In Indonesia, It's Blatant, In the US It's Subtle
JPMorgan Fined For Wash Trades In Oil, Gasoline
Economists call it “rent-seeking” but more precisely it’s theft. Ironically, some Texans want to do just the reverse. We trim, blend, and append four 2012 articles from: (1) Reuters, Jun 1, on Morgan by D. Sheppard; (2) PolicyMic, May 23, on rent by H. Pell; (3) Jakarta Globe, May 22, on corrupt chiefs by R. Wardi; and (4) Impact News, May 30, on Austin by M. Stelte, with an announcement of a classic book on a cool solution by Bob Flatley.
by David Sheppard, by Haven Pell, by Robertus Wardi, by Mitzie Stelte
JPMorgan fined for wash trades in oil, gasoline
JPMorgan Chase & Co executed wash trades on 10 separate occasions in U.S. crude oil and gasoline futures in the first half of 2011, the operator of the New York Mercantile Exchange (NYMEX) said in a disciplinary notice on Friday.
Banned under exchange rules, wash trades involve having the same dealer on opposite sides of one trade, simultaneously buying and selling the same commodity.
CME Group, which operates NYMEX, ordered JPMorgan to pay a fine of $30,000. One of the JPMorgan traders, Ebele Emelumadu, was fined a further $10,000.
The $30,000 fine, equivalent to just over one millionth of JPMorgan's total employee compensation last year of $29 billion, comes as the bank's trading practices are already under the spotlight after the now-infamous 'London Whale' racked up huge losses for the firm.
[Perhaps due to the manipulation,] in the first six months of 2011 U.S. crude oil prices rallied from around $91 a barrel to a post-2008 peak of $114.83 a barrel, before falling back to around $95 a barrel. On Friday, U.S. crude oil was trading around $83 a barrel.
To read more
JJS: While a powerful entity was punished, the punishment was an inconsequential wrist-slap compared to the amount of money they took by jiggering the price of oil. And the “bigger” (not as small) fine was paid by the company, which means it ultimately came from stockholders while directors and management did not have to feel the pain at all. That act of corruption was blatantly illegal while most corruption falls well within the law.
The Rent Is Too Damn High Party Explains the 2012 Elections
Jimmy McMillan, who ran for president on Americans Elect and for Governor of New York, on Saturday Night Live is not using the word “rent” as did economist, Adam Smith.
According to Smith, "rent" is neither a rock musical nor what you pay each month for an apartment. It is the income derived from controlling a resource rather than creating it. The first example of rent seeking in Wikipedia is spending money for political lobbying.
Unions are guilds as are financial advisors and stockbrokers. Guilds are nice work if you can get it, but none of it is additive. It is all based on toll collecting.
Bar associations are guilds. Under the guise of protecting the public from charlatans, competition is limited through elaborate applications. Too many lawyers? Hourly rates going down? Easy: raise the failure rate on next year’s test. Better still: control the number of law schools. Throw in every other kind of professional association and every licensed activity (with the possible exception of driving a car).
The two political parties thrive off rent seekers. Each collects its group of donors who seek one advantage or another, whether a tax break, a tariff, a contract, or a law that impedes competition.
To read more
JJS: That’s a sophisticated sort of corruption, not quite as direct as running the government and dipping into the public treasury.
30 Percent of Regional Chiefs Implicated in Corruption
More than a third of the 470 regional heads voted into office since 2004 have been implicated in corruption cases, the government revealed on Monday.
Reydonnyzar Moenek, a spokesman for the Home Affairs Ministry, said 37 percent of the regional heads, or 174 officials, had been named witnesses or suspects in various graft cases.
“Seventy percent of them have been convicted in court and removed from office,” he said.
Reydonnyzar blamed both inexperience of some elected officials that led to inadvertent procedural violations and genuinely corrupt regional heads who were appointed to office in exchange for helping higher-ups win theirs.
And some regional heads openly and knowingly engaged in corruption and regularly embezzled funds from local coffers to pay back campaign contributions, Reydonnyzar added.
Reydonnyzar said,”We hope police continue to go after these corrupt officials all over the country, obviously in a fair and just manner.”
The ministry notes that regional heads are not the only problem. Since 2004, the ministry has granted permission for police to question nearly 3,000 regional legislators in a variety of cases. A third of the 2,976 cases center on graft, but others involve assault, fraud, sexual abuse, and murder.
To read more
JJS: Corruption has a cure. It’s called community. It means we have to strengthen community, by delivering to each member a fair share of society’s surplus. It can’t be said too many times that public revenue belongs to all of us, that the worth of Mother Earth belongs to all of us. And to make those words have real meaning, all members of society must pay in land dues to the public treasury and get back “rent” dividends. It’s an old idea, well explained by American philosopher Ralph Borsodi. This insightful thinker founded the land trust (his School of Living still operates) and community currency (in Exeter NH where even the local bank accepted it).
Seventeen Problems of Man and Society
Bob Flatley and Bill Sharp (Jun 4): A digitized copy of Borsodi's magnum opus, Seventeen Problems of Man and Society, is now available for free download (in pdf) on the SoL's main index page. To read more
JJS: While the reform of public recovery of socially-generated land values and land rents may seem pie-in-the-sky, some jurisdictions are already doing it while others want to do more.
State-of-the-art museum/planetarium planned for downtown Austin
Downtown Austin may soon be the home of the largest planetarium in Texas.
The nonprofit Austin Planetarium and developer KUD International announced plans to build a 47-story tower near the Capitol building that would house a state-of-the-art science and technology museum.
According to Austin Planetarium, funding for one-third of the museum’s cost has been identified so far.
The development is expected to attract more than 600,000 annual visitors, more than $10 million in tax revenue over 10 years, ground rent revenue for the state, and $60 million in annual economic impact.
The nonprofit is aiming for a groundbreaking in late 2013 or early 2014.
To read more
JJS: Actually, the state could recover even more ground rent if it were to lower or eliminate its counterproductive taxes on people’s productive efforts. Once people are no longer fettered by taxes, they become even more productive, and where people produce lots, there land values rise. The advantages of this tax shift -- from produced goods and services to never-produced sites and resources -- are legion and legendary; read on!
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
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