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Nov 16 2017

Suckers

Being rich doesn’t necessarily make you very bright. It’s well known in the Art community that Donald Trump’s Renoir is a forgery, and not a particularly good one.

Some one, or some institution, has just paid $450 Million for a Leonardo da Vinci that is likely just as fake.

A ‘Leonardo’ sells for $450 million. But what did the buyer actually get?
By Philip Kennicott, Washington Post
November 16, 2017

Before the sale of a painting that some scholars and a very assertive auction house believe is by Leonardo da Vinci, the debate was all about authenticity. Was this painted panel, known as “Salvator Mundi,” or “Savior of the World,” an actual Leonardo?

It had been so aggressively cleaned and over-painted that it had long been assumed to be a copy of a Leonardo by another, far lesser-known artist. But after extensive restoration it looked sufficiently like a Leonardo that the auction house Christie’s secured a $100 million bid to begin Wednesday’s auction. In the end, it went for $450.3 million, the highest price ever paid at auction for a work of art.

So now the question is, will that astonishing amount of money banish doubts about its authenticity? Logically, one should say: Of course not. Although some serious scholars believe that the painting, which depicts Jesus holding a transparent crystal orb in his left hand, can be attributed to the Renaissance master, the restoration was so thoroughgoing that it might be safer to say: There is possibly some Leonardo in there.

I don’t think it’s the real deal at all and the reason is because the image in the orb does not reflect the laws of optics and Leonardo is as well known for his genius as a scientist and engineer as he is for his art. He knew it would appear upside down and reversed as well as anyone and paid a great deal of attention to such details in works of his with unquestioned provenance and authenticity. He was also a prideful guy and it’s doubtful he would allow such a glaring error to stand uncorrected. No amount of carbon dating and pigment analysis will convince me otherwise.

But that’s not my main point. I came across this interesting piece from Ian Welsh today that also notes the sale.

The “Missing” Inflation Shows Up As Hyper-Inflation
by Ian Welsh
2017 November 16

In things that rich people buy.

$450 million is damn near half a billion, the ability to blow that amount of money on a single painting is absolutely crazy, no matter who the painting is by. It could not have happened even 20 years ago, and did not happen even ten years ago.

The rich are floating on an ocean of money, and they have nothing to spend it on that really matters, so it’s going to 3rd homes, real-estate speculation and conspicuous luxury consumption (which is what this is.)

As an aside, one of the ways to deal with off-shore tax haven money is for the major economies to not allow it back into their countries without high taxation. It’s great that you have a few billion in an offshore haven, but you can’t spend it there. If you want to bring it back or use it as collateral then just make them pay taxes on it. 90% is a good rate.

What, they won’t bring it home at that level? Then fuck’em. You can’t buy anything that matters in most tax havens, and no one wants to live there. Let it rot, uselessly, there.

Throwing $1.5 Trillion at Plutocrats and Multinational Mega-Corporations is not going to do anything except produce hyperinflation in the luxury goods market.

CEOs raise doubts about Gary Cohn’s top argument for cutting the corporate tax rate right in front of him
by Tucker Higgins, CNBC
15 Nov 2017

(A)t a gathering of chief executives hosted yesterday by the Wall Street Journal, business leaders called into question one of Cohn’s top arguments for slashing the corporate tax rate to 20 percent.

When one of the Journal’s editors asked the crowd if they planned to up their capital expenditure if the GOP’s tax plan went through, only a smattering raised their hands.

“Why aren’t the other hands up?” Cohn asked.

There’s little evidence to support the claim that tax breaks boost employment numbers.

A National Bureau of Economic Research study published in 2014 found “little evidence that corporate tax cuts boost economic activity” unless implemented in a recession.

Far from being short on cash, corporations are sitting on record amounts.

Dean Baker suggests that if one wishes to tinker with Corporate Taxes then allow the Government to accept non-voting equity stakes and participate in all the dividends, buy backs, and sell outs.

I propose instead that Tax rates be set so high on financial transactions that in order to experience meaningful returns on capital, money must be invested in production. You should have to actually make something.