Billingsley investigates a crime of "Exceptional Depravity"

 

The first police officer to arrive at the scene of the murder of Chip Northrup, age 87, and his wife Claudia Maupin, 76, called it in as “a double homicide with one subject having been eviscerated.” Soon enough, the authorities would learn that in fact both victims had been eviscerated, their abdomens sliced open, and intestines pulled out. As the police report stated, it was an act of “exceptional depravity.”

Two months later, in June 2013, a local teenager, Daniel Marsh, confessed to the crime, telling authorities he stabbed the couple to death in their bedroom just to see what it would “feel” like. . . .

That's the first few lines of my review of Exceptional Depravity: Dan Who Likes Dark and Double Murder in Davis, California, by veteran journalist Lloyd Billingsley, which appears in the February 2016 issue of The Florida Bar Journal.    If you are so inclined, here's a link to the full review.   But the book itself is an entertaining, fast-paced read and worth the time of any fan of the true crime genre.  

Thursday Theme Song

.... a blistering version of Herbie Hancock's "Cantaloupe Island."   

Obama is right about taxation of hedge fund partnerships

One of the most outrageous industry specific tax breaks is the preferential tax treatment of "carried interest" for hedge fund and private equity partnerships.

In a hedge fund or private equity partnership, the fund managers get paid by the limited partners (i.e. investors) in two ways: an annual fee, usually 1-2% of assets under management, and a percentage of any investment gains made by the fund, usually 20%. This 20% participation fee is known as carried interest.

For some reason, our tax code treats carried interest as if it were a capital gain, and is therefore taxed at a 15% rate and is excluded from payroll taxes. But carried interest is not really a capital gain. We are not talking about the hedge fund managers own money here, we are talking about a management fee. Yes it is a highly uncertain, contingent fee, but it is still a fee nonetheless.

Hedge fund managers claim that the preferential treatment is justified because the fee is uncertain and risky. But there are lots of occupations where the ultimate income is highly uncertain - a lawyer who works on contingency, an author or composer who gets paid via royalties, or a salesmen who works on commission - yet all of these folks pay taxes at ordinary rates.

The President has proposed that the preferential taxation of carried interest be eliminated, and I agree with him. His problem is that he may have to fight some members of his own party on this one - particularly Charles Schumer.

By the way, I only agree with the President with respect to the preferential nature of the tax rate, not with the idea that 15% is too low of a tax rate. I think all income should be taxed at a flat 15% rate, whether you work at a hedge fund or not.

Farewell to the Glenn Beck Program on Fox

In honor of the final week of the Glenn Beck TV program on Fox News, I have assembled a list of my favorite moments from the show.

February 2010, Glenn Beck vs. Joe Klein. My favorite comedic moment was this clip where he lampoons Joe Klein and the Ivy League faculty lounge, donning a tweed smoking jacket and a pipe. I've watched it a dozen times or so and it never gets old. Just hilarious.

Look it up Joe, it's true. It almost makes it sound like you don't know what you are talking about. And it also kind of turns your entire nasty little blog entry into...anti-intellectual drivel!

August 2009, Beck exposes Van Jones. Beck makes history by airing a devastating mini-documentary on the radical background of White House clean energy czar Van Jones. Thanks to Beck and a revelation that Van Jones was a 9/11 truther, Van Jones resigned just a few weeks later. Beck 1, White House 0.



July 2010, Beck devotes entire show to Hayek's Road to Serfdom. It wasn't Beck at his best...I am not sure Beck actually read the book before doing the episode. But it didn't matter. Within hours, the book jumped to number one on Amazon.com.



February 2010, Beck addresses CPAC. This was not actually part of his TV program, but it might as well have been. The best moments: his rock star introduction set to the music of Muse, and the moment he brings out his chalkboard.




January 2009, The Inconvenient Debt. This was very early on in the show's history, and I think was one of the first Beck clips that went viral. He parodies Al Gore to demonstrate the dramatic and frightening rise in the nation's money supply. Who said monetary policy makes for bad TV?




May 2010, "The Plan". Yes, he is a self described rodeo clown, but in May of 2010, Beck devoted an entire week to outlining a plan to solve the country's fiscal problems and reversing 100 years of progressivism. He discusses how to cut entitlements, education, health care, and yes, even defense spending. Making policy conversations accessible and entertaining...Beck at his best.



October 2009, Glenn vs. Anita Dunn. In the fall of 2009, White House communications director Anita Dunn spearheaded an unusual White House strategy to attack and marginalize Fox News, calling the network "opinion journalism masquerading as news". A few weeks later, Beck reveals a video of Anita Dunn making a speech where she calls Mao one of her "favorite philosophers". Was she joking when she said that? Most likely. She claims she was "being ironic". But at a minimum, it showed really bad taste. And after going after Fox, did she really think she was going to get the benefit of the doubt? Beck 2, White House 0.

And perhaps the funniest part of all of this was on the next episode, when Beck's staff member manning the White House hotline is dressed in a Mao suit. Hilarious.




March 2009, Beck apologizes to audience for Massa interview. On March 7, 2010, Democratic Congressman Eric Massa accused the White House of orchestrating an ethics investigation "to oust him because he had voted against overhauling health care". Beck is intrigued and lands an hour long interview with the former Congressman, hoping to get some insight into possible Chicago style political tactics from the White House. The interview is a complete disaster, as Massa backs away from his previous statements and is preoccupied with pointing out that he did not engage in "groping", only "tickling". At the end, Beck apologizes to his audience for wasting their time.




January 22 2010, Beck airs documentary "The Revolutionary Holocaust". Beck takes a huge risk and it pays off. Jonah Goldberg, who is featured in the documentary, described it as follows: "It is very, very hard hitting. It’s the sort of thing that would never, ever, have been allowed on TV 20 years ago."



March 13 2009, Beck launches 9/12 project, cries on air. Here is where it became clear that Beck was interested in more than just putting on a news show. The 9/12 project becomes a strand of the tea party movement, and not an insignificant one. Critics are hysterical because Beck cries on air.




April 15, 2009: Beck leads tea party rally at the Alamo. This was perhaps the moment where the tea party movement really started to take hold. As the media and the White House are geniunely confused by the tea party protests (after all, taxes had not gone up yet!), Beck defines the tea party as a non-partisan movement concerned with one issue - the dramatic growth in government spending. From his opening monologue:

(The media) continues to think that the tax day tea parties are all about Barack Obama or they are all for the GOP. It’s not because they don’t try to understand, I don’t think they are capable of understanding. But since the media are watching, I am going to speak very, very slowly. As I understand it, at least the way I see it here, these have nothing to do with the Democratic party, other than the Democrats suck (roar from crowd). However, no more than the Republicans suck (even louder roar from crowd). This has nothing to do with how much Barack Obama is spending, it’s about how Barack Obama AND George W Bush AND both Congresses have been spending for years.- Glenn Beck

Farewell to the Glenn Beck TV program on Fox News. It made history and was unlike anything we have ever seen or will ever see again on TV.

What not to say after losing the NBA championship

Lebron James following the Game 6 loss to the Mavericks:

All the people that were rooting me on to fail, at the end of the day they have to wake up tomorrow and have the same life they had before. They have the same personal problems they had to today. I’m going to continue to live the way I want to live and continue to do the things that I want with me and my family and be happy with that.

Well, I wasn't rooting for him to fail, but after reading that quote, I'm sure glad he did!

Calling all Senate Democrats

.... it's time to do your jobs. It is now 749 days and counting since the Democratic-controlled Senate passed a budget.

Romney doesn't know anything about economics

Maybe that is an exaggeration, but here is my point. Conventional wisdom says that because Mitt Romney was a successful business man, that he is also a great candidate when it comes to economic issues.

Really? I'm sorry, but understanding economics and being able to manage a business are two very different things. The economy doesn't run like a business. And anyone who thinks that it can be managed like a corporation is terribly misguided.

Back in 2008, I recall that Romney was clamoring for a "stimulus!" and was mocking McCain for his proposal to cut government spending as a way to forestall the recession. And of course, you don't need to look much further than his awful health care plan for more evidence of his economic ignorance.

So this line of thinking that says "yes, I know Romney is a flip-flopper who reverses himself on issues like abortion, immigration, campaign finance, etc...but that's okay because he's great on the economy!" needs to end now.

Romney is the quintessential "pro-business" candidate. What we need is someone who is "pro-market" and understands the limitations on the role of government, both practically and constitutionally.

Romney nomination would be as if the tea party never happened and would reverse all of the progress of the last 24 months.

That is why lately I have been leaning in this direction.

Book: Selfish Reasons to Have More Kids

I recently finished the book Selfish Reasons to Have More Kids by George Mason economist and Econlog blogger Bryan Caplan, and it is a wonderful read for anyone interested in the topic of parenting or grandparenting.

Here is the book summary:

We've needlessly turned parenting into an unpleasant chore. Parents invest more time and money in their kids than ever, but the shocking lesson of twin and adoption research is that upbringing is much less important than genetics in the long run. These revelations have surprising implications for how we parent and how we spend time with our kids. The big lesson: Mold your kids less and enjoy your life more. Your kids will still turn out fine.

The book also presents this theory that most of us "overcharge" ourselves for the cost of having a child, because we overestimate the impact we have on our children in the long run. In other words, the costs of having a child are really less than we think they are.

He's not saying that everyone must have a kid, or that if you are happy with 1 or 2, that you have to have 2 or 3. He is simply presenting a point of view, one that may convince someone who is on fence to go ahead and have another child.

Yesterday, Caplan appeared on the Dylan Ratigan show. Link to video here.

T.G.I.Fla.

A week of Florida headlines:

MONDAY, MAY 2

Wearing Only a Smile, Nudists Seek out the Young and the Naked
Loxahatchee Groves, Fla.

TUESDAY, MAY 3

Nothing to see here. Move along. (Why oh why did I promise a week's worth of headlines?). I'll make it up to you later, promise.

WEDNESDAY, MAY 4

Cops: Fighting woman hid knives and drugs in her private parts and fatty skin folds
Fort Myers, FL

THURSDAY, MAY 5

Here we take a break from the kookiness to remember that Florida has its share of wonderful stories, too:

Toddler ready to go after having seven transplanted organs at Jackson Memorial.
Miami, FL

FRIDAY, MAY 6

From the sublime back to the ridiculous

Bicycling Flower Thieves Hit Orlando Florida
Orlando, FL


BONUS ROUND: the best of April

Police arrest man accused of urinating on cough drops at Walgreens
Sanford, FL

BONUS ROUND: the best of All Time

This apparently happened in March, but I just heard about it today.

Herman Cain vs. Bill Clinton

Herman Cain, former CEO of Godfather's Pizza, made quite a debut last night as a candidate for President of the United States. I am not jumping on any bandwagon - I am particularly concerned about his apparent enthusiasm for the TARP bailout back in 2008. He seems to be trying to ride the tea party wave, but since the tea party was in large part a protest against bank bailouts, this makes little sense.

But what is worth watching is the video below from a 1994 Health Care Town Hall with Bill Clinton. Cain, speaking as the CEO of Godfather's Pizza, takes on Clinton and destroys any possibility of the Clinton health care law being enacted into law in a matter of about 6 minutes.

Early on in the discussion, Cain asks Clinton: "If I am forced to do this, what will I tell those people whose jobs I will have to eliminate."

Clinton then responds by trying to convince Cain that the costs will really not be as high as he says, and then suggests that Cain would be able to pass the cost on to his customers. After all, all of his competitors would be in the same boat. And to this comment, Cain's response is simply devastating:

In the competitive marketplace, it simply doesn't work that way, because the larger competitors have more staying power before they go bankrupt, then the smaller competitor.

This is a fantastic insight. Regulations do impose costs on large corporations, but they often have a disproportionately larger impact on smaller businesses. In other words, regulations build a competitive "moat" for the larger players by making it more difficult and more costly for the smaller competitors to compete.

Hayek/Kaynes Round 2!

Tax burden

A friend of mine recently argued, "raising taxes slightly on the highest income earners produces large amounts of revenue. " That seems like a reasonable argument, until you take into account how few rich people there are relative to everyone else. Here are some of my back of the envelope calculations based on numbers provided by the Tax Foundation:

• If you raised everyone's tax rate by 1% you would generate about $17 billion more from the top 1%, and about $67 billion from everyone else.

• If you raise taxes on the top 1% by 20 percentage points, (from 35-55%), you raise about $337 billion. Raise tax rates on everyone by 5 percentage points, and you raise about $421 billion.

• If you raise taxes on the top 1% by 50 percentage points, (from 35-85%) you raise about $842 billion. Raise tax rates on everyone by 10 percentage points, and you raise about $842 billion (not a typo).
  

Of course, all of this ignores behavior changes and incentive effects. If you raise rates 20 or 50 percentage points, the static analysis above would not hold, because people would go out of their way to earn less. It’s not that they would be “lazy”, the word some have used to try and disparage the supply side argument. It’s that at 85% marginal rates, people spend more time sheltering income than earning income. At 85%, the return on sheltering income would be so much higher than just about anything else you could do with your money.

Below is an amazing graph from the American Enterprise Institute. Conventional wisdom says that the payroll tax is progressive because it is capped. But maybe the proper way to measure is to take into account what everyone puts in versus what you get out. If you get more out than you put in, that is a negative tax, and if you put in more than you get out, it’s a positive tax.

The graph below from shows just who is really paying the social security tax. Hat tip to Veronique de Rugy.

Limbaugh brilliance

On today's program, he said something to the effect of:

I keep hearing about how great the 90's were, and that we need to go back to the Clinton tax rates. Well, okay, if the 90's were so great, then let's go back to the level of spending that we saw in the 90's.

I'm mad at myself for not thinking of that one.

Here is inflation adjusted per capita total government spending:


And total spending as a percent of GDP:

Columnist who accuses Douthat of not having a clue, has no clue

Yahoo finance columnist Dan Gross thinks he's really nailed Ross Douthat in his column NYTimes Columnist Douthat Needs a Clue on Taxes. He writes:

I'm not quite sure where Douthat pulled that $94,000 figure from. Perhaps from the same place where he got the notion that a family making $94,000 "pays 15 percent in federal taxes." Look at the Internal Revenue Service's 2010 tax tables and you'll see that a family filing jointly, earning $94,000, is squarely in the 25 percent tax bracket. Because the first $68,000 of their income is taxed at lower rates, their total federal income taxes would come in at about 17 percent.

But there's more to federal taxes than income taxes, especially when you're in the lower tax brackets. This fictional family would also pay payroll taxes for Social Security (4.2 percent, thanks to this year's payroll tax cut) and Medicare (1.45 percent). So a family of four making $94,000 is already paying about 22.5 percent of its income in federal taxes, and is looking at a 30.65 percent marginal rate on income earned up to the Social Security cap.

This is how the math actually works out for this family of four making $94K:

Adjusted Gross Income: $94,000
less Standard deduction: $11,400
less Exemptions: $14,600
Taxable income: $68,000

Tax $9,369

less Child tax credit: 2,000
less Making work pay credit: 800
Tax owed after credits: 6,569

Marginal tax rate: 15%
Effective tax rate: 11%

So, the tax they are paying is actually 11%. Even if you include social security and Medicare payroll taxes, which total $7,191, the effective tax rate would still come in under 15%.

Stunningly sloppy.

Practice makes perfect

I don't know if President Obama is, as Democratic Senator Bob Kerrey once said of Bill Clinton, an "unusually good liar," but he certainly works hard at it.

The impact of George Washington's ignorance of the internet on Constitutional interpretation

In Little Rock on his book tour, Supreme Court Justice Stephen Breyer argued (in the words of an AP reporter) "that judges need to apply the Constitution's values with an eye toward the changing times." The Court's job, he said, was to discern how to apply the Founders' values to the modern world "George Washington didn't really have a view about the Internet," he said, drawing laughter from the crowd of about 650 people at the Statehouse Convention Center. This is a commonly stated observation, and it's always puzzled me that liberals find it clever. I mean, George Washington did not have a view about lots of things: telegraphs, phonographs, typewriters, telephones, microphones, electrified megaphone, radios, televisions, highway billboards, walkie-talkies, and Ubbi Dubbi. So what? The point Justice Breyer is making is that the new technology sometimes raises questions about how pre-existing laws should be applied. But this does not change the judge's job, which is to apply the law as it is written to the new facts. Justice Breyer's comment that the Court "should apply the Constitution's values with a pragmatic view toward present circumstances, rather than focusing only on the document's historical meaning" is at best banal, and at worst pernicious. First, no judge disregards "present circumstances" while "focusing only on the document's historical meaning." The originalist judge does not, for example, define the First Amendment's provision that Congress shall make no law ... abridging the freedom of speech" and define "speech" to mean only those forms of speech available in 1789 such as pamphlets and books, but not radio shows and movies. (This is what Judge Breyer is suggesting his opponents do, with his joke about the internet). Rather, originalist judges are inclined to think that the free speech clause protects only speech, as that term was generally understood, regardless of method of transmission. Thus, an originalist has no doubt that statements on internet blogs qualify as "speech," even though George Washington never read one, but are skeptical about whether nude dancing does. If the judge sees his role as to apply the Constitution's "values" in a "pragmatic" way, it is very tempting for him to think that any result that seems"unpragmatic" or "impractical" must be incorrect. Bans on abortion seem impractical given the judge's views about family arrangements and sexual morality, illegitimacy rates, etc., so ipso facto the bans on abortion must be unconstitutional. "Pragmatism" becomes a synonym for "a result that I like." Honoring the Constitution's "values" can be a way to dodge the limitations of the actual text. But what better encapsulates the Constitution's genuine "values" than the Constitution's words?If the judge sees his task as applying the words of the Constitution to present circumstances, the words themselves as a tether, which can prevent him or her from straying too far from what the people actually agreed to when they approved the Constitution (which is, after all, a document made of words). This approach does not always prevent a judge from allowing his own preferences to cloud his interpretation -- not by a long shot --but it's better than the alternative, which provides no brake at all on judicial willfulness. Justice Scalia tells a joke to illustrate this. Two men are walking in the woods and come across an angry bear. They start running. The first man says, "I don't think we're going to make it." the second guy responds, "I don't need to outrun the bear, I just need to outrun you!" To Breyer's credit, he is aware of this quip and usually includes it in his speeches. Which makes it even more peculiar that he is so impressed with that crack about George Washington and the internet.

Quote of the week from Mark Steyn on the EIB

"Baseball should have a season, not taxes." - Mark Steyn

The MJ of Killer Whales

Remember the killer whale at Sea World who killed its trainer in front of a live audience last year? You may recall he grabbed the trainer by her hair and pulled her underwater, drowning her either before or after severing her spine. Apparently he had been involved in the deaths of two other people before that. The whale's name is Tilikum, which in the language of the Chinook means "friend." Well yesterday Friend made his comeback performance in front of 5,000 animal lovers at Sea World in Orlando. No word yet whether People magazine will characterize this -- as they usually do when a celebrity resumes making money after getting caught doing something awful -- as a "triumph over adversity." Comments one observer:

Death by whale is uncommon, but that’s not to say Tilikum won’t strike again. Trainers are extra cautious around the whale, and no longer rub him manually. What he doesn’t get in human touch, he gets in the form of high-powered hoses.

From an objective standpoint, Tilikum’s return to SeaWorld’s performance lineup must be qualitative. He must be an awesome whale, capable of high jumps and the finest beach-ball balancing. Additionally, considering his massive frame, he must excel at the audience whale splash—a fan favorite.

Tilikum is the Michael Jackson of killer whales. Promoters will book him and crowds will come see him regardless of his personal turmoil.

Via First Thoughts

Social security trust fund accounting

Don Boudreax at Cafe Hayek has some great posts on how the Federal government's accounting in regard to the Social Security Trust Fund is fraudulent. He writes:

When sensible people ... note that these obligations are so massive that honoring them in full will require drastic tax hikes or spending reductions, accounting-challenged defenders of the status quo exclaim “Not to worry! The Social Security trust fund holds lots of U.S. Treasury bonds. Those bonds are assets. So Social Security’s obligations are covered!”

But those bonds are held by the same party that issued them, namely, Uncle Sam; the creditor here is one with the debtor.... The bonds in the ‘trust fund’ are no independent source of revenue for Uncle Sam to tap into to meet his Social Security obligations as these bonds would be if they were issued instead by, say, Microsoft or by Her Majesty’s government in the U.K.

Here is an example:

Suppose I have a savings account with $10K, and I empty it to pay for a car. Most sane people would say that I now have a car worth $10K, and a savings account worth $0.

If I were the federal government, however, the accounting would be a little bit different. When I empty the savings account, I would replace it with an IOU from myself, and claim that the IOU is worth $10K. So I now have a car worth $10K and an IOU (from myself) "worth" $10K. All of a sudden, I have assets worth $20K!

At some point in the future, my income falls short of my expenses, and I need money, so I begin selling assets. I eventually get to the $10K in IOUs and have no choice but to sell them. But here’s the problem: because the person who is obligated to make the IOU payments is me, and I am in no position to make those payments, so the IOUs are worthless!

How did this happen? It was never an asset to begin with.

Who are these greedy owners?

I was in an email discussion with a few friends on various labor issues, and one of them wrote this:

If I had a business where I made shoes and could hire 5 American workers to make let's say 50 pairs of shoes per day, why would I send the work to another country where I could hire 10 people to make more shoes for the same price or less? Because I would make more money....mind you what I was making a profit prior to firing the American workers ...it is greed pure and simple...no one needs that much money.

My question to him was, who exactly are these greedy people? After all, I am a shareholder in thousands of companies through my ownership of index mutual funds. Through those investments, I am seeking a return on my money - a profit. It's these investments that provide money to companies to buy machinery and equipment and factories and offices, i.e. capital. Capital is what makes workers more and more productive, and ultimately allowing workers to demand higher and higher wages.

And regarding the "no one needs that much money", again, who is he talking about? I know that I am invested in thousands of companies, and that some of these companies that I own will be incredibly profitable while others will quickly go bankrupt. On average, I will make a return that is the "market return" - as will the average investor - pensioners, 401K participants, IRA holders, etc. So when you see one highly profitable company, that doesn't mean that the investors in those companies didn't have 10 other investments that fared poorly. So again, I don't know exactly who he is talking about.