Sammamish High School graduate, and Washington state gubernatorial candidate Rob McKenna is looking like a case study of the failure of our schools to teach basic, real world, mathematical skills. (Have at it Cliff Mass!)
The short version: Rob McKenna attempts to do an analysis of Washington state budgets…and ends up soiling himself.
Rob McKenna was pushing some awfully fishy numbers during his campaign kick-off (via Goldy):
Here is some red meat from McKenna’s “triumphant” speech:
I went back and I crunched the numbers for the state budget to figure out where the spending’s been going—what’s been driving it. I looked at one 10-year period: 1998 to 2008. And what I discovered is that, in that 10 year period, every single year the state increased the amount it spent per employee by 5 percent, every year for 10 years.
[…]In that same 10-year period, the state increased the amount it spent on state worker benefits by 9 percent a year every single year for 10 years.
The fact is that by every rational measure, state government has been shrinking over the past few decades, in per-capita spending, per-capita taxes, per-capita state workers, and most importantly, as a percentage of the economy, with state general fund revenues falling from 6.9 percent of personal income in 1995 all the way down to 4.7 percent today. McKenna may sound smart and informed and trustworthy and all that, but he’s just not being honest with voters.
He digs even deeper into the bullshit here. But, you know, Goldy is just a filthy blogger journalist for a vile, extreme leftist blog newspaper, so what does he know?
Now the AP is on the case. And they can dig a little deeper because, unlike Goldy who is blacklisted by the McKenna campaign, the AP can ask follow-up questions of McKenna.
Their conclusion?
Problem is, a couple of McKenna’s key numbers were wrong, exaggerating the speed of government growth.
McKenna, who currently serves as attorney general, described his statistics in slightly different ways during both an interview with The Associated Press and his campaign speech. After The AP repeatedly questioned the validity of the statistics, his campaign provided details on how he reached his totals. Those written calculations indicated that he was using faulty math.
The crux of the problem is that McKenna doesn’t understand the basic mathematics of compounding growth. On his claim that the state annually “increased the amount it spent per employee by 5 percent “:
McKenna reached his incorrect numbers after seeing a 48 percent growth over the decade. His supporting documents indicate that he took that number and divided by 10 years to reach his conclusion about 5 percent annual growth.
But annual growth can’t be calculated so easily. Because each year’s increase compounds on top of the last, a 5 percent annual growth for 10 years would end up being 63 percent growth for the decade — not 48 percent.
The correct number is 3.6 percent per year, which is pretty much the same as the 3.5 percent average for all of Washington state over the same period.
As to McKenna’s claim that the state annually increased benefits by “9 percent a year…for 10 years”? Nuh-uh. Same error:
To reach his 9 percent number, McKenna relied on the same questionable math he used to calculate the salary figures. The state’s overall spending for worker benefits actually rose an average of 7.1 percent annually during that time.
Average benefit increases per employee were even less, growing by about 5.4 percent each year, with rising health care costs driving up expenses just like in the private sector.
What the AP missed, and what Goldy points out, is that the benefits calculation is the largest component of the “amount [the state] spent per employee” increase McKenna raised first. But it comes off as in addition to the first (erroneously calculated) number.
McKenna’s speech is dishonest in other ways, as both Goldy and the AP points out. He implies a 13 percent per year increase in number of state employees, when the 13 percent actually refers to the increase over a decade. Oopsies!
Dishonesty is bad in a politician even though we have acquired a certain immunity that seem to allow politicians like McKenna to get away with fabrication and distortion.
My beef is with McKenna’s inability to work with the most elementary of budget mathematics. The AP has flat-out busted McKenna for his failure to understand the mathematics of growth—the same math one uses for understanding investment interest, population growth, budget projections, mortgage costs, etc.
Governors don’t really have to understand the Fundamental Theorem of Integral Calculus or the Pythagorean theorem.
But, holy shit, incompetence with the elementary mathematics of budget growth? That makes a Rob McKenna in the Governor’s seat nothing short of a fiscal calamity waiting to happen for Washington state.
Since when have the Fascists ever cared about mathematics? It is always the first thing after History on the chopping block when they pass school budgets. McKenna is just another Christie. And he’s courting the same white supremecist/evilangelical voting bloc.
Ignorance is Strength!
McKenna once looked like a serious contender for the governorship, but he’s increasingly coming across as a slimebucket snakeoil peddler. He’s making it easy for the Democrats to extend their wining streak.
Given that McKenna is promising to make state government “leaner,” and is currently an elected state official with nearly absolute autonomy over his own 1,000-employee state agency, someone should look up McKenna’s budgets for the past several years and see what, if anything, he’s done to make the state agency he currently runs more efficient. His track record in the AG’s office, not his campaign spiel, is the best evidence of whether he possesses the ability to make state government “leaner.”
Let’s see, in 2009, the agency run by Rob McKenna requested $245.2 million and 1,142.5 FTEs.
http://www.ofm.wa.gov/budget09/recsum/100.pdf
In 2011, the agency run by Rob McKenna requested $223.85 million and 1,024.2 FTEs.
http://www.ofm.wa.gov/budget11/recsum/100.pdf
Roger Rabbit Commentary: Hmmm, that’s a 7.6% cut in spending and 10.3% cut in staff positions in two years. The overall state operating budget was cut 4.1% over the same period. However, if you take a closer look, you’ll see that education spending is fairly inflexible (no surprise there) and the brunt of cuts fell on general government agencies (which includes AGO) which took an average of 12.55% of cuts in the two-year period ($829 million in 2011-13 versus $948 million in 2009-2011). So McKenna’s agency was cut less than the average for general state government over the two years he’s been in office. Betcha anything he was making a pitch to the governor’s office and OFM (Office of Financial Management) budget writers to spare his agency from deeper cuts, just like all the other agency heads did.
http://www.ofm.wa.gov/budget09.....lights.pdf
http://www.ofm.wa.gov/budget11.....itures.pdf
So the question is, if McKenna wants to be governor so he can make state government “leaner,” why isn’t he taking advantage of the public office he already holds to set the example by making his agency leaner than the rest?
Hmmm, one of my posts just went into purgatory, probably because of the number of links in it. I’ll summarize it, in case it fails to appear here later. Comparing the 2009-2011 and 2011-2013 budgets, the funding allocation for McKenna’s agency (AGO) was cut by 7.6% compared to 12.55% for all general government agencies, so his agency was cut much less than the rest of general government.
Rob McKenna fails math
by Darryl, 06/20/2011, 3:04 PM
My beef is with McKenna’s inability to work with the most elementary of budget mathematics. The AP has flat-out busted McKenna for his failure to understand the mathematics of growth—the same math one uses for understanding investment interest, population growth, budget projections, mortgage costs, etc.
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This is typical libhole bullshit; everything must be compounded except, of course, the growth in spending on government employees.
In addition to his lack of math skills, Robbie has a strained relationship with the truth. The only value he holds is that of self-promotion.
Americafirst @ 6,
“This is typical libhole bullshit”
There is nothing particularly liberal or conservative in what I said.
If you take the growth rate for a 10 year period and divide it by 10 to get an “annual growth rate”…YOU FAIL.
It is a fact, and denying this makes you look like a total blathering idiot!
“everything must be compounded except, of course, the growth in spending on government employees.”
What are you babbling about now? Please try again. Take a deep breath, there, Squirt, and attempt some coherence.
6
Actually, twit, what McKenna said is simply not true–state worker pay did not grow by 5% each year for 10 years. Does that even matter to ideologues like you? Does the truth matter at all?
@9
No, it doesn’t. The Fascists are very clear on their program. Eliminate the Constitution, eliminate public offices that uphold the law. Eliminate any and all public responsibility for education, law enforcement, prisons, roads and public lands. Hand everything over to Corporate interests and privatize the entire system. Their purpose is to tear everything down that had stood for 230 years and replace it with private enterprise where you have to hold stock in some Business to have any say, and any say you might have would be based in how much stock you own.
They don’t even try to hide it anymore. It is exactly the same as it was in the 1920’s-1930’s. The same program, by the same people for the same reasons.
10: “They don’t even try to hide it anymore.”
I think that might be the scariest aspect of this breed of antidemocratic corporatists. They are so brazen and self-assured that they figure they can sell their poison to the American populace without even hiding (not really, anyway) their agenda.
If the Seattle Times ever stops to wipe their chin, they too will see this man is full of shit. Massively intellectually lazy, especially when he wants to make a point that benefits his corporate overloads and screws over the working man. He is another nasty Scott Walker in the making.
@11: hide it from whom? Who is even investigating this? Certainly not the Corporate Media they own. I guess they’re not afraid of HA and the Stranger. Yet.
And Bobbie Mac goes down. Great job Goldy & Darryl.
Two months ago, McKenna blasted the state’s rosy projection of 13% revenue growth over two years. Now he wants to increase education funding by spending all that new found money.
@8. Darryl spews:
Americafirst @ 6,
What are you babbling about now? Please try again. Take a deep breath, there, Squirt, and attempt some coherence.
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Thanks, I will try again with pleasure, as your typical libhole response simply points out yet another characteristic of libholes; you can’t focus.
I posted:
“This is typical libhole bullshit; everything must be compounded except, of course, the growth in spending on government employees.”
I was pointing out that if you insist upon compounding the economic growth figure you should also compound the government spending on employees figure to be consistent. Your mind is so full of silly ideas that you forgot all about what I said in my post; there was not one word in your response about why economic growth should be compounded but government spending should not. I will try to make it easier for you.
What is your reason for compounding the economic growth figure but not compounding the spending on state employees figure, and be sure to not forget the 9% figure for state worker benefits, which would greatly inflate if compounded.
I’m sure that you must have a reason, maybe that 9% growth in state benefits figure is simply too tiny to bother with, but please try to focus on the question.
@16
Geeze, it’s the AP that’s saying Bobbie Mac screwed the pooch.
Why All Wingnuts Should Be Rounded Up*
“Those who can make you believe absurdities can make you commit atrocities – Voltaire”
* This is, of course, an absurd idea — I plagiarized it from Ann Coulter, an absurd person if there ever was one.
@17 “which would greatly inflate if compounded”
You’ve got it bass ackwards.
Americafirst @ 16,
You are still babbling like an ignorant (and petulant) child.
The problem is that McKenna DIDN’T properly do the compounding.
He STARTED with a 10 year growth figure and reverse engineered the ANNUAL rate improperly, which INFLATED it. (Try working it in reverse and you will receive enlightenment.)
“What is your reason for compounding the economic growth figure but not compounding the spending on state employees figure, and be sure to not forget the 9% figure for state worker benefits, which would greatly inflate if compounded.”
NOPE! You got it COMPLETELY BACKWARD.
Get some fiber in your diet, think deeply about it, and get back to us when you’ve figured it out.
(Sheesh…wingnuts!)
@20. Darryl spews:
Americafirst @ 16,
NOPE! You got it COMPLETELY BACKWARD.
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This just keeps getting better, now you claim that I have it backwards without having a word to say on just how I have it backwards. Thanks for making my point yet again.
Damn, we need to get us some better trolls.
But, here’s the thing. I’ve worked enough campaigns to know that wasn’t just Bobbie Mac, this was a team effort. And when they got done writing their spiel they tested it out before they ran with it.
So the question is: did his whole team screw the pooch or did they know it was wrong and run with it anyway?
@21 You remind me of what I was like in 7th grade algebra.
@21
You can’t really be that stupid (if you are, the banks would LOVE to sell you a mortgage).
As the above story reads, McKenna made the exact same error twice. The first time he said that state employee spending grew 5 percent every year, it was in fact 3.6 percent. In the second case, he said that worker benefits spending increased 9 percent when it was in fact 7.1 percent. The example of compounding means you can’t just take a total percentage and divide by the number of years which McKenna did for both examples.
@7 (continued) P.S.: I eventually got it. I don’t think you ever will.
Here’s a clue: McKenna got his percentages by simple division. For example, if benefits cumulatively increased by 90% over 10 years, he divides 90 by 10 to get 9% a year.
But here’s how his math actually works: 1 x 1.09 = 1.09 (year 1) x 1.09 = 1.19 (year 2) x 1.09 = 1.30 (year 3) x 1.09 = 1.41 (year 4) x 1.09 = 1.54 (year 5) x 1.09 = 1.68 (year 6) x 1.09 = 1.83 (year 7) x 1.09 = 1.99 (year 8) x 1.09 = 2.17 (year 9) x 1.09 = 2.37 (year 10).
As you can see, a 9% annual increase would result in a 137% cumulative increase over 10 years, not 90%. Thus, McKenna has overstated the increase by more than half again as much.
This is what we call “lawyer math.” Lawyers figure if they get within $100,000 of a whiplash victim’s actual loss, that’s close enough for legal work. If you’re the plaintiff’s lawyer, you round up. If you’re the insurance company’s lawyer, you round down.
McKenna, a lawyer, doesn’t mind if he’s off several billion dollars. It’s how he was trained, and it’s how he has always practiced.
A number of years ago, when Gregoire was AG, I attended a legal seminar at which her top underling on the tobacco settlement explained how they calculated the damages, which were based on estimates of what smoking cost the State of Washington in Medicaid payments to sick smokers over a period of many years. I immediately noticed there was no interest in the calculation. When I asked him about it after his presentation, he acted like he didn’t know what interest is, or what it’s for. The guy had no concept of the time value of money. He blew off my explanation as if it wasn’t important, the extra calculation step was just too much trouble, and the lawyers on both sides couldn’t be bothered with it. That’s an example of what happens when you turn math over to lawyers.
@26 “You can’t really be that stupid”
Yes he can — he’s a wingnut. Are you beginning to understand now how Republicans brought the economy to its knees? And we can’t even prosecute them, because how can you form a criminal intent if you’re too stupid to understand that if you add two plus two, you get the same number every time, and it isn’t three or five or seven or eleven-and-a-half.
Americafirst @ 21,
“This just keeps getting better, now you claim that I have it backwards without having a word to say on just how I have it backwards. Thanks for making my point yet again.”
Took a stupid pill this morning, did ya?
I EXPLICITLY pointed out TWO ways you have it backward.
1. You stated @ 16: “What is your reason for compounding the economic growth figure but not compounding the spending on state employees figure”
I pointed out @ 20 that it was McKenna who screwed up by failure to do the compounding for state employee spending and benefits. Not me. That was the entire point of the post, ya fracken moron!
2. You stated @ 16 “and be sure to not forget the 9% figure for state worker benefits, which would greatly inflate if compounded.”
I pointed out @ 16, McKenna “STARTED with a 10 year growth figure and reverse engineered the ANNUAL rate improperly, which INFLATED it.” In other works, you are incorrect to use the 9% figure because that was erroneously computed by McKenna. The correct figure is substantially less than 9%.
Lay off the Wingding talk radio, there, Squirt. It makes you REALLY STOOPID!
@32 What he doesn’t get, Darryl, as I explained @28 is that McKenna used “lawyer math” which is basically the same thing as throwing darts.
@31. Darryl spews:
Americafirst @ 21,
———————————————–
You are not explaining how I am wrong, you are simply restating the figures in the article and jumping to the conclusion that I am wrong because I don’t agree with the article. By doing so you do indeed confirm what I said about you. What rodent has done is argue from facts, and I’m going to take another look at that. At least rodent has given you an example of arguing from facts and not mere conclusions. Maybe you will learn from that and do better next time.
@33 I’m a lagomorph, not a rodent.
@26. Roger Rabbit spews:
@7 (continued) P.S.: I eventually got it. I don’t think you ever will.
Here’s a clue: McKenna got his percentages by simple division. For example, if benefits cumulatively increased by 90% over 10 years, he divides 90 by 10 to get 9% a year.
But here’s how his math actually works: 1 x 1.09 = 1.09 (year 1) x 1.09 = 1.19 (year 2) x 1.09 = 1.30 (year 3) x 1.09 = 1.41 (year 4) x 1.09 = 1.54 (year 5) x 1.09 = 1.68 (year 6) x 1.09 = 1.83 (year 7) x 1.09 = 1.99 (year 8) x 1.09 = 2.17 (year 9) x 1.09 = 2.37 (year 10).
As you can see, a 9% annual increase would result in a 137% cumulative increase over 10 years, not 90%. Thus, McKenna has overstated the increase by more than half again as much.
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Thanks for arguing from facts; you may well know more about math than I do. McKenna was giving an average figure of 9%. Assuming his raw figure is correct, his average of 9% is correct. However the individual figures for each of those ten years shaped up you would have a series of yearly figures that will probably show yearly increases, some less than 9 and some maybe more than 9, but it is the cumulative total divided by the number of years that gives the average figure. I don’t see where McKenna was claiming that the growth was 9% every year, he was giving an average. You are obviously correct that a 9% annual figure would give a higher cumulative figure, but I don’t think that is what McKenna did.
@35 Make that @34 not @33.
I don’t know how Associated Press came up with 7.1%. I couldn’t replicate it, so it may be off. Journalists, IMO, aren’t any more reliable at math than lawyers. (I went to one of America’s top journalism schools and was a newspaper reporter before I became a lawyer, so I’ve been in both professions, and know about this from personal experience. Btw, if you’re wondering what Pop Rabbit — who lived to be almost 100 years old before he passed away last month — did for a living he was a legendary midwestern news reporter who was widely known and greatly respected by media people in the midwest. But he was so shitty at math that he never gave his bunnies any money, and he was so tight he never spent any of it either, so he left an estate worth nearly a million dollars, which is a lot for a newsy. It seems the company paid him with stock instead of money and the stock kind of took off. Unfortunately, he made a lot of bunnies — I had a good-looking mother which undoubtedly is where my good looks come from — so I’m only gonna get a percentage of it.)
Interest is a tricky business. Think of it as rent for the use of money. (You wouldn’t let someone else use your money for free, would you? Any more than you would rent a house or apartment for free?) There are basically three things that interest pays for: Time, risk, and inflation. Let’s consider these in order.
Obviously, the longer somebody borrows your money, the more you expect them to pay you for the use of your money.
Obviously, the higher the risk of not getting repaid, the more interest you demand for letting someone else use your money.
Not so obviously, but importantly, you also want the interest you’re paid to cover any inflation that occurs during the time that someone else is using your money.
Let’s say you make a loan for 1 year, and you expect the inflation rate to be 3% during that year. First of all, to get back the same amount of money you loaned out, you have to tack on 3%. If the loan is quite safe, warranting a small “risk premium,” you might tack on 1% to compensate you for risk. And let’s say you want another 3% as “rent” for the use of your money. In this scenario, you would “demand” an interest rate of 7% a year. But let’s say the risk is higher, so you want a “risk premium” of 4% to compensate for the chance of not being repaid, then you’d demand interest of 10% a year.
To further complicate things, there are two kinds of inflation, real and monetary. Real inflation is what occurs when the actual cost of producing something goes up. For example, we can’t fulfill the world’s oil consumption with cheap Saudi Arabian oil that costs $2.50 a barrel to get out of the ground because there isn’t enough of it, so we have to fulfill a portion of global oil demand with expensive arctic and deep sea oil that costs $40 to $60 a barrel to get out of the ground. Because the average cost of oil is going up as cheap oil is depleted and we have to meet a growing portion of our needs with oil that costs more to find and extract, the cost of oil is experiencing real inflation. Monetary inflation, on the other hand, is the decrease in value of currency that results from governments printing currency faster than the increase in output of goods and services. For example, if a hypothetical economy produces 100 widgets and has 100 dollars in circulation, widgets will cost 1 dollar each; but if the output of widgets increases to 125 widgets but the gummint increases the money supply to 250 dollars, widgets will cost 2 dollars each.
It’s kind of hard to pass on real inflation to borrowers, employers, suppliers, or customers because people feel the burden of real inflation should be shared more or less equally by everyone. On the other hand, if you are leasing your cash to someone, or investing your cash capital in an enterprise, it’s reasonable for you to expect to be fully compensated for monetary inflation because otherwise the transaction is transferring a portion of your hard-earned wealth to the borrower or entrepreneur in return for nothing, and why would you agree to do that?
I’m sure you understand, AmericaFirst, that if monetary inflation is 3%, then state employees need to get a 3% COLA just to stay even, otherwise they’re taking a pay cut. If monetary inflation is 3% and their raise is 3%, they cancel each other out and the state employees have received an effective raise of zero.
The big inflation item in labor costs for the last couple of decades has been the cost of health benefits. Since World War 2, most Americans have relied on a system of employer-funded health insurance. But rising health care costs have far outstripped monetary inflation, and a portion of higher health care costs constitute real inflation. This is partly because we’re consuming more health care and partly because we have better health care that is more expensive. (When I was a young bunny CAT Scan machines costing $2 million each hadn’t been invented yet.) And because employers were footing most of the bills for America’s health care system, they became very concerned about this inflation, and very early in the game decided to push these rising costs onto the employees who were benefitting from increased consumption of better health care, and this seemed fair to them; but workers who were acclimatized to getting their health care seemingly for free were very uncomfortable with the idea that they would have to pay more for health care because they were consuming more health care.
I’ve wandered a bit off the subject of interest. Let’s proceed to the matter of compounding interest. If you don’t understand this concept then you’d better not invest. Wait, I have a better idea, if you don’t understand the compounding principle then let me borrow your money at simple interest and invest it for compound interest and I get to keep the difference! If you have half a brain, you’ll say “no” to that proposal, because you’ll realize I’m ripping you off, which is something I’m always more than happy to do, if I can find an “investor” dumber than me. (This proclivity of mine must have something to do with the fact I was a Republican before I acquired a conscience and became a Democrat, except along the way, I never acquired a conscience about making money. In that respect, I’m like most other Americans, who as a group, have absolutely no morals at all when it comes to money.)
Any financial book will tell you that compounding makes a HUGE difference. For example, many companies have dividend reinvestment plans. Here’s how they work. Let’s say you buy 100 shares of Boeing at $80 a share and Boeing pays a 3% dividend. Instead of collecting $240 a year in dividends from Boeing, you tell the company to “reinvest” our dividends. So, in Year 1, they give you 3 shares of stock instead of $240. Now let’s look at what happens in Year 2. Do you get another 3 shares in Year 2? No, you get 3% times 103 shares or 3.09 shares. Now you have 106.9 shares. In Year 3, you get 3% times 106.9 shares which is 3.1 shares — now you have 110 shares. In just 3 years, your portfolio has grown from 100 shares to 110 shares! Meanwhile, Boeing has increased their dividend by 5% a year, so now the dividend is $2.78 a share instead of $2.40 a share, but because you now have 110 shares, you’ll get $305.80 instead of $240! See how compounding works? And when you use the dividend reinvestment plan of a company that’s increasing its dividend every year you get DOUBLE compounding! It’s like fucking magic!!! And as long as you keep reinvesting your dividends instead of collecting cash dividends you’ll never pay a fucking cent in taxes!!! Are you starting to get a sense of what a racket investing is, thanks to compounding and a tax code that coddles investors and screws workers?
Well, this is McKenna’s mistake: In the real world, everything runs on compound interest, not simple interest. But, being a lawyer, he’s either too stupid or too lazy to calculate compound interest, which is more difficult and complicated to calculated. Believe me, AmericaFirst, you can’t trust this guy’s math! He’s trying to sell you simple interest in a compound interest world! There’s some justification for your suspicion of the media, and the journalists who write for the media, so don’t take AP’s numbers at face value … but Darryl knows what he’s talking about when he tells you that McKenna fucked up the math. The fuckup was at the conceptual level. Remember what your seventh-grade math teacher told you? If you set up the problem wrong, the answer will be wrong — every time! Well, McKenna set up the problem wrong. He used a simple interest calculation for a compound interest math problem, and it goes without saying he got the wrong answer.
Is this a little clearer to you now?
I’m reasonably good at investing — better than 90% of America’s professional mutual fund managers — despite the fact I was trained to be a journalist and lawyer, not because of it! I had to do some extracurricular reading and self-medicating deprogramming to break the bad habits I learned in journalism school and law school, to learn to do the fucking math right! But once I did, hoooo-boyyy!!!, all I can say is COMPOUNDING IS MAGICAL in terms of what it does to your investing nest egg — as long as you don’t buy shit that loses money. Here’s the whole key in investing: Buy golden eggs, not rotten eggs! There’s no easy way to do this, you have to understand the principles, and then you have to read a lot of current news so you understand what’s going on in the economy, the markets, and the companies you’re investing in. If you do it right … well, let me put it this way, my original investment in the stock market of $7,400 was $96,000 less than 20 years later!!! And today it’s well up in six figures. FREE FUCKING MONEY!!! Sure beats working for the wages that Republicans want to pay!!! I don’t work anymore. I don’t have to. And it’s all because of the MAGIC of compound interest.
If you ignore COMPOUND INTEREST, you’re shorting yourself and your loved ones. If you don’t understand COMPOUND INTEREST you shouldn’t be a union negotiator sitting at a bargaining table to protect your union members from inflationary government economic policies and trying to get them a fair share of the wealth they helped to create with their increased productivity. If you don’t understand COMPOUND INTEREST you shouldn’t be a banker or investor, you should become a journalist or lawyer or somebody else who can get away with not giving a shit about the fact that the real world runs on compound interest not simple interest. If you don’t understand COMPOUND INTEREST then don’t be an academic or a statistician, like Darryl is, or an actuary!!! Are you getting my drift? COMPOUND INTEREST rules the world! And if you don’t understand how COMPOUND INTEREST works, the world will swallow you up.
That’s why McKenna isn’t going to be our next governor.
@36 “Assuming his raw figure is correct, his average of 9% is correct.”
Only in a world that runs on simple interest. Perhaps on another planet.
I wrote 36, 37, and 38 in the middle of the night when I was drunk on cheap tequila. Imagine how formidable I am between 7 AM and 1 PM, when the stock market is open! Maybe now you’re getting an inkling of just how kick-ass I am at robbing banks, insurance companies, mutual funds, and pension funds (these institutional investors own two-thirds of the stocks) of their money! Some granny in Arkansas is going to get a smaller pension check because of me. (sniffle) There, I shed a tear for her! I can’t BELIEVE how EASY it is for the small investor to take advantage of professional money managers equipped with supercomputers and research staffs! You’d think they would have passed a law against it by now. But they haven’t, and until they do, I’ll keep taking money out of their pockets and putting it in my pocket! It’s called CAPITALISM and I LUV IT!!! Can you actually fucking believe that some of these stupid wingnut trolls think I’m a fucking COMMUNIST?!! If only they knew … I’m more Republican than they are!!!
HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR
Excuse me, I have to get up and refill my shot glass.
Among my many talents, I draw original cartoons. Unfortunately, there’s no way to post them here on Horsesass, so I can only describe them.
I once drew a cartoon of two guys sitting at a bar. The clock in the background points at 10 o’clock. As you’ll infer from the punch line, it’s 10 AM, not 10 PM. Bar Patron #1 says to Bar Patron #2:
“I prefer to think of it as drinking after midnight instead of drinking before noon.”
N.B.: I’m sure 97% to 99% of the liberals will “get” it. Our wingnut trolls? Not as many.
Another one of my cartoons has two research scientists standing in a hallway. One of them is in fromt of a door to a room with a sign that says “Research Lab #1.” The other is in front of a room with a sign that says “Research Lab #2.” The scientist from Lab 1 is holding a glass beaker out to the scientist from Lab 2. The punch line goes:
“Here, invent a disease for this cure.”
This cartoon, which I drew about 20 years ago, is relevant to the wildfires raging in Arizona today. If you don’t know what I’m talking about go to MSNBC and look at their news photo of an aerial tanker dropping retardant on an Arizona wildfire that’s threatening a suburban subdivision.
My cartoon is a view from outside the plane looking in through the cockpit windows. You see the pilot at the controls, talking on the radio. In the background, the copilot is standing at an open door, using his arms to brace himself, with his pants down, pissing out the doorway. The punch line, of the pilot talking on the radio, goes:
“Okay, we’re out of water and returning to base … wait a minute … Kowalski is making one more drop.”
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The drunker I get, the more Republican I become, but there isn’t enough liquor in the whole fucking world to get me to vote for any Republican.
@35 I don’t see where McKenna was claiming that the growth was 9% every year
These are McKenna’s actual words (at the top of this page):
“In that same 10-year period, the state increased the amount it spent on state worker benefits by 9 percent a year every single year for 10 years.”
I also do ink sketches, oil paintings, and write poetry.
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Good night.
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Once again, and I mean it this time, this is final … good night. I’ll see you all again in the morning after the sun wakes up.
Damn RR, woulda been a trip being with you on a ‘bush.
Here is some real math. The just passed Washington Budget is already almost $500 million in the hole, including $183 million of Revenue shortfall and will require a supplemental Budget that cuts even more.
http://blogs.sos.wa.gov/FromOu.....ops-again/
Makes you wonder if it was really truly ever balanced.
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@52 Anything to pass the time …
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Americafirst @ 33,
“You are not explaining how I am wrong”
Ummm…yes, I did explain quite explicitly how you are wrong (and how McKenna was wrong).
“you are simply restating the figures in the article and jumping to the conclusion that I am wrong because I don’t agree with the article.”
Nope. You apparently don’t have enough competence in mathematics to actually understand what I said.
“By doing so you do indeed confirm what I said about you.”
Sorry, chump, your failure to comprehend is not my problem.
“What rodent has done is argue from facts, and I’m going to take another look at that. “
Wrong. What RR did was GIVE A NUMERICAL EXAMPLE, to demonstrate the proper computation. That is not the same as “arguing from facts.”
“At least rodent has given you an example of arguing from facts and not mere conclusions.”
Again…you confuse “arguing from facts” with an example.
“Maybe you will learn from that and do better next time.”
Yes…I suppose the lesson, is don’t engage with people too stupid to understand the elementary mathematics of computing interest rates….
AmericaFirst,
“McKenna was giving an average figure of 9%.”
And that figure is wrong, because the mathematics of computing growth rates is not the same as the mathematics of computing say, a grade point average.
“Assuming his raw figure is correct, his average of 9% is correct.”
Nope.
“However the individual figures for each of those ten years shaped up you would have a series of yearly figures that will probably show yearly increases, some less than 9 and some maybe more than 9, but it is the cumulative total divided by the number of years that gives the average figure.”
Nope. Wrong again. Please learn how to compute an average annual growth rate from a 10 year growth rate and get back to us…. (This is not my opinion, this is mathematical FACT.)
“I don’t see where McKenna was claiming that the growth was 9% every year, he was giving an average.”
Nobody said otherwise. You simply don’t understand how to compute an average annual growth rate from a 10 year cumulative growth rate.
“You are obviously correct that a 9% annual figure would give a higher cumulative figure, but I don’t think that is what McKenna did.”
McKenna improperly computed the 9% figure using the same erroneous method you are suggesting (taking the 10-year growth rate and dividing by 10). That isn’t how the math works with growth rates. Sorry.
Man…you are dumber then dirt.
@63
Geez, I barely graduated from high school and only gots me a AA degree and I could see that Bobby Mac had gotten it wrong.
Of course, McKenna isn’t going to admit he was wrong, or apologize for mis-speaking, etc.
He’s already in the mode of pandering to the right, and the operative talking point which was handed to him by his advisors was to “attack growth in state govermment”. They have not intention of letting the facts get in the way of that talking point.
This whole thread, and the McKenna speech underlying it, demonstrates the problem we now face as a society: The American electorate is making important decisions, not based on facts, but based on sheer nonsense. If our voters can’t do any better than this, you’ll have a better chance of being cured of cancer by a Haitian witch doctor than you’ll have of living in a prosperous America in the future.
Of course, Republicans don’ want prosperity for all. They only want it for a few.
@40
Excuse me, I have to get up and refill my shot glass.
you mean empty your colostomy bag…
@63. Darryl spews:
Man…you are dumber then dirt.
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You just keep blundering on without knowing what you are talking about. You don’t understand the difference between accumulate and compound. I will break it down once more for you and then you can keep repeating yourself until hell freezes over. This is what you said:
“My beef is with McKenna’s inability to work with the most elementary of budget mathematics. The AP has flat-out busted McKenna for his failure to understand the mathematics of growth—the same math one uses for understanding investment interest, population growth, budget projections, mortgage costs, etc.”
If you are talking finance, compounding is a term of art which recognizes the time value of money. Population growth and budget projections in general accumulate, investment interest and mortgages compound. If you are going to use compound to mean accumulate, be consistent. You use them interchangeably, and demonstrate your ignorance of the distinction. If you are going to print a bullshit hit piece on McKenna, which with 99% certainty is a misrepresentation of what he said but which I can’t prove, don’t be surprised if I find fault with something trivial just to watch you react. I enjoy seeing you get wound up, thanks.
@37. Roger Rabbit spews:
Is this a little clearer to you now?
———————————-
Yes, it’s clear that you write better when you’re drunk. As for the rest, I must admit that I didn’t read the whole thing, but the parts I sampled looked pretty good.
When you are in a room with McKenna, you know that he’s the smartest halfwit in the room.
Send Bobby Mac back to school before we let him screw up our budget please. BTW Roger Rabbit you are hilarious and perhaps borderline psychotic :)
@69: America first but logic last
Umm, What Darryl said was that the math was the same for population growth and compound interest. That is – if you have a 10% growth in population or in money (interest) in one year – then you need to add that to the next year to get an overall amount for multiple years and the rate for a period of years is calculated differently than the rate for one year.
You seem to think that making the point that population accumulates while interest “compounds” is somehow sublime….that is just terminology. The actual MATH is the same if we are comparing growth rates for one year versus multiple years.
Is there some part of that you don’t understand?
Americafirst @ 69
You are spewing more uninformed bullshit.
“Population growth and budget projections in general accumulate, investment interest and mortgages compound.”
Wrong. There is no difference in the math for, say, projecting a population over 10 years from a starting population and an annual population growth rate, and projecting an investment over 10 years from a starting value and an annual interest rate. The math is identical. They both involve compounding annually.
This is well-known, elementary mathematics we are talking about.
YOU FAIL!