mafia – The Menace of Privilege

Putting government pension costs into perspective

Wirepoints recently issued a helpful report showing state and local government pension debt per Chicago household. They estimate the burden at $144,000 per household. This is a big number, but one could suppose that a prosperous household, over decades, could bear such a burden. Some could, but probably not those below poverty level. Take them out of the picture and the per household amount rises to $172,000. Excluding households with incomes below $75,000, or below $200,000, and the per-household amount rises further, to $393,000 and $2,022,000 respectively.

Here’s their chart: pension debt chart

Of course this doesn’t consider land values, nor businesses. If prime Chicago land is worth $1,000/sq ft, that’s 5.38 sq miles. But more typical land value is much less, probably no more than $25/sq ft. (it seems that nobody has tried to estimate citywide values). That would be 112 square miles. Once we subtract land owned by governments, churches and other exempt nonprofits, we might be approaching the total value of all land in Chicago. And that’s just for pensions, not bonded debt, nor needed capital improvements. Real estate buyers know, or certainly should know, about these encumbrances.

Of course money can be raised from business taxes, but that’s hardly a way to grow economic opportunity for Chicagoans. I would consider any tax revenue from “gaming” as a kind of business tax.

The lesson Wirepoints draws from this is that pensions have to be downsized somehow, which required amending the state constitution. And they go further, comparing government salaries to those of the private sector:

some local gov't salaries compared to average workers

So it looks like we’re going to have to confront a large number of people with guns and firehoses and control over our children, who have been getting a lot of money from us for years and may prefer not to moderate their demands.

Tho I don’t know how, this problem will be solved. Maybe MMT will yield a continuing stream of funds to bail us out. Maybe inflation will accelerate such that the fixed 3% compounded pension increase isn’t a burden. Maybe Chicagoans will decide that they just don’t want so many government “services.” Maybe politicians will decide to remove all taxes from productive economic activity, taxing only the value of land and other privileges (such as the private monopoly over street parking fees), which will grow the economy (while reducing the need for emergency services) sufficient to make pensions a non-issue.

And when it is solved, those who own land and other privileges will benefit most.

Tribune exposes one scandal and misses a bigger one

Property tax needs attention

credit: From Sovereign to Serf (CC BY-ND 2.0)

The Chicago Tribune, or what’s left of it, has issued a pretty good report on inequities and corruption at the Cook County Assessor’s office. Of particular note, they’ve included a lot of detailed statistics looking at assessment/sales price ratios, as well as a lot of details of recent history. I think it’s fair to describe their main points as:

Less expensive homes typically are assessed at a higher percentage of market value than more expensive homes, and therefore pay more taxes than they would if assessments more accurately reflected market prices.
Sophisticated homeowners are more likely than unsophisticated ones to appeal their assessments, and a large percentage of appeals are successful. This is one cause of the problem in (1).
The quality of assessments in Cook County doesn’t meet professional standards of accuracy. The MacArthur Foundation funded development of new mass appraisal methods which may provide more accurate results, but the Assessor has made little or no use of them.
The Cook County Assessor’s office suffers from some combination of corruption and incompetence.

Continue reading Tribune exposes one scandal and misses a bigger one

I don’t understand GovCare Part 2

image credit: Paul Narvaez via flickr (cc)

Over at New City, Tony Fitzpatrick tells us how he survived a heart attack. The good news, of course, is that he did, and it seems to have been due to an aware spouse, responsive ambulance, and nearby hospital with skilled and dedicated staff. Except for the first, those are advantages of living in a more-or-less functional and prosperous city, with pretty decent emergency services, all of which is reflected in the cost of land.

But somehow, because before “ObamaCare” Tony’s pre-existing condition prevented him from getting insurance for medical expenses, he credits O’Care with his survival. As if, five years ago, there were no ambulances, no hospitals, or no medical staff. In 2010 an ambulance still would have come, he still would have been taken to the closest available hospital, and the staff still would have done their best for him. The only difference is that, afterwards, he would have gotten a big bill, even bigger than the bill he probably did (or will) get. He might have paid the bill, or worked out some payment plan, or had to sign up for some kind of public assistance. And very possibly the hospital would have written off part of the bill. (Either way, before or after O’Care, the hospital would have a considerable staff who spent their time negotiating payments, filling out forms, etc.)

It wasn’t Obamacare, Tony. It was living in a city with helpful people and pretty good medical services. Either way, we’re all paying for it.

And, yeah, somebody ought to make this comment on Tony’s article, but I can’t seem to get thru New City’s spam protection. Maybe someone else can.

CTA Continues Investment in Employee Comfort

Yes, transit facilities should be comfortable. Investments to improve comfort can be a smart use of limited transit funds, attracting ridership and … oh, employee comfort. Well, sure, it’s good that we’re past the days when ‘L’ conductors had perch precariously between cars. And providing employees with comfortable facilities can be a cost-effective alternative to treating them with respect or paying them well — last I heard, some full-time journeyman CTA employees are paid less than $65,000 per year. But somebody forgot about the passengers.

Observant passengers already know that CTA has hundreds of public washrooms — owned by the public, tho not accessible to them. But in the short run [between elections] and for the most part, we are captive riders, and fares don’t provide the majority of CTA revenue anyway.

America’s Biggest Bank and America’s Biggest Crook and Cook County’s Treasurer

logo3 No, they aren’t all one and the same.

I personally haven’t had any problem with JP Morgan Chase. I had a CD with a predecessor bank and, when it matured, I retrieved it without difficulty. My real estate tax is paid thru them, and as far as I could tell my payments have been processed as intended. Once upon a time I may have had a credit card with them. But I long assumed JP Morgan Chase is a corrupt organization, because I seem to recall having read various things here and there, and, well, how could an honest bank become so large?

I hadn’t even thought about Morgan Chase’s role in the Madoff affair, but of course it was nontrivial, as documented by Helen Davis Chaitman and Lance Gothoffer on their JP Madoff website (and, one presumes, in their book). They have compiled the information, most of which was floating around the Internet, that “In the past four years alone, JPMorgan Chase has paid out $28,902,150,000 in fines and settlements for fraudulent and illegal practices.” And that, of course, is only the cases where they were caught and unable to avoid prosecution.

“Boycott JP Morgan Chase,” Chaitman and Gothoffer urge. Great idea, and I have done so as best I can. But I need to pay real estate tax, and as long as I live in Cook County it seems I must pay it to JP Morgan Chase. So I wrote Maria Pappas, the County Treasurer, saying

I see from the check with which I paid my most recent real estate tax bill that you are still using JP Morgan Chase to process the County’s receipts. It’s pretty clear that JP Morgan Chase is a criminal enterprise, having paid over $28.9 billion in fines and settlements for fraudulent and illegal practices during the past four years. Why is the County unable to use any less dishonest bank to process payments? Thanks in advance for your response.

And just a couple of [business] days later, I received a response from “Customer Service Department:”

Thank you for contacting the Office of Cook County Treasurer Maria Pappas.

Cook County aims to provide efficient payment processing to the greatest number of taxpayers at the least cost to those taxpayers. Nevertheless, we acknowledge that additional considerations are relevant in the County’s choice of vendors, and we take your concern under advisement.

We hope this information is helpful and thank you for the opportunity to be of assistance.

So, they didn’t exactly say “we are going to boycott JP Morgan Chase because they’re crooks,” but it at least it appears that somebody read and understood my message.

My other recent check processed by JP Morgan Chase was used to pay Illinois State income tax. I suppose I should write somebody (Governor? Treasurer? Comptroller?) with a similar message, but I just assume that anyone responsible for administering a tax on earned income is already beyond hope. Maybe someone else will do it.

Quid Pro Brew

image credit: Bernt Rostad (cc) via flickr

I was wondering a few weeks ago why Revolution Brewing supported the lobbyist-friendly “Transit Future” funding effort. How foolish I was, is not brewing a regulated industry desirous of government favors? WBEZ reminds us of the “Small Brew Act,” which would cut the federal taxes on the first 60,000 barrels produced. Senator Kirk, who has never done anything constructive that I can recall, toured the ~~Lobbyist~~ Revolution Brewery and spoke kindly of the act.

Of course, there is no just reason to impose any tax on production of beer or anything else people want, provided that land rent is collected by and for the benefit of the community. In the same situation, I might do the same thing Revolution has done, especially if I knew more about political strategy and good beer than about smart fiscal policy and public finance. But it’s a shame they’re doing it.

America Fast Forward to Transit Future Obligations

Over here in Illinois a coalition of powerful and dangerous people and organizations seems to be supporting a “transit future” initiative to harvest a “robust revenue stream,” inferentially a further increase in the sales tax. I say “seems to be” because I haven’t verified that everyone listed (including southern California’s moveLA) is in fact a supporter rather than a typo. And “inferentially” because the examples cited on the site involve sales tax increases.

GETTING TO HYDE PARK…

There is some fancy mapping at vision.transitfuture.org Continue reading America Fast Forward to Transit Future Obligations

Mortgage Wars & Collapse

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.

I don’t understand govcare part 1

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.”

Not easy to support private search

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.