Thursday, April 30, 2009

Security clearance progress

I am in the process of obtaining a security clearance for a potential job. After a couple of months of little apparent progress this now appears to be moving forward. So I spent some time today figuring out things like how to get my former employer to verify my employment and what my early 80s California driver's license number was.

It is also a reminder that if I want to explore other employment possibilities I should get a move on.

Wednesday, April 29, 2009

Heat wave

The weather here is too cold or too hot much of the time. Even in the spring and fall when the average temperatures are reasonable there is enough variability that a lot of the days are too cold or too hot. We just had some too hot days, the first of the year. Today was pleasant enough but no doubt too hot will return before long.

Tuesday, April 28, 2009


My brother Peter lives and works 3000 miles away in San Diego, California. While we have kept in touch to some extent I have not followed his professional career closely. Apparently it was going better than I had realized as Peter has just been elected to the National Academy of Sciences. This is of course a great honor and congratulations are in order.

The picture shows us on a balcony outside the UCSD building in which he has his office. Peter is on the right. The picture was taken in November 2003.

Monday, April 27, 2009

Climate change and fossil fuels

In the 90s I got interested in climate change induced by burning fossil fuels and participated in sci.environment discussions about it. Here is my layman's take.

Simple models predict that increasing the concentration of CO2 in the atmosphere will cause the average temperature at the surface to increase. Burning fossil fuels adds CO2 to the atmosphere and measurements show that in the short term about half of it remains there increasing the concentration of CO2 in the atmosphere. Observations also show that the earth's surface has been warming. The amount of the warming is roughly consistent with the amount predicted by simple models. So it is plausible that burning fossil fuels has warmed the earth and will continue to do so.

There is some room for doubt as the simple models leave out a lot of things and more complicated models are difficult to validate. So detailed predictions are quite untrustworthy. Still there are real reasons for concern even if it is not absolutely certain that major problems will result.

So what can be done? It appears that in the long run the impact will mostly depend on how much of the world's supply of fossil fuels gets burned. Within limits the rate of burning doesn't matter too much. So conservation doesn't help much if it just delays the time it takes to exhaust the earth's supply of fossil fuel. Some fossil fuel has to be left in the ground.

The three main fossil fuels are oil, natural gas and coal. The oil will run out first, followed by the natural gas and finally the coal. I see little chance that all the oil and natural gas won't get burned. There is some chance that we won't burn all the coal. Currently coal is mainly burned to generate electricity and there are alternative ways such as nuclear power to generate electricity. They are more expensive but not impossibly so if limiting climate change becomes imperative.

A key turning point will occur when the oil runs out. It is technically feasible to make oil from coal. Currently oil from coal is not cost competitive but this will change as the oil runs out. If this leads to large scale conversion of coal to oil it seems inevitable that all the coal will be eventually burned. In which case we best hope the climate effects are not too costly or that some sort of active mitigation is feasible.

Sunday, April 26, 2009

Horizon effect

Early attempts at computer chess programs encountered a problem that became known as the horizon effect . The problem was because the programs were only looking a fixed distance (moves) into the future the programs would sometimes think they were avoiding a bad event when instead they were just delaying it. This would cause them to make mistakes. For example they might sacrifice a bishop thinking they were avoiding the loss of a queen when in fact the loss of the queen was just delayed by the opponent first having to take the bishop. This would increase the ultimate loss from a queen to a queen and a bishop.

Something like this effect appears to occur more generally. For example when Bush gave GM and Chrysler enough money to kept them alive until his term was over. Of course it is sometimes sensible to buy time but often it just increases the ultimate losses.

Saturday, April 25, 2009

Croton Point Park

I sometimes take walks in Croton Point Park . You have to pay to park there in the summer but it is free off season. The park is on a peninsula which sticks out into the Hudson River. Part of it used to be a landfill. It has been capped and the views from the top are pretty spectacular. I took the picture last December. The deer are kind of cute but they are also a menace to drivers as they have a suicidal tendency to dart in front of cars.

TV evolving?

I don't watch broadcast or cable TV much. However since I got a netflix subscription a few years ago I have been watching old TV series on DVD. I just finished watching all seven seasons of "Homicide" (which is about Baltimore homicide cops and aired from 1993-1999) and have started watching "The Rockford Files" (which is about a southern California PI and aired from 1974-1980). The contrast between the series is interesting. "The Rockford Files" appears a bit primitive and dated compared to "Homicide". In part this is just due to things like the noticeably older cars in "The Rockford Files" which reflect the 20 year difference in when the shows are set. And advances in camera technology may also have had an impact. However there are more substantial differences as well. For example "The Rockford Files" seems to be full of somewhat mindless car chases while "Homicide" has hardly any. Perhaps TV is evolving and becoming more complex. Or perhaps I am overgeneralizing.

Thursday, April 23, 2009

Long tails

Mark Penn wrote an article about the lucrative opportunities supposedly available to bloggers. The article has been widely criticized (see for example Kaus or Lemieux or Yglesias ). The article makes a number of dubious claims but the one I will focus on is:

... It takes about 100,000 unique visitors a month to generate an income of $75,000 a year. ...

which Penn later defends as follows:

... We say it takes "about 100,000 unique visitors a month to generate an income of $75,000 a year" and Technorati states those who had 100,000 or more unique visitors the average income is $75,000.

It should be clear that the first statement does not follow from the second since the average income of bloggers with 100000 or more visitors can be expected to be more (perhaps much more) than the average income of bloggers with just 100000 visitors. And in fact the Technorati article Penn is citing says:

... Among active bloggers that we surveyed, the average income was $75,000 for those who had 100,000 or more unique visitors per month (some of whom had more than one million visitors each month). The median annual income for this group is significantly lower — $22,000.

So 100000 visitors can in fact be expected to generate at most $22000 in income. The actual number will be less since bloggers at the lower end of the range 100000 to infinity visitors can be expected to earn less than the median.

This suggests the following mathematical puzzle. Suppose we assume that annual income is strictly proportional to unique visitors per month. And suppose the distribution of bloggers with 100000 or more unique visitors a month obeys a power law. This means the density of bloggers with x visitors is proportional to 1/x**a for some value a. Then given average income of $75000 and median income of $22000 find the annual income for bloggers at the lower bound with 100000 unique visitors per month.

You can give your answer in the comments, I will give mine in a later post.

Senior moment

After paying my property taxes yesterday I had hoped I was done with taxes for awhile. No such luck. Today I got a letter from the New York tax authorities claiming my recently filed return was unsigned. Fortunately this apparently happens a lot and they enclosed a simple form to correct the error. Still it is a bit disconcerting to have done something so dumb. Perhaps being laid off is more disorienting than I had realized. Hopefully I will avoid more serious mistakes.

Tuesday, April 21, 2009

Property tax

I paid my property taxes today (they are due by the end of April). You can pay by mail but I always go to the office of the Receiver of Taxes and pay in person. The April payment is the town and county portion of the property tax. The school tax portion is paid separately in two equal installments due in September and January.

Property taxes in Westchester can be onerous but mine aren't too bad. In part this is because my condo isn't worth a lot by local standards. Also condos are assessed at a lower rate than single family houses. There is some justification for this because the condo association is responsible for some expenses (like plowing the streets in the complex) which would otherwise be the responsibility of the town. Finally the STAR program (which reduces school taxes for owner occupied housing) has a greater percentage effect on people already paying less in taxes as it tends to reduce everyone's taxes by a fixed amount.

Monday, April 20, 2009


Reading my former employer's proxy statement reminded me of one of my pet peeves, section 162(m) of the Internal Revenue Code. This provision, passed in 1993, prevents companies from deducting as a business expense compensation paid to top executives in excess of $1 million dollars unless the compensation is performance based. The purported intent was to discourage excessive executive pay. However stock option grants are considered to be performance based. The result was companies started giving out more stock options actually increasing executive pay among other bad effects. This link refers to these perverse results as unintended. In my opinion this is overly generous to Congress and Clinton, the results were readily predictable. This happens all too often, special interests find a way to put a benign spin on some malign proposal and thereby get it enacted.

Sunday, April 19, 2009

Hatteras lighthouse

In the 90s I vacationed several times on North Carolina's Outer Banks, a series of off shore barrier islands. I always went in the off season when it is relatively uncrowded and inexpensive. The water was too cold for swimming but the weather was often quite pleasant even in the winter. Here is a picture of the Cape Hatteras lighthouse taken in December 1995 before it was moved away from the ocean's edge.

Stealing home

Another post from my brother, Peter Shearer.

Stealing home is almost unheard of in baseball today. But Jackie Robinson attempted it 30 times, succeeding 19 times. Today's NYT has an interesting analysis of whether these attempts helped or hurt his team, based on a statistical tool called run expectancy. It turns out that his efforts produced a net gain of 8.3 runs, which the author of the article dismisses as insignificant when considered over his entire career. I think that misses the point. To most players, trying to steal home would rightfully be deemed boneheaded because they would give up a possible run for a near-certain out. But Robinson was so good that his spectacular attempts succeeded often enough that he actually helped his team. That's pretty impressive. In addition, the knowledge that he might try to steal home whenever he was on third surely rattled many pitchers into making mistakes that are not counted in the statistics.

Saturday, April 18, 2009

Death tax

The death tax (aka estate tax) is in the news again. I am not a big fan of this tax but on the other hand the government needs the money. So here is my proposal. Increase the exemption to $5 million and tax any excess at 20% while eliminating the charitable deduction and preserving the basis step up. I expect this would raise about the same amount of money (especially when taking into account the reduced incentive to engage in elaborate tax avoidance schemes). I also expect this proposal will have little appeal to the partisans on both sides.

Friday, April 17, 2009

Proxy vote

I still own some stock in my former employer. After some prodding by their proxy solicitation firm I finally got around to voting my shares over the internet. One of the shareholder proposals seemed bizarre to me. It wanted executive performance to be judged without reference to how well the pension funds were doing. This makes no sense to me. If a company pension fund loses $10 billion in a bad market the company has lost $10 billion. Managing the pension funds is an important part of the job for the top executives and should certainly be included when evaluating their performance. Of course any shareholder can offer proposals so it is not uncommon to see strange ones. However I was startled to learn that the same proposal had received over 43% of the vote last year.

Thursday, April 16, 2009

Plastic shopping bags

Many environmentalists consider plastic shopping bags a flagrant example of environmentally damaging wasteful consumption. I have a bit more sympathy for this view now that I am eating meals at home. Plastic bags do seem to accumulate at a remarkable rate from food shopping and it does seem a bit wasteful to just throw them out. However I suspect that considered objectively they aren't actually that wasteful. A single gallon of gas is probably the equivalent of 100 plastic bags in terms of resource consumption. So there are probably more important things to worry about.


Pirates are in the news these days. Piracy is basically a business. Profitable businesses expand, unprofitable ones contract. It appears Somali piracy is currently very profitable. Unless something is done about this the problem is just going to get worse.

Wednesday, April 15, 2009

State Income Tax

The New York State income tax is considerably less trouble to compute than the federal income tax. In part this is because you can simply carry over a lot of the entries on the federal return. But it is also because the computation is just simpler. The process does have some irritating features. In recent years New York has required you to copy your W2 information onto their own form instead of attaching the W2. And New York has have stopped mailing the forms (they are still available in public libraries) in an attempt to get you to file electronically.

Monday, April 13, 2009

Federal Income Tax

Taxes are due soon. Being cheap and pigheaded I still do my taxes by hand rather than do the sensible thing and use a program. This is harder than it should be because of all the pointless complexity politicians have added. The effects of phasing out personal exemptions and itemized deductions could be largely achieved by changing the brackets and marginal rates slightly. Also it would be much simpler to favor capital gain and dividend income by just excluding half of it. And it is irritating to spend a lot of time computing the regular tax when your liability is actually determined by the alternative minimum tax (AMT). I won't even go into all the provisions inserted to favor special interests. I don't really know how to prevent this sort of thing but it imposes substantial dead weight costs on society.

Sunday, April 12, 2009

Masters golf

I signed up for basic cable TV at the beginning of this year. Although broadcast TV reception is pretty bad in my condo I had been too cheap to get cable earlier. Obviously I am not too much of a TV fan. However the combination of a gift big TV, the end of analog broadcasts and a cheap cable promotion induced me to sign up.

I haven't really been getting my money's worth being unaccustomed to watching TV. However this weekend I got sucked in to watching the Masters golf tournament. It seemed more interesting than my memories of golf on TV. Perhaps the broadcasts are done better. And I was just watching the end of the rounds. Still a pretty exciting finish. And the Augusta National course itself looked beautiful.

Saturday, April 11, 2009

Corliss Lamont

When I bought my condo in late 1989 the real estate agent mentioned that some vacant land adjacent to the complex was owned by a very old man (with implication that it might be developed after he died). While looking at online land records in connection with the Hawkes Crossing development, I learned the old man was named Corliss Lamont. I was interested to discover that he was notable enough to have a wikipedia biography . He died in 1995 at the age of 93. The land remains undeveloped.

Friday, April 10, 2009

Feed-in tariffs

Bradford Plumer has a post discussing rooftop solar. It mentions Gainseville Florida which has adopted a feed-in tariff which obligates the local utility to buy solar electricity from anyone who produces it. This has produced a flurry of solar power installations which is described as "stunning". However it is considerably less stunning when one learns the tariff has been set (for 20 years for installations through 2010) at the exorbitant rate of .32$/KWh. This means the program is symbolic as it will only be affordable as long as the amount of solar power generated is a small fraction of the power the utility sells.

As I posted earlier I think rooftop solar makes no sense.

Thursday, April 9, 2009


Since my hearing could be better I sometimes watch DVDs with subtitles turned on. It is interesting how far the subtitles can diverge from the actual spoken words. This is particularly apparent with foreign films which are both subtitled and dubbed in English. I have concluded the translations must be done independently and are often pretty sloppy. Hence major differences. And I gather doing subtitles is not the highest paid job in the world.

Wednesday, April 8, 2009

Jersey gas

Last Friday I bought gas in New Jersey. The good news is gas is much cheaper in New Jersey as compared to New York because the state gasoline tax is much lower. The bad news is New Jersey is one of two states (the other is Oregon) which prohibit self serve gas stations. I much prefer to pump my own gas. One reason is what happened Friday, the pump stopped at $28.05 and the attendant topped it off to $29.00 which is bad practice. At least I didn't have to worry about him losing my gas cap (which I have also had happen) because it is wired to the car.

Tuesday, April 7, 2009


I am not the world's biggest baseball fan but I do like warm weather and sunshine so I always happy to see the baseball season start.

Monday, April 6, 2009

Suspending social security

In an earlier post I commented about a loop hole in FDIC bank account insurance limits that can be exploited to raise the limit. My local paper published a column on Sunday about how you can apply for social security at age 62, collect a reduced benefit for 8 years and then pay it all back (without interest) at age 70 and start collecting the maximum benefit. This appears to be better than just waiting until age 70 to collect the maximum benefit as it hedges against the possibility that you will die between age 62 and 70. See here for more on this and other scenarios for optimizing your social security benefit. Again I think it is dubious public policy to provide options like this whose main benefit appears to be to provide employment for financial planners at the expense of making life more complicated for ordinary people.

Sunday, April 5, 2009

Hawkes Crossing

For the last few months I have observed sporadic site preparation activity on vacant land a few blocks from my condo. Last week a sign appeared advertising Hawkes Crossing . I was a bit startled to see they are planning to build 16 single family houses which is more than I would have guessed.

It takes a brave (or perhaps reckless) builder to proceed in the current environment. Hopefully they won't run out of money with the houses half built.

Science and Technology

Science is about predicting the future. One scientific theory will supplant another if it makes better predictions.

Technology is about changing the future. The better our technology the more we are able to alter the future.

Friday, April 3, 2009

Inflation and Banks

Here I discussed why the prospect of inflation is worrisome to people like me who benefit from fixed income streams. There is another reason to be worried about future inflation. Banks are currently making a lot of 30-year mortgages at low interest rates. They for the most part are not funding these mortgages with 30-year CDs, instead they are using shorter term deposits. But this means they are vulnerable to increases in short term interest rates which inflation would likely produce. This was a big contributor to the 1980s S&L crisis. When interest rates were deregulated S&Ls were caught with a lot of long term loans paying low interest while they had to pay higher interest rates as their shorter term deposits rolled over.

Thursday, April 2, 2009

Workforce New York

After being laid off I applied for and began receiving unemployment insurance. I recently received a letter with some forms to fill out and directing me to report to the Peekskill Workforce New York office today.

This proved relatively painless. After a bit of a delay about 20 of us listened to a talk of about 40 minutes giving general information and job hunting tips. We also received a sheet of paper on which we are supposed to document our job hunting efforts lest we lose our eligibility to collect unemployment. However the lecturer took pains to explain that eligibility is handled by a separate organization in Albany.

The majority of people in our group were also laid off by my former employer although I didn't recognize any of them. Some them seemed interested in socializing afterwards but I was worried my parking meter was running out so I didn't stick around.

Wednesday, April 1, 2009


Some people don't see why we should be worried about inflation given the current situation. Actually there is a fairly large group of people receiving pensions, annuities or other fixed income streams for which inflation is a real concern. For example I will start to receive a fixed pension later this year when I turn 55. Since I could live another 30 years I would like to see this pension lose value due to inflation as slowly as possible. Inflation of 3% a year will halve its value in about 24 years, of 6% a year will halve its value in about 12 years and quarter its value in 24 years, of 9% a year will halve its value in about 8 years, quarter its value in about 16 and eighth its value in 24 years. These are significant reductions in a pension which is not overly generous to begin with.