THE GEORGIST NEWS

    WEB EDITION
    Volume Nine, Number Nine, March 1, 2007

    Welcome to the March issue of The Georgist News.

    Welcome aboard to new subscriber Heather Remoff. If any of you dear readers receive this a day late, blame me, your editor. Humbly I beg your forgiveness. I've been in New York speaking at the Eastern Economic Association along with other geoists and new EEA President and Nobel Laureate Joseph Stiglitz; guess which one of us didn't utter the word "rent"? The highlight of the weekend was the fellowship with Geoists and BIGists (members of the Basic Income Group) at the reception hosted by the very generous Henry George School: don't miss the next one. For those of any age who can indeed learn new tricks, read on. There's lots of good press, noteworthy news, and projects you can do.

    CONTENTS:

          1. Movement Business
          2. Good Press
          3. News
          4. Numbers for '06
          5. Numbers for '07
          6. Letters to the editor
          7. Likeable link
          8. What You Can Do
          9. At the Margin: Quips and Quotes
        10. Publication affairs


    1. Movement Business

    • Summer conference brochures
      by Sue Walton, sns at swwalton.com

      We are beginning to put together our 2007 conference brochure and need to determine our print run on or before 3/5/07. Please respond to me off list with the number of extra brochures, if any, you would like to receive.


    2. Good Press

    1. Last NY Administration now encourages LVT
      by Bill Batt, ex-tax researcher for the State of New York, January 21, 2007

      In ex-Governor Pataki's Report on Quality Communities, one of the recommendations, among dozens, is site value taxation. Dated November 2006, on page 95 it reads: A split-rate tax would benefit many upstate New York cities and villages with aging infrastructure and high property taxes that have resulted from diminishing tax bases.  Nearly all of the Pennsylvania cities using the split-rate tax experienced an increase in development after the split-rate tax was implemented. The State of New York passed home rule legislation in 1993 for the City of Amsterdam to use a split-rate property tax system.  Unfortunately, Amsterdam reverted to the conventional property tax system before the effects of the split-tax could be measured.

    2. Business and industry for land tax
      Kansas City Business Journal, January 25 (2007)
      The Kansas City Star, January 26 (2007)

      "Scrapping Kansas City's 1% tax on workers' earnings and replacing it with a a land tax would help the city compete more successfully with other metropolitan areas and slow the migration of businesses and workers to distant suburbs, according to a study released by the Show-Me Institute, a St. Louis public policy research organization supported by business and industry. The 1% tax on income that Kansas City currently charges residents and workers in its city limits is its largest single source of tax revenues, raising a projected $177.8 million in revenues or about 16% of the city's revenue stream in its current fiscal year. Business activities, such as running the airport and water and sewer companies, are projected to contribute $248 million in revenues, with the balance of the expected $1.08 billion stream coming from an assortment of taxes and fees. Kansas City could replace the earnings tax money entirely by imposing a tax of 6.7% land value, conservatively estimated at $15,233 per acre or about $1.5 billion for an estimated 100,000 acres of taxable land in Kansas City's 313.5-square-mile area."

      The next week, the Kansas City Star continued (January 31): The tax on a modest $100,000 home would increase by more than $1,000 a year. Under the current system, the owner of that home, who might earn only $25,000 or $30,000 now, may not pay more than $300 year in earnings taxes. Shifting entirely to a land tax system would also raise taxes for retirees on fixed incomes, who currently don't pay earnings taxes on their Social Security income."

      Editor's note: Perhaps a higher rate, one which would raise much more proportionally from the more valuable downtown locations, would generate enough revenue to pay residents a dividend. Then for the vast majority the shift of property tax off buildings and onto land would at worst be a wash, and often a net gain.

    3. "Another Tool Against Virginia's Sprawl"
      The Washington Post, February 13, 2007
      by Paul E. Gagnon, Metro DC Chair, Common Ground

      The General Assembly has permitted the use of the split-rate land value tax in a few urban localities. By taxing land at a higher rate than buildings, the land value tax stimulates revitalization, discourages real estate speculation and discourages sprawl by making it financially attractive to build up, not out.

    4. Special to West Virginia readers
      Charleston Gazette, Feb 9; Huntington News Network, Feb. 12, 2007
      by Perry Mann, former teacher, lawyer, prosecuting attorney of Summers County, and a regular columnist for the Nicholas Chronicle in Summersville and Huntington News Network.

      Henry George knew that state ownership of land would never be tolerated, so he proposed that the state confiscate all unearned increment of land values as a single tax: "What I, therefore, propose, as the simple yet sovereign remedy, which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals, and taste, and intelligence, purify government and carry civilization to yet nobler heights, is to appropriate rent by taxation."

    5. Ex-White House worker pro-LVT
      Dissident Voice, February 18, 2007
      by Richard C. Cook, who worked in the Carter White House and NASA before spending 21 years as an analyst with the US Treasury Department. He is the author of Challenger Revealed, called by Publisher's Weekly, "easily the most informative and important book on the disaster."

      The technology exists today, not only for alternative energy, but also for a highly accelerated program of oil conservation. How to shift focus in these new directions is what Congress should now be debating. As always, the question is: how to pay for it? One way would be serious tax reform, not only by eliminating the Bush tax cuts, but also by heavily taxing non-productive asset transactions through restoration of higher capital gains taxes, shutting down offshore tax havens, a universal land-use tax on rents and mineral rights, or higher taxes on earnings from privatized public utilities and interest.

    6. Reformer directs listeners to HG
      by Bill Batt, hwbatt at yahoo.com

      Chuck Collins, formerly a director of United for a Fair Economy and colleague of Bill Gates, Sr., gave a talk recently about tax policy. During the Q&A, in answer to a question whether there's an inherent anti-tax attitude, Collins said that polls say that people are completely confused and that there's a need for "tax literacy" – including knowing about a progressive property tax. Collins recommended checking out the "Georgists" or followers of Henry George. Read it at www.uua.org/ga/ga03/3083.html

    7. Housing Boom over, Full Price to be paid
      The Guardian, February 19, 2007  by Ashley Seager

      Residential property in Britain jumped by £410bn in value last year. Only about 2% of that gain was taxed by stamp duty or inheritance tax. Would prices have risen so far so fast if land values were taxed more? No. The discussion of land value tax, which has been around since the days of Adam Smith and David Ricardo, is gaining ground again as people reflect on the absurdities of the housing boom.

    8. Investors see land price cycle
      International Herald Tribune, February 8, 2007

      Henry George wrote in his 1879 book "Progress and Poverty" that land's boom-and-bust cycle is natural because land is not produced by human labor and prices can be manipulated by owners who are able to delay selling to get higher prices. Speculators discovered Florida real estate in the 1920s, when the low cost of borrowing and improved transportation made second homes in the warm climate attractive to wealthy Northerners. Japan's land prices skyrocketed in the late 1980s, fueled by low interest rates and easy credit. The peak came in 1991. After the bubble burst, Japan was stuck in the mire of a stagnant economy.

      Money Week, a free daily email that rounds up of the latest investment news and profit opportunities, reprinted (Jan 30) Fred Harrison, author of Boom, Bust: House Prices, Banking and the Depression of 2010: "Look at all the developed countries put together: real-estate prices have risen by more than $30trn over the past five years. That's equivalent to 100% of their combined annual GDPs. This eclipses the 1990s stockmarket bubble (an increase over five years of 80% of GDP), and Wall Street's bubble of the late 1920s (55%). But this bubble may not be done yet."

      The Parade Magazine of December 24 noted that high-end office space rents are higher in Moscow than in New York City, $21 per square foot higher, at $95 per square foot. To capture those rents, investors are building a 93-story office tower, which will be Europe's tallest building.

      Editor's note: If it's darkest before down, it's also brightest before sunset. It's at the end, the peak, of the land price cycle when investors put up the newest, tallest building.

    9. India reads about geonomics
      Punjab News, 28 January 2007
      by G.S.Bhalla, professor in the department of Commerce and Business Management, Guru Nanak Dev University, Amritsar via Ed Dodson

      "Taxing unearned income is preferable to taxing earned income. The tax shift to resource use and community-generated land values will distribute income more fairly without dependence on income and business taxation to redistribute income. Taxing unearned income (resources, land) and not earned income (jobs, profits) will reduce the rich-poor gap since the rich are always in a better position to capture unearned or windfall income by their ability to hold assets that they do not have to consume. Pay for what you take, not for what you make. Businesses should not be taxed for hiring people or for earning a profit, but should be charged for using resources and polluting the planet. People should not be taxed for earning an income or purchasing products but should be charged for the value of land they own and the resources used in the products they buy. Resource use and polluting are privileges not rights, and businesses and consumers should pay for these privileges."

    10. Bush's farm bill still too fat
      Los Angeles Times, February 4, 2007

      "So why should Americans care (about US farm subsidies)? First, because other nations retaliate against U.S. exports. Second, because subsidies kill competition with foreign growers that would ultimately lower prices on some produce in this country. Third, because taxpayers are shelling out roughly $20 billion a year to an agribusiness juggernaut that neither needs nor deserves the money at a time of ballooning deficits. And fourth, because the poor countries most harmed by our trade policies are the ones most likely to become failed states, embittered by our hypocritical preaching on the merits of 'free trade'."


    3. News

    1. Tolls to unclog highways
      NY Times, February 11, 2007 via Heather Remoff, htr at epix.net

      Some number of travelers will always be willing to pay a price to save several minutes, while others would rather save a few dollars and take the chance of being stuck in traffic. Addressing the preferences of the former, the administration's proposed $2.9 trillion fiscal 2008 budget allocates $130 million to finance construction of so-called congestion pricing systems. There are a few congestion-pricing experiments in the United States today. On a portion of California Route 91, in Orange County, drivers can choose between the free road and the less-traveled pay-per-drive adjacent lanes, in which tolls vary throughout the day and throughout the week. Driving eastbound in the express lanes at 4 p.m. Thursday costs $9.25, compared with $1.85 at noon the same day. To the south, in San Diego, on an eight-mile stretch of Interstate 15, high-occupancy toll, or H.O.T., lanes can be used by individual motorists willing to pay fees that vary throughout the day, depending on traffic conditions.

    2. Not brain drain but go-getters get gone
      by USA Today, Feb 7 (2007)

      Throughout U.S. history, immigrants, have started small shops, restaurants, and other neighborhood businesses. Today, many come from strong merchant cultures – such as Syria, Iran, Greece, South Korea, Israel and Brazil – that have existed for centuries. Millions are well-educated, middle-class professionals. And many possess the same drive to succeed as U.S. business people. With the fast-rising immigrant population in recent years, highly skilled immigrant entrepreneurs in many industries are creating broader enclave economies of supermarkets, food-manufacturing companies, health clinics, banks, law firms, high-tech start-ups, and other companies. The growing number of immigrant entrepreneurs in major U.S. cities is giving a huge lift to urban economies and even outpacing self-employed native-born Americans.

      Editor note: We all gain lower prices and greater variety from true free trade, when goods and services (out-sourced jobs) can cross borders without tariffs or quotas. Likewise, we all benefit from "free travel", when workers and consumers can cross borders without visas or quotas. However, few people would emigrate if poverty and oppression did not push them out. Developed nations can help others prosper at home not with aid or loans (debt) but by ending subsidies to agri-business (see LA Times excerpt above) and by ending exports of weapons, allowing people to organize and win the same political rights that most Americans enjoy.

    3. Government favors cowboys, cheats citizens
      by the Center for Biological Diversity, February 05, 2007 via Paul Metz, metz at integer-consult.com

      The Forest Service and Bureau of Land Management announced the new fee of $1.35 per cow/calf pair, per month, down from $1.56 last year. The new fee is as low as it can legally be. A small number of Western livestock operators, producing less than three percent of the beef we eat, pay less per month to feed their cows than it costs to feed a hamster. Meanwhile those cows are befouling our rivers, accelerating erosion, and driving rare species toward extinction on lands that belong to the American people. The federal grazing program operates at a deficit of at least $123 million annually. Independent economists have estimated that the costs may be closer to $500 million annually. It estimated that in order to cover costs, the Bureau of Land Management would have to charge $7.64 per animal-unit-month and the Forest Service would have to charge $12.26.

    4. Katrina aid often went to waste
      by Frank Bass and Michelle Roberts of The Associated Press The Seattle Times, Feb 7 (2007)

      "After Hurricane Katrina, the government gave out nearly $5.3 billion in aid to rebuild New Orleans. Besides purchase food and construction materials, it was used to pay for guns, strippers, and tattoos. The Federal Emergency Management Administration has determined nearly 70,000 Louisiana households improperly received $309.1 million in grants, and officials acknowledge those numbers are likely to grow. At least 162,750 homes that didn't exist before the storms may have received a total of more than $1 billion in illegal payments. Conversely, some deserving people were improperly denied aid. The Justice Department so far has prosecuted more than 400 people for storm-related fraud, and $18 million has been returned to FEMA or the American Red Cross. A block-by-block survey of flooded areas completed last month also shows that about 10,000 properties in New Orleans remain in a state of withering neglect."

      Editor's query: Dr. Mason Gaffney noted in his article in Dollars & Sense that after its destruction by fire, San Francisco rebuilt sans federal aid, using a tax on land, not on the building improvements. If New Orleans were not to receive federal aid, and its homeowners were to buy private insurance, would the result be as wasteful? Federal insurance lets homeowners rebuild in the same place in the same way, flat on the ground which in many places is below sea level. No longer able to rake in that misguiding subsidy, a homeowner could lower private premiums by re-building on stilts, as in other hurricane-prone areas.

    5. Slow justice in back-dating scandal
      Associated Press, February 16, 2007

      SEC Chairman Christopher said the scandal over suspect timing of stock option awards to executives at scores of U.S. public companies, "appears to be a pandemic of crooked accounting." In its wake, more than $5 billion in company earnings has been erased by restatements and more than 60 senior officers and directors – including 18 chief executives – have been swept from their jobs. The founder of the company that brought the graphic "Grand Theft Auto" video games into popular currency became the first CEO to succumb to prosecution. Ryan A. Brant, the former chief executive of Take-Two Interactive Software Inc., pleaded guilty; then a former top executive of the company that runs another popular feature of American culture, the Monster job search Web site, admitted that he illegally backdated millions of dollars in stock option grants. They were the sixth and seventh executives to be criminally charged in the wave of government investigations. The inquiries appear to be accelerating as prosecutors home in on cases at companies culled from the 130 or so under investigation by the Justice Department and the Securities and Exchange Commission. Yet the pace of enforcement actions in corporate America's biggest fraud of 2006 still is lagging, in the view of some critics and observers.

      Editor's note: Along with back-dating, there's trading ahead. The Financial Times, Feb 15, 2007, highlights several examples of the length some stock traders go to, to disguise their knowledge and then trading of non-public information. Which will still affect price, of course, diluting returns to those not in the know. Thanks to Phil Anderson for sending along the article.

    6. Prime English land kept idle
      Labour Land Campaign press release, February 22, 2007 via Dave Wetzel, davewetzel at tfl.gov.uk

      The Campaign for the Protection of Rural England (CPRE) published a report November 22 showing that in London alone landowners waste enough brownfield land for 60,000 new homes. Landowners always complain that they are hindered by the planning system, but the Royal Town Planning Institute (RTPI) reported that there is enough land lying unused and with planning permission to deliver 30,500 houses in London each year until 2016. The RTPI further reported that in the South East of England there is a six-year supply of land with planning permission.

    7. A decent home for $20 a month
      by Ana Maria Ortiz. Translated by Manuel Talens and Revised by Mary Rizzo, Feb 2, 2007, from Town of Marinaleda's official website; via Caspar Davis, prana4 at shaw.ca

      The average price of a second-hand house is $282,000 – equal to nine years' salary. The City Council of Marinaleda, a small town on the Spanish province of Seville gives away the land to anyone who needs a house, together with a grant, and in exchange requires that the new owner help work on its construction or pay for someone to do so. The attached cottages have 880 square feet distributed in two floors with three rooms, living room, bedroom, bathroom, kitchen and a small terrace plus 980 square feet of courtyard. Each costs the same price as two movie tickets with its corresponding serving of popcorn. The same house, but with a courtyard half the size in Villaverde, the cheapest neighbourhood in Madrid, would cost $557,000 and would take a monthly mortgage of about $2,688 lasting 30 years. Marinaleda buys or expropriates land. The mayor states, "The land to build is a necessity, a right, and it should be a common good as water or air. "Land is about 60% of the final value of a house so by giving it away, its final price is already reduced by more than half." Mayor Juan Manuel Sanchez Gordillo has won all seven municipal elections in Marinaleda since the reinstitution of democracy in 1979.

      Editor notes: Yes, Henry, there is a margin of production. A couple years ago, small towns in mid-America did the same. Reader Ed Dodson sent us this blurb from CNN/Money of 2004 December 23:

        Ellsworth, population of 2,900, is one of many communities throughout the Great Plains looking to reverse decades of population decline by offering free parcels of land. Not only that, they're also giving down payment assistance, tax rebates, breaks for small business and even the promise of high-speed Internet access. Although the federal government stopped giving away free land when it repealed the Homestead Act in 1976, cities, school districts, economic development groups and individuals in rural communities have been donating land for the cause. Some rural communities in North Dakota have similar incentives. New residents of Crosby, N.D., for example, are eligible for free land and a welcome package that includes free memberships to the golf club, hockey club and curling club, as well as $500 worth of gift certificates redeemable at local businesses.

    8. January shatters heat record
      USA Today, Feb 16 (2007)

      Earth had its hottest January ever recorded. Records have been kept since 1880. Spurred on by a waning El Nino and unusually warm weather in Siberia, Canada, northern Asia and Europe, the world's land areas were 3.4 degrees warmer than a normal January. That didn't just nudge past the old record set in 2002, but broke that mark by 0.81 degrees; records often are broken by hundredths of a degree. The USA was about normal for January. The nation was 0.94 degrees above normal, ranking only the 49th warmest January since 1895. Last year was the warmest for the USA. The Earth's average temperature in 2006 was the fifth-highest, according to scientists from NASA's Goddard Institute for Space Studies. Only 2005, 1998, 2002 and 2003 were warmer.

      Editor's note: Noel Hodson, who is working on Alanna Hartzok's UN GLTN LVT/C project, has written novels on this theme.


    4. Numbers for '06

    1. Wages in sine wave behind productivity
      by Martin Crutsinger, Associated Press in USA Today, Feb 7 (2007)

      Productivity, the amount of output per hour of work, increased in 2006 at the slowest rate in nine years – in 1997 the gain was 1.6% – while labor's wages shot up at the fastest rate in six years. Since hitting a gain of 4.1% in 2002, productivity has been slowly declining. In 2005 it was 2.3%. Last year it was 2.1%. But the rise was still nearly a full percentage point above average annual gains from 1973 through 1993. Then the country struggled to cope with a series of oil price shocks until high-tech tools such as computers began to boost worker efficiency. Last year ended on a brighter note, with productivity growing at an annual rate of 3% in the fourth quarter, a big improvement from the 0.1% drop in the third quarter. Labor's wages for each unit of output rose 3.2% for all 2006, up from a 2% increase in 2005 and the fastest rise in worker wages and benefits since a 4.2% increase in 2000. For the fourth quarter, wages fell back a bit, rising just 1.7%, following a 3.2% rate of increase in the third quarter.

      Editor's note: Most productivity gains that labor pockets go to rent. The rest swells the already swollen pay for CEOs.

    2. Oil rent breaks profit record
      USA Today, Feb 2 (2007)

      In 2006, the world's largest oil company netted $39.5 billion, making it the most profitable year for any company. It tops the last record, also set by Exxon, in 2005 by 9.3%. Exxon's annual net income soared despite fourth-quarter earnings falling 4.3% from last year's record quarter. Exxon's profit equals roughly $132 for every U.S. resident, more money generated per minute, $75,150, than 90% of the U.S. population earned all year. Exxon raked in record profits even though the price of a barrel of oil ended 2006 at $61.05 where it started – $61.04 a barrel at the end of 2005. It benefited over the summer when oil prices spiked to a high of $77.03 a barrel.

    3. Inverted bond yield, bye-gone signal?
      USA Today, Feb 13 (2007)

      The bond market is telling you they have a pessimistic view of the next 12 months. Bond traders push down long-term yields if they smell a slowdown, and the Federal Reserve pushes up short-term rates to slow the economy. And though the Fed has pushed the fed funds rate higher 16 times since 2004, current short-term rates still aren't very high historically. By comparison, the fed funds rate was 19% in July 1981. Even when their basic rate is not raised nearly so much, the yields of short and long-term bonds "invert". Normally, long-term yields should exceed short-term ones. The inverted yield curve occurs when the yields on long-term Treasuries fall below short-term yields. Every recession since 1960 has been preceded by an inverted yield curve. The indicator's only wrong signal was in 1966, when the curve inverted but no recession followed. The 30-year bond is typically 1.5 percentage points higher than the fed funds rate. The 30-year bond yield was 4.89% Monday – 0.36 below the fed funds rate. Yields on the 10-year Treasury note, often used as a benchmark for 30-year fixed-rate mortgages, have fallen below yields on six-month Treasury bills for eight-straight months, the longest such period since 1981. The curve has been inverted 11 of the past 13 months. Yet does the inversion still signal recession? As demand for long-term bonds rises, their yields fall. China's holdings of Treasury notes have swelled to $347 billion, up from $303.9 billion a year before. Oil exporters held $97.1 billion in Treasuries at the end of November, up from $79.3 billion a year earlier. Further, when the Fed raises its basic rate, the interbank overnight loan rate, that may not slow growth as much as it has in the past. Heretofore it has meant that banks must pay more for deposits; consumers pay more for loans. Now U.S. companies can often borrow overseas at lower rates. The funds rate, for instance, is 5.25%; the European Central Bank rate is 3.5%.

    4. Q4: Housing market

    • The Christian Science Monitor, Feb 7 (2007)
      By last year, a median-priced American home cost nearly eight times average annual earnings, up from about five times earnings in 1980, according to research by Merrill Lynch. The number of unoccupied homes for sale has reached a record 2.7% of all homes that are normally owner occupied.
    • CBS MarketWatch, Feb 27, 2007
      Home prices in the top 10 metro areas fell 0.8% in December, the largest monthly drop since 1991. Nominal prices in 18 of 20 cities fell in the fourth quarter compared with the third. Only Seattle (up 12.1%) and Portland (up 9.9%) managed gains. Nine of the 20 cities showed lower prices at the end of the year than at the beginning. The biggest losses in the past year were recorded in Detroit (down 5.9%), Boston (down 5.1%) and San Diego (down 4.2%). Prices had been rising at unprecedented double-digit rates during the housing boom in 2003 to early 2006.
    • USA Today, Feb 16, 2007
      Nationwide in the final three months of 2006, the median sales price for an existing single-family home rose in 71 metro areas and fell in 73 areas. The overall average fell to $219,300, down 2.7% from the fourth quarter in 2005. What goes up, must come down. In Riverside-San Bernardino-Ontario, Calif., for example, prices have soared 155.3% in the past five years. Several once-sizzling markets in Florida continued to see price declines. In Sarasota-Bradenton-Venice, prices fell 18% in the fourth quarter.
    • CBS MarketWatch, Feb 27, 2007
      While sales of existing U.S. homes rose 3% in January, the highest sales pace in seven months and the largest percentage gain in two years, sales were down 4.3% year-on-year, the biggest drop since last March. In a separate report, Standard & Poor's said national home prices fell 0.7% in the fourth quarter, the fastest decline in 14 years.


    5. Numbers for '07

    1. Jan: Housing market
      CBS MarketWatch, Feb 16, 2007

      U.S. home builders started the fewest homes in nearly a decade in January, as housing starts plunged 14.3% from December, the lowest rate since August 1997. Compared with January 2006, starts were down 37.8%, the largest year-over-year decline since early 1991. Starts fell in three of the four regions as tracked by the Commerce Department, as the Northeast enjoyed warmer temperatures and drier-than-normal weather in the first half of the month. Starts rose by about 9% in the region. Starts fell by 12% in the South, by 15% in the Midwest, and by 28% in the West. Starts in the Midwest were at the lowest level since 1991. Starts in the West fell to the lowest level since 1996. It was the biggest drop in the West since 1979. Also, building permits dropped 2.8% to 1.568 million in January, 28.6% below the same month a year ago.

      In January, the median price of an existing home sold dropped to $210,600, a decline of 3.1% from a year ago. It marked the sixth straight month that the median price has been down compared with a year ago. The January decline was the third-biggest drop in history. Thanks to lower prices, sales of existing homes rose in January by 3% from December, the largest amount in two years, the biggest one-month increase since 2005 January.

    2. As houses cool, apartments heat up
      USA Today, Feb 5 (2007)

      "From 2000 to 2004, most landlords couldn't raise rents because so many tenants were leaving to buy houses or condos. To feed that buying frenzy, about 300,000 apartments were converted to condos for sale in the past three years. Now, even with 92,000 new rental units this year, the stock is still too little to meet rising demand. Even with this year's increase, the national median rent will be $943 a month, only 60% of the median mortgage payment of $1,566. Renters will get a bit of a break in places such as Miami, Las Vegas and San Diego, where investors bought thousands of condos, hoping to flip them for a quick profit. Since the market faltered in late 2005, many of those condos have been empty, and investors are seeking tenants to help pay the mortgage."

    3. Mainstream economists still sanguine

      *  USA Today, Feb 5 (2007)
      "According to a USA Today survey of 55 economists taken Jan. 18-24, 9% said the housing decline ended in 2006, another 42% said the downturn will end in the first half of 2007, and 45% said it will bottom out in the second half."
      *  USA Today, Feb 16, 2007
      Last year "was the year of contraction," said David Lereah, the NAR's chief economist. "When we get the figures for this spring, I expect to see a discernible improvement in both sales and prices."
      *  CBS MarketWatch, Feb 18, 2007
      The number of homes entering the foreclosure process increased by 19% in January, compared with December's numbers. Compared with January 2006, the number of homes in the process is up 25%. In 2006, a total of 1.2 million homes entered the foreclosure process, 42% more than 2005.

    4. US Gov spent less, still too much
      USA Today, Feb 13 (2007)

      "The four-month deficit for the budget year that began Oct. 1 totaled $42.2 billion, down 57.2% from the same period in fiscal 2006. Revenues were up 9.7%, climbing to $834.1 billion, a record for the period from October through January. Government spending was up only 2.1%, but set a record for the period at $876.3 billion."

      Ben Bernanke, who's now Federal Reserve Chair, in a speech before the National Economists Club, Washington, DC, in 2002 on November 21, titled "Deflation: Making Sure "It" Doesn't Happen Here", told how to create inflation. "The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation." Thanks to his speech, bond desks nicknamed him "Helicopter Ben", noted Plexus Mauldin, Volume 2 No 1, 2 January 2007.

      Dr. Mason Gaffney, UC-Riverside Prof, echoed Bernanke's explanation of inflation (February 4): "As for inflation, though, the main cause of it is the failure of governments to collect enough taxes, so they resort to deficits, financed by central banks issuing new money. So LVT, properly used, should put an end to inflation." Meanwhile ...

    5. Inflation in January
      USA Today, Feb 21 (2007)
      In January consumer prices rose 0.2%, while core prices, which exclude food and energy costs, climbed 0.3%, largest gain in seven months. Energy costs slid 1.5% in January, partly reversing a 4.2% gain in December. But medical costs – thanks to prescription drugs and doctor services rising at the fastest clip in 25 years – rose 0.8%, steepest increase since a matching 0.8% gain in 1991 August. And food costs grew 0.7% in January, biggest increase since 2005 April. Consumer prices rose 2.1% from January a year ago, while core prices rose 2.7% over the same 12-month period. The Federal Reserve said it will raise interest rates to tamp down price pressures, rather than refuse to lend new money to the US Government that never existed before.

      Editor's note: Because the prices for copper and zinc have inflated, some clever people melt down pennies and sell the metal. The US Mint, late last year, made melting down pennies and nickels illegal. No one has yet made it illegal for the US itself to over-issue new money, making possible the inflation in the first place.


    6. Letters to the editor

    • by Sue Walton
      I blew John Kelly's middle initial (it's L not M; he's a speaker at this summer's CGO conference) and then someone else blew the hotel name for EEA conference – it was the Crowne Plaza, not the Crowne Sheraton.
    • by Green Budget Germany Team
      Our invitation to the 2007 Brussels Tax Forum, "Taxation for sustainable development", 19-20 March 2007, had a typo. The link in our previous mail was incorrect; please accept our apologies. More information can be found on the Brussels Tax Forum online.


    7. Likeable link

      School of Cooperative Individualism update
      by Ed Dodson, ejdodson at comcast.net, February 04, 2007

      The SCI continues to expand. A few new historical documents: In the early 1900s, one Ernest Crosby compiled a book of quotations on the land question, providing complete citations for each quotation included in his volume, The Earth-For-All Calendar. Many quotes included in this book are familiar but their origins have been lost in their reprinting. Visit the SCI section on "The Land Question" to find many new, important observations by important historical figures. Roy A. Foulke's professional life was spent with the Wall Street firm, Dun & Bradstreet, where he became a vice president, retiring in 1961. Foulke produced several pamphlets, published by Dun & Bradstreet: "Land In Our National Economy" then "A Study of the Concept of National Income," and "An Inquiry Into the Purpose of the Production of Wealth." The texts of these pamphlets were followed by extensive sets of data on the U.S. economy. All three of the above pamphlets (excepting the appended data) are now available in the SCI library. The insights of this experienced market analyst are still valuable.


    8. What You Can Do

    • Get-well cards
      by Sue Walton, Sns at swwalton.com, February 4, 2007

      Mildred Gross is a long-time Georgist who with Everett was honored for their life-time achievement at the 2000 CGO Conference. Mildred's left foot has seemed to be getting weaker and on Jan 17, she fell and broke her left arm near the shoulder. A metal plate was installed the next day.  On Jan 23, she was moved to a full nursing care. She would love receiving cards  (945 Longwood Drive, Crete, NE  68333)

    • Attend Fed Reserve Conference
      by Matthew W. Ashby, Senior Community Affairs Specialist Legal, Public and Community Affairs The Federal Reserve Bank of St. Louis

      Exploring Innovation Conference, May 2-4, St. Louis, Missouri, US. A PDF of the invitation brochure may be viewed online. The conference web site – http://www.stlouisfed.org/community/innovation/ – has been updated and online registration is open! The early bird fee is reduced to $275 until March 29. Please contact me if you'd like to receive a PDF advertisement for use in a newsletter or on a web site.

      Editor's note: A couple of Georgists – yours truly and Tom Gihring – will be presenting. We plan to network with Al Katzenberger and other area Georgists to further their fine work in the St. Louis region.

    • Apply for grant
      via Chuck Metalitz

      The Funding Exchange has an Emergency Fund for Seizing Strategic Opportunities through which qualifying organizations may receive grants of up to $5,000 in support of a specific social justice project, event or initiative. This fund makes grants in response to political crises or opportunities, when a small amount of money can make a difference in educating or mobilizing for social change under time-sensitive circumstances. For the purposes of this fund, 'emergencies' are defined as instances when the organization could not have foreseen the need for the activity but is compelled by the moment.

    • Watch Georgist playwright
      NewsBlaze

      March 1 to 25, 2007, Theater for the New City presents "The Further Adventures of Uncle Wiggily: Windblown Visitors. Laurel Hessing, a verse play with music for young audiences that tells of the experience of dislocation from New Orleans by Hurricane Katrina as an animal story. The cast of 35 includes ten children and is headed by Clara Ruf Maldonado as Merilee/Merilee Rabbit. Clara, age 9, has played the juvenile lead in ABT's "The Nutcracker" at Lincoln Center these last two years. Christopher Grant, who also appeared in ABT's "Nutcracker", plays her companion, Johnny Squirrel. As a child, Ms. Hessing spent summers in Free Acres, a Single Tax Community founded on the principles of Henry George, located in the Watchung Hills of central New Jersey.


    9. At the Margin: Quips and Quotes

    • Answers given by 2nd grade school children to the following questions:

      - Why did God make mothers?

      1. She's the only one who knows where the scotch tape is.
      2. Mostly to clean the house.
      3. To help us out of there when we were getting born.

      - What did Mom need to know about dad before she married him?

      1. His last name.
      2. She had to know his background. Like is he a crook? Does he get drunk on beer?
      3. Does he make at least $800 a year? Did he say NO to drugs and YES to chores?

      - What's the difference between Moms & Dads?

      1. Moms work at work and work at home & dads just go to work at work.
      2. Moms know how to talk to teachers without scaring them.
      3. Dads are taller & stronger, but Moms have all the real power 'cause that's who you got to ask if you want to sleep over at your friend's.

      - What does your Mom do in her spare time?

      1. Mothers don't do spare time.
      2. To hear her tell it, she pays bills all day long.

    • "Only those who will risk going too far can possibly find out how far one can go."
      – T.S. Eliot


    10. Publication affairs

    Contributing to this issue:

    Phil Anderson, Bill Batt, Ed Dodson, Alanna Hartzok, Chuck Metalitz, Paul Metz, Mark Monson, Heather Remoff, Walt Rybeck, Sue Walton, Dave Wetzel.

    Editor: Jeffery J. Smith Copy Editor: Enzo Piccone Assistant Editor: Caspar Davis Archivist: Stewart Goldwater Owner: The Robert Schalkenbach Foundation Founder: Adam Monroe Publisher: Hanno T. Beck

    Send your news and other interesting material to the Georgist News at jjs at geonomics.org or gn at progress.org. The deadline for the next issue is March 25.

    About The Georgist News

    The Georgist News, a project of the Robert Schalkenbach Foundation, is an email newsletter brought to you free of charge. Its purpose is to keep you updated on the latest news, citations, events, and initiatives of relevance to people who, like Henry George, seek a world free from special privilege and the causes of poverty.

    Do you know someone who'd enjoy reading the GN? Please forward them an issue and ask them to subscribe, or send us their eddress. As always, it's free. Thanks.

    The Georgist News is also available on-line at http://www.georgist.com/


    The Georgist News, Volume Nine, Number Nine, March 1, 2007