Ted Frank asks that salient question in regard to the New York City transit workers strike.
Or does such an action not meet Spitzer’s lofty standards?
Inquiring minds want to know.
Update: On second thought, maybe Spitzer isn’t needed, after all.
The now three year-long criminal investigation into corruption of the City of Houston administration of former Houston Mayor Lee Brown turned another page yesterday as this Southern District of Texas U.S. Attorney press release reports that federal authorities have charged Atlanta, Ga. businessman, Floyd Gary Thacker, with mail and wire fraud charges. Dan Feldstein’s Chronicle article on the indictment is here, and previous posts on the criminal probe into Brown Administration corruption are here.
The implication of the form of the charges against Mr. Thacker — a criminal information rather than a grand jury indictment — is that Thacker is cooperating with prosecutors in the probe. Thacker is accused of bribing former Brown Administration director of building services Monique McGilbra with thousands of dollars in cash and gifts in return for favorable treatment in regard to a city energy services contract. Thacker’s company designed the energy saving system for the city, but the Bill White Administration ultimately canceled Thacker’s contract in 2004 and paid Thacker liquidated damages of $202,000.
Walter Mischer, one of Houston’s best-known real estate developers and banking investors over the past generation, died yesterday at the age of 83 after a long illness. The Houston Chronicle story on Mr. Mischer’s life is here.
Mr. Mischer’s most interesting venture was his acquisition in the 1970’s of the town of Lajitas, near the Big Bend National Park on the southwest Texas border with Mexico. Mr. Mischer initially planned to develop Lajitas into a Palm Springs-type resort, but the remoteness of the location ultimately undermined that plan. Nevertheless, Lajitas over the years has developed into a unique getaway spot in one of the most beautiful areas of the nation.
2004 Nobel Laureate Edward Prescott is a Clear Thinkers favorite, and his work on Social Security reform reflects (here and here) a remarkable ability to present economic principles in a clear manner. In this Wall Street Journal ($) op-ed, Mr. Prescott criticizes playing politics with tax rates on capital gains and dividends, and — in so doing — provides this astute reasoning on the adverse economic effect of taxation:
So what are good tax rates? It’s useful to begin with consideration of a simple principle: Taxes distort behavior. From this powerful little sentence comes the key insight that should inform our thinking about setting tax rates. Any tax, even the lowest and the fairest, will cause people to consume less or work less. Taxes that are inordinately high only exacerbate this reaction, and the aggregate accumulation of these individual decisions can be devastating to an economy.
Good tax rates, then, need be high enough to generate sufficient revenues, but not so high that they choke off growth and, perversely, decrease tax revenues. This, of course, is the tricky part, and brings us to the task at hand: Should Congress extend the 15% rate on capital gains and dividends? Wrong question. Should Congress make the 15% rate permanent? Yes. (This assumes that a lower rate is politically impossible.)
For many years, the State of Alaska has been trying to persuade Exxon Mobil Corp. and BP PLC to invest with the state in a natural gas pipeline that would be built from the North Slope Oil Field to Valdez in the southern part of the state, where the companies’ natural gas would be liquefied and loaded onto tankers. But BP and Exxon Mobil prefer an alternative, longer pipeline over which they would own a larger share that would run through Canada to the Midwest. According to the companies, such a pipeline would deliver the natural gas directly to markets and be less risky than the state’s proposal. As a result of the disagreement between the state and the companies, there is currently little natural-gas production generated from the North Slope even though U.S. natural-gas prices are soaring.
So, what’s Alaska to do? Compromise and cut a deal with the owners of the natural gas? No way, not when the state can hire David Boies to come up with an implausible lawsuit against the companies (W$J article here) that plays on the public’s resentment of greedy capitalists.
Let’s see if we have Alaska’s lawsuit right. Exxon Mobil and BP, which generate less than 10% of the U.S. natural gas production, are refusing to enter into the pipeline deal that the state favors (and which might make the companies more money now, but maybe not) because the price of natural gas in the future will probably be higher than it is now. Thus, the companies prefer to “warehouse” their gas for the time being so that they can make more money in the future than they would make now.
That’s a lawsuit? Sounds as if Exxon Mobil and BP are making either a good or bad business decision to me (too early to say how it will turn out), but that should not be the basis of a lawsuit. Unless, that is, the purpose of the lawsuit is to punish those companies for having the right to make that decision in the first place.
Following on prior posts here, here, here and here, this NY Times article addresses the unhealthy economic effect of the favored tax treatment of employer-based health insurance. As opposed to individual health insurance policies, employer-based health insurance is a tax deductible expense of the employer and employees are not required to report the economic benefit of that policy as taxable income on their individual returns. The amount of the subsidy (in foregone tax collections) is about $150 billion and is expected to increase to $180 billion by 2010. As Harvard economist David Cutler notes: “If you had $150 billion to play with, you could come very close to universal coverage.”
NY Times reporter Kurt Eichenwald — best known for his coverage of the Enron scandal for the paper and his book on the scandal, Conspiracy of Fools — pens this remarkable Times article, which tells the incredibly sad story of Justin Berry, a teen-ager who was seduced by online pedophiles.
At the ripe age of 13, Justin began attracting online pedophiles by performing on his webcam and he subsequently made hundreds of thousands of dollars over the next several years by performing online. In researching the story, Eichenwald met Justin and persuaded him to get off of drugs, to shut down the online business, and provide to the government names and credit card information on about 1,500 people who paid him to perform on his webcam.
This is one of those stories that stays with you for a long time.
It looks as if a number of wealthy Aggies have had an Aggie joke played on them.
This Southern District of Texas U.S. Attorney’s office press release (newspaper report here) reports that a Bryan woman has been indicted on mail and wire fraud charges after the woman allegedly portrayed herself to investors as a postgraduate A&M student studying cattle reproduction at the university. Based on her supposed position as an A&M grad student, the woman promoted a number of Aggie investors to purchase bogus cattle as a part of an alleged grant-funded genetics research program at the university. The woman would raise $600 per head of cattle from the investors on the promise that she would use the invested funds to buy cattle from one of four Texas ranches, including the venerable King Ranch. Then, after nine months of “research” at A&M, the cattle would be sold back to the ranches for $1,000 per head, with $400 of that sales price coming from a research “grant” funded by A&M and the four participating ranches. After she pocketed a $100 fee for “tax purposes,” the woman would tell the investors that they would make a $300 per-head profit on each resale of the cattle. Remarkably, the woman was able to promote the dubious deal for almost three years.
As with all investments that violate the tried and true “too good to be true rule,” the research program was nonexistent, the cattle were bogus, the woman was not an A&M student and she is currently a defendant in civil lawsuits by investors seeking over $5 million. She faces 26 criminal counts, each of which carries a possible punishment of up to 20 years in prison and a $250,000 fine.
Meanwhile, there is no truth to the rumor that the A&M administration — as an accomodation to the defrauded investors — is attempting to schedule a special screening of the new movie, The Producers. Hat tip to Peter Henning for the link to the U.S. Attorney’s press release.
Now that we know that the Texans’ draft picks are not all that bad, the Texans (2-12) went out and set up a January 1st “Reggie Bush Bowl” in San Francisco against the 49ers by beating the equally hapless Arizona Cardinals (4-10) on Sunday afternoon at Reliant Stadium. The Cardinals QB Kurt Warner was hurt early in this one and the team’s second team QB (Josh McCown) came down with the flu during the game. So, the Texans were able to play most of the game against the Cardinals third-team QB John Navarre and were able to pull this one out despite gaining 63 yards in the second half. Texans fourth year QB David Carr continues to look basically clueless as he threw for a total of 134 yards passing on 33 attempts while coughing up two turnovers, which was basically the only possible way the Texans could lose this game. Oh well, at least the win makes the Texans’ season-ender against the 49er’s — who will probably also have only two wins as of that game — something to watch on New Year’s Day.
By the way, I know the Texans’ management blew it badly by having the roof open at Reliant Stadium for the Steelers game earlier this season, but who one earth decided to close the roof for the Cardinals game on a gorgeous late autumn afternoon in Houston?
Over the years, I have been blessed to have had the opportunity to represent several professional and major college football coaches in their contract negotiations and related legal matters. Through that experience, I have become friends with quite a few coaches and personnel experts in both professional and major college football.
As noted in this earlier post, I have been disappointed in the local sports media’s (with the notable exceptions of the Chronicle’s John Lopez and talk radio host Charlie Pallilo) lack of evaluation of the Texan GM Charlie Casserly‘s personnel decisions, I decided to ask a friend with extensive experience in evaluating college and NFL players to review and assess Casserly’s Texan draft picks. My friend graciously agreed to do so, and his final evaluation contains some surprising and interesting observations.
