December 31, 2005

Holiday Blog Break

Filed under: General — Tom @ 1:00 pm

Except for already prepared Positivity posts, I’ll be on a blog break until sometime in the afternoon on January 2.

Happy New Year, everybody!

Does Paul Krugman of the New York Times Read His Own Newspaper?

Filed under: Economy,MSM Biz/Other Ignorance — Tom @ 11:01 am

New York Time economist Paul Krugman continually wails about how real incomes are declining, the middle class is disappearing, and “woe is us,” to the point that you want to make sure you’re in a ground-floor building whenever you’re reading his columns.

What Krugman claims about declining incomes can’t be true if housing is more affordable than ever, and if the percentage of Americans who own their own homes continuing to climb, both of which are the case, as reported in his own newspaper (HT Cafe Hayek):

Despite a widespread sense that real estate has never been more expensive, families in the vast majority of the country can still buy a house for a smaller share of their income than they could have a generation ago.

A sharp fall in mortgage rates since the early 1980′s, a decline in mortgage fees and a rise in incomes have more than made up for rising house prices in almost every place outside of New York, Washington, Miami and along the coast in California. These often-overlooked changes are a major reason that most economists do not expect a broad drop in prices in 2006, even though many once-booming markets on the coasts have started weakening.

The long-term decline in housing costs also helps explain why the homeownership rate remains near a record of almost 69 percent, up from 65 percent a decade ago.

Nationwide, a family earning the median income – the exact middle of all incomes – would have to spend 22 percent of its pretax pay this year on mortgage payments to buy the median-priced house, according to an analysis by Moody’s, a research company.

The share has increased since 1998, when it hit a low of 17 percent before house prices began rising sharply in many places. Although the overall level has reached its highest point since 1989, it remains well below the levels of the early 1980′s, when it topped 30 percent.

I’ll add something I believe The Times missed. People are spending a higher percentage of their income on housing now than they were seven years ago because they want more bells and whistles on their houses. Builders are responding, and building them, making the median price go up.

As to Krugman’s central complaint, Jim Glassman of TCS Daily (formerly Tech Central Station) notes the reality:

Stephen Moore of the Wall Street Journal and Lincoln Anderson of LPL Financial Services recently pointed out that the latest Census data show that, far from shrinking or losing ground, the middle class in America has become a good deal richer.

“Back in 1967,” they write, “the income range for the middle class [that is, the third of five quintiles] was between $28,800 and $39,000 (in today’s dollars). Now that income range is between $38,000 and $59,000.” In 1967, one family in ten had an income of more than $75,000 (in 2004 dollars); today, it’s one in four.

The only partially-valid counterargrument is that it takes more income-earners per household to achieve the higher real incomes. Without a doubt, there are more income earners per household now than there were 40 years ago, and there is of course a heated debate over whether many of these two-income choices have been good ones. But for this post the point is that the “real incomes are falling” argument is just not valid, and Paul Krugman needs to get over it.

UPDATE, Jan. 3, 2006: Independent Sources points to a publicly available post of the full Stephen Moore-Lincoln Anderson piece at the John Batchelor Show web site.

Exit Strategy Accomplished–After 60 Years

Filed under: Taxes & Government — Tom @ 9:24 am

A US Air Force Base in Germany Closes (HT American Thinker):

The U.S. Air Force on Friday handed over the keys to Rhein-Main Air Base to the operator of Frankfurt International Airport, the last step in closing the base that hosted American forces for 60 years.

The 120 buildings on the base are to be bulldozed to make way for a third terminal for Frankfurt’s sprawling civilian airport — continental Europe’s busiest. It officially becomes German property on Saturday.

The ceremony, at which Brig. Gen. Mike Snodgrass gave the keys of the base’s buildings and main gate to Manfred Schoelch of airport operator Fraport AG, followed Rhein-Main’s formal closing in October.

….. Rhein-Main was once a hub of activity for American forces facing Soviet bloc forces and tensions in the Middle East. It saw a steady stream of planes fly supplies to West Berliners in the late 1940s during the Soviet blockade of the city.

No complaint was heard from Congressman John Murtha about how long the pullout took.

This Weekend’s Unanswered Questions (123105)

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4) this inquiring mind would like to have answers for (some links included may require free registration):

QUESTION 1: Will the security nightmares end when (if?) Microsoft’s new Vista operating system is released?

The latest exploit is so bad, it may, and probably should, mean the death of a file format (also, a very serious warning to Google Desktop users; link was included in original article):

Opinion: How bad is the new WMF bug? Research suggests that the WMF format has been officially ruined.

Microsoft really has improved the security of its code over the last few years. The fact that every now and then a bug like the new WMF bug still comes along just goes to show how careless the old code is.

The problem with the WMF (Windows Metafile) file format turns out to be one of those careless things Microsoft did years ago with little or no consideration for the security consequences.

Almost all exploits you read about are buffer overflows of some kind, but not this one. WMF files are allowed to register a callback function, meaning that they are allowed to execute code, and this is what is being exploited in the WMF bug.

As a result, it is surprisingly easy to get hit with this attack, even if you are being careful. I’ve heard stories of experienced researchers being hit while researching the attack.

One way this might have happened, and it’s a good example of how easy it is, is through Google Desktop. F-Secure has demonstrated that Google Desktop users can become infected simply by downloading an infected file. When Google Desktop indexes the file it launches the exploit.

Imagine how much further along the economy could be if so many billions of dollars weren’t being spent fighting viruses and other malware. Let’s hope Vista is a cure, and not just another cause of yet more disease.

QUESTION 2: Will Delta or Northwest fail to emerge from bankruptcy in 2006?

Delta lost $182 million ($164 million excluding reorganization costs) in November on revenue of $1.3 billion, and had $2 billion in cash. Since then, the company has won some concessions from pilots, but needs more from them and others. It seems that Delta will require airfare increases at least as much as cost-cutting to survive. Given the competition, I don’t see big domestic fare increases sticking without a big upward spike in overall travel traffic.

Meanwhile, Northwest lost $129 million (second item at link; $64 million excluding reorganization costs) on revenue of $947 million, and had $1.5 billion in cash. Their mechanics, who have been on strike since before the September bankruptcy filing, rejected the latest offer from the company, which has been using replacement-worker mechanics since the strike began. From here, it seems Northwest is in better shape than Delta because of its more profitable Asian routes, and because the Japanese economy appears to be on a serious roll for the first time in about 15 years.

Both companies must be praying for a travel boom in 2006.

QUESTION 3: How is this going to keep from falling, let alone get built?

The coming New Year is time for optimism. Even so, this report from a few weeks ago is taking “Can you top this?” to an unfathomable extreme (HT Wasp Allergies):

Blueprints for a kilometre-tall skyscraper have been drawn up by UK architects, who hope to see the record-breaking structure commissioned in Kuwait.

At 1001 metres, the enormous tower would be almost twice the height of the world’s tallest building today, the Taipei 101 in Taiwan, which stands at 509 metres. The new building would also dwarf the Burj Dubai, a building under construction in Dubai that is expected to stand 700-800 metres tall once completed in 2008.

Architecture firm Eric Kuhne and Associates, based in London, UK, has drawn up plans for the skyscraper. Although the designs have yet to be made public, the company is reported to be in talks with the Kuwaiti government about construction.

Representatives told the Architects’ Journal that the Kuwaiti government is considering commissioning the building for a city called Madinat al-Hareer, or the “City of Silk”. The skyscraper could house 7000 people, but would cost an estimated £84bn to construct and could take 25 years to complete.

File the towers that will be done in 2008 under “marvels.” File the “Kilometer Tower” under “I’ll believe it when I see it.”

Positivity: College Coach, #1 on Wins List, Does It Right

Filed under: Positivity — Tom @ 7:10 am

Chances are you haven’t heard of him (Harry who?), which is just fine, as far as he’s concerned (but we need more like him in all walks of life):