Miscellaneous (G)

European Bank Stress Tests

I have proposed the alternative of share economy to our present banking
and debt system. And Ann Pettifor showed how the finance system
is a parasite creating money in a leverage.
And Nassim Taleb, of "Black Swan" fame, decries debt.

The Europeans, and similarly the United States of America Government,
is having "stress tests" of the banks.
After the financial crisis, many governments go through this exercise to
prove that their financial system is sound.
Unfortunately the Europeans use rather bland assumptions for
these allegedly
worst case scenarios:

1. 
   What if the United States Dollar falls eleven percent
   
2. 
   What if theEuropean unemployment goes up a mere 0.5 per cent to 10.5 percent.
   
3. 
   if stocks drop 15 percent
   
4. 
   gdp goes down a mere 0.4 percent
   

and specifically they don't consider that even a single European country might default on its debts.

And banks include assumptions over how much revenue their "trading desks" would generate.

Source: Page C1 and C2, Wall Street Journal July 14th 2011, "Late Stress Over Tests". Volume CCLVIII Number Eleven

Arab Unemployment

I pointed out in June 12th's Miscellaneous category the unemployment among educated Arabs. The IEEE Spectrum pointed out this issue. Sixty percent of college graduates do not find jobs in their fields. Engineers still face bleek prospectsd, but fortunately Egyptian Engineers are doing better, particularly electrical engineers. ("What Young Engineers Want Out of the Revolutions" Prachi Patel, June 2011, Pages 11 and 12, Volume 48, Number Six)

The Bond Market

"James Carville, Bill Clinton's political adviser, once said he wanted to be reincarnated as the bond market so that he could 'intimidate everybody.'"

Global Markets: A Wild Ride, The Economist January 26th 2008, page 70, Volume 386 Number 8564

We are now so accustomed to governments running up billions of dollars in deficits every year that we take it as normal, even to people outside the country. "But it is insane to think that a country can run up such debts for years and not have it affect their fiscal autonomy." (Will Kymlicka, "Citienship in an era of Globalizstion: commentary on Held" Page 112 to 126, Democracy's Edges, edited by Ian Shaipro & Casiano Hacker-Cordon Cambridge University Press 1999.

Dr. Kymlicka went on to say that when Canada, which he discusses in the article, will soon be running a surplus and this will test whether it has more power.

But a share economy would deal with this appropriately--one would sell the bonds not at an interest rate but as a share of the income or tax revenue or imports or exports of the country. (I would argue that a country would be better to make it a share of imports so as toimprove its international competitiveness.)

And to be explicit, a bond holder gets a vote proportional to the amount of their share. So if two percent of the country's GDP is contracted away in lieu of interest. Then, the Currently the United States Public debt interest cost is 1.6 percent of GNP of 212 billion per year.

I propose to replace that by a share of the GDP instead of bonds. But the new debt would also include a vote--thus bond holders would together have voting power equivalent to 2% of the population.

In a share economy, the interests of the bondholders would be pretty much aligned with that of the citizens, although perhaps with a some difference in time preferences, but neither would really want to sacrifice long-term growth for a larger payment now.

In the United States, we talk about not saddling our unborn children or children with these debts. Make our bonds payable at a certain percentage of the income of all people who were of voting edge at the time the debt was contracted. The debt gets retired naturally as these individuals die off.

More on the Financial Crisis

Michael Hudson on Democracy Now stated that at the time of the financial crisis and bail out:

1. 
   There was enough money in the banks to pay the ordinary depositors. That is
   the FDIC could liquidate the banks and pay the individuals. What there
   was not money to pay is the "gambles" in derivatives and trading and exotic
   financial instruments where the losing counterparty was broke.
   
2. 
   Money is created on a keyboard, the FED did it, and the banks do it.
   This echoes my review of Ann Pettifor's book
   

patents and patent trolls

On the pay everyone what they earned theory, I suggested that each individual and business pay a tax for intellectual property. They can then allocate this to the intellectual property they consider worthwhile, whether it be a drug, the result of scientific research, music, tv/memovies and services and content agregators like google npr or MSNBC, or the reporters who actually get the news. We would select a median amount to pay by a median process. Each person can then distribute their share to whichever intellectual providers THEY feel made the most contributions, whether it be Einstein, a researcher finding a great medicine, the latest Startrek movie, or google that provides a wonderful search engine.

When we have intellectual property or a public good as private property, one has problems. The most severe is determining who has worthy intellectual property. The worst of this is patent trolls, people who get me-too patents on obvious things. One example of the disfunctional system: someone in 2000 got a patent on toast. And the featured patent Chris Crawford for setting up internet backup or software refreshening softwares. There is a patent suit about the mouse bringing up a popup when it hovers over something. 30% of all U. S. patents are for things that were already known. And eighty percent of software engineers said that the patent system hinders innovation.

Intellectual Ventures, described as a largest patent troll, brought in two billion dollars. Nortels old patent collection sold for 4.5 billion dollars.

Unfortunately, it is difficult to define "Patent Trolls." using conventional statutes. "Under some definitions, the legendary independent inventor toiling in his garage could be a troll. Under other defnitions, well-known productive companies could sometimes be deemed to be polls, if they sue over a patent which covers a product the company does not currently sell." (Mechanical Engioneering, page 35 to 36, August 2011 Volume 133 Number Eight

The patent statute punishes companies who mark their item with a patent number, but the patent has expired or has been judged invalid. If a company marks their object with a patent number, then all companies are non notice about the patent. Otherwise, the company has to send a "cease and desist letter" to the infringer.

This kind of problem happens when a manufacturer still has usable molds, except that they have a patent number on them which is no longer appropriate. Do they make a new mold, or save money on molds but risk a lawsuit under the rule that one cannot put a misleading patent number on one's products.

All these things can be handled by sortiton juries.

ExpertLens

An online method that can use both experts and individuals to determine difficult policy questions. It uses some crowdsourcing and feedback between the group's answers and seeing if people changed. This is a type of deliberative polling. (Source, Mechanical Engineering August 2011, Page 21-22. Volume 133 Number Eight.

Weird Results

Undergraduates were asked to rate five personality traits of Chief Executives of Fortune 1000 firms solely on the basis of their photograph. And found that these were correlated with the firm's profits. By the way, another set of researchers tried to look at actual chief executive personality. They found no correlation between that and how well the company did. (Perhaps more profitable firms are able to get chief executives that look competent, dominant and who have "facial maturity," i. e., not "baby-faced.")

"Face Value" The Economist Page 78, January 26th 2008, Volume 386, Number 8564.

Safety First

The proposed design for a product included a particular safety features. Marketing wanted it removed to save money. The three engineers involved inthe design and a recognize testing laboratory stated that the safety device should be included (but no standard mandated the requirement). Marketing prevailed, but Eventually all the items had to be recalled because of the fire risk. It was of course much more expensive to do the recall than to have done it right the same time.

"Serving Two Masters" Brian porter, Mechanical Engineering August 2011, Volume 133 Number Eight

Predictions

Freakonomics Radio just had a good show on Predictions. Tetlock did a twenty year study of political experts predicting political events. Most did somewhat better than chance, but no better than regression. The predictors who were dogmatic were not effective. And the predictors who might make the big prediction, say the person in 2006 or 2007 who predicted the financial meltdown, did worse on average than others.

Michael Hudson on Democracy Now pointed out tht the bond rating agencies do not want to be liable to their "opinions." Thus, those who bought AAA-rated mortgage banked securities that turned out to be "junk" could not sue the rating agency that gave it an AAA-rating Dodd-Frank made the rating agencies liable. Michael Hudson proferred that the rating agencies are threatening to downgrade the United States debt if they don't repeal these provisions of Dodd-Frank.

The Freakanomics radio programs began with a new Romanian law that made "witches" liable for their bad opinions with criminal fines and jail sentences. But Romanian politicians were not liable for their bad predictions. We need to track each predictor's predictions over a lifetime. Right now, predictors have an incentive to make wild predictions because they can trumpet that "they predicted the big one." There is nobody to day that 90% of that experts predictions were wrong. In my clawback tax and the "pay when we really know" proposals, we should only
pay people much later than the predictions and hopefully their lifetime
record will determine people's rewards.

Miscellaneous

Referendum News

This November, San Francisco will have
a referendum
might be unconstitutional as Jews and Moslems practice circumcision for
religious reasons. It also would be ineffective, as people could easily
have the procedure down outside San Francisco limits. It is sad that
referendums, a wonderful tool, are used for such silliness when Californians
have very pressing problems.

On the subject of silliness in California Referendums, Amazon is using the
referendum process so it does not have to collect sales tax, even though
it "has a physical presence in the state."

Unfortunately, it will probably end in court--apparently in.
California, budget related
laws and "laws that take effect immediately" can't be referendum-vetoed

And one borough is dealing with anti-budget referendum by a clause in its. And there is a move to discourage voting.
bylaws that says fifteen percent of the voters must vote in a referendum--otherwise the referendum is null and void

And Maryland is going to have a referendum on whether undocumented immigrants.
will be eligible for in-state tuition in the Universities

New Zealand will vote on which parliamentary voting system it will use:

1. 
   Currently they use mixed-member proportional with 70 chosen from districts
   and fifty thorugh party lists
2. 
   single transferable vote with some districts electing more than one member
   of parliament
3. 
   a conventinal system like what the United States does, where each district
   elects one represenative.
4. 
   A variation of this with single transferable
5. 
   and a variation on MMP, but where they don't try to adjust the party list members
   to ensure tghat the percentage of each party in parliament matches the total
   voting.

I discussed many of these voting options in my last Thoughtful Thursday posting.

Apparently, the voters will choose on two questions and then there will (I would be in favor of using approval.)
be another referendum in 2014.
voting here between the systems

Anti-nuclear referndum are popular world wide. Poland is planning one on shelving
building their own that were planning.

Italy voted against nuclear energy. Voters also rejected immunity for government officials, so they could
concentrate on their official duties. This is a referendum on Berlusconi who
would have to attend four separate trials.

Health Care

The new health care law allows businesses to pay two thousand dollars
instead of insuring its workers. At that point the workers move into
subsidized "exchanges." There is debate about how many businesses will But Freakonomics reports that when a day care center
take that option. And small businesses less than fifty employees pay nothing
if they choose not to pay their employee's health insurance.
moved from no fine for coming late to pick up your child to a three-dollar
fine, more parents were tardy to collect their kids. Sometimes, people
will take a minor penalty when given that option. With no penalty, moral
pressure will get them to do the "right thing" whether that be picking
up their kid on time or health insuring their workers.
In any event, my suggestion is to apply a sales tax based upon.
the business's provision of health insurance, among other factors.

Businesses would compete to be good businesses, and that includes

taking care of their workers.

elatedly, the June 28th issue of the New York Times (Andrew Pollack, page one)
reported on drugs that
extend the lives of a small percentage of prostate cancer sufferers, those
who are unfortunate enough to have the cancer goe beyond the prostrate and
for which hormone therapy has not worked. This is the question of whether
a few billion dollars is worth what appears to be a modest extension of survival.

And the Wall Street Journal just reported on several drugs that
are truly innovative as opposed to a me-too product. They include a new
drug for advanced melanoma, the first drug for lupus in over fifty years,
and improvements in hepatitis C care.

Of course, I propose that we have a fixed amount of money for drug innovations.

The drug companies would innovate to achieve the best improvements and try
to find drugs that work where no drug has worked before, as contrasted with
me-oo drugs.

Then, the money would be given to the teams and companies achieving the best
outcome, compared to current care.

Admittedly, the insurance companies are achieving this outcome already, by simply
demanding that their patients use generic drugs when such are available and
the new pharmaceutical, under patent protection, dosn't do much better.

Good Statistics, in 2006, pharmaceutical firms spent 45.8 billion on research,
17 percent of their revenue.
("Drug Makers Refill Prched Pipelines", by Jonathan D. Rockoff and Ron Winslow,
July 11 2011 BVol CCLVIII No 8, Wall Street Journal, pages A1, A12)

Another pork barrel project

Representative John L. Mica, who happens to be chairman of the House
Transportation and Infrastructure Committee, has pushed through a 61 mile
ommuter ail prject. The federal government ranks it as one of the least
cost-effective, only projected to serve 2100 people per day. Althougn in

Central Florida, it does not serve the Orlando Airport or Disney world attraction. The Federal government will pay CSX $432 million
for the use of its tracks. CSX and other contractors have contributed to
r. Mica's campaign.

All government projects should go before a sortition jury for approval.
New York TimesJune 28th, pages A1 and A3, "A Congressman's Pet Project;
a Railroad's Boon" by Eric Lipton.

Thoughtful Thursday, Construction Construction Kit Two and the ACE

Protecting minority rights can be written into a Constitution. There are two cases. The easiest case, the approve case, is when the people have a plebiscite to say something is OK with them. It is a take-it-or-leave-it-proposition. The usual case is ratifying a Constitution, or voting Yes, is OK to cede sovereignty in some matter like joining the European Union, or a giving major rights to develop the country's mineral or oil resources or building a free city. The more complicated case is choosing among several alternatives. This has been studied extensively when there are n people running for a single office, e.g. President . This means that the the plebiscite has more alternatives. Allow the people to choose one of many proposed constitutions.
I discussed this briefly in the case of finalizing a peace treaty between two peoples. I explained that Israeli demos and the Palestinian Demos together would find the best peace deal for themselves without relying on their leaders to negotiate one. Simply seeing which peace deal got the most votes
total won't work. One must find one that gets the best possible approval from both
sides.

And there could have been several health care bills presented to the people.
In such a multi-candidate election, there are many techniques of converting the votes into a "Who Won?" or a ranking among candidates--approval voting, range voting, Single-Transferrable voting, Kemeny and Dodgson Scores. But these all keep all voters alike. Assume in Ethnic Group A is 55% of the population; ethnic group B is the rest. If 98% of a want to do something B really don't like such as outlawing their religion. In a simple majority or any sophisticated multi-candidated election, a could get their way. And if 60% of the A's want to do something and only 40% of B want to do it, then it will be done. But how could we design a Constitution to ensure that issues get support among both (or all) ethnic groups. Or how could we design a Constitution to encourage the legislators to prepare bills that also get support from a wide variety of individuals?

We could simply require that no bill passes unless x percentage in y percent of the ethnic groups approve the act. Thus, in our simple example above, we could require that any bill that passes earns at least 40% of the votes of each ethnic group as well as the traditional 50% of the entire population.
And the Constitution could make a broad rule of the above sort, to pass a plebiscite, in addition to getting 50% of all votes cast, it must get at least 30% of the voters in seven out of the ten designated ethnic groups.
What about a multicandidate election or a referendum with seven choices of what bill to pass. The first is simply to do whatever we were going to with the multicandidate election, but add that whatever came out of it must also pass an approve. If the winner by Dodgson score, Approval Voting or whatever method the Constitution selects, did not meet the approve criteria, where to go the next one in the ranking. See if that meets the approve criteria, otherwise, go on to the third one in the ranking. Etc.
The other option is more gentle, it adjusts or subtracts from each voting total by a deviation factor. A bill that gets the same percentage support from each ethnic group has no adjustment factor downward. A bill that gets all its support from a single ethnic group, even a majority, would have the highest adjustment factor downward.
The constitution specifies the adjustment factor.
We describe this in terms of Wally Smith's COAF system. Recall that this means that each voter gives a number for each candidate. The most general is range voting, where each candidate gives any number from one to ten, let's say. The least general, and arguably the most problematic, is the basic plurality system. Each voter gets to vote once for only one candidate. The winner is the one with the most votes.
Assume our votes came as follows in a three way election. X,Y and Z might represent candidates for the president. Or they may be one of three alternatives in a referendum.

Ethnic Group	X	Y	Z	Percentage
A	3	2	1	15
B	3	6	1	15
C	15	18	25	70
COAF SUM	2	26	27

(The percentage of the population of the ethnic group is not used in the calculation, it simply explains why the vote totals are so much higher for ethnic group C.)
The next step in calculating the ethnic group by candidate is easily done. We simply find what percentage of each ethnic group voted for each canddiate. We then average these

Ethnic Group	X	Y	Z	Percentage
a	50.00%	33.33%	16.67%
b	30.00%	60.00%	10.00%
c	25.86%	31.03%	43.10%
Average	35.29%	41.46%	23.26%

The next step is computing the deviation from the average for that candidate for each of the boxes. This gives us the the three data rows in the table below.

Ethnic Group	X	Y	Z
A	14.71%	-8.12%	-6.59%
B	-5.29%	18.54%	-13.26%
C	-9.43%	-10.42%	19.85%
Squares	216.5	66.0	43.4

Then, we sum the squares of those deviations, This a classic case of "sum of squares" or "norm two." Assume the constitution specifies an adjustment factor of 0.02. The new scores for the choices X, Y and Z. This gives us

	X	Y	z
Adjusted Score	14.3	15.6	14.7

Y won!. Thus, observe that even though Z won the popular election with 27 to 26 votes, that candidate was somewhat more skewed than y, turning the election over to Y after the adjustment factor.

nth smallest voting

There is another technique, nth smallest voting. The Constiution specifies a number nth smallest percentage is the winner. I suggested this in my first Thoughtful Thursday on the Constitution Construction Kit.
Assume, that there are seven provinces, which I call a, b, c, d, e, f and g. And assume there are three choices or candidates: X, Y and Z. And assume the Constituiton specified n = 3, or the third smallest vote,by province, determines the winning candidate. The table below states in the election of how many voted for each choice. (We allow each voter to vote for more than one alternative, like in approval voting, so the percentages don't add up to 100 per cent.)
The third smallest in each column is marked with a -.

	X	Y	z
a	38	47	43
b	12	42	42
c	13	32 -	40
d	35 -	27	34
e	60	35	37 -
f	20	28	32
g	50	50	50

Thus, the winner would be Z as its 37 for the third smallest is higher than that for other two candidates (35 and 32, respectively).

Electoral systems

The ACE Electoral District discusses many country's experiences and many statistics on how the countries choose the systems. It is a goldmine of information and analysis and suggestions for those making the decisions about constructing a Constitution. I see the fundamental division between proportional systems and geographic districts. The United States uses the latter. Each House Representative is elected from a contiguous, if not compact, district. And each voter gets to choose only one representative.
114 have districts and 35% use PR-type systems.
And twenty-two countries have some representatives being elected from districts and other representatives being elected at large or via proportional representation. A nice twist is to deal with the "wasted vote" problem. The proportional votes are distributed so as ensure that the percentage for each party matches the percentage they got fromt he whole country. E. G. Assume, there are 150 seats in parliament and 100 districts. And assume there are two parties: A and B. The top winner in each district gets elected, just like the United States. However, assume that because of the way each district votes, only 55 members of party A get elected from  the districts, and 45 of the districts B. This parallel system would then take the top 35 from the A list and 15 from the Party B-provided list. This means that the parliament would have ninety members from party A and 60 from party B--this gives the proportionality of the list system but allows each person to have a represenative for their geographical district.
And there is a really neat variation of the proportional system. The voters can rearrange the list from the parties, or just vote for a particular party.
And countries can and do use the many techniques of dealing with multiple candidate elections. Thus, if there are three people running in a district, they can simply have the one with the most votes wins, have a run off between the ones with the top two vote counts, or use one of the Hare-techniques.
And the Hare techniques can be extended to multi-member elections. Assume there are three members in a district. Those candidates getting 33% or more are chosen. Then, the bottom most candidate's second choice gets added to the total for each candidate. We then see if any of the remaining candidates got 33% votes. If not, the second choice of the second-lowest vote getter gets added to the totals. This process can continue until all the members are selected.

Minority Protection

The Ace Electoral System points out that several countries designate certain seats for specific ethnic groups including Jordan, India, Pakistan. (Also Iran reserves seats for specific groups including Zorastrians, Jews, Assyrian Christians and Armenian Christians. And of course several countries simply overrepresent certain regions in the legislature. This, of course, is done to favor ethnic groups tending to live in the area. And many nations have special arrangements for women.

Referendum News

British Columbia is referendum voting on a different way of consumption, a "Harmonized Sales Tax) versus
the older provincial sales tax. Of course, this is a take-it or leave-it proposition.
Why can't the people vote for the tax rate (median) and choose which items are to be subject to the tax and at which rate.

The Seattle citizens are deciding part of the major tunnel
project. Sadly, it give the people an opportunity to simply not build the tunnel. They only vote on part of the document or agreement authorizing the project.

Miscellaneous

Obviously, I dropped the ball on this blog. I anticipate preparing
five or six more "Thoughtful Thursdays" over the next year. And sending out
more of these miscellaneous postings.
I have been focusing my
writing energies this semester on the complete Requirements Document for the
Constitutional Construction Kit
The next Thoughtful Thursday is from that effort.

Hack for Egypt

The Hack For Egypt , as part of Cloud Camp 2011, has proposed
a "crowdsourcing" project for the new Egyptian Constitution.
They are looking in the future at a crowdsourcing for the Bill of Rights in
that Constitution.
This is a much less ambitious proposal than the one I am working on. one needs
a simulation component where the Egyptians.
The Egyptian unemployment
is concentrated among the young, as it is in
many other countries including the Arab world.
And 50 percent of educated of
men
and ninety percent of young female
college graduates are unemployed.
So there is a resource of time to work on the Constitution.

Climate Change

I talked about using sortition-based consumption taxes to address
climate change. The Wall Street Journal
had a special issue on Energy and the first article, which frankly
is an editorial, on Climate Change. They say that emissions cuts,
raising energy costs with taxes, cuts economic
activity. Countries do not want
to do this. By putting the tax at the consumption side, this attacks
imports, and tends to get people to consume in ways
that are not energy-intensive.
They may not buy a computer-they may use an internet cafe.
Imports get taxed based on the embodied energy.
They may buy a smaller and more energy efficient house, use public transportation instead of a car.
The article suggest that governments should push for innovations that produce
less costly energy.
Wall Street Journal, November 29th 2010, Page R1

United States Health Insurance Mandate

As I assume all readers of this blog know, the United States has
mandated that all people purchase health insurance. However, there
is some question whether that is constitutional. The famous "necessary
and proper" clause of the United States Constitution gives the
United States Congress the power to make laws "necessary and proper" to
exercising its enumerated powers.
Does mandating that everyone buy health insurance fall within the
"necessary and proper" clause? One District Court has said no!
And it appears that a Florida judge will rule the same way.
However two lower courts said yes, they did.
I made a proposal that would resolve this. Make individuals tax rate
dependent upon their financial responsibility. We already have deductions
for contributing to IRA and for some education items. Individuals who are
purchasing disability insurance, health insurance, education should pay
lower taxes than those who are not.
There are people who cannot be expected
to have money for
health insurance, the single mom putting
herself through Nursing School. However, those who have money
for a flat panel TV or internet, should spend or invest
it some other way such as health insurance.
The New England Journal of Medicine article,
"Can Congress Make you Buy Broccoli? and Why
That's a Hard Question" by Wendy K. Mariner J.D. M.P.H.,
George J. Annas, J.D. M. P. H. and Leonard H. Glantz J.D.
said that Congress had two goals in passing the health reform
it did:

1. 
   provide a way for all Americans to gain health care
2. 
   preserve the private, commercial health industry

Obviously, it is not reasonable to require the health insurance companies to insure anyone regardless of sick they are and let people wait until they are in the proverbial ambulance to buy health insurance.
When a person wants insurance and has a "preexisting condition," we need to distinguish between those who simply waited until they got sick and those that had good reasons for not purchasing health insurance. A bureaucracy cannot. A sortition jury can.
Judge Vinson asked "If the government decides that everyone needs to eat broccoli, can Congress require everyone to buy Brocolli." If Congress chose to expand Medicare or Medicaid to cover everyone, they could have. Congress could then raise everyone's taxes to do so.
I believe at tax time, everyone should compete to show how responsible they are, buying and eating their broccolli, and saving, whether for retirement or their health needs.

Bronte Capital Management Blog

I met Mr. Hammond on the plane to New York City, and then by luck as I walking near 42nd Street in Manhattan. The first article I turned to, was the one on the Australian financial system. There is concern about one of the strategic funds in Australia. More importantly, he discusses the risks with privatized social security of fraud.
There are many other articles there, often very insightfully showing the numbers in investments and securities, from Chinese bus adverts and alcohol sales to Australian Real Estate near the iron ore mining boon.

Benefits Schemes

A gentleman who won two million dollars from the lottery is still collecting food stamps. The food stamp program uses income and lottery winnings is not considered income. State of Michigan is talking about getting a special waiver from the Federal government. (Ron French, Detroit News)
This is why all benefit recipients should go before a sortition jury to eliminate those who don't deserve them, even though they may qualify under the rules.

State Income Taxes

Wall Street Journal, Volume CCLVII Number 70, Page C1 and C2, March 26th to 27th, "The Price of Taxing the Rich" Robert Frank
Million dollar a year incomes pay 45 percent of California's Income Tax receipts. Similarly percentages for Connecticut and New Jersey. The problem with this is that these individuals incomes are erratic. Of course, when the market is up, these people "take their profits." And they have to pay their taxes on the capital gains, and tax revenue goes up. (We saw that when the federal government was briefly in surplus around the turn of this century. But some of this was due to "hundreds of millions in unanticipated tax revenues from taxes on capital gains.") In one year, the top one percent of the taxpayer's income dropped sixteen percent. In 2006, California anticipated a six billion change, either direction, from year to year on a regular basis. In the dot com bust, revenue from capital gains changed from seventeen billion to five billion.
Of course, states can protect themselves with "rainy day" funds. But state governments, like people in general, do not have the discipline to do this.
This blog has long called for salaries and other expenses to be a share of their revenue. Thus States would make goverment salaries and pensions a percentage of revenue. (Note that under the full share economy, government workers and retirees would set their mortgage, rent, etc. as a percentage of this amount. Thus, if this varied fifteen percent a year, they would not be between this decrease and an expense that does not change. Their discretionary income for day-to-day purchases would go up or down by the same percentage as the state's revenues.) And their "borrowing" would be the same way. Thus, rather than selling a three percent bond due in thirty years, they would sell a perpetual bond that paid out nnn percent of the revenue. I earlier called for a "clawback" tax to deal with, among other things, those earning high pensions.
A consumption-based sortition "badness tax" could have firms competing to avoid the taxes necessary to fund the state government.
And with individuals having a share of the income of the companies in which
they invest, there would be less variability of income. Individuals
earn money as the company does, not by selling the shares.

Referendum on how to elect United Kingdom House of Commons

The United Kingdom had the referendum on "alternative vote" system for its House of Commons (parliamentary) elections. They voted resoundingly no. If passed, there would be multi-member districts, with alternative voting, or ranked ballot, to choose who would represent each district. The referendum vote was part of the agreement to form a coalition between the Conservatives and Liberal Democrats.

There was discussion of having a threshold that fourty percent turn out would be needed to pass the referendum.

The Green Party of England Wales is in favor of a proportional vote. They believed that the alternative vote system in the referendum would be a step in the right direction. And this illustrates that we should have several possibilities in a referendum. In this case that would include the Alternative Vote proposed, Proportional Voting, and the Status Quo.

"At a March 2011 Voting Power in Practice annual workshop, held at the London School of Economics (LSE), 22 voting theory specialists voted to select the "best voting procedure" to elect a candidate from a selection of three or more. First past the post received no votes, compared to 10 for AV, although another system, Approval Voting (not on offer in this referendum), received 15 votes.[106]

By the way the Yes campaign outspent the No campaign three to two.

Iceland Referendum rejects bailout repayment

Iceland rejected a second time a bailout in a referendum. I mentioned in this blog that Iceland had a referendum to repay bail out, and in fact rejected a previous offer, but that was part of the negotiation process. The Icelandic spoke twice no.