Archive for the ‘Government gone wild’ Category

Discouraging inventors and tax dodgers

September 11th, 2011 by Administrator

Major patent “reform” has passed both houses of Congress, presumably the President will sign shortly.  This is called the “America Invents Act,” apparently has as much relevance to invention as the Patriot Act has to patriotism. But dictionary.com tells me that “invent” has two meanings:

1.     to create or devise (new ideas, machines, etc)
2.     to make up (falsehoods); fabricate

Perhaps the second is what’s intended here.

From what I read, the big news is a switch of priority from “first to invent” to “first to file,” which seems to indicate that skill at patent lawyering now is officially recognized as more important than skill at inventing.

Better news, according to Vaughn Henry, is that tax strategies will no longer be patentable.  150 existing patents are grandmothered in, however. (Information from  Henry’s blog here, you need to join, free, to see it, or perhaps it is somewhere on his site. )

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Posted in Government gone wild, Intellectual property, which I think is neither, mafia, taxes | No Comments »

Government helping private “enterprise”

September 8th, 2011 by Administrator

This is just a note I write to myself, observing a curiosity about  solar panel maker Solyndra, who filed bankruptcy yesterday and were raided by your FBI today.  The biggest equity investor in the firm is George Kaiser, with “about $337 million”.  Solyndra received a government loan for $527,808,544. OK, so bankruptcy is supposed to mean that loans are repaid to the extent possible, and if there’s anything left it goes to the equity investors.

Not in this case.  Somehow, after the loan was made, documents were revised so that $69 million of Kaiser’s money is first in line for repayment, followed by the government loan. Also, Kaiser was a fundraiser for the current President’s campaign, and visited the White House 16 times since the inauguration.

Lately I kind of figured this is how business is done, it is to be expected that major campaign donors will receive substantial favors from those they helped elect. But at least in this case Reuters has demonstrated some interest, and investigations are giving the appearance of commencing.

Maybe somebody didn’t get their share.

Posted in economic development, Government gone wild, mafia, Uncategorized | No Comments »

Land Economics and Ownership– cancelled

August 19th, 2011 by Administrator

I am back to the blog, after a series of computer difficulties and travel distractions. I could have resumed earlier, but had (still have) too many things to write about, so I waited for something simple and outrageous. And here it is.

What two products, planned for the 2007 U S Census of Agriculture, have been cancelled?  One is a report on acquaculture.  The other? Land Economics and Ownership.  One inclined to conspiracy theory might say TPTB are trying to prevent folks from learning the truth.  I would tend more to think it’s a product of ignorance, no need for conspiracy. I wonder what the report would have said.

 

 

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Posted in agriculture, Government gone wild, land rights, land value, mafia | No Comments »

Does Accurate Forecasting Get Attention?

July 22nd, 2011 by Administrator

No, not particularly.  CXO Advisory Group did a little study, comparing the accuracy of forecasts made by a number of investment  “gurus” who they monitor, to the magnitude of google searches.  Based on a couple of different formulations, there was basically no relationship. Of course google searches would be only one measure of fame, and CXO’s way of measuring accuracy isn’t the only reasonable one, but still it is not a surprise.  If I made accurate forecasts, I could prosper with only a few subscribers, who I might charge a high price and ask not to talk about me much.  But if my forecasting record is mediocre, I would want to get as much publicity as possible, because I would need to constantly attract new subscribers.

Tho no surprise, this is not good news for geoists.  At least investment advice can be measured in a more-or-less objective way.  But geoist reforms are in an arena where there are always extraneous factors.  You might get your local tax policy exactly right, for instance, but this could be overwhelmed by an unwise investment in, say, an incinerator.

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Posted in economic development, Government gone wild, investments, taxes | No Comments »

The limits of Econned

June 8th, 2011 by Administrator

Over the years, Naked Capitalism has provided a fine, if discouraging, play-by-play of the worsening corruption of our financial and governmental powers.  Dense daily posts, plus links to relevant news stories, supported by thoughtful and knowledgable commenters, makes it one of the few sites I really ought to read daily. (Cute animal pictures are a bonus.)

When chief blogger Yves Smith published Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, I was anxious to read it. Which I finally did over the last couple of weeks. (more…)

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Posted in business cycle, Government gone wild, history, investments, mafia, speculation | No Comments »

Excess returns to Congress

May 27th, 2011 by Administrator

Some may say excess never left Congress, but I am referring to something a bit different.  “Excess returns” is the phrase used to describe an investment result which is above average for the kind of investment made.  And according to a report from Barron’s Randall W. Forsyth, a new study shows that U. S. Senators achieve an excess return of 10.7% per year in their personal investments.  For members of the House of Representatives, the excess is 6.8%.  Forsyth points out that any professional investment manager who achived this result on a consistent basis would be quite phenomenal.  He concludes that

Members of Congress used inside information gleaned from their positions of power to enrich themselves in the stock market.

He is probably right, and I would be the last to accuse Congress of honesty, but there is another possible explanation.  Maybe Congressmen are just cleverer than the rest of us, and in particular are more difficult to deceive.  Congress itself is evidence that the broad public is easily fooled.

In this regard, I recall stumbling a few months ago on a link to the personal investment statements that Congressmen and some other federal officials file. (Curious that I did not bookmark it and can’t seem to locate it right now.) I picked a Congressman who I thought might be honest, Ron Paul, and looked up his statement.  Dr. Paul seemed to have most of his money in precious metals, I don’t recall the extent to which it might have  been bullion, mining stocks, or related investments.  Of course this strategy would have done very well over the past couple of years. Paul is associated with the idea that U. S. dollars should be backed with gold.  I don’t think he considers this realistic in the near term, but of course if it ever happened the effect would be to push the price of gold higher as bullion would be accumulated to “back” the money.  But does Paul endorse gold-backed money in order to increase the value of his investments?  Or does he invest in gold  because he expects its value to increase?  I’m pretty sure it is the latter.  Of course this kind of logic would apply only to honest Congressmen, so I suppose we could consider Ron Paul to be an outlier.

According to Forsyth, the source study, by Alan J. Ziobrowski of Georgia State University, James W. Boyd of Lindenwood University, Ping Cheng of Florida Atlantic University and Brigitte J. Ziobrowski of August[a] State University appeared May 25 in the Journal “Business and Politics” and covers the years 1985-2001.

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Posted in dependent scholars, Government gone wild, investments, mafia, speculation | No Comments »

Iceland’s example

May 26th, 2011 by Administrator

Of course we should not have bailed out the financial sector.  Fred Foldvary gives a concise summary of what happened when Iceland refused to do so.

And since no fundamental change has taken place, I suspect Americans will have an opportunity to use this lesson when an attempt is made to extort a second bailout.

Posted in business cycle, Government gone wild, mafia, money, Sane voices | No Comments »

Saudi housing bubbling

April 7th, 2011 by Administrator

Suppose you are a king. And suppose you have a restless, mostly young population, high unemployment, with most people having to rent because housing and land are too expensive. Few people can get mortgages, because they involve large down payments and high interest rates. Also suppose that you have a big country, lots of land relative to population, and a huge government surplus. What to do?

You could examine why housing is so expensive, and whether there’s a way to make more land available. Maybe that’s happened in Saudi Arabia, but recent news reports give no indication.  Instead, the Saudi solution is to encourage the mortgage industry and expand credit.  Will that make housing cheaper?  Will that make it easier for an underemployed population to get decent housing? Or will it drive up the price of land and feed what seems to be an already-building bubble?  It may be that the Saudi objective is to get more of their people into debt-slavery so they’ll faithfully serve the state.  I don’t know.

What really puzzles me is how mortgage interest fits into an Islamic-dominated state.  Possibly this is like the “Islamic Finance” offered by some U S banks, where no interest as such is charged, but either the price is inflated to compensate for the fact that it will be paid gradually, or the “homeowner” is technically a renter until enough rent has been paid to cover the cost plus what, to others, would be interest.

Bloomberg says the King pledged more than $82 billion for housing, but does not say whether this comprises direct government grants, or is simply some amount of debt which homebuyers will contract.  It also says that

Saudi Arabia’s mortgage law will change the way home finance is regulated, from registering mortgages to prosecuting police officers who refuse to carry out eviction orders.

This will be interesting to watch, preferably from a distance.

More about Saudi housing and morgages:

 

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Posted in Housing, mafia, public policy--nec, speculation, Unintended consequences | No Comments »

Inside Job gets outside

April 4th, 2011 by Administrator

Prize-winning documentary Inside Job was posted for free download at archive.org a few days ago.  It was withdrawn late yesterday or this morning, but in the interim I had a chance to watch it. It was pretty much as I expected: A very well-documented expose of the forces which brought down the world economy, emphasizing that they have been rewarded, not punished, for doing so, and essentially escaped prosecution (some paid fines amounting to a small part of their takings.)  It’s well put together, director Charles Ferguson seems to be a skilled and persistent interviewer, getting on-camera answers even from some of the guilty parties.  Ominous music reflects our ominous economic future, lots of shots showing the Manhattan skyline, other centers of wealth, as well as foreclosed houses and abandoned developments.

As a documentary with a point of view, this film says “The guys who drove us off this cliff and unpunished and still in charge,” which might lead one to suppose that, if only they could be caught and punished, perhaps our long-term future would become brighter.  These guys own the government, of course, so exactly how a prosecution would work isn’t clear.  Elliott Spitzer’s experience, reported in the movie, does not make one optimistic.

The problem, as I see it, is that Inside Job doesn’t tell the story from the beginning.  I would represent the principal causes of the global financial crisis as the five connected items below

5  Regulatory capture and control of the government

↑

4  Concentration of financial power

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3  Securitization

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2 Loans against capitalized rent

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1  Private collection of economic rent

 

IJ describes 5 quite well, addresses 3 and 4, but doesn’t get into the fundamentals.  As long as, and to the extent that, we have private collection of economic rent, we will continue to suffer from economic crashes.  Inside Job needs a prequel explaining the root cause of the problem.

Posted in business cycle, corporate privilege, Georgist teaching resources, Government gone wild, history, Intellectual property, which I think is neither, speculation | 2 Comments »

How to cut your medical costs 75%

March 19th, 2011 by Administrator

Last month a couple of my dependents went to the local hospital for routine blood tests.  The hospital sent me a routine bill for an outrageous amount, saying “don’t worry about this, we have asked your insurance company to pay, and you are responsible only for the portion they don’t pay.”

A few weeks later, the “insurance” company, popularly known as “Blue Thieves,” sent me a statement, and the hospital sent a revised bill.  These show that the insurance company paid exactly zero, but muscled the hospital’s fee down by 75%.  Both parties expect me to pay the difference.  In other words, if you are a normal retail customer, the hospital marks up your bill 300%. In my previous experience, lab costs are typically marked up this much or more; for other services the markup is often less.

To reduce your medical costs, then, just tell the hospital that you’ll pay what Blue Thieves pay, 25% of retail.

I put “insurance” in quotes because what they sell is mainly not insurance, in the sense of taking on some of your risk, but protection, in the sense of “we will impose extra difficulties on you if you do not pay us.”

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Posted in costly medical services, mafia, medical treatment | No Comments »
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