Isaac Laquedem

The Laquedem Plan to honor Anatole France with low-income housing

Tokyo is so dense a city that commercial spaces are even squeezed into the arches that support commuter trains.  As I read yet another story about how Portland's pro-density policy encourages property owners to tear down older houses (often rentals) and replace them with newer (owner-occupied) townhouses, I pondered what the city and TriMet will do with the space underneath the new rail/bike bridge that connects the South Waterfront to OMSI.  At that point Anatole France's famous line came to mind: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal their bread."  (That last bit is not often enforced against people who run hedge funds.)

Hence the Laquedem Plan to honor Anatole France.  It occurs to me that the Tillikum Crossing project gives us a striking opportunity to achieve several goals at once, if we construct affordable housing underneath -- not next to, but underneath -- its western approach.  We can meet a need with housing that is convenient to transit and walking distance from downtown and the inner east side.  We can give that part of the city a more international flavor.  We can provide an opportunity for the city and the South Waterfront developers to keep their broken promises to provide affordable, working-class housing in the area.  The land is cheap -- free, really -- and services are all available.  A wag with Isaac's sense of humor might name the housing project "Anatolia."  The literary among us could take that as a reference to the Anatole France quotation about living under bridges.  The commercially minded might take the name to refer to an area that is part of a larger turkey.

The Laquedem Plan to keep the governor in touch with the outside world

One lesson of the recent meltdown in Salem is that it's all too possible for the governor -- or for that matter the executive of any large organization who must govern through a small circle of assistants -- to have his or her access to information and to public thinking cut off by those assistants, or by one or two of them.  Dr. Kitzhaber is not the first to suffer the consequences of this malady: recall the final years of the Nixon White House as one example of this common phenomenon.

The phenomenon is unfortunate but understandable.  A governor (or president, or general, or chief executive officer, or other Pooh-Bah) of an organization that employs tens of thousands of people and that must respond to public opinion can't talk with everyone who wants a few minutes of the Pooh-Bah's time.  Nor can the person at the apex answer every letter or every e-mail - staff must handle most of the requests or let them go unanswered, and from the point of view of the person who wants the boss's attention, unnoticed.

It's also understandable because the cadre around the boss owe their jobs to the boss's favor, and can sometimes score perquisites for themselves from others who see them as access points to the boss.  The result is that members of the cadre don't want to bring bad news to the boss, or disagree, or mention unpleasant facts even when a crisis develops, preferring to flatter the boss by praising his or her judgment, brilliance, and management skills.  What the executive needs is someone who has access to the executive and whose job doesn't depend on the exec's good humor -- someone who can tell the truth without repercussions.

I'm reminded of the Roman civil servant (possibly a slave) who, as the conquering general was given a parade and a hero's welcome, and then a crown of laurels, would whisper in the general's ear, "Remember thou art mortal."  (Mel Brooks does a fine rendition of this tradition in "History of the World, Part I.")

It occurred to me that Pooh-Bahs of many sorts, including our future governors, would benefit by having on staff a person, hired for a fixed term or protected by civil service, whose function would be to follow the governor around, listen to the governor's speeches and meetings, and then once or twice a week tell the governor privately whether the governor was being statesmanlike or foolish.  This person might also spend one day a week reading the mail that the governor receives from ordinary citizens and then summarizing it to the governor, without fear or favor.  It would not be necessary to remind the governor of his or her mortality -- we have the ballot box and the newspapers for that -- but simply, by expressing an unbiased opinion and passing public sentiment through to the governor, perhaps staving off crises such as the one our state is going through now.

The Laquedem Plan to reduce, however slightly, the risk of identity theft and credit card fraud

This morning as I wrote orders to the Laquedem Bank to send money to two credit card issuers, I noticed that both issuers ask me to write my account number on my check.  One of them, a Big Bank, helpfully prints my account number on my invoice.  The other, American Express, prints only the last six digits of my account number, leaving me to either guess at the rest, locate my credit card, or write only the last six digits on my check and hope that Amex credits my check to my account.

Amex prints only the last six digits of my account number on its invoice to protect me from identity theft and credit card fraud - someone who comes across my account statement won't have my full account number and won't be able to charge to my account.  (As the account number is actually encoded at the bottom of the statement, I think Amex is fooling itself, but that's another story.)

It occurred to me that the banks could accomplish the same result a lot more easily, simply by giving each cardholder two account numbers.  The first number would appear on the credit card; it would be the actual account number.  The second number would be just for writing on the payment checks.  So my invoice might say "This statement is for your account ending in 7-89012 (the last six digits of the credit card number)".  Please write the number 1234-5678-9012-3456 (the remittance identification number) on your check."  Both numbers would be unique to me, but the number printed on my bill would be useful only for paying my bill and not for charging anything new.  It's such a simple device that I have to think that some intelligent bank is doing this already, but I haven't heard of one.

A fair gas tax increase: The Laquedem Pay To Pave Gas Tax Plan

The aftereffects of my celebration of the demise of the Columbia River Crossing took longer to wear off than I expected.  I think I'm back to normal now.

Today's paper Oregonian (the story doesn't appear to be online) reports that the Oregon Department of Transportation is running out of money and likely will not be able to undertake new projects or even maintain the existing highways and bridges.  The reasons are threefold.  First, Oregonians are driving less and using more efficient cars, so gas tax revenues are down.  Second, federal grants for state highways will stop when the federal Highway Trust Fund goes dry next year.  (Yuxing Zheng of the Oregonian wrote about that on March 28, here.)  Third, ODOT is making massive debt service payments of nearly $200 million/year, maxing out at $210 million/year) on the $2.5 billion in bonds it's issued to finance the road and bridge construction projects under the Oregon Transportation Investment Act of 2001 and its successors.

Declining revenues, large debts, no federal funds: what's an agency to do?  The public is reluctant to raise taxes to finance even the best highway spending, and residents of low-tax areas of the state, mainly rural, don't like to contribute to funds that they see as mainly spent to help urbanites.

At the same time it must be conceded by all but the most Teaful of the Party that the state gasoline tax is cheaper now, in inflation-adjusted dollars, than it's been for years, possibly since our first gasoline tax of 1c/gallon in 1919.  From 1967 to 1981 the tax was 7c/gallon, from 1981 to 1984 it was 8c/gallon, increases in 1984, 1985, and 1986 brought it to 11c/gallon.  From 1993 to 2011 it was 24c/gallon.  In 2011 it was raised to 30c/gallon, where it is today, standing at about 9% of the pretax retail price of gasoline.  In 2004 Oregon's tax of 24c was about 19% of the pretax retail price (24c out of $1.35 or so).  In 1972 the 7c tax was nearly 30% of the pretax price of 25c/gallon.  (The state and federal taxes brought the retail price of branded gasoline to 36c/gallon then.)

Herewith, therefore, the Laquedem Pay to Pave Gas Tax Plan.  Let us vote on raising the gasoline tax to 40c/gallon, with the extra 10c devoted 95% to road and bridge maintenance (no new projects) and 5% to what the planner-types call "active transportation":  bike paths, sidewalks, wheelchair ramps, and other aids to unpowered mobility (no light rail).  The first Laquedem catch is that we'll tally the vote county by county, and impose the tax only in those counties that approve the measure.  If you and your neighbors don't want to pay the tax to maintain your state highways, you don't have to pay it.

"Why would anyone vote for it?" you ask.  That's the second Laquedem catch: ODOT will be authorized to spend the money only in those counties that approve the tax.  If, for example, Curry County rejects the tax, then ODOT may not spend any money from the fund in Curry County.  People who are willing to pay for paved highways can have them; people who don't want to pay for paved roads can enjoy their potholes while they salute Ayn Rand.

The Laquedem Congressional Spending Reduction Plan, revived for the shutdown

As long as the House of Representatives doesn't want the government to work because a majority of the House members believe the government is too large, I'd like to revive my suggestion of two years ago that Congress reduce the size of the House by a meaningful percentage, let's say by a quarter, so that the House would have 325 members instead of the present 435.  Each of the remaining members would represent about 1 million constituents and could boast about becoming 33% more productive.  The savings in cost would be modest -- Congress isn't a big part of the federal budget -- but it would be a good symbolic move.  The savings would allow the government to reopen the Panda Cam and several of our national parks, good places for the newly retired Congresspeople to go and chill out.

The Laquedem Plan to restore the original intent of the Second Amendment

The post-Newtown debate over gun control and the Second Amendment has pitted advocates of gun control against believers in the Second Amendment.  Proponents of gun control (generally the same group as opponents of mass killings) can't see the sporting purpose in allowing people to possess and use 25- and 50-round ammunition clips.  Opponents of gun control strongly object to federal and state governments limiting their ability to buy and own any sort of weaponry.

Some government restrictions on private armories apparently withstand a Second Amendment attack: for example, we can't own machine guns, rocket-propelled grenade launchers, and tactical nuclear weaponry. If the Second Amendment protects individual rights as broadly as its backers say it does, then the government can't prohibit us from owning these useful items of destruction.

How, then, can the Supreme Court make a principled interpretation of the Second Amendment that protects the private right to own guns without opening the door to my homeowners' association acquiring first-strike capability?  It occurred to me that the doctrine of original intent, favored by Justices Thomas and Scalia, offers an answer. 

The doctrine of original intent states that the Supreme Court should interpret the constitution in accordance with the intent of the Framers -- that is, the original intent of the document -- rather than to accommodate changes in politics and society.  Not every justice agrees with this, but it is a useful starting point.

The Second Amendment states that as a well-regulated militia is necessary for defense, the right of the people to bear arms shall not be abridged.  Most people who talk about the Framers' intent focus on what is meant by a well-regulated militia, and argue that the right to bear arms should be limited to the right to bear arms as part of a well-regulated militia.  I suggest that we should look instead at the Framers' intent in using the words "defense" and "arms." 

"Defense" has a plain and simple meaning.  It means defending territory that one already possesses, rather than attacking territory that one does not possess.  People can defend their homes.  ("A man's home is his ammunition cache," as the saying might be revised to read.)  People can as part of a militia defend their counties and states from invasion and insurrection.  It's consistent with that reading to say that people can't take guns to schools and shopping centers.

Similarly, the term "arms" meant to the Framers single-shot rifles and pistols, swords, bayonets, catapults, and cannons.  "Arms" didn't include automatic and semi-automatic guns, tanks, rocket launchers, and nuclear bombs.  A creative legislature might adopt, and an alert judge might uphold, a gun control measure that protected the right of the people to keep flintlocks at home to protect themselves against intruders, and prohibited people from carrying weaponry on the street.  I think the judge could even quote from opinions of several conservative members of the Supreme Court to show that the prohibition is consistent with the original intent of the writers of the Constitution.  It would be an amusing and possibly worthwhile exercise.

The New And Improved Laquedem Columbia River Crossing Plan

I had thought that one or another of my solutions to the Columbia River Crossing problem might save us a couple of billion dollars despite the best efforts of our local govenrments, and then last week's news that the Coast Guard will not let Oregon's and Washington's highway departments replace the Interstate Bridges with a fixed span that is 30 feet too low to accommodate existing river traffic sent me back into contemplation.  Any solution to the problem must, as I see it, take three factors into account.  First is that the City of Portland opposes replacing the bridge unless it includes light rail to Vancouver.  Second is that although the bridge is being advertised as a solution to the traffic jams on Interstate 5, the new bridge won't add any actual car capacity: the real bottlenecks are in the cluster of on-ramps at the north end and the vanishing third lane about two miles south of the south end.  The jams would likely vanish if traffic were reduced by about 20%.  Third is that many of the bridge lifts are required because the high spans on the Interstate Bridges don't line up with the lift span on the railroad bridge 4000 feet downstream, and this forces some barge traffic to go through the Interstate Bridges' lift spans so that they can pass through the swing span on the railroad bridge.

If you start with those three principles, then a solution becomes easy to imagine.  Here is how Isaac reconciles those three principles.

First, forget about replacing the Interstate Bridges.  Leave them in place, and charge passenger cars a toll of $5 to cross.  Exempt trucks and buses from the toll, and exempt any vehicle that is carrying at least four passengers.  The only glitch is that this would require the approval of the Oregon legislature to charge a toll.

Second, build two two-track tunnels, one for light rail and one for the Burlington Northern, so that the railroad swing bridge can be taken down.  This means that the Port won't have rail service to West Hayden Island.  Too bad.

The first measure will reduce bridge traffic and thus congestion by discouraging single-passenger cars from crossing and encouraging carpooling and bus riding.  (It will become cheaper for many cross-border workers to take the bus to work instead of driving.)  The revenue from tolls can also pay part of the cost of building the rail tunnels.  It will also reduce traffic on Interstate 5 to and from the bridge, which will reduce the aggravating traffic jams that clog the freeway for four to six hours a day.

The second measure will reduce the number of bridge lifts by removing the rail bridge as an obstacle to river traffic.  Barges can pass under the high fixed span of the Interstate Bridges without having to make a tight turn to go throught the rail bridge's swing span.

Each rail tunnel should cost about $500 million.  The tolling booths, equipment, and cameras should cost about $50 million.  Designing a cute logo for the automatic toll-pass system should cost about $5 million.  (Just kidding about that last one.)  So for about $1 billion -- one-fourth the current cost of the project -- we satisfy all of its goals.

Problem solved; billions saved.  Easy!

The Laquedem Plan to Help the Susan G. Komen Foundation Live Up To Its Rules

The Susan G. Komen For The Cure Foundation (I think that's its current legal name) took a beating today in the court of public opinion after it told its local affiliates that it would prohibit its local affiliates from issuing grants to Planned Parenthood to conduct breast cancer screenings.  The stated reason is that the national organization has adopted a policy under which neither it nor its local affiliates may give money to any organization that is under federal, state, or local investigation.

I noted earlier today, not too explicitly, that in 2009-2010 the Komen Foundation gave substantial sums to other organizations that are under federal, state, or local investigation.  It occurred to me that the trustees of the Komen Foundation may need a helping hand to be sure that they don't inadvertently fund an organization that's being investigated by the authorities; they fund so many groups, and there are so many law enforcement authorities, that the trustees may be funding targets without realizing it. 

Won't you help them out and play the Laquedem Get What's Komen To You Game?  It's easy.  Here's what you do.  First, pull up the Komen Foundation's latest Form 990.  That's the tax return that the Komen Foundation, and other tax-exempt organizations, have to file every year.  In it they list their grants of $5,000 or more.  Here's a link to the return for the year ending March 31, 2011.  Go to pages 47 to 59, labeled "Schedule I."  These pages list the organizations to whom the Komen Foundation gave $5,000 or more.  Pick three of them, and Google them (or Bing them, if you're Microsoft-inclined) together with the words "federal investigation" or "state investigation." See if anyone's investigating the three organizations you picked.

Did you get lucky and find three that are all under investigation?  Congratulations!  You're a winner.  Even if you found only two, you've done well.

Now the next step:  Let the Komen Foundation know that it's promised to cut off funds to those groups until the authorities clear them of wrongdoing, and give them the names of the organizations that their new policy now prohibits them from supporting.  Here's the contact page.  

Sorry, Yale University; no funds this year from the Komen Foundation, not until the feds finish their investigation.  Even Komen's hometown university, the University of Texas, may be off the grant list; the IRS was investigating the salaries it paid to some of its top officials.

Play now!  It's fun!  It's easy!  And it's for a good cause.  Help the Komen Foundation keep its grantees honest.

Thomas Friedman catches up to one of Isaac's plans

Thomas Friedman, writing in the New York Times on Sunday, credited the blogosphere with the idea of requiring our elected representatives to wear the names and logos of their largest corporate contributors, rather like the logos on the suits and cars of NASCAR drivers.

I can't imagine that I was the first to think of that particular campaign reform, but it did occur to me back in 2005, and I wrote about it here on February 9 of that long-past year.  So I'm delighted to see the idea appear in the Times six-and-a-half years later.  That's faster than it usually takes ideas to get from Portland to New York, but slower than it takes news to make the return trip.

The Laquedem Equal Protection for Corporations Tax and Budget Plan

Last year, in the Citizens United case, the United States Supreme Court struck down part of the McCain-Feingold campaign finance act that limited what corporations could spend to support or oppose political candidates independently of the candidates' campaigns.  The court reasoned that corporations are "persons" protected by the Constitution and have free speech rights on matters of public importance.

I'm delighted that the court recognizes corporations to be artificial persons with rights that the Constitution protects, because its decision makes possible the Laquedem Equal Protection for Corporations Tax and Budget Plan.

One quirk of United States tax law is that citizens of the United States pay income tax not just on their United States income, but on their worldwide income.  Only a handful of other countries tax their citizens on their worldwide income; most tak only income earned within their borders.  United States corporations also pay American income tax on their worldwide income, but with one loophole not available to natural persons (whom we used to call "people").  United States corporations can defer paying tax on their foreign income while they keep the profits offshore.   Real people can't.

So, if American corporations have the same constitutional rights I do, then they and I have the right to the equal protection of the laws, including the right to be taxed under the same general principles.  To require one class of persons (e.g., you and me) to pay tax on their worldwide income while allowing another class of persons (e.g., General Electric) to avoid the tax indefinitely deprives you and me of our right to the equal protection of the laws . . . or it may deprive General Electric of its right to support the United States government on the same terms on which its employees get to support it.

Justice Kennedy, in the majority opinion, and Justice Scalia, in his concurring opinion, have shown the way to close this loophole.  Let's take them up on their offer.

-------------------------------------

Here's how the IRS explains the loophole to its staff:

4.61.7.1  (05-01-2006)
Controlled Foreign Corporations (CFC) Subpart F

1. The taxation of foreign income earned by U.S. controlled foreign corporation drastically changed with the introduction of Subpart F into the Internal Revenue Code in 1962. Subpart F deals with the U.S. taxation of amounts earned by controlled foreign corporations (CFCs). It provides that certain types of income of CFCs, though undistributed, must be included in the gross income of the U.S. shareholder in the year the income is earned by the CFC.

2. It is important to note that the Subpart F sections of the Code take precedence over the foreign personal holding company sections. Further, the rules contained in Subpart Fare to be applied after the income of the CFC has been adjusted to conform to U.S. income tax concepts.

3. Under certain circumstances, current earnings of a CFC may be deferred from U.S. tax if not actually distributed to the U.S. shareholder. Since domestic entities are currently taxed, it is essential that the relationships between CFCs and domestic entities be at arm’s length. Any allocations of income and deductions between the CFC and its related organizations under IRC section 482 take precedence over the application of the provisions of Subpart F.

4. The provisions of Subpart F contain many general rules, special rules, definitions, exceptions, exclusions, and limitations that require careful consideration.