Sunday, August 1, 2010
Saturday, December 6, 2008
Bailouts
Change.gov just opened a new option: Your Seat at the Table. It's a way of looking at the options currently on the table for economic strategies, education, whatever. We're invited to add our two cents on particular issues. Here's mine on the bailouts...
I’m not sure Wall Street or Detroit bailouts will do much good; besides, where do you stop? I’d rather see banks demoted to utilitiy companies, as Nassim Taleb put it in a Charlie Rose interview. No more fractional reserves. Let them make their money purely from interest on lending money they actually have in the vaults, less whatever they’re charging depositors for keeping that money in the vaults. As it is, they’re creating fiat money; then the government creates more fiat money to bail them out when they screw up, which is bound to happen sooner or later. And Detroit? “... bankruptcy is... the means by which bad companies... fix themselves. Bailouts are the means by which governments subsidize bad companies.” (Jonah Goldberg)
As for Main Street, let us take care of ourselves. Remember United Flight 93. Sure, we make mistakes, but we learn from them. If we know our union contract is to be renegotiated in three years, it’s a fool who doesn’t set aside some strike money. We can stop our own credit card debt. We can hedge our own retirement bets with several small pensions and a paid-off house and car.
More from Jonah: “The problem ... it makes private-sector decision-making very difficult. If your boss says he will lay off half his employees next month, but he doesn't know who yet, will you buy a new house this month?”
Along the lines of safety nets, however, there might be something in expanding Americorps and giving it competitive benefits. There are a lot of military bases that could be reopened to serve as staging points for emergency relief. The people who serve on a part-time basis could get short-term relief from unemployment, and at the same time begin to build themselves a small long-term pension plan separate from social security and whatever IRAs they also have going for themselves. This hedging of retirement bets would allow us to protect ourselves from both Wall Street and government.
I’m not sure Wall Street or Detroit bailouts will do much good; besides, where do you stop? I’d rather see banks demoted to utilitiy companies, as Nassim Taleb put it in a Charlie Rose interview. No more fractional reserves. Let them make their money purely from interest on lending money they actually have in the vaults, less whatever they’re charging depositors for keeping that money in the vaults. As it is, they’re creating fiat money; then the government creates more fiat money to bail them out when they screw up, which is bound to happen sooner or later. And Detroit? “... bankruptcy is... the means by which bad companies... fix themselves. Bailouts are the means by which governments subsidize bad companies.” (Jonah Goldberg)
As for Main Street, let us take care of ourselves. Remember United Flight 93. Sure, we make mistakes, but we learn from them. If we know our union contract is to be renegotiated in three years, it’s a fool who doesn’t set aside some strike money. We can stop our own credit card debt. We can hedge our own retirement bets with several small pensions and a paid-off house and car.
More from Jonah: “The problem ... it makes private-sector decision-making very difficult. If your boss says he will lay off half his employees next month, but he doesn't know who yet, will you buy a new house this month?”
Along the lines of safety nets, however, there might be something in expanding Americorps and giving it competitive benefits. There are a lot of military bases that could be reopened to serve as staging points for emergency relief. The people who serve on a part-time basis could get short-term relief from unemployment, and at the same time begin to build themselves a small long-term pension plan separate from social security and whatever IRAs they also have going for themselves. This hedging of retirement bets would allow us to protect ourselves from both Wall Street and government.
Friday, November 28, 2008
PAYGO
Doubling the Peace Corps to 16,000, and extending Americorps to 250,000 seem like ideas with a lot of potential - but what would they actually do? Is there a way to use PAYGO to get concrete services out of them, such that the Peace Corps’ salary, health and life insurance, and three-tiered retirement plan would be fair compensation? And pooled resources that provide food, simple clothing (jeans, t-shirts, sweatshirts), shelter (barracks in renovated and reopened military bases), and recreational facilities? Certainly recovering from hurricanes, earthquakes, and forest fires is worth paying for. Federal tutors bearing down on substandard districts might be effective. Manning clinics for flu shots could be a low-key rehearsal for biowarfare. Adequate pay would dignify the services performed.
Because education has a lower priority in this country than sports, employers are used to training new hires. Use them, and use the excellent training facilities that the military already has, to train noncombatants in Americorps and the Peace Corps to do useful work for the nation.
Relax restrictions on entrepreneurs. We can get out there and do lots of things, but the paperwork is too much hassle! I would guess that there are 25 million jobs, let alone 2.5 million, that people could invent for themselves, if government just got out of the way! Especially if their income were not taxed. The amounts, at least at first, would not pay the cost of collecting them anyway. John Stossel did a "special", showing how easy it was to start a business in Singapore versus how difficult it was in India. How about letting anyone with a car earn some money using it as a taxi, with no warranties expressed or implied?
Using the PAYGO principle on the extension of unemployment insurance, how about basing those payments on actual work done? If folks will volunteer at soup kitchens for no benefits, more will volunteer for similar duties when benefits are offered. I can remember “policing up” the grounds on military bases. Make it part of the Americorps program: no job too small. Even slackers, panhandlers, and functional retardates could be picking up litter, and might be happy to if it were made hassle-free and properly rewarded. You can’t bail out everyone, and there’d be a lot less resentment from the rest of us if cities got visibly cleaner in exchange for money being spent.
I’d also like to see a combination of your whistleblower protection with the line-item oversight of federal programs, and a finder’s fee for individuals or groups who save government money. Say a 10% finder’s fee for up to a million dollars’ worth of savings, down to a 1% fee for saving a billion (ten million dollars is probably adequate encouragement).
Above all, please, do it with all deliberate speed, but Don’t Panic. Don’t overdrive your headlights. Do no harm. One of the reasons for the Wall Street meltdown was that CEOs couldn’t understand the algorithms their mathematicians were using.
As for those of us on Main Street, if we’d saved a little money along the way, we wouldn’t be worried about paying next month’s bills with next month’s paycheck. But we can solve our own problems. We may be consumptive (pun intended), but we’re neither clueless nor helpless.
Because education has a lower priority in this country than sports, employers are used to training new hires. Use them, and use the excellent training facilities that the military already has, to train noncombatants in Americorps and the Peace Corps to do useful work for the nation.
Relax restrictions on entrepreneurs. We can get out there and do lots of things, but the paperwork is too much hassle! I would guess that there are 25 million jobs, let alone 2.5 million, that people could invent for themselves, if government just got out of the way! Especially if their income were not taxed. The amounts, at least at first, would not pay the cost of collecting them anyway. John Stossel did a "special", showing how easy it was to start a business in Singapore versus how difficult it was in India. How about letting anyone with a car earn some money using it as a taxi, with no warranties expressed or implied?
Using the PAYGO principle on the extension of unemployment insurance, how about basing those payments on actual work done? If folks will volunteer at soup kitchens for no benefits, more will volunteer for similar duties when benefits are offered. I can remember “policing up” the grounds on military bases. Make it part of the Americorps program: no job too small. Even slackers, panhandlers, and functional retardates could be picking up litter, and might be happy to if it were made hassle-free and properly rewarded. You can’t bail out everyone, and there’d be a lot less resentment from the rest of us if cities got visibly cleaner in exchange for money being spent.
I’d also like to see a combination of your whistleblower protection with the line-item oversight of federal programs, and a finder’s fee for individuals or groups who save government money. Say a 10% finder’s fee for up to a million dollars’ worth of savings, down to a 1% fee for saving a billion (ten million dollars is probably adequate encouragement).
Above all, please, do it with all deliberate speed, but Don’t Panic. Don’t overdrive your headlights. Do no harm. One of the reasons for the Wall Street meltdown was that CEOs couldn’t understand the algorithms their mathematicians were using.
As for those of us on Main Street, if we’d saved a little money along the way, we wouldn’t be worried about paying next month’s bills with next month’s paycheck. But we can solve our own problems. We may be consumptive (pun intended), but we’re neither clueless nor helpless.
Monday, November 24, 2008
Loop Taxis
It’s an answer to: gridlock and air pollution, dependence on foreign oil, scheduling carpoolers, insufficient use of downtown areas due to parking problems and long waits for a bus, underused and empty buses as well as overfilled ones, gerrymandered bus routes, and 500,000 people needing jobs NOW, without bureautic delay.
It will necessitate finding common ground with current municipal transit systems as well as taxi companies and drivers who shelled out thousands for medallions.
It’s in use in Chile, and probably most other countries shouldering their way into the developed world.
In Chile they’re called Collectivos. Here, I’d call them Loop Taxis or Loopers. It’s a simple concept: a driver of an ordinary car or van driving east on a major urban street for several miles, then looping around on the same or a parallel road and heading west to the start point of the loop. As he goes along, he picks up people heading in his direction until his vehicle is full. He collects a dollar from each and drops them further along his route. Passengers who need to go north or south from that point simply grab another Looper going in that direction and pay another dollar. Once it catches on (a tipping point is involved), it costs only two bucks to get anywhere, you don’t have to call a taxi company or consult a bus schedule, and you never have more than about a 60-second wait for a ride.
You may end up walking a few blocks, which is not nearly as inconvenient as a bus, and actually good for your health. Downtowns are revitalized, since people don’t have to wait half an hour for a bus, wondering if it even goes where they want to go. Exact change is no problem. Parking, ditto.
But the main power of the idea is instant jobs for half a million people. That’s one out of every 600 people in this country. If you’re out of a job, or inexperienced or unqualified or simply need the extra money, and you can get your hands on a car, you can do this RIGHT NOW!
All that is necessary is for the government to get out of the way. No screening of drivers or testing of cars; no warranty expressed or implied. Also no grabbing of municipal fees, and no tax on the earned income (why bother? It’d be too small and too hard to monitor!).
Would there be unintended consequences? Certainly. Can we cope with them? Yes, we can. Believe in the people and let them solve the problem.
Will one out of 600 people be willing to make untaxed money by performing the service of driving people down the street? Why not try it and find out?
It will necessitate finding common ground with current municipal transit systems as well as taxi companies and drivers who shelled out thousands for medallions.
It’s in use in Chile, and probably most other countries shouldering their way into the developed world.
In Chile they’re called Collectivos. Here, I’d call them Loop Taxis or Loopers. It’s a simple concept: a driver of an ordinary car or van driving east on a major urban street for several miles, then looping around on the same or a parallel road and heading west to the start point of the loop. As he goes along, he picks up people heading in his direction until his vehicle is full. He collects a dollar from each and drops them further along his route. Passengers who need to go north or south from that point simply grab another Looper going in that direction and pay another dollar. Once it catches on (a tipping point is involved), it costs only two bucks to get anywhere, you don’t have to call a taxi company or consult a bus schedule, and you never have more than about a 60-second wait for a ride.
You may end up walking a few blocks, which is not nearly as inconvenient as a bus, and actually good for your health. Downtowns are revitalized, since people don’t have to wait half an hour for a bus, wondering if it even goes where they want to go. Exact change is no problem. Parking, ditto.
But the main power of the idea is instant jobs for half a million people. That’s one out of every 600 people in this country. If you’re out of a job, or inexperienced or unqualified or simply need the extra money, and you can get your hands on a car, you can do this RIGHT NOW!
All that is necessary is for the government to get out of the way. No screening of drivers or testing of cars; no warranty expressed or implied. Also no grabbing of municipal fees, and no tax on the earned income (why bother? It’d be too small and too hard to monitor!).
Would there be unintended consequences? Certainly. Can we cope with them? Yes, we can. Believe in the people and let them solve the problem.
Will one out of 600 people be willing to make untaxed money by performing the service of driving people down the street? Why not try it and find out?
Tuesday, November 18, 2008
Tax Reform
Some people have begun converting their cars and trucks to run on reclaimed vegetable oil; that’s what Otto Diesel had in mind to begin with a hundred years ago. But as soon as success seems likely, the government is ready to place roadblocks in the path of anyone who wants to start a conversion business, and then to tax the reclaimed oil, and soon there’s no longer any advantage to anyone in pursuing it.
How many tax accountants and attorneys, looking for loopholes in 3,000-page statutes, would rather be working in some capacity on an urban monorail project along the lines of what Disneyworld has had for half a century? So many unproductive jobs are created, directly or not, by a government which could improve things for everyone if it simply got out of the way.
Some things are worth getting rid of, and the power to tax is the power to destroy. So if we want to discourage something, such as cigarette smoking, it makes a certain sense to tax cigarettes and apply the revenue to research and education on lung cancer, and try to make the culture less dysfunctional.
So if you want to discourage productivity, tax earned income.
But wait. Do we really want to discourage productivity? Let’s think outside the box instead and try alternative ways of generating government revenue, scrap the income tax, and let the tax wonks find productive work.
Let the government charge the parties who want court cases adjudicated and contracts and verdicts enforced, instead of taxpayers in general who never get inside a court except on jury duty.
Cut down on enforcement costs by creating a federal sales tax, payable at the cash register. Anyone who wants to avoid taxation can simply do without stuff.
A daily national lottery would generate tons of revenue, if it were worked right. California has lotteries that were supposed to generate revenue for education, but there’s a lack of transparency, and the revenue didn’t necessarily go where it was supposed to. Also, prizes of 100 million dollars are almost obscene; a thousand prizes of $100,000 each would increase everyone’s odds by a factor of 1,000 and provide a significant boost to a winner’s welfare without the problems attendant on a fabulous windfall (such as relatives appearing out of nowhere, right behind the tax collectors). A thousand days of a thousand non-repeating winners per day would give a boost to a million citizens, percolating up into the economy instead of trickling down.
Of course these ideas are only half-baked, but the basic ingredient, keeping Congress’ hands off our earnings, aligns with traditions going back to the founding of the country. It has to be better than Aid to Dependent Children, and that made it through both houses and into law.
If a temporary income tax cut works for 95% of the population, let’s build on it; over the next eight years, lessen government’s dependence on income taxes to exclude all of everyone’s earned income, permanently, by constitutional amendment. Then we’ll see this country take off!
How many tax accountants and attorneys, looking for loopholes in 3,000-page statutes, would rather be working in some capacity on an urban monorail project along the lines of what Disneyworld has had for half a century? So many unproductive jobs are created, directly or not, by a government which could improve things for everyone if it simply got out of the way.
Some things are worth getting rid of, and the power to tax is the power to destroy. So if we want to discourage something, such as cigarette smoking, it makes a certain sense to tax cigarettes and apply the revenue to research and education on lung cancer, and try to make the culture less dysfunctional.
So if you want to discourage productivity, tax earned income.
But wait. Do we really want to discourage productivity? Let’s think outside the box instead and try alternative ways of generating government revenue, scrap the income tax, and let the tax wonks find productive work.
Let the government charge the parties who want court cases adjudicated and contracts and verdicts enforced, instead of taxpayers in general who never get inside a court except on jury duty.
Cut down on enforcement costs by creating a federal sales tax, payable at the cash register. Anyone who wants to avoid taxation can simply do without stuff.
A daily national lottery would generate tons of revenue, if it were worked right. California has lotteries that were supposed to generate revenue for education, but there’s a lack of transparency, and the revenue didn’t necessarily go where it was supposed to. Also, prizes of 100 million dollars are almost obscene; a thousand prizes of $100,000 each would increase everyone’s odds by a factor of 1,000 and provide a significant boost to a winner’s welfare without the problems attendant on a fabulous windfall (such as relatives appearing out of nowhere, right behind the tax collectors). A thousand days of a thousand non-repeating winners per day would give a boost to a million citizens, percolating up into the economy instead of trickling down.
Of course these ideas are only half-baked, but the basic ingredient, keeping Congress’ hands off our earnings, aligns with traditions going back to the founding of the country. It has to be better than Aid to Dependent Children, and that made it through both houses and into law.
If a temporary income tax cut works for 95% of the population, let’s build on it; over the next eight years, lessen government’s dependence on income taxes to exclude all of everyone’s earned income, permanently, by constitutional amendment. Then we’ll see this country take off!
Brainstorming
In the Agenda on change.gov, we can see the interconnections as we look at education, which connects in one way to aid to families, and in another direction to increasing spending on R&D.
It’s all connected. We would rather young people help build new rapid transit systems than mark up the old ones with grafitti. We would prefer an efficient mass transit system to gridlock and parking problems. And we would like it if the transportation system made us independent of foreign oil.
It’s not as if the technologies are not already here.
Half a century ago, Disneyworld had the monorail, a quiet, efficient, and lovely system that by now has transported millions without a single traffic fatality. The footprint of each pillar is about a square yard; the noise level allows a quiet conversation even as people travel overhead.
People have recently begun converting their cars and trucks to run on reclaimed vegetable oil; that’s what Otto Diesel had in mind to begin with, a hundred years ago.
The first electric car is also over a hundred years old.
And as for new ideas, all it took was a laying off of aerospace engineers in the 70s, and all of a sudden we had skateboards, Hobie Cats, windsurfers and parasails. It turns out that imagineers don’t all have to work for Disney.
We have all seen ideas that work and that could be expanded on. How about using this space, and the Suggestions button at change.gov, to explore a few, without criticism? That’s what brainstorming is all about; even ideas that seem far out may have a kernel of value, or at least suggest one that does.
It’s all connected. We would rather young people help build new rapid transit systems than mark up the old ones with grafitti. We would prefer an efficient mass transit system to gridlock and parking problems. And we would like it if the transportation system made us independent of foreign oil.
It’s not as if the technologies are not already here.
Half a century ago, Disneyworld had the monorail, a quiet, efficient, and lovely system that by now has transported millions without a single traffic fatality. The footprint of each pillar is about a square yard; the noise level allows a quiet conversation even as people travel overhead.
People have recently begun converting their cars and trucks to run on reclaimed vegetable oil; that’s what Otto Diesel had in mind to begin with, a hundred years ago.
The first electric car is also over a hundred years old.
And as for new ideas, all it took was a laying off of aerospace engineers in the 70s, and all of a sudden we had skateboards, Hobie Cats, windsurfers and parasails. It turns out that imagineers don’t all have to work for Disney.
We have all seen ideas that work and that could be expanded on. How about using this space, and the Suggestions button at change.gov, to explore a few, without criticism? That’s what brainstorming is all about; even ideas that seem far out may have a kernel of value, or at least suggest one that does.
Subscribe to:
Posts (Atom)
