Time to rant about economics and politics

[tcpip]

It's been a while since I've had a jolly good rant about politics and economics and related subjects and this is as good as time as any. So let me get stuck into three favourites; land and housing prices, religion and the NSW government, and finally, the environment and vested interests.

Firstly, let me draw your attention to the collapse of the UK housing market. A few days ago Barratt Development has announced cuts of 1200 jobs in attempt to crawl out the £1.66bn debt it's found itself in - and it's not an isolated incident. Housing prices have been falling for months now in the the UK, with expectations that a million homeowners could end up in negative equity. Why does this occur and why now? Because the value of land is hopelessly inflated, fuelled by speculation in what Winston Churchill accurately described as "the mother of all forms of monopoly", a fact well recognised by almost all economists. Many months ago, Alan Moran of the Institute of Public Affairs, commented correctly that "land based wealth is an illusion" and condemned government rationing of useful land as a restriction on supply. He's right of course, but regrettably typical of the IPA he lacks the intellectual and moral courage to point out that all landlords - public and private - reduce supply. Hence the need for a massive increase in land taxes with an equivalent reduction in taxes on productive goods and services. As that most heroic lawyer (yes, they do exist) Clarence Darrow deemed to say: "The 'single tax' is so simple, so fundamental and so easy to carry into effect that I have no doubt that it will be about the last land reform the world will ever get."

Sometimes Green Left gets it right, such as their article on Religion and Socialism. However these principles have not been embodied in the legislation by the NSW Labor government for World Youth Day 2008 which carries fines of up to $5500 for those causing "annoyance" and "inconvenience" to participants. Apropos, a student who smuggled out a Eucharist wafer has been receiving death threats. Back in NSW however, it is clear that with the decision to go ahead with electricity privatisation (contrary to public opinion) and this fundamental breach of civil liberties and the right to protest, that Premier Morris Iemma simply has to go. Fortunately, there seems to be some moves against him.


In recent weeks, the Garnaut Review has been released, an independent assesment of the effects of climate change to the Australian government and commissioned by the Australian Commonwealth government and the State and Territory governments. Following on with this is the aim of the G-8 nations to halve carbon emissions by 2050 (perhaps too little, too late). Whilst all this is happening, OnlineOpinion publishes an article entitled The UN climate change numbers hoax, where the authors cannot understand why review commentary on the IPCC working groups was, in their eyes, minimal (maybe they agreed with it?). I took the opportunity to show that one of the authors (Tom Harris) one held dual positions as the Executive Director of Natural Resources Stewardship Project whilst holding a position as Director of Operations for the registered energy-lobbying firm, the High Park Group. Further, Mr. Harris has been on the public record advocating a campaign to deliberately create chaos and confuse everyone about climate science. In response to this, the chief editor Graham Young has deleted these true and directly verifiable comments three times. If there was ever any doubt of OnlineOpinion being a highly-biased in favour of the AGW denial industry, it is certainly all over now - and others have noticed.

Comments

[strangedave.livejournal.com]

The sad decline of Online Opinion has been noted. What is it about climage change denialism that causes such urge for the rats to run towards this particular sinking ship? I was particularly disappointed when Ian Plimer, whose demolition of creationism Telling Lies for God I much enjoyed, leapt on board the denialist clueless train.

[tcpip.livejournal.com]

I suspect there are a number of reasons.

Firstly there is the empirical claim of the medieval warm period having comparable temperatures to the current environment. Which is true, but the rate of increase in the twentieth century is far more significant and there's the problem of our existing infrastructure (especially agricultural infrastructure) being geared towards a particular climatic environment.

Secondly there is simply those with strong vested interests and their paid shills who simply can't tolerate the idea of having to do things differently. Sometimes people see "a 50% reduction in carbon" and think "that'll wreck the economy". Such claims indicate a poverty of imagination.

In Dr. Pilmer's case I think he just needs to research more. Climatology and geology have often been in some conflict in this subject, not the least by the vagaries in paleoclimatology. His claim that there is no correlation between carbon dioxide levels and temperature is certainly contrary to the available direct evidence.

[jonathankorman.livejournal.com]

What I find baffling is what motivation climate change deniers imagine scientists to have in “inventing” global climate change.

Creationists at least have a psychology I can apprehend. They think atheistic scientists want to be free of God's moral strictures, and have thus invented an argument that we're only animals. That's stupid, but is at least a belief in a meaningful motivation for their opponents.

But climate change deniers don't even seem to have that.

BTW, I am embarrassed that I've never been exposed to the idea of simple land value taxation. It's an intriguing concept.

[tcpip.livejournal.com]

There is a body of opinion that climate change scientists are a secret cabal of socialists seeking to control good Christian folk with the witchcraft of AGW..

WRT to land value taxation it's a model I've been trying to break for years. The fact that I have been unable to demonstrates in my mind how incredible robust it is.

[jonathankorman.livejournal.com]

There's a significant edge case which inspired California citizens to vote for a ballot initiative to sharply limit property taxes and thereby fubar the state budget forever.

Say you have a little old lady living in a small cottage she and her husband bought for a song in 1965. Since then, the value of land in her neighborhood has soared, but her pension hasn't changed, so she cannot afford the taxes on her house. Sure, she could sell that house and move, but uprooting her like that isn't so good: it disrupts her and the community.

But I can think of ways to address that. You could make a rule that says that if you own a single plot of land, and you live there, then you can defer taxation on increases in its value beyond the growth in the consumer price index, and pay those taxes at the later time when the property is sold. Or something like that.

There's also taxes I like as tools of policy, primarily in order to make costs visible in the market that otherwise would be negative externalities: taxes in carbon, tobacco, sugar, et cetera. But it would be nice to set these taxes at levels that meet our policy needs, rather than to meet our revenue needs.

Plus I still like progressive income tax, though it sure would be nice to tax folks only on their income above about $60k ...

[tcpip.livejournal.com]

The "asset rich, income poor" issue is raised (and has been raised for decades!) and whilst it was popular once to discount the "little old lady" as an appeal to sentimentality (as a pro-land tax independent South Australian MP once did), I think it is important to find ways to accommodate such issues.

The easiest initial mechanism is subdivision. If Grandma Jones has a big block of land in a area that's now developing quickly, she can sell off parcels of it. If, for whatever reason, the land becomes extremely valuable and it is not longer plausible to hold onto a old shack when the place should really have a (insert: block of flats, factory, harbour etc) then I think that simple economics would have to take its course.

[taavi.livejournal.com]

I suspect Plimer is a bit of a sucker for anyone who claims to be a "sceptic".

[strangedave.livejournal.com]

Oh, and you know about the problems with Fannie Mae and Freddie Mac in the US? The housing bubble continues to drag everything down with it - if the two FMs really seriously go down, it will be pretty damn hard to get a mortgage at all in the US.

[tcpip.livejournal.com]

You mean this?

Yeah, it's a disaster. "What taxpayers need to understand is that Fannie and Freddie already practice socialism, albeit of the dishonest kind. Their profit is privatized but their risk is socialized."

(Heh. Souns like the National Party, eh?)

Fred Harrison did an excellent Youtube video on a related topic.

[brockulfsen.livejournal.com]

I never did get my head around the openly national socicialist Country Party changing their name to the National Party.

Yes the lower case letters were deliberate despite the connections, especially in Queensland.

[tcpip.livejournal.com]

In Western Australia there was a three way split.

There was those who opposed the transformation, who remain the Country Party.

There were those who supported it, who became the National Party.

And there were those, centered around the local leader Hendy Cowan (a decent conservative, one you could reason with), which called itself the National Party of Western Australia.

It was the later group which eventually became dominant.

[roadriverrail.livejournal.com]

The catchphrase du jour on it is "socialism for the rich, capitalism for the poor."

[tcpip.livejournal.com]

Ahh, it's great for labour productivity and it's comfortable for those with power and money!

[roadriverrail.livejournal.com]

On a philosophy-of-economics level, I've been starting to wonder if perhaps capitalism, at least as it's so commonly considered by most people, carries adverse effects in an environment where success encourage centralization. Here in the states, our banks are becoming ever-centralized, and now if one falls, the phrase "too big to fail" comes up. I hate that phrase, but it's got a certain kernel of truth to it, in that if one of these banks badly goes under, we can kiss a wing of the economy goodbye.

So what do we do, then? We're ransomed. We end up having to bail their asses out because the alternative is worse, and we get socialism for the rich and capitalism for the poor. It seems that either businesses need to not be able to get that big or the public deserves the right to become a stakeholder.

Granted, Fannie Mae Freddie Mac are examples of really bad socialism, having been government social programs that were then allowed to have real shareholders. Other companies, however, really have crawled themselves into positions of making us share their fates.

[tcpip.livejournal.com]

Perhaps Joseph Schumpeter was right after all.

[roadriverrail.livejournal.com]

Hm. Looks like I have someone new to read, then.

[tcpip.livejournal.com]

Schumpeter is interesting. He sees a development of capitalism to the point where the key positive characteristics (competition, entrepreneurship) become limited by institutional powers, especially (ironically) large capital which seeks stability more than profit and mass democracy in the welfare state. The two elements merge in advanced capitalism thus leading to minor variations between social democratic and liberal democratic parties.

And excellent follow-on to Schumpete is Habermas' Legitimation Crisis (although the original German title - transliterated as "Structural Problems in Advanced Capitalism" is superior).

[razorgirl-au.livejournal.com]

"Back in NSW however, it is clear that with the decision to go ahead with electricity privatisation (contrary to public opinion) and this fundamental breach of civil liberties and the right to protest, that Premier Morris Iemma simply has to go. Fortunately, there seems to be some moves against him."

He has been very disappointing.

In other news, there are alternative ways that people can protest against WYD in a manner that is:

a) Funny
b) Actively takes steps to support a good cause

...

World Youth Day Protest Give to the Taronga Zoo Lion Exhibition. "Zoo Parent sponsorship is 100% tax deductible... And for every $1 donated, the NSW State Government contributes a further $3, so your contribution becomes even more valuable." Which makes donating to this cause even funnier, 'cause the NSW will support your protest! : D Sponsor a Lion today!

Unfortunately, the minimum donations you can make is for $85, but if you get some friends together, it's very "doable".

The only question now is what to call our protest group?

* Roman Entertainment?...
* Colosseum Support Group?..
* Catholicism Wow?...

I like option 2 myself.

: )

[tcpip.livejournal.com]

That's pretty funny. :)

There is the "offensive" t-shirt competition.

http://remogeneralstore.com/pages/domBrowse.cfm?theme=122

I liked the "Bugger The Pope. Get Your Own Back". But you'd have to been friends with kids who went to Christian Brother's College (aka "City Bum Cleaners" as we used to call them) to truly appreciate it.

[nicked-metal.livejournal.com]

Oh crap, I didn't even call. I'm sorry.

Next weekend is a write-off...

Saturday August 2?

[tcpip.livejournal.com]

No you didn't ;-)

No problem, Saturday Aug 2. It's worth it, I promise you :-)

[redcountess]

Reading PZ Myers post, it's not the student who originally took the wafer who is receiving the death threats but Myers, and while I don't support the threats of violence, he quite frankly *was* disrespectful in his "only a cracker" piece. I'm still very much Agnostic but it seems to me that Atheists are going out of their way to be offensive to believers whether they follow a particular religion or not.

[tcpip.livejournal.com]

Umm.. No. The student, Webster Cook. received death threats. In that context, I can certainly understand Prof Myer's response "it's only a cracker", especially when this is the justification.

"It is hurtful," said Father Migeul Gonzalez with the Diocese. "Imagine if they kidnapped somebody and you make a plea for that individual to please return that loved one to the family."

Nobody has been kidnapped. But a real person (not a metaphorical one) has received death threats.

[grailchaser.livejournal.com]

The Green Left got it right?! Now there's a rarity.

I used to quite enjoy that rag till I noted in an article that as a Detention Officer at Woomera, I was supposed to be equipped with both a cattle prod and a shotgun. I complained to my supervisor that I was underequipped and he directed me to the riot equipment officer who couldn't find any of these weapons either. We were most put out. :)

It was a watershed moment for me, allowing my cynicism to extend to all sides of mass media.

[tcpip.livejournal.com]

Well, I went to Woomera in mid-2001 and witnessed water cannon used against inmates after the news cameras left.

I don't think I ever saw a detention officer with a shotgun however.

Some land tax questions

[taavi.livejournal.com]

Would a land tax be levied annually on the value of land, or only levied at the point of sale? The latter seems more reasonable to me as taxing unrealised income seems a bit dubious - but most of the arguments you link to are to the former. Wouldn't this force people to e.g. borrow against or sell their land or assets if they were caught in a boom and had to pay a large tax on only a notional value increase? Or is that the idea? (I'm aware that part of the purpose of the tax is to reduce the likelihood of booms, but what I get from chaos theory is that booms are an inherent part of any complex system).

Re: Some land tax questions

[tcpip.livejournal.com]

Either is possible, plausible and within the scope of the theory. Personally I would prefer an orientation towards an annual (or even monthly) payment as renting "site value". Many LVT advocates (myself included) suggest that this payment should the entire unimproved site value.

In other words, whilst you would pay interest for "borrowing" a building from a home-owner, you would rent the land from the community.

With regards to rapidly inflated values these would only be likely if there were sudden development in the region; in which case holding on to the land in an uneconomic manner would retard productivity.

[wylde-writer.livejournal.com]

I have a huge activism streak, and an interest in issues beyond the borders of the U.S. where I live. If I were paying attention to news headlines and current events right now I'd probably be ranting right along with you about a variety of things. I can't afford to do that while I'm trying to stay immersed in my writing zone with a deadline drawing closer, but I appreciate where you're coming from.