I enjoy reading the descriptions of natural history that condense the life of the universe into the scale of a single year, sometimes called the Cosmic Calendar, so that if the Big Bang happened on January 1, the solar system formed on September 2, life on Earth started on September 21, fish appeared on December 17, the ice age ended on December 31 at 11:59:33 p.m, and so on. I also appreciate the similar scaling of the federal income tax and the concept of Tax Freedom Day, the day of the year on which the nation has earned total income equal to its federal and state income tax burden. It's in late April.
Something I read inspired me to condense income taxes and the federal budget into a single workweek -- the Laquedem Cosmic Federal Budget Workweek. Imagine that your annual work and income are condensed into a single workweek of five 8-hour days, each running from 9:00 a.m. to 5:00 p.m. (For this exercise, skip lunch and breaks.) The tax freedom moment is Tuesday at 1:29 p.m., including state taxes. Your federal income tax freedom moment is Tuesday morning at 9:20 a.m.
But let's take this scale one step farther. If your income tax is allocated ratably among the $2.854 trillion (net of certain offsetting revenues including Social Security and Medicare taxes) that our federal government spends, for how much of the LCFBW are you working for which program?
The answer is that from 9:00 to 10:52:19 Monday you're working for the Defense Department, from 10:52:20 to 12:37:26 you're funding other discretionary spending, from 12:37:27 to 1:19:39 you're funding the interest on the national debt, from 1:19:40 to 2:24:08 you're funding Medicaid, and from 2:24:09 to 3:51:23 you're funding the gap between Social Security and Medicare tax revenues and expenses. For the rest of the Monday (remember, no breaks!) and 20 minutes Tuesday morning you're supporting everything else the government does that has some mandatory element, including SNAP (food stamps), federal and military retirement benefits, the earned income credit, some veterans' programs, and unemployment benefits, net of all offsetting revenue.
Mr. Trump proposes to cut funding for the National Endowment for the Humanities, the National Endowment for the Arts, and the Corporation for Public Broadcasting. How much of your workweek goes to support those three programs? Last year the federal government funded public broadcasting with $445 million and sent about $150 million each to NEH and NEA. On the Laquedem Cosmic Federal Budget Workweek scale, one minute equals $5.708 billion and one second equals $95 million. The answer, then, is that the $745 million for those three programs together correspond to about eight seconds of your workweek. If you read at a respectable 300 words per minute, in the time it took you to read this post you funded your share of the three programs twelve times over. Now get back to work.
They may wish to review the history of how the nation's tax burden has shifted from corporations to individuals. In the early years of the federal income tax, the burden lay about evenly on individuals and corporations. In eight of the first ten years, the government actually collected more from corporations than from individual taxpayers. That tenth year -- 1943 -- was the last year in which the United States government collected more income tax from corporations than from individuals ($9.56 billion from corporations and $6.51 billion from individuals).
The last year in which corporations paid as much as two-thirds as individuals was 1954 ($21.1 billion from corporations and $29.5 billion from individuals).
The last year in which corporations paid as much as half as individuals was 1967 ($34 billion from corporations and $61.5 billion from individuals).
The last year in which corporations paid as much as one-third as individuals was 2006 ($353.9 billion from corporations and $1,044 billion from individuals), and before that was 1977 ($54.9 billion from corporations and $157.6 billion from individuals).
The tax cut that the Republicans champion has already happened.
Hidden within Donald Trump's executive order on immigration is this little gem, section 9:
Sec. 9. Visa Validity Reciprocity. The Secretary of State shall review all nonimmigrant visa reciprocity agreements to ensure that they are, with respect to each visa classification, truly reciprocal insofar as practicable with respect to validity period and fees, as required by sections 221(c) and 281 of the INA, 8 U.S.C. 1201(c) and 1351, and other treatment. If a country does not treat United States nationals seeking nonimmigrant visas in a reciprocal manner, the Secretary of State shall adjust the visa validity period, fee schedule, or other treatment to match the treatment of United States nationals by the foreign country, to the extent practicable.
"Nonimmigrant visas" are visas for business, education, and tourism. The ringer here is that a few nations, most notably Saudi Arabia, prohibit tourist visits entirely: this website states that Saudi Arabia allows foreign visitors only for sponsored business travel, religious purposes, and family visits. Conspicuously absent are visits for education and tourism.
If this portion of President Trump's order is upheld, and it might be, then he has directed the Secretary of State to treat Saudi visitors the same way that Saudi Arabia treats American visitors: that is, to keep them out of the country. He's told the Secretary of State to exclude from the United States all Saudi nationals who are coming for education, or for non-specific business purposes, or simply to visit the United States -- even though Saudi Arabia isn't one of the nations on his list. He's actually moved to exclude from the United States citizens of one of the nations that produced the 9/11 terrorists, even if he hasn't realized it yet.
Once upon a time the United Hotel Company needed to hire a new president. It narrowed more than a dozen applicants down to two and called them in for a final interview. "What's your experience in the industry?" they asked the finalists, though they had read their resumes.
The first applicant, a woman, replied, "I''ve spent more than 30 years working in hotels and the hospitality industry. I worked my way through college serving tables in a restaurant. When I graduated, I took a job in customer service at a hotel, then was promoted to run the catering department, and later became the sales manager. I was out of the industry for 8 years because my husband ran a hotel chain -- he was the first CEO in 50 years at that company to turn a profit -- and I moved with him to support his career. When he retired, I was selected to be the senior finance manager at another hotel chain, which I did for eight years, and then for four years was the director of communications. Also, so you can know what else I've done, here are 10 years of my income tax returns."
The second applicant, a man, said, "I've never had a job at a hotel, but I know all about them because I stay in hotels and I have my weddings catered in hotels. I've figured out some great ways to avoid paying my hotel bills. I know all about how to stiff a hotel, so you should hire me because I can stop other people from stealing from you. You need an outsider to teach you about fraud. And if the business goes downhill I know all about how to reorganize it, because I've taken six of my own companies into bankruptcy. I'm the best you're ever going to get, and if you don't hire me it means the system is rigged to favor the insiders. By the way, your receptionist's cute. I know people who own hotels in Russia - let's do a merger."
The hiring committee hotly debated which candidate to hire. The committee was almost evenly divided, so it scheduled a final discussion and vote. On the big day, one member was busy with other things, and didn't attend. The members who showed up talked for a while and then voted. The second candidate won by one vote, despite his inexperience, his bankruptcies, and his attitude, because he was a man.
This, of course, is a fable, and would never happen in American business, where decisions are based on merit. Whether it happens in American politics depends on your ballot.
In matters of gambling, Oregon has two personalities. The law prohibits casinos and commercial gambling, even as the state itself operates two lotteries and other games of chance. ORS 167.117 permits Oregonians to engage in social games, such as the inoffensive wagering on the roll of the dice or the play of the cards, which I occasionally enjoy in the company of others of the Laquedemimonde. What is a "social game?" The law defines the term to be (i) a game other than a lottery in a private home in which there are no house odds and no house profit, and (ii) a game in a business establishment in a city or county that has authorized social gaming, where there are no house odds, house profit, or house bank. The idea behind this statute was that small towns might allow taverns to host card games in the hope of selling more food and drink, but the taverns weren't allowed to participate in or profit from the gambling itself.
Where the camel's nose goes, the body will soon follow. Prominent Portland attorney Tom Rask, who represents cardrooms in Washington, pointed out yesterday that Portland and Multnomah County are allowing games whose scale belies the benign adjective "social." Pots of tens and hundreds of thousands of dollars are sometimes advertised, far more Hamiltons and Lincolns than the framers of ORS 167.117 envisioned.
What, then, can be done? Mr. Rask called for the city to enforce state law and its own regulations, something the city seems disinclined to do. (The city fathers and mothers prefer to place their wagers on real estate through the Portland Development Commission.) The gambling houses themselves are keeping quiet.
A government that neglects the law for social reasons -- it's hard for a local government that receives money from the state lottery to seize the moral high ground when it complains about private enterprise joining in -- might enforce the law for financial reasons. Here's where Multnomah County is missing a bet. It can make a few dollars the easy way, if it cares to read ORS 91.240 and 91.245, two statutes buried in Oregon's non-residential landlord-tenant law. ORS 91.240 prohibits landlords from renting any building, boat, or booth if they know or have reason to know that the tenant will use the premises for gambling purposes. ORS 91.245 provides an incentive for the county to enforce the law: the penalty for being the landlord of a gambling house is "twice the amount of the rent of such building or other place for six months." So if the district attorney can identify a few gambling houses that lease their space, the D.A. can chase the landlords for the penalty and turn the office into a profit center. Your winnings, sir!
In 1903 Richard See, age 19, came to America from Frankfurt, settling in New York, where he became a hat buyer for a large department store. Three years later a Russian emigrant arrived in Portland to pursue the American dream. He took the surname of “Gold,” though not because of the legend that American streets were paved with gold. In 1908 his wife Rose and their four small children joined him. A fifth child was born here in 1910 in a house on now-vanished SW Baker Street. Joe and Rose Gold gave their children plain American names – Jack, Paul, Sam, Sarah, and Dave – and raised them in the Jewish and Italian quarter of South Portland, where Joe Gold was a junk dealer.
In 1921 Meier & Frank lured Richard See to leave New York for Portland, and placed him in charge of the millinery department. Meier & Frank’s hat sales soared when Mr. See carried out his promise to, in his words, “make at least ten trips a year to New York, to give the women of Portland the new styles as fast as they originate.”
Around 1927 Paul Gold opened his first millinery store with his younger brother Dave. A gregarious man, Paul readily accumulated friends in Portland’s retail community, including Richard See, who was still buying and selling hats at Meier & Frank. In 1941 another friend, a shopkeeper in the Goodnaugh Building at 5th and Yamhill, told Paul that his landlord was raising the rent and he didn’t know if he and the other Goodnaugh tenants could pay the increase. By coincidence, at about the same time Mr. See, who was planning for retirement, told Mr. Gold that he had saved some money and didn’t think that government bonds paid a high enough return. Perhaps, if Paul invested some of his money for him, Paul could do better?
Mr. Gold did do better. “Paul made things grow,” his rabbi said when Mr. Gold died in 1981, and so he did, starting with the Goodnough. According to legend, Mr. Gold (pictured at right, foreground) approached the worried Goodnough tenants and promised that if they would pay him three months’ rent in advance, he would buy the building and not raise their rent for two years. The tenants pungled up, Mr. See wrote a check, and soon the Goodnough Building had become the first acquisition of the new firm of See, Gold & Associates. A few months later they bought a second building, the Kraemer Building at SW 2nd and Washington.
Pleased with their purchases, Messrs. See and Gold gave up the hat business to focus on buying downtown property. In 1944 they were able to buy the Hotel Oregon, at Broadway and Stark, for the amount of the unpaid property taxes. In 1945 they bought the Portland Garage, a parking structure at 5th and Taylor, later acquiring the rest of the block. They acquired so much real estate that by 1956 the society page of the Palm Springs newspaper could describe them as “realtors from Portland, Oregon.”
They became famous for never making counteroffers. If you quoted them a price for your building, they would say only “yes” or “no.” Would-be sellers learned to name their best price first. See, Gold & Associates continued to buy downtown property – like potato chips, no one can stop with just one – sometimes trading up, rarely selling. One exception was when they sold the block at 5th and Taylor to Georgia-Pacific for an office tower, a deviation that Mr. Gold rationalized to his partners by pointing out that the property across the street that See, Gold & Associates owned would go up in value when G-P built its skyscraper.
Messrs. See and Gold transacted their business from offices in the New Fliedner Building at 10th and Washington. (It was called the New Fliedner Building because it had replaced the original Fliedner Building in 1907.) Mr. Gold could often be found at a corner table at Danny’s Delicatessen at 5th and Yamhill across from the Farmers Market, where thick pastrami sandwiches fueled negotiations. In between acquiring buildings See, Gold & Associates found time for other ventures, including buying and operating the Pacific Department Store and Powers Furniture Company. Mr. Gold also flirted with the restaurant business, investing in one of Portland’s first Japanese restaurants and operating a downtown bar called the Harvester.
Richard See died in 1979 and Paul Gold died in 1981. In their 40 years in business, they had owned buildings, separately or together, on every downtown avenue from 1st to 11th and on every downtown street from Salmon to Stark. Last week the final property was sold, bringing to a quiet close a remarkable 75-year story of Portland real estate history.
Messrs. See and Gold owed their success to Portland’s postwar growth – the streets of downtown Portland turned out to be paved with gold after all – but also to the happy accident of both being in the hat business. Had Mr. See bought shoes, or had Mr. Gold sold suits, they might never have joined forces to become rich together. Sometimes clothes really do make the man.
One delightful, unintentional irony of the Republican debate on Saturday was that in between the candidates' jousting about the influence of money on politics, the commercials were all for Presidents' Day sales. None of the Temples of Commerce offered to sell me an entire candidate, however.
In recent months we've seen stories of persons who, when accused of civil violations, solicit money for their defense through crowdfunding, including most notably a website called GoFundMe.com. GoFundMe turned down the effort of the clerk of Rowan County, Kentucky after she was briefly jailed for refusing to issue marriage licenses, but has accepted efforts to fund the defense of Second Amendment cases, marijuana cases, and deputy sheriffs.
It's all very well to raise money to get people out of legal trouble, but these efforts point out the need for a similar crowdfunding source to get wealthy miscreants into legal trouble -- or, more exactly, to provide a way for the general public to express their view of the malefactors' crimes. Hence the Laquedem Crowdfining Plan: GoFineMe, to provide a measure of the public wrath against those who steal and cheat on a grand scale. It works like this: if a judge or jury convicts a defendant of (say) securities fraud or some other massive financial crime that has identifiable victims, the court will open a GoFineMe account for a specified period of time, into which the public can donate funds to be used as restitution for the victims. The GoFineMe wrinkle is that the judge will also sentence the malefactor to pay a fine equal to X times the GoFineMe fund. A piker at the swindling game might be fined an amount equal to somewhere between half and twice the GoFineMe fund. A master of the art, if convicted, might be fined 10 or 20 times the GoFineMe amount. The fine would be used as restitution to the victims. It would work like a matching gift to charity, and it's far more gentle on the offender than setting up the stocks in the town square next to a supply of rotten tomatoes.