Prologue:

Federalism => competition between states => one (small) state, S. Dakota, abolishing long-standing laws that prevented usury => growth of trillion dollar credit card debt industry

See also Little South Dakota (pop. 833,000) holds $2.5 trillion in bank assets — more than any other state. Here's why. (The Atlantic, 2013):

• But when state leaders, desperate to attract outside businesses during the economic recession of the early 1980s, changed South Dakota's usury laws to eliminate the cap on interest rates and fees, Citibank came calling...The deal was breathtakingly quid pro quo, with then-Gov. Bill Janklow's chief-of-staff leaving to become president and CEO of Citibank South Dakota.

AND then the abolishing of laws against perpetuities

In 1983, he abolished the rule against perpetuities and, from that moment on, property placed in trust in South Dakota would stay there for ever. A rule created by English judges after centuries of consideration was erased by a law of just 19 words. Aristocracy was back in the game.

The Tax Justice Network (TJN) still ranks Switzerland as the most pernicious tax haven in the world in its Financial Secrecy Index, but the US is now in second place and climbing fast, having overtaken the Cayman Islands, Hong Kong and Luxembourg since Fatca was introduced. “While the United States has pioneered powerful ways to defend itself against foreign tax havens, it has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion,” said the TJN in the report accompanying the 2018 index. In just three years, the amount of money held via secretive structures in the US had increased by 14%, the TJN said.

Here is an example from one academic paper on South Dakotan trusts: after 200 years, $1m placed in trust and growing tax-free at an annual rate of 6% will have become $136bn. After 300 years, it will have grown to $50.4tn. That is more than twice the current size of the US economy, and this trust will last for ever, assuming that society doesn’t collapse altogether under the weight of this ever-swelling leach.

If the richest members of society are able to pass on their wealth tax-free to their heirs, in perpetuity, then they will keep getting richer than those of us who can’t. In fact, the tax rate for everyone else will probably have to rise, to make up for the shortfall caused by the wealthiest members of societies opting out, which will just make the problem worse. Eric Kades, the law professor at William & Mary Law School, thinks that South Dakota’s decision to abolish the rule against perpetuities for the short term benefit of its economy will prove to have been a long-term catastrophe. “In 50 or 100 years, it will turn out to have been an absolute disaster,” said Kades. “Now we’re going to have a bunch of wealthy families, and no one will be able to piss away that wealth, it will stay in the family for ever. This just locks in advantage.”

All effected by one man

And upheld by this 1978 SCOTUS case which allowed banks to export interest rates based on where they were "headquartered," — sound similar to the Irish tax dodge? (based on where the IP was owned)

The unintended consequences of interventionism @Nassim Taleb? + America's ridiculous healthcare system

About four peanut-allergic children die every year in the United States from a reaction to peanut.

Kids’ lack of exposure to peanuts, however, seems to have an unintended consequence: more peanut allergies. In the United States, the latest estimates find that 2 to 5 percent of American kids have a peanut allergy. The number of visits to emergency rooms due to anaphylactic reactions to peanuts more than doubled from 2008 to 2012.

In 2016, Vickery left Duke to work full time for Aimmune, where he oversaw a clinical trial of the peanut flour. Two groups of about 250 people with peanut allergies took the peanut pill or placebo every day and were monitored over the course of a year. At the end of the experiment, the participants all ate small, gradually increasing doses of peanut, up to about two peanuts. The researchers measured how much it took to cause a reaction. Almost everyone in the placebo group had a reaction before reaching the full amount. But among the people taking the peanut-flour pill, two-thirds could safely eat two peanuts.

In a small 2018 study, researchers reported safely giving 1/125,000th of a peanut to allergic kids and very slowly working all the way up to 12 whole peanuts.

“Well, I suppose they could,” Casale said. But he went on to explain that the real value is billing codes. When peanut flour is an FDA-approved drug, that means doctors can be reimbursed for prescribing it and overseeing its administration. The process can be covered by insurance. As it is, practitioners who offer their own versions of oral immunotherapy have to be paid out of pocket. This makes it inaccessible to many patients. So, essentially, in order to make the therapy accessible, it has to become part of the system. The system is what allows pharmaceutical companies and doctors to charge insurers thousands of dollars for peanuts.

In April, a meta-analysis in The Lancet confirmed the same: There was “high-certainty evidence” that peanut oral immunotherapy considerably increases allergic and anaphylactic reactions, compared with avoidance or placebo treatment. The FDA committee lists the intended use of the drug as “to reduce the risk of anaphylaxis after accidental exposure to peanut in patients.” Yet in people who’ve taken the drug, this risk has been shown to go up, not down.

“It’s impossible to know if the increase in anaphylaxis was due to increased exposure to peanuts because people felt protected, or if it was due to the drug itself,” Tice notes. This sort of semi-protective treatment can have the complicating effect of making a person feel more protected than they are in the real world. Letting one’s guard down, even a little, can cause any benefit of desensitization to be quickly outweighed.

The old standard was that a drug could not be taken to market until it had proved to be safe and effective in two trials with meaningful end points—ideally treating or curing a disease, or at least alleviating symptoms. Over the past decade, the FDA has loosened standards, requiring only some evidence of an effect that may or may not be meaningful.

Subscription credit lines— a tactic to inflate IRR

Over the past two years, however, the accuracy of IRR has been called into question thanks to the increasing ubiquity of subscription lines of credit. These loans, also known as commitment facilities, have long been used in the private capital industry to finance transactions before investor capital is called in, easing limited partners’ liquidity needs and making it possible for general partners to jump on deals more quickly. But lately, fund managers have been using subscription credit lines differently — and with greater frequency.

According to alternatives data provider Preqin, the use of commitment facilities among private equity funds has more than tripled in the past decade, with 47 percent of funds launched in 2010 and later having utilized the financing tool, compared with 13 percent of funds launched before 2010. And it’s not just that more private fund managers are taking out these loans. Preqin also reported that these once short-term instruments are now being used to delay capital calls longer — which investors, researchers, and other industry experts claim is leading to artificially inflated IRRs.

Two recent papers — one from a pair of Carnegie Mellon business school professors, one co-authored by two German researchers with a BlackRock private equity director — have explored the effects of subscription credit lines on IRRs and arrived at the conclusion that the loans have meaningfully improved IRRs without increasing the actual amount of money that investors take home.

The German researchers, Pierre Schillinger and Reiner Braun of the Technical University of Munich, worked with BlackRock Private Equity Partners director Jeroen Cornel to simulate how real buyout funds would perform if they had hypothetically used subscription credit lines. Simulating commitment facility use for less than six months resulted in only a 47-basis-point increase in IRR on average, or a 20bp improvement at the median. But increasing the time frame of the loan to a year led to an average IRR bump of 120 basis points — a median increase of 57bp.

“If used extensively, [subscription credit lines] can indeed lift fund returns substantially,” they concluded.

The secret behind gift cards— companies recognise 10% of all stored value cards as never being redeemed in any year and book it as profits

Each year Starbucks recognizes that a portion of its stored value liabilities will be permanently lost. This is known as breakage. Starbucks recognizes this amount as profit. In 2018 the company recognized $155 million in breakage, around 10% of all stored value balances. Wow! Starbucks already pays just 0% on its debts to customers, but add in breakage and that equates to a roughly -10% interest rate!

Starbucks is really good at harvesting seigniorage. Walmart's annual sales are 20x larger than Starbucks sales (~$500b vs $25b). But Walmart only has $1.9 billion in unredeemed gift card balances, not much more than Starbucks.

Big Towel vs Big Hand-dryer. Another weird Big Thing: Big Raisin. Really drives home the point that good writing can turn anything into a melodrama worthy of TV.

Public bathrooms offer three primary options to dry a pair of wet hands. First, there is the venerable crisp-pleated paper towel. Second, the old-style warm-air dryer: those indestructible metal carapaces that, through their snouts, breathe down upon our hands. And finally, the jet dryer sub-species of the sort Dyson makes, whose gale-force winds promise to shear away every drop of moisture rather than slowly evaporating it. In the quest to dominate the world’s restrooms, Campbell discovered, Dryer v Towel is a pitched contest of business strategy and public relations. “Expect to be lied to a lot,” Campbell told me. “It’s almost like the cola wars. You have Pepsi v Coke, and you have hand dryers v paper towels.”

Neopets” was the wireframe for a community of girls that continuously expanded its expressive reach. Not bound by the limitations of a traditional open-world game built on a console system, “Neopets” began a collaborative building exercise for those that played it. Even in the aspects of play that were regulated by “Neopets” developers, users provided input: A player could publish reported and researched stories or opinion pieces in the in-game newspaper, The Neopian Times, or build out shops that filled Neopia’s marketplace. Players gathered in forums and in guilds – partly responsible for the “Neopets” DIY media scene – to forge relationships and share experiences. Communities of storytellers, artists, reporters, designers, and poets emerged, alongside an economy that fed off its collaborators.

Garcia and other girls like her, including Madison Kanna, now a software engineer, looked outside “Neopets'” set system to earn Neopoints, capitalizing on the skills that drew them to the site. “I would build profiles for people with HTML and CSS and exchange that for goods and supplies,” Kanna says. “Just going on and knowing I could create anything I wanted was huge.” Both women taught themselves as girls to design and code websites for their “Neopets,” and, in turn, started “businesses” designed to use those skills. “I designed my profile page, my shop,” Garcia says. “I coded everything. And what came out of that was my first tutorial site where I was teaching people – other girls, mostly – to code. I had a ‘staff member’ when I was 14, also writing tutorials. That’s what I was doing in my spare time.”