Have your say on TSA tax-hike

If you'd rather that the cost of US airline tickets not rise an average of 5% to pay for additional invasive and largely pointless TSA screening, you can tell them so. (Thanks, Dwen!)

Wall Street as cause and beneficiary of skyrocketing university tuition

A deep, carefully argued, carefully research report from Debt and Society makes a strong case that sky-high tuition (and brutal, lifelong student debt, up 1000% in 15 years) is not primarily caused by bloated administrations or high professors' salaries. The explanation is a lot more banker-y.

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IRS says free software projects can't be nonprofits

In a disturbing precedent, the Yorba Foundation, which makes apps for GNU/Linux, has had its nonprofit status application rejected by the IRS because some of projects may benefit for-profit entities.

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How accounting forced transparency on the aristocracy and changed the world


In the 16th century, celebrated Dutch painters did a brisk trade in heroic portraits of accountants and their ledgers. That's because accounting transformed the lowlands, literally bringing accountability to the aristocracy by forcing them to keep track of, and report on, their wealth. As Jacob Soll (author of The Reckoning: Financial Accountability and the Rise and Fall of Nations) writes in the Boston Globe, from the 14th century invention of double-entry bookkeeping until the 19th century -- when accounting became a separate profession instead of something that every educated person was expected to practice -- accountancy upended the social order, elevating financial transparency to a primary virtue.

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Best-paid CEOs perform the worst


In Performance for Pay? The Relation Between CEO Incentive Compensation and Future Stock Price Performance , a paper from U of Utah business-school professors, the relationship between executive performance and executive pay is intensively investigated. The authors carefully document that the highest-paid executives in the 1,500 companies with the biggest market cops from 1994-2013 perform the worst, and that the higher a CEO's pay, the more likely it is that he'll perform worse than his low-paid colleagues. The effect was most pronounced in the 150 highest-paid CEOs.

The authors propose that sky-high pay leads CEOs to be overconfident -- after all, if they're getting $37M for a year's work, they must be pretty damned smart, so anyone who disagrees with them is clearly an idiot, after all, look at how little that critic is paid! The longer a CEO is in office, the worse his performance becomes, because he is able to pack the board with friendly cronies who keep hiking his pay and overlooking his underperformance. And CEOs suck at figuring out when to exercise their stock options, generally getting less money than they would by following conventional financial advice.

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IRS won't fix database of nonprofits, so it goes dark


Rogue archivist Carl Malamud writes, "Due to inaction by the Internal Revenue Service and the U.S. Congress, Public.Resource.Org has been forced to terminate access to 7,634,050 filings of nonprofit organizations. The problem is that we have been fixing the database, providing better access mechanisms and finding and redacting huge numbers of Social Security Numbers. Our peers such as GuideStar are also fixing their copies of the database."

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Jason Alexander endorses the anti-corruption Mayday PAC

Brian says, "Jason Alexander (of stage, screen & Seinfeld) has decided to endorse the Mayday PAC." Mayday.US is the super PAC that Lawrence Lessig founded to fight campaign finance corruption by raising money to send politicians to Congress if they'll promise to get the money out of politics.

Mayday.US

Help raise $5M in 30 days to send anti-corruption politicians to America with Mayday.US PAC

More than 90% of Americans believe that the US government is unduly influenced by money, and the Mayday.US super PAC is raising $5M to fund the election campaigns of politicians who'll pledge to dismantle super PACs and enact other campaign finance reforms. They raised more than $1M in 30 days last month, and this month, the goal is $5M. It's the brainchild of Lawrence Lessig, who's going to prototype the project by running five electoral campaigns in 2014, and use the lessons of those projects to win enough anti-corruption seats in 2016 to effect real change.

Again, I'm not able to contribute to Mayday.US, because I'm a Canadian and Briton. But I ask my American friends to put in $10, and promise that I'll put CAD1000 into any comparable Canadian effort and/or £1000 into a comparable UK effort. We all win when countries embrace evidence-based policy guided by doing what's best for its citizens, rather than lining the pockets of corrupting multinationals.

Mayday.US (Thanks, Brian!)

Punk hedge-fund performs "Multi Media World"

Toronto's Parkdale Hookers International Inc, "a business conglomerate, hedge fund and punk rock group" have released Multi Media World, a great punk-anthem single from their new album Echo Bubble Overdrive. (Thanks, Mark!)

Red states are most dependent on federal money


Wallethub compared the direct and indirect federal subsidy to all 50 states and DC by comparing federal taxes remitted; federal funding as a fraction of state revenue; and number of federal jobs per capita and produced a ranked list of the states with the greatest federal dependency. Unsurprisingly, the top ten are overwhelmingly Republican dominated "red" states with low state taxes and low average per-capita incomes thanks to harsh labor laws -- these states necessarily depend on federal money to make up the shortfall from their own politically expedient tax-holidays, and lack the robust middle-class who pay the largest percentage of their income in tax.

The top ten in order of dependency are Mississippi, New Mexico, Alabama, Louisiana, Maine, Montana, Tennessee, South Dakota and Arizona. The five states most independent of federal subsidy are (in order): Delaware, Illinois, Minnesota, New Jersey, and Connecticut.

The article is good and full of interesting footnotes -- for example, Delaware's seeming independence is largely illusory, an artifact of its stock franchise tax drawn from out-of-state companies.

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Matt Taibbi's The Divide: incandescent indictment of the American justice-gap

Matt Taibbi’s
The Divide: American Injustice in the Age of the Wealth Gap
is a scorching, brilliant, incandescent indictment of the widening gap in how American justice treats the rich and the poor. Taibbi’s spectacular financial reporting for Rolling Stone set him out as the best running commentator on the financial crisis and its crimes, and The Divide — beautifully illustrated by Molly Crabapple — shows that at full length, he’s even better. Cory Doctorow reviews The Divide.

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Interview with Matt Taibbi about "The Divide"


Matt Taibbi is touring the States with his new book, The Divide, which is on my must-read list right after I finish Capital in the 21st Century. Rick Kleffel caught up with him for his San Francisco NPR show and posted the interview, along with his notes (which includes links to his previous interviews with Taibbi).

Taibbi was, until recently, the best reason to read Rolling Stone: a finance writer for the 99%, whose incandescent and meticulous columns were terrifying and enraging by turns.

The Divide

05-12-14: A 2014 Interview with Matt Taibbi

(Thanks, Rick!)

MAYDAY: Larry Lessig launches a Superpac to get money out of US politics

Lawrence Lessig has announced the next step in his campaign against corruption in American politics with the launch of MAYDAY, a Superpac intended to raise enough money through small donations (and, eventually, major ones) to elect a large enough roster of congressmen and senators that they can pass meaningful campaign finance reform, making Superpacs and other perversions of democracy a bad memory.

MAYDAY is trying to raise $1M in the next 30 days, and to build this sum into a "moneybomb" that can be dropped onto the 2016 elections. They're doing it through a Kickstarter-like mechanism, so your pledge only comes out of your bank account if the full amount is raised. They're calling it a moonshot. It's audacious, improbable, and desperately needed. I only wish that I could donate (I'm a foreigner). Tell you what, if you throw in an extra buck for me, I'll add an extra hundred pounds to the UK equivalent when and if it launches.

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UK tax authority caught sneaking in plan to sell Britons' private financial records

Just weeks after a plan to sell "anonymized" sets of British health-records collapsed in the face of massive public criticism, a new plan has emerged to sell the country's tax records to companies and researchers, prompting an even more critical response. One Tory MP called the plan "borderline insane," and tax professionals are in an uproar. The plan was buried as a brief mention in the autumn budget. HMRC's defense rests on the idea that the information in the datasets will be anonymized, something that computer scientists widely believe is effectively impossible.

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Michael Lewis's "Flash Boys": lifting the rock on crooked high-speed trading

Michael Lewis is the best finance writer in the business (see my reviews of The Big Short and Liar's Poker), a gifted storyteller with a firm grasp of his subject and real insider access and insight. He's got a new book out, Flash Boys: A Wall Street Revolt, which tells the story of the high-speed traders who turned the stock markets into (more of) a rigged game, and how the big incumbent banks fought back. The New York Times Magazine has adapted a long excerpt from the book and it's thrilling, shining a light on what New York Attorney General Eric Schneiderman called "insider trading 2.0."

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