Steve Reads

I am now on Google+, because men of my ilk are required to join new services such as this. But it is not solving a problem I have. It’s just creating more problems.

I left Twitter some months ago, because my workflow was like this:

1. post to Twitter.
2. have the post automatically mirrored to Facebook.
3. flip over to Facebook to make sure that the post replicated.
4. if it took more than a minute to replicate, refresh a few times before giving up with an odd, low-level form of nervousness.

I was connected to all the same people on Twitter that I was connected to on Facebook. Granted, there were others on Twitter who were not on Facebook, like famous people or, to put it another way, people with whom the interaction was expected to be more one-way. I followed Chris Onstad, author of Achewood, for instance. It was fun. His Twitter feed is hilarious. I followed the author of a book I really loved, and to my great surprise and pleasure he connected me with the Boston Globe to write a piece for them. So I can definitely say that Twitter was good for my wallet.

But it was also really distracting, for reasons I laid out in that piece. And I don’t have the self-control to be connected to two social networks and yet only check them occasionally. Nor do I have the self-control to prevent myself from refreshing email dozens of times a day. Email by now is in fact a reflex. But at least email isn’t getting new updates constantly. And the fun of Twitter is following lots of interesting people saying lots of interesting things. It was too fun, honestly. Sad to say. It’s taken me until age 33 to realize that I actually have to talk myself down from unhealthy habits; I literally have to say to myself, “Yes, you want a milkshake from Toscanini’s made with burnt-caramel ice cream and a shot of espresso. But 1) those are empty calories, 2) you can use that $5 for something better, 3) you’re trying to cut down on your caffeine intake, aren’t you?” I probably should have been doing this throughout my life. In any case, I’m starting now, and it seems to be working.

So I ended up thinking that it was better to concentrate on one social network, namely Facebook, and ditch the rest. Really, it’s probably best to go with zero social networks, but Facebook is essentially inevitable now. Many websites require you to use a single-sign-on platform, and OpenID is dead; Facebook is the only one left. Google, as I recall, tried OpenID. OpenID sucked. So a Facebook account is … well, “necessary” isn’t the word, but it would certainly be annoying to go without one.

Also, though, Google+ isn’t solving a problem that I have. Its main innovation, so far as I can tell, is that it makes the concept of a “circle” fundamental: circles for friends, circles for acquaintances, circles for colleagues, etc. Others have the problem that they need their messages to go to specific circles; I do not. The problem is supposed to be that, say, you want to write naughty words, but don’t want your grandmother to read them; or that you want to bust on your coworkers but don’t want your coworkers to read it; or some such. First of all, Facebook offers enough in this direction that Google+ is not really solving a real problem. For instance, I was connected on Facebook to my girlfriend’s son, and I set up permissions such that he couldn’t see a lot of what I posted. Problem solved. I’ve certainly been on the receiving end of those blocks, too: coworkers have clearly put me on a “don’t share your Wall with coworkers” rule set. Facebook also offers a nice preview feature, which allows you to see how your profile looks when visited by a specific Friendster of yours.

More fundamentally, having to figure out who should read a given post and who shouldn’t is the kind of psychic weight that I try very hard to cast off. “Should this go to Acquaintances, or only to Friends?” is a question which, when asked often enough, will eventually rub my mind raw.

I’d much prefer to just post whatever comes to my mind to Facebook or Twitter, and let people decide whether they want to read it. On the receiving side, I’m sure Facebook has enough intelligent algorithms to decide whether you find my posts interesting; if it doesn’t think you do, they won’t show up in your feed. If you think I swear too much, you can ignore my posts. If you really hate me, you can defriend me.

Mark Zuckerberg, I’m told, said at one point that people should have just one persona, which is on display at all times. At some level this is wrong: I make dirty jokes with some people but not with my mother; I have one side of my personality that really likes discussing policy and theory, but that side will quickly put itself into hiding if it senses that the people around it just don’t care about those things.

But the costs of having different personalities on the web — one for Acquaintances, one for Friends, one for Policy Wonks — exceed the gains, for me anyway. I’d much prefer to put all those personalities together into one feed. I suspect the audience finds this more interesting, in any case: much better to get the occasional notional pornography title (a category of Facebook post that I very much enjoy writing) amidst links about health insurance, I think, than to get a steady diet of one or the other. I could be wrong about this, in which case my audience would prefer that I put different ideas in different channels. Not my problem. I guess Google+ is designed for people who think that is their problem.

Google+, I gather, came out of watching people’s occasional paroxysms of anger against Facebook’s privacy problems. But people don’t really care about their privacy; if they did, Twitter wouldn’t be popular. In Twitter, everything you write is visible to the world. Had Facebook decreed from early on that everything you post is public, people would have nothing to be angry about. It’s the perception of a bait-and-switch that angers people about Facebook; it is manifestly not that people care about their privacy. So inasmuch as Google+ gives people more privacy than Facebook, it’s not offering the world a solution to any problem that the world actually suffers from.

Neither Google nor Facebook actually cares about privacy. What they want is to sell ads, or to otherwise monetize their social networks. That means, as the saying goes, that “if you’re not paying for a product, you’re the product.” They’re selling you to advertisers. So at a fundamental level — the level of what keeps the lights on in Google’s and Facebook’s datacenters — neither of them is actually interested in your privacy. Neither of them could be interested in your privacy. If Google+ has any actual appeal, it’s the perception that it won’t bait-and-switch you. But that’s just responding to an accident of Facebook’s history. If Facebook were born now, it would be Twitter, and everything would be public. Not baiting-and-switching on privacy is not the basis for a network that people should care about.

What I get with Google+, then, is the solution to a privacy non-problem and the creation of groups of acquaintances that cause me stress without solving any problem I have. Can someone point me to some really killer feature that I should know about?

I am often a curmudgeon about new technology, but it’s not out of reflexive hostility toward new things. It’s that I really need people to prove to me why I need something. I was this way with the iPhone and the Mac, but eventually the tipping point came where it was obvious that the iPhone and the Mac were just better than every one of their competitors, and that there was no legitimate reason to avoid buying one. So I’m more than open to being convinced that I should use Google+. I just need to be convinced that it a) solves a problem I have and b) is better than Facebook. Thus far I’ve not been convinced.

I come back to Austin Frakt’s post calculating how much the Federal subsidy for health insurance is worth every few months, and I think I have to re-study it every time. It’s a hugely important post.

Probably a lot of others don’t read wonky health-insurance blogs quite as obsessively as I do, so the background is like so: your employer (if you’re lucky enough to have an employer that supplies health insurance) doesn’t pay taxes on the health-insurance fringe benefit. When they pay you a dollar in wages, they have to pay their part of Medicare and Social Security taxes. Once they’ve paid their taxes and passed your wages on to you, you have to pay taxes on them. Health insurance isn’t like that: your employer doesn’t pay taxes on health benefits, and neither do you. So one dollar in health insurance is worth more than one dollar in wages to you and to your employer.

Turns out that the subsidy is really distorting. Professor Frakt’s exercise may already be clear to everyone, but I don’t think it was clear to me for a while. So in bullet form, trying to make it as clear as possible (to myself as much as to everyone else) it’s like so:

• For every dollar an employer pays out in wages, a certain fraction of that dollar goes to taxes (employer pays Medicare and Social Security). Call that fraction T.
• So for every dollar in wages that the employee receives, the employer pays $(1+T).
• Flip that around: for every dollar in wages that the employer pays, the employee receives $1/(1+T).
• Now the employee has his dollar in wages. Of that, a certain fraction goes to taxes (Medicare, Social Security, federal, state). Call that tax fraction E.
• So the employee is left with $(1-E) of his dollar.
• But his dollar was already $1/(1+T) of what the employer spent.
• So of every dollar the employer spends on wages, what ends up in the employee’s pocket is $(1-E)/(1+T). Call this F, for “Final amount in the employee’s pocket.”
• This means that $(1-F) goes to taxes, for every dollar the employer spends on wages.
• Put another way: a dollar spent on health insurance, which no one pays taxes on, loses the government $(1-F). 1-F is called the “tax price.” Professor Frakt links here to a paper by the omnipresent Jon Gruber, an MIT professor who was central to building Massachusetts’ universal-coverage system, and who advised President Obama on the Affordable Care Act. The paper — “The Impact of the Tax System on Health Insurance Coverage” — sounds interesting.

To put some flesh on the numbers:

• when the employer pays you a dollar (in wages, but not in health insurance), it spends 6.2 cents on Social Security and 1.45 cents on Medicare Part A. So T = .062 + .0145 = 0.0765.
• you pay Social Security and Medicare Part A (same percentages as your employer), plus your Federal marginal tax rate (I’m in the 28% bracket), plus your state marginal rate (Massachusetts’ is 5.3%). So my marginal rate is 40.95%, whence E = .4095.
• So when my employer spends a dollar on health insurance rather than on wages, the government loses 45 cents that it would have picked up in taxes. (Professor Frakt ends up with 37 cents using more-conservative assumptions, namely that the state tax rate is 5% and that my Federal marginal rate is 20%.)

This distorts the labor market — encouraging employers to buy more-expensive health-insurance plans — and costs the government money that it could be spending on other valuable things.

And it’s regressive: if you’re in the top (35%) bracket, you’re getting more of a benefit from the health-insurance subsidy than is someone in the 28% bracket. Same goes for the mortgage-interest deduction, and it may be even worse there: not only do higher-income people get more off their taxes for every dollar they spend on mortgage interest than do lower-income people, but the more you spend on a house, the more you can take off your taxes. Assuming Bill Gates’s house cost the $97 million that some random web page says it did, that he put 20% down, and that he financed it with a 2%, 30-year fixed-rate mortgage, he’ll be able to use the mortgage-interest deduction to avoid paying taxes on $26,345,019.10 in income over the life of the mortgage. Assuming he’s in the 35% bracket, that’s $9,220,756.69 that the mortgage-interest deduction saved him. Whereas if you’re in the 28% bracket and finance a $350,000 home the same way, you’ll save $33,270.77 over those same 30 years.

These “tax expenditures” cost the government money in the same way that buying a bomber or building a road costs it money. But tax expenditures haven’t, until recently, appeared on the radar in the same way that a $500 toilet seat does. We may well be paying for Bill Gates’ $500 toilet seat, but it hasn’t had the same visceral effect.