Government gone wild – Page 4 – The Menace of Privilege

Drug prohibition coordinates politicians and “gangs”

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.

Another successful politician endorses land value tax

Nick Boles

MP for Grantham and Stamford. New-intake MP and a key moderniser. Former Policy Exchange director and one of the Notting Hill set. Deemed close to the leadership. Tipped for bigger things

I assume this means he’s successful, British political terminology being rather unfamiliar to me. What’s really important is that

Nick Boles, The MP for Grantham and Stamford says a Land Value Tax should be introduced and use the proceeds to cut National Insurance – permanently.

He doesn’t want to do it exactly how I would want to do it, because he seems to want to exclude owner-occupied residential land and farmland, without limitation. But the important thing is, he’s a successful politician, he gets elected, and he appears to want to move toward a sound economy. I’m just some guy with a blog.

I also don’t know how all this relates to the British custom of building homes on rented land far more commonly than Americans do. But it seems to be his top priority.

Source: FT via GN

2014 Business Report

Blue Screen of Bankruptcy — 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.

Outrageous assessments

Gary Lucido writes of a small parcel at 3710 N. Kenmore, offered at $9.9 million ($4950/sq ft) after failing to sell when offered at lower prices. While the price seems outrageous, the property is very close to Wrigley Field and could be used for a billboard or rooftop viewing platform. We know that the former use has commanded $350,000/year on a nearby building, which seems to justify a multi-million-dollar asking price.

So we have a parcel worth, let us say, five million dollars. What are the taxes? Continue reading Outrageous assessments

Karl Marx at the Tea Party

photo credit: jtriefn via flickr (cc)

As the national debt finds its support in the public revenue, which must cover the yearly payments for interest, etc., the modern system of taxation was the necessary complement of the system of national loans. The loans enable the government to meet extraordinary expenses, without the tax-payers feeling it immediately, but they necessitate, as a consequence, increased taxes. On the other hand, the raising of taxation caused by the accumulation of debts contracted one after another, compels the government always to have recourse to new loans for new extraordinary expenses. Modern fiscality, whose pivot is formed by taxes on the most necessary means of subsistence (thereby increasing their price), thus contains within itself the germ of automatic progression. Over-taxation is not an incident, but rather a principle. In Holland, therefore, where this system was first inaugurated, the great patriot, De Witt, has in his “Maxims” extolled it as the best system for making the wage-labourer submissive, frugal, industrious, and overburdened with labour. The destructive influence that it exercises on the condition of the wage-labourer concerns us less however, here, than the forcible expropriation, resulting from it, of peasants, artisans, and in a word, all elements of the lower middle-class.

— K Marx, Capital, Part VIII Chapter XXXI (source)

So Karl objects to public debts, sees them requiring high taxes as a way to keep the workers docile and the lower middle-class poor. What part of this do the Tea-Partiers disagree with?

Five minutes about 9/11

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

Discouraging inventors and tax dodgers

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. )

Government helping private “enterprise”

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.

Land Economics and Ownership– cancelled

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.

Does Accurate Forecasting Get Attention?

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.