Iran's program: what's so complicated?

The WSJ has another somewhat dull article on Iran's nuclear weapons program. There's been remarkably little informative discussion.

Iran wants a nuclear weapon and they'll likely get one sooner or later. Many nations would like Iran to get its nuke as far in the future as possible, ideally after a regime change. All the efforts being expended are to delay the acquisition date. The only real question is whether China and Russia will cooperate. That cooperation will depend on a lot of trading and swapping with the US and Europe.

One can argue that Bush's cavalier attitude towards treaties of all types, and the NPT in particular, hasn't helped. I don't have much of an opinion either way. Once Pakistan had its bomb (mostly built pre-Bush), and once the US invaded Iraq, the die was pretty much cast.

All this chatter about treaty obligations etc etc is mostly irrelevant. I can imagine that if China and Russia fully cooperated that Iran's nuclear program could be delayed for a few years, which might just allow for a less whacky Iranian President. (Maybe we'd get a less whacky US president too.)

Update 11/18/06: It looks like Russia is going to block sanctions, so it's pretty much game over now. There's nothing quite like fundamentalist zealots with nuclear weapons. At least Iranian fundamentalists don't seem to have the end-time enthusiasms of our religious extremists.

If Al Gore had been our president, would engagement with Iran have prevented the "election" of their current nut-case president? We'll never know.

Why the democrats should filibuster Alito

Not because of Roe v Wade. Because Alito supports Bush signing a bill banning torture while issuing a 'signing statement' that he is not obliged to abide by it:

The Imperial Presidency at Work - New York Times

...Both of the offensive theories at work here - that a president's intent in signing a bill trumps the intent of Congress in writing it, and that a president can claim power without restriction or supervision by the courts or Congress - are pet theories of Judge Samuel Alito, the man Mr. Bush chose to tilt the Supreme Court to the right.The administration's behavior shows how high and immediate the stakes are in the Alito nomination, and how urgent it is for Congress to curtail Mr. Bush's expansion of power. Nothing in the national consensus to combat terrorism after 9/11 envisioned the unilateral rewriting of more than 200 years of tradition and law by one president embarked on an ideological crusade.

A filibuster would likely fail, but it is a noble cause and, given where Bush is going, history may judge it well.

Hard core libertarian praising Ted Kennedy?

Wow. The end times must be near. A friend with libertarian sympathies sends me a link to a libertarian pundit -- praising (albeit through clenched teeth) Ted Kennedy's criticisms of Alito:

Agreeing With Ted Kennedy by Anthony Gregory:

... How sad it is that we have come to the point that we have to rely on Ted Kennedy to be the voice of reason on some of the most fundamental issues of the day. How frightening it is to be agreeing with Ted Kennedy and disagreeing with nearly the entire rightwing on these issues, all while most of the talking heads ignore them nearly completely...

Rockwell's Kennedy quotes are great, and, yes, I agree the media ignored them. The mainstream media is plumbing new depths of inadequacy every day; blogs are helping but they're no replacement. We are hurting because the Fifth estate is in the toilet.

As to Alito, forget Roe vs. Wade. Alito is bad because he believes the American President can have the powers of a tyrant -- at least when the president is Republican. I rather doubt his sentiments would extend to a Democrat.

Douglass' judgment upon Lincoln

[correction: I was guilty of the great faux pas of spelling Douglass with one s.]

DeLong has put together an excellent post, combining Lincoln's words from his debates with Frederick Douglass 1876 judgment of Lincoln:

Brad DeLong's Semi-Daily Journal

...Viewed from the genuine abolition ground, Mr. Lincoln seemed tardy, cold, dull, and indifferent; but measuring him by the sentiment of his country, a sentiment he was bound as a statesman to consult, he was swift, zealous, radical, and determined...

Douglas was a terribly eloquent writer. I do recommend reading the entire post.

Listen to Stanford lectures on iTunes

Jon Udell pointed me here. You can listen to Stanford lectures -- but only on iTunes. I gather Apple is cosponsoring the project. Jon is rightly concerned about the iTunes lockin; he connects it to the DRM plague. I'm confident Microsoft will sponsor something similar -- with a lock-in to Windows Media Player.

In fairness though the lock-in part is not really DRM, it's the same old technique that made Microsoft the most dominant corporation in the past century. Apple's very good at it too, just not as clever as Microsoft.

Medlogs is looking good on Bloglines

Jacob Reider and his cohorts recently added an RSS feed to their RSS aggregator: Medlogs.com - The News Aggregator for Medical Topics.

The initial version didn't render well on Bloglines -- it included a section of unwanted descriptive text. Jacob has just fixed that it looks quite good now.

I now get my medlogs in the same space as my other syndicated reading. (So is Bloglines a meta-aggregator, since it's getting a feed from an aggregator?)

You can't win - the trap of the home office depreciation

On the advice of an accountant, I depreciated my home office. Bad mistake. When you sell, there are lots of headaches. Grrr. The infuriating part is that if even if you deducted expenses, but not depreciation, the IRS taxes you as though you claimed the depreciation.

Between Digital Rights Management and the IRS I'm ready for a life of crime.

Depreciation Appreciation 101: The Ins and Outs of Deducting for a Home Office - New York Times

By DAMON DARLIN

... The I.R.S. allows you to take a home office deduction if you meet certain conditions, and about 30 million taxpayers manage to meet them. The rules are pretty clear for the self-employed. The home office has to be the primary place of business, used exclusively and regularly for that business. If your office fits that definition, you can write off a percentage of the utilities, the mortgage, repairs and maintenance and, of course, all the office equipment and furniture stuffed into it.

... when you sell your home for a profit you have to recapture the depreciation you took on that office and pay taxes on it. For example, say you bought a house for $500,000 and used 10 percent of it for an office. (You figure that out by measuring the square footage of the office and dividing that by the square footage of the entire house.) You are allowed to depreciate 10 percent of the purchase price of the house each year using what the government succinctly calls the "39-year commercial property straight time depreciation schedule." That adds up to about $6,000 in depreciation over five years.

You later sell the house for $750,000. The $250,000 in profit is excluded from tax. But the $6,000 you took in depreciation over the years must be reported as a gain on Schedule D, in the gains and losses section. It is taxed at a 25 percent rate.

What if you take other home office deductions and skip the depreciation? Nancy Mathis, an I.R.S. spokeswoman, says that will not help. "Even if you don't take this depreciation, it will be treated as if you did when it comes times for calculating the basis of the home sale and capital gains exclusion." The I.R.S. will not say why it makes that assumption, but accountants surmise it is because the government cannot keep track of home-office owners who might depreciate some years and then stop right before selling in hopes of avoiding the extra tax.

Here's something to think about: If you rent, you avoid this entire frustration when claiming a home office deduction.

Now for the more complicated question: Remember that the government allows a single person to exclude $250,000 of capital gains on a home sale and a married couple, $500,000. If you claimed 10 percent of your home as a home office and wrote that off over the years, when you sell the house, do you owe capital gains tax on 10 percent of the profit? This is what is tripping up Mr. Sigal, the chemical engineer.

The government used to say, you owe the tax on the portion of the residence that is used for commercial purposes. But it gave taxpayers a little gift when a new rule took effect in 2002. The home office inside the structure of your house is no longer considered commercial property. Everything is covered under the capital gains exclusion. If your accountant is not up to date on that, ask him or her to check it out.

Indeed, Mr. Sigal does not owe as much as he was told and a new accountant confirmed that he owes taxes on only the $2,000 of recaptured depreciation.

But in changing the rules, the I.R.S. also made things more complicated. Funny how that happens. That no-tax rule applies only if the home office is part of the structure of the main residence. "If it is a separate building," said David Gitel, a New York City tax accountant, "you are out of luck." When you work out of a detached garage or shed, you must compute the profit that is attributable to that structure and pay a capital gains tax of 15 percent on it, plus the tax on the depreciation recapture.

In that case, what you can do is make what is called a 1031 exchange. Don't do it without guidance from an accountant, but buy another piece of commercial property within 190 days and you can avoid paying taxes.

Given how complicated it is, many people might ask whether it is worth the bother to deduct a home office on Schedule C, the form for private businesses. Would it be easier to just write off most of the expenses as nonreimbursable business expenses on Schedule A?

You probably are deducting your interest payments and your property taxes on Schedule A anyway. The benefit to using Schedule C - you'll need two other forms, 8829 and 4562 - is that the mortgage, the taxes and other costs of running the home office decrease the income you made from your home-run business. That means there is less that is assessed the 15.3 percent self-employed Social Security tax. "You get more out of it on Schedule C," Mr. Gitel said.

But if you don't qualify for a home office, Schedule A is the place to deduct business expenses. A good tax accountant will make easy work of this. Tax software, like the Premier edition of TurboTax, can do it, too, and will also walk you through the process of depreciation recapture in a series of interview questions.

You can deduct other things if you have a home business. In addition to a share of utility bills, you can deduct an extra phone line, any business equipment you buy or the business use of the car.

You can hire your spouse as an employee and provide medical insurance. He or she puts you on her medical plan and your business swallows the cost as a business expense, reducing your taxable income. Retirement accounts for private businesses are also quite generous and another good way to shield income.

As for Mr. Sigal, he has a home office in his new condo. But this time he is cutting his taxes by deducting business expenses that were not reimbursed by his employer.

In Minnesota, when you sell, you're asked if you ever took the home office deduction. I'm told savvy people give the same answers as Judge Alito -- I can't recollect that.

I do like the bit about the spousal insurance though.

Alito and Roe vs. Wade

As a resident commie socialist pinko democrat, I feel compelled to say something about Alito and Roe vs. Wade.

First, I like the comments that this is now Kennedy's court. He's the swing vote as the court moves right. Kennedy is usually considered a libertarian. We could do much worse. Alas, I get the feeling not everyone on the liberal bloc is necessarily immortal.

Secondly, since Kennedy has affirmed Roe V. Wade, it will probably survive. The GOP should be immensely relieved. Irregardless of whether one thinks abortion should be funded by medicaid, or available to the wealthy only, or illegal entirely, Roe v. Wade is hugely valuable to the GOP. It's a primary rallying point for much of their base.

On the other hand, cynical Dems, suffering in our dim dungeons, would secretly, oh so secretly, love to see Roe v. Wade go away. To the non-specialist it seems like have a rather peculiar legal foundation, and losing Roe is a big win for the Democratic base. The fight would then shift to the federal and state legislatures, and I think Dems would win some red states as a result.

Alas, the GOP knows they need Roe. It won't go away.

Bated or baited breath?

Questions & Answers: Bated breath. What a fun site. I may never come across it again, but I do love finding these chance things.

Is it ethical to download music I own?

Allofmp3.com is a Russian site that provides mp3 encoded music. The copyright holders get nothing for this music. The musicians get nothing. Unsurprisingly, it's very cheap.

Whether or not it's illegal to download that music (in Russia, murder is almost a misdemeanor), it's certainly unethical.

But what about music I own on old cassette tapes or LPs? It is ethical and probably legal for me to digitize that music and load it in iTunes. Is it ethical (forget legal) for me to download the mp3 of the music I own from allofmp3.com instead of wasting hours on the digitizing?

Which is more likely to lead to future revenue to the license holders -- music on tapes I don't listen to, or music I listen to that leads me to purchase new CDs? On the other hand, Allofmp3.com's main mission is theft, so my money would be supporting their primary mission. On the other hand, the amount of money coming to them from people like me would always be insignificant.

Hmmm. I could ask my friend Lin, but shortly after getting the words 'allofmp3' out of my mouth I would need plastic surgery ...

Comments on Capitalism: Gilded Age III

Obsidian Wings writes about health care in the new China, and someone comments:

... Capitalism is a system for finding local minima. It optimizes for the local system. I think communications and interconnectivity may widen the scope of the optimized domain, but it still feels too local.

Capitalism delivers local truths. The weak are not worth investing in. Economic output usually declines after age 40. As 'The Economist' recently noted the maxim 'survival of the fittest' has always been more true of Capitalism (where Spencer first applied it - approvingly) than of nature (where the long grinding calculations of evolution optimize for body-bound genes, gene pools, and emergent interdependent environments).

Can capitalism deal with the risks of social unrest? What if the poor rebel? The weak may not be powerless as a mass movement. Crushing the weak effectively (see history China, Egypt) may not be consistent with capitalism, and it may be distasteful.

Capitalists like George Soros and Warren Buffett prefer a future that doesn't require crushing the weak. Others may feel that super yachts and island fortresses are a better solution.

I don't know how this will play out. If I had to bet, I'd bet we'll retreat from the new Gilded Age and we'll see a return to a social net that will include adequate (fully depreciated) health care.

Gilded Age II

Joseph Nocera writes in NYT Business (TimesSelect):

... from 2000 to 2003 the total compensation of the five best-paid officers of all publicly held companies amounted to 10 percent of corporate earnings.

The futures market in American Socialism is up another five points. However the futures market in 'Servants are US' is up 100 points.

BTW, contary to predictions that the TimesSelect paywall would fall, it's holding. Interestingly, putting this kind of commentary behind the paywall has the presumably unintended consequence of lessening its social impact. That may account for the disproportionate grown in 'Servants are US'.

Personally, the more the Times goes behind the PayWall the more I'm inclined to pay. I didn't care for much of the OpEd (David Brooks is a smart moron, whatshername is a juvenile), but as the PayWall expands it does cover things I do care about. I don't mind paying for valuable content, they just weren't offering enough of value up until now.

The Gilded Age

Where can you park a 200 million dollar toy?

The New Megayachts: Too Much of a Good Thing? - New York Times

... From Miami to St. Thomas, new marinas with names like Super Yacht Harbor and Yacht Haven are being developed with berths for boats as long as 450 feet, roughly half the length of a 2,000-passenger cruise ship. To keep megayacht owners busy - not to mention spending - while their boats are parked at the marina, developers are surrounding their ports with high-end restaurants and retail shops. To entice yacht owners and their entourages to stay longer, they are also building luxury condominiums and five-star hotels.

As a result, a new real estate concept is beginning to emerge centered on the lifestyle of the boating elite. Island Capital Group in New York is transforming an existing port, Long Bay Harbor in St. Thomas, into a megayacht marina called Yacht Haven Grande with 48 slips averaging 120 feet in length. Twelve luxury condominiums, four waterfront restaurants, high-end shopping and a private yacht club around the 32-acre harbor are scheduled to open in the fall.

I'd wondered how the ultrawealthy would separate themselves from the trogs. A floating city should do nicely.

The end of the inheritance tax was very good for the yacht business. American socialism is up 10 points on the futures market.

Breeding the long-lived dog: Step One

I have long hoped breeders would focus on breeding a dog with a long, healthy, lifespan.

Modern veterinary care has added 2-3 years to the canine lifespan, but many mid-sized breeds die at about age 10-12 (the lifespan of some giant dogs is criminally short).

How hard would it be to get to a 20 year dog? One could start with the australian cattle dog. At least one of these dogs is thought to have lived 29 years. True, they are not ideal family dogs, but that's what breeding is for. Mix in some European lab and some other sociable laid back breeds with relatively long lifespans and good health. In 30 years we could be well on our way ...

On taking companies public

I thought this rule of thumb was quite interesting. (HIStalk is read religiously in my industry. That's a sort of blog influence that doesn't show up in the newspapers.):

An Exclusive Interview with Jon Phillips, Managing Director of Healthcare Growth Partners (HIStalk)

It seems that going public makes small companies worse once they fall into the never-ending quarterly earnings cycle.

The objective of most companies is either to be sold or go public. Sometimes a company is happy just to make money and not grow, but not often. The pressures increase exponentially on a publicly traded company. Even just trying to go public makes you so focused on financial results that you lose sight of the strategy.

To go public, you need to be a $50 million company. If you’re a $20 million company, you might go out and make acquisitions just to get bigger, even though they don’t follow the strategy. Sometimes companies cut back on services or support just to pretty themselves up for a sale.

My standard advice for companies is to run the business as if you’ll be running it independently with no extra capital and no buyer. Then, if something good happens, you can always build on that. You don’t try to position the business for sale or for an investment and then find you’ve got an asset without much worth. Focus on the business. The rest of that stuff will come.