March 22nd, 2014 by Administrator
An informed review by political economist Ed Dodson of Tim Howard’s new book about the collapse of Fannie Mae. The senior people understood that they were in trouble due to politics and ideology, and they saw the collapse of underwriting standards, but most had no interest in addressing the fundamental cause.
February 11th, 2014 by Administrator
credit: Colin Dunn via flickr (cc)
I am not going to call it “Obamacare” since most of it existed long before we’d heard of that guy, and I am not going to call it “health insurance” since it only applies to medical costs, which have just an approximate relationship to health, and it is not insurance since it is intended to pay routine costs rather than help pay for catastrophes. I suppose I might call it “diversion of productive people’s income to lobbyists and their clients” (which we might pronounce “DOPPILC”), but I’ll just call it “govcare” since it certainly involves the government and has something to do with care.
I really don’t understand it at all. Do we, the People of the United States, wish to pay whatever is necessary in order that all of us may have whatever medical treatment a group of licensed professionals assert is necessary? If so, why do we think it will not absorb 100% of our production beyond subsistence? If not, how do we decide priorities and set limits, when inevitably any limit is going to find someone very sick and very sympathy-arousing unable to afford some treatment which really would be helpful? (The answer probably has something to do with us the People of the United States behaving like adults, but if I was the very sick person in question I might have a different attitude.)
The subject is simply too big for me to comprehend, so I will just nibble around the edges. Today’s nibble is a message I received from the “health insurance” company who take a large part of my income.
Copayments do not apply to deductible or out of pocket.
Or, to put it a different way, if you purchase any considerable amount of medical treatment, what comes out of your pocket is likely to exceed the “out of pocket limit” that “your” “insurance” company proclaims. (This is in addition, of course, to the amount they already took from you to provide what they call “coverage.”
February 1st, 2014 by Administrator
New York’s housing situation (image credit: David Shankbone (cc) via flickr)
Melissa Kite had a piece in Thursday’s Guardian complaining about the escalating cost of London housing. She starts off well, observing that she can’t earn as much in a year as the increase in the value of her flat. “[W]hat does it say about our society when we can, in theory at least, make more money doing nothing than we can by the sweat of our brow?” Agreed, it’s a problem. So what does she recommend?
In New York, 45% of people live in rent-stabilised accommodation where landlords are limited to increasing rates by a certain percentage each year. This is not rent control – which accounts for only 1% of tenants – but rent with controlled increases, an important difference.
I will wait to hear from New Yorkers about how this has solved their housing problem. Going back to the Guardian article, Kite gets pretty close when she observes that “a British company is selling a flat-pack self-assembly ‘house in a box.’ But she doesn’t take the next step to ask: “If you buy one, where are you going to place it?” The answer, of course, will be that anyone who can afford only the flat-pack house will be unable to obtain a suitable site anywhere near London.
The problem isn’t house costs, it’s land costs. And land costs would be a lot lower if all land was subject to a stiff site value tax, because there could be little or no speculative premium. (To be clear, the cost of obtaining a site for your house, purchase financing plus tax, would be much less if landholders weren’t pricing sites based on their future hopes rather than current usefulness.) This point is readily made, for example here and here. It’s unfortunate that the writer of the Guardian article seems unfamiliar with the concept.
January 30th, 2014 by Administrator
image credit: Wiertz Sebastien via flickr(cc)
It’s well-understood, I guess, that Google tracks and filter-bubbles those who search with it. And Microsoft is, well, it’s Microsoft, no reason to suppose they’re not tracking and bubbling users also. Fortunately, there are alternatives:
Great options for search! So what if I want to advertise? And suppose that the people I want to reach are the kind of people who would prefer these privacy-facilitating search options? They’re profit-seeking companies and they carry ads. Can I buy ads on them?
Not really. It turns out that Startpage has an arrangement with Google, so I would need to buy Google Adwords and hope, maybe, that they’ll end up on Startpage. With Duck, the arrangement is with the “Yahoo-Microsoft Search Alliance” and seems otherwise similar.
This may be the best way for a small company to get a tiny piece of the search pie, but depending on your competitor doesn’t seem like a great long-term strategy. Maybe they have other plans. But for now, there seems to be no way for an advertiser to reach privacy-minded users, except by taking advantage of the tracking that the dominant search companies do.
January 19th, 2014 by Administrator
image from Michael Casey via flickr (cc)
Last year the remnant of the Chicago Tribune requested ideas for elements of a new “Plan of Chicago.” They even posted a few of the responses on their site. I suppose some were included in the hardcopy newspaper too. But those don’t seem to have included my submission, so I probably ought to post it here.
My proposal, of course, relates to how public revenue is raised. The protesters pictured on the right probably wouldn’t realize that it relates to their concerns, and would almost certainly cause Apple to make a greater contribution to local coffers than they do now. But it wouldn’t increase any corporate tax rate nor prevent Apple from playing accounting games. It doesn’t need to.
Here’s the proposal as submitted on October 24 2013: Read the rest of this entry »
January 18th, 2014 by Administrator
As Tolstoy pointed out in slightly different words, anyone who understands the fundamentals of public finance cannot fail to agree that the smartest way to fund our governments is to collect economic rent. So the challenge for Georgists is simply to get the 99% of the population who really don’t think about these things to do so.
Which brings to mind some cards printed many many years ago by Advocates for Self Government.
back. The phone numbers and addresses may no longer have any connection to the organization, because the card is probably over 30 years old.
The idea is, of course, that if you like (or respect or admire) the person who served you, you don’t tip, but give a gift. A gift to an individual is taxable to the giver, not the recipient, but as long as you don’t give any one person more than $14,000 you won’t pay gift tax. (I get my information from Wikipedia, which is no more likely to be incorrect than other sources I know of.) I find tipping disconcerting, but I do admire and respect the ability of many baristas, waiters, cabdrivers, barbers, etc who have skills I could never hope to develop. I like some of them too, and have had a few of them as students learning the fundamentals of political economy.
So this is an approach Georgists might try, to encourage more folks to think about important issues, while making their lives just a teeny bit easier. No, I have no idea what happens if you put a card and a small amount of money in a tip jar. Maybe new regulations will be issued requiring separate gift jars, and auditors dispatched to assure compliance..
January 10th, 2014 by Administrator
When the dinky suburb I live in decided to outsource the water bill processing to a firm six towns distant, I didn’t really object. Maybe it’s more efficient to have the work done elsewhere. But when the Cook County Assessor asked me to send a form to an address just outside the county boundary, I wonder what message he is trying to send.
January 5th, 2014 by Administrator
photo credit: coal dubya via flickr (cc)
If the earth belongs to the people, then whatever is paid for the use thereof belongs to them in some equitable fashion also. Therefore, beyond what’s needed for legitimate government purposes, there would seem to be enough for a considerable “citizen’s dividend” for everyone. Plenty of discussion on this subject can be found here.
My guess is that it would likely be enough to replace most of the aid programs which provide funds — rarely enough but maybe better than nothing — to low income people. One advantage is that it could be administered at relatively modest expense. A related advantage is that it can probably be made to work, with everyone getting what they’re entitled to. This latter aspect is what came to mind when I read this NY Times article, in which a Georgetown law professor summarizes “a litany of automation and contracting meltdowns” whereby the poor were unable to obtain benefits to which they were entitled under various aid programs and which may have been essential to their support.
His point seems to be that, while healthcare.gov suffered major problems initially, it was soon repaired because its failure affected many non-poor people. (I have no idea how well-repaired it might be, but will assume he is correct about this.) He does not mention the citizens dividend, perhaps is unaware of it, or maybe ignores it because it would likely reduce the demand for lawyers. But he makes the case. A regular check for everyone, as a just entitlement, would be a far simpler system than most of the means-tested (and otherwise-restricted) aid programs which cost taxpayers so much money.
And while we’re on the subject of means-tested programs, consider this:
[I]f a single mother has two children in childcare and she’s making $36,000, she’ll pay about $310 a month for childcare. Then, if she gets a raise to $37,000, she’ll need to pay $1,200 a month for childcare because of the loss of a subsidy.
Of course, it needn’t be a raise, it might just be a decision to work a bit of overtime. I have written about this before and I will probably have to write about it again. Means-tested aid is a disgrace.
January 4th, 2014 by Administrator
detail from photo by Jennifer Wu via flickr (cc)
Writing in Standard Digital, Charles Kanjama proposes that “If government was clever, it would include a value-capture approach in project financing.” He’s writing about big infrastructure projects, which in his time (2014) and place (Kenya) include railway and port improvements. He suggests that perhaps half the cost should come from land value tax, without explaining why it would be appropriate for landowners to receive half the benefit of improvements paid for by the general community. (Kanjama is an attorney and accountant who was rated among the top 100 legal minds in Kenya as well as one of the 100 most influential people in that country.)
The same edition (January 4 2014) carries another article showing a problem resulting from failure of the community to collect all the rent. It seems that the government wanted to remove a large number of squatters who had settled in a protected forest. Ordered to vacate, they each received 400,000 shillings ($4604.67 US, according to Wolfram Alpha) to purchase land elsewhere. Now the time for relocation has expired, and many spent the money on things other than land. Of course I don’t know these people, don’t know what land was available, don’t know their needs, but very clearly if land were nearly free (as results from a high land value tax) they would almost certainly be better off.