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This 2013 excerpt of The Guardian, Spt 22, is by Robert Newman, a comedian.
The rate of population growth has been slowing since the 1960s, and has fallen below replacement levels half the world over. But what about the other half? The UN Population Division’s world fertility patterns show that, worldwide, fertility per woman has fallen from 4.7 babies in 1970–75 to 2.6 in 2005-10. As Peoplequake author Fred Pearce puts it: “Today’s women have half as many babies as their mothers … That is not just in the rich world. It is the global average today.”
Today’s population panic goes on as if the Earth’s temperate grasslands are straining under the weight of supporting voracious humans rather than voracious Big Ag. According to the National Corn Growers Association, 30% of US corn ends up as fuel ethanol, while 5% is grown as corn syrup for junk food sweeteners and fizzy pop. Ain’t it grand that we’d sooner say there are too many human beings in the world than too much Coca-Cola, Honey Nut Cheerios, or Special K?
Food security and ecological sustainability are impossible without democratic control of land. Only through land nationalisation can we introduce the connected landscapes, smart cities and wildlife corridors that will let ecosystems bend, not break. As with homelessness a century ago, the problem facing a population of 7 billion is not too many people crowding too small a piece of land, but too few people owning too much world.
Ed. Notes: Actually, you don’t have to nationalize land. All you have to do is share land’s rental value. You see, members of society spend piles of money for land, natural resources, ecosystem services, and government-granted privileges like utility franchises which grant monopolies over certain regions. People’s spending for nature and privilege is by far the biggest flow within the GDP. So you’d get your government to redirect that flow with user fees, Land Dues, maybe land taxes, so to fill up the public treasury, the disburse it back out again as dividends to citizens.
When owners must pay Land Dues to compensate their neighbors for excluding them from their private property (as their neighbors would do for them), then owners lose any reason to own more land than they can use, land that others need. Why bother collecting rent from tenants if you just have to turn around and hand it over to your community? So you don’t bother. That’s how the tax on land value broke up humungous land holdings in nations all over the world and widely spread ownership of land to most of the population.
Taiwan did it and when former tenant farmers became family farmers, they rooted out hunger and — lo and behold — cut population growth by 40% in one generation. So economic justice is a win/win for both issues — ownership and population growth. Geonomics can be that powerful.
Perhaps the most basic reform possible is public recovery of the socially-generated values of land, locations, and natural resources. Collecting those values of assets not made by anyone’s labor or capital not only makes it possible to eliminate the counterproductive taxes on income, sales, and buildings (property). It also gives everyone, even the poorest among us, the opportunity to prosper and live lives of dignity. Plus, by streamlining the economy, our new efficient ways of producing and consuming would remove the pressure on the environment.
So it’s great news when other writers and publications cover this crucial topic. Previously the British press touted the idea. This time the roundup is from the Australian press.
These seven 2013 excerpts of Aussie coverage of a tax on land value are from:
(1) Australian Property, Dec 10, by Leith van Onselen;
(2) Herald Sun, Oct 8, by Jessica Irvine;
(3) Australian Financial Review, Nov 19, by Robert Carling;
(4) The Australian, Nov 22, by James Pawluk;
(5) Property Observer, Nov 25, reprinted in Macrobusiness, by Catherine Cashmore, a market analyst with extensive experience in all aspects relating to property acquisition; then our own cohorts, Prosper Australia:
(6) Media Release, Nov 19, by David Collyer; and
(7) Research Report, Dec 3, by Karl Fitzgerald who also recently had an op-ed in America’s Truthout, Dec 10 (more on that later).
Speculators Run Wild in Housing Finance
If you’re wondering what’s primarily driving up house price at the moment, look no further. Investor [speculator] finance commitments [to buy a house] were up by 8% in October, 29% over the year, and hit the highest level on record.
Various government-initiated tax reviews, including the Henry review, have recommended replacing stamp duty with broader and less distorting taxes, including land tax. However, land tax attracts much more political protest than stamp duty.”
The tax on land value (LVT) is best advocated by American political economist and author, Henry George, who wrote Progress and Poverty - an enlightened and impassioned read. George noted that land is in fixed supply, therefore we can’t all benefit from the ‘best’ sites without effective taxation of the resource.
New York’s Central Park is the highest generator of real estate wealth. The most expensive homes in the world surround the park with apartments selling in excess of $20 million, and newer developments marketed in excess of $100+ million.
Economist Michael Hudson has recently assessed land values in New York City alone to exceed that of all of the plant and equipment in the entire country, combined.
Currently more than 30 countries around the world have implemented land value taxation – including Australia – to varying degrees. In Pennsylvania 19 cities use land value tax with Altoona being the first municipality in the country to rely on land value tax alone.
Bringing about reform is never easy. The increased tax burden falls on those who have significant influence across the political spectrum. Strong leadership is essential. I do see a time when all the chatter around affordability, will finally evolve into real action – and a broad based LVT should form an important part of that debate.
State governments wring their hands over funding infrastructure, yet ignore the direct link between civic facilities and land prices. Houses close to transport, schools, libraries, and parks are simply worth more.
Dr Gavin Wood et al of the Australian Housing and Urban Research Institute: “Land prices have broken from their fundamental connections. We are in speculative frenzy, bidding up the price of land and shouldering a staggering debt burden to do so. This departure from common sense and good economics will destroy the finances of all who borrow heavily to buy property.”
The influence of monopoly is 10 times greater than mainstream economists acknowledge.
Economic rents are a significant component of the Australian economy, comprising 23.6% of GDP.
Almost half of all government revenues could be delivered by channelling the property boom to more productive purposes.
Income, company and sales taxes, along with 122 present taxes could be scrapped.
90% of taxes are distortionary, adding 23% to prices of goods and services.
The Total Resource Rents of Australia report finds monopoly rents are capable of replacing taxation at all levels of government. In 2011-12, local, state and federal governments required $390.067 billion in operating revenue. The most efficient form of government revenue-raising, the taxation of economic rents, can raise 87% ($340.719 billion) of revenue needed. By including ‘sin taxes’ and non taxation revenue, a fairer, more equitable tax base is possible.
This 2013 excerpt of Naked Capitalism, Spt 4, is by Lambert Strether of Corrente.
Christopher Alexander’s A Pattern Language (1977). From Pattern #79, Your Own Home:
People cannot be genuinely comfortable and healthy in a house which is not theirs. All forms of rental — whether from private landlords or public housing agencies — work against the natural processes which allow people to form stable, self-healing communities. …
This pattern is not intended as an argument in favor of “private property” or the process of buying and selling land. Ineed, it is very clear that all those processes which encourage speculation in land, for the sake of profit, are unhealthy and destructive, because they invite people to treat houses as commodities, to build things for “resale,” and not in such a way as to fit their own needs.
And just as speculation and the profit motive make it impossible for people to adopt their houses to their own needs, so tenancy, rental, and landlords do the same. Rental areas are always the first to turn to slums. The mechanism is clear and well-known. The landlord tries to keep his maintenance and repair costs as low as possible; the residents have no incentive to maintain and repair the homes — in fact, the opposite — since improvements add to the wealth of the landlord and even justify higher rent. And so the typical piece of rental property degenerates over the years.
This requires, then, that every house is owned — in some fashion — by the people that live in it; it requires a form of ownership which discourages speculation.
In Germany, “just 45% of homes in Germany are owner-occupied, one of the lowest rates in Europe.” Are 55% of Germans not, then, genuinely comfortable and healthy in their living quarters?
Still: Renting works against “stable, self-healing communities.”
The degree to which the housing “recovery” has been driven by speculators isn’t fully appreciated. Some sources have said that cash buyers have accounted for as much as 50% of the activity in the hottest states, and those would also have a bigger impact in the national estimates of home price appreciation.
They might have had some cash from a previous life on Wall Street, and raised a bit more money overseas, mainly from the Middle East and China. They may call themselves hedge funds as a way of glamorizing their strategy and justifying asking for hedgie-type fee structures. They often simply hold the houses for expected appreciation.
It was “not a coincidence” that more Americans than at any time since the Great Depression were being forced out of their homes just as records of home ownership and mortgages were transferred wholesale to a privatized database.
Ed. Notes: The key is to realize that the rent for the building and the rent for the land are two very different rents. The value of the building belongs to whoever built or owns the structure. The value of the location belongs to those who created it, which is the surrounding community.
As they say, the three most important things in real estate are location, location, location (the actual answer to an actual question on the California Real Estate Exam). People pay for good views, nearby shops, schools, accessible open space — things not made by any lone owner but by society as a whole.
Our mistake is having people pay lone owners instead of paying the neighbors. That is, we should pay the seller for the home (or other building) but pay the local government — which in turn would disburse the revenue to residents — for the land.
Government could require Land Dues, levy a land tax, or shift the property tax off buildings, onto locations. Places that have done this have de-motivated speculators. When speculators back out of the property game, then the price for land and improvements falls.
And more people become homeowners, as happened in Pittsburgh from 1980 to 2000 when they taxed land six times as much as buildings. They enjoyed the most affordable housing and highest owner occupancy rate of any major US city and twice was named America’s Most Livable City.
The writers above are looking for a solution. Geonomics is it.
These two 2013 excerpt about de-criminalizing a weedy mood-alterant are from (1) the BBC, Dec 11, by Ignacio de los Reyes, and (2) AlterNet, Spt 19, by Jodie Gummow.
Uruguay Marijuana Move ‘Illegal’ – UN Drugs Watchdog
Hundreds of young people gathered outside Congress in Montevideo to follow the vote on a giant screen. Many shared a joint of marijuana with their friends. They partied amid reggae music and some waved marijuana leaves.
Presenting the bill to fellow senators, Roberto Conde said it was an unavoidable response to reality, given that the “war” against drugs had failed.
After nearly 12 hours of debate, senators gave the government-sponsored bill their final approval — it was passed by 16 votes to 13 — making Uruguay the first country in the world to legalise the production and sale of marijuana.
The project had already been approved by Uruguay’s lower house in July.
A group of former presidents and influential social figures, including Brazil’s Fernando Henrique Cardoso, Mexico’s Ernesto Zedillo, and Colombian ex-leader Cesar Gaviria, have called for marijuana to be legalised and regulated.
President Mujica asked why the former leaders only spoke out about the legalisation of marijuana after they had left office.
The INCB is an independent body of experts established by the United Nations to monitor countries’ compliance with international drug treaties. It claims that de-criminalization violates international law.
Ed. Notes: The most important part of this story has little to do with drugs and more to do with the fact that people in power can make a rational decision some times. If they can go by the facts when dealing with drugs, perhaps they can use the clear-cut evidence in favor of turning land value into common wealth by taxing site rent or charging ground rent in lieu of the typical counterproductive taxes on income, sales, and buildings (property). One sensible step might lead to another and eventually all the way to geonomics.
10 Farm Subsidy Recipients Who Voted to Cut Food Stamps
This 2013 excerpt of Alternet, Spt 20, is by Derek Pugh.
Ten of the members of Congress who receive those agriculture subsidies, either directly or indirectly through trusts or businesses held by themselves or their spouses, voted to cut funding for feeding low-income people.
Last year food stamp benefits (SNAP) lifted 4 million people out of poverty, including 1.7 million children. A total of 47 million Americans have relied on SNAP benefits this fiscal year. The Congressional Budget Office estimated that the House’s legislation would deny 3.8 million people, who are already living on an average of $1.33 per meal, access to SNAP. This includes 177,000 veterans who rely on the program.
SNAP costs $4 billion per year while Congress gives hundreds of billions of dollars to big corporations that don’t need them.
$7 billion per year subsidizing the oil industry.
Over $20 billion per year on farm subsidies.
$600 billion — 15 times the value of proposed food stamp cuts — over a decade by allowing corporations to stash cash overseas.
$1 trillion over a decade be allowing special tax exemptions and loopholes for multinational corporations and wealthy households.
$137 billion over a decade by not negotiating prescription drug prices.
The $10 million that was cut from Meals on Wheels due to sequestration will end up costing the federal government $479 million due to the rise in Medicaid costs because less-well-fed seniors will end up getting sicker. The $40 billion in SNAP cuts would no doubt generate their own costly consequences.
Ed. Notes: Some people can feel no shame. Without a hitch in their voice, they dip into the public trough to fatten themselves while worsening hunger in one of the richest nations in the history of humanity. Talk about having a lot of gall.
What’s to be done? Stop letting politicians spend our money and start spending it ourselves. That is, we’d pay ourselves a Citizen’s Dividend. From whence comes the funding? From all of society’s spending for all the nature it uses. Use taxes and fees to redirect that immense flow of revenue from owners and lenders, into the public treasury, then back out again as that dividend.
While using the state’s power to collect revenue from legitimate sources — the worth of Earth is a socially-generated value — quit using said power to take money from illegitimate sources, such as people’s earnings and purchases. The pile of public revenue won’t shrink. Indeed, it will even expand. Places where dumb taxes are not levied, there people work harder and that pushes up site values. So if society recovers those values, there’ll be plenty of revenue to share. It’s the geonomic solution.
This 2013 excerpt of Bloomberg, Dec 9, is by Peter Coy.
Since the 1980s, rents (right scale) have risen, while incomes (left scale) have fallen. Both series are adjusted for inflation
If you can’t afford to own, you can rent. But what if you can’t afford to rent, either? Millions of Americans are in precisely that situation. The availability of apartments, especially cheaper ones, hasn’t nearly kept up with demand, and the problem has worsened since the 2007-09 recession.
In 1960, about one in four renters paid more than 30 percent of income for housing. Today, one in two are cost burdened.
“Cost-burdened” means you’re paying more than 30 percent of income for housing and “severely cost-burdened” means you’re paying more than half. By 2011, 28 percent of renters paid more than half their incomes for housing, bringing the number with severe cost burdens up by 2.5 million in just four years, to 11.3 million.
Foreclosed homes have become rental properties. However, soaring demand was more than enough to absorb the 2.7 million single-family homes that flooded into the rental market after 2007.
From a record high of 10.6 percent in 2009, the vacancy rate turned down in 2010 and has continued to slide, averaging 8.4 percent in the first three quarters of 2013.
With little else in their already tight budgets to cut, those with incomes under $15,000 a year spend about $130 less on food — a reduction of nearly 40% relative to those without burdens.
Deterioration is another problem; more than one in five mobile homes was removed from the housing stock from 2001 to 2011.
Ed. Notes: Eventho’ we don’t have enough affordable housing, we still tax it. How much sense does that (property tax) make? And scattered around those stuffed apartment buildings are plenty of vacant lots, kept vacant by speculators and sluggish governments. All those sites could support more housing, which would increase the supply and bring down the cost of residing.
Government should shift the property tax off improvements, onto locations. That’d cut the cost of construction and making improvements. It’d also prod owners to put their land to use. Besides bringing down the cost of putting a roof over one’s head, it’d also create job opportunity in construction and in the businesses that’d occupy some of the new buildings. So the poor could climb up into the middle class.
Try smart tax policy. You’d both raise the amount of housing. And you’d lower the amount of poverty. Now, if only the Harvards of the world had what it takes to point out the obvious. But they’re still stuck in the blind spot regarding land. They still talk about housing when it’s the land — the location — that climbs (then collapses) in value.
This 2013 excerpt of WorldStage Newsonline, Spt 19, is by Abel Krabee.
Delta State Government has announced plans to start collecting ground rent from property owners across the state.
Commissioner for Lands, Mr. Patrick Ferife said the decision to fully enforce the payment of ground rent was reached in Asaba at a meeting between officials of the state internal revenue board and officials of the Ministry of Lands, Housing and Urban Development.
Each property/plot owner was required by law to pay rent to the governor.
According to him, the focus for now will be on urban centres of the state even as he spelt out the rates for both commercial and residential plots/property.
Ferife said ground rent was not new but that property/plot owners have continued to default in their civic responsibility, insisting that the practice must stop as government was going all out to enforce the law to the letter.
“Like I said, we are setting up a task force to move from house to house to collect the rent. One of the challenges we have been having is that those that pay ground rent are those whose properties are registered and you find out that a very high percentage of property owners have not registered their properties or plots.
“But we are going to change that. Whether you register your property with the ministry or not, we are coming to you with the demand notice.”
Ed. Notes: Let’s hope that the government does not demand more than the annual rental value of a location as some businessmen fear.
And however much the Governor receives, let’s hope he uses the recovered rents for the benefit of the whole society.
It’d also be nice if the Governor used some of the public revenue to pay citizens a dividend, so they’d need not fear registering their land and paying the owed rent.
Further, it’d be wonderful if the Governor simultaneously repealed the counterproductive taxes, such as those that fall on income, sales, and buildings. With those taxes off their backs, people would become so much more productive, they’d enjoy greater income, and bid up the price or rent for locations. So government could retrieve plenty of revenue, even without its counterproductive taxes.
Take all these geonomic steps and Nigeria could cure itself of its resource curse.
This 2013 excerpt of The Guardian, Dec 6, is by Decca Aitkenhead.
Peter Higgs, the physicist who laid the groundwork for the discovery of the Higgs boson subatomic particle and winner of the 2013 Nobel Prize in Physics, says he doubts any university would give him a job today.
Higgs says universities wouldn’t consider him productive enough — though the papers he published were important and of high quality, he didn’t have the volume necessary for serious consideration in today’s competitive employment environment. He doubts a similar breakthrough could be achieved in today’s academic culture, because of the expectations on academics to collaborate and keep churning out papers.
He said: “It’s difficult to imagine how I would ever have enough peace and quiet in the present sort of climate to do what I did in 1964.” Higgs, 84, said he would almost certainly have been sacked had he not been nominated for the Nobel in 1980.
Ed. Notes: If conventional schooling stifles progress, why are we subsidizing it? If, instead, we were to pay ourselves, the whole citizenry, a dividend from surplus public revenue — and for sure there’d be a surplus after we recover all the socially-generated values of sites, resources, and government-granted privileges — then the minds like Higgs’ (deep thinking, creative, and useful) would be liberated from the judgments of smaller minds. And as a society and species we’d be so much further along!
Mathematicians propose using the “Lévy flight” model to reveal and police hotspots of crime.
This 2013 excerpt of Pacific Standard, Spt 17, is by Lauren Kirchner.
Lévy flight is a pattern of movement that consists of short, frequent steps all clustered in one area, and is then punctuated by long walks to a separate area. Picture wild animals foraging for food in a field, or searching an ocean for prey: they’ll slowly use up all the resources in one small area, and then move to a new area and start eating or hunting again there.
The Lévy flight, named after French mathematician Paul Lévy, has been used to describe phenomena as wide-ranging as financial markets, earthquakes, and a child’s game of hide-and-seek. In recent years, it has even been used to analyze patterns as dreary as the Web-surfing habits of online consumers, and as fascinating as the drips and streaks of Jackson Pollock’s paintings.
Now mathematicians argue that the Lévy pattern may mapping — and potentially prevent — crime.
A burglar might try to break into a group of homes in one localized area over the course of several days, and then, after a while, might travel to a new neighborhood for another cluster of break-ins. Short steps, long leap, short steps: the Lévy flight model.
While law enforcement agencies normally record information about the location and times of discrete crimes in an area, they don’t yet have a widely-accepted method for tracking — let alone predicting — the movement of individual criminals.
“Certain policing efforts concentrate on known offenders’ home territories as a predictor of future crimes,” Kolokolnikov and McCalla said. “If the relationship between a burglar’s movement and choice of targets becomes better elucidated, then the police will be better informed when they schedule their nightly patrols.”
Ed. Notes: Imagine if some mathematical formula could predict future behavior; then maybe it could predict a new fad or fashion. And wouldn’t it be nice if Levy flight described a real-world workweek? We’d do a bunch of short activities to make money then take a long time off just to relax, back and forth.
Actually, there is an economic reform that could make workweeks more humane and at the same time fight crime — that is to recover and share the socially-generated values of land and resources.
When Pittsburgh used to tax the rental value of locations in the city, it had the lowest crime rate of any major US city, by far. The tax kept speculators at bay, so land and housing was affordable and neighborhoods enduring — that cut crime. And if any place were to pay a “rent” dividend — bigger than Alaska’s oil share or Singapore’s land dividend — then people would have the cushion that’d allow them to work and play in a healthier balance.
This 2013 excerpt of Slate, Dec 6, is by Jessica Olien.
There is an awful lot of pressure to conform. “Satisfiers” avoid stirring things up, even if it means forsaking the truth or rejecting a good idea.
People’s partiality toward certainty biases them against creative ideas and can interfere with their ability to recognize creative ideas. Unexceptional ideas are far more likely to be accepted than wonderful ones.
The place where our first creative ideas go to die is the place that should be most open to them — school. Teachers overwhelmingly discriminate against creative students, favoring their satisfier classmates who more readily follow directions and do what they’re told. Schools make sure children’s minds are not on the “wrong” path, even though adults’ accomplishments are linked far more strongly to their creativity than their IQ.
Truly creative ideas take a very long time to be accepted. The better the idea, the longer it might take. Even the work of Nobel Prize winners was commonly rejected by their peers for an extended period of time.
What distinguishes those who become famously creative is their resilience. While creativity at times is very rewarding, it is not about happiness. A successful creative person is someone “who can survive conformity pressures and be impervious to social pressure.”
Ed. Notes: What happens to our childlike minds? Whatever, we should be able to avoid it. In the so-called primitive societies of hunters and gatherers, people are more exploratory, observed Jared Diamond in Guns, Germs, & Steel. Perhaps it would help to have student-driven education, as suggested by George Bernard Shaw, who also had kind things to say about Henry George, the reformer who promoted public recovery of natural rents, and about sharing the recovered rents. How fundamentally could sharing change society?
This 2013 excerpt of AlterNet, Spt 16, is by Marty Kaplan, winner of the LA Press Club’s Best Columnist award and a professor of entertainment, media, and society at USC.
In the public realm, a lack of information isn’t the real problem. The hurdle is how our minds work.
Do facts matter? No. When people are misinformed, giving them facts to correct those errors only makes them cling to their beliefs more tenaciously.
When people were asked to write a few sentences about an experience that made them feel good about themselves, a significant number of them changed their minds about the bad economy. If you spend a few minutes affirming your self-worth, you’re more likely to say that the number of jobs increased.
In one experiment, some people were asked to interpret a table of numbers about whether a skin cream reduced rashes, and some people were asked to interpret a different table – containing the same numbers – about whether a law banning private citizens from carrying concealed handguns reduced crime. when the numbers in the table conflicted with people’s positions on gun control, they couldn’t do the math right, though they could when the subject was skin cream. The more advanced that people’s math skills were, the more likely it was that their political views, whether liberal or conservative, made them less able to solve the math problem.
Denial is business-as-usual for our brains. More and better facts don’t turn low-information voters into well-equipped citizens. It just makes them more committed to their misperceptions. When there’s a conflict between partisan beliefs and plain evidence, it’s the beliefs that win. The power of emotion over reason isn’t a bug in our human operating systems, it’s a feature.
Ed. Notes: So now what? I’d say, downplay argument and up-play forging relationships around the topics that people can agree about. That might mean invoking a big familiar frame that resonates with a lot of people, hopefully a critical mass.
This 2013 excerpt of the Wall Street Journal, Dec 2, is by David Wessel.
Over the past 64 years and 16 presidential terms, the U.S. grew at an average rate of 4.35% when a Democrat was in the White House and at a 2.54% when a Republican was, a gap economists call “astoundingly large.”
The research was done by Alan Blinder, a macroeconomist who served in the Clinton White House and has advised several Democratic candidates, and Mark Watson, an econometrician who hasn’t dabbled in partisan policies.
Democrats would no doubt like to attribute the large Democrat-Republican growth gap to better macroeconomic policies.
The researchers reject the assertion that Democrats inherit stronger economies from Republican predecessors than vice versa. Instead, they assert it’s a matter of luck.
– Oil price shocks tend to occur when Republicans are in the White House: President Richard Nixon for the first OPEC oil shock, President Jimmy Carter for the second, but sGeorge H.W. Bush’s Gulf War and George W. Bush’s Iraq war were policy decisions that affected oil prices.
– Surges in productivity, or output per hour, account for about one-quarter of the gap.
– Swings in consumer confidence explain about a quarter of the Democrat-Republican gap between 1962 and 2013.
The difference between growth rates when Democrats control Congress and Republicans do is trivial. It’s the president’s party that matters.
There is a slight tendency for Fed-influenced interest rates to rise during Democratic presidencies and fall during Republican presidencies. This doesn’t suggest the Fed playing politics; it’s what the Fed does when the economy grows faster with rising inflation, which is what tends to happen when Democrats hold the White House.
A similar partisan growth gap is seen in Canada, but they found no statistically significant difference between economic growth records of left and right governments in the U.K., France or Germany.
Ed. Notes: While economists get lots of money and prestige for fiddling with numbers, numbers do not always tell the truth. As wits have been noting for over a century: “There are three types of lies: lies, damnable lies, and statistics.” Democrats were president during both the Great Depression and the Great Recession.
Further, there is the matter of lag time. Some policies don’t have an immediate impact; a subsidy to, say, dam builders would take years to bear fruit or wreak havoc. Plus, the first budget of a new administration they inherit as the last budget of the outgoing administration.
All in all, it’s a fun exercise if you like politics but essentially a distraction from the real issues that economist should measure: Why won’t the workweek shrink with so much techno-progress? And, how much damage do subsidies do? What’s their net gain or loss? And, how much more do people prosper when taxes get shifted off our efforts and onto never-produced land and resources and privileges? You could surely add to the list.
This 2013 excerpt of Pacific Standard, Spt 13, is by Tom Jacobs.
The easiest way to increase the value of your home [site]? Live near a winning high school football team.
A study of more than half a million single-family home [+land] sales in upstate New York between 2000 and 2009 finds that in places where the local Friday Night Lights squad won its first state football championship, property [location] values increased by 1.65 percent over the following year.
Andrew Friedson of the University of Colorado-Denver speculates the spike may be due to a “local pride effect,” most pronounced when the team plays in the highly competitive AA division, which is limited to schools with 1,000 students or more. The impact was strongest in the first three months following a championship victory, after which it gradually dissipated.
Ed. Notes: Not only in Texas but all across America regular Americans are crazy about their version of rugby they call football. I guess it must be nice to live near the loud cheering carrying across the familiar blocks on a fall Friday night. But it’s the location that rises in value, not anything on it, the media routinely neglect to point out.
The phenomenon is not just interesting but also presented as good news. American media assume homeowners don’t own homes so much as speculate in their house. A higher price for the site beneath the house doesn’t mean a higher land tax or land dues — eventho’ it should — but rather means a fatter profit when the owner sells out and moves on, uprooting his family and fraying the neighborhood fabric.
Scoring big in real estate is about the only way most regular people can every hope to score. It’s not capitalism that’s spreading over the world with the rise of China and others but land fever that’s infecting the human race. Like in a game of musical chairs, most ordinary people only hope to win and get out before the bubble bursts.
China accused of stealth land grab over Mozambique’s great rice project.
This 2013 excerpt of The Ecologist, Nov 30, is by Cecilia Anesi and Andrea Fama.
When you visit the Xai-Xai rice project its sheer scale takes you aback. Black soil, perfectly ploughed, extends for miles until it touches the horizon.
Local NGOs allege that 80,000 people have been displaced by the project; that villages have been left as small islands of habitation surrounded by square kilometres of intensively farmed land where villagers can no longer grow food, or graze their cattle; that crops have been run over or ploughed under; that cemeteries have been despoiled to make way for new developments.
Most worrying of all, they say these impacts are set to multiply as the farming project expands into new territory. The same NGOs also accuse the project of being led with lack of consultation with local communities, and violations of the International Labour Organization’s convention 169 which protects the rights of indigenous peoples.
As with many things in Africa, hard facts are difficult to come by. The project enveloped a massive portion of land, taking it from poor people most of whom had never heard the term ‘land rights’. The Chinese company that reaped the rewards, like a hostile alien invasion, has ‘conquered’ — dismissing any doubt regarding its right to be there. But it is the Mozambique Government that has allowed this to take place – and even encouraged it.
While dedicating all the project area to monocultural intensive farming might satisfy Southern Mozambique’s rice demand, it will certainly not solve the problems of hunger in Xai-Xai district. A partial solution could lie in allowing local farmers to continue using the machambas close to the villages, while contracting local farmers to work on Wanbao’s rice production project.
Ed. Notes: It’s an all too common occurrence: the powerful take land from the weak. Looking deeper, powerful locals and powerful outsiders collude to get what they want, the weak be damned. Haven’t we seen enough yet? Perhaps a more just system would be for the powerful to rent the land from the weak. Then the weak would be compensated, the powerful would acknowledge and perform their responsibilities, and the land would be put to its most productive use.
It’s not the morphine, it’s the size of the cage: Rat Park experiment upturns conventional wisdom about addiction
A 2013 excerpt of garry’s subposthaven, Spt 13.
About the rats in a cage who can self-administer morphine who get addicted to the stuff, and then just hit that lever until they die. A seemingly keystone argument in the war against drugs. But there’s another model: drugs do not cause addiction, living conditions do. Laboratory rats kept isolated in cramped metal cages, tethered to a self-injection apparatus, show only that severely distressed animals, like severely distressed people, will relieve their distress pharmacologically if they can.
Rat Park housing colony, 200 times the square footage of a standard laboratory cage, had 16–20 rats of both sexes, an abundance of food, balls and wheels for play, and enough space for mating and raising litters. Rats who had been forced to consume morphine hydrochloride for 57 consecutive days were brought to Rat Park and given a choice between plain tap water and water laced with morphine. For the most part, they chose the plain water. Control groups of rats isolated in small cages consumed much more morphine in this and several subsequent experiments.
Rats that are born into extreme conditions in small cages are clearly more likely to self-medicate.
The results are catastrophic for the simplistic idea that one use of a drug inevitably hooks the user by rewiring their brain. When Alexander’s rats were given something better to do than sit in a bare cage they turned their noses up at morphine because they preferred playing with their friends and exploring their surroundings to getting high.
Perhaps it’s time the war on drugs becomes a war on the existence of poverty? It’s not about the drugs. It’s about the social environment in which we live.
Ed. Notes: A big part of social conditions is the size of our space. Crowding many people into small spaces happens when those people are poor, of course, but also when space is limited. Who limits space? Speculators do, when they withhold locations from productive use. And cities do, when they rely on taxes upon sales and income and buildings and so let lots lie vacant and buildings remain abandoned.
To motivate both calculating speculators and dull-witted cities, reform the flow of public revenue. Don’t let governments tax anything willy-nilly but require them to first recover the values that society generates before trying to tax anything else. What values does the mere presence of society generate? Those would be the values of locations. Levy a land tax or require Land Dues. Then owners will quit keeping land under-utiliized and to afford the charge get busy and develop their sites or sell to others. To increase public revenue, cities too will sell-then-tax or lease public land.
All that activity will increase the supplies of both land and buildings. Plus, the construction of buildings and filling some of them with shops and stores will increase job opportunity, raise wages, and give poor people the chance to climb into prosperity. In a society of prosperous people following fair economic rules, people will feel more worthy and hence less likely to need to escape via drugs.
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.
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?
not a panacea, but like John Muir said, “pull on any one thing, and find it connected to everything else.” Recall last month’s earthquake in El Salvador. We felt it and its formidable after-shocks in Nicaragua. Immediately afterwards, my host nation, one of the poorest in the Western Hemisphere, sent aid to its Central American neighbor. The Nica newspapers carried photos of the devastation. They showed that the cliff sides that crumbled had had homes built on them while the cliffs left pristine withstood the shock. Could monopoly of good, safe, flat land be pushing people to build on risky, unstable cliffs? If so, that’s just one more good reason to break up land monopoly. What works to break up land monopoly, history shows, is for society to collect the annual rental value of the underlying sites and resources. That’d spur owners to use level land efficiently, so no one would be excluded, forced to resort to cliffs. To prevent another man-induced landslide is yet another reason to spread geonomics.
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.
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.
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!
one of many words I coined over 20 years ago: geoism, geonomics, geonomy, geocracy, etc – neologisms that later others came up with, too. CNBC once had a Geonomics Show, and Middlebury College has a Geonomics Institute. If “economy” is literally “management of the household”, then geonomy is “management of the planet”. The kind of management I had in mind is not what CNBC was thinking – top-down. My geonomics is not hands-on, interfering, but hands-off, organic. It’d strive to align policy with natural processes, similar to what holistic healing does in medicine, what organic farming does in agriculture. Geonomics attends to two key components: One, the crucial stuff to track is fat – or profit, especially profits without production, such as rent, or all the money we spend on the nature we use. Society’s surplus is the sine qua non for growth, needed to counter death – not merely more, but sustainable development, more from less. Two, the basic process to respect is the feedback loop. These let nature maintain balance automatically and could do the same for markets, if we let them. Letting them would turn our economies, now our masters, into a geonomy, our servant, providing us with prosperity, eco-librium (to coin a term) and leisure, time off – a hostile environment for economan but a cradle for a loving and creative humanity.
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.
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 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.