Margin Call opened four months ago, so this review isn’t exactly timely, but for readers who haven’t seen it, it purports to be about the 2008 financial crisis. Since the Antiplanner has written extensively about this crisis, I found the movie intriguing enough to watch the DVD.
The entire picture takes place during about 27 hours in the life of an investment bank loosely modeled after Lehman Brothers, which went bankrupt in September, 2008. While the bank in the movie is never named, it has many parallels to Lehman. Lehman’s CEO, Richard Fuld, though out of touch with his employees, was at one time worth a billion dollars based on the value of his Lehman Brothers stock. The movie CEO, cleverly named John Tuld, is similarly remote but is also said to be worth a billion. Lehman’s chief financial officer in charge of risk management was a beautiful blonde who some whispered gained her position more because of a never-proven affair with the company’s executive VP than because of her skills. The movie’s chief risk manager, played by Demi Moore, is a beautiful brunette who apparently has a close but not fully disclosed relationship with the bank’s number two person. The blonde and her boss end up losing their jobs a few months before Lehman’s goes bankrupt; here the movie breaks from reality in that only Moore loses her job.
Leave it to the New York Times to put the most negative spin on a conference about driverless cars. “Collision in the Making Between Self-Driving Cars and How the World Works,” reads the headline.
As the Antiplanner wrote three years ago, the main barriers to driverless cars are institutional and bureaucratic, not technological. So it isn’t really news when the Times reports that “an array of speakers suggested that questions of legal liability, privacy and insurance regulation might pose far more problems than the technological ones.”
“Asking a billionaire to pay at least as much [tax] as his secretary is plain common sense,” says President Obama. When Warren Buffett announced that his secretary paid a higher rate than he did, some people calculated that he must pay her at least $200,000 a year to put her in an (average) 19 percent tax bracket.
Yet the latest report is that Warren Buffett’s secretary pays 35.8 percent of her income in federal income taxes, and other people in his office pay as high as 41 percent. Buffett himself supposedly pays only 11 percent. As dramatic as this sounds, the problem with this story is that the marginal federal tax rate is 35 percent. In 2010, people only paid that rate on incomes over $373,650; the rate on all income up to that amount is lower. If a married person’s income is $400,000, for example, and they they take only the standard deductions, their tax rate is less than 27 percent.
In other words, you can’t have a tax rate of 35.8 percent, much less 41 percent. If Warren Buffett’s secretary is paying that much, she needs a new accountant.
Honolulu has the best bus system in America, taking a higher percentage of commuters to work and carrying more daily riders per capita than any other bus system. But just having the best bus system isn’t good enough for some people, who just have to have a rail line to have “real transit.” So the city is about to break ground on a 20-mile-long elevated rail line that is expected to cost $5.27 billion ($260 million per mile), and will probably end up costing more. The city has already spent $350 million just planning the rail line–enough to operate its bus system for nearly two years–without laying a single inch of track.
The project even has Bette Midler upset. She grew up in Honolulu but now lives in New York which, she notes, went to a great deal of trouble to remove many of its ugly elevated rail lines. “That this project is going to be so small, cost so much, and have such a terrible impact on the environment is dreadful,” she says. “The very idea that the state would sacrifice the most important amenity it has to offer the world, the beauty of its environment, is beyond belief.” Not beyond belief: some people want rail transit no matter what the cost.
The latest news is that former Hawaii Governor Ben Cayetano is running for mayor for the specific purpose of killing the rail line. The Honolulu Star-Advertiser “objectively” reports that, if Cayetano wins, “money and jobs may disappear.” Yes, money will “disappear” back into taxpayers’ pockets, who will foolishly spend that money on things that will create jobs that are a lot more useful than building an elevated rail line that will only have to be torn down in a few years.
The Economistsuggests that sending a woman to the moon would have a more positive impact on the economy than building high-speed rail. Certainly, a trip to the moon would use more modern technology as the first high-speed rail line was built in 1964 but we didn’t send a man to the moon until 1969.
The New York Times Magazine has discovered what everyone who has ever been to a Tea Party meeting already knew: tea parties are a coalition of social conservatives and libertarians. Both are fiscally conservative and so the tea parties focus on fiscal issues and agree to disagree on social issues.
Does this mean the tea parties are losing influence? No, but it does mean that the tea parties will have little influence on the Republican presidential nomination (which can’t be counted as a loss of influence because they never influenced one before). Both sides dislike Romney, but the social conservatives support Santorum while the libertarians support Paul.
Unfortunately for those who are not neoconservatives, that means Romney is likely to be the nominee. But the Antiplanner doesn’t think the president is as important as Congress, and the tea parties are likely to remain influential in many Congressional and local elections.
The Obama administration’s rejection of the Keystone pipeline was predictably stupid and will do little to protect the environment other than by slightly increasing world oil prices. Opponents made it clear that they didn’t care about the negligible environmental impacts of the pipeline; they just wanted to “keep the tar sands in the soil.”
The existence of tar sands refutes the frequent assertion that oil is going to become fantastically expensive in the near future. The Alberta tar sands are estimated to be the second-largest petroleum deposit in the world, but are ignored by those who want “peak oil,” who focus only on the liquid oil that has historically been our main source of petroleum. Extracting liquid oil costs less than extracting tar-sands oil, but since extraction costs form only a fraction of the cost of gasoline, access to tar-sands oil is going to keep gasoline affordable for a long time.
Once the envy of much of the rest of the United States, the California high-speed rail project is increasingly viewed as being run by a bunch of buffoons who can’t see the handwriting on the wall. Actually, a few of them may see it: last week the authority’s executive director and board chair both resigned. The former said he wanted to “spend more time with his family,” code for “I no longer want my name associated with these crackpots.”
The board chair remains on the board, and the board as a whole still can’t read the handwriting. Last week they decided that, when they fail to find the money to build the portion of the line from Bakersfield to Los Angeles, they won’t build it through Lancaster and Palmdale instead of not building it over the Grapevine, which had previously been given serious consideration. To even bother to make the decision shows they haven’t realized the project is hopeless.
As if to show that even small cities can waste gobs of money on transit infrastructure, Grants Pass, Oregon (population 35,000) recently debated the wisdom of spending more than $100,000 each for several modest three-seat bus shelters to serve the Josephine County Transit system. As The Oregoniannotes, this is roughly the cost of building a modest three-bedroom, two-bath home, not counting the land.
The story began when Grants Pass decided to boost transit ridership by building five bus shelters using federal Congestion Mitigation/Air Quality (CMAQ) funds. Under state and federal rules, the city did not have any engineers who were considered qualified to design such shelters, so the city had to hire an outside consultant. The shelters designed by the consultant were originally expected to cost $76,000 apiece, but due to cost overruns the cost rose to $106,000. By comparison, the nearby city of Roseburg, Oregon (population 21,000) built similar (though perhaps not quite as pretty) shelters for $7,000 to $11,000 each.