New York city taxi medallions

Via Benedict Evans’s newsletter:

Long NewYork Times investigation into the bubble and then crash in the value of NY city taxi medallions. The price went from $200k to over a million in the last decade before crashing, and this was (guess what) mostly a consequence of manipulation by industry insiders, predatory loans targeting immigrant drivers, and city regulators and politicians that were complicit at best.

 

The truth about David Cameron and the ‘mad, swivel-eyed loons’

The Spectator:

Later this year, it seems likely that those same Conservative members will choose Theresa May’s successor. The perceived need to appeal to their preferences on Brexit has persuaded several otherwise sensible MPs to claim that they do not fear and even embrace the prospect of leaving the EU without an exit agreement in place.

In short, the Conservative members fixated on Europe above all else have won. They got their referendum, got their Brexit and soon they’ll quite likely get their prime minister.

In that sense then, the person who called at our table in the Blue Boar was quite right. But that’s not the whole story, of course. Because nothing about that tale was inevitable; it didn’t have to go that way. Having identified the fact that Conservative activists were pushing the party and its MPs towards misguided and destructive positions, the Cameron team, like their successors, could have acted. They could have attempted to broaden the membership, to infuse new blood and new opinions into a small and shrinking membership.

This isn’t impossible. Tony Blair did it, and so did Jeremy Corbyn. ‘Change to win,’ the Cameroons used to say, but they never really tried to change their own party. Under Cameron and the person who called at our table, Conservative membership numbers more than halved, handing ever more power to a smaller group of people whose interests and priorities are extremely hard to reconcile with those of the country as a whole.

Did Cameron and his friends mind about that, or about the consequences of their failure? No doubt the man himself will answer that question expensively in his book this autumn, though not in a way that will change the country’s scornful view of him.

As for that person at our table that night six years ago, I have only this to say: he said it and he was right. The mad, swivel-eyed loons were calling the shots then and have done so ever since, taking the country right to the brink today. But since he and his friend David Cameron knew it then, why didn’t they try to stop it?  Was it because they didn’t know how, or because in the end, they didn’t really care?

My emphasis.  Aside from the question why (to which the answer’s in the last sentence – they didn’t care) allowing party members such a significant role in the direction of both the Labour and Conservative parties has had significant consequences.  The whole topic and possible alternatives should be explored.

No, corporate tax avoidance is not legal

Financial Times:

Nailing down criminality, though, is usually tough. It’s hard to prove deliberate intent to deceive in court. The question often hinges on matters of interpretation, what constitutes economic ‘substance,’ what corporate bosses were actually thinking when they set up these structures, and so on. And tax havens often don’t criminalise stuff that most countries would criminalise: for example, plenty of tax-related activity that would be considered criminal activity in most countries does not get treated under the criminal code in Switzerland.

When a company claims that all its decisions are taken in an office in Jersey, but it turns out that the relevant directors make all their decisions in London then fly out to Jersey once every few months just to tick the ‘economic decision-making in Jersey’ box, then there’s a deliberate subterfuge going on. There’s the old expression, “everyone knows what is going on.” That kind of behaviour could attract criminal penalties – and if it does, we can call it criminal.

All this just underlines our earlier point: a lot of what gets called “tax avoidance” is not ‘legal’, a lot is illegal, and a fair bit may be criminal.

As the author, Nicholas Shaxson, says “Governments need to get serious about beefing up their audit capacities: there is easy money here.” It’s just a puzzle why they don’t, isn’t it?

Incompetence

New Statesman:

Simon Kuper, in a brilliant article in the Financial Times, has an interesting explanation for this epidemic of incompetence. He writes how leaders like Macmillan, George HW Bush or Clement Attlee had their formative experiences in fighting WWII, while Lyndon B Johnson, Bill Clinton, and John Major had a visceral experience: of poverty. They knew in their bones that government mattered. He goes on
“But both countries have now fallen into the hands of well-off baby boomers, born between 1946 and 1964 – the luckiest members of the luckiest generation in history. These people had no formative experiences, only TV shows. They never expected anything awful or unknown to happen. They went into politics mostly for kicks.”
I’m sure Kuper is right that if our current leaders had had the strong formative experience of living with poverty or living through WWII their behaviour would have been different. In particular they might have thought twice about using populist tropes like ‘the will of the people’. But surely being ‘the luckiest members of the luckiest generation in history might be a necessary but not sufficient condition for being incompetent.

There is more than a grain of truth in it.  Macmillan flirted with communism after his experience in World war 1, he was an arch proponent of one nation Toryism, perhaps paternalistic, but he built more houses in the late 50s than anyone.

LBJ was in the second world war, but if you look at even Nixon or JFK both were moulded by personal circumstances and the war.

As we have always said the old style politicians had experiences we could only dream about, usually in nightmares.

As you say the difference has been that the current crop have relied on academic analysis of problems rather than actual experience. Perhaps that’s why compromise is a dirty word?

I think its telling that Carrington and Healey, opposite ends of the political spectrum (though perhaps not that much) probably had a lot in common due to the war, making life and death decisions and going into politics as they thought they could either improve the lot of others, perhaps with Carrington it would be noblesse oblige, but there was a desire to do the right thing.

The current crop whether Tory or labour, or lib dem are joined by often public school, PPE Oxbridge, think tanks etc .IE their world view is based on life as an academic exercise rather than experience.

As you say the likes of Johnson, see it as a game, Rees Mogg as a crusade, and Raab as a way to further his CV.

It is telling that we look back to major and think, God what an upright decent guy who had to deal with a bunch of idiots, shouting from the sidelines. I do wonder if he was perhaps the last PM we had that actually had a moral compass.

Boris Johnson: “Everybody likes him except the people who know him”

An excellent summary from Shagger.