Danny Taggart's Blogarama

A more-or-less daily dose of news, politics, techmology, and any random thoughts that pass through my head.

Wednesday, March 30, 2005

Idiot "experts"

The Guardian has an article titled "Two-thirds of world's resources 'used up'" and begins:
    The human race is living beyond its means. A report backed by 1,360 scientists from 95 countries - some of them world leaders in their fields - today warns that the almost two-thirds of the natural machinery that supports life on Earth is being degraded by human pressure.
Think about this. These are supposedly "scientists" and "world leaders." I guess they haven't heard of something called "technological progress", you know, how people change the way they use the environment around them. Un-freakin-believable.

Saturday, March 19, 2005

Anti-war protest downtown

There's quite a big hubbub surrounding the South Loop post office; lots of riot police on the ground, news choppers in the air. The protest itself is somewhat unimpressive. Same old (and I do mean old) bedraggled crowd listening to unintelligible megaphone blather. Since I couldn't get an accurate headcount just by looking at the crowd, I measured the length and width of the area by counting the cops surrounding it. The area is approximately 65 x 30 people standing next to each other, so the upper bound on the crowd is about 2000, assuming it is that compact. The real number is probably 1200 to 1800.

As a libertarian conservative, I was disappointed to see a Libertarian Party banner among the anti-war crowd. There was also a smaller pro-Bush contingent across the street, behind the line of cops. Here are some pics:

Various views of the protest

Just riot police (there were a lot)

Some pro-Bush people (notice a Lebanese flag in the second shot)

"Freedom Is Not Free"

The anti-war band

The anti-war cart ("Let's Bomb Texas")

Chicago police getting ready for rally

I was walking around today and noticed lots and lots of police on every street corner. I thought it might be some terrorist training, but it looks like they're getting ready for some sort of rally in front of the post office. The area around the office is fenced off and there is a stage with sound equipment. I'm guessing they're commemorating the 2nd anniversary of the start of the Iraq war (March 20, 2003). I'll get more info when I go out for lunch. For now, here's a pic of the area:

All Schiavo, all the time

That should be FreeRepublic's new motto. I'm estimating that more than half the threads there are about Terri Schiavo. The vast majority of posts are militantly for keeping her alive. I'm a contrarian on this one and have been posting my thoughts, which have been generally answered seriously and politely (no one has called me a troll). However, the atmosphere is a bit too obsessive and rabid on this issue, so I think I'll sit this one out for the remainder. Also, I've been threatened with expulsion by the Lead Moderator for posting this (I thought) humorous image:

The mod deleted the picture and threatened me: "Post that again on any of Shiavo thread [sic] and you're out of here."

Friday, March 11, 2005

Rename ANWR

This tiny piece of barren wasteland stands between us and energy independence.

I suspect that most public opposition to drilling for oil in ANWR is due to its inaccurate name: Arctic National Wildlife Refuge. This conjures up images of evil tankers spilling oil all over cute and cuddly penguins. But a more appropriate name would be the Arctic National Wasteland Region. I recommend that the Republican congress table the drilling issue, but rename ANWR. Then, bring up the drilling issue again in a few years. But this time, the public will be asked to choose between cheaper gas and a "Wasteland Region." Can't lose!

Tax rate market, continued

To clarify my tax rate market idea, here's how it would work:

Step 1: Investors Bid

Each investor places a bid for:
S percentage share of government revenue,
for the next T years,
at price P,
for policy change D

S = 1/100 billion
T = 3
P = $60
D = -10% capital gains

The investor in this example expects that if the government cuts capital gains taxes by 10%, revenues would average $2 trillion per year over the next 3 years, plus the rate of return to compensate the investor for risk. (2 trillion * 1/100 billion * 3 = 60)

Step 2: Government Chooses a Policy

The government looks at its policy options:
1. The status quo
2. A policy change in the tax rate market

The government will choose a policy change from the market if:
A majority of congress and the president believe that the total value of the bids for the policy change exceeds expected revenues.

Step 3: Payout

For the next 3 years, each of the investors receives his share of government revenues (the government covers its obligations with the capital from the tax rate market). If, as a result of the selected policy change, the economy improves and government revenues are better than expected, the investors profit. If government revenues are lower than expected, investors lose out.

Problems with the idea:

The biggest problem is that a risk-neutral government will engage in risky behavior. Even if the tax code is frozen so that only the specified policy is enacted, the government can still adversely affect the economy through:
1. Legislation
2. Regulation
3. Monetary policy

Since the government still operates under political constraints, it may be reasonable to assume that excessively adverse legislation or regulation is unlikely. Furthermore, a tax rate market would probably only exist for dramatic tax changes, which would overwhelm most effects of legislative/regulatory action (or other adverse economic factors).

In the comments of my last post, McGroarty said, "I'm apprehensive about anything that aligns government fiscal interests against the public's." The reason the government engages in economically risky behavior is that it balances the needs of the economy (and hence future revenues) vs. the needs of its constituencies (special interests). Politicians are risk averse because of the ballot box, so they are biased towards their constituents' interests.

The tax rate market, in effect, boosts the political constituency for the economy by exposing the real value of optimal tax policy. The stake that the investing public has in the economy translates into additional accountability at the ballot box. So, instead of the government guessing what its fiscal interests are (i.e., optimal tax policy), it can simply focus on responding to political pressure from the investing public.

That leaves monetary policy. Since the Fed is not tied to political constraints, it may be more aggressive with the knowledge that its actions will not affect government revenues (in the short term). This is a big issue, although the Fed would still be wary of long-term economic consequences.

Another lesser problem is the difficulty of raising so much capital. It may be more feasible to implement such a market at the state level first. This has the following benefits:
1. The policy change does not have to affect the entire national economy.
2. Monetary policy is not an issue.
3. It would be easier to raise capital.
4. It would be politically easier to implement (less risky to try it in one state, which may be ailing badly anyway).

NOTE: To insert line breaks, use the <br/> tag.

Monday, March 07, 2005

Ohio government works hard to protect ...um...

From Interested Participant:
    Okay, here's the deal. Starting May 2 in the state of Ohio, thanks to a law signed last month by Gov. Taft, sellers on eBay will be required to have an auctioneer's license. To obtain a license, an individual must complete a one-year apprenticeship under a licensed auctioneer, including 12 gigs as bid-caller, attend an approved auction school, passing a written and oral exam, and pay a license fee of $200. In addition, a $50,000 bond must be posted. The penalty for failing to comply with the law by selling on eBay without a license is a $1,000 fine and up to 90 days in jail.

Saturday, March 05, 2005

How about a tax rate market?

I'm wondering what kind of research has been done on tax rate markets, i.e.: create a market in which people buy equity in government revenues in exchange for tax rate reductions. So for example, the value of the "-5% cap gains" market would represent the anticipated increase in government revenues were the capital gains tax reduced by 5%. This may be a solution to removing political barriers to tax cuts (perhaps due to ideology, but more likely due to extreme risk aversion).