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Archive for September, 2010

I’ve had a few discussions recently with individuals that suggested libertarian philosophical bases of sustainable approaches.

I very much respect the integrity and consistency of the individuals that I’ve been conversing with, and at the same time I note what could (or might not be) a fundamental philosophical disagreement.

That is the old bugaboo on the nature and extent of property rights, and critical conclusions derived from those primary assumptions.

The libertarian view, as I understand it, is that property rights are sancrosanct, that all powers derive from individual rights, and that there is no implied or corresponding responsibility of those with net worth, beyond their own voluntary associations and voluntary charitable and collaborative attitudes. The idea of commons only applies to those assets that are not yet titled, with the expectation that every thing under the sun (including the sun) will be assigned private property status under the control of an individual, an organization or in the case of wilds and commons, some authorized agent.

The mature libertarians acknowledge that much of what has constructed private property in reality results from some form of forced taking, that title does not emerge from any natural origination. And, that much of what they derive value from includes free goods from nature (sunlight, ecological services of forests, etc.) that they did not pay for.

In contrast, the theological/posterity view is that all property originates in nature as commons or “from God”, and implies an obligation to preserve assets for its original owner (obligation to restore to nature), or to use as an agent for greater good.

The two views are consistent in ways and inconsistent.

The differences occur in three respects:

1. Is property fundamentally common, or is it fundamentally individual?

2. Do non-human species/individuals bear any existential rights beyond what humans confer on them or represent them?

3. How does the concept of permanent obligation and responsibility affect attitudes, political and social conclusions differently than the concept of permanent title and ownership?

All rights are on a continuum. To any but ideologs (sorry for th dig), no right is unequivocal, unencumbered.

The rights to use land or dwellings – “real property” is a primary example.

The range of rights allowed include:

  1. non-property uses of commons or parks
  2. rights to use a strip of another’s land for conveyances
  3. temporary exclusive rights to use property for conditional purposes in exchange for rent
  4. temporary exclusive rights to use property unconditionally in exchange for rent
  5. extended temporary exclusive rights to use property via transferable lease
  6. what we call private property (unrestricted permanent title unless contested, or claimed by eminent domain, or rendered uninhabitable and unidentifiable by war, revolution, desert or glaciar).

The libertarian view holds that even after war, revolution, desertification or glaciation, property remains property. Once title is born it never dies, it is only transferred.

For all objective purposes within our lifetime, the rights of property authorized apply to both the theological/posterity view and the libertarian view.

The rights to exclusive use, transferable to heirs or others by the property owners’ choosing, is not disputed. Those are social arrangements, agreements per the legislated law of the society. That law is applied, that social agreements and conventions are applied and not ignored, allows us to transact, to minimize our fear and defensiveness.

The difference in views does however affect attitudes, behavior, political and social conclusions.

The view that property derives from nature as commons originally, its native and ultimately permanent status, regards the rights to use property as inevitably containing obligations to return to its original state. The theological/moralist view hold that ownership of title is a current agency obligation to use for the social good.

As the sun shines on all without prejudice and permanently so, that reference is profound and the rock that eco-socialists stand on. We are borrowers from the future, not owners.

In the rohrshach exercise of what comprises sustainability, those that adopt the libertarian view, originating in individual rights, think of their own first, and as community and social institutions as means to firm their own and families’ long-term survival.  Those that adopt the theological/moralist/posterity view tend to think in terms of what society as a whole needs to do survive/thrive, and assume that if society is functional that they and their descendants will be able their way through.

Beyond making sure that I and my family are secure, safe, viable living, I find no merit in thinking in terms of what preserves my family’s wealth for multiple generations. It dissolves into time.

I regard equity in the theological sense, that everything that I have is “God-given” or “nature-given”, and that my life is temporary, and that even the life of the human species is temporary.

I live on land that 20,000 years ago was under a mile of ice, a pattern that has repeated 30+ times in the last 40 100,000 year cycles. I have no basis to assume that it will not repeat.

10,000 years ago (500 generations), the land that I lived on first became inhabited, and very sparsely until maybe 1000 years ago (50 generations). There was not coherent social/legal norms in the Indian society that was here until 400 years ago (20 generation).

And, English law of property was not established at all in the region until 300 years ago (15 generations). And, that the specific surveying and titling of all land in New England (individual or state land) was complete only 160 years ago (8 generations).

For me to conclude that the norms of only 8 generations are permanent, seems to me to be an exercise in a very false vanity.

I regard property as a temporary obligation to use well, and only for my own benefit to the extent of my own experienced well-being, not for power.

And, I conclude that that is the general case.

And, I conclude that that is consistent with the sustainability effort to enhance individual personal responsibility, AND the sustainability effort to enhance social responsibility.

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The language that is used for entities’ balance sheets are Assets, Liabilities, Equity.

They are strictly financial terminology, so most relevant to the “cult”. Still, everyone knows what it means to own something (asset), to owe something (liability). Even the more abstracted features on a published balance sheet are understandable if not clearly understood. Prepaid benefits are an asset. Intangibles like a copyright are assets. A pension obligation is a liability.

I’m shifting to preferring a change in language that would be applicable beyond the financial “cult”, and that would also infer a shift in thinking about the scope of social responsibility.

My preferred language is now “Rights” (assets) and “Responsibilities” (liabilities and equity).

Moralists speak of a balance of rights and responsibilities, that any right acquired or given is accompanied by a corresponding responsibility.

Sadly, in our society, rights are the primary focus of most people’s and movements’ attention. The rights of property, civil rights, human rights, right to minimum necessities. They are important, real, naturally the focus of one who is deficient in those rights. In society, it is also important that they be applied fairly, equally for all common rights (civil rights) and equitably for all earned or purchased rights.

So, looking at a balance sheet, a legal entity’s balance sheet, rights are implied to be granted by some greater authority, and conditionally, not by natural law of property (rights without accompanying responsibilities). So, even perfected ownership of an asset is considered to be a conditional right.

(The conditions may be theoretical, but they always come with a corresponding responsibility. The right conferred in ownership includes the right to exclusive discretionary use permanently, and the ability to confer those same rights in gift or estate. The theoretical right of the commonwealth or of nature, to reclaim, is not widely institutionalized currently in practice.)

So, a person or entity (a legal quasi-person), or theoretical entity (community, region) has a right to his/her bank account, rights to receive money in the future from loans or goods and services provided, a right to prepaid services, a right to control the use of equipment or buildings, a right to exclusive use of a documented intellectual property.

An individual might attribute some value of civil rights guaranteed by the state, or of a share of the commonwealth of “God-given” sunlight that hits the earth, that are not currently included in a personal or entities’ balance sheet.

Similarly, a person or entity or community might have responsibilities or obligations. Some of those responsibilities are easily quantifiable. Some are less so.

Liabilities like accounts payable or notes payable are clear specific responsibilities to be paid in dollars. Other liabilities may include responsibilities to deliver future services.

There are MANY liabilities that are not disclosed fully on the face of the balance sheet, particularly contingent liabilities that include situations where it is unknown if the responsibility will ever require financial expenditure, or how much. They include market driven liabilities (off-balance sheet) like the ones that drove Enron out of business (in addition to their frauds), and also social and environmental contingent liabilities. Contingent liabilities require disclosure in notes to financial statements.

Other currently unlegislated and undisclosed responsibilities/liabilities of an entity include the implied obligation to restore land and buildings to the qualitative state before they were acquired, restored to the commons/posterity.

The residual of rights less responsibilities are currently understood as the term “equity”, or “net worth” or “property”.

Moralists use the terms liabilities and equity differently than the conventional usage.

Moralists use the term “liabilities” to refer to specific obligations or responsibilities to specifically identified parties. A bill due for services performed is a specific responsibility to a specific entity, defined. A pension obligation is a specific (though changing) responsibility to a specific set of entities, defined.

Moralists think of equity as also a responsibility, in conformance with the “moral balance sheet” concept of symmetry of rights and responsibilities. Every net right (“equity” or “net worth”) is really a net social responsibility in some form.

“Equity” is a different responsibility than a specific liability, in that the form of that responsibility is discretionary, freely determined.

Its an important responsibility, very often rationalized away, and thereby neglected. The absence of sense of social responsibility on the part of those with net worth (thinking that it is only a right), is a large source of the structural and functional injustices and frailty of modern society.

The libertarian view is that net worth is owned and is solely a right. The socialist view is that net worth is commonwealth and the state bears the rights to use that for its definition of social purposes. The moralist view is that net worth is commonwealth but executed decentrally by the agency of the individuals with the title to it.

Assets = Rights

Liabilities = Specific responsibilities

Equity = Discretionary responsibility

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I watched a film yesterday, “Blind Spot”, published by the Media Education Foundation, on Peak Oil.

I’m more than familiar with the peak oil thesis, and it most often represents my thinking, that as a society we are utterly addicted to oil, and that the world is in a status of net depletion relative to oil which will not change.

The rational assertion of the peak oil thesis is that at some point soon, the price of oil will increase, and rapidly, driven by wellhead supply limitations.

I think that long-term price increase is a certainty, but that the pattern of oil price increases will not be a linear pattern driven by wellhead supply as much as other factors. For both responsible public policy makers and for opportunistic commodity speculators alike (and everyone in between), the price of oil is largely predictable.

The price is based on a few factors and recognitions about the oil supply chain. I am not an expert in oil pricing, and am only commenting on my own speculations based on what I do know.

The market price for a barrel of oil is very fungible. There are few market commodities that are as liquid with a ready market comprised of parties with very varying interests. The market is too large and there are too many sources of commodities at each stage in the supply chain to be cornered or functionally distorting the market except for some group psychology effects,  “everyone knows”.

It is also determined almost entirely by temporary changes in supply and demand within the existing supply chain pipeline (wellhead, pre-refining, crude transportation, refining, wholesale logistic delivery). Currently the constraints in the supply chain pipeline occur not at the wellhead, but further through the system, most likely in refining capacity. Wellhead drilling becomes the governing constraint only during periods of unnatural disruption to the supply chain, war or severe collusion.

Oil is an inelastic commodity, in the sense that changes to the capacity of the supply chain are not flexible. They require enormous capital investment, and take a decade to implement. As such, at the point that the supply chain becomes constrained, the price of oil increases dramatically and increasingly, disproportionate to the increase in demand.

So, the important question for all involved in the oil marketplace, is where that threshold of price inelasticity occurs.

The oil supply chain pipeline can function at a very high percentage of capacity before hitting that threshold. Most manufacturers of finished goods function profitably at much lower percentages of theoretical capacity. A firm that I was a financial executive operated profitably at 60% of productive capacity. At 80%, we could manage relatively easily and very profitably. At 90%, logistics for materials, labor and machine availability became difficult to manage.

Production systems like just-in-time rigorously adhered to, and rigorous preventative maintenance systems were required to ensure full available capacity.

In the oil supply pipeline, the norm of throughput is in the 90% range. During recessions (currently), the throughput drops to the high 80’s as a low. At the low 90’s % of potential capacity, the effect on prices is minimal. Somewhere around 93% of capacity of the oil supply chain pipeline, the threshold for price limitations kicks in.

With the growth of China and India in the marketplace, both responding to global productive demand (in their manufacturing spheres) and creating their own domestic demand (increase in home sizes, prevalance of autos) there is a continual upward pressure on that supply chain. Even at recession levels for western economy, the global utilization of the oil supply chain inches up.

When the recession eases, it is likely that that high level of pipeline capacity utilization will reach threshold levels. At 2% growth in GDP, oil prices are stable, not pressing capacity. At 4% probably starting to increase. At stable 4% growth for a as little as two to three years, the pressure on the supply chain, will stimulate the role of speculation in oil markets in addition to natural stresses on supply/demand, will press prices up and considerably.

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I’ve had a bunch of contact with individuals that are interested in the transition movement.

I love it in many ways. I agree wholeheartedly with the intention of living lightly on the planet, and the sensitivity of resilience and connection with ecology that is implied.

There are a few norms in the movement that are understandable, but I think are misguided, thinking in terms of preserving what is loved about the rural present, rather than actually anticipating the likely post-carbon intensive energy/economic future.

As promoted in Western Mass and Southern Vermont, they include the retaining of rural propertied privilege and a projection from the specifics of our geography.

We are the new old yankees  preparing for our own survival through change, but not taking the next step of making a norm and a path for others to thrive through change. (When I moved to southern Vermont in 1974, the old Yankees didn’t exactly accept us newcomers from the city, no matter how committed we were).

The transition movement is based on two converging crises that are primarily incremental but with dramatic moments: the depletion of fossil fuels and the consequences of carbon in the atmosphere beyond long-term sustainable stable levels. They are obviously related.

Depletion happens fast when oil prices are low. And, carbon emissions happens fast when oil prices are low. So, although home heating fuel and transportation fuels are now minimum necessities and bear a difficult burden on working families when prices increase, to avert the consequences of predicted future transition, it would seem to better to have higher oil prices.

The primary area that neo-Luddite transition advocates neglect is in the likely effects of population migration out of the cities when city-life becomes less financially secure.

So, a town like Greenfield might expect increased migration to our town, or should be prepared to absorb it. Our population of 16,000 should double. (We currently prohibit greater than four-story buildings, but do permit sprawl.)

The nature-centric view of many transition town advocates (wonderful) conflicts with the alternative sustainable view of sustainable engineering, or sustainable design that would conclude in a town like Greenfield, to zone for settlement patterns that accommodate 30,000 people, but while confidently preserving agricultural and wilds within the town and region. Similarly for neighboring towns which could see their population quadruple or more.

To not accomodate those that cannot live well past the transition period, is to compel them to suffer, literally.

Just to clarify, the libertarian view of “build wherever you can acquire property” is worse. We need well-thought and enforced zoning. Sprawl is much worse for a town than concentrated downtowns with lots of wilds nearby.

The attitude of the transition movement is understandable really for three good reasons, but responsible governmental or parallel governmental leadership needs to think differently.

1. Assumption that the norms of rural Western Mass and Vermont apply everywhere. That is false. We live in geographically separated mountain valleys. You can’t get there from here (even as the crow flies 2 miles and can). Communities are distinct in the rural mountains.

They are not so distinct as you travel even 100 miles south of us. They are not distinct at all. East and west of Hartford are easy to travel to. East and west of Brattleboro isn’t. Connecticut is sprawl from outside of New Haven long into New Jersey. And, that is a natural consequence of coastal and plain geography.

Our situation is relatively unique. Sustainability is bigger than our quaintness.

2. Community is just arms length away (and not 100 miles away, false). Many of us decentralist economy advocates thought in terms of community intimacy, that economy should revolve around the Pioneer Valley for example, rather than be thought of at a macro-regional scale.

But, that is a fantasy. We rely on cars, and the nearest auto plant to us is in West Virginia or Ohio. There is relatively little industry in the Pioneer Valley that provides for regional basic needs. We import literally most of our needs, even those of us that avoid global trade.

At the macro-regional economic scale, it is feasible to incorporate a large % of our region’s needs, but not at the community scale. Buying and selling maybe, some utopian agricultural practices (not exporting to other regions) but not making things.

3. We seek to preserve our privilege, the results of our good life choices in settling here. “I told you so”.

Those that approach sustainability beyond the idyllic, those with a sentiment of service-oriented leadership, really have to design for the needs of society at large, even if “others” are opportunist late-comers.

We need to define the criteria of sustainability so confidently and concisely, that it can function as guiding community, regional, and macro-regional governance principles for the next few hundred years.

It will happen inevitably within an engineered/designed ecological regimen, and not within the quaint or even literal nature-surrounded ecological, just because of our numbers.

Transition needs to be aware that it will need a transition.

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I’m an accountant. In the sense that accountants, bankers, business-owners, shareholders speak a common language, we are a cult.

And, in the sense that I am also a committed moralist, social ecologist, generalist, I attempt to apply knowledge that results from cross-fertilization.

What is a balance sheet?

It is the summaryof an entity’s assets, liabilities and net equity in financial terms, at a single point in time. The other common financial statement, “Income statement”, is an elaboration on the balance sheet, a blow up of the change in net equity over a period of time.

Even in just financial terms, it means a lot.

Who are we talking about? Legal entities:

  • An individual has a personal balance sheet. Individuals own cash, investments, prepaid rights, real estate, personal assets, business assets, even intellectual property rights. We owe bills, loans, mortgages, intangible liabilities. And, we have net equity (some of us).
  • A business has a balance sheet.
  • A government has a balance sheet
  • A not-for-profit organization has a balance sheet.

The net equity represents the net liberty that an entity has to use the assets within its control to meet its liabilities and for other discretionary purposes.

Other entities that are not confirmed as legal entities also have implied balance sheets. In the context of my pet social heirarchy (person, family, community, region, macro-region, planet), only a person is necessarily a legal entity. Unless incorporated or chartered in some form, a family is not a legal entity. A community isn’t (though might have an associated government). A region isn’t. A macro-region isn’t. The planet isn’t.

But, there are implied boundaries between families, communities, regions. There are inflows and outflows between families, communities, regions, etc. There are assets that are distinctly the commonwealth of families, communities, regions.

It does make sense to account for the financial and other status of as of yet unformed entities, and changes over time.

To look at the balance sheet of a family, assumes that a family thinks of itself as a commonwealth. When young adult children leave the nest, that presumption dissolves a bit. Similarly for a community. People think of themselves as part of a community, but most don’t think of themselves as a commonwealth. The term balance sheet is applied differently.

We do derive our support and cooperation from our voluntary and not voluntary associations, from our families, communities, regions even.

In some ways the neglect to account for the status of (balance sheet) and net inflows/outflows (income statement) of our community at various social scales, is a cause of their not functioning well.

Do we compile the data to determine if our family is secure, improving. Our neighborhood? Our community? Our micro-region? Our macro-region?

Most don’t. We should start.

What is the financial status of our family? What are our assets or rights, our liabilities or obligations, our net liberty? What are the components of net change over time in our family’s net assets/rights?

What is the financial status of our community (not our government perse)? What are our assets and rights, our obligations and responsibilities? Our change in relative functional liberty?

Our region?

In thinking about the balance sheet of my family, I think in terms of what I/we are willing to share, to acknowledge as our collective responsibilities, even if we do not commingle everything or unconditionally.

As a father, I do think of my responsibility to support my adult sons’ survival, security, aspirations. I do think in terms of family responsibility, even as my children are legally independant.

Our assets are my personal assets. Cash, home, some investments dedicated to family needs. Our liabilities are my liabilities. Mortgage, bills, promises. I have more promises than assets.

There is a “we”.

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We live in a throw-away society. Our economy requires it. We don’t build many assets that are durable.

We require people to churn through assets, rather than buy them as life-long investments, maintain and repair them, supply and fuel them.

Retailers depend on it. Cars, computers, appliances, entertainment equipment, telephones, furniture, household equipment (lawn mowers, snow blowers). All are made to be disposed of (but not made to be disposable in the waste stream, that’s another real discussion).

Most middle class replace cars every five years (or less), even though their useful life is potentially 15-20 years if well maintained. Computers become functionally obsolete after five years (or much less) due to increased software requirements and software clutter. Appliances are often used over an extended period (if they last). Entertainment equipment becomes obsolete as prevailing technology intentionally changes. (Consider DVD players, moving to recordable harddisks, blu-ray, now content is downloadable via web, for a monthly fee of course). Telephones are disposables due to their physical and technological obsolescence. (My parents had the same hand-held telephone for 20 years.) Furniture can last a long time if cared for. Household equipment is also subject to physical obsolescence.

There are fashions in new technology that appear. I remember when the first rideable lawnmowers appeared. Everyone in the neighborhood bought one. The hardware dealer couldn’t keep them in stock, then when everyone had one, very few were sold. Then weed wackers came out and everyone bought one, in droves. Now, few are sold (more than few, but comparably few).

Of durable goods, capital equipment, few should be sold. The lives of the assets should be so long, so durable, so technologically and fashionably stable that it is economical to build a plant to produce them over 50 years, not over 3 (requiring enormous quick volume and harrassing supporting marketing to achieve).

Then, those of us that have designed our personal and community lives to regard capital assets as capital assets not as disposables, are in conflict with the needs of the consumer economy to maintain full employment (even though the disposables are made in China and the only domestic or regional jobs created by their purchase are logistical and marketing jobs). We are asked to feel guilty in some way, not buying retail, not buying frequently.

But, utilization non consumption is the rational trend that I am actively working for, as “selfish” as that may seem. I encourage people to buy durable, to extend their decision profile out another year. Rather than think what car you would like for five years, I encourage people to think about what car they would like to have for six. And, that is subversive, almost seditious in the current national economy.

I encourage friends to go even further. Rather than which durable asset they would like themselves to last over six years,  to think what lawnmower they and their neighbors will cooperatively need over the next six years.

As a result of my recommendations and active facilitation, I hope to cause a decline in capital asset sales volume. I want people to buy 1/10 of the number of lawnmowers that they were previously. (Shared between five families and maintained to last twice as long). I’m sorry that I am so unpatriotic in that respect.

The irony of shifting from a mass consumption to a maintenance/utilization economy is actually likely an increase in domestic employment, not a decrease.

Applying the same philosophy in the use of autos from privately owned consumption to utilization of fleet owned, and mass transit with intermodal connections, the effect is to increase employment. There is additional need for maintenance (labor-intensive), repairs (labor-intensive), drivers (labor-intensive), still a high need for sales and marketing (labor intensive), but a much lower need for large mass produced capital assets (capital intensive – not labor intensive as we imagine).

Its counter-intuitive, but makes sense, and is a fact.

The other advantage of a maintenance/utilization based economy over a throw-away economy is that the jobs that are created are at a wide range of skills, so actually does provide jobs for unskilled, semi-skilled and highly skilled. Not all or nothing as currently.

Conventional economists are at their wits ends. They can’t imagine how to revive the GDP, particularly to improve exports as means to  to restore employment opportunities to a real middle class. Shifting to a maintenance/utilization economy is that way.

Volatility of demand for capital goods is then moderated, stable demand, not  shifting from excessive and impossible till to economically unviable. Demand for supporting labor is moderated, stable, not shifting from surges to unviable.

The horizon for capital investment is thus made more stable as well, much less volatile, much less of a crapshoot whether the $3 billion retooling of a computer chip plant will be utilized fully for 2.4 years or for 3 years, with a three year plant at full capacity generating enormous profits, while a 2.4 year plant losing large sums threatening the viability of a company, and all its cumulative intellectual property development.

The most thoughtful people that I’ve met speak in terms of “co-evolution”, of the mystery of interdependant species evolving in response to changes in environment, actually appearing as a cooperative process between them.

But, social progress can point south. What looks like evolution can really be a devolution. The human engineered economy, the imagination that employment is enhanced and even stabilized by continual growth, rather than a maintenance oriented economy, is in many ways a co-devolution, a cooperative reduction in social adaptation.

The institutions that can make the bridge to a sustainable economy to a maintaining economy are currently feasible to develop. Unlike high-tech solutions, they are less capital intensive, less speculative.

We do need imaginative entrepreneurs and committed finance to accomplish, but the objective designs are feasible and available. As I noted in the last post, there are absurd institutional obstacles, sadly.

Just a thought. Paul Krugman?

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I love ironies. I love that I can appreciate them, not their effects.

There are two major ones in this post.

1. I favor relaxation of American and state securities laws to provide exemptions to registration requirements and some immunity from liability (certainly excepting intentional fraud) allowing for “outline” disclosures for stock and other share offerings to non-intimates for all capital requests less than $1,000,000, and less than $3,000,000 for qualified “commonwealth” endeavors.

2. That the proposed Obama tax cuts for those earning under $250,000 will likely not accomplish a stimulus to the productive economy, will exacerbate the US trade deficit, and will expedite – rather than inhibit – the migration of jobs overseas and/or out of home regions.

I wish I didn’t feel this way.

1. American securities laws – American and most states’ securities laws require SEC registration and annual audit for offerings of ANY securities to non-intimates (family, personal friends), constituting a public offering.

This is in place as residual of the waves of bank and insurance fraud perpetuated during the 1920’s, that contributed to the 1930’s depression and bankruptcy of many that had  invested  in less than worthy securities. The securities acts of the early thirties do provide the federal government with an authorized agency to attempt to intervene in the economy at large, limited. But, the main emphasis of the securities laws is to function as a consumer protection agency for the consumers of investments.

What happens in practice though, is that the law also functionally prohibits the creation of community supporting enterprise. The disclosures required to protect issuers from liability in even a restricted offering, even in discussion of an offering, require front-end legal and other professional fees of  in the range of $50,000, a fixed front-end cost, with no exceptions.

So, a local proposed community supported retail store to provide an alternative to big box stores, that seeks $300,000 in capitalization from non-intimate community members, must spend $50,000 to draft and audit the documents before they can even speak to their non-intimate neighbors.

Or, a community bank similarly.

Or, transportation alternatives that rely on the self-capitalization of an enterprise through contributing one’s private auto, must invest the legal and professional fees to protect themselves from liability. The $50,000 saved by the self-capitalization of private vehicles into a community car-rental, is then a public offering.

Yes, we are over-regulated.

Investment in community enterprises prohibited or at least greatly hindered.

2. Obama’s propose tax reduction to those earning less than $250,000/year. I know that $60,000/year doesn’t go very far in cities where is costs $20,000/year in mortgage costs to own a simple home. In my home town, Greenfield, MA, there are few jobs outside of state and municipal and medical fields that pay greater than $60,000/year. Teachers can get by, barely. Even lawyers and accountants struggle a bit.

I support the restoration of tax law to pre-Bush era status in rates, capital gains and dividends taxes, estate taxes, etc for those earning cosiderable income. I disagree with the contention that a 5% swing in the maximum capital gains rates will cause a migration of investment out of the United States.

As I commented widely when the Bush tax cuts were enacted, I do favor some favored tax rates on genuinely new investment in productive assets or enterprise. (How to distinguish what is new from what is merely a functional shifting of organization names is tricky.)

But, continuing reduced capital gains rates for preexisting investment does not stimulate the economy, it stimulates the securities markets primarily, and that overwhelmingly consists of pre-existing wealth and institutional pools of money.

The dilemma that the Obama administration faces is of how to induce the very wealthy institutions, corporations, private wealth to not sit on the sidelines. It is not grandmothers that are stuffing dollars under the mattress currently. It is corporations and their owners.

There are tax laws applying to corporations that tax accumulated earnings, or cash and other assets accumulated but not put to operating business purposes. They are required to either be distributed as taxable dividends (albeit at very low tax rates) or put to use, or plausibly demonstrated for tangible future use.

There doesn’t seem to be much enforcement of this law, although small corporations are somehow scared that it will be enforced.

The proposed tax reductions for those earning less than $250,000 are attractive to me personally, slightly. I would get a moderate tax break. But, too much of the spending socially would go to superfluities, resulting in likely exacerbation of the trade deficit. In effect then, the spending that would be stimulated would not contribute sufficiently to US jobs to revive the economy, but would revive the Chinese economy and considerably increase the cost of fuels.

“A rising tide that lifts all boats” that lifts only a few boats, is not a rising tide, its artificially pumped, temporary.

The combination of the two is the irony.

Rather than stimulate community economy, the proposed tax cuts would primarily stimulate the consumer economy, and at a large cost in long-term deficit to the working economy.

There would remain prohibitions from working people investing in their communities. To the extent that they save/invest, they would be permitted to invest (through IRA’s, 401(k)’s, etc) only outside their communities. There would be prohibitions from working people investing in “commonwealth” enterprises (those who are genuinely for-profit, but seeking social objectives as much or more than private profits).

Big flow to the wealthy, with little effect for communities. It is the 1930’s. Those with a lot of cash “under the pillow” got very wealthy coming out of the depression.

That big money can afford to spend on securities registration as an incidental fixed cost to them, but working people cannot legally create social capital, except through not-for-profit organizations, is not the type of society that I want to live in.

I want to live in a world in which members of the community do invest in and support local corporations, and build capital from work and enterprise in that way. I don’t want to have to rely on the class of “qualified investors” only to fund enterprise.

In order for the US, the world, to get out of this economic slump (9.6% official unemployment), it needs investment to get to enterprise that performs needed services, and not only through the logic that would appeal to large external sole (or publicly offered) investment.

The combination comprises an irony, a prohibition from investing in one’s community, but more money available chasing large corporate offerings only.

As republicans love to emphasize, it is small business that generates the majority of new jobs and hence the majority of new tax revenues. But, only large business, not small business, efforts are enhanced by both the Obama and all republican “proposals”.

He means well.

If the securities laws were changed to enable commonwealth enterprises through community “public offerings”, then the Obama proposed tax reductions would make change.

In the stacked deck current securities regulations, not.

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