00 $66,400.00
Salary of Teacher $105,300.00 $34,400.00 $18,740.00
Fine for violating 1 adult per 7 children ($25/person/day)

Actual Salary of Teacher


So, just from a babysitting perspective, each teacher should be paying $40K for the privilege to babysit. But as the author pointed out, your kids get an education too! Well, hopefully, in too many cases you don't.  So look at it as a teacher has to be providing at least $90K worth of information/training/mentoring in their job in order to be paid an average of $50K.  If not you are a drag on society.  $90K is a lot of information (particularly in this digital age).

But don't get on your high horse just yet.  Check out some publicly traded companies revenue and divide that by the number of employees and you will find that many of them average $150-300K of revenue per employee (and their employees are not making more than teachers on average).  That's a lot more than the above hypothetical teacher is bringing in.

So, teachers get paid what they are worth, sort of.  Most of them operating under union contracts get paid by seniority regardless of how well they teach.  Private school teachers, on average, get paid less and have less benefits than public school teachers, but you don't hear them complaining.  My wife and I home school our kids.  As part of it, the school district has the come for half a day once a week to meet state progress requirements.  The kids don't get assignments or tests from this half a day, it is just fun learning art, music, PE, and science.  Talking with the teachers, they love the job.  It has all the positives of being a teacher - seeing kids grow and develop, teaching what they like, involved parents; with none of the negatives - grading papers, teaching to a test, parents that don't care.

If you are a teacher and are not getting paid what you think you are worth, did you not realize this before getting into teaching? Like I said, this complaint has been going on for more than 30 years.  The US has put a value on teaching our kids at $50K per year average.  If you want to make more than that, practice putting a ball through a net or hitting it with a stick.  Society values those people who do it best at around $750K per year (just be aware that if you are only almost the best at those skills, society only values it at around $6K per year, so maybe teaching isn't so bad after all).  You're all adults now.  Live with your decision, or change your circumstances.  Just stop the whining about how unfair it is.

Wednesday, February 27, 2013

Making Bread

I like to make bread.  I wouldn't say I am very good at it, I just follow the recipe. Fresh bread from the oven is addicting.  I have been known to wolf down half a loaf smothered in honey.  And there are very few breads I have come across that I don't like.

Currently, I am trying to grow a good sour dough starter.  A week ago, it was just flour and water with a pinch of sugar.  It smells nice, so I'll use part of it this evening to make some sour dough English muffins.  But from everything I have read, it takes several weeks for a sour dough starter to get really good.  And you have to feed it every other day, which means I need to make something at least once a week. Guess the kids will like that!

I also like flatbreads.  I haven't been very successful getting pita to have the pocket on the inside, but even just pieces of it taste good with hummus.  When my family lived in New York we couldn't find good tortillas (they all tasted like cardboard), so for Christmas (or Mother's Day) I bought a tortilla press.  That made some good tortillas.

I have used a bread machine, but I really don't like the output from them.  For a while, we would use the bread machine just to mix the dough.  But, it can only mix one loaf.  So our bread machine has sat in our cabinet for a couple of years, untouched.  Perhaps its time to get rid of it...

Tuesday, February 26, 2013

Soda Ban Unintended Consequences

So one of the unintended consequences of the Soda Ban in New York City is that you can't get a 2 Liter bottle of regular coke with your pizza.  Apparently a 2 Liter bottle of Diet Coke is OK though.  Also, no more pitchers of root beer at birthday parties - because you know it is too tempting for some little kid to just down the whole thing.  However, if you go to your local grocery store, you can by 2-liter bottles of Coke (and Mountain Dew) until they run out and order more.  Just don't buy them from Dominoes. It is times like these that I am glad I don't live in New York City and wonder why 8 million people still do.  But then again, they elected Bloomberg, so they got what they wanted.

I looked at the regulation a little more and found out something.  First off, the regulation specifically defines a "sugary drink" as meeting these 4 criteria:

1) Non-alcoholic (so if you are worried about not getting your giant margarita in a 20 oz glass, don't its perfectly legal - unless its a virgin margarita!)

2) Sweetened by manufacturer or establishment with a caloric sweetener (hence the reason Diet Coke is kosher, but regular Coke is not - to say nothing of Mexican Coke which uses real sugar and probably would cause the entire city of New York to go into diabetic shock)

3) More than 25 calories per 8 oz serving

4) Does not contain more than 50% milk or milk substitute

I deal with government regulation on a daily basis.  This one is a beauty.  There are some obvious work arounds here. So let me use the USDA Nutrition database for some examples of what is legal and illegal. Since a "sugary drink" has to meet all four criteria, as long as we don't meet one criteria, then we're good to go.

Criteria 4 is the first hit.  If I have a glass of milk, it can be as big as I want it (because it is more than 50% milk). So, milk is legal.  In all of its varieties.  Milk, Chocolate Milk, Strawberry Milk, etc.  Do you understand that.  Milk has 130 calories per serving.  Skim milk has 90 calories per serving.  Both of them have 50 calories from sugars per 8 oz serving.  And since they are more than 50% milk, criteria 4 is not met, therefore, I can order a 2 Liter bottle of milk from Pizza Hut or McDonald's and they can sell it to me without fear of being fined.

Which means Chocolate milk is also legal.  Because it is more than 50% milk (unless you use a whole crap ton of Hershey's syrup, in which case, just drink the syrup).  So chocolate milk with 200 calories per serving (100 of them from sugar, 50 calories from added sugar) is also legitimate.  But a 16.1 oz bottle of Mountain Dew is worth a fine.

Now Eggnog is a bit of a quandry.  If it is alcoholic, then it is legal (Criteria 1).  If it is the non-alcoholic kind, though, we might have issues. In a typical recipe I have seen, you have a pint of milk, a 1/3 cup of sugar, 4 eggs, and a cup of heavy cream.  Now if we can count the heavy cream as milk, then we are safe.  If however it doesn't count as milk, then we are going to be cutting it close.  A pint is two cups, one cup of cream means 4 eggs and 1/3 cup of sugar have to be less than 1 cup.  Maybe if they are small eggs. I'm going to err on the side of caution and say non-alcoholic eggnog is illegal to sell in greater than 16 oz cups.  We can call this the Virgin Margharita Loophole. From a health standpoint, the non-alcoholic beverage has to be better for you, yet the city has chosen to leave the alcoholic beverage legal.

Fruit Juice is also OK.  And Vegetable Juice. I looked through the nutrition database and obviously numbers vary, but every single fruit or vegetable juice I could find had more than 25 calories (usually a lot more) per 8 oz serving.  But since the manufacturer is not adding the sugar (Criteria 2), they are perfectly legal.

Lemon juice in particular, is OK.  But Lemonade is NOT! Because they have to add sugar.  So, lemon juice with 54 calories per 8 oz serving = good, but lemonade with 106 calories per 8 oz serving = bad. But Chocolate milk at 200 calories per 8 oz serving = good. (Don't ask me what geniuses figured this out.)

Most soft drinks (that aren't diet) have around 100 calories per 8 oz serving.  Less than what normal milk has and about the same as Fruit juice. But they are banned from being served in a size greater than 16 oz.

Now with any amount of regulation, people will find ways around it.  So let me share mine.

1) Drink more milk.  It is ridiculous that the pizza company can't deliver a 2 liter bottle of Coke, but they can send over a gallon jug of chocolate milk.
2) Add alcohol to everything.  This could revolutionize the industry, although I admit some combinations might not be appetizing.  In college, one of my dorm mates wanted to have a Root Beer - Beer mix.  This was after he had already had a few beers. He said it didn't taste that good, and he was inebriated - imagine if you try this sober!
3) Sell components.  Have a packet of Coke syrup to be added to a 2 Liter bottle of carbonated water.
4) Stock up on those miny sugar packets and sell unsweetened (not even artificial sweetener) drinks.  People will quickly catch on to how many packets are needed for a pitcher.  It is ridiculous that you can't sell the customer a 2 liter bottle of coke, but if they have a cup of coffee and like it REALLY sweet, they are allowed to add as many packets of sugar as the establishment stocks.
5) When people order a self serve drink cup, give them two.  One for ice and one for the drink.  Then they have their full 16 oz of drink and can pour it over the ice as needed.
6) Move out of New York City.  Come on, 300 million people in this country don't live in New York City, and yet we get along fine with our lives.  Some of us don't even drink sugary drinks that often.

Except Eggnog.  I love Eggnog!

Monday, February 25, 2013

2 Shillings and 6 Pence

I have been collecting coins since I was a child. A previous job had me travel to England regularly and while filling up my passport with stamps of her Majesty, I began my collection of British coins. Since that time, British coins are one of my favorites to collect. Understanding British coinage is important to making sense of the great English literature. Unfortunately, they don’t tell you this in high school. Today I am going to use the novel A Christmas Carol to explain the monetary amounts.

First we need to understand a little about British coinage. Let’s begin with the pound sterling, the official name of the British monetary system. This has its roots all the way back to Charlemagne who minted small silver pennys that had 240 to a pound, which has its basis in old Roman coinage. In later centuries in England, these were called sterlings. The fineness of silver was 92.5% which didn’t wear as much as pure silver, so 92.5% silver came to be known as sterling silver and that usage extends to today. The symbol, a fancy L with a line through it, comes from the zodiac sign of Libra, the balance or scales.

The major subdivisions of the pound prior to 1971 are the shilling, of which there are 20 in one pound; and the penny or pence of which there are 12 in one shilling, for a total of 240 pence in one pound. The symbols for these two coins, s and d, come from the Roman coins solidus and denarius. So, we can see that this system of coinage has its origins long before the English language.

If we wanted to stop here, we would be missing out on a number of important coins in the British history. For instance, two farthings equaled a halfpenny and were minted from the 1300s all the way up to 1960. This was probably one of the most common coins for everyday life in the middle ages.

The crown first appeared in the 16th century and was a coin worth 5 shillings, or a quarter pound. There was also a half crown which was worth 2 shillings and six pence. But to confuse things, in 1990, the crown was remonetized at 5 pounds. So, if you want to know how much a crown is worth, you better be sure what year of coin you are talking about.

The guinea was a gold coin first minted in the 17th century that originally was worth one pound or 20 shillings. However gold price fluctuations made its value as high as 30 shillings. In 1816 its value was fixed at 21 shillings. While no coin currently bears this name, it is used colloquially for one pound, although the exact amount 21 shillings is still used in horse racing and livestock trade.

There’s more.
The florin was equal to two shillings.
The tanner was equal to six pence.
The groat was equal to four pence.

In 1971, all of this changed. The major denomination, the pound sterling was retained and now divided into 100 new pence. The government was hoping that people would use the term "new pence" to distinguish it from the old pence, but people don’t always do what the government wants, and called the new denomination by its symbol, "p". So pence is an old penny, and p is a new penny, although some people still call the new penny, pence.

On to A Christmas Carol. This story was written in 1843 so I have used online calculators and historical British inflation rates to determine what these values would be in 2013 US dollars.

Bob Crachet is poor, how poor? He makes 15 shillings a week - $135 or $7020/yr, less than a minimum wage job today.

How punitive were the laws in England? A Tailor was fined 5 shillings for being drunk - $45, less than the $300 you’ll pay today for a public intoxication charge.

Fezziwig spent a few pounds on the Christmas Party - $900. Since the party was in his shop, there was no need to rent a hall, the band was probably employees or friends, so the $900 was spent on food for the 50 or so guests. Pretty comparable to today.

Scrooge’s nephew hoped that his good will towards his uncle would inspire Scrooge to leave Bob 50 pounds - $9000. This gives us an idea of Scrooge's wealth. His nephew talks about this amount as if it is a paltry sum of Scrooges wealth. Assuming it is just 0.1%, he and Marley amassed a fortune of $9 million dollars, in a two person shop. Impressive.

Mrs Crachet's ribbons cost sixpence - $4.50 This is also comparable to going down to the mall to buy a hairbow today.

Peter Crachet was going to make 5 shillings and six pence each week - $49.50 Far below minimum wage, although coincidentally, my first job was as a lifeguard at Boy Scout Camp, and I got paid, $49.50 per week. Of course they also provided room and board, but maybe Peter was getting that as part of the deal too!

Did the ghosts really change Scrooge’s generosity? Scrooge offers a boy half a crown for coming back in 5 minutes - $22.50. Have you ever tipped the pizza man $20. This isn’t even comparable. This is tipping the guy who took your phone order $20, because the boy was just a messenger. In the movie adaptations, he gives the actual delivery man a nice tip as well. Scrooge was definitely a changed man.

As you can see, knowing a little about foreign currency can help you bring out details in a story that millions in our country read every year, unawares. I have enjoyed coin collecting over the years, and even more so, I have enjoyed the tidbits of trivia it has given me.

Friday, February 22, 2013

How Many Computer Operating Systems are in Your Home?

I often point out to my kids how lucky they are.  I didn't have a computer in my home until I was about 8 years old, an Apple IIc.  My Dad would bring the portable computer from work home on occasion and we were able to play a Centipede like game.  But that thing was as big as a suitcase.  The Apple IIc was sleek, it had a 10" monitor (although some of my friends had a monitor up to 13") and we could play games like Oregon Trail and Loderunner.  Oh yeah, and we could keep track of our allowance and write school reports.  It was awesome!

Fast forward to today.  I have probably gone through a dozen computers in my life.  Currently (considering computers, laptops, and tablets) there are 6 working computers in my home all far more powerful than that Apple IIc was. Can you imagine telling Isaac Asimov in 1960 that 50 years from then, multiple computers in homes would be common?  He would laugh at you as if you were talking poppycock (I had a book about the using the slide rule that he wrote where he specifically states that there would never be computers in people's homes and that was one of the reasons to learn to use the slide rule).

Currently, three of my machines run Windows 7, one runs Windows XP, one runs Android Ice Cream Sandwich, and one runs Android Honeycomb. Four different operating systems.  But I have had more there was one time for about 6 months that I had 6 different operating systems in my home. That can get confusing as to where everything is.

Thursday, February 21, 2013

What's in a Date?

One of the complaints from many people about history is that there are so many dates to remember. Unfortunately, to help ourselves we use a cookie cutter approach of picking the important ones and maybe laying them out on a timeline, while forgetting all the rest.

So lets look in detail at an important event in history. The birth of America. Independence Day. July 4th, 1776 America declared its independence from Great Britain and a new country was formed. Right?  Well...maybe. July 4th is the day that the Continental Congress approved the text of the declaration. On July 2nd, they had actually voted for a resolution to declare independence. But the vote wasn’t quite unanimous. New York’s delegation didn’t get permission to vote until a week later, July 9th.

Jefferson’s original text of the declaration was presented to Congress on June 28th. This of course was proceeded by Congress appointing a committee to draft such a declaration on June 11th. The resolution for independence was proposed by Richard Henry Lee on June 7th. Even this was proceeded by a preamble passed on May 15th which clarified a resolution passed on May 10th, calling for the suppression of authority put in place by the crown of England. Doesn't that sort of sound like independence?

Rhode Island had already declared its independence on May 4th, South Carolina on April 23rd, and North Carolina had authorized it’s delegates to vote for independence on April 12th. Any one of these dates could legitimately be claimed as the “birth of America.”

We know the text of the declaration was passed on July 4th, but what about all of the signatures? Undoubtedly they all were not put on that sheet on July 4th. Several of the signers weren’t even members of the Congress that had passed the resolution. Some historians have the “original” parchment Declaration of Independence not being produced until July 19th (although printed copies already existed by then). August 2nd is a day that is usually put forth as when the majority of signers penned their name, although at least one signatory is known not to have signed it until Nov 4th. While there is no record of a copy specifically being sent to King George, the declaration had been printed in England and Europe by the middle of August. Perhaps this notification to our wayward parent should be America’s birthday.

That’s not too bad is it? Fifteen possible days for America’s Independence Day, with July 4th about in the middle. Except if we gained our freedom through the Revolutionary War, then perhaps the beginning of the Revolution, at Lexington on April 19th, 1775 is our birth. Before the Declaration of Independence, Americans had already fought in the famous battles of Bunker Hill and Ft. Ticonderoga.

Sometimes the American Revolution is painted with an even broader brush and includes the Boston Tea Party in December of 1773 or even the Boston Massacre in March of 1770. The Sons of Liberty were organized in several of the colonies in 1765 as a result of the Stamp Act. In 1761, James Otis argued that the open-ended search warrants Britain used to enforce the Navigation Acts violated the constitutional rights of the colonists. But this idea wouldn’t have been possible without John Locke’s “Two Treatises of Government” which was published in 1689.

On the flip side, the fighting in the Revolutionary War ended on October 19th, 1781 with the surrender at Yorktown. The Treaty of Paris officially ended the war, and Britain recognized the United States as an independent country on September 3rd, 1783, although this wasn’t ratified by Congress until January 14th, 1784.

Examining an actual government structure also gives us some potential dates. The First Continental Congress convened on September 5, 1774 and members were labeled by the King to be traitors. The Second Continental Congress convened on May 10, 1775 and was the national government for most of the Revolutionary War. The Articles of Confederation were adopted on March 1st, 1781.

The Annapolis Convention tried to improve the Articles in September of 1786 but did not have enough states represented. The Philadelphia Convention began on May 14th, 1787 and ended on September 17th, 1787 with the adoption of the Constitution. This was ratified by the minimum 9 states. Delaware the first on December 7th, 1787 and New Hampshire the ninth on June 21st, 1788. The last of the thirteen original colonies ratified the Constitution on May 29th, 1790.

The 1st US Congress convened and the 1st President was inaugurated on March 4th, 1789. But it should also be remembered that ratification of the US Constitution was gained with the promise of a Bill of Rights. On September 25th, 1789 Congress passed 12 amendments to the new Constitution. Ten of these amendments were ratified by the necessary 3/4 of states by Dec 15th, 1791. One more was ratified on May 18th, 1992, more than 200 years after it was passed by Congress. The last of the twelve remains un-ratified in Constitutional limbo. So perhaps, America hasn’t yet been born.

There you have it. Thirty-seven possible dates for the “birth of America.” Sure some may have more legitimacy, but it goes to show that history isn’t just isolated dates and places, but more of a pot of stew, simmering as we continue to add vegetables and spices.

Wednesday, February 20, 2013

Tax Hike Doesn't Increase Revenue

Greece has given us the latest example of something that has been obvious to people throughout time. Tax increases do not necessarily increase revenue.  Yes, it is true if tax rates didn't affect people's behavior and if no one took them into account, then increasing tax rates would increase revenue. But taking this logic to its extreme, a tax rate of 100% should bring in 100% of the revenue for the country.

This statement is true only if we consider "legal" revenue.  There are lots of other competing factors in any market (regardless of how much control the government has on it).  People don't work to support the government.  I haven't met one yet.  Warren Buffet and others may say they are not taxed enough, but they aren't beating down the doors of the Treasury department to give their excess money either.  Actions speak louder than words.

There is a cash economy that is completely untouched by federal taxes. This includes the kid who mows your lawn, your piano teacher, and even tipping at some restaurants. These people engage in legal business but don't report the income even though many of them are required to.  There is no way to track this money and the best that we can do is estimate how large it is. All of the estimates I have seen are in the hundreds of billions and in a few are $1-3 trillion (with GDP around $15 trillion, this is a significant amount).  Other than taxes these markets are relatively harmless.

Then there are the various black markets.  Markets of illegal activities. They exist for everything from drugs, guns, prostitutes, child porn, endangered species, etc. People in these markets are not subject to government regulation or the legal system to settle disputes.  They have lots of costs on society.  First, the law enforcement cost to find and prosecute these people, second the harm caused to people unrelated to the markets who are affected since there is no legal structure to insulate them.

Whenever tax rates/regulation changes money will flow to or from these other markets.  At a 100% tax rate, the black market would blossom (and probably involve more barter) and the cash economy would also flourish (although those who formerly received all of their income from this economy may take a significant hit because now nearly everyone would be involved in the cash economy). No one would want to work for "legal" money since they wouldn't keep any of it. So, traditional business would grind to a halt overnight.  This would not be good for the economy.

Changing tax rates (particularly targeted to wealthy people or on voluntary transactions) also can have large effects as their behavior changes. For instance, when the capitol gains tax rate was reduced, more capital gains were taken, so much so that the reduction in tax rate ended up generating more revenue than the higher rate did.  Conversely, luxury taxes on things like yachts did nothing but destroy the yacht building industry.  Sure the middle class and poor don't buy yachts, but they work for the yacht manufacturers.

Governments use a static model for projecting tax revenues. This is wrong.  Sure it would be a lot more complicated to use a dynamic model that actually takes peoples actions into account, but lots of things are difficult and complicated and we still do them.  We put a man on the moon for crying out loud. With slide rules.

Tuesday, February 19, 2013

Selling Coins on Ebay

I like to collect coins.  I have been doing it since I was a kid.  It started with spare change and whenever family members were going out of the country I wouls ask them to bring back money for me. As I have gotten older, I have focused my collection on circulated coinage of the 20th century, for a couple of reasons.  1) it is really cheap, I can get coins for about 5 to 6 cents per coin and 2) there is so much of it.

Before the internet, the best place to get coins was at a coin shop.  Unfortunately, almost all of them had jacked up prices. Of course, since there wasn't up to date available market information, I was willing to pay 10 cents to 50 cents for a penny that I needed (which was probably only worth 3 or 4 cents).  Good thing I wasn't looking for Morgan dollars at the time.

Recently, I wanted to dispose of some American Eagles and Proof sets that I had received from my grandparents estate. A quick look on Ebay showed me what the going auction rates were.  So, I went down to a coin shop to see what they would give me.  The man looked them over and quoted a price less than half of the Ebay price.  I went with Ebay.

With the money, I bought more coins.  Sellers on Ebay will sell bulk coins for around $6-8 per pound.  The funny thing about many of them is they like to say that they are in "unsearched" lots.  Unsearched by the seller maybe, but anyone in this day and age can sort through a pound of coins (approx 100) and pick out any valuable ones in about 10 minutes or less. What is really funny is when you look at the buying and selling history of some sellers and find that they buy up large lots of coins, and then sell smaller lots the next day (while saying that they are from Grandpa's barrel of coins).

So, after buying about 30 lbs of coins from various sellers, sorting through them and keeping about 15 lbs, I sold the rest on Ebay in two lots.  Of course, I like to distinguish my sales from others so I wrote the following description:
This is my duplicates from collecting foreign coins. Somewhere between 700 and 800 coins based on 100 coins/lb. You’ll notice from the title that I didn’t use the key words “unsearched” or “silver”. Well, there are two reasons.
Reason # 1: If I said unsearched I would be lying. Of course I have searched these. Just looking back through the auctions I have won you can see that I have bought a lot of foreign coin lots in the last month. Why? Because I collect coins that is why. Besides, every lot has been searched. Perhaps not by the current seller, but it has been searched. That being said, let me explain what I collect so that you know what I will have taken out. I collect one each of every different circulated coin (including years and mint marks). That’s it. I don’t hoard copper, nickel, or silver coins. I am not expecting the Mayan apocalypse at the end of the year. I just like enhancing my collection of foreign coins. So periodically, I will buy a whole bunch, sort through them all to find ones I don’t have, and then sell the rest for the next person to search through.
Reason #2: Silver coins are rare enough now, that any you find in a batch have probably been planted there (see also Reason #1 where I mention that all lots are searched by someone before it gets to you). That being said, I can just about guarantee that there are no silver coins from the US, Canada, Europe, Australia, or New Zealand in this lot. That is not 100% guarantee, but if you are bidding on this because you think I missed a Morgan dollar, then you are a fool. For the rest of the world’s coins I have a cursory knowledge of silver coinage, but I can be pretty sure that nothing after 1970 is silver, and the VAST majority of things before 1970 are also not silver (Copper, Bronze, Brass, and Aluminum have very distinctive looks from silver, steel is magnetic, and stainless steel coinage is too modern). So if you are bidding on this in hopes of finding that off chance foreign silver coin, you too are a fool.
Now that those reasons are out of the way, what is it you are getting. 7+ lb of foreign circulated coinage. There is something from most everywhere around the world. Probably enough Canadian pennies to have a complete collection from the 1970s with many earlier dates as well – and they aren’t making any more Canadian pennies (I know because my Canadian penny collection is almost complete). Enough British new pennies to have a nearly complete collection (1971 to present) (I know because my British penny collection is almost complete). German Marks and pfennigs galore. Plenty of French Francs and Spanish Pesetas to keep you happy. Mexican pesos in all of their varieties for the last century.
What about money that is currently legal tender? Absolutely. Japanese Yen. Taiwan dollars, Chinese Yuan, British pounds, Canada, Australia, New Zealand, and Euros! Plus more (its hard to keep track of what money is current in all countries on earth).
Is it just pennies and nickels? No, there are higher denomination coins as well. While any bulk lot is going to be made up of primarily low value coinage, this is because there was a whole lot more low value coinage minted. That being said, I only collect one of each coin. So if I have two 2001 British pounds, then one of them is going in my duplicates bag. Same with Canadian Loonies, Australian 50 cent pieces, or Hong Kong 10 dollar coins.
Well, it must be all modern money? No, most of it is from 1950 to present, but again, that is because more coins were minted from 1950 to present than prior to 1950. When it comes to Thailand, Israel, and the Arab countries, I don’t know what dates they are. However, I don’t hold back. I know there are a half dozen Canadian WWII nickels (with the V back). Large British Pennys and Halfpennys. Again, anything that I already have one of, will go in this bag, I am not particular. Browsing through the Krause catalog there are probably some coins that are worth 50 cents to $2, however, the additional cost to me (in time and storage space) to separate them out and sell them individually or as a separate lot when I have enough, is not worth it. Coin collecting is my hobby, not my full time job. Yes, if there was a high dollar coin that I recognized, I would pull it out and sell it separately. But in the last 40 lb of coins that I have bought, I haven’t found a coin that I would consider valuable enough to sell separated. Probably the people who searched through the lot before me already found those.
Are these just culls? No, there might be a cull or two (although usually I throw culls in the trash if they aren’t silver, copper, or nickel). Look at the pictures, they run the gamut of condition. The pictures are the actual coins you are going to receive. Things I have removed are tokens, medals, and US coinage (although no one is perfect so if one slips through, please forgive me).
Are they washed or cleaned? Yes, now before you panic, are they individually washed? Heck no, I don’t have time for that. What I do though, is wash the pile of them in a hot water and dish soap bath and then rinse with clean water and pat dry. These are common circulated coins, so when I get them, they have plenty of surface grime that will turn your hands black while sorting them. I like to send them off cleaner than I got them so the next person doesn't have to use as much soap to wash his hands. It’s less harsh than putting them through the washing machine in your pants pocket. And they are going to get more banged up in the bag during shipping and handling than they are swished around in a colander. Once again, these are not high dollar coins. Washing them with dish soap is not going to change their value. Hopefully, it will keep you from starting a collection of germs from around the world!
I tell you all of this so that you know exactly what you are getting. A lot of foreign coin lots are slim on the details. Why don’t I tell you exactly all of the coins in the lot then? Because that would take hours. Foreign coin lots typically sell for $7-$12 per pound. It would be a waste of my time to catalog all of the coins. That is why it is sold in a bulk lot!
So now that you know what I know, bid to your hearts content!
 The best thing about this is I received about a half dozen emails from people who didn't even bid on them and telling me how great it was that I was completely honest.  Yeah, there are a lot of sleazy people on Ebay, but every now and then, you run into an honest person like myself.  I sold them for about $8 a pound. Not necessarily any more than the sleazy people, but more than I paid for them originally.

Monday, February 18, 2013

Why Would Anyone Need More Than 7 Rounds?

New York's new law is that no more than 7 rounds in a magazine. Is this even a realistic amount for the situations that we know happen?  If Law Enforcement had to live with these rules would anything change. Let me start out by saying that crimes committed with firearms are rare. That is not to say they don't happen, but compared to other types of crime, they are rare in the US.  By this I mean the chances of you as an individual being involved in one are rather small.

In 2008 RAND published a study of NYPD firearms training. Based on Table 2.3, less than 0.4% of police officers will  discharge their firearm (other than at a shooting range) in any given year. Less than half of these incidents are defending against a suspect.  So, most of the shootings by NY police are accidental or against dogs (why don't they show this on TV and movies).

The bullet points above and below that table are very informative.  Average hit rate was 18% for gunfights and 30% when the subject did not return fire.  Close range hit rates were 37% (less than 7 yards) while longer range fell to 23%.  Remember these are the people that have firearms training as part of their job.  They specifically qualify on the use of a firearm.  30% isn't that bad when you get right down to it.  The subject is moving, while the officer is also probably moving for cover or doesn't have time to line up an optimal shot.  My guess is that the majority of static range training is a waste of time for them.

The really interesting statistic is the shots fired per incident.  7.6 per officer per incident involving return fire and only 3.5 for no return fire.  So, in 10-15 incidents a year, out of 37,000 officers, they will need more than 7 rounds.

But if the argument is that it is rare a civilian will ever be in a situation like that, I whole heartedly agree.  There is only a 0.2% chance each year that an individual will be on the receiving end of a gun crime (I'm using this as a proxy for when a gun may be "needed" because it is a lowball figure, there are plenty of other instances when deadly force is threatened - by other weapons or number of assailants - where a gun may be "needed"). Some may argue that not all of these incidents require deadly force, in fact the vast majority will be robberies or assaults that leave only minor injuries or none at all.  Yes, that is true. And in the cops case, the vast majority of shooting incidents involved no return fire at all, so that logic could be applied there in saying the cops use of force was also unjustified.  Only the problem is, until the incident is over, you have no idea what the intention of the criminal is. Even if they tell you they aren't going to hurt you, the fact that they have violated the law in their crime means they can't be trusted.

But wait, remember that statistic above, only 0.4% of officers discharge their weapon each year and half of those are against dogs or accidental discharges?  So, only 0.2% "needed" to discharge their weapon against another person.  Funny how those numbers line up. Yet we still arm 100% of police officers with a handgun, while only about 30-40% of the population as a whole has access to a handgun and only 2-3% carry one daily. Because once again, we don't know the intent of the criminal mind until after the fact.  And if the intent was murder, it is too late once we know (after we're dead) to use deadly force.  Therefore, every deadly threat (i.e. words or actions with the tools to back it up) should be met with deadly force. Regardless if you wear a badge or not.  Otherwise, you are trusting the benificence of criminals.

If the chance of "needing" a firearm for police and civilians is the same, then shouldn't we also have access to the same firearms and magazines?  Once again New York, you fail.

Friday, February 15, 2013

Only Trust the Cops with Guns

We can trust them completely.  Afterall, they have gone through intense psychological examination to make sure that they are the most stable people.  They have had hours of training on firearm usage.  They are expert marksman who shoot thousands of rounds to qualify.  Blah, blah, blah.

In the last week, Cleveland police killed an unarmed couple in their car (after a car chase, but reading the reports it sounds like the car chase started after the police started shooting - if the police start shooting at you, are you going to hang around, but we'll never know because their dead); the LAPD shot completely innocent people in their hunt for Dorner (not once but at least in two incidents); Dorner was a former police officer himself.  And those were just the ones that made national headlines.

There are about 700,000 police officers in the US.  There are more than 8 million people with permits to carry firearms. Yet in the last week there has not been a single national news story about a concealed carry person killing or wounding an innocent bystander.  None.  Is this a statistical anomaly?  Not at all, scan over the last year or two and you will find dozens of stories of police killing or injuring innocent bystanders and the only national news story that comes close for a concealed carry holder is Zimmerman, and that is still going to trial to determine if it was self defense. (And don't forget that in New York last year during one incident the police killed or injured more innocent people than the perpetrator they were trying to apprehend did).

So, even though there are 11 times as many people packing heat than there are cops on the street, the civilians have "bad" shoots 20-30 times less often than the police?  And many people think that law enforcement should be the only ones with guns on the street?  You have got to be nuts!

So, lets make a deal.  Gun control supporters want compromise, I'll offer a compromise.  They have proposed universal background checks, an Assault Weapons ban, and magazine/clip limits.  Three things I don't support in the least.  In return, I want repeal of the Hughes Amendment (allows new machine guns to be sold to civilians - although still would be registered), removal of silencers, short barrelled rifles and shotguns from the Gun Control Act registry, and reciprocity of carry in all states and all places that armed police can go (i.e. removal of Gun Free Zones).  That's three options for both sides.  We can choose which ones of the others to get rid of one by one until we have a deal (my guess is the deal will be nothing).

Thursday, February 14, 2013

Valentine's Day Spending

Happy Valentine's Day?  If you spent less than $130, than you are below average. Actually, if you and your significant other spend less than $260, you are below average.  So with $18.6 billion spent on Valentine's Day each year, I just have one question?


My wife and I have been happily married for more than a decade.  I would guess that in all of our years of marriage we have maybe spent $260 total.  Not each year, total.  This year I spent about $20 on my wife.  So unless she has a big $240 surprise for me, we will be below average yet again.

Now, $18.6 billion divided by $130 is only 143 million people.  Since the population of the US is north of 310 million, my guess is that they are only talking about adults (because if it was households then there would only be around $110 million which would bring the average up more). So possibly, there is even more spending that is going on from the younger crowd, you know the ones who buy giant teddy bears in the hopes of getting the amorous attention of their crush (don't those things cost more than $130 each).

Now, I am not in retail, never have been, but I always wanted to know how "they" figure out how much is spent on each holiday.  Halloween seems pretty easy - because it involves primarily candy and costumes, two things which aren't really purchased in massive quantities the reset of the year.  Mother's Day probably is made up of cards and flowers.  4th of July is fireworks and burgers. Christmas is probably a little more difficult, but as long as there is some month that is average, then you can compare it. So let me see if I can nuke this out ...

January - ????
February - Valentine's Day
March - Easter (if it happens this month) and St. Patrick's Day
April - Easter (if it happens this month)
May - Mother's Day
June - beginning of summer and Father's Day
July - 4th of July
August - back to school
September - Labor Day picnics (maybe) and some diehard Christmas shoppers
October - probably some Christmas and Halloween
November - Thanksgiving (food) and Christmas
December - Christmas shopping and returns

So, based on my limited understanding, it looks like January is the only month without a major shopping event.  But then for an event like Christmas, which the shopping spans several months, how do they identify which sales are Christmas and which are something else, like a birthday.

OK, I understand they get the numbers from a survey.  But that then just begs a different set of questions.  For instance, if I am being asked in the presence of someone else, I may be inclined to say a higher number just so people don't think I am a cheapskate (no, not really, I don't care what other people think about my spending habits).  And, since I am only spending $20, then that means someone is spending $250 to make up for me.

Sure hope his girlfriend doesn't get too fat from all that chocolate.

Wednesday, February 13, 2013

Detroit Schools

This story is two years old, but it is still applicable to lots of other things.  To begin look at what the population of Detroit has been doing for the last 100 years:

Detroit has been a classic bubble which peaked in 1950 and then busted (and is still in the bust stage).  For the first few decades of the bust, the flight appeared to be just to the suburbs, but in the last couple of decades, the population of the region has been declining as well.

The demographics of Detroit have switched dramatically as well. At its peak in the 1950s, Detroit was a white town (84%).  While the bust has been fueled primarily by "white flight" (Detroit has lost 1.5 million white people since 1950), between 2000 and 2010 the population of almost every group declined, so everyone realized that Detroit is not a place to live.  The only group that saw an increase in population, Hispanics, only had a very minor increase.

So, imagine for yourself what the change of losing 55% of your population.  Think of half of the homes in your neighborhood, half of the apartments in your complex being empty.  Always.  Its pretty easy to see why a home in Detroit can be bought for $5000.

With the decline of population of this magnitude, the number of school children will decline as well. Hence the need to close lots of schools.  In our city, there was a big debate about closing 3 elementary schools last year.  You would have thought that the government was shooting the dogs of random families with the rancor that was going on.  Face it, there are less kids, so there is less need for schools.  Massive population changes like Detroit has had compound the problem because you can't close schools gradually.  And since they are funded through the property taxes of the homes that are vacant and abandoned, there is less money each year.  But every school still needs to have some minimum level of funding for maintenance.

Overall, school age children have declined as a percentage of the overall population.  Since 1981, we have about 15% less students as a percentage of the population.  So, this should mean that we are spending 15% less as a percentage of GDP on education, right?  Well, if logic prevailed, yes.  But education spending is driven by the government and lobbied for by the Teacher's Unions.  In 1981, 3.3% of the GDP was spent on K-12 education.  In 2010, 3.6% was spent.  That is 9% MORE!  This is a recipe for bankruptcy.

This same logic has gotten the US Post Office in the mess we are in today.  They are (hopefully) going to eliminate Saturday service.  What they really need to do is eliminate Saturday, Tuesday, and Thursday service. The world has changed.  People don't rely on the mail anymore.

Tuesday, February 12, 2013

Wisdom from Uncle Joe

What have we learned recently from the musings of Vice President Biden:

1) We have to pass "common sense" gun control measures for the children.

2) The gun control measures will do little to nothing to reduce crime or prevent another mass shooting.

3) There are government approved media outlets (legitimate news agencies) that we should get out information from.

4) No one is trying to take your guns.

So, knowing these things, we should shortly be hearing the Vice President speak out against the proposals in California and other places by elected officials to confiscate firearms.  Then we will have licenses issued to the approved media so that we the people know who the government approves of.  And, if the common sense is for the children and it will do little to nothing, than Obamacare probably won't improve access for those uninsured, it probably won't reduce the cost for those who have it, and it probably won't result in better care.

Maybe this is what the State of the Union is going to be about?  Either that or jobs.  Yeah, we sort of need those. Still. After 4 years.

Monday, February 11, 2013

No One is Proposing a Gun Confiscation

That is what I have been reading in the news for the last two months.  It is what people on Facebook keep telling me.  Its on the TV and the Radio.  So it must be true.

California must not be no one.  Because someone is proposing a confiscation.  Sure it may not be anyone just yet, but it certainly isn't no one.

Friday, February 1, 2013

Politicians Want to Decide Sports For Us Too!

Texas gives me plenty of reasons to make fun of it (and unfortunately many of them are from my alma mater).  The former A&M vs t.u. rivalry is no exception. In case you don't know, A&M left the Big 12 and joined the SEC last year (and did mighty good for themselves in spite of predictions to the contrary).  Their reasons for leaving were varied, depending on who you believe.

However, one thing that A&M did want to do is maintain the rivalry with Texas in all sports. Texas decided since A&M was going to a better conference and would have better media coverage than them, they weren't going to play.  118 years be damned! (OK, so I may be exaggerating a bit, but Texas did inform A&M that they had no intention of continueing play if we weren't in the same conference.)

So, instead of whining like a baby and begging Texas to play ball, A&M shrugged their shoulders and said, OK, we kind of like our new friends - you're loss.  Until some pompous politician from A&M gets in the mix - don't vote for Aggie politicians (more on that in a second).  He has filed a bill in the Texas legislature to require A&M and Texas to play. Hello - they talked about it already. One of the two parties distinctly doesn't want to play and the other is fine with that decision.  Let it go.  I understand that Texas doesn't have all of the important issues that the Federal government has, but if I remember correctly, they also only meet for 30 days a year.  So surely there must be 30 days of other more important stuff to talk about.

Back to the politician thing.  I had the opportunity to vote for an Aggie for the House.  We were re-drawn into a new district and there was the son of another Congressman running who had attended A&M (the district had Texas A&M University in it) and another candidate running who graduated from t.u.  (There were several others, but these were the top two!)

The Aggie's sole campaign was "But we can't have a teasip (t.u. graduate) represent A&M, so vote for me."  I honestly don't remember anything else about his campaign other than this whine.  I voted for the teasip, while he did try to do some baby kissing at a function we attended, I did at least agree with him on most of the issues. So, while at A&M, I voted for a teasip instead of an Aggie. (Do I burn in hell for that?)

Unless sports are doing something illegal, politicians just need to stay out of them.