Vroman made me do it: Tourney Report from 9/20 Mox event

At 6am on Sunday, Vroman, Josh Lalo and I departed from Vroman’s apartment in the U-city loop to drive 5+hours to a Vintage tournament a little ways north of Chicago to compete for a Mox Pearl.

The night before the event, I went to a birthday party for a friend of my girlfriend’s. It was Ninja/Zombie themed and Mary did my makeup beforehand. Sadly a pic of ZombieJosh is unavailable, but I found out later I still had some red stuff coming out of my nose, so try to picture that when I’m describing my games later. Also I was on about 4 hours of sleep.

I have played in a number of power tourneys before, but never even come particularly close to walking away with magic cards valued in the triple digits — largely because I get super skiddish once I make any kind of cut (top8, top4) and want to organize a split, because I don’t like variance and my expected value is basically fixed once the cut happens (or so I think). Or maybe I am just not confident enough in my ability to beat other magic players in a top 8.

Anyway, we arrive at Xtreme Games at approximately 11:15, in plenty of time for the noon scheduled start. The dozen or so people milling around as noon approaches don’t look particularly threatening, but what do I know? I’m sure I looked like a typical beard in a bright green t-shirt. I did notice one fella wearing a black t-shirt with the elegantly silk-screened
FUCK
TEZZ
on the front in large white letters. “What a classy fellow,” I remember thinking. I also remember thinking I hope I don’t play that guy. More on that later.
When round one starts, 16 players sit down for four rounds, cut to top eight. I didn’t write down any names, so I’ll have to identify my opponents by their deck. Here’s what I sat down with:

4 Force of Will
4 Mana Drain
1 Ancestral Recall
1 Ponder
1 Brainstorm
1 Lim-Dul’s Vault
1 Merchant Scroll
1 Mystical Tutor
1 Demonic Tutor
1 Vampiric Tutor
1 Gifts Ungiven
1 Fact or Fiction
1 Fire // Ice
1 Rebuild
1 Tinker
1 Transmute Artifact
1 Intuition
1 Time Walk
1 Timetwister
1 Sphinx of the Steel Wind
1 Regrowth
1 Recoup
1 Yawgmoth’s Will
1 Ancient Grudge
1 Gorilla Shaman
1 Goblin Welder
1 Empty the Warrens
1 Memory Jar
1 Time Vault
1 Voltaic Key
1 Black Lotus
1 Lotus Petal
1 Tropical Island
1 Tundra
1 Tolarian Academy
1 Island
1 Sol Ring
1 Mox Emerald
1 Mox Ruby
1 Mox Pearl
1 Mox Sapphire
1 Mox Jet
1 Mana Crypt
1 Mana Vault
3 City of Brass
2 Flooded Strand
2 Polluted delta
2 Underground Sea
1 Volcanic Island

SB:
4 Leyline of the Void
1 Helm of Obedience
2 Pyroblast
1 Sower of Temptation
1 Balance
1 Seal of Cleansing
1 Crime // Punishment
1 Trinisphere
1 Shattering Spree
1 Tormod’s Crypt
1 Echoing Truth

RD 1 Workshop aggro? 2-0

I lose the roll and force his turn one thorn of amethyst (off workshop) because it made my hand of two lands, mox, tinker really clunky if it resolved. After my uneventful reply turn one of land, off-color mox, go, I was sweating bullets when he cast crop rotation off of basic forest. What would he get? Strip mine to ruin my day? Wasteland to do the same? Maze of Ith to make my tinker useless? Bazaar to quickly win the card quality competition? Imagine my relief when he retrieved a second ‘shop and cast Triskelion. No need for a counter, I can race that. On my turn I tinker for sphinx of the steel wind, and he plays nothing meaningful for the rest of the game, though I was worried a Duplicant might hit play.
SB:
-1 timetwister
-1 empty the warrens (I like to side this out against stax, since if they succeed at all in their plan, multiple spells per turn are out of the question)
-1 regrowth
+1 echoing truth
+1 seal of cleansing
+1 shattering spree
Game two was even more lopsided. He plays turn one welder, turn two ATTACK, miss land drop, thorn of amythest off lotus petal. I decide that if he isn’t going to play lands and is going to attack with the best creature in type one, I can afford to allow the thorn. As predicted, the thorn was mostly in his side as he attacked with welder for about four straight turns while was making land, mox and sol ring drops. I added a seal of cleansing to the board pretty quickly but saw no reason to even use it right away. He added a second welder off his eventual second land, so I echoing truthed the welders to gain some tempo in what felt like an unloseable game. Eventually I realized the thorn was hurting me slightly more, as I was the only one playing spells, so I popped it and Fact or Fictioned into time vault with a tutor for key in hand. He wanted me to play it out, so I did. He conceded when I tutored for tinker for sphinx.

RD 2 Dredge 2-0

My memory of this match is particularly bad, but I know that I got vault key on turn two or three in game one, and started game two with a leyline. I drew the helm of obedience pretty early on and brainstormed or something into mana vault + voltaic key. This poor man’s vault key gave me the mana i needed to cast and activate the illustrious helm.

RD 3 Don’t know ID
I sat down for this round and immediately started making a chart to see if all the talk last round about “anyone with six points can draw in” had any merit. Here’s a tutorial for those interested, feel free to skip if you don’t care.

ASIDE
The horizontal rows are the round numbers. The vertical columns are the number of players with a particular number of points after whatever round(row) they are in. We assume away draws, because draws only reduce the total number of points and on net, can only make worse the record required to make the cut. That is, when draws are present in the results, people with worse records tend to make it in.

—- 0 — 3 — 6 — 9 — 12
0 — 16 ——————- (before rd 1, everyone has 0 pts)
1 — 8 — 8 ————— (after rd one, half the people win and half the people lose)
2 — 4 — 8 — 4 ———- (in this rd, half the people with zero pts (four of them) lost, and half won, same for the 3 pointers)
3 — 2 — 6 — 6 — 2 —- (same rules as before, half win in each pt bracket and stay where they are, and half move up)
4 — 1 — 4 — 6 — 4 — 1 (note that these numbers are abnormally easy, owing to the power of 2 number of players(2^4=16). There are no odd numbers until the last round. Normally you have to make assumptions or make separate charts to deal with the event of an upset (a paired down player loses) which can only happen with an odd number of people in a given point bracket)

So in the absence of any draws, the undefeated player makes the cut, and so do all the 9 pointers, but that’s only five people. so 3 of the 6 pointers make top 8 on tie breaks. Since you need at LEAST 6 points to make the cut in the max points (no draws) scenario, and there aren’t more than 8 people with at least six points in RD 3, this means that anyone with more than six points must make the cut whether they have draws or not.
/ASIDE

I explained to my opponent using a chart much like the one above that if we drew we were guaranteed to make the cut. Who says no to that? Thankfully not this fellow, and I spent the rest of this round watching Spiderman 3 on the bigscreen in the adjacent room. Vroman lost RD one as well as this round so he was out of contention. Lalo was 2-0, so he ID’d also.

RD 4 Josh Lalo ID

It was a hard fought battle. Knowing we were both guaranteed in made it hard not to scoop to my car-mate/name-a-like. In the end, I accepted the handshake and watched more BugmanIII.

Suddenly I found myself struck with an overwhelming desire to learn all about the prize structure. Here’s what I learned
1.mox pearl
2.FTV:E
3-4. “a dual land each”
5-8. a draft set

Now I am getting visions swirling in my head of sacrificing 17 hours of my life and $25 for a draft set, but the total prize pool was so small I just wasn’t really comfortable with an eight way split, never mind the logistics of actually organizing such a thing.

TOP 8
Quarterfinals mono U 2-0
I am told that the guy I played is quite good, and never did he make a mistake that I noticed, apart from the obvious one everyone has likely noticed by now, namely: playing mono U. I could describe in detail about how I agonized over every play, always feeling slightly behind and worrying over every counter, even down to merely one card in his hand. I could do that, but the best way to describe this match is to say that in both games he went first, playing ancestral visions off an island, and he never removed the last counter. I managed to kill him in three turns, two games in a row. Ok, technically the last game it took me four turns, but one of them was a timewalk turn. I started that game with turn one tinker for sphinxer, and he forced or fetched his way to a three-swing kill. Game one I believe he scooped to vault-key.

My top four match was one of the first two to finish. The other to finish quickly was won by none other than FUCKTEZZ, who would be playing the winner of Lalo’s quarterfinals match. My semi-finals match would be the winner of the Jason Jaco(I think that was his name) vs Very Geeky Looking Guy With R/G LD. This latter fellow folded to Lalo in RD 2, but bested Vroman in Rd 3, giving V his second match loss, making it impossible for him to draw into the cut. I was sorta hoping to face LD guy in the semis, partly because his deck was lacking things like Null Rod and seemed like a pushover, but mostly because his opponent seemed way too competent. I did not get my wish.
The top 4 wound up being two Joshes (way to take it down Lalo!), Jason Jaco, and FUCKTEZZ. I immediately wanted to organize a split. Since the dualland prizes for 3-4 were non-blue, I valued them at about $30, the FTV:E at $100 and the mox at $250. This meant that each person would get around $100 in the event of a split, with whoever got the mox paying $70 to each of the dualland recipients and the last person getting the FTV:E outright. This sounded just fine to me and Jason Jaco (we both wanted to leave asap), but Josh Lalo wasn’t hearing it, and neither was FUCKTEZZ.
I tried to reason with FUCKTEZZ first, since Lalo was still playing, explaining to him how nobody wanted to get only $30 when they could get $100 guaranteed, and we drove a long way and want to leave. Here’s an example of the type of replies I got:
“I give a fuck about the money”
“I just came to play some magic”
“I play poker for a living so I could give a fuck about the cards, I just wanna win”
“I lost 2400 dollars this week so I give a fuck about a hundred dollars”
These last two struck me as peculiar. I know that poker has high variance, but how much longer can someone who “plays poker for a living” continue to do so when he is losing over a grand a week? Moreover, you’d think that he would A)try to stem the tide by maximizing his return on this event and B) face a high opportunity cost of playing the silly magic game, when he could be pokering to recoup his losses.

Either way, the split was obviously not happening, and after beginning to set up and then moving twice, Jaco and I sat down for what was the most fun match of Type 1 I think I’ve ever played (or maybe just the most fun one that didn’t involve turn one Phyrexian Negator).

Semi-Finals Jason Jaco 2-1
He seemed like a nice guy, and this was for quite a bit of money, so I chatted him up as we shuffled and began to play. I never do this with magic opponents, though I may do it more in the future and highly recommend it for anyone. The people are the most important reason to play this game, IMO.
I scouted quite a bit in the quarterfinals, going so far as to watch him resolve a tutor, so I knew what he was playing rather well and didn’t like my odds. He had inkwell to my sphinx(shroud is too good) and confidants galore, so I was not likely to win the long game.
I remember that these games were epic, but that’s about it. The only game I remember well is the last one, where I managed to put 14 goblins on the board with him at 16, and pass the turn with no cards in hand. He took a LONG time thinking about ways out over the next couple turns, so long in fact that I pulled out my rubik’s cube and solved it repeatedly while waiting. In the end he found no answer to my goblin offensive(not the card, the attack, and they certainly are) and I was headed to the Finals.

At this point I was satisfied with any prize as I had shown my willingness to split for just $100 which I had valued the FTV at earlier, so losing wouldn’t’ve been so bad. Except that my opponent was the abrasive FUCKTEZZ. I had gotten to the point where this guy’s attitude and swagger were really pissing me off, plus he had just beaten my boy Lalo, so I felt I had to take him down. This one was for all the honor.

FINALS FUCKTEZZ 2-0

As we sat down he refused the split once more, and made comments to the effect of “I don’t even know what a from the vault is.” I explained in some detail exactly what it is, to which he replied “Well, I don’t even know what a from the vault is.”

. . . ok then.

Game one involved an unanswered turn one welder, getting time vault in my hand off a fact or fiction, then resolving gifts for lotus, mana vault, mana crypt and voltaic key with no mana up but a sol ring in play. Yeah, can’t lose that one. He thought about it for a while then gave me mana vault and key, so I welded in lotus and played it all, took my first free turn, welding out mana vault during my upkeep so as not to lose on damage, took a couple turns just drawing some cards, then began to swing with Goblin of the Weld, at which point he scooped.

Game two I mulliganed and he turn one duressed, taking the balance out of my one land two mox, demonic tutor, sol ring, balance hand. I’m drawing a blank on the details, but somehow I didn’t lose this game either.

During the match, Jaco, perhaps recognizing the jerkitude of the fellow before him, offered to play FUCKTEZZ for money or even “the mox if you win it.” Downcast gazes and hasty excuses about needing to meet up with his “babymama” stayed his hubris’s execution. This made me think of something else, which Vroman pointed out on the ride home: if you have a child you REALLY can’t afford to lose a couple grand a week at poker. Too each his own, I suppose.

I offered to buy his FTV:E for 70 cash which I had on me to buy Drew Idoux’s copy the next day as planned (I would be willing to pay that much for two, I guess), but he declined saying that he already had an offer for more. Hopefully not too much less than the $100 or so he stood to gain from the split he refused all the way to the finals.

In order to piss off Vroman, I am reviving the Props and Slops:

Props
-Vroman for driving and being the orchestrator of my attending the event
-Lalo for manning up and making the trip, not to mention top fouring
-Xtreme Games for putting up the mox and running the event so well
-That guy from Wings for beating the hell out of tobey maguire
-my deck for serving up game after game of turn two or three vault-key

HUGE PROPS
-FUCKTEZZ for not only refusing the split and thus adding value to my tournament winnings, but making my win that much sweeter by acting ignorant all the way.

Slops
-Gregg for deciding to stay home at the absolute last minute. Surprise, last minute, short-deadline project for work = nut low.
-the mexican cafe down the strip from XG for not being able to make a decent hotdog
-me if I spelled anything wrong and for not remembering more details. I have taken decent notes at so many tournaments I’ve scrubbed out on — why not this time?

My only regret is that I didn’t make the TGalbs victory speech:
“I’d like to thank so many people for my win today. I’d like to thank my parents for raising me, my opponents for being courteous as well as not out-drawing me. I’d like to thank my playtest group and the guys I traveled with for making this all possible. And most of all, I’d like to thank God Almighty for helping me to win today.

“I’d like to thank all those people, but I can’t, because I DID IT ALL. That’s right I have no one to thank but myself for being the greatest.”

PS. Vault-key is completely busted, if you haven’t heard.

Categories: Uncategorized | 1 Comment

Missouri’s Ticking Pension Time Bomb

[This post was originally written for my employer’s blog, Show-Me Daily.]

The front page article in today’s Post-Dispatch is about the underfunding of Missouri’s public employee pension programs. This is a serious issue that deserves more attention, and the Show-Me Institute is happy to oblige. Check out our full policy study on the matter, as well as this op-ed by Joe Haslag, who is quoted in the P-D article.

The main problem with Missouri’s public employee pension plans, as discussed in both the P-D article and our policy study, is that they use an outdated system of defined benefits. This plan is generally less expensive for the employees (who is likely concerned about retirement savings, at least somewhat) and more expensive for the employers (who have to pay the difference when the amount they set aside in anticipation of payouts turns out to be insufficient because of changes in valuation, such as stock market fluctuations).

The economics of this arrangement can be simplified as follows (pardon if this is too abecedarian): Employees accept a certain wage and benefit package when choosing between employers. It is common for employers to compete for employees by offering different combinations of wage and benefit packages. When viewed in context of the prevailing type of plan offered by employers, the Missouri public employee pension plans are more generous to the employee and more expensive for the employer. It may be the case that in order to attract the number and quality of employees that the various state agencies desire, a less attractive benefits package with a less generous pension plan would need to be balanced with increased salaries.

As I see it, this is a very good thing. The costs of retirement benefits are only fully realized in the future, when market fluctuations may cause a plan to become underfunded — a situation that is likely to happen only with defined benefit plans. One reason these plans are popular, however, is because the nature of political incentives means that politicians have a much greater chance of enacting a plan with benefits that can be realized today and costs that are paid for tomorrow. If government agencies in Missouri were forced to compete with private companies based on salary rather than benefits, this would lead to increased immediate costs for public employees, which would also mean higher taxes. I think that Missourians would be more likely to vote for less public spending if the spending had to be paid for here and now, rather than after the lifetime of the employee’s career.

As Richard Dreyfuss points out in his Show-Me Institute policy study, defined contribution plans would not only level the playing field between public and private employers pursuing potential employees, it would put the Missouri pension plans on firm ground, economically — defusing the time bomb of underfunded employee pensions.

Categories: Government Spending, Taxes | Leave a comment

Our World-Famous Health Care Study

[This post was originally written for my employer’s blog, Show-Me Daily.]

The latest Show-Me Institute Policy Study — “The Prognosis for National Health Insurance: A Missouri Perspective” — is shaping up to be a slam dunk.

Produced by Arduin, Laffer & Moore Econometrics, the study gives some historical perspective on the growth of the public sector’s role in paying for health care expenses, and provides an analysis of the effect of a public health care plan on Missouri residents. The study spells out the expected costs such a plan would impose per capita on Missouri residents, as well as making predictions about inflated medical costs overall in the face of increased bureaucratic distance between health care producers and consumers.

And it’s getting attention. Missourinet ran a segment about it, and it was also featured on Jamie Allman’s radio show yesterday, as well as some more attention from him while he was guest hosting for The Laura Ingraham Show this morning. So far, it has also been featured in the St. Louis Post-Dispatch and the Springfield News-Leader. This coverage combined to break our previous single-day study download record yesterday, and we’ve already more than doubled that number so far today.

Why wait? Read the study that everyone is talking about. Or, if time will simply not permit, at least check out the four-page briefing paper.

Categories: Health Care, Media, Show-Me Institute | Leave a comment

Economics of Our Health

[This post was originally written for my employer’s blog, Show-Me Daily.]

There’s been a lot of talk lately about health care, especially at the suddenly very popular town hall–style meetings, which have seen both violence and passionate debate. As both David Stokes and I have argued, we are better off remaining civil. And, because health care is so important to us here at the Show-Me Institute, I thought I’d weigh in with some thoughts on health care reform.

If it were the case that a government solution, in the form of any act of Congress or national board of medical care, could provide service better than an actual competitive system, I would support it wholeheartedly, and would advocate it strongly. It’s worth pointing out, though, that what we have now is not a free market — it’s not even close.

Because of economic reality, no act of government would produce something better than a competitive system would, so long as the good or service in question is excludable (and medicine certainly is). This is because the price system operates in a way that produces an optimum allocation of resources, given limited availability of goods and information.

Health care in this country is broken because government intervention prevents competition from fixing it. Alleviation of licensing, regulation, and other burdens would encourage entrepreneurs to innovate cheaper forms of care. This is true not only of the providers of health care services, but also of health insurance provision. Right now, we are lucky we aren’t all getting the kind of “care” they get in McAllen, Texas. That’s a place where doctors are really exploiting the market power they are granted by the AMA monopoly and the current level of federally funded medicine (Medicare and Medicaid). I definitely recommend this New Yorker article — which we’ve linked to before — even though I disagree with the author’s conclusions about how to proceed, policy-wise.

And, for the record, medicine is not the best way to improve health. Sound counter-intuitive? Well, check this out:

our main problem in health policy is a huge overemphasis on medicine. The U.S. spends one sixth of national income on medicine, more than on all manufacturing. But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status. Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. To their shame, health experts have not said this loudly and clearly enough.

I added the emphasis for the “other factors,” because it’s important to realize which factors may make more of a difference than increasing medical treatment, which, unfortunately, is getting all the attention in the current debate.

The above quote is from a fantastic article by Robin Hanson. I HIGHLY recommend it to anyone concerned with making this country healthier.

Or, if you just want the latest coverage of Missouri’s town hall meetings from the Show-Me Institute’s roving reporter Audrey Spalding, check out her article on Policy Pulse.

Categories: Uncategorized | 2 Comments

Despite Admirable Goal, Autism Bill Ill-Conceived

[This post was originally written for my employer’s blog, Show-Me Daily.]

The Post-Dispatch has the latest about Gov. Jay Nixon’s struggle to ensure medical coverage for all Missouri children who have autism. I have selected a truly arcane method of judging his argument; in it, I’ll praise his intentions and convictions, while drawing critical attention to the reasonableness of the proposal itself.

The ancient Greeks divided argumentation into three criteria: “ethos,” the ethical credibility of the speaker; “pathos,” the emotional appeal of the speaker; and “logos,” the logic of the speaker’s argument. In this case, Nixon’s ethos is admirable — he wants to help these children and their families. To determine his pathos regarding this matter, look no further than this report about his level of conviction. However, as far as sober logic is concerned, his proposal is ill-conceived.

It goes like this: Autism among children is on the rise, and the treatment is prohibitively expensive. Many families can’t afford the treatment or the insurance coverage that would pay for it, but if we force insurance companies to cover all autistic children, the cost of the treatment would be spread among all the insurance company’s premium paying customers.

The economic logic of this is dubious at best. It externalizes the cost of what should be an internal transaction, forcing many people to pay for something that they will see no benefit from. The plight of autistic children is very sad, and my heart goes out to the families affected by it, but it is unreasonable to make the paternalistic decision to reallocate the money of those who buy insurance. Deadweight loss would inevitably result in such a scenario, and, like other subsidies — especially those for issues that can be so emotionally moving — the question quickly becomes, “Why pay for this treatment and not that one?” A compelling emotional argument can be made in favor of subsidizing all manner of medical care, but someone has to pay the resulting bill.

Criticism is not particularly useful without a proposed alternative. I submit that there are many people right here in Missouri — not just insurance customers — that would be willing to part with a modest amount of money in order to ensure that those who can’t get autism coverage because they can’t afford it are provided for. I would rather see a voluntary system, be it a charity campaign, or a checkbox on your state income tax form or license plate renewal application, etc., with wording along these lines: “Would you like to contribute 1, 5, or 10 dollars to provide help for poor autistic children?” The people who contribute to such a fund would not necessarily be the people who buy insurance, but this would eliminate the deadweight loss.

Sarah Brodsky has been a prolific writer about the topic of mandatory autism coverage, with a great op-ed and several blog posts, all of which are worth reading.

Categories: Government Spending, Health Care | 4 Comments

Show-Me Health Care Outing: A Newt Experience

[This post was originally written for my employer’s blog, Show-Me Daily.]

This morning, six employees of the Show-Me Institute and one of our regular book club attendees found ourselves among 200 other guests at the futureFOCUS 2009 seminar, which featured a presentation from former speaker of the House Newt Gingrich. He made some excellent points that I can only agree with on the topic of health care, including: The public option is likely ill-considered; taxes should be lowered across the board so that individuals will have more money to buy their own health care; and, the present level of bureaucracy is to blame for much of the present cost of health care. He also pointed out that the Canadian system currently does not cover a number of conditions, for which many Canadians cross the border to get treatment; if we adopt a system similar to Canada’s, where will those people go?

Gingrich made one point I did not agree with. After pointing out that the progression of technology will afford new avenues for medical care and scientific progress, he used that as an opportunity to advocate a federally funded project that would study the brain using the latest technology, similar to the Human Genome Project or the Manhattan Project.

Overall, Gingrich was an incredible speaker, and the hour just flew by. During the Q&A, one audience member indicated his disappointment at the lack of outrage at some of President Barack Obama’s proposals. He asked, “Do you have any outrage?” Gingrich waited several beats before responding, and ultimately indicated that, yes, it’s easy to get outraged, but then you’re exhausted and you may not accomplish what you want. It’s better to remain level-headed, slow down the debate, and point out anything false stated by your opponents with calm reason.

This reminded me of a blog post I read awhile back about how anger and emotionality in politics is adaptive. It made sense for our ancestors to get excited about policy decisions, because it could literally mean life and death for the tribe. As modern individuals with the benefit of self-analysis and better reason, however, it is incumbent upon us to follow Gingrich’s great advice and make every effort to withhold anger, instead letting cooler heads prevail. It makes sense that a veteran politician would have learned this lesson already, but it was still impressive to see him articulate it so clearly.

Categories: Health Care | 1 Comment

David Stokes on the News

[This post was originally written for my employer’s blog, Show-Me Daily.]

I didn’t catch David Stokes on Fox 2 last night in St Louis, but fortunately the clip is online. Dave was interviewed regarding the Internet furor about plans by the city of St. Louis to apply its 1-percent earnings tax to players in the All-Star Game, which St. Louis is hosting this year. As Stokes explains in the video, and as many Show-Me Institute publications have expressed before, the city earnings tax is a bad idea for the economic health of the city.

Be sure and check out the clip, and also some of our related publications, such as this op-ed and this policy study.

Categories: Local Government, Media, Show-Me Institute, Taxes | 1 Comment

MOSERS Bonuses Revisited

[This post was originally written for my employer’s blog, Show-Me Daily.]

Jim Winkelmann — who was mentioned recently on this blog for his pithy letter to the Post-Dispatch arguing against the Clayton smoking ban — has had another letter to the editor printed in that paper. This one addresses the contentious topic of bonuses for Missouri public pension managers.

I wrote about this topic before, contending that criticism of the bonuses didn’t make sense given that the fund was (at least on paper) not losing value as fast as the rest of the market. I am now reconsidering, given Winkelmann’s clever point that the MOSERS employees were the ones assigning value to the investments that they reported as having lost less value than the market.

Here is a relevant quotes from the letter:

The MOSERS website reports that its investment policy is to have 25% of the pension portfolio invested in “alternative investments” in the published annual report they are referred to as “limited partnerships”. Even though the balance sheet in the annual report uses the term “fair market value” assigned to these limited partnerships by definition there is no ready market for these investments. […]

With no market for these limited partnerships where do these fair market valuations come from?

I ran into Winkelmann at lunch yesterday, and he commented to me that the problem is similar to that of assigning “market value” to a house appreciating or depreciating … before it’s sold. The fact is that the true market value of a thing is never the amount that you expect to receive — instead, it is the amount that somebody will actually pay.

I don’t agree with the argument that the MOSERS employees’ bonuses were unearned just because the plan lost money. However, the more subtle yet very relevant point that the MOSERS valuation was totally subjective, and assigned by the very people who stood to gain by inflating the number, smacks of perverse incentives.

Categories: Economic Freedom, Media | 5 Comments

A Taxing Dilemma

[This post was originally written for my employer’s blog, Show-Me Daily.]

Caitlin Hartsell’s recent blog entry discusses another recent news piece, this one in the Springfield News-Leader, about that lawyer who is suing small Missouri towns that he holds to be charging illegally high sales taxes. I already talked about this in terms of theory, so I thought I’d use this opportunity to discuss the issue a bit more practically.

Here’s what I think should happen:

Officials in the towns that are charging these contested additional sales taxes believe they are in the right, because they received a letter from the Missouri Department of Revenue telling them what they could charge. The law, in my thoroughly layman interpretation, is ambiguous. It would be wonderful if we had an unambiguous state law that would prevent the present conflict between small towns’ desire to tax sales above 1.5 percent and the threat of expensive judgments/settlements.

In the absence of that, I question whether sales tax rates above 1.5% is actually needed in these towns. Giving them the benefit of the doubt, they want tax revenues in order to provide needed services to their communities. Perhaps a better solution would be to reduce the number of taxing districts, so that the benefits of economies of scale can be realized. This possibility, which is one of the insightful prescriptions of David Stokes’ recent policy study of government in Missouri, could work as an alternative to higher sales tax rates.

At present, I am of two minds about the lawsuits. On one hand, lowering sales tax rates benefits consumers immensely. On the other, I worry about which avenues for funding these towns might undertake if the sales tax rug were suddenly pulled out from under them. I am not optimistic that cutting spending will be considered as an option.

Categories: Government Spending, Local Government, Taxes | 1 Comment

High-Speed Rail Would Take Taxpayers for a Ride

[This post was originally written for my employer’s blog, Show-Me Daily.]

There’s an unfortunate discussion going on among Midwestern governors and the federal government about a possible high-speed rail line linking major Midwestern cities. The Show-Me Institute has covered the problems with light rail in the past, but surely some of the arguments carry over: This project will likely cost more than projected, and the benefits are almost certainly overstated.

If this issue appeals to you, stay tuned to Policy Pulse for stories relating to this and other topics of interest.

Categories: Government Spending, Transportation | 1 Comment