Buffett's Bet

November 18, 2007
Posted by Jay Livingston

Often, a simple example is the best way to get a point across.

For example, the US tax system is incredibly complicated. To illustrate the idea that it also favors the wealthy, Warren Buffett (the second richest man in the country) has said that he pays a lower rate of income tax than does his secretary. Buffett’s income was about $47 million last year, and he paid about 18% in federal income taxes. His employees, whose incomes ranged from $60,000 to $750,000, paid an average of 33%.

It’s anecdotal evidence of course, so Buffett has extended it to the Forbes 400 – Forbes Magazine’s list of the 400 wealthiest Americans. He’s offered to bet any of them one million dollars that they paid a lower income tax rate than did their office secretaries and receptionists.

A few of them have responded, and Forbes online prints what they have to say.

• Philip Ruffin ($2.1 billion) said that Buffett is “senile.”
• Kenneth Fisher ($1.8 billion) said, “He should stick to his area of expertise. It’s a little late to be trying to learn and teach social policy.”
• Randal J. Kirk ($1.6 billion) said, “His thesis here seems grossly simplistic.”

As my father said many years ago as we listened to some politician’s “denial” of some charge made by an opponent, “He called him a son-of-a-bitch, but he didn’t call him a liar.”

These guys called Buffett names (senile, simplistic), but none of them took Buffett’s offer of the million-dollar bet.

John Catsimatidis ($2.1 billion) said, “The numbers can fool you . . . . I have a complex business . . . I own real estate, stocks and bonds, and so I have depreciation and write-offs.” Which is precisely Buffett’s point. The tax system favors rich people for the way they make their money, and it punishes people who work for a weekly paycheck.

What Is That You're Drinking?

November 16, 2007
Posted by Jay Livingston


Jeremy Freese says that after some time away from his rural Iowa roots, he started saying “soda” instead of “pop.” (Yes, he's blogging again. Jeremy’s retirement from blogging was analogous to Michael Jordan’s first retirement from basketball: unwanted by all but the retiree – and mercifully short. He’s now co-blogging at Scatterplot ).

But the soda/pop split is not so much rural-urban as it is regional

From these maps it looks as though the stores in Evanston and Chicago are about as likely to sell pop as soda. In Pittsburgh, where I grew up, it was “soda pop.” We didn’t want to take sides on such a controversial issue. And in Boston, when you go to the deli (oops, I mean the spa), you get a bottle of “tonic” (pronounced “taw-nic”).

The maps are from Bert Vaux’s dialect survey, and I find it fascinating. For instance, I had that thought that the use of “anymore” without a negative to mean “nowadays” was pure Pittsburgh (“ I do exclusively figurative paintings anymore”). True, only a small minority (5%) find it acceptable, but they are fairly well dispersed.

Do you eat crawfish, crayfish, or crawdads? Do you have a yard sale, a garage sale, or a tag sale? Which word do you stress in “cream cheese” and which syllable in “pecan” (and is that “a” in “pecan” short or broad)?

“Tell me what you eat, and I will tell you what you are.” Well, maybe. I can’t remember much about Brillat-Savarin’s personality assessment instrument. But “Tell me what you call what you eat, and I will tell you where you are.”

Norman Mailer

November 13, 2007
Posted by Jay Livingston

Norman Mailer died on Saturday. Sociologist/criminologist Chris Uggen posted briefly about Mailer’s criminal-justice-related writings – Chris is less impressed by Mailer’s fiction – so here’s my Mailer story. Not much, not sociology, not even lit crit, just one degree of separation.


In the summer of 1963, still in my teens, I was traveling across the country to San Francisco on a Greyhound bus. We’d stop every few hours in larger or smaller towns. You’d get off to use the bathroom or get a snack, and when you got back on, the demographics of the bus would have shifted. Different accents, different bodies.

We scaled the Rockies at night, crossed Utah as the sun was rising, and made it into Reno at mid-morning. The layover was an hour or so, and when I got back on the bus, my new seatmate was a gaunt, sallow, man in his thirties, much different from the plump and pasty folks I’d gotten used to over the previous thousand miles.

He’d stayed awake for thirty-six hours straight playing chuk-a-luck in a casino, winning a lot, losing it all back, and eventually developing a severe eye infection. He’d just gotten out of the hospital, and he was going to California to try to write for the movies and TV.

It was at about this point in our conversation that he pulled out a plastic bag with some odd food in it. It was thick crusty black bread covered with strange seeds and perhaps mold. “It’s Zen macrobiotic bread,” he said, and offered me a piece. I hadn’t heard of macrobiotics then, though I did know that Zen was cool. Still, I politely declined the offer.

He’d come from New York, where he’d taught English in grade school. But he also was an aspiring writer and hung out with the literary crowd in Greenwich Village. He’d been at parties with Norman Mailer.

He must have sensed my heightened interest at the mention of the name. Mailer was famous. He’d written a Big Novel, he’d published advertisements for himself, he’d invented the White Negro, he’d stabbed his wife.

“You know what another writer once told me at one of these parties?” he said. “‘Norman Mailer is a little Jewish kid from Brooklyn who still thinks it’s a big deal to get laid.’”

I remembered this pithy ad hominem when, a couple of years later, I read An American Dream. From that viewpoint, it seemed less a novel of political and social significance than a string of adolescent fantasies of sex and power. Like Chris Uggen, I never could never see the greatness of Mailer’s novels (at least the ones I read). But I remember being impressed immensely by Armies of the Night, even reading passages of it out loud to my roommates.

A Country of Have-Nots?

November 12, 2007
Posted by Jay Livingston

At a Republican fundraiser in 2000 where the minium buy-in was $800, George W. Bush referred to those in attendance as “the haves and the have-mores.”

Talk about “the haves and the have-nots” – the phrase Bush was alluding to – seemed old-fashioned at the time. To my ear, the terms sound like something out of the Depression. But the concept of haves and have-nots is making a comeback. The perception of inequality may be catching up to the reality.


In 1998, more than 70% of the US population rejected the idea that the country was divided between the haves and the have-nots. Today, as many people agree with that proposition as disagree (numbers are from the Gallup poll).

My first impulse is to trace it all to Bush– to see the shift as the chickens of false consciousness finally coming home to roost. After all, Bush did refer to the have-mores as “my base,” and his policies have rewarded them handsomely. But as the chart shows, the largest part of the change in perception was happening in the 1990s.

Along with their perception of an economically divided country, more Americans see themselves as being on the wrong side of the divide. (Numbers are from a recent Pew survey.)
In 1998, even among those in the lower third of the income distribution, 42% saw themselves as being among the “haves.” That percentage has since declined, of course, but so has the percentage of self-perceived “haves” in the middle and upper thirds of the distribution. That middle-group is especially interesting, with the percent thinking of themselves as among the “haves” declining from 61% to 43%.

Politically, this shift in perceptions would seem to work for the Democrats, who are more likely to be seen as the party for the have-nots. It’s certainly what John Edwards has been saying in his “two Americas” speeches. To counter the idea of a divided country, the Republicans seem to be relying on the unifying force of an external enemy. If we see ourselves as under attack from outside evildoers, terrorists, Islamofascists, et. al., we will have to rally together and ignore or deny internal divisions.