Money Quote Thursday Oct. 26
China Takes Over The World
Is Xi the most powerful man in the (sort of) free world?
China is dominating this week’s news, thanks to the canonization of its communist party leader. Xi has taken the mantle as “the most powerful leader in the world” — note the lack of the word “free” in that statement. Thanks, Trump. Money quote: “China is quickly growing into the world’s most extensive commercial empire. By way of comparison, after World War II, the Marshall Plan provided the equivalent of $800 billion in reconstruction funds to Europe (if calculated as a percentage of today’s GDP). In the decades after the war the United States was also the world’s largest trading nation, and its largest bilateral lender to others. … Now it’s China’s turn. The scale and scope of the Belt and Road initiative is staggering. Estimates vary, but over $300 billion have already been spent, and China plans to spend $1 trillion more in the next decade or so.”
If this isn’t building hotels, I don’t know what is. It’s interesting to see how non-traditional disruptors eventually end up being in the same business as those they disrupt. The Florida-based building is not a hotel, per se, but an apartment complex optimized for sharing (it still has residents). Money quote: ““Right now we’re focused on Florida, but we’re considering other markets,” he says. “We are looking to be present in many other cities across the U.S.” That makes sense. The very cities where rents are high also tend to be places where tourism is robust. Armed with a building offering that helps residents offset their rents, Niido may provide the edge that Hernandez would need to expand his business across the country–while helping Airbnb with a new source for listings.”
Oh, yes, let’s drain the swamp. Kind of hard to see the upside on this, unless you’re in the business of defrauding investors. Money quote: “The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.”
I wrote about this several times a few weeks ago. While regulation is tough to do, I think the idea of self regulation here is insane. Period. Money quote: “Kilmer is a backer of the so-called Honest Ads Act, a new bill chiefly authored by Democratic Sens. Amy Klobuchar and Mark Warner with the aid of GOP Sen. John McCain. It would require large tech platforms to make copies of all political ads available to the public, along with data about the audiences those ads targeted.”
I did not know of this approach, it sounds like a reasonable proposition. Money quote: “So it makes sense to tax the value of land. A land-value tax, or LVT, is like a property tax, but with a deduction for the value of buildings and other improvements. The tax would reduce land prices and increase the incentive to build more, which in turn will help drive down rents, making a city more affordable. And because land is a fixed quantity, taxing it doesn’t shrink the economy like taxes on wages and capital sometimes do. Also, since you’re taxing a windfall, it’s hard for landowners to argue that the tax isn’t fair. The money raised with a land-value tax can be spent building affordable housing for the poor.”
