Friday, December 16, 2011

A New Political Tactic?

The current rhetoric in the debates and in Congress sounds more and more like:
"Support whatever Obama opposes 
and oppose whatever Obama supports".

Now listen to Mao Tsetung: "Interview with Three Correspondents from the Central News Agency, 
the Sao Tang Pao and the Hsin Min Pao" (September 16, 1939), Selected Works, Vol. II, p. 272.
"We should support whatever the enemy opposes 
and oppose whatever the enemy supports."

Is this really the best we can do? 

Friday, December 9, 2011

Rethinking the Property Tax

It used to be a great idea; fund local government by taxing property. Before the industrial revolution the only significant source of income was land.  The owners of land, essentially royalty or the church, received income from lands in the form of rent or directly from the production of that land whose value was considered to be 20 years of derived income.

Thus it was sensible and fair to tax the value of that land as a source of local revenue. During that period, land values were quite stable.  If one's land were worth twice another's land it remained twice the value year after year and he paid twice the tax.

The result was a system of property taxes that was transparent, related fairly to one's ability to pay and was easy to assess.

Wednesday, December 7, 2011

Here's an Idea

We in North Kingstown have recently had some modest public works projects completed or nearly completed.  The parking area in front of the Town Hall was changed, traffic pattern was changed etc.  Also the town beach area was modified including construction of a new bandstand.
As I view these projects I find that I have some questions and comments about their design.  While I am not an expert and would not want such projects to require voter approval, I do believe that the public would benefit greatly if the projects were posted for voter review and comments before they are begun. Certain issues might have been overlooked and citizen comments prior to construction might make a significant contribution to the final results. The town would be under no obligation to accept or even consider the suggestions but they would have to be posted along with the images, schedules etc.
Perhaps someone might introduce legislation requiring (non binding) posting such municipal projects (and possibly state projects) with visuals of intended outcomes so the public might have input beforehand and avoid some of the complaints after the fact.
Using the internet the costs would be minimal but the benefits could be very great.
But Maybe It's Just Me

Friday, December 2, 2011

Should we bail out underwater mortgages?

It's somewhat difficult to understand the efforts to address the plight of homeowners who are declared "underwater", that is who owe more than their homes are worth. Neither walking away from one's mortgage obligation nor foreclosing on a property is the best answer.

The value of one's home has nothing to do with one's ability to make mortgage payments. A mortgage is a loan, an obligation that must be paid back. Whether the value of the mortgaged property tumbles or rises has nothing to do with one's ability or obligation to repay the borrowed money.

No one would tolerate a bank, or any lender writing the following note:   
Dear Mr. Homeowner, 
We notice that the value of your asset (house) has increased in the past two years and the Federal Government has given us permission to increase your monthly payments. 
We will let you know the new terms of the loan and your new payments soon. 
Your Friendly Bank.
A homeowner can have trouble making mortgage payments due to illness, job loss or some other legitimate reason and compassion dictates that banks and borrowers try to work out terms to their mutual satisfaction. If the original sale or mortgage were based on deception and/or misrepresentation then that too would be a proper basis for voiding or at least re-negotiating a contract. 

But it's wrong to force wholesale rewriting of contracts because of falling market prices. Otherwise we could require the corporate issuers of stocks and bonds to buy them back at their original value when the market goes down and our retirement plans drop in value as a result. 

Those who hate government regulation of financial institutions and other business would be more correct to blame their successful deregulation efforts, (repeal of Glass - Steagall), for the disaster that engulfs Americans today.

We need more regulations but they must be more intelligently crafted and properly enforced if our goal is to prevent another disaster driven by corporate greed. And people need to understand that if they consider their homes solely as investments, well, investments aren't guaranteed. That's just the way it is.

Maybe It's Just Me