Day: April 9, 2001

The Cato Institute’s Edward Hudgins wrote an interesting article looking at the Post Office’s financial problems. One of the more amusing part of the piece is this: the Post Office is so inefficient in its operations that it contracts out overnight delivery to a private competitor.

In the long run people will find ways to avoid using the USPS. An exception to its monopoly allows private companies to carry emergency mail for next day delivery, though at government-mandated high prices. The result: 90 percent of overnight mail goes by private carrier. Now the USPS is contracting out to Federal Express to carry USPS express mail. Further, more people will be paying bills electronically over the next decade, reducing USPS revenues by some $15 billion.

Source:

Postal Ploy: “Give Us Your Money or Don’t Get Your Mail!” by Edward Hudgins (Cato Institute)

When I was a kid I thought Willie Stargell was the coolest human being on the planet. ESPN reports that Stargell died from kidney failure early this morning.

ArsTechnica pointed to an article about efforts underway in Egypt to build a digital version of the famous library of Alexandria.

Later this year, a state-of-the-art research facility opens in Alexandria, transforming legend back into reality. Announcing the project, Egyptian first lady Suzanne Mubarak vowed the new Bibliotheca Alexandrina would be “a digital lighthouse for the world.” Many countries are contributing precious archival holdings on microfilm or CD-ROM and returning documents confiscated during wars and occupations.

According to the library’s web site, “he Egyptian Government, in close co-operation with UNESCO, has decided to build a new library in Alexandria to endow this part of the world with an important focal point for culture, education and science.”

The only problem being, of course, that the Egyptian government regularly outlaws books that Muslims find offensive, and still tries and jails academics and intellectuals for crimes like blasphemy. The idea of free inquiry and expression — and its preservation in the legal system — would be a far worthier endeavor than building a library.

Like many people who worked for many of the formerly high rising dot.com companies, Angela Hartley acquired stock options which today are practically worthless. And like an increasing number of people in her situation, Hartley has learned that her worthless stock may actually end up forcing her into bankruptcy thanks to tax laws designed to sock it to the rich.

The tax problem is created by the Alternative Minimum Tax. The AMT was created to lose tax “loopholes” that some wealthier people were using to drastically reduce their tax burden. One of the provisions of the AMT is that taxes have to be paid on incentive stock options — such as those Hartley received at her dot.com job — based on the value of the stock when the options are initially exercised rather than the value of the stock when the shares are actually sold.

When Hartley decided to exercise her stock options, the value on paper of her stocks was $900,000. If she had sold the stocks as soon as she could have, she would have been subject to high capital gains tax so, as many wealthy people do, she held on to the stock rather than sell it. Holding on to the stock for more than a year lowers the capital gains tax but triggers the AMT. The bottom line is after the year wait she would owe a $350,000 tax on her $900,000 stock sale.

The problem: by the time the year was up, her stock was in the tank. In fact, by the time she was actually ready to sell her stock, the value of the it won’t even pay half of her tax bill. Hartley now faces the prospect of selling her home and emptying her savings and retirement funds just to pay tax on paper profits. This for a single mother who had planned to quit her job to take care of her child. As Hartley told the San Jose Mercury Center, “THe irony is I will lose almost everything I have worked for due to the only stock I had that went up.”

Many people who enjoyed paper profits from sky high stock options find themselves in a similar situation as Hartley. Just one more reason to scrap the current income taxation system and start over.

Source:

Many investors running out of options. Mark Schwanhausser, Mercury Center, March 16, 2001.

Wired‘s Kristen Philipkoski has an interesting article about the confusion that some families have between the terms “dead” and “brain dead.” Doctors who perform organ transplants say that families don’t realize the two are the same and often insist on continued medical treatment to people who are dead. As the article notes, keeping a person who is brain dead on life support is absurd.

But medical ethicists and transplant doctors themselves have helped foster this blurring of the line with various proposals for increasing the number of available organs. In fact some doctors and ethicists want to do away with the brain death definition of death and obtain organs from what are euphemistically called non-heart-beating donors.

Imagine I am involved in a horrible car accident and am taken to the emergency room. I suffer a severe head trauma and massive brain damage but I am not brain dead. My body has suffered so much damage — including several heart attacks which required medical intervention to prolong my life — and it is just a matter of time before I die. My family takes me off life support and 36 hours later I am declared dead.

Any organs I might have had to donate for transplantation purposes are pretty much useless. In that 36 hour period my kidneys and other organs began shutting down and are no longer good candidates for transplantation.

What to do? Take a little shortcut. When it’s apparent I’m going to die anyway, doctor wait for me to go into cardiac arrest and don’t intervene to try to restart my heart. Wait two minutes and declare me dead based solely on the cessation of pulmonary activities, and then begin taking organs for transplant. No measure of brain activity is performed, and, in fact, brain activity is almost certainly continuing.

In fact an entire line of criticism of the brain death standard has emerged largely because of desires to take organs from patients who are clearly not viable but who are not technically brain dead either. Is it any wonder that families of dying patients are confused when even the doctors and ethicists can’t agree on how to define death?