I saw this the other day on Maggie’s Farm. I can’t recall how many times I have had debates with people over death taxes. Everyone is always shocked by my position on the issue. I guess it is just assumed that Progressives like inheritance taxes so anti-Progressives must be against them. That’s generally the assumption on all taxes and tax policy. Once again, we see how the Left’s hive mindedness shapes public discussion.

Taxes are necessary if you wish to have a government. Government is necessary if you wish to have a state. Even libertarians get this. The question is, what do you tax in order to fund government? The amount of taxing should always track the amount of spending. The great disaster of late 20^th century American conservatism is the uncoupling of taxes from spending. The modern Right is just a different brand of liberal, offering a free lunch in exchange for a vote.

It seems to me that taxing the dead is a great way to fund the state. After all, the dead have few spending needs. They have no rights and no claims on the living. Taking the property of the dead is well within the traditions of western people so it’s not like we are breaking new ground. Throughout history, failure to properly name an heir meant your property was awarded to the state upon your death. To date, the dead have never petitioned their government for redress of death taxes.

The only snag is when it comes to property held in association with others, like a business or jointly held lands. If your business partner dies and the state takes ownership of his shares in the business, you now find yourself in partnership with the government against your will. Worse yet, the state could auction off that ownership stake and you end up out of business entirely. But, key-man polices have been around a long time so there’s a remedy.

A key-man policy is a type of insurance policy. If one partner dies, the policy pays off so that the other partner can acquire the shares of his partner from his estate. Putting that into law so that the state gets the insurance money rather than the company stock is not terribly difficult. It would protect the rights of the living without giving rights to the dead.

The thornier problem is property or a business sort of owned by a family. The patriarch builds up a company and has his kids join in the business. Before they are ready to gain a share of the business, the old man gets hit by a bus. There’s no insurance policy to cover the business so the tax obligations would wipe out the family business. Again, this could be addressed with minor changes in the law such that life insurance could cover this sort of calamity.

The only sensible objection, it seems to me is one of equity. The guy who works hard, saves his money and builds up a fortune ends up paying a greater tax than the bum who never bothered to save. Bill Gates, according to some, should have the right to give his great fortune to his children if he chooses. It should not be confiscated by the state.

There’s nothing to prevent Bill Gates from giving his fortune away. He would just have to do it while he is alive. If he wants to set his kid up with a billion dollar gift, that’s his choice. That option exists now. Whatever is left upon his death will go to the government. People have been doing this sort of planning for generations.

The counter to this is the modest, middle-class family cannot take advantage of these laws. The folks who have their wealth in their primary home, maybe a vacation spot and the family business cannot be expected to liquidate before death and give away their money. As a practical matter, it must be done at the time of death. At the risk of sounding callous, life is unfair like that sometimes. No tax is without its unfairness.

That’s the thing I come back to when it comes to the death tax. No one likes paying taxes. There is no tax scheme that makes everyone happy or everyone equally miserable. Every tax irks someone more than others. The dead have bigger problems than the disposition of their property so taxing them strikes me as the least harmful of the possible taxes.

Unlike most other taxes, death taxes have the benefit of breaking up large fortunes. Concentration of wealth is the number one enemy of civilization. There’s nothing wrong with someone getting fabulously rich through his own initiative. There’s an assumed link between the fortune and the talent. Inheriting a fortune and the power that comes with it is hitting the lottery. Worse yet, it subjects the rest of us to sortition, thus pegging the fate of society to the mating choices of the long since dead.

In conclusion, taxes are about paying for the current operations of government. The best taxes are those that retard the normal functioning of society the least. No one escapes death so taxing it will not get less of it. It’s not perfect, but no tax is perfect. It is the only tax that has any plausible social benefit.

I was paging through Twitter and saw this posted by Gavin McInnes. The story itself is not the point of this post. It is an example of how race is covered in America. If a white guy executed two black guys, the major news companies would devote all of their coverage to it for a year. That’s because it fits into the mythology that animates the liberal narrative. But, that’s a topic for another day.

I was thinking about writing something about it when sound mysteriously started coming through my speakers. For some reason I was using Chrome rather than Mozilla, the former not having the array of pop-up blockers, script blockers and flash blockers installed. I hunted around and found the offending video and stopped it. If you have clicked on the above link, you will be doing the same thing in a few seconds.

The story was actually blocked until you took a survey. The page is plastered with ads, in addition to the video crap in the middle. Just doing a little estimating, I’m going to say that the page is 60% advertisement. The story takes up maybe 10% of the page. The rest is promotions for the site and other features on the site. They are perilously close to the point where the story is so hard to find in the clutter that we’ll need an app to help find it.

This is happening all over and not just on the Internet. Websites have no way to make money other than ads and even then the money is small. They have no choice but to pack their pages with ads. The weaselly tactics some use is not wise, but maybe they are desperate. Breitbart is a useless site, as far as I’m concerned, because it is so cluttered with ads and embedded audio. I really hate the embedded audio.

I was talking to a friend the other day after one of the football games about how a 60 minute game is now a five hour event. A football game is a three hour commercial with a football game woven into it. The promotion of it and other games before and after the game is just more marketing, disguised as content. Even replays have sponsors now so that we end up with “this replay brought to you by Viagra shows…” I’m all for the NFL making money, but do they really need to sell so many ads?

I read the other day that the NBA will start placing ads on the uniforms. It will not be long before technology allows them to have rotating ads on the uniforms. The courts will soon be plastered with ads. The NHL is using video technology to digitally place ads on the ice for TV viewers. During World Cup, they had ads crawling on the screen because there are no breaks in the game to run ads. That means the rules of the game will be changed so they can run ads during games. “This water break brought to you by…”

Getting back to the web page ads, there’s a limit. I don’t go to Brietbart because I hate the ads. Even if they don’t care about old hate-thinkers like me, there is a limit to the number of ads they can post on their site. Similarly, there’s a limit how much crap they try to sell us on our phones and TV’s. What happens when the limit is reached? The whole economic system of the west is based on never ending growth and that includes advertising.

What happens when there’s no more room to grow?

I saw this in a Taki column by Ann Sterzinger. I’m not a fan of Sterzinger’s brand of groaty snark. It may be a generational thing. Maybe it is my sexism. Who knows, but the New Yorker piece on the Internet parasite was worth wading through Sterzinger’s many references to bodily functions. Jim Goad has this habit too. Anyone he does not like is compared to a bowel movement or vomit or some other base human function. I don’t get the point of painting such pictures for the reader.

Anyway, the linked piece above is interesting and free of scatological references. The title is what gets me. A virus is always bad. Calling someone a “virologist” should be an insult, unless the person works for the CDC. Even after reading the article, I’m not sure if it is an insult or compliment here. What’s clear is the subject of the story makes his money by deceiving people and stealing the property of others. His sites are built around appropriating the ideas of others to draw an audience.

Deception is the primary line of business.

Much of the company’s success online can be attributed to a proprietary algorithm that it has developed for “headline testing”—a practice that has become standard in the virality industry. When a Dose post is created, it initially appears under as many as two dozen different headlines, distributed at random. Whereas one person’s Facebook news feed shows a link to “You Won’t Believe What This Guy Did with an Abandoned Factory,” another person, two feet away, might see “At First It Looks Like an Old Empty Factory. But Go Inside and . . . WHOA.” Spartz’s algorithm measures which headline is attracting clicks most quickly, and after a few hours, when a statistically significant threshold is reached, the “winning” headline automatically supplants all others. “I’m really, really good at writing headlines,” he told me. “But any human’s intuition can only be so good. If you can build a machine that can solve the problem better than you can, then you really understand the problem.”

At the bottom of a Dose post, there is usually a small “hat tip” (abbreviated as “H/T”). Many people don’t notice this citation, if they even reach the bottom of the post. On Dose’s first day of existence, its most successful list was called “23 Photos of People from All Over the World Next to How Much Food They Eat Per Day.” It was a clever illustration of global diversity and inequity: an American truck driver holding a tray of cheeseburgers and Starbucks Frappuccinos; a Maasai woman posing with eight hundred calories’ worth of milk and porridge. Beneath the final photograph, a line of tiny gray text read “H/T Elite Daily.” It linked to a post that Elite Daily, a Web site based in New York, had published a month earlier (“See the Incredible Differences in the Daily Food Intake of People Around the World”). That post, in turn, had linked to UrbanTimes (“80 People, 30 Countries and How Much They Eat on a Daily Basis”), which had credited Amusing Planet (“What People Eat Around the World”), which had cited a 2010 radio interview with Faith D’Aluisio and Peter Menzel, the writer and the photographer behind the project.

What passes for building a better mousetrap in the new economy is usually just using technology to game the system. In this case, the guy started out by attaching himself to the Harry Potter franchise. Calling it a “fan site” let him skirt the rules governing theft of intellectual property. If he tried selling Harry Potter shirts he would have been sued out of existence. Selling ads on a “fan site” is essentially the same thing, but it skirts the rules just enough to avoid a lawsuit.

The click bait sites are just fraud, for the most part. He’s gaming search engines and he’s misrepresenting his site to get hits. He then uses the traffic to defraud advertises. Increasingly, mainstream sites employ the same tricks. They split stories into many pages to drive up page hits. Bleacher Report has figured out how to game Google so that their crappy pages show up at the top of any sports related search. I’ve had to modify by browser to block that site.

Stealing from one another is not economic activity. There are only three types of economic activity that can increase the nation’s wealth. You either invent things, make things or fix things. Emerson Spartz is not doing any of that. He is siphoning money from people who make things, invent things and fix things. These parasites are the only part of the economy that are growing. The parasite economy has a natural limit. When the host dies, the parasite economy dies with it.

I’m old and I hate change so naturally I think the kids, with their smartphones and sharing economy, are just a bunch of addled-minded commies, high on stupid. After all, what was wrong with hailing a cab and paying the fare? Now I’m supposed to hop in with some weirdo who drives strangers around town because he finds livery work self-actualizing? Fiddlesticks to that!

In all seriousness, I’ve been skeptical of Uber from the start. It has that slippery con-man vibe to it. Like everything else about the “sharing economy” it is real good at sharing the costs, but even better at privatizing the profits. Apparently, they are not very good at screening their drivers.

A man who works as a driver for the ride-sharing service Uber is accused of raping a woman he picked up in Boston.

The suspect, 46-year-old Alejandro Done of Boston, was arraigned Wednesday on charges of rape, assault to rape and assault and battery.

Authorities say on December 6, the victim was waiting for a ride-sharing driver at a residence on Tremont Street in Boston.

When the victim got into the car, the driver told her that he would need a cash payment for the ride, so he brought her to an ATM.

The driver then allegedly drove to a location the passenger was not familiar with, pulled over in a secluded area and jumped in the backseat where she was sitting.

“He allegedly struck her with his hands, strangled her, locked the car doors so that she could not escape and covered her mouth so she could not scream,” according to the Middlesex County District Attorney’s office. “During an ensuing physical struggle, the defendant allegedly sexually assaulted the woman.”

Uber says Done was not the driver the victim contacted to pick her up.

“This is a despicable crime and our thoughts and prayers are with the victim during her recovery,” Uber spokesperson Kaitlin Durkosh said. “Uber has been working closely with law enforcement and will continue to do everything we can to assist their investigation.”

Uber says Done passed a background check prior to becoming an independent contractor with the company. He is being held pending a dangerousness hearing scheduled for December 24 in Cambridge District Court.

Uber strikes me as one of the pet rock businesses of post-reality America. By that, I mean it is is a fun fad that people get rich from, but otherwise is not a real business with staying power. The reason is they are basically making money by deception. Part of that deception is cost shifting. They shift the operating costs of a taxi company onto the drivers, cell phone carriers and general society.

Let me explain that last part. On their site they say you don’t need extra insurance to be one of their drivers. That’s not exactly true. My insurance policy explicitly says I am not covered as a for-hire driver and my car will not be covered as a commercial vehicle. Uber says they cover you while you are on a trip, but the limits are the bare minimum and it is unclear if they are the primary or secondary carrier.

That’s just one piece of the cost shifted to the driver. If your fare spills their coffee, tears a seat of some other common occurrence, Uber is not paying for it. Uber is not getting your oil changed or your tires rotated. Basically, Uber is dodging the costs taxi companies face in fleet expenses, by suckering people into working for them under the table, in effect. What Uber is doing is no different than what landscapers do with illegal alien labor.

The old school taxi company they are “disrupting” is required to comply with a long list of laws, regulation, and insurance requirements. Those have costs which show up in the fare. No one is getting rich driving a taxi. Uber either shirks those costs or shifts them to the rest of us. That let’s them undercut the taxi companies and make money.

The argument from libertarians is that Uber is forcing changes to those regulation, taxes and so forth, by functioning as an above ground black market. We’ll see. It may be easier just to put Uber out of business. Either way, Uber is not magically making taxis cheaper. They are just hiding the costs. When you factor back in the cost of being raped by the Uber driver, a taxi starts looking pretty good again.

Over at National Review, where I occasionally post in the comment sections, I’ve taken some flak for pointing out that falling oil prices are not due to market forces and they are not necessarily a good thing. The people who post there tend to be running dog Republicans, worshipping at the alter of capitalism. They think suddenly cheap oil is vindication of their “drill baby, drill” chants from a decade ago.  This post from the Beeb explains one of the down-side effects of an oil glut.

Oil companies and service providers are cutting staff and investment to save money.

Robin Allan, chairman of the independent explorers’ association Brindex, told the BBC that the industry was “close to collapse”.

Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims.

“It’s almost impossible to make money at these oil prices”, Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. “It’s a huge crisis.”

“This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that’s painful for our staff, painful for companies and painful for the country.

“It’s close to collapse. In terms of new investments – there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone.”

The thing that people don’t understand about the business of digging stuff up and selling it is there are costs. It cost money to set-up an oil well – lots of money. If you can get a million barrels from a well and the cost of extraction is fifty million dollars over the life of the well, you need to sell that oil for $50 a barrel to break even. If you started your project assuming $100 prices and now the prices are $40, your business collapses and the well closes.

Almost all of the new oil sources coming on-line were planned and executed in a world of $60-$70 oil. That was the assumption of the investors. That’s an important piece of the puzzle that no one considers. Every BTU of energy is backed by a debt instrument these days. In fact, those debt instruments are backed by debt instruments.

The debt pyramid in the energy business probably looks like every other asset market. That means bankruptcies in the energy markets ripple through the financial world in the same way that foreclosures in Nevada brought down the housing market.

There’s that and there is the fact the oil glut is about things other than supply and demand. Demand is slightly down of late as the world economy has slowed. That has driven up relative supply. There’s also more supply due to speculators jumping into a hot market the last decade. But, there’s also the financial war with Russia lead by the US and Saudi Arabia.

The Saudis, of course, see this as manna from heaven. They can knock out the Russians who have been a source of mischief to them in the Middle East. A collapsing Russia would take Syria and Iran down, plus open the door for the Saudi pipeline projects.

An oil glut also knocks out North American producers who suddenly face margin calls. No one pumps at a loss so the high cost producers will have to shut down. An extended price slump means they go bankrupt. It also means credit flees the market, making even profitable operations less profitable. The Saudis can weather even $30 oil so this is good for them in the long run.

Cheap energy is always a good thing, but it is not without trade-offs. It’s why our next currency arrangement will probably be pegged to energy. If everything is priced in joules, price stability in the energy markets becomes the default state. Until then, energy is a tool of war and even cheap gas has negative consequences.

Many moons ago, I sat through a presentation by the director of marketing for a company where I was working. He put up charts and graphs showing the effectiveness of the various market programs. It was very well done, but complete bullshit. Talking with the guy after his presentation, he admitted as much.

There was no way to measure the effectiveness of his programs. I had been tasked with trying to come up with a way to do it, which was why I was in his presentation. To the guy’s credit, he knew there was no point in trying to fool me so he came clean. He was just making assumptions from anecdotes and wishful thinking.

The guy was not an asshole or a crook. He was doing his job like every other marketing guy. His bosses and coevals made all the same assumptions he made and relied on the same pseudo-logic to justify the marketing budget. Everyone just assumed smart people had worked it all out a long time ago.

That’s why every great company spent money on ads, campaigns, promotions, etc. The one very memorable thing he said was that he made sure to spend a little more than his budget every year. That way, he would get  a bigger budget the next year.

I’ve always wondered if there would come a time when companies figured out that much of their advertizing was a waste of money. Dr. Pepper spends millions on college football, but their product still tastes awful. The percentage of people who will like odd flavored soda is fixed. No amount of advertizing with change it. Beyond product awareness and sales, advertizing strikes me as rather pointless. As I type this, I’m watching an ad for something that may be for clothes or possibly wheat. I have no idea and doubt anyone else does either. Millions were spent for something and I doubt the company will see a nickel in return.

On TV, most of these ads are filtered out by our brains as background noise. On-line, they are blocked by the browser and browser add-ons. I suspect most of us have become so good at blocking out web ads that we don’t even notice them. When I bother to look, I wonder why anyone would be spending money on them. Sites that lard up on ads, like Brietbart and the Daily Caller, I tend to avoid. If I have to close eight windows and then find and mute some stupid video in order to get to your site, your site sucks.

Of course, it has long been suspected that skimmers like Facebook use click farms to scam companies into advertizing with them. This video from earlier in the year is pretty good. No one has ever bothered to refute it. It has been known for a while that there are “like farms” for hire that will boost a Facebook page for a fee. Twitter has been plagued by zombie accounts to boost the follower counts of celebrities. The fact that Facebook, and presumably others, is using robots and click farms to scam advertisers should not shock anyone. The degree is the question. How much of scam is on-line advertising?

It appears half of these ads are never actually seen by humans.

Online advertising is a fickle thing. It accounts for 20% of the ad industry’s total spending, and over 90% of revenue for the internet giants Google and Facebook. That said, no one seems to have any idea whether it actually works.

That uncertainty reached a new high this week, as Google announced that 56.1% of ads served on the internet are never even “in view”—defined as being on screen for one second or more. That’s a huge number of “impressions” that cost money for advertisers, but are as pointless as a television playing to an empty room.

This is not a big revelation. The web metrics company ComScore reported last year that 46% of online ads are never seen. Spider.io, an ad fraud company acquired by Google in February, has pointed out that a large portion of ads are “viewed” only by robots, revealing that one botnet of 120,000 virus-infected computers viewed ads billions of times, running up the tab for advertisers without offering them the human eyeballs they sought.

It’s worth noting that Google made this acknowledgement of the deficiency of the model it has profited richly from while also offering a new model to advertisers: In July it introduced its Active View product, which measures only viewed ads.

This goes back to the puzzle of Facebook and Twitter. How can they be worth billions? Yeah, they have lots of users, but so what? Those users pay them nothing. The ads on Twitter are minimal and you can’t even see them on your phone. I don’t do Facebook anymore, but the ads I used to see were mostly scumbags like dating services and fake medicines. At some point, the guys writing the checks will figure out they are wasting 100% of their money these sites.

Way back when the phrase “new economy” caused economists to swoon, cynics made sport of them and the idiocy of the dot-net boom. I recall a conversation with a friend who was involved with a dot-com back in the 1990’s. I kept asking him how they made money and he kept talking about hits and stickiness and other nonsense. I kept trying to get an answer and he finally got frustrated with me and said I did not get the new economy. The company burned through all of its cash in about six months and went bust.

The tech boom was driven, in part, by free money from the credit boom. It is not an accident that the tech boom quickly followed the Louvre Accords, which codified the floating exchange rate currency system we enjoy so much today. All of a sudden there was cheap money for all sorts of crackpot ideas. Some turned out to be revolutionary, while others turned out to be insane. The information grid is an example of the former. The financial services industry is an example of the latter.

This post at Marginal Revolution and many others like it at various other places make me laugh. The new buzz phrase is “sharing economy” which is as devoid of meaning and value as the people who like to use it. The vapid hipsters love prattling on about Uber and how it is “disruptive” as if that is always a good thing. Earthquakes are disruptive. The Black Plague was disruptive. Like everything else today, Uber is about signaling. You are a beautiful person if you think Uber is the best. You are a loser if you think it sounds like a handful of sharpies convincing hipsters to be gypsy cab drivers at below market rates.

That is the thing about the “sharing economy.” It is not new. Ross Perot got rich doing much the same thing in the 70’s and 80’s. In the old days, computers were expensive. Companies would sell their idle time to guys like Perot who would find customers in need or processing power but lacking the money to buy their own mainframe. It was the technological equivalent of the oxpecker bird and rhino. The bird picks ticks and parasites from the hide of the rhino and functions as a warning system. The rhino can live without the bird but lives better with him.

Perot and others could make a business out of renting processing capacity because it was very expensive in the old days. When processing costs plummeted in the 80’s and 90’s that “sharing economy” went away. In other words, the “sharing economy” was just a transitional phase, not a desirable economic arrangement. The companies renting their mainframes rented them out to defray the cost of ownership. The renters wanted their own mainframe, but they could not afford it. The solution was a temporary one until the preferred solution was available.

Ride sharing “works” now in the same way. In most cities, taxi service is regulated by the municipality. That means lots of costs on the taxi company. They are real companies so that means they have to abide by labor laws, zoning laws, OSHA regs, insurance regs, etc. Of course, it is not cheap to maintain a cab. The cabs take a lot of abuse and they need a lot of service. The end result is a price for cab service the hipsters in these cities think is too high, so they are searching out alternatives. In steps Uber.

Unlike the old sharing economy, the new sharing economy borrows from the new new economy or economy 2.0 or whatever. That is, the money is made in shifting the cost onto unsuspecting third parties and/or by not complying with the laws that govern everyone else. Amazon avoided sales tax. Google and Netflix shifted costs to non-customers. Media companies taxed people through their cable bill. In the case of Uber, they are not abiding by the municipal laws that govern the livery business. Instead of having cabs, licenses, insurance, and employees driving the vehicles, they shift those costs onto their customers.

If you look at the Uber website, they make the claim that you can drive for them without incurring the wrath of your local government or your insurance company. Neither is true. My insurance specifically says it does not cover me as a hired driver. They will not cover my car if it is used for hire. Similarly, my state does not permit me to rent my car without a permit and a special license plate. But that’s not Uber’s concern. They will not be paying the fines or the insurance premiums.

That is what gets missed in the gushing over companies like Uber. If your wife gets raped by the Yellow Cab driver, the company pays the price. Not only does their reputation suffer, but they also get investigated by the authorities and they get sued by the victim. Therefore, they have a strong incentive to keep their cabbies from raping their fares. If the Uber guy rapes your wife, that is your problem. Uber is not accountable. That is an extreme example, but that is the point. We have these laws because of extreme examples in the past. No law sprung from nothing. Every one of them is there for a reason.

To wrap this up, let us circle back to the old days of renting our mainframe time. Back then, the companies renting the time had an expensive asset they want to maximize. The renter was looking for a lower cost alternative to the million dollar mainframe. Cabs are cheap. No one gets rich driving a cab. How desperate do you have to be to be an Uber driver? How hard up are you if you want to take a ride from some hard up weirdo you met on-line?

Forty years ago, a symbiotic relationship between mainframe users was a temporary solution to bridge the gap between the now and better future. Uber represents a desperate attempt to squeeze the remaining juice from the lemon of the modern economy. It is the equivalent of a widow taking in laundry and borders in order to pay rent. It is not something signaling a better future. It is a desperate attempt to delay the inevitable decline. Maybe they should have named the company “Unter.”