How To Help The Poor Without Subsidizing The Rich

If you are a high net worth individual you probably already know about it. A seminar on the subject at Manhattan’s Harvard Club attracted financial advisors to some of Americas richest dynasties – including the Pritzker and Soros families.

A Las Vegas meeting on the subject was organized by former White House aide Anthony Scaramucci and attracted such attendees as Mark Cuban, the billionaire owner of the Dallas Mavericks, and former New Jersey governor Chris Christie. It has spurred the Swiss bank UBS to create a fund for its “ultra high net worth” clients – people who have at least $50 million in investable assets.

So, what’s all the excitement about? They are called OZs, or Opportunity Zones. They are the hottest investment opportunity around, and they were created by a mere 8 pages in the 185-page tax reform bill the Republicans passed in 2017.

Today In: Business
In theory, the idea was to provide capital to revitalize the urban areas that President Trump has portrayed as “wastelands, ravaged by crime and homelessness and infested by rats.” In practice, it’s gentrification on a grand scale – as luxury high-rises for the rich replace run-down buildings and other structures.

For example, an OZ project in New Rochelle, N.Y., is financing an upscale apartment building that has a yoga studio, 24-hour valet parking and a spa for residents’ pets. One in New Orleans’ trendy Warehouse District is building a hotel with an opulent restaurant and a roof-top pool.

As explained in a New York Times investigative report (which is the source of most of what I am relating), here is how it works. Investors in an OZ can defer any capital gains taxes for up to 7 years. After 10 years, an investor can cash out and not owe any taxes at all. On paper, an opportunity zone is a census tract where poor people live. But there can be affluent areas within the tract and that’s where the investments can be targeted.

Bottom line: A tax break meant to benefit the poor has become a boon to hedge funds, real estate developers and wealthy investors.

Here is what the tax reform bill might have done instead. Almost 40 years ago, Stuart Butler, then at the Heritage Foundation, proposed Enterprise Zones – a concept first imagined in Margret Thatcher’s Britain. Butler’s idea was to take a depressed area, remove burdensome taxes and regulations and allow laissez-faire capitalism to flourish. Within no time at all, he expected the South Bronx, for example, to look like Hong Kong.

This idea was championed by Jack Kemp, HUD secretary during the George H.W. Bush presidency, and by New York congressman Charlie Rangel. It was partly implemented during the Clinton administration.

But by most measures, the experiment was a failure. The reason? No regulations were actually repealed. What we got instead was increased spending and a few tax breaks – making government a partner in every private decision that was made. We didn’t get less government. We got more government – on top of the government we already had!

That prompted a different approach by my colleagues and me  – one called enterprise programs.

Here is the idea: instead of carving out a geographical area for deregulation, let’s carve out essential services that are needed by low-income families. All too often, burdensome regulations are pricing poor people out of the market for the services they need the most. So why not remove those regulations?

Take transportation. Did you know that low-income families use taxi cabs more than any other income group? The reason: they are less likely to own a car. So, in cities where taxi regulations have done little more than create a transportation cartel, poor people are hurt the most.

Uber and Lyft have made a huge dent in this market – but they are mainly serving the high end of the market. It’s still illegal for me (without a license) to drive a van to a low-income neighborhood in South Dallas, pick up a group of would-be workers, transport them to a job site in North Dallas, and charge each of them a couple of bucks for the ride.

Then there is medical care. Studies show that nurses following computer protocols in MinuteClinics provide care that adheres to best practices as well or better than traditional primary care physicians. Yet in most states, access to this type of high-quality, low-cost care is limited by regulation. That’s why there are virtually no MinuteClinics in rural Texas.

Housing is another example. Local governments often block the use of inexpensive modular homes, limit the number of rental housing units, create minimum lot sizes, and impose cost-increasing amenities such as landscaping requirements. All too often, regulations designed to protect property values in affluent neighborhoods have the unintended consequence of reducing housing construction and availability in non-affluent areas.

Most home-based businesses are started by women and they are a principal way women entrepreneurs become self-supporting. But numerous local regulations stand in the way and day care regulations are among the most severe. Suppose you offered to take care of your neighbors’ children for a modest fee during the day, while their parents are at work. In most cities that would be illegal unless you obtain a license and meet all kinds of burdensome regulations.

The Brookings Institution estimates that almost 30 percent of all the jobs in the country require a government license. Whom does that type of regulation hurt the most? People with less education, lower incomes and fewer resources. It hurts them in two ways. On the supply side, occupational licensing is a barrier to a job. On the demand side, licensing raises the cost of goods and services people buy.

Our idea is to let the middle and upper-middle class keep all the regulations they want. For them, nothing would change.

But low-income families should have access to a free market.

SOURCE 

***************************************

Wise Judge Blocks California Law Targeting Trump

We’re all used to seeing California throw its weight around, but its new law requiring a presidential candidate to provide five years of tax returns to be eligible to appear on a primary ballot is a new low. Now, however, a federal district court judge has blocked the state from enforcing it, at least temporarily.

It’s the right decision. The law is nothing more than a political attack on President Donald Trump, the federal elections process, and the right of free association of citizens and all political parties.

California is weighing its options, but if it chooses to appeal, the 9th U.S. Circuit Court should affirm the district judge’s decision because the law violates the presidential Qualifications Clause and the First Amendment of the Constitution.

The Qualifications Clause in Article II, Section 1 sets out the sole requirements to be president of the United States. You must be a “natural born Citizen,” 35 years of age, and a resident “within” the U.S. for 14 years.

The key case on this is U.S. Term Limits, Inc. v. Thornton (1995). There was a movement across the country in the late 1980s and early 1990s to impose term limits on members of Congress. This political movement ended, however, when the U.S. Supreme Court held in Thornton that an Arkansas law limiting the number of terms that a member of Congress could serve was a violation of the separate Qualifications Clauses that apply to members of Congress.

The Arkansas law provided that once a representative or senator reached the maximum term, he could not have his name “placed on the ballot” — a ballot-access restriction akin to California’s new law.

Arkansas was adding an additional qualification to being a representative or a senator; the court, in a 5-4 opinion written by Justice John Paul Stevens, said that “States lack the power to impose qualifications.” Although the Thornton case dealt with congressional elections, the same constitutional consideration would apply to presidential elections and the presidential Qualifications Clause.

Arkansas also tried to argue that the term limit was not an additional qualification, but simply a ballot-access requirement. But the court disagreed. States can “adopt generally applicable and evenhanded restrictions that protect the integrity and reliability of the electoral process itself.” States have the right to implement rules that are intended to avoid “voter confusion, ballot overcrowding or the presence of frivolous candidacies.”

But what states cannot do is try to disguise additional qualifications as ballot-access requirements.

In another decision in 1983 — this time involving Ohio — the Supreme Court in Anderson v. Celebrezze (also a 5-4 decision written by Stevens) threw out a March filing deadline for a presidential candidate to appear on the November ballot. The deadline placed an unconstitutional burden on the voting and associational rights of supporters of a candidate in violation of the First Amendment.

According to the court, “state-imposed restrictions implicate a uniquely important national interest” since “the President and the Vice President of the United States are the only elected officials who represent all the voters in the Nation.” Thus, “in a Presidential election a State’s enforcement of more stringent ballot access requirements” have “an impact beyond its own borders.”

So states have far less power to regulate presidential elections “than statewide or local elections, because the outcome of the former will be largely determined by voters beyond the State’s boundaries.”

Similarly, in 2001, in Cook v. Gralike, the Supreme Court, this time in a unanimous opinion written by Stevens, said that the authority of states is limited to regulating election procedures. The acceptable regulations are those necessary to impose “some sort of order, rather than chaos” on the “democratic process” as well as to protect the integrity of elections.

The new California law says its purpose is to “provide voters with essential information regarding the candidate’s potential conflicts of interest, business dealings, financial status, and charitable donations” so they can “make a more informed decision.” Gov. Gavin Newsom said in his signing statement that states “have a legal and moral duty to do everything in their power to ensure leaders seeking higher office meet minimal standards, and to restore public confidence.”

The law’s stated purpose reveals that it has nothing to do with regulating the “reliability of the electoral process itself” and ensuring orderly voting procedures. Newsom’s statement about the law imposing “minimal standards” also shows the law isn’t about protecting the voting process — it’s about imposing California’s minimal qualifications on anyone who wants to be president.

California passed a similar bill two years ago. When then-Gov. Jerry Brown vetoed the bill, he not only acknowledged that it might “not be constitutional,” but he expressed his concern “about the political perils of individual states seeking to regulate presidential elections in this manner.” He called it a “slippery slope.” Tax returns now, but what else might states start to demand he said. Health records? High school report cards? Certified birth certificates?

All of that might depend, as Brown warned, “on which political party is in power” and it could “lead to an ever-escalating set of differing state requirements for presidential candidates.”

Neither California nor any other state has the right to impose additional requirements for presidential candidates, whether they categorize them as “qualifications” or as restrictive ballot-access requirements.

More HERE 

************************************

A military mind that most of the world does not understand

Our military men on dire occasions do remarkable things

It was 2003 on the march into Baghdad. Brian Chontosh was a platoon leader rolling up Highway 1 in a humvee.

When all hell broke loose.

Ambush city.

The young Marines were being cut to ribbons. Mortars, machine guns, rocket propelled grenades. And the kid out of Churchville was in charge. It was do or die and it was up to him.

So he moved to the side of his column, looking for a way to lead his men to safety. As he tried to poke a hole through the Iraqi line his humvee came under direct enemy machine gun fire.

It was fish in a barrel and the Marines were the fish.

And Brian Chontosh gave the order to attack. He told his driver to floor the humvee directly at the machine gun emplacement that was firing at them. And he had the guy on top with the .50 cal unload on them.

Within moments there were Iraqis slumped across the machine gun and Chontosh was still advancing, ordering his driver now to take the humvee directly into the Iraqi trench that was attacking his Marines. Over into the battlement the humvee went and out the door Brian Chontosh bailed, carrying an M16 and a Beretta and 228 years of Marine Corps pride.

And he ran down the trench.

With its mortars and riflemen, machineguns and grenadiers.

And he killed them all.

He fought with the M16 until it was out of ammo. Then he fought with the Beretta until it was out of ammo. Then he picked up a dead man’s AK47 and fought with that until it was out of ammo. Then he picked up another dead man’s AK47 and fought with that until it was out of ammo.

At one point he even fired a discarded Iraqi RPG into an enemy cluster, sending attackers flying with its grenade explosion.

When he was done Brian Chontosh had cleared 200 yards of entrenched Iraqis from his platoon’s flank. He had killed more than 20 and wounded at least as many more.

But that’s probably not how he would tell it.

He would probably merely say that his Marines were in trouble, and he got them out of trouble. Hoo-ah, and drive on.

“By his outstanding display of decisive leadership, unlimited courage in the face of heavy enemy fire, and utmost devotion to duty, 1st Lt. Chontosh reflected great credit upon himself and upheld the highest traditions of the Marine Corps and the United States Naval Service.”

That’s what the Navy Cross citation says.

And that’s what nobody will hear.

That’s what doesn’t seem to be making the evening news. Accounts of American valor are dismissed by the press as propaganda, yet accounts of American difficulties are heralded as objectivity. It makes you wonder if the role of the media is to inform, or to depress – to report or to deride. To tell the truth, or to feed us lies.

But I guess it doesn’t matter.

We’re going to turn out all right.

As long as men like Brian Chontosh wear our uniform.

SOURCE 
 
********************************

IN BRIEF

NO MORE "CATCH AND RELEASE": "The Trump administration will no longer allow migrant families apprehended at the border to enter the U.S. under the immigration policy commonly known as 'catch and release.' The policy change was announced Monday by Acting Secretary of Homeland Security Kevin McAleenan in remarks at the Council on Foreign Relations in Washington, D.C. ... McAleenan said the end of 'catch and release' is a reaction, in part, to the record number of 144,000 migrants apprehended or encountered at the southern border in May. He said that 72% were unaccompanied children or families." (NPR)

BORDER ENABLERS: "The Marine Corps has charged 13 members with smuggling illegal immigrants into the U.S., in addition to a range of other offenses including failure to obey an order, drunkenness, endangerment, larceny, and perjury, according to a statement released Friday. Lance Corporals Byron Law and David Salazar-Quintero were specifically charged with transporting illegal immigrants into the country for financial gain. The two were based in Camp Pendleton, located between San Diego and Los Angeles, Calif. The other marines included in the indictments, some of whom were charged with distributing cocaine and LSD, were not named." (National Review)

PRESS BRIEFINGS INDEFINITELY SHELVED: "White House Press Sec. Stephanie Grisham said Monday that she has no plans on bringing back the daily White House press briefings, saying reporters used them to make themselves famous. 'Ultimately, if the president decides that it's something we should do, we can do that. But right now, he's doing just fine. And to be honest, the briefings had become a lot of theater, and I think that a lot of reporters were doing it to get famous,' Grisham said on Fox & Friends. ... It has been over six months since a press secretary has held a traditional briefing in the White House press briefing room, according to Axios." (The Daily Caller)

NO RESPECT: "In August, a group of Trump supporters led by conservative activist Scott Presler went to West Baltimore for a massive clean-up operation following tweets sent by President Donald Trump highlighting the dire conditions in the area. Keeping to his promises, Presler has since led clean-up efforts in Newark, New Jersey and Virginia Beach, Virginia. And on Saturday, Presler and some 200 volunteers headed to Democrat-run Los Angeles, removing a stunning 50 tons of garbage, according to the activist. ... The impressive feat, however, has gone widely unnoticed by the mainstream media." (The Daily Wire)

NOLA CRIME: One in seven adults in New Orleans has a warrant out for arrest (The Washington Post)

**********************************

For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated), A Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here  (Personal).  My annual picture page is here 

**************************