MICHAEL MUNGER, a professor of political science at Duke University, insightfully compares “tax expenditures” to the Catholic church’s practice of selling indulgences, which fomented the Reformation by sending Martin Luther into fit of righteous pique. Mr Munger reminds us that
Indulgences were “get out of purgatory free!” cards. Of course, it was the church that had created the idea of purgatory in the first place. Then the church granted itself the power to release souls from purgatory (for a significant fee, of course).As Luther put it, in his Thesis No. 27, “as the penny jingles into the money-box, the soul flies out.”
If high tax rates are a sort of purgatory (and who doubts it?), then tax credits are indeed akin to indulgences. Mr Munger writes:
We let people out of tax purgatory if they own large houses, if they receive expensive health insurance from their employer, if they produce sugar or ethanol, or any of thousands of special categories. These categories have nothing to do with need (is there a national defense justification for a protected sugar industry?), but instead depend on how much these sinners are willing to pay to members of Congress.
“As the campaign contributions jingle into the campaign funds, the tax revenues fly out”, he adds. As a result, “we have categories within categories within subgroups, all at different prices, deductions or exemptions that release some elites from the published tax rates.
Category: History
The Scourge of the Faith-Based Paper Dollar: Jim Grant foresees a new American gold standard despite Wall Street’s stake in monetary chaos
Jim Grant’s father pursued a varied career, including studying the timpani. He even played for a while with the Pittsburgh Symphony. But the day came when he rethought his career choice. “For the Flying Dutchman overture,” says his son, “they had him cranking a wind machine.”
The younger Mr. Grant, who can be sardonic about his own chosen profession, might say he’s spent the past 28 years cranking a wind machine, though it would be a grossly unjust characterization. Mr. Grant is founder and writer of Grant’s Interest Rate Observer, perhaps the most iconic of the Wall Street newsletters. He is also one of Wall Street’s strongest advocates of the gold standard, knowing full well it would take away much of Wall Street’s fun.
You might say that, as a journalist and historian of finance, he has been in training his whole life for times like ours—in which the monetary disorders he has so astutely chronicled are reaching a crescendo. The abiding interest of Grant’s, both man and newsletter, has been the question of value, and how to know it. “Kids today talk about beer goggles—an especially sympathetic state of perception with regard to a member of the opposite sex,” he says of our current market environment. “We collectively wear interest-rate goggles because we see market values through the prism of zero-percent funding costs. Everything is distorted.”
Panorama: Penn Museum of Archaeology & Anthropology
Click or tap to view this handheld panoramic scene from the Penn Museum of Archaeology & Anthropology. Apologies for a few scene errors.
Iraq 2011: Jet skiing the Triangle of Death, listening to Bee Gee songs–and pondering what comes next
The taxi driver to Beirut airport tells me that yom al-qiyama (the day of judgment) is approaching. There will be a big explosion soon — a very big explosion. The revolutions sweeping the Arab World are not good. Islamic parties will come to power everywhere. There will be no more Christians left in the Middle East. Believe me, believe me, he insists. In anticipation, he will make the Hajj to Mecca this year, inshallah. I tell him that I am traveling to Iraq as a tourist. The look he gives me in the rear view mirror says it all: He thinks I am crazy.
I am heading back to Iraq nine months after I left my job as Political Advisor to the Commanding General of U.S. Forces Iraq. Earlier this year, a Sheikh emailed me from his iPad, “Miss Emma we miss you. You must come visit us as a guest. You will stay with me. And you will have no power!” I am excited and nervous. The plane is about a third full. I am the only foreigner. I look around at my fellow passengers. I wonder who they are and whether they bear a grudge for something we might have done.
The flight is one and a half hours long. I read and doze. As we approach Iraq, I look out of the window. The sky is full of sand and visibility is poor. But I can make out the Euphrates below. Land of the two rivers, I am coming back.
I do not have an Iraqi visa. Visas issued in Iraqi Embassies abroad are not recognized by Baghdad airport. I have a letter from an Iraqi General in the Ministry of Interior, complete with a signature and stamp. In the airport, I present my passport and letter, fill out a form, pay $80, and receive a visa within 15 minutes. I collect my bag. I am through. I want to reach down and touch the ground, this land that has soaked up so much blood over the years — ours and theirs.
Henry Kissinger talks to Simon Schama
Not so much, though, as to get in the way of treating China as an indispensable element in any stabilisation of perilous situations in Korea and Afghanistan. Without China’s active participation, any attempts to immunise Afghanistan against terrorism would be futile. This may be a tall order, since the Russians and the Chinese are getting a “free ride” on US engagement, which contains the jihadism which in central Asia and Xinjiang threatens their own security. So was it, in retrospect, a good idea for Barack Obama to have announced that this coming July will see the beginning of a military drawdown? The question triggers a Vietnam flashback. “I know from personal experience that once you start a drawdown, the road from there is inexorable. I never found an answer when Le Duc Tho was taunting me in the negotiations that if you could not handle Vietnam with half-a-million people, what makes you think you can end it with progressively fewer? We found ourselves in a position where to maintain … a free choice for the population in South Vietnam … we had to keep withdrawing troops, thereby reducing the incentive for the very negotiations in which I was engaged. We will find the same challenge in Afghanistan. I wrote a memorandum to Nixon which said that in the beginning of the withdrawal it will be like salted peanuts; the more you eat, the more you want.”
Investing, Risk, Politics & Taxes: Global Central Bank Leverage
Source: Grant’s Interest Rate Observer, 5/20/2011 edition. Worth considering for financial & risk planning.
Related: Britannica: Central Banks and currency.
Basell III details: Clusty.com and Blekko.
Former Fed Vice Chair: Kohn ‘regrets’ pain of millions in financial crisis
The former vice-chairman of the Federal Reserve has said he “deeply regretted” the pain caused to millions of people around the world from the financial crisis, admitting that “the cops weren’t on the beat”.
Don Kohn’s apology for the actions of Federal Reserve in the run-up to the financial and economic crisis goes significantly further than the limited responsibility taken by his former boss, Alan Greenspan.
Speaking to British MPs at a confirmation hearing on Tuesday, Mr Kohn nevertheless said his experience would be valuable for the Bank of England, where he has been appointed to a new committee with powers to guide UK financial stability.
“I believe I will not make the same mistake twice,” he said.
Mr Kohn has been appointed to the Bank’s new Financial Policy Committee, which will soon have powers to change system-wide UK financial regulations and even limit borrowing by households and companies if it thinks there are threats to financial stability.
Having been a strong advocate of the Greenspan doctrine not to burst asset bubbles but to mop up any mess after a crash, Mr Kohn recanted much of his previous view in front of MPs. He said he had “learnt quite a few lessons – unfortunately” from the financial crisis, including that people in markets can get excessively relaxed about risk, that risks are not distributed evenly throughout the financial system, that incentives matter even more than he thought and transparency is more important than he thought.
The Mini
Every generation seems to produce some high-profile individual who mourns to the masses that there was once a simpler and better time in America. You know the drill: People knew their neighbors, morality reigned and most everyone knew right from wrong. These elegies always end with the premise that somehow we as a nation have lost our way. Of course the simpler times that everyone seems to think we’ve gotten away from are nothing more than our childhood memories. As children, we perceived and remembered everything far more simplistically – without the freight of context surrounding situations we encounter as adults.
Still, it’s those wistful thoughts of innocent bygone days that drive the automotive styling designs we know today as retro-cars. The BMW-designed and British-built Mini is a perfect example. This modern automobile seems made to bring back fond memories of the British Invasion and the Swinging 60s. It seems to exemplify the days when Carnaby Street, the Stones, Donovan, the Beatles, Twiggy, white plastic go-go boots and all other things British were new and groovy.
Of course the original Mini was far more and much less than that. Introduced in 1959, the Mini was the British Motor Corporation’s answer to the long and successful sales career of the Volkswagen Beetle.
What is less well remembered is that the Mini’s creation in the late 50s was a direct response to a major oil crisis for the Brits. What caused it? England’s foolish war against Egypt’s Gamal Nasser, in which England tried and failed to regain control of the Suez Canal.
Obituary: The man who gave the world CDs
Norio Ohga, who was instrumental in bringing the world the compact disc and the PlayStation and is credited with building Sony into a global electronics and entertainment group, has died of organ failure aged 81.
“It is no exaggeration to attribute Sony’s evolution beyond audio and video products into music, movies and games, and subsequent transformation into a global entertainment leader to Ohga-san’s foresight and vision,” Howard Stringer, Sony’s chairman and chief executive, said in a statement.
“By redefining Sony as a company encompassing both hardware and software, Ohga-san succeeded where other Japanese companies failed,” Mr Stringer said.
A musician by training, who was a close friend of Austrian conductor, Herbert von Karayan, Mr Ohga led Sony during perhaps its most successful years, as president from 1982 until 1995, when the Japanese electronics maker became one of the most admired companies in the world.
It was under Mr Ohga that the name Sony came to symbolise Japanese manufacturing excellence and to define what was “cool” in the world of electronics – an image encapsulated in the catchphrase, “It’s a Sony.”
Lonely Planet’s Ambassador
Tony Wheeler, co-founder of Lonely Planet, sits in the lobby of an austere five-star hotel here. Soft-spoken and down-to-earth, the 64-year-old wears a gray dress shirt with dark-blue trousers. He has trimmed gray hair and silver glasses, but his amiable face still hints of the youthful, long-haired traveler featured in photos from the 1970s.
Mr. Wheeler doesn’t need to stay in budget hostels anymore. When traveling to big cities, he checks into luxury hotels. And why not? He founded Lonely Planet travel guides with his wife, Maureen, nearly four decades ago. Since its launch in 1973, Lonely Planet has sold more than 100 million guidebooks to far-off lands, from Antarctica to Zambia and everywhere in between. And this past February the Wheelers sold their remaining 25% stake in the company to BBC Worldwide for £42.1 million (about $69.5 million) after selling 75% in 2007 to the same buyer for £88.1 million. The Wheelers don’t have official roles in the company but will continue as de facto ambassadors for Lonely Planet.