Prosper Australia

In one of the most compelling interviews of recent times, Michael Hudson talks about economic warfare like few others. In a wide ranging interview discussing the GFC via his recent experiences in Iceland, of UK financial powerplays and the dominance of the Rubinomics banksters, the speed of thought and analysis that Hudson displays is what we need in this world of diplomatic doublespeak. The 2nd half of the interview is dominated by a piercing critique of Marxism. Make yourself that hot cuppa and arm yourself with essential information.

How independence was never intended to mean freedom

When: Thurs April 30th, 6.30 for 6.45pm
Who: Karl Fitzgerald, Prosper Australia Project Coordinator and 3CR’s Renegade Economist.
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Vanuatu means ‘Eternal Land’.

However, our recent visit to these idyllic lands revealed a dark side to the beauty surrounding such a community. Economic policy is out of kilter with the Treasure Island type mentality that wealthy speculators abuse in quoting Vanuatu as the ‘World’s Happiest People’. The free lunch prerogative of the vested interests has the indigenous people of Vanuatu, the ni-Van’s, battling for food in a bounty-ful land .

We returned from Vanuatu in tears at the destruction economic policy was causing. Both working people and capitalists themselves are subservient to the forces that have brought the world economy to it’s knees. We were chased off world heritage land developments by shady property sharks but yet lauded by people in the street for bringing understanding to the economic imperative that land demands.

Australia’s reputation in the Pacific has scarcely been lower. We are facing the likelihood of more Fiji-like revolutions with the current tax policy recommendations of the World Bank, IMF and ANZUS dominating the Pacific.

Foreign aid will be forensically examined and the keynesian limitations discussed during the presentation. We must find a new model for community development. Earthsharing Australia will be discussing this new model within the confines of the projects undertaken with ‘ni-NGO’.

ni-NGO is a ni-Van run NGO that Earthsharing Australia has helped set up. If this model is successful, we will set up Earthsharing Pacific to give both DIY self-support at the micro level, and tax advice at the macro level throughout the Pacific.

Come and hear about the trials and tribulations of one of the world’s most beautiful locations, the progress we have made so far and our outline to assist ni-Van’s regain control over their most precious resource – the land on which they are meant to stand.

Where: Level 1/ 27 Hardware Lane, Melbourne
Entry: gold coin donation – all funding goes towards ni-NGO
Drinks and nibbles to follow
RSVP via Facebook or via email so we know how many goodies to buy.

photo credit: dave_7

Polly Cleveland

Economists conventionally attribute the Great Depression to blunders by the then-new Federal Reserve Bank. According to this story, promoted by Milton Friedman and the Chicago School, after the stock market crash of 1929, the Fed kept interest rates too high, strangling the economy. This story made most economists confident that it couldn’t happen again.
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But there’s a different story: the story of the great 1920s real estate bubble. It began with cars.

Starting in 1899, the auto industry took off exponentially, dipped fortwo years during World War I, then took off exponentially again during the 1920s. Production reached a peak of over 4 million vehicles in 1929, before collapsing. It did not again pass 4 million until 1949!

The auto suddenly opened up vast suburban and rural areas to housing. Developers–legitimate and bogus–leapt at the opportunity. Banks jumped in too, creating so-called “shoestring mortgages”—effectively allowing property purchases on margin. Within a few years, tens of thousands of acres around major cities had been subdivided and sold. In rural areas, developers bought up farms, dug a pond, built a “club house” and sold cheap “vacation” lots. As reported in Homer Hoyt’s classic One Hundred Years of Land Values in Chicago, from 1918 to 1926 Chicago population increased 35 percent and land values rose 150 percent, or about 12 percent a year.
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short but sweet

Why a 130-Year-Old Idea is Still Relevant Today

Jason Bessey

Apr 21, 2009

In the late 19th century, the Industrial Revolution was well underway. Society, it would seem, was beginning to make a huge leap in progress in areas like technology and production. In places like California, many places went from camps to cities in a relatively short time. Such a time, one could assume, must have been quite exciting and hopeful.

But not everyone at that time would have made such an assumption. A printer from San Francisco named Henry George couldn’t help but notice that in the midst of all this progress, poverty was on the rise. “How could this be?” George wondered. So troubled by this observation, he set out to explore this vexing question in his aptly titled book, Progress and Poverty.

The problem, George concluded, was the inefficient hoarding of land and natural resources by a few at the top of the socio-economic ladder coupled with a taxation system that hindered upward mobility of those at the bottom. George’s solution was to abolish all taxes but one: a single tax on land, (which would include natural resources but not include the products of human labor, like buildings and improvements to land).

Though Henry George was well known in his day, and though Progress and Poverty very popular, these days, it would seem, George has essentially been relegated to a footnote in economic history. This is unfortunate, I would argue, since I believe his idea would still be very relevant today in the larger context of many of today’s pressing issues, like the economy, poverty, the environment, and responsible government.

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What’s the difference between land price and land value?

photo credit: zachstern

Karl Williams

Progress Magazine’s editorial column. Make sure you sign up to receive a hard copy of our hard hitting magazine – Trial Subscriptions are available.

This time of economic crisis is when we make our run. Politicians, think-tanks, bankers and the commentariat are proving to the public that their voodoo economics – essentially, neoclassical economics – is a proven failure.

The bailouts occurring – especially in the USA – are chiefly designed to prop up the banks and property prices. No surprise there – a collapsing property market is seen as disastrous by almost all.

No, we assert! Let the bubble burst! Let us be free from the iron chains into which we’re all shackled as we make our entrance on this planet – the massive cost we must pay to those who have misappropriated the Common Wealth. The burden that industry must bear – in terms of rent or interest on bank loans – in occupying the land they need to produce goods and services.

And when the rent from land is instead diverted into the public purse, the burdensome taxes on production can also be phased out. And the busts that inevitably follow speculative booms in land – as we predicted – will also have their origin withdrawn.

That Kevin Rudd’s solution to this crisis would simply involve giving away (from future taxpayers’ pockets) vast sums of money with the encouragement that they madly spend needs no comment. When Australia’s land price bubble bursts, as it shortly will, then Kev will wish he had something else in his pocket to dish out to the electorate.

Somehow, we seem to be living in parallel universes. Our universe still contains land, but Kev’s has land conflated into capital. Oh dear.

photo credit: azrainman

Occasional commentary # 9

27 March 2009

Bryan Kavanagh

Let’s say labour joins with capital to produce wealth. The locational rent of land arises as a by-product, simply from the existence of the community.

Say, for some reason or other, you wanted to create an economic depression. How would you go about it? OK, then let’s tax labour and capital to reduce their wages and interest. But don’t collect the land rent for government, because we’re trying to get a depression happening, remember?

So you fine labour and capital for working, but you don’t capture the land rent, is that it? Yes, but that’s only the beginning. It’s what happens next with the rent you’ve left in private hands that’s the most important consideration. That’s because if you’re really trying to create economic depression, you’ve got to set up a vast disparity in wealth, and to squeeze the middle class and the poor. You choke off what they call ‘effective demand’ by putting them into impossible debt.

Now, as the wealthy own the most valuable properties, and usually more than one property, they also control much of the land rent. That means that every red cent they pay in taxation is clawed back by the increases in land rent which is then capitalised back into the value of their properties. They may pay more tax than the poor, but they’ll certainly get it all back via their escalating land values. They simply translate it into their asset values by privatising rent.
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An occasional commentary on the depression # 8

5 March 2009

Bryan Kavanagh*

There’s something happens when people get together in groups. Their IQs halve. If the most obvious fact an outsider puts to the group is incomprehensible to them, the interloper should be set upon and duly removed by the group’s designated attack dogs.

Take for instance what happened during the onset of this economic depression. Economists obviously aren’t to blame. How could they be? Nobody could have possibly foreseen this financial collapse approaching. (A veritable cyclone, the Prime Minister calls it.) Those one or two blowhards, such as Steve Keen, who claims to have foreseen these debt levels to be ‘impossible’ are simply publicity-seekers. Did they actually want to destroy confidence in the economy? They ought to know that mountains of debt are a house of cards, waiting to fall if they utter the wrong words! Why didn’t these individuals accept their responsibility to see the economy as ‘a matter of confidence’?

Access Economics has played a much more respectable part throughout. Chris Richardson patiently and simply explains what has already happened to the economy. There’s no harm in that, so long as it’s well and truly after the event. That’s the way it should be if we are to retain peoples’ confidence in the financial system. Albeit we may allow economists to take a guess at next year’s increase in GDP, and the overnight cash rate that might apply at this time next year, that’s just a nice game. You may conclude with absolute certainty that anyone who claims to see where we’re really headed, especially if they see dark clouds looming on the economic horizon, is most certainly an imposter, a fraudster, not at all worthy of the profession.

And take the example of the political parties. They may seem to be at odds as they cut each other to shreds, but they still honour the group rules. Neither major party may support any action of genuine reform, because that simply gives the other side too much leverage for criticism, and that only ‘scares the horses’. It’s common, in fact, to accuse the other side of scaring people. And some people are clearly too simple to have truth thrust upon them. So, the status must remain pretty well quo. That’s really what confidence is all about, isn’t it, being concerned to leave things more or less as they are, whilst giving the appearance that things are going along smoothly with all the legislation and stuff?
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photo credit: nflorence2012

How to avoid being caught short: US calls in old rules to shield its markets:

The slumping financial markets have been rebounding steadily in the past month for several reasons, including regulatory and legislative decisions in Washington. The Dow Jones Industrial Average closed on Friday above 8000, a dramatic increase from the 6500 level of four weeks ago.

The true nature of neo-conservative has been revealed as neo-con. We are being conned big time and this trifecta of policy addendums is adding to the mis-information in the marketplace:

• The removal of mark to market accounting
• The push to ban short selling with the upkick rule
• The Geitner Plan propping up the land market

Stiglitz rips into the Geitner plan (above) and Jeffrey Sachs expands on this to show just how easy the scheme would be to rip off with an off-balance sheet arrangement.

The change away from mark to market accounting will allow banks to embellish asset prices. Isn’t the market meant to correct itself? The con in neo-con comes back to haunt us….This move aims to save more banks from liquidation. Does it infer a return to Mark-to-Model?

The soon to be announced banning of short selling by the introduction of the upkick rule will prevent corporate whistleblowers from holding a company accountable. Whilst shorting does seem to be against the spirit of capitalism, it is a warning signal to others. Share prices will be propped up until one of the whistleblowers briefs a journalist.

All in all its another move to preserve the current players, maintain the wealth gap and increase the inter-generational gap.

Schumpeter would be turning in his grave with Creative Destructionism making way for Bailout the Destroyers.

Why do rent-seekers rule? The investment theory of politics explains why such priority is being given to these political operatives.

To top things off, read this white collar piece on AIG’s side letters and whether they intended to be bailed out or not.

Yawn, yawn, yawn…