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This 2013 excerpt of International Business Times, July 26, is by Michelle FlorCruz.
Detroit has been losing manufacturing and people. Prices of homes+sites have plummeted, while foreclosures continue to skyrocket. China’s real estate-hungry buyers see an investment opportunity.
After announcing that the city filed for bankruptcy on July 18, Detroit property has been a hot topic on China’s social media platform, Weibo. This news, compounded with a television news segment aired on state-run CCTV back in March that said a price of a pair of leather shoes could get you two houses in Detroit, got many people moving their money from the mainland to the Midwest.
In true Chinese fashion, they are looking to buy up in bulk; one bought 30 properties. Buyers seem to be purchasing purely as investment, and don’t plan on moving to Motown anytime soon.
Social mobility tsar Alan Milburn said his report shows “work is not a cure for poverty.”
This 2013 excerpt is of the BBC, Oct 17.
Working parents in Britain “simply do not earn enough to escape poverty”, the government’s social mobility tsar Alan Milburn has warned.
In its first report, the government’s Social Mobility and Child Poverty Commission warned the target of ending child poverty by 2020 would “in all likelihood be missed by a considerable margin” – leaving as many as two million children in poverty.
Alan Milburn’s recipe for improvement calls for higher minimum wages and more universal help so poor working families get help as well as those out of work.
Around five million people in the country, mainly women, were earning less than the living wage, which is about £7.45 an hour outside of London.
“These are the people frankly who do all the right things, they go out to work, they stand on their own two feet, they look after their families – they’re the strivers not the shirkers – and yet they’re all too often the forgotten people of Britain and I think they desperately need a new deal.”
Though former NSA contractor Edward Snowden has been indicted for leaking secrets about the U.S. government’s intrusive surveillance tactics, he was honored by a group of former U.S. intelligence officials as a courageous whistleblower during a Moscow ceremony.
This 2013 excerpt from ConsortiumNews, Oct 10, is by Ray McGovern.
The award, named in honor of the late CIA analyst Sam Adams, was presented to Snowden at a ceremony in Moscow by previous recipients of the award bestowed by the Sam Adams Associates for Integrity in Intelligence (SAAII). The presenters included former FBI agent Coleen Rowley, former NSA official Thomas Drake, and former Justice Department official Jesselyn Radack, now with the Government Accountability Project. (Former CIA analyst Ray McGovern also took part.)
Several hours were spent in informal conversation during which there was a wide consensus that Russia seemed the safest place for Snowden to be and that it was fortunate that Russia had rebuffed pressure to violate international law by turning him away.
Snowden showed himself not only to be in good health, but also in good spirits, and very much on top of world events, including the attacks on him personally. Shaking his head in disbelief, he acknowledged that he was aware that former NSA and CIA Director Michael Hayden, together with House Intelligence Committee Chair Mike Rogers, had hinted recently that he (Snowden) be put on the infamous “Kill List” for assassination.
Coleen Rowley, the first winner of the Sam Adams Award (2002), cited some little-known history to remind Snowden that he is in good company as a whistleblower — and not only because of previous Sam Adams honorees. She noted that in 1773, Benjamin Franklin leaked confidential information by releasing letters written by then-Lt. Governor of Massachusetts Thomas Hutchinson to Thomas Whatley, an assistant to the British Prime Minister. Like Edward Snowden, Franklin was called a traitor for whistleblowing the truth about what the government was doing.
The Sam Adams associates also expressed gratitude for those who made this unusual gathering possible: Anatoly Kucherena, a lawyer for Snowden and founder and head of The Institute for Democracy and Cooperation in Moscow; WikiLeaks’ Julian Assange (SAAII award winner in 2010); Sarah Harrison, also of WikiLeaks, who facilitated Mr. Snowden’s extrication from Hong Kong and has been a constant presence with him since; other Internet transparency and privacy activists rendering encouragement and support, and, of course, Mr. Snowden himself for agreeing to host the first such visit to express solidarity with him in Russia.
It was Adams who discovered in 1967 that there were more than a half-million Vietnamese Communists under arms. This was roughly twice the number that the U.S. command in Saigon would admit to, lest Americans learn that claims of “progress” were bogus.
Aluminum ingots waiting to be shipped from a processor. Financial institutions like Goldman Sachs have used industry pricing regulations to earn millions of dollars each year.
This 2013 excerpt is from the New York Times, July 20 , by David Kocieniewski.
Americans pay a fraction of a penny more for each aluminum article because Goldman Sachs and other financial players manipulate regulations, costing consumers billions of dollars.
A Goldman subsidiary stores customers’ aluminum. Two or three times a day, sometimes more, their drivers load in one warehouse. They unload in another. And then they do it again.
The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman. It has cost American consumers more than $5 billion over the last three years.
The maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone. In the last year, federal authorities have accused three banks, including JPMorgan, of rigging electricity prices.
In the case of aluminum, Goldman bought Metro International Trade Services, one of the country’s biggest storers of the metal. More than a quarter of the supply of aluminum available on the market is kept in the company’s Detroit-area warehouses. Before Goldman bought Metro International three years ago, warehouse customers used to wait an average of six weeks for their purchases to be located, retrieved by forklift and delivered to factories. But now that Goldman owns the company, the wait has grown more than tenfold — to more than 16 months. The delays are so acute that Coca-Cola and many other manufacturers avoid buying aluminum stored here. Nonetheless, they still pay the higher price.
The vast majority of the aluminum being moved around Metro’s warehouses is owned not by manufacturers or wholesalers, but by banks, hedge funds and traders. They buy caches of aluminum in financing deals. Once those deals end and their metal makes it through the queue, the owners can choose to renew them. About 90 percent or more of the metal moved at Metro each day goes to another warehouse to play the same game.
This 2013 excerpt of PropertyForum, Oct 25, is by Mark Benson.
The Norwegian government has had a sovereign wealth fund, which collects income from their oil, for many years now and it was worth $810 billion at the last official valuation.
While the managers of the Norway sovereign wealth fund have already been looking at the European property market, a revelation today shows that there could be a significant investment in worldwide property by the fund in the short to medium term.
As the price of UK property continues to move higher and higher there are now serious concerns that first-time buyers may become a thing of the past.
European property appears on the surface to be undervalued on a long-term basis although there are concerns that Spanish and Portuguese banks in particular are about to dump an array of unwanted properties on the market.
The UK property market is seen as something of a safe haven in light of problems within Europe and with investors such as the Norway sovereign wealth fund looking towards the UK in the short term and Europe in the medium to longer term.
Banking giants from Wells Fargo to Fannie Mae are routinely paying top dollar on the auction steps to hold onto their own distressed properties, outbidding cash offers and paying well above assessed value.
This 2013 excerpt of the Herald-Tribune, Jly 6, is by Josh Salman.
Speculating that properties will appreciate even more in the next couple of years is a shift from the years after the nadir of the foreclosure crisis, when mortgage lenders accepted any fair offer to avoid the hassle of listing the default.
The competition between lenders and billion-dollar investment funds could drive housing values higher through the kind of price speculation that marked the walk-up to the Great Recession, beyond what most working families can afford.
The trend could suffocate short sale and loan modification approvals for delinquent borrowers.
Banks can control prices and inventory, and trickle these properties onto the market at their own pace.
Banks do not have to pay out-of-pocket until they bid more on an auction than what a court judgment deems they are owed on the foreclosure. That is a fairly rare phenomenon.
This 2013 excerpt is from Biological Sciences, October 4, by Katie R. Billings.
Infants as young as three-months-old have innate preferences for altruistic individuals.
Infants between the ages of six and ten months watched a series of puppet shows. The infants selected their favorite puppet. Over 80 percent of the infants chose the “helpful” puppet, a surprisingly high, statistically significant percentage.
Basically every single baby chose the nice puppet… totally surreal.
Infants only three-months-old were given the same puppet show. SResearchers used eye trackers to determine the children’s preferences. The eye tracking results revealed that infants showed a clear aversion toward the “unhelpful” characters.
Babies are born with a set morality – a clear preference toward altruistic behavior. Infants as young as three-months-old can already evaluate others based on their actions, long before they are taught to do so.
New figures underline the depth and extent of Londoners’ concerns about spiraling accomodation costs.
This 2013 excerpt is from The Guardian, Jun 22, by Dave Hill.
Londoners’ deep anxiety about their housing costs is much more widespread compared with the rest of the country. Over a third are already concerned about their ability to pay their rent or mortgage, 45% are worried that they won’t be able to meet their payments in a year’s time, and that 53% are caused a great deal or a fair amount of stress by the expense of their accommodation.
The British average for concern about ability to meet costs now was 23%, while worry about a year into the future was 33% and the stat for stress was 36%.
Yhe cost of renting privately in London has risen by an average of 3.1% in the past year while average incomes have fallen.
This 2013 excerpt of the Huffington Post, Oct 16, is by Adam Grant, author of Give and Take, a New York Times and Wall Street Journal bestseller.
Most people assume that strategic optimists outperform defensive pessimists, because they benefit from confidence and high expectations. Defensive pessimists were more anxious and set lower expectations for themselves. Yet they didn’t perform any worse.
By imagining the worst-case scenario, defensive pessimists motivate themselves to prepare more and try harder.
Strategies that prove effective are often the reverse of what you expect.
We think it’s a good idea to encourage people, but not so fast. Defensive pessimists did significantly worse when they were encouraged. The encouragement boosted their confidence, quelling their anxiety and interfering with their efforts to set low expectations.
When people are anxious, we sometimes tell them to distract themselves. Once again, this doesn’t pay off for defensive pessimists. Taking time to worry helps them generate the anxiety necessary to motivate themselves.
In the U.S., we favor optimists over pessimists. When economists surveyed more than 1,000 U.S. CEOs, they found that more than 80 percent scored as “very optimistic.”
We need pessimists to anticipate the worst and prepare us all for it.
Ultimately, both styles are deadly at their extremes. Pessimism becomes fatalistic, and optimism becomes toxic. The key is to find the sweet spot, the more moderate ranges that combine the benefits of both approaches.
This 2013 excerpt of Bloomberg, Jun 21, is by Janice Kew.
South Africa’s growing black middle class: 4.2 million people strong last year and double what it was in 2004.
The country now has more middle-class blacks than white, and the group spends more annually as well.
The newly affluent are moving from townships and the countryside to formerly whites-only suburbs, boosting the revenue of companies from car retailers to supermarkets.
Since 1994, national income per capita has climbed 40 percent, access to power has risen to more than 80 percent of the population from 50 percent and more than 3 million houses have been built.
Of a population of 53 million people, the number of black South Africans classified as the middle class rose from 1.7 million in 2004, the study showed.
While South Africa’s middle class is growing, the unemployment rate of 25.2 percent is the highest of more than 30 emerging-market nations. Income inequality has widened since 1994, with 35 percent of the population living on less than $51 a month. The Gini coefficient, a measure of inequality in which a reading of zero means society is totally equal, worsened to 0.63 in 2009 compared with 0.59 in 1993.
South Africa had a record 173 protests by township residents last year over a lack of housing and basic services.
This 2013 excerpt of Bloomberg, Oct 15, is by Victoria Stilwell.
In all but two quarters since the beginning of 2011, “hair,” “eggs,” or “kidney” have been among the top four autofill results for the Google search query, “I want to sell my…,” according to Nicholas Colas, chief market strategist at New York-based ConvergEx Group, which provides brokerage and trading-related services for institutional investors.
At Shady Grove Fertility Center, which has offices in Washington, Virginia, Maryland and Pennsylvania, about 13,000 women will apply this year to be an egg donor. That’s roughly a 13 percent increase from 2012.
Payrolls are still down 1.9 million employees from the January 2008 peak. The share of unemployed Americans out of work for 27 weeks or longer was 38 percent in August. Median household income, which includes wages and investments, has fallen every year for the past five after adjusting for inflation.
Egg donors receive compensation at almost every step of the process, earning $7,000 by the time they finish their first donation cycle.
While Americans can legally sell hair, breast milk and eggs, the sale and purchase of a kidney in the U.S. is against the law. While the sale of kidneys is limited to the black market, the organ could fetch $15,200 if legal monetary incentives for donations were introduced.
This 2013 excerpt of the BBC, Oct 21, is by Linda Yueh.
Singapore is one of only a handful of countries to have managed it in the past half century. A colonial outpost now has the third highest average income in the world. How did it do it? And why are social tensions now showing?
Singapore has more millionaires per capita than anywhere else in the world. One in six households are in the millionaire club. They come to this city-state by design. The government offers low taxes, raising their revenues through a property tax on the expensive, multi-million dollar houses of the ultra-rich. In return the rich spend – boosting the local economy’s shops, restaurants and even a Universal Studios.
It is a city-state with about five million people so the scale isn’t comparable to the challenges of a country.
That makes its ability to be a large manufacturer all the more surprising. Manufacturing accounts for more than one-fifth of the economy, which is a larger share than in Britain and the US.
Skilled workers also come from all over the world. Two out of five people in Singapore are foreigners. Bankers and others in the financial industry have moved to what has become the Switzerland of Asia.
For Singaporeans who are working in blue collar jobs, the arrival of lower paid foreigners creates social tension. There are concerns over congestion in public transport and housing.
Singapore made itself an internationally oriented economy and that has largely paid off for its people. Cracks are showing in the orderly facade — but for most people, their working lives have benefitted.
This 2013 excerpt of the New Zealand Herald, July 27 is by Anne Gibson.
The Cornwall Park Trust Board is a registered charity which owns the park, along with 23.4ha of surrounding land gifted to it by Auckland’s founding father, Sir John Logan Campbell.
The residential land was subdivided from 1910 to 1923 into 110 sections to provide leasehold income to pay for the upkeep of the park.
As the latest round of 21-year leases expire and are reset based on current market values, rentals have gone through the roof and feelings among the lessees are running high.
The board argued successfully that the value of the land should be based on the highest and best use of a property, unconstrained by any development.
Since then disillusioned leaseholders have been voting with their feet. Properties worth at least $6 million are up for sale and at least one has simply walked away.
An auction in September 2011 failed to draw a single buyer.
Freehold: Includes the house and the land. Leasehold: Includes the house but not the land, so the house owner pays “ground rent” to the land owner.
Purchasing a leasehold property can be a way of acquiring a property in a prime real estate area at low cost, compared to the cost of purchasing the freehold in such a property. However, purchasers of leasehold properties need to understand the obligations they are taking on and the economics of the purchase.
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.
a POV that Spain’s president might try. A few blocks from my room in Madrid at a book fair to promote literacy, Sr Zapatero, while giving autographs and high fives to kids, said books are very expensive and he’d see about getting the value added tax on them cut down to zero. (El Pais, June 4; see, politicians can grasp geo-logic.) But why do we raise the cost of any useful product? Why not tax useless products? Even more basic: is being better than a costly tax good enough? Our favorite replacement for any tax is no tax: instead, run government like a business and charge full market value for the permits it issues, such as everything from corporate charters to emission allowances to resource leases. These pieces of paper are immensely valuable, yet now our steward, the state, gives them away for nearly free, absolutely free in some cases. Government is sitting on its own assets and needs merely to cash in by doing what any rational entity in the economy does – negotiate the best deal. Then with this profit, rather than fund more waste, pay the stakeholders, we citizenry, a dividend. Thereby geonomics gets rid of two huge problems. It replaces taxes with full-value fees and replaces subsidies for special interests with a Citizens Dividend for people in general. Neither left nor right, this reform is what both nature lovers and liberty lovers need to promote, right now.
close to the policy of the Garden Cities in England. Founded by Ebenezer Howard over a century ago, residents own the land in common and run the town as a business. Letchworth, the oldest of the model towns, serves residents grandly from bucketfuls of collected land rent (as does the Canadian Province of Alberta from oil royalty). A geonomic town would pay the rent to residents, letting them freely choose personalized services, and also ax taxes. Both geonomics and Howard were inspired by American proto-geonomist Henry George. The movement launched by Howard today in the UK advances the shift of taxes from buildings to locations. A recent report from the Town and Country Planning Association proposes this Property Tax Shift and their journal published research in the potential of land value taxation by Tony Vickers (Vol. 69, Part 5, 2000). (Thanks to James Robertson)
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
a way to connect the dots. Making the cyber rounds is “The Cavernous Divide” by Scott Klinger, from AlterNet (posted March 21): “As the number of billionaires in the world expands, so does the number of those in poverty.” Duh. The yawning income gap is not news. Nearly every issue of our quarterly digest carries a similar quote. Yet the connection was worked out long ago by one of America’s greatest thinkers, Henry George, who labeled his masterpiece, Progress and Poverty. Techno- and socio-advances always enrich few and impoverish many. Yet progress also pushes up location values – the geonomic insight (is Silicon Valley cheaper now or more expensive?). Instead of taxing income, sales, or buildings, society could collect those values of sites, resources, EM spectrum, and ecosystem services via fees and dues, which would lower the income ceiling, and instead of lavishing corporate welfare, pay out the recovered revenue via dividends, which would jack up the income floor. Dots connected.
a manual. The world did not come without a way for people to prosper, and the planet to heal and stay well; that way is geonomics. Economies are part of the ecosystem. Both generate surpluses and follow self-regulating feedback loops. A cycle like the Law of Supply and Demand is one of the economy’s on/off loops. Our spending for land and resources – things that nobody made and everybody needs – constitutes our society’s surplus. Those profits without production (remember, nobody produced Earth) can become our commonwealth. To share it, we could pay land dues in to the public treasury (wouldn’t oil companies love that?) and get rent dividends back, a la Alaska’s oil dividend. Doing so let’s us axe taxes and jettison subsidies. Taxes and subsidies distort price (the DNA of exchange), violate quid pro quo by benefiting the well-connected more than anyone else, reinforce hierarchy of state over citizen, and are costly to administer (you don’t really need so much bureaucracy, do you?). Conversely, land dues motivate people to not waste sites, resources, and the ecosystem while rent dividends motivate people to not waste themselves. Receiving this income supplement – a Citizens Dividend – people can invest in their favorite technology or outgrow being “economan” and shrink their overbearing workweek in order to enjoy more time with family, friends, community, and nature. Then in all that free time, maybe we could figure out just what we are here for.
an answer to a rarely asked question. If price is a reward for production, why do we pay for land, never produced by any of us? What is land price a reward for? Good behavior? How much money do we spend on the nature we use? Who gets it? What do they do with it? (If you answer all these correctly, you’re not a genius but a geoist.) The worth of Earth is enough that were we to collect and share it, we could abolish taxes on the goods we do produce. For example, San Francisco’s Redefining Progress has calculated that Cali-fornia could abolish all state and local taxes were it to collect the values of resources and of using na-ture as a dump. By exorcising the profit motive from depletion and pollution, rent collection could replace bossy regulation. Economies could self-regulate, as the rest of the eco-system does. See how big problems yield to big answers when we ask the right questions?
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.
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.
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.