The Daily Parker

Some items that have gotten my attention:

• Linda Greenhouse on the Supreme Court's divisions, and how they may throw the health-care law into chaos
• Laura Miller on Game of Thrones' real-life inspirations and Charli Carpenter writing in Foreign Affairs on Game of Thrones as Realpolitik
• The Daily with more about craft brewing's increasing market share
• On Friday, schlock artist Thomas Kinkade died, joining a pantheon of artists we wish the world would forget but probably won't, a group that includes Johannes Pachelbel, Edward Bulwer-Lytton, and Le Corbusier.

More, I'm sure, later.

...by finally stating the obvious:

[Y]ou would think that after the results of this experiment in trickle-down economics, after the results were made painfully clear, that the proponents of this theory might show some humility, might moderate their views a bit. You'd think they’d say, you know what, maybe some rules and regulations are necessary to protect the economy and prevent people from being taken advantage of by insurance companies or credit card companies or mortgage lenders. Maybe, just maybe, at a time of growing debt and widening inequality, we should hold off on giving the wealthiest Americans another round of big tax cuts. Maybe when we know that most of today’s middle-class jobs require more than a high school degree, we shouldn’t gut education, or lay off thousands of teachers, or raise interest rates on college loans, or take away people’s financial aid.

But that’s exactly the opposite of what they’ve done. Instead of moderating their views even slightly, the Republicans running Congress right now have doubled down, and proposed a budget so far to the right it makes the Contract with America look like the New Deal. (Laughter.) In fact, that renowned liberal, Newt Gingrich, first called the original version of the budget "radical" and said it would contribute to "right-wing social engineering." This is coming from Newt Gingrich.

And yet, this isn’t a budget supported by some small rump group in the Republican Party. This is now the party’s governing platform.

If you didn't hear the speech, it's worth reading.

Republicans, naturally, bleated like sheep but largely confirmed the President's main points. Oh, what a fun election this will be.

Raganwald yesterday posted a facetious resignation outlining the dangers to employers of asking prospective employees to disclose social media information:

I have been interviewing senior hires for the crucial tech lead position on the Fizz Buzz team, and while several walked out in a huff when I asked them to let me look at their Facebook, one young lady smiled and said I could help myself. She logged into her Facebook as I requested, and as I followed the COO’s instructions to scan her timeline and friends list looking for evidence of moral turpitude, I became aware she was writing something on her iPad.

“Taking notes?” I asked politely.

“No,” she smiled, “Emailing a human rights lawyer I know.” To say that the tension in the room could be cut with a knife would be understatement of the highest order. “Oh?” I asked. I waited, and as I am an expert in out-waiting people, she eventually cracked and explained herself.

“If you are surfing my Facebook, you could reasonably be expected to discover that I am a Lesbian. Since discrimination against me on this basis is illegal in Ontario, I am just preparing myself for the possibility that you might refuse to hire me and instead hire someone who is a heterosexual but less qualified in any way. Likewise, if you do hire me, I might need to have your employment contracts disclosed to ensure you aren’t paying me less than any male and/or heterosexual colleagues with equivalent responsibilities and experience.”

Three things:

• He's right on the main point. Looking through employees' Facebook pages uninvited is tricky enough. Determining whether or not to hire someone based on a Facebook page is closer to the line. Forcing the disclosure crosses the line, surveys the land, plants a flag, and invites the natives to kill you in your sleep.
• Disclosing a password to anyone for any reason is, almost always, a bad idea. Authentication is half of security (the other is authorization, which depends on you being who you say you are). The corollary to authentication is deniability. If you lose control over your Facebook password, you expose yourself to identity theft. To emphasize this point, in our office we routinely prank developers who leave their keyboards unlocked when they leave the room. Walking away at a client site could let clients see other clients' materials, for starters, but it also could allow someone to send email or make Facebook posts in your name.
• I am proud to report that Illinois is right now passing a law to prohibit this practice. It will probably be signed later this month.

The Economist reported this morning that engineers have developed a machine to create bespoke pets:

[A] small Californian company, the Gene Duplication Corporation, based in San Melito, proposes to push the technology to its limits. On Sunday it will announce plans to use 3D printing to make bespoke pets.

GeneDupe, as the firm is known colloquially, has previously focused on the genetic engineering of animals. However Paolo Fril, the company’s boss, is keen to expand into manufacturing them from scratch.

There are still a few technical difficulties to overcome, of course, but Dr Fril plans to start taking orders soon. And he is already looking forward to the firm’s next product, custom-printed boyfriends and girlfriends for those who cannot find the right partner by conventional means—a surprisingly large proportion of the population. If all goes well, these will be available by St Valentine’s day. If not, customers will probably have to wait until April 1st of next year.

In related news, Antonin Scalia pretended to be a lying, partisan hack this week. I'm sure he was making an early April Fool's joke as well.

Via Sullivan, the Royal Canadian Mint has stopped producing pennies and will withdraw them from circulation this year, saving $11m outright and eliminating a $150m drag on the Canadian economy:

It costs the government 1.6 cents to produce one penny, which has been made of copper-plated zinc and copper-plated steel since 1997.

The penny, with two maple leafs on one side and Queen Elizabeth II on the other, can continue to be used in payments. As they are gradually withdrawn from circulation, price rounding on cash transactions will be required, the government said.

The calculation of the federal goods and services tax and provincial sales taxes will continue to be calculated to the penny and added to the price, with rounding only taking place on the total payment.

Non-cash payments on checks and credit cards will continue to be rounded to the nearest cent.

Here's hoping we can eliminate ours as well, as they cost the U.S. 2.6¢ each. Of course, the Canadian program I really want to see would save our economy tens of billions of dollars a year...but apparently we're ready yet.

The Mega Millions lottery, held in 42 states including Illinois, now has an estimated jackpot over $540m. (The amount will probably be higher as more people buy tickets.) But how much do you really get if you win?

First, you have to choose whether to get 26 annual payments or take the award as a lump sum. The lottery uses a discounted cash flow analysis so that the amount you get as a cash lump is worth the same as 26 equal payments of the whole thing. In other words, if you get a lump sum, you actaully only get the amount that the total award would be worth if you took it in the future.

Take that $540m prize. If you take it as an annuity over 26 years, you get 26 payments of just under $21m each. But a promise of $21m in 2038 is worth a lot less than $21m right now. Think about it: if you have that $21m today, instead of 26 years from now, you can make investments, give it away, buy a lot of stuff that gives you happiness, etc. So how much is $21m in 2038 worth right now? Only $10.7m. Or, put another way, if you take $10.7m in 2038 or $21m today, it's worth about the same—according to the lottery.

We can figure this out by looking at the lump-sum value you would get if you opted for it. If you won today's lottery, Mega Millions will give you $540m only if you take it in 26 payments. Or they'll give you a steaming pile of $389m in cash right now. Because to them, it's the same value.

Why? If you win, you have to make a bet on whether they've estimated something called the discount rate correctly. The discount rate is a guess about how much money will be worth in the future because of things like inflation and the risk that investments change in value. For example, if I bet on a discount rate of 4% (which is historically about middling in the U.S.), I'm betting money gets less valuable by about 4% per year on average. In that case, if I give you the option of taking $100 today or $104 a year from now, and you think the discount rate is 4%, it's an even bet. But if you think the discount rate is 3%, you would take the $104 in a year—because by your estimate, $100 invested today is only going to be worth $103 in a year.

Using a quick Excel function, I figured out that Mega Millions uses a discount rate of 2.6%, well below historical averages but close to what we've seen in the last five years. Here's the calculation:

Yeah, but watch this. If you increase the discount rate to 4%, the estimate of the present value of that $540m drops to $332m, a difference of $57m. In other words, because the lottery uses such a low rate, if you bet that the rate is 1.4% higher, you're betting that you'll come out ahead $57m by taking the money right now instead of over 26 years.

So, great, you're getting $389m in one big pile. Excellent.

Later today I'll talk about your Federal (36%) and Illinois (5%) taxes...and what they might do to the calculation.

The Atlantic has noticed a trend among millenials: they aren't buying as many cars as we did.

The Times notes that less than half of potential drivers age 19 or younger had a license in 2008, down from nearly two-thirds in 1998. The fraction of 20-to-24-year-olds with a license has also dropped. And according to CNW research, adults between the ages of 21 and 34 buy just 27 percent of all new vehicles sold in America, a far cry from the peak of 38 percent in 1985.

The billion-dollar question for automakers is whether this shift is truly permanent, the result of a baked-in attitude shift among Millennials that will last well into adulthood, or the product of an economy that's been particularly brutal on the young.

[But] Millennials are more likely than past generations to live in an urban community, and this may be part of what terrifies car markers. About 32 percent reside in cities, somewhat higher than the proportion of Generation X'ers or Baby Boomers who did when they were the same age, according to a 2009 Pew Research Center report. But as the Wall Street Journal reports, surveys have found that 88 percent want to live in an urban environment. When they're forced to settle down in a suburb, they prefer communities like Bethesda, Maryland, or Arlington, Virginia, which feature plenty of walking distance restaurants, retail, and public transportation to nearby Washington, DC.

Absent Parker, I don't know if I would own a car. With two ZipCar locations within 400 m of me, I'd hardly need one. My takeaway, however, is that we're becoming more urban, and that means less car-dependent. This is one American trend I particularly like.

Josh Marshall explains what the right has really been up to with judicial appointments:

he real issue has always been the regulatory state. In any case, it is the height of judicial activism for the Court to consider striking down legislation on grounds that was barely considered — certainly not in the mainstream of jurisprudence — only two years before when the legislation was being considered. But what struck me more was how the the critical questions from the conservative bloc on the Court grappled so little with the actual economic role of health care provisions in society and the systemic market failure. These would seem to be precisely the issues the Commerce Clause is meant to address. Simply because the problem is serious doesn’t mean every possible solution is constitutional. But again, no real grappling with the practical issues the law was meant to address but rather a hyper-focus on academic and ideological points.

The right wants to get and stay rich. That's it. And chipping away at regulations while reducing enforcement of existing regulations does exactly that.

If you want to see what it's like when the government stays out of business, just look at Russia. That's the society Grover Norquist wants us to have.

The Washington Monthly makes a case for it being a disaster for the medium markets:

St. Louis, for example, has seen “available seat miles”— an industry measure of capacity—fall to a third of their 2000 level, following the American Airlines takeover of TWA and Lambert International Airport’s subsequent downgrading as a mid-continental hub. Two of Lambert’s five concourses are now virtually empty, and another, which housed the TWA hub, is only partially used. A third runway—the building of which required demolishing hundreds of homes and cost local taxpayers a billion dollars to finish in 2006—is now redundant. “This scenario,” notes Alex Marshall, a senior fellow at the Regional Plan Association, “can be likened to states building highways and then having General Motors, Ford, and other auto companies suddenly telling their drivers to use different roads.”

St. Louis’s loss of service comes despite the fact that the population of the St. Louis metropolitan area, the eighteenth largest in the U.S., grew by more than 4 percent between 2000 and 2010. The city is also the home of eight Fortune 500 companies and is a major center for such international players as Anheuser-Busch InBev, Monsanto, Boeing, Emerson Electric, Express Scripts, and Nestlé Purina. The GDP of the metro area, which is also propelled by such large research institutions as Washington University and a fast-growing medical sciences sector, rivals that of oil-rich Qatar. Yet like most other midsize American cities, St. Louis’s economic development is now hostage to the shifting, closed-door deals and mergers of a mere handful of airline executives and their financiers. The prevailing mood was captured by a St. Louis Post-Dispatch editorial that quoted “The Serenity Prayer” in advocating philosophical acceptance of the distant forces shaping the region.

The article mentions other similarly-sized markets, like Cincinnati and Pittsburgh, facing the same problems. We take cheap air travel for granted here in Chicago, but as a traveling consultant for much of my career, I've seen the decline of other cities.

On the same theme of private control over what should be public resources, Paul Krugman today warns about the rise of private prisons and the closed-door deals that encourage them:

What is [the American Legislative Exchange Council]? Despite claims that it’s nonpartisan, it’s very much a movement-conservative organization, funded by the usual suspects: the Kochs, Exxon Mobil, and so on. Unlike other such groups, however, it doesn’t just influence laws, it literally writes them, supplying fully drafted bills to state legislators. In Virginia, for example, more than 50 ALEC-written bills have been introduced, many almost word for word. And these bills often become law.

[Y]ou have to think about the interests of the penal-industrial complex — prison operators, bail-bond companies and more. (The American Bail Coalition has publicly described ALEC as its “life preserver.”) This complex has a financial stake in anything that sends more people into the courts and the prisons, whether it’s exaggerated fear of racial minorities or Arizona’s draconian immigration law, a law that followed an ALEC template almost verbatim.

Think about that: we seem to be turning into a country where crony capitalism doesn’t just waste taxpayer money but warps criminal justice, in which growing incarceration reflects not the need to protect law-abiding citizens but the profits corporations can reap from a larger prison population.

We've been turning into a corporate-run country for so long we don't even notice it anymore. What baffles me, and saddens me, is how most people continue to support this trend indirectly, by voting for cynical politicians (I'm looking at you, Mr. Romney) who sound like social conservatives but really want to acquire wealth through political means. But that's a longer conversation.

Oh, my, where to begin?

Former vice president and war criminal Dick Cheney now has a heart. Here's video from the hospital:

Of course, we have to consider the donor:

And the long-term implications: