Monday, November 30, 2009
Only in Academia Could This Happen
Shannon Love:
Recent revelations that the peer review system in climatology might have been compromised by the biases of corrupt reviewers miss a much bigger problem.
Most climatology papers submitted for peer review rely on large, complex and custom-written computer programs to produce their findings. The code for these programs is never provided to peer reviewers and even if it was, the peer climatologists doing the reviewing lack the time, resources and expertise to verify that the software works as its creators claim.
Even if the peer reviewers in climatology are as honest and objective as humanly possible, they cannot honestly say that they have actually preformed a peer review to the standards of other fields like chemistry or physics which use well-understood scientific hardware. (Other fields that rely on heavily on custom-written software have the same problem.)
Top 10 Green Living Myths...
...can be found here. The first one points out explicitly how the Law of Unintended Consequences applies even to cap-and-trade.
Sunday, November 29, 2009
An Excess of Certitude
Even in light of Climategate, James "Prosecute-Coal-Company-Executives-for-Crimes-Against-Humanity" Hansen is dead certain of the future:
Oh geez. When has climate ever been within anyone's control?
Science reveals that climate is close to tipping points. It is a dead certainty that continued high emissions will create a chaotic dynamic situation for young people, with deteriorating climate conditions out of their control.
Oh geez. When has climate ever been within anyone's control?
Indeed
Christopher Booker in Telegraph.co.uk:
The reason why even the Guardian's George Monbiot has expressed total shock and dismay at the picture revealed by the documents is that their authors are not just any old bunch of academics. Their importance cannot be overestimated, What we are looking at here is the small group of scientists who have for years been more influential in driving the worldwide alarm over global warming than any others, not least through the role they play at the heart of the UN's Intergovernmental Panel on Climate Change (IPCC).
Lest We Forget the Real Goal of Many Climate Alarmists...
some are kind enough to tell us explicitly:
That's right, Pachauri would have us believe that the only thing that can save the world is fascism--though he prefers to think of it as a government-imposed "radical value shift" that remakes Western culture. In my book, that's a distinction without a difference.
Hotel guests should have their electricity monitored; hefty aviation taxes should be introduced to deter people from flying; and iced water in restaurants should be curtailed, the world's leading climate scientist has told the Observer.
Rajendra Pachauri, the chair of the Intergovernmental Panel on Climate Change (IPCC), warned that western society must undergo a radical value shift if the worst effects of climate change were to be avoided. A new value system of "sustainable consumption" was now urgently required, he said.
"Today we have reached the point where consumption and people's desire to consume has grown out of proportion," said Pachauri. "The reality is that our lifestyles are unsustainable."
***
Pachauri caused controversy last year by advocating, in an interview with the Observer, that people should eat less meat because of the levels of carbon emissions associated with rearing livestock.
***
He said that he also believed car use would have to be "curbed": "I think we can certainly use pricing to regulate the use of private vehicles."
That's right, Pachauri would have us believe that the only thing that can save the world is fascism--though he prefers to think of it as a government-imposed "radical value shift" that remakes Western culture. In my book, that's a distinction without a difference.
Saturday, November 28, 2009
Friday, November 27, 2009
Dr. Judith Curry:
What has been noticeably absent so far in the ClimateGate discussion is a public reaffirmation by climate researchers of our basic research values: the rigors of the scientific method (including reproducibility), research integrity and ethics, open minds, and critical thinking. Under no circumstances should we ever sacrifice any of these values; the CRU emails, however, appear to violate them.
Ya think?!
Ya think?!
Charles Sizemore Makes a Good Point:
The continued fall in prices despite the increased interest is disturbing, and the tax credit has a way of understating it. Let’s think about this for a minute. At a median price of $177,900, an $8,000 credit amounts to a 4.5% discount on the price of the house. Prices have “only” officially fallen by 7.1% year over year. But if you assume that buyers calculate the affect of the tax credit into their purchase decision, you have to assume that the “real” price at which the house would have changed hands would be approximately $8,000 less. This means that, year over year, prices in the absence of the subsidy would have been down nearly 12% — a devastating blow to the typical mortgaged homeowner.
In other words, the official statistics are hiding the true extent of the decline in housing. Thanks to a government subsidy, many homes have changed hands over the last year at a price that is $8,000 higher than they would without the subsidy.
In other words, the official statistics are hiding the true extent of the decline in housing. Thanks to a government subsidy, many homes have changed hands over the last year at a price that is $8,000 higher than they would without the subsidy.
An Excess of Certitude
George Will: [T]he greatest threat to civility—and ultimately to civilization—is an excess of certitude. The world is much menaced just now by people who think that the world and their duties in it are clear and simple. They are certain that they know what—who—created the universe and what this creator wants them to do to make our little speck in the universe perfect, even if extreme measures—even if violence—are required.
*
It has been well said that the spirit of liberty is the spirit of not being too sure that you are right. One way to immunize ourselves against misplaced certitude is to contemplate—even to savor—the unfathomable strangeness of everything, including ourselves.
Though these words were written years ago and were directed primarily at religious fundamentalists, they apply equally to scientists in the age of Climategate.
*
It has been well said that the spirit of liberty is the spirit of not being too sure that you are right. One way to immunize ourselves against misplaced certitude is to contemplate—even to savor—the unfathomable strangeness of everything, including ourselves.
Though these words were written years ago and were directed primarily at religious fundamentalists, they apply equally to scientists in the age of Climategate.
The Alarmists Doth Protest Too Much
Why did it take leaked emails and documents for the average liberal to realize that something was rotten in the state of Denmark climate science? Shouldn't the strict secrecy over the data and models used by these alarmists, combined with threats like these, have been sufficient:
NASA's James Hansen has called for trials of climate skeptics in 2008 for "high crimes against humanity.” Environmentalist Robert F. Kennedy Jr. lashed out at skeptics of 2007 declaring “This is treason. And we need to start treating them as traitors” In 2009, RFK, Jr. also called coal companies "criminal enterprises" and declared CEO's 'should be in jail... for all of eternity."
In June 2009, former Clinton Administration official Joe Romm defended a comment on his Climate Progress website warning skeptics would be strangled in their beds. "An entire generation will soon be ready to strangle you and your kind while you sleep in your beds," stated the remarks, which Romm defended by calling them "not a threat, but a prediction."
In 2006, the eco-magazine Grist called for Nuremberg-Style trials for skeptics. In 2008, Canadian environmentalist David Suzuki called for government leaders skeptical of global warming to be thrown “into jail.” In 2007, The Weather Channel's climate expert called for withholding certification of skeptical meteorologists.
A 2008 report found that 'climate blasphemy' is replacing traditional religious blasphemy. In addition, a July 2007 Senate report detailed how skeptical scientists have faced threats and intimidation.
In 2007, then EPA Chief Vowed to Probe E-mail Threatening to 'Destroy' Career of Climate Skeptic and dissenters of warming fears have been called 'Climate Criminals' who are committing 'Terracide' (killing of Planet Earth) (July 25, 2007) In addition, in May 2009, Climate Depot Was Banned in Louisiana! See: State official sought to 'shut down' climate skeptic's testimony at hearing.
Many more examples provided at the above link.
NASA's James Hansen has called for trials of climate skeptics in 2008 for "high crimes against humanity.” Environmentalist Robert F. Kennedy Jr. lashed out at skeptics of 2007 declaring “This is treason. And we need to start treating them as traitors” In 2009, RFK, Jr. also called coal companies "criminal enterprises" and declared CEO's 'should be in jail... for all of eternity."
In June 2009, former Clinton Administration official Joe Romm defended a comment on his Climate Progress website warning skeptics would be strangled in their beds. "An entire generation will soon be ready to strangle you and your kind while you sleep in your beds," stated the remarks, which Romm defended by calling them "not a threat, but a prediction."
In 2006, the eco-magazine Grist called for Nuremberg-Style trials for skeptics. In 2008, Canadian environmentalist David Suzuki called for government leaders skeptical of global warming to be thrown “into jail.” In 2007, The Weather Channel's climate expert called for withholding certification of skeptical meteorologists.
A 2008 report found that 'climate blasphemy' is replacing traditional religious blasphemy. In addition, a July 2007 Senate report detailed how skeptical scientists have faced threats and intimidation.
In 2007, then EPA Chief Vowed to Probe E-mail Threatening to 'Destroy' Career of Climate Skeptic and dissenters of warming fears have been called 'Climate Criminals' who are committing 'Terracide' (killing of Planet Earth) (July 25, 2007) In addition, in May 2009, Climate Depot Was Banned in Louisiana! See: State official sought to 'shut down' climate skeptic's testimony at hearing.
Many more examples provided at the above link.
Another Domino Falls
Zorita wants Mann, Jones and Rahmstorf banned from the IPCC, and for a very important reason.
It's looking more and more like...
global warming was man-made after all. Well, at least the claimed extent of it.
Thursday, November 26, 2009
Not Just Willful Blindness
Reuters: Ireland published a report on Thursday saying church authorities in Dublin covered up child sexual abuse until the mid-1990s.
South Korea Looks at Japan, and Doesn't Like What it Sees
LifeSiteNews.com: The Republic of Korea has signaled its willingness to work to reverse a heavily pro-abortion culture through various measures, including beginning to enforce an abortion ban that has technically existed in the country for decades, in order to address the severe demographic implosion that threatens the country's economic stability, Korean sources report.
The pro-birth effort was announced on Wednesday by the Presidential Council for Future and Vision, and includes proposals to expand benefits for single mothers and provide greater benefits to families with more than two children.
"We have been a society that promoted abortion," Kwak Seung-jun, leader of the Presidential Council, told reporters. "There are few people who realize abortion is illegal. We must work to create a mood where abortion is discouraged."
According to the Korean journal JoongAng Ilbo, the abortion ban - rarely enforced for decades, and even flagrantly violated in the 1960s and 1970s as part of official policy to combat what the government had deemed a "population explosion" - will now be more strictly enforced as part of an overall plan to increase the birth rate and incentivize more women to carry their pregnancies to term.
The pro-birth effort was announced on Wednesday by the Presidential Council for Future and Vision, and includes proposals to expand benefits for single mothers and provide greater benefits to families with more than two children.
"We have been a society that promoted abortion," Kwak Seung-jun, leader of the Presidential Council, told reporters. "There are few people who realize abortion is illegal. We must work to create a mood where abortion is discouraged."
According to the Korean journal JoongAng Ilbo, the abortion ban - rarely enforced for decades, and even flagrantly violated in the 1960s and 1970s as part of official policy to combat what the government had deemed a "population explosion" - will now be more strictly enforced as part of an overall plan to increase the birth rate and incentivize more women to carry their pregnancies to term.
Wowsa
HALF of all Australians born this century will live to 100, experts predict.
I think they are wayyyyy underestimating the future impact of gene therapy, stem cell therapies and nanotechnology.
I think they are wayyyyy underestimating the future impact of gene therapy, stem cell therapies and nanotechnology.
Megan McArdle:
[I] think most people--including me--missed the biggest part of the climate emails story. Sexing up a graph is at best a misdemeanor. But a Declan McCullough story suggests a more disturbing possibility: the CRU's main computer model may be, to put it bluntly, complete rubbish.
Ouch
Lorrie Goldstein: If you're wondering how the robot-like march of the world's politicians towards Copenhagen can possibly continue in the face of the scientific scandal dubbed "climategate," it's because Big Government, Big Business and Big Green don't give a s*** about "the science."
They never have.
What "climategate" suggests is many of the world's leading climate scientists didn't either. Apparently they stifled their own doubts about recent global cooling not explained by their computer models, manipulated data, plotted ways to avoid releasing it under freedom of information laws and attacked fellow scientists and scientific journals for publishing even peer-reviewed literature of which they did not approve.
Now they and their media shills -- who sneered that all who questioned their phony "consensus" were despicable "deniers," the moral equivalent of those who deny the Holocaust -- are the ones in denial about the enormity of the scandal enveloping them.
They never have.
What "climategate" suggests is many of the world's leading climate scientists didn't either. Apparently they stifled their own doubts about recent global cooling not explained by their computer models, manipulated data, plotted ways to avoid releasing it under freedom of information laws and attacked fellow scientists and scientific journals for publishing even peer-reviewed literature of which they did not approve.
Now they and their media shills -- who sneered that all who questioned their phony "consensus" were despicable "deniers," the moral equivalent of those who deny the Holocaust -- are the ones in denial about the enormity of the scandal enveloping them.
Wednesday, November 25, 2009
People that are much smarter than me...
...are getting a look at the actual computer code (and programmers' notes!) that comprise the climate models which scientists have relied on for years to make their predictions, including those contained in the now infamous IPCC reports.
And, not surprisingly (given previous refusals to subject the code to peer review), both the program itself and the data that populates it is a complete and utter mess. And that's not just my opinion, but the opinion of the very programmers hired to build the model!
Unbelievable. Truly unbelievable.
And, not surprisingly (given previous refusals to subject the code to peer review), both the program itself and the data that populates it is a complete and utter mess. And that's not just my opinion, but the opinion of the very programmers hired to build the model!
Unbelievable. Truly unbelievable.
Is This How Peer Review Works These Days?
The Washington Times: In another exchange, Mr. Jones told Mr. Mann: "If they ever hear there is a Freedom of Information Act now in the UK, I think I'll delete the file rather than send to anyone" and, "We also have a data protection act, which I will hide behind." Mr. Jones further urged Mr. Mann to join him in deleting e-mail exchanges about the Intergovernmental Panel on Climate Change's (IPCC) controversial assessment report (ARA): "Can you delete any emails you may have had with Keith re [the IPCC's Fourth Assessment Report]?"
In another e-mail, Mr. Jones told Mr. Mann, professor Malcolm K. Hughes of the University of Arizona and professor Raymond S. Bradley of the University of Massachusetts at Amherst: "I'm getting hassled by a couple of people to release the CRU station temperature data. Don't any of you three tell anybody that the UK has a Freedom of Information Act!"
At one point, Mr. Jones complained to another academic, "I did get an email from the [Freedom of Information] person here early yesterday to tell me I shouldn't be deleting emails." He also offered up more dubious tricks of his trade, specifically that "IPCC is an international organization, so is above any national FOI. Even if UEA holds anything about IPCC, we are not obliged to pass it on." Another professor at the Climate Research Unit, Tim Osborn, discussed in e-mails how truncating a data series can hide a cooling trend that otherwise would be seen in the results. Mr. Mann sent Mr. Osborn an e-mail saying that the results he was sending shouldn't be shown to others because the data support critics of global warming.
Repeatedly throughout the e-mails that have been made public, proponents of global-warming theories refer to data that has been hidden or destroyed. Only e-mails from Mr. Jones' institution have been made public, and with his obvious approach to deleting sensitive files, it's difficult to determine exactly how much more information has been lost that could be damaging to the global-warming theocracy and its doomsday forecasts.
In another e-mail, Mr. Jones told Mr. Mann, professor Malcolm K. Hughes of the University of Arizona and professor Raymond S. Bradley of the University of Massachusetts at Amherst: "I'm getting hassled by a couple of people to release the CRU station temperature data. Don't any of you three tell anybody that the UK has a Freedom of Information Act!"
At one point, Mr. Jones complained to another academic, "I did get an email from the [Freedom of Information] person here early yesterday to tell me I shouldn't be deleting emails." He also offered up more dubious tricks of his trade, specifically that "IPCC is an international organization, so is above any national FOI. Even if UEA holds anything about IPCC, we are not obliged to pass it on." Another professor at the Climate Research Unit, Tim Osborn, discussed in e-mails how truncating a data series can hide a cooling trend that otherwise would be seen in the results. Mr. Mann sent Mr. Osborn an e-mail saying that the results he was sending shouldn't be shown to others because the data support critics of global warming.
Repeatedly throughout the e-mails that have been made public, proponents of global-warming theories refer to data that has been hidden or destroyed. Only e-mails from Mr. Jones' institution have been made public, and with his obvious approach to deleting sensitive files, it's difficult to determine exactly how much more information has been lost that could be damaging to the global-warming theocracy and its doomsday forecasts.
Tuesday, November 24, 2009
The Dominoes Begin to Fall
First, noted global warming alarmist George Manbiot admits:
And now, Tim "Global-Warming-Is-Settled-Science" Flannery, Chairman of the Copenhagen Climate Council, is backtracking:
Given their past zeal as defenders of the IPCC, CRU, etc., both of these gentlemen are to be commended for eating crow.
As a side note, I don't think anything that's come to light so far completely undermines AGW theory. But, the fact is that even most "skeptics" have always admitted that humans were contributing to global warming. The debate has not been whether the earth has warmed over the last century, but how much of that warming was caused by humans, how much it is likely to warm in the future, and therefore how many liberties humanity should be prepared to forfeit to combat it.
Alarmist have relied on models produced by CRU for the IPCC to argue for draconian controls over CO2 production, cost and consequences be damned, while so-called skeptics have argued that the science is not clear and therefore a more measured and less invasive approach is appropriate. Now, in light of climategate, even some of the most ardent alarmists are starting to sound like skeptics.
It's no use pretending this isn't a major blow. The emails extracted by a hacker from the climatic research unit at the University of East Anglia could scarcely be more damaging. I am now convinced that they are genuine, and I'm dismayed and deeply shaken by them.
Yes, the messages were obtained illegally. Yes, all of us say things in emails that would be excruciating if made public. Yes, some of the comments have been taken out of context. But there are some messages that require no spin to make them look bad. There appears to be evidence here of attempts to prevent scientific data from being released, and even to destroy material that was subject to a freedom of information request.
Worse still, some of the emails suggest efforts to prevent the publication of work by climate sceptics, or to keep it out of a report by the Intergovernmental Panel on Climate Change. I believe that the head of the unit, Phil Jones, should now resign. Some of the data discussed in the emails should be re-analysed.
And now, Tim "Global-Warming-Is-Settled-Science" Flannery, Chairman of the Copenhagen Climate Council, is backtracking:
We’re dealing with an incomplete understanding of the way the earth system works… When we come to the last few years when we haven’t seen a continuation of that (warming) trend we don’t understand all of the factors that create earth’s climate...We just don’t understand the way the whole system works… See, these people work with models, computer modelling. So when the computer modelling and the real world data disagree you’ve got a very interesting problem… Sure for the last 10 years we’ve gone through a slight cooling trend.
Given their past zeal as defenders of the IPCC, CRU, etc., both of these gentlemen are to be commended for eating crow.
As a side note, I don't think anything that's come to light so far completely undermines AGW theory. But, the fact is that even most "skeptics" have always admitted that humans were contributing to global warming. The debate has not been whether the earth has warmed over the last century, but how much of that warming was caused by humans, how much it is likely to warm in the future, and therefore how many liberties humanity should be prepared to forfeit to combat it.
Alarmist have relied on models produced by CRU for the IPCC to argue for draconian controls over CO2 production, cost and consequences be damned, while so-called skeptics have argued that the science is not clear and therefore a more measured and less invasive approach is appropriate. Now, in light of climategate, even some of the most ardent alarmists are starting to sound like skeptics.
The Fix Was In
If you've not been following the Climategate scandal closely, Robert Tracinski has a wonderful summary of what we know so far.
"Scandal" doesn't even begin to describe it.
"Scandal" doesn't even begin to describe it.
Sunday, November 22, 2009
First Female Head of National Institutes of Health Says to Ignore New Guidelines on Mammograms
Foxnews.com: The first female to head the National Institutes of Health said Sunday she is advising women to ignore new recommendations by the U.S. Preventive Services Task Force, which last week changed guidelines for mammographies from annually starting at age 40 to every other year starting at age 50.
"I'm saying very powerfully ignore them," former NIH director Dr. Bernardine Healy told "Fox
News Sunday."
Yah, me too.
"I'm saying very powerfully ignore them," former NIH director Dr. Bernardine Healy told "Fox
News Sunday."
Yah, me too.
Update on Climategate
Bishop Hill has a post summarizing some of the details he's garnered from publication of the recently hacked (or leaked) emails and documents of the East Anglia Climate Research Unit (CRU). If true, the information discloses highly unethical (and perhaps even illegal) activities by some of the world's top climate research scientists.
For important background that will put these disclosures in context, see here and here.
While some of the CRU's defenders rightfully point out that this information may have been obtained illegally, the fact is that much of it is apparently subject to the Freedom of Information Act (or the British equivalent) and therefore should have been released years ago in response to numerous requests by Steve McIntyre and others. Thus, some of it may have been withheld illegally in the first place.
UPDATE:> Washington Post coverage of this story can be found here. The most troubling aspect of this post story is the apparent attempt by the world's leading climate scientists to boycott scientific journals that post scholarly articles by AGW skeptics, while chiding those same skeptics for their inability to get more articles published. Shameless.
For important background that will put these disclosures in context, see here and here.
While some of the CRU's defenders rightfully point out that this information may have been obtained illegally, the fact is that much of it is apparently subject to the Freedom of Information Act (or the British equivalent) and therefore should have been released years ago in response to numerous requests by Steve McIntyre and others. Thus, some of it may have been withheld illegally in the first place.
UPDATE:> Washington Post coverage of this story can be found here. The most troubling aspect of this post story is the apparent attempt by the world's leading climate scientists to boycott scientific journals that post scholarly articles by AGW skeptics, while chiding those same skeptics for their inability to get more articles published. Shameless.
Saturday, November 21, 2009
An Update on the US's Strategic Calorie Reserve
The CDC has released nationwide statistics on obesity and diabetes rates on a county-by-county basis. Here's a map summarizing the results:
Scary stuff.
Scary stuff.
Friday, November 20, 2009
Witnessing evolution...
...in real time.
Of course, nothing will satisfy evolutions detractors until they see a bird transform into a dog right before their eyes.
And, of course, evolution doesn't work that way.
Of course, nothing will satisfy evolutions detractors until they see a bird transform into a dog right before their eyes.
And, of course, evolution doesn't work that way.
Stolen Emails Excite Climate Skeptics
The evidence does seem to suggest in places that the fix was in when it comes to measuring temperature.
But, my question is this: Why was it necessarily to obtain this information illegally? Shouldn't science be conducted in the open where both it's methods and its conclusions are subject to scrutiny and peer review?
UPDATE:> Much more on this available here and here.
But, my question is this: Why was it necessarily to obtain this information illegally? Shouldn't science be conducted in the open where both it's methods and its conclusions are subject to scrutiny and peer review?
UPDATE:> Much more on this available here and here.
Muslim Hating
This type if idiocy can't be met with silence.
While it might be possible for one to make a nuanced argument that the Bible is superior to the Koran in matters of morals, statements such as these by Mike Devine (from the above link) can't go unchallenged:
Is his ignorance of the Bible really that vast? He must not recall the words of Deuteronomy 13 which state:
Or those of Deuteronomy 20:10:
Heck, I've only cited one book from the Bible and I've already refuted his premise (and, where the premise if flawed, so is the conclusion).
Yes, words do matter, Mike. Learn them.
While it might be possible for one to make a nuanced argument that the Bible is superior to the Koran in matters of morals, statements such as these by Mike Devine (from the above link) can't go unchallenged:
Nowhere in the Bible will you find admonitions from God or anyone else to prospectively kill. You will find some history of past admonitions at particular times and places in the OT. Moreover, nowhere in the Bible will you find any calls to convert or be killed.
The Koran can make no such claim. For this reason, Islam will always be a danger. Words matter.
Is his ignorance of the Bible really that vast? He must not recall the words of Deuteronomy 13 which state:
6 If thy brother, the son of thy mother, or thy son, or thy daughter, or the wife of thy bosom, or thy friend, which is as thine own soul, entice thee secretly, saying, Let us go and serve other gods, which thou hast not known, thou, nor thy fathers; 7 Namely, of the gods of the people which are round about you, nigh unto thee, or far off from thee, from the one end of the earth even unto the other end of the earth; 8 Thou shalt not consent unto him, nor hearken unto him; neither shall thine eye pity him, neither shalt thou spare, neither shalt thou conceal him: 9 But thou shalt surely kill him; thine hand shall be first upon him to put him to death, and afterwards the hand of all the people. 10 And thou shalt stone him with stones, that he die; because he hath sought to thrust thee away from the LORD thy God, which brought thee out of the land of Egypt, from the house of bondage. 11 And all Israel shall hear, and fear, and shall do no more any such wickedness as this is among you.
Or those of Deuteronomy 20:10:
When thou comest nigh unto a city to fight against it, then proclaim peace unto it.
11And it shall be, if it make thee answer of peace, and open unto thee, then it shall be, that all the people that is found therein shall be tributaries unto thee, and they shall serve thee. 12And if it will make no peace with thee, but will make war against thee, then thou shalt besiege it: 13And when the LORD thy God hath delivered it into thine hands, thou shalt smite every male thereof with the edge of the sword:
14But the women, and the little ones, and the cattle, and all that is in the city, even all the spoil thereof, shalt thou take unto thyself; and thou shalt eat the spoil of thine enemies, which the LORD thy God hath given thee. 15Thus shalt thou do unto all the cities which are very far off from thee, which are not of the cities of these nations. 16But of the cities of these people, which the LORD thy God doth give thee for an inheritance, thou shalt save alive nothing that breatheth: 17But thou shalt utterly destroy them; namely, the Hittites, and the Amorites, the Canaanites, and the Perizzites, the Hivites, and the Jebusites; as the LORD thy God hath commanded thee: 18That they teach you not to do after all their abominations, which they have done unto their gods; so should ye sin against the LORD your God.
Heck, I've only cited one book from the Bible and I've already refuted his premise (and, where the premise if flawed, so is the conclusion).
Yes, words do matter, Mike. Learn them.
What's Going on in Farragut?
A couple of month's ago our house was robbed at gunpoint (no injuries, thankfully), and now police have made an arrest of a suspect in a shooting at the Farragut Kroger.
Geez.
Geez.
IBM Simulates a Cat's Brain on Computer
Well, kinda.
UPDATE: Glenn Reynolds ponders the significance of this event over at Popular Mechanics.
UPDATE: Glenn Reynolds ponders the significance of this event over at Popular Mechanics.
Obama Makes Decision on Afghanistan!
Really?
No, not really.
But the White House wants you to rest assured that he's still fixin' to commence to begin making a decision.
No, not really.
But the White House wants you to rest assured that he's still fixin' to commence to begin making a decision.
Sunday, November 15, 2009
Who Knew?
newsok.com: Oklahomans have a life expectancy 10 years less than those in the rest of the country, and a big factor for that is poor health choices, a House committee was told Thursday.
***
Oklahoma’s life expectancy for women is 72, compared with 82 in other regions of the country, Figart said.
For men, Oklahomans’ life expectancy is 66, compared with 76 nationally.
Figart said the state might as well put up a sign that says, "Come to Oklahoma and die.”
Rep. Ann Coody, R-Lawton, chairman of the House Common Education Committee, called the statistics "absolutely horrifying.”
I'll say.
***
Oklahoma’s life expectancy for women is 72, compared with 82 in other regions of the country, Figart said.
For men, Oklahomans’ life expectancy is 66, compared with 76 nationally.
Figart said the state might as well put up a sign that says, "Come to Oklahoma and die.”
Rep. Ann Coody, R-Lawton, chairman of the House Common Education Committee, called the statistics "absolutely horrifying.”
I'll say.
Saturday, November 14, 2009
What Do Christian Pedophiles Have to do With the Fort Hood Massacre?
There's a big debate over at the dallasnews.com opinion blog about a Muslim's central role in the Fort Hood massacre. The general sentiment seems to be that the government overlooked far too many "warning signs" of Hasan's extremism and that this oversight was due to a culture of political correctness that overvalues diversity and refuses to acknowledge the "Muslim threat". Most posts lament the government's failure to "take action sooner" against Hasan.
Now, followers of this blog know that I don't usually defend the government, but in this case I'm not sure when exactly these critics would have had the government act against Hasan and what exactly they would have had it do? Until the day of the shooting, Hasan had never committed any known crime. True, he spoke critically of US policy toward Muslims, but so do lots of people. He apparently articulated some radical ideas on occasion, but it was often not clear whether these ideas were his own or whether he was simply informing others of the enemy's thought process as part of his duties as any army psychologist. Yes, he had contacts with some radical Muslims, but these contacts could also be explained in part by his job duties.
In short, although I favor racial and religious profiling (for obvious reasons), we must never forget that one's race or religion is only one factor to be considered as part of an overall profile. It certainly is not determinative. And government cannot "take action" against a person based on his or her racial or religious background without compelling justification.
To illustrate the point, consider the following: Why aren't all these people who are so alarmed about "Muslim terrorists" in our midst equally alarmed about all the "Christian pedophiles" among us? I mean, think about it for a minute: Most every high-profile case of child sexual abuse or pedophilia over the last fifteen years has involved...Christians. The biggest example is probably the the hundreds of catholic sex abuse cases, but there are many, many others. The kidnapper of Elizabeth Smart was motivated by his Christian religion (yes, Mormons consider themselves Christian). As was David Koresh, and Warren Jeffs, and Tony Alamo.
And whether or not they were specifically motivated by their faith, a great many other Christians seem to find young children irresistible. Consider this massive collection of news stories of Christians abusing children on church premises or at church functions. And now it turns out that three of the seven members of the Mohler Family were lay ministers.
So, given this history, and if we are to apply the same standard to Christians as Muslims, shouldn't we be prepared to "act sooner" and intervene anytime a Christian exhibits "warning signs", such as...oh...regularly volunteering to lead a youth group or to teach children's Sunday school classes? Shouldn't we have church or government spies monitor such persons' activities for a year or two to insure that they have no ill intent? (I'm being facetious, of course)
An offended Christian might argue that Muslim Jihadist are different than Christian pedophiles because the former do their terrible acts in the name of their religion. But, didn't also Brian David Mitchel and Warren Jeffs and Tony Alamo and David Koresh and many others also justify their sex crimes by their interpretation of Christianity?
An offended Christian could argue that pedophiles aren’t “true Christians”, but many Muslims can (and do) argue that terrorists aren’t true Muslims. (Regardless though, such arguments are indicative of the “No True Scotsman” logical fallacy and are therefore completely unpersuasive).
An offended Christian could argue that most terrorists attacks these days are committed by Muslims, but Muslims could persuasively argue that most acts of pedophilia or child sex abuse (at least in the US) are committed by Christians of one variety or another.
An offended Christian could argue that Jihad is officially tolerated by elements within Islam, but pedophilia has been officially tolerated by certain elements within Christianity (witness again the churches of Warren Jeffs and David Koresh and Tony Alamo and even the Catholic church’s “willful ignorance” of priestly abuses). Such behavior is not overly difficult to rationalize on biblical grounds: A variety of Christian sects simply argue that pedophilia cannot exist within marriage, so marry 'em young and you're fine! After all, the Jewish patriarchs did it that way.
I could continue, but the long and short of it is that, if we are going to permit racial and religious profiling (and I believe we should because they are effective), we must always remember that the race or religion of the profiled is only one factor to be considered. In short, we should be no more or less paranoid about Muslim terrorists than we are Christian pedophiles. Those who would have had the government "take action sooner" against Hasan should remember that.
Now, followers of this blog know that I don't usually defend the government, but in this case I'm not sure when exactly these critics would have had the government act against Hasan and what exactly they would have had it do? Until the day of the shooting, Hasan had never committed any known crime. True, he spoke critically of US policy toward Muslims, but so do lots of people. He apparently articulated some radical ideas on occasion, but it was often not clear whether these ideas were his own or whether he was simply informing others of the enemy's thought process as part of his duties as any army psychologist. Yes, he had contacts with some radical Muslims, but these contacts could also be explained in part by his job duties.
In short, although I favor racial and religious profiling (for obvious reasons), we must never forget that one's race or religion is only one factor to be considered as part of an overall profile. It certainly is not determinative. And government cannot "take action" against a person based on his or her racial or religious background without compelling justification.
To illustrate the point, consider the following: Why aren't all these people who are so alarmed about "Muslim terrorists" in our midst equally alarmed about all the "Christian pedophiles" among us? I mean, think about it for a minute: Most every high-profile case of child sexual abuse or pedophilia over the last fifteen years has involved...Christians. The biggest example is probably the the hundreds of catholic sex abuse cases, but there are many, many others. The kidnapper of Elizabeth Smart was motivated by his Christian religion (yes, Mormons consider themselves Christian). As was David Koresh, and Warren Jeffs, and Tony Alamo.
And whether or not they were specifically motivated by their faith, a great many other Christians seem to find young children irresistible. Consider this massive collection of news stories of Christians abusing children on church premises or at church functions. And now it turns out that three of the seven members of the Mohler Family were lay ministers.
So, given this history, and if we are to apply the same standard to Christians as Muslims, shouldn't we be prepared to "act sooner" and intervene anytime a Christian exhibits "warning signs", such as...oh...regularly volunteering to lead a youth group or to teach children's Sunday school classes? Shouldn't we have church or government spies monitor such persons' activities for a year or two to insure that they have no ill intent? (I'm being facetious, of course)
An offended Christian might argue that Muslim Jihadist are different than Christian pedophiles because the former do their terrible acts in the name of their religion. But, didn't also Brian David Mitchel and Warren Jeffs and Tony Alamo and David Koresh and many others also justify their sex crimes by their interpretation of Christianity?
An offended Christian could argue that pedophiles aren’t “true Christians”, but many Muslims can (and do) argue that terrorists aren’t true Muslims. (Regardless though, such arguments are indicative of the “No True Scotsman” logical fallacy and are therefore completely unpersuasive).
An offended Christian could argue that most terrorists attacks these days are committed by Muslims, but Muslims could persuasively argue that most acts of pedophilia or child sex abuse (at least in the US) are committed by Christians of one variety or another.
An offended Christian could argue that Jihad is officially tolerated by elements within Islam, but pedophilia has been officially tolerated by certain elements within Christianity (witness again the churches of Warren Jeffs and David Koresh and Tony Alamo and even the Catholic church’s “willful ignorance” of priestly abuses). Such behavior is not overly difficult to rationalize on biblical grounds: A variety of Christian sects simply argue that pedophilia cannot exist within marriage, so marry 'em young and you're fine! After all, the Jewish patriarchs did it that way.
I could continue, but the long and short of it is that, if we are going to permit racial and religious profiling (and I believe we should because they are effective), we must always remember that the race or religion of the profiled is only one factor to be considered. In short, we should be no more or less paranoid about Muslim terrorists than we are Christian pedophiles. Those who would have had the government "take action sooner" against Hasan should remember that.
Genetic Medicine is Here
Los Angeles Times: Injecting a gene into thigh muscles of a monkey's leg greatly increased muscle mass and strength, a finding that could have potential application in a variety of human diseases that involve muscular weakening, researchers reported this week in the new journal Science Translational Medicine. The effects have now persisted for as long as 15 months and no side effects have been apparent, according to the researchers from Ohio. Clinical trials in humans are expected to begin next year.
More gene therapy news here.
More gene therapy news here.
Big Progress on Aging
webnewwire.com: A team led by researchers at Albert Einstein College of Medicine of Yeshiva University has found a clear link between living to 100 and inheriting a hyperactive version of an enzyme that rebuilds telomeres – the tip ends of chromosomes. The findings appear in the latest issue of the Proceedings of the National Academy of Sciences.
Telomeres play crucial roles in aging, cancer and other biological processes. Their importance was recognized last month, when three scientists were awarded the 2009 Nobel Prize in Physiology and Medicine for determining the structure of telomeres and discovering how they protect chromosomes from degrading.
Read the whole thing.
Telomeres play crucial roles in aging, cancer and other biological processes. Their importance was recognized last month, when three scientists were awarded the 2009 Nobel Prize in Physiology and Medicine for determining the structure of telomeres and discovering how they protect chromosomes from degrading.
Read the whole thing.
Friday, November 13, 2009
No Wonder It's so Warm There
Florida’s global warming pollution has skyrocketed 36 percent since 1990, according to a report released Thursday by Environment Florida.
Thursday, November 12, 2009
Calling Out Jay Adkisson
Jay Adkisson of the law firm Riser Adkisson, LLP is one of the foremost authorities on the subject of captive insurance companies. For a description of captive insurance companies and their purpose, see here.
While I have a great deal of respect for Mr. Adkisson and the legal work he does, I do take umbrage with his approach to marketing--that is, using scare tactics to drive business to his firm. Reading over portions of the Riser Adkisson website, to which I link above, one could be forgiven for concluding that Mr. Adkisson believes that only his firm is competent to guide clients through the complex web of laws governing captive insurance companies, and that anyone else trying to do so is shyster.
Take, for instance, this web page discussing captives that invest in life insurance. On this page alone, the word "shady" appears twice. "Bogus" appears four times. "Sham" appears five times. "Scheme" appears ten times. "Tax shelter" appears seventeen times. And "promoter" appears twenty-one times. Unfortunately though, none of these terms are used in their narrow, legal sense (to the extent that one exists), but rather as a way of scaring the public away from any advisor but Riser Adkisson.
And, the tarring of other professionals doesn't stop with his choice use of scary words. In fact, he explicitly warns the public not to respect the considered opinion of other professionals:
Apparently, Adkisson would have the reader believe that Adkisson Riser is the only firm qualified to offer its opinion on captive insurance companies, that any opinion from any other firm is dubious--equivalent in quality and substance to those related to the Son of BOSS scandal. I don't think Mr. Adkisson would ever say such offensive things explicitly to another professional's face, but he seems to have no problem doing so by not-so-subtle implication. Very unprofessional.
Furthermore, even when we get to the substance of his website, much of of it is short on analysis and long on conclusions, and invariably those conclusions are overly broad and intentionally alarming. Sometimes, they are even incorrect. To illustrate my point, I will continue analyzing several quotes from this page discussing the advisability of captive insurance companies investing in life insurance.
Adkisson begins by noting that "[s]ubject to the tax restrictions, a captive can invest in pretty much any life insurance policy from any company, so long as there is enough cash value in the policy to meet the reserve requirements -- taking into account all the other assets of the captive." This is true, except that his implication that there are "tax restrictions" on the ability of captives to invest in life insurance is erroneous. No tax authority of which I am aware has published any restrictions or even guidelines on captives investing in life insurance.
He then asserts that if a captive invests all (or substantially all?) of its assets into life insurance, "the IRS might label the entire arrangement to be a 'sham'". First of all, the IRS doesn't have authority to conclusively designate any transaction as a "sham." It can certainly assert that any given transaction is a sham if is so desires, thereby denying the taxpayer the relevant deduction, but the taxpayer is not required to acquiesce to the IRS's characterization and retains the right to challenge the IRS's position in court. So, except for those taxpayers who rollover, it's ultimately a court that decides what is a sham and what isn't, not the IRS.
Second, the word "sham" has a limited meaning in a legal and tax context, and simply purchasing large amounts of life insurance doesn't make something a sham in the absence of significant additional facts. Thus, provided that there are are non-tax reasons for creating the captive insurance company and for it to invest in life insurance, provided that the taxpayer chose to create the captive and invest in life insurance based primarily on those non-tax reasons, and further provided that those non-tax reasons are demonstrable to the IRS (or to a court if the IRS proves unreasonable), the taxpayer need not be overly concerned about the transaction being labeled a tax sham. While investing a significant portion or even all of a captive insurance company's assets into life insurance is one fact that could tend to suggest that the captive was created merely or primarily for purpose of purchasing life insurance with tax favored dollars, such a conclusion isn't required and numerous other facts may completely undermine the assertion.
In fact, as anyone familiar with the benefits and attributes of captives and modern life insurance policies can attest, there are multiple, compelling non-tax reasons to create a captive and invest in life insurance. Both captives and life insurance existed as a popular risk protection and asset accumulation vehicles long before either enjoyed favored tax status. Perhaps in a later post I shall count the many non-tax ways that captives and life insurance benefit the public, but Adkisson's apparent ignorance of them doesn't make those who are familiar with them simple "promoters" of "tax shelters".
Next, in explaining why small physician practices allegedly can't benefit from a captive insurance company, Adkisson says the following:
Oh, really? Nothing?! I suppose physician's don't need administrative actions insurance to protect their practices or their labs in the event of audits by OSHA, CLIA, or other regulatory agencies? And I suppose physicians can 't benefit from business risk indemnity insurance? Or failure of computer operations and/or data restoration insurance? Or contract cancellation insurance, or kidnapping and ransom insurance, or employment practices insurance, or intellectual property insurance, or trademark/servicemark infringement insurance, or terrorism insurance, or insurance for any number of other risks that either aren't typically covered under standard third party insurance policies or which contain numerous exclusions and limitations when they are?
Of course physicians could benefit from such coverage! Purchased for risk management and asset protections reasons, each one of the types of insurance mentioned in the prior paragraph is perfectly legitimate and relevant to most any business owner, including doctors. Furthermore, by purchasing all of the types of insurance noted above, and potentially several more, it's not difficult at all for total premiums paid by a small practice physician to a captive insurance company to legitimately reach six figures, Adkisson's silly assertion to the contrary notwithstanding. Any business, including a physician's practice, that engages in comprehensive risk management and asset protection planning would be crazy not to consider the impact that such contingencies could have on its operations and plan accordingly.
So, why doesn't Mr. Adkisson mention any of these risks as appropriate forms of insurance for a physician to purchase from a captive? Well, I have no benign explanation for this oversight. Perhaps Mr. Adkisson thinks that the benefits of a captive should be reserved only for those large corporations that are his clients, and that smaller businesses (especially if they work with law firms or advisors other than his own?) are likely to just screw things up for everyone. (Normally, I would be reluctant to impute such impure motives to someone I haven't personally met, but Mr. Adkisson never hesitates to assume the worst of insurance agents and other attorneys/advisors that work in "his field", so I'm just returning the favor).
Mr. Adkisson then goes on to criticize professionals who may use "risk pools" as a means of satisfying relevant risk sharing and risk distribution rules. In this regard, he states:
I have a few questions for Mr. Adkisson: Are there ever times when non-shady people establish risk pools? Do risk pools ever insure anything other than "questionable" risks? Are all "risk pools" shams?
The obvious answers to these questions (well, obvious to anyone who knows anything about the captive insurance industry) are as follows: Yes, yes, and no. So, why doesn't Mr. Adkisson distinguish legitimate arrangements from bogus ones rather than implying that all "risk pools" are suspect?
Finally, under the heading "Problems with Life Insurance", we finally get to what appears to be Mr. Adkisson real concern:
Unfortunately, as is so common in this particular article, both his premise and his conclusion are flawed. Highly regulated entities such as insurance companies and banks regularly invest huge amounts of money in life insurance. Nearly seventy percent of Fortune 1000 companies fund their non-qualified deferred compensation plan for their senior executives with life insurance.
And, life insurance doesn't necessarily materially impact an insurance company's liquidity, as Adkisson implies. Modern high cash value policies have a very modest impact on liquidity in the early years and actually greatly enhance potential liquidity in the "out years." Whether such arrangement makes sense for a given captive is determined by the captive's risk profile and expected flow of claims. And, where a captive insures primarily "black swan" types of risks, future liquidity is probably more important than short term liquidity, and life insurance may therefore be among the most appropriate investments it can make (for reasons that have little or nothing to do with taxes).
While it is true that most "real" insurance companies don't invest the vast majority of their assets into life insurance as some captives do, there are very practical reasons why that's the case, none of those reasons have anything to do with the fact that the IRS might consider it a sham if they did, and most all of those reasons don't apply in the context of a closely held captive. To illustrate the point, let's engage in a thought experiment: Assume that a publicly-traded company was structured in such a way that it was economically advisable to invest one hundred percent of its assets into life insurance. Would doing so constitute a sham? Of course not! There's simply no way that the IRS could ever make a case that an existing, publicly held company investing its assets in life insurance is a tax sham if it were otherwise economically advisable for it to do so.
Which really brings home the point: There is nothing inherently wrong with a captive investing in life insurance, and there is no IRS litmus test for how much life insurance is appropriate under a given set of circumstances. Thus, the real question is not whether or how much a captive invests in life insurance, but whether or not the whole captive structure is simply a ruse to purchase on a tax deductible basis assets that could normally only be purchased on an after-tax basis. If so, then what does it matter whether the captive invests in life insurance or something else? Either way, it's a sham! And, if not, then same question: If the captive is legitimate, what does it matter whether it invests in life insurance or something else? Either way, it's not a sham.
Thus, where the taxpayer's pure motives in creating the captive are clear and well documented, I would suggest that limiting investments in life insurance to some "small percentage" or arbitrary limit, as Adkisson suggests, is absurd if business considerations dictate otherwise. Any legitimate company should ultimately invest its assets so as to best achieve its overall business objectives and not merely to satisfy some paranoid fear that the IRS will consider a legitimate arrangement to be a fraudulent one merely because life insurance is involved.
Intrestingly, to his credit, Mr. Adkisson admits as much. At the beginning of his article and at various places throughout, he lays down the the real rules, noting that there are no limits on captives investing in life insurance. But, regrettably, he then attempts to muddy the water through scare tactics in an attempt to dissuade people from contemplating significant amounts of life insurance as an option. Why?
Well, he eventually does tell us why:
In short, Mr. Adkisson makes his money creating and administering captives, presumably for larger corporate clients and not small business owners like "small practice physicians". Large companies have little to no risk of being accused of employing captives as shams, but smaller companies, especially those run by that favorite target of the IRS, doctors (gasp!); and even more those that choose to invest in another favorite target of the IRS--life insurance (gulp!)--are admitedly more likely to use captives in abusive ways. But does Adkisson attempt to distinguish legitimate arrangements from abusive ones? No!
Why? Because if the IRS finds some captives to be abusive, they may seek legislation or propose regulations that would limit the benefits of captives even to the larger companies that Adkisson serves. After all, the IRS has a well-known history of performing delicate surgery with a sledge hammer.
And, should that happen, should the IRS crack down on captives in general, then Mr. Adkisson's business would be adversely affected. As a result, his website makes clear (if only by implication) that he'd rather only "big companies" gain the benefits of captives.
So, small business owners of America, please, please, for Adkisson's sake, run from captives and their "promoters" as fast as you can! This is especially true if you're a "small practice doctor" (gasp!) being approached by a life insurance salesperson (oh, the horror!) Just know that the benefits afforded business by captive insurance companies aren't for the likes of you, and no one else is qualified to "promote" captives other than Adkisson himself. In fact, just pondering these benefits too long could subject you and your tiny business to accusations of fraud(gasp!), or of participating in a sham (gulp!), or of "promoting tax shelters" (yikes!), and this is doubly true if you ponder these arrangements without the assistance of those captive omniscients at Riser Adkisson. In that case, they may even be the ones to throw the first stone at your captive!
Adkisson's public hostility toward the use of life insurance with captives insurance companies, as noted on his website, is all the more mystifying since he personally spoke at the 2009 meeting of the Association for Advanced Life Underwriting ("AALU") and gave a presentation that included a discussion on the benefits of combining life insurance and captives in various ways. During this presentation he even spoke favorably of the particular structure with which I am most familiar. So, why does he speak so broadly negatively of life insurance and captives on his public website when he spoke so positively about it in private at AALU? Perhaps it's because his talk at AALU focused on his way of doing life insurance with captives? If so, this would be consistent with his apparent position that only he knows how these things should be done. In his mind, the rest of us are just self-interested "promoters", but Jay Adkisson is looking out for the public good!
So, now that you know Adkisson's motivations, you should also understand my own: A small but significant portion of my income results form selling life insurance policies to entities affiliated in one form or another with captives (gasp!). Yes, like Adkisson (and everyone else in the world), I am biased. The difference between me and most others, Adkisson included, is that I don't pretend otherwise.
Beware the "unbiased" advisor, for he is not! And now that all biases are on the table, I'll let the reader judge who has the better argument on this particular issue, Adkisson or myself.
Finally, now that I have vented my frustrations, I will offer my apologies to Mr. Adkisson for the tone of my criticism herein. Perhaps he might consider offering his own apology to all those dedicated, knowledgeable, professional captive advisors (attorneys, CPA's, insurance agents, insurance managers, etc.) who he has (inadvertently?) slandered by lumping them together with ignorant or dishonest "promoters" of simple "tax shelters" in his article?
DISCLOSURE: IRS regulations require me to inform you that this post is not intended or written by the me to be used (and cannot be used by you) for the purpose of avoiding penalties that may be imposed with regard to the tax consequences arising from any matters discussed in this message or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed in this message.
While I have a great deal of respect for Mr. Adkisson and the legal work he does, I do take umbrage with his approach to marketing--that is, using scare tactics to drive business to his firm. Reading over portions of the Riser Adkisson website, to which I link above, one could be forgiven for concluding that Mr. Adkisson believes that only his firm is competent to guide clients through the complex web of laws governing captive insurance companies, and that anyone else trying to do so is shyster.
Take, for instance, this web page discussing captives that invest in life insurance. On this page alone, the word "shady" appears twice. "Bogus" appears four times. "Sham" appears five times. "Scheme" appears ten times. "Tax shelter" appears seventeen times. And "promoter" appears twenty-one times. Unfortunately though, none of these terms are used in their narrow, legal sense (to the extent that one exists), but rather as a way of scaring the public away from any advisor but Riser Adkisson.
And, the tarring of other professionals doesn't stop with his choice use of scary words. In fact, he explicitly warns the public not to respect the considered opinion of other professionals:
"Don't be fooled by the promises of the promoters, and the dubious opinion letters of their affiliated pals (remember: Son of BOSS had some of the thickest and most detailed opinion letters of all, and it didn't help)" [hyperlink added].
Apparently, Adkisson would have the reader believe that Adkisson Riser is the only firm qualified to offer its opinion on captive insurance companies, that any opinion from any other firm is dubious--equivalent in quality and substance to those related to the Son of BOSS scandal. I don't think Mr. Adkisson would ever say such offensive things explicitly to another professional's face, but he seems to have no problem doing so by not-so-subtle implication. Very unprofessional.
Furthermore, even when we get to the substance of his website, much of of it is short on analysis and long on conclusions, and invariably those conclusions are overly broad and intentionally alarming. Sometimes, they are even incorrect. To illustrate my point, I will continue analyzing several quotes from this page discussing the advisability of captive insurance companies investing in life insurance.
Adkisson begins by noting that "[s]ubject to the tax restrictions, a captive can invest in pretty much any life insurance policy from any company, so long as there is enough cash value in the policy to meet the reserve requirements -- taking into account all the other assets of the captive." This is true, except that his implication that there are "tax restrictions" on the ability of captives to invest in life insurance is erroneous. No tax authority of which I am aware has published any restrictions or even guidelines on captives investing in life insurance.
He then asserts that if a captive invests all (or substantially all?) of its assets into life insurance, "the IRS might label the entire arrangement to be a 'sham'". First of all, the IRS doesn't have authority to conclusively designate any transaction as a "sham." It can certainly assert that any given transaction is a sham if is so desires, thereby denying the taxpayer the relevant deduction, but the taxpayer is not required to acquiesce to the IRS's characterization and retains the right to challenge the IRS's position in court. So, except for those taxpayers who rollover, it's ultimately a court that decides what is a sham and what isn't, not the IRS.
Second, the word "sham" has a limited meaning in a legal and tax context, and simply purchasing large amounts of life insurance doesn't make something a sham in the absence of significant additional facts. Thus, provided that there are are non-tax reasons for creating the captive insurance company and for it to invest in life insurance, provided that the taxpayer chose to create the captive and invest in life insurance based primarily on those non-tax reasons, and further provided that those non-tax reasons are demonstrable to the IRS (or to a court if the IRS proves unreasonable), the taxpayer need not be overly concerned about the transaction being labeled a tax sham. While investing a significant portion or even all of a captive insurance company's assets into life insurance is one fact that could tend to suggest that the captive was created merely or primarily for purpose of purchasing life insurance with tax favored dollars, such a conclusion isn't required and numerous other facts may completely undermine the assertion.
In fact, as anyone familiar with the benefits and attributes of captives and modern life insurance policies can attest, there are multiple, compelling non-tax reasons to create a captive and invest in life insurance. Both captives and life insurance existed as a popular risk protection and asset accumulation vehicles long before either enjoyed favored tax status. Perhaps in a later post I shall count the many non-tax ways that captives and life insurance benefit the public, but Adkisson's apparent ignorance of them doesn't make those who are familiar with them simple "promoters" of "tax shelters".
Next, in explaining why small physician practices allegedly can't benefit from a captive insurance company, Adkisson says the following:
The principal risk that the physician faces is medical malpractice liability. Usually, the physician doesn't want to move that coverage to the captive because (gulp!) there actually might be a claim. Plus, hospitals may require a certificate of insurance from a rated insurance company as a condition of extending hospital privileges to the physician.
So, the physician wants the big deduction for a captive, but doesn't want to give up their existing medical malpractice coverage. So what does the physician have left that will support a six-figure premium payment to a captive? Nothing!
Oh, really? Nothing?! I suppose physician's don't need administrative actions insurance to protect their practices or their labs in the event of audits by OSHA, CLIA, or other regulatory agencies? And I suppose physicians can 't benefit from business risk indemnity insurance? Or failure of computer operations and/or data restoration insurance? Or contract cancellation insurance, or kidnapping and ransom insurance, or employment practices insurance, or intellectual property insurance, or trademark/servicemark infringement insurance, or terrorism insurance, or insurance for any number of other risks that either aren't typically covered under standard third party insurance policies or which contain numerous exclusions and limitations when they are?
Of course physicians could benefit from such coverage! Purchased for risk management and asset protections reasons, each one of the types of insurance mentioned in the prior paragraph is perfectly legitimate and relevant to most any business owner, including doctors. Furthermore, by purchasing all of the types of insurance noted above, and potentially several more, it's not difficult at all for total premiums paid by a small practice physician to a captive insurance company to legitimately reach six figures, Adkisson's silly assertion to the contrary notwithstanding. Any business, including a physician's practice, that engages in comprehensive risk management and asset protection planning would be crazy not to consider the impact that such contingencies could have on its operations and plan accordingly.
So, why doesn't Mr. Adkisson mention any of these risks as appropriate forms of insurance for a physician to purchase from a captive? Well, I have no benign explanation for this oversight. Perhaps Mr. Adkisson thinks that the benefits of a captive should be reserved only for those large corporations that are his clients, and that smaller businesses (especially if they work with law firms or advisors other than his own?) are likely to just screw things up for everyone. (Normally, I would be reluctant to impute such impure motives to someone I haven't personally met, but Mr. Adkisson never hesitates to assume the worst of insurance agents and other attorneys/advisors that work in "his field", so I'm just returning the favor).
Mr. Adkisson then goes on to criticize professionals who may use "risk pools" as a means of satisfying relevant risk sharing and risk distribution rules. In this regard, he states:
To create the appearance of third-party risk, a shady captive promoter may establish a "risk pool." Each client of the promoter makes premium payments for some questionable risk to an insurance company that is owned or controlled by the promoter. The risk pool then buys reinsurance from each client's captive, thus giving the appearance that each captive is deriving at least 50% of its premiums from third-party risk.
These sorts of risk pools are a sham on several levels.
I have a few questions for Mr. Adkisson: Are there ever times when non-shady people establish risk pools? Do risk pools ever insure anything other than "questionable" risks? Are all "risk pools" shams?
The obvious answers to these questions (well, obvious to anyone who knows anything about the captive insurance industry) are as follows: Yes, yes, and no. So, why doesn't Mr. Adkisson distinguish legitimate arrangements from bogus ones rather than implying that all "risk pools" are suspect?
Finally, under the heading "Problems with Life Insurance", we finally get to what appears to be Mr. Adkisson real concern:
Real insurance companies typically buy little, if any, life insurance as an investment. Instead, they generally hold more traditional and relatively liquid investments like stocks and bonds.
Owning a cash-value life insurance policy in a captive reduces the captive’s liquidity, and thus its ability to pay claims as they arise. It's just not something that a real insurance company would purchase as its principal asset.
The fact that the IRS has never issued guidance that says that a captive insurance company cannot invest in a cash-value life insurance policy doesn’t mean that it’s not a bad idea. Captive owners have worked hard over the years to gain the IRS’s begrudging acknowledgment of the validity of legitimate captive insurance arrangements for tax purposes.
Using a captive as a device to buy cash-value life insurance with pre-tax funds makes it look much less like a bona fide insurance company, and much more like a tax shelter.
Unfortunately, as is so common in this particular article, both his premise and his conclusion are flawed. Highly regulated entities such as insurance companies and banks regularly invest huge amounts of money in life insurance. Nearly seventy percent of Fortune 1000 companies fund their non-qualified deferred compensation plan for their senior executives with life insurance.
And, life insurance doesn't necessarily materially impact an insurance company's liquidity, as Adkisson implies. Modern high cash value policies have a very modest impact on liquidity in the early years and actually greatly enhance potential liquidity in the "out years." Whether such arrangement makes sense for a given captive is determined by the captive's risk profile and expected flow of claims. And, where a captive insures primarily "black swan" types of risks, future liquidity is probably more important than short term liquidity, and life insurance may therefore be among the most appropriate investments it can make (for reasons that have little or nothing to do with taxes).
While it is true that most "real" insurance companies don't invest the vast majority of their assets into life insurance as some captives do, there are very practical reasons why that's the case, none of those reasons have anything to do with the fact that the IRS might consider it a sham if they did, and most all of those reasons don't apply in the context of a closely held captive. To illustrate the point, let's engage in a thought experiment: Assume that a publicly-traded company was structured in such a way that it was economically advisable to invest one hundred percent of its assets into life insurance. Would doing so constitute a sham? Of course not! There's simply no way that the IRS could ever make a case that an existing, publicly held company investing its assets in life insurance is a tax sham if it were otherwise economically advisable for it to do so.
Which really brings home the point: There is nothing inherently wrong with a captive investing in life insurance, and there is no IRS litmus test for how much life insurance is appropriate under a given set of circumstances. Thus, the real question is not whether or how much a captive invests in life insurance, but whether or not the whole captive structure is simply a ruse to purchase on a tax deductible basis assets that could normally only be purchased on an after-tax basis. If so, then what does it matter whether the captive invests in life insurance or something else? Either way, it's a sham! And, if not, then same question: If the captive is legitimate, what does it matter whether it invests in life insurance or something else? Either way, it's not a sham.
Thus, where the taxpayer's pure motives in creating the captive are clear and well documented, I would suggest that limiting investments in life insurance to some "small percentage" or arbitrary limit, as Adkisson suggests, is absurd if business considerations dictate otherwise. Any legitimate company should ultimately invest its assets so as to best achieve its overall business objectives and not merely to satisfy some paranoid fear that the IRS will consider a legitimate arrangement to be a fraudulent one merely because life insurance is involved.
Intrestingly, to his credit, Mr. Adkisson admits as much. At the beginning of his article and at various places throughout, he lays down the the real rules, noting that there are no limits on captives investing in life insurance. But, regrettably, he then attempts to muddy the water through scare tactics in an attempt to dissuade people from contemplating significant amounts of life insurance as an option. Why?
Well, he eventually does tell us why:
"Captive owners have worked hard over the years to gain the IRS’s begrudging acknowledgment of the validity of legitimate captive insurance arrangements for tax purposes.
Using a captive as a device to buy cash-value life insurance with pre-tax funds makes it look much less like a bona fide insurance company, and much more like a tax shelter."
In short, Mr. Adkisson makes his money creating and administering captives, presumably for larger corporate clients and not small business owners like "small practice physicians". Large companies have little to no risk of being accused of employing captives as shams, but smaller companies, especially those run by that favorite target of the IRS, doctors (gasp!); and even more those that choose to invest in another favorite target of the IRS--life insurance (gulp!)--are admitedly more likely to use captives in abusive ways. But does Adkisson attempt to distinguish legitimate arrangements from abusive ones? No!
Why? Because if the IRS finds some captives to be abusive, they may seek legislation or propose regulations that would limit the benefits of captives even to the larger companies that Adkisson serves. After all, the IRS has a well-known history of performing delicate surgery with a sledge hammer.
And, should that happen, should the IRS crack down on captives in general, then Mr. Adkisson's business would be adversely affected. As a result, his website makes clear (if only by implication) that he'd rather only "big companies" gain the benefits of captives.
So, small business owners of America, please, please, for Adkisson's sake, run from captives and their "promoters" as fast as you can! This is especially true if you're a "small practice doctor" (gasp!) being approached by a life insurance salesperson (oh, the horror!) Just know that the benefits afforded business by captive insurance companies aren't for the likes of you, and no one else is qualified to "promote" captives other than Adkisson himself. In fact, just pondering these benefits too long could subject you and your tiny business to accusations of fraud(gasp!), or of participating in a sham (gulp!), or of "promoting tax shelters" (yikes!), and this is doubly true if you ponder these arrangements without the assistance of those captive omniscients at Riser Adkisson. In that case, they may even be the ones to throw the first stone at your captive!
Adkisson's public hostility toward the use of life insurance with captives insurance companies, as noted on his website, is all the more mystifying since he personally spoke at the 2009 meeting of the Association for Advanced Life Underwriting ("AALU") and gave a presentation that included a discussion on the benefits of combining life insurance and captives in various ways. During this presentation he even spoke favorably of the particular structure with which I am most familiar. So, why does he speak so broadly negatively of life insurance and captives on his public website when he spoke so positively about it in private at AALU? Perhaps it's because his talk at AALU focused on his way of doing life insurance with captives? If so, this would be consistent with his apparent position that only he knows how these things should be done. In his mind, the rest of us are just self-interested "promoters", but Jay Adkisson is looking out for the public good!
So, now that you know Adkisson's motivations, you should also understand my own: A small but significant portion of my income results form selling life insurance policies to entities affiliated in one form or another with captives (gasp!). Yes, like Adkisson (and everyone else in the world), I am biased. The difference between me and most others, Adkisson included, is that I don't pretend otherwise.
Beware the "unbiased" advisor, for he is not! And now that all biases are on the table, I'll let the reader judge who has the better argument on this particular issue, Adkisson or myself.
Finally, now that I have vented my frustrations, I will offer my apologies to Mr. Adkisson for the tone of my criticism herein. Perhaps he might consider offering his own apology to all those dedicated, knowledgeable, professional captive advisors (attorneys, CPA's, insurance agents, insurance managers, etc.) who he has (inadvertently?) slandered by lumping them together with ignorant or dishonest "promoters" of simple "tax shelters" in his article?
DISCLOSURE: IRS regulations require me to inform you that this post is not intended or written by the me to be used (and cannot be used by you) for the purpose of avoiding penalties that may be imposed with regard to the tax consequences arising from any matters discussed in this message or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed in this message.
Wednesday, November 11, 2009
Tuesday, November 10, 2009
Some interesting items were sold at auction recently...
...including a leaf from the Gutenberg Bible.
South Africa is in Shambles
Timeslive.com: Former president Thabo Mbeki came under fierce attack once again as Health Minister Aaron Motsoaledi released shocking statistics on the devastation HIV/Aids has inflicted on the country's population.
Motsoaledi said South Africans now had an average life expectancy as low as that of the people of a country at war.
"Life expectancy in South Africa at 47 years is like Afghanistan, which is at 44 years, and we know that they are at war. That means we are like a country that is at war," he said.
In 2005 life expectancy was 50.7 years compared to 63.3 years in 1990, according to Statistics SA.
The pathetic story of post-apartheid South Africa gets very little attention. It's not a politically correct narrative, I suppose.
Motsoaledi said South Africans now had an average life expectancy as low as that of the people of a country at war.
"Life expectancy in South Africa at 47 years is like Afghanistan, which is at 44 years, and we know that they are at war. That means we are like a country that is at war," he said.
In 2005 life expectancy was 50.7 years compared to 63.3 years in 1990, according to Statistics SA.
The pathetic story of post-apartheid South Africa gets very little attention. It's not a politically correct narrative, I suppose.
WSJ regarding Hasan:
Warning Signs May Have Been Missed.
I love the use of the passive voice in this headline. How convenient.
I love the use of the passive voice in this headline. How convenient.
Let's Make a Deal
I won't vote for the government to put a gun to your head and make you do things that you don't want to do if you'll grant me the same courtesy.
Deal?
Deal?
Kindle for PC is Here
Yep, now you can read that can't-put-down book from your Kindle Reader, your iPhone and your PC.
I'm a big fan of Kindle. Being able to read the same book from nearly any location without ever losing your place or your bookmarks is quite an experience, though workplace productivity probably just took a big hit.
UPDATE: Tim Conneally has a review of Kindle for PC. Sounds like it's not yet ready for prime time.
I'm a big fan of Kindle. Being able to read the same book from nearly any location without ever losing your place or your bookmarks is quite an experience, though workplace productivity probably just took a big hit.
UPDATE: Tim Conneally has a review of Kindle for PC. Sounds like it's not yet ready for prime time.
Unnatural Male Enhancement
FoxNews.com: After implantation with replacement tissue, lab rabbits that once had damaged penises had working organs and could produce offspring.
"Further studies are required, of course, but our results are encouraging and suggest that the technology has considerable potential for patients who need penile reconstruction," said researcher Dr. Anthony Atala, director of Wake Forest University Baptist Medical Center's Institute for Regenerative Medicine in Winston-Salem, N.C.
Such methods could potentially aid men who just want to enhance their normal penises, rather than repairing any damage.
"Further studies are required, of course, but our results are encouraging and suggest that the technology has considerable potential for patients who need penile reconstruction," said researcher Dr. Anthony Atala, director of Wake Forest University Baptist Medical Center's Institute for Regenerative Medicine in Winston-Salem, N.C.
Such methods could potentially aid men who just want to enhance their normal penises, rather than repairing any damage.
Monday, November 9, 2009
Lifestyle Choices v. Life Expectancy
7thspace.com: The current health care debate in the United States is complicated. Trade-offs between heath care expenditures, lifestyle choices and life expectancy have been suggested but seldom clearly demonstrated. The U.S. spends on average more than $45,000 per year on health care for every 80 year old, while the Europeans spend $12,000 for the same age group. U.S. octogenarians have a 20 percent less chance of dying than Europeans in the next year. But, more than 30 percent of the U.S. population is obese, compared to less than 10 percent of Europe's population.
"Many of the lifestyle choices that we make as adults have negative health consequences," said Paul Fischbeck, professor of social and decision sciences and engineering and public policy at Carnegie Mellon University. "But once we reach retirement age, it appears that differences in the medical systems start to favor the U.S."
***
The research shows that prostate cancer, which has few lifestyle risk factors, is a much greater killer in Europe. In 11 European countries (including Sweden, Norway, Switzerland, Denmark, Netherlands and the United Kingdom) a man in his 70s has a higher chance of dying from prostate cancer than a man in Mississippi, the U.S. state with the highest risk. When compared to residents of Hawaii, the U.S. state with the lowest prostate cancer risk, Europeans are two to three times more likely to die from prostrate cancer.
The tables are reversed when comparing the diabetes death risk for men in their 70s, a risk highly related to lifestyle choices and obesity. Fifteen European countries (including Greece, the United Kingdom, Norway, Germany and France) have lower risks than Iowa, the U.S. state with the lowest risk. Louisiana, the U.S. state with the highest risk, has a risk that is 10 times greater than Iceland, the lowest risk European country for diabetes.
Read the whole thing.
"Many of the lifestyle choices that we make as adults have negative health consequences," said Paul Fischbeck, professor of social and decision sciences and engineering and public policy at Carnegie Mellon University. "But once we reach retirement age, it appears that differences in the medical systems start to favor the U.S."
***
The research shows that prostate cancer, which has few lifestyle risk factors, is a much greater killer in Europe. In 11 European countries (including Sweden, Norway, Switzerland, Denmark, Netherlands and the United Kingdom) a man in his 70s has a higher chance of dying from prostate cancer than a man in Mississippi, the U.S. state with the highest risk. When compared to residents of Hawaii, the U.S. state with the lowest prostate cancer risk, Europeans are two to three times more likely to die from prostrate cancer.
The tables are reversed when comparing the diabetes death risk for men in their 70s, a risk highly related to lifestyle choices and obesity. Fifteen European countries (including Greece, the United Kingdom, Norway, Germany and France) have lower risks than Iowa, the U.S. state with the lowest risk. Louisiana, the U.S. state with the highest risk, has a risk that is 10 times greater than Iceland, the lowest risk European country for diabetes.
Read the whole thing.
Saturday, November 7, 2009
Climate Change as Religion
Judge holds that belief in climate change may be entitled to protected status as a religious belief.
Genetic Medicine is Here
Los Angeles Times: In the third gene-therapy success of recent weeks, French researchers have arrested the progression of the rare and fatal degenerative disorder adrenoleukodystrophy, which was at the heart of the popular movie "Lorenzo's Oil." The disease has stabilized in two boys who were 7 years old when the therapy was performed two years ago, the team reported today in the journal Science.
"This is a disease that never, ever stabilizes" on its own, said Dr. Katherine A. High of the Children's Hospital of Philadelphia, who was not involved in the research. "The fact that they were able to achieve that means they are getting a therapeutic effect."
This is the fifth disease for which gene therapy has been shown to be beneficial, said Dr. Theodore Friedmann of UC San Diego, who was also not involved. "That's a major achievement for a field that has been in the clinic for only 18 or 19 years. . . . This is a new form of medicine and deserves to be seen as such."
Indeed. Read the whole thing.
"This is a disease that never, ever stabilizes" on its own, said Dr. Katherine A. High of the Children's Hospital of Philadelphia, who was not involved in the research. "The fact that they were able to achieve that means they are getting a therapeutic effect."
This is the fifth disease for which gene therapy has been shown to be beneficial, said Dr. Theodore Friedmann of UC San Diego, who was also not involved. "That's a major achievement for a field that has been in the clinic for only 18 or 19 years. . . . This is a new form of medicine and deserves to be seen as such."
Indeed. Read the whole thing.
How Can This Be? I Thought They Had Socialized Medicine?!
DailyMail: Gap in life expectancy between rich and poor 'bigger than in Victorian times' despite Labour promises.
Wednesday, November 4, 2009
Big Trouble in Big China
Russell Hsiao: Even as the Chinese economy under the Hu-Wen administration is set to wean through the global financial crisis with a remarkable eight percent growth rate this year, senior officials from the Ministry of Civil Affairs under the jurisdiction of the State Council, which is responsible for social and administrative affairs, revealed that China's aging population—people older than 60 years old—reached 12.79 percent (169 million) of the total population at the end of 2008 (Xinhua News Agency, October 26).
That equates to almost half the US population.
That equates to almost half the US population.
More Than Just the Economy Reminds Me of the 1930's
Videos uncovered of school children singing praises to the Dear Leader Obama. Really.
Here's the lyrics from my favorite:
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Change
That we can believe in
Change
That we can believe in
Change
That we can believe in
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Change
That we can believe in
Change
That we can believe in
Change
That we can believe in
Yeah, haha, haha.
Alright, come on now, here we go;
You know we gotta get Barack and all of his crew
In the White House so they can prove that
In their hearts they know what to do
And that includes Michelle and the kiddies too
[kids chanting] “There is not a black America and white America and Latino America and Asian America — there’s the United States of America.”
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Heil the O!
Here's the lyrics from my favorite:
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Change
That we can believe in
Change
That we can believe in
Change
That we can believe in
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Change
That we can believe in
Change
That we can believe in
Change
That we can believe in
Yeah, haha, haha.
Alright, come on now, here we go;
You know we gotta get Barack and all of his crew
In the White House so they can prove that
In their hearts they know what to do
And that includes Michelle and the kiddies too
[kids chanting] “There is not a black America and white America and Latino America and Asian America — there’s the United States of America.”
We believe in Barack Obama
He loves you and he loves your mama
We believe in Barack Obama, yeah
With all the change he’s building
Gonna bring hope to the children
We believe in Barack Obama, yeah
Heil the O!
Dumb and Dumber
ATT&T Sues Verizon Over "There's a Map for That" Ads.
I predict they'll lose, and bring more publicity to their competition at the same time. Pretty dumb.
I predict they'll lose, and bring more publicity to their competition at the same time. Pretty dumb.
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