During our recent blargument Marco wrote:

Facts say what the speaker wants them to (like statistics).

I responded:

This is an abuse of the word “fact” (and “statistic”). I know that your idea of what’s “fact” and mine do not necessarily like up exactly, but there’s no sense in trying to make “fact” mean “objective” and instead make it “subjective”.

We already have a word for that: “opinion”.

I might like to *say* that my opinions are facts, but that doesn’t make it any more true than if I say my car is a Ferrari. It may or may not be, but it would be silly to take my word for it without some sort of evidence (a peek in my garage, my vehicle registration, or perhaps a look at my bank account).

Persuasive arguments are not always false or misleading, but I am at a disadvantage if I take persuader’s word for it that his statements are true (ie: are facts). I need to take other information into account. Part of that may be experience (how accurate has he been in the past, is he drawing reasonable conclusions based on the evidence he’s presented), but outside evidence and/or well-reasoned counterarguments are even more reliable.

(I’ve added the emphasis in my reposting here.)

A week ago the U.S. Government Accountability Office published a study about corporations (both US-based and foreign-controlled) and the taxes they pay. It was factual, apparently objective, and probably accurate (I don’t know how well the GAO does their job, but for the purposes of this argument I’ll assume it’s correct). It specifically did not draw any conclusions from the facts that it presented.

The news media took the report and wrote hundreds of stories on it. Many (most?) of them had the theme “Corporations use tax loopholes to pay less than their ‘fair share’”., lead by the Associated Press who claimed that two-thirds paid no federal income taxes between 1998 and 2005. Even my favorite business news source, APM Marketplace, did a bit about big evil pampered corporations, leading off the story by saying that if real people were dodging their taxes on this scale, there would be public outrage.

The very first thing I thought of when I read the first of these GAO news stories was “were the corporations that aren’t paying taxes also not earning income?

In the U.S. (and in Canada, and probably most other developed nations), corporations pay “income” taxes on their profits, not their sales. This makes sense to most people when you explain it to them. “Sales” refers to the amount of money a business takes in. Subtract “costs” (what they pay out) from that, and the leftovers are what they keep: “profit”. Taxing based on sales (which would ignore costs and profitability) isn’t very effective, because it would hurt a an already struggling company with high sales and low or negative profitability (think GM) yet give a company with small sales and great profitability. There are such things as taxes on certain assets (which would effect business which own those assets, which may tend to be larger), but that’s not what the study was about.

Most people think of corporations as big entities with thousands of employees, woldwide reach, and millions (or billions) in sales — and thus want them to pay millions of dollars in taxes. The truth is that most corporations are small and local; many have only one employee. Many are short-lived too (many don’t survive beyond five years, although the actual numbers vary depending on the study). A lot of them don’t have profits in every year. The laws allow a business who has a loss in one year to apply it against their profits in another year for the purposes of taxes (allowing that business to “catch up” from a business slowdown). Some (similar to my own business, although I’m not incorporated) pay out all of their post-expense sales money to their employee(s) (who then pay personal income taxes on it), and thus show no profit and pay no corporate tax.

As it turns out, what I wrote above is probably a better explanation for the results than “corporate tax-dodging loopholes”. The GAO report itself wrote, in the very first paragraph of the summary:

Most large [foreign-controlled] and [US controlled corporations] that reported no tax liability in 2005 also reported that they had no current-year income. A smaller proportion of these corporations had losses from prior years and tax credits that eliminated any tax liability.

However, that’s not the story you got from most of the news articles.

A few sources did try to offer counterarguments to the popular story. Fark summed it up nicely:

Do corporations really pay no taxes? Or is it just a bunch of overhyped media BS on a slow news day? The real numbers indicate the latter

This is yet another example of why counterarguments are necessary in most (if not all) discussions. Facts don’t speak for themselves (in fact, they don’t speak at all; they don’t have mouths), but everyone with an opinion or an agenda will be quick to offer theirs as the “correct interpretation” of the facts.

It’s too much to ask for an unbiased interpretation of the facts from any one source (as evidenced by the countless examples of biased interpretations) so your best bet is to get multiple interpretations, analyze the reasoning behind their conclusions, and determine the best conclusion based on the strength of the arguments.

Note that this doesn’t necessarily mean picking the best argument out of the group of all arguments. Each argument should have some aspect of the truth in it (if it’s completely faulty then you can discard it). Conclusions will usually only be true if their assumptions are correct, and often decision making comes down to picking from the most probable (but not necessarily correct) assumptions. If it comes down to a choice between one good argument with bad assumptions and one bad argument with good assumptions, you might get the best results by combining the two.

Goddard College invents Masters in Consciousness degree to study eastern religious traditions. Actual Buddhists, Hindus in China and India lift heads from engineering textbooks, smile, get back to work taking over world

From Fark.

Alternate headline: “New Spirit of Chinese-American Cooperation comes to Cuba”

We in North America love to say that money can’t buy happiness. Justin Wolfers has writen a six-part blog post describing how that is not necessarily true — in fact, money and happiness are in fact strongly correlated.

The facts about income and happiness turn out to be much simpler than first realized:

1. Rich people are happier than poor people.
2. Richer countries are happier than poorer countries.
3. As countries get richer, they tend to get happier.

Moreover, each of these facts seems to suggest a roughly similar relationship between income and happiness.

There’s a lot of great facts, data, and analysis in his series — far to much to explain here. Instead, I’ll simply link to the articles and recommend that you read them if you’re interested. They’re quite an easy read and have some great graphs.

1. Reassessing the Easterlin Paradox
2. Are Rich Countries Happier than Poor Countries?
3. Historical Evidence
4. Are Rich People Happier than Poor People?
5. Will Raising the Incomes of All Raise the Happiness of All?
6. Delving Into Subjective Well-Being

Also, here’s the original research paper. (Note: PDF)

I would like to post two significant quotes though. Firstly:

When we plot average happiness versus income for clusters of people in a given country at a given time, we see that rich people are in fact much happier than poor people.

It’s actually an astonishingly large difference. There’s no one single change you can imagine that would make your life improve on the happiness scale as much as to move from the bottom 5 percent on the income scale to the top 5 percent.

Also:

There’s another striking finding in this graph: the relationship between happiness and log income appears nearly linear.

Thus, a 10 percent rise in income in the United States appears to increase happiness by about as much as a 10 perecent rise in income in Burundi.

Even so, it is worth noting that a 10 percent rise in income in Burundi requires one-sixtieth as much income as a 10 percent rise in income in the U.S. Thus, even if the slope is three times as steep for rich countries as poor countries (as we estimate), this still means than an extra $100 has about a twenty-times-greater effect on happiness in Burundi than it would in the United States.

I think that this last one plays a significant role when discussing fighting terrorism (and foreign policy in general). If terrorism does have its roots in unhappiness (which is not proven but quite likely true) then the most effective means of combating it may be to take the money spent on rich-nation soldiers and arms producers and sink it directly into improving the lives of poor-nation civilians. That may have a better bang-for-your-buck ratio than trying to attack terrorists directly.

Lastly: these data show correlations, and correlations are not causations. It is not possible (yet) to say that money does cause happiness. It may very well be the opposite effect: happiness causes productivity and thus higher GDP. However, there is some evidence that it really is the former situation (see the articles for full details), and I think that we’ll see a stronger causal link in the future as more research is done.

Quick, in which country do you have greater freedom: China or the United States?

The answer is definitely the U.S., where the laws ensuring freedom have been on the books for over two hundred years. Freedom is at the core of the American legal and political system.

However, take away all the laws written on paper for the moment. How free are you in real, every day situations?

Elliotte Rusty Harold just got back from China, and he says that he felt freer on the streets of Beijing:

Entering China, I was prepared to be polite to cops, show my passport as necessary, and explain as best I could just why I was walking around sewage treatment plants with camera and binoculars. To my surprise I never had to. The simple fact is that I could walk absolutely anywhere I felt like in Beijing without being hassled by anyone. … There were surveillance cameras, but fewer than in the U.S. or London. Getting on the subway, no one wanted to look inside my bags. All transactions were cash.

…

I saw fewer traffic stops, arrests, and police actions against other citizens than I do in a typical week in the states. In fact, I think I saw a grand total of two, both related to car accidents; and neither looked very serious.

Somehow I thought a one-party, authoritarian state would be more oppressive than this. At least in the capital, Beijing compares favorably to major U.S. cities. To be honest, that doesn’t speak well for the U.S. If we can’t be less of a police state than a one-party, nominally Communist nation like China, then something has gone seriously wrong.

Disclaimer: the plural of anecdote is not data — and this is only a singular anecdote. But I thought it was interesting and postworthy nonetheless.

What important here is that actions speak louder than words. I think that it’s very important to have freedom built into the laws (one thing that the U.S. does better than Canada). However, those laws are only written on goddamn pieces of paper, and if they’re not enforced / respected, then they’re meaningless.

The story is interesting, but the real gold is in the Fark headline:

China surpasses the US as the world’s top carbon producer, making the problem real to conservatives and no longer interesting to liberals

This Slashdot post is very much in the same vein as my earlier blog post on the size of humanity relative to the size of the earth. Here’s the jist:

If you moved every single person in the world to the land area within Texas, we’d have less population density than New York City.

The water outflow of the Columbia River would provide each and every person with nearly 26 gallons of fresh water per day

We could feed all those people - about 500 square meters per person - with the existing farmland within the US

Essentially, we could live mid-density, and feed and provide potable water for every single person on the face of the earth, and not require a single person living outside of Texas - no one on the other 6 continents, the oceans, or any other State. No one in Canada or Mexico.

We could feed everyone without a single acre converted from farmland - wouldn’t need to touch a single acre of forest, nor city, nor ocean, nor park.

The earth can support a LOT of people; the problem is distribution of the resources. And that is a purely political issue. Concerns about too many people on earth are demonstrably false.

(The poster provides links for all of these claims; see the post for URLs. They’re mostly raw factual/wikipedia links with one Vegan Society link to support the food production claim).

Today I was reading this Slashdot story about this article on tapping geothermal energy for human consumption. Good stuff.

Of course any time there’s discussion about new energy sources, someone always brings up the unforeseen consequences argument. In this case: “wouldn’t we cool the earth’s core if we started using it’s energy, causing catastrophe?” This post says “no”:

I’ve seen too many comments about the “effect this would have on magma under the earth if we cool it this way.” The answer to these questions is that for a long long time, we’d have virtually no effect. The scale of human activity is just to small compared to the mass of the earth -the heat source for this power generation method. Go back to school and look at the graphics that show just how thin of an area the crust occupies on the earth. http://iga.igg.cnr.it/geo/what-is-for%20IGAnew_file/image038.jpg Now imagine for yourself just how thin of an area human activity would impact.

The poster misused “area” instead of “volume”, and he’s talking about energy impact rather than physical space, but this post did get me thinking… how much area do we actually take up? I mean us, personally, not our ecological footprint.

So I did the math:

• Start with 1 square metre per person. That’s roughly 3 feet to a side: a little crowded but you’re not pressed up against anyone.
• There’s roughly 6.6 billion people on the planet.
• 6.6 Gm² is 6,600 km²
• 6,600 km² is a bit larger than P.E.I., just about the size of Delaware, and a fair bit smaller than Puerto Rico
• If you divided Earth evenly, each person would get about 77,283 km²m²: 22,567 km² of land and 54,716 km² of water.
• That works out to a plot of land about the same size as Israel or New Jersey, and (mostly saltwater) lake nearly twice the size of Lake Superior an area the size of 14 U.S. football fields, or nearly 1.5 times the base area of the Great Pyramid of Giza.
• If you want to talk volume, each person could get a chunk of Earth 164 km³ big.
• If you limit that volume to 2 m high (the taller of you will have to duck), each piece would be 82,000 km² in area, which is a bit smaller than Austria.

I call dibs on the top-left corner.

Update:I made a big calculation mistake figuring the amount of area per person, which unfortunately lessens the entertainment value.

It figures: now that I’m living in Canada and earning US dollars, the exchange rate between the two hits its worst level in my lifetime.

Still, I’m not complaining too loudly: I did pay off my student loans while the exchange rate was near the historically best levels (circa 1999). Complaining that the exchange rate is poor is like complaining about the weather: you can’t do much about it, unless you’re willing to move… and it’ll probably change by the end of the week anyway.

Microsoft is going to set up shop in Vancouver. One of the reasons for doing so is the more favorable immigration policy in Canada:

The Vancouver area is a global gateway with a diverse population, is close to Microsoft�s corporate offices in Redmond and allows the company to recruit and retain highly skilled people affected by immigration issues in the U.S.

This is a good thing for Vancouver and Canada, a big win for those who favor relaxed immigration policies (such as myself), and a big slap in the face for those in favor of tighter immigration controls — both for economic and homeland-security reasons.

There are smart & talented people all over the world. Those people may not be able to do the work they want to do in their home countries for a variety of economic and political reasons. Many of those people aren’t allowed to work in the U.S. due to the American love-hate relationship with immigration; this practice will allow them to work in a similar (better?) environment. While they do that, they’ll draw a salary (which is largely made up of U.S. money) and spend most of that within Canada (on taxes and domestic purchases).

Microsoft is showing that it’s not just trying to lobby for an H1B cap increase (as many have claimed): they’re serious enough about a real problem to take some actions outside the realm of the U.S. Government. The message to the American closed-border crowd is very clear: current policy is detrimental to business, and if it’s not corrected the U.S.A. will be loose out in the long run.