Democrats need to work harder to keep their attacks on Trump consistent. On the one hand, they say that his income tax proposals would selfishly benefit himself and his family. But now they point out that he doesn’t pay any income tax anyway. So he doesn’t stand to gain personally. Contradiction!
A proposal for a partial unified theory of Trump scandals.
There has been considerable speculation about whether Donald Trump’s $916 million loss from 1995 may be something other than unadulterated “economic genius” (as Rudolf Giuliani called it, because that’s what you usually call it when someone manages to lose nearly a billion dollars in a single year). In particular, some commentators have suggested that these were not real losses, but an example of “debt parking”: Instead of allowing the losses in his bankruptcy to be written off (in which case, the debt write-down would count as income, cancelling the tax benefit of the loss) it got transferred to an offshore entity controlled by Trump
But here’s another possibility: What if the offshore entity is not controlled by Trump, but by Vladimir Putin and/or the Russian state. Since he hasn’t gone through personal bankruptcy, the debt remains valid, and the creditor can choose to demand repayment at any time. They would essentially own him. That would explain a lot.
I remember reading, back in the late 1990s, an article in Spiegel, about the dubious decision of the Euro finance ministers to create a 500 euro banknote. Since the only people who use cash in significant quantities in this millennium tend to be shy people eager not to be singled out for their achievements by prosecutors, the question was raised, why would you want to create a unit of currency that enables law-abiding citizens (and others) to pack five times as much currency into a suitcase as the former favourite $100 bills?* The answer given by Edgar Meister, one of the directors of the Bundesbank, was that Germans had gotten used to having a 1000 Mark banknote, and that if the largest Euro banknote were worth less, people would think this new currency was a weakling.
Eine Währung, die es sich leisten kann, mit so hohen Noten herauszukommen muß wertbeständig sein.
A currency that can afford to produce such large banknotes must be solid.
As everyone knows, that’s why Germany produced this 50 million Mark note in 1923: Continue reading “Big notes”
I think a lot of people — a lot of foreigners living in Britain — are feeling like this character in Paul Murray’s wonderful satire of the financial crash, The Mark and the Void:
“But if you write the truth about our time? How can the truth ever be obsolete?”
“People don’t want the truth,” he says, waving a hand at the streets around us. “They want better-quality lies. High-definition lies on fifty-inch screens. I wrote the damn truth already, Claude. Maybe I didn’t write it well, but I wrote it. And not only did no one want to see it, they made me feel like a fool for even trying. They laughed out the window at me as they sped away on the gravy train.”
“That was during the boom. Now the gravy train has stopped.”
“Yeah, well, I can’t unsee what I saw. The money poured in, and it was like suddenly everyone in Ireland took off their masks, and they were these horrific, rapacious alien beings who if you fell down in the street would just leave you there to die.”
Conservative advocates of Brexit are angry that experts whose job it is to protect the stability of the British economy are proving so stubbornly… conservative. Their narrow-minded equations only respond to the boringly conventional changes in tariffs, consumer confidence, investment flows, and the like, and seem to have no place for the growth-multiplying effect of exuberant national sense of purpose and untrammeled Britishness. The most recent offender is Bank of England governor Mark Carney (himself dangerously colonial), last seen protecting Britishness by warning the Scots of the financial implications of their own leap into national autonomy. He warned that a vote to leave the EU could devalue the pound and initiate a recession.
The Conservative Brexit response:
Andrea Leadsom, a Conservative energy minister, accused the Bank’s governor, Mark Carney, of disrupting the markets and jeopardising his independence… “It is institutional ganging up on the poor British voter who is trying to get a decent primary school place and doctor’s appointment.”
The Bank of England governor had “come out with some nonsense that is totally unjustifiable, totally speculative stuff” and predicted that he would be wishing that he had not done it, she said…
Jacob Rees-Mogg, a backbench Tory MP, said Carney should be fired and had become highly politicised in what was meant to be an impartial role.
Yes, we need to protect the impartiality of the Bank of England by firing its governor when his advice supports one side in a political argument.
Asked about the motivation for recent cyberattacks on the Swift (Society for Worldwide Interbank Financial Telecommunication) system, banking security consultant Shane Shook said
These hacks specifically target financial institutions because smaller efforts result in much larger thefts. It’s much more efficient than stealing from consumers.
Shades of Slick Willie.
The BBC has a surprising headline:
Leading financial institutions welcomed a crackdown on tax dodging? That’s a surprise. Which institutions are these? Goldman Sachs? Deutsche Bank? Maybe UBS? Well, no. What they mean are International Financial Institutions (capitalised), which is a different thing from financial institutions (such as banks) that happen to act internationally and have the world economy by the throat. Government institutions. Somewhat less surprising.
Even the reference to “financial institutions” (plural) is misleading, since the only institution that is mentioned by name in the article is the IMF. Maybe the World Bank requested anonymity.
I strongly appreciate the importance of a reputation for probity.
Good name in man and woman, dear my lord,
Is the immediate jewel of their souls.
Who steals my purse steals trash; ’tis something, nothing;
‘Twas mine, ’tis his, and has been slave to thousands.
So many vague accusations and suspicions can float around in everyday life where the best basis for judgement is to appeal to prior probability. But this goes too far:
Mossack Fonseca says it has operated beyond reproach for 40 years and never been accused or charged with criminal wrong-doing.
Mossack Fonseca has just mislaid 11 million documents that show its complicity in a vast web of tax evasion through secret accounts in Panama. Even to say that it has operated legally would be stretching credulity. To say that it has been “beyond reproach”… well, I suppose it’s technically true, since no one knew enough about them to reproach them. Similarly a master burglar, when finally caught with his home full of stolen jewels and cash, could say, “This is an outrage. No one has ever cast such aspersions on my good name.”
Maybe we should shut Wall Street down for 24 hours, see how everybody who blames Wall Street for everything likes that.
Well, what would happen? I think I know a fair amount about the role of financial markets in the economy, and while I don’t consider them useless, I really can’t see what the problem would be if they were shut down for 24 hours. Not only that, I’m not even sure what their staunchest defenders might claim the problem would be.
In fact, didn’t we try this experiment already? The NYSE, and pretty much all the New York financial industry got shut down for several days or a week after the 9/11 attacks. Did anyone mind? I’ve heard a lot of commentary about the impact of 9/11, and I’ve never once heard anyone even suggest that there had been negative consequences to closing the financial markets for a week.
A BBC report today says that some popular current account packages are having their fees increased substantially.
The change in Santander fees – announced in September – will see customers paying £60 a year, instead of the previous fee of £24. The charge for its 123 credit card rises from £24 a year to £36.
Last year the Santander account proved very popular, with more than 27,000 people switching to it in a single month. But experts said that – even after the changes -it still offered relatively generous interest payments of up to 3% a year, and cashback of up to 3% on some household bills. “Don’t jump ship until you’ve done the maths,” said Hannah Maundrell, editor in chief of advice site Money.co.uk. “To put it simply, you need to look at how much you’re earning in interest and cashback. If it’s less than the new £60 a year fee you need to take it as a wake-up call to seriously consider your options.”
Why should people need to do complicated calculations to figure out whether their bank is scamming them? Obviously, this is a rhetorical question. I know, sort of, that banks see current customers as locked in, so they are motivated to provide a minimum of interest and service to them, while trying to dislodge a few customers from other banks with some flashy (but inexpensive) offer.
Barclays has said it will double its cash rewards programme for those who take out an account this month. Marks and Spencer is already offering incentives worth up to £220 to anyone who switches.
The article cites experts arguing about whether the banks have been forced to charge more because of increased costs, or whether they are padding their profits. But even have to raise the question shows how pathological banking has become. It’s the consumer
Every few years I find myself in my bank, needing to spend half an hour talking with a customer-service drone about why the Super Privilege Advantage account doesn’t pay interest anymore, but if I switch to the brand new Club Lloyds (really) Account I’ll get interest (varying amounts depending on my balance, increasing up to £5000, and then cutting out after that.
By the theory of the competitive market, you might think that someone would see an interest in providing simple financial services, to people who have better things to do than discuss their half a percent interest with a bored bank employee for half an hour every year or two.