Monday, October 13, 2008
Pickles
If anyone is going to the Lower East Side (say to buy a lulav and etrog this week), check out the Pickle Guys. You won't be sorry.
Blue Hill Restaurant
Blue Hill Restaurant is a local/organic/environmentally responsible paradise. Everything is fresh and spectacularly prepared. including:
- Three kinds of pickled cauliflower
- Dried kale
- Arugula and tomato salts
- Haddock, beets, and horseradish cream
- Smoked tomato and almond soup
- Poached yolk and eggplant
- Bass with cauliflower and pesto
- Honey ice cream with caramelized condensed milk cream
- Chocolate bread pudding with vanilla ice cream
Friday, October 10, 2008
Time for a return to defined benefit plans
Lost in this past bearish week (US stocks are down ~20% since Monday morning) is a recent debate about retirement plans: defined benefits vs. defined contributions.
Defined benefits is the old system. After a certain number of years of work, one's company will guarantee a certain amount of money each month during retirement. These disbursements are funded from current worker's paychecks, and managed either by the company itself or by a contractor. Social Security is, in effect, a giant government defined benefits plan.
Defined contributions is the new system. We can take a certain amount of money out of our paycheck each month, tax free, and invest it as we choose, letting it grow tax free until we retire and then draw funds out as we need it. This has been attractive for three reasons:
1. It creates a direct link between the money I'm putting aside versus the money I'm getting out, bypassing any potential pyramid schemes (as Social Security has been the past few decades, with more people paying into it and than getting money out of it).
2. It allows each individual to set his or her own risk tolerance and direct investment accordingly.
3. Finally, and most importantly, it shifts the risk from the employer to the employee. This is primary reason that employees have switched to these plans.
The problem with defined contribution plans has reared its head this week: panic. The massive sell off on Wall Street is in part a function of millions of individuals deciding that their retirement accounts have dropped low enough and must be liquidated before they decline further. This, of course, pushes stock prices even lower.
A defined benefits plan would not fall victim to such a panic routine, since defined benefit plans have much better and more accurate projections of future liquidity needed (i.e. payouts), and also (should) have access to both private and government insurance and hedging mechanism to protect themselves against downturns. Companies should certainly shift their allocations in times such as these. But they are far less likely than individuals to simply dump their holdings into a falling market.
Defined contributions plans were supposed to be the herald of a new ownership society. Instead, they are a mechanism for irrational risk taking and collective panic.
Defined benefits is the old system. After a certain number of years of work, one's company will guarantee a certain amount of money each month during retirement. These disbursements are funded from current worker's paychecks, and managed either by the company itself or by a contractor. Social Security is, in effect, a giant government defined benefits plan.
Defined contributions is the new system. We can take a certain amount of money out of our paycheck each month, tax free, and invest it as we choose, letting it grow tax free until we retire and then draw funds out as we need it. This has been attractive for three reasons:
1. It creates a direct link between the money I'm putting aside versus the money I'm getting out, bypassing any potential pyramid schemes (as Social Security has been the past few decades, with more people paying into it and than getting money out of it).
2. It allows each individual to set his or her own risk tolerance and direct investment accordingly.
3. Finally, and most importantly, it shifts the risk from the employer to the employee. This is primary reason that employees have switched to these plans.
The problem with defined contribution plans has reared its head this week: panic. The massive sell off on Wall Street is in part a function of millions of individuals deciding that their retirement accounts have dropped low enough and must be liquidated before they decline further. This, of course, pushes stock prices even lower.
A defined benefits plan would not fall victim to such a panic routine, since defined benefit plans have much better and more accurate projections of future liquidity needed (i.e. payouts), and also (should) have access to both private and government insurance and hedging mechanism to protect themselves against downturns. Companies should certainly shift their allocations in times such as these. But they are far less likely than individuals to simply dump their holdings into a falling market.
Defined contributions plans were supposed to be the herald of a new ownership society. Instead, they are a mechanism for irrational risk taking and collective panic.
Monday, October 6, 2008
Cabinet Selector
Here it is: the ultimate technocrat toy I've been waiting for: a cabinet picker!
Here are my picks (notes where I dissented from the majority of pickers):
Obama/Biden:
Ag: Stenholm
AG: Holder
Com: Furman - huge campaign advisor; liberal leanings
Def: Danzig - Gates too polarizing, Reed's seat may go Rep, which would hurt chances of 60 seats
Ed: Napolitano
E: Moinz
HHS: Sebelius
HS: Kelley
HUD: Franklin
Interior: Inlsee
Labor: Granholm - term limited and can't run for pres/vice, with no senate seat likely to open up
State: Richardson
Trans: Rendell - Obama has talked a lot about putting more emphasis on Trans, and Rendell would add diversity (Jew)
Treas: Geithner
VA: Duckworth
EPA: McGinty
OMB: Orszag - From CBO, with Furman already used above
Trade: Brainard
McCain/Palin:
Ag: Sanford
AG: Giuliani- he's the reason why McCain won California and became the nominee
Com: Whitman
Def: Lieberman -makes it easy for Republicans to pick up Joe's seat - and he deserves a big prize if McCain wins
Ed: Keegan
E: Wilson
HHS: Huckabee - anti-obesity enthusiast - would give him a national profile
HS: Keating
HUD: Ken Blackwell - previous HUD experience
Interior: Allard
Labor: Engler
State: Woolsey - Lieberman not going to be State - he's not a negotiator; Negroponte too close to Bush administration
Trans: Peters
Treas: Paulson
VA: Sias
EPA: Shayes
OMB: Holtz - Eakin
Trade: Schwab
Here are my picks (notes where I dissented from the majority of pickers):
Obama/Biden:
Ag: Stenholm
AG: Holder
Com: Furman - huge campaign advisor; liberal leanings
Def: Danzig - Gates too polarizing, Reed's seat may go Rep, which would hurt chances of 60 seats
Ed: Napolitano
E: Moinz
HHS: Sebelius
HS: Kelley
HUD: Franklin
Interior: Inlsee
Labor: Granholm - term limited and can't run for pres/vice, with no senate seat likely to open up
State: Richardson
Trans: Rendell - Obama has talked a lot about putting more emphasis on Trans, and Rendell would add diversity (Jew)
Treas: Geithner
VA: Duckworth
EPA: McGinty
OMB: Orszag - From CBO, with Furman already used above
Trade: Brainard
McCain/Palin:
Ag: Sanford
AG: Giuliani- he's the reason why McCain won California and became the nominee
Com: Whitman
Def: Lieberman -makes it easy for Republicans to pick up Joe's seat - and he deserves a big prize if McCain wins
Ed: Keegan
E: Wilson
HHS: Huckabee - anti-obesity enthusiast - would give him a national profile
HS: Keating
HUD: Ken Blackwell - previous HUD experience
Interior: Allard
Labor: Engler
State: Woolsey - Lieberman not going to be State - he's not a negotiator; Negroponte too close to Bush administration
Trans: Peters
Treas: Paulson
VA: Sias
EPA: Shayes
OMB: Holtz - Eakin
Trade: Schwab
Thursday, October 2, 2008
Thoughts on the VP Debate
1. Joe Biden hit a home run. He is a consummate gentleman. Someone (maybe his debate partner, MI Gov. Jennifer Granholm) said to him, "Joe, shut up and smile," which he did perfectly. He was always on point, with loads of facts at his fingertips. Furthermore, he was never condescending toward Palin. And, most importantly, he did not make a single gaffe.
2. Gwen Ifill should have dropped out of moderating the debate. As soon it became known that Ifill had a book coming out next year with Obama's name in the title, she should have stepped aside. The fact that she did not meant that Ifill was on eggshells the entire debate, unwilling to press Palin when she dodged a question (which happened almost every question). Another moderator should have repeated questions that either Palin or Biden would not answer.
3. Sarah Palin may not know who Achilles was, since she did nothing to convince me otherwise by making no effort to answer a question about what her Achilles Heel is.
4. And finally, the real loser of this debate was John McCain. Joe Biden made point after point about how McCain has voted on the wrong side of an issue, and Palin made almost no effort to refute them. If this were a high school debate, Palin would have lost in a landslide, since, at the end of the day, it is the unrefuted arguments that count.
2. Gwen Ifill should have dropped out of moderating the debate. As soon it became known that Ifill had a book coming out next year with Obama's name in the title, she should have stepped aside. The fact that she did not meant that Ifill was on eggshells the entire debate, unwilling to press Palin when she dodged a question (which happened almost every question). Another moderator should have repeated questions that either Palin or Biden would not answer.
3. Sarah Palin may not know who Achilles was, since she did nothing to convince me otherwise by making no effort to answer a question about what her Achilles Heel is.
4. And finally, the real loser of this debate was John McCain. Joe Biden made point after point about how McCain has voted on the wrong side of an issue, and Palin made almost no effort to refute them. If this were a high school debate, Palin would have lost in a landslide, since, at the end of the day, it is the unrefuted arguments that count.
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