My God, you are an idiot.

[LessinSF]

Blue Lake Racharia v. United States (9th Cir. - August 11, 2011)

Forget gambling. Forget cigarettes. There's a much easier -- and lucrative -- way for Indian tribes to make tons of money. Help corporations evades taxes.

It works.

An Indian tribe creates a corporation owned by the Tribe. Its sole function is to hire employees and then "lease" those employees to other companies. Who hires the employees? Not the Tribe. Where do the employees work? Not on the reservation. Who do the employees work for? Formally, for the Tribe's company, but actually, the outside employer. It's as if Oracle said to its employees: "Okay, I want all of you to be formally employed by this outside entity. You'll still work here, and for me, but your paycheck will come from someone else."

Why do that? Because tribal corporation don't have to pay Federal Unemployment Tax on its employees, which is around six percent of the first slice of an employee's wages. So the company thus hoses the United States (and, secondarily, the states) for those taxes, which pay for unemployment benefits, and instead the employer and the Tribe keep for themselves (and then split) those taxes.

How much money can you make this way? Well, this case involves the Blue Lake Racharia, an Indian tribe in Humbolt County. How many members does it have? 53. How many "employees" did it have?

39,000.

That's a lot of change.

The Ninth Circuit holds that all you have to do for this scheme to work is to have some pro forma policies for your employees (don't smoke, take breaks, etc.) and get reimbursed from the real employer for all you give "your" workers (salaries, benefits, etc.) instead of having the employer pay 'em directly and you're good to go. Not hard at all. Even someone unsophisticated like me can set that up easy. Especially after reading this opinion.

So forget trading on human misery. There's an easier target out there. The government.

Perhaps it's karma. The U.S. stuck it to the tribes when it took their land. Now they're sticking it to the U.S.

http://calapp.blogspot.com/

[Adder]

Originally Posted by sebastian_dangerfield

it's obvious it does lead to higher energy costs

Why? What is the evidence you have considered in coming to this belief?

I have absolutely argued that selective inflation has been crushing consumers for some time. You and I had a protracted argument about it in the context of a discussion on how core inflation is computed just a few months ago.

Yes, this is you arguing against the facts on the ground. What I want to know is why you believe fiscal and monetary stimulus cause inflation at the zero lower bound. I want to know what theory you have that contradicts what the economists say. I want to know what mechanism you have in mind in your belief that excessive inflation is inevitable.

I've not seen that from you (or really anyone else) and instead you try to find ways to make things that aren't inflation (like wage stagnation and volatile non-core prices) into rising price levels.

[And I know the "as long as unemployment stays high, we'll never see inflation, so borrow and spend all day" school quite well.

That's not what I said. Try to actually engage with what I am saying for once, instead of spewing your standard rant.

Three things. One, you wish people were saving. The deleveraging we're seeing is defaulting. Two, how do we get more dollars to people? Govt spending or banks. The latter doesn't work. It's not loaned domestically (the story that businesses don't want any is propaganda... Dodd/Frank, continuing mortgage losses, and a general lack of creditwortiness among borrowers impede credit expansion). All the money the banks borrow goes to speculation - most of it abroad. The former has delivered some results, but now here's the problem with stimulus, and easing: The economy has quickly become addicted to them. When they stop, it contracts. And in the interim, little real growth is created. Most of the growth is on the financial side. Nobody gets hired, no concrete, job-creating operations are expanded because nobody wants to take on additional overhead. And worse, easing fuels consolidation. It creates TBTF entities, stifles competition and causes job losses.

This is a load of silly defeatism and excuse making.

I'm pretty sure you're wrong about household saving, but you can look that up for yourself.

As to whether banks will lend, it is no argument against monetary policies that are meant to provide greater incentives to lending (e.g., no or reduced interest on excess reserves, moderate inflation) to say that they are not lending now. That's the point.

I get it. You're in the tower with the eggheads.

Seriously? When did you become anti-intellectual, Ms. Palin? It's flabbergasting to me that you have started worshiping stupidity and intentional ignorance.

They're all just expanding, more complex versions of the same essential transactional behaviors.

They really aren't. Macroeconomics isn't just a bigger version of microeconomics.

The only unique factor that makes the US economy different than any business is the fact that it can print its own money.

And influence interest rates. But yes, that is a major, and fundamental, difference. It comes with whole lot of complications.

But I use seemingly because both history and common sense dictate that nothing can borrow indefinitely

Really?? Guess what borrows indefinitely? Every major multinational corporation.

particularly where that borrowing and spending is the only thing keeping its anemic economy alive.

Actually, not borrowing, and consequently significantly scaling back government employment at the state and local level, is a big part of what's holding the economy back.

ETA: Sorry, but I have to go back to this bit:

It absolutely does lead to inflation. Not across the board, but it's obvious it does lead to higher energy costs, which in turn impede growth. I think many believe we can export inflation elsewhere and it will never come back. Wrong. Raise gas prices in China, and inevitably, they'll rise here.

We've had this conversation before, and I've asked you how you think higher gas prices in China are the result of Fed easing, to which you've never responded (which is why I asked you again above). But there is also a common, but fundamental misunderstanding here too (which we've also discussed before). Higher prices for something (e.g., gas) are not "inflation." They are price variations.

You seem to recognize that here, but apparently believe that higher prices for some things (e.g., gas) will inevitably lead to higher prices for other things. Why? Do you think higher gas (or just oil) prices in China will mean higher manufacturing costs for products produced in China, which will then lead to higher prices for those goods? And if that's what you have in mind, why is the price for those goods unconstrained by demand?

[Adder]

Originally Posted by sebastian_dangerfield

He's too stupid to win, which kind of sucks. I hate the guy, but he's the only real chance against Obama. And we need Obama gone. Because although it's not fair, or warranted (perhaps), it seems more apparent to me every day that US corporations are simply waiting out Obama.

You really have the strangest, most mismatched and disconnected set of economic beliefs.

[Adder]

Originally Posted by LessinSF

http://calapp.blogspot.com/

There's a big disconnect between the blog and the opinion. Based on the opinion, it sounds like the tribe set up a temp agency. Surprise, surprise, the employees of a temp agency work for the temp agency, and sorry, Mr. Blogger, but the agency hires and pays them. It's hard to see how the court could reach a different conclusion.

[Icky Thump]

Originally Posted by LessinSF

http://calapp.blogspot.com/

We'll all be matrix slaves any day now.

[Icky Thump]

Originally Posted by Adder

Tripped up by having never heard of the Dougherty Gang. 11/12

Or Bristol Palin or some criminal in Texas. 9/12. I did better than I did on the candy quiz.

[LessinSF]

Originally Posted by Adder

There's a big disconnect between the blog and the opinion. Based on the opinion, it sounds like the tribe set up a temp agency. Surprise, surprise, the employees of a temp agency work for the temp agency, and sorry, Mr. Blogger, but the agency hires and pays them. It's hard to see how the court could reach a different conclusion.

You are extraordinarily semantic.

[sebastian_dangerfield]

Why? What is the evidence you have considered in coming to this belief?

Actual price increases.

Yes, this is you arguing against the facts on the ground.

Really? Energy prices didn't rise?

What I want to know is why you believe fiscal and monetary stimulus cause inflation at the zero lower bound. I want to know what theory you have that contradicts what the economists say. I want to know what mechanism you have in mind in your belief that excessive inflation is inevitable.

I've not seen that from you (or really anyone else) and instead you try to find ways to make things that aren't inflation (like wage stagnation and volatile non-core prices) into rising price levels.

Oh, I see. If I reject core as a bullshit definition, I am not allowed to argue there's inflation. Energy is not part of core inflation. Why did you bother engaging me on the issue above. Speaks volumes to how far your head is up your ass.

This is a load of silly defeatism and excuse making.

Translation: It makes sense. I can't fight it.

I'm pretty sure you're wrong about household saving, but you can look that up for yourself.

I have. In another place I write "stuff" I wrote about it at length, citing a study analyzing just how much of the savings are actually via default. And it's fucking apparent to anyone who actually runs a business, as opposed to some twit reliving his days in Econ 101. The middle class is tapped the fuck out. My wife and I employ a few. I still receive debt portfolio profiles for purchase in my email. The everyman is holding onto lines of liquidity, but he isn't paying ANYTHING else (well, perhaps the cable bill). He's fucked. Student loans? Nearly fifty percent currently non-performing. People like me are saving. I'm sure you're saving. Below us, if you'd care to join reality, it's all default.

And yet you lecture me on people running to safe assets. 60% of this country can barely stay in their home. Collecting any fucking asset is a goddamn dream.

As to whether banks will lend, it is no argument against monetary policies that are meant to provide greater incentives to lending (e.g., no or reduced interest on excess reserves, moderate inflation) to say that they are not lending now. That's the point.

Have you ever heard of regulators? Heard any of the stories about how close banks are being examined these days? What do you think? A lending officer simply can drop credit standards if he likes? Newsflash, again: Just getting a line of credit for a business these days is like submitting to an anal cavity search. I know this because, again, I represent people seeking them, and I have two. I also happen to be the son of someone who was a banking executive for twenty five years. You think I'm talking out my ass when I relate stories about how difficult regulators are in that area? But of course, you know better.

Seriously? When did you become anti-intellectual, Ms. Palin? It's flabbergasting to me that you have started worshiping stupidity and intentional ignorance.

I am not in the least anti-intellectual. I am anti-dimestore-intellectual. That is what you are. You have no business experience, fixate on minutiae to look intelligent, and think your long winded bullshit undoes a simple, pragmatic point that's usually irrefutable to anyone who actually sees the economy up close. You've said in the past you have family who are retail advisors. You've certainly proved that point.

Really?? Guess what borrows indefinitely? Every major multinational corporation.

...And pays it back. You forget that. Kind of an important point. Shall I cite you everyone from Jim Rogers to Pete Peterson saying We Can't Pay Back What We're Borrowing? That we have no chance of ever making good on the debts? $65 Trillion. Sixty-Five Trillion. Run the revenues under which we can fund that.

Actually, not borrowing, and consequently significantly scaling back government employment at the state and local level, is a big part of what's holding the economy back.

Indeed. All the future pension liabilities we nipped in the bud would have had a glorious multiplier effect.

[Adder]

Originally Posted by sebastian_dangerfield

Actual price increases.

Really? Energy prices didn't rise?

Seriously? That's the extent of your thinking? The Fed did something, prices moved, thus the fed must have moved the price?? I know you are not that stupid.

In particular, you can't be that stupid because prices energy prices have now come down.

I was going to respond to more of this, but I'm done with you. You're being an idiot and trying to paper over that with assholery. Fine. Have fun. And go fuck yourself while you are at it.

ETA: Okay, I lied.

If I reject core as a bullshit definition, I am not allowed to argue there's inflation.

No, but if you're going to argue the headline is a better measure, than you should be fucking talking about deflation right now. And you should be talking about price levels and not individual prices. And, as I said, you shouldn't confuse wage stagnation with inflation if you are talking about monetary policy (i.e. you can't fix wage stagnation by keeping unemployment high with tight money).

Translation: It makes sense. I can't fight it.

Whatever.

The middle class is tapped the fuck out. My wife and I employ a few. I still receive debt portfolio profiles for purchase in my email. The everyman is holding onto lines of liquidity, but he isn't paying ANYTHING else (well, perhaps the cable bill). He's fucked. Student loans? Nearly fifty percent currently non-performing. People like me are saving. I'm sure you're saving. Below us, if you'd care to join reality, it's all default.

And yet you lecture me on people running to safe assets. 60% of this country can barely stay in their home. Collecting any fucking asset is a goddamn dream.

So your understanding of what I've been saying is that I expect those who have no money are going to be influenced by monetary policy???? Again, you aren't this stupid. Why do you keep pretending to be.

But lots of people (i.e. banks, corporations, you and me) have lots of money. Those people, you know, the ones with the money, are the ones we are talking about influencing with incentives.

You know, like you suggested with the "businesses are just waiting for Obama to go" bullshit.

Heard any of the stories about how close banks are being examined these days? What do you think? A lending officer simply can drop credit standards if he likes?

You know, I don't know that much about banking regulations, but you know what I do know? There aren't any like this. There are no federal bank regulations that set credit standards. I learned that by, you know, doing work for banks and hanging out with people who represent them.

Newsflash, again: Just getting a line of credit for a business these days is like submitting to an anal cavity search.

Newflash: yes, and we are talking about ways to make it less of an anal cavity search, by increasing the banks' incentives to lend.

I am anti-dimestore-intellectual.

Right, the economics professors whose views I have tried to share are the dime-store intellectuals, while your Uncle Billy Joe Bob, who once got a small business loan, is the true deep thinker.

Dude. This whole debate is about you spouting the conventional wisedom without being able to explain how the disjointed tidbits you cling to (e.g., printing money always leads to hyper inflation, oil prices went up = inflation, there are fewer manufacturing jobs now so we are permanently screwed, but business will invest if we get rid of Obama, we need a WPA) fit together.

...And pays it back. You forget that. Kind of an important point. Shall I cite you everyone from Jim Rogers to Pete Peterson saying We Can't Pay Back What We're Borrowing? That we have no chance of ever making good on the debts? $65 Trillion. Sixty-Five Trillion.

Again, I don't think you have any understanding of corporate finance. Multinationals do not ever fully pay back their borrowing, at least not until they are being wound up. Just as no, the federal debt will never be paid back in full, nor should we ever want it to be.

I also don't know where you are getting $65 trillion from. The whacky conspiracy sites that come up via google suggest that it's a projection of all future federal government liabilities. If so, whoopty fucking do. And weren't you the one who was so skeptical of long term projections (or I guess that's only when they don't fit your preferred story).

Run the revenues under which we can fund that.

Hold on here while a do a little figurin'. Is it $65 trillion??

[Tyrone Slothrop]

Originally Posted by Adder

Seriously? That's the extent of your thinking? The Fed did something, prices moved, thus the fed must have moved the price?? I know you are not that stupid.

In particular, you can't be that stupid because prices energy prices have now come down.

I was going to respond to more of this, but I'm done with you. You're being an idiot and trying to paper over that with assholery. Fine. Have fun. And go fuck yourself while you are at it.

Hey, now. Let's all be nice to each other.

[Tyrone Slothrop]

[Replaced_Texan]

Originally Posted by sebastian_dangerfield

He's too stupid to win, which kind of sucks. I hate the guy, but he's the only real chance against Obama. And we need Obama gone. Because although it's not fair, or warranted (perhaps), it seems more apparent to me every day that US corporations are simply waiting out Obama.

Plus, of the four terms he's had, he's only gotten 50% of the state in two. First one he was appointed, third one he couldn't get over 40%. I'm not particularly concerned about him.

[sebastian_dangerfield]

Originally Posted by Adder

Seriously? That's the extent of your thinking? The Fed did something, a prices moved, thus the fed must have moved the price?? I know you are not that stupid.

In particular, you can't be that stupid because prices energy prices have now come down.

I was going to respond to more of this, but I'm done with you. You're being an idiot and trying to paper over that with assholery. Fine. Have fun. And go fuck yourself while you are at it.

Yes, it was exactly that simple. I read about it on CorrelationIsEverything.com. That you'd ask me to explain how I reach that conclusion, in light of the approximately 3846483256 articles out there explaining how Fed policy did in fact impact energy prices, shows... and this will come as a huge shock (in fact some would say it's unpossible): You don't read enough blogs.

Oh God... Did you just argue that energy prices dropping recently disproves my point? Putting aside speed with which you contradict your initial point, might I ask... just for shits and giggles, How?

The only person papering anything over here is you. You can't discuss the issues in any rubber-meeting-the-road terms because that's out of your depth (one would have to experience the business cycle to grasp that), and in the absence of capacity to offer critical thinking of value, all you've repeatedly offered is pseudo-intellectual pap.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

Really? Energy prices didn't rise?

Since you are sympathetic to the observation that we are in global markets that we can't control, let me suggest that any increases in energy prices likely have much more to do with continued strong demand in places like China, India and Brazil than with government action in the United States. China is growing like nuts and all of the people moving into the middle class start using a lot more energy.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Since you are sympathetic to the observation that we are in global markets that we can't control, let me suggest that any increases in energy prices likely have much more to do with continued strong demand in places like China, India and Brazil than with government action in the United States. China is growing like nuts and all of the people moving into the middle class start using a lot more energy.

Indeed. But consider... We pump a shitload of dollars into govt projects. This causes a domestic increase for simple supply and demand reasons. That's the simple energy price inflation. The more complex one is, we pump a shitload of money into the system via QE. This gets funneled to emerging markets which provide the best returns. This creates inflation in emerging markets which inflates the price of oil there which, in a global market, causes our prices to rise. Add to that the speculation increased by policies feeding financial institutions looking for big returns cheap money with which to make bets... in a commodities bubble.

Yes. You cite contributors to energy price increases. I add the Fed to your list. How big a contributor is it? Not as big as Chinese growth, surely. But significant, I think (hence the emerging markets accusing of us of exporting inflation). And in combination with a stimulus that put few back to work while increasing energy prices a bit, I'd say the Fed easing and stimulus had a considerable impact on energy prices, and the amount of pain they caused, domestically.