The Wealth Defense Industry

Wonderful phrase; wish I had thought of it.  It’s Jeffrey Winters’ term for the pile of lawyers and others who contrive technically-legal ways for wealthy people to avoid paying most of the tax for which they would otherwise be liable. His recent book, Oligarchy, seems to have a lot of other details we haven’t seen elsewhere.

All I actually know about Winters and his work comes from this interview, broadcast this afternoon on WBEZ. I did note one error: The U S federal income tax imposed in 1894 was the second, not the first, which was in  1861. He seems to have compiled a lot of data that we don’t usually see (some of it presented in this pdf article).  Naturally, altho his work is descriptive, he is asked about the potential for the Occupants or other movements to alleviate the oligarchs’ control.  One wishes that he had mentioned the importance of taxing privilege, instead of production. Perhaps he is unfamiliar with the concept.

Producing electricity from waste heat

The general concept of using waste heat from one process as an energy source for another is quite old, but this report says that some University of Minnesota researchers have figured out a practical way to generate electricity from it. It involves a new alloy which changes magnetic properties when it’s exposed to heat. Of course I have no idea whether it’s practical, or even whether some patent troll will step in to exact a fee for its use.  It will be interesting to check back in a year or two and see what has become of it.

And let’s remember, it was publicly funded (fortunately completed before the State of Minnesota suspended operations)

Funding for early research on the alloy came from a Multidisciplinary University Research Initiative (MURI) grant from the U.S. Office of Naval Research (involving other universities including the California Institute of Technology, Rutgers University, University of Washington and University of Maryland), and research grants from the U.S. Air Force and the National Science Foundation. The research is also tentatively funded by a small seed grant from the University of Minnesota’s Initiative for Renewable Energy and the Environment.

(No, I don’t know what “tentatively funded” means regarding completed work.)

This is your technology.  Don’t let the big guys take it away from you.Famous photo, unless it has been relocated

Excess returns to Congress

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.

Reality and the Real World Economics Review Blog

Somehow the “mainstream” didn’t anticipate the 2008 global financial crisis until it actually happened, yet a few analysts did issue warnings.  So it seemed like a good idea for the Real World Economics Review Blog to organize a contest and award a prize to “the economist who first and most cogently warned the world of the coming Global Financial Collapse.” Yet somehow they couldn’t allow even the nomination of the guy who predicted it first and most accurately (pdf).  We are fortunate that Mason Gaffney has reviewed the record and documented what happened.

Another way the poor and their land are separated

Andrew Kahrl‘s talk this afternoon at APA was “The Plight of Black Coastal Landowners in the Sunbelt South and Its Lessons for Post–Housing Bubble America.”

He used examples from New Hanover County (NC) and Virginia Beach (VA).  A hundred years ago, coastal land wasn’t really good for farming, and folks were aware of the danger of storms, so it tended to be cheap. Poor black farmers wanted to own their own land, and this was what they could get.  Continue reading Another way the poor and their land are separated

National Police Misconduct Statistics and Reporting Project

[November 2012 update: Earlier this year, the project got something like the resources it deserves, having been adopted by the Cato Institute.  The new link is, with browsers apparently being forwarded from the old link. The text below is unedited since it was originally posted.]

A very impressive volunteer statistical effort, injustice everywhere simply summarizes and tallies reports of one kind of injustice in one country, specifically police misconduct in the United States.  Certainly a big enough category, it turns out.  For the first three quarters of 2010, a total of 3814 reports, involving 4966 police officers and sheriff’s deputies.   Sounds like a lot of misconduct, tho actually less than 1% of the country’s government-employed law enforcement people.

All information is from published reports, and a link to each (a dozen or more most days) is provided.  “National Police Misconduct Statistics and Reporting Project” seems to be the overall project name, but a bit ponderous for a URL.

This is one of those things that somebody ought to do, and fortunately somebody does.   It’s really something the government should be doing, or, if you don’t trust the government, perhaps a university.  Or, if you don’t trust entrenched university staff, it falls to independent scholars, and that’s what we’ve got.

It really deserves more resources, so that systematic data-gathering, analysis and followup could be done.  Those of us with a few extra dollars can help, especially if we do not itemize our tax deductions. Injustice Everywhere hasn’t yet managed to jump thru the hoops to charitable status certification. There’s a donation link near the top of their web site.

Podcasts: appropriate agriculture, inappropriate singularity, Argentina

Podcasts can be a way to learn while doing something else.  I’ve encountered some interesting ones in recent weeks.

Grow rice in Vermont? Why not? Continue reading Podcasts: appropriate agriculture, inappropriate singularity, Argentina

Does poverty cause conservatism?

A University of Tennessee study, reported at among other places, finds that, when incomes are more concentrated, people are more likely to say they oppose governmental redistribution of income.  This decidedly includes low-income people.  Why would low-income people oppose redistribution of income?

It might be because they’re too busy with survival to pay much attention to the question.  Or, having been screwed by the powers-that-be, they assume any redistribution will be away from them, toward those already in control.  Might even be that they are “free-market” types who expect to make a better living in the absence of government interference. I really have no idea.

I’ve only seen the news report, the actual paper seems to be behind a paywall, so there’s a lot of detail left unspecified. Such as whether “redistribution” is defined to include the current pattern of redistribution from those who work to  those who manipulate, what specific surveys were analyzed, and how the matter of sequence (Does public support for redistribution cause redistributive programs to be expanded?) was handled.

Why Why the German Republic Fell is Hard to Find

Bruno Heilig’s 1938 essay Why the German Republic Fell is posted and freely available on the Internet. Unfortunately, the Scholars at the School of Cooperative Individualism are not the world’s greatest proofreaders, so google has some trouble finding it, but it is here.  There is also a nice abridgement here.  Hardcopy, of course, is for sale cheap at Schalkenbach.

I read this booklet about 25 years ago, didn’t remember a thing about it, but hoped it would give me some insight into how the Weimar inflation was dealt with. No such luck, it really begins after inflation had been tamed and prosperity commenced, but it’s all the more worthwhile for that.   Heilig asserts that the rise of Hitler was caused by land speculation. I am no expert in German history, but he does seem to make a good case.

Not by land speculation exclusively, of course, but land speculation as an ingredient along with:

  • public aid to large landlords, encouraging them to withhold land from use
  • privatization, on especially favorable terms to connected individuals and groups
  • failure to fully utilize farmland, resulting in unemployment as well as high food prices
  • tariffs, raising prices of consumer and industrial goods
  • public subsidies to favored enterprises
  • control of the major news media by the landed class

Land prices soared, wages fell, eventually the economy slowed, and:

Although it was obvious that the, “invariable costs” — i.e. the tribute land monopoly exacts from the working people — were eating into all production, the responsible men and the leading exponents of what was taught as economics kept their eyes, as if under some hypnotic influence, fixed upon the worker’s pay-packet.

Reformers advocated unworkable or ineffective solutions: If progress brings poverty, they urged that we retard progress.

The newspapers, of course, served the interests of their owners:

I need not explain what that propaganda organization meant in operation. Its effect was to sway public opinion into believing that the interests of the landowners were the interests of the nation. Subsidizing the landlords was the accepted policy for preserving and even saving the sources of subsistence of the people: the higher tariff walls were for the benefit of the wage-earning population: increase in land values meant increase in the national wealth: and so on…

[A]s unemployment grew, and with it poverty and the fear of poverty, so grew the influence of the Nazi Party, which was making its lavish promises to the frustrated and its violent appeal to the revenges of a populace aware of its wrongs but condemned to hear only a malignant and distorted explanation of them.

Much in this essay is similar to today, tho Heilig never uses words like “TIF” or “terrorism.”  Some things are decidely different, for example I don’t think Germany at the time had anything like a well-paid public employee class, nor a large class of small-scale investors, such as workers with 401k’s.  But it’s easy to see how today’s conditions could lead to similar results.