Considering state and federal income taxes, as well as Social Security and Medicare taxes, we had an effective tax rate of 16.5%. Mitt Romney, on the other hand, had an effective tax rate of 13.9% on over $20 million of income in 2010, as has been widely reported. The news reports I have seen do not include information on whether Social Security or Medicare taxes are included in that total; however, since Social Security taxes are capped  on the first $100,000 or so of income and Medicare taxes are 1.45% of your income, including those taxes in his amount would still put it below our effective rate. His “estimated” tax rate of 15.4% in 2011 is also below our rate. If you include the employer portions of Social Security and Medicare taxes in both our income and tax burden, as many economists are wont to do, then the total tax burden on us is a hair under 20%, which is a bit more lopsided. Again, due to caps, Romney’s total tax burden with this calculation would increase no more than three percentage points, and I’m not even sure that carried interest income is subject to Medicare taxes.

A couple of observations on this. First, either a 16.5% or 20% effective tax rate does not seem “onerous” or “job-killing” or any other descriptors that some people use for income taxes. Sure, I’m not including the sales tax rate, gas taxes, or any other excise or property taxes, but all the same, the end result not that we’re working so the government can take half of our income. Second, our income tax burden was reduced by some middle-class tax perks, such as the deduction of student loan interest payments and tuition. Perks that I don’t happen to agree with, but they are the law and so it is what it is.

Third, it is wrong to pay a higher tax rate on money you get from going into work five days a week than money you get in a big pile that’s sitting around. If you are a cop, teacher, office worker, even a doctor or lawyer, you pay a higher tax rate than if you draw an income on a huge pile of money, as Mitt Romney does. This is not right.

I’m actually no more in favor of the Buffet Rule than I am other tax code complications: it makes taxes harder, not easier, to calculate. As I’ve said before, I prefer a drastically simplified, progressive income tax, without most deductions, loopholes, Alternative Minimum Taxes, and the like. Even so, something definitely needs to be fixed in our tax code. I’d like it if Romney boosted his contribution to something over ours.

• Current Mood: Foggy
• Currently Listening To: "I Saw Her Standing There", The Beatles

But I’ve been thinking beyond passwords lately to the broader subject of authentication, which I think is where the real issues are. Take online finance. I use Quicken, which I hate. However, I have more than 15 years of data in Quicken that won’t easily move elsewhere, so I have few choices as to where I can go. One popular alternative finance site is Mint.com, which has a pretty strong following online. It allows you to pull in data from all of your banks so you can have a centralized view of your finances, much like Quicken. Unlike Quicken, it’s web-based, and it can send you alerts based on balances, fraudulent activity, and so forth.

To get this information, Mint obviously needs to be able to access your banking information. They do they by storing your bank login credentials, although they say that they only have read-only access to your banking data, so even if your Mint account was compromised, criminals couldn’t move your money anywhere. Of greater concern is that they (or, more accurately, a third party) has that data. Mint claims that it is super-secure, encrypted, all that jazz, and I have no reason to doubt them. All the same, though, it makes me uncomfortable, which is one of the reasons I won’t use it and instead rely of credentials stored securely just on my computer instead of in the cloud.

The problem is with authentication, and frankly, it’s with the banks themselves. Mint shouldn’t need to have access to my all-powerful banking logins. I should be able to create additional logins with my banks with differing privilege levels that are completely unrelated to my “superuser” account. That way, I could expressly create a read-only login and use that with Mint, Quicken, and wherever else necessary. I shouldn’t have to rely on the proper storage of my credentials at Mint or anywhere else to protect me; I should be able to limit rights directly. Sadly, as far as I know, few if any banks allow this, even though technologies are available to allow this.

So yes, change your passwords. Stop reusing them. But unique, strong passwords are not enough. We need more granular control over the access we have online, so we can put up stronger firewalls around our data while still allowing it to be used.

• Current Mood: Healthy
• Currently Listening To: "Ship of Fools", The Doors

First of all, nowhere else is the old adage more true than with Google: if you don’t know what the company is trying to sell you, then they are trying to sell you. Gmail, Google Docs, Google Search, and every other service provided by Google is free. They make money by collecting information about you to tailor advertising, which they sell to others. This should come as a surprise to nobody: why else would Google offer such versatile and useful products for free?

I was honestly surprised that before now, Google was not agglomerating information from all of the different services that Google offers. So for them to do so now is not terribly concerning to me: I think that more targeted YouTube searches, for example, would be useful. If I worry about my searches, I can use Chrome’s incognito mode, or maybe DuckDuckGo. I can get rid of my Google account, shutting off my Gmail, Google+, and everything else. Would it be a pain? Of course. But as a non-paying customer, what do I expect?

Two issues about Google’s collection of information have the potential to bother me. The first is whether they sell that information to third parties, and they say that they don’t. Should that change without an opt-out, that would be a different ball game. The second, and probably more important, is how well they are actually securing the data they collect. To date, Google has not had any major data breaches that I am aware of. They seem to do a pretty good job securing their data. Again, if that changes in the future, that would be concerning, but at the same time, let’s be honest: plenty of companies have a far worse record when it comes to securing personally identifiable information. Zappos lost my data, and I’m not severing ties with them.

I can understand why people would be concerned about what Google is doing. However, let’s keep things in perspective. Google’s unified privacy policy has probably spurred more debate on the subject than anything else in recent memory, which has probably done more for the cause of privacy awareness than anything even the most ardent supporters could hope for. In addition, Google isn’t doing anything too terribly out-of-bounds with the data they are already collecting. Privacy is a very important issue, certainly. However, not every privacy policy is a terrible one.

• Current Mood: Bang
• Currently Listening To: "Purple Rain", Prince

First, I’m going to ignore the anti gay marriage amendment, about which much has already been said. I’ll also ignore some of the more fantastic amendments, such as replacing all state taxes with a sales tax on every good and service in the state. That, however, still leaves plenty to talk about. And why not start with the amendment requiring a three-fifths majority to raise taxes? Because you know who else requires a supermajority to raise taxes? That’s right, California. Even people from California will admit that the state is hardly a paragon of good governance, what with its constant budget crises caused by that very rule. I’d also throw into that same pot bills that limit spending to some arbitrary amount. Colorado went down that road until they suspended it because of the trouble it caused. The last thing this state needs, considering all of the special sessions and shutdowns in recent years, is an amendment that makes it even harder to balance the budget.

Photo ID is the next big one. Because Dayton vetoed the statute that the Republicans passed, they are trying to evade him and put it directly to the voters. Such an amendment has broad support in the public, meaning that it if were on the ballot, there’s a good chance it would pass. It’s still unclear which voting problems it would solve, aside from the problem that people who don’t have current IDs, like the elderly, poor, and students, can vote. It wouldn’t solve the non-existent problems of non-citizens voting, or dead people voting, or even people voting twice. If such an amendment had a requirement for a comprehensive, year-round government effort to get to every person in the state and ensure they had a free ID, then perhaps it wouldn’t be a problem. But of course it doesn’t.

Nullification? It looks like a number of state legislatures need to go back to high school civics class and re-learn what that Civil War was fought over.

Of course, we can’t forget “Right to Work”. Unions have been losing power for decades and union membership is at a level not seen since the Great Depression. Thus, I really don’t see much point to this one; the actual economic record when it comes to whether these laws attract business development is decidedly muddy. As with most of his statements, I tend to agree with Martin Luther King Jr. on this one.

Taking a look at all these amendments, it would appear that the goal is to turn Minnesota into a cross between California and Mississippi. I’ll pass, and I believe that most of the people in Minnesota would agree. There are a lot of thing that make this a great state: the community, the belief that government should work well and not in a dysfunctional manner, and that everybody deserves a chance. These amendments would do a lot to remove what makes Minnesota great.

• Current Mood: Monday
• Currently Listening To: "I Want To Know What Love Is", Foreigner

I took the test, and received a score of 33, which puts me squarely in the category of “A first-generation upper-middle-class person with middle class parents.” My parents were certainly middle class; I would generally not consider myself upper middle class from a wealth perspective. Perhaps from an educational standpoint maybe, although there were no questions on who paid for that college and post-graduate education, just one of a whole host of questions that were omitted for him to prove a point.

My low score is supposed to be indicative of how out of touch I am with the “common man”, though, and with this, I do have to disagree. First, the questions are quite arbitrary, and even counter to what he is trying to prove: is buying Budweiser, now owned by InBev, more “American” than buying a beer that is brewed within 30 miles of my house and employs workers only in America? Why would I go to Applebee’s when I live in an area that has much better restaurants available for the same price? Sure, I understand that in many places, basic cable, chain stores, and terrible beer are all that is available. However, should I choose to live in a place that allows me a wider array of choices, have I somehow lost touch with the zeitgeist?

Second, as pointed out in one of the links, there is little correlation between scoring highly and having empathy for, well, for whomever Murray thinks needs the help, so the rural, conservative, Evangelical Christian viewpoint that is so rarely heard these days. David Brooks, he of the salad bar at Applebee’s, has no idea what life is like for the hourly worker. Nor would Murray, frankly: the world is quite full of highly-educated pundits who continually lecture us on what the “less educated” and “lower classes” want, without ever actually deigning to find those things out for themselves. Look no further than Murray’s belief that poorer people choose to work less and so are at fault for their poverty (and yes, we’ve heard this before).

Murray, like a lot of people on one side of the aisle these days, think that problems such as unemployment, low wages, and foreclosures are due to personal moral failings. They refuse to see any of the large-scale structural changes both in the economy and in the policies of our own government that have led to these issues. After all, it is far easier to blame the individual than to seriously take a look at our society and ask if there are things we could change through policies to make things easier for those who are less well off. Especially if it means people like Murray would have to both 1) pay more taxes, and 2) have some real empathy for people instead of the fake stuff.

I certainly have few illusions that my beliefs make up anything near a majority of the country. I know they don’t. All the same, though, I don’t think I need to regularly eat at Chili’s to participate in a discussion about why a huge chunk of people are falling behind in this country. In fact, I want such a discussion, unlike those like Murray who simply blame the victims.

• Current Mood: Sore

The problem stems from a registry hack that allows Windows 7 to use UTC in the CMOS real-time clock (RTC). All adult OSes expect that the RTC will be in UTC, and then the OS calculates the corrects time to display for users based on the time zone and daylight savings time. Windows has forever expected the RTC to be in local time, however, which can cause all sorts of problems, such as moving the clock twice for a DST change. Recent versions of Windows have incorporated a registry hack to allow the RTC to be in UTC, but it’s not working perfectly, as I’ve discovered.

For when that hack is in place, when you sync to an internet time server, the correct time is not written to the CMOS RTC, as it is when the RTC time is local time. I believe the problem started on my computer when the CMOS battery was dying and the clock was losing time. When I replaced it, I of course had to set the time in the BIOS manually, and so I got it close enough, thinking that after I did an internet time update it would be written with the correct value. However, this didn’t happen: it kept on losing time. At first, I thought the new battery was dead, so I replaced it, going through the time-setting process again, and guessing even farther off from the correct time. Of course, this incorrect time was the time that Windows kept falling back to after I did manual time updates.

Eventually, after many reboots checking the behaviour of Widows with the RealTimeIsUniversal registry key both “true” and “false”, I discovered that Windows will write the correct time to the CMOS RTC when they key is “false”, but not “true”. And hence the problem.

The solution, if you want to keep UTC in the RTC, is to use another clock to manually set the correct time in the BIOS, because using internet time update won’t save the correct time. This is not cool and pretty much makes internet time update useless. Hopefully, Microsoft will fix this in a future version of Windows. As I said before, all other OSes work just fine with the CMOS clock being UTC, and it really does make the most sense from a computing standpoint. Get with the program!

One thing that the top 1% say, of any measure, is that those people in the Occupy Wall Street protests should probably be spending their time in better ways. In the NYT article, Anthony Bonomo, in that top 1%, says, “If those people could camp out in that park all day, why aren’t they out looking for a job?” It’s a common refrain, and not just from the top of the heap. Many people have said that who are nowhere near that 1%, who look upon the protests as the self-indulgence of a spoiled minority who are too lazy or too entitled to actually work.

Why don’t those damn hippies get a job? Well, the vast majority of them have a job, actually. But what about those slackers who don’t? This picture is all you need to know to reply to that:

There are currently four unemployed persons for every job opening. It is numerically impossible for every unemployed person to get a job. “Get A Job, Hippie!” may have made sense in 2000 when there was a bit over one unemployed person per job opening; today it is little more than a cruel insult. And this only counts the unemployed, not the underemployed or people who have dropped out of the workforce entirely. I’m sure if you counted the people who are part-time and looking for full-time work, or the people who have just plain given up, the numbers would be even worse.

It’s intellectually lazy to dismiss protesters as lazy no-goodniks who just need to take a shower, put on a suit, and start being productive members of society. The top 1% of income earners may work hard, and they may feel that they are being unfairly targeted in today’s economic climate. But the unemployed are even more unfairly targeted, and unlike the top 1%, they don’t have the income to help make them feel better.

• Current Mood: Pain
• Currently Reading: "Requiem For A Dream", Hubert Selby Jr.

There are a few things still not known about the Zappos breach, such as how they were compromised and, more importantly, whether the password hashes (it’s presumed that “scrambled” means hashed) were salted. Important questions, true, but I am not worried in the least. Why? Because I used a password manager, and so I don’t care about the password being compromised. In fact, here’s my old Zappos password: “TaH8pcEloWsb8R1nrol2”. It’s useless now, because it’s been changed, and more importantly, it’s unique and random.

Hackers can do a lot of things with this data. They can take the email address and do phishing attacks against you, such as sending out an official-looking email purporting to be from Zappos asking you for your password, credit card number, and so forth. What they really hope for, though, is to get the plaintext password and see if it works on other sites. Even if passwords are hashed, they can sometimes be recovered, especially if they aren’t complex enough. And once they have that password, they’ll try to log onto banking sites, credit card sites, and anything else they can think of. Because so many people reuse their passwords, it sometimes works, and now that Zappos breach has drained your bank account.

A password managed (I use KeePass) stops this in two ways. First, it can generate very complex, random passwords. It is orders of magnitude harder to figure out a complex password from a hashed value than something like “password”. More importantly, though, even if they do somehow get the password, perhaps because the website has broken every security rule by storing the password in plain text, it’s unique. They may be able to log onto that website, but that’s it. The password is not shared with a banking website, or any other website.

Using a password manager is a bit of a chore. It’s somewhat cumbersome and inconvenient. However, the extra 30 seconds it takes to use a password manager is well worth the peace of mind I get from knowing that even if the password to a website I use once a year is compromised, the damage is limited only to that site.

• Current Mood: Meh
• Currently Listening To: "Under My Thumb", The Rolling Stones
• Just Watched: True Grit

Capitalism, like a gun or a hammer or a nail, is a tool. It’s a system. It has zero inherent morality. Morality only comes into play when humans decide to use those tools. A hammer that is used to build a house through Habitat for Humanity would be a moral use of that hammer, most people would say. A hammer used to break your neighbor’s window is immoral, unless you are breaking the window to get him out of a burning house, in which case it is moral again. A gun used to commit a crime is used immorally, a gun used to protect yourself from an attacker is seem by most people as a moral use of a weapon. In all of these examples, the objects are just tools, free from goodness or badness until they are used in some manner by people capable of being good and bad.

The free market is the same way. It’s a tool. When it is used by businesses to make both the business and the customer better off, most people would agree that it is a moral transaction. When a private equity firm swoops in, liquidates a business, lays off all the employees, and enriches nobody but the initial investors, people may debate the morality of such a thing. It’s not an attack against the amoral system, it’s an attack against how the system is being used. Saying critics are “attacking capitalism” in this case is as absurd as saying people are “attacking cars” when they fault criminals for drunk driving.

As I’ve said many times before, I happen to think that the free market is a mighty useful system for a lot of things. I won’t, however, ascribe morality to it a priori. It’s not inherently moral; it’s not inherently immoral. What matters is what people do within and throughout the system. We can all agree to use a system while still debating the morality of using that system in certain ways. It’s perfectly acceptable to try to ban things largely considered “wrong” even if they are allowed within the rules of the free market. Defining “right” and “wrong” and getting that balance right is difficult, of course, but it’s a good and healthy debate. I welcome an honest debate about the merits of private equity firms, of CDOs, and of payday lenders, to name a few (and there are good arguments on both sides of the debate for those three examples). I shun, though, any attempt by people to close off the debate by claiming it’s an attack against the free market. And that is exactly what Romney is doing.

• Current Mood: Sore
• Currently Listening To: "Long, Long, Long", The Beatles
• Currently Reading: "The Compass of Pleasure", David J. Linden

Here’s the deal: CitiMortgage has a new program to help people pay off their mortgages more quickly. Instead of making 12 monthly payments a year, this program allows people to make 26 half-payments a year to match most people’s biweekly paycheck schedule. The result, one extra mortgage payment per year, will reduce the time it takes to pay off the mortgage, along with the total interest charged. Good deal, right? Except for the strings.

See, CitiMortgage charges $375 to set it up, then $1.50 per payment for “processing”. And what does it do with your money? It holds onto that half-payment for a couple weeks, then bundles it with the other half-payment to remit the payment in full. Yes, it floats your money for half the year. So CitiMortgage is making money on you in several ways from this scheme. No wonder people are not amused.

Is this something that should be regulated? I think two points are relevant here. First, as the article points out, it is impossible to set up such a scheme using Citi’s available bill paying tools, despite the fact that such a payment plan is not necessarily harder for banks to deal with. On the other hand, there are other ways to get the same effect, such as increasing each mortgage payment by 1/12th, and setting that up as an auto-payment. I’m not sure if Citi would allow this setup.

The second point is the feasibility of consumer choice. If you don’t like a McRib sandwich, you have little problem finding someplace else to eat. However, when it comes to mortgages, you can’t really up and take your mortgage elsewhere if you don’t like the fees. Most people, when they shop for a mortgage, are only concerned about the upfront fees and the interest rate. They don’t care much about extra fees down the line. Perhaps one of the efforts of the CFPB that has already started, that of revamping the mortgage disclosure forms, will help. But even with more disclosure, it is unlikely that people would prioritize future fees when choosing a mortgage company. Plus, those fees could change in the future. Thus, the lack of the ability for a consumer to decide they don’t like the fees and take their business elsewhere is severely hindered.

Clearly, the CFPB is going to have a lot of details to work through with regards to regulating financial products. It won’t be easy. Frankly, I’m not sure what the correct course of action would be for this CitiMortgage product. Generally, I think most people would agree that making people pay for using their own money in the manner they want is not acceptable, aside from nominal fees. Nobody likes ballooning ATM fees, or monthly fees to use a debit card, and so forth. Maybe the solution would be to prevent Citi from doing this. Or maybe the solution would be to make Citi tell its customers there are free ways to achieve the same end, and let people choose the expensive option if they really want to.

I think we are going to be hearing a lot more stories about similar products. To the extent they get publicity, I think it’s going to be good for the debate.

• Current Mood: Calm
• Currently Listening To: "We Gotta Get Out Of This Place", The Animals