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This 2014 excerpt of Grist, Jan 13, is by Jaafar Rizvi.
From 2001 to 2010, the U.S. built roughly 13,000 miles of new interstate natural gas pipelines compared to just 748 miles of interstate high-voltage transmission lines. This gigantic mismatch is in part due to the fact that the Federal Energy Regulatory Commission lacks the authority to site transmission lines, but does have the ability to site pipelines. So FERC can approve a pipeline route, while a patchwork of local and regional regulators with competing interests must all agree on where an electric transmission line should be built. One broken link in that long and fragile chain of approvals can quash an entire project.
Take for example the Zephyr Power Transmission Project. This line, proposed in 2011, would take power from what could be the largest wind farm in the nation and perhaps the world, the Pathfinder Zephyr Wind project in Wyoming, and deliver it to Las Vegas in the Southwest. This wind farm is expected to generate between 2,000 and 3,000 megawatts of inexpensive, renewable energy — enough to power a million homes. But permitting and review is expected to take six years. The process could go longer and at any point it could be rejected.
Natural gas pipelines, on the other hand, are getting fast-tracked. For example, Spectra Energy, the owner and operator of a pipeline delivering fracked natural gas from the Marcellus Shale to Manhattan, applied for a permit with FERC on Dec. 20, 2010. Less than three years later, it’s bringing natural gas to Manhattan.
Ed. Notes: While bureaucracy may be too slow for power lines, those lines are above ground while pipes for gas are below, so the problems with views, bird flight patterns, etc, are different. Further, should clean energy renewables be centralized, as in a wind farm, or should they be decentralized, with windmills atop skyscrapers for example? Maybe the government shouldn’t necessarily speed up processing for power lines but slow it down for gas lines, and take into question such issues as the pollution from the burned natural gas.
This 2014 excerpt of Common Dreams, Jan 13, is by Bill Quigley.
There are actually thousands of tax breaks and subsidies for the rich and corporations provided by federal, state and local governments but these ten will give a taste.
One. State and Local Subsidies to Corporations.
Two. Direct Federal Subsidies to Corporations.
Three. Federal Income Tax Breaks for Corporations.
Five. Subsidy to Fast Food Industry. They pay wages so low that taxpayers must put up $243 billion to pay for public benefits for their workers.
Six. Mortgage Deduction benefits mostly homeowners with incomes over $100,000 per year.
Seven. The government bailout of Wall Street cost $32 to $68 billion, not including the takeover of Fannie Mae and Freddie Mac which alone cost more than $180 billion. The Federal Reserve made at least $7.6 trillion [others say double] available to banks, financial firms, and investors.
Eight. Each major piece of legislation; e.g., the emergency tax legislation passed by Congress in early 2013 contained 43 business and energy tax breaks worth $67 billion.
Nine. Lax enforcement. E.g., JPMorgan Chase made a preliminary $13 billion mortgage settlement with the US government but is allowed to write off $4 billion. Corporations paying fines to the government protect their officers from being prosecuted (you and I would be prosecuted).
Ten. Thousands of smaller special breaks. E.g: Fifty billionaires received farm subsidies in the past twenty years.
Special breaks in tax code is the reason there are thousands of lobbyists in the halls of Congress, hundreds of lobbyists around each state legislature and tens of thousands of tax lawyers all over the country.
Ed. Notes: Not just tax breaks but subsidies, too, and fat-cat contracts, are why there are lobbyists pulling down millions of bucks, getting passed into law welfare for the rich.
Back to the mortgage interest deduction. It does not save the homebuyer a penny because while the buyer’s tax burden might be less the purchased home’s price is higher. The deduction merely lets real estate, construction, and banking industries inflate land, buildings, and loans. Without the deduction, some wannabe buyers could not afford the house, so its price would have to come down. Canada does not allow interest deduction and it enjoys an even higher rate of home ownership than America.
Back to the Wall Street bailout. It also let them avoid mending their dishonest ways, gobble up smaller unlucky competitors, and created a false recovery (inflated asset values) that papered over the continuing recession for millions of Americans.
The author left out military contracts, perhaps the biggest part of corporate welfare, and the free funds to the oil industry, an industry which cheats on its royalty payments and never gets punished, for something as intangible as research, and the fact that corporations and multi-millionaires each year get refund checks back from the US Treasury in the hundreds of millions of dollars!
After all this, many people still don’t see anything wrong with subsidies, they just see something wrong with the payments going to the wrong people. And they don’t see anything wrong with vast fortunes, they just want to tax them, suggesting it does not matter how you accumulate your money as long as you give us a slice — not a pretty moral picture. And pragmatically, it’s hard to capture a slice downstream, after the tax target has already become rich and powerful, and much easier to capture the funds, the source of fortunes, upstream, while they’re still in flux.
Another part of the author’s analysis left out is that the recipients of state favors (of tax breaks and subsidies) are entities that have long been the recipients of natural “rents”, of the money that society spends for the nature it uses. With money comes power and those unearned rents have enabled the recipients to lobby and make campaign contributions for ever more favors. So to stop the abuse of pubic revenue we also have to turn off the primordial spigot — the titles, deeds, leases, and loans that channel our spending for land and resources into so few pockets.
To make a clean sweep of it, we should direct government to forget taxing and instead use fees, dues, leases, etc to redirect Earth’s worth into the public treasury, making this social surplus our common wealth, and to forget subsidizing and instead disburse the lion’s share of public revenue back to citizens as a monthly dividend. Since complexity is the enemy of equity, let’s follow the KISS principle. Life could be so much easier!
Following Argentina’s economic crisis in 2001, the country leaned heavily on mining and large-scale agribusiness (especially soy) to reinvigorate its ailing economy. The expansion of these industries requires the accumulation of new lands and the violent displacement of rural communities. Many farmers and indigenous communities don’t have titles to their lands, leaving them vulnerable to displacement or criminal charges for squatting.
Nationally, nearly a quarter of Argentina’s farming families are engaged in some kind of dispute over their land, 64 percent of which began within the last 20 years. There are 857 distinct conflicts over land, affecting 63,843 family farms, covering nearly 23 million acres.
In the past three years 11 farmers and indigenous people have died, all of whom opposed the incursion of large-scale developments on their lands. Some were murdered in cold blood, while others died in mysterious traffic accidents that their families claim were also premeditated.
Six corporations (Cargill, Bunge, Dreyfus, AGD, Vicentín and Molinos Río de la Plata) control 90 percent of soy production and its derivatives, making record profits.
In the neighborhood of Ituzaingó in Córdoba province, the activist group of concerned mothers Las Madres de Ituzaingó claims 500 of the 2,000 residents have reported some form of cancer from pesticides for soy cultivation.
Communal land use for animal grazing, for instance, is crucial to many peasant farmers’ survival. However, the Argentine judicial system does not easily recognize commons and is prone to a lack of political accountability.
Peasant movements like Argentina’s National Peasant and Indigenous Movement (MNCI) are resisting this assault on their lands and fighting to transform the system. These two strategies —- 1) demanding communal land titles and 2) appealing to international human rights instruments for collective territorial rights —- go beyond the typical strategy of occupation in that they seek broader systemic transformation.
Ed. Notes: Such bloody disputes are not uncommon in Latin America. Elsewhere and earlier, they’ve been settled by charging people for claiming land. Then they claimed no more than they could individually use, and huge plantations were broken up. Could Land Dues work again?
This 2013 excerpt of the Hampton Institute, Dec 27, is by Jeriah Bowser. In 2014 the full article appeared at Truthout, Jan 12.
Unless I purchase a piece of land, I will forever be a serf to a landowner, forever paying “rent” to another person who “owns” the land I am living on. And even if I do manage to acquire a parcel of land, I will be forced to pay taxes to the government in which ‘my’ land is located in, or I will have ‘my’ land forcibly taken from me. There is simply nowhere to live for free, no public areas, no “commons” with which one can live simply and quietly without having to participate in industrial society.
Completely foreign to humanity for over 200,000 years was the concept of private property while sacred land was familiar.
For those of us who are not landowners and don’t have the economic means to purchase and then free land, there are still many actions we can participate in: squatting, eviction-resisting, and communal housing. Participating in or starting a land conservancy is a great way to preserve and reclaim land. Engaging in direct-action to protect land-grabs by government and corporate powers is another way that you can participate in this movement.
Ed. Notes: Is owning land wrong? Don’t people need a place to call their own? A tribe of hunter/gatherers in Africa, the Ik, have the custom of a “di”, a place reserved for just one person where he can sit in full view of others and be ignored, just as if he were in a private home. Perhaps the actual problem is absentee ownership.
Further, even before the planet got crowded, people have always competed for the same parcel or region. Often they settled claims by killing. Now where there isn’t much room for commons — and even within commons people long for the right to a particular site — isn’t paying money for some land an improvement on violence?
Happily, having to pay for land can also force absentee ownership to retreat and owner occupancy to expand. Where societies levy a land tax, or a property tax which contains the land tax, having to pay for land on an ongoing basis makes it not profitable to be a middleman. So the grasping landlords who had too much sell off their excess and speculators don’t even bother to accumulate an excess of land.
Far better than paying site rent to the government, however, is paying it to one’s community. Then residents would not only pay Land Dues for the parcel one claims but also get paid a fair share of the amassed dues that all one’s neighbors pay: Land Dues into the public treasury, Rent Dividends back out to residents, somewhat similar to what Aspen CO and Singapore do. It’s a third-way alternative to renting land, to buying land, or to paying land (or property) taxes.
One would expect this sharing of socially-generated land values to strengthen one’s ties to both community and to the earth.
This 2014 excerpt of Pacific Standard, Jan 11, is by Jim Russell.
Large companies, universities, and other anchor institutions help spread the fixed costs of research (think buildings, suppliers, etc.). And by massing large numbers of research and development workers together in large organizations, they give the capacity to capitalize on new inventions. The presence of just one large-scale firm can be a huge advantage in providing the institutional heft behind a fledgling innovative economy.
But these big companies tend to focus on things that relate to their existing products and may overlook inventions in other areas. Regions with large numbers of smaller, more entrepreneurial companies can gain an edge in capitalizing on these innovations that larger companies might pass over. The story of Steve Jobs’ trip to Xerox’s Palo Alto Research Center — walking away with a whole host of ideas Xerox hadn’t brought to market — is perhaps the most legendary example of this.
The population-weighted density approach reveals that the areas with people living at the highest density levels —- metro areas with 5,000 or more people per square mile —- were clustered mainly in California and along the corridor stretching from Boston to Washington. Other very dense metro areas included Chicago, Honolulu, Laredo, Las Vegas, Miami, Milwaukee, and San Juan. Low-density metro areas, on the other hand — those with fewer than 1,000 people per square mile -— were generally clustered in the South.
While we usually think of the knowledge economy as having a strong bi-coastal orientation, most of Lumosity’s top 25 brainiest places are in the Midwest. Milwaukee is the highest-ranked large metro. Minneapolis-St. Paul is second, Boston third, Pittsburgh fourth, and Indianapolis fifth. Kansas City, Rochester, Seattle, Cincinnati, and Austin round out the top 10 among large metros. San Francisco is 11th, San Jose (the Silicon Valley) 13th, and D.C. 14th among large metros.
Milwaukee is the brainiest. Milwaukee is also among the most dense. Yet Milwaukee isn’t the most innovative.
Take a look at Portland, Oregon, and Rochester, New York. Both have about 1,000 inventors apiece. But Portland had twice the number of quality-adjusted patents per inventor. Though both metros had similar numbers of large labs, Portland registered a whopping five times as many smaller labs as Rochester. Having a diverse firm base — with at least one large lab and many smaller labs — can increase innovation by 17 percent.
Migration matters. Portland is a destination for ambition. Rochester is the place the prodigal daughter leaves. The more parochial a place, the more ineffective the talent.
Ed. Notes: Wherever people go they bring their land values with them. And the more the gather in one spot, the more they push up the value of locations, and do so exponentially. Eventually those high site values, unless recovered and shared, will drive away the original innovators, a phenomenon seen in every hip neighborhood in every city.
The burning issue in Britain is the cost of living. Prices have outstripped wages for the past six years. The thing that is really out of control is the cost of housing [land]. In the past year wages have risen by 1%; property [location] prices are up by 8.4%. This is merely the latest in a long surge. If since 1971 the price of groceries had risen as steeply as the cost of housing, a chicken would cost £51 ($83).
By subsidising mortgages, and thus boosting demand, the government is exacerbating the problem. Driven by a baby-boom, immigration, and longer lives, Britain’s population is growing by around 0.8% per year. Foreign wealth, meantime, is pouring into London.
New British homes are smaller than those anywhere else in Europe, household size is rising in London, and slums are spreading as immigrants squash into shared houses (and, sometimes, garden sheds). Inequality is growing, because the higher property prices are, the greater the advantage that accrues to those own homes.
Though land prices can soar 200-fold when planning permission is granted, councils cannot extract much of the increased value to spend on services.
The ideal solution would be a tax on the value of land. This would be low or zero for agricultural land and would jump as soon as permission to build is granted. It would prod builders to get to work quickly. It would also help to capture the gains in house [site] prices that result from investment in transport or schools.
Ed. Notes: The British press does a great job of promoting this fundamental and effective reform: public recovery of publicly generated location values. Let’s hope the public can’t be far behind. And soon after that may the “leaders” get on board.
One of the topics that has not received enough attention in economics is the effect of economic growth on the distribution of income. So if you want to understand it, you should get a piece of paper. I’ll wait until you have it …
Now on the lower left side, draw a rectangle with a height longer than the width. The top half of the paper should still be blank. We will use an agricultural model with one product, corn. At first, the only factors are land and labor. Now draw small circles of equal size in the rectangle. These are farms of equal size. The yield is ten bushels of corn per farm per period of production. As long as there is free land available, land rent is zero, and the entire yield of ten goes to wages.
Now draw another rectangle to the right of the first one, three-fifths as high. Label this “six,” because the output in that land is six bushels of corn. All the farm workers are equally skilled and work the same number of hours, so the lower yield is due to its being less productive land. With rent at zero because there is free land, the wage is six. The wage in the ten-bushel land has now fallen to six, because workers are mobile and equally skilled. The extra four bushels in the ten-bushel farms are now land rent.
For rent and wages, it does not matter whether the owner is also the worker, or whether he hires labor at six bushels, or whether he rents out the land to a tenant at four bushels. The economic rent is the difference in the productivity of the two lands, regardless of who are the owners, tenants, and workers. If the landlord happens to charge only three bushels from a tenant, the economic rent is still four: three go to the landlord, while one bushel is the yield as rent kept by the tenant.
In classical economics, the least productive land in use is called the “margin of production.” There is a “law of wages,” which states that the wage level for the economy is the wage at the margin of production. There is a “law of rent” which states that the rent of a plot of land is its output minus the normal costs of labor and capital goods, such as, in our simple model, the difference between the output of the lands yielding ten and six.
Now add a third rectangle to the right of the six-bushel land, and label this “four,” because this is the new margin of production yielding four bushels. Wages there are four, making the wage also four at the lands yielding ten and six. Now rent in the ten-bushel land has risen from four to six, and rent at the six-bushel land has risen from zero to two. You can see that as the margin of production moves to less productive land, wages fall and rent rises.
Now let us introduce a plow, which represents both more capital goods and better technology. The plow costs two bushels and completely depreciates each period, requiring a new plow for the next period. The plow doubles production at each plot of land. So on the rightmost rectangle, draw another rectangle just above the first one, attached to it, with an equal size, representing the doubling of output.
Is it worth buying the plow? Yes! The farms at the margin, having yielded four, now yield eight. After paying for the capital good, the plow, the output is six, which all goes to wages. Wages there have risen by 50 percent. By the law of wages, wages in the other farms have risen to six.
With the plow, the farms that yielded six now yield twelve. Draw a rectangle above the middle one, with equal size. Now the distribution of the twelve-bushel output is two to capital goods, six to wages, and the remainder, four bushels, to rent. Rent there doubled from two to four bushels.
Now do the same for what was the ten-bushel land, which now yields twenty. The distribution is two to capital goods, six to wages, and the remainder, twelve bushels, to rent. Rent there also doubled, from six to twelve bushels. (A similar graph of the factors).
Now we can see the effect of the economic growth caused by more and better capital goods. Wages have risen by fifty percent, while rent doubled. We can calculate this in bushels. Suppose there were ten farms in each grade of land. Write this down: before the plow, for the three lands, output was 100 + 60 + 40 = 200. Wages were 40 times 3 = 120. Rent was 60 + 20 = 80. So wages were 60 percent and rent was 40 percent of income.
With the plow, output doubles to 200 + 120 + 80 = 400. Are you writing this down? Wages are now 60 times 3 = 180. Capital yields are 2 bushels per plow times 30 farms = 60 bushels. Land rent is 120 + 40 = 160. Wages are now 180/400 = 45 percent of income. Capital yields = 60/400 = 15 percent of income. Rent = 40 percent of income. Wages rose by 60 bushels, while rent has risen by 80 bushels.
The portion of income going to wages has fallen from 60 to 45 percent, but the portion of rent stayed the same, 40 percent. The doubling of output doubled the rent, but because the plow has a cost, wages could not double, but they did rise by 50 percent. Labor benefits from the greater productivity, but landowners benefit more. If new technology and capital goods were to similarly double production again, the distribution of income would keep the same proportions.
If the ownership of the land value is concentrated, then much of the gains from economic expansion is distributed to a few landowners. The greater rent going to a few owners explains much of the inequality of income today throughout the world. These landowners do nothing to generate the growth. Usually, better capital goods also requires better human capital, greater skills. So the economic growth and development is caused by entrepreneurship and investment in capital goods and human capital, and the yields properly go to a return on the capital goods, the capital yield, and to greater wages, including the gains to the entrepreneurs. But the greater rent is a surplus windfall to the owners of land that obtain the rent just by holding title.
If we believe in human equality, the land rent should be distributed to all the people equally. Then all the people would equally benefit from the greater productivity. The effect of greater productivity on the input-factor distribution of income has been neglected, so this model should be taught in all courses on the principles of economics.
This 2014 excerpt of Pacific Standard, Jan 9, is by Noah Davis.
Between July 1 and December 15 along the American Mid-Atlantic Coast, 996 dolphins were “stranded,” which is marine-biology speak for a much darker reality. Compare that figure to the 117 average during the same period between 2007 and 2012.
This isn’t the first one. Between June 1987 and May of 1988, more than 700 bottlenose dolphins died in the Mid-Atlantic. It’s estimated that the figure represented roughly half of the Mid-Atlantic population. Marine biologists discovered that cetacean morbillivirus, which is in the same genus as measles, killed the dolphins.
Morbillivirus is also to blame for the recent deaths.
Morbillivirus is endemic to the dolphin environment. It’s always floating around, waiting to be passed through the air via exhalation from a dolphin’s blowhole. So why are they dying off in 2013?
One theory, according to Erin Fougeres, a marine biologist with NOAA Fisheries, is that outbreaks are cyclical. “Those bottlenose dolphins that don’t die develop natural antibodies,” she told me over the phone. “As those animals slowly die out of the population, herd immunity drops which can lead to an outbreak. That’s what we think it’s happening.”
Dolphins act like the proverbial canaries in a coal mine. “We will continue to look and see if there are any underlying causes that might make them more susceptible to the virus this year versus other years,” she said. “Something like global warming.”
There was an unrelated UME in Louisiana’s Barataria Bay, an area affected by the BP Deepwater Horizon oil spill. All the deaths aren’t linked but.
Ed. Notes: With power comes responsibility, supposedly. Human industry has the power to harm nature, so where is the responsibility not to? We humans need to strengthen our ties to the natural world. Perhaps a share of the worth of Mother Earth would do that. The healthier the ecosystem, the fatter our “rent” dividend. The old bottom line would be pulling on the same end of the rope with stewardship. It’d align the interests of people and planet both.
Thousands of homes can’t be sold because of private ground rent
A 2014 excerpt of Dutch News, Jan 9.
In 2011, it emerged that banks had suddenly all but stopped giving mortgages to people who want to buy property situated on another private owner’s land and therefore subject to ground rent (erfpacht).
The banks consider it too risky to do so, because the land owner can increase the ground rent at will. This, they say, could mean people default on their mortgages.
‘The aim of the new procedure was to make it possible to sell houses on land owned by third parties,’ said Piet van Buuren from a lobby group representing people unable to sell their homes. ‘In some cases, the notaries are being demonstrably tougher than was agreed.’
Ed. Notes: Is what the bankers get the media to repeat true? Don’t leases cover things like how often rents can be raised? And can’t leasees buy insurance to cover jumps in rents? And if site rents were rebated back as resident’s dividends, would any of this even matter? Maybe bankers don’t like rents going to anyone but themselves via mortgages? Didn’t journalists used to ask penetrating questions?
Why Karl Marx Hated the Land Value Tax and Why He’s Wrong
This 2014 excerpt of Keystone Politics is by Jon Geeting.
Rightists and conservatives calling Jesse Myerson a Communist for supporting ideas like Henry George’s land value tax is pretty amusing since Karl Marx himself described Georgist politics as “capitalism’s last ditch.”
Henry George differs from Marx in this important respect: whereas Marx’s politics envisioned a bifurcated struggle between labor and capital, George’s politics placed labor and capital on the same side, with landowners on the other.
George’s idea is that you work for a living, and (contra Marx) that the honest-to-God investors who make stuff like buildings and machinery and national telecommunications networks and politics blogs make an honest living too.
But your landlord doesn’t really work. He makes money by sitting around owning stuff, repairing your dishwasher sometimes, while you toil doing real work to pay him a third of your income or more.
What if we stopped taking so much money in sales, wage, and investment taxes from the people who work and invest for real, and started funding more of our public services with wealth expropriated from people who just own stuff. Rent hikes would stop eating into wages so much, workers and businesses would have more disposable income to spend and invest in the real economy, and this would all create a much stronger economic foundation for cities.
Ed. Notes: Paying your community for your land instead of an individual is not only fair, since it’s the community who generate that value, but also efficient, because drives efficient use of land and, as noted above, makes possible deleting the ruinous taxes. And psychologically, Land Dues ought to strengthen our identity with both community and Earth. Long run, that should help.
This 2014 excerpt of the BBC, Jan 7, is by Julia Carneiro.
Rio dos Macacos, home to 67 families, is one of Brazil’s quilombos – communities started by former slaves who went to live in hiding, surviving as best as they could by working the land, before forced labour was prohibited in Brazil in 1888.
According to Fundacao Palmares, a government-funded cultural organisation, there are more than 2,400 quilombos across the country.
Many still keep alive the traditions of their ancestors, such as African dance forms and forms of worship.
But even after slavery was abolished, elders say their ancestors had few rights. For a long time, they continued to work the sugarcane fields not for pay, but in return for food and housing.
It was only after the local farms went into decline, that the quilombolas – as quilombo residents are known – were allowed to harvest some of the fields and keep the proceeds for themselves.
But no land was ever formally given to them – an omission which is at the root of at their current problems.
Brazil’s constitution – signed in 1988, 100 years after slavery was abolished – ruled that quilombolas were entitled to the land they had historically occupied.
A navy built a naval base in the area in the 1950, and as the base grew, the area where quilombolas lived shrank. Today, the Aaratu Naval Base is the second largest in the country. One of the oldest residents, Maria de Souza Oliveira, 86, remembers how 70 families were moved to make way for a village built for the families of navy personnel in the 1970s. Nowadays, some 450 families live in the navy village, just across the Macacos river from the quilombo.
Community leader Rosimeire dos Santos Silva says the community has had its crops pulled out. “They harass our children on their way to school. And if we try to work the soil, we’re beaten up.”
Ed. Notes: Ironic, isn’t it, that the institution that’s supposed to defend the people instead attacks them when it wants what the people have. And nobody is going to attack Brazil. What do they want with an expanding military anyway? They could abolish it, as Costa Rica did, as any nation could. Just use geonomics to settle and disputes both within and beyond national borders.
The recent 2014 Rolling Stone article on how to transform the economy into one working right for everyone stirred up a firestorm of reaction, including a half dozen articles, excerpted here.
1) Demos, Jan 4, by Matt Bruenig The Totally Doable Slate of Economic Reforms That Conservatives Are Losing Their Minds Over
I do not generally care for framing that talks about what Millennials should be fighting for because it does not really make any sense, but the five reforms Jesse Myerson lists are basically doable and have been written about here and elsewhere before.
Nonetheless, a massive conservative backlash ensued on Twitter in response to the piece. On some level, this kind of reaction is to be expected. Conservatives prefer our institutions as they exist and the way they distribute power, income, and wealth in society. But the conservative backlash did not center around how they just prefer another system. Instead, it was almost universally premised on the idea that these reforms are fundamentally impossible. This is a popular conservative rhetorical move because declaring impossible all of the things that are so much more appealing than what they have to offer is the only real way to advocate the terrible things they support.
Nonetheless, with the exception of Myerson’s call for a job guarantee, all of the other reforms he proposes—a universal basic income, a land value tax, a sovereign wealth fund, and public banks—are clearly possible because they already exist in the world.
2) Business Insider, Jan 5, by Joe Weisenthal People Are Freaking Out About This ‘Rolling Stone’ Plan To Fix The Economy
“Five Economic Reforms Millennials Should Be Fighting For” has conservatives on Twitter flipping out. Nick Gillespie at Reason.com has a breakdown of the conservative backlash, but if you actually read the article it’s really baffling trying to figure out why the piece is generating such controversy.
You can disagree with all of these — all have various drawbacks and benefits — but the idea that this is some insane communist raving looks like an example of people just deciding to be outraged over something they didn’t actually read.
3) Business Insider, Jan 6, by Josh Barro Some Of These ‘Communist’ Economic Ideas Are Actually Pretty Good
This weekend, Jesse Myerson advanced five economic reform ideas that he thinks millennials should champion, and various conservative readers’ heads exploded for reasons I don’t fully understand. Particularly, I don’t see what’s supposed to be “communist” about Myerson’s proposals.
Conservatives dismiss this agenda at their peril.
The most promising of Myerson’s ideas is an unconditional basic income, which is a policy of sending checks to Americans simply for existing.
Or consider a land value tax. This tax would actually foster economic growth by making it harder for landowners to keep their land unproductive; you could expect to see a lot fewer vacant lots in New York City.
So, I’m not ready to sign up for Myerson’s agenda. But I’m not sure why people are treating it like it’s silly, or Soviet.
5) Washington Post, Jan 7, by Dylan Matthews
which we already posted as “WaPo Blogger: Millennials, Do Fight for Rolling Stone Reforms”
6) Los Angeles Times, Jan 8, by Emmett Rensin, a political activist and essayist living in Chicago, has appeared in USA Today, Salon, the Los Angeles Review of Books and elsewhere; he is 23 years old.
A Lefty Millennial Activist Takes on Columnist Jonah Goldberg
“In America,” I once quipped, “the old are always ready to give those who are young the sad news that history, with its opportunities for fresh ideas, is over.”
“One of the wonderful things about America is that both the left and right are champions of freedom. The difference lies in what we mean by freedom. The left emphasizes freedom as a material good, and the right sees freedom as primarily a right rooted in individual sovereignty. For the left, freedom means ‘freedom from want.’ If you don’t have money, healthcare, homes, cars, etc., you’re not free.”
In a way, Goldberg’s right. Young leftists like Myerson and myself share a moral outlook that fundamentally differs from conservatives like Goldberg: Freedom, in the most prosperous nation on Earth, must entail the freedom to act without the constant specter of homelessness, hunger, and preventable illness.
If liberalism believes that freedom consists of freedom from want, then we want only to extend the means for such achievement beyond the wealthy, white, and landed few. Not everyone needs their own Monticello, but an apartment and some groceries might suffice.
Who knows? Maybe if millennials achieve the kind of economic justice Myerson is calling for, we might just have the time to find a new idea under the sun.
Ed. Notes: A couple of Myerson’s ideas can’t really fit on the left/right spectrum, since they’re either left and right or neither, they’re simply “organic” in that they should be a key part of a market economy in order to make it work at full capacity. Those two ideas are to “socialize” or to tax the value of land and resources, a bit like Alaska does, and to pay everyone an extra income, which would correct the “price” of or wage for labor. But the human brain prefers differences to be black or white, so third ways have a hard time getting any traction. Still, if you have the time, read the articles. All were enlightening.
This 2013 excerpt of the Daily Caller, Dec 27, is by Burton A. Abrams.
Gasoline blended with ethanol, an alcohol, corrodes metal and deteriorates plastic and rubber parts. Fuel lines have been known to leak, causing obvious dangers to operators. Where’s the Consumer Protection Agency when you need it? Not only won’t the government protect us consumers, it caused the problem. Government legislation mandates the blending of ethanol into most gasoline sold in the United States.
Mandating the use of ethanol imposes more costs than benefits, including hidden costs on consumers that hit the poorest members of society worst, and provides billions of dollars in lucrative business to grateful campaign-donating special-interest groups.
In 2012/2013, approximately one-third of the U.S. corn crop went into ethanol production. U.S. annual production of ethanol has surged since 1998, increasing from slightly over one billion gallons to over 13 billion gallons in 2012. This surge in production and consumption is the result of state and federal mandates requiring it to be blending with gasoline.
Lands previously planted with other grain crops have been shifted into corn production, lowering supplies of other grains and raising their prices. Livestock that feed on higher-priced grains have had their costs of production and prices go up as well. These higher prices for food items are a “tax” on consumers — financial burdens that fall disproportionately on lower-income families whose budgets are heavily weighted towards food items.
The environmental benefits of corn-based ethanol are in doubt. While ethanol is an oxygenate that allows for the cleaner burning of gasoline, drivers using gasoline blended with ethanol find their cars’ miles-per-gallon fall, so more gallons of blended gasoline are needed for traveling any given distance.
Ed. Notes: A better solution to air pollution might be to just make the polluter pay and to repeal automatic limited liability. To avoid pollution charges and high insurance premiums, car manufacturers would find alternatives. There could even be one already found, sitting on a shelf, awaiting our use; who knows? As long as government tilts the playing field, who knows?
If government wants to help farmers, it could actually tax land, driving down its price and the mortgages that go with it, and use the raised revenue (raised mainly in cities, where locations are steepest) to pay citizens a dividend. An extra income (more honest than subsidies) would go further in the country, where the cost of living is lower. And it’d go further still, if government weren’t taxing incomes.
Geonomize — that’s how you help nature and farmers.
This 2013 excerpt of Keystone Politics, Dec 21, is by Jon Geeting.
Some people pop up to say land value is difficult for city governments to assess fairly and accurately, but I don’t buy that.
For starters, local governments in PA already do assess land values. We do it here in Philadelphia, and they do it in your town.
If people think these official land values aren’t sufficiently accurate, then what we need to do is try harder to get accurate values. The reassessment system most places have now, where we send a bunch of dudes to walk around and eyeball the value of everybody’s houses from outside, is far less accurate than using market prices.
The best valuation system that exists for figuring out what people are willing to pay for stuff is the housing market.
Why can’t we just use asking rents as a proxy for land, for tax purposes? Rents are basically equal to land values. Asking rents for crappy oldster row homes that haven’t been improved in decades have been going up. That’s all land. The asking price increases are driven by the desirability of the neighborhood, the school catchment district, and other amenities. You didn’t build that!
Shouldn’t it be possible to come up with an index where we keep track of the asking rents for different types of houses in each catchment zone or ward, average the rate of price increases or decreases together, and then use that number as a stand-in for land value changes in determining people’s tax bills?
That’s a bit crude, but I feel like the GIS wizards can definitely figure out a more sophisticated algorithm in areas where there aren’t that many vacant parcels left to assess directly.
Ed. Notes: People wonder how government will be able to figure out the value of locations but don’t wonder how business already figures out the value of sites, buying and selling, leasing and letting parcels of land every day. If business people can figure out the rental value of land, then so can government people. It’s really another non-issue.
“Drugs Aren’t the Problem”: Neuroscientist Carl Hart on Brain Science and Myths About Addiction
This 2014 excerpt of Democracy Now!, Jan 6, is by Amy Goodman, interviewing Dr. Carl Hart, the first tenured African-American professor in the sciences at Columbia University and a research scientist in the Division of Substance Abuse at the New York State Psychiatric Institute. However, long before he entered the hallowed halls of the Ivy League, Hart gained firsthand knowledge about drug usage while growing up in one of Miami’s toughest neighborhoods. He recently wrote a memoir titled High Price: A Neuroscientist’s Journey of Self-Discovery That Challenges Everything You Know About Drugs and Society. His book recalls how he avoided becoming one of the crack addicts he now studies.
Their conversation on the nationwide shift toward liberalizing drug laws continues.
AMY GOODMAN: Both your research findings will surprise many and also your own path in life. Let’s start by talking about, well, where you come from.
DR. CARL HART: Well, I come from — as you said, I grew up in the hood. And so, when we think about these communities that we care about, the communities that have been so-called devastated by drugs of abuse, I believed that narrative for a long time. In fact, I’ve been studying drugs for about 23 years; for about 20 of those years, I believed that drugs were the problems in the community. But when I started to look more carefully, started looking at the evidence more carefully, it became clear to me that drugs weren’t the problem. The problem was poverty, drug policy, lack of jobs — a wide range of things. And drugs were just one sort of component that didn’t contribute as much as we had said they have.
AMY GOODMAN: So, talk about the findings of these studies. I mean, you’ve been publishing in the most elite scientific journals now for many years.
DR. CARL HART: Yes. So, one of the things that shocked me when I first started to understand what was going on, when I discovered that 80 to 90 percent of the people who actually use drugs like crack cocaine, heroin, methamphetamine, marijuana — 80 to 90 percent of those people were not addicted. I thought, “Wait a second. I thought that once you use these drugs, everyone becomes addicted, and that’s why we had these problems.” That was one thing that I found out. Another thing that I found out is that if you provide alternatives to people — jobs, other sort of alternatives — they don’t overindulge in drugs like this. I discovered this in the human laboratory as well as the animal laboratory. The same thing plays out in the animal literature.
AMY GOODMAN: What do you mean? You’re saying that crack is not as addictive as everyone says?
DR. CARL HART: Well, when we think of crack — well, we have a beautiful example now, the past year: the mayor of Toronto, Rob Ford, for example. The guy used crack cocaine, and he did his job. Despite what you think of him and his politics, but he came to work every day. He did his job. The same is true even of Marion Barry. He came to work every day, did his job. In fact, he did his job so well, so the people of D.C. thought, that they voted for him even after he was convicted for using crack. But that’s the majority of crack cocaine users. Just like any other drug, most of the people who use these drugs do so without a problem….”
Ed. Notes: If we de-criminalized drugs, we could quit the drug war and save tax dollars and reverse the militarization of the police force who’re supposed to protect and serve. Criminalizing drugs is another example of how politicians misspend public funds and damage lives in doing so.
But nature abhors a vacuum so we’d have to replace the drug war with something. The researcher above mentioned jobs (too bad he didn’t mention startups since many dealers are excellent entrepreneurs). There is a proven way to generate job opportunity. First, don’t tax jobs; taxes on wages only make it more expensive to employers to hire helpers. Second, do tax land or somehow recover the value of locations, whether by tax, fee, dues, or lease. To pay the levy, owners quit speculating and put their sites to good use, and doing that generates jobs.
It’s amazing what some fundamental economic justice can do — just geonomize!
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 heri-tage 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 divi-dend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jeffer-son 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 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.
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.
about the money we spend on the nature we use. It flows torrentially yet invisibly, often submerged in the price of housing, food, fuel, and everything else. Flowing from the many to the few, natural rent distorts prices and rewards unjust and unsustainable choices. Redirected via dues and dividends to flow from each to all, “rent” payments would level the playing field and empower neighbors to shrink their workweek and expand their horizons. Modeled on nature’s feedback loops, earlier proposals to redirect rent found favor with Paine, Tolstoy, and Einstein. Wherever tried, to the degree tried, redirecting rent worked. One of today’s versions, the green tax shift, spreads out of Europe. Another, the Property Tax Shift, activists can win at the local level, building a world that works right for everyone.
the Great Green Tax Shift maxed out”
Economically, taxing pollution and depletion does reduce pollutants and extracts – and thus the tax base; plus such taxes are regressive, requiring a safety net. On the other hand, collecting site rent is progressive and generates a revenue surplus payable as a dividend to residents, which can serve as the safety net.
Environmentally, taxes on waste and extraction do not drive efficient use of land, as does getting site rent. Better settlement patterns do reduce extraction upstream and pollution downstream.
Politically, green fees have less impact if applied locally; local is where grassroots movements have more impact. Yet getting rent usually entails shifting the property tax (or charging user fees), the province of local jurisdictions; both mayors and city voters have been known to adopt a site-value tax.
Ethically, putting into practice “tax bads, not goods” skirts the issue of sharing Mother Earth which collecting rent confronts head on. Since nothing is fixed until it’s fixed right, ultimately, greens must lead humanity into geotopia where we all share the worth of Mother Earth.
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.
as unfamiliar as geo-economics. The latter is a course some universities offer that combines geography and economics. A UN newsletter, Go Between (57, Apr/May ’96; thanks, Pat Aller), cited an Asian conference on geopolitics and “geoeconomics”. The abbreviated term ‘geonomics” is the name of an institute on Middlebury College campus and of a show on CNBC. Both entities use the neologism to mean “global economics”, in particular world trade. We use geonomics entirely differently, to refer to the money people spend on the nature they use, how letting this flow collect in a few pockets creates class and poverty and assaults upon the environment, and how, on the other hand, sharing this rental flow creates equality, prosperity, and a people/planet harmony. This flow of natural rent, several trillions dollars in the US each year, shapes society and belongs to society.
a new field of study offered in place of economics, as astronomy replaced astrology and chemistry replaced alchemy. Conventional economics, in which GNP can do well while people suffer, is a bit too superstitious for my renaissance upbringing. If I’m to propitiate unseen forces, it won’t be inflation or “the market”; let it be theEgyptian cat goddess. At least then we’d have fewer rats. Meanwhile, believing in reason leads to a new policy, also christened geonomics. That’s the proposal to share (a kind of management, the “nomics” part) the worth of Mother Earth (the “geo” part). If our economies are to work right, people need to see prices that tell the truth. Now taxes and subsidies distort prices, tricking people into squandering the planet. Using land dues and rent dividends instead lets prices be precise, guiding people to get more from less and thereby shrink their workweek. More free time ought to make us happy enough to evolve beyond economics, except when nostalgic for superstition.
the annoying habit of seeing the hand of land in almost all transactions. In geonomics we maintain the distinction between the items bearing exchange value that come into being via human effort — wealth — and those that don’t — land. Keeping this distinction in the forefront makes it obvious that speculating in land drives sprawl, that hoarding land retards Third World development, that borrowing to buy land plus buildings engorges banks, that much so-called “interest” is quasi-rent, that the cost of land inflates faster than the price of produced goods and services, that over half of corporate profit is from real estate (Urban Land Institute, 1999). Summing up these analyses, geonomists offer a Grand Unifying Theory, that the flow of rent pulls all other indicators in its wake. Geonomics differs from economics as chemistry from alchemy, as astronomy from astrology.