Viewing a single comment thread. View all comments

semimodestmouse t1_je9ncax wrote

Fraud, in the finance industry? Shocking.


Test19s t1_jea6zh1 wrote

We could easily go back to mid-2000s housing bubble levels where it’s impossible to tell how much of the economy is actually legit vs fraudulent.


ethervillage t1_jea8p6e wrote

Regrettably, it’s pretty clear we’re already there


Test19s t1_jea9xfs wrote

1920s, 2000s, 2020s

Each saw a massive property boom centered in Florida that spiraled into a massive global downturn


almisami t1_jebx4ic wrote

This time will be different! ...It won't just be centered in Florida!


makashiII_93 t1_jeezyt3 wrote

I realized this around 2015, my Junior year of college.

Kinda killed grad school ideas. And look what’s happened:

Exactly what I was afraid of.


400921FB54442D18 t1_jeabowb wrote

I mean, it depends on your definition of "fraudulent." If you mean "gonna get you convicted of fraud in court" then barely anything counts as fraudulent because our courts are cowards. If you mean "based on getting people to believe things that are plainly untrue" then nearly every part of the economy is fraudulent. Macroeconomics is based on the untrue claim that the economy can keep doubling every n years without limit. Microeconomics is based on the untrue claim that people always act in their own rational self-interest. And regular everyday economics, in the sense of just selling things to customers, is based on all of the untrue claims in all of the advertising we're exposed to. There really is no such thing as an honest capitalist.


Dwarfdeaths t1_jeamnyu wrote

Land rent is fraudulent, in the sense that land is not something that can be created yet we let people own it and sell it to us.


dratseb t1_jeappi8 wrote

You mean the land that was stolen from it’s original owners? Yeah, we shouldn’t pay rent for that lol


Dwarfdeaths t1_jeaqnvx wrote

Who are "original owners"? Ultimately someone just found some land and put a flag on it. Even natives who have been living in a place for thousands of years are still just using land they didn't make. We either have to agree that all humans have equal claim to the earth by virtue of existing, or accept the arbitrary acquisition of land by whomever can hold it for a sufficient period.

The "equal sharing" solution is known as the land value tax.


smurficus103 t1_jebkjmg wrote

This subject is super interesting and concerns our entire social structure.

Instead of land, as important as it is, my thoughts consider water. You can draw an example: someone built a fence around the last freshwater lake and river and defends it with force. You and your family are dying of thirst. What do you do? Sit outside of the fence, allowing you and your family to die of thirst, out of respect for ownership?

Pretty fucked up, but, extrapolate that scene outwards to every resource.

Whatever I happen to own, I feel like i worked hard to own it, I even feel like I earned more than I own (why am i paid so little?). I can only assume people with excessive lives, that can afford to go on vacations and retire, also feel like they deserve that...

So we're at this bizarre impass of ownership of everything that has value vs being born into a world where there's no freshwater source, no land, no fishes that aren't claimed by somebody & they enforce ownership with violence

It seems obvious: if you want this type of structure to sustain, everyone must have at least the opportunity to own something. Forcing people to work 3 jobs and live in shared housing is just asking for violence, and, the general narrative pushed is "work hard and you can do anything" rather than "get extremely lucky and you might have a successful buisness after a few failed attempts ". This isn't a guaranteed path for everyone to obtain land and water rights. It's more of a lottory & people rightfully point out that the deck is stacked. I can't to take out a billion dollar loan from the federal reserve to implement my will onto other people.

All that said, i don't want to hand over everyone's possessions to the federal government, that would just concentrate all power and fuck everyone hard. I suppose all consistent philosophies converge on anarchy.


Dwarfdeaths t1_jebnd6h wrote

> Instead of land, as important as it is, my thoughts consider water.

Henry George, the pioneer of this field of thought and the land value tax policy, had a fairly broad definition of "land" which would include not only water but "all natural forces and opportunities." This would include things like sunlight, radio bands, low earth orbits, mineral deposits, and so on.

Personally, I might go even further and include "sufficiently old capital" under land. In this context "capital" means "wealth employed for the increased productivity of future labor." Someone who saves their money to build a tractor instead of buying ice-cream should enjoy return to their capital, aka interest or dividends. On the other hand, if someone built a tractor thousands of years ago (that somehow still works) we might consider it "land" since no one alive today made it. Use of that tractor excludes everyone else from using it and the user should have to pay the "rent" for it if they want to use it. In a world of increasing automation, taxing ownership of robots/software that you didn't personally build would be a critical step in approaching the UBI paradise that we all hope for.

> All that said, i don't want to hand over everyone's possessions to the federal government

The land value tax doesn't take away land, it just charges people the "ground rent" to keep private ownership of it. You can own a square mile of Manhattan and do whatever you want with it, you just have to pay others for your exclusive use of that valuable land. And if you don't want to use it, let someone else use it (either renting it out or "selling" it). Ideally under a properly assessed LVT, the price of land should tend towards zero, because there is no economic advantage in just having it.

> The general narrative pushed is "work hard and you can do anything" rather than "get extremely lucky and you might have a successful buisness after a few failed attempts "

Indeed rent will soak up any increased productivity and hand it to land owners, whether it's residential land or the industrial land. To "get ahead" and perhaps own some land, you basically have to exceed the average productivity expected from a location. (Assuming they haven't over-estimated rent, which is what leads to economic depressions btw). You can do this either by working way harder than the average person, inventing a way to increase your productivity beyond expectations. Either way, this is not accessible for the average person almost by definition.


smurficus103 t1_jebt3h9 wrote

Wow, yeah, that does seem to solve the "old money" conundrum without bloodshed, if you expand the definition of land into all sufficently old property and charge a property tax on even, say, automation systems. A productivity tax? Sounds bizarre, but, also the opposite of a regressive tax.

/s, If only there were a way to itemize taxes,

Production taxes could go toward developing small buisness, little guys and gals getting out of h.s., for example

I had a similar thought that nobody cared for: as companies "write off" old equipment, they could choose to donate it for an additional write off & it gets lottoried to the public. Hopefully, this could encourage competitors to emerge from their backyard, or something. "Honey, i won a silicon furnace!"


Dwarfdeaths t1_jebwqhd wrote

For corporations, at least, I think a stock-based solution might be a good approach to the transition of capital to land.

The work you do for a company can be divided into two broad categories: (1) directly trading time for product, and (2) creating stuff that increases productivity of future labor. Manually stamping every part on a factory line or waiting tables would be type 1, and writing code or building robots would be type 2.

So, it seems logical that you could define two classes of stock: "labor stock" and "productivity stock." Labor stock is issued when you join and dissolved when you leave, which basically pays wages for type 1 work (companies must now issue regular dividends as their wage process).

Productivity stock is issued as you work and stays with you when you leave, until it expires (end of life or some fixed time). When productivity stock expires, it is transferred to the public.

Depending on the scope of work, a worker may be paid in some mixture of the two classes.

As time moves forward, ownership of a company (and its assets) will gradually move from the original workers to the public, while still incentivizing the production of new capital at the company. In this system you could no longer issue stock to raise money; instead, money would have to be raised through "loans" with fixed payback terms, rather than indefinite future ownership of the company.


lzwzli t1_jecpr2s wrote

I don't get it. We already have property tax. If you fail to pay property tax, the government can reposes the land and sell it to someone else who can pay. How is what you're proposing different?


Dwarfdeaths t1_jecsnrs wrote

(1) Property tax considers both land and land improvements, e.g. a house or factory. Taxing the house disincentivizes construction and investment on land, which is exactly the opposite of what we want. The land value tax only attempts to capture rent, which is an intrinsic value associated with the productivity of the location compared to alternatives. Actual studies of this policy have been done and LVT encourages construction when used to displace property taxes.

(2) A tax on the market value of the land (or property) can never capture the full ground rent. This is because the market value of land derives from the rent you could collect from it (or the work you could do on it yourself). The market value of the land will decrease, adjusting for the lost tax revenue, and that in turn changes the amount of tax that will be collected...

Let's call "Rev" the annual tax revenue, "Rate" the annual tax rate on land value, "Rent" the true ground rent, and "t" the number of years someone considers in their assessment of market value of real estate.

Rev = (market_value)*Rate
Rev = (Rent*t - Rev*t)*Rate
Rev = Rent * t*Rate/(1 + t*Rate)

No matter what combination of t and Rate you choose, the tax revenue will always be smaller than ground rent. Moreover, the higher you try to set the tax rate, the more unstable the assessment will get, because you're trying to charge large multiples of tiny appraisal values. Instead you have to assess the ground rent directly.


dratseb t1_jear860 wrote

False equivalency, but I don’t feel like getting into it right now. Have a good day!


400921FB54442D18 t1_jearyb7 wrote

That's just it; there's no such thing as the "original owners" of any piece of land. Anyone who shows up to any unclaimed land and says "well, this is mine now," is at best stealing from everyone, and at worst simply lying. And anyone who then buys that land from that person is complicit in the theft or lie -- they're purchasing stolen goods.

If you mean land that was stolen from the native peoples who lived on it, then (generally) those native peoples understood the concept that the land belongs to everyone, because it is necessary to support everyone. They wouldn't claim to "own" that land because they rightly recognize that land can't validly be owned by a single entity.

(Disclaimer: I'm not an expert in the nuances of historic land policies among Native American tribes and communities, and I'm even less of an expert in how that played out in other parts of the world. I live in the American West, where you pick up a lot of this stuff by osmosis, but if someone with a formal education in this area wants to clarify what I'm saying, corrections are welcome.)


lanahci t1_jebjuwu wrote

Didn’t the tribes raid each other for better hunting grounds? Their belief that land can’t be owned seems to just be a severe lag in civilization development.


SomeSwordsCutDeep t1_jebxno3 wrote

The Navajo people, whom live in the Southwest on the borders of Arizona and New Mexico and have by land area the largest reservation in the US are Athabascan -- aka, Pacific Northwestern. They showed up in that area as conquerors not long before the Spanish showed up. Some of the other tribes and native people still harbor resentment that the borders got drawn when they did, because they were working on repelling them. To the point that as a kid, when we'd have field trips to various natives monuments or communities, different native kids from different tribes would not go to depending upon which tribe / monument we were visiting.

And they very much did believe in the thought of owning land; they just didn't have property deeds written out, and have communal thoughts on more things, but still had the concept of private residences and private belongings, and private separate spaces to exist in. There's still a bit of the noble savage myth going on and circulating around a lot of this (the various tribes and people that compromise the native americans were really fairly typical stone age societies).


ganja_and_code t1_jeak85r wrote

> We could easily go back

Look around homie, we're already there.


stormdelta t1_jebegik wrote

There is almost zero legitimate reason for the entire "fintech" space to exist at all.

First and second order financial service derivatives are acceptable, and add real utility/value to the economy - things like basic banking and lending services, properly regulated stocks/bonds, even options/futures trading to a lesser extent.

Past that, it's pretty much just corporations leeching money from the real economy, producing nothing of value and creating mass systemic risks. It's the same kind of shit that gave us the 2008 crisis.

The worst part is that the same kinds of people who push fintech have successfully convinced a ton of people to get mad at the wrong targets, and to support the worst form of fintech yet (cryptocurrencies).


College_Prestige t1_jece17d wrote

I mean, Fintech is a lot of things. Until like last week MasterCard and Visa were technically Fintech companies because they were classified as technology companies


libginger73 t1_jeahseg wrote

Who knew creating money out literal thin air was bad?


chris84126 t1_jeckxzq wrote

Yes, they could take a lesson from the insurance industry. No fraud there either /s