Welfare for citizens == welfare for corporations?

Hey, Washington! The Pay Is Too Damn Low: The Minimum-Wage War
Giving America’s lowest-paid workers a raise is great for the economy. And even better for Democratic prospects in 2014
http://www.rollingstone.com/politics/news/hey-washington-the-pay-is-too-damn-low-the-minimum-wage-war-20140227

This seems to be another step in my personal liberalization. I long viewed minimum wage as a bad thing because I felt it distorted supply and demand. Those who look closely at this will note that in most cities the true minimum wage is often substantially higher than the official wage (even when the local official wage is higher than the federal wage). I felt that the federal minimum would cause distortion in rural areas where the actual value of the work a person could do was below the wage set, so either jobs didn’t get done or there developed a huge incentive for illegal immigrants.

Today, though, since I have long been on record for supporting a strong social safety net, I am now convinced (the above article was just the last straw compelling me to blog on this topic) that a robust social safety net is nothing more than a massive (and by ‘massive’ I mean $20+ billion per year; it wouldn’t shock me to find out it was 10x that amount) gift to the low wage industry (e.g., Wall-mart, McDonald’s, etc.) that goes directly to their bottom line. Why should taxpayers subsidize these very profitable industries? Shouldn’t these industries pay their employees enough so that their employees can exist without welfare?

So, now I feel that minimum wage needs to be such that someone working full-time shouldn’t have to have welfare simply to exist. While the EITC sounds like a great thing, it is also a huge gift to low-wage employers as it does exactly the same thing: subsidizes those corporations lower wages with tax dollars (the article above quotes 1/3, where I got the $20 billion figure). Man, the amount of taxpayer dollars that winds up as corporate welfare here in the US has to run to a trillion dollars, easy (think about the DoD hiring contractors because the US govt doesn’t want all those millions of people directly on the payroll; if the govt hired these people directly it would probably cost half, or even less), and this isn’t even including the trillions of dollars in direct handouts to Wall Street as reward for crashing the global economy.

You might be surprised that the GOP, long a supporter of minimal government involvement in your personal space, is fighting the idea of raising the minimum wage, tooth and nail. Shockingly (perhaps), they support the idea of increasing the EITC, more taxpayer transfers to further subsidize corporate profits. Of course, the ideal for the GOP is to remove the safety net all together, yet keep the corporate welfare going full-blast. I wonder if they realize that as the middle class shrinks the amount of tax revenue shrinks (since rich people pay a disproportionately lower share of their income as taxes), so corporate welfare increasingly becomes a larger and larger percent of the budget, but who cares about that, I guess.

I believe we need a robust social safety net so that when capitalistic excess gets out of hand (bubbles anyone?) society doesn’t have to suffer because of the bad decisions of people too rich to give a damn. If we accept a strong safety net, then we need to be absolutely sure we don’t inadvertently (as is currently the case) subsidize the profits of low-wage industries and the only way I see to do that is to have a much higher (and indexed to inflation!!!!! how could that not be the case?) minimum wage. If that drives out some labor, perhaps those jobs really aren’t that necessary to society.

Turning tide on executive compensation?

A new study: How overpaid CEOs tank their firms
http://www.pbs.org/newshour/making-sense/new-study-overpaid-ceos-tank-firms/

Quite interesting article, I will copy the summary of the paper here:

We find evidence that CEO pay is negatively related to future stock returns for periods up to three years after sorting on pay. For example, firms that pay their CEOs in the top ten percent of excess pay earn negative abnormal returns over the next three years of approximately -8%. The effect is stronger for CEOs who receive higher incentive pay relative to their peers. Our results appear to be driven by high-pay induced CEO overconfidence that leads to shareholder wealth losses from activities such as over investment and value-destroying mergers and acquisitions.

So, overpaying the CEO leads to worse stock performance, who woulda thought? It seems that some hedge fund managers (who often own controlling amounts of company stock) are now looking at pushing back because they see the ‘investment’ in compensation as a loser. (It is kind if ironic to me that hedge fund managers, who, as a class, are grossly overpaid, might wind up corralling CEO pay.) Nothing gets the attention of Wall Street types like consistently under performing the stock market, maybe this will result in a dampening of these idiotic baseball player compensation.

I am also not very sure about this statement:

Cooper, who previously ran a firm at Goldman Sachs, doesn’t go as far as to say that higher incentive pay causes overconfidence. Maybe executives who are overconfident just tend to demand higher remuneration. After all, the reason CEOs earn so much in the first place is largely a supply and demand effect, he says. Running a large firm requires a rare and specific skill set, and because so few people can do that, Cooper says, that bids up the price.

I know a thing or three about corporate management (got an MBA, after all, back when getting one actually meant something) and I can say with some assurance that while not everyone is capable of managing managers (what is necessary at the CEO level of large organizations), neither is it a skill so rare that baseball player salaries are necessary. Lots and lots (and lots!) of people, even without formal education, have the skill set to manage at that level so I can state with very high confidence that it doesn’t take multi-million dollar compensation packages to get people with these skill sets.

Interesting idea, I think

EU project to build lie detector for social media
http://www.sheffield.ac.uk/news/nr/lie-detector-social-media-sheffield-twitter-facebook-1.354715

I am not sure how practical this is, technically, as I see it as necessary to record the first occurrence of any new trend and there has to be many, many first occurrences that never turn into a trend. Also, they would have to record the origin of each occurrence, somehow classify its truthiness, _then_ track how it trends. An interesting technical challenge, something I think would be cool to try, but there are so many sources of nonsense you would have to monitor them all (for instance, how many times has some story made up on the Onion wound up being taken seriously by some nimrod who couldn’t be bothered with actually checking the source?) and to do so even when the networks get clogged with people pinging one another back and forth on the very same nonsense.

I would love to see it successful, though I have to say since I started responding to my relatives who spam me with nonsense by sending them a link to Snopes I have got a lot less of that type of spam. It is possible that they are now checking Snopes, but perhaps they just leave me off their distro list.

It’s the victims fault!

Judge Tosses Muslim Spying Suit Against NYPD, Says Any Damage Was Caused by Reporters Who Exposed It
https://firstlook.org/theintercept/2014/02/21/judge-tosses-muslim-spying-suit-nypd-saying-damages-caused-reporters-exposed/

Kind of amazing that someone would go on legal record spouting such nonsense, but then again, this is the sort of thing that happens regularly in our fucked up country (like when one of the richest in the country compare themselves to Jews in Nazi Germany). I suspect that eventually this ‘decision’ (made, as noted, before he bothered hearing oral arguments; why let the facts change his mind?) will get overturned, but it will be several years from now and likely at the Supreme Court (though they have shown somewhat of a willingness to let the federal govt commit as many crimes as it wants in the name of national security, this is a state (actually city) government doing so), but in the mean time this idiot has given cover for all the fascists (can they really be called anything else?) in government and law enforcement to get even more outrageous in their activity.

I was going to make a portentous statement about our looming police state, but is isn’t looming, it is hear and part of our society. We used to have a nice country, a few years ago, or maybe it was them rose covered glasses.

More financial shenanigans

The Vampire Squid Strikes Again: The Mega Banks’ Most Devious Scam Yet
Banks are no longer just financing heavy industry. They are actually buying it up and inventing bigger, bolder and scarier scams than ever
http://www.rollingstone.com/politics/news/the-vampire-squid-strikes-again-the-mega-banks-most-devious-scam-yet-20140212

I wrote earlier about Matt’s article detailing the aluminum manipulation, this is more or less a continuation that looks at the other commodities that are being jerked around. If it were only investor dollars (as opposed to hundreds of billions of taxpayer dollars; but of course, the taxpayer won’t get any of the return!) at least it would be OK when the house of cards came down, but now that the too big to jail companies are doing it, not only will they be bailed out yet again with even more taxpayer dollars (privatized reward, but the public pays for all the risk), but the global economy will take a huge hit as well. All part of the looming apocalypse that is going to dick us all in the ass in the not-to-distant future (if I could only predict correctly it this time, dammit; I saw the housing implosion coming but my efforts to take advantage of it were horribly timed), better make sure you have fuel for your generator (you did get a generator, didn’t you?) and canned food stockpiled!

Movie therapy for your marriage

Movie Date Night Can Double as Therapy
http://well.blogs.nytimes.com/2014/02/10/movie-date-night-can-double-as-therapy/?_php=true&_type=blogs&_r=0

An interesting idea, to use Hollywood movies as therapy. This article is focused on marriage therapy, I wonder if it could work on PTSD, depression, etc. Anyway, my wife and I rewatched the US remake of Shall We Dance the other day and she was asking me why I liked the movie so much (it was me making the pick, she joined me after I started watching it). I kind of surprised myself at how passionate I was about explaining my thoughts. Yes, I really like looking at JLo’s butt, but I didn’t watch Halle Berry’s Catwoman because the movie sucked so bad, so a hot woman isn’t enough to get me to watch a movie the first time, let alone many times. To me the reason I like the story so much is because of the emotional interplay between Richard Gere’s character and Susan Sarandon’s character (husband and wife, if you haven’t seen the movie). They are still in love with one another after all those years together (probably 20+), but he is embarrassed because he feels something is missing. He doesn’t want to upset his wife by explaining this, because he is very happy with their life together, but at the same time desperately wants to make a change. I enjoy seeing them work things out in their relationship (and yes, JLo’s butt) and like rewatching it sort of like rereading a good book.

I tried to convince my wife that the movie Mystery Alaska really wasn’t about hockey just like Shall We Dance really isn’t about dancing, but I don’t get the impression she was able to see it that way. To me Mystery Alaska is mostly about the Russell Crowe’s character coming to the realization that the woman he loves really didn’t make any unhappy sacrifices to stay with him, though for much of the movie he feels very threatened by that thought (and does become a bit of a dick). Anyway, I can see movies being good starts for a therapy discussion and can help break the ice on some difficult discussions and thought my reader(s) might find it interesting as well.

Sleep and placebo

The placebo effect even works for sleep
New research suggests we perform better on cognitive tests if we’re told we had a good night’s sleep
http://www.salon.com/2014/02/09/the_placebo_effect_even_works_for_sleep_partner/

Regular reader(s) will know I am interested in the placebo effect, this article is another interesting one where they create a sham exam that ‘measures’ how much REM sleep you have had (as a supposed proxy for how good a night of sleep you had), then, after randomly telling the subject they either had a good or poor night’s sleep, they then administered a cognitive test. Those who were told they had a good night’s sleep did much better on the test than those who were told they had a poor sleep (independent of how the subject initially reported they felt they did). Man, the human mind is so damn mutable, sometimes it amazes me that we get anything done. Perhaps our geniuses are simply people who have so convinced themselves that they are smart that it becomes a self-fulfilling prophecy.

Now, if they could just make this work so people could get away from taking drugs (say, for pain, depression, etc.)…

Retweet

Blind eye to scientific fraud is dangerous
http://www.cnn.com/2014/02/06/opinion/wong-scientific-fraud/index.html?hpt=hp_t4

I debated blogging about the above article. When I read it I was motivated, but as I started to think about what I would write that would be different than stuff I wrote before I couldn’t think of anything to add. The anti-science attitude here in the US seems stronger than ever and poised to get stronger still, but that is old news. That people would rather believe in nonsense spoken to them forcefully and with authority rather than take 10 minutes to do their own research is also old news. However, I decided I would bring this to the attention of my reader(s) in case they might be interested in someone else’s take.

This is what happens when your business model says a certain amount of fraud is OK

Unless you have been living under a rock, you know that Target (and several others) have recently been hacked at their point of sale (POS) terminals to the tune of 10’s of millions of credit cards. Back in the ‘old days’ when it was a whole lot of work to take advantage of a stolen credit card it made a lot of sense for the credit card companies to simply bake in a percentage of fraud and just get the customers to deal with it (note that the real customers of the CC companies are the merchants, NOT the consumer). However, now that CCs can be stolen by the millions and monetized quickly and entirely remotely this strategy is now biting the CC companies on the ass. Sure, with data mining they can identify a lot of fraud and take steps to minimize it, but since they push this cost on to their customers at some point the customers are going to balk. The core of the problem is that when you use the CC at the POS the merchant (and by extension anyone who has hacked the merchant’s POS hardware) now has all the information to make any number of unauthorized purchases. If we had smart cards that produced a one-time encrypted, signed token, ‘stealing’ this information would be entirely pointless. While it is not trivial to make such a system bulletproof, even a naive implementation would immediately eliminate any value from stealing the CC information and likely make the cost of fraud orders of magnitude higher. Of course, in the real world it is very hard to get anyone to change AND there is a huge amount of money to be made in converting to a new system so none of the current actors actually want to have open standards. However, I predict that the current paradigm will end soon (decade or so) because the fraud costs are going up on nearly a daily basis and I am quite sure that merchants are about ready to switch to cash-only to avoid the increasing percentage the CC companies are charging them. Of course, the merchants simply pass this cost onto their customers (us), but because of the highly competitive nature of (true capitalistic (not that we really have a lot of that here in the good old USofA)) competition, if a merchant can give a consumer a 10% discount for paying with cash (and maintain the same or better margins) I bet that would attract a lot of attention.

I was motivated to write this post after reading this other blog post:

Dispute Resolution Systems for Security Protocols
https://www.schneier.com/blog/archives/2014/02/dispute_resolut.html

It is not totally relevant to my post, but here it is in case you are curious. I didn’t read the paper the post refers to, because, as mentioned in my post and a couple of the comments (as usual, the comments are very interesting (well, if you are interested in infosec, anyway)) the paper is addressing the wrong problem.

This tickled my fancy

Mobile Marketing from xkcd:

Mobile Marketing

To me this really speaks to the phrase ‘think outside the box’. Problem: customer wants to increase visits to their website. Solution: trigger a wave of website visits by playing on the viral aspects of social media (how many people would simply forward the text without bothering to check out the news sites?). Sure, every other news site also gets increased traffic, but the customer didn’t specify they _didn’t_ want that in their initial requirements. The solution is simple, quick and effective.

Of course, solutions like this are bound to trigger upset by the customer’s user community. This is why contracts today are a dozen pages of tiny print.