Wait long enough, and great ideas come back around, although not necessarily wearing the same garb. Elizabeth Warren has just come out for a 2% wealth tax (above $50 million).* But this is simply an annualized version of my lump sum stochastic jubilee. What’s the advantage of redistributing the whole thing every 50 years (on average) vs a steady trickle? A periodic reset would interrupt long run processes of wealth inequality more fully than a tax, so long as the rate of return on financial assets is high enough to compensate for the extra annual pinch, which it most likely would be, since wealth holders would demand a higher rate of return. It would also be a lot more fun. On the other hand, it would be more complicated to administer and might be resisted by force.
On balance, I’d go for the jubilee, but I’ll take Warren’s version as a close second.
*There’s also an extra 1% on wealth in excess of $1 billion, but this is largely symbolic.
Monday, January 28, 2019
Friday, January 25, 2019
The Testament Of Omar Bin Said
In Washington Post, 1/25/19 metro section there is a story recounting that the Library of Congress of the US has acquired the only diary of an American slave written in Arabic by Omar bin Said in 1831, originally from Senagal. The completion of this world historical accesson will now be able to proceed now that the ridiculous US federal governmint shhutdown so stupidly ordered by Preisident Trump has come to an end for now
Omar bin Said was a deeply serious Islamic scholar up until his capture at age 37 in 1807, to be sent across the "Big Sea" into slavery in Charleston, SC, USA. He escaped from his initial captor only later to end up as the slave of the politically powerful Owen family of North Carolina, whom he remained owned by until his death at age 94 in 1864 in the midst of the US Civil War, just before the freeing of all American slaves.
Omar's manuscript in Arabic opens with Surah 67 from the Qur'an, which affrims that the ultimate ruler and owner of all things in the universe is Allah. Michael A. Ruaae of WaPo reports that he said regarding his arrival in the USA, "And in a Christian language, they sold me. A weak small, evil man called Johnson, an infidel who did not fear Allah at all. bought me."
Omar's later owners, who lived as he did fot thst later portion of his life on the Cape Fear River in North Carolina, treated him well, and he was in fact treated with great respect, with most people there realizing that he was a deeply wise and scholarly man, with his later owners granting him many privileges and much respect. with him likewise praising them for their kind conduct towards him. But he died their slave.
Barkley Rosser
Omar bin Said was a deeply serious Islamic scholar up until his capture at age 37 in 1807, to be sent across the "Big Sea" into slavery in Charleston, SC, USA. He escaped from his initial captor only later to end up as the slave of the politically powerful Owen family of North Carolina, whom he remained owned by until his death at age 94 in 1864 in the midst of the US Civil War, just before the freeing of all American slaves.
Omar's manuscript in Arabic opens with Surah 67 from the Qur'an, which affrims that the ultimate ruler and owner of all things in the universe is Allah. Michael A. Ruaae of WaPo reports that he said regarding his arrival in the USA, "And in a Christian language, they sold me. A weak small, evil man called Johnson, an infidel who did not fear Allah at all. bought me."
Omar's later owners, who lived as he did fot thst later portion of his life on the Cape Fear River in North Carolina, treated him well, and he was in fact treated with great respect, with most people there realizing that he was a deeply wise and scholarly man, with his later owners granting him many privileges and much respect. with him likewise praising them for their kind conduct towards him. But he died their slave.
Barkley Rosser
Thursday, January 24, 2019
BREAKING: Jimmy 'The Brute' DiNatale's daughter "used to put clothes on layaway"
From Siligato v. State:
The story starts in early 1985 when one Arthur Hall, a special agent of the F.B.I., was arrested following a four-month joint investigation by the New Jersey State Police and the F.B.I. into Hall's suspected involvement in an extensive motor-vehicle theft operation in the Atlantic City area. At that time Siligato was asserted to be a confidential informer of both the F.B.I. and the State Police.
According to Sheeran's affidavit in support of the warrant, Hall, while being interrogated after his arrest by State Police Detective Sergeant Grusemeyer, told Grusemeyer that Siligato had been involved with him, Hall, in the criminal activities under investigation and that Siligato had "once told him (Hall) that he (Siligato) had beaten up a Puerto Rican individual who later died from the said beating and that Jimmy DiNatale, Sr. helped him (Siligato) get away with the crime." Although Hall told Grusemeyer that the murder had taken place in Atlantic County, he, Hall, "was not sure about the time period of the offense." The affidavit goes on to recite that thereafter Lieutenant Kaufman of the State Police interrogated Hall further on that subject. Hall told Kaufman that Siligato operated two businesses on two separate properties in Hammonton, the Silly Gator Bar and the Elm Deli. Hall also recalled that his conversation with Siligato respecting the murder took place in the summer or fall of 1982 and that Siligato had then told him that the victim had owed him money. Hall further told Kaufman that Siligato had a quick and violent temper and that he, Hall, had helped Siligato construct forms for pouring concrete for steps and front and rear pads at the Elm Deli "two or three years ago." Hall was not, however, present when the concrete was poured. Sheeran's affidavit further explained that the Jimmy DiNatale referred to by Hall, who had died in 1983, was "a significant criminal associate of the Bruno Crime Family.""I was raised by a single mom who used to put clothes on layaway. I wasn't raised in privilege." -- Kellyanne Conway
From Philly Voice News:
DiNatale bought cigarettes for his vending company, Logan, from Bruno, and later from Raymond "Long John" Martorano, who worked under Bruno in the mob.
After Bruno was killed in March 1980, Martorano came to directly sell smokes to DiNatale and then Siligato.
Siligato eventually bought the Logan vending company from DiNatale, he said.
There were always closer cigarette distributors, but they “liked doing business” with Bruno because it gave them “advantages.”
“People do business with you because they know who he (Bruno) was and what he did,” Siligato said.
Providing vending machines – smokes, jukes, pinball and later video games – to bars was “a way to maneuver into the bar business.”
DiNatale would loan money to a bar owner, explained Siligato. In return he would place his vending machines in a bar. Then he would visit the bars “to make collections.”
Wednesday, January 23, 2019
The Nobel Economists Petitiion on Carbon Tax And Dividend Plan
As many now know, a large group of prominent economists, led by a large group of Nobel Prize winners, has published a petition in the Wall Street Journal. This petition declares the idea of putting a tax on carbon and then returning the receipts from it to the population on an even per capita basis to be the best and most efficient plan for dealing with global warming. This group continues to encourage more professional economists to sign this petition. I had previously received an invitation from Janet Yellen to do so, and today one came from Larry Summers. I kind of doubt that either specifically directed that I receive the invitation or, less likely, actually sent the message, although I could be wrong as I do know both of them. This petition shows how powerful this revenue neutral carbon tax fad has become.
As it is, I have not signed it, and my use of the word "fad" indicates my attitude. I really do not get why so many proiment and clearly highly intelligent economists have signed onto this proposal as being the one and only way to deal with this problem. Why are these people not mentioning cap and trade as an alternative (formerly known as "tradeable emissions permits"). There are multiple reasons to believe that cap and trade is at least as good if not better than this tax dividend proposal, both in terms of effectiveness and also in terms of the politics of getting something done.
The most famous cap and trade plan was that enacted in the US in 1990 for SO2 emissions. This plan eventually got superceded, but until that point it was universally viewed as a successful program, substantially reducing such emissions in a manner that did not trigger noticeable economic pain. There are now a substnatial number of carbon cap and trade systems in place, with the first one out the door being that of the EU, put in place to obey the Kyoto Protocol, which actually favored such systems. That system has faced criticism and had a major decline in its price in 2006, but has since stabilized, a fact not widely reported. Very recently the system has been put in place by the world's largest emitter, China. Other nations or major sub-national units adopting cap and trade for carbon include South Korea, California, and Ontario, The closest we came ot having a national program to deal wiith carbone emissions in the US was early in Obama's first term when he got a cap and trade plan passed by the House of Representatives, only to have it blocked by Republicans in the Senate.
I note that that the Paris Climate Accords do not favor ither taxes or cap and trade. Nations are free to use whatever policy they want to meet targets, either one of those or just plain old commands or anything else. The adoption of those Accords led some advocate of taxes to get all bent out of shape that they did not insist on only taxes as the proper policy, with perhaps the most ridiculous complaint coming from climatologist James Hansen, who denounced cap and trad as being a "capitalist" system, even though taxes also use markets to achieve their results.
In any case, theory says that there is no obvious reason to favor one over the other. In princople the efficient solution is to set equal marginal social costs and marginal social benefits of pollution removal. One does this by approaching this from the price side and the other side from the quantity side. An old paper by Martin Weitzman says one should use one or the other based on whether there is more uncertainty about costs or quantities. As it is, I would say that the uncertainties are greater on the quantiy than the cost side, which argues for a preference for a quantity approach. That would be cap and trsde. Another approach is to use both in what have been called "Lerner markets," following on the Greenwald-Stigliz thorem. Curiously Stiglitz is one of those Nobelists who has so far not signed this petition, although in the past he has supported using taxes.
Certainly taxes can achieve favorable results in pollutions policy, although the most dramatic cases known have involved somewhat smaller problems. META in Eruope lists the following as the most successful taxation approaches to environmental problems: a 2002 plastic bag tax in Ireland, a 1994 Finland tax on beverage bottles, a 1996 UK landfill tax, a 2007 fishing licesnse in Iceland, and a 1992 NOx tax in Sweden. The latter has led to a reduction of 30-40% of such pollution in Sweden, which iis certainly successful, alrhough a bit less than the SO2 reductions in the US from the cap and trade program.
Nations adopting carbon taxes, most of these so recently we have not yet seen results, include Chile, Portugal, UK, Ireland, Australia, Sweden, Finland, New Zealand, and France. As it is, the latter has brought out the potential political problems with this approach, the outbreak of jilets jaunes ("yellow vests") protests against the tax in France, although those protests, still ongoing, have morphed into something much broader against President Macron.
So this uprising in France should have given some pause to all these eminent petition signers, but especially given how many of them are Americans it is more surprising that they do not seem to have taken into account this politicsal reality: raising taxes is especially hard to do in the US, especially given the overwheming opposition of thr Republican Party to raising taxes, and especially for something that they do not approve of. Now in France it is true that there was not dividend or other payyout to citizens from the tax. But even in Wasington State, dominated by Democrats and posted on here previously by Peter Dorman, referenda on a carbon tax with payout have failed, with part of the problem arising from disagreements over the form of the payout.
I really do not get it. Do not alll these eminent economists, especiaally the American ones, not realize this hard reality, that it is essentially barking up a hopeless tree to call for a carbon tax in the US, even one with some system of returning the receipts to the population in some form or other. Why are they simply ignoring cap and trade, despite its clear successes including here inthe US? Is it beause of the defeat in Congress of Obama's plan? Heck, it got pretty far along, a lot farther along than any tax proposal is likely to get. Really, these people should have supported cap and trade as an alternative, although perhaps they think that would be distracting. Maybe, but their position has them simply making nonsense statements, namely that this tax and dividend plan is clearly the best way to go. That is very far from being the truth, especially given the old and well-known arguments of Weitzman from his famous "Prices and Quantities" paper.
(I must note that I may be biaed in favor of cap and trade as I was partly involved in setting up the very first cap and trade program by a government anywhere in the world, an effort led by prominent environmental economist, Tom Tietenberg, this being by the Wisconins Department of Natural Resources for BOD emissions into the Fox River in the mid-1970s, a program still in place and viewed as a success.)
Barkley Rosser
As it is, I have not signed it, and my use of the word "fad" indicates my attitude. I really do not get why so many proiment and clearly highly intelligent economists have signed onto this proposal as being the one and only way to deal with this problem. Why are these people not mentioning cap and trade as an alternative (formerly known as "tradeable emissions permits"). There are multiple reasons to believe that cap and trade is at least as good if not better than this tax dividend proposal, both in terms of effectiveness and also in terms of the politics of getting something done.
The most famous cap and trade plan was that enacted in the US in 1990 for SO2 emissions. This plan eventually got superceded, but until that point it was universally viewed as a successful program, substantially reducing such emissions in a manner that did not trigger noticeable economic pain. There are now a substnatial number of carbon cap and trade systems in place, with the first one out the door being that of the EU, put in place to obey the Kyoto Protocol, which actually favored such systems. That system has faced criticism and had a major decline in its price in 2006, but has since stabilized, a fact not widely reported. Very recently the system has been put in place by the world's largest emitter, China. Other nations or major sub-national units adopting cap and trade for carbon include South Korea, California, and Ontario, The closest we came ot having a national program to deal wiith carbone emissions in the US was early in Obama's first term when he got a cap and trade plan passed by the House of Representatives, only to have it blocked by Republicans in the Senate.
I note that that the Paris Climate Accords do not favor ither taxes or cap and trade. Nations are free to use whatever policy they want to meet targets, either one of those or just plain old commands or anything else. The adoption of those Accords led some advocate of taxes to get all bent out of shape that they did not insist on only taxes as the proper policy, with perhaps the most ridiculous complaint coming from climatologist James Hansen, who denounced cap and trad as being a "capitalist" system, even though taxes also use markets to achieve their results.
In any case, theory says that there is no obvious reason to favor one over the other. In princople the efficient solution is to set equal marginal social costs and marginal social benefits of pollution removal. One does this by approaching this from the price side and the other side from the quantity side. An old paper by Martin Weitzman says one should use one or the other based on whether there is more uncertainty about costs or quantities. As it is, I would say that the uncertainties are greater on the quantiy than the cost side, which argues for a preference for a quantity approach. That would be cap and trsde. Another approach is to use both in what have been called "Lerner markets," following on the Greenwald-Stigliz thorem. Curiously Stiglitz is one of those Nobelists who has so far not signed this petition, although in the past he has supported using taxes.
Certainly taxes can achieve favorable results in pollutions policy, although the most dramatic cases known have involved somewhat smaller problems. META in Eruope lists the following as the most successful taxation approaches to environmental problems: a 2002 plastic bag tax in Ireland, a 1994 Finland tax on beverage bottles, a 1996 UK landfill tax, a 2007 fishing licesnse in Iceland, and a 1992 NOx tax in Sweden. The latter has led to a reduction of 30-40% of such pollution in Sweden, which iis certainly successful, alrhough a bit less than the SO2 reductions in the US from the cap and trade program.
Nations adopting carbon taxes, most of these so recently we have not yet seen results, include Chile, Portugal, UK, Ireland, Australia, Sweden, Finland, New Zealand, and France. As it is, the latter has brought out the potential political problems with this approach, the outbreak of jilets jaunes ("yellow vests") protests against the tax in France, although those protests, still ongoing, have morphed into something much broader against President Macron.
So this uprising in France should have given some pause to all these eminent petition signers, but especially given how many of them are Americans it is more surprising that they do not seem to have taken into account this politicsal reality: raising taxes is especially hard to do in the US, especially given the overwheming opposition of thr Republican Party to raising taxes, and especially for something that they do not approve of. Now in France it is true that there was not dividend or other payyout to citizens from the tax. But even in Wasington State, dominated by Democrats and posted on here previously by Peter Dorman, referenda on a carbon tax with payout have failed, with part of the problem arising from disagreements over the form of the payout.
I really do not get it. Do not alll these eminent economists, especiaally the American ones, not realize this hard reality, that it is essentially barking up a hopeless tree to call for a carbon tax in the US, even one with some system of returning the receipts to the population in some form or other. Why are they simply ignoring cap and trade, despite its clear successes including here inthe US? Is it beause of the defeat in Congress of Obama's plan? Heck, it got pretty far along, a lot farther along than any tax proposal is likely to get. Really, these people should have supported cap and trade as an alternative, although perhaps they think that would be distracting. Maybe, but their position has them simply making nonsense statements, namely that this tax and dividend plan is clearly the best way to go. That is very far from being the truth, especially given the old and well-known arguments of Weitzman from his famous "Prices and Quantities" paper.
(I must note that I may be biaed in favor of cap and trade as I was partly involved in setting up the very first cap and trade program by a government anywhere in the world, an effort led by prominent environmental economist, Tom Tietenberg, this being by the Wisconins Department of Natural Resources for BOD emissions into the Fox River in the mid-1970s, a program still in place and viewed as a success.)
Barkley Rosser
Tuesday, January 22, 2019
Fighting Outrage with Outrage
Having watched ALL the videos, my humble opinion is "a plague on all your houses." Not so much the hapless participants at the Lincoln Memorial as the viral legions of "outraged" spectators who turned a circus of misperception into a carnival of righteousness and condemnation.
HAVEN'T YOU ALL GOT ANYTHING BETTER TO DO?
Trust me when I say that OUTRAGE has a right-wing bias. There are several reasons for this. One is that the right is fueled by outrage. A second reason is that the Mostly Seagulls Media is easily manipulated by the right-wing outrage Wurlitzer, which is heavily subsidized. The third is that you can't beat something with nothing. Liberals seem to think that outrage is some kind of spontaneous expression of disapproval. WRONG! (see points one and two) It's one thing when a mob of MAGA-hatted brats are disrespectful to a Native American elder beating a drum. But it is something else entirely different when a restaurant owner politely refuses service to a lying press secretary. One is just kids-will-be-kids, the other is incivility.
Having heard that a public relations firm associated with Mitch McConnell wrote the exculpatory explanation for the poster-boy Covington kid, I begin to wonder if maybe that firm staged the whole incident as sort of a rhinestone Reichstag Fire. Because, you know, everything the right doesn't want you to pay attention to is a false-flag carried out by crisis actors.
Maybe if people were busy building the General Strike, they wouldn't have so much time for pointless spectacles of outrage.
HAVEN'T YOU ALL GOT ANYTHING BETTER TO DO?
Trust me when I say that OUTRAGE has a right-wing bias. There are several reasons for this. One is that the right is fueled by outrage. A second reason is that the Mostly Seagulls Media is easily manipulated by the right-wing outrage Wurlitzer, which is heavily subsidized. The third is that you can't beat something with nothing. Liberals seem to think that outrage is some kind of spontaneous expression of disapproval. WRONG! (see points one and two) It's one thing when a mob of MAGA-hatted brats are disrespectful to a Native American elder beating a drum. But it is something else entirely different when a restaurant owner politely refuses service to a lying press secretary. One is just kids-will-be-kids, the other is incivility.
Having heard that a public relations firm associated with Mitch McConnell wrote the exculpatory explanation for the poster-boy Covington kid, I begin to wonder if maybe that firm staged the whole incident as sort of a rhinestone Reichstag Fire. Because, you know, everything the right doesn't want you to pay attention to is a false-flag carried out by crisis actors.
Maybe if people were busy building the General Strike, they wouldn't have so much time for pointless spectacles of outrage.
Monday, January 21, 2019
Weirdly Non-Monotonic Yield Curves
This is a situation that may be on the verge of disappearing and more or less normalizing, but over the last couple of months US bond markets have exhibited a weird phenomenon of non-monotonicity. It has been even weirder than what we saw during the period of negative nomial interest rates, when what we saw was interest rates on US treasury securities fell from the shortest time horizon to a low usually around the two-year time horizon, with the pattern then revetting to its usal upward slope. What has been going on recently has been a pattern of rates initially rising with the time horizon in the normal pattern, then turning aound and declining, then turning around yet again and rising again. I do not know what to make of any of this. I exhibit it in a table below for the three days, January 2, January 10, and January 18 of this year.
3 mo. 1 yr. 2 yr. 3 yr. 5 yr. 10 yr. 30 yr.
1/2/19 2.42 2.60 2.50 2.47 2.49 2.66 2.97
1/10/19 2.43 2.59 2.56 2.54 2.56 2.74 3.06
1/18/19 2.41 2.60 2.62 2.60 2.62 2.79 3.09
So at the beginning of the year the rates rose from 3 months to 1 year, with rates declining to 3 years, and then rising after that. The same pattern was still holding on January 10. On January 18 things were somewhat more normalized with the ind-range decline being a decline from the 2 year to 3 year range, but then reversing to rise in the normal way after that.
I note that we still have not yet seen an explanation of the pattern we saw (and still see in some nations) during periods of negative nominal rates of them declining to around the two year time horizon and then reversing. One possible explanation may be that central banks have tended to keep the very shortest term rates ither non-negative or not as negative as market forces were pushing them so those rates declined as one moved out of the zone of more immediate central bank control, then to turn around and rise.
In this case it is curious that the rates have been rising to about that two year zone (or just shy of it) and then declinig, and then rising. If my explanation of what went on in the negative rates perios is correct, well, I do not see any equivalent for this situation to explain it. We are seeing more changes in directon of the rates, although these variations have not been great The one thing I can see is that December is when this weird pattern appeared, and on January 3 Jay Powell spoke at the ASSA/AEA meetings shifting the Fed to a more dovish stance. Has this change been partly in response to this weird yield curve shape and that now we are indeed seeing some normalization as the new policy gradually sinks in? I do not know, and I doubt anybody else does either.
Barkley Rosser
3 mo. 1 yr. 2 yr. 3 yr. 5 yr. 10 yr. 30 yr.
1/2/19 2.42 2.60 2.50 2.47 2.49 2.66 2.97
1/10/19 2.43 2.59 2.56 2.54 2.56 2.74 3.06
1/18/19 2.41 2.60 2.62 2.60 2.62 2.79 3.09
So at the beginning of the year the rates rose from 3 months to 1 year, with rates declining to 3 years, and then rising after that. The same pattern was still holding on January 10. On January 18 things were somewhat more normalized with the ind-range decline being a decline from the 2 year to 3 year range, but then reversing to rise in the normal way after that.
I note that we still have not yet seen an explanation of the pattern we saw (and still see in some nations) during periods of negative nominal rates of them declining to around the two year time horizon and then reversing. One possible explanation may be that central banks have tended to keep the very shortest term rates ither non-negative or not as negative as market forces were pushing them so those rates declined as one moved out of the zone of more immediate central bank control, then to turn around and rise.
In this case it is curious that the rates have been rising to about that two year zone (or just shy of it) and then declinig, and then rising. If my explanation of what went on in the negative rates perios is correct, well, I do not see any equivalent for this situation to explain it. We are seeing more changes in directon of the rates, although these variations have not been great The one thing I can see is that December is when this weird pattern appeared, and on January 3 Jay Powell spoke at the ASSA/AEA meetings shifting the Fed to a more dovish stance. Has this change been partly in response to this weird yield curve shape and that now we are indeed seeing some normalization as the new policy gradually sinks in? I do not know, and I doubt anybody else does either.
Barkley Rosser
Saturday, January 19, 2019
Not Accurate
BuzzFeed’s description of specific statements to the special counsel’s office, and characterization of documents and testimony obtained by this office, regarding Michael Cohen’s congressional testimony are not accurate. -- Office of the Special Counsel.
If this is the first story the special counsel has felt compelled to dispute, does that mean he had no objection to all the others that have come out before now? -- Peter Baker, New York Times.These things cannot both be true:
- The Mueller investigation is a witch hunt fomented by a Mueller-Comey-Strzok cabal of Trump haters.
- The statement from the Office of the Special Counsel calling BuzzFeed's "description of specific statements to the special counsel's office" "not accurate" definitively refutes the two-year long fake news crusade against Trump by the media.
Parsing the special counsel's statement, it seems to refer to the "description of specific statements to the special counsel's office, and characterization of documents and testimony obtained by this office." Period. Note the repetition of the word "office." The evidence may or may not exist. The office of the special counsel may or may not be in possession of it. They do not confirm or deny that they are not confirming or denying.
But "BuzzFeed's description" is "not accurate." Where does the crucial word "office" appear in the BuzzFeed description?
The special counsel’s office learned about Trump’s directive for Cohen to lie to Congress through interviews with multiple witnesses from the Trump Organization and internal company emails, text messages, and a cache of other documents.
"The special counsel's office learned..." It is not accurate to say that the office learned (through interviews, etc.). This "inaccuracy" could mean simply that the office of the special counsel has not yet determined that Trump directed Cohen to lie.
Subscribe to:
Comments (Atom)