Nicholas D. Rosen's Journal|
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|Saturday, December 20th, 2014|
|Georgist Conference in Newport Beach, Part Twenty-Six
After Fred Foldvary's talk, we heard from. Dan Sullivan on "Money Without Banks: The Greenback Solution." This was still the morning Of Wednesday, July 9. Dan said that money should be fixed in value, and the. Supply should fluctuate.
Also, there is an element of privilege in. Ones, and there can be no free trade in privilege. For example, if the government accepts Bank of Wells Fargo at par for payment of taxes, but a Bank of Fred Foldvary money at a 50% discount! the Wells Fargo is privileged over Dr. Foldvary.
Allocating money to worthy borrowers should be a private function. Creating the money should be a government function.
There used to be government without money. People paid taxes in kind, or by performing militia service or road repair. With money, they could pay without serving directly.
[Here's a note: I think Dan was replying to what Ellen Brown said earlier about public banking. Pittsburgh is the city with the highest percentage of owner-occupied homes without mortgages. In 2000, it was the most affordable city in America; in 2005 (after it ended its two-rate tax system) it was not. Pittsburgh isn't North Dakota (with the Bank of North Dakota).]
Dan said to suppose there's a fixed supply of gold/money, but economic growth, so prices fall. If you have money, your claim to what other people produce has doubled with no effort on your part. How is that just?
Dan also asked how people could pay back their loans with interest if a bank keeps the same amount of money in circulation.
|Friday, December 19th, 2014|
|The Red Queen's Race
I got one new amendment this week, and did Office Actions on three of my older ones, bringing me down to a total of eight.
I finished an Office Action on a Request for Continued Examination last weekend; now, after working on amendments, I am working on my oldest Regular New case.
|Wednesday, December 17th, 2014|
|"For protecting them, by a mock Trial"
I trust that my friends online are aware of the grand jury's excision not to indict Daniel Pantaleo, the policeman who choked Eric Garner, and aware that this is not the only case of police enjoying effective impunity. Reason magazine has reported on the union of corrections officers at Rikers Island
doing its best to protect its members from being held accountable when prisoners die in custody.
When we hire people to use force on our behalf, we need to give them the benefit of the doubt in dubious cases. Nonetheless, their actions should not be exempt from public scrutiny, and they should not be immune from prosecution in clear cases of wrongdoing.
The Declaration of Independence lists as one of its grievances against King George III that he had conspired with others (ministers? Members of Parliament?) "For protecting them [British troops], by a mock Trial, from Punishment for any Murders which they should commit on the Inhabitants of these States." Eric Garner's family, and other bereaved relations, might well agree that it is a serious abuse.
|Friday, December 12th, 2014|
|The Red Queen's Race
Three amendments showed up this week, one of which appeared on my Expedited docket, and which I therefore turned around quickly. I'm now up to a total of ten amendments.
I also finished a Special New case, then did my oldest Regular New case, and am now working on a Request for Continued Examination; I hope to finish that Office Action well before 3:00 PM Monday, and get it counted for the biweek.
|Sunday, December 7th, 2014|
|Georgist Conference in Newport Beach, Part Twenty-five
To continue Dr. Fred Foldvary's talk on "Free Banking as Free Trade," from the morning of Wednesday, July 9:
Dr. Foldvary said that an expansion of money by the central bank acts like more savings, but there is no real increase in savings or planned consumption, so prices rise. Inflation distorts relative prices.
With free banking, banks expand the money supply only to he extent that the public wants to hold money.
To implement free. A king, we could first freeze the supply of federal money. Future expansion could be by private banks. A Wells Fargo $20 Niall could be redeemable for a Federal Reserve $20 bill. Eventually, if many economies have free banking, the market will return to gold as an international currency.
We could still have government banks like the Bank of North Dakota, and we could have local currencies, etc.
Then came a question and answer session. In reply to a question about the risk of counterfeiting, Dr. Foldvary said that there would be paper money only to the extent that people wanted to hold it. Currency could be largely electronic.
He also said that Scotland had free banking until 1844, and Canada had almost-free banking until the Great Depression.
There could be warehouse banks and fractional reserve banks; people could choose where to put their money.
Dr. Foldvary said that the U.S. has never had free banking. Before the Civil War, there were no federal restrictions, but states had laws against branch banking, so a New York bank couldn't operate in a Western state or territory, which would therefore have local "wildcat" banks. (These frequently failed.)
|Brother Guy Sighting
The Saturday Washington Post
Had an article in the Metro section (page B2) about Brother Guido Consolmagno, brotherguy
, an astronomer at the Vatican Observatory, and co-author of the recently published book, Would You Baptize an Extraterrestrial?
. The journalist is David Gibson, and the article is titled, "Bewildered by the star of Bethlehem?"
I had heard of Brother Guy, and I've friended him on LiveJournal, so I was especially interested to read the article.
|Saturday, December 6th, 2014|
Last Friday, someone left a message for me claiming that the IRS was suing me, and I should call right away. I tried the number (a DC number with a 202 area code), and got busy signals. Yesterday, I called and got through to someone with an Indian accent. Between that and the dubious quality if the connection, I couldn't understand much. Finally, either he hung up on me or the connection broke, so I didn't get to hassle him much.
|Friday, December 5th, 2014|
|The Red Queen's Race
This week, I got three new amendments and did Office Actions on two, so I'm up to eight on my dockets.
I've been working on a Special Programs New case, and after that one, which I hope to finish Monday, I'll work on my oldest Regular New.
|Tuesday, December 2nd, 2014|
|Narratives, Facts, and Admitting Ignorance
Reading blog entries and printed commentaries about the shooting of Michael Brown. I have had occasion to notice something (not for the first time, alas). Too many people derive their views of a particular case from their preferred narratives and ideology, not from the facts of the case.
To some on the left, there have been too many police shootings, the Ferguson police force and local government haven't always behaved admirably, and Michael Brown's body was left in the street for hours; therefore, he must have been an innocent young man murdered by a racist cop. To some on the right, Michael Brown may have committed a robbery, and there is a high percentage of thugs in certain neighborhoods primarily inhabited by people of certain skin shades; therefore, the shooting must have been justified.
It may sound pretentious to say, but it bears repeating, that the proper basis for judgment is the facts of a particular case, as best we can determine them. The proper questions are, What do the witnesses say? and What can be determined from the coroner's report and other physical evidence? A wise man will base his views on the facts, not deduce his "facts" from his preferred narrative. When witnesses' account differ and the physical evidence is ambiguous, he will admit his ignorance of what transpired.
|Monday, December 1st, 2014|
|Saturday, November 29th, 2014|
|Georgist Conference in Newport Beach, Part Twenty-Four
Wednesday, July 9, again. Having heard from Ellen Brown on "The Public Bank Solution," we heard from Fred Foldvary on "Free Banking as Free Trade." Dr. Foldvary said that arbitrary regulations can be seen as taxes. True free trade means no restrictions or imposed costs on anything peaceful and honest. With true free trade, we could have public banks, but private banks would also be free to operate.
In a free market, money, like other goods, is produced by voluntary means, by the market, it's quantity set by demand. The real money is gold. Notes are redeemable in gold; redemption prevents inflation, and the money supply is flexible. But gold is no longer used as money.
Why interest? Because of time preference. Future goods have discount -- not for all people all the time, but for most people most of the time. Jobs of the interest rate are:
To equalize savings and borrowing.
To equalize net savings and investment.
To allocate all income into spending for consumption and for investment.
Capital goods have a structure like a stack of pancakes; the lower orders circulate more rapidly.
The Federal reserve Board's problem is that the optimal amount of money and the optimal interest rate are impossible to know, unknown and unknowable
Free banking could let the market set them.
To be continued.
|The Red Queen's Race
I got one amendment this week, and I did an Office Action on one of my amendments, so I'm back to a total of seven. I expect to deal with one of those amendments quickly.
I also did a First Action on one of my Regular New cases.
|Tuesday, November 25th, 2014|
|Georgist Conference in Newport Beach, Part Twenty-Three
To continue with Ellen Brown's presentation on "The Public Bank Solution" (morning of Wednesday, July 9), she said that we pay interest to private lenders plus interest on the national debt is close to all government revenue from the income tax.
How to eliminate interest? Own the bank!
States can do this. She talked about the Bank of North Dakota, which has been operating since 1919, and listed its benefits. It is owned by the state of North Dakota, doing business was the Bank of North Dakota. The bank is low cost.
She mentioned prompt, efficient disaster relief. After the Grand Forks flood of 1997, there was a moratorium on foreclosures.
Globally, 40% of banks are publicly owned, as in Russia, Chine, Brazil, and India; these are high-growth countries.
Twenty U.S. states have introduced bills for publicly owned banks.
In the U.S., there are problems with chains of title for mortgages. MERS is an electronic database that records assignments of titles -- these are not recorded with the County Recorder. When title cannot be proved, it escheats to the state, as a judge agreed (U.S. District Court in Pennsylvania). The case will no doubt be appealed. There's a similar case going the Maine Supreme Court.
So titles may go to the states due to mortgage and title frauds.
After this, we had a mid-morning coffee break, and then Fred Foldvary expressed rather different views.
|Sunday, November 23rd, 2014|
|Visit to Philadelphia
I'm on a train heading back to DC, whence I can get home to Arlington by Metro, and maybe take a cab the last mile or so. I took the train to Philadelphia Friday, and spent the night in a hotel. First, though, I walked to an Indian restaurant maybe eight blocks from the hotel; it was a chilly evening, and I passed a church, the Cathedral of Saints Peter and Paul, where I saw homeless people in piles of coverings sleeping in the church doorways. There's further evidence that Philadelphia needs tax reform, so housing will be cheaper and people can find jobs.
Saturday, I attended the meeting of the Board of the Center for the Study of Economics
, where I was elected President; the previous President, Joe Casey, was elected to my old job of Treasurer. This was essentially by cones sue, before the actual voting; we didn't dispute the election.
Then I headed out toward Conshohocken, and had dinner with my mother in the dining hall of her assisted living facility. After spending some more time with her in her apartment, I spent the night in a room at the guest house, and then went back to her apartment. In the early afternoon, my sister arrived, bearing lunch from Panera, and accompanied by my six-year-old niece and the family Cavalier King Charles Spaniel. We all spent some time together, and the niece showed me the two books she had written and illustrated (dictating the words to her father, but she did compose and illustrate the stories).
My sister and the others went home, and I caught a cab to the train station. Now, here I am in Baltimore, waiting for the train to take me the rest of the way home
|Friday, November 21st, 2014|
|The Red Queen's Race
I got two amendments this week, and I dealt with two amendments, so I'm back to a total of seven. I'm hoping to hear back from a patent attorney; if she's prepared to be reasonable, I may be able to allow one of my amendments.
I also did a first action rejection on my oldest Regular New case early this week, although it was on Tuesday, not before 3:00 PM Monday as I had hoped.
|Wednesday, November 19th, 2014|
|Abenomics Hasn't Worked
Japan is now officially in a recession, Prime Minister Abe is calling new elections, and has postponed a planned increase in the sales tax. Abenomics has not worked, which should not come as a surprise to anyone who read my essay in The Progress Report almost a year ago
. By the way, someone took issue with my disagreement with Keynesian doctrine, and there's a debate you can follow.
|Monday, November 17th, 2014|
|Georgist Conference in Newport Beach, Part. Twenty-Two
To continue with the morning of Wednesday, July 9, we heard from Ellen Brown, JD, about "The Public Bank Solution." (We would hear other views later that morning.). Ms. Brown has websites as EllenBrown.com
, and WebofDebt.com
, and also PublicBankingInstitute.org
. She presented as her thesis that natural resources, per Georgism, include money and credit, which should be public utilities.
She said that banks create money. 35% of everything we buy goes to interest. Businesses have lines of credit, etc.
29% of all business profits go to the financial industry.
Parasites last until they kill their hosts. Bail-in is now the law in Europe; banks can be bailed in by their bondholders, depositors, etc., as in Cyprus. Tax money and deposits are now at risk.
Are we protected by the FDIC? It has $47 billion to protect $4.5 trillion.
She mentioned Dodd-Frank.
The next collapse is likely to be huge because of derivatives exposure. Derivatives have superpriority in bankruptcy.
There is another way, the public bank model developed by the Quakers in colonial Pennsylvania. The government prints $105, spends $5, and lends out $100. $105 is in circulation in the economy, and comes back to the government. The government again spends $5, and lends $100. It's mathematically sustainable, she claimed.
To be continued.
|Friday, November 14th, 2014|
|The Red Queen's Race
I got two "amendments" this week, and I didn't work on any, so I'm up to a total of seven, six on my docket of Amendments, and one on my docket of Special Amendments. I put "amendments" in quotation marks, because the Special Amendment was actually a decision from the Board of Appeals, affirming my rejection of an application. I looked up my Examiner's Answer to the Appeal Brief, and in replying to one of Appellant's arguments, I wrote, "Examiner finds this argument beyond astonishing; he believes that 'high weirdness' is the term of art." The honorable judges of the Board didn't repeat my colorful expression, but they did affirm my rejections, all of them.
In other news, I finished a first action rejection of my Special Programs New case Monday, then I did a first action rejection of my oldest Regular New case, and now I'm working on another Regular New case.
|Thursday, November 13th, 2014|
The lower-lying parts of Virginia don't match New England or the Pennsylvania hills for autumn foliage, but I did enjoy some of the views on my commute to work this morning. There were bright red leaves as well as leaves in various shades of yellow and orange, and also some green leaves left.
|Tuesday, November 11th, 2014|
|Georgist Conference in Newport Beach, Part Twenty-One
To continue with Deirdre Kent's lecture, she proposed to have the Treasury issue a new currency for buying land; it would be accepted for payment of taxes, etc. Once the New Zealand government had bought the land, lessees would pay rent to the Treasury, but not pay local rates.
Land dollars would be issued at par and redeemed at par with the NZ dollar. Land dollars would be a digital currency, with expiration dates. The Treasury could refresh and re-date land dollars.
Has anything like this been done before?
She mentioned Woergl in Austria, 1932; Silvia Gesell was involved. Also, the German hyperinflation of 1923, and the Age of Cathedrals in the tenth through thirteenth centuries. If she provided more details,I didn't manage to jot them down.
She did provide a quote, "It's preposterous, but all ideas are preposterous at first."