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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).
This 2014 excerpt of Pacific Standard, Oct 27, is by David Dunning.
People who don’t know much about a given set of cognitive, technical, or social skills tend to grossly overestimate their prowess and performance, whether it’s grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, or financial knowledge.
Incompetent people cannot recognize just how incompetent they are, a phenomenon that has come to be known as the Dunning-Kruger effect. Poor performers — and we are all poor performers at some things — fail to see the flaws in their thinking or the answers they lack.
In many cases, incompetence does not leave people disoriented, perplexed, or cautious. Instead, the incompetent are often blessed with an inappropriate confidence, buoyed by something that feels to them like knowledge.
In one study, roughly 90 percent claimed some knowledge of at least one of the nine fictitious concepts we asked them about, such as the plates of parallax, ultra-lipid, and cholarine. In fact, the more well versed respondents considered themselves in a general topic, the more familiarity they claimed with the meaningless terms associated with it in the survey.
One of our greatest strengths as a species is that we are unbridled pattern recognizers and profligate theorizers. Often, our theories are good enough to get us through the day, or at least to an age when we can procreate. But our genius for creative storytelling, combined with our inability to detect our own ignorance, can sometimes lead to situations that are embarrassing, unfortunate, or downright dangerous. As the humorist Josh Billings once put it, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” (Ironically, one thing many people “know” about this quote is that it was first uttered by Mark Twain or Will Rogers—which just ain’t so.)
Ed. Notes: Maybe if we get clear on how our brains malfunction we can figure out how to get our brains to function right … and adopt geonomics.
This 2014 excerpt of the Financial Times, Oct 26, is by Asher Klein.
Ex-Microsoft CEO Billionaire Steve Ballmer will be able to write off about a billion dollars of his basketball team’s purchase price. He bought the Los Angeles Clippers in August for $2 billion. A tax break for owners of sports franchises would let him claim about half of the team’s purchase price from the taxable income he makes over the next 15 years.
Under an exception in US law, buyers of sports franchises can use an accounting treatment known as goodwill. Goodwill is the difference between the purchase price of an asset and the actual cash and other fixed assets belonging to the team. Ballmer paid the former owners, the Sterling family, almost four times as much for the Clippers as the previous record NBA franchise purchase, $550 million for the Milwaukee Bucks.
Most corporations can’t charge for goodwill, but sports franchises are an exception.
Ed. Notes: Who writes these loopholes, anyway? It wouldn’t be the lobbyists for the billionaires, would it? Regardless, rather than close loopholes, what say we get rid of taxes on earned income, rendering loopholes meaningless, and simultaneously get rid of the corporate welfare that creates such fat unearned incomes in the first place? While many people long to tax the rich, they rarely succeed, due in part to such loopholes — that are another example of why complexity is the enemy of equity. KISS. Just recover all rents and share them while abolishing taxes and subsidies that always favor powerful insiders. Ask any billionaire.
This 2014 excerpt of Truthdig, Oct 26, is by Ellen Brown, attorney, founder of the Public Banking Institute, and author of twelve books, including the best-selling Web of Debt.
Banks do not lend their depositors’ money; why are they always scrambling to get it? Banks advertise to attract depositors, and they pay interest on the funds. What good are our deposits to the bank? Banks need to balance their books; and attracting customer deposits is usually the cheapest way to do it.
To win depositors, small banks are driven to open expensive branches that can add over 1% to a bank’s true marginal cost of funds. So by driving small banks to compete for a relatively difficult to access source of funding, the regulators have effectively raised their cost of funds.
In most states, local banks must meet fairly onerous collateral requirements in order to accept local government deposits, which can make taking public funds more costly than it’s worth. But in North Dakota, those collateral requirements are waived by a letter of credit from the state-owned Bank of North Dakota.
Ed. Notes: If money is a public utility, maybe we should be allowed to save our surplus in the public treasury. Let our savings tempt politicians rather than bankers! Whichever, when we let others re-invest for us, we must allow them a portion of the profit and a smaller return for ourselves.
This 2014 excerpt of The Associated Press, Oct 20 by Richard Lardner, David Rising, & Randy Herschaft.
Dozens of Nazi suspects have collected benefits after being forced out of the United States. Though their World War II actions led to their departure, they were not convicted of war crimes.
The payments flowed through a legal loophole that gave the Justice Department leverage to persuade Nazi suspects to leave the U.S., a tactic known as “Nazi dumping”. If they agreed to go, or simply fled before deportation, they could keep their Social Security.
Several efforts to change the law to cut off payments to the few aged former Nazis have failed.
One beneficiary was a German rocket scientist accused of using slave labor to build the V-2 rocket that pummeled London. He later won NASA’s highest honor for helping to put a man on the moon.
The US Justice Department has said it has “aggressively pursued Nazi war criminals and brought over 100 of them to justice.”
Ed. Notes: Is it too easy to become a US citizen? Should there be a probationary period for guests? Should someone vouch for the applicant?
This 2014 excerpt of The Intercept, Oct 20, is by Murtaza Hussain.
The head the NSA’s Signals Intelligence Directorate, Teresa O’Shea, is married to the Vice President of DRS Signal Solutions – a company which circumstantial evidence suggests was the beneficiary of significant contracting work from the agency.
In addition to her work at the NSA, O’Shea might be a successful businessperson in her own right: Another company is based at the Shea residence, called Oplnet LLC.
If top NSA officials are apparently spending their time running secret side-businesses, it’s going to be difficult for them to focus on their day jobs … unless the two jobs are one and the same.
Ed. Notes: The NSA can not spy on citizens or do anything at all without money, money it gets from Congress, money that Congress gets from taxpayers. To end this gravy train, we could deprive Congress of both discretionary spending and discretionary taxing. Replace most spending with a Citizen’s Dividend and replace most taxes with fees for services, leases of public resources, and dues for membership in society. Without the power to tax and spend any way they want, no longer able to grant favors to insiders, politicians will walk away from their jobs of governing everyone else, making room for true statesmen who could pass policies that benefit all.
This 2014 excerpt of the Daily Mail, Oct 14, is by Harriet Arkell.
In London’s Mayfair, one of the capital’s most exclusive, and expensive, districts, eight parking spaces go on sale for £2.25m – making each one more expensive than the average UK home.
Price equates to £281,000 per space — eight, as long as they are not for the billionaire’s favourite Maybachs. One space goes for more than £274,000, the price for an average house.
The spaces are on a tarmac-covered forecourt under a block of flats. The forecourt is open to the elements. They don’t offer much in the way of security for any expensive cars parked there – there is just a metal chain skirting the forecourt’s boundary.
The spaces are close to the heavily-guarded US Embassy and Berkeley Square.
Estate agent Carter Jonas is selling a 900-year lease on the outdoor parking spaces. And given that it is merely a lease on the parking spaces that is being sold, the new owner will still have to pay £100 a year in ground rent.
Ed. Notes: Extremely pricey land in a world capital is to be expected. What would make this phenomenon perfect would be if the surrounding society were to be the one to receive the payment for the land. Nobody makes land, everybody needs land, and the population density is what makes the land valuable. Sharing this surplus, all members of society could benefit from the boom in location value — benefit so much that it should be possible to “geonomize”, to lose most taxes and subsidies.
This 2014 excerpt of the Daily Beat, Oct 19, is by Jamie Dettmer.
While U.S. warplanes strike at the militants of the so-called Islamic State in both Syria and Iraq, truckloads of U.S. and Western aid has been flowing into territory controlled by the jihadists, assisting them to build their terror-inspiring “caliphate.”
The aid—mainly food and medical equipment—is meant for Syrians displaced from their hometowns, and for hungry civilians. It is funded by the U.S. Agency for International Development, European donors, and the United Nations.
The aid convoys have to pay off ISIS emirs (leaders) for the convoys to enter the eastern Syrian extremist strongholds of Raqqa and Deir ez-Zor. The kickbacks are either paid by foreign or local nongovernmental organizations tasked with distributing the aid, or by the Turkish or Syrian transportation companies contracted to deliver it, providing yet another income stream for ISIS militants, who are funding themselves from oil smuggling, extortion, and the sale of whatever they can loot, including rare antiquities from museums and archaeological sites.
Some aid is sold off on the black market or used by ISIS to win hearts and minds by feeding its fighters and its subjects. At a minimum, the aid means ISIS doesn’t have to divert cash from its war budget to help feed the local population or the displaced persons, allowing it to focus its resources exclusively on fighters and war-making.
“There is always at least one ISIS person on the payroll; they force people on us,” says an aid coordinator. “And when a convoy is being prepared, the negotiations go through them about whether the convoy can proceed. They contact their emirs and a price is worked out. We don’t have to wrangle with individual ISIS field commanders once approval is given to get the convoy in, as the militants are highly hierarchical.” He adds: “None of the fighters will dare touch it, if an emir has given permission.”
That isn’t the case with other Syrian rebel groups, where arguments over convoys can erupt at checkpoints at main entry points into Syria, where aid is unloaded from Turkish tractor-trailers and re-loaded into Syrian ones.
While aid is still going into ISIS-controlled areas, only a little is going into Kurdish areas in northeast Syria.
Ed. Notes: Do you really want the people with cushy government jobs spending your hard earned money? If so, it should come immediately from federal income taxes, not one penny from borrowing, so pro-war people can feel the cost and so all taxpayers can consider if another war is worth it.
This 2014 excerpt of Gates Notes, Oct 13, is by Bill Gates, the richest private person on Earth.
I Skyped Thomas Piketty, author of Capital in the Twenty-First Century. I agree with his most important conclusions and hope more smart people will study wealth and income inequality because the more we understand about the causes and cures, the better.
High levels of inequality are a problem, messing up economic incentives, tilting democracies in favor of powerful interests, and undercutting the ideal that all people are created equal.
Capitalism does not self-correct toward greater equality —- that is, excess wealth concentration can have a snowball effect if left unchecked.
Governments can play a constructive role in offsetting the snowballing tendencies if and when they choose to do so.
I fully agree that we don’t want to live in an aristocratic society in which already-wealthy families get richer simply by sitting on their laurels and collecting “rentier income”: the returns people receive when they let others use their money, land, or other property.
I agree that taxation should shift away from taxing labor. Taxing labor will make even less sense in the coming years, as robots and other forms of automation come to perform more and more of the skills that human laborers do today. But rather than move to a progressive tax on capital, as Piketty would like, I think we’d be best off with a progressive tax on consumption.
Philanthropy also can be an important part of the solution set.
Ed. Notes: According to another Bill — Domhoff at UC Santa Cruz — America too endures an aristocracy, just like everywhere else. Rockefeller oil money founded the Council on Foreign Relations, which provides the US with its foreign policy, helped fund the U of Chicago which provides the US with its neoliberalism, etc. The Ford Foundation has not been idle, either.
And philanthropy is not giving money away but giving it to friends and associates who do with it as directed … for a pretty tax write-off, too.
Bill Gates adding his voice to the call to de-tax labor helps win that goal. But hopefully it’ll backfire on winning more sales taxes or a VAT. The consumption to tax — or to fine or fee — is not downstream, not a good or service, but well upstream.
One set is natural: land, natural resources, EM spectrum, ecosystem services such as the atmosphere performs, etc. The other set is political: utility franchises (enriching telecomms unduly), patents and copyrights offered for the same fee no matter the value of the idea protected (imagine an insurance company doing that!), corporate charters and other limits on liability, such as the special act of Congress, a gift to Gates, when Y2K was a scare, banking charters that legalize counterfeiting by the (not really) Federal Reserve, etc.
Run government like a business. Get full market value for all these little pieces of paper that government grants. Then you can forget about taxing either labor or capital, luxuries (as phones initially were) or waste. Just recover the values that society generates without anyone’s labor or capital involved — the values of earth and of privilege. Inequality will be slashed to human-scale.
These six excerpts on the very rich owning very muchly desired land are from two different years. In 2012, (1) Forbes, Nov 29, on Kroenke by Morgan Brennan; (2) Billings Gazette, Dec 13, on Wilks by Brett French. In 2014, (3) Pacific Business News, Jan 10, on Kelley by Duane Shimogawa; (4) CNN, May 13, on Khosla; (5) Pacific Business News, Spt 26, on Zuckerber, by Duane Shimogawa; and (6) Wall St Jrnl, Oct 8, on Gates, by Candace Taylor.
Billionaire Stan Kroenke Buys $132.5 Million Broken O Ranch
Stanley Kroenke, a real estate mogul worth $4 billion, bought Broken O Ranch for an undisclosed price. Asking price was $132.5 million. Kroenke is owner of the NBA’s Denver Nuggets, the NHL’s Colorado Avalanche, the NFL’s St. Louis Rams, and the Premier League soccer club Arsenal. His wife Ann is daughter of Bud Walton, co-founder of Wal-Mart; she has her own $4.5 billion. Wal-Marts anchor Kroenke’s shopping centers. He and Ann primarily reside in Columbia, Mo.
The 124,000 acre Montana farm was assembled over the course of nearly 25 years by the late founders of the Kelly-Moore Paint Company. It stretches 20 miles along the Sun River and spans three counties. It’s the largest irrigated farm in the state of Montana, boasting extensive water rights. Annually, it produces 700,000 bushels of small-grain crops and 25,000 tons of alfalfa hay. One of the top commercial cattle operations in the Rocky Mountains, its livestock includes 3,500 “mother” cows, 800 replacement heifers and 175 range bulls.
There’s a 10,000-square-foot main house that overlooks the river and the Rocky Mountains. It has an indoor swimming pool. Recreational activities on the sprawling compound include trout fishing, hunting and wildlife viewing.
In most states, fully-operational ranches like Broken O have welcomed double-digit appreciation every year, save 2009.
Prior to this purchase, Kroenke’s personal portfolio held an estimated 740,000 acres’ worth of U.S. real estate, making him the 10th largest landowner in America. With the addition of Broken O’, he is now the eighth largest in the country. At 864,000 acres, his holdings still trail million-plus-acre owners like John Malone, Brad Kelley (below), and Ted Turner.
Two Texas billionaire brothers have quietly collected more than 177,000 acres of ranch land in the last two years. They are now the second-largest landowner in Idaho County. On a bluff across Flatwillow Creek from their new N Bar Ranch headquarters, they are building a 6,000-foot asphalt airstrip.
The BLM owns about 2,500 acres in the Durfee Hills that are landlocked within the N Bar with no road access.
N Bar is only a portion of the property that Farris, 60, and Dan Wilks, 56, have accumulated in Montana. In all, they own more than 276,000 acres in seven counties in the eastern half of the state. That’s 431 square miles.
Another landowner the Wilks brothers have bought out is Theodore Roosevelt IV, who had a log lodge, timber and grazing land between the south and north forks of Flatwillow Creek. They also bought property from the Sunlight Ranch Co., owned by Earl Holding of Sinclair Oil.
In 2002, Dan and Farris Wilks started Frac Tech; fracking is a way to recover oil by injecting fluids underground under high pressure. They sold their interest in 2011 for $3.2 billion. They landed on the Forbes magazine list of little-known billionaires, ranking 312 out of 400 on the list.
The brothers may be looking for their next oil play in central Montana. Or like other wealthy individuals, they are parking their money in a safe investment during a volatile time in the stock market.
Wilks brothers own land in Wyoming, Kansas, Texas, and Idaho. In Colorado, Farris Wilks paid $16 million for the most expensive ski-accessible home in Snowmass Village — a seven-bedroom home on five acres in the ski town.
Tennessee Billionaire Buys 1000s of Acres on Kauai
Billionaire Brad Kelley purchased “thousands of acres” of agricultural land in Hawaii on the island of Kauai from landowner Grove Farm, which is owned by AOL founder Steve Case.
One of the largest private landowners in the United States, Kelley has more than 1.5 million acres of ranch lands in Kentucky, Tennessee, New Mexico, Florida, and Texas. His massive landholdings amount to about 1,600 square miles, more than the entire land area of Rhode Island and not that much less than the state of Delaware.
The 57-year-old Kentucky native, who has a net worth of $2 billion, ranking him at No. 273 on the Forbes 400 list, gained such wealth by starting discount cigarette brands Bull Durham and USA Gold, eventually selling the business for $1 billion in 2001.
Additionally, Kelley, who lives in Franklin, Tenn., south of Bowling Green, Ky., purchased the well-known Calumet Farm in Kentucky about two years ago, which produced the 2013 winner of the Preakness, Oxbow.
Grove Farm, the 10th largest landowner in Hawaii and third largest on Kauai with 33,294 acres, recently partnered with eBay founder and billionaire Pierre Omidyar’s Ulupono Initiative to build a grass-fed dairy farm on the south side of the Garden Isle on 583 acres of pasture land that it owns.
Kelley’s purchase marks a similar transaction by another billionaire — Oracle Corp. CEO Larry Ellison — who in 2012 bought the majority of the island of Lanai, which amounts to about 87,700 acres.
Is Facebook’s Mark Zuckerberg Buying a Hawaii Beachfront Estate?
Facebook founder and CEO Mark Zuckerberg is the likely buyer of a 357-acre beachfront estate on the Hawaiian Island of Kauai’s North Shore. The likely sales price is $66 million. It is fully entitled for 80 homesites with approved roads.
Zuckerberg, who has a net worth of $34.7 billion, is the 13th richest man in the world, according to Forbes.
Zuckerberg has had an appetite for Hawaii real estate with the apparent purchase of several multi-million-dollar units in a 23-story ultra-luxury condominium under development called ONE Ala Moana. This happened after both Zuckerberg, 30, and his wife, Priscilla Chan, were photographed over the 2012 holidays in Hawaii, walking around town, eating hamburgers, and surfing.
Bill Gates Buys Jenny Craig’s California Horse Farm for $18 Million
Bill Gates, the Microsoft co-founder, has purchased weight-loss guru Jenny Craig ’s Rancho Santa Fe, Calif., equestrian estate. Known as Rancho Paseana, the approximately 228-acre property is about 20 minutes north of San Diego. The price was $18 million.
The Gates family has enjoyed visiting the San Diego area with friends and family for many years. Gates’ daughter Jennifer is active in horseback riding. The ranch includes a ¾-mile racetrack, a guesthouse and an office, an olive orchard, five barns and a veterinarian’s suite.
The property took long to sell because Craig wanted a buyer who would keep it as a horse facility, though she received many offers from potential purchasers who wanted to develop the land.
Ed. Notes: Like others above, Gates also owns an island, Grand Bugue Island, the largest in the republic of Belize. Even more than do rich businessmen, many American entertainers also own islands, such as Eddie Murphy. Is it to get away from the paparazzi?
Note Kroenke got help from someone already rich. Wilks got theirs from our addiction to oil, a natural resource created by none of us, needed by all of us, at least until we get over our addiction and go solar. Kelley got his from our addiction to tobacco, grown on vastly subsidized farmland. Vinod Khosla, Zuckerberg, and Gates got theirs in IT where government-granted patents on monopolies are embarrassingly cheap (no business would sell its services so cheaply) and where government contracts proliferate, paying well above market rates. As is true with all fortunes, some of it is earned, most of it is not. There is simply no way that any individual can work hard enough or invest smart enough to own more than the value of the possessions of millions of other people also working hard and saving diligently.
However, it’d be OK if one person owned all the Earth — as long as s/he paid everyone else all the rent.
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.
in part 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.
not exactly Georgism, the Single Tax on land value proposed by Henry George. He did, tho’, inspire most of the real-world implementations of the land tax that some jurisdictions enjoy today, and modern thinkers to craft geonomics. While his name and our remedy both begin with “geo” since both words refer to “Earth”, the two have their differences. (a) George pegs land monopoly as the fundamental flaw while geonomics faults Rent retention. (b) To fix the flaw, George was content to use a tax, while geonomics jettisons them in favor of price-like fees. (c) George focused on the taking while geonomics headlines the sharing. George envisioned an enlightened state judiciously spending the collected Rent while geonomics would turn the lion’s share over to the citizens via a dividend. (d) And George, as was everyone in his era, was pro-growth while geonomics sees economies as alive, growing, maturing, and stabilizing. Despite these differences, George should be recognized as great an economist as Euclid was a geometrician.
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.
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.
a neologism for sharing “rent” or “social surplus” – the money we spend on the nature we use. When we buy land, such as the land beneath a home, we typically pay the wrong person – the homeowner. Instead, since land cost us nothing to make and is the common heritage of us all, rather than pay the owner, we should pay ourselves, our neighbors, our community. That is, we should all pay land dues to the public treasury, then our government would pay us land dividends from this collected revenue. It’s similar to the Alaska oil dividend, almost $2,000 last year. Indeed, the annual rental value of land, oil, all other natural resources, including the broadcast spectrum and other government-granted permits such as corporate charters, totals several trillion dollars each year. It’s so much that some could be spent on basic social services, the rest parceled out as a dividend, as Tom Paine suggested, and taxes (except any on natural rents) could be abolished, as Thomas Jefferson suggested. Were we sharing Earth by sharing her worth, territorial disputes would be fewer, less intense, and more resolvable.
a 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.
of interest to Dave Lakhani, President Bold Approach (Mar 8) and Matt Ozga (Jan 29): “I write for the Washington Square News, the student run newspaper out of New York University. Geonomics seems like it has great significance, especially in this area. When was geonomics developed, and by whom?”
About 1982 I began. Two years later, Chilean Dr Manfred Max-Neef offered the term geonomics for Earth-friendly economics. In the mid-80s, a millionaire founded a Geonomics Institute on Middlebury College campus in Vermont re global trade. In the 1990s, CNBC cablecast a show, Geonomics, on world trade as it benefits world traders. My version of geonomics draws heavily from the American Henry George who wrote Progress & Poverty (1879) and won the mayoralty of New York but was denied his victory by Tammany Hall (1886). He in turn got lots from Brits David Ricardo, Adam Smith, and the French physiocrats of the 1700s. My version differs by focusing not on taxation but on the flow of rents for sites, resources, sinks, and government-granted privileges. Forgoing these trillions, we instead tax and subsidize, making waste cheap and sustainability expensive. To quit distorting price, replace taxes with “land dues” and replace subsidies with a Citizens Dividend.
Matt: “This idea of sharing rents sounds, if not explicitly socialist, at least at odds with some capitalist values (only the strong survive & prosper, etc). Is it fair to say that geonomics has some basis in socialist theory?”
A closer descriptor would be Christian. Beyond ethics into praxis, Alaska shares oil rent with residents, and they’re more libertarian than socialist. While individuals provide labor and capital, no one provides land while society generates its value. Rent is not private property but public property. Sharing Rent is predistribution, sharing it before an elite or state has a chance to get and misspend it, like a public REIT (Real Estate Investment Trust) paying dividends to its stakeholders – a perfectly capitalist model. What we should leave untaxed are our sales, salaries, and structures, things we do produce.
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 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!