Consulting by RPM || Free Advice Blog

Income and Consumption: It’s OK to Be Different

You kids know me, when Steve Landsburg has a new post up with which I find myself in 99% agreement, I have to focus on what I don’t like. (It’s not a grudge or anything. I’m actually testing the Coase Theorem’s prediction that Steve will efficiently offer me $10,000 to leave him alone.)

Anyway, both Landsburg and Scott Sumner (with whom I agree only about 15% of the time, but that’s because he spends 85% of his posts talking about one topic) have lately been hitting their familiar theme of the evils of income taxation. (1, 2, 3) Of course, I totally agree that the government shouldn’t be taxing people’s income, and I also agree that the income tax screws up the intertemporal allocation of present vs. future consumption, and thus inefficiently penalizes saving.

Nonetheless, the way Landsburg and Sumner go about making their case, disturbs me. To give a 30,000 foot view, they often come across as saying: Investment income is really just deferred consumption out of prior wages, and so it’s not fair to tax people more heavily just because they are quirky and happen to enjoy a lifetime consumption stream that’s biased to the right. I don’t have the time to go hunting and make an airtight prosecution. My only pieces of evidence are: [UPDATE: Upon re-reading, I understand what the commenter was saying and why Steve agreed.] (A) a commenter at Landsburg’s site says something that is arguably wrong, depending on how it is interpreted (as my example below demonstrates), and Steve merely says, “Point extremely well taken.” (B) Sumner actually wrote a post saying the very concept of income was “meaningless, misleading, and pernicious.”

Before jumping into my example, here’s my basic message: As the title of my post indicates, consumption and income are different terms, and that’s OK. They are both important. Just because consumption is a more useful concept than income for certain questions, doesn’t mean we should therefore jettison the latter. (So Sumner is wrong.) Furthermore–and this point is less obvious–the standard way that a lot of free-market guys critique the income tax, obscures exactly what the concept of income does for civilization. In short, accountants aren’t fools; there’s a reason they construct Income Statements. (Have you ever heard of a Consumption Statement?)

Without further ado, here’s another Excel chart. (Don’t worry, there are no apples in this example.)

So here’s what’s going on in the table above:

There are two brothers, Paul and Freddy. They each work at a job and earn a single paycheck of $100,000, in the beginning of period 1. Paul blows the whole paycheck on consumption that period. Freddy, in contrast, only consumes half of that paycheck. He saves the rest in a bank account, where it earns 5% 10% interest every period.

The middle column tracks Freddy’s consumption through five periods. The accounting in this example is discrete (not continuous), so I have Freddy earn his interest income at the beginning of period 2 from the $50,000 in wealth that he held at the “end of period” (eop) 1. (Just to reiterate, Paul and Freddy only get labor income of $100,000 at the start. Then neither of them labors another second.) You can see the vagaries of Freddy’s wealth, as he changes his consumption from period to period. During period 5, Freddy consumes his remaining wealth, and so ends with nothing, just as Paul had done by the end of period 1.

Now here is what Steve Landsburg and Scott Sumner want us to take away from this demonstration: Both Paul and Freddy put in the same labor effort in period 1. They each earned $100,000 in salary or wages. Paul is prodigal, and consumed it all immediately. Freddy, in contrast, deferred his enjoyments, and spread the consumption out over 5 periods. However, if you calculate the present discounted value of Freddy’s consumption from the perspective of period 1 then you find over his lifetime, Freddy will consume exactly $100,000 worth of goods and services, just like Paul.

So Landsburg and Sumner argue that because of this phenomenon, clearly it would be unjust to have an income tax, or at least to have a tax on capital income (as opposed to labor income). In the table above, if there had been an x% income tax every period (that didn’t distinguish between labor and capital income), then Freddy would clearly pay more in taxes during his life. In period 1, he would pay the same in taxes as Paul, but then in periods 2 – 5 he would get dinged on his interest income too. Even in present value terms calculated in period 1, Freddy would pay more in taxes during his lifetime, and not because he was “richer” than Paul–so Landsburg and Sumner would argue–but merely because he decided to spread out his consumption.

Another way of seeing this important point is to imagine that there are extensive derivative markets to deliver future goods. (The casual reader probably wants me to call these “futures markets,” but that’s actually not right. Really what we’re talking about here is Freddy using all of his income in period 1 to buy call options with a strike price of $0, on the consumption items dated periods 2 – 5 that he desires.) So in period 1, Paul buys a steak dinner for $100, but Freddy buys an airtight claim to a steak-dinner-delivered-in-period-3 for $90.70 $82.64. (This assumes the spot price of a steak dinner will still be $100 in period 3.)

If this is how Freddy arranged his affairs in period 1, in order to set up his desired lifetime consumption stream using that paycheck from period 1, then gosh it really does look like Paul and Freddy are both spending all of their paychecks in period 1–it’s just that they have different tastes. Paul likes burgers-with-pickles, while Freddy likes burgers-with-onions. Fine; the government shouldn’t be taxing the latter but not the former, because that wouldn’t be fair. Yet by the same token, if Paul likes to eat “steak-in-period-1” while Freddy likes to eat “steak-in-period-3” then why the heck should Freddy suffer a higher tax burden?

Now we can finally see why Scott Sumner hates the very concept of income. As the table above shows, even though Paul and Freddy have the same lifetime consumption (measured in market value in period 1), Freddy nonetheless has a higher lifetime income–even if we measure everything in PDV terms in period 1. (This has to be true, since Paul and Freddy both have $100,000 in labor income in period 1. So the further interest income that Freddy earns during periods 2 – 5, no matter how highly discounted, will still in period 1 push Freddy over the top in terms of lifetime income.)

For the purists, another way of seeing the injustice that so irks Landsburg and Sumner is that even doing the derivatives trick would still ding Freddy, so long as the IRS properly measured people’s accounting income. Specifically, if Freddy buys that claim ticket to a steak in period 3 that we discussed, it had a market value of $90.70 $82.64 in period 1. As time passes, that asset appreciates in market value. Maybe the government won’t ding him on the capital gain until it is realized, but when he exercises the claim in period 3, presumably the IRS will say, “Ah! You just exercised that option, which currently has a market value of $100. So you owe us tax on that capital gain from the asset you purchased at a lower price in period 1.” My point is, Freddy can’t help but earn income, even if he avoids banks and the stock market, if we do the accounting right. Because of the positive interest rate, in period 1 he can lock in consumption goods in the future, for a lower price than what their spot values will ultimately be at the time of consumption. That’s the source of the growth in Freddy’s wealth over time (offset by his consumption) and his income.

We now come to my main point: Thus far I’ve just been saying how smart Landsburg and Sumner are. So what the heck is my deal? Well, you might get the idea from those two guys that income is, I don’t know, a meaningless or useless concept. But that can’t possibly be right; of course we need income.

Specifically, Freddy can use the notion of income to guide his decisions through time. In any period, Freddy’s income tells him, “This is how much you can consume this period, without reducing your wealth below last period’s level.” Put differently, if interest rates are expected to remain constant, then your (net) income in a period tells you how much you could consume, if you wanted to maintain that level of consumption forever.

To see how that works, look again at Freddy’s numbers. In period 2, he consumed exactly his income of $5,000. That’s why his wealth at the end of period 2 was the same as it was at the end of period 1. If Freddy continued to consume $5,000 per period, his wealth would remain constant at $50,000 and he could tread water like that perpetually.

But Freddy got impatient. In period 3 he consumed twice his income. So he consumed $5,000 of his wealth or capital; he dissaved $5,000. That’s why he ended up with only $45,000 in wealth at the end of period 3.

So what? Who cares if wealth goes down? Well, that means (with constant interest rates) that in period 4, his income is now only $4,500. That means, just to tread water, Freddy now has to settle for only $4,500 in consumption. Put differently, his one-time splurge of living above his means in period 3, would forever condemn Freddy to $500 less consumption per period, if he just wanted to maintain his wealth at its new, lower level.

Then, just to round out the discussion, I have Freddy consuming all of his wealth in period 5.

In simple little thought experiments like this, Freddy might not care about such questions as, “Did I live beyond my means last period?” or “How much can I consume this period without reducing my opportunities in the future?” But in the real world–especially when things change all the time, from period to period, and we learn new information–we have to continually update our plans. In such a world, the concept of income is crucial.

Sumner is mad at the concept of income because it makes Freddy seem richer than Paul, and hence gets hit with a bigger tax burden. But that’s because Sumner is using a hammer to tighten a screw. The relevant concept is wealth, and yes, given our assumptions in this scenario, Paul and Freddy both have the same wealth in the beginning of period 1, as a result of that paycheck.

Now Sumner might complain, “OK, but in period 2 Paul has no wealth, and Freddy still has a bunch. So this is misleading.” No, it’s not. Who the heck said we should forever be condemned to calculating things from the perspective of period 1? In period 2, looking at Paul and Freddy, it really is the case that Freddy is richer in material terms, and can enjoy a higher standard of living.

We can go ahead and acknowledge these obvious facts without thereby endorsing an income tax (let alone a wealth tax). Look, I can use Sumner’s own logic against him: Take two identical twins, Lazy Larry and Workaholic Will. Larry cuts lawns once a week, and spends all $100 on consumption. Will cuts lawns every day, and spends all $700 on consumption. Under Sumner’s call for a progressive consumption tax, Will not only pays more in absolute terms, he actually pays a higher percentage of his potential consumption to the taxman. And why? Simply because Will has quirky tastes and prefers to exchange more of his leisure for other goods and services. How arbitrary is that, Sumner? What do you have against work? I think we can all see that “consumption” is a meaningless, misleading, and pernicious concept, since it gives ammunition to silly calls for a consumption tax, which is really just a penalty on work.

Last point: As the government debt debate made very clear, an important fact of life is that many people work and invest not to consume, but to pass on an estate to their heirs. That’s yet another reason that people in the real world ask their accountants to keep track of their assets and income.

Irony Alert

I was reading my favorite Keynesian’s blog today, and happened to glance at the right side, where it has links to his actual NYT columns. Here were the blurbs for his second- and third-most recent ones:

Taxes at the Top
By PAUL KRUGMAN
As Mitt Romney dances around calls for him to release his tax returns, a question about U.S. tax policy comes up: Why do the rich bear a startlingly light tax burden?

How Fares the Dream?
By PAUL KRUGMAN
Martin Luther King would see a nation that judges people by the size of their paychecks.

Ludwig von Mises 1, Abba Lerner 0

I am working on my article for this month’s Lara-Murphy Report. (Carlos had mentioned that he been reading Human Action lately, and noticed that Mises talks matter-of-factly about people saving via insurance policies, so I’m elaborating on that phenomenon.) I came across this passage (pp. 843-844) which made me feel dumb:

In the process of the unhampered market economy Bill saves one hundred dollars and deposits it with a savings bank. If he is wise in choosing a bank which is wise in its lending and investing business, an increment in capital results, and brings about a rise in the productivity of labor. Out of the surplus thus produced a part goes to Bill in the shape of interest. If Bill blunders in the choice of his bank and entrusts his hundred dollars to a bank that fails, he goes emptyhanded.

In the process of government interference with saving and investment, Paul in the year 1940 saves by paying one hundred dollars to the national social security institution. He receives in exchange a claim which is virtually an unconditional government IOU. If the government spends the hundred dollars for current expenditure, no additional capital comes into existence, and no increase in the productivity of labor results. The government’s IOU is a check drawn upon the future taxpayers. In 1970 a certain Peter may have to fulfill the government’s promise although he himself does not derive any benefit from the fact that Paul in 1940 saved one hundred dollars. Thus it becomes obvious that there is no need to look at Soviet Russia in order to comprehend the role that public finance plays in our day. The trumpery argument that the public debt is no burden because “we owe it to ourselves” is delusive. The Pauls of 1940 do not owe it to themselves. It is the Peters of 1970 who owe it to the Pauls of 1940.The whole system is the acme of the short-run principle. The statesmen of 1940 solve their problems by shifting them to the statesmen of 1970. On that date the statesmen of 1940 will be either dead or elder statesmen glorying in their wonderful achievement, social security.

In fairness to my younger self, Mises doesn’t go through and spell out exactly the Nick-Rowian-OLG-endowment-economy point; Mises couches the discussion in terms of capital accumulation. Still, everything he says above is right, including the nonsense of the “we owe it to ourselves” line.

Jon Stewart on Newt Gingrich

HT2 the LRC blog:

New Ways of Understanding the Debt Burden Dialog

Curse Dean Baker! Not only did he mislead (through the amplification by Paul Krugman) millions of people about the danger of government deficits, but then he went and posted again on the topic. This allowed me to skirt my earlier pledge to not post anything else on this.

If you can stand it, over at Nick Rowe’s blog (which I think he shares with some other Canadian[s]) we are very close to achieving total consciousness in the comments. If I may be so bold, I believe my skills now exceed that of my master. (If you have time for just one, try this.)

First, some related posts of interest, and then I will offer a completely fresh approach to illustrate what’s going on:

* This guy’s a philosopher or something, but he thinks I’m funny so he’s A-OK in my book. In this post, he illustrates the mechanism by considering per capita tax burdens and bond payments, before and after the next generation is born, and depending on whether the parents share their bonds or hold on to them. This perspective might make it click for some of you.

* This guy has a funny summary of the whole debacle too, but he has dumped my role down the memory hole. So I don’t like him as much as my new friend, the philosopher.

* Given the timing of this post, I can only conclude that Brad DeLong saw that his Keynesian allies had driven right into quicksand. Rather than risk falling in himself, DeLong kept his remarks curt and merely threw them a rope with which they might pull themselves out.

OK but now on to a new way to think about this. Forget government debt for the moment. Think of the beautiful, pristine, laissez-faire economy. I’m going to talk about one of its virtues that I have never seen discussed by pop writers.

Suppose there is a scientist who realizes that a certain, small asteroid has (say) $10 trillion worth of very easily extractable metals, even adjusting for the drop in the price of the metals with the increased supply. Only this scientist knows the exact trajectory of the asteroid. Given the technology of private spacefaring at the time of his discovery, it would cost (say) $10 million to send a nuclear bomb out into space to detonate at just the right spot to make the asteroid land on Paul Krugman’s house. (Thus we achieve both private and social benefits.)

Seems like a no brainer, right? We further assume that there’s no problem with property rights and that kind of stuff. The scientist gives the engineers the precise coordinates, and BOOM it’s a simple operation to bring that baby in, and shower $10 trillion in wealth into his estate. Since it only costs $10 million to execute the plan, duh, of course he’ll do it, as if led by an Invisible Hand. He just needs to explain the situation to some venture capitalists, they will understand all the details (perfect capital markets), and boom, there ya go.

Oh shoot–there’s a hitch. The asteroid is really far away, and it won’t actually smash into the area currently occupied by Krugman’s house, until the year 2112. Will the scientist and venture capitalists still go ahead with the scheme?

Well, if they care about their kids and grandkids, sure they will. What better inheritance to bequeath, than the property rights to the $10 trillion in metals that will land on Earth in 2112?

Oh shoot–these guys are all eunuchs. Even worse, they are misanthropic eunuchs. They don’t care about future Earthlings.

Well that’s that, I suppose. Another market failure to add to the next edition of Krugman & Wells….

Wait a tic! What if the scientist and the venture capitalists auction off their property rights to some other investors? For example, at a 5% discount rate, the looming $10 trillion jackpot in 2112, is worth about $76 billion today. (I think I did that right. It’s 2am my time, if not.) So the venture capitalists put up the $10 million to fund the launch of the nuclear bomb, then they auction off the property rights in the asteroid (when it crashes in 2112), for $76 billion. They split up the sizable surplus with the scientist in a mutually agreeable way.

But wait a second, who would be so stupid as to buy that property claim? People who are neither eunuchs nor misanthropes?

Well maybe; that would solve the problem right there. But even investors who were also eunuchs and misanthropes would be willing to do it. Let’s say they are 40 years old right now. (You’d have to be at least 40, to have accumulated $76 billion to put up for such a project.) They put in their $76 billion today, then sell the property right for about $257.5 billion when they’re 65 and want to retire. It was a sure-fire way to earn 5% per year on their money, so that’s why they did it.

At that time–the year 2012+25 = 2037–a new batch of 40-year-old investors grabs the torch. They carry it for another 25 years (i.e. till 2062), then sell it for about $872 billion to another group of investors. They in turn sell it (in the year 2087) for about $2.95 trillion to another group. These guys in turn hold it for the remaining 25 years, and when the asteroid crashes into Krugman’s great-grandkids’ house, they sell the metals for $10 trillion, thus earning 5% per year on their retirement fund.

When you step back and think about what happened, it’s quite beautiful. Even though the planet didn’t have physical access to the cornucopia on the asteroid until 2112, in a very real sense the earlier generations “consumed” that wealth. In particular, the scientist and venture capitalists who made it all possible got the lion’s share of the benefits. They got to consume $76 billion of goods and services in their retirement years, and nobody was hurt by it. Where did this massive bout of consumption come from? Well, from the asteroid. But you have to think through the overlapping generations to see exactly how it was “passed backward” through time, metaphorically.

OK now that we’ve got that one under our belt, consider a new one: A politician in the year 2012 says to a bunch of venture capitalists: “Hey! I have just discovered a way to give $10 trillion to the holder of a particular property right in the year 2112! There is this technology called ‘guns, prisons, and a docile population who will report on tax cheats.’ What do you guys say? If you lend me $76 billion, I’ll sell you this piece of paper entitling the bearer to get the $10 trillion our government will tax in the year 2112.”

So the logic is the same as in the asteroid case. People in the year 2012 enjoy $76 billion worth of consumption (assuming that’s how they use the raised funds–it’s possible they spend it on finding a cure for cancer). Where does it come from? Why, out of the hides of the indentured servants who work for the taxman in the year 2112. The bond markets and overlapping generations allow that slave wealth* to be passed backward through time, metaphorically.

* Purists such as Gene Callahan will object to the term “slave.” If he has a better term for one group of people using force to extract wealth from workers who had absolutely no say in the decision–they weren’t even alive when the process was set in motion–I will consider his suggestion.

UPDATE: Two important things.

#1: Of course I’m kidding about blowing up Krugman’s house.

#2: Notice that in the second scenario, the people in 2112 “owe the government debt to themselves.” The government at that time is taxing money from some of the great-grandkids, to hand over to other great-grandkids. Clearly it’s just a distributional issue at that time, and it would be nonsense to somehow think that the people consuming the $76 billion of goodies in 2012 were in any way living at the expense of the people living in 2112….right?

Krugman and Kuehn Take Me to the Woodshed on the 1920-1921 Depression

I have all sorts of sarcastic wise-alecky things I could say, but let me just play the straight man on this one. On Sunday Krugman had a quick post titled “Harding” in which he alluded to unnamed gnats who kept repeating that the 1920-1921 experience showed the success of austerity policies. Krugman at that time referred to his earlier post on the subject, and then said:

And let me be peevish: if you’re reading this blog, before demanding that I respond to some argument or other, why not use the little search box off to the right? Not always, but often, I’ve already done what you demand.

(Keep that in mind; it will prove humorous in a bit.)

Then I imagine what happened is that someone (perhaps Daniel Kuehn himself) either in the comments or over email, informed Krugman that Kuehn had recently published a note in the Cambridge Journal on just this issue. So in a follow-up post on Monday, titled “More Than You Want to Know About Warren Harding,” Krugman wrote:

So naturally I clicked on the link to Daniel’s paper, where I read this: “Contrary to the claims of Woods (2009) and Murphy (2009), most of the austerity measures were implemented by the Wilson administration before industrial production peaked in January 1920.”

I thought, “That’s funny. I was meticulous in my research of the fiscal year / presidential term issues. There’s no way I made the mistake Daniel is attributing to me.” The reason I remembered, incidentally, is that the federal fiscal years ran on different dates back then (from starting in July 1, not October 1 as they do now), and presidents were inaugurated in March, not January. So you have to be careful when assigning events to one administration versus another.

Now when Daniel cites “Murphy (2009)” he is referring to my Freeman article. I was curious to see if, by condensing the research I had done for my book, I ended up sounded like I was one of the right-wing fools who doesn’t understand how calendars work, that Daniel and Krugman find so exasperating.

Well no, because neither “Harding” nor “Wilson” appear in my Freeman article. (I mean that literally: I just tried searching for the terms at the webpage of the article; no hits.) Not only does my article consist of true statements, there is nothing even misleading (at least regarding the presidents responsible for what) in there.

Then, just for fun, I looked up my fuller treatment in my book, The Politically Incorrect Guide to the Great Depression and the New Deal. (BTW if you call yourself my fan and haven’t read that book yet, well, I don’t know what that is, but it’s something. It’s like saying you went primal and you eat a croissant for lunch every day.) Here’s an interesting excerpt. It’s a bit long but please do read the whole thing slowly. I think you will enjoy it, if you’ve understood the criticism that Krugman and Daniel have leveled above. The italics are in the original, but the bold I have added right now:

As with the evaluation of Hoover’s high-wages policy, his high-federal-budget policy can be usefully contrasted with the depression occurring at the end of Woodrow Wilson’s watch. With the conclusion of World War I, the U.S. government slashed its budget from $18.5 billion in FY 1919 down to $6.4 billion one year later. As the U.S. economy entered a depression at the turn of the decade, receipts fell. The Wilson Administration responded by cutting spending even more, down to $5.0 billion in FY 1921 and then following with a single-year slash of 34 percent, down to $3.3 billion in FY 1922. (Because of the fiscal/calendar year mismatch, it is debatable whether Wilson or Harding should be associated with the FY 1922 budget.)

So how do the two strategies stack up? We already know that Hoover faced 20+ percent unemployment after the second full year of his Keynesian stimulus policies. Wilson/Harding, on the other hand, was Krugman’s worst nightmare, taking the axe to federal spending in a way that would have given even Ron Paul the willies, and during a depression to boot! Yet as we already know, unemployment peaked at 11.7 percent in 1921, then began falling sharply. The depression was over for Harding, at the corresponding point when a desperate Hoover had decided to (try to) rein in his massive budget deficits.

In fairness, we should concede that there can be no truly controlled experiments in the social sciences. It is theoretically possible that Krugman’s interpretation of history is correct. Presumably he would argue that the 1920-1921 depression was exacerbated (or perhaps even caused) by the enormous cuts to government spending. And he might further argue that Hoover’s profligacy averted unemployment rates of, say, 40 percent in 1931.

But Occam’s Razor recommends the simplest answer staring us in the face: the old-school economic wisdom was correct, while the newfangled Keynesian remedies proved disastrous. (For what it’s worth, Coolidge never let federal spending exceed $3.3 billion, even though he presided over the most prosperous decade in U.S. history.) During a depression, when every private citizen is cutting nonessential spending, the government should do so as well. The experience of the Harding and Coolidge administrations reminds us that Americans used to treat government as a (huge) business; it could run up debts during emergencies such as war, but then it had to pay them off as a matter of fiscal responsibility. (Murphy, pp. 49-50)

Incidentally, I am pretty sure (though not positive) I wrote the above before I even knew who Daniel Kuehn was. I don’t think I was reluctantly dealing with an objection that a Keynesian had raised to my views on 1920-1921; I’m pretty sure (again, not positive) that I actually tried to be a Keynesian for a minute and look at the world with such eyes.

This post is already long, so let me hit one other major point: In his Cambridge note, Daniel refers matter-of-factly to the “austerity” under Herbert Hoover. Huh? In the last fiscal year that can be attributed to Hoover, the federal budget deficit was 4.5% of GDP. In the first three years of FDR’s reign–when Christina Romer says FDR’s deficits ushered in the strongest recovery in American history, and showed the strength of countercyclical fiscal policy–the deficit averaged 5.1 percent of GDP.

I’m not so sure the historical record is as solidly pro-Keynesian and Krugman and Kuehn would have us believe.

P.S. It may appear that I’m throwing Tom Woods under the bus in this post, but I’m not. It’s true that if you read Tom’s article (cited by Kuehn), you might walk away thinking all of the budget cuts occurred under Harding. But as far as I can tell, Tom makes nothing but true statements, and he has some great quotes from leftist historians on the mystery of the 1920-1921 depression. Anyway, time is scarce and I’ll let Tom defend his honor from the young whippersnapper if he wants.

P.P.S. There are some other elements of Kuehn’s note that, in a perfect world, I would address. But I’m not a tenured academic, and nobody is paying me to respond to him. I will just note that there is a lot of assertion, example the stuff about the recovery being ushered in by Fed loosening. I’m not saying I know this to be wrong–after all, it would be consistent with canonical Austrian business cycle theory, do we all agree?–but I’m saying Daniel hasn’t demonstrated it. For example, he hasn’t (in that note at least, maybe he did it in his earlier article) shown that the unemployment rate only started falling until after the Fed changed course.

How the Private Bankers Are Using the Financial Crisis to Reshape World Government

How’s that for a neutral title? If you are willing to play this in the background, there are a few decent jokes sprinkled throughout.

Mick and Gene Discuss the Weather

GENE: It’s really nonsensical, all these people talking about the chance that it might rain during the Super Bowl. It can’t possibly rain in February, it’s too cold. It’s true, it might snow, but that’s something else entirely.

MICK: I understand why you might think that, but you’re wrong. We can easily imagine atmospheric conditions under which it rains in February.

GENE: Are you listening to me? Think about what you’re saying. It’s winter time, you know? Brrrrr. A jolly fat man in a red suit. Bing Crosby didn’t sing, “I’m dreaming of a wet Christmas.” Wow I can’t believe how bad the press is, when reporting the weather.

MICK: I promise you, I really do understand what your intuition is here. But I’m certain you are wrong. Even in February, it can still be the case that the air is above the freezing point, and so precipitation takes the form of liquid water, not ice crystals. It is entirely possible for it to rain in February.

GENE: *sigh* OK sure. I agree with you that if a bunch of Army helicopters strapped big basins to their undersides, and dumped a bunch of water on the stadium, it would seem like it was raining. But c’mon, Mick, that’s not what I’m talking about. You know that. Let’s rule out Army helicopters, and Superman freezing a lake with his breath then picking up the slab of ice, etc. etc. I’m saying under the real-world conditions as we face them, it won’t rain at the Super Bowl.

MICK: I’m sort of at a loss here. I’m not invoking anything like that at all. I’m saying your original argument is totally wrong.

GENE: Mick, are you forecasting that it will rain on the Superbowl?

MICK: Huh? Well, no, I mean, I hadn’t really thought about it…

GENE: Uh-huh that’s what I thought. Like I was saying, these fears about rain on Super Bowl Sunday are ludicrous.

MICK: Look, I’m not trying to be a jerk or anything, but your actual argument was invalid. If you want to say you think in practice it won’t rain this particular Super Bowl Sunday, you may very well be right–

[GENE’s fans:] What the heck is this guy’s deal? Is he getting paid by the umbrella lobby?

GENE: Look Mick, we both know that it would make for a much nicer Super Bowl if it were sunny, right?

MICK: Of course.

GENE: All right then. Are you willing to go on record saying it won’t be sunny?

MICK: No.

GENE: All right then. Like I was saying all along, these people warning about rain on the Super Bowl are idiots.