GM needs land rents, Flint says
|September 9, 2008||Posted by Jeffery J. Smith under Progress Report, The Progress Report|
GM needs land rents, Flint says
Libyans should get oil cash directly, says Gaddafi
This year, Alaskans get a record amount of oil royalty. People in general might do a better job of spending the worth of Mother Earth. We trim, blend, and append three 2008 articles, one on Gaddafi by Reuters of September 1, one on Alaska by the Associated Press of September 5, and one on GM by Clawback of September 4.
by Jeffery J. Smith, September 2008
Reuters: Libyan leader Muammar Gaddafi accused corrupt officials of looting the countrys oil wealth and said its five million people should be given the money directly.
Gaddafi urged a sweeping reform of government bureaucracy, saying most of the Cabinet system should be dismantled to free Libyans from red tape and protect the state budget from corruption.
You have to be ready, each Libyan will get directly his share of the oil money, Colonel Gaddafi told a gathering of his supporters including ministers, top military and police officers and members of the General Peoples Congress, the countrys top executive and legislative body.
The implementation will start at the beginning of next year, he said, for the first time giving a date for the direct sharing of oil wealth. Gaddafi was speaking on the 39th anniversary of the army coup that brought him to power.
Corruption is linked to bureaucracy everywhere in the world. The solution to ending corruption is to end this administration which manages money spending, and put the money directly in people hands, Gaddafi said in the speech, broadcast live on Libyan television.
Gaddafi named justice, defense, interior, and foreign ministries as the only ministries which would be spared the purge of bureaucracy.
He said Libyans should decide for themselves how to spend the oil money, such as on better education for their children, healthcare, and the freer import of goods to counter monopolies and fight price increases.
He warned that direct sharing of oil money and the dismantling of bureaucracy would unleash chaos in the first stage, but added: Libyans, with oil money directly in their hands and bureaucracy dismantled, will set up a genuine popular administration and form a society of the masses ruled by a genuine direct democracy.
Gaddafi also said Libya would grant Italy privileges in investments in oil, gas, and other business to reward it for compensating Tripoli for its colonial rule of the North African state.
Italian Prime Minister Silvio Berlusconi signed the landmark deal in Benghazi to pay $5 billion in compensation for misdeeds during its 1911-1943 colonial rule.
Italy has had difficult relations with Gaddafi since he took power in 1969. But Rome backed Tripolis drive to mend fences with the West, which have improved dramatically since 2003 when Libya accepted responsibility for the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland and abandoned prohibited weapons programs.
JJS: A fair share of oil royalty to everyone was a reality in Kuwait and still is in Alaska.
AP: “The royalty dollars that flow through the state are the people’s wealth,” said Alaska Lt. Gov. Sean Parnell. This year, every eligible man, woman, and child will receive $2,069 from the state’s oil royalty investment program distributed annually. On top of that, the checks will include another $1,200 from the state treasury to help offset soaring fuel prices. Ironically, most people must spend most of their entire amount of oil revenue on heating fuel. This years $2,069 dividend tops the old record set in 2000 at $1,963. People must live in Alaska one calendar year to qualify for the payout.
JJS: You think if everyone got a dividend — not just from oil value but also from all spending on land and natural resources and ecosystem services — then would there any longer be any rationale for subsidizing a few individuals, such as the management and shareholders of one of the worlds biggest corporations? People say a dividend to everyone is expensive but a subsidy to a company is not cheap, and does the public get much bang for its buck?
Clawback: In Michigan, the city fathers of Flint — the birthplace of General Motors a century ago — voted unanimously to grant several tax breaks to GM for building a factory there to manufacture engines for an electric car.
One can only hope GM is serious. A decade ago, this same company developed an electric car — the EV1 — and declined to market it (as documented in the 2006 film Who Killed the Electric Car?).
Many residents of Flint who got downsized out of GM jobs — the tale Michael Moore told in his 1989 film Roger & Me — disagree with the favors, despite the fact that GM is hemorrhaging cash; it posted a loss of more than $15 billion for the second quarter of this year
The city will partially exempt GM property, but will their tax savings do much to rectify that mess? The tax payments would mean much more to a struggling city than to the companys bottom line.
JJS: The property tax breaks do not distinguish between land and buildings. While exempting improvements is a fair reward for investment, exempting locations is not fair at all. Whatever value a site has is generated by the investments of the surrounding society. The residents of a region are the ones entitled to the rental value of the region. Then if they wished they could invest in GM directly.
Jeffery J. Smith runs the Forum on Geonomics.
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