Pluralistic: 25 Aug 2021


Today's links



A bombed out cityscape surmounted by a Lowe's sign.

Big Box stores' other shoe drops (permalink)

Since the start of this century, small and mid-sized towns have courted big box stores, using tax revenues to fund expensive road, sewer and electric expansions to lure large corporate chains to town.

These companies promised jobs and tax revenues, and, technically speaking, they delivered both, but only if you do some very funny math. National chains pay little or no federal income tax, and often secure state tax abatements.

This gives them a 30-40% advantage over small, homegrown businesses operated by locals who can't afford the huge sums needed to pay corrupt tax-experts to establish fictional headquarters on offshore financial secrecy havens.

Large national chains also have commanding bargaining power when they negotiate with suppliers, which means they pay less for their merchandise than locally owned businesses.

Given the tax and purchasing advantages, the arrival of a big box store doesn't really create jobs. Sure, they hire locals to work in their stores, but at the cost of a boarded-up main street where the only businesses that survive are dollar stores.

When a local government spends public funds to lure in a big box store, they actually cost the town net jobs, and the funds they spend to kill those jobs come from the workers whose jobs were lost and the businesses that provided those jobs.

But at least big boxes pay local taxes, right?

Well…

In Michigan, Lowes pioneered an aggressive tactic of lowering its tax bills. It's called the "dark store" gambit, and it's so successful that towns are refunding millions to big box stores.

https://ilsr.org/dark-store-tax-tactic-makes-big-box-stores-terrible-deal-for-cities/

In her breakdown for ILSR, Olivia LaVecchia explains how the "dark store" hustle works. First, a big box store files an appeal on its tax assessment, arguing that the town or county have overvalued its property.

Instead of opting for the usual assessment formula (building costs minus depreciation), they demand assessment based on the sale price of "comparable" properties.

Then, they argue that the relevant "comparable" properties are shuttered, abandoned big box stores.

Big box stores are built to order, heavily customized to the retailer's specific requirements. They are designed to be fast to erect and disposable, and when they are put up for sale, restrictive covenants are added to the deed to block a competitor from moving in.

These restrictions are incredibly specific (and restrictive), listing individual items that may never be sold by anyone who buys the property, for the rest of time.

Unsurprisingly, the resale value of a cheaply built, white-elephant structure that can't be used to sell common items is very, very low. Lowe's argues that the taxes on its property should reflect this incredibly low valuation.

That's how the Lowe's in Marquette, MI retroactively slashed the assessed value of the store it built for $10m from $5.2m to $2.4m (in 2010), $2m (in 2011) and $1.5m (in 2012).

Based on the new assessment, Marquette was on the hook to refund $755,828 to Lowe's, a company with $50b in net annual sales.

To pay for the refund, Marquette slashed its library, police and fire-department budgets.

Lowe's is a trailblazer. After a corporate-friendly state tax tribunal and supreme court sided with Lowe's, 12 more big-box stores in Marquette appealed their historical tax assessments, seeking comparable refunds from the city.

Marquette isn't an outlier. Ottawa City, MI is on the hook to refund $14.8m to its big box parasites. Statewide, the "dark store" gambit has netted $47m, so far – and it's spreading to Indiana, with Meijer hitting Marion County, IN for $2.4m.

Indiana is projecting a $120m tax shortfall for towns and counties as "dark store" reassessments sweep the state. Big box stores already destroy local businesses and jobs and erode the local tax-base, but it's about to get much worse.

Thanks to the sky-high costs they impose on local governments, big box stores already cost municipalities $0.44/sqft/year ($80k/year for a Walmart Supercenter). That's before dark-store reassessment.

https://ilsr.org/key-studies-why-local-matters/#7

The myth of big box prosperity sent money gushing out of the public spigots: by 2014, big boxes had sucked up more than $2.4b in direct subsidies from local governments.

https://www.goodjobsfirst.org/taxbreaksandinequality

The dark-store hustle has all the hallmarks of a long con. In a long con, the crook lets the mark win a little money at first, as a convincer. Then, having lulled the mark into complacency, the crook takes them for everything.

Local governments were able to pretend that somehow these big boxes would make up for the costs they imposed and the losses they triggered, because of the local tax bills they paid. That kept the subsidies and favors flowing.

Now that local governments are on their last legs, battered by the covid slump and anti-tax extremists in state government that cut spending, the fraudsters pull their switch, clawing back all the taxes they paid as convincers and setting themselves up for a tax-free future.

(Image: City of Westminster Archives Centre, CC BY-SA; Mike Mozart, CC BY, modified)



The Belarusian Cyber Patriots logo: cartoon drawing of a happy hooded hacker with a laptop and cup of coffee, the laptop bears a sticker with an image of the pre-Soviet Belarusian flag knight-emblem. The background is a grid of ones and zeroes.

Belarusian dictator pwned by "cyber-partisans" (permalink)

Belarus is "Europe's last Soviet dictatorship," a country ruled by Alexander Lukashenko, an absurd authoritarian caricature who once had a one-armed man arrested for clapping:

https://loweringthebar.net/2013/01/one-armed-man-arrested-for-clapping.html

Lukashenko's brutality is absurd, but it's no joke. Belarus has a terrible human rights record: it's a corrupt land of secret disappearances and torture (it's also my heritage: my grandfather was born in Nowy Swerzne, Belarus).

Lukashenko is a clown, but he possesses the administrative competence to avail himself of high-tech surveillance – a decade ago, he was already using mobile carriers' records to obtain lists of every person who attended anti-government demonstrations.

https://charter97.org/en/news/2011/1/12/35161/

But as the saying goes "any weapon you don't know how to use is your enemy's." Lukashenko's regime is highly digitized – and badly secured. Earlier this year, hacktivists called the Belarusian Cyber Partisans announced that they'd obtained a huge trove of government docs.

The trove includes the identities of police informants, government officials' personal information (including spies), recordings from the state's widespread wiretapping program, and footage from security cameras and drones.

Now, these documents are starting to trickle out. As Ryan Gallagher reports for Bloomberg, the authorities are starting to freak. The head of the Belarusian KGB made a special TV broadcast to blame the breach on foreign spies.

https://www.bloomberg.com/news/articles/2021-08-24/belarus-hackers-seek-to-overthrow-local-government

The leaks expose Lukashenko officials to liability in the International Criminal Court when and if the regime finally falls. The leaks are being promoted by BYPOL, a dissident group of former Belarusian cops who resigned en masse after last year's rigged election.

They're especially incensed to learn that Lukashenko's spies were wiretapping cops (including senior cops), and planning violent suppression of peaceful protesters – actions that made the cops look particularly bad.

While there are parallels between the Cyber Partisans and other hacktivist groups like Anonymous, Gabriella Coleman (who literally wrote the book on political hacktivism) told Gallagher that this represents a new level of hacktivist activity.

https://www.spectator.co.uk/article/the-anonymous-ghost-in-the-machine

Gallagher spoke to a Cyber Partisans spokesperson who claimed the group's membership was 15 people: 3-4 intrusion specialists with the rest serving as data-analysts. The members are said to work in Belarus's tech industry.

There's lots more to come in this breach – they have 1-2 million minutes of wiretap audio alone.

Lukashenko's hold on power has never been more fragile. Even by low global standards, his government seriously bungled covid respnse.

Last year's protests over obviously rigged elections saw massive waves of protest that only swelled in the face of brutal repression and mass arrests. Senior military officers publicly burned their uniforms in protest.

https://pluralistic.net/2020/08/14/shock-doctrine/#walkaway

Dozens of riot cops dropped their shields and switched sides, embracing protesters as brothers.

https://www.cnn.com/2020/08/14/europe/belarus-protests-riot-police-intl/index.html

Coleman told Gallagher that she had never seen hacktivists operating as skilfully as the Cyber Partisans "except in the movies." It's true that Belarus's indomitable and creative opposition seem to be ripped from fiction.

Last year, I wrote that the protests bore a resemblance to the climax of my 2017 novel Walkaway.

https://craphound.com/category/walkaway/

The current breach triggered lots of email from people who say it reminds them of the plot of my 2020 novel Attack Surface:

https://craphound.com/attacksurface/

But I didn't "predict" this – instead, I observed the same tactics being used by other opposition movements as the Cyber Patriots, and, like them, thought about how they might evolve.

Just as my 2008 novel Little Brother was inspired by the whistleblower Mark Klein, who revealed the NSA's mass surveillance program – official lies about this also inspired Snowden's decision to reveal more NSA secrets.

I didn't "predict" Snowden – instead, we were both paying attention to the same underlying phenomena. And while it's easy to get discouraged about the ways that tech is used as a force for oppression and control, examples like this remind us of its liberatory potential.

The mission of technological self-determination isn't motivated by blind faith that more tech leads to more human rights – rather, it's the dual understanding that unless we seize the means of computation tech will be a terrible force for oppression.

But that also, wrestling control over the technology that enables us to form groups and coordinate their actions has powerful potential for human thriving. This isn't crude optimism, rather, its motto is, "This will all be so great…if we don't screw it up."



This day in history (permalink)

#20yrsago The internet is boring https://www.nytimes.com/2001/08/26/us/exploration-of-world-wide-web-tilts-from-eclectic-to-mudane.html

#15yrsago Windows Media DRM cracked, no one cares https://blogs.harvard.edu/cmusings/2006/08/25/#a1889

#10yrsago Internet Archive’s cache of 24/7 TV footage from 9/11 and beyond https://archive.org/details/911

#1yrago Ballistic Kiss https://pluralistic.net/2020/08/25/anxietypunk/#bk



Colophon (permalink)

Today's top sources: Naked Capitalism (https://www.nakedcapitalism.com/).

Currently writing:

  • Spill, a Little Brother short story about pipeline protests. Yesterday's progress: 257 words (16919 words total)

  • A Little Brother short story about remote invigilation. PLANNING

  • A nonfiction book about excessive buyer-power in the arts, co-written with Rebecca Giblin, "The Shakedown." FINAL EDITS

  • A post-GND utopian novel, "The Lost Cause." FINISHED

  • A cyberpunk noir thriller novel, "Red Team Blues." FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: Disneyland at a stroll https://craphound.com/news/2021/08/22/disneyland-at-a-stroll/
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Upcoming books:

  • The Shakedown, with Rebecca Giblin, nonfiction/business/politics, Beacon Press 2022

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