Archive for the ‘mafia’ Category

Planned office tower may take double subsidy

May 17th, 2012 by Administrator
rendering of 444 W Lake St proposal

rendering from Chicago Sun-Times

Two or three developers (depending on which source you read) plan a new 45-story, 900K sq ft, $300 million office tower at 444 W Lake Street. In the world most of us were born into, this would mean they’d purchase the site, continue to pay taxes on it, and on the building when constructed. Thus the prior landowner would benefit from the transit and other infrastructure that we all provide, some part of this cost being offset by taxes resulting from the project.

This particular building, tho, may be a special case, to be built on air rights over the north approach to Union Station, tracks owned by either Metra or Amtrak. So public transportation would benefit, right?  It doesn’t appear so, because, I think pre-Amtrak, the old Chicago Union Station Co. sold off the air rights. The Sun-Times says Larry Levy owns the “site,” presumably including the air rights.

Still, the building will yield taxes which help the comunity pay, right? Not in today’s Chicago.  Blair Kamin says we’ll pay $29 million in real estate tax money to the developer, to build a park.  A commenter elsewhere suggests it might be $40 million. Whichever, of course, that’s on top of all the subsidies we pay to provide transit service and maintain infrastructure without which this building would be infeasible.

The Tribune helpfully notes that the project “is expected to generate … 3,400 permanent office jobs.”  Apparently those office jobs will be created to fill the building and would not otherwise exist in Chicago. The details of this mechanism are beyond me.

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Posted in Chicagoland, land value, mafia, taxes, transit | No Comments »

Bast drafts Henry George for Green Bay

March 13th, 2012 by Administrator
image credit: freedigitalphotos.net

image credit: freedigitalphotos.net

Longtime HGS  supporter Joseph Bast, head of the Heartland Institute, has a new policy brief (pdf), with a podcast overview, recommending that fans of professional “sports” own the teams thru nonprofit corporations.  The only actual example of this is the Green Bay Packers, which originated as a for-profit organization but was bought out of bankruptcy by a fan-organized nonprofit.  They would never leave Green Bay since the owners cannot profit by moving them. Thus the main lever used by for-profit teams to extort new stadiums and other favors would be broken.

Pointing out that teams currently extract monopoly rents from the community, Bast mentions Henry George but rejects George’s idea that natural monopolies should be municipally-owned.  Of course, George never applied this concept to professional “sports,” which existed in his day but was nothing like what we see now. The closest I can think of is that George considered the idea of a publicly-subsidized theater to be so absurd, that he compared it to subsidy of various other industries to illustrate the absurdity of the latter.

So why don’t fans establish nonprofit teams?  My personal theory is that most fans of professional “sports” are masochists and like to be abused.  But perhaps I’m wrong.  Bast suggests routes around other barriers including opposition of major leagues, high cost of setting up a team, and existing taxpayer-subsidized facilities which are controlled by existing monopolies.

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Posted in corporate privilege, Georgist/geoist, human rights, mafia, podcasts, public policy--nec | No Comments »

Gold vs. “real money”

February 9th, 2012 by Administrator
Gold Mine

image credit: Kake Pugh via flickr (cc)

The basic function of money is as a medium of exchange.  Inevitably, a secondary function arises as a measure of value. Money can be paper, precious metals, shells, whatever people in a particular time and place use as a medium of exchange.  There’s no reason that it would need to have “intrinsic” value. If  people use U S currency to buy and sell, then it is “real money.”

So is gold “real money?” I don’t think so. Just about nobody uses it as a medium of exchange. Historically, gold coins have sometimes been used but for ordinary people silver, copper, or base metal fiat-type money would be much more common.

Certainly fiat money can depreciate, usually does, and for us in the U S that has been and will almost certainly continue to be the trend.  And gold might be a good investment, in the sense that it will be exhangeable in the future for more real wealth than it is now, or at least more in comparison to other kinds of investments available to ordinary people. Of course, gold can depreciate too, if large new deposits are discovered or folks decide they really don’t want gold after all.  Which isn’t to say that either of these things will happen any time soon.

Anyone who wishes to resurrect the “gold standard” might want to read the late Peter Bernstein’s “Power of Gold,” or some other history books. Somehow we end up electing people who don’t put a high priority on keeping the dollar strong (or at least, not too much weaker).  If that’s a problem, then maybe we should be electing other people, or finding ways to reduce the power of those who purchase elections. Making the U S dollar convertible into a fixed amount of gold is not going to bring prosperity, or even prevent further disruption. There are plenty of examples of economic collapse under a gold standard.

It might, however, benefit those who own gold, or gold mining stocks.

Somebody please disagree with me, or I will assume all of the above to be true.

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Posted in corporate privilege, economic development, Government gone wild, human rights, mafia, money, speculation | No Comments »

Drug prohibition coordinates politicians and “gangs”

December 19th, 2011 by Administrator
Pilsen

image credit: Rosalyn Davis via Flickr (cc)

David Bernstein and Noah Isackson have a pretty good article in Chicago Magazine, Gangs and Politicians in Chicago: An Unholy Alliance. Focusing mainly on Alderman but also including State and Federal legislators, they assert that “gangs” provide the money, votes, and workers that enable officials to attain and retain their office.  In exchange, the governments these legislators control provide funds and favors.

Isackson and Bernstein stop short of suggesting how to repair this problem, but reading thru the article it’s clear that the main way these “gangs” prosper is thru unauthorized distribution of drugs.  And one of the main favors aldermen provide is assistance in avoiding “law enforcement” efforts to arrest them. End the drug prohibition, most of the “gangs’” income will end, and candidates will no longer get “gang” money.  They’ll have to rely on crooked lawyers, lobbyists, etc.

Some of the drug money, of course, has gone into real estate, with “gang” members able to get favors such as rezoning and inspection waivers. A land value tax, by constraining real estate speculation, would be of assistance here.

 

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Posted in Chicagoland, Government gone wild, mafia, public policy--nec, speculation, Unintended consequences | No Comments »

2014 Business Report

December 11th, 2011 by Administrator

image credit: Ged Carroll via Flickr (cc)

I used to be in the forecasting business; still am in a way.  So here’s a forecast:  Look for financial difficulties in the next few years at Sandisk, Yankees Entertainment and Sports (YES) Network, Louisville Arena Authority, and Harmony Oaks housing development in New Orleans. What kind of difficulties and when?

I don’t exactly know.  Sandisk has apparently survived sixteen years of Goldman Sachs help, and the smart parasite does not kill its host too quickly. Maybe not all four; in fact maybe these four have been selected for survival.

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Posted in corporate privilege, Government gone wild, investments, mafia | No Comments »

With enough assumptions, you don’t have to be correct

September 27th, 2011 by Administrator

Does anyone pay any attention to the “retirement” investment advice that financial institutions provide? I do, once in a great while. Of necessity, these comparisons assume stable tax laws and regulations, and ignore state income taxes. That’s two unrealistic assumptions right there. So why should we worry if the rest of the example is wrong, too?

What brings this to mind is an article in the Fall, 2011 issue of a publication from a major  stockbroker. The story centers on Jane, the daughter of William Smith, who died in 2010. William left her a $900,000 IRA. What should she do? Three options are presented:

  1.  Transfer the IRA into her own name immediately. According to the article, this would yield $620,100, after taxes, all received in 2011.
  2.  Inherit the IRA thru the estate. Apparently IRS regulations provide that you can sit on it for five years, then must withdraw the entire thing. Assuming 6% annual returns (another assumption that we know cannot be correct), Jane would in 2015 then inherit $782,862, after taxes.
  3.  Be the IRA’s designated beneficiary. (This would require that William had made the designation, which seems to be the point of the article.) Under this scenario, Jane withdraws minimum annual distributions, with the result that, in 2036 when she is 65 years old, she will have withdrawn $1,221,117 plus she will have an IRA worth $1,652,117.

But, if Jane took options (1) or (2), what would she have done with the money? We have assumed she is in the 35% tax bracket, so plausibly she doesn’t need the money right away, but would prefer to pile up more. So she would invest it. And we can assume she’ll get the same 6% annual return that we assumed for everything else. Further, we will assume that she pays 35% tax on this income (whereas in reality she will probably pay a lower rate on at least some dividends and capital gains, and might be able to hide some). So, netting 3.9% what is her pile worth in 2036? For option (1), I calculate $1,613,803. And she had complete control of this money, she could invest it in things prohibited to IRA’s, she could use it to flee the country, anything she wanted not effectively criminalized. That’s over twice as much as our friendly discount brokerage firm asserted.

So did the broker make a mistake here? No, because at the bottom of the chart it says:

Source: Ed Slott & Co, LLC. [the broker] is not responsible for information, opinions or services provided by third parties.

Just remember this if you are tempted to spend time reading,  or worse yet taking, “investment” advice provided without charge by financial firms. It’s worth every penny, almost.

I really shouldn’t be spending time on this, I have serious responsibilities in the world, but one does what one is compelled to do.

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Posted in corporate privilege, investments, mafia | No Comments »

Five minutes about 9/11

September 13th, 2011 by Administrator

This pretty well summarizes what I know, as well as quite a bit that I don’t.

Posted in dependent scholars, Government gone wild, human rights, mafia | No Comments »

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 »

Yes, LVT falls on the rich

August 25th, 2011 by Administrator

In case anyone doubted it, Bloomberg reports that real estate prices in vacation areas favored by the wealthy, such as Mount Desert ME and the Hamptons on Long Island, continue to rise even as prices generally have dropped.  And, yes, these are land prices, not house prices:

[B]illionaire Mitchell Rales bought a $5.5 million estate and tore it down to build a $25 million mansion

The only specific figure given for the wealthy enclaves is a rise of 14% in Southhampton, and the period to which this applies isn’t specified.

One hopes that local assessors are closely monitoring and responding to these trends.

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Posted in corporate privilege, land value, mafia, taxes | No Comments »
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