What was learned from the Mueller Report?

Today was the big exciting day for the Mueller Report. I don’t have the patience to read 400 pages. The nytimes coverage of the report fails to distinguish between stuff that was previously known and stuff (if any) that was newly uncovered by this crack team of investigators working for two years.

From the NYT:

While the report does not find that the president or his campaign aides had committed any crimes in their contacts with Russians, it lays bare how Mr. Trump was elected with the help of a foreign power.

What did the Russians do? Reveal to Americans that Hillary Clinton was secretly planning to raise taxes and government spending?

[The same newspaper previously attributed Hillary’s failure to defeat a political amateur to “misogyny” among the unwashed masses of Republican voters. So maybe the Russians revealed to the American people that Hillary, contrary to outward appearances, identified as a woman?]

Also from the article:

At the very least, in the face of repeated Russian efforts to make contact with Mr. Trump’s advisers, none of them thought to contact the F.B.I.

Are they talking about during the campaign? So they’re surprised that the Republican candidate wouldn’t want to call up a government agency controlled by an incumbent Democrat? Or are these Russian contacts that happened after Trump’s election?

And the NYT is also trumpeting that Donald Trump tried to thwart an investigation whose primary purpose was to find criminal fault with either him or his close associates? Wasn’t that previously reported?

Readers: Please help me and others out! What was in this eagerly-awaited (at least among my Facebook friends!) report that wasn’t previously known and/or obvious?

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Asylum-seekers’ stories point to a labor shortage in Central America?

A core feature of the tales told by many asylum-seekers is that criminal gangs tried to force them to join. The sought-after gang member thus fled from Honduras, for example, and couldn’t find safety in Guatemala, Belize, or Mexico (since the gangs are multinational and sufficiently organized to hunt down potential labor across borders?). Thus the former Honduran finds him or herself, along with some children, living in Texas (maybe soon in San Francisco or Oakland?), collecting welfare, and going through a multi-year asylum process.

I wonder if this shows that there is a labor shortage in Honduras. The population has grown from 1.5 million in 1950 to over 9 million today (Wikipedia). Yet criminal gangs cannot find volunteers to join in the activities and share in the profits. They are forced to recruit new members, whom they will be responsible for paying enough to afford housing, food, clothing, etc., at gunpoint. American criminal enterprises, on the other hand, get their employees by voluntary processes.

It seems reasonable to assume that a gang seeks only the minimum number of required members for its criminal goals (just as non-criminal employers try to avoid hiring surplus staff). A $1 million profit from dealing drugs, for example, isn’t so exciting if it has to be split among 1,000 members.

Can we infer from the above stories and assumptions that there is an acute labor shortage in Honduras compared to the U.S.? If not, why would gangs recruit members by force?

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Income and virginity among Japanese men

“About 1 in 4 Japanese adults in their 20s and 30s are virgins, says study” (CNN) started a bit of discussion among some of my (married high-income guy) friends. They highlighted

‘Money talks’
The report found that a higher percentage of men on lower incomes remained sexually inexperienced compared to women.
“Although the discussion around cause and effect becomes very complex when considering who becomes sexually experienced and who remains a virgin, we show that heterosexual inexperience is at least partly a socioeconomic issue for men. Simply put, money talks,” said Cyrus Ghaznavi, the lead author of the study.

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Aircraft types that I have flown

I was asked to fill out a form showing the aircraft that I have flown and it turned out to be a longer list than expected…

  1. 8KAB (Decathlon)
  2. AA5 (Grumman Tiger)
  3. AC95 (Twin Commander 1000 turboprop)
  4. B200 (King Air 200 turboprop)
  5. B206
  6. B505 (new Jet Ranger)
  7. BE36
  8. BE55
  9. BE58
  10. BE103 (Beriev twin-engine seaplane!)
  11. C172
  12. C182
  13. C210 (in southern Africa)
  14. C310 (crazy noisy!)
  15. C510 (Cessna Mustang jet)
  16. CJ3
  17. CL65 (Canadair Regional Jet)
  18. COL4 (Columbia 400/Cessna 400)
  19. DA20 (Diamond Katana)
  20. DA40 (Diamond Star)
  21. EMB-500 (Phenom 100 jet)
  22. Evolution (experimental turboprop)
  23. Gamebird GB1
  24. HK36 (motor glider)
  25. M20T (turbocharged Mooney)
  26. PA12 (Piper Super Cruiser… on floats!)
  27. PA28
  28. PA32
  29. PA34
  30. PA38 (with a very slender student!)
  31. PA44
  32. PA46 (Malibu; the dream family airplane as long as one can get a letter from God promising that the engine won’t quit)
  33. PC12
  34. R22
  35. R44
  36. R66
  37. SGS 2-32 (glider)
  38. SGS 2-33 (glider)
  39. SR20
  40. SR22
  41. TBM850

Adding to this blog so that the information doesn’t get lost. I was thinking that it would be good to put the favorites in bold, but I realized that at least half of the above aircraft would need to be marked. Most of them have at least some great characteristics.

The list would be a bit longer if I included variants, e.g., the turboprop versions of the PA46, the retractable version of the PA28, or the turbocharged version of the SR22.

Despite FAA English proficiency requirements for certificate holders, I am having some trouble understanding this new copilot. I think that he is complaining about the lack of A/C in the Cirrus:

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No statute of limitations for accused academics

David Marchant, still a geologist, but no longer a Boston University employee, has learned what my friend who teaches at University of California explained: “I can be fired for any reason… except incompetence.” (Science Mag)

The alleged unkind words and actions toward three people occurred in the late 1990s (2017 Science Mag article), but no complaints were made until October 2016 (at least 17 years after the alleged facts).

Had these aggrieved individuals wanted to sue former Professor Marchant, they would generally have had to do so within three years (Massachusetts law) of the events.

(Separately, the accused geologist seems to be a bit of a skeptic regarding climate change catastrophe. He is co-author of a paper telling people not to worry about the East Antarctic Ice Sheet melting and leading to a 60 meter rise in sea level. The Ice Sheet has been around for 14 million years, the paper says, and thus has survived some very warm periods indeed.)

Even if we assume that we can establish 20-year-old facts to perfect accuracy, should there be a statute of limitations for this kind of situation? We could say that what Dr. Marchant (his Ph.D. hasn’t been rescinded yet!) allegedly did was like murder and it can’t be forgiven so we need to punish him even though he might have changed completely during the intervening years. Or we could say that people do evolve over a period of two decades so we want to consider only accusations regarding reasonably recent behavior.

What if, for example, Dr. Marchant had changed gender ID between 1999 and 2019? Would it still make sense to get rid of her on the theory that her presence made it difficult for women?

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Malthus was right in rural America too?

In https://philip.greenspun.com/blog/2019/04/03/malthus-was-right-but-it-is-real-estate-not-food-that-is-limiting/ we looked at data from cities around the world. “Housing’s hidden crisis: Rural Americans struggle to pay rent” (CBS) says that a lot of Americans can’t afford housing even in thinly populated areas of the U.S.

Since there is plenty of land in rural areas, I’m wondering if high costs can be partly explained by high materials prices due to demand from a growing economy worldwide. The 25th percentile American worker can’t afford cement for a home foundation because a 75th percentile worker in China or Mexico has purchased the cement instead.

Related:

  • “Bay Area Housing Struggles Extend To Farm-Rich Salinas”: “Salinas families earn a median income of $69,000, while the region’s 90,000 farmworkers bring in far less. They face a median home price of nearly $550,000 and two-bedroom apartments costing roughly $1,800 a month, according to Zillow.”
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Career advice: be a harbor pilot

In 2016, I wrote “Earn $400 per hour in a government-regulated job” about today’s harbor pilots, whose jobs are protected by the U.S. Coast Guard. That’s about 20X the U.S. median wage.

How stable is this premium?

From The Great Halifax Explosion: A World War I Story of Treachery, Tragedy, and Extraordinary Heroism by John U. Bacon:

All of these changes [From World War I] put a greater burden on Wyatt to ensure the harbor’s safety. His exposure was compounded by the lack of enough local licensed harbor pilots who could guide the ships through the tricky Narrows. Given the eightfold increase of cargo during the war, the need to increase the number of harbor pilots was obvious. But by 1917 the harbor still had only fourteen pilots on duty, partly because the pilots liked it that way. The pilots’ coveted civil-servant posts were the products of local patronage, not merit or military rank. They could earn as much as $1,000 a month, extraordinary money when soldiers like Ernest Barss were earning $33 a month to risk their lives overseas. When the RCN proposed greatly expanding the number of licensed harbor pilots, the current pilots forcefully rejected the plan because they were none too eager to see their windfall diluted.

So it was a 20-30X job 100 years ago too!

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Washington, D.C. chosen as national capital so that founding fathers could profit

As we send in your checks today to keep the wise planners in D.C. funded, let’s consider why D.C. is where it is.

In our government-funded K-12 system, I learned that the location between Maryland and Virginia was a political compromise and that the interests competing were those of multiple states.

From America’s Founding Fathers, a lecture series by Allen Guelzo, a professor at Gettysburg College, I have learned that actually the interests competing were those of individuals.

The original idea was a capital near Philadelphia on the Susquehanna River. Why relocate to a swamp along the Potomac River? Professor Guelzo says that this was a much better location for shareholders of the Potomac Company, which was building canals to facilitate shipping up and down the river.

Who were the shareholders and principals of the company? George Washington was one of the biggest! And his Mt. Vernon estate happened to be quite close to the eventual site of the national capital. Many additional “founding cronies” helped themselves to what they expected to be massive personal profits by moving the site of the capital to the river whose navigation they were improving.

Maybe the next Mueller investigation can look at whether Donald Trump has been scheming to move the capital to Palm Beach?

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Happy Tax Day and welcome to the new world of Qualified Business Income

I think that 2018 will be remembered as the breaking point at which the federal tax code become too complex for anyone other than a full-time accountant to understand.

One of the brand new areas is the 20-percent discount for pass-through income from LLCs and S Corp. I think the goal of this is to prevent everyone from forming a C corporation and paying tax at the new corporate tax rate, then eventually taking money out via a dividend and paying tax at the qualified dividend rate (21 percent federal for the corporate tax, 20 percent for dividends, plus another 3.8 percent for Obamacare, plus whatever a state might charge (e.g., 13 percent for California)).

The 20 percent discount, however, is limited to something like the first $157,500 of income. So it is progressive! The mason or plumber gets the full discount while the business consultant probably won’t.

How can you tell how much tax you’re going to pay? You need to calculate the wages paid by the business and also “the unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business” and then plug those into a formula (IRS explanation):

A qualified trade or business is any trade or business, with two exceptions:

1.Specified service trade or business (SSTB), which includes a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees. This exception only applies if a taxpayer’s taxable income exceeds $315,000 for a married couple filing a joint return, or $157,500 for all other taxpayers

2. Performing services as an employee

Q6. The SSTB limitation discussed in Q&A 5 does not apply if a taxpayer’s taxable income is below $315,000 for a married couple filing a joint return and $157,500 for all other taxpayers; the deduction is the lesser of:

A) 20 percent of the taxpayer’s QBI, plus 20 percent of the taxpayer’s qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income B) 20 percent of the taxpayer’s taxable income minus net capital gains.

If the taxpayer’s taxable income is above the $315,000/$157,500 thresholds, the deduction may be limited based on whether the business is an SSTB, the W-2 wages paid by the business and the unadjusted basis of certain property used by the business. These limitations are phased in for joint filers with taxable income between $315,000 and $415,000, and all other taxpayers with taxable income between $157,500 and $207,500. The threshold amounts and phase-in range are for tax-year 2018 and will be adjusted for inflation in subsequent years.

Got it? If so, please explain this to the rest of us!

(“Section 199A: unadjusted basis of qualified property” by an Arizona CPA is helpful. It says that you go back 10 years in calculating the value of property used, unless there is a longer applicable recovery period “under Sec. 168.”)

If your brain doesn’t explode from all of the paperwork, an accountant friend says that, due to the 20 percent discount, it always now makes sense to have an LLC or S Corp. (as opposed to a Schedule C sole proprietorship) if you’re going to be doing any kind of profitable business.

Separately, I have noticed a trend of Massachusetts friends and neighbors spending more time in Florida (or outright moving to Texas). Some of them will spend 1 day every four years voting virtuously for a Democrat, but 183 days every year living in Florida so as to skip out on the no-longer-deductible Massachusetts income tax.

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