What we’re reading (12/28)
“The Peanut Butter Secret: A Lavish Tax Dodge for the Ultrawealthy” (DNYUZ). “Thanks to the ingenuity of the tax-avoidance industry, investors in hot tech companies are exponentially enlarging the [Qualified Small Business Stock, or “Q.S.B.S.”] tax break. The trick is to give shares in those companies [initially obtained by investing when they were small and speculative ]to friends or relatives. Even though these recipients didn’t put their money into the companies, they nonetheless inherit the tax break, and a further $10 million or more in profits becomes tax-free.”
“Why Capital Will Become Scarcer In The 2020s” (The Economist). “[L]et us shelve the immediate outlook and ask instead how things might change over the next decade or so. Today capital is abundant. A middle-aged global workforce has lots of savings to put to work. Low long-term interest rates and expensive assets point to a scarcity of worthwhile ways to deploy those savings. New businesses are often ideas-based and do not need a lot of capital. It can be hard to imagine this state of affairs ending. But over time capital is bound to become less abundant. Greater demand for it will come from three sources in particular: economic populism; shorter supply-chains; and the energy transition.”
“Reflections On Greenspan’s ‘Irrational Exuberance’ Speech After 25 Years” (Cato Institute). “Greenspan clearly recognized that monetary policy is a blunt tool for achieving long‐run economic growth, which depends on increasing real factors—such as labor, capital, and technology—as well safeguarding private property and the rule of law. Activist monetary policy may spur economic growth in the short run, but cannot do so in the long run. If it could, then all that need be done to increase the wealth of nations would be to drop money from helicopters.”
“Jimmy Cayne, Who Led Bear Stearns Before It Imploded, Dies At 87” (Wall Street Journal). The most brutal obit I’ve ever read: “Mr. Cayne, a blunt, competitive, cigar-smoking executive, remained an archetype of a Wall Street boss now rarely seen. He once told an associate, after meeting her son, ‘that kid’s got a rotten handshake. He’s going nowhere in life.’”
“Confessions Of A Loan Shark” (City Journal). “It was Labor Day weekend, 1961. Georgie McLaughlin, stewed to the gills, insulted and likely assaulted the girlfriend of one of McLean’s many friends. What happened next was the mandatory minimum for that kind of conduct in that kind of crowd. Georgie was beaten senseless and ended up in a hospital. Predictably, his two brothers sought vengeance—they crossed the border into Somerville and demanded that McLean hand over those responsible. McLean knew what that meant. He refused.”
