Posts tagged ‘revolving door tax’

A NY Example of DC Corruption and Cronyism

You sometimes hear of a Congressman who raises more money from New York state, or from the D.C. region than he raises from his home state, reflecting perhaps that he’s out of touch with the place he’s supposed to represent.

Congressman Chris Collins (R-NY), though, represents a district in the Empire State, which makes it more amazing that he’s raised more money so far this cycle from D.C., Maryland, and Virginia than he has raised from New York.

. . .

Collins’ ties to the drug industry are a lot more intimate than that, though. He is a very wealthy businessman (subsidies from the Export-Import Bank have helped), and recently his net worth got a boost thanks to a pharmaceutical stock in his portfolio, in an episode that highlights Collins’ tendency to blend policymaking, fundraising, and investing.

Collins is the No. 1 shareholder in Innate Immunotherapeutics, an Australian drugmaker. The Daily Beast reported that Collins has been close to the company since 2005 and joined the board in 2006.

Collins also played a major role in shaping the 21st Century Cures Act. According to various news reports, Collins inserted a provision into the late-2016 legislation that allowed a fast-track approval process for investigational drugs. This provision boosted Innate’s stock by helping bring Innate’s sole product, a Multiple Sclerosis drug called MIS416, to market more quickly.

Collins just happened to have bought up about a million dollars in Innate stock in August 2016, as the 21st Century Cures Act wended its way through Congress. This purchase was part of a special stock offering — a VIP opportunity into which Collins brought some friends. “Sixteen people with close ties to Collins bought Innate shares at discounted prices of $0.18 or $0.26 cents per share,” the Daily Beast reported in April. “Those investors have given nearly $42,000 to Collins’s political campaigns over the years, a review of campaign finance records found.”

This brings us back to his donor list.

. . .

Collins’ friends who bought discounted stock in 2016 would have paid around 25 or 34 cents per share, according to the New York Times. Shortly after the bill became law, the price skyrocketed, eventually to $1.77 per share in January. Shortly before that peak is when reporters overheard Collins talking on the phone saying, “Do you know how many millionaires I’ve made in Buffalo the past few months?”

Being a donor or friend of Chris Collins pays off.

Chris Collins, self-proclaimed millionaire-maker, wades into another drug lobby fight

Revolving Door Tax, Crony Capitalism, Ozymandias

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Leviathan – We Don’t Believe You

John Koskinen is the new face of beadledom in Washington, DC.

Serious as are the policy disagreements roiling Washington, none is as important as the structural distortion threatening constitutional equilibrium. Institutional derangement driven by unchecked presidential aggrandizement did not begin with Barack Obama, but his offenses against the separation of powers have been egregious in quantity and qualitatively different.

Regarding immigration, health care, welfare, education, drug policy and more, Obama has suspended, waived and rewritten laws, including the Affordable Care Act.
. . .
Some say the judicial branch should not intervene because if Americans are so supine that they tolerate representatives who tolerate such executive excesses, they deserve to forfeit constitutional government. This abstract doctrine may appeal to moralists lacking responsibilities.

Stopping a lawless president

So, do we have a coverup at the IRS? Has a crime been committed? I don’t know. What I do know is that I am deeply disturbed by all this.

Maybe it’s just sloppy record-keeping, which would be bad enough. Most of the government’s business is now conducted digitally, and those records need to be properly handled. Or is it worse? Is the IRS deliberately keeping things from the public? Excuse my cynicism, but the IRS’s penchant for secrecy is what led Tax Analysts, using the new Freedom of Information Act, to sue the agency in the 1970s to force it to release private letter rulings. There have been several subsequent lawsuits to pry records that should have been public out of the agency’s hands.
. . .
The exempt organization issue is now more than just fodder for conservative blogs. The IRS and the Treasury Department need to start being square with the American people and their Congress. Even if you hate the IRS — and I do not — a wounded and compromised tax collector (whether or not most of its wounds are self-inflicted) does no good for the country.

The Coverup Is Usually Worse Than the Crime

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Mockery and Truculence

Clueless in DC, by Phil Dragoo

Clueless in DC, by Phil Dragoo

Thank me. Thank me so very much. Even though this is ostensibly a graduation speech it is really about me. My ratings have been slipping of late and my media advisors said a photo-op in Bagram and a speech at West Point will boost the polls by about 3 points.

Among you is the first all-female command team, which I mention as an accomplishment, since there’s nothing else I can boast of. You are the first class to graduate since 9/11 who may not be sent into combat in Iraq or Afghanistan though you will probably see action elsewhere, as everything is going to hell in a handbasket. But I mention it as another kind of fake accomplishment, the only other thing I can think of other than the all-female command team.
. . .
So we must choose our enemies carefully. For the foreseeable future, the most direct threat to America, at home and abroad, is Climate Change. You might be saying WTF? But consider that it’s a whole lot easier than fighting al-Qaeda. Who would you rather go up against? Mark Steyn or Zarqawi. I rest my case.
. . .
I just want you to remember, in case you feel like blaming me, that it’s Bush’s fault.

Brother Rat

President Blah Blah Blah, Moral Preener in Chief

John Kass described in January 2014 how tired many of us are of President Blah Blah Blah:

The prospect of listening to him blah blah blah his way through three more of these annual speeches is enough to cause the nation to curl up on the floor in the fetal position and start breathing from a brown paper bag. The man is talking the country to death, and we can’t take anymore.

Please, just STFU.

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Dunbar Number, Reason Video Awards, George Washington, Rent Seeking, Fascism

The answer isn’t 42. It is 150.

Meet Puddles: The Giant Sad Clown with the Golden Voice
Walking Tall With Atlanta’s Big Mike Geier
Mike Geier
Dames Aflame!
King-sized Mike Geier continues to follow his ever-growing, ever-eclectic muse
Interview at Teatro ZinZanni

Working with the anthropologist Russell Hill, [ evolutionary psychologist Robin] Dunbar pieced together the average English household’s network of yuletide cheer. The researchers were able to report, for example, that about a quarter of cards went to relatives, nearly two-thirds to friends, and 8 percent to colleagues. The primary finding of the study, however, was a single number: the total population of the households each set of cards went out to. That number was 153.5, or roughly 150.

This was exactly the number that Dunbar expected. Over the past two decades, he and other like-minded researchers have discovered groupings of 150 nearly everywhere they looked. Anthropologists studying the world’s remaining hunter-gatherer societies have found that clans tend to have 150 members. Throughout Western military history, the size of the company—the smallest autonomous military unit—has hovered around 150. The self-governing communes of the Hutterites, an Anabaptist sect similar to the Amish and the Mennonites, always split when they grow larger than 150. So do the offices of W.L. Gore & Associates, the materials firm famous for innovative products such as Gore-Tex and for its radically nonhierarchical management structure. When a branch exceeds 150 employees, the company breaks it in two and builds a new office.

The Dunbar Number, From the Guru of Social Networks

It is also the answer to “How Many People ‘Should’ You Invite To Your Wedding?

It is impossible for Americans to accept the extent to which the Colonial period—including our most sacred political events—was suffused with alcohol. Protestant churches had wine with communion, the standard beverage at meals was beer or cider, and alcohol was served even at political gatherings. Alcohol was consumed at meetings of the Virginian and other state legislatures and, most of all, at the Constitutional Convention.

Indeed, we still have available the list of beverages served at a 1787 farewell party in Philadelphia for George Washington just days before the framers signed off on the Constitution. According to the bill preserved from the evening, the 55 attendees drank 54 bottles of Madeira, 60 bottles of claret, eight of whiskey, 22 of porter, eight of hard cider, 12 of beer, and seven bowls of alcoholic punch.

George Washington: Boozehound. Prodigious alcohol consumption by Washington and his fellow founding fathers has been whitewashed from American history.

More after the jump.

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Libertarian, Classical Liberal: Richard Epstein

Libertarians fall into two distinct groups: strict libertarians like Rand Paul and classical liberals such as myself. “Classical liberal” is not a term that rolls off of the tongue. Consequently, “libertarian” is the choice term in popular discourse when discussing policies that favor limited government. Libertarians of all stripes oppose President Obama’s endless attacks on market institutions and the rich. The umbrella term comfortably embraces both strands of libertarian theory vis-à-vis a common intellectual foe.

It is important to understand the differences in views between the strong libertarian and classical liberal position. Serious hard-line libertarian thinkers include Murray Rothbard and Karl Hess. Rothbard believes nonaggression is the sole requirement of a just social order. For Hess, “libertarianism is the view that each man is the absolute owner of his life, to use and dispose of as he sees fit.” There are large kernels of truth in both propositions. It is quite impossible to see how any social order could be maintained if there were no limitations against the use, or threatened use, of force to enslave or butcher other people, which Hess’s proposition of absolute self-ownership strongly counteracts.

Yet the overarching question is how does a group of people move from the Hobbesian “war of all against all” toward a peaceful society? Hess claims that stable institutions are created by “voluntary association and cooperation.” Again, strong libertarians are on solid ground in defending (most) private contracts against government interference, which is why Lochner v. New York (1905), reviled as it is by most constitutional thinkers, was right in striking down New York’s sixty hours per week maximum labor statute. Yet the hard-line libertarian position badly misfires in assuming that any set of voluntary contracts can solve the far larger problem of social order, which, as Rothbard notes, in practice requires each and every citizen to relinquish the use force against all others. Voluntary cooperation cannot secure unanimous consent, because the one violent holdout could upset the peace and tranquility of all others.

The sad experience of history is that high transaction costs and nonstop opportunism wreck the widespread voluntary effort to create a grand social alliance to limit the use of force. Society needs a coercive mechanism strong enough to keep defectors in line, but fair enough to command the allegiance of individuals, who must share the costs of creating that larger and mutually beneficial social order. The social contract that Locke said brought individuals out of the state of nature was one such device. The want of individual consent was displaced by a consciously designed substantive program to protect both liberty and property in ways that left all members of society better off than they were in the state of nature. Only constrained coercion can overcome the holdout problems needed to implement any principle of nonaggression.

The flat tax is preferred because it reduces private incentives to game the tax system and, likewise, the ability of government officials to unfairly target their opponents. The optimal theory of taxation minimizes the distortions created by the need to fund the government activities that maintain public order and supply infrastructure. The classical liberal thus agrees with the hard-line libertarian that progressive taxation, with its endless loopholes, is unsustainable in the long run. At the same time, the classical liberal finds it incomprehensible that anyone would want to condemn all taxes as government theft from a hapless citizenry. The hard-line libertarian’s blanket condemnation of taxes as theft means that he can add nothing to the discussion of which tax should be preferred and why. The classical liberal has a lot to say on that subject against both the hard-line libertarian and the modern progressive.

My Rand Paul Problem: Why classical liberalism is superior to hard-core libertarianism.

Acton Institute, Cato Institute

Wikipedia: Libertarianism | Classical Liberalism | Christian Libertarianism

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We’re from the government, and we’re here to help.

Newspapers are filled with stories (example) about how Russia’s Sochi Olympics construction has cost a lot of money due to “corruption.” I asked my in-apartment Russian experts what this might mean. It turns out that cronies of the government are getting paid more-than-standard-commercial rates to build stuff. So taxpayer funds are being transferred to the politically connected.

I’m wondering how this is different than the U.S. military, which is ridiculously expensive but not typically labeled “corrupt.” TIME reports that the cost of a USAF Boeing 757 (C-32A) is about $43,000 per hour to the taxpayers; Conklin & De Decker says that $12,000 per hour is about what an airline would spend to fly one extra hour in the same airplane. In December, I wrote about how the U.S. Army is planning to do primary helicopter training in $6 million Eurocopters (foreign militaries and private flight schools get this done in aircraft that cost about 1/20th as much)

Is Russia’s Sochi project more corrupt than the U.S. military?

Sochi cf. military industrial complex

‘What Eisenhower Said About the Military-Industrial Complex Is True’

“Politics itself is nothing but an attempt to achieve power and prestige without merit.”
P.J. O’Rourke

The War on Drugs, another disaster. A half century, billions of dollars, countless stupid laws, Mexico a war zone. Result? Every drug known to man, woman, or hermaphrodite is for sale at great prices in every high school in America. Another triumph of private enterprise over governmental regulation. If Washington tried to provide free drugs, it couldn’t come close. No one would be able to get so much as an aspirin.

Infinite Arrogance, Infinite Incompetence

Downsizing Government

Yeah! Studebaker!

Yeah! War on Drugs!

Yeah! Big government coalition!

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The Crony Class Includes the Political Class

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Government Ethics and the Revolving Door (cont’d), Crony Capitalism at Work

“Citigroup replaces JP Morgan as White House Chief of Staff”

The revolving door is in large measure how the ruling class, the Leviathan, the Cult of the Philosopher Kings, has turned the Republic into a crony capitalist haven of mutually reinforcing money and power. And the price of admission is often a degree from an Ivy League school.

Michael Paese used to be chief of staff to House Financial Services Committee Chairman Barney Frank, until Paese became a lobbyist. When former Tom Daschle intimate Mark Patterson left Goldman Sachs’ lobby shop to become Tim Geithner’s chief of staff at Treasury, Paese took the helm at Goldman’s lobby shop.
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Crony Capitalism Index

Crony capitalism is another reason we need a Revolving Door Tax (RDT).

Would this be a money-making proposition, allowing an investor a piece of the upside as the companies use the power of the government to their advantage? Or would it be a money-losing proposition, because the companies whose CEOs are spending their time cultivating government relationships are doing so only as a desperate tactic because their firms are otherwise unable to compete successfully in the marketplace on the basis of the value they offer their customers?

So I spent some time running the numbers. Suppose one began this strategy at the beginning of the Obama administration, buying one share of each publicly traded company with an executive appointed by the president on February 6, 2009 to the President’s Economic Recovery Advisory Board. That would be UBS, GE, CAT, and ORCL. In the nearly two years since then (using the Monday February 7 closing prices, and using Yahoo! Finance historical price data that adjusts for splits and dividends), the gain would have been 145% — far outperforming the 52% return of the S&P 500 Index over the same period.

Suppose that later that year, you decided to buy one share of each American publicly traded company that had a top executive attend President Obama’s first state dinner at the White House, in honor of Prime Minister Singh of India. GE and CAT are on the list again, along with Honeywell, Pepsi (CEO Indra Nooyi) and Ethan Allen (ETH) CEO Farooq Kathwari.The return through day’s end February 7, 2011 would have been 46%, versus a 19% gain for the S&P 500 over the same period.

Or suppose you wanted to invest in the publicly traded companies whose executives President Obama appointed on July 7, 2010 to the President’s Export Council. Buying UPS, Boeing, Met Life, Disney, Pfizer, Dow Chemical, Ford, Verizon, United Airlines, ADM, and Xerox would have earned a 30% return over a period in which the S&P 500 gained 24%.

So far, it looks like a pretty good way of outperforming the market.

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Government Ethics and the Revolving Door: Tax It = Revolving Door Tax (RDT)

When Obama ran for president in 2008, he promised to “close the revolving door” and clean up both ends of Pennsylvania Avenue, but that hasn’t happened. Which isn’t to say that it shouldn’t happen now. But I don’t think the usual ethics-rules approach is enough.

The problem with ethics rules for this sort of thing is that they tend to be ignored, or distorted. So I say, let’s involve the most effective behavior-control machinery in America: the Internal Revenue Code.
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