The Last Palace

[Orestes Munn]

Saw some discussion of this book and thought it looked interesting.



However, it turns out that the "palace" in question belonged to my father's family and is where he lived from 1936-1938. It's now the US Ambassador's residence in Prague. I was visited a few years ago. Nice place. The brother of the guy who built it had a similar house, which is now the Russian Ambassador's residence. I wonder if they had any boats...

[kdh]

Apparently another time during which people endured wealth inequality. And Joseph Stiglitz, Bernie Sanders, Elizabeth Warren weren't around to prevent it.

[Orestes Munn]

Apparently another time during which people endured wealth inequality. And Joseph Stiglitz, Bernie Sanders, Elizabeth Warren weren't around to prevent it.

Owner (married to my dad's aunt) was a total dick.

Oh, and a coal baron!

[kdh]

Apparently another time during which people endured wealth inequality. And Joseph Stiglitz, Bernie Sanders, Elizabeth Warren weren't around to prevent it.

Owner (married to my dad's aunt) was a total dick.

Oh, and a coal baron!

Not part of the 99.8%. Figures.

[BeauV]

I've got another question: Why is the US paying for a palace for its Ambassador to live in???

I get that the US needs to have a place for parties and such - rent a room! That's what hotels and conference centers are for!! Geesh! When I see things like that, I just see US Tax payers getting ripped off, I don't see: "What an impressive building, the US must be a powerful successful country." Also the "security issue" is utter BS. That's what you have an Embassy for. There's no rational reason I can think of for an Ambassador to be living in a Palace. This is all payback to big donors. Let's drain this swamp!

Someone should sent that Ambassador a Form-1099 for the cost of living in a palace. After all, it's tax time.

[Orestes Munn]

My guess is there wasn't much choice when the US took it over, but I have been in touch with Norm Eisen and we can ask him what he thinks. He's going to interview my brother for the book web site.

[BeauV]

My guess is there wasn't much choice when the US took it over, but I have been in touch with Norm Eisen and we can ask him what he thinks. He's going to interview my brother for the book web site.

I'm sure there wasn't much choice, there aren't many palaces available in most cities

I"m reminded of an article I just read about the movie business. Paramount is nearly dead, it has a few hits but nothing like it used to. It has palatial offices and a giant lot full of sound stages etc.... A few miles away Netflix has a rented office with old furniture and no sound stages anywhere; Amazon has similar digs.

Paramount is dying. Amazon and Netflix are booming.

Only old dying institutions hang out in palaces, in my experience. The folks who are getting things done rent an office or hotel room to hang out in and focus on the job not the glitz. But, the job of Ambassador has been a reward for big donors and you can't ask a Billionaire who just helped fund your election to hang out in a hotel room. (Don't get me started on the electronic bug invested US Embassy building in Jerusalem!)

I have to say, it is really fun to know someone who has a relative who lived in a real palace. I just wish the US Tax Payers weren't footing the bill as the next occupant. Maybe we should rent the Petit Palais for the French Ambassador.

[Orestes Munn]

My brother now tells me they lived in a guesthouse on the grounds, so my whole story is falling apart. However, he did tell me that my dad, during his first stint in the US Army, visited right after Prague fell into allied hands and the first question the US personnel there had for him was how to fill the swimming pool.

[TheOffice]

My guess is there wasn't much choice when the US took it over, but I have been in touch with Norm Eisen and we can ask him what he thinks. ;) He's going to interview my brother for the book web site.

I'm sure there wasn't much choice, there aren't many palaces available in most cities ;)

I"m reminded of an article I just read about the movie business. Paramount is nearly dead, it has a few hits but nothing like it used to. It has palatial offices and a giant lot full of sound stages etc.... A few miles away Netflix has a rented office with old furniture and no sound stages anywhere; Amazon has similar digs.

Paramount is dying. Amazon and Netflix are booming.

Only old dying institutions hang out in palaces, in my experience. The folks who are getting things done rent an office or hotel room to hang out in and focus on the job not the glitz. But, the job of Ambassador has been a reward for big donors and you can't ask a Billionaire who just helped fund your election to hang out in a hotel room. (Don't get me started on the electronic bug invested US Embassy building in Jerusalem!)

I have to say, it is really fun to know someone who has a relative who lived in a real palace. I just wish the US Tax Payers weren't footing the bill as the next occupant. Maybe we should rent the Petit Palais for the French Ambassador. :lol: :lol: :lol:

Southwest Airlines started in flex space with furniture that Kelleher and crew assembled. Major airlines had Class A office space.
When Ted Turner took over Time he sold off the million dollar art collection.

Can you tell I'm not a fan of high overhead?

Joel

[kimbottles]

Customers pay for high overhead one way or another.

[kdh]

My brother now tells me they lived in a guesthouse on the grounds, so my whole story is falling apart. However, he did tell me that my dad, during his first stint in the US Army, visited right after Prague fell into allied hands and the first question the US personnel there had for him was how to fill the swimming pool.

I suppose when Senator Warren has seized my assets someone will have to show the 99.8% how to raise the mainsail on my boat.

[Orestes Munn]

My brother now tells me they lived in a guesthouse on the grounds, so my whole story is falling apart. However, he did tell me that my dad, during his first stint in the US Army, visited right after Prague fell into allied hands and the first question the US personnel there had for him was how to fill the swimming pool.

I suppose when Senator Warren has seized my assets someone will have to show the 99.8% how to raise the mainsail on my boat.

It would be decent of you, but I’m sure they’re not expecting it.

[Audrey]

https://www.bizjournals.com/washington/news/2018/09/11/saudi-arabia-cant-seem-tostop-buying-homes-on.html
https://vimeo.com/221767517

Saudi Arabia royalty is buying up in VA. We're doing a site plan for them but construction is a ways away. I don't believe tax payer dollars are going to it, but it does make me question why there?

[Benno von Humpback]

https://www.bizjournals.com/washington/news/2018/09/11/saudi-arabia-cant-seem-tostop-buying-homes-on.html
https://vimeo.com/221767517

Saudi Arabia royalty is buying up in VA. We're doing a site plan for them but construction is a ways away. I don't believe tax payer dollars are going to it, but it does make me question why there?

Colonial architecture is so much more democratic looking.

[TheOffice]

Gives them a great view of their second kingdom!

[BeauV]

Given the Royals in Saudi are a tiny minority religious sect, they most certainly need someplace to live out their days if the majority ever succeeds in rebelling. Also, with that much property, you can probably build an air strip and only have to ask the neighbors. Oh wait! You are your own neighbors. It’s also much easier to defend a property with water along one side, at least from everyone but the SEALs.

[kimbottles]

Looking for a place to post this, I decided this would be as good as anywhere else:

https://www.nytimes.com/2019/02/02/opin ... 1970s.html

Ignore the picture and just read the article, interesting thoughts.

[kdh]

Looking for a place to post this, I decided this would be as good as anywhere else:

https://www.nytimes.com/2019/02/02/opin ... 1970s.html

Ignore the picture and just read the article, interesting thoughts.

From the article: [The rich] have to decide what kind of country they want to be rich in. A place of more and more tax cuts for them,...

Here's my economic theory: Everyone wants more for themselves. The top tax rate was 35% not long ago. It's now 37%, with a 3.8% Obamacare tax on investment income. Effectively nothing deductible other than the marginal charitable contribution.

Here's what the government has to work with. The kind of country I want to be rich in has a government that is effective at something. Helping the poor, caring for our veterans, responsible use of military power, providing health care. Something.

[Jamie]

Ironically the 70's were better for real wage growth than the 80's.

The top tier tax rate changed to 35% from 50% in 1986, and from 70% to 50% in 1981. It wasn't just the taxes, but that's about the time that you really started to see the distribution of wealth and wealth creation for the classes below P90 deteriorate.

Not to be flip, but I'm not sure I'd want to be living in a castle in Prague in 1938, given what was about to happen.

[BeauV]

Kim,

I read that and found it quite interesting. I think there is an angle that the author leaves out. While we had massive inflation in the price of goods, we didn't have wage inflation. As always, that's probably too complex to explain in a general journalistic article, but a key to avoiding wages being inflated right along with the price of goods was a well run attack on Unions in the country. The standout example being Reagan's attack on the Air Traffic Controllers.

In 1980 when inflation rates were hitting 14% (SOURCE) the growth in wage rates were almost flat and stayed that way even after inflation dropped back down to ONLY 7-8%. (SOURCE)


(SOURCE: ibid)

I completely agree with the author's general conclusion that we are seeing the damage caused by inflation and the demented response to it, which is trickle-down economic policy.

Keith,

I agree that the Government needs to be efficient, and that they appear to be inefficient at a lot of things. What I have discovered as I've grown older is to be more careful in my critique of folks trying to do things that I've never done. Let's take Medicare for example, I really have no idea how I'd run a national health insurance org with hundreds of thousands of clients and what levels of efficiency I'd actually have. I believe I might be able to do better than the folks currently doing it, but I have absolutely zero evidence of that being true. Talking to my son the Marine, I ran right into how little I actually know about running a military organization; and I'm someone who spent many years with over 18,000 people reporting to me.

At the root of this is a universal American trait of playing Monday morning quarterback. I've had folks who couldn't manage a gas station tell me exactly what they think is wrong with the way the US Gov. runs the IRS, FBI, etc...etc..... etc.... I'm not accusing you of that, but I'm certainly accusing a large parentage of the US population that loves to berate everything from their state's DMV to the US Congress as being populated with idiots and neer-do-wells.

Personally, I was surprised at how well the Code For American folks and the US Digital Service did at fixing the web stuff that was broken in Obamacare. But there the failure wasn't with the Government, it was with the Government contractors who were the only ones bidding on the original work. Of Course this administration has pretty well shut down the USDS because it had Obama's finger prints on it and anything Obama did must, by definition, be wrong.

Ah me.....

There is one last observation I'd like folks to consider. Worker's compensation has been getting competition from overseas labor but also from automation. As we look at the productivity curve above, I can't help but think that much of that is from various forms of automation. Robots are the physical manifestation, email is better hidden. Consider the number of letter carriers etc... that were put out of work by email. Thus, as various forms of automation really took off, they competed with a number of sectors of the labor market.

Finally, sorry this post is so long, we have provided free capital to those who could put it to work since the crash of 2008. (Free meaning the true cost of capital is lower than the inflation rate.) When this happened, we saw a massive increase in management's willingness to automate by buying machines which replaced labor. After all, the capital was free. A side effect of our "stimulus" was to provide a tremendous boost to those who have an ability to replace labor with machines. I'm not arguing that we shouldn't have stimulated the economy in 2008, only that there are unintended and often unpredicted side effects of what we do with policy.

[BeauV]

I just bumped into this article in the NY Times which is analyzing what is happening to two types of labor in Phoenix, AZ: Tech folks and manual assembly folks. It's worth reading in the light of the discussion just above.

[kdh]

Beau, of course you're right--my response was more emotional than analytical.

I long for the "good old days" when our country was viewed as having enough opportunity that people saw a tax on the rich as likely a tax that would apply to them when their ship came in.

[Benno von Humpback]

Beau, of course you're right--my response was more emotional than analytical.

I long for the "good old days" when our country was viewed as having enough opportunity that people saw a tax on the rich as likely a tax that would apply to them when their ship came in.

Keith, I don't know how people viewed their individual prospects back in the good old days of postwar economic expansion, but, right or wrong and as you know, they legislated some pretty high taxes on the rich:



This is a good illustration of the central thesis of Kim's article

[kdh]

I thought the central thesis of the argument in Kim's article involved inflation and the greed that resulted, not historical tax rates.

But let's be real, a 70% tax on income over $10m, as Ocasio-Cortez casually suggested, is not at all outlandish given the historical perspective. And class warfare is also nothing new.

[Olaf Hart]

Those high tax rates don’t translate as clearly to more government revenue, they just stimulate growth of tax schemes.

I have lived in a high tax regime most of my life, it is a definite disincentive to earn, and an incentive to avoid tax.

Wierd now, as a self funded retiree our system is tax free, it’s like playing a bridge game and bidding mezaire.

[Benno von Humpback]

I thought the central thesis of the argument in Kim's article involved inflation and the greed that resulted, not historical tax rates.

But let's be real, a 70% tax on income over $10m, as Ocasio-Cortez casually suggested, is not at all outlandish given the historical perspective. And class warfare is also nothing new.

I think the tax rates reflect the shifting view of the social value of high-percentile incomes discussed in the article.

I also think that any continuation of low marginal rates and neoliberal economic policies, let alone any form of fiscal restraint, is going to come a. from the Republicans only, and b. at an increasing cost in Right Wing populist social policy. Those folks want increased spending and taxes on the rich too and will only part with them for things like The Wall. There are no more socially liberal, fiscally conservative voters now, if there ever were any.

[kimbottles]

I thought the central thesis of the argument in Kim's article involved inflation and the greed that resulted, not historical tax rates...........

I think there is a relationship between the two thesis.......

[kdh]

I thought the central thesis of the argument in Kim's article involved inflation and the greed that resulted, not historical tax rates.

But let's be real, a 70% tax on income over $10m, as Ocasio-Cortez casually suggested, is not at all outlandish given the historical perspective. And class warfare is also nothing new.

I think the tax rates reflect the shifting view of the social value of high-percentile incomes discussed in the article.

I also think that any continuation of low marginal rates and neoliberal economic policies, let alone any form of fiscal restraint, is going to come a. from the Republicans only, and b. at an increasing cost in Right Wing populist social policy. Those folks want increased spending and taxes on the rich too and will only part with them for things like The Wall. There are no more socially liberal, fiscally conservative voters now, if there ever were any.

I agree. But the easiest path is no fiscal restraint and low taxes.

Seems clear that the estate tax at $22m exempted and a top rate of 40% won't survive for long. Put whatever you want to give your kids in a trust. Now.

[kimbottles]

And then there is this article........

https://www.nytimes.com/2019/02/04/opin ... hultz.html

[Benno von Humpback]

And then there is this article........

https://www.nytimes.com/2019/02/04/opin ... hultz.html

That was the partial inspiration for my post at 1620 EST.

Krugman is too far left for me, but he does make some good points.