Money Management Mishaps – Page 3

We Require More Stolen Money

The constitutionality of speed cameras has been raised in several court cases. Many of these cases have resulted in speed cameras being ruled unconstitutional because the people who were ticket had no opportunity to defend themselves. A case in Ohio recently found this to be the case. However, the city that was sued is claiming that it will be financially ruined if the ruling isn’t reversed:

The village of New Miami told the Ohio Supreme Court last week that its “fiscal integrity” would be compromised if a lawsuit succeeds in stopping the use of speed cameras. In January, the state Court of Appeals sided with motorists who challenged the constitutionality of the one-square-mile speed trap town’s photo radar program (view ruling). To avoid paying the resulting $3 million in refunds, New Miami is begging the high court for relief.

“The village now faces financial ruin should the Twelfth District’s overly restrictive reading of the sovereign immunity statutes be allowed to stand, and the matter proceed to final judgment,” New Miami attorney James J. Englert wrote.

If a private company claimed that a ruling should be reversed because it was detrimental to its bottom line, the judge presiding over the case would probably laugh at the company’s lawyers and then tell them to get the fuck out of the courtroom. This would be especially true if the company was found to have stolen the money in question. But rules are often different for governmental bodies. When a governmental body steals it’s usually referred to as “taxation,” a “citation,” or an “inspection fee” and considered legitimate.

Personally, I hope the judge refuses to grant the city relief and it ends up having to go into bankruptcy. Any organization that is only able to survive on theft should be tossed into the dustbin of history.

Playing with Other People’s Money

Is government deficit spending good? If you ask the party in power, yes. If you ask the party out of power, no. The Republican Party likes to advertise itself as being fiscally conservative, which is a label that implies an opposition to deficit spending. And the Republicans did decry deficit spending… during the reign of Barack Obama. But now their party is in power so deficit spending is a good thing:

On Wednesday, Congressional leadership seemed united behind a budget deal that looks truly awful — at least if you care about the country’s financial future. The bipartisan deal blasts through budget caps and could return the U.S. to trillion-dollar deficits in short order. Right after getting historic tax reform passed, politicians apparently seem content to toss a huge future tax hike onto the next generation. After all, the bills will eventually come due.

And they are serious bills indeed. The proposed deal would include a one-year debt limit suspension, while raising defense spending by $80 billion and non-defense expense by $63 billion. The budget for 2019 would see similar increases, and over the 10-year window, this Chuck Schumer-Mitch McConnell budget could result in $1.5 trillion more added to the national debt.

The poles have flipped. Now the Democratic Party is suddenly concerned about deficit spending.

The United States government is like a teenager who has racked up thousands in credit card debt. It is so far in debt at this point that it cannot hope to pay it off. Hell, it can barely pay the interest on the debt. And if it’s already so far in the hole that it can’t possibly pay off its debt, why should it care if it goes further into debt?

The national debt can’t be repaid and is therefore no longer a financial point of interest. It’s purely a political point of interest that is brought up by the party not in power to criticize the party in power.

Just Throw More Money at It

Let’s pretend for a moment that we have been tasked with managing an effort to upgrade an archaic vehicle registration system. Eight years and $93 million later the new system is still a complete mess. The developers that we hired say that they need another $43 million to make the system actually work. How do you proceed? Do you just toss more money at the developers or do you write the entire project off as a loss and try again? That’s the question currently facing the State of Minnesota:

State officials Wednesday unveiled an expensive plan for fixing the troubled computer system for vehicle licensing and registration.

They say lawmakers would need to approve another $43 million early in the 2018 session to get the system back on track this year.

One Republican lawmaker called the request “mind boggling.”

The Minnesota Licensing and Registration System, or MNLARS, has been plagued by technical problems since its launch last summer. The cost of the statewide computer system, used for tab purchases, title transfers and other transactions, has already topped $93 million over eight years.

Mind boggling is an understatement.

Vehicle registration isn’t a new problem. 49 other states have solved the problem already. Why hasn’t Minnesota been able to tap into that vast amount of knowledge?

I’m naturally cynical when it comes to politics so I’m betting that the legislators will eventually approve the addition funding, which is part of the problem with government. Government constantly falls for the sunk cost fallacy. After sinking millions or billions of dollars into a project without any meaningful gain, government goons tend to develop an aversion to admitting that the project will never bear fruit and abandoning the project. This government tendency creates an environment rife with corruption because anybody running a project can claim that they need more funding less all of the previous efforts will be for nothing and they will receive that funding.

The Government Was Shutdown? I Couldn’t Even Tell!

The media wouldn’t shut up about the government shutdown. Apparently it was shutdown all weekend. While this news was treated apocalyptically by many partisans wanting to blame the other party for the shutdown, people who weren’t wasting their weekend with politics and didn’t watch the news would have had a hard time knowing that the government was shutdown. Why is that? Because a government shutdown doesn’t actually mean the government is shutdown. It means a few services that will inconvenience the plebeians are shutdown while the “essential services” remain operational:

Mulvaney said the closures would inflict less pain on citizens who use government services than the last time Congress failed to pass a spending bill in time. The 2013 shutdown closed down many government functions for 16 days until House Republicans relented on their demands that a spending bill include a repeal of the Affordable Care Act.

Mandatory spending like Social Security and disaster relief will continue, as they have in past shutdowns. Military troops, police and other essential workers would also continue, but their pay could be held up if the shutdown lasts more than a week. Even federal workers told not to report to work would likely be paid eventually — Congress has historically voted to pay them retroactively.

Federal workers who didn’t show up to work get retroactively paid? Talk about a sweet gig. A shutdown for government employees is effectively a paid vacation. This is also why I just roll my eyes when some statist tries to make me feel guilty for cheering government shutdowns by pointing out that federal employees aren’t getting paid. Not that I care that parasites get paid but I do like to point out that those employees will end up being retroactively paid so their pain will be, at most, temporary.

Unfortunately, as a libertarian anarchist, government shutdowns are mostly disappointing to me. They’re sold as government ceasing to function, which fills me with happy thoughts. But then the government continues to function and I’m left disappointed.

Making Up Numbers

The economic boost provided by major sporting events can’t be emphasized enough… by how lackluster it is. Those who argue for public funding to build stadiums or host major sporting events like the Olympics and Super Bowl will show a bunch of numbers to make their point. One of their favorite numbers to bring up is the number of visitors the hosting city will receive from events. For example, we’ve been told that Minneapolis will receive about 1 million visitors during the Super Bowl. That number sounds impressive until you realize that it’s bullshit:

The number is tossed about frequently in national and local media reports: 1 million people are expected to visit Minneapolis for the Super Bowl.

[…]

“What’s a visitor?” I asked Kenneth McGill, managing director of West Chester, Pa.-based Rockport Analytics.

“A visitor is one of two things,” McGill said. “It’s a person who has stayed overnight in some sort of paid accommodation. In that context it doesn’t matter where they’re from. The could live downtown and move to a hotel just to experience it all.

“The second definition of a visitor is someone who has traveled more than 50 miles, one-way, to get to the event.”

If McGill’s visitor estimate comes true, it means that roughly 874,600 of the 1 million visitors expected by the Host Committee already live in the Twin Cities, a metro area with a population of 3.5 million.

So Minneapolis shouldn’t expect 1 million visitors. It should expect roughly 125,000. While 125,000 people might bring a bit of business to the Twin Cities that wouldn’t have existed without the Super Bowl, I have my doubts that it will be anywhere near enough to compensate the tax cattle of Minneapolis and Minnesota for the publicly funded security expenses alone.

I guess on the upside the arrival of the Super Bowl has forced the state and municipal governments to fix some of their damned roads. Even though I’m told that I have to pay taxes to maintain the roads it seems like the roads are only maintained when people from out of town are visiting. Why I have to pay for road repairs to impress people from out of town is also a mystery to me.

People Are Going Batshit for Crypto

People are going batshit for crypto. When the Long Island Iced Tea Company changed its name to Long Blockchain its stock jumped by 50 percent. Similarly Hooters’s stock jumped by 50 percent when it announced its blockchain rewards program and Kodak, which I didn’t realize was even still around, enjoyed a stock increase of 60 percent when it announced its blockchain-based currency. It seems like the mere whisper of the word blockchain is enough to get investors excited.

Let us return to Long Blockchain though. When the company announced its name change it justified it by claiming that it was going to buy cryptocurrency mining hardware. After baiting investors Long Blockchain announced that while it was still planning to invest in cryptocurrency mining hardware it didn’t have a definite timeline:

But today Long Blockchain announced it was scrapping the stock offering. The company says that it’s still planning to buy bitcoin-mining hardware. However, Long Blockchain says that it “can make no assurances that it will be able to finance the purchase of the mining equipment.”

Every time Bitcoin’s price increases detractors claim that it’s a bubble that will soon burst and leave everybody who invested penniless. Little did they know that Bitcoin itself wasn’t the real bubble but the technology it’s based on, blockchains, was. And yes, when the mere whisper of adopting a technology causes your stock to significantly jump in value, you’re operating in a bubble.

I’m Putting Myself on The Blockchain™

I am formally announced that I’m putting myself on The Blockchain™. Please throw money at me:

The stock market loves blockchains. Last month, the Long Island Iced Tea Company rebranded itself as Long Blockchain and saw its stock price triple. On Tuesday, restaurant company Chanticleer Holdings saw its stock soar by 50 percent after the company announced that it would be moving its reward programs to the blockchain. The company owns several burger brands and operates a number of Hooters restaurants. It also holds a minority stake in Hooters of America, the parent company of Hooters.

Venezuela Tries Its Hand at Creating a Failed Cryptocurrency

A cryptocurrency managed by the same regime that tanked the economy of a country that has vast natural resource wealth? I can’t see how this could possibly go wrong!

CARACAS (Reuters) – Venezuelan President Nicolas Maduro looked to the world of digital currency to circumvent U.S.-led financial sanctions, announcing on Sunday the launch of the “petro” backed by oil reserves to shore up a collapsed economy.

The leftist leader offered few specifics about the currency launch or how the struggling OPEC member would pull off such a feat, but he declared to cheers that “the 21st century has arrived!”

I’m doubting that we’ll see any technical white paper about the Petro since that would solidify implementation details and I’m guessing the Venezuelan government’s plan is to have a cryptocurrency it can change on a whim.

What Happens When You Don’t Own Something

The cloud is good. The cloud is holy. The cloud is our savior. If you listen to the marketing departments of online service providers and Internet of Things manufacturers, you’d be lead to believe that the cloud will soon cure cancer. While there can be advantages to moving services online there are also major disadvantages. The biggest disadvantage, in my opinion, is the fact that you don’t own anything that is dependent on an online service. People who bought the Canary security camera are learning this lesson the hard way:

Canary, a connected home security camera company, announced changes to its free service last week that went into effect on Tuesday. Under the new terms, non-paying users will no longer be able to freely access night mode on their cameras nor will they be able to record video for later viewing. Night mode is a feature that lets you set a schedule for your Canary camera to monitor your home while you sleep without sending notifications.

On top of that, all the videos the company previously recorded for free will be converted into 10-second clips called “video previews.” Essentially, important features are being taken away from users unless they’re willing to pay $9.99 a month.

People will likely blame this on greed but the real culprit is the lack of ownership. The Canary camera isn’t free but paying money to acquire one doesn’t mean you’re paying money to own it. In reality, you’re paying money for the privilege of paying a monthly fee to tie a camera to an online service. The terms of accessing that online service can change on a whim and, in this case, the change left people who decided not to pay the $9.99 per month fee with a paperweight that used to be a security camera (albeit a limited one).

The Internet of Things means never owning the devices you pay money for and if you don’t own it, you don’t control it.

Rewarding Incompetence

A lot of people are very upset with Equifax at the moment. The company’s amateur hour security practices allow the personal information of millions of people to fall into unauthorized hands. You would think that a screw up of that magnitude would dissuade any rational business from doing business with it. Well the Internal Revenue Service (IRS) isn’t rational or a business so this shouldn’t surprise anybody:

Between March and July of this year, the credit rating agency Equifax, was infiltrated by hackers who made off with the sensitive personal information of more than 140 million Americans. That sounds like the kind of thing that might hurt a company’s credibility when it comes to security. But Politico is now reporting that the IRS will pay Equifax $7.25 million to “verify taxpayer identities and help prevent fraud.”

I don’t know why the IRS feels the need to pay Equifax to verify taxpayer identities when its database is in the wild. I’m sure the IRS could acquire a copy and just perform verify taxpayers itself.

I really need to get into government contracts. It seems like no screw up is so severe that it will dissuade the government from doing business with you.