THE GEONOMIST
Vol. 16, No. 1
Editor: Jeffery Johnson Smith
subsidies, rent-shares, and other green rights
| Geonomics is … 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. |
Finns, Germans for BIG
Imagine getting an income just for being a member of a society with a surplus. You'd have so much security, you could choose to do only useful work. You'd have time to enjoy your brief stay on this planet.
Back in 1985 in the UK Parliament, the Labour Land Campaign sponsored a bill to craft a dividend paid to citizens from the recovered values of sites and resources. Dave Wetzel worked on that campaign and works for the “rent” dividend now. He wields some clout among civic leaders worldwide; he's a VP in the capitol's mass transit agency, Transport for London.
Something similar to this dividend is the Basic Income Grant (BIG). Some of its advocates note the payment should come from “rent” – the money we spend on the nature we use (sites, resources, EM spectrum, ecosystem services). Most proponents, however, are silent on how to fund BIG. The Scottish Green Party advocates both a “Citizen's Income” and a tax on land value but does not connect the two – a case of the left hand not knowing what the right hand is doing.
Among the BIGists are some fairly big (no pun intended) names. Prime Minister of Finland, Matti Vanhanen of the Centre Party, in joining his nation's debate on BIG, said that the current wide range of benefits could be replaced by a BIG of about 600 or 700 euros per month, supplemented by incentives to encourage people to work. The Finnish Greens had accused the Social Democrats of using false reasons to reject this extra income for everyone.
Several newsworthy Germans have endorsed BIG, including sociologist Ulrich Beck, author of "The Risk Society," and chairperson of the left party PDS, Kayja Kipping. One of the 500 richest Germans, Gotz Werner, owner of over 1700 drug stores with annual sales of 3.7 billion euros said, “Like almost all entrepreneurs, I wanted more and more in the past. Today maximizing meaning is my top priority. I have read the classics, Goethe, Schiller. I understand my own success is not everything. I want to help others succeed. 'Nothing is stronger than an idea whose time has come,' Victor Hugo said. Two years ago BIG was something for a few experts. When I give lectures today the halls are full.”
In behalf of Africa, the UN Commission for Social Development praised Namibia's basic income grant proposal. The Lutheran World Federation (LWF) urged its member churches to consider poverty reduction initiatives like Namibia's BIG proposal. The LWF also praised Namibian Lutherans for their work promoting the BIG in South Africa.
In Australia, John McDonnell has been an MP for the Australian Labour Party since 1997. Now he campaigns to become the next Labour leader and endorsed social rights to a Citizen's Income (or BIG). If his campaign succeeds, he'd be poised to become Prime Minister of Australia next general election, after which he could likely get his Citizen's Income implemented.
In South America, Uruguayan member of the Parliament Pablo Álvarez (Frente Amplio, left wing coalition) presented at the Chamber of Representatives of the National Parliament a proposal to create the "Uruguayan National Network for Basic Income". The Parliament approved the creation of a Committee to study the political meaning and feasibility of BIG. A committee can be a graveyard for new ideas, but at least the discussion is underway.
In North America, participants in a survey by the [Canadian] National Council on Welfare ranked the Guaranteed Livable Income (another name for BIG) number one for action to permanently reduce poverty. Three Canuck politicos declared their support: Conservative Senator Hugh Segal, Green Party Leader Elizabeth May, and the Green Party of Manitoba. Ontario Green Party leader Frank de Jong wrote us (May 26), “I just got around to reading your amazing piece on the citizen's dividend in Common Ground. You inspire me greatly.” US BIG posted on the web a copy of “Can a Citizens Dividend Replace Welfare?” What do you think the answer is?
FROM THIS PEN'S PERCH
Gulfs and support widen
Summer's already begun and here I am in a New York airport, after the Ecological Economics meeting, stranded by a hard rain, trying to wrap up this summer issue. Sitting butt-numb, wondering what's next as some basic trends keep moving apart. Some guys get a billion dollars a year while others must keep working past the old retirement age. Subsidies and oil account for ever more of the income gap. Bankruptcies pile up while, too late, home (site) prices drop. The environment worsens yet investors appear oblivious as the stock market hits new highs and the newest world's tallest building nears completion. In the Pacific Northwest, it's different. Land prices are still high – they always follow the rest of the nation – and its environmentalists keep ahead of the pack, getting local governments to address both climate change and peak oil, altho' one problem seems to cure the other. And the solution to this myriad of ailments along economic lines keeps making more friends, more in Britain and Asia than in America, yet the coming housing bust could change that. Enough middleclass Americans lose all their savings by defaulting on mortgages and they may become ready to hear what works. It'd be a hard way to learn, but sometimes it seems only pain gets thru. On the bright side, once the rules on property are fixed right, they're fixed forever.
INTERNATIONAL NEWS
Iraqi oil funds bad guys
Between 100,000 and 300,000 barrels a day of Iraq's declared oil production over the past four years is unaccounted for. Using an average of $50 a barrel, the discrepancy was valued at $5 million to $15 million daily. It's possible that Iraq has been consistently overstating its oil production. However, Iraq has a history of corruption – the “resource curse”. Bush's Administration has spent billions of US tax dollars to improve Iraq's oil industry while output has dropped. These new figures reinforce longstanding suspicions that smugglers, insurgents, and corrupt officials control significant parts of the country's oil industry. (James Glanz, International Herald Tribune, May 13) That oil corrupts and absolute oil corrupts absolutely is not peculiar to Iraq; it happens in the US, too. One current and two former Alaska legislators – all Republicans – were indicted for accepting bribes to back a pipeline negotiated by a former governor. More than just cash, the bribes included a job offer in Barbados. Yet businesses lavishing politicians with perks and campaign contributions is how permits, taxes, and subsidies get passed – until we realize the worth of Earth belongs to us all. One US presidential candidate, Tommy Thiompson, does call for giving the oil revenue to the Iraqi people, something Bush's administrator Brenner talked about doing, too.
Rich from oil & subsidies
According to the United Nations, in 2006 the net transfer of capital from poorer countries to rich ones was $784 billion, up from $229 billion in 2002. (In 1997, the balance was even.) Even the poorest countries, like those in sub-Saharan Africa, are now money exporters. Rich-country governments spent $283 billion in 2005 to support and subsidize their own agriculture, mainly companies like Archer Daniels Midland and Cargill. They undercut small farmers in poor countries who stop farming; three-quarters of the world's poor people are rural. Then their nation buys food from the North. (NY Times, March 25, via Heather Remoff)
While income for the lower 55% of the world's 6-billion-plus people declined or stagnated last year, the total wealth of the global ruling class grew 35%, topping $3.5 trillion USD. It came mostly from speculation on equity markets, real estate, and commodity trading, rather than from technical innovations. One hundred millionth of the world's population owns more than over 3 billion people. Over half of the current billionaires (523) come from just 3 countries: the US (415), Germany (55) and Russia (53). (James Petras at stwr.net)
The oil-rich, former Soviet Union, including billionaires in Russia, Ukraine and Kazakhstan, would rank second to America as home to 65 billionaires. Turkey is home to 25; Hong Kong accounts for 21; but France has only 15. Quite a few of these billionaires in emerging markets, such as Mexico and Russia, were helped along the way by cronyism and weak antitrust laws. (Los Angeles Times, March 17)
Topping off tallest of all
Burj Dubai, the iconic super-tower, is now the tallest structure in the Middle East and Europe and it is not finished. Already at 110 levels and 380 meters high, Burj Dubai shares the honor of having the largest number of floors in any building in the world, alongside Sears Tower in Chicago. At the current unfinished height, the tower is also the world's ninth tallest building. Burj Dubai is only one meter shorter than the Empire State Building, the second tallest in the US. It is the centerpiece of the AED 73 billion (US$20 billion) Downtown Burj Dubai, a mixed-use project in the heart of Dubai featuring residences, commercial space, hospitality projects, and several retail outlets including The Dubai Mall, the world's largest shopping and entertainment destination. Burj Dubai is on course to become the world's tallest building. (Emaar Properties PJSC press release, March 3, via Phil Anderson) Every time the newest world's tallest building opens, it has been just after the 18-year land-price cycle peaked.
Buy bottled air? Got to.
Take a deep breath. Or, maybe not. Not if you're in the Indian city of Calcutta. Traffic has so dirtied the air that 70% of its residents suffer from lung disease, including breathing difficulties, asthma, and lung cancer. The worst offenders are the 50,000 rickshaws – half of them unregistered – that burn "kantatel". This fuel is a deadly concoction of kerosene and petrol. Government cannot force rickshaw drivers to convert to a cleaner fuel because they're protected by powerful trade unions. What government has done is soothe the headaches of police who breathe the worst smog at work. The city equipped traffic offices with oxygen concentrators, the kind used by patients in hospitals. Doctors caution, however, that the oxygen cannot dislodge pollutants buried deep in the lungs. (17 May, BBC News) We already have the technology: fuels, motors, and mass transit that'd emit less pollution. But we still choose the same old entrenched smoggy ways because they're cheaper, made cheaper by subsidies while the more efficient clean ways are made more expensive by taxes. Stop letting drivers pollute for free and start recovering the socially-generated value of sites and resources, then cities won't be choked with traffic and the air with smog. Denizens could breathe again.
NATIONAL NEWS
Retire when? Not soon.
After falling for more than 100 years, the retirement age edged up; in the 1980s, 18% of over-65s kept on working, now 29% do. What choice do those Boomers have? Aging has gotten spendy and benefits scarce. (LA Times, May 30) Slow trends that are so hard to sense can only get worse until people feel right about getting an extra income apart from their labor, one from the value of the land in their region, a value that all residents contribute to just by contributing to population density, one of the main factors by which society generates the value of locations.
Congress to tax oil?
The World Bank Group reports in 2005, public institutions such as the World Bank and US agencies such as the Export-Import Bank provided more than $3 billion to the international oil and gas industry; over the past year, lending for oil projects increased more than 75%. Instead of alleviating poverty, most oil and gas projects have exacerbated corruption, worsened economic inequality, increased local conflict, and intensified global climate change. Hence Congressman Maurice Hinchey (D-NY) on April 17 introduced a bill to help end international subsidies to Big Oil. (The Progress Report)
Despite the market price for crude oil and natural gas being lower than a year ago, in Q1 Exxon Mobil, the world's largest publicly traded oil company, saw profits rise 10% to $9.3 billion. Sen. Bob Casey (D-PA), introduced a bill to impose a windfall profits tax and close certain tax loopholes for big oil companies. (AP, April 26)
Ethanol subsidy to land
When we subsidize them, farmers can make money farming or by selling or leasing land. On one hand, returns from farmland have averaged 10.9% annually the last 15 years (Bloomberg, February 20). On the other hand, the growing demand for ethanol has pushed up corn prices an average of 63% to $3.31 a bushel during the first quarter of 2007. So farmers nationwide expect to plant 16% more acres to corn this year. In Iowa, the value of good farmland shot up 16% over the last 12 months, with 7%, or nearly half the total increase, coming in the first quarter of 2007. (Des Moines Register, May 29) Dr. Fred Foldvary, Sta Clara U, uses this example to show how higher prices for goods get capitalized into higher land values. In this case, it is corn, as subsidies to ethanol drive up corn prices. Who benefits? Owners of corn farms.
Pay for rich golfer's links
The more you can afford to pay, the less you have to. Bill Gates, Michael Jordan, and Don Johnson have all hit the links at the Bandon Club in central Oregon. To play golf there, rich CEOs fly into the nearby Bend airport on 5000 private jets per year at a cut rate, thanks to their shareholders kicking in and taxpayers paying $31 million for the airport and its new expansion. Golfers pay $200 each and altogether play 120,000 rounds each year, besides drink, dine out, and hire hotel rooms. Despite raking in tens of millions each year, Bandon also gets a break on its property tax and the local government's power of eminent domain to take land for a reservoir in that dry part of the state. (David Cay Johnston, The Oregonian, June 15, via Gil Herman) While not a major rip-off, it is exemplary of how the elite-state partnership works. It's spending like that that makes government expensive and a bad bargain and that keeps the rich rich since they can slough off their costs onto everyone else. It's why discretionary spending should reside not with politicians but with citizens – pay public revenue to citizens directly, equally, by paying them a monthly dividend from raised revenue, from charging for granting privileges like land titles, resource leases, utility franchises, charters, and … airport landing slots.
Showy insider confesses
CNBC TV' Jim Cramer, host of Mad Money: "A lot of times when I was short (in debt for stocks) at my hedge fund – meaning I needed it (the stock to go) down – I would create a level of activity beforehand that would drive the futures. It's a fun game, and it's a lucrative game." Cramer told how he'd make bets that gave the impression insider investors were predicting a stock's future. Cramer said everything he did was legal but added that illegal activity is common in hedge funds, where regulation is lax. He said some hedge fund managers spread false rumors about a company to the media and large trading desks to drive a stock price lower. He said this practice is illegal, but easy to do "because the SEC doesn't understand it." He said, "The way that the market really works is to have that nexus hit the brokerage houses with a series of orders that push it down, then leak it to the press, and then get it on CNBC.” (Matt Krantz, USA Today, March 23,)
For 2006, some managers of hedge funds were paid more than $1 billion each, way more than they've been paid in the past. While the Standard & Poor's 500 index returned 15.8% last year, many hedge funds did 40%. Centaurus Energy, before fees, posted 317%; it hasn't done less than 200% since its founding in 2002. Hedge funds pool the capital of very rich individuals or institutions such as pension funds who meet financial minimums set by the SEC. Unlike the more regulated stocks and bonds bought by mutual funds, hedge funds buy derivatives and other exotic debts – which can hit the jackpot or swallow an entire investment. Hedge fund managers typically take 2% of the fund's assets and 20% of its returns. (AP, Tim Paradis, May 1)
Stocks defy gravity
Are giant corporations any longer national? Companies like IBM, Coca-Cola, and Intel – all among the 30 in the Dow Jones Industrial Average – derive well over half their revenue from abroad. The growing economies of Europe, China, and other emerging giants absorb US exports. US-based corporations saw the earnings of their foreign affiliates in 2006 Q4 surge to an annualized level of $272 billion, up 38% from the pace in 2005 Q4. That amounts to 15% of all US corporate profits.
Flushed with global profits, companies buy back their own stock and purchase that of others – they merge. Both actions pump up share value. The price of shares for the Standard & Poor's 500 index is about 16 times the companies' earnings. The S&P 500 is flirting with its historic high of 1527.46 set in 2000. The Dow Jones Industrial Average crossed 13000 for the first time. All this despite the housing-market slump and gasoline topping $3 a gallon.
An old adage on Wall Street advises, "Sell in May and go away." Historically, from May through October share prices average lower than during the winter-to-spring period. Some of the stocks performing the best are companies that typically do well during downturns – relatively safe industries such as healthcare, utilities, and telecommunications. Like farming, football, and fashion, markets are cyclical, too. As the US economy – the globe's largest and the one that imports the most goods – slows, other economies must slow, too. Those places will quit returning such fat profits to US firms. (Mark Trumbull, Christian Science Monitor, May 8)
Income gap 2x 1980's
Income inequality grew significantly in 2005, with the top 1% of Americans – those with incomes that year of more than $348,000 – receiving their largest share of national income since 1928. Their incomes rose to an average of more than $1.1 million each, an increase of more than $139,000. The top 10%, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression. Average incomes for those in the bottom 90% dipped slightly compared with the year before, dropping $172. The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
Defaults up, prices down
In California, Florida, Nevada and Arizona, speculators walked away from properties since home prices fell as interest rates rose. Late payments and foreclosures on adjustable-rate home mortgages spiked to all-time highs in 2007 Q1, up from 14.44% to 15.75%. The percentage that started the foreclosure process climbed from 2.7% to 3.23%, the highest on record. Among lenders of loans with teaser rates, 30 have gone bankrupt this year. In Q1, the number of all mortgages starting the foreclosure process rose to 0.58%, a record that surpassed the previous high in 2006 of 0.54%. (Jeannine Aversa, AP, June 14)
Sales of existing homes in May fell by about 10% from last year to the lowest level in four years, and prices dipped for the 10th month in a row. The inventory of properties on the market has swelled to an 8.9-month supply, highest in 16 years. The median price for an existing home fell about 2% to $223,700 from a year ago. (AP, June 26)
Home prices in the 10 cities fell 2.7% on a year-over-year basis, the largest decline since September 1991. Meanwhile, prices in 20 cities dropped a record 2.1% year over year. Price appreciation has slowed for 17 consecutive months. (MarketWatch, June 26)
Commercial real estate, which lags behind residential, seems to have peaked in February. See the iShares Dow Jones US Real Estate index (an ETF and NYSE: IYR). Go to the YTD or 1-year chart.http://finance.google.com/finance?q=IYR
Land eats up our budget
The number of households spending more than half their income on housing increased in one year by 1.2 million to 17 million in 2005. That year, records were set for home sales, single-family starts, and house-price appreciation. Then in 2006, while median house prices increased at least 10% in 23 of 149 metropolitan areas, they fell in 34 metros. Of the 11 metros that had declines of greater than 3%, nine were in economically depressed areas in the Midwest. The amount of home equity cashed out set a record. (MarketWatch, June 11)
Employees who're asked to relocate balked, fearing losing money were they to sell their home. Some companies are losing prized recruits or paying higher relocation costs, as much as $100,000. (Amy Hoak, Market Watch, May 11, 2007)
Freddie Mac, which bundles and resells mortgages as securities, lost $211 million in Q4. The report marked Freddie Mac's first on-time filing of a quarterly report in five years. Freddie Mac paid a then-record $125 million civil fine in 2003 for management misconduct in their faulty accounting. (AP, June 14, USA Today)
FROM THE OP-ED PAGES
British influenced world
New Statesman (June 4) ran "50 ideas for Brown's Britain", asking five leading think tanks to suggest ten-point plans for the Gordon Brown premiership. The second point in the submission from Compass reads: "Tax Land – It is often public investment in schools, roads and other supply-side measures that creates unearned gains by landowners. A land tax would stabilise house prices, slow speculation, and rebalance regional and wealth inequalities." (via Dave Wetzel)
The Herald (May 8): “Amid the council taxation debate, the Scottish Green Party wants to tax land value rather than property price for both homes and businesses … to spur owners to bring unused shops and brownfield sites into use.”
The Sunday Herald, Deputy Business Editor Antony Akilade: “The Greens propose a land value tax. As such, it compensates the community for the private gains made from public investment in the infrastructure and financial assistance to attract development.”
Financial Express, F. H. M. Masoom (March 20): “The owners of properties whose value increases year to year enjoy the unearned increment without contributing anything towards the development of the country. To tax them is most justified and not to tax them is unethical.”
Sun Star, Antonio V. Osmeña (April 11): “In many urban areas, particularly those of high population concentration, vacant land or lots with blighted structures should be assessed and taxed in excess of their contribution to overall real estate market value, in order to stimulate its use, to discourage the holding of vacant urban land for speculative purposes, and to encourage improvement of blighted structures.
US Banker and NE editor
St. Louis Post-Dispatch, Jo Mannies (April 15, via Joe Casey): “Retired investment banker, Rex Sinquefield, plans to invest millions in upcoming years in an effort to shape Missouri's future. He also helped to establish the Show-Me Institute. He believes that state income taxes, as well as earnings taxes in St. Louis and Kansas City, hurt job growth and economic prosperity. He proposes replacing St. Louis' earnings tax with a land tax that would be separate from a property tax.”
Hartford Courant, Tom Condon, editor of Place (June 10): “The thought is that the land tax, pioneered by 19th-century economist Henry George, will encourage owners to get the most out of the land by building on it, or selling it to someone who will build on it. Downtown seems like a very good candidate. Speculators are buying buildings and holding on to them. If owners had to pay higher taxes on land, this kind of bottom-feeding would be discouraged. Conversely, building in the trident areas would be encouraged.”
Gore, LA Times for shift
Before the House Energy and Commerce Committee on global warming, former vice president Al Gore urged Congress "to reduce taxes on employment and production and make up the difference with pollution taxes," principally on carbon dioxide emissions. (The San Francisco Chronicle, March 23 (via Paul Martin)
Daniel Rosenblum, cofounder of the Carbon Tax Center, interviewed by Ray Suarez on PBS NewsHour (April 11): “So whenever the refiners or the oil companies sell oil into the pipeline, there will be a tax imposed there. When you take coal out of the ground, it will be taxed as it goes into commerce… Raise one tax, reduce another. You tax the bad, you tax pollution instead of productive work… We're proposing that all the monies that are received from the carbon tax go back to all Americans, either by offsetting the payroll tax or through a rebate to all Americans, kind of like the Alaska Permanent Fund.” (via Paul Martin)
The Los Angeles Times (May 28): “While all the added costs under cap-and-trade go to companies, utilities, and traders, the added costs under a carbon tax would go to the government, which could use the revenues to offset other taxes. So while consumers would pay more for energy, they might pay less income tax, or some other tax.”
The Huffington Post (June 27): “They're being showered with government subsidies to develop and deploy carbon capture and sequestration (CCS), whereby the emissions from coal-fired power plants are collected and stored underground. It's technologically precarious and enormously expensive, but with taxpayers footing the bill, what the hell?”
FROM THE ARCHIVES
From Gutenburg Project
Eric Freyfogle, College of Law, U of Illinois: “To get people to mix labor with the land we need to protect the value of their labor. There is far less need to protect the land's speculative value for future development... [M]any observers have reached these economic and moral conclusions. Among them was the late 19th-century economist Henry George, who based his enormously popular writings on this line of reasoning.” (APA journal, Planning & Environmental Law, 2006 June, Vol. 58 No. 6, via Chuck Metalitz via Bill Batt)
From Resurrection by Leo Tolstoy (1828-1910): “Henry George's fundamental position recurred vividly to his mind and how he had once been carried away by it, and he was surprised that he could have forgotten it. The earth cannot be any one's property; it cannot be bought or sold any more than water, air, or sunshine. All have an equal right to the advantages it gives to men… he formed a project in his mind to let the land to the peasants, and to acknowledge the rent they paid for it to be their property, to be kept to pay the taxes and for communal uses.”
Gamasutra, Ian Bogost (April 3): “In 1903, thirty years before the initial release of Monopoly as we know it, Elizabeth Magie Phillips designed The Landlord's Game, a board game that aimed to teach and promote Georgism, an economic philosophy that claims land cannot be owned, but belongs to everyone equally. Henry George, after whom the philosophy is named, was a 19th century political economist who argued that industrial and real estate monopolists profit unjustly from both land appreciation and rising rents. To remedy this problem, he proposed a 'single tax' on landowners.”
BOOKS REVIEWED
It's All For Sale
Subtitled, "The Control Of Global Resources”, it's by James Ridgeway (2004). Five companies dominate the US petroleum industry. Five control the worldwide trade in grain. Two have a corner on the private market for drinking water. In terms of actual dollars, trade in heroin, cocaine, and tobacco ranks alongside grain or metals. There are more slaves in the world today than ever before. Resource by resource, It's All For Sale uncovers and discloses who owns, buys, and sells what. Some resources—such as fuel, metals, fertilizers, drugs, fibers, food, forests, and flowers—have, for better or worse, long been thought of as commodities. Others—including fresh water, human beings, the sky, the oceans, and life itself (in the form of genetic codes)—are more startling to think of as products with price tags, but as Ridgeway shows, they are treated as such on a massive scale in lucrative markets around the world. Vandana Shiva calls it, "Essential reading for the ecology movement, the justice movement, the peace movement, and all who believe 'Our World is not for sale.'" (Katipo Books website)
COMMENTARY
FCC defends EM auctions
“Spectrum Auctions Do Not Raise the Price of Wireless Services: Theory and Evidence” is by Evan Kwerel of the Office of Plans and Policy, Federal Communications Commission (2000 October). “A widely held misconception about auctions for spectrum licenses is that they will raise the price of wireless communications services. If licensees pay for their licenses instead of getting them for free, it is argued that they would have higher costs and that these costs would be passed on to their customers in the form of higher prices. This conventional wisdom is, however, contradicted by both economic theory and empirical evidence.” (via Heartland's Institute's Joe Bast) It's good to know that Ricardo's Law is still true after all these years (two centuries).
LA Times & Bulgaria
The Sofia (Bulgaria) Echo (June 25): “Subsidies create a culture of dependence and do not stimulate innovations and an enterprising spirit among market players. Subsidies are the reason for making short-sighted decisions and sustaining unprofitable and losing productions. European policy on banana production stimulates producers in France and Spain to increase output, although their costs are many times higher than the costs of Latin American producers. In the long run, without relying on EU officials for support, these producers will go bankrupt.”
Los Angeles Times (April 8): “Go ahead and rage at the peanut farmer, but in the government-handout economy – a world of concentrated benefits and distributed costs – he'd be a fool to say no to that money, and his representative in Congress would be a fool not to deliver it.”
Los Angeles Times (June 25): “Conservatives don't like farm subsidies because they're a waste of taxpayer money and interfere with free trade. Consumers don't like them because they inflate food prices. Anti-poverty activists don't like them because they encourage American farmers to overproduce certain crops and dump them on the world market, putting farmers in poor countries out of business. Even most U.S. farmers don't like them because its benefits are distributed so unevenly; the top 20% of recipients collect 84% of crop payments, and roughly two-thirds of American farmers don't get any subsidies at all. There are alternatives, particularly the bipartisan Farm 21 bill introduced in the Senate by Richard G. Lugar (R-Ind.) and in the House by Ron Kind (D-Wis.), Jeff Flake (R-Ariz.), Joseph Crowley (D-N.Y.) and Dave Reichert (R-Wash.). It would end crop subsidies and instead put the money in 'risk management accounts' – sort of like Individual Retirement Accounts for farmers – and end government payments entirely within seven years.”
The Twinkie offense
New York Times (Michael Pollan, April 22): “The Twinkie is basically an arrangement of carbohydrates and fats teased out of corn, soybeans, and wheat – three of the five commodity crops that the farm bill supports, to the tune of some $25 billion a year. (Rice and cotton are the others.) For the last several decades – for about as long as the American waistline has been ballooning – US agricultural policy has promoted the overproduction of these five commodities. The reason the least healthful calories in the supermarket are the cheapest is that those are the ones the farm bill encourages farmers to grow. By making it possible for American farmers to sell their crops abroad for considerably less than it costs to grow them, the farm bill helps determine the price of corn in Mexico and the price of cotton in Nigeria and therefore whether farmers in those places will survive or be forced off the land, to migrate to the cities or to the United States. The public-health community has come to recognize it can't hope to address obesity and diabetes without addressing the farm bill. The environmental community recognizes that as long as we have a farm bill that promotes chemical and feedlot agriculture, clean water will remain a pipe dream. The development community has woken up to the fact that global poverty can't be fought without confronting the ways the farm bill depresses world crop prices. Voting with our forks can advance reform only so far. It can't, for example, change the fact that the system is rigged to make the most unhealthful calories in the marketplace the only ones the poor can afford. To change that, people will have to vote with their votes as well.” (via Bruno Moser)
Say “no” or say “share”?
Some wanna-be defenders of Earth rely on the same tactic that got Nancy Reagan ridiculed: “just say no”, as in “no” to misplaced development. It didn't work for Nancy, it doesn't work for “greens”. What would work is to propose a way for people to both receive profit from Earth and to live within natural constraints.
Presently, we profit only when we develop – needs of the ecosystem be damned – or when we sell out and move on – integrity of the community fabric be damned. An alternative is to share the region's natural values. That is, owners would pay in land dues (or land taxes) to the public treasury according to the value of the land they claim and residents would get back rent dividends (like Alaska's oil dividends) in equal shares. Most people – not owning oil fields or downtown blocks while living on sites of less than average value – would come out well ahead.
The land dues would make it unprofitable for absent owners to exploit or speculate. Alert residents, enjoying receipt of rent dividends, will want to keep sufficient space open since that'd maximize the region's value. Thus without changing popular bottom line values, environmentalists can align profit with planet.
People sharing ground rent is not new. The words "own" and "owe" were one. Our ancestors understood landowners owed rent to their community, unlike contemporary property rightists who claim the socially-generated value of land for themselves exclusively.
When we get offended, our first response it to oppose. But our opposition goes unheeded if people still need to meet their needs the same old way. To succeed, we need to show others a win/win for all.
Private property a right?
If you're the first person on a planet, and no one else will ever follow you, you neither have nor don't have the right to own it all or exploit it all, since there's nobody else there to suffer the consequences of your actions. Human rights exist only when there's more than one person, putting them in competition for the same opportunity. Rights are a way to settle competing claims.
If I'm responsible enough to respect your rights, then they actually exist. If you respect mine, mine exist. Rights and duties are the flip side of each other.
And rights are equal. If you're first and own all, that does not mean me, who comes second, loses my right to the same opportunity. You ever see the movie Whale Rider? In one scene, some tough motorcycle guys are sitting on a bench. When another shows up, they don't fight; the seated ones slide their big butts over and make room. Eventho' they all could've torn anyone from limb to limb, they quite naturally yielded ground and settled their competing claims peacefully, unconsciously.
A good way to settle two or more rightful claims is mutual compensation – you pay me what yours is worth annually in an open market and I do the same for you: we all pay land dues in to the common kitty and we all get rent dividends back.
Animals, humans too, need privacy and a place on Earth to call their own. So yes, there is a right to private property in land. Yet it doesn't exclude the same right of everyone else. And the dues/dividend scheme is the most efficient way to settle competing claims.
DIALOG
How to get attention
David W Burdick, Portland economist (Apr 19): “What are the major categories of products and services purchased in the world (as a percentage of world GDP). Its a key figure for my presentation coming up soon.”
Editor: The World Bank site should break it out, or the UN. In the US economy, according to the official website of the US, it's not any manufactured good or popular chain stores but FIRE (Finance, Insurance, and Real Estate). I suspect most economies are the same.
Tom Sherrard, San Diego ret. Lawyer (April 15): “This is the Georgists' first problem: how do we get the attention of a growing number of people? We know how HG did: how do we do it today?”
Editor: Lose the identity of taxists. First focus on what it is you'd like to tax or somehow charge for, and that is the worth of Mother Earth, that multi-trillioin dollar flow of all the money we spend on the nature we use. Economists call it “rent” which misleads most people. So invent new words like other world-shakers did, coining “ego”, “dianetics”, “sexism”, “Reagonomics”, etc. Call it “society's surplus”. Whatever, once you focus public attention on this natural bounty, the public will know what to do with it. At our easy urging, they'll be happy to share it all out fairly. Then you can talk about losing the counterproductive taxes and subsidies.
OUTREACH
Oregon reacts to action
The Oregon legislature considered a bill, HJR 45, which would lift the lid on the property tax. Several urged legislators to lift the lid only on land value while keeping the cap on built value. For writing, thanks to David W Burdick, Portland economist, Howard Kronish, Portland ret., Christine Yun, Portland supporter, Dr. Mason Gaffney, UC-Riverside, Al Sheahen, LA ret./BIG activist, Gilbert Herman, Connecticut ret., Wendy Rockwell, Costa Rican elected official, and Godfrey Dunkley, South African businessman and activist.
Lenny Dee, organizer of Onward Oregon and the Oregon Bus Project (May 20 & 21): “I've always thought the concept of givings would help turn the Oregon's Measure 37 [compensate landowners for no growth] conversation. We're adding technology to our site to create Conversation Circles. When it goes live you'd be welcome to post and see how folks respond.”
Laine Young, BS, MES, Landlinks Consulting LLC and organizer of Orenco Urban Farm, a Permaculture Site (May 14): “I don't know you, but I've been watching the dialogue and appeals for action for Measure 37. I wholeheartedly agree that land-grab and undermining our planning process must be balanced with an equally strong message about sharing (a lesson lost for many of us after leaving our parent's home) and 7-generations view of what we leave as our legacy. Let me know if there is an effort worth getting involved in.”
BlueOregon, the web discussion of progressive Oregonians, posted my guest editorial, “Environmental-ists: For or Against Reforming the Property Tax?” (May 29) which first appeared in The Progress Report. It generated about a dozen responses the first day, more later, evenly split between those who got it and those who thought they did. Seems unlearning must precede learning. Australian geoist Karl Williams wrote, “I've just read your great guest piece and would love to reprint it the Aussie journal Progress.” (Any other re-printers?)
In the media
Michael Strong, CEO and Chief Visionary Officer of FLOW, Inc, promotes Women's Empowerment Free Zones where at least 50% of the land gains are distributed to women's credit institutions and to health and education vouchers for women and children. In his “Sustainability in a Bright Green Future”, he cited Alan Durning of Sightline and our work. Tom Greco, author on consensual currencies, posted our article, “An Introduction to Geonomics” (Feb 23). The Robert Schalkenbach Fdn. hired me for an essay on attitudes towards property and environment during the debate over Oregon's Measure 37 and to edit the monthly Georgist News and the daily Progress Report.
The Democratic Freedom Caucus responded June 18 to my comment: The call to limit government worries some people not because they want big government but because they don't want big business, big religion, big military – or little lynch mobs. The issue is not size but coercion. Power cannot be banished. It can only be concentrated or spread around. That's what we're for, precluding a big government or big anything by empowering individuals with full rights and responsibilities. John: “Outstanding. I applaud your common sense.” William Cerf: ”This is so well spoken and really speaks to why I'm a Libertarian Democrat.”
Christian Butterbach of Germany (May 20): “I thank you. I am mostly on your side (geolibertarianism is almost never mentioned or taken seriously; if libertarians did, they would have to change too much of their ideology). I was happy to discover your site and hope to be able one day to get back at all this.”
SOCIETY FINANCES
Newcomers, old stayers
The fall Geonomist elicited enough renewals and newals to cover the costs of copying and postage: from super stalwarts Jing Chen (Canadian prof), Marion Sapiro (ret. CA prof) and Artie Yeatman (PA organic farmer), supporters Brian Beinlich (Oregon programmer), three friends of John Morales (ret. of Panama Canal), and subscribers Mario Cordero (Costa Rican American), John Fisher (ret. Canadian), Mark Nedleman (West Coast personal organizer), and Joan Sage (ret. Philadelphia), among others. Big thanks to all for re/joining, donating, and granting. If you don't see your name above and know it belongs there, just send a check. We'll know what to do with it.
The Robert Schalkenbach Foundation has contracted with us to produce the monthly e-newsletter, The Georgist News. It's free, fact-packed, and timely. If you'd like a sample copy, let me know.
WHERE FROM HERE?
What you can do
Scott, The Roots, Oregon father (Apr 5): “Would like to get up to Portland to meet you in person. Your writings have had a profound effect on my understanding and am forever grateful for that. It took some time before Henry's concepts sunk in but when they finally did they sunk all the way to the core. Given enough reflection, it is impossible for anyone to deny the Truth underlying the concepts. I was able to deny it for almost two years. For some reason it just didn't click; strange when I think back about it. Lindy Davies was also a large part of my awakening as was Alanna Hartzok. Anyway, no turning back now – impossible. When it grabs you, it really grabs you. Thanks again.”
Editor: You echo Tolstoy, who kept a photo of George on his desk, warned the Czar that refusing to fairly share land and its rent would lead to revolution, whose dying words to passengers on a train were to tax land alone, and wrote: "People do not argue with the teaching of George, they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree." And thanks for the kind words. Would be great to meet you, too, and any other readers passing thru. Drop by whenever you can.
Greg Young, Missouri caregiver (April 13): “What it would take to get you to come to Springfield, MO before or after your St Louis talk. Call or write as soon as possible. Thanks.”
Editor: Thank you. All it takes, as always, is lucre. Won't move mountains but it will me to any audience. Like the Conference of Georgist Organizations in Scranton PA the last week of July. It features a dialog of theologians and geoists. To join us, visit their website.
What else you can do
Rita Rowan, Common Ground NYC Chapter (April 10): “I'd like to get a hard copy of The Geonomist. I'd like to make a small donation to pay for it. Or better still, I could buy a regular subscription.”
Joan Sage, ret. (Apr 5): “Does one write a check to The Geonomy society?”
Editor: Yes, as often as one wishes. Our bank accepts any permutation, including Forum on Geonomics, The Geonomist, etc. Also, we are enrolled at Pay Pal.
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Dear Forum on Geonomics (an educational IRS 501(c)(3)); name: address: city,state,zip: phone/e-mail: Send to THE FORUM ON GEONOMICS, 5117 SE 30th Ave., Unit 44, Portland OR 97202 jjs@geonomics.org |
The bottom line: Secure Earnings, Share Earth