Category Archives: In the News

Bank deregulation: Wash, rinse, repeat

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With “bipartisan” bank deregulation rushing its way through Congress again (Why do bad bills progress so quickly?) I thought it time for a little history lesson. As if the 2008 housing debacle wasn’t enough to keep Congress understanding that the banks are rarely to be trusted, let’s go back a couple bank crises before that one, the forgotten one from… Read more »

Government budgets are moral documents

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“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” – U. S. Constitution, Article I Section 8 With the release of President Trump’s first proposed budget, I thought… Read more »

Uber wages and the Amway model

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A recent controversial study from the Massachusetts Institute of Technology [1] has asserted that Uber and Lyft drivers’ median wage is really just $3.37 per hour. I don’t want to wade here into the final number calculated by MIT, but I thought it might be useful to demonstrate that the techniques used by Uber and Lyft to keep the “real… Read more »

Taxpayer-financed business failure insurance

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Two recent posts looked at private equity (PE) as an aberrant form of business model dependent first on very artificial tax preferences and second on the ability to empty the cash from “cash cow” businesses. In this final part of my critique of PE, I will look at the liberal use of bankruptcy protection as a “feature, not a bug”… Read more »

What makes the United States different on guns?

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A February 26 interview by NPR’s Steve Inskeep with Kentucky Governor Matt Bevin on the curiously-ignored mass school shooting in his state in January was one of the most disturbing discussions with a politician I have heard recently. In short, Governor Bevin has no explanation for school shootings except “evil,” and thus no useful suggestions for countering this national tragedy. He… Read more »

Army suicides and gun policy

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A very significant U. S. Army study on suicides in the ranks [1] came and went past most public notice in 2013. On some military bases, “successful” suicides are nearly zero. Suicides on U.S. bases in South Korea have been very rare. But the rates are disturbingly high at Fort Campbell, Kentucky, and Fort Hood, Texas, for example. The one… Read more »

How to milk a cash cow

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An earlier post explored the “tax welfare” characteristics in much private equity (PE) investment in the U.S. This post explores the second key characteristic of PE, which is the preying on “cash cow” companies. One of the greater misstatements common in the business press is that private equity firms like Bain Capital target “troubled companies” for takeover and rescue. A… Read more »

The “mentally-ill shooter” fallacy

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In my earlier post on “The gun violence lottery” I presented the math behind my contention that the rise of American gun violence is mostly correlated simply with the accelerating rise in the availability of guns in America. The short version of the proof is found in the “should be obvious” fact that other “first world” countries have all of… Read more »

Fingers, toes, and Bernie Madoff

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The record-breaking Bernie Madoff Ponzi scheme, which collapsed in 2008, is in news again. The trustee trying to recover assets has clawed back $76.5 million from a Bermuda/Austrian investment fund that had profited from the scheme. [1] Most people don’t know that this fraud could have been taken down eight years earlier. An analyst named Harry Markopolos had tried to… Read more »

Private equity and tax welfare

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With Mitt Romney back in politics, running for senator from Utah, as well as the recent death of his business mentor, Bill Bain, [1] I thought I should revisit the legacy of the “private equity” (PE) model of corporate governance. Romney’s Bain & Co. spin-off, Bain Capital, was one of the first, and has long been one of the most… Read more »