The missing cryptocurrency queen

Some people have made a lot of money in the tech world. Some have done it by creating companies, others by investing in them. But there are others who wish that they had invested in successful companies early on and made a lot of money but didn’t and now feel that they missed out. These people who are on the lookout for the next big thing so that they can get is early and cash in too. Such people are easy prey for con artists who know that the sales pitch of ‘buy now before it is too late’ can drive people to rash decisions and invest in something they may know little about for fear of missing out again.

We have seen this scenario play out so many times before and blog reader Jason Wessel sent me a link to this extraordinary story about someone who managed to scam people out of millions of dollars by promising them great rewards with a new cryptocurrency called OneCoin that she claimed would put Bitcoin out of business. The scam was based on the multi-level marketing scheme used by companies like Amway whereby people are recruited to sell both a product and also recruit new people to sell the product. Part of the sales proceeds of the new recruits goes to the person who recruited them, all the way up the chain. This is a version of a pyramid scheme and, like all such schemes, the few people who get in early make the most money while those lower down the chain can lose whatever they invest.
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The menace of private equity firms

Luke Darby explains how venture capital and private equity firms are responsible for destroying otherwise healthy companies, killing jobs, devastating communities, while reaping fat rewards for their investors. Once they take over a company, the private equity partners take out huge fees for themselves, burdening the company with large debts.

The quick and dirty explanation of private equity is that these are firms that buy other businesses. They restructure acquired companies in order to increase short-term profits or otherwise make them look more appealing to a buyer, and then sell them at a profit. While that means a nice chunk of cash for the investors who made the sale, it can be a chaotic and disastrous process for the employees of the companies being bought and sold, and they might get laid off or see their company broken up and sold out from under them.
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First they took from the poor, then the middle class, then the upper middle class, then …

Everyone knows the response that bank robber Willie Sutton supposedly gave when asked why he robbed banks. He is said to have replied, “Because that’s where the money is.” Sutton denied he ever said it but that story has entered the folklore.

But that saying seems relevant when we see something similar happening with the way that the oligarchy increases its share of the wealth, by going where the money is. We know that the poor have been squeezed so that the wealthy get even wealthier. But as the money left among the poor dries up. the oligarchs started squeezing the middle class. Wolf Richter says that it now appears that the oligarchs are starting to put the squeeze on the upper middle class.
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Bernie Sanders and two economics professors explain the benefits of Medicare for All

Sanders keeps making very clear arguments about its benefits in order to counter the distortions.

Economists Emmanuel Saez and Gabriel Zucman explain how the Sanders’s plan for Medicare for All will result in reduced taxes, because what we now pay in health care premiums are in fact taxes, something that opponents of universal health care plans try to ignore.
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Debating the wealth tax

To understand why the oligarchy in the US absolutely hates the idea of Bernie Sanders or Elizabeth Warren becoming president, one need look no further than their proposals for a tax on wealth to serve two goals: provide income to fund their progressive agendas and to reduce the staggering levels of inequality in the US.

Sen. Bernie Sanders has unveiled his plan to directly tax the wealth of millionaires and billionaires — and it goes substantially further than Sen. Elizabeth Warren’s plan to do the same.

The proposal would cut the wealth of billionaires in the United States in half in 15 years and entirely close the gap in wealth growth between billionaires and the average American family, according to University of California Berkeley economists Gabriel Zucman and Emmanuel Saez, who advised Sanders on his plan. Hitting the richest 180,000 American households, Saez and Zucman estimate the tax would raise $4.35 trillion over the next decade, which Sanders says would go toward paying for his biggest policies, including Medicare-for-all, affordable housing, and universal childcare.
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How the ratings agencies triggered the financial meltdown

Matt Taibbi has come out with an excellent article that looks at the role of the ratings agencies, those institutions that are supposed to protect the interests of investors by providing accurate ratings for the investments issued by companies, in causing the financial collapse of 2008. Their role has been criticized before (I wrote about it back in 2008 here and here) but Taibbi says that recent revelations show that their culpability is even worse than was thought.
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How some of the tax plans compare

Economist Gabriel Zucman has compared what the average tax rates will be depending on your income, based on the various plans offered by Bernie Sanders, Elizabeth Warren, Joe Biden, and under Donald Trump. It should come as no surprise that Bernie Sanders and Elizabeth Warren go easy on the bottom 99% and start taxing the richest 1% very heavily, with Sanders really socking it to them. Joe Biden and Donald Trump tax the 99% more than the other two plans, tax the top 1% a lot less, and greatly reduce the tax rates of the top 400 individuals.

The story of money

The radio program On The Media had a fascinating episode on money: what it is, how it came to be, why it has value, and what its purpose is. It started with a story of someone I had not heard of before, an artist named J. S. G. Boggs, who made detailed drawings of currency notes with some slight imperfections deliberately inserted, and then exchanged those notes for goods with people who accepted them at face value as a work of art and even gave him change in regular currency, knowing that they were not notes issued by the government.
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The real purpose of the 70% marginal tax proposal

Alexandria Ocasio-Cortez’s proposal to raise the marginal income tax rate for incomes over $10 million to 70% has sparked a huge amount of interest in general and also alarm among the wealthy. Much of the discussion has focused on how much revenue it might raise. But as Vanessa Williamson writes, the main purpose of such a tax is not to raise revenue but to reduce inequality, and that those who focus on the former are missing the point.
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Trust Amazon to act like a jerk

Amazon is a retail behemoth has been reviled for overworking and underpaying its workers, forcing them to depend on the government social services to supplement their income, as well as using its power in the retailing world to drive many small local firms out of business. Recently it got some good publicity by saying that it would pay all its workers at least the minimum living wage of $15/hour. But it turns out that there is a catch, that what Amazon gave with one hand, it partially took away with the other.
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