Welcome to the October issue of The Georgist News.
Welcome to new subscribers Michael Hudson, a radio commentator (see
below) and Jacob Kestner. Our archivist, Stewart Goldwater asks, What is
Rent? (September 1): "It occurred to me while reading this month's GN
(where there are a lot of references to rent) that a new reader --
perhaps someone who just happened to "bump into" the website -- might
wonder just what we're talking about. So how about we carry a link in
every issue to: http://www.henrygeorge.org/rent1.htm or something
similar?
This issue is less newsy than past issues. Heck, if a story is a month
old, can it still be news? And our movement does have a venue for daily
news, The Progress Report. For new news -- about issues relevant to
advancing economic justice -- visit that site daily. See some of its
headlines below.
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CONTENTS:
1. Good Press: CBC on Greens; Guardian on LibDems; NYT on Tax Shift;
Hudson on the radio
2. News: State real estate venture fails; Land grab in Cambodia;
Euro ministers worry over the dollar
3. Numbers: Foreclosures up; House (land) prices down; Gold up
4. Movement Progress: 2008 CGO conference; Smithers Project
5. Letters: Subsidize landowners; School tool; Revised PowerPoint;
Aussie radio
6. Likable links: Progress Report; Tax Shift list; Guardian
7. What You Can Do: Comment on New Statesman; Call for Papers
8. At the Margin: Quips and Quotes
9. Publication affairs: Contributors, About the Georgist News
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1a. Good Press:
CBC, a biggie, and others tell public about Green Party platform
Canada's major media covers the current campaign of the Green Party
north of the US border, paying attention to key components of the
party's platform, such as shifting taxes off the value one creates, onto
the value one takes. Their leader and ours, Frank de Jong, runs an
exciting campaign in Ontario. See the Progress Report story cited below
in Likable Links. Lots of information available at www.gpo.ca. And there
is a great interview with Frank, in which he makes compelling arguments
for LVT, available as an MP3 file at
http://www.canada.com/ottawacitizen/features/editorialboard/index.html
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1b. Good Press: Guardian online covers UK party support for LVT
By Mark Braund, guardian.co.uk/commentisfree, Sept 17, 2007
A Liberal Democrat report affirms the party's "long term commitment to a
system of land value taxation" in respect of domestic property. LibDem
Tony Vickers has written an excellent short book called Location
Matters: Recycling Britain's Wealth. Establishing such an alternative
source of public revenue would enable reductions in economically
dis-incentivizing taxes on incomes, profits, trade and consumption.
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1c. Good Press: Tax Shift: One Answer to Global Warming
By N. Gregory Mankiw, professor of economics at Harvard, ex-adviser to
President Bush, current adviser to Mitt Romney, NY Times, September 16,
2007
Basic economics says that when you tax something, you normally get less
of it. So if we want to reduce global carbon emissions, we need a
global carbon tax. Q.E.D. Natural aversion to carbon taxes can be
overcome if the revenue from the tax is used to reduce other taxes;
e.g. a tax of $15 per metric ton of carbon dioxide, together with a
rebate of the federal payroll tax on the first $3,660 of earnings for
each worker.
Editor's Note:
Taxing pollution -- one use of Earth -- could lead to taxing occupation
-- another use of Earth. Mankiw also predicted an 18-year period in the
land price cycle, the same length found by Homer Hoyt and touted by Fred
Harrison. Mankiw also sent a cordial email to this editor and by regular
mail, a hard copy of his cycle study.
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1d. Good Press: KPFA again interviews Hudson
By Michael Hudson, September 26, 2007
I was interviewed on KPFA on Sept. 26 at 1 PM. I talked about the Fed
vs. the Treasury as affects money creation, and on Alan Greenspan's Junk
Economics as lobbyist for the banks. You can access the interview as a
podcast on KPFA's website for "Guns and Butter".
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2a. News: Build it and they will come? Maybe
By James Drew, Baltimore Sun Reporter, September 21, 2007
The Rocky Gap Lodge & Golf Resort in Allegheny County was built in a
3,000-acre state park; the state spent $16 million towards its
construction. The resort has not had much of an effect on the area's
economy beyond the area residents who work there, 175 and 300 depending
on the season. It's a playground for the political figures down-state
and is in the red. The state could lose an $8.5 million loan and $3.1
million owed to the Department of Natural Resources for ground rent.
Losses should not rise; the bondholders can't tap state tax revenue to
recover their money.
Editor's Note:
An example of how putting up a building does not necessarily raise land
value. Demand for the location must exist before a new building can turn
a profit. Sometimes, even if people aren't yet clamoring for a spot,
development might assemble ambient value, draw it to that location, the
way a windowpane might turn humidity into moisture, but the relevant
demand to satisfy must exist first. It's also another example of why it
might be more efficient to narrowly restrict discretionary spending by
politicians and instead share public revenue -- from recovered land
rents -- among residents.
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2b. News: Land grabs continue in Cambodia
By NY Review of books, http://www.nybooks.com/articles/20650; via Bill
Batt and Richard L. Biddle, Director of the Henry George School,
Birthplace, and Museum in Philadelphia.
There is a bit of oil within the boundaries of Cambodia, and the Chinese
are hard at work securing that too. One scholar, François Mangin, has
estimated that between 1993 and 1999, the Cambodian government sold
concessions to more than a third of Cambodia's most productive land,
mainly to foreign companies engaged in commercial exploitation of
forests, mineral resources, agriculture, fisheries, and tourism.
The proceeds from land confiscation — which primarily involves the
pillage of Cambodian forests for Chinese exploitation — have been used
to finance the prime minister's party and his security force, which is
the only well-equipped military unit in the country (other brigades are
employed in the transport of timber). Money acquired dishonestly is
laundered in nine casinos now operating in Poipet, a town near the Thai
border. Western governments and international aid organizations,
including the World Bank and Asian Development Bank, are well aware of
this phenomenal corruption.
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2c. News: Dollar's Retreat Raises Fear of Collapse
By Carter Dougherty, The International Herald Tribune, 13 September
2007; via Paul Martin, who sends dozens of fascinating articles.
Finance ministers and central bankers have long fretted that at some
point, the rest of the world would lose its willingness to finance the
United States' proclivity to consume far more than it produces -- and
that a potentially disastrous free-fall in the dollar's value would
result.
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3a. Numbers: Homeowners can't make mortgage payments
By the Associated Press, Sept 18, 2007
The number of foreclosure filings in August jumped 36% from July and
more than doubled versus 2006 August. Homeowners are increasingly unable
to make timely payments on their mortgages or sell their homes. August's
total represents the highest number of foreclosure filings reported in a
single month since tracking began two years ago. The number of bank
repossessions jumped to 42,789 in August, compared to 26,842 in July and
20,116 a year earlier. Places people had been flocking to and where home
sites had inflated the most -- Nevada, California and Florida -- had the
highest foreclosure rates in the country last month.
3b. Numbers: New Home Construction at Slowest Pace in 12 Years
By Fox News Network, September 19, 2007
Construction of new homes fell in August to the slowest pace in 12
years. The National Association of Home Builders reported that in
September its index of builder confidence fell to 20, tying the lowest
level on record.
3c. Numbers: Unsold homes at 18-year high
By Rex Nutting, Washington bureau chief of MarketWatch, Sep 25, 2007
Home resales slipped for the sixth month in a row in August. With sales
of existing homes falling 4.3% to a five-year low, inventories of unsold
single-family homes rose to an 18-year high.
3d. Numbers: Decline in US home prices accelerates
By Vinnee Tong, AP Business Writer, Sep 25, 2007
The Case-Shiller gauge of home prices fell for the 12th straight month
in July. Its index of 10 U.S. cities fell 4% from a year ago. That was
the biggest drop in 16 years, since 1991 July. Their broader index of 20
cities fell 3.9% in July over last year, with 15 of 20 cities reporting
that prices fell. The largest declines are in the Rust Belt and in the
formerly boom towns along the coasts. Prices are holding up in the
Pacific Northwest and in areas of the South.
3e. Numbers: Both new home sales and median sales price plunge
By Rex Nutting, Washington bureau chief of MarketWatch, Sep 27, 2007
Sales of new homes dropped 8.3% in August to a seasonally adjusted
annual rate of 795,000, the slowest sales pace since June 2000. Sales
are now down 21.2% in the past year.
The median sales price fell 7.5% to $225,700 compared with a year
earlier, the largest year-over-year decline in 37 years. The listed
price does not take into account the value of non-monetary incentives,
such as upgrades, free vacations, and new cars.
Freshly completed homes now represent 34% of all homes on the market,
the highest percentage in this business cycle.
3f. Numbers: Gold rallies to 27-year peak as dollar tumbles
By Polya Lesova, MarketWatch Sep 28, 2007
Traders digested a mixed bag of economic reports, including a plunge in
U.S. new-home sales and prices.
The dollar dropped across the board, sinking to yet another fresh record
low against the euro, which began trading in 1999 January.
The dollar's tumble against other major currencies boosted demand for
gold. For December delivery, the precious metal surged $10.10, or 1.5%,
to end at $750 an ounce on the New York Mercantile Exchange. The
contract earlier hit an intraday high of $752.50, a new 27-year high.
The record intraday all-time high for a benchmark gold futures contract
on Nymex stands at $875 from 1980 on Jan. 21.
Also on Nymex, other metals prices were mostly higher. December silver
rose 27.50 cents to end at $13.920 an ounce, and October platinum surged
$30.50 to finish at $1,395.20 an ounce. December palladium rose $4.20 at
$351.95 an ounce, while December copper edged down 0.8 cents at $3.64 a
pound.
Editor's Note: Watching reality conform to theory -- the predictions
based on the 18-year land price cycle explored by Georgist economists
-- is thrilling. However, the thrill is tempered by knowing that this
unraveling economy does hurt many innocent bystanders. Some day,
residents must learn to forgo speculating in real estate (locations,
actually) and instead expect to receive a fair share of the value of the
land beneath their society.
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4a. Movement Progress: Trains & Planes & Interstates
By Sue Walton, phone 847-475-0391; efax 775-248-8630;
email sns at swwalton.com, September 22, 2007
The 2008 CGO conference is quickly shaping up. We've already made
arrangements with Amtrak for discount train travel. Our hotel is just
ten minutes from Kansas City International Airport which is served by
all of the major airlines including Southwest. Our hotel is located just
off Interstate 29 which is parallel to Interstate 35. The nightly rate
of $72 plus tax will include a free continental breakfast. Please watch
this space for monthly updates.
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4b. Movement Progress: Smithers Project
By John Fisher, September 9, 2007
The completed Smithers Property Tax Shift Project shows adjustments and
improvements are possible within the current case study. The Smithers
Project can be applied to many of today's economic, social and
environmental problems (see Rationale section) across Canada. More
information, including the 48 pages showing data on each site in
Smithers, is available from John Fisher. Smithers Project Structure:
1) Coordinator, John Fisher, Box 122, Rodney, ON, N0L2C0, Canada;
PH 519-785-0203; jmfisher at execulink.com
2) Support Panel, Ted Gwartney, Frank Peddle, Leslie Ford,
Bill Goodacre, Donna Morton, Zane Parker, Joshua Vincent, Bill Batt,
Jamie Spinney
3) Research and analysis by Henry George Foundation of America
(Philadelphia), Joshua Vincent, president
4) Financial support ($500) from the Henry George Foundation of Canada,
John Fisher president.
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5a. Letters: Subsidies go straight to the landowner
By Carol Wilcox, September 1, 2007
A couple of excerpts from the minutes of a recent Labour Land Campaign
meeting: The hardest pressed farmers, e.g. dairy farmers, still had to
pay £70 an acre in rent. The CAP (European Union Common Agricultural
Policy) subsidies are also around £70 per acre.
Mark Wadsworth, a valuable member of the LLC because he is a tax
advisor, reported an experience from work. His client was selling for
£5m a factory site which had potential problems with contamination.
Under the letter of the law, the person who has caused the pollution is
not allowed to claim the relief. The purchaser said that the remediation
would cost £500,000 and wanted to reduce the price by that amount. Mark
pointed out that the purchaser could claim full tax relief on 150% of
the cost, so the tax break would reduce the cost to the purchaser from
£500,000 to £275,000 (in the ordinary course of events, such expenditure
is capital expenditure so there is no tax relief at all). The price
would be reduced by up to £275,000 (depending on what it actually cost).
So clearly, the person who had caused the pollution, Mark's client, was
benefiting from the tax break -- instead of having to reduce his price
by £500,000, he only had to reduce it by £275,000.
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5b. Letters: Meets student's needs
By Jacob Kestner, September 9, 2007
Thank you. I'm going to be attending the School of Economic Science's
[http://www.schooleconomicscience.org/] course on Henry George, so very
interested in this. Can I subscribe, please? Thank you.
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5c. Letters: Updated presentation on the global economic situation
By Ed Dodson, ejdodson at comcast.net, September 24, 2007
I recently updated and revised the PowerPoint presentation I put
together supporting Fred Harrison's forecast of the coming global
economic "bust" in 2010. If you can make use of this material, I am more
than happy to send you a copy. What does the most recent data indicate?
My conclusion is that the stresses created here in the U.S. by
dysfunctional land markets, a tax structure that is heavily weighted in
favor of rent-seeking activities, and a national debt fast approaching
$10 trillion are coming to a head. Personal bankruptcies and home
foreclosures are at record highs.
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5d. Letters: Last month's issue
By K2 (Karl Fitzgerald), September 02, 2007
Jeff, top stuff on the newsletters you write! We will be mining them for
all they are worth on our new Aussie radio show, The Renegade
Economists. I will send you a link when we get the podcasts up, but you
can stream it from www.3cr.org.au -- 5.30pm Wednesdays Oz time -- our
first show this week. Great stuff again.
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5e. Letters: New Geo-Reform Group
By John Massam, john.massam at multiline.com.au, 46 Cobine Way Greenwood
WA 6024 Australia Tel. +61 ( 0 ) 8 9343 9532 Mobile 0408 054 319;
September 09, 2007
Please note this campaign, The Australian Taxation Reform Group Inc. for
abolition of all taxes except a 1 per cent transaction tax, at
http://www.onefairtax.org.au/
Ass't Editor's Note:
I don't understand how this is geoist. Most tax reduction campaigns are
simply greedy, unless they advocate shifting taxes off productive things
onto rent. For instance, progressive income taxes are far from perfect,
but they are the best approximation of taxing rent that has been
implemented to date, and actually led to greater economic equity in the
50's and 60's than at any other time in modern history.
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6a. Likable link: Each day, The Progress Report
Do you read The Progress Report daily? It's a great way to keep
up-to-date with news from sources everywhere. Some articles from
September include:
* "Green Party Platforms Get Good Press"
* "Land Grabbers Know No Limits"
* "Latin America's Surprising New Eco-Warriors"
Read them and more at www.progress.org.
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6b. Likable link: Tax Shift list
Not exactly a link, but Wyn Achenbaum sends articles from the mainstream
press that highlight Georgist understanding, if you'd like to receive
her mailings (wyn at achenbaum.com). One from the New York Times (Sep 2,
2007) had: "Brokers estimate that an apartment with a view can cost 10
to 20% more than a comparable apartment that looks out on an interior
courtyard or straight into another building."
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6c. Likable link: Guardian September
By David Brooks, radical at aapt.net.au , September 9, 2007
Please find below the Guardian for September 2007. Enjoy the reading.
Please pass on to friend and foe alike. Freedom is the only end.
http://people.aapt.net.au/~radical
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7a. What You Can Do: Comment on New Statesman
By Stewart Goldwater, September 1, 2007
The New Statesman Land Reform Campaign
http://www.newstatesman.com/landreform/lrindex.htm
invites your comments. View previous comments at:
http://www.newstatesman.com/landreform/lrcomments.htm
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7b. What You Can Do: Call for Papers - Journal of Urbanism
By Elif Tural, Editorial Assistant, journalofurbanism at asu.edu,
via Trevor Acorn
The Journal of Urbanism will not be limited to articles that advocate
any particular positions or ideas. It will focus on research that
investigates the theories, concepts, methods, and empirical results of a
number of overlapping and international movements that seek to establish
a sustainable approach to urban form: Urban Regeneration, Livable
Communities, Transit-Oriented Development, Walkable Communities, Urban
Morphology, and others. The journal will be a quarterly publication
consisting of peer-reviewed articles only. Topics of interest include:
* Policies designed to promote urbanism: assessments of outcome
* Affordable housing, new urbanism, and smart growth
* Environmental performance of low vs. high density development.
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8. At the Margin: Quips and Quotes
If harmless actions are the opposite of harmful nonactions, why are
shameful and shameless behavior the same and pricey objects less
expensive than priceless ones?
- By Richard Lederer in Crazy English: the Ultimate Joy Ride Through
Our Language
Few have at once both thought and capacity for action. Thought expands,
but lames; action animates, but narrows.
- Goethe
We must do what we conceive to be the right thing and not bother our
heads or burden our souls with whether we're going to be successful.
Because if we don't do the right thing, we'll be doing the wrong thing,
we we'll be part of the disease and not part of the cure.
- E.F. Schumacher
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9a. Publication affairs: Contributing to this issue
Richard Biddle, David Brooks, Ed Dodson, John Fisher, Jacob Kestner,
Stewart Goldwater, Michael Hudson, Paul Martin, John Massam,
Mark Monson, Sue Walton, Carol Wilcox.
Editor: Jeffery J. Smith
Assistant Editor: Caspar Davis
Copy Editor: Enzo Piccone
Archivist: Stewart Goldwater
Owner: The Robert Schalkenbach Foundation
Founder: Adam Monroe
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 October 25.
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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
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Do you know someone who'd enjoy reading the GN? Please forward them
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The Georgist News is also available online at
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The Georgist News, Volume Ten, Number Four, October 1, 2007