Tag Archives: political economy

Construction Union Vig

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In California last week, legislators and interest groups declared dead a measure…to allow certain apartments with some low-income units to sidestep the state’s environmental review process. That followed a failed effort by state lawmakers in New York earlier this year to renew a widely used tax break for rental housing in New York City….

For both measures, construction unions were key to the defeat, as they won over key allies with their argument that the government shouldn’t be aiding apartment development without also guaranteeing union-level wages.

Let’s see, low income housing, union wages.  Union wages, low income housing.

Union wages add some 20% to the cost of residential construction in California and New York.  Low income folks—who have the lowest ability to pay up; even union leadership understands that tautology—are being gouged by these unions.

That 20% is the vig low income folks must pay to have housing.  Alternatively, that 20% is the vig others must pay to subsidize low income housing.

Nice construction project you got there, really cool that it’s for the less fortunate.  Be too bad if something were to happen to it.

A Question of Cash

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Kenneth Rogoff, Thomas D. Cabot Professor of Public Policy at Harvard University and ex-Chief Economist of the IMF, thinks we should get rid of most of the cash—paper currency—we have in circulation.  Rogoff claims to not want to do away with cash altogether, but regardless of his goal, it’s clear that eliminating a particular cash instrument can only be a first step and not a last one.

[P]aper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it—that is, moving to a society where cash is used less frequently and mainly for small transactions—could be a big help.

Really?  Hmm….

There is little debate among law-enforcement agencies that paper currency, especially large notes such as the US $100 bill, facilitates crime: racketeering, extortion, money laundering, drug and human trafficking, the corruption of public officials, not to mention terrorism.

This would matter if we had a fundamentally criminal society operating in a fundamentally criminal economy.  We have, though, a nearly $18 trillion economy, and crime—crime where cash matters, which is largely limited to the categories identified above, don’t play that big a role.  This is not to say that these crime types aren’t worth worrying about, but it’s better to deal with the crimes themselves rather than manipulate our cash forms or availability.

But Rogoff gives the game away with this:

According to the Internal Revenue Service, a lot of the action is concentrated in small cash-intensive businesses, where it is difficult to verify sales and the self-reporting of income. By contrast, businesses that take payments mostly by check, bank card or electronic transfer know that it is much easier for tax authorities to catch them dissembling.

That’s the rub.  Reducing the availability of instruments for cash transactions—pushing ordinary American citizens into transaction mechanisms which Government can track—facilitates exactly that: Government tracking of the activities of American citizens, a tracking in which Government most assuredly engages, sometimes for legitimate reasons, but far too often for no better reason than that a bureaucrat has a prurient interest.  And worse, because Government dislikes particular groups of Americans and so engages in any fishing expedition it thinks it can get away with.

The upshot of restricting cash instruments, then, is that everyone gets punished for the misbehavior of the few, and worse, the power of Government to track our private doings, for any purpose at all to which a bureaucrat might take a notion, is enhanced.

How very Progressive of Rogoff.

What’s Scaring Her So Much?

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Democratic Party Presidential candidate Hillary Clinton, with the active support of the State Department which she used to lead, is refusing to release all of her State Department daily schedules until after the elections this fall.  These schedules would reveal with whom she met, for how long, and on what (claimed) subjects.  While some of those schedules have been released already (not voluntarily, but only under court order pursuant to an AP FOIA request that had to be satisfied via AP’s lawsuit), she—and State—are slow walking the release of the rest.  Now why would that be?

Recall that the daily schedules so far released demonstrate that while Secretary of State, Clinton met with or had telephone conversations with thousands of diplomats, other foreign dignitaries, Federal employees, and the like.  The released schedules also demonstrate that Clinton met with 154 private individuals, 85 of whom had given, in aggregate, more than $155 million to her Clinton Foundation.

The Clinton campaign has accused the AP of “cherry picking” schedules by focusing on those 154 individuals, saying that these folks are a tiny per centage of the meetings and telephone calls Clinton had as Secretary of State.

The campaign is correct, as a matter of third grade arithmetic, that those private individuals are a tiny per centage of the total.  What the campaign is carefully ignoring, though, is that Secretary Clinton was obligated to meet or otherwise talk with those thousands of diplomats, other foreign dignitaries, Federal employees, and the like.

What the campaign also is carefully ignoring is that Secretary Clinton was obligated to meet or otherwise talk with zero per cent of those 154 individuals; instead those 154 represent 100% of a population 55% of whom had given her Foundation those $155+ million.

This is of a piece with Clinton’s private email server, on which she conducted official State Department business, and which she had set up for the avowed purpose of concealing her emails from public scrutiny.

What is Clinton so desperate to hide?

Clintons, Clinton Foundation, and Donations

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Democratic Party Presidential candidate Hillary Clinton is making the claim, through her campaign staff, that the Clinton Foundation will stop taking donations from foreign countries or from corporations in the event she’s elected President.

Republican Party Presidential candidate Donald Trump and his campaign organization are pointing out a loophole in that Clinton commitment: the promised ban carefully does not include smaller Clinton-tied charities like Alliance for a Healthier Generation, Clinton Giustra Enterprise Partnership, and Clinton Health Access Initiative (CHAI), among others.

There’s another loophole in Clinton’s commitment, though.  The Clinton Foundation would be permitted to accept donations (only) from

US citizens and independent charities[.]

Notice that.  Foreign governments and other foreign favor-seekers would have only to make their donations to any of a number of those “independent charities,” which then would pass along the money to the Clinton Foundation.  Wall Street donors and their like, US citizens for the most part, can still buy their favors directly through the Clinton Foundation.  That’s a loophole you could drive a truck through.

“Commitment,” indeed.  How very Clinton-esque.

Death Tax

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Democratic Party Presidential candidate Hillary Clinton demurs from Republican Party Presidential candidate Donald Trump’s plan to repeal the death tax—the 40% tax on a man’s estate that the government currently claims because the man was rude enough to die.  Never mind that the man’s heirs might have a claim on the money—no, it’s Government’s money, says the Progressive Democrat.

Clinton claims she wants to build schools, cancel student loans, and provide health care to veterans with the proceeds from that death tax.

Let’s review the bidding.

Clinton has no intention of building voucher or charter schools; she only wants to build “public” schools run by her supporting teachers unions—crony capitalism in our education system.

Clinton’s wish to cancel student loans sends an equally terrible signal: that private citizens aren’t responsible for their own debts or their own actions: government will take care of it for them.  Which puts government in charge of those citizens’ choices, too, but carefully elides that part of her wish.

Clinton’s claims regarding our veterans’ health?  Compare that with the Democratic administration’s handling of the Veterans Affairs and its abject failure regarding our veterans’ health.  The Obama administration has taken no meaningful steps to correct that disaster (some might say refused to take steps), and she brags about wanting to continue President Barack Obama’s (D) policies.  And she says nothing to reconcile the opposition between her veterans-related claims on the one hand and her veterans-related claims on the other.

There’s another aspect to this death tax of hers, too.  Most of the estates being inherited (or which inheritance is blocked by the death tax) are in the form of small, family businesses and farms—businesses which usually have to be sold off to raise the cash to pay the vig tax.  And that leaves the surviving families, those heirs, without the means to earn their livelihood.