Friday, August 22, 2008

McCain another Bush?

Jack Cafferty writes at CNN about how McCain seems to be as intellectually vacuous as George W. Bush.


Hume's Ghost said...

He has to be, doesn't he? The inmates are now running the asylum in the GOP and their presidential candidate has to run against reality to appease the base.

Hence the mocking of Obama when he made the accurate statement about tire inflation and care maintenance.

tom said...

I'm not a McCain supporter, but it would improve the debate for everyone if detractors like Cafferty would stop pretending that McCain's "$5 million" remark was meant seriously. It's hard to win people over when even a small part of your case involves putting blatant & disingenuous misconstruals in front of them.

Jim Lippard said...

Actually, I think that his $5 million remark was both serious and *correct*.

Most of the candidate questions about what makes somebody "rich" are based on complete ignorance of the difference between income and wealth.

Obama has had income of over $1M per year for the last three years, but his net worth is barely over $1M, because he's spending most of the money he makes. Apparently he bought a house worth nearly $2M once he first got a big book advance, which has no doubt greatly increased his living expenses. In my opinion, if you've had three years of > $1M income but your net worth is barely over $1M, you're probably doing something very wrong. In his case, I suspect he's counting on a continued future of such high-level income, which is almost certainly correct in his circumstances, but he's certainly not being frugal.

On the other hand, having a $1M net worth doesn't make you rich--if you have $1M at retirement, that will support you for 30 years at $40K/year, which is below-average income. $5M, by contrast, will give you 30 years of $200K/year. (In both cases assuming a 4% annual draw from retirement funds.)

tom said...

I'm not sure I understand your comment, so apologies if I've managed to get your point backwards, but I think both parts of your first statement there are wrong.

First, that it's "correct": McCain's $5 million remark was about income, not net worth. But I take you to be saying that $5 million is actually a reasonable cutoff (for what counts as "rich") when considering net worth, but not when considering income. Have I misunderstood you?

If I'm right about the first part, then I doubt I need to muster much of a case to establish that he was clearly joking. He makes the comment and chuckles, Warren cracks up, the audience laughs, and McCain starts saying "but seriously ...seriously ... the point is, seriously..."

Here's the video, in case you haven't seen it in context:

Einzige said...

What if a person's $5M net worth was entirely tied up in inaccessible vacant land in Southern Utah? Would they be "rich"?

Now, imagine a talented Neurosurgeon who easily makes $250K per year, but rents an apartment in Manhattan and owns no other real estate or stocks/bonds... Is that person "rich"?

Perhaps these are unlikely scenarios.

Jim Lippard said...

Tom: You're correct that my discussion was about $5 million net worth.

$5 million income doesn't say anything about whether the earner is rich. If you earn $5 million on expenses of $10 million, you're $5 million in the hole.

If the average person were suddenly to receive a windfall of $5 million, they would probably become rich--and probably would remain so for a very short period of time, because most people have little conception of finance. Thus my "lottery winners and losers" category of posts, which is very heavy on the "losers" side.

tom said...

Gotcha. I agree with your point about net worth, and income vs. expenses, I just didn't see it as germane to the issue of McCain's comments.

While you're on the topic of lottery winners&losers: This American Life did a good segment on the phenomenon you mention (they interviewed someone who buys up lottery jackpots and pays out lump sums; he explains the sad truth about what happens to his clients and their lump sums).
Costs a buck to download but you can listen to the whole thing for free on their site. If you're interested, it's Act II of this episode:

The interviewee has a book called "Money for Nothing: One Man's Journey through the Dark Side of Lottery Millions." Haven't read it, but I figured the title might spark your interest. :)

workingsmart said...

After reading the comments and the initial blog here mccain sounds reasonable. Obama's attacks seem lame when he has to distort what mccain said in order to attack him. I'm really pissed off at where this election is heading.

Ktisophilos said...

Shrubby obtained better Uni grades than both alGore and Kerry.