My Most Influential Books

When reporters want to trip up a candidate, they ask them to name one book which has profoundly influenced them other than the Bible? Can you name one book that has influenced you? I can't name just one, but I can give a list.

Before Age 23:

1. A Day in the Life of Ivan Denisovitch by Alexander Solzhenitsyn and Atlas Shrugged by Ayn Rand gave me a distrust of the power of big government and shaped the libertarian side of my philosophy during my teen and young adult life. Pink Floyd's The Wall feeds a similar viewpoint.

2. The Lord of the Rings trilogy by J.R.R. Tolkien and The Foundation trilogy by Isaac Asimov fired my imagination. The ability to see civilizations that never existed in your mind's eye is key to creative thinking.

3. My political philosophy textbook in college exposed me to the Enlightenment philosophers. They shaped my libertarian views in a less cynical way. I would say that I was influenced by The Federalist Papers but I have never made it all the way through them.

4. Candide by Voltaire and Lysistrata by Aristophanes exposed me to the power of satire. I have been a smartass ever since.

5. The Law of the Land by Charles Rembar was the start of my love affair with the law. Rembar demonstrated that writing about the law could be fun, something that influenced me many years later when I began to write a bankruptcy blog.

6. Blessed Rage for Order by Catholic Theologian David Tracy did not influence me in the least. However, I always thought it would be a good name for a Christian punk band. Dynamics of Faith by Paul Tillich was one theology book that I did understand.

After Age 23:

7. The Bible and Luther's Small Catechism made me appreciate the value of compassion more. I know that I was supposed to have read these books at a much younger age, but I did not really appreciate them until I was older. I especially like the way that Luther turns the Ten Commandments into positive commands to do good as opposed to merely negatives to be avoided.

8. Judgment at Nuremberg by Robert Conot, Letters to Freya by James Helmuth von Moltke and The Looming Tower by Lawrence Wright helped me to appreciate the power of evil and the danger of fanaticism. I had read books about World War II, including William Shirer's Berliln Diary, when I was younger, but I didn't really comprehend them until I was an adult.

9, Hamlet and the works of William Shakespeare helped me develop a love of the English language and the power of words. The Story of English by Robert McCrum, William Cran and Robert MacNeil is runner-up in this category.

Do Tax Cuts Increase Employment?

In the debate over raising the debt ceiling, Republicans have refused to consider tax increases of any kind. The adjective "job-kiling" is always linked to "tax increases" even if it is eliminating a tax loophole for corporate jets. That made me wonder. If tax increases kill jobs, then tax cuts must increase taxes. According to an ABC News Report, there have been five major tax cuts in recent years: JFK in 1963, Ronald Reagan in 1981 and 1986 and George W. Bush in 2001 and 2003. What was the effect of those tax cuts on employment? I used employment rates rather than unemployment, because unemployment is a fickle figure.

Looking at the Bureau of Labor Statistics, I found that for the period between 1948 and 1984, employment rates hovered between 55-59%. It didn't matter which party was in the White House, employment rates stayed within a narrow band. However, the years 1985-2008 tell a different story. During those years, encompassing three Republican and one Democratic President, employment rates exceeded 60% every year. Because these years of high employment spanned the Reagan and Bush tax cuts, there is at least some correlation between tax cuts and employment.

However, I wasn't satisfied with that. I decided that a better comparison would be to look at government revenues as a percentage of GDP compared to employment rates. During the period since 1948, government revenues as a percentage of GDP have ranged from 14.4% to 20.6%. That means that the lowest quartile of revenues as a percentage of GDP would be 14.4%-16.0% and the highest quartile would be 19.0%-20.6%. I only found four years in the bottom quartile (1949-50 and 2009-2010), while I found eleven years in the upper quartile (1952, 1969-70, 1980-82 and 1997-01).

Comparing these rates yields the following table:

Year	Revenues as % of GDP	Employment %
1950	14.4%	56.1%
1949	14.5%	55.4%
2009	14.8%	59.3%
2010	14.8%	58.5%
1952	19.0%	57.3%
1970	19.0%	57.4%
1980	19.0%	59.2%
1982	19.2%	57.8%
1997	19.2%	63.8%
2001	19.5%	63.7%
1981	19.6%	59.0%
1969	19.7%	58.0%
1999	19.8%	64.3%
1998	19.9%	64.1%
2000	20.6%	64.4%

These numbers are very counter-intuitive. The higher the percentage of GDP consumed by the government, the higher the level of employment. While I can't prove it, my hypothesis is that when the economy is good, employment is higher and tax collections are higher as well. When the economy is in the toilet, employment is lower and tax collections are lower.

I decided to perform one last test. How did government revenues and employment change in the four years after a cut? If tax cuts spur the economy, you would expect to see revenues as a percentage of GDP stay constant, constant dollar collections increase and employment increase. Here is what I found:

Year	Revenue as % of GDP	Revenue in Constant $	Employment $
1963	17.8%	$674.9	55.4%
1964	17.6%	$704.3	55.7%
1965	17.0%	$721.1	56.2%
1966	17.3%	$789.1	56.9%
1967	18.4%	$875.4	57.3%
1981	19.6%	$1,251.4	59.0%
1982	19.2%	$1,202.8	57.8%
1983	17.5%	$1,113.6	57.9%
1984	17.3%	$1,174.3	59.5%
1985	17.7%	$1,250.9	60.1%
1986	17.5%	$1,277.7	60.7%
1987	18.4%	$1,375.7	60.7%
2001	19.5%	$2,215.3	63.7%
2002	17.6%	$2,028.6	62.7%
2003	16.2%	$1,901.1	62.3%
2004	16.1%	$1,949.5	62.3%
2005	17.3%	$2,153.6	62.7%
2006	18.2%	$2,321.4	63.1%
2007	18.5%	$2,414.0	63.0%

These are a lot of numbers. Here is what I think they mean. The Kennedy tax cuts increased revenue by $200 million and increased employment by 1.9%.

The Reagan tax cuts initially resulted in both reduced revenue and reduced collection. However, by 1987, revenue was up by $100 million and employment was up by 1.7%.

The Bush tax cuts followed the same pattern with revenue and employment trending down but then increasing. However, the Bush tax cuts resulted in a net employment loss of 0.7%.

The bottom line is that it appears that depending on how you slice and dice the numbers, you can conclude that high taxes lead to high employment or conversely that tax cuts increase employment. It is beyond my abilities as an amateur economist to figure it out.

Sources: http://www.bls.gov/cps/cpsaat1.pdf

http://abcnews.go.com/Politics/presidential-tax-cuts-now/story?id=12337213

http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf

Did You Know That Taxes Are Low And Spending Is High?

One of the Republican mantras during the debate to increase hte debt ceiling is that we have a spending problem and not a revenue problem. As it turns out, receipts as a percentage of Gross Domestic Product (GDP) are at an historic low, while spending is at an historic high. For 2009-10, government revenues were under 15% of GDP. You have to go back sixty years to 1950 to find a comparable level. Since 1940, there have only been eight years when revenue was less than 15% as a percentage of GDP (1940-43, 1949-50 and 2009-10). See Historical Tables: Budget of the U.S. Government 2011, Table 1.3, which you can find here. To be fair, the last two years are an anomaly. The same report predicts that receipts will increase to 16.8% in 2011 and 18.1% in 2012. For the post-World War II era, government receipts have traditionally been more than 15% but less than 20% of GDP. The only post World War II year in which receipts were greater than 20% was 2000.

Using the same measure, spending is historically high. In 2009-10, spending as a percentage of GDP was approximately 25% of GDP. The last time spending was that high was 1946. However, in fairness, there have been many years when spending exceeded 20% of GDP (1942-46, 1953, 1968, 1975-96, 2006, 2008-11). So which recent Presidents kept spending below 20% of GDP? President Clinton (1997-2000) and President George W. Bush (2001-05 and 2007).

So what is "normal" about receipts and expenditures? In recent years, receipts above 20% but below 25% of GDP are typical, while expenditures around 18%-22% of GDP. The past two years have been unusual in that receipts have been below historic levels and expenditures have been much higher. That has led to the history-busting deficits that I described in my prior post.

The Deficit Is REALLY BIG And That's Not Just Partisan Spin

I have been listening to the current debate about the size of the federal budget and the deficit with some confusion. Republicans say that spending is too high. Democrats say that taxes are too low. I have vague recollections of budget deficits under President Reagan and both President Bushes and a surplus under President Clinton. Those facts made me a little skeptical about claims that deficits are out of control under President Obama. Since I had a little free time on this Fourth of July, I decided to do some reading. The Government Publishing Office put out a volume titled Historical Tables: Budget of the U.S. Government. You can find it here. It contains a great history of the federal budget and it confirms that current deficits have hit record levels.

Raw numbers don't tell you much over time due to the effects of inflation and the fact that the effect of the federal budget on the economy depends on the size of the economy. That is why I found table 1.3 at page 26 very instructive. It shows government receipts, government spending and the deficit in both constant FY 2005 dollars and as a percentage of Gross Domestic Product (GDP).

According to the Report, we have historically run deficits in times of war and depression until the 1970s when we ran continuous deficits with the exception of a few years. Deficit years from 1940 forward were 1940-46(World War II), 1950 and 1952-55 (Korean War), 1958-59, 1961-68 and 1970-73 (Vietnam War) and 1974-97 and 2002-11 (Afghanistan and Iraq). The only non-wartime years that we ran deficits since 1940 were 1958-59 under President Eisenhower and 1974-97 under Presidents Ford, Carter, Reagan, George H.W. Bush and Clinton. Presidents Clinton and George W. Bush were the most recent presidents to preside over a surplus during 1998-2001.

While deficits have been common, the size of the deficit shows striking differences. During the war years of 1943-45, we had deficits equal to 30.3%, 22.7% and 21.5% of GDP. In constant dollars, those deficits were in the $500 billion range. The first postwar year of 1946 showed a fiscal hangover with a deficit equal to 7.2% of GDP and $175.6 billion in constant dollars.

In terms of percentage of GDP, we would not see a deficit equaling 1946 until the Obama administration when the deficit was 9.9% in 2009 and 10.6% of GDP in 2010. In other words, as a percentage of the economy, the deficits under President Obama consume a greater portion of the economy than at any time since World War II. (The Tables only go back to 1940, so I can't speak to the pre-World War II era. In constant dollars, we did not exceed the $175 billion level of 1946 until 1975-76 under President Ford, 1982-88 under President Reagan, 1989-92 under President H.W. Bush, 1993-95, 1996-97 under President Clinton, 2003-2008 under President George W. Bush and 2009-2010 under President Obama. However, while these deficits were greater than 1946, none reached the $500 billion level until 2009. Under President Obama, the deficit was $1.279 trillion in 2009 and 1.386 trillion in 2010. (Since the Table was using constant 2005 dollars, the actual deficits were higher at $1.4 and $1.5 trillion respectively).

Thus, it appears that President Obama's deficits really are unprecedented. In terms of GDP, they are the most since 1945. In constant dollars, they are over double the largest in history, more than double the World War II era deficits. This doesn't tell us WHY the deficits are so large. That would take a lot more digging than I have time to do on a holiday afternoon. President Obama has several strikes against him with interest piling up on the borrowing from his predecessors, wars in Afghanistan and Iraq and a population of aging Baby Boomers. However, it is a verifiable fact that they make President Reagan and both President Bushes' deficits look mild in comparison and make President Clinton's record look positively sterling.

Mel Gibson vs. C.S. Lewis: The Problem of Good Friday

Some time ago, a Jewish friend told me about her discomfort at being taken to watch The Passion of the Christ. She said, “It’s just too painful to watch God being killed.” I replied, “As Christians, we are so familiar with the story that it doesn’t shock us.” If we observe Good Friday at all, it is a quiet service with somber, reverent music. Because we know the ending, we do not experience the terror or the soul-sucking despair felt by the disciples. More importantly, because we know that Good Friday will be followed shortly by chocolate bunnies and Easter dresses and shouts of “He is risen indeed,” we do not dwell overly much on the meaning of Good Friday: it is a passing inconvenience.

If, like my Jewish friend, we approach the story with fresh eyes, the story is truly shocking. Man kills God. Of course, we have a ready answer to this. Man kills God because God allows it to happen. The more disturbing question is why. We don’t like to dwell on why because there are two different why stories, both disturbing in their own way.

On the one hand, you have the Mel Gibson version of Good Friday. In the Passion of the Christ, the God man Jesus doesn’t just die, he is tortured beyond our ability to watch. It is the story of a raging, out of control God who must have satisfaction. Jesus is like the older sibling who takes a beating from the alcoholic father in order to protect the younger, vulnerable one. As Christians, we are grateful that Jesus took the beating instead of us. When He returns like a conquering superhero, we know that we will never have to fear God the Father again.

Admittedly, my analogy is exaggerated. God the Father is not an out of control monster who must be satisfied. Instead, God the Father is just. The penalty for sin is death and that price must be paid. The fact that His Son pays the price for us does not change the fact that God the Father demands that the price be paid. In the world of Mel Gibson, God the Father is very much of an eye for an eye, a life for a life kind of God.

C.S. Lewis excellently captures another answer to why in The Lion, the Witch and the Wardrobe. When Aslan, the Jesus analogue, returns from being killed by the White Witch, Susan asks what it means. Aslan replies:

It means that although the Witch knew the Deep Magic, there is a magic deeper still which she did not know. Her knowledge goes back only to the dawn of time. But if she could have looked a little further back, into the stillness and the darkness before Time dawned, she would have read there a different incantation. She would have known that when a willing victim who had committed no treachery was killed in a traitor’s stead, the Table would crack and Death itself would start working backward.

In this version, Jesus is not a pathetic victim, but a brave and loving friend, who sacrifices Himself so that we might be saved. While God the Father cedes some of his power to Death, he also provides the means to conquer Death.

In the Bible, “for God so loved the world” and “greater love has no man than to lay down his life for his friends” support the Jesus as Aslan view of God. What is disturbing here is that God limits Himself. He establishes rules which even He must abide. However, as a loving God, He provides an override to those rules, a “deeper magic” in the words of C.S. Lewis. This really begs the question of why God couldn’t have just invoked the deeper magic to begin with and spared us the pain of sin. If God will grant us a blissful afterlife, why couldn’t He have just skipped to the good part? I don’t know. However, I would much rather prefer a limited but loving God to one who is angry and omnipotent.

The Good Girls of Disney and Nickelodeon

Lindsay Lohan is in the news again. Like so many of the alumni of the Disney and Nickelodeon starlet factory, she has failed to make the transition from teen sensation to responsible adult. However, rather than focusing on her troubles (or those of Britney, Jamie Lynn, Miley or Mary-Kate), this post will focus on some girls who are actually good role models. Unfortunately, the bar is rather low. To make this list, the actress must be at least twenty years old, have had a successful second act as an adult and not been arrested or pregnant outside of marriage.

Hilary Duff. Hilary Duff, age 23, is the queen of the good girls. As Lizzie McGuire, she played a middle school every-girl complete with a cartoon alter ego to act out her insecurities. The show concluded when she gave guy friend Gordo a chaste kiss on the cheek. Since then, she has had a successful career as a singer, actress, writer, fashion designer and philanthropist. She has recorded three albums, including the appropriately titled Dignity, appeared on the TV show Gossip Girl and has written a young adult book titled Elixir. She serves on the Board of Kids with a Cause and donated $250,000 for Hurricane Katrina Relief. She dated singer Nick Carter and Good Charlotte rocker Joel Madden without incident and is now married to Canadian hockey player Mike Comrie. She has accomplished a lot in 23 years and is a great role model.

Raven Symone. Raven Symone, age 25, began her acting career on the Cosby Show when she was only three. She appeared as the star of That's So Raven, Disney's highest rated and longest running show. Since then, she has recorded four albums, provided the voice of Tinker Bell in a Disney movie and has acted in several movies. Her ABC Family movie Revenge of the Bridesmaids attracted 2.5 million viewers in its premiere making it the number one movie on basic cable among women 18-34. She will be returning to TV with the upcoming ABC Family show The Great State of Georgia. Two additional factors qualify her for a high place on the good girls list. First, she had to dispel rumors that she was pregnant or had a child. The important thing is that the rumors were absolutely false. Second, she has been very comfortable with her size. While she has been somewhat heavy at times, she maintained a positive self image throughout and eventually lost the weight without resorting to fad diets or surgery.

Amanda Bynes. Amanda Bynes, age 24, was the star of Nickelodeon's The Amanda Show. I loved her Judge Trudy segment which always ended with "send in the dancing lobsters." She has acted in several successful movies including Big Fat Liar, She's the Man, Hairspray and Easy A. While she has appeared in Maxim, she also said, "I think I’ll go out as much as I’ve ever gone out... which is not a lot. I like to dance and stuff, but drinking isn’t good for you in every way. It’s not good for your skin; it makes you feel horrible. So, drinking-wise, no."

Alyson Michalka. Alyson Michalka, age 21, was the co-star of Disney's Phil of the Future. She played the BFF and love interest of Ricky Ullman's stranded time traveler Phil. She also has had a successful recording career with her sister in the pop duo Aly and AJ, now known as 78violet. She has successfully made the transition to adult actress with a supporting role in the movie Easy A and appears in the cheerleader series Hellcats on CW. While her pictures in men's magazine Maxim were a reminder that she does possess an adult body, they were still on the tasteful side of sexy.

Alison Scagliotti. Allison Scagliotti, age 20, had a small role in Nickelodeon's Drake & Josh as Mindy Crenshaw, an ultra competitive know it all. However, she has really blossomed as ultra cool computer hacker Claudia Donovan on Sy Fy's series Warehouse 13. The lead characters of Warehouse 13, Pete and Myka, share a similar vibe to the X-Files Scully and Mulder. However, what really makes the show work is its quirky supporting cast and no one is quirkier than Alison Scagliotti. She will also be appearing in the upcoming indie movie Losers Take All.

You may notice that except for Hilary Duff, I haven't mentioned much about their personal life. That is because they have been successful in keeping their private life private. And that's a good thing.

Half Marathon Shout Outs

I ran my fifth half marathon yesterday. My time was nothing to write home about. I finished in 2:50:22. That placed me 3,992 out of 4,256 finishers, which I think puts me in the bottom 6%. Among men aged 45-49, I placed 258 out of 264, which is the bottom 2%. I was five minutes slower than last year and 16 minutes slower than my personal best from 2008. I have to remind myself that the first time I ran the race, it was to see if I could finish. For the fifth straight year, I did finish.

While the news stories in today's paper focused on the Kenyans and Ethiopians at the front of the pack, I would like to point out a few remarkable individuals who were not in this group.

The oldest man to finish the race was Joe Barger of Austin, age 85, who finished in 2:40:48. Way to go, Joe. At 85, some people have trouble walking across the room. You completed a half marathon and did it faster than me.

The oldest woman to finish the race was Vonda Lee Adorno of Austin, age 76. Her time of 2:28:23 was 22 minutes faster than mine. Way to go.

The youngest girls in the race were just 14. The fastest 14 year old was Brenna Lanford of Cameron, who flew through the course at 1:42:05.

The youngest boys in the race were 13 years old. The fastest of the youngest was Ryan Mata of Dripping Springs, whose time was 1:45:26.

The final remarkable thing about the race was that 5,750 people would get up in order to be at the starting line at 6:45 a.m. on a Sunday morning and proceed to push themselves through 13.1 miles of Austin roads. To all who ran, I salute you.

Defining Moments

As I approach 50, I tend to think about the past more. Recently, there are some specific moments that have popped into my head from school days. Here they are:

1. Most Embarrassing Moment

When I was in third grade, we were reading a book about a person stranded on an island in the Pacific. The person comes across something which refers to "Dink." The teacher asked me what the significance of "Dink" was. I was horrified. The only meaning I knew for "dink" was as a synonym for penis. Was the teacher really asking me to talk about a penis in class? I sat there in crimson-faced silence. It turned out that Dink was short for Dinkum which was an Australian name and meant that someone else had been on the island. However, that meaning went straight over my head and I was mortified. I am sure that the teacher had no clue about the alternate meaning.

2. Most Disillusioning, Soul-Sucking Moment

During my sophomore year in high school, my teacher assigned the class to write an alternate ending to the story "The Monkey's Paw." To seamlessly blend the original story with my alternative, I started with the line, "I wish my son alive again." I wrote a very creative piece. However, when I got it back the grade was an F. I asked the teacher what the problem was. She had a policy that anyone using a sentence fragment would receive an F on the assignment. She said that the line I had quoted from the story was a sentence fragment and that I should have changed the language from the story! I was shocked and angry. The teacher assigned us to read this story and yet using the actual language from the story would earn me an F. To make it worse, it wasn't a sentence fragment. The verb "wish" was being used in an active sense rather than the passive "I wish my son was alive" that the teacher preferred. During this time, I was reading Ayn Rand and Alexandr Solyzhenitsyn. I became convinced that high school was a gulag designed to stifle creativity and reward mediocrity. It wasn't (at least not all of the time), but that was how I viewed it through the lens of one callous teacher.

Several years later, a friend asked me why I identified with the Pink Floyd song which had the refrain "We don't need no education/We don't need no thought control/No dark sarcasm in the classroom/Hey teacher, leave those kids alone." This moment was why.

3. Scariest Moment

This also happened my sophomore year in high school. PE was a nightmare for me. The coach would throw a ball at 30 boys and then retreat to his office for the rest of the hour. With 30 unsupervised boys, there was a lot of chest thumping, macho swagger and outright aggression. I learned that you had to push back or you would constantly be bullied. One day we were playing basketball in the gym. Someone shoved me and I shoved him back. He became enraged and shoved me down some steps. I bloodied my knee and wanted to go to the nurse to get it cleaned up. However, the coach would not let me go unless I told him who did it. Foolishly, I broke the code and told him. Later that day, I ran into the same person in the hall. He came up to me and said "I wasn't f***ing around. I'm going to finish it." Something in his eyes made me realize that this was not a garden variety threat. I went to the assistant principal almost in tears. He assured me that this person would not be hurting anyone. He was kicked out of school and I never saw him again. Later, he was arrested for murder. It turns out he had killed a freshman the year before for snitching on him.

4. Most Fortuitous Moment

One day during my junior year, I sat down to take the PSAT. I don't think I knew what the PSAT was or its significance. It was just another standardized test. Back then, we didn't have prep classes and didn't have it drilled into our heads that these tests were the most important things in the world. My results came back and I was a national merit semi-finalist. This changed my life. I was always a good student, but I made plenty of Bs (see #2 above) which meant that I was not an academic rock star. However, with this one test, I not only got my picture in the paper, but was inspired to believe that I could do well in life (or at least in taking standardized tests).

5. Most Ironic Moment

I took journalism for three years in high school. Every year, there was a UIL contest in journalism. My teacher entered me in headline writing. I did well enough that I got to go to regionals in Lubbock. The result of that was that I earned a letter. I bought a letter jacket to put my letter on. Suddenly, I could walk the halls with the same letter jacket that the jocks wore. It was funny because, like most Texas high schools, we had a culture which focused on football. There were no pep rallies for the math club or the school newspaper. However, someone in the school decided that letters could be given for academic contests and I had one. The really funny thing was that the actual headlines that I wrote for the school newspaper never fit right and almost always had to be done over.

6. Happiest Moment

During my sophomore year in college, I asked a girl in my dorm if she would like to go to see a campus production of Godspell with me. I don't think I had exchanged more than three words with her and she was not in any of my classes. It was a shot in the dark. She said no, that she was going with her father. The day of the play, she told me that her father had cancelled and would I like to go with her. This was a first. A girl actually asked me out. That was my first date with my wife and we have been married for 26 years now.

There are probably other moments that are worth mentioning, but these are the ones that stand out.