Vox Popoli

Robert Novak writes:

For many Republicans, the Bush Social Security bill is beginning to look like a bridge too far. They would like to abandon what they see as an impossible quest. However, the president is committed — a commitment that now is not limited to personal accounts but necessarily includes basic revision of how Social Security is financed and distributed.

Sen. Lindsey Graham, a first-term Republican senator from South Carolina, has taken the lead in searching for a bill that would attract a few Democrats who are essential for passage. Three months ago, he proposed raising above $90,000 the amount of individual income subject to the Social Security payroll tax in order to pay “transition costs” for personal accounts. That brought down the conservative house on Graham for “negotiating with himself.”

Many things have happened since then. Bush said that raising the tax cap is on the table

Surprise, surprise. Instead of replacing the Ponzi scheme, it appears likely that the total tax base will be raised, thus allowing personal accounts to replace personal income. Which, as I wrote on Monday, would be a net LOSS of freedom, instead of the expansion of freedom it is being portrayed as.

The only good Social Security reform is elimination. Given the enthusiasm of America’s most vocal and politically active group for the program, that would appear to be extremely unlikely.

I must confess a certain sympathy for the sort of progressive, educated, quasi-intellectual who reads The New Yorker and shudders at Fox News. There truly is something horrible about seeing a crowded Macdonalds in Verona, and strolling down the streets of Oxford one realizes that there is virtually no point to tourist shopping, since you can buy precisely the same clothes and whatnot at the Mall of America. The last time I was at the Megamall, what impressed me most was that barring a few digital gadgets I’d probably order online anyhow, I did not see a single thing I wanted to buy.

And I’ll admit, I cringe at the sight of the obese American tourists in their t-shirts and white tennis shoes, farting and shouting at each other as they stroll around Venice. I was at a hotel in Amsterdam a few years ago, and the contrast between two families in the hotel’s living room – one Italian, one American – could not have been more stark. The two Italian children were quietly sitting on a couch next to their parents, drinking wine with them. The supersized American parents were talking so loudly that I could understand every word of their conversation from across the room, while their two roly-poly teenagers were doing reverse somersaults over the back of another couch.

I was alone, engrossed in a worn English copy of The Prisoner of Zenda and a glass of wine, when the Italian girl glanced at me and caught me staring with horror at the out-of-control kids. She glanced at them, shook her head and said: “Come animali, che brutto!” Needless to say, I did not feel any strong urge to leap to the defense of my fellow countrymen. At that moment, I probably would have preferred to confess to being a Frenchman first.

Europeans also have a great respect for literature which is delightful. Most homes possess a library that is more than a mere smattering of books, most of which are not the King-Clancy-Grisham fare that Americans overwhelmingly find so absorbing. However, their servile nature is downright frightening to any red-blooded American, even an elitist, as their resignation to whatever lunacy their socialist governments are currently wrapped up in inflicting on them is complete. If the price of culture is gas chambers and gulags, it is far too high.

Anyhow, if the Europhile elitists have a point about what Umberto Eco describes as the absence of culture, (for in Apocalypse he explains at some length how the concept of mass culture is inherently oxymoronic), they also miss the larger one. First, every individual has a perfect right to his tastes, regardless of how appalling they might be. Second, in a world without Wayne Newton and Britney Spears, there would be no one for the devotees of Wagner and Calvino to despise.

And where would be the fun in that?

From the Rev. Moon-owned UPI:

Two developments are plaguing atheism these days. One is that it appears to be losing its scientific underpinnings. The other is the historical experience of hundreds of millions of people worldwide that atheists are in no position to claim the moral high ground.

Writes Turkish philosopher Harun Yahya, “Atheism, which people have tried to for hundreds of years as ‘the ways of reason and science,’ is proving to be mere irrationality and ignorance.”

I don’t completely agree with the ignorance bit, although I’ve been open to it ever since hearing the lamentations of a mother who didn’t believe in discipline complaining about the latest shenanigans of her son while happening to have a Bible open to the bit about an undisciplined child being a mother’s curse. I suppose

But most atheists are hopelessly irrational, being moral parasites wholly dependent upon the very belief systems in which they claim no faith.

And before anyone begins an indignant commentary on how they have personally developed their own highly refined moral system, consider these two points. 1. Is it likely that the extraordinarily close similarities between the moralities of your supposedly independent system, every other atheist’s supposedly independent system and the heavily Christian system by which Western culture is dominated is simply a huge coincidence? 2. Whence come the moralities of those atheists who, by every indication, have given no thought whatsoever to the matter?

One theme that pops up quite often when success, or the lack of it, enters the discussion, is jealousy. The presumption appears to be that one must always be jealous of another in a similar field who is more popular. But a comparison of two recent columns should demonstrate my take on the situation, which boils down to the point that since most people harbor pedestrian interests, mass popularity usually requires some amount of willingness to pander to the mediocre mean.

For example, in a recent post, I mocked a certain column, the headline of which breathlessly announced the discovery of a dangerous new practice by teenagers. A few days later, I wrote a column on a deceptive stock market practice which is undeniable, yet significant and understood by very few. It also dealt tangentially with what is suggested to be one of the most important long-term initiatives of the current presidential administration.

Interestingly, almost twice as many people opted to read about the dangerous “new” practice even though it has been around for decades and almost certainly has a minimal effect on almost everyone. Now, this doesn’t surprise me, given my generally low regard for the popular tastes of a world in which Britney Spears is one of the most popular “singers” in the world, but it may be contrary to the understanding of some people who believe that those who follow the news are more intelligent and less addicted to pop culture than the norm.

Ultimately, there is a choice. One can either devote oneself to pandering to the popular tastes, or writing about one’s own interests with the full knowledge that many readers simply will not be interested. I have no doubt that a column headlined “Britney’s Sex Secrets” would draw an even bigger readership than decades-late alarmism, but I am also convinced that were Dante to draw up modern circles of Hell, one of them would require damned intellectuals to subsist on a library comprised entirely of People and US magazines.

The genius of the free market is that it gives people what they want. That is also its curse. I don’t think most writers are particularly jealous of a writer who achieves popularity by writing about utter trivialities, any more than most women are jealous of Jenna Jameson. Success always comes at a price, and some prices are simply too high to pay.

Walter Anderson, a telecommunications entrepreneur who used the pseudonym Mark Roth, was arrested on Saturday at Washington’s Dulles airport after arriving from London. He was charged with evading more than $200m in taxes over five years and faces up to 80 years in prison if found guilty. He reportedly pleaded innocent….

Mark Everson, commissioner of the IRS, on Monday acknowledged that the US tax authority’s efforts to pursue tax evaders had declined in the mid-1990s. But he said Monday’s news was a sign that the IRS was getting back on track. The IRS and Justice Department said they received co-operation from four unidentified countries during its investigation of Mr Anderson but they refused to comment on what prompted the investigation.

Hark, the first sign of spring! The annual IRS show trials.

DP doesn’t sweat the details:

For someone who loves to periodically crow about how brilliant he is, and who usually demonstrates the truth of that, today’s column on measuring the stock market based on indices was amazingly naive and stupid. Anyone who would invest in the group of stocks making up the Dow in 1965 and never make any trades, which is what your analysis assumes, would have to be dumber than your column. The same is true for anyone who would invest in the mix of stocks making up the pre-2000 NASDAQ and never make changes. No one ever does that. The way most people invest is through mutual funds. The most common way of tracking performance of any fund is by comparing it to the index which most closely mirrors the fund’s investment objective, and that comparison includes the changes in the appropriate index. Many funds perform better than their comparable index, even with its changes in composition (the composition of the fund is also constantly changing–that’s why there is a fund manager), and when the fund’s performance is significantly less than the index, it experiences a mass exodus of assets.

DP somehow manages to completely miss the point while inserting his foot in his mouth, which is that historical analysis by index is misleading because investors BUY INDIVIDUAL STOCKS, not because they occupy themselves constructing their own little index-matching funds. Furthermore, around 88 percent of mutual funds underperform their index of comparison, and while 12 percent may be “many” it is certainly not “most”.

Theory is a fine place to begin, but one has to learn to abandon it in the face of actual evidence.

PS sees a little Fonz action going on:

I think you may have ‘jumped the shark.’ I read everything and agree with the vast majority of what you write, but subverting the private ownership of retirement accounts (something you would be presumably be in favor of ideologically) on the basis of your dislike for its proponent (and his overall political philosophy) does not seem to me to have been done out of a desire on your part to function as a paragon of enlightenment and virtue.

Your argument was set up very nicely rhetorically, but your desire to see such an initiative fail seems a bit petty to me: “But this does not mean that the Bush administration’s plan to allow a modicum of private investment in the stock market is necessarily a winner or even an expansion of individual freedom in America.” How about substantiating this assertion instead of proceeding to do something analogous to a Democratic ‘scare the old people’ scam?

This made me think of a story from an Ann Coulter column a number of years ago . . . with you cast in the role of the Russian, I’m sorry to say: “There’s a joke about a Frenchman, an Englishman and a Russian who are told they have only one day until the end of the world. The Frenchman says he will spend his last day with a bottle of Bordeaux and a beautiful woman. The Englishman says he will take his favorite sheepdog for a walk across the moors. The Russian says he will burn down his neighbor’s house. I’m with the Russian.”

I’ve enjoyed your columns for a long time . . . but think this one appears to me to be going down a new and different road.

Yes, and many people thought NAFTA was actually about free trade too. Not so many believe that now. I have no objection whatsoever to people controlling their financial assets or making money in the market, but the Bush plan is MANIFESTLY not about returning freedom, (not to mention money), to America’s workers, but is intended instead to shore up a failing government program. You’ll notice that the emphasis is on fixing and funding Social Security, not eliminating it so that people can keep their 15 percent and do whatever they want to do with it.

I don’t hope the Bush plan will fail if enacted. I don’t have to. I know it will. My opposition to the plan is not based on it being proposed by Bush – I predicted that Social Security money would be moved into the markets back in 1998 – but because it is a overt measure to use government force to inject more money into the stock markets.

My position is the same as it was when I was on the board of a company being acquired by a public company. The CEO, who was staying on with the new owners and was acting as their sock puppet, argued vociferously for accepting a stock deal, because “the investors want to be invested in industry X”. I won the rest of the board over by pointing out the obvious – that in accepting a cash deal, every single investor who wanted to be invested in industry X could do so by using their cash to buy the publicly traded stock of the new owners.

None of this is to say that the Bush plan is worse than the existing Ponzi scheme. It isn’t. But don’t pretend that it is a massive blow for freedom and the individual investor either. It’s not intended to be.

It’s interesting to see how the removal of a company from an index is, counterintuitively, perhaps one of the better ways to anticipate future performance – unless it goes bankrupt, of course. For example, Sears was removed from the Dow in favor of Microsoft in 1999, but whereas one would have lost 39 percent over the last five years by investing in Microsoft, Sears stock is up 81 percent.

I haven’t completed my analyses of dropped vs added stocks yet, but it appears that stocks almost always experience their best run prior to being invited to join an index, which would appear to indicate that either the market makers are investing ahead of time and then cashing in by distributing shares to an unsuspecting public once the stock hits the index, or they’re making the same mistake that most people make in assuming that past performance is an indicator of future performance.

Since the stocks are already tradeable and the whole point of the exercise is to make the index look prettier – in other words, go up – I’m assuming the latter.

Interestingly enough, the eight stocks dropped from the NDX on December 10, 2004, have significantly outperformed the new additions. The former are up 15 percent on average, the latter are down 3 percent.

It’s too soon to tell and too close to call with the newcomers to the lower-beta Dow Jones industrial average, as the three new additions are up 3 percent in the first three months, while the three dropped are down one percent. But the results of the 1999 “rebalancing” are clearly in favor of those dropped: Sears, Goodyear and Chevron are up 44 percent since being dropped from the Dow 30, (Union Carbide was acquired by Dow in 2001), while 1999 inductees Microsoft, Intel, SBC Communications and Home Depot are down 36 percent since joining the index.

The Law of Unintended Consequences triumphs yet again….

For reasons that I will not go into, I am forced to boot into XP on a daily basis. I’m not happy about it, but I have no choice. Unfortunately, I made the mistake of allowing TPAM to use my laptop one day, and he has the execrable habit of copying things to the Desktop.

Hence, I am left with a ghost icon called “fax..” on my desktop. When I try to delete it, I get a “Cannot delete file. Cannot read from the source file or disk.” Going to the DOS shell and running a directory doesn’t even show any file called “fax..” and yes, it has two periods.

Does anyone know how to get rid of this icon? Intelligent suggestions will be appreciated; I already run Fedora Core 2 most of the time and would not even be booting into XP if I had any alternative. Thanks….

Paul Hiltemann had already noticed a darkening mood in the Netherlands. He runs an agency for people wanting to emigrate and his client list had surged. But he was still taken aback in November when a Dutch filmmaker was shot and his throat was slit, execution style, on an Amsterdam street. In the weeks that followed, Mr. Hiltemann was inundated by e-mail messages and telephone calls. “There was a big panic,” he said, “a flood of people saying they wanted to leave the country.”

Leave this stable and prosperous corner of Europe? Leave this land with its generous social benefits and ample salaries, a place of fine schools, museums, sports grounds and bicycle paths, all set in a lively democracy?

The answer, increasingly, is yes. This small nation is a magnet for immigrants, but statistics suggest there is a quickening flight of the white middle class. Dutch people pulling up roots said they felt a general pessimism about their small and crowded country and about the social tensions that had grown along with the waves of newcomers, most of them Muslims.

It’s no surprise why emigration from Holland has increased 33 percent in the last five years. Of course, those Dutch folks will probably all move to New Zealand and vote for precisely the same idiotic policies that made them want to leave Holland in the first place. Of all the immigration destinations in the world, only Switzerland seems to grasp this danger. You can move there, you can work there, you can pay taxes there… but you can’t vote.

It’s too bad the Southrons didn’t figure this out before Naples became the Midwest South and Miami became South Manhattan.