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Ed. Notes: Maybe wannabe problem solvers need to propose solutions that are either non-ideological or are balanced ideologically, such as a shift of taxes, not a new, higher tax, and a shift of subsidies, not merely more, potentially wasteful, spending. Specifically, we should be able to keep our earnings, untaxed, and share earth’s worth without losing so much to landlords, speculators, and lenders.
This 2014 excerpt of The Economist, Nov 10, is by H.C. Timekeeper.
Throughout history, economists have advocated a tax on the unimproved value of land. Adam Smith said “nothing [could] be more reasonable”. Milton Friedman said it was “least bad tax”.
Yet there are only a handful of real-world examples of land value taxes (LVT). Why?
Politics. LVTs would impose concentrated costs on today’s landowners, who face a new tax bill and a reduced sale price. The benefit, by contrast, is spread equally over today’s population and future generations.
Ed. Notes: People want to earn money from their land, which is understandable. However, the only part that is theirs is the value of the building. The value of the location is not theirs, but is a product of their neighbors and nature — location being the three most valuable things in real estate.
That said, people should not lose the value of their land. What must change is their view of what is theirs. While all of us are entitled to some land to use in privacy, all of us are also entitled to a share of the worth of Earth in our region. It’s OK to get rich in real estate; it’s just something we must do together.
And once residents get a dividend from local natural values, then they won’t object to pay a land tax or land dues.
This 2014 excerpt of a Center for Responsive Politics press release, Nov 5, is by Russ Choma.
As Republicans seized the majority in the US Senate and built their lead in the House, the candidate who spent the most prevailed 94.2% of the time. But where Democrats had raised more in pivotal Senate races, they still were mostly beaten.
Every election since 1998 has been more expensive than the one before it. Counting all forms of spending — by candidates, parties, and outside groups — Team Red is projected to have spent $1.75 billion, while Team Blue’s spending is projected to ring in at $1.64 billion.
Measured only by the money spent by the candidates themselves, the cost of the average winning campaign in both the House and Senate declined to $1.2 million, down from $1.5 million in 2012. And the average winning Senate campaign cost $8.6 million, down from $11.4 million in 2012 — even with several Senate races setting records for their final price tag. One reason: Outside groups did some of the heavy lifting, outspending the candidates in 36 races.
Democrats relied more on small donors since 2010 while Republicans turned sharply to big dollar donors.
Democratic/liberal groups channeled most of their money through organizations that disclosed donors, while conservative counterparts relied heavily on secret sources funneling money through political nonprofits.
Ed. Notes: Democrats, no matter how well endowed, seem incapable of communicating with the majority, despite the majority agreeing with party positions in many polls. Well, Democrats are not alone in refusing to learn how to communicate. We advocates of deep change are hobbled by our resistance to learning persuasive language, too.
Left out of the above analysis is where do donors get their surpluses which they can freely donate? Typically they have managed to corral huge portions of what should be our common wealth, which is all of society’s spending for things never made by anyone’s labor or capital: land, locations, downtown corners, oil fields, EM spectrum, etc, and the values that accuse to government-granted privileges such as patents, military contracts, corporate charters, etc. Those are the industries and investors and owners who buy elections.
What to do? Recover and share those “rents” ourselves, sort of like Alaska’s oil dividend. If one state can do it, why not 50? Elections would never be the same.
Chairman of Liberty Media John Malone attends the Allen & Co Media Conference in Sun Valley, Idaho in this July 12, 2012, file photo. Malone recently avoided millions in capital gains taxes through an inversion deal and exploiting an IRS loophole.
NEW YORK — Shifting the address of his Liberty Global Inc. from Colorado to London last year didn’t just put billionaire John C. Malone in a position to reduce his company’s tax bill. He also took precautions to avoid the capital-gains hit that the so-called inversion would trigger for him and other investors. The day before the deal was announced, Malone — the company’s chairman and controlling shareholder — transferred $600 million of his shares into a tax-exempt charitable trust. He avoided paying taxes on his remaining stake, worth about $260 million, by exploiting IRS regulations meant to block a different loophole. All told, Malone escaped about $200 million in personal taxes, and Liberty Global’s U.S. shareholders together likely saved more than a billion dollars, according to data compiled by Bloomberg. See source.
This 2014 excerpt of Credit Writedowns, Nov 3, is by Katharina Knoll, Moritz Schularick, and Thomas Steer. This post was first published on Vox.
For 14 advanced economies, real house prices display a pronounced hockey-stick pattern over the past 140 years (since 1870). They stayed constant from the 19th to the mid-20th century, but rose strongly in the second half of the 20th century. Sharply increasing land prices, not construction costs, were the key driver of this trend.
Real house prices have approximately tripled since 1900, with virtually all of the increase occurring in the second half of the 20th century. Urban and rural house prices as well as farmland prices display similar long-run trends.
Surprisingly, income growth was relatively stable in the long run. House prices even declined until the mid-20th century relative to incomes. In the past two decades preceding the 2008 global financial crisis, real house price growth outpaced income growth by a substantial margin.
While construction costs have flat-lined in the past four decades, sharp increases in residential land prices have driven up international house prices. During the first half of the 20th century, residential land prices remained constant in advanced economies despite substantial population and income growth. Up to 80% of the increase in house prices between 1950 and 2012 can be attributed to land price appreciation alone.
From the 19th to the early 20th century, the transport revolution – mostly the construction of the railway network, but also the introduction of steam shipping – led to a massive drop in transport costs. This substantially augmented the supply of economically usable land. Greater supply means land price may remain low despite continuous growth of income and population.
Since World War II, zoning regulations and other restrictions on land use inhibited the utilisation of additional land, while rising expenditure shares for housing services added further to rising demand for land. Surging land prices were also influenced by growing subsidies for home ownership or easy borrowing conditions.
In the long run, economic growth disproportionally profits landlords as the owners of the fixed factor. Since land is highly unequally distributed across the population, market economies produce ever-rising levels of inequality (Piety, take note).
Ed. Notes: Some people think land no longer matters in a modern wrong. To put it bluntly, they are wrong — nothing matters more. The only way to make housing affordable again is to welcome those rises in land values, and to recover those socially-generated values, then share them equitably among all members of society.
This 2008 excerpt of his blog, Feb 12, is by Robert Reich, adapted from a piece he did a couple of years ago for The New Republic.
Basic stories have defined and animated the United States since its founding. The first two are about hope; the second two are about fear.
1. The Triumphant Individual. This is the familiar tale of the little guy who works hard, takes risks, believes in himself, and eventually gains wealth, fame, and honor. It’s the story of the self-made man (or, more recently, woman) who bucks the odds, spurns the naysayers, and shows what can be done with enough gumption and guts. Benjamin Franklin’s Autobiography is the first in a long line of U.S. self-help manuals about how to make it through self-sacrifice and diligence. The story is epitomized in the life of Abe Lincoln, born in a log cabin. The theme was captured in Horatio Alger’s hundred or so novellas, whose heroes all rise promptly and predictably from rags to riches. It’s celebrated in many stories of downtrodden fighters who win: Rocky Balboa, Norma Rae, and Erin Brockovich. The moral: With enough effort and courage, anyone can make it in the United States.
2. The Benevolent Community. This is the story of neighbors and friends who roll up their sleeves and pitch in for the common good. Its earliest formulation was John Winthrop’s “A Model of Christian Charity,” delivered on board a ship in Salem Harbor just before the Puritans landed in 1630—a version of Matthew’s Sermon on the Mount, in which the new settlers would be “as a City upon a Hill,” “delight in each other,” and be “of the same body.” Similar communitarian sentiments are found among the suffragettes and civil rights activists of the 1950s and 1960s. The story is captured in frontier settlers erecting one another’s barns, in neighbors volunteering as firefighters, and in small towns sending their high school achievers to college. It suffuses Norman Rockwell’s paintings and Frank Capra’s movies.
3. The Mob at the Gates. In this story, the United States is a beacon light of virtue in a world of darkness, uniquely blessed but continuously endangered. The story is found in the Whig’s anti-English and pro-tariff histories of the United States, in the anti-immigration harangues of the late nineteenth century, and in World War II accounts of Nazi and Japanese barbarism. The narrative gave special force to cold war tales during the ’50s of an international communist plot to undermine U.S. democracy and subsequently of “evil” empires and axes. The underlying lesson: We must maintain vigilance, lest diabolical forces overwhelm us.
4. The Rot at the Top. The malevolence of powerful elites is a tale of corruption, decadence, and irresponsibility in high places —- of conspiracy against the common citizen. It started with King George III, and, to this day, it shapes the way we view government —- mostly with distrust. The great bullies of American fiction have often symbolized Rot at the Top. Suspicions about Rot at the Top have inspired what historian Richard Hofstadter called the paranoid style in U.S. politics. The myth has also given force to the great populist movements of U.S. history, from Andrew Jackson’s attack on the Bank of the United States in the 1830s through William Jennings Bryan’s prairie populism of the 1890s.
If they’re to be understandable, policies and issues must fit into larger narratives about where we have been as a nation, what we are up against, and where we could be going. Major shifts in governance have been precipitated by one party or the other becoming better at telling these four stories. The challenge for progressives is not simply to manufacture a new set of stories but to find and tell stories that match their convictions.
This 2014 excerpt of Reason.com, Nov 3, is by Scott Shackford.
US Senator from North Carolina, Kay Hagan, her family — husband, son, and son-in-law —- stands accused of receiving more than $250,000 in stimulus funds from 2009 to renovate buildings owned by their companies.
Stories appeared on the websites for the Charlotte Observer and Charlotte-based CBS affiliate WBTV. But then were scrubbed from the sites. So the media in North Carolina is being accused of aiding and abetting Hagan in a tight race.
It seems a desperate act. Nothing can be deleted from the Internet.
Ed. Notes: Just a reminder of how the real world works, how people in power can get what they want more easily than can the people who pay their salaries by paying taxes. Soon’s you get tired of such news stories, then do all you can to get rid of programs like the so-called stimulus and replace that with a Citizen’s Dividend. Then senators won’t have so much power and won’t be able to influence news coverage.
These two 2014 excerpts on DST are from ABC 15, Oct 27, on Arizona by Chris Kline, and Time, Oct 31, on consumption by Brad Tuttle.
Why Arizona Doesn’t Observe Daylight Saving
Over the course of the last 100 years, the United States (including Arizona) has gone on Daylight Saving time in both World War 1 and World War 2, but then gone off after the wars were over.
In 1973, a more permanent federal law was enacted to help with the oil shortages of that time. But Arizona asked for – and was eventually granted an exemption.
A 2008 report from the U.S. Department of Energy said sticking with one time could save approximately 0.5% of electricity per day for the country. That’s enough power for 100,000 households over a year.
Another study shows that switching of clocks causes a 25% jump in heart attacks in the few days following the switch.
A 2009 Michigan State University study found that following [the start and end of DST], employees slept 40 min less, had 5.7% more workplace injuries, and lost 67.6% more work days because of injuries than on non phase change days.
The main beneficiaries of daylight saving include the golfing, tourism, and recreation industries — all of which attract more business when there’s more daylight after the traditional work day is done.
Since 1915, the principal supporter of daylight saving in the United States has been the Chamber of Commerce on behalf of small business and retailers. If you give workers more sunlight at the end of the day they’ll stop and shop on their way home. More people out on the roads need to gas up.
Due to pressure from lobbyists supporting candy manufacturers and convenience stores, now kids get an extra hour of daylight for trick-or-treating.
Ed. Notes: What politicians won’t do for consumerism! Anyway, instead of mess with the clocks, we could simply get up earlier. Even better, we could just shorten the work day. Better still, we could shorten the entire workweek.
Most work that people do is not productive but merely conformist; that is, it does not produce the actual goods we need like food, clothing, shelter, medicine, transportation, etc, but merely shuffles paper around in banks, insurance offices, corporations, government departments, etc. Those non-productive jobs would disappear in an efficient and just economy.
How then would people replace the income? They could get a Citizen’s Dividend which would be funded from the worth of Earth. Government would use fees, taxes, dues, leases, etc, to redirect our spending for land and resources into the public treasury, then use the Social Security system to pay citizens the dividend. Enjoying material security, many people would choose to “work” less. Then there’d be no consumerist reason to mess up the clocks.
These three 2014 excerpts are from: (1) Police State USA, Oct 24, on eminent domain; and from Armstrong Economics by Martin Armstrong, (2) Nov 7 on shredding evidence and (3) Nov 11 on holding pot.
Indiana Town Moves to Seize over 350 Homes For Private Developer
The City of Charlestown Indiana intends to give land to a private commercial developer that is now Pleasant Ridge, a working-class neighborhood, by using $5.3 million in a federal subsidy — “Hardest Hit Funds” — and the power of eminent domain to evict 354 families and demolish their homes.
In 2005, the U.S. Supreme Court ruled that it was “constitutional” for a city to seize homes for the benefit of private developers (see: Kelo v. City of New London). The city council claims the Pleasant Ridge community is “blighted” and that retail stores and new homes would be an improvement to Charlestown.
The City of Charlestown has proclaimed that $6,000 per home is the amount of “just compensation” that will be administered to the Pleasant Ridge refugees if the land grab takes place.
Throwing Fish Overboard Warrant 20 Years in Prison
In 2007, Captain John Yates was fishing off the coast of Florida when the National Marine Fisheries Service (NMFS) inspected his boat, claimed that Yates had caught undersized fish, and instructed him to return to shore. When the boat reached shore, the finny evidence was missing. In 2010, federal prosecutors arrested and charged Yates under the Sarbanes-Oxley Act —the sweeping legislation passed after Enron’s collapse to crack down on securities and accounting fraud, arguing that throwing fish overboard was “shredding” of “tangible evidence”, which carries a maximum 20-year prison sentence.
Feds Confiscate Home for Possession of $10 Worth of Legal Marijuana
While states may legalize marijuana, it remains a federal crime. They do not prosecute the people in those states, but for $10 worth of marijuana they can confiscate your house and never have to charge you. Police are pulling people over leaving states where they sell marijuana and if the police find marijuana in the car, there goes the car. They get to confiscate your car for it is the marijuana that constitutes a crime – not you personally.
Ed. Notes: People in government can get away with almost anything, even murder, with impunity. The give such characters the least opportunity possible, we need to live under laws and customs that are the most just and fair as possible. That means we share land rents, so eminent domain becomes a non-issue. De-criminalze victim-less crimes. And punish officials who overstep their authority. All that takes us seeing ourselves as citizens, not peons, as individuals entitled to respect and equal treatment under the law.
These three 2014 excerpts are from (1) the UK’s Independent, Oct 6 on Libya by Jim Armitage; (2) Rolling Stone, Nov 6, on a silenced witness by Matt Taibbi; and (3) the Wall St Journal, Nov 12, on fixing currency sales by Chiara Albanese.
Goldman Sachs Charmed Gadaffi-era Sovereign Wealth Fund Employees With Girls and Alcohol
Goldman Sachs took naive employees of the Gadaffi-era Libyan sovereign wealth fund on an all-expenses paid trip — on the Goldman banker’s corporate credit card — where lavish entertainment included “heavy drinking and girls”.
The Libyan Investment Authority contends the bank did this to persuade its inexperienced staff to invest in highly risky Goldman Sachs investments that ended up losing the fund, and by association, the Libyan people, more than $1bn.
The LIA staff had not checked the deal as they “completely trusted” Goldman, in particular its top banker Youssef Kabbaj. The LIA staff, when asked where their due diligence was, they responded: “Due What?”
The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare
In 2006, Chase’s CEO Jamie Dimon was aware their loans were too dangerous for Chase itself to own. The bank knowingly peddled bad products to investors without disclosing the obvious defects with the underlying loans. Lawyer Alayne Fleischmann told her boss at Chase that selling its high-risk loans as low-risk securities was committing fraud.
“It used to be if you wrote a memo, they had to stop, because now there’s proof that they knew what they were doing,” Fleischmann says. “But when the Justice Department doesn’t do anything, that stops being a deterrent.”
When Dimon testified before the Financial Crisis Inquiry Commission, he portrayed the Chase leadership as having been duped, just like the rest of us. “Somehow we just missed, you know, that home prices don’t go up forever.”
One of the ongoing myths about the financial crisis is that the government is outmatched by the legal talent representing the banks. But a litigator named Richard Elias sounded like he had been a securities lawyer for 10 years,” Fleischmann says. “This actually looked like his idea of fun – like he couldn’t wait to run with this case.”
When Justice scheduled a press conference to announce sweeping civil-fraud charges against the bank, Dimon called Associate Attorney General Tony West, the third-ranking official in the Justice Department, and asked to reopen negotiations to settle the case out of court.
It goes without saying that the ordinary citizen who is the target of a government investigation cannot simply pick up the phone, call up the prosecutor in charge of his case and have a legal proceeding canceled. But Dimon did just that. “And he didn’t just call the prosecutor, he called the prosecutor’s boss,” Fleischmann says.
Chase and the government settled on a $9 billion figure. Because most of the settlement monies were specifically not called fines or penalties, Chase was allowed to treat some $7 billion of the settlement as a tax write-off.
The bank’s share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders; Chase actually made money from the deal. Per-employee compensation rose four percent, to $122,653. The board awarded Dimon a 74 percent raise, upping his compensation package to about $20 million.
The bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC.
Six banks have agreed to pay about $4.3 billion to regulators in the U.K., U.S., and Switzerland to settle allegations that traders tried to move a key currency benchmark to their advantage.
The five banks are: HSBC Holdings PLC, Royal Bank of Scotland Group PLC, UBS AG, Citigroup Inc., and J.P. Morgan Chase & Co. In a separately-timed agreement, the same two U.S. banks and Bank of America Merrill Lynch Corp settled with the Office of the Comptroller of the Currency for fines totaling $950 million.
Barclays PLC pulled out of the agreement at the last minute. The bank said after discussions with other regulators and authorities it had decided to seek a “more general coordinated settlement.” Barclays is being investigated by New York regulators as well as the U.S. Justice Department.
The Bank of England was aware that foreign exchange traders used to share client information via chatrooms. The bank’s employee failed to report it to its supervisors.
Ed. Notes: Fining a bank does not punish the people who made the decision to cheat. The fines come out of the bank’s account, not the banker’s, and no banker goes to jail. That means the one’s actually paying the fine are those who own stock in the bank. But the bank gets to write off most of the fine, so the amount paid is dwarfed by the profit made by cheating. Hence bank shares keep rising.
And it’s not only bankers who want to get rich off of investments and real estate and currency swaps. Everybody does. But is doing so ethical? It is, if it actually grows the pie. But if it is merely a legal or illegal way to transfer wealth from those with less power to those with more power, then it is not ethical at all. Ordinary people should find a better way to grow their income — as by sharing Earth’s worth.
How to put an end to bankers’ cheating? Soak up all the “rents” into the public treasury then back out again as dividends to the citizenry. If government captures rents — our spending for land and resources and privilege — then those monies will no longer be around to tempt insiders. And if members of society get a dividend, then people will enjoy financial security and won’t feel pressed to grab for all they can get. Sharing rents — geonomics — would shrink banks to human-scale, no longer too big to jail.
This 2014 excerpt of Reader Supported News, Oct 14, is by Robert Reich.
In recent years, a few very rich people are donating more to the elite private universities that educated them or that they want their children to attend. Harvard’s endowment is over $32 billion, followed by Yale at $20.8 billion, Stanford at $18.6 billion, and Princeton at $18.2 billion — each up over last year by more than $1 billion.
The tax deduction is about one out of every three dollars contributed — or about $54,000 per student attending Princeton. Other elite privates aren’t far behind. A tax deduction is the same as government spending if it is made up by other taxpayers.
State and local financing for public higher education came to about $76 billion last year, nearly 10 percent less than a decade before.
That means the average annual government subsidy per student at a public university comes to less than $4,000, about one-tenth the per student at the elite privates tax deduction.
About 70 percent of Harvard’s senior class submits résumés to Wall Street and consulting firms. Among Harvard seniors who got jobs last spring, only 5 percent were headed to health-related fields. The percentages at the other Ivies do not much differ.
Ed. Notes: So an Ivy League degree is not about acquiring knowledge but about acquiring connections to keep the old boy (gender neutral) network intact and the largesse flowing. The author above hopes to raise taxes on the rich and subsidies under the state colleges. But why create the rich in the first place? And why impoverish students so much that they need financial aid? Would it not make more sense to recover all the socially-generatead “rents” upstream, before they become private fortunes, and share them downstream, so students can afford to hire inspiring teachers? That would be the geonomic solution.
These two 2014 excerpts are from AlterNet, Oct 13, on economists by Lynn Stuart Parramore, and Liberty Blitzkrieg, Oct 15, by Michael Krieger.
Jeff Madrick’s Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World is a brisk and accessible volume.
Several forces keep economists committed to bad ideas, like the conformity required for professional success, the pretense that economics is a science akin to physics, and the addiction to simplistic models that do not account for the messiness of the real world. Given these forces, how can we move toward a better economics?
The notion of economics being akin to physics confers a certain kind of prestige, but it is also easier to measure contributions, even if they are wrong. These ideas are part of the sociology of academia, which badly needs reforming.
Ed. Notes: The rest of the book is the usual diatribe against markets and for government, more precisely, against concentrated profits and for government spending.
A deeper analysis would reveal that it is not markets – free exchange among consensual adults – that concentrates incomes and wealth but privilege and successful lobbying that do. A deeper analysis would also reveal that government spending probably does much more bad than good: for every swept street there is a sprawl-enhancing freeway, bridge to nowhere, stultifying school, over-crowded prison, war on drugs, war on the enemy of the week, etc, never mind the crushing debt. For a much better critique of the discipline, see Gaffney’s Corruption of Economics.
Gaffney goes on to show how not markets but unbridled ownership of Earth creates our economic problems and how public recovery of rents would address that inequitable custom.
In New York City, where locations are among the most pricey in the world, the city’s real-estate taxes accounted for $15.4 billion of the city’s $41 billion in 2012 local revenue, more than enough to pay for its 70,000 teachers, 35,000 police officers, firefighters, sanitation workers, parks and libraries. A union-backed research group, the Fiscal Policy Institute, has proposed a new 0.5% surcharge on non-resident owners of apartments valued at more than $5 million.
The measure would raise about $665 million annually. More than 80% of the generated revenue would come from 445 foreign- (often oligarch-) owned, vacant units valued at more than $25 million, whose owners would pay an average $1.2 million a year (from Michael Krieger, ex-Wall St analyst, now small investor advisor).
Please note that it’s not the apartment but the location that is worth so many extra millions; land rent is what such a tax would recover.
However, any bill needs the signature of Governor Andrew Cuomo, a Democrat who built a campaign treasury of more than $30 million by accepting donations from corporate executives and real-estate developers — the very same influences who make sure that economics does not rise up to the status of science.
These two 2014 excerpts are from Vox, Spt 29, on solar by Brad Plumer, and The Guardian, Oct 13, on wind by Arthur Neslen.
Solar Power is Growing so Fast that Older Energy Companies are Trying to Stop it
Solar power provides just 0.4 percent of electricity in the United States — a minuscule amount. But as solar technology gets dramatically cheaper, tens of thousands of Americans are putting photovoltaic panels up on their roofs, generating their own power. At the same time, 43 states and Washington DC have “net metering” laws that allow solar-powered households to sell their excess electricity back to the grid at retail prices.
All these solar households are buying less and less electricity. So utilities will eventually have to raise rates. That could spur even more people to install their own solar rooftop panels to save money. If rooftop solar were to grab 10 percent of the market over the next decade, utility earnings could decline as much as 41 percent.
Many utilities are pushing to slow the breakneck growth of rooftop solar — say, by scaling back those “net metering” laws. Conservative groups like the American Legislative Exchange Council (ALEC) push to get rid of subsidies to solar (not to oil?). Yet Tea Party groups defend solar.
Onshore wind is cheaper than coal, gas or nuclear energy when the costs of ‘external’ factors like air quality, human toxicity, and climate change are taken into account, according to an EU analysis.
The report says that for every megawatt hour (MW/h) of electricity generated, onshore wind costs roughly €105 (£83) per MW/h, compared to gas and coal which can cost up to around €164 and €233 per MW/h, respectively.
Renewable energy took €38.3bn of public subsidies in 2012, compared to €22.3bn for gas, coal, and nuclear. However, if free carbon allowances to polluters were included in the data, it “would reduce the gap between support for renewables and other power generation technologies.”
Ed. Notes: It’s good news that technological progress is happening. Somewhat sad that the rich and powerful stand in its way. Which makes me wonder: how much great technology are we missing out on due to behind-the-scenes politics? New building materials? New engines and motors? New energy sources? Even anti-gravity? It’s hard to know what’s truly technologically possible right now with so much political favoritism for insiders. But once we win economic justice — no corporate welfare, no taxes on wages, no pollution, and fair shares of society’s surplus — then we’ll probably see technological progress take off like a rocket in all fields, not just in new ones like IT but in old ones, too, where old corporations are so entrenched … then enjoy the creativity of the human mind.
21 Arrested Over Deadly Land Clash in Southwest China
Twenty-one people have been arrested in connection with a violent clash over a development project in southwestern China that left nine people dead and 24 seriously injured.
Since May, residents of the village of Fuyou in Jinning County, a semirural area under the administration of Kunming, the capital of the southwestern province of Yunnan, had blocked the construction of a logistics hub for manufactured goods. The villagers had sought better compensation for giving up their land for the project and had complained about the flooding of vegetable fields as a result of the construction. They
On Oct 14. jundreds of workers dressed in auxiliary police uniforms and carrying shields, tear gas, and other anti-riot gear were sent to Fuyou in an effort to intimidate residents and force them to drop their resistance. Instead, some villagers captured eight of the workers, tied them up and beat them, and then doused them with gasoline and set them on fire, the government says. Four of the eight detained workers were killed. Two other workers were beaten to death in the riot, along with two villagers.
Conflicts between residents and developers are not uncommon in China, and local governments often push construction projects that can increase land sale revenues and create symbols of economic growth. Developers sometimes bribe local officials to back their projects.
In addition to those arrested for the violence in Jinning County, the Kunming Commission for Discipline Inspection, the local Communist Party antigraft agency, said that 16 officials had been suspended or removed from their posts while their links to the project were investigated.
Ed. Notes: People die defending land for use in the developing world and to keep it out of use in the developed world. The difference helps explain why land and its rent are such huge blind spots in the developed world, while nature may be less comprehensible in the developed world. In both cases, geonomics would help. What if the French dam or the Chinese factory could only be funded by an increase in the value of surrounding locations? And what if any increase did not go to builders or developers or politicians but to the citizenry in general? I bet then there’d be a lot less push from the powerful to pave over nature and put up another parking lot (sang Joni Mitchell).
more transformation than reform; it’s a step ahead. Harvard economics students this year did petition to change the curriculum, in the wake of the English who caught the dissension from across The Channel. French reformers, who fault conventional economics for conjuring mathematical models of little empirical relevance and being closed to critical and reflective thought, reject this “autism” – or detachment from reality – and dub their offering “post-autistic economics”. Not a bad name, but again, academics define themselves by what they’re not, not by what they are, unlike geonomists. We track rent – the money we spend on the nature we use – and watch it pull all the other economic indicators in its wake. We see economies as part and parcel of the ecosystem, similarly following natural patterns and able to self-regulate more so than allowed, once we quit distorting prices. To align people and planet, we’d replace taxes and subsidies with recovering and sharing rents.
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!
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.
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.
the study of the money we spend on the nature we use. When we pay that money to private owners, we reward both speculation and over-extraction. Robert Kiyosaki’s bestseller, Rich Dad’s Prophecy, says, “One of the reasons McDonald’s is such a rich company is not because it sells a lot of burgers but because it owns the land at some of the best intersections in the world. The main reason Kim and I invest in such properties is to own the land at the corner of the intersection. (p 200) My real estate advisor states that the rich either made their money in real estate or hold their money in real estate.” (p 141, via Greg Young) When government recovers the rents for natural advantages for everyone, it can save citizens millions. Ben Sevack, Montreal steel manufacturer, tells us (August 12) that Alberta, by leasing oil & gas fields, recovers enough revenue to be the only province in Canada to get by without a sales tax and to levy a flat provincial income tax. While running for re-election, provincial Premier Ralph Klein proposes to abolish their income tax and promises to eliminate medical insurance premiums and use resource revenue to pay for all medical expense for seniors. After all this planned tax-cutting and greater expense, they still expect a large budget surplus. Even places without oil and gas have high site values in their downtowns, and high values in their utility franchises. Recover the values of locations and privileges, displace the harmful taxes on sales, salaries, and structures, then use the revenue to fund basic government and pay residents a dividend, and you have geonomics in action.
the policy that the earth’s natural patterns suggests. Use the eco-system’s self-regulating feedback loops as a model. What then needs changing? Basically, the flow of money spent to own or use Earth (both sites and resources) must visit each of us. Our agent, government, exists to collect this natural rent via fees and to disburse the collected revenue via dividends. Doing this, we could forgo taxes on homes and earnings and subsidies of either the needy or the greedy. For more, see our web site, our pamphlet of the title above, or any of our other lit pieces; ask for our literature list.
a way to have everybody pulling on the same end of the rope. Last summer’s expansive forest fires shed light on growing class resentment in the West. Old log-gers and ranchers rankled at the new urgency to stamp out the blazes that threatened the recent Aspenesque settlers. The newcomers expected working class firemen to make protecting their expensive homes top priority. (Chr Sci Mntr, Spt 7) The tinder for this envy? Rich people moving in bid up the price of land, making it hard to afford by people on the margin. The fault really lies with our system of privatizing land value. If this rising value were collected by land dues and shared by rent dividends – the essence of geonomic policy – who’d complain? The more people move in, the higher the land value, and the fatter the dividend paid to residents. Then people on the margin might go out of their way to invite rich outsiders in.
a way to redirect all the money we spend on the nature we use – trillions of dollars annually. We can’t pay the Creator of sites and resources and are mistaken to pay their owners this biggest stream in our economy. Instead, as owners we should pay our neighbors for respecting our claims to land. Owners could pay in land dues to the public treasury, a la Sydney Australia’s land tax, and residents could get back a “rent” dividend, a la Alaska’s oil dividend. We’d pay for owning sites, resources, EM spectrum, or emitting pollutants into the ecosphere, then get a fair share of the recovered revenue. The economy would finally have a thermostat, the dividend. When it’s small, people would work more; when it’s big, they’d work less. Sharing Earth’s worth, we could jettison counterproductive taxes and addictive subsidies. Prices would become precise; things like sprawl, sprayed food, gasoline engines, coal-burning plants would no longer seem cheap; things like compact towns, organic foods, fuel cells, and solar powers would become affordable. Getting shares, people could spend their expanded leisure socializing, making art, enjoying nature, or just chilling. Economies let us produce wealth efficiently; geonomics lets us share it fairly.
shaped by reality. In the 1980′s, the Swedish government doubled its stock transfer tax. Tax receipts, however, rose only 15%, since traders simply fled to London exchanges. Fearing a further exodus, the Swedish government quickly rescinded the tax altogether. (The New York Times, April 20) That willingness to tax anything leads us astray. Pushing us astray is that unwillingness to pay what we owe: rent for land, our common heritage. Assuming land value is up for grabs, we speculate. We cap the property tax on both land and buildings and the rate at which assessments can go up; while real market values rise quicker, assessments can never catch up. Our stewards, the Bureau of Land Management, routinely sell and lease sites below market value, often to insiders, says the Government Accounting Office. Once we grasp that rent is ours to share, we’ll collect it all, rather than let it enrich a few, and quit taxing earnings, which do belong to the individual earner. That shift is geonomic policy.
a new policy from a new perspective. Once your worldview shifts — so that vacant city lots are no longer invisible — then epiphany. “Of course! Why didn’t I see it before?” Once you do see the emptiness and what damage it does, how can you ever go back to the old paradigm?