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This 2014 excerpt of the Financial Times, Jly 25, is by Adair Turner, senior fellow at the Institute for New Economic Thinking and former chairman of the UK Financial Services Authority.
Thomas Piketty’s book, Capital in the Twenty-First Century, illustrates rising wealth-to-income ratios in all advanced economies. They are primarily explained by one factor: rising property prices. And the rises mainly reflect not new investment in housing stock but the rising value of the land on which existing housing sits. As the lucky ones grow richer, they spend an increasing share of their income on competing to own homes in desirable locations.
Technological progress drives down the price of many goods and services but up the value of the oldest and most physical thing of all – land.
By 2010, more than 70 per cent of all advanced-economy bank lending was against property. The more credit is available, the more prices rise. Credit-driven price rises encourage borrowers to demand more credit and banks to supply it – until land soaks up so much money that the cycle goes into reverse. Property booms and busts have been central to all recent financial crises.
Between 2010 and 2011 Sweden’s Riksbank raised interest rates by 1.75 per cent in the hope of slowing a Stockholm property boom. The boom continued unabated, but the economy fell into slow growth. Interest rates cannot be the sole policy lever.
More construction is no panacea: Ireland’s relaxed planning rules did not prevent a devastating property boom and bust.
In the Netherlands, mortgage interest relief has helped drive a house price boom that has turned to bust.
Increased property taxes, on higher-priced properties in particular, could help reduce the bias towards property investment and encourage more efficient use of the existing housing stock.
Ed. Notes: The author is half right. If you’re going to increase the property tax, increase only the half on land, not the half on buildings. Taxing buildings creates slums. But taxing land — or instituting land dues — spurs owners to put their sites to highest and best use.
Further, neither the location nor its value is generated by the owner. While land is not made by any of us, its value at least is the product of all of us in society. It is the perfect common wealth.
Better still, as government recovers socially-generated land values, it can lose counterproductive taxes. If government were to disburse the revenue as a dividend, sort of what Singapore does, then it could get rid of many wasteful programs. Imagine that: nearly no taxes nor subsidies, along with affordable housing and a conserved environment. Such is the power in geonomics.
This 2014 excerpt of Vox, Jly 29, is by Ezra Klein.
About one-half of one-percent of adult Americans gave more than $200 to a federal candidate in the 2011-2012 cycle. About four percent contributed if you look at donations under $200.
More than a quarter of the nearly $6 billion in contributions from identifiable sources in the last campaign cycle came from just 31,385 individuals, a number equal to one ten-thousandth of the U.S. population.
The small minority of people who fund American politics are much more politically polarized than the vast majority of people who don’t contribute to campaigns.
You’re a lot likelier to contribute to a political campaign if you think the fate of the nation rests of your guys defeating the other guys.
Politicians have to appeal to the people who fund their campaigns. The people who fund their campaigns really believe the other party is terrible. And so spending a lot of time working across the aisle or questioning your party’s political strategy is not going to make your donors very happy.
Ed. Notes: So should more people give money to politicians? Or should more people make it safe for politicians to do the right thing by making the right thing popular? How would citizens do that? The way they always have. Read, Write. Talk to friends, family, co-workers, neighbors. Wear T-shirts. Put on bumper stickers. Attend meetings. Join fundraisers. Host events. When giving money, give it to successful organizers and purveyors of inspiring messages. Create the parade that politicians will then have the courage to get in front of. That strategy — making a movement — is what makes most sense to me.
This 2014 excerpt of the New York Times is by James K. Boyce of the University of Massachusetts, Amherst.
Representative Chris Van Hollen, Democrat of Maryland, plans to introduce legislation that would require coal, oil, and natural gas companies to buy a permit for each ton of carbon in the fuels they sell. Permits would be auctioned, and 100 percent of the proceeds would be returned straight to the American people as equal dividends for every woman, man, and child.
The state of Alaska has been paying dividends since 1982. That’s when the Alaska Permanent Fund, the brainchild of Gov. Jay S. Hammond, a Republican, began to pay dividends from oil royalties based on the principle that the state’s natural wealth belonged to all its people. The biggest payout came under Gov. Sarah Palin.
The number of permits initially would be capped at the level of our 2005 carbon dioxide emissions. This cap would gradually ratchet down to 80 percent below that level by 2050. Prices of fossil fuels would rise as the cap tightened, spurring private investment in energy efficiency and clean energy. Energy companies would pass the cost of permits to consumers in the form of higher fuel prices. But for most families, the gain in carbon dividends would be greater than the pain. And that doesn’t count the benefits of cleaner air and a cooler planet.
The outsize consumption — and outsize carbon footprints — of the richest 10 percent of Americans means that they’ll furnish a similarly high fraction of the carbon dollars generated by household spending on gasoline, electricity, airplane trips, and so on. For these households, the dividends won’t outweigh the costs. But the affluent can afford to pay for their emissions.
The bill’s main political weakness is that no one stands to make a killing on it. The bill’s main strength is that it protects the incomes of ordinary Americans as it protects the planet for their grandchildren.
Ed. Notes: A better reason to share the raised revenue is that the atmosphere is not some overarching dumpsite but a major part of the commons. It has an economic value and that value belongs to all of us, not to the class of polluters.
Not just the atmosphere’s value but all parts of nature with value should be shared — even surface land. People have an equal right to Earth, so residents should pay land dues into their community treasury and get back rent dividends. That way, each citizen would compensate and be compensated by every other citizen.
Were this geonomic system in place, then what need would we have for taxes and subsidies? Not much. We could lose the worst of them and enjoy a far more efficient economy along with all the benefits that follow from an extra income from the worth of Earth.
This 2014 excerpt of Occupy, Jly 28, is by Ellen Brown.
Shadow banking refers to hedge funds, derivatives, and credit default swaps.
Conventional banks also engage in “shadow banking.” The cash cushion from excess deposits does not make the banks less vulnerable to shock. The proprietary trading desks at these “banks” use that cash as collateral to take out loans to gamble with.
Despite the 828-page Dodd-Frank Act, the derivatives pyramid has continued to explode to a notional value now estimated to be as high as $2 quadrillion.
Taxpayers pay about $400 billion a year in interest on the federal debt, just as they did in 2006 — although the debt has nearly doubled, from $9 trillion to over $16 trillion. The total interest is kept low by extremely low interest rates.
Raising interest rates could implode taxpayers and the derivatives scheme. The biggest banks have written over $400 trillion in interest rate derivatives contracts, betting that interest rates will not shoot up.
If they do, the banks would become insolvent. It will be our deposits that get confiscated to recapitalize them, under the new “bail in” scheme approved by Janet Yellen as one of the Fed’s more promising tools (called “resolution planning” in Fed-speak).
Depressions, credit crises, and financial collapse are not acts of God but are induced by mechanical flaws or corruption in the financial system. Credit may stop flowing, but the workers, materials and markets are still there. The rules of money and banking have changed every 20 or 30 years for the past three centuries. We can change them again.
Ed. Notes: Forget changing regulations — lose them, their bureaucracies, and the Federal Reserve, and address fundamentals.
For safety, let people put their savings in any public treasury, earning no interest. Prohibit politicians and bureaucrats from touching it. If people want to receive an interest, they’d have to invest elsewhere.
Yet getting an interest payment won’t matter so much if there is no inflation, and there won’t be any if government quits overspending on wasteful programs like war and quits taxing people’s useful efforts like trade.
Getting an interest payment will matter even less when government pays citizens a dividend from surplus public revenue. Whence the surplus? It’s the worth of Earth, its economic parts, none of which needed human effort to exist. It’s all our payments for the nature we use, the land, resources, EM spectrum, ecosystem services.
Presently mortgages direct most of that spending into banks, the source of the trouble. However, government could use taxes or fees or dues to redirect that flow into the public treasury then back out again as a Citizen’s Dividend. Already, Singapore does something like that.
This 2014 excerpt of Gillette News Record, Jly 20, is by Greg Johnson.
“Town For Sale,” the sign reads. “30 acres, store, house and bar, trailer park, post office.” Asking price? $1.5 million.
Located on Wyoming Highway 24 between Belle Fourche South Dakota and Devils Tower National Monument, Aladdin is the lowest settlement in Wyoming at 3,740 feet elevation. A basin just to the north is the lowest point in Wyoming at 3,125 feet. The area is rich in fossil remains, from petrified tree trunks to lizard footprints.
Four miles west of Aladdin may be seen ruts from Lt. Col. George A. Custer’s 1874 expedition into the Black Hills.
Aladdin’s owners for the past 28 years, Rick and Judy Brengle, live on a ranch seven miles down the road and operate another store in South Dakota.
“All our kids had gone to college,” that was in 1986, “so my husband bought me a town.” The ranch wife has served as Aladdin’s mayor, postmistress, chief of police, and more. With striking white hair and piercing blue eyes, she’s no-nonsense but fashionable in a skirt and boots.
Of the 15 buildings that make up Aladdin (it also has a population of 15), the big prize is the 118-year-old General Store, one of the five oldest in Wyoming. It has never had running water and boasts two of the last functioning outhouses around.
“The bar has always just been a liquor store, but you can drink on the porch or anywhere on these 30 acres,” Brengle says cheerfully.
The town’s busiest time of year will arrive in early August with the boisterous Sturgis Motorcycle Rally of well-to-do bikers.
Coal had first been discovered in the area in 1882 and was hauled by ox team to Belle Fourche to be loaded on rail and sent to the gold mines of the Black Hills.
Coal mining and shipment slowed drastically by 1910. In 1922, the mines and railroad were sold to local interests and by 1928 the railroad closed down. Three coal-mining towns just east of Aladdin didn’t survive (Bakertown, Barrett Town, and Hay Creek).
Aladdin isn’t the only small town to have been sold lock, stock and barrel. In 2012, two others were sold.
Buford – also in Wyoming – was sold at auction. The 10-acre spread with a store and fuel station, cell tower, three-bedroom house, and historic schoolhouse, was expected to bring less than $300,000. A Vietnamese businessman bought it with a bid of $900,000.
Bankersmith Texas, a tiny railroad town, was bought by Doug Guller, who changed the name to Bikinis Texas, in honor of his “breastaurant” chain.
Ed. Notes: What feels odd about buying an entire town to me is not just everyone living there having the same landlord but the public spaces — streets, sidewalks, utilities — having a private owner. Should public spaces be owned by the public? Or even be part of a commons?
Also, when places get so tiny and nobody any longer wants to live there, should they die a natural death and become a ghost town as so many in the American West have? The towns only existed for exploiting the earth. When that’s no longer possible, the town is not viable, and loses its raison d’etre.
The only thing that could save it would be its location — enjoying proximity to somewhere that people want to be — coupled with geonomic revenue policy.
This 2014 excerpt of the New York Times, Jly 26, is by their Editorial Board.
It has been more than 40 years since Congress passed the current ban on marijuana, inflicting great harm on society just to prohibit a substance far less dangerous than alcohol.
The federal government should repeal the ban on marijuana.
We believe that on every level — health effects, the impact on society, and law-and-order issues — the balance falls squarely on the side of national legalization.
The social costs of the marijuana laws are vast. There were 658,000 arrests for marijuana possession in 2012. The arrested are disproportionately young black men, ruining their lives, and creating new generations of career criminals.
There are legitimate concerns about marijuana on the development of adolescent brains. For that reason, we advocate the prohibition of sales to people under 21.
Ed. Notes: Cool. The NYT considers it safe enough to take a stand. Some leadership would have been nice, but better late than never. And way cool that it shows the powers-that-be can change, that society has changed, and that eventually government will catch up. Now, if only those three players will get real about economic justice and promote a Citizen’s Dividend from society’s surplus, those trillions of annual rents, all our spending for nature and privilege, now lining the pockets of very few but available to make life a joy for everyone.
This 2014 excerpt of Pacific Standard, Jly 25, is by Tom Jacobs.
For women looking to attract a man, there are advantages to being caring. But new research shows it doesn’t work the other way around. Women do not equate responsiveness in men with attractiveness or masculinity.
Women may see emotionally responsive men as overly eager to please or as insincere cads who are clumsily trying to ingratiate themselves.
In the getting-to-know-you phase, potential partners often tend to rely heavily on conventional cultural scripts of how women and men should behave toward one another.
Ed. Notes: But where do those cultural scripts come from and why do they apply to the same gender across cultures? Whatever, the main take away is that people have frames and if you want open-minded people to support your new good idea, you must push the right buttons — no matter who’s your listener nor what’s their gender.
This 2014 excerpt of EcoWatch, Jly 24, is by Brandon Baker.
Hours after a jet flying over Ukraine was shot down, Congress members from both sides of the aisle presented cases to lift the 40-year-old ban on crude oil exports. The oil would cut Europe’s oil dependence on Russia and provide an economic boost to the U.S., they say [at least for those whose money comes from oil], ignoring the cost of further damaging our environment and collective health by drilling.
Ed. Notes: Since the only winner from this tragedy would be oil companies, and since there was no lag time whatsoever in politicians jumping to do what oil companies want, does that cast suspicion on the US Government as culpable of instigating another false flag? (like the Gulf of Tonkin, the Maine in Havana, perhaps even 9/11?)
Politicians and business people do conspire, meaning, their private discussions and plans are not part of the public record. But conspiracies aside, is isolating all the Russian people the best way to bring about peace with the Russian government? German leader Bismarck noted that when goods can not cross borders, armies will. But if Russia and Europe were to become more dependent upon each other, not less, then that scenario would be the likeliest path to peace. So on this score, US politicans are wrong again and just serving the “oiligarchy” again.
They are also wrong to allow more destruction of the natural world. More drilling in more places ruins ecosystems. So does extracting, transporting, refining, storing, and burning oil. Giving up the burning of fossil fuels would be altogether a good idea. And there are other power sources, such as solar and fuel cells, to turn to. They are probably even cheaper than oil — especially if polluters had to pay damages — but how can we know with politics hiding the truth?
This 2014 excerpt of BoingBoing, Jly 23, is by doctorow5d.
Have we a “shortage” of humans to care for other humans? What people really mean when is that employers don’t pay enough to attract and sustain workers to do it.
What business means by “there are not enough workers” is “there are not enough workers at the price we’re willing to pay.”
If we persist in the view that the dividends from robots’ increased productivity should accrue to robot owners, we’ll come to a future where there aren’t enough owners of robots to buy all the things that robots make.
Property rights may be a way of allocating resources when there aren’t enough of them to go around, but when automation replaces labor altogether and there’s lots of everything, do we still need them?
The unwillingness of economists and thinkers to contemplate it tells us that we’re arguing about what kind of railroad rules we should have once there are automobiles everywhere.
Ed. Notes: If you want to live in the privacy of your own home, won’t you need that right and to own the house? And what about the land beneath it? And the land beneath the factories? And the land above those resources? And the locations in the EM spectrum? Somebody does and will own all those valuable aspects of nature. Which is fine. But should they keep the rents for those valuable locations or pay them?
By analogy, you may have a child, but do you own that child’s labor? Even after paying so much for the child’s upbringing? A better example. You park downtown or at a park in the country, because space is limited and the people excluded by your presence deserve compensation. Similarly, you as an owner of land would not keep the rent from your community but pay it to your neighbors, just as they would pay you.
Everyone would pay land dues (like land taxes) into the public treasury and get rent dividends back (like Singapore does). Plus, extra awesome is this: as technology progresses, it pushes up site values; look at Silicon Valley. So if your society is recovering and sharing those values, then the farther hi-tech advances, the fatter your dividend check grows. Finally, it would not matter at all how many jobs disappear — and property rights could stay the same.
This 2014 excerpt of Motherboard, Jly 24, is by Sam Gustin.
Two cities —- Chattanooga Tennessee and Wilson North Carolina —- have asked the federal government to help them bypass state laws banning them from expanding their community owned, gigabit, high-speed, fiber internet service.
Federal Communications Commission Chairman Tom Wheeler has made clear that he believes the FCC has the authority to preempt state laws that erect barriers to community broadband efforts, which are proliferating around the country.
Many of the areas surrounding Chattanooga are “too rural for it to make economic sense for a major telecom to lay with fiber,” leaving residents in those areas in “a digital desert”.
Tennessee is one of 20 states with laws on the books that pose barriers to community broadband efforts —- laws that in many cases were pushed by cable and telecom industry lobbyists. In states throughout the country, major cable and telecom companies have battled attempts to create community broadband networks.
Rep. Marsha Blackburn, the Tennessee Republican who has received tens of thousands of dollars in campaign contributions from the cable and telecommunications industry, introduced an amendment to a key appropriations bill that would prevent the FCC from preempting such state laws.
Ed. Notes: Your internet bill could be a lot lower if your local government owns the fiber network. So does that make it a go? If your grocery bill were lower, should government own the supermarket chains? Where do you draw the line? Should a line be drawn?
Somethings historically have not been owned by individuals, such as paths, roads, and streets. Even land itself, long enough ago, was not owned by anyone. Of course, that changed. Now, only land that everyone can use in total view of everyone else — roads, sidewalks, parks, beaches, wilderness — is still held in common while land we use privately, such as the sites beneath our homes, has left the commons.
Some atomists want the roads to be owned privately, too. But should we allow that? Should everything be private, or public, or a mix?
Is there a principle to follow to determine what to own individually and what to own together? Some suggest monopoly. For instance, you couldn’t have competing water delivery systems in a city, those pipes constitute a natural monopoly, so the community should own them, to prevent anyone from over-charging for water delivery and raking in an undue fortune.
That model could serve for other utilities, too, such as power delivery and phone cables. That might make it easier to put the unsightly telephone wires underground, along with gas lines, along side water pipes, near any sewer system. Already, customers of public utilities pay much less than customers of privately-owned utilities. The goal of progress should not be to enrich a few owners of monopolies but to reduce the cost of living for everyone. Fiber connections make a logical addition to our resurrected commons.
This 2014 excerpt of Pacific Standard, Jly 24, is by Noah Davis.
Academics bemoan our growing lack of attention span. One infographic reported that our attention spans have dropped from 12 minutes to five. (The rise of infographics being yet another example of humanity’s inability to read anything for more than a few words at a time.) This site claims that attention spans have dropped from 12 seconds in 2000 to eight seconds in 2013 -— or one second shorter than the attention span of a goldfish.
Studies have shown that 32 percent of consumers will start abandoning slow sites between one and five seconds. Bounce rate can be improved by up to 30 percent with the reduction of page size and resulting speed improvements. A one second delay in page load time can result in 11 percent fewer page views, 16 percent decreased customer satisfaction and 7 percent lost conversions.
Leaving a page that isn’t loading isn’t a character fault; it’s smart. You can get the information you were after elsewhere, and you can get it faster.
This 2014 excerpt of CounterPunch, Jly 9, is by Mike Whitney.
Russia provides 30 percent of the gas the EU uses every year. And Gazprom’s prices are competitive too, sometimes well-below market rates which has been the case for Ukraine for years.
Ukraine’s Parliament adopted .. a bill under which up to 49% of the country’s gas pipeline network could be sold to foreign investors. This could pave the way for US or EU companies, which have eyed Ukrainian gas transportation system over the last months. US companies will be in the right spot to gouge Moscow for every drop of natural gas that transits those pipelines.
All Putin has to do is sit-tight and he wins, mainly because the EU needs Moscow’s gas. If energy supplies are terminated or drastically reduced, prices will rise, the EU will slide back into recession, and Washington will take the blame. So Washington has a very small window to draw Putin into the fray, which is why we should expect another false flag incident on a much larger scale than the fire in Odessa. Washington is going to have to do something really big and make it look like it was Moscow’s doing. [One week later, a jetliner crashed in Ukraine, shot down by Russian rebels, the US Government immediately concluded.]
Does the US Government really go to these extremes to enable US oil companies to swell their profits?
The State Department applied a little muscle on Turkmenistan, Afghanistan, Pakistan and India and “voila”, Chevron and Exxon clinched the deal to build the TAPI pipeline. Who is going to protect that 1,000 mile pipeline through hostile Taliban-controlled Afghanistan? US military bases are conveniently located up an down the pipeline route. Coincidence?
From the Wall Street Journal: “Earlier this month, President Obama sent a letter to (Turkmenistan) President Berdimuhamedow emphasizing a common interest in Afghanistan and expressing Obama’s support for TAPI and his desire for a major U.S. firm to construct it.
In Iraq, oil production has surged to its highest level in over 30 years. Who’s raking in the profits? The oil giants: ExxonMobil, BP, and Shell.
Ed. Notes: While it’s hard for us to know what happens behind closed doors, everyone can see that oil and war go hand in hand, not just in Ukraine, the Mideast, and South Asia, but also North Africa and Nigeria, with political violence in Venezuela and a war on the environment and against environmental defenders in the American states of Louisiana, Texas, and Alaska. There are so many good reasons to quit burning fossil fuels, besides war and pollution, such as huge inequality and hierarchy. And ironically, we have the peaceful and clean technologies to switch to — solar, batteries, fuel cells, etc plus conservation — but political and institutional hurdles are almost insurmountable. About all we can do is push for a truly free market.
Corporate Taxation Is Inefficient
This 2014 excerpt of the New York Times, Jly 21, is by Tim Worstall, senior fellow at the Adam Smith Institute in London and a contributor to Forbes.
Corporate taxation is hidden taxation: everyone thinks that someone else is paying it, not them, which is why politicians love it so much. It’s a grossly inefficient tax. Taxing economic activity means that we will have less economic activity: the economy will be smaller than it would be without tax.
Government should raise revenue at the least cost in reduced economic activity. The deadweight cost, that lost activity, is higher for capital and corporate taxation than it is for income taxation, higher than for consumption and all higher than property taxation.
Optimal taxation theory tells us that we should therefore eliminate capital and corporate taxation and move to a progressive consumption tax and perhaps a land value tax.
Ed. Notes: Brave of him to cite land as a tax base (onceagain). Of course he had to cover his butt and add “perhaps”. Which is the difference between mainstream media, constantly catering to fear, and alternative media, always trying to lay it on the line.
Bear in mind that “land” here refers to location, not just downtowns but also sites above oil fields and the oil itself. And not just tangible land but also the intangible, such as the EM spectrum (a frequency is a location there). And not just land, the good, but also ecosystem, the service. Finally, what the tax or fee or lease or dues falls on is not land, the stock, but its rent, the flow.
This flow of money that we spend for the nature we use need not fund government; government can get by charging fees for its services. Instead, all those rents for all those locations could be disbursed as dividends to citizens. Receiving a fair share, citizens could get by with much less government, making the whole taxation question much more tolerable.
Hans Bruyninckx, the director of the European Environment Agency, has urged ministers to carry out fiscal reforms, such as moving tax from labour to activities that damage the environment.
“Well-designed environmental taxes can reduce pollution and increase resource efficiency in a very cost-effective way, and at the same time promote employment, economic growth and social fairness.”
The world does not have to choose between job creation and preserving the environment.
Bruyninckx added that environmental taxes were “still an under-used tool”. Environmental taxes currently account for 2.4% of EU GDP.
The informal ministerial comes after the European Commission published proposals earlier this month aimed at pushing the EU towards a ‘circular economy’, with higher recycling targets and a phase-out of landfill.
Ed. Notes: Shifting taxes from wages to pollution is one of three big green tax shifts. Another is to shift from purchases (e.g., VAT) to extraction of resources. The most powerful shift is the least obvious and well known: off buildings onto exclusive use of locations.
When owners pay land rent to their community rather than receive it from tenants or buyers, then they take no more land than they need and use that wisely. In urban areas, using land efficiently makes for compact towns that use fewer materials (the goal of the depletion tax) and less energy (the aim of the pollution tax).
Other powerful advantages of recovering rents is that doing so grows the tax base rather than shrinks it (since owners develop their lots), raising enough revenue to afford a dividend to citizens, merging everyone’s need for money with their love for Earth. Proposing land dues challenges society to see the worth of Earth as part of the commons. And shifting the property tax off buildings, onto land is something localities can do without waiting for states or nations or unions. So get busy geonomizing now.
More than a thousand people showed up outside Cobo Center in downtown Detroit, calling for an immediate moratorium on service shutoffs by the city’s water department.
Among them was “Avengers” actor Mark Ruffalo, who appeared unexpectedly, calling on others to join the demonstration.
Also appearing at the rally were UAW President Dennis Williams and Congressman John Conyers.
“Water should be available to everybody,” Conyers said. “It shouldn’t be something that only people who can afford it can get.”
“Right now in a household there is child thirsty who cannot have a drink,” Williams said. “Right now there is an elderly person who is ill that needs fresh water.”
The demonstration was organized by the group National Nurses United, which claims the shutoffs pose a public health emergency and that shutting off water is inhumane.
People who can’t afford water have to choose between medications and food, rent or mortgage payment, and water.
The Detroit Department of Water and Sewerage stepped up the shutoffs in March to collect some of the nearly $90 million owed by residents, businesses and other customers with past-due accounts. Through June, more than $43 million was owed on over 80,000 city residential accounts.
To get water back on requires a title deed because so many homes have squatters.
Ed. Notes: Is the City charging more than the cost of delivering water? If so, are they using the profit to lower bad taxes or pay residents a dividend? And why are so many residents poor?
Poverty has an easy economic solution, and that is geonomics.
One, don’t subsidize insiders, that only makes it easier for them beat competitors, and competitors keep prices low and wages high.
Two, don’t tax people’s efforts, that only makes it harder to hire helpers.
Three, don’t fail to recover socially-generated land rents, which merely rewards speculators; when owners pay “land dues” they put locations to best use, which attracts investment and creates employment. And
Four, disburse surplus public revenue as a dividend, which is substantial in cities where site values are higher than skyscrapers. Dividends mean people can always afford water.
The problem is not that there isn’t any solution. The problem is that people have no interest in fundamental solutions and prefer to just blame one another: rich are greedy, poor are lazy. If humans could get over that and rekindle their innate curiosity, they’ll discover what works — geonomics.
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
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 study of a phenomenon David Ricardo noted going on two centuries ago. When wine grapes rise to $10,000 a ton from the very best land (last year, cabernet sauvignon commanded an average of $4,021 a ton in the Napa Valley), then vineyard prices soar from $18,000 an acre in the 1980′s to $100,000 an acre five years ago and now for a top pedigree up to $300,000 an acre (The New York Times, April 9, via Wyn Achenbaum). Pricey land does not make wine pricey; spendy wine makes land spendy. While vintners make their wine tasty, nature and society in general – not any lone owner – make land desireable. Steve Kerch of CBS’s MarketWatch (April 5) notes that much of what a home sells for on the open market is a reflection of intangible factors such as what school district the house sits in. The price the builder has to pay for the land also tends to be driven by the same intangibles. Because the value of land comes from society, and because one’s use excludes the rest of society, each user owes all others compensation, and is owed compensation by everyone else. Sharing land’s value, instead of taxing one’s efforts, is the policy of geonomics.
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.
an answer for Jonathan of the Green Party (Nov 7): “What does ‘share our surplus’ mean?”
Our surplus is the values that society generates synergistically. It’s the money we spend on the nature we use: on land sites, natural resources, EM spectrum, ecosystem services (assimilating pollutants). It’s also the money we pay to holders of government-granted privileges like corporate charters. We could share it by paying for the nature we use and privileges we hold to the public treasury then getting back a fair share of the recovered revenue. Used to be, owners did owe rent (“own” and “owe” used to be one word). And presently, some lucky residents do get back periodic dividends: Alaska’s oil dividend and Aspen Colorado’s housing assistance. Doing that, instead of subsidizing bads while taxing goods, is the essence of geonomics.
Jonathan: “Is local currency what you mean?”
Editor: It’s not. Community currency is a good reform, but every good reform pushes up site values. That makes land an even more tempting object of speculation. Now, any good will eventually do bad by widening the income gap – until you share land values.
a discipline that, compared to economics, is as obscure as Warren Buffett’s investment strategy, compared to conventional investment theory, about which Buffett said, “You couldn’t advance in a finance department in this country unless you taught that the world was flat.” (The New York Times, Oct 29). The writer wondered, “But why? If it works, why don’t more investors use it?”
Good question. Geonomics works, too. Every place that has used it has prospered while conserving resources. Yet it remains off the radar of many wanna-be reformers. Gradually, tho’, that’s changing. More are becoming aware of what geonomics studies – all the money we spend on the nature we use. Geonomics (1) as an alternative worldview to the anthropocentric, sees human economies as part of the embracing ecosystem with natural feedback loops seeking balance in both systems. (2) As an alternative to worker vs. investor, it sees our need for sites and resources making those who own land into landlords. (3)As an alternative to economics, it tracks the trillions of “rent” as it drives the “housing” bubble and all other indicators. And (4) as an alternative to left or right, it suggests we not tax ourselves then subsidize our favorites but recover and share society’s surplus, paying in land dues and getting back “rent” dividends, a la Alaska’s oil dividend. Letting rent go to the wrong pockets wreaks havoc, while redirecting it to everyone would solve our economic ills and the ills downstream from them.
People must learn to stop whining so much and feel enough self-esteem to demand a fair share of rent, society’s surplus, the commonwealth.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old loggers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
the policy that the earth’s natural patterns suggests. Use the eco-system’s self-regulating feedback loops as a model. What then needs changing? Basically, the flow of money spent to own or use Earth (both sites and resources) must visit each of us. Our agent, government, exists to collect this natural rent via fees and to disburse the collected revenue via dividends. Doing this, we could forgo taxes on homes and earnings and subsidies of either the needy or the greedy. For more, see our web site, our pamphlet of the title above, or any of our other lit pieces; ask for our literature list.
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 way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.