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This 2014 excerpt of The Guardian, Feb 18, is by Luke Mansillo.
Australians are routinely being told that hefty mining taxes would hinder the country’s exports of coal and iron ore. However, mining giant BHP Billiton recently increased its profits by 83% to US $8.1bn. In spite of this enormous growth, the company only paid US $29m in minerals resource rent tax (MRRT). As it stands, the tax is in no way making BHP uncompetitive.
Unlike Australia, Norway has kept their resource extraction “rents”. Norway has a 78% tax on oil and gas revenues – unlike Australia, where the effective tax rate is a mere 13%. $60bn from gas sales to continental Europe is annually deposited in the Norwegian sovereign wealth fund. The fund has 5.11 trillion Krone (AU$930bn), or twice Norway’s GDP.
Norway’s example demonstrates that, after 20 years, private companies will remain and continue to make a profit – with margins reduced.
But while Norway has been prudent with its resource bounty of $185,000 for every citizen, Australia has not.
It is not xenophobic to believe that Australians should receive the maximum benefit from their property. Australia’s mineral wealth is owned by the Crown; the Crown holds those resources in trust so they may benefit citizens. Those resources ought to be exploited by the Australian citizenry because they belong to them.
Ed. Notes: It’s not just exhaustible natural resources that should enrich the populace but the more familiar surface land, too. Have owners pay in Land Dues and have everyone (owners included) receive rent dividends. Doing so is not only fair. It also makes taxes and subsidies far less excusable. And it — geonomics — has worked wherever tried.
This 2014 excerpt of TakePart, Feb 18, is by Willy Blackmore.
The fight over GMO labeling isn’t the first regulatory battle Monsanto has engaged in over the course of its 112 years in business. From PCBs to DDT to Agent Orange, the chemical company turned ag giant has manufactured numerous products that ended up all but disappearing — if not being banned outright — following high-profile public debates about environmental and health concerns.
You don’t have to look much farther than the boardroom to see how deeply entrenched Monsanto’s ties to the rest of the food industry are: Janice L. Fields, a former president of McDonald’s USA, and C. Steven McMillan, a former CEO of Sara Lee Corporation, both sit on the board of directors. Other board members have ties to Procter & Gamble, Lockheed Martin, and Microsoft.
Monsanto’s board members have worked for the EPA, advised the U.S. Department of Agriculture (USDA), and served on President Obama’s Advisory Committee for Trade Policy and Negotiations. They presided over multiple universities in various senior positions, including South Dakota State University (with whom Monsanto has a significant research agreement), Arizona State’s Biodesign Institute and Washington University in St. Louis…. The prevalence of Monsanto’s directors in these highly influential positions begs a closer look at how they’re able to push the pro-GE agenda within the government and influence public opinion.
Ed. Notes: Monsanto is hardly the exception. Every major corporation has its directors serving as directors on other company boards, rich foundation boards, executive advisory councils, as university trustees, intermarrying themselves and their children, etc. It’s the way of the world. It’s well documented in Who Owns America by G. William Domhoff.
It has its roots — both historically and even today — in capturing the vast stream of money paid for land and resources. If ever the hierarchy is to be toppled, then reformers will have to redirect that flow of “rents” to the accounts of everybody. Government would have to quit being the handmaiden of the elite and instead use its powers to tax or charge fees or institute dues or lease public resources at full market value in order to recover these socially-generated values then disburse the raised revenue as dividends to the citizenry in general.
More equitable distribution of society’s surplus will provide a foundation for a more equitable society, minus the concentration of wealth and power.
BTW, there is a petition to pass a law to require truth in the labeling of food which would require Monsanto’s customers to reveal the GMOs on shelves in grocery stores, in case you’d like to know what your eating.
This 2013 excerpt of Clawback, Feb 17, is by Greg LeRoy.
A large national poll of independent business owners finds that cutting taxpayer subsidies to big business is their top-rated public policy priority. And a smaller survey of high-growth entrepreneurs finds that the last things they are concerned about are low taxes or business-friendly regulations.
Nationwide, of 2,602 small business owners said the public policy change that would most help their business was “eliminate subsidies for big companies.”
Of the fastest-growing companies in the United States, only five percent cited low taxes and only two percent cited regulations as a reason for choosing their location. Before starting their company, they moved to a city of one million or more because of personal connections and quality of life. Their most critical business reason for staying was a pool of talented labor, followed by access to customers and suppliers.
Ed. Notes: In the US, regulations are not as big a problem as in the nations listed by deSoto in his work on capitalism where people must wait years for permits. That said, even if most businesses here don’t run into trouble, some still do, and none should.
Instead of regulate and permit (or not) and otherwise interfere, governments could instead get out of the limited liability business. To minimize liability and ruinous lawsuits, business would conduct its affairs safely and buy sufficient insurance coverage.
And to attract talented labor, customers, and suppliers, there is something any town can do to make itself such a destination city. It’s something cities across the Pacific used to help themselves become the Asian Tigers. And that is, shift the property tax off buildings, onto locations. Then to pay the higher “land dues”, the owners quit speculating and develop their sites. The development stimulates the local economy and the second wave of businesses that fill the new structures keep the good growth going.
This property tax shift does not directly fall on new businesses but it does create a context that favors start-ups. Indeed, in the recession before last, the Australian towns that taxed land not only did not lose businesses but actually added them! Good ol’ geonomics worked again!
So smart taxes and efficient land use matter, as does eliminating the financial favors for bigger insiders.
This 2014 excerpt of Seeking Alpha, Feb 16, is by Craig Pirrong.
Elon Musk is the founder of PayPal, Tesla Motors, and SpaceX (space exploration). All of his companies were heavily dependent on government subsidies and support. This support socialized the potential losses, and allowed Musk (and other major investors, notably Goldman) to capture the upside.
If his products and business models were so great, visionary Musk could succeed on his own, by attracting private capital.
SpaceX is dependent on government contracts, given that a very large fraction of space launches carry government payloads. This is something different from Solar City and Tesla, where the government is providing subsidies but not receiving any product or service in return. But still, it means that Musk depends crucially on cultivating government support.
A firm does not succeed or fail at winning big ticket contracts on the basis of the superiority of its product, but instead on the basis of its ability to influence politicians and bureaucrats. And a lack of scruple is often a feature, not a bug in that regard.
SpaceX was looking for a commercial launch site, and seeking state subsidies in order to build it. The company has been playing states off against one another, looking for tax benefits. Musk focused on one of the poorest parts of Texas – Brownsville – and dangled the prospect of a mere 600 jobs, in exchange for $20 million dollars or so in tax benefits. Some of which will come from the taxpayers of that very poor community. The state legislature has succumbed.
Ed. Notes: There’s long been a refrain in economics and business: The way to make a fortune is to rake in the public’s money and to slough off your costs onto the public. Don’t pay for your pollution; let others do that. And, classically, capture the socially-generated rental value of land, while unconscious society sits idly by not even aware of what they’re losing.
Ordinary people will fight each other over wages and jobs but not over locations and their rents (only the elite know enough to wage those battles). In this regard, regular people are much like the species of lizards that live on the cliffs of South America overlooking the Pacific Ocean, but in reverse. The lizards fight each other over nesting spots but when a seagull comes and eats the eggs, the lizards don’t defend their own offspring; they just blithely sit there watching the next generation go down the gullet of the seagull. The lizards are not evolved enough to understand what’s happening to their progeny, to their species.
Similarly, humans are not hardwired to be able to see the flow of rent, to see their loss of rent, to see who captures it, to see how social conventions like property, mortgages, subsidies, and tax breaks direct the flow of rent into the pockets of favored insiders. Hopefully, humans will acquire the ability to become conscious of rent out of innate curiosity and a sense of justice without having to wait for evolution to deliver the needed new neural connections in the brain. Which is the mission of this site, to somehow make rent and geonomics obvious to the curious and caring.
This 2014 excerpt of AP, Feb 16, was from Williston Herald and was circulated by ABC.
The rapidly growing North Dakota oil patch city of Williston has the highest average rent for an apartment in the United States. Oil field workers receive six-figure salaries that can bear inflated rent.
A 700-square-foot, one-bedroom apartment in Williston costs an average of $2,394 a month. The same apartment would cost $1,504 in the New York area, $1,411 in the Los Angeles area or $1,537 in the Boston area. Nearby Dickinson, N.D., ranks fourth on the list at an average of $1,733 a month. Chicago didn’t even crack the Top 10.
The population of Williston, in the northwest corner of the state not far from the Montana border, has more than doubled since the 2010 Census.
Many of the new apartment buildings feature mudrooms, where workers can remove dirty shoes before entering.
The oil boom may be around for the next 20 years because of the different levels of oil they now have access to through fracking.
Ed. Notes: What sets how much you must pay for land, something you usually pay for when paying for housing? It’s not the cost of land, since land has no cost, not being created by anyone. Instead, it’s how much users or occupants are willing and able to pay. It’s all laid out in the old Ricardo’s Law of Rent.
Also, the oil boom could bust any time, turning those boom towns into ghost towns. If fracking uses up to much water, or pollutes too much water, or burning oil worsens climate change to the point where people have had enough, then petroleum could go the way of whale oil.
That day of switching to clean, renewable energy could come sooner if governments were to switch to geonomics right away.
This 2014 excerpt of CounterPunch, Feb 15, is by Mike Whitney. It also appeared in OpEdNews.
Economic fundamentals played no part in the so called housing rebound. The economy stinks as bad today as it did four years ago when the government number-crunchers announced the end of the recession. The reason prices have been rising is because of the Fed’s fake rates and QE, inventory suppression, bogus gov mortgage modification programs, and speculation by Private Equity and investors groups.
The big PE firms made a killing, since prices soared 12 percent in one year. In some of the hotter markets, investors represented upwards of 50 percent of all purchases.
Sales are down, purchase applications are down, and the country’s homeownership rate has slipped to levels not seen since 1995, 18 years ago.
The Fed’s $1 trillion purchase of mortgage backed securities (MBS) and zero rates have done nothing to stimulate “organic” consumer demand. No “trickle down” at all. All the policy has done is generate a temporary surge of speculation that’s distorted prices.
Household growth of 448,800 in 2013 represents a 48 percent drop in household growth relative to that from 2012 and marked the lowest annual household growth measure since 2008, in the depths of the Great Recession.
Nearly half of college grads have been scrubbed from the list of potential buyers due to their burgeoning student loans which now exceed $1 trillion. These kids will probably never own a home, let-alone have a positive impact on sales in 2014.
The number of “seriously delinquent borrowers” has actually gone up in the last year. Not only that, but many of these people haven’t made a payment in more than four years.
The banks have been dragging their feet for 40 months now, slowing down the foreclosure process (that adds to the shadow supply of distressed homes) in order to push up prices hoping to ignite another boom. Now — after three and a half years of blatant collusion — they’ve done a 180 and started speeding up foreclosures. Why?
They think that “institutional investors” are going to call-it-quits and move on to greener pastures. That’s going to push down prices, which means they’re going to lose money. So they want to get ahead of the curve and dump more houses on the market before the stampede. That way, they lose less money.
Ed. Notes: Foreclosures are sad for families but part of banking as is but maybe shouldn’t be. Maybe banking should change. But change how?
First, trends in economies are not smooth, rising or falling evenly; it’s more like two steps forward, one back, or vice versa. What the writer above is noticing is a temporary correction that won’t last more than a few months. It fits right into the more regular 18 year cycle business cycle, or more precisely, the land-price cycle. That cycle could be flattened so there’d be no more recessions and foreclosures. How?
Remove the value of land from the price of housing. How? Get government to recover the socially-generated value of land. How? Tax locations. Institute land dues. Raise the deed fee. However. Just do it.
Then housing — minus any price for land — would no longer attract speculators, no more inflating its price. Land and housing would only reflect “organic” demand, to use the jargon above.
And BTW, while recovering the value of locations and resources, don’t tax anyone’s labor or capital. Those taxes are not fair and merely counterproductive. Sans such taxes, the value of land will be high in a healthy way, able to fund a dividend to everyone, the key feature of geonomics.
This 2014 excerpt of Weekly Wastebasket, Feb 14, is by Taxpayers for Common Sense.
Congress mandated these sweetheart deals:
Agriculture Committee leaders jammed a trillion dollar farm bill through Congress last week that will increase taxpayer subsidies for agribusinesses coming off several years of record profits.
Shipbuilders want to build more ships or, at the very least, they want to modernize the current ships. Congress directed the Secretary of the Navy to upgrade one of the cruisers starting immediately.
Taxpayers across the nation spend more than $200 million each year so that a privileged few in just 117 communities can be guaranteed convenient air service. Taxpayers spend $3.9 million annually to subsidize air service from Presque Isle, Maine to Boston. Every time somebody flies from Lewistown, Montana to Billings, Montana, it costs taxpayers $1,905. A taxi for the two hour drive – at New York City taxi cab rates – would be less than $350.
Some BLM offices let coal companies explain their low bids, and then accept them. The BLM collects lower royalty payments for coal because it doesn’t consider foreign markets, where coal is more expensive.
Such largesse is certainly not the way into any taxpayer’s heart.
Ed. Notes: Don’t you wish you could put a stop to such wasteful favors for insiders? To fix this problem, it’s not enough to criticize such subsidies in particular. Citizens must criticize the validity of subsidizing in general.
There’s never been a government that didn’t favor insiders. Indeed, that’s what government is for, to fleece the flock and feed the wolves. It’s always been that way and always will, until citizens demand a wholesale transformation of public revenue policy.
We need to make taxing and subsidizing relics of the past. Instead, our governments must recover and share society’s surplus, which is all of society’s spending for land, resources, and other natural assets that come into existence without the contribution of anyone’s labor or capital. It’s called geonomics and it would save citizens one heck of a lot of money!
This 2014 excerpt of Grist, Feb 14, is by John Upton, based on articles in Science and in Stanford News.
A new mega-analysis of 20 years worth of research suggests that the EPA is underestimating the fossil fuel’s climate impacts by 25 to 75 percent.
The problem with the EPA’s math doesn’t concern the burning of natural gas, which produces less carbon dioxide than other fossil fuels (but way more than solar panels or wind turbines). The problem is in the leaky systems that extract and transport the fuel.
The EPA is severely underestimating the amount of natural gas that leaks into the atmosphere during drilling, processing, and distribution. Atmospheric tests covering the entire country indicate emissions around 50 percent more than EPA estimates. And that’s a moderate estimate.
Natural gas is basically just methane. Methane is responsible for perhaps a fifth of global warming since the 18th century. Levels of methane detected in the atmosphere have been rising rapidly since 2007.
Ed. Notes: A huge hullaballoo is made about the discovery of fire but burning has been too easy for humanity for way too long. These natural gas leaks are just another reason for our species to change how it harnesses energy. We must use
sunlight for electricity to make artificial light,
fuel cells for electricity to power motors, thereby
reducing the need to burn whatever fuel to heat homes to a bare minimum.
Technologically, we could make such a shift today. What’s in the way is not a lack of new gizmos but the presence of political opposition. Government subsidizes the old ways and taxes the new ways, albeit inadvertently by making both labor and entrepreneurship more expensive than they would be sans taxes.
Thus if we shifted our revenue policy we could shift our energy technology and score another one for geonomics.
Ed. Notes: As usual, the problem is people assuming that the rental profit from locations belongs to the landowner when in a moral universe it belongs to those creating it, which is the surrounding society. Further, nobody made the earth, everybody needs some part of her, and enjoying an equal right to life we all have an equal right to land. If we were to use government to recover then disburse equitably the socially-generated value of land — and to not tax and subsidize willy-nilly — then the rise in site value would be a boon to us all, no matter what its cause: tourists, Air(mattress)BnB, or locals hitting the jackpot.
This 2014 excerpt of CorpWatch, Feb 12th, is by Pratap Chatterjee and it also appeared at OpEd News.
Three top executives at Anglo Irish bank are on trial for a secret scheme to buy their own bank’s shares. The bankers allegedly hatched the plan to cover up bets made by Sean Quinn, once Ireland’s richest man.
What the executives were doing had “potentially disastrous consequences for the entire Irish financial system.”
Ireland attracted a phenomenal amount of investment in its Celtic Tiger boom days after it set up an “offshore” tax haven named the International Financial Services Centre with a special limited-time tax rate of 10 percent. Among the beneficiaries was Anglo Irish bank, a property finance bank founded in 1964, which gained a reputation for lending quickly for risky local projects at a higher rate of interest that in turn swelled its profits. One of the ways that Anglo was able to grow exponentially was because it often accepted one mortgaged property as collateral for the next, a scheme not unlike a house of cards.
Over the course of a decade, beginning in 1994, house prices in Ireland rose five fold and by 2007 even Irish farm land was worth €66,000 ($88,000) per hectare, the highest in Europe. Ireland was soon building more than seven times as many houses per capita as the U.K. and the Irish had borrowed twice as much as their gross national product. At the time one in five workers in Ireland was employed in the construction industry, and lending to the sector totaled 28 percent of all lending (compared to 8 percent in the rest of Europe).
One notable beneficiary of this was Irish entrepreneur Sean Quinn, who started his career in 1973 quarrying gravel on his family farm, who eventually built a fortune in manufacturing by undercutting his competitors. In 2008, Quinn was the wealthiest man in all of Ireland, worth €4.722 billion ($6.13 billion)
At the time, Quinn had quietly built up a 29.3 per cent ownership stake in Anglo Irish by buying an exotic financial instrument called contracts for difference (CFD) that essentially involved gambling that the bank’s share price would rise. Quinn made his bets in secret, using a bank registered in Madeira to invest a total of €3.2 billion ($4.4 billion) in Anglo Irish beginning in 2006.
When share prices in the bank started to fall in March 2008, bank executives discovered that Quinn was effectively the biggest shareholder in the bank. Panic stricken, they decided to lend money to ten wealthy people – who have been dubbed the Maple Ten based on the name for the scheme drawn up by Morgan Stanley – to buy a large chunk of Quinn’s shares from him in the hope that would stabilize their value.
The problem was that since the Maple Ten had borrowed money from the bank itself so when the share price continued to collapse, the bank lost its own money.
They had legal opinion from MOP (law firm Matheson Ormsby Prentice) and that the financial regulator was aware of it, and the Central Bank, everyone, was aware of it, and they wanted it done.
When Anglo Irish teetered on the brink of complete collapse later that year, the Irish government pumped €30 billion ($33.8 billion) of taxpayers’ money into it. The following year, Anglo Irish was nationalized and in February 2013, the bank was liquidated, essentially writing off the taxpayer’s money. Meanwhile the government of Ireland has been forced to borrow €67.5 billion from the European Union and International Monetary Fund to cover the losses caused by the collapse of the national economy.
Ed. Notes: Good to see some top dogs face jail time potentially. But what’s overlooked is such scams happen every business cycle. The problem, this cycle — which is really the real estate cycle — is too long for most people to notice, being 18 years. What’s also overlooked is that the value is not in any building but in the land or location. And finally, most people don’t notice that the value of locations is generated by the presence of society, so it’s fair for society’s government to recover this surplus value. If government we to tax land value or charge land dues or recover site value by whatever mechanism, then it’d no longer be available for speculators, and such scams could not occur; why would any speculator bother? So, instead of one billion grabbing for all that rising land value, society should, and put an end to both such scandals and a roller-coaster real estate cycle.
The Economics of Star Trek — The Proto-Post Scarcity Economy
This excerpt of Medium, either late 2013, late December, or early 2014, January or February, is one of their Editor’s Picks by Rick Webb.
People can get paid doing zero work. We have the capacity to feed everyone, even if we don’t have the will. It’s not a matter of scarcity; it’s a matter of the organization of labor and capital.
In today’s terms, a ‘healthy’ economy now is one at or near full employment. A healthy economy now is one where everyone has a job. But in abundance, jobs are actually unrelated to a healthy economy. Everyone’s fed and housed and tons of people simply don’t need to work. Right now, we have them working making stuff we don’t need. Is that any better than them not working?
It seems pretty clear cut that jobs are optional. The Federation is based on a philosophy of self improvement and cultural enrichment. We’ve never seen people who sit around and literally do nothing, but then why would we?
The big challenge here is how does society get someone to do the menial jobs that cannot be done in an automated manner. Why would anyone? There are really only two options: there is some small, incremental increase in your hypothetical maximum consumption, thus appealing to the subconscious in some primal way, or massive societal pressure has ennobled those jobs in a way that we don’t these days.
Private ownership still exists — the biggest examples are Sisko’s restaurant and Chateau Picard. The Maquis routinely refer to “our land,” which they presumably owned. Some spaceships were privately owned. Finally, Captain Kirk says in the Nexus, “This is my house. I sold it years ago.”
Star Trek is, essentially, European socialist capitalism vastly expanded to the point where no one has to work unless they want to. The amount of welfare benefits available to all citizens is in excess of the needs of the citizens. Therefore, money is irrelevant to the lives of the citizenry, whether it exists or not. Resources are still accounted for and allocated in some manner, presumably by the amount of energy required to produce them (say Joules). And they are indeed credited to and debited from each citizen’s “account.” However, the average citizen doesn’t even notice it, though the government does, and again, it is not measured in currency units — definitely not Federation Credits.
If robots do all the dirty work, and the US is hugely rich, does every single person really need a job? Are we going to let all of that money pile up in the 0.1% ruling elite, or can it be distributed to everyone? Does wealth being distributed to the people in an equal manner mean communism absolutely? What happens when the surplus is more than enough?
Ed. Notes: Outsiders buying up homeland happens all the time in Africa and elsewhere. America is not exempt from that and, actually, never has been. Because we humans are land animals and have the instinct of ownership, and feel upset by trespassers, our hackles rise when the rich land-grabber is a foreigner but don’t even care when the absentee owner is a fellow countryman. Nationality (the horizontal dimension) matters but class (the vertical dimension) doesn’t count.
But in reality, investor owners won’t make different decisions; being from here or there won’t change any minds about preferring big agri-business, factory farms, selecting crops that travel well and can sit on shelves for long periods, using GMOs, mechanizing and automating with hot fertilizers, over-irrigating and thereby depleting the ground water, etc.
If people could care as much about sharing rents, making land value into our common wealth, rather than about the home address of absentee owners, then these downstream issues would no longer plague us. So how do we tie instinct to geonomics?
This 2014 excerpt of iranian.com, Feb 12, is by Reza Varjavand of Saint Xavier University in Chicago.
Rent seeking is often carried out through exorbitant lawsuits against business firms and the costs are passed on to consumers. Mighty corporations like pharmaceutical companies are also shielded by the patent system. In a recent lawsuit, the jury awarded Apple $1 billion in damages to be paid by Samsung for allegedly copying some aspects of Apple’s iPhone and iPad.
Lawyers will gain handsomely regardless of the outcomes. They may also encourage companies to file even more lawsuits in anticipation of monetary gain as well as monopoly of power. Propagation of such cases can divert companies’ attention away from focusing on their products and redirect it toward gaining easy money at the expense of their rivals.
There are more than 3100 lobbyists working for the healthcare industry alone (nearly 6 for every congressperson), and 2100 lobbyists working for the energy and natural-resources industries. Physicians are represented by more than 750 lobbyists in Washington spending nearly $80 million every year to safeguard their interests.
The U.S. ranks at the top when it comes to the number of licensed lawyers. There are currently 1,143,358 of them, one per every 265 people. The inverse correlation between economic growth and the number of lawyers has been documented.
Despite oversupply, the costs of legal service keep rising at usually twice the rate of inflation. The mounting spending on legal services is partially due to additional demand created through vigorous advertising by lawyers seeking to find lucrative targets for possible lawsuits. Such solicitation efforts have been proliferating in the mass media – via commercials aired during the shows watched by most susceptible people – and particularly in the form of billboard advertising that is proliferating especially in the aftermath of Great Recession of 2008.
Lawyers, just like medical doctors, have to go through rigorous training and a time-consuming licensing process. They incur an immense amount of debt upon graduation. Once they finally begin practicing, they feel the need to generate as much money as possible to pay off that debt and make up the opportunity cost of the time they have invested in education and demanding internships.
The proliferation of specialists has caused massive increase in the number of surgeries performed in the US, “400% in a little over a decade”. Like many other business people, lawyers often tend to create a market for real or imaginary problems because they have already a solution for them. Lawyers, like doctors, earn income when things go wrong.
Ed. Notes: Most politicians are lawyers. Lawyers have persuaded politicians to pass laws that make it a punishable offense for a non licensed legal expert to perform even a routine task. Lawyers have erected insider court proceedings that if anyone representing themselves fail to follow can be found in contempt of court. None of this is to facilitate justice for society but to fatten the pockets of lawyers.
Doctors use the same tactics of requiring licenses, punishing non conformists, and winning other laws to maintain their oligopoly.
What can the rest of society do? Get its government out of the licensing racket. Get rid of automatic limited liability so people in business would have to become responsible personally for their decisions to cheat. And, basically, share society’s surplus so it can’t be concentrated onto few major owners and corporations that hire the unscrupulous minions to do their dirty work. If people feel materially secure, perhaps those now tempted will be able to resist a career in lawyering.
This 2014 excerpt of Quartz, Feb 12, is by Matt Phillips.
In the wake of the financial crisis, US companies have socked away a record $1.93 trillion in cash or liquid securities. So if they’re not investing it, what are they doing?
And paying dividends. At the end of January, some 420 out of the 500 companies that comprise the benchmark S&P 500 stock index paid dividends. That’s the most since 1998. And S&P companies say they plan to pay out roughly $330 billion in dividends this year—a new record high.
They’re buying back their stock.
The cash at these companies belongs to shareholders, not the management of the firms. Returning it either via dividends or buybacks is the right thing to do, if executives don’t see a productive place to invest that money.
Money floating around keeps interest rates low — regardless of the fact that the Federal Reserve continues to cut back on its bond-buying programs (QE).
Ed. Notes: Yes, that excess does belong to stockholders. So how long does management get to keep it? How is the delay legal, not theft? Why doesn’t the government enforce shareholder rights? The “recovery” may have been a boon for those corporations but for some penny investors a dividend check could come in handy right about now.
This 2014 excerpt of UPI, Feb 11, is by Brooks Hays.
According to a new survey by the National Science Foundation, nearly half of all Americans say astrology is either “very scientific” or “sort of scientific.”
By contrast, 92 percent of the Chinese public think horoscopes are a bunch of baloney.
Skepticism of astrology hit an all-time high in 2004, when 66 percent of Americans said astrology was total nonsense. But each year, fewer and fewer respondents have dismissed the connections between star alignment and personality as bunk.
Not surprisingly, those with less science education and less “factual knowledge” have become increasingly willing to accept astrology as legitimate science.
Young people are also especially inclined to offer astrology scientific legitimacy, with a majority of Americans ages 18 to 24 considering the practice at least “sort of” scientific, and the 25-34 age group is not far behind them.
Ed. Notes: How do old, non-scientific ideas gain popularity while new, provable ideas are so hard to sell to people? One saving grace may be the fact that good new ideas don’t need everyone behind them, or even a majority, but just a critical mass. And whatever else those early adherents believe, that’ll be quite alright.
RichDiesal writes: The new report (PDF) from the National Science Foundation that states that roughly 40% of Americans believe astrology to be scientific turns out to be false; most of those apparently astrology-loving Americans have actually confused astrology with astronomy. In a 100-person Mechanical Turk study with a $5 research budget, I tested this by actually asking people to define astrology. Among those that correctly defined astrology, only 10% believe it to be scientific; among those that confused astrology for astronomy, 92% believe ‘astrology‘ to be scientific.
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, including the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
an economic policy based on the earth’s natural patterns. Eco-systems self-regulate by using feedback loops to keep balance. Can economies do likewise? Why don’t they now produce efficiently and distribute fairly? The answers lie in the money we spend on the earth we use. To attain people/planet harmony, that financial flow from sites and resources must visit each of us. Our agent, government, must collect this natural rent via fees and disburse the collected revenue via dividends. And, it must forgo taxes on homes and earnings, and quit subsidies of either the needy or the greedy. As our steward, government must also collect Ecology Security Deposits, require Restoration Insurance, and auction off the occasional Emissions Permit. And that’s about it – were nature our model.
a new field of study offered in place of economics, as astronomy replaced astrology and chemistry replaced alchemy. Conventional economics, in which GNP can do well while people suffer, is a bit too superstitious for my renaissance upbringing. If I’m to propitiate unseen forces, it won’t be inflation or “the market”; let it be theEgyptian cat goddess. At least then we’d have fewer rats. Meanwhile, believing in reason leads to a new policy, also christened geonomics. That’s the proposal to share (a kind of management, the “nomics” part) the worth of Mother Earth (the “geo” part). If our economies are to work right, people need to see prices that tell the truth. Now taxes and subsidies distort prices, tricking people into squandering the planet. Using land dues and rent dividends instead lets prices be precise, guiding people to get more from less and thereby shrink their workweek. More free time ought to make us happy enough to evolve beyond economics, except when nostalgic for superstition.
suitable for framing by Green Parties. When Greens began in Germany two decades ago, they defined themselves as neither left nor right but in front. Geonomics fits that description. The Green Parties have their Four Pillars; geonomists have four ways to apply them:
Ecological Wisdom. Want people to use the eco-system wisely? Charge them Rent and, to end corporate license, add surcharges. To minimize these costs, people will use less Earth.
Nonviolence. Want people to settle disputes nonviolently? Set a good example; don’t levy taxes, which rely on the threat of incarceration, to take people’s money. Try quid pro quo fees and dues.
Social Responsibility. Want people to be responsible for their actions? Don’t make basic choices for them by subsidizing services, addicting them to a caretaker state. Let people spend shares of social surplus.
Grassroots Democracy. Better have grassroots prosperity. Remember, political power follows economic. Pay people a Citizens Dividend; to keep it, they’ll show up at the polls, public hearings, and conventions.
a scientific look at how we divvy up the work and the wealth, how some of us end up with too much or too little effort or reward. That’s partly due to Ricardo’s Law of Rent, showing how wasteful use of Earth cuts wages. And it’s partly due to how a society’s elite runs government around like water boys, dishing out subsidies and tax breaks. While geonomists look political reality right in the eye, without blinking, conventional economists flinch. When Paul Volcker, ex-chief of the Federal Reserve, moved on to a cushy professorship at Princeton cum book contract, the crush of deadlines bore down. So Volcker asked a junior associate to help with the book. The guy refused, explaining that giving serious consideration to policy would ruin his academic career. The ex-Fed chief couldn’t believe it and asked the department chair if truly that were the case. That head honcho pondered the question then replied no, not if he only does it once. And economics was AKA political economy!
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?
what you do when you see economies as part of the ecosystem, following feedback loops and storing up energy. Surplus energy – fat or profit – enables us to produce and reproduce. To recycle society’s surplus, the commonwealth, geonomics would replace taxes with land dues (charged to users of sites and resources, in-cluding the EM spectrum, and extra to polluters), and replace subsidies with rent dividends to citizens (a la Alaska’s oil dividend). Without taxes and subsidies to distort them, prices become precise, reflect accurately our costs and values; then, motivated by no more than the bottom line, both producers and consumers make sustainable choices. While no place uses geonomics in its entirety, some places use parts of it, most notably a shift of the property tax off buildings, onto locations. Shifting the property tax drives efficient use of land, in-fills cities, improves the housing stock, makes homes affordable, engenders jobs and investment opportunities, lowers crime, raises civic participation, etc – overall it makes cities more livable. Geonomics – a way to share the bounty of nature and society – is something we can work for locally, globally, and in between.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.