Lots of politics and finance this week. Probably not your favourite subjects (nor mine); sorry.
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Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father / New York Times
President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents, an investigation by The New York Times has found. Mr. Trump won the presidency proclaiming himself a self-made billionaire, and he has long insisted that his father, the legendary New York City builder Fred C. Trump, provided almost no financial help. But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day. Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings. These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances. The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.
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The real Goldfinger: the London banker who broke the world / The Guardian
The true story of how the City of London invented offshore banking – and set the rich free [...] The cumulative effect of this game of jurisdictional Twister was that Fraser created a bond paying a good rate of interest, on which no one had to pay tax of any kind, and which could be turned back into cash anywhere. These were what are known as bearer bonds. Whoever possessed the bond owned them; there was no register of ownership or any obligation to record your holding, which was not written down anywhere. Fraser’s eurobonds were like magic. Before eurobonds, hidden wealth in Switzerland couldn’t really do much; but now it could buy these fantastic pieces of paper, which could be carried anywhere, redeemed anywhere and all the while paid interest to their owners, tax free. Dodge taxes and make a profit, worldwide.
Paul Singer, Doomsday Investor / New Yorker
The head of Elliott Management has developed a uniquely adversarial, and immensely profitable, way of doing business. [...] Elliott’s executives say that most of their investment campaigns proceed without significant conflict, but a noticeable number seem to end up mired in drama. A signature Elliott tactic is the release of a letter harshly criticizing the target company’s C.E.O., which is often followed by the executive’s resignation or the sale of the company. [...] Bush told me that, when he began to research Elliott online, the experience was like “Googling this thing on your arm and it says, ‘You’re going to die.’ ” Shortly after Bush’s call with Cohn ended, Elliott’s stake in Athena became public, and Bush’s phone was deluged with messages from friends and colleagues expressing panicky concern. Some sent pledges of support; others offered advice. Many asked him not to tell anyone that they had been in touch. Bush recalled that one of Athena’s longtime investors simply wrote, “They’re going to ask for your head.”
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The inescapable weight of my $100,000 student debt / The Guardian
Now 30, I have been incapacitated by debt for a decade. The delicate balancing act that my family and I perform in order to make a payment each month has become the organising principle of our lives. I am just one of 44 million borrowers in the US who owe a total of more than $1.4 trillion in student loan debt. This number is almost incomprehensibly high, and yet it continues to increase, with no sign of stopping. Legislation that might help families in financial hardship has failed in Congress. A bill introduced in May 2017, the Discharge Student Loans in Bankruptcy Act, which would undo changes made to the bankruptcy code in the early 2000s, stalled in committee. Despite all evidence that student loan debt is a national crisis, the majority of the US government – the only organisation with the power to resolve the problem – refuses to acknowledge its severity. My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design. My parents never lived extravagantly. [...] College, which cost roughly $50,000 a year, was the only time that money did not seem to matter. “We’ll find a way to pay for it,” my parents said repeatedly, and if we couldn’t pay for it immediately, there was always a bank willing to give us a loan.
I Know Brett Kavanaugh, but I Wouldn’t Confirm Him / The Atlantic
Republicans Rescued Kavanaugh’s Nomination By Making It About #MeToo / FiveThirtyEight
If I were a senator, I would not vote to confirm Brett Kavanaugh. These are words I write with no pleasure, but with deep sadness. Unlike many people who will read them with glee—as validating preexisting political, philosophical, or jurisprudential opposition to Kavanaugh’s nomination—I have no hostility to or particular fear of conservative jurisprudence. I have a long relationship with Kavanaugh, and I have always liked him. I have admired his career on the D.C. Circuit. I have spoken warmly of him. I have published him. I have vouched publicly for his character—more than once—and taken a fair bit of heat for doing so. [...] I am also keenly aware that rejecting Kavanaugh on the record currently before the Senate will set a dangerous precedent. The allegations against him remain unproven. They arose publicly late in the process and, by their nature, are not amenable to decisive factual rebuttal. It is a real possibility that Kavanaugh is telling the truth and that he has had his life turned upside down over a falsehood. [...] Despite all of that, if I were a senator, I would vote against Kavanaugh’s confirmation. I would do it both because of Ford’s testimony and because of Kavanaugh’s. For reasons I will describe, I find her account more believable than his. I would also do it because whatever the truth of what happened in the summer of 1982, Thursday’s hearing left Kavanaugh nonviable as a justice.
Instead, GOP leaders, including President Trump, have waged what amounts to an aggressive anti-#MeToo campaign in Kavanaugh’s defense, not only rejecting the charge that he behaved improperly but more broadly arguing that men in America are in peril. Perhaps the most remarkable comments of the past 10 days have not come from Kavanaugh or Christine Blasey Ford (who alleged that Kavanaugh sexually assaulted her), but from Trump and Sen. Lindsey Graham of South Carolina. [...] I don’t think that increased support is because GOP voters are fans of sexual assault, obviously. Instead, there is a deep vein of resistance to #MeToo and what it means in conservative America. A HuffPost/YouGov survey conducted in August found that 54 percent of Republicans had an unfavorable view of the #MeToo movement, compared with 26 percent who had a favorable view. [...] In fact, it’s worth considering whether #MeToo is not a women’s movement, but really a liberal women’s movement. Pushes for gender equality, by a number of measures, are more popular with Democratic men than Republican women.
The iPhone Franchise / Stratechery
Apple released a new flagship iPhone yesterday, the iPhone XS. This isn’t exactly ground-breaking news: it is exactly what the company has done for eleven years now (matching the 11-year run of non-iOS iPods, by the way). To that end, what has always interested me more are new-to-the-world non-flagship models: the iPhone 5C in 2013, the iPhone 8 last year (or was it the iPhone X?), and the iPhone XR yesterday. Each, I think, highlights critical junctions not only in how Apple thinks about the iPhone strategically, but also about how Apple thinks about itself.
PSA Flight 182 crash: how a routine commuter flight turned into an apocalyptic disaster / Independent
Nine seconds later, at 0900:31 San Diego Approach told Kazy and Boswell about the presence of Flight 182, and reassuringly informed them that the much bigger aircraft had their Cessna in sight. Shortly after that, the Cessna turned through 20 degrees to head due east, flying in exactly the same direction as Flight 182, just at a lower altitude. Kazy and Boswell, having been told Flight 182 had them in sight, could reasonably assume the men in control of the jet had seen them change course. They hadn’t. The light aircraft was now beneath the jet and out of sight of the men in the Boeing’s cockpit. Flight 182, however, was not told by air traffic control about the Cessna’s change of direction. The rules dictated that Flight 182, as the overtaking aircraft, was the one with the duty to keep “well clear”, whatever changes in course the Cessna made. But, as the small pieces that would make a massive disaster began to slot into place, the men in the Boeing did not tell air traffic control they had lost sight of the Cessna.
Does the education system adequately serve advanced students? / Slate Star Codex
Pretend you’re a teacher. With 25 students, who gets your attention during class? There’s the kid who asks for it, whose hand is constantly up. There’s also the quiet kid in the corner who never says a word, but has been lost in math since October, who will fail if you don’t do something. There’s the student in the middle of the pack, flowing along. Finally, there’s the kid who finishes everything quickly. She’s looking around and wondering, what am I supposed to do now? In a survey of teachers from 2008, just 23% reported that advanced students were a top priority for them, while 63% reported giving struggling students in their classes the most attention.
Why Kids Want Things / The Atlantic
A conversation with a researcher who has studied materialism for almost 30 years [...] I think of seventh grade as being the worst age of a person’s life. It’s really a fraught time, and there’s all this insecurity that kids have about Who am I? Do people like me? What kind of person am I? So how do we navigate that? Well, our appearance is one of the things we navigate with. So what does a kid see when they see another kid? They see the expression on their face, they see the body language, the posture, and the clothes they’re wearing. And so a kid who’s not very self-confident in navigating this is going to maybe feel a little more self-confident if they’re wearing the right kind of clothes rather than the wrong kind of clothes. Here we’re learning, right off the bat, that having things can help us define who we are.
Book Review: The Black Swan / Slate Star Codex
Writing a review of The Black Swan is a nerve-wracking experience. First, because it forces me to reveal I am about ten years behind the times in my reading habits. But second, because its author Nassim Nicholas Taleb is infamous for angry Twitter rants against people who misunderstand his work. Much better men than I have read and reviewed Black Swan, messed it up, and ended up the victim of Taleb’s acerbic tongue. One might ask: what’s the worst that could happen? A famous intellectual yells at me on Twitter for a few minutes? Isn’t that normal these days? Sure, occasionally Taleb will go further and write an entire enraged Medium article about some particularly egregious flub, but only occasionally. And even that isn’t so bad, is it? But such an argument betrays the following underlying view: It assumes that events can always be mapped onto a bell curve, with a peak at the average and dropping off quickly as one moves towards extremes. Most reviews of Black Swan will get an angry Twitter rant. A few will get only a snarky Facebook post or an entire enraged Medium article. By the time we get to real extremes in either directions – a mere passive-aggressive Reddit comment, or a dramatic violent assault – the probabilities are so low that they can safely be ignored.
Voters Like A Political Party Until It Passes Laws / FiveThirtyEight
Can either political party maintain power while enacting its agenda? Or are governing majorities transient, with policy victories sowing the seeds for future electoral losses? The evidence we have suggests the latter. When Democrats historically have tried to enact a spate of liberal policies, Republicans have made gains and public opinion has moved in a more conservative direction. Likewise, when Republicans have passed more conservative policies, Democrats have made gains, and public opinion has moved in a more liberal direction. It might not sound intuitive, but policy victories usually result in a mobilized opposition and electoral losses. Or, put another way, voters usually punish rather than reward parties that move policy to achieve their goals.
To Serve and Collect / Marginal Revolution
We find that drug arrests, especially of blacks and Hispanics, generate revenues so police have the motive and opportunity to engage in revenue driven policing. What about the means? Arrests for murders or robbery are limited by the number of murders and robberies. Drug arrests, however, are more of a police choice variable, able to be ramped up or down almost at will. Thus, in addition to motive and opportunity, police also have the means for revenue driven law enforcement. How can we test for this effect? In some states, police get to keep the revenues they collect from forfeitures but these states are not randomly assigned. Thus, we use deficits which are plausibly randomly assigned (relative to our variables of concern) and we identify off of the interaction of the two i.e. the marginal impact of additional budget deficits in states where seizure revenue is retained. We find that black and Hispanic arrests for drugs, DUI, and prostitution arrests are all increasing with deficits in states where seizure revenues are legally retained while white arrests are broadly insensitive to deficits.
Trump Has Changed How Teens View the News / The Atlantic
Since President Trump took office, he has relentlessly attacked the media. He’s shunned individual reporters, referred to the press as “the enemy of the American people,” and popularized the term “fake news” to denigrate credible articles. Meanwhile, public trust in the press is at an all-time low. According to a recent Knight-Gallup report, only a third of Americans view the press positively. There is increasing evidence that this skepticism, exacerbated by the president’s relentless attacks, is trickling down to the next generation of voters. A 2017 report on a series of focus groups with 52 people between the ages of 14 and 24, conducted by Data & Society and the Knight Foundation, found that many young Americans believe the news is biased and are skeptical of its accuracy. “There was no assumption that the news would convey the truth or would be worthy of their trust,” the study reported.
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Game Changers / ESPN
In honor of "Basketball: A Love Story", our experts ranked the signature moves they loved most. Join us as we journey through the decades, showing the evolution of basketball's best go-to dribbles, shots and slams.
The split-second choreography of a long one-shot / Kottke
The Showtime series Kidding did something quite clever (really, two things): for a scene showing one of its characters’ transformation over the course of a year, it compressed multiple discordant events into a long, cut-free, panoramic photography shot of a single room. Outfits change, actors come and go, furniture, props, and lighting are moved in and out of the room, all without cuts. Now, while the main camera shoots all around the increasingly unrecognizable room, a second camera, shooting from above the set, shows how they did it. A mix of body doubles, quick outfit changes, and grips and crew working furiously to move the entire set around just outside the camera’s field of vision. It’s worth watching a couple of times. It’s a little like one of Penn and Teller’s bits where they show you how they pulled off the magic trick. You see everything they needed to do to do what they did, but you still don’t entirely believe they pulled it off.
How Real News Is Worse Than Fake News / Bloomberg
As problematic as “fake news” is, and as dangerous as the label can be, maybe “true news” is equally corrosive. The contemporary world is giving us more reality and more truth than we can comfortably handle — and that, as much as the lack of a common enemy since the end of the Cold War, may explain the decline of the liberal world order that I lamented in a recent column.
Scientists determine four personality types based on new data / Northwestern
Researchers led by Northwestern Engineering’s Luis Amaral sifted through data from more than 1.5 million questionnaire respondents to find at least four distinct clusters of personality types exist — average, reserved, self-centered, and role model — challenging existing paradigms in psychology.
Improving But Not Learning by Doing / Marginal Revolution
In the excellent The Secret of Our Success Joe Henrich gives many examples of complex technological products and practices which were not the product of intelligence but rather of many, small, poorly understood improvements that were transmitted culturally down the generations. Derex et al. offer an ingenious experimental test of the cultural generation hypothesis. [...] The authors then did an especially clever test. They allowed each generation/participant to leave the next generation a “theory” of wheel speed. Did this “book learning” speed up the evolution of technology? It did not. Moreover, theory transmission didn’t even result in much learning!
One way the universe might end / Kottke
My favorite astrophysicist Katie Mack recently reposted a Cosmos article she wrote about a relatively obscure model for the total annihilation of the universe, called “vacuum decay.” Essentially, what vacuum decay relies on is the fact that we don’t know for sure whether space is in the lowest energy, most stable possible state (a true vacuum) or at an adjacent, slightly higher energy level (a false vacuum). Space could be only metastable, and a random quantum fluctuation or sufficiently high level energy event could push part of the universe from the false vacuum to the true one. This could cause “a bubble of true vacuum that will then expand in all directions at the speed of light. Such a bubble would be lethal.”
Partisan hatred, a short history thereof / Marginal Revolution
A graph of % of respondents who hate each party, over time. More or less what you'd expect.
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