bdross.com

This site is moving.

Er, my blog will be moving to a new address. THIS domain will become a portfolio site.

Sometime before the end of the summer. Maybe.

That is all.

Thanks, gramma.

Suppose I have $1,000.

Alice decides she wants some of my money. She asks me for $400. I don't want to give it away, so I refuse. Angry, Alice points a gun at me and demands that I give her the $400--or else. Rather than be shot, I give her the $400.

Alice has taken what was mine by threatening to harm me. This is wrongful, and we usually call it "robbery."

Suppose, I have $1,000. Alice and Bob want my money. They both point guns at me and ask me to give them the $400. Rather than be hurt, I give them the money. Still robbery.

Suppose Alice, Bob, and a gang of other people want my money. They demand I give up my money or else they'll hurt me. Still robbery? Certainly. If it's wrong for one person to rob me, and it's wrong for two people to rob me--a gang of people robbing me is still wrongful. Can you buy that?

Now pretend that Alice and the gang decide that Bob really needs my $400--or at least that Bob needs it more than I do. So, the group declares that Bob should have my money. And they threaten to hurt me if I don't cough up the cash. By agreeing amongst themselves to take my money and proclaiming their reasons for doing so, does this make the robbery less wrongful? Maybe Bob wants some crack, or needs to pay bills, or wants to pave his driveway...

If robbery is wrongful, can a group of people, by mutual agreement, rightfully do something that is otherwise wrongful?

Mull it over, as you prepare your tax returns.

"A well regulated militia being necessary to the security of a free State, the right of the People to keep and bear arms shall not be infringed."

This morning, the Supreme Court heard oral arguments in D.C. v. Heller.

It's highly academic--and completely unnecessary.

RTFC.

So you've noticed the headlines too? About the recession, I mean. Wonderful.

Just thought I'd lend some depressing thoughts. The nominal rate of growth right now (r_n)--at least for 2007--was something like 2.2%. The rate of inflation (r_i was a whopping 4.1%. Please check your closet for Alan Greenspan; I'd be crying if I were him.

By the book--and I hate the book--the Fisher equation says that the real rate of return, (r_r) is given by:

r_r = r_n - r_i

Easy peasy. Apply the above data, and the real rate of return for 2007 was -1.9%. Ouch!

But here's why I'm writing this. Whenever some economic downturn comes along--as they do--magazines and articles written by witchdoctor economists scribble off book-formulas like above. Gotta roll them bones. And I start seeing things like the Fisher equation invoked in everyday reading, only to be relied upon to support some completely irrelevant assertion:

"The pantheon of economic equations, derived by people with names more famous than my own, ordains that the actual economy shall behave according to the predictions of incredibly simplified algebraic equations."

Bleh. The Fisher equation shows up in the macroeconomic realm. But if this rate identity holds true, how do microeconomic agents see the world? In the microeconomic world, these equations almost never adjust for taxes. (Even in a recession, Uncle Sam takes his share--and does quiet well.) Looking at the equation from the microeconomic point of view--and assuming r_r is the best nominal rate of return you can get--I would off-the-cuff rewrite the Fisher equation as:

r_r = (r_t)(r_n) - r_i, where r_t is your tax rate^*

Pretend your tax rate is 28.5%--as it is for many Americans. This brings your real rate of return down to a paltry -2.53%. Guess my point is, in REAL-real terms it's worse than you think. People know they get taxed. Right?

Suppose you invest $10,000 at the above nominal rate. The nominal profit from that $10,000 is about $220. After taxes, your nominal profit would be about $157. Adjusting for inflation, your real profit is $151. But wait--there's more! Your original $10,000 is now worth about $9,600 because of inflation.

That's right: the investment's value actually dropped considerably. But you'll have more physical dollars (or, at least on paper somewhere). And according to our tax laws, you have will have the exquisite privilege of paying taxes! Because the IRS doesn't let you account for "inflation tax" when calculating gain. (Not that it necessarily should...)

Sucks.

Ever played Monopoly? The rules affect the outcome of the participants playing the game. The economy is no different. If inflation is at a 30-year high, pumping $200 billion dollars into the economy is... well... what the hell? If anything, the Fed should be doing the exact opposite. Things that the U.S. should fix if it really cared about the economy: (1) Federal Reserve system, (2) Internal Revenue Code.

Hope maybe my rambling wasn't too incoherent. Happy St. Patty's day. Drink a beer: the economy is depending on it.

---
*In reality, the tax rate changes as a function of gain received. Since this is an illustrative analysis about rates, wave a magic wand over the marginal tax rate and call it a constant.

Dilbert - The Knack

I had a strange dream last night, the latest in a series of crazy subconcious goings-on:

I was sitting in the back row of a law lecture. And the professor was babbling on about... something. When she arrived at some natural pausing point, she noted that eeeeeverybody knows that the set of natural numbers includes the negative integers--

--It's a dream. Quiet now.

She called on me. And I said that she wasn't quite correct. I tried explaining this, with no success at convincing her or the rest of the class. (Though a high school friend, who will remain unnamed, was sitting next to me... he bought it.)

Professor and I went back and forth until I had to explain some history on the Peano axioms and successor operations. And you just can't get to the negative integers that way. But why argue--it's an issue of a vocabulary word. This still didn't work. And I ended up yelling the old quote by Kronecker:

"Die ganzen Zahlen hat der liebe Gott gemacht, alles andere ist Menschenwerk!"

--except, now looking at it, I'm sure I didn't get the quote quite right. Regardless, German things sound angrier, ja?

...

O', sleep deprivation and math. Quite a kick.

Nick and I car-pooled to Baltimore for the bar examination. He posted some comments on the exam. Since I was quoted, I feel like I have some license to explain my previous comments a bit further:

Nick said it's a miserable experience. And that's true. This morning I was thinking about which requirement I would rather fulfill if it meant the grant of a law license: (1) re-take the bar exam, or (2) or receive a full rectal examination from a less-than-reputable Honduran doctor coming off of a 3-meth binge all during a magnitude-7 earthquake wherein said doctor is also covered in gasoline and set on fire. And maybe he's trying to fend off ninjas too. Perhaps said ninjas are also on fire? Whatever--it's a tough choice.

Bar associations like to say the exams are a test of minimal competence. I disagree; I've met a few sub-competent attorneys in my time. Not that wanting a state's attorneys to be minimally competent is a bad thing. But the justification for this has always been to protect the public. I just don't think the exams further that in any way.

Nick mentioned that the MPT wasn't what he expected. I didn't think this was too bad--but this was only because the last project in my advanced writing class was almost exactly
like the specific MPT question we were given. So I head some bearing. Luck of the draw--I expected the MPT to be a lot worse. And of course, even how I felt doesn't mean anything. The gradings seems pretty arbitrary--"arbitrary" is the general theme that pervades the bar exam.

And if the MPT tests how fast you can commit malpractice in 90 minutes. The MBE tests whether you can commit malpractice 200 times in 6 hours. The MBE writers have convinced themselves--by telling other people over and over--that each question they write has only one correct answer. I call bullshit on that, as every test administration has a few questions that the examiners toss out because, after the fact, two or more choices are sufficient answers. Sure, you can test the existence of legal principles, facts, procedures, etc. But when you start asking examinees to weigh subjective facts as being more determinative than another--that's a recipe for disaster. In addition, I find the MBE writers are incredibly lazy, as they don't consistely use "and" and "or," "most" and "least", and double negatives (e.g., "Which choice is not the best answer?"). Not that I hate MBE questions--I usually do really well. I'm just admitting that, yes, the process is pointless.

How would I make the process "better"? --That's a topic for a different day...

Netflix Prize

This is so cool.

An interesting dilemma presented itself today:

Tasked with responding to an appellate case, I went about doing research on a particular point of law. Research ended--not with the result I would have preferred--citing back to the original case being appealed.

A lesser fool would give up. . .

Oh no, my friends. For I am a much, much greater fool.