Wading Toward Home

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Michael Lewis (with his better half, Tabitha Soren riding shotgun taking pictures) visits post flood New Orleans:

Immediately he had a problem: a small generator that powered one tiny window air-conditioning unit. It cooled just one small room, his office. But the thing made such a racket that, as he put it, “they could have busted down the front door and be storming inside and I wouldn’t have heard them. There could have been 20 natives outside screaming, ‘I’m gonna burn your house down,’ and I’d a never heard it.” Fearing he might nod off and be taken in his sleep, he jammed a rack filled with insurance-industry magazines against the door. (Haywood sells life insurance.) In his little office, he sat all night – as far as he knew, the last white person left in New Orleans. He tried to sleep, he said, but “I kept dreaming all night long someone was coming through the door.” He didn’t leave his air-conditioned office until first light, when he crept out and squinted through his mail slot. In that moment, he was what Uptown New Orleans had become, even before the storm: a white man, alone, peering out through a slot in search of what might kill him. All he needed was the answer.

Konkel on Madison’s Open Government

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Brenda Konkel:

When you combine all of the above with other disturbing trends I’m seeing in City Hall of removing or threatening to remove people from committees if they don’t vote how the Mayor wants them to or even worse, the Mayor recently, in his own words, “holding a gun” to the TPC to get them to vote to increase the bus fares, one begins to wonder about how open and transparent our government is and if the public opinion matters.

Hut to Hut Ride

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Washington Post:

Hut System’s seven-day, 206-mile route from Telluride to Moab, Utah, is almost completely on USDA Forest Service and Bureau of Land Management roads, unpaved but well-maintained. Each segment averages about 35 miles a day. The route is not technically difficult (there are a few glorious stretches of single track available as optional routes), but you must be in decent shape to handle more than 16,000 feet of ascents at an average altitude of 9,000 feet. (The company offers a Durango-to-Moab route that is even more challenging.

Fight Rising Home Heating Costs

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Morning Edition:

Natural gas prices have more than doubled since last year. Homeowners can expect to see, on average, a 50-percent increase in their bills this winter.
Renee Montagne talks to Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, about what homeowners can do to save on their heating bills.

Bogle’s New Book: The Battle for the Soul of Capitalism

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The Motley Fool:

Time magazine called him one of the world’s 100 most powerful and influential people. Now John Bogle weighs in on the current direction of America with his new book, The Battle for The Soul of Capitalism.
Bogle, who founded the Vanguard Group of mutual funds in 1974, was the company’s chairman until 2000. Vanguard, one of the largest fund groups in the world, holds accounts totaling more than $800 billion.

Tax Shelters: KPMG and Legal Issues

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Jonathan D. Glater takes a fascinating look at the “Wonderworld” of the Tax Law, the US DOJ and the KPMG Tax Shelter Cases:

Eight former executives of the accounting firm KPMG and one outside lawyer have been indicted on charges stemming from their role in designing and selling questionable tax shelters. Yet so far, no court has decided that the shelters were improper.
One tax shelter promoter has asked a federal judge in San Francisco to tackle that very question: the legality of the shelters. And federal prosecutors in Manhattan appear to be worried that the judge might do that. Lawyers for the government have twice argued that the judge should wait for the criminal case to conclude.

More here.

Our Tax System’s “Wonderland”

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The Wall Street Journal:

Contrary to what has been reported in the media, however, the IRS does not “ban” tax shelters. Whether a shelter qualifies as a tax deduction is, like any other point of law, adjudicated in court. But BLIPS, FLIP, OPIS and the other tax shelters in this case have never been brought before a judge, so their legality and legitimacy has never been settled as a point of law.
Never. The way tax law has usually developed in this country is that the IRS issues its point of view on a shelter, putting taxpayers who use it on notice. If the IRS then takes the taxpayer to court over the shelter, he has the chance to respond before a judge, who makes a ruling and precedents are thus established. In this case, the IRS has called in the prosecutors first.
This in itself is striking. Despite some recent legal setbacks, the IRS has an excellent track record of obtaining favorable rulings on tax shelters it dislikes. Yet no taxpayer has been brought to court over these shelters, and no judge has ruled on whether they “work,” in the jargon of the tax-shelter business. In America, last we checked, the accused are innocent until proven guilty. That gives this KPMG trial an Alice-in-Wonderland quality; the accused are on trial for promoting a fraudulent tax shelter that has never been proved to be fraudulent in the first place.
This is not the first time the Justice Department has taken this route, and recent history suggests it may have a tough road ahead. Last November, Justice froze $500 million in assets at Xelan, a charitable trust set up for doctors in California, alleging that the trust was a vehicle for tax fraud. Six weeks later, the Federal Court for the Southern District of California threw out the case, noting, among other shortcomings, that the prosecutors could not show that any court had ever ruled that Xelan’s activities were illegal under the tax code.