He got a few bettors to ante up.  As a result, Yellow Kid Weil could be considered one of the first men to bet on the weather.

Weil’s story as a conman, who swindled as much as $8 million from his targets, has been well-documented.  Among his most famous scams was swindling the Italian dictator Benito Mussolini out of $2 million, staging fake prize fights, selling “talking” dogs, and selling oil-rich land that he did not own. His audacity was legendary.  He once claimed to have defrauded Andrew Mellon’s brother of $500,000 in a scheme involving a silver mine in Colorado.

The spirit of “Yellow Kid” Weil is alive today.  He returns in the form of prediction markets, a mass-betting scheme disguised as a computer-driven, large-participant pool of bets on any future event, human-made or natural.

The big question is: The future of what?  It could be bets on which raindrop will reach the bottom of a window, an election in Alaska, when Lady Gaga’s next album will be released, who will score the first penalty shot in a Manchester City soccer game this weekend, or if Trump will be impeached by Christmas.

This could all be considered a joke, except that financial engineering, like everything else in late-stage capitalism, is at the point where it has to monetize everything.  This is occurring because of faster computers, algorithms that appear to require applications devoid of any societal purpose, and the need for investment firms to generate new commissions and trading sources.

This is all fueled by a population that has not seen real wage growth adjusted for inflation since 2015.  Wage stagnation, accompanied by rising inflation and the constant push of advertising to buy more, has created a hamster-wheel class of workers.  These workers are not merely minimum-wage workers but highly paid executives who seem to spend as much as they earn on the old conspicuous-consumption bangles that were bought by the Robber Barons 150 years ago.

So, with the combustible mix of needy bettors, unvetted prediction firms, and greedy investment firms, the prediction markets have sought legitimacy by posing as an “asset class” in need of a futures market to list their trades.

This shroud of legitimacy brings in the Commodity Futures Trading Commission (CFTC).  This is an interesting development for several reasons: like any federal agency, the CFTC seeks to regulate more markets, even if they serve no economic purpose.  Second, the Trump-Libertarian CFTC is essentially anti-regulation, even though they claim they are “regulators.”

The CFTC would also lend legitimacy to prediction market firms.  These betting fronts can claim they are being “regulated,” but that does not alter their basic function as betting parlors.

In the latest development, the Trump-libertarian appointed CFTC chairman Michael Selig said, “The CFTC will no longer sit idly by while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products.”

This is predictable fed talk from a libertarian who would call judicial overreach about supervising air traffic or food safety standards.  Selig should also explain what he means by “these exciting new products.”

Selig also said the prediction markets should be considered “commodity derivatives.”  This is an interesting argument, since many of the categories listed on Poly Markets’ website don’t use examples of hard commodities.  As their website says, users can bet on “Will TikTok be banned in the U.S. this year?” or “Whether the Miami Heat will win the 2025 NBA Finals?”

Selig must have a creative interpretation of how TikTok meets the definition of a “commodity derivative.”

The Technology Behind Prediction Markets

A decentralized prediction market (DPM) used smart contracts and oracles (Peterson et al., 2019) that managed event outcomes through secure blockchain technology. This can be everything from the results of a prize fight to weather conditions in California in a month. DPMs create “smart contracts” where the terms of the bet or contract are directly encoded. When the predefined real-world conditions are met, and the verified external data is used, the self-executing contract notifies bettors of the result.  The blockchain and the real-world outcomes are connected by oracles. When the conditions for a payoff to participants are met, the holders of the winning tokens are notified and paid.

Proponents of DPMs cite the same benefits of blockchain for crypto as they do for DPMs: transparency, lower costs, and impartial odds makers.

For anyone familiar with the exchange-traded futures, the prediction market meets Webster’s definition of gambling.

There are no fundamentals to driving prices, no economic hedging need, and nothing tangible driving prices.  Stock index futures are based on a basket of underlying stocks.  The prices of live cattle futures are based on a pen of cattle in a feedlot in the Midwest.  The prices of West Texas Intermediate Crude futures are based on extensive data about supply, demand, refinery capacity, tanker traffic, Arab oil prices, weather conditions, pipeline transport, and storage.  None of this information is available for TikTok or the LA Lakers.

To gain additional legitimacy, the CFTC’s Selig argues that all will be fine because the prediction markets will be traded on an exchange.  This is window dressing.  The fact that prices will be disseminated by an exchange will not make the underlying bet product legitimate.

However, it could reassure bettors that an exchange will supervise and regulate the listed trades.  However, the nation’s casinos now serve this same function.  Casinos pay out millions daily to chip holders and card game winners, with very few disputes.  Aside from Trump’s Taj Mahal Casino, few casinos have ever gone bankrupt.

Why is the CFTC Involved with Prediction Markets? 

As a federal agency, the CFTC is always seeking new markets to regulate, given the right circumstances. However, their interest may be tied to the Project 2025 plan to destabilize financial markets through crypto, prediction markets, and private equity.  This would also include any other financial-engineering-enabled scheme to monetize assets for the benefit of the large investment firms controlling the action.

Crypto and prediction markets are the latest iteration.  But there’s more. The latest development in private equity is to monetize medical malpractice lawsuits by assembling a portfolio of claims and then wait for the best settlement that pays off investors.  In 2024, the average malpractice claim was $56 million.

Dr. Caleb Masterson said this new private equity trend will push doctors out of specialty practices. These include emergency room medicine, obstetrics and gynecology, and neurosurgery. He said doctors will also have to pay higher malpractice premiums. Private equity firms, such as Bain and Company, are positioning these malpractice portfolios as a “non-correlating asset” to attract institutional investors.

Private equity firms, like prediction market firms and crypto firms, have yet to demonstrate a positive societal function.  Futures markets in the US date to 1848, when the Chicago Board of Trade began trading forward, or “to arrive,” contracts for grain.  Margin and delivery procedures were established in 1865.  Within 50 years, more futures exchanges were established in Chicago, New Orleans, New York, Minneapolis, and Philadelphia to set prices for practical hard commodities such as grain, cotton, coffee, and sugar.

Transparent pricing helped reduce price risk for producers and manufacturers through hedging, while also improving cash management.

Futures markets have advanced significantly, now including equity indexes that provide many of the same benefits to portfolio managers and investors.

A Bleak Future For Prediction Markets?

Selig’s claim that prediction markets should be treated as swaps is overstated, as swaps are used to manage cash flows.  If a bettor takes a position on when TikTok will be sold, where’s the cash flow?  What is the risk that is being managed?  Who would suffer if TikTok were not sold?

Prediction markets have more in common with cryptocurrencies than with traditional markets. Both are desperately seeking a legitimate purpose beyond price appreciation and the pursuit of fast profits.  Crypto is not being used as an everyday medium of exchange.  Its main purpose is to weaken the Federal Reserve, avoid taxes, trick unsuspecting people, and support illegal trade.

The big investment firms and the financial media treat crypto as a real investment. They have forgotten basic security analysis. Ben Graham and David Dodd explained these ideas in their classic 1934 textbook, “Security Analysis.” This book established procedures for determining and analyzing a company’s profitability, margins, intrinsic value, earnings, cash flows, PE ratios, fundamental valuations, and premium discount calculations from the stock price.  In stark contrast, determining the prices of crypto and prediction markets relies on animal instincts and social media rumors.

The forces driving financial engineering and private equity are out of control.  No moral or ethical standards are evident in this investment segment.

Selling malpractice settlements as a non-correlated asset to institutional investors is a new low for private equity firms.  Their next investment area will pool trades on infant mortality in India and traffic deaths in California.

With Trump’s CFTC pushing to legitimize the prediction markets, it will essentially bring gambling to the entire nation.  Whether in a casino or on an exchange, prediction markets do not serve any societal benefit.  The same is true for malpractice-suit portfolios that are part of private equity’s search for new asset classes, and for the social media rumor mills that drive Bitcoin. All this is only a measure of the decadence of the nation’s investment class.

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Private equity is one of the greediest forms of unregulated capitalism.  It deceives the public, misleads investors, and bribes politicians and regulators at the state, local, and national levels.  And that’s just for starters.

Private equity can harm businesses, restrict market access for individual investors, and, in the real estate market, distort the housing market, making it unaffordable for average people to buy a home.

This is old news.  However, like everything else that involves money and politics, private equity takes a long-term view and is not distorting or exploiting markets.

Many homeowners are receiving unsolicited phone calls from unidentified individuals asking if their homes are for sale.  They primarily come from private equity firms that offer cash and purchase homes on an as-is basis.  They will then modestly fix it up, list the house, or rent it at a high market value to recoup their investments.  They do this thousands of times a month, and soon homes are removed from the realm of local real estate firms and added to a private equity portfolio on a spreadsheet.

This decreases the available supply, raises prices and rents, and is another reason why housing is out of reach for so many buyers.

Private equity also distorts the stock market.  When a private equity firm acquires a public company and takes it private, it is delisted from the stock exchanges, and its financial information becomes inaccessible to the public.

What the public does see when this happens is that the operation of the firm acquired by private equity decreases. In restaurants, portion sizes shrink, ingredients are cut, staff size is reduced, service levels decline, and then consumers realize the restaurant is no longer appealing.  When this happens, lenders get stuck with significant debt, and investors suffer a loss.  Only the managers of the private equity firms make money, often from fees and other charges.

This is what happened to Payless ShoeSource, Sears, Red Lobster, Walgreens, Kmart, PetSmart, Party City, and Staples in the consumer sector.  Private equity has also expanded into the medical technology, healthcare, and even veterinary clinics, preschools, and funeral homes.

The best description of how they work, aside from the explanation given by Senator Elizabeth Warren in the attached video, is to watch the episodes of The Sopranos when the gang takes over a sporting goods store from its owner, who has huge gambling debts.  The owner first mortgages his house.  Then stops paying on it.

Soon, the episode shows the gang ordering massive amounts of sporting goods on credit, borrowing from anyone who does business with the store.  The unpaid bills pile up. One of the last scenes shows the owner sleeping on the store’s floor in a camping tent, with the store nearly empty.  In short, the Sopranos looted the business, victimized the owner and his employees, and the gang keeps all the money. As for the store’s owner, he loses everything.

That’s the private equity business model.

Corrupt Politicians Let Private Equity Into 401(k)s

Since the government accepts campaign contributions (bribes) from big business, private equity firms have given cash to allow their private equity funds to be included in the 401(k) plans of average, unsophisticated workers.

A recent decision by the US Department of Labor and the Biden administration to allow private equity funds into 401(k) plans is a significant benefit to major Wall Street investment companies, which will now enable investors to be exposed to high-fee, high-risk private equity funds.

In the latest setback for investors, the Biden administration’s Department of Labor (DOL) has reversed its earlier proposal to oppose the extension of private equity investment into 401(k) plans, now supporting it.

Biden earlier rejected this idea of allowing private equity into 401(k)s when Donald Trump proposed.  At that time, “Biden’s campaign criticized the Trump move,  that Biden “staunchly opposes regulatory changes that will lead to skyrocketing fees and diminished retirement security for savers. This regulatory action is another example of President Trump putting the interests of Wall Street ahead of American workers and families.”

But Biden was a weak leader, a corporate Democrat, with a massive ego.  He was ideal for a private equity attack.

The Fee Scam

Private equity, like banks and credit card companies, thrives on fees.

How much private fee income are we talking about?

One expert cited in the Daily Poster estimated these fees participants will pay to be near $13.7 million annually. To obtain the DOL’s approval, the Biden administration is rewarding the private equity industry for its significant campaign contributions. These came from a few private equity funds, but the largest was from the Blackstone Group, whose president, Steve Schwartzman, was a major donor to Trump and Biden.  Blackstone is the largest private equity firm in the US.

As noted in this article on this site, Bloomberg News found that Schwartzman, “the private equity mogul single-handedly accounts for the vast bulk of the reported contributions toward Trump’s re-election effort over the past 18 months from people associated with the 31 banks and investment firms that dominate the U.S. financial industry.”  His contributions alone amounted to $3.7 million of the $4.8 million from this group of private equity firms and banks.

As for Biden, the Daily Poster said, “Biden’s election bid was boosted by $350,000 worth of donations from top Blackstone executives to a super PAC backing his campaign. One of his top 2020 fundraisers was Jon Gray, the heir apparent to Blackstone CEO Steve Schwarzman (in the photo with Trump).

In all, Biden’s campaign raked in more than $3.8 million from donors at private equity and investment firms, according to OpenSecrets.”  Now, it appears that the Biden administration has appeased the private equity industry.

Revoke the Carried Interest Tax Loophole

Like other predatory capitalists in hedge funds and real estate development, not paying taxes is a huge part of their profitable business model.

Carried interest is an accounting provision that allows any profits earned by the general partner of a private investment fund to be treated as a long-term capital gain. These gains are taxed at a lower rate than ordinary income.It is also worth noting that this tax loophole was never enacted as a law. It was part of a revenue action issued by the Internal Revenue Service in 1993 and originally applied to real estate transactions.

According to Slate, the IRS tried to address when a piece of property was sold or traded in the future and determine how it would be taxed.  The IRS refers to this as a “realization event,” and if the transaction occurred more than a year after the real estate was acquired, the tax would be considered a long-term capital gain.  When carried interest was developed, hedge funds were not popular.

In this 2015 article posted here, Obama, like Biden, made campaign promises to close this tax loophole that favors private equity funds, hedge funds, and real estate developers. This carried interest loophole allows these hybrid financial firms to pay ordinary income tax rates on their compensation at the lower rate of 20%, as opposed to the higher rate associated with capital gains.Obama’s campaign pledge on tax reform was to close this loophole that the Obama administration said would raise $1 trillion over the next 10 years.

But Obama was never a reformer, a progressive, or a take-charge leader, and his administration eventually caved to the big donors.  Like the Clintons and Biden, Obama was a corporate Democrat, closer to a conservative Republican than the prominent reformer he pretended to be.

Taking Action at the Local Level

The best way to prevent the contagion of private equity is at the state and local level.  Petitions to local city councils, county boards, and state legislatures to avoid private equity takeovers would help maintain jobs, keep local businesses local, preserve the available housing supply for average buyers, and curb greedy firms from ravaging the local economy.

Eliminating the carried interest tax loophole would be possible with new Democratic and progressive leadership that does not accept bribes from private equity and hedge funds.  Without these reforms, the current “affordability crisis,” which is another way of talking about income redistribution and predatory capitalism, will ensure that the nation is run by corporations for generations to come.

Since Trump wants to create America’s first oligopoly, here ARE the ETFs that would allow average people to cash in on the unprecedented corruption of the federal government

Since the financial services industry is always looking for new products, here is a suggestion for some Trump Oligarch ETFs (Exchange Traded Funds) that should attract average investors.

The Trump Oligarch ETF is based on underlying companies whose owners or top shareholders donated a minimum of $1 million to Trump’s presidential campaign.  In exchange for these donations, any astute multimillionaire would expect favorable treatment from the federal government for donating to Trump.

In return, the billionaire owners of these corporations should receive favorable regulatory treatments, tax breaks, immunity from antitrust investigations, more federal contracts, non-prosecution of labor, workplace OSHA, and environmental violations.

According to Forbes, “26 billionaires have already given more than $1 million apiece to pro-Trump PACs and committees.”  However, ten billionaires have privately held companies, so they cannot participate in the ETFs.

But that still leaves 16 companies for the ETF. The underlying companies’ ETFs are diversified in the following industries: casinos, finance, and oil and gas.

Even better, since Trump has a verified and solid record of bankrupting companies and making them worthless, the Trump Oligarch ETF would be managed by outside investment professionals, so it has an exponentially better chance of succeeding than if Trump had anything to do with it.  Plus, in the Trump administration, “greed is good,” and donors to Trump are well-known as being some of the greediest people in the Top 1% of Americans. That’s why they should benefit from the looting and receive the spoils of Trump’s presidency.

Now, as Trump reshapes America into an unregulated oligopoly as part of what the Marxists call “monopoly capitalism,” this last stage of capitalism will look like the Sodom and Gemorrah of financial engineering and elevate greed into the Republican Party’s new Golden Calf. Looking ahead, there will not be any safeguards against mergers and antitrust. This leaves entire industries to be consolidated as part of monopoly capitalism. 

As Matt Stoller has written in his newsletter, Big, “look for mergers in Comcast buying Charter, Exxon merging with Chevron, banks consolidating, and Amazon and Google once again going out and making large acquisitions. “the blatantly illegal LIV Golf-PGA Tour deal is going to move through, as long as Elon Musk is involved somehow.”  Others, such as Citigroup CEO Jane Fraser, said M&A activity will increase after Trump takes office. 

So what are these companies and their billionaire owners or top shareholders whose companies will benefit from the Trump spoils system?  Here is the list:

The Oligarch ETF Component Companies

Las Vegas Sands (NYSE: LVS).  Miriam Adelson, the widow of casino magnate Sheldon Adelson, donated about $200 million to Trump in his presidential bids in 2024 and 2020.  Miriam Edelson, a physician, now owns a majority stake in the LVS and the NBA’s Dallas Mavericks.  Adelson wants to convince Trump that Israel should annex the West Bank and Gazza Strip, which it looks like the Israelis have now begun.  Adelson’s contributions, along with those of the Republican Jewish Coalition, were very divisive for the American Jewish community, of which about 70% supported Kamala Harris. Trump owes Adelson, and she should be able to get whatever she asks for within her area of expertise, such as an ambassadorship.

World Wrestling Entertainment (“TKO”) donated $16 million to Trump groups, mainly through Linda McMahon (the wife of Vince McMahon).  Linda McMahon is a Trump loyalist. Forbes reported that she  “has been involved in politics for years, running unsuccessfully for Senate in Connecticut in 2010 and 2012 and then serving as head of the Small Business Administration under Trump. She’s still close to the center of the MAGA orbit, chairing the pro-Trump nonprofit America First Policy Institute, serving on the board of Truth Social’s parent company, Trump Media and Technology Group, and contributing more than $15 million to Trump’s PACs.” If you ever wondered why Trump rallies looked like professional wrestling spectacles, complete with the sideshow of cheap performers, McMahon provided the model for these political carnivals.   

Energy Transfer Energy Transfer L.P. (NYSE: E.T.).  Kelcy Warren’s company is best known for the highly controversial Dakota Access Pipeline, which Trump helped expedite in one of his first acts in office.  Warren donated $5.8 million to Trump.

Artificial Intelligence. AI is considered the most important technical advance since the invention of the printing press around 1440.  AI has several ways for investors to access this market, including via the chip side, generative AI, AI data and infrastructure, AI software, and AI services. Among the AI ETFs to look at are the iShares Future AI & Tech ETF, the iShares Innovation and Tech Active ETF, Xtrackers Artificial Intelligence and Big Data ETF (XAIX), Global X Artificial Intelligence & Technology ETF (AIQ), Global X Robotics & Artificial Intelligence ETF (BOTZ), Global X Data Center & Digital Infrastructure ETF (DTCR), and the Invesco AI and Next Gen Software ETF (IGPT).

Major Bank ETFs.  Global banks have the best intelligence on Trump’s tariffs, deals, and favorites but face interest rates and political risk.  If you want global bank exposure, look at these ETFs: Invesco KBW Bank ETF (KBWB), the SPDR S&P Bank ETF (KBE), and the First Trust Nasdaq Bank ETF (FTXO). iShares US Financial Services ETF (IYG): Tracks U.S. financial services companies, iShares U.S. Regional Banks ETF (IAT): Tracks U.S. regional banks, Financial Select Sector SPDR (XLF): Tracks central U.S. money center banks, including Bank of America, JPMorgan Chase, and Wells Fargo, Roundhill Big Bank ETF (BIGB): Tracks a handful of big-bank stocks, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo 

Intercontinental Exchange (NYSE-ICE).  Major Trump donors Jeff Sprecher and his wife, former Georgia Republican Senator Kelly Loeffler, donated about $5 million to Trump.  As noted on this site, Sprecher and Loeffler are the most corrupt public couple in public life. 

A series of articles on this site explain that Sprecher and his wife, a sitting Senator, were involved in an insider trading scandal as NYSE chairman, but they got away with it because of an outdated SEC rule. The fact that they got away with it must have impressed Trump, who can now do the same thing on a much larger scale.

Even better for Trump, Loeffler was involved in the Georgia vote-stealing scheme that failed to materialize.  That alone would prove her loyalty to Trump.  As expected, neither Loeffler nor Sprecher were ever prosecuted by the law.  This pattern will be much more evident in the new Trump administration.

Loeffler and the other senators accused of insider trading got their get-out-of-jail-free cards because 1) they were Senators, 2) they were both major Republican donors and 3) a controversial rule, Rule 10b5-1, that benefits members in Congress.  One of the hallmarks of the American legal system is that there are at least two systems of justice: rich vs. poor, and elected officials vs. average citizens.

According to attorney Patrick Daugherty, senior SEC partner at the Chicago law firm of Foley & Lardner, SEC Rule 10b5-1 says that “if you are a corporate insider, you can enter into a plan that will allow for shares to be sold at stated intervals in dollar amounts, according to an algorithm with the trades done in a certain way.  This means the corporate executives take themselves out of timing decisions about when to buy or sell.  They give control to an outside advisor or brokerage firm that is not communicating with them.”  That is the scheme.

What makes Sprecher’s donations worth watching is that ICE owns the New York Stock Exchange, a designated self-regulatory organization that has to report to the Securities and Exchange Commission (SEC).  The fact that Sprecher, the NYSE chairman, was connected to an insider trading scheme would be scandalous in another era, but not now.  Given the regulatory accountability of ICE, Sprecher’s significant donations to Trump and his anti-regulation policies will make the new head of the SEC a vital post in the deregulation world.  Sprecher should directly benefit from lax SEC oversight, including appointing a new, more lenient SEC chairman. 

Johnson & Johnson (JNJ).  Thanks to the $2.7 million in donations to Trump, Robert “Woody” Johnson has a right to ask for some favors.  Johnson has already cashed in some favor when Trump appointed him ambassador to the United Kingdom.  Johnson is also the owner of the New York Jets.

Charles Schwab (NYSE: SCHW).  The link to Schwab is J. Joe Ricketts, who donated $2 million to Trump. Rickets sold his brokerage firm to T.D. Ameritrade is now a subsidiary of Charles Schwab. Like Sprecher, Rickets has a direct regulatory relationship with the SEC, and whoever Trump picks to be SEC chairman will undoubtedly know which firms were major Trump donors. 

United Rentals, Inc. (NYSE-URI)   Don Ahern donated over $1 million to Trump and is a long-time supporter.  Ahern, with a net worth of about $1 billion, owns a firm that rents construction equipment.

Wynn Resorts Limited (NASDAQ: WYNN).  Steve Wynn donated $1.1 million to Trump and his various groups.  As Forbes reported, Wynn’s name is displayed on casinos in Vegas and Macau, but his ex-wife now controls the empire.

The Satellite Investments to the Oligarch ETF

Aside from the Oligarch ETF, some individual sectors and firms will benefit from the Trump right-wing agenda.  The Oligarch ETF can be combined with these particular companies or ETFs in defense, crypto, or energy.  This can be done via a core-satellite strategy, also known as core and explore, that uses a core portfolio holding  (the Oligarch ETF) complemented by satellite positions, often in other mutual funds or Exchange Traded Funds (ETFs), to meet specific client needs.

Here are individual companies that could be part of a satellite strategy for the Oligarch ETF:

Geo Group (GEO) is a large private prison firm that will benefit from the Trump anti-immigration and incarceration program. GEO is big with ICE (Immigration and Customs Enforcement) processing centers and USMS (U.S. Marshals Service) detention centers. Remember, each arrested immigrant is a few dollars in profit for GEO.

Coinbase Global (COIN)

Exxon Mobil (XOM)

Nucor (NUE)

JPMorgan Chase (JPM), a beneficiary of deregulation

Lockheed Martin (LMT)

The Private Equity Mafia Will Profit in Trump World

Private Equity, aka predatory capitalism, will have an outsized role in the Trump administration.  Their crucial man inside the Trump family is Musk, who could be named to head a group of outside special billionaire advisors in a think tank to severely reshape and cut the federal government’s budget and workforce numbers. 

This will be a technocrat’s dream.  Private equity people will use big data, A.I., libertarian philosophy, and a heavy reliance on automation and technology to replace people and programs with the next stage of big tech.  They could also use crypto, the world’s largest Ponzi scheme, to make federal payments and thus artificially boost the price of crypto. 

As discussed on the site many times, cryptocurrency only has a few purposes:

–To destabilize the Federal Reserve

–To launder money, secretly transfer funds, and pay gambling debts

–To scam other investors

— To evade paying taxes

Moreover, despite the hype, crypto is neither an asset class nor has any of the classic characteristics of an investable asset (price-driven financials, a dividend history, fair value, a time horizon to hold the investment, transparency).

But these are priorities for traditional investments. In the private equity world, crypto has another, as yet undisclosed purpose, known only to the people who control its origins, price direction, and liquidity. For these mysterious reasons, we expect crypto to be woven into Trump’s future policies. 

Since private equity is all about making money by cutting jobs, cutting costs, maintaining secrecy, and paying the most negligible taxes possible, these businesses will seamlessly transition into the Trump business world.  

Naturally, they will be investing in companies before the public knows what is happening so they can benefit from their big-brain ideas and make huge profits.  Ethics is not a core belief among the private equity crowd, so conflicts of interest, self-serving programs, and making more money will drive this group of outside Trump advisors.

Although the masses cannot invest in private equity firms since they are not qualified investors, they can watch as their government is reduced, jobs are cut, and the private equity firms decimate unions.  At the top of the list these people will attack is the US Postal Service.  The U.S. Post Office (created in 1775 by Ben Franklin) is America’s largest union. It could be privatized in favor of UPS and Federal Express and regional private mail and package delivery firms that have yet to be created.  Also, look for the privatization of airports, public harbor facilities, waterworks, and electric companies. 

Although Trump will work with many private equity firms to get their approvals, as well as a share of the profits, here are the leading people in this business who will have the inside track among the private equity firms:

Antonio Gracias, a co-investor and friend of Elon Musk, has donated about $1 million to Trump. As Musk’s protégé and owner of a private equity firm, Gracias is involved with Tesla, SpaceX, X Corp. (formerly Twitter), xAI, Neuralink, and The Boring Company.

Another private equity baron is Sequoia Capital executive Douglas Leone, who donated $1 million to Trump.  Leone is a long-time Trump supporter. He has a net worth of about $8 billion.

Individuals Who Made Big Contributions Will Benefit

The wealthy Republican donors to Trump are the stars of Wall Street. As such, they want to pay less taxes and be free of regulation and anti-trust threats.  Importantly, they all want the famed and profitable Carries Interest tax loophole to remain in place or, better yet, be expanded.

This controversial loophole benefits the hedge fund, private equity fund, and real estate businesses, aka the elements of predatory capitalism. The preferential tax treatment of carried interest reduces federal revenues, putting pressure on the federal budget.  Carried-interest-loophole graph “The Congressional Budget Office estimated that treating carried interest as ordinary income would raise $12 billion over ten years — including revenues from both individual income taxes and self-employment taxes,” according to the Peter G. Person Foundation.

Howard Lutnick (Cantor Fitzgerald, net worth $1.5 billion); the late Bernie Marcus (Home Depot, co-founder, net worth $8.6 billion); William Albert Ackman (net worth $9.3 billion); Stephen Schwarzman (co-founder of Blackstone, net worth $41 billion); Barry Sternlicht (Starwood Capital, net worth $3.8 billion); Steve Mnuchin  (former US Treasury Secretary); David Oliver Sacks, (co-founder of PayPal, net worth $1.7 billion); Larry Ellison (Oracle, net worth $31 billion); Paul Singer (Elliott Investment Management, net worth $6 billion); Leonard Blavatnik (Warner Music Group, net worth $31 billion); and Dr. Miriam Adelson (widow of Sheldon Adelson, with a net worth of $34 billion).  Adelson contributed $100 million to Trump’s campaign.   Cliff Asness  (AQR Capital Management), Paul Singer (Elliott Management), Harvey Golub (former Chairman, American Express Co.), Bruce Kovner (Caxton Alternative Management), Susan Lebovitz-Edelman (Edelman Family Foundation), Jay Lefkowitz (Kirkland & Ellis), Ben Horowitz, a partner in the prominent venture capital firm Andreessen Horowitz; Dan Loeb (Third Point), and Robert Rosenkranz (Delphi Capital Management)

Trump’s Role in the Shady Crypto World

The crypto industry was Trump’s largest corporate donor.  In exchange, Trump said he would make the U.S. “the crypto capital of the planet and the bitcoin superpower of the world, and we’ll get it done.”  The U.S.  and federal regulators, especially the SEC, have not been friendly to crypto because it has no financial purpose.  While its proponents say it is an “alternative investment,” there is no evidence that it is anything less than a Ponzi scheme.  Trump is no stranger to Ponzi schemes; his family has invested in crypto, and Trump himself has issued crypto gimmicks for donations.  As a crypto-friendly president, crypto is one more scheme he will push on the naïve American people.

While the crypto industry will try to capitalize on their significant donations, their primary beneficiaries could be Cameron and Tyler Winklevoss, who donated $1.3 million to Trump.  The brothers made their money by getting a $65 million settlement in 2008 from Facebook and its founder Mark Zuckerberg.  The Winklevoss brothers claimed they invented an earlier version of Facebook, which Zuckerberg stole from them.  The Winklevoss twins invested some settlement proceeds into Bitcoin and other crypto scams and founded the Cryptocurrency exchange Gemini.  

As part of the shady world of crypto, the brothers were forced “to return at least $1.1 billion to customers of its defunct lending program and pay a fine of $37 million for unsafe and unsound practices as part of a settlement with the New York Department of Financial Services.”  Since they are heavily involved in crypto, they are in touch with Musk.

Trump’s economic policies will affect wealth management, financial and retirement planning, average incomes, tax and trade policies, employment, and the quality of the labor market.

Here is the video.

The reason: Governor Desantis’ MAGA Republican politics takes precedence over the life of average Floridians, even when it comes to Mother Nature. 

This includes everything from climate change denial to voter suppression to banning books in public schools and tolerating all types of fraud.

It also includes Desantis’ pathological hatred of his state’s citizens.  How bad is this?  Republican Florida Governor Ron DeSantis refused to take any calls from Vice President Kamala Harris about storm recovery. A DeSantis aide told NBC News, “Kamala was trying to reach out, and we didn’t answer.”

Florida has natural and man-made problems that combine to make it a risky place to live politically and environmentally. You would think that since Florida is facing more severe storms and flooding, it would work to address the problems. But that is hard to do if you deny that climate change exists because it does not comply with your political philosophy.

But what the MAGA politicians in Florida cannot deny is the costs in dollars and human lives. Hurricane Helene caused an estimated $250 billion in damage and economic loss, according to the latest estimate from AccuWeather. According to Bloomberg, that would make it the second-most destructive storm after Katrina.

Florida’s state-backed nonprofit home insurance company, Citizens Property Insurance Corp., has access to reserves to pay claims. Still, back-to-back hurricanes will invariably cause Citizens to raise premiums, which will only add to homeowners’ financial burden.

Climate Change Should Be a Top Election Issue in the Affected Red States

Climate change affects the cost of buying and owning a house. As such, it should be a much bigger campaign issue in the Republican states (Florida, North Carolina,  Georgia, South Carolina, North Carolina, Virginia, Tennessee) where the hurricanes have hit hardest.  

The latest news for Hurricane Milton, one of the worst predicted in modern history, is that it could cause 20-foot storm surges with more damage caused on the south side of the hurricane (as of Oct. 7, 2024). Meteorologists say the heated water, as high as the mid-80s, is fueling the hurricane. The target area is central to northwest Florida (Sarasota, Ft. Myers), with the Tampa area predicted for the landfall.

As the publication, BankRate points out:

• Florida accounts for only 9% of the country’s home insurance claims but 79% of its home insurance lawsuits, many of them fraudulent.
• Because of fraudulent lawsuits and the high overall claim risk in Florida, insurance companies have experienced multiple years of net underwriting losses of over $1 billion.
• Florida has lost some form of home coverage from over 30 insurance providers in the past few years.

For these reasons, over 10 property and casualty companies offering Florida homeowners insurance have liquidated since 2017.  Five of those companies liquidated in 2022 alone.  Other insurance companies exited the state, and more are canceling home insurance policies, restricting policy eligibility requirements, or raising rates.  This is all about risk management, and it is evident Florida is a risky state due to climate change and rising water levels.

However, many of Florida’s elected politicians do not share these explanations.

And this, along with the state’s mismanagement of other policies, including fraud prosecutions, is why Florida homeowners should not expect help from its leaders.

Here are some examples:

Florida has a huge home insurance problem.  Over the past seven years, more than 10 major residential property insurance firms have left Florida after they paid out or were exposed to significant property claims, most recently after Hurricane Ian (2022).  A few lesser-known insurance companies moved into the state to cherry-pick the best locations and policyholders and charge premiums based on new risk levels to fill the void.

Florida fraud.   Florida is the epicenter of the nation’s leading fraudsters.  Everything from insurance to identity, Medicare, Medicaid, auto, internet, and elderly scams are prevalent in Florida.  The state has a lax attitude towards fraud for political and organizational reasons.  Law enforcement is understaffed and cannot keep up with the scams, even if they want to be zealous.

Right-wing Florida politicians.  Republican Florida politicians are the standard bearers of almost every right-wing agenda item.  These include denying climate change and global warming, anti-abortion activism, book banning, cronyism, anti-union legislation, and election denial.  With friends like this, who needs enemies?  Led by Republican Governor and MAGA supporter Ron Desantis, the state legislature has strong relationships with the insurance industry and major polluters, such as sugar growers and other mega-farmers. 

Florida’s history is also its present.  Florida was the third state to join the Confederacy in 1861 (behind North Carolina and Mississippi), and its long history of backing slavery and the plantation culture.  Florida is anti-union, resists higher base wage proposals, and works very closely with real estate developers statewide who typically run over local governments to get zoning variances and tax breaks.  Florida is also a leader in voter suppression and anti-immigrant legislation.  Since the state has no state income tax, it has attracted wealthy new residents from non-productive industries, such as hedge funds and private equity operators, seeking more tax breaks and special favors.  Real estate developers also have moved to Florida to contribute to the over-congestion and the sale of expensive properties and flexible zoning regulations. 

A disjointed group of residents.  Florida has a broad demographic variety of residents broken down by income, race, location, political beliefs, religion, their time as permanent or part-time residents, and whether they live in gated or traditional neighborhood communities.  For instance, new residents to Florida include Haitians and others from South America who are first-generation Americans with little or no knowledge of U.S. history or customs.  This is common to all immigrant groups, but it can create strains at the neighborhood level.  Florida also has many part-time residents, especially in south Florida on the east and Gulf sides.  Part-time residents are often more politically liberal than full-time residents but may not be Florida voters.  As such, they are not very interested in local political and environmental developments.

Florida is Hurricane Alley.  Even before global warming, Florida has suffered some of the nation’s worst hurricanes. This list of hurricanes shows the geographic and damage ranges of hurricanes that run from the Florida Keys to the Panhandle.  Hurricanes are a fact of life in Florida.  Their course is set by nature, and while modern science has made their tact more predictable, their destructive force cannot be changed.

Project 2025 wants to cut FEMA and NOAA Budgets.  It’s important to note that the Republican’s Project 2025 calls for either downsizing or cutting the budgets for NOAA (National Oceanic and Atmospheric Administration) and FEMA.  Project 2025 calls NOAA a primary component “of the climate change alarm industry” and says it “should be broken up and downsized.”  This is fundamental science denial being made for a political purpose.  Floridians will suffer as a result of these Medieval policies.

Climate change should become a more significant election issue.  Climate change and disaster management should be more significant campaign issues in the states affected by this season’s hurricanes. The bad news is that the locations where hurricane damage was most severe are MAGA Republican districts. Since MAGA Republicans deny the fact of global warming, these Republicans are unprepared or unwilling to admit the scientific facts.  This prevents them from correcting the problem. You cannot fix a problem if you don’t know its origins.

The hurricanes are Mother Nature’s wrath on climate deniers and MAGA liars.  The devastating power of the last two hurricanes and their destructive paths through mainly MGA Republican states may be Mother Nature’s wrath on their climate denial and willingness to be fooled by MAGA leaders.  Since you cannot fool Mother Nature, the hurricanes are proof that global warming (manifesting itself in droughts, wildfires, heatwaves, flooding, hurricanes, famines, ocean pollution, record rainfalls, and the resurgence of diseases) is accurate and that the MAGA deniers are only opportunists feasting on their follower’s stupidity or self-delusions. As Project 2025 boldly states, the Republicans want to cut the budgets of national weather and disaster assistance agencies.  To foster this, Trump is promoting anti-FEMA lies, such as saying FEMA money is being spent on immigrants rather than hurricane victim relief.  This sick lie is deliberate and meant to foster hate towards federal agencies. So, consider the message of the back-to-back hurricanes to MAGA Republicans: Trump and Vance can fool you, but you cannot fool Mother Nature.

A Florida Disaster Case Study

The impact of the Florida hurricane on the ground was devastating. As this video shows, few people can comprehend the power of moving water. How else do boats get pushed a block inland to land on someone’s front lawn?

As for homeowners who have sustained major water flood damage, the insurance companies consider these hoes as total losses.  The homeowner then sells the home for the price of the land only.  The house is considered debris to be demolished and put into a dump truck.

In this video, 20,000 people in the St. Petersburg suffered hurricane damage.  In the Shore Acres neighborhood in St. Petersburg, homes are being sold for “lot value,” or the price of the land alone, because FEMA restricts the amount of money paid to rebuild homes in a disaster area.  Even then, the newly constructed home must meet FEMA codes, and that expense can exceed the amount of money the homeowner has for the remodeling.  Left in this situation, the homeowner sells the house for the cost of the land alone.

The Perfect Storm for Florida Homeowners

Florida’s current political and environmental situation is the perfect storm for disaster. The state is ill-prepared and not predisposed to help its residents. Florida’s political leadership is a reactionary clique that denies global warming and is pursuing the MAGA agenda. The legislature will become more reactionary if Trump loses the 2024 election, while Florida remains a red state.

The next big news item will be how much insurance companies in Florida pay—or do not pay—to homeowners and to what extent fraud is allowed in Florida.

This does not bode well for the underwater Sunshine State homeowners, who are facing the devastation of global warming and a scientific event their elected leaders refuse to admit is happening.

Florida is the best example of a MAGA state where lax law and regulatory enforcement and right-wing culture wars are attracting America’s most wealthy people and Fraudsters.

Florida, Donald Trump’s adopted home state, is not just a state with the highest fraud levels in the nation but also a burgeoning bastion of right-wing financial and social values. This shift in the political landscape is a cause for concern. 

From the panhandle to Miami, Florida has become Governor DeSantis’s right-wing bastion. He controls the state legislature and almost all state departments and has powerful patronage powers.  His state supervisors have banned books, dictated subjects that cannot be taught in school, banned books, mangled scientific evidence to prevent COVID, installed party hacks at the state’s universities and colleges, and put out the welcome mat to billionaires whose primary purpose is to pay the least taxes possible.

And that’s just for starters.

As numerous articles, including this powerful piece from The Prospect,  have reported, Governor DeSantis has flagrantly abused the public trust. His actions are a slap in the face of democracy.

• “He suspended State Attorney Andrew Warren, a twice-elected local official, because he didn’t like the police reforms he initiated. Warren was also among a group of prosecutors who announced, “We decline to use our offices’ resources to criminalize reproductive health decisions.”
• “He suspended four elected members of the Broward County school board—all registered Democrats—and turned the board over to a majority of Republicans.
• “He held a press conference to announce the arrest of 20 people—who cast 0.0000018 percent of the 11 million ballots cast in Florida’s 2020 election—for allegedly voting illegally.”

This is just a sampling of his anti-Democratic acts.

But, less reported are the billionaires who have been welcomed to Florida because the state has no state income tax, estate tax, no tax on capital gains, lax regulatory enforcement, and favorable consideration of ongoing business operations that stretch state regulations and local ordinances.  Billionaires like Jeff Bezos and Ken Griffin, hedge funds, private equity funds, and real estate developers often continue to run their businesses in New York but change their residence status to obtain tax benefits.

Rick Scott: Florida’s Fraud Idol and DeSantis’ Buddy

By far, the best example of Florida corruption comes from its own Republican senator, and former governor, the rabid MAGA Trump supporter, Rick Scott.

Rick Scott amassed his personal fortune as the CEO of Columbia-HCA which he grew into a hugely profitable hospital network.  By 1994, his company had over 340 hospitals, 135 surgery centers and 550 home health locations, with some 285,000 employees.

Scott resigned as CEO in 1997. That was the same year that federal agents announced their investigation into the company. “In time, it became apparent that the investigation focused on whether Columbia/HCA bilked Medicare and Medicaid for tests that were not necessary or ordered by physicians, and for attaching false diagnosis codes to patient records to increase reimbursement to the hospitals,” according to Politifact.com

To show the scope of the investigation, the U.S. Justice Department announced  “the largest government fraud settlement in U.S. history when Columbia/HCA agreed to pay $840 million in criminal fines and civil damages and penalties. Among the revelations from the 2000 settlement, which all apply to when Scott was CEO, were that Columbia overbilled Medicare for unnecessary tests and false diagnosis codes,” according to Politifact.com  In a second series of similar penalties against Columbia/HCA in 2002, the Feds received an additional $881 million. This brought the total fine against Columbia-HCA to $1.7 billion.

As an example of how criminal get away with their crimes, when the the company agreed to pay $1.7 billion in fines in 2003, as what was then the largest health care fraud settlement in U.S. history. Scott walked away with $10 million severance pay, a five-year consulting contract and $300 million in stock and options. Trump certainly saw Scott’s remuneration package as how crime pays.

And since corporations are people, as part of the 2000 settlement, Columbia-HCA agreed to plead guilty, but Scott, an actual human being, was never indicted. In his court testimony, he said he could not recognize his own signature on corporate documents. Still, Scott was able to keep his fortune and was elected governor of Florida, which has a huge Medicare-Medicaid constituency, for two successive terms.

DeSantis Welcomes Fraudsters to Florida

The state has also attracted shady cryptocurrency and hedge fund operators.  These people join the resident Florida fraudsters who have a long history of preying on the elderly, hurricane victims, people starting home construction projects, identity thieves, as well as Medicare and Medicaid frauds.

Some of the best examples of this happen in the state’s growing real estate development industry.  Real estate developers routinely ask for and receive variances in local building codes to access every square foot of buildable land for their projects in every major city.  This often involves reducing parking spaces to expand the building’s footprint.  In exchange, the lawyers for real estate developers are kept busy badgering city building departments and city councils, petitioning and negotiating for more land than the original land survey shows.

What’s happening in Palm Beach is an excellent example of hypocrisy from the wealthy people who have a double set of standards. This island town is the most prosperous city in Florida, with a median household income of $169,500 and an estimated 30 billionaires living there as of 2022.  What makes Palm Beach interesting is that it does not allow any high-rise construction on the island.  The wealthy residents there want to preserve the island’s old tropical chic and congestion.

But Palm Beach is the exception.  In every other major Florida city, real estate developers run the table.  This accounts for the added congestion in South Florida alone: West Palm Beach, Boca Raton, south Miami, and Pompano Beach. These areas have the location and demographics to attract new buyers who can afford a few million for one of the low-end units.  In Miami, one building has units starting at $10 million. 

Florida Corruption Starts From the Bottom Up

Corruption is a corrosive process that starts from the top down and the bottom up.

As the independent investigative news site, the Florida Bulldog, has reported, city corruption is common and often goes unpunished.  As an example, a Bay Harbor Island, Florida police chief was promoted despite his “double-dipping”  that he received from an off-duty job while simultaneously supposedly working for the town’s police force.  Documents obtained by the Florida Bulldog found that the chief made about $37,000 from his off-duty job while also collecting his police salary of $143,932.  In July 2020, an assistant Miami-Dade State Attorney declined to prosecute the police chief despite the evidence from an extensive investigation.

The Florida Bulldog has stories about similar city-level corruption, but the lax enforcement attitude is not lost on the wealthy people relocating to Florida.  Their best example comes from the late sexual predator Jeffrey Epstein, who received very favorable treatment from Palm Beach County Sherriff Ric Bradshaw, who did not enforce the house arrest stipulation from Epstein’s conviction. 

As the Florida Sun-Sentinel reported, Palm Beach County Sheriff Bradshaw approved a very lenient work release schedule for Epstein after he pled guilty to two state prostitution   charges in 2008 and 2009.  Bradshaw allowed Epstein “to leave the Palm Beach County Jail seven days a week, for up to 16 hours a day — including two hours per day at the Palm Beach mansion where he previously sexually abused dozens of minor girls, records from the Sheriff’s Office reveal.”

Examples like this are a stark reminder for the new wealthy Florida residents.  They are well aware that their political power and large political donations will buy them leniency and, even better, a blind eye if they violate state and local laws. 

In DeSantis’ Florida, it’s not just about the wealthy getting extensive tax breaks but also getting a get-out-of-jail-free card.

Carville told campaign workers that the three issues facing Americans were health care, avoiding the same mistakes perpetuated by George Bush, and the economy.

About 32 years later, little has changed.  Today, the economic issue facing Americans is not the economy or inflation but something more insidious: income inequality.

Again, this is nothing new.

Income inequality has fluctuated since 1915, when the government began to track income inequality, and it has fluctuated since due to changes in inflation, unionization declines, economic shocks, and tax policies.  But since 2016, income inequality has been steadily increasing by almost any measure:

• The share of American adults living in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly since 1971, with each decade after that typically ending with a smaller share of adults living in middle-income households than at the beginning.
• CEO pay has skyrocketed by 1,460% since 1978. According to the Economic Policy Institute, CEOs were paid 399 times as much as a typical worker in 2021. 

This constant and widening wealth gap affects every aspect of America’s economic and political life.  It happens because of technological change, globalization, the decline of unions, and the eroding value of the minimum wage.  Most professional political pundits miss the political economy of the wealth gap, and for good reason.  The neoliberal political-economic problems are systemic; they question whether unregulated capitalism works.  It does not.

The wealth gap affects people’s political outlook, their faith in the U.S. democratic system, their future plans, and where they live.  A recent article in Bloomberg found that “the wealth gap between homeowners and renters has never been higher. In the past three decades, the average wealth of homeowners increased by almost $900,000. For renters, the increase is only by $56,000,” according to Saleah Mohsin.

Housing ownership only exaggerates the wealth gap between the haves and the have-nots.  Owning a home remains the most significant wealth creation engine in the U.S. Without ownership; families are stuck as renters on a treadmill of payments.

In the same article, Shaun Donovan, the secretary of Housing and Urban Development during the fallout of the 2008 financial crisis, said, “There’s plenty of data that shows that our economic mobility has slowed down and that moving up the economic ladder is harder and harder in the US. I’ve never seen the affordability crisis this bad.”

More Problems With Anti-Trust Enforcement

Antitrust regulation helps everyone participating in the economy, from small businesses to individuals who can shop around for better prices, services, and amenities from more innovative and aggressive suppliers for the best deals that fit their budget.

Buying from a few providers benefits the bog providers, not the average consumer.

This is evident in housing, food, medical services, and industry sectors that have become a limited source of sellers due to distortions created by private equity firms.  Institutional investors owned about 4% of the 15.1 million single-unit rental properties in the U.S. as of February 2024.  Worse,  CNBC claims that by 2030, institutional investors will own nearly 40% of the nation’s single-family rentals.

The income gap is possible through the lack of antitrust enforcement, monopoly tendencies in mature markets, and private equity firms that use speculative capital to target industries where private equity speculators see opportunities (private prisons, medical practices, technology, and healthcare.)

How Income Inequality Disrupt Everyday Life

In everyday life, American consumers now have to compete against organized business forces like private equity, whose primary purpose is to extract more profit from every business sector they consume.  Profit maximization creates a spiral of high prices even as the quality and level of services decline.

In housing, people looking to buy their first home or buy a more prominent house face dealing with corporate sellers whose primary goal is to increase prices and reject more offers because they have the backing to keep the house off the market for as long as they want until they get an offer that meets their price and target profit margin.  Private equity firms have become the country’s most prominent corporate landlords.  In 2023, private equity accounted for 44% of all flipped homes nationwide.

Private equity home purchases disrupt the buy-sell market since corporate, private equity sellers have deeper pockets and are not enticed to sell because the private equity corporation does not have a new job or expanding family to deal with.  That’s the problem when individuals are dealing with corporations versus another human family with more human considerations, such as let’s move before the new school year starts.  Private equity corporations couldn’t care less about these factors.

So, when voters say they are concerned about “the economy,” what do they mean?

It’s not only inflation, which originates in monopoly capitalism and “sticky prices.” It’s the more powerful impact of income inequality, disproportionate income distribution, and all the economic and political distortions it creates.

Corruption in the U.S. Supreme Court, politicians owned by corporations, lobbyists who write legislation at the state and federal levels, buying politicians, and pay-to-play access to political discussions are all part of income inequality.

The media ignores this because they cannot criticize the capitalist system or even begin to explain unregulated capitalism to regulated capitalism.  The American public is too ill-informed to understand the differences.  As detailed in this article, this sad fact has been verified in years of surveys and studies.

So, as Americans go to the polls, only the progressive Democrats led by progressive Senators Bernie Sanders and Elizabeth Warren have addressed the dangerous impact of the wealth gap.  Most mainstream politicians, including Democrats, avoid this discussion because they believe it is too contentious or would undermine confidence in the existing economic and political systems.

But that is precisely what is happening anyway.

The electorate is way ahead of the politicians.  The negative impact of income inequality explains why government at all levels is held in low esteem and why voters think too many politicians are corrupt or bow to bid donors.

All this verifies the point: It’s the wealth gap, stupid.

Address it and see the results.  Closing the gap will benefit 95% of all  Americans.

Wealthy, Elitist American Jews are now pushing their right-wing Republican, pro-Trump agendas, despite the fact that 80% of American Jews are democrats.  With friends like these, who needs enemies?

Rhetorical disputes and sometimes violent attacks between Jewish groups are not new in the 3,000-year-old history of the Jewish civilization.

From the wars during the periods of the united and divided monarchies of Israel and Judah (circa 1000-586 BCE) to the gun battles between Haganah and the Irgun in 1948, Jews have resorted to the entire range of actions, including violence, to settle disputes.

But the current presidential campaign by Donald Trump has re-ignited a new, modern political battle between American Jews that is as pointed and divisive as any in history.

The current war between the Jews is ideological and related to privilege, self-interests, and economic class.  This conflict is not especially religious.  It pits a numerically small number of Jewish billionaires who support Trump against the millions of American Jews, 80% of whom are Democrats.

It is also not primarily about the current state of Israeli politics.  However, support for the right-wing policies of the Netanyahu government plays a role for some donors; it is not the focal point of the dispute.

Instead, the new war between American Jews hinges on a handful of pro-Trump political action committees (PACs), think tanks and wealthy individual donors. These rich people are using their considerable contributions to push Trump into the presidency despite his long history of trafficking and entertaining white nationalists and pro-Nazi-groups.

Despite their wealth and college degrees, many of Trump’s Jewish supporters are only concerned with two issues: Israel and preserving their wealth. This includes maintaining tax loopholes, especially the carried interest tax break that primarily benefits hedge funds, private equity, and real estate developers. Another financial benefit is preserving estate planning tax breaks.

But the most significant future attraction for these wealthy Jewish Trump supporters is to benefit from Republican policies concerning the privatization of federal agencies and assets. This is how they will reap the politically connected billions of dollars. Putin rewarded the politically connected businessmen in Russia with this model. The oligarchs kicked back millions to Putin to get these coveted state agencies. This led to the creation of an oligarch class with Putin as its head, making Putin the wealthiest man in the world.

In the process, these wealthy Jews want to become America’s first oligarchs. Using their political positions buttressed by huge donations, they will be closest to the trough when Trump decides to sell favors, contracts, access, tax benefits (including the valuable carried interest tax loophole), and regulatory relief to the most favored donors if he becomes president.

Since cash is king in Trump’s world, being close to Trump through the donation pipeline will make the Jewish Republican billionaires into American oligarchs.  In the process, they will be working against the interests of their brethren as they ignore Trump’s favoritism to right-wing policies that victimize immigrants, the less fortunate, minorities, and women as he pushes a Christian-oriented conservative agenda. To become oligarchs, these wealthy people will have to be in bed with some disgusting people. 

Who Will Become American Oligarchs

The big donors’ names and affiliations with Republican Jewish groups, such as the Republican Jewish Coalition and Jewish Republicans of Nevada, are well-known.

At the individual level, the big donors come mainly from the world of finance (hedge funds, private equity, real estate development) and gambling.  These are regulated industries the billionaires must tolerate even though they restrain their money-making deal opportunities.  Trump is their man because he will cut regulations and through in the added favor of cutting taxes.

Plus, as Trump said during a meeting in April in Florida, he will be willing to kill regulations and offer tax benefits in exchange for $1 billion in donations to roll back environmental regulations for the oil and gas industry.  This blatant solicitation of favors in exchange for money is the fertile ground to create a new class of American oligarchs.

The wealthy Republican donors are the stars of Wall Street.  Howard Lutnick (Cantor Fitzgerald, net worth $1.5 billion); Bernie Marcus (Home Depot, co-founder, net worth $8.6 billion); William Albert Ackman (net worth $9.3 billion); Stephen Schwarzman (co-founder of Blackstone, net worth $41 billion); Barry Sternlicht (Starwood Capital, net worth $3.8 billion); Steve Mnuchin  (former US Treasury Secretary); David Oliver Sacks, (co-founder of PayPal, net worth $1.7 billion); Larry Ellison (Oracle, net worth $31 billion); Paul Singer (Elliott Investment Management, net worth $6 billion); Leonard Blavatnik (Warner Music Group, net worth $31 billion); and Dr. Miriam Adelson (widow of Sheldon Adelson, with a net worth of $34 billion).  Adelson said she will contribute $100 million to Trump’s campaign.

But there are more. The latest comes from the Manhattan Institute think tank comprised of libertarians and rich people who don’t want to pay taxes and embrace neoliberal causes, like private schools, no regulation, race, immigration, and gender policy.  As usual, many of these elitists are Jewish.  They include many hedge and private equity fund moguls, lawyers, and foundation heads. The list consists of Cliff Asness  (AQR Capital Management), Paul Singer (Elliott Management), Harvey Golub (former Chairman, American Express Co.), Bruce Kovner (Caxton Alternative Management), Susan Lebovitz-Edelman (Edelman Family Foundation), Jay Lefkowitz (Kirkland & Ellis), Ben Horowitz, a partner in the prominent venture capital firm Andreessen Horowitz; Dan Loeb (Third Point), and Robert Rosenkranz (Delphi Capital Management). As usual, they favor tax cuts for the wealthy and are against gun control. A Bloomberg article says Singer, the chairman of the Institute, has “attacked diversity, equity, and inclusion as dangerous left-wing woke-ism.”

According to Bloomberg, Jeff Yass, “Pennsylvania’s richest man,” opposes regulation and is a strict libertarian who hires professional gamblers for his hedge fund operation. Yass opens a new topic for discussion since he wants to make national gambling great again because, like most libertarians, he thinks he is more intelligent than others. Because of his deep pockets, he can stay longer in a card game to beat his opponents.

What do all of the wealthy American Jews have in common?

They want to dominate the 80% of American Jews who vote for Democrats and support candidates that favor liberal policies, many of which are in the Jewish tradition, as they push their right-wing Republican, pro-Trump agendas. With friends like these, who needs enemies?

Jewish Oligarchs in Russia

While the potential appointment of Jewish American oligarchs will open a new tawdry chapter in American Jewish history, there is a long list of Jewish oligarchs who have emerged from the turmoil in Russia to become some of the wealthiest people in the world.  But the price they paid is significant.

The Jewish Russian oligarchs owe their entire fortune to Vladimir Putin, who is reportedly the wealthiest person in the world but has naturally kept his fortune hidden as only a KGB agent can do.  Putin is reportedly close to Jewish billionaires Roman Abramovich and Lev Leviev.  But, all of the oligarchs operate at Putin’s whim, and if they fail to pay homage or make a required deposit, their lives will be in danger.

Russian oligarchs, like their American counterparts, are in industries re-assigned from Russian state properties to a portfolio of privileged, loyal individuals, regardless of their business knowledge.

The Russian Jewish oligarchs are:

1. Mikhail Khodorkovsky: Once Russia’s richest man, Khodorkovsky was the head of Yukos Oil Company. He was arrested in 2003 and spent several years in prison on charges widely viewed as politically motivated.
2. Roman Abramovich: Abramovich made his fortune in the oil industry, mainly through the Sibneft company, which he later sold to Gazprom. He also owns the Chelsea Football Club.
3. Leonid Nevzlin: A former Yukos executive and close associate of Mikhail Khodorkovsky, Nevzlin fled to Israel in 2003.
4. Boris Berezovsky: An influential political figure and businessman in the 1990s, Berezovsky was involved in various industries, including media and oil. He lived in exile in the UK from 2000 until he died in 2013.
5. Vladimir Gusinsky: Gusinsky was a prominent media executive who faced legal challenges and left Russia in the early 2000s, spending time in Israel and Spain.
6. Viktor Vekselberg: An aluminum and energy industrialist, Vekselberg is the chairman of Renova Group and is known for his extensive collection of Fabergé eggs.

While the established Russian and emerging American Jewish oligarchs came into their fortunes differently, they also have made significant cash contributions and engaged in philanthropy to their respective Jewish communities in Russia, the US, and Israel.

This puts a different light on their activities.  On the one hand, they do business with Putin and contribute to Trump, but they also have a charitable side or at least one that recognizes the tax benefits of philanthropy.

Billionaires Like Trump, Even Though Trump Works With Anti-Semites

The difference with the American oligarchs is that their support of Trump is visible at the same time Trump meets with white supremacists and nationalists, who do not hide their dislike of Jews.

This was dramatically played out during the early years of Trump’s presidency when two Jewish members of the Trump team left after Trump famously said there were good people” on both sides of the white nationalist rally that turned deadly in Charlottesville, Virginia, in 2017.

When Trump defended the Nazis at the rally Gary Cohn, then the Director of the National Economic Council, resigned in March 2018.  Cohn’s cover story was that he left over disagreements with Trump’s trade policies, particularly tariffs on steel and aluminum, but his later comments fleshed out the resignation story.

Similarly, Reed Cordish, an assistant to the president for intergovernmental and technology initiatives, resigned in February 2018.  Cordish’s departure was reportedly for personal reasons.  Still, it came amid a broader wave of resignations and departures from the administration and may have been tied to Trump’s defense of the white supremacists.

When Cohn left his position, he said, “Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis, and the KKK.  I believe this administration can and must do better in consistently and unequivocally condemning these groups and do everything we can to heal the deep divisions in our communities.”

Cohn added, “As a Jewish American, I will not allow neo-Nazis ranting ‘Jews will not replace us’ to cause this Jew to leave his job.”

These resignations were in contrast to the actions of other Jewish members of Trump’s administration, such as Steve Mneuchin, who defended Trump’s defense of the Charlottesville rioters.

When Good Jews Support Bad People

When wealthy people back a political leader, they do so for various reasons, which reflect their personal goals, personality flaws, political atmosphere, and conscience.

In the past, Jews have supported fascist dictators for reasons that historians say look untethered or naïve.  In Italy, a few wealthy Jews supported Benito Mussolini and his Fascist regime.  Aldo Finzi, a prominent Jewish lawyer and politician, was one of Mussolini’s earliest supporters.  He became a member of the Fascist Grand Council and held various governmental positions until his fall from grace in the mid-1920s.  Giorgio Del Vecchio, a philosopher and jurist, held academic and governmental positions under the Fascist regime.  Margherita Sarfatti, an art critic who was also Mussolini’s mistress, helped shape Fascist cultural policies.  She used her position to promote Italian art and culture in alignment with Fascist ideals.

In Germany, there were very few Jews or Jewish groups who Hitler fooled.  One exception was the small group, the Association of German National Jews (Verband nationaldeutscher Juden).  This organization was led by Max Naumann, who proposed that Jews should assimilate and show their loyalty to Germany, even under Nazi rule.  Naumann believed Jews could gain acceptance by showing their patriotism and loyalty to the nation.  This meant that German Jews should denounce any political ideology that conflicted with German nationalism, such as Zionism and Marxism.  The Nazis had a different opinion and rejected the idea that Jews could ever be Aryan Germans.

In 1935, the Nazis shut down the Association as part of their vicious campaign to eliminate Jewish influence and presence in Germany.  That same year, Naumann was arrested by the Gestapo and briefly imprisoned.  He was released, then re-arrested in 1939, and interned in Sachsenhausen concentration camp.  He was eventually released, but he died in May 1939, probably as a result of the treatment he received in the concentration camp.

Bad Comparisons Still Contain a Message

Of course, comparisons between the genocidal authoritarian.  Fascist movements that led to WWII do not apply to today, but sometimes well-meaning people get entangled with sociopaths for a variety of complex motives.

Trump’s history speaks for itself.  He embraces authoritarianism nationalism and encourages the erosion of democratic norms.  His associations with white supremacists are well known.  So, given all this, why would wealthy Jews contribute millions to his campaign?

Greed, avarice, ego, self-advancement, profiteering, and power are the engines of this membership.

But at the same time, some in this elite group have made very positive contributions through their philanthropy.  While some of this may be done for tax purposes, it also has a more extended history, even if it is unknown to the donors.  Talmudic law includes extensive discussions on the ethical and legal responsibilities of the wealthy toward the less fortunate.

These responsibilities are rooted in the broader Jewish legal and moral framework, which emphasizes justice (tzedek), kindness (chesed), and communal responsibility, including the responsibilities of the wealthy toward the larger Jewish community.

This includes the concept of arevut, which holds that all Jews are responsible for one another.  This principle is derived from the Talmudic teaching “Kol Yisrael arevim zeh bazeh,” which translates to “All of Israel are responsible for each other.” This has a double meaning in day-to-day life.  This mutual responsibility includes economic support, spiritual well-being, and protection from harm.

It also covers damaging the community’s reputation.  The idea of Shanda happens when Jews publicly violate the law and receive public condemnation and punishment.  Unfortunately, in the era of “greed is good,” many Jews have been convicted of white-collar crimes or flirted on the edge of bad business practices but have escaped legal punishment.

The Shanda stigma may seem archaic and outdated in modern society, where Jews comprise every level of political affiliation, religious observance, and lifestyle in a dispersed global contemporary society.  Still, as a totem of tribal affiliation, and regardless of religious identity and observance, the impact of public transgressions by individual Jews does not go unnoticed by the greater Jewish community.

Maybe that’s why one of the first questions asked in the afterlife is whether a person conducted their business faithfully (the Talmud, Shabbat 31a).  If Trump wins or loses, it looks like many wealthy Jews may be asked this question in the next world.

Hedge funds are the real “rootless cosmopolitans” who go anywhere where there are tax breaks, minimal regulations, and a luxurious lifestyle.

One of the biggest attractions of hedge funds since their inception in 1949 was that they could skirt many regulations and always love the “edge.”

The “edge” is a trading term meaning “the advantage.” That advantage comes in many forms, ranging from an informational advantage over the trading crown,  a leverage advantage,  the ability to trade faster than the competition, a talent advantage, a niche trading advantage, and the paramount advantages, a regulatory and tax-free or reduced tax advantage.

Trading is all about net profits, including the all-in trading costs. These can seem insignificant to average investors, but these trading costs add up when hedge funds trade in huge volumes on listed exchanges in shares, options, or currencies. Things like market impact (when a big trade moves the market against the trader because the market is too thin), clearing fees, trading costs, regulatory costs, and tracking errors all impact trading profits.

Hedge funds use the all-important measure of “alpha” as their measure of profit, or out-performance, compared to a benchmark. The textbooks define Alpha as an investment strategy’s ability to beat the market or its “edge.” Alpha is thus also often referred to as “excess return” or the “abnormal rate of return” about a benchmark when adjusted for risk.

So when a hedge fund seeks Alpha, it also must consider its risk. The goal is to reduce or eliminate as much risk as possible. Some of this risk is inherent in the global markets, and another source of risk comes from regulators and taxation. If hedge funds can reduce these artificial risks, they can maximize profits better.

Managing or Eliminating Regulatory Risk

To reduce tax and regulation risks, hedge funds lobbying groups and other political pressure groups in the financial services industry have developed the most aggressive and well-funded lobbying groups in Washington. Estimates say the financial services lobby (comprised of finance, insurance, and real estate)spent $609 million in 2022 that it deploys to curtail actions by the SEC, CFTC, taxation legislation, changes in real estate taxation, and the hated Consumer Protection Financial Board.

The financial services lobby has waged war against several landmark regulatory efforts that benefit average investors, pensioners, and 401(k) participants. These include the epic seven-year campaign against the Department of Labor’s enactment of fiduciary standards that would make self-dealing and conflicts-of-interest in selling and trading investments in pension and 401(k) plans violate DOL rules. The DOL rule specifically addresses excessive fees and expenses charged to pension and 401(k) plan investors.

When the DOL’s regulations (specifically 404 (a) (5) were implemented in 2012, the DOL said it would produce savings to investors of $15 billion by cutting fees and expenses. (Source: How 401(k) Fees Destroy Wealth and What Investors Can Do to Protect Themselves, by Chuck Epstein, 2012, page 63.)

The Scourge of Carried Interest

Since taxes are one of the biggest hits to bottom-line profitability, hedge funds, private equity, and real estate developers, which all exploit this loophole, have gone to great lengths to protect their tax advantages. The little-known carried interest tax loophole is the most significant benefit to hedge funds, private equity, and real estate.

This tax loophole allows these industries to evade paying their fair share of taxes in exchange for a very preferential tax rate. As a result, average taxpayers pay more taxes than the owners and investors in the billion-dollar hedge, private equity funds, and real estate developers.

CARRIED INTEREST DEFINED

Carried interest is a nerdy accounting term that allows private equity, real estate developers, and hedge fund managers “to mischaracterize their earnings as capital gains rather than income,” according to Patriotic Millionaires University. This group says private equity and hedge funds claim “they are in a ‘partnership’ with their investors, and their earnings should be classified as capital gains instead of income (because they’re investing their time and expertise into the firm).” But this is any small business’s exact definition of how they work. The big difference is that they pay a higher tax rate.

This category of firms loves this loophole since it allows their owners to reduce tax bills by about half. This happens because they are taxed at the much lower capital gains tax rate, just 20%, rather than the top income tax rate of 37%.

The loophole hits the federal tax collection purses hard, so it has attracted the attention of more populist politicians. In the 2020 presidential election, the sociopath Donald Trump rhetorically called for the loophole to be closed, although it was another blatant lie. In the 2012 presidential campaign, candidate Barack Obama criticized Republican candidate Mitt Romney for his profits from the carried interest loophole. He made a powerful argument that should be repeated today.

“How much Mr. Romney benefited from the carried-interest loophole could not be determined since he refused to release his tax returns before 2010. But as a former Bain Capital partner, he received substantial carried interest — 31 percent of his 2010 and 2011 income, The Boston Globe reported,” according to the New York Times. Having 31% of your total multi-million dollar income linked to the carried interest loophole is worth fighting for, and that’s precisely what the financial service lobbyists do daily.

Tax Freedom and Luxury in the Desert

But fighting to keep tax loopholes alive is a constant and expensive task. So hedge funds and other predatory capitalist businesses do what anyone else does when it gets tough: move to another country.

Enter Abu Dhabi, the capital of the United Arab Emirates, which sits off the mainland on an island in the Persian (Arabian) Gulf.  

According to a comprehensive article in Bloomberg News, over 100 high-powered financial trading firms have moved some staff to the capital of this desert nation. In the process, they have boosted office rents to a level comparable to London and New York.

“One in five of the world’s top 100 hedge funds now has an office in Dubai, while 10 out of 15 of the top-tier multi-strategy hedge fund platforms have a presence, according to industry tracker With Intelligence,” according to the Bloomberg article.

Accompanying the hedge funds has seen a rise in private jet use at the local airport, a surge in rents at luxury living spaces, and packed expensive restaurants. The article noted that people rent penthouses in the new waterfront development, where four- and five-bedroom apartments rent from about $9,000 to $11,000 a month. To keep the art crowd happy, Dubai has also reached a deal with the Louve and the Guggenheim to open art museums nationwide.

“People want to move to a place from a tax purpose that’s efficient, where the quality of life and connectivity is great,” said Arvind Ramamurthy, chief of market development at ADGM,” the Bloomberg article said.

But that’s an understatement. “UAE citizens and foreigners with residence visas are exempt from taxes on income, capital gains, gifts, inheritance, wealth, and luxury. When buying or selling property, individuals pay a property transfer tax,” according to PWC.

So, anyone working with hedge funds can get a residence visa and pay no taxes. As for corporations, the benefits are still huge. “Business activity in the United Arab Emirates will be subject to UAE CT at 9% where the total turnover from such business or business activity exceeds 1 million UAE dirham (AED). For this purpose, wages, personal investment income, and real estate investment income will not be considered for determining such turnover,” according to PWC.

Hedge Fund: Rootless Cosmopolitans Who Hate Taxes

So, as the world gets smaller and tax rates go higher in some localities, the best way to cut tax risk is to go to a friendly nation.

Now, Dubai offers significant tax relief. Pay less taxes in Dubai but enjoy all the benefits of the U.S. trading system infrastructure and deep, liquid markets. This gives new meaning to the old saying, “Take the money and run.”

PART 2:

How a city council can disregard citizen input to push through real estate development and more congestion

Ron Desantis’ vision of Florida is that the state would have no or few regulations. This has attracted predatory businesses, such as real estate developers, hedge funds, and private equity firms, even as Florida remains the top state in the nation for fraud. Under Desantis, it will only get worse.

Boca Raton may have the image of pink stucco walls and narrow streets lined with palm trees, but this postcard version of the city is not what its future will resemble.

Thanks to Governor Desantis’ vision of a Florida that is loose on regulations. These range from zoning to wearing COVID-19 prevention masks to allowing large corporations to run their internal human resources department and what lessons teachers can present to their students.

But for the residents of Boca Raton, “free” means allowing real estate developers to have a free hand in deciding how large a project can be and what special considerations the city must provide for the project to move smoothly and profitably.

To do this, the city relies on a few basic ways to minimize and sometimes eliminate public participation in significant construction developments in Boca Raton.

These include the use of everything from state legislation to managing public meeting protocols:

Florida State Bill 102; This bill addresses affordable housing construction, but it also has some interesting provisions that make it impossible for any municipality in Florida to challenge a project. Specifically, the bill:

• “Preempts local governments’ requirements regarding zoning, density, and height to allow for streamlined development of affordable multifamily rental housing in commercial, industrial, and mixed-use zoned areas under certain circumstances.
• Removes a local government’s ability to approve affordable housing on residential parcels by bypassing state and local laws that may otherwise preclude such development while retaining such rights for commercial and industrial parcels.
• Removes provision in current law allowing local governments to impose rent control under certain emergency circumstances, preempting rent control ordinances entirely.

While the need for “affordable” housing carries political weight, the devil is in the details. In this case, the bill allows any residential project that provides 40% of its “affordable” housing space to be built to the highest limit of any other building within a one-mile radius. This could create a concrete forest of tall buildings.

Second, this law gives preferential treatment to projects that aim to provide “affordable” housing. One project slated for development to be built on the old IBM campus  (an area near Clint Moore and Yamato Road), would offer three-bedroom apartments of 1,300 square feet for at least $4,000 per month. Surprisingly, there is no affordable housing in the new BRiC Project as of now. This is a question that vexes some long-time real estate observers.

Affordable housing is a thorny issue for the city and developers. One developer explained that under Bill 102, you have to adhere to all the setback rules, and that limits what you can build. As a result, developers cannot build 100 units per acre. With setbacks, you lose valuable building space and are height-restricted. The setbacks and units per acre rules also do not apply to downtown Boca, he said.

He concluded by saying that “the city is getting so built up that the only thing left to develop are commercial properties and golf course. This is what Boca has coming t it in the years ahead.”

Florida State Bill 620: Also known as the “Local Business Protection Act”; this bill allowed certain businesses to claim business damages from a county or municipality if the county or municipality enacts or amends certain ordinances or charter provisions that hurt the businesses’ profitability. The bill would have taken away some of the home rule powers of towns and cities that were affecting business operations, such as the closing times for bars, as well as zoning ordinances that affected development. The bill was widely considered a very pro-small business bill and it had the backing of the Florida League of Cities, one of the most powerful lobbying groups in Florida.

Publicly, the bill was presented as one that would prohibit puppy mills. But more importantly, it would have made a significant impact on local real estate development due to “onerous local regulations,” such as zoning restrictions.

Specifically, The Florida State Bill Analysis and Fiscal Impact Statement regarding Bill 620 states, “Currently, landowners have a cause of action under the Bert J. Harris Act (passed in 1995) to compensate them for the lost value of their land caused by certain local government actions; landowners have a cause of action for onerous local regulation in the form of exactions; and business landowners have a cause of action under eminent domain law for business damages related to a taking of real property. Similarly, this bill creates a cause of action for a business to sue a local government when the enactment or amendment of an ordinance or charter provision causes at least a 15 percent loss of profits to the business.”

Bill 620 would have given property owners recourse to contest city or town zoning restrictions it considered unfair or detrimental to their profitability. It would have allowed businesses to collect business damages and attorney fees if the business could prove a monetary loss “when an ordinance or a charter provision causes a business significant economic harm.” However, in a surprise move, Desantis vetoed the bill claiming it contained “broad and ambiguous language” that would lead to “unintended and unforeseen consequences.”

For a Republican who is supposed to be pro-small business, DeSantis’ veto surprised many Republicans. One real estate professional said DeSantis’ veto was strictly to keep the state’s municipalities behind him as he approached the election. “DeSantis just cares about his image and he will sell himself out for the vote, no matter what it is. His whole Republican Party caucus supported bill 620 and blindsided them by vetoing the bill, just to keep the municipalities happy, so they could keep and protect home rule,” he said.

Ex parte meetings:  These are secret meetings outside the purview of the public between interested real estate developers and their agents and city officials. What is discussed and agreed upon is not disclosed to the public.

Stage-managed public meetings: One of the most frustrating things for Bocar residents who take the time to attend public zoning meetings is that they are not allowed to speak due to time constraints or, more commonly, the earlier speakers, who often represent developers, speak for too long. As a result, interested citizens get bored and leave the meeting.

A Case Study in Land Development and Profit

The Boca Raton Innovation Campus, known as BRiC, was developed in the late 1960s by IBM as its North American Research and Development facility. The world’s first personal computer was invented on this site.

Today, it’s a 1.7 million square foot office park and is the largest office complex in South Florida. Yet most residents will drive by this campus and not even know it’s there. It is bordered by Yamato Road, Spanish River Boulevard, and Broken Sound Boulevard, west of I-95 and about a half mile west of the Tri-rail Commuter line.

It is a prime attraction for developers because it is already developed and due to its location. This 120-acre site was purchased for about $179 by Crocker Partners (now called CP Partners) in 2018. In 2021, the Group sold BriC for $320 million to DRA Advisors “in one of South Florida’s biggest real estate investment deals this year,” according to the Commercial Observer. Why did the sales price of BRiC increase by $141 million in three years? The project received a preliminary OK to expand how the property would be developed vastly.

One of the significant concessions the new owners received was that it would require fewer parking spaces because it is a half-mile away from the Tri-Rail train station. The theory of planned mobility developments is that more people would be taking the train to work on the campus and would not need a car. That could be a stretch since commuting on public transportation in South Florida is uncommon. Still, the theory convinced zoning officials.

Under the new plan, the BRiC developers would only provide one parking space for every 1.75 square feet of finished space versus the current ordinance that calls for one parking space for every 500 square feet. Parking calculations can also be distorted by how many people will live in a residential unit in the BRiC development.

For instance, what if three adults live in an apartment, and each has their car? The variance only allows one parking space for that same unit.

Parking space code requirements are a way the city addresses congestion. Parking spaces are valuable property and are stated explicitly in the Boca Raton Engineering Design Standards Manual, according to whether the spaces are in office parking structures, and if they are in a parking lot, whether the incoming parking traffic is one-way or two-way. The type of building, location, and square footage determines the space required. As for the dimensions of the spaces themselves, the Manual says they should be 10 feet by 20 feet. (Page 26 of the Manual.) That’s a precious 200 square feet for every developer to sacrifice.

As a result of how this mandated valuable parking space can be used, a random look at Boca Planning & Zoning Board meeting minutes routinely shows that parking spaces are reduced or traded for other spaces on a property or an adjacent property to fit the variance*.

(The building code for parking spaces is particular in Boca Raton and covers almost every type of business, from mortuaries to restaurants to schools and doctors’ offices. See below for the Boca parking code requirements.*)

A Real Estate Developer Fable

There is an old tale about a scorpion who wanted to cross a river. Unable to swim, the scorpion asks a frog sitting on a nearby rock if he could ferry him across the river on his back.

“I would do that for you, but how do I know you will not sting me and that I would not die?” the frog asked.

Perplexed, the scorpion replied: “I would not sting you since you are doing me a favor. And if I stung you, I would drown in the middle of the river. I also consider you my friend, so I would not harm you for doing me this great favor.”

Convinced by this logic and sincerity, the frog agrees. The scorpion climbs on the frog’s back, and the two start across the raging river. As they approach the far bank, the scorpion lifts his long tail and stings the frog. As the frog gasps for air, he asks the scorpion why he killed him despite his assurances that all would be well.

The scorpion looks the frog in the eyes and says: “It is my nature, and nothing I do can change it.”

Like the scorpion, the nation’s largest real estate developers have it in their nature to be repeat offenders of local zoning laws and other land use regulations that delay or hamper their projects. The evidence of this happens in every city and town where developers undertake a large, expensive project.

Unlike other industries, real estate developers also have access to significant tax credits that are not available to many other businesses. These tax credits include opportunity zones, historic tax credits, low-income housing tax credits (LIHTC), year 15 tax credits applied to LIHTC, new market tax credits, cost segregation, investment tax credits, production tax credits, energy/renewable energy tax credits, and brownfields tax credits. Tax credits help propel the industry. The other engine is looking for available land or buildings that a builder can profitably develop.

In South Florida—from West Palm Beach, Boynton Beach, Delray, Pompano Beach, and Miami– rampant real estate development is transforming towns with various residential, mixed-used, shopping, and commercial office spaces. To get more favorable considerations from local zoning regulations, developers often drive hard bargains against local zoning staff and city officials to get the most advantageous—and profitable—concessions.

As an example, a recent article by investigative reporter Jason Garcia in his blog “Seeking Rents” found that undisclosed lobbyists are persuading members of the Florida Legislature to “pass a controversial bill that would have made it much easier for real-estate developers to bulldoze older buildings in Miami Beach — a city famous for both its Art Deco architecture and its strict historic-preservation rules.”

These “opaque lobbying groups” with undisclosed donors are another way predatory real estate developers work in Desantis’ version of a state that distains regulation, accountability, and public disclosure. This is why Florida is the fraud capital of the U.S. and will get worse given the lack of ethics in the Florida legislature and the big money bulldozing local zoning codes. In Florida, bug money trumps quality of life. More congestion means higher taxes and lower property values for individual homeowners.

A 2018 study of cities around the Great Lakes in the Journal of Transport Geography by Jangik Jin and Oeter Rafferty found that noise, air pollution, stress, energy consumption, and wasting travel time…may lead to falling residential property values…Property values decreased in areas 5 to 15 miles from the central business district.

So, where does that leave Boca’s residents and those in other cities concerned about over-building?

Not in a good place. As long as elected officials in Florida disdain regulation and cater to special interests, residents will see a slight decrease in their quality of life, accompanied by an inability to hold them accountable.

*Boca Raton Parking Space Building Code Requirements, Sec. 28-1655. – Required off-street parking: Multi-dwelling units containing two or more living units: 1.75 motor vehicle parking spaces for a 1-bedroom unit, 2.0 motor vehicle parking spaces for a 2-bedroom unit, and 2.0 motor vehicle parking spaces for a 2-bedroom unit with den or a three or more bedroom unit, except that efficiency units shall require 1.5 motor vehicle parking spaces per unit; Places of public assembly: 1 motor vehicle parking space for every three seats, plus one motor vehicle parking space for every 25 square feet of additional, gross floor area provided for public assembly purposes. Business, professional, governmental, and research development offices: 1 motor vehicle parking space for each 200 square feet up to 4,000 square feet of gross floor area and one motor vehicle parking space for each 300 square feet in excess of 4,000 square feet.