When frozen in other types of “cash”, it is hard to free up cash to spend on good causes without losing much value

Sir, I refer to “Debt Collectors” September 16, in which Eric Platt, Alexandra Scaggs and Nicole Bullock search to explain what could happen to the “portfolio of cash, securities and investments worth roughly $840bn, held outside the US by just 30 US companies, because of tax reform designed to … encourage American companies to bring back jobs and profits trapped overseas”.

The article, though it refers to difficulties such as the “repatriation process itself could involve selling bonds” and the impact of that on interest rates, fails to illustrate the whole truth.

The reality is that all that “cash”, as well as all that “cash” held by other wealthy (for instance in Panama) except for the less than 1% that could be in real cash, is in other assets like securities investments, perhaps even in art collections.

So, in order to convert all that “cash” into real cash, those other assets have to be sold to others who are then required to give up their real cash for these. And, in that process, clearly a lot of the value of the “cash” would just change hands or disappear.

Why are these difficulties of converting “cash” into cash not more discussed? Because doing so would be sort of inconvenient for those redistribution profiteers who try to sell their politically beneficial envy, for instance that present in the “one percenters being against all us 99 percenters” theme.

What is a £20 million flat in London or a US$200 million Picasso hanging on a wall but the voluntary freezing of millions in alternative purchase power that could be out there in the economy competing for consumer goods… and generating inflation? Is a lowering of the value of hard-assets the inflation driver central banks want?

PS. Of course the above does not take away one iota of the need to relentlessly pursue those who have accumulated “cash” assets illegally, and might hold these in places like in Panama.

https://teawithft.blogspot.com/2016/04/tett-get-it-whats-stashed-away-in.html

https://perkurowski.blogspot.com/2016/10/i-tweeted-how-do-you-morph-200-million.html

http://perkurowski.blogspot.com/2016/01/the-wealth-of-62-richest-equals-that-of.html

How do you tax land deemed “junk space”?

Nicholas D Rosen writes that Henry George, “writing in 1879, noted that if labour-saving technology reached perfection, labourers would get nothing and capitalists would get nothing; all production would go to the owners of land, as land would still be needed despite automation”, “Instead of taxing robots, tax the land” February 23

And Rosen uses that to argue for “letting people keep what they earn by their own efforts, and putting the burden of taxes on those who enjoy the privilege of holding land that they did nothing to create.”

“what they earn by their own efforts”? Oops I thought we were referring to robots.

“privilege of holding land”? Oops, most people don’t care one iota about land; they just want to be close to each other, preferably close to the 1%, in order to have a better chance to make it. Recently Kjell A Nordström, a Swedish economist, mentioned in that in 30 years five million will inhabit Greater Stockholm and that other parts of the country emptied of people would become economic "junk space".

@PerKurowski

Bank regulators should stop profiling risk and use predictive statistics instead.

Sir, Gillian Tett brings up an extremely interesting question. What has predictive statistics on crime, which might indicate more crime possibilities in black areas, have to do with discrimination? “Mapping crime – or stirring hate” August 23. I would apply those notions to current banks regulations.

Regulators should apply risk-neutrality, meaning stop profiling bank assets using risk-weights based on perceived risk, which in essence is highly discriminatory and creates distortions in the allocation of credit; and instead use predictive statistics about when banks really get into troubles. Would they do so, they would soon discover that bank lending to “the risky” requires much less supervision than bank lending to what is perceived as safe and profitable. 

The predictive model could be based on quite simple algorithms… like what bank exposures are growing the fastest, in real time. At this time it would clearly indicate that, in Europe, regulators would have to urgently send out a squad to patrol the area of loans to infallible sovereigns.

Tax the 1 per cent with no other changes and all you get is the 1 per cent of the 1 per cent becoming even wealthier.

Sir, I refer to Richard Robb´s “If you tax the 1 percent it is the middle class who will suffer” May 16.

He is absolutely right and I have myself made similar arguments in an Op-Ed published in Venezuela about a month ago.

That said, what Robb misses is that 99 percent of the 1 percent would, though quite bearable, suffer too, because unless the current wealth concentration channels are altered, the resulting flows would just signify that the 1 percent of the 1 percent, the real plutocrats would become wealthier.

http://perkurowski.blogspot.com/2014/04/avoid-merchants-of-poverty.html

Democracy goes way beyond the 1% vs. the 99% debate.

Sir, I agree in much with what Edward Luce puts forward in his “America’s democracy is fit for the 1 percent” March 31 but, the issue of undue influence in a democracy, goes much further than the simplistic 1% vs. the 99% debate.

For instance I hold the view that corporate taxes should be zero, since only citizens should be able to wield the influence of paying government bureaucrats their salaries.

And also that 1% too often seems to imply that all those in the 1%, like in the 99%, are alike which we know they aren’t. For instance you would not want to tax the wealthy in order to further benefit the oligarchy, or do you?