You're only as good as your last class

One funny thing about teaching, even after 20 years, is how each class goes differently. So you never quite entirely get past the highs and lows. I've been doing this intensive-schedule tax policy class at Singapore, where you go for 3-1/4 hours (with only short breaks) 4 days in a row. Then, after a long weekend, four more days in a row.

I thought my first two classes went well. Fired up for the first one, sluggish start then strong recovery for the second. But today, for the third class, which (like the others) started at 12 pm local time, I decided at about 8 this morning that I didn't like my layout for the first third of the class. So I spent what should have been my usual morning prep time revising that portion. Bad idea. I showed up for class not having done adequate day-of-class review of the last two-thirds. Result, even though I know the material quite well: much harder to explain things coherently and clearly, and to keep in mind what sorts of threads to pick up and which to avoid.

Oh well. Tomorrow is another day.

UPDATE: Well, I feel it's been going better recently.

Singapore

Five days ago, I arrived with my family in Singapore, after a very long flight (more than 24 hours, door to door). We're now acclimated, to the extent of having a temporary subscription to the Singapore version of netflix.com, and have been wandering the very humid city seeing the sights. I think I want to go into the import business, so that U.S. people can sample dragonfruit, a very strange-looking and aptly named import from Vietnam that, once cut open, tastes something like a crisper, tarter version of a kiwi.

Amazing construction boom in Singapore - it's radically transformed since my one other visit here, back in 1990. Without intending any sort of endorsement of anything, it's amazing, as a U.S. citizen, to be in a place that actually appears to be well-governed. Not exactly what I am used to these days.

Yesterday I taught my first session of an intensive 26-hours-over-8-class-days plunge through Tax Policy, and felt pretty good about it - excellent students, from all over the world. I don't know if it's something I said, probably not, but when I was explaining welfarism I got a question to the effect of: Why would anyone believe that anything other than people's subjective wellbeing is important? Hard for me to answer as that's the way I look at it as well.

If J.K. Rowling weren't alive and read this, she'd be spinning in her grave

My kids and I decided to try to think of the dumbest possible ending to the Harry Potter series. Although there are many possibilities, here's our favorite so far:

Right at the peak of Harry's climactic showdown with Voldemort, he wakes up in his plush bedroom with the Dursleys and realizes that - it was all a dream! Even the Dursleys being mean to him!

"Oh, Aunt Petunia, I've had the strangest dream!" And he tried to tell her about it, but the words failed, although he managed to express how sad a lot of it had been, and how mean his loving family.

"Well, it's all over now, Harrykins," said his beaming aunt, smothering him with kisses. "Would you like some extra porridge? Dudley insisted on leaving it for you."

Fade to black.

Abu Ghraib

An article by Seymour Hersh in this week's New Yorker makes it clear that the military engaged in a massive cover-up regarding higher-level involvement in and knowledge about the torture at Abu Ghraib and elsewhere. By higher-up, I mean it's clear to the forcibly retired General Taguba that Bush and Rumsfeld were likely involved in ordering torture, deliberately ignoring the evidence that their wishes were being all too fully carried out, and then squelching the investigation so that it would only reach the low-level grunts.

I've said it before in this blog. We often hear about torture as a means, as in the ticking time-bomb scenario. But to these people, torture is the end, not a means to some other end.

Why? Mainly just to establish that they can, because if you can do this then you can do anything.

Any other reasons? Well, one might ask why Bush as a tweener or adolescent dynamited frogs, as he apparently did. The child is father of the man.

Hedge fund managers again

Funny how issues arise in Washington and become all-consuming for their designated 15 minutes. Right now, it's hedge fund managers, along with the Blackstone deal that somehow cleverly avoids corporate status under federal income tax law for what is effectively a publicly traded firm. (I'm not up to speed at this point on just how they manage this.)

Back on the hedge fund point, which I blogged on recently, I got an invitation from wsj.com to participate in an on-line two-person blog forum this week discussing the merits of the proposed legislation that would get rid of the managers' ability to take most of their compensation at a 15% marginal rate. They said I could blog pro or con, and the whole thing would be wrapped up within a few days. Tempting, and I definitely would have liked to do it (I would have blogged pro the legislation) so long as the opposing debater was a responsible grown-up not a Norquistian freak.

But I had to pass as I will be on the road, flying to Singapore to teach Tax Policy at the NYU @ National University of Singapore program, at the time when the exchange is supposed to take place.

One point I would have made is that, under a properly designed consumption tax, the hedge fund managers would definitely be taxable at the full statutory rate, whether directly or indirectly. Say it's a consumed income tax with yield-exempt savings accounts allowed only for "arm's length," i.e., third party market transactions. The managers would have to expense, and would pay a positive tax, upon consumption, on their more than market interest rate of return (assuming they're good enough to add value through their labor). A properly designed X-tax or flat tax would likewise avoid providing the benefit of the low rate, although exactly how this would work out as a practical matter, in light of these rules' generally disregarding financial instruments and eliminating double taxation of corporate equity-financed income, would take a bit more figuring out than I have time for pre-trip. E.g., we might have to think of it as operating via the corporate-level tax on the underlying equities. But clearly a 15% tax rate on substantially positive real returns that conceptually are labor income would not be the fruit of any well-designed and properly operating progressive consumption tax.

I am starting to think this issue requires a bit more thought than I have time for right now. But that's the great thing about blogging as opposed to scholarship and even journalism - tentative first drafts are allowed, as I see it.

Tell a vision

Today's pre-Father's Day treat for me was an afternoon in Central Park seeing what was billed as the last concert ever by the great late-70s NYC rock band, Television. If you're not familiar with them, imagine a punk rock (for lack of a better word) version of Derek & the Dominoes, only a thousand times more original and interesting.

They were preceded by the Dragons of Zynth, best described as venturesome & imaginative but not all that compelling, and the Apples in Stereo, reasonably fun candy-coated Beach Boys-influenced indie pop. The day started warm and sunny but then rained steadily through the Apples' show, notwithstanding that (or perhaps because?) most of their songs have lyrics about how the sun is shining.

Then a long wait, the sun came back, and finally Television came on. I have waited to see them for thirty years, so a half-hour of roadie set-up wasn't too bad. I did see Tom Verlaine, the group's leader, with a back-up band in DC some time in the early 1980s, but it wasn't the same.

Worse news, the group's second lead guitarist, Richard Lloyd, wasn't there - apparently in the hospital; hope he's okay. That kills the whole point, I thought initially - one of Television's amazing features is the tradeoff between two guitarists who play very different lead styles. And indeed the replacement did nothing but strum rhythm and play fills, so there was something missing, but still it was one of the best concerts I've seen.

Verlaine plays in his own head, more than to the audience. Kept tuning and re-tuning his guitar at first, and complained about the lack of a sound check and that the City's sound system was "crap." Though this came out as good-humored, not petulant, and he did seem to like having a large and appreciative crowd that knew many of the songs. Great rhythm section, melodic and distinctive lead playing, he gets just amazing sounds in the high ranges, memorable riffs, the songs have an architecture, and even if ten minutes long they are always going somewhere. The songs and playing do what the group's name promises.

UPDATE: For those who are interested, Richard Lloyd's website reports: "I am sorry to report that Richard is currently unwell. He has been in hospital Intensive Care for 8 days with pneumonia as a primary medical problem. This has responded to treatment and he has shown some improvement and is now free of the breathing apparatus."

Two excellent CDs I've been listening to lately

The first is the Unicorns' Who Will Cut Our Hair When We're Gone, which I bought some time back and played a lot for a while but have recently taken out again. Despite an at times almost too high whimsy level, one of the handful of best new releases of the last several years.

The other is Ray Davies' Other People's Lives, which I didn't play much the first time around. It's really quite good although the playing (his vocals aside) is, if solid, a bit generic. Still standing as one of the finest songwriters of the rock era, and I'd rate this outing above any other release of the last ten years by any of the old war horses with the exception of Dylan's Modern Times.

The most important story of our generation (at least until tomorrow)

I admit it to my shame, while preparing lecture notes for summer teaching I have been checking in periodically on the Paris Hilton news. So far, it turns out that she was handcuffed and has been crying, and that 96% of those responding to a CNN poll are agin her. No word yet on what the judge is going to do. Give her credit for one thing, she is helping to bring us together.

About the summer teaching: I will be doing a course on Tax Policy in Singapore, at a newly established NYU @ National University of Singapore program there, starting in a couple of weeks. 3-plus hours a day, Monday through Thursday for two weeks, then two weeks' vacation with family in Vietnam and Cambodia, perhaps with a resort in Thailand thrown in as well. This may affect blogging, though I will have internet access most of the time.

The class will be an interesting challenge, given the packed-in intensity of doing it in so short a time period, plus the fact that I don't as yet know what to expect from the students. I want to spend the time discussing & explaining a bunch of things that I think are really interesting and important, but there isn't always suitable reading that covers what I'd like. The subjects for the 8 days are (1) public economics background, (2) horizontal equity, (3) progressivity, (4) income versus consumption tax, (5) corporate taxation, (6) corporate tax shelters, (7) international taxation, and (8) deficits / long-term budget measures and issues.

The complexities of trying to plan open-endedly for varying possibilities in class dynamics make it all the harder to resist checking periodically for new Paris updates.

I have learned to purr

At least, that's how Ursula, our small brown tabby, appears to interpret the sound of my electric shaver. When she hears it in the morning, she runs upstairs and jumps up onto the bed, ready for a lovefest.

I knew it

This morning at breakfast I saw the NY Times headline, "Bush Proposes Goals on New Greenhouse Emissions," and I said to my wife: "You know, I bet this is fake." I figured that it must actually be an attempt to take some of the heat off Bush on his foot-dragging regarding global warming, while at the same time actually doing more deliberate foot-dragging.

It turns out that I was right, not that I feel I should get much credit for insight here; it was pretty obvious. Bush is actually calling for a new round of meetings, to make sure nothing can get done yet, in pursuit of "aspirational goals," i.e., no actual adoption of any policies that would have any effect.

It's a strange thing, and people who have read my past words on Bush will simply have to take this on faith, but I was actually hoping I was wrong about Bush this time. I still get this atavistic impulse occasionally - indeed, frequently - where I find myself wishing for a moment that just this one time he'll surprise me positively. But the rule remains - everything he does is bad, and everything he does is in bad faith. I can't think of any other U.S. President of whom this was more than, say, 50 to 60 percent true, but for him it's verging on 100 percent.

One exception, actually - whatever one thinks in the end about his immigration policy, it doesn't seem entirely to fit the simple formula. But I am at a loss to think of any other exception.

Political economy of FASB decisions

I haven't as yet tried to use this site as a research tool, but perhaps I should, so here goes.

In the article I'm working on concerning tax and accounting measures of income, an important issue is the political economy of how the two income bases are set. I certainly feel up to speed on the general issue of Congress and tax policy decisions, but the manner in which GAAP standards are set for financial accounting is more opaque to me. Yes, I can easily learn more about exactly how the Financial Accounting Standards Board (FASB) operates, and I know a bit about the broader political setting - e.g., threatened Congressional interventions from the 1990s on concerning the treatment for financial accounting purposes of managerial stock options.

What I want, and am not at the moment entirely clear on how best to get, is a better feel for the real politics of the FASB process. For example, literature that I have seen gives me the overall sense that people think the process is better insulated from crass political intervention, e.g., by particular interest groups, than the process of determining taxable income. Of course, that sets the bar pretty low. I have also heard the view expressed that the accounting profession is pretty responsive, through FASB just as in client work, to the interests of managers as a group, leading to the kind of industry capture scenario that one would of course fear relative to the optimistic scenario where FASB responds more to official professional ideals by seeking unstintingly to serve investors and the cause of capital market transparency.

Any guidance that readers could offer me, be it anecdotal or systematic, informal or scholarly, would be most welcome, whether offered in the comments section here or off-line (my e-mail address is easy to find). Thanks.

Rutles anniversary

Yes, it was only 40 years ago today that the Rutles released "Sergeant Rutter's Only Darts Club Band," which remains a millstone in pop music history.

As you may recall, their first album was made in twenty minutes; their second took even longer.

The Rutles will be remembered long after Beethoven is forgotten - but not until.