Welcome to the August issue of The Georgist News.
Notable commentators covered every aspect of geoist public revenue
reform. The power of the land to swallow profit was demonstrated yet
again. The deflating housing bubble lost more air as geoists predicted.
And a new book, by somebody who's been right before, is out telling how
bad it will get. Chatty fodder all for backyard barbeques.
CONTENTS:
1. Good Press: Get gas rent; End agri-subsidy; Bishop Tutu for BIG;
Christian Science Monitor for Housing Voucher;
Goldman Sachs anti-war spending
2. News: LA real estate at $1 trillion; Farm profit eaten by land cost;
Farmland driven up by subsidies and speculators
3. Numbers: Bad news undercounted; Three new lows
4. Movement Progress: Scranton conference popular success
5. Likable links: The Guardian; Cooperative Individualism
6. What You Can Do: Rate one-minute messages; Buy forecast book
7. At the Margin: Quips and Quotes
8. Publication affairs: Contributors, About the Georgist News
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1a. Good Press: Let's recover natural gas rent
By John Brummett, The Morning News, July 6, 2007
The State of Arkansas' severance tax on natural gas is 1/200th the
amount of Texas', which is 7.5% of market value; therefore, not only
higher, but flexible according to price variations. It takes a
prohibitive three-fourths legislative majority to raise our state's
severance tax on natural gas. The sales tax on the regular Joe, created
later, can be raised by a simple majority. Someone could propose a
citizens' initiative for a state constitutional amendment saying
severance taxes on natural gas in Arkansas would be based on market
value, at a rate subject to the state Legislature's discretion, set by a
simple majority vote.
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1b. Good Press: End agri-business subsidies
Los Angeles Times, June 25, 2007
"Conservatives don't like farm subsidies because they're a waste of
taxpayer money and interfere with free trade. Consumers don't like them
because they inflate food prices. Anti-poverty activists don't like them
because they encourage American farmers to overproduce certain crops and
dump them on the world market, putting farmers in poor countries out of
business. Even most U.S. farmers don't like them because its benefits
are distributed so unevenly; the top 20% of recipients collect 84% of
crop payments, and roughly two-thirds of American farmers don't get any
subsidies at all.
There are alternatives, particularly the bipartisan Farm 21 bill
introduced in the Senate by Richard G. Lugar (R-Ind.) and in the House
by Ron Kind (D-Wis.), Jeff Flake (R-Ariz.), Joseph Crowley (D-N.Y.) and
Dave Reichert (R-Wash.). It would end crop subsidies and instead put the
money in 'risk management accounts' -- sort of like Individual
Retirement Accounts for farmers -- and end government payments entirely
within seven years."
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1c. Good Press: Bishop Desmond Tutu for extra income for all
By The Star, 17 July, 2007 in the newsletter of SANE
(S. African New Economics Foundation) Vol. 7, No. 18, 18 July, 2007,
via Godfrey Dunkley
Archbishop Desmond Tutu has urged the government to implement a basic
income grant to relieve the plight of the poor and the unemployed. This
was his submission at the opening of the triennial national conference
of the South African Council Churches. President Thabo Mbeki's cabinet,
with the exception of Social Development Minister Zola Skweyiya, is
opposed to a BIG (Basic Income Grant).
Joseph Thompson, former President of the International Union for LVT, in
his pamphlet of approximately 1964, "Basic Income," pointed out the need
for a Basic Income Grant or Citizens Dividend.
Editor's note: The Basic Income Grant gets publicity. And South Africa
has active Georgists. If they could get the ear of Bishop Tutu to point
out the proper source of revenue for a BIG ...
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1d. Good Press: Housing Voucher beats public housing
The Christian Science Monitor, July 13, 2007
The number of households spending more than half their income on housing
has risen sharply: up 1.2 million to 17 million from 2004 to 2005.
Owners and renters, middle-income and poor, 1 in 7 households carry this
burden, most of them low-income Americans. The tradeoff for many
Americans is a longer commute (at higher gas prices), substandard
housing or crowded living quarters. It can also mean no savings and less
spent on healthcare, food or clothing. A new federal bill emphasizes
bricks and mortar; yet research shows it's more cost effective to
subsidize housing (through vouchers, for instance), than to build it.
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1e. Good Press: Banker warns about federal debt
By Paul B. Farrell, MarketWatch July 23, 2007
Robert Hormats, vice chairman of Goldman Sachs International, appeared
before the U.S. House Budget Committee to "discuss an issue of great
economic, financial and national security importance to our country: the
growing dependence of the United States on foreign capital." Currently
we import $1 trillion new debt annually, with no repayment plans. That's
a historic break from over two centuries of American policy. He says
sound, national finances have proved to be indispensable to the
country's military strength" and long-term national security. The war is
costing us $12 billion a month. Foreign banks are dumping dollar
reserves. Americans must have a plan to repay our debts -- if we want a
strong credit rating.
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2a. News: County's property tax rolls hit $1-trillion mark
By Susannah Rosenblatt, Los Angeles Times, July 10, 2007
Steady, single-family home sales last year amid the Los Angeles area's
limited mid-priced housing supply helped push the county's property tax
assessment rolls over the $1 trillion mark for the first time. The
county's 2006 assessed value grew by 9.3%, or $88 billion, over the
previous year, when the increase was an even greater 11%. The increase
was above the county's average annual growth of about 7% in the last
three decades. The county's assessment rolls include 2.3 million parcels
and about 300,000 pieces of business equipment, boats and airplanes. The
county receives about a third of property tax revenue, cities get a
quarter, school districts take 20%, and community redevelopment areas
and special districts combined receive 20%.
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2b. News: Farmers' gross up, costs up
By Gregory W. Griggs, Los Angeles Times, July 26, 2007
Just up the coast from LA, Ventura County's agricultural industry
reported a record $1.5 billion in gross sales last year, up more than
$238 million from the previous year. "As far as profitability, it was a
very average year; about the same as 2005," said Terry, a
fourth-generation farmer. "The bulk of that [extra revenue] is being
chewed up in land rent, fuel costs, which are through the roof, and
labor costs."
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2c. News: Land prices leave farmers in a lurch
By Beth M. Gilbert for USA Today, contributions by Sue Kirchhoff,
USA Today, July 19, 2007
In the biggest, sustained gains since the 1980s downturn, farm real
estate values more than doubled to a record from 1996 to 2006, rising
40% from 2004 to 2006 alone. The increases were propelled by good crop
markets, a rash of outside investors, favorable interest rates and tax
incentives and a strong housing market. Even as the housing market
falters, land values in some areas are rising due to a surge in corn
prices and corn-based ethanol production that is creating a gold-rush
mentality in parts of the Midwest.
Unlike the 1970s and 1980s, when booming export markets induced farmers
to borrow at double-digit interest rates to purchase land, many buyers
today are paying cash. Farming and ranching operations have become far
more productive; to work 7,000 acres today, one farmer needs just two
full-time employees. After jumping in response to a strong export market
and high commodity prices, rural land values fell more than 25% from
1982 through 1987.
About 20% of U.S. corn production is now dedicated to ethanol. Corn
prices more than doubled to nearly $4 a bushel on futures markets,
before falling to $3.27 -- still historically high. Rising prices for
corn and other crops are pushing up land prices and having other
indirect effects: the thirsty corn crop requires huge, wheel-mounted
sprinklers, and this is straining water supplies. If corn prices stay
high, farmers could take more fragile land out of the federal
Conservation Reserve Program.
Rising land values make it harder for newcomers to get into agriculture,
while increasing costs to farmers and ranchers who lease acreage.
Upwards of 40% of agricultural land is owned by absentee landlords, and
many farmers and ranchers lease the land they rely on.
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3a. Numbers: Bad news undercounted
By Rachel Beck, Associated Press, July 5, 2007
Housing prices might be falling faster than is being reported. The
median sales price of new homes fell 0.9% in May from a year ago, after
tumbling 10.9% in April. But those numbers don't include thousands of
dollars in the incentives that sellers are using to lure buyers,
including cash rebates, plasma TVs, pool installation and closing costs.
A home selling for $600,000 gets reported for that price though the
extras are reducing the net sale price. Sales incentives at Lennar
Corp., one of the nation's biggest builders, averaged $43,700 a home in
its second quarter, up from $24,700 in the corresponding quarter last
year. And the incentives are spilling over to the existing home and
foreclosure market. Also, mortgage application indexes that don't
account for the implosion of lenders could mask a slowdown in demand.
The survey refers to mortgage applications, not originations, which
legally bind borrowers to the mortgage. But in recent months, more
applications are rejected, and originations go down.
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3b. Numbers for Q1: Mortgage debt tardiness worst since 2001
By Rex Nutting, MarketWatch, July 3, 2007
More Americans fell behind on their debt payments in the first quarter
than at any time since the 2001 recession, despite fewer delinquencies
on credit card debts. Delinquencies of all types of consumer loans rose
to 2.42% in the first quarter from 2.23% in the fourth quarter, led by
higher rates of late payments for real estate loans.
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3c. Numbers for June: A six-year low and a 10-year low
By Reuters, July 18, 2007
The pace of home construction rose 2.3% in June, but building permit
activity, a sign of future construction plans, sank 7.5% in June to its
lowest rate in 10 years. Builders' Confidence dropped two points to 28
in June to the lowest level in more than 16 years.
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3d. Numbers for June: A year-year low and a price drop
By Noelle Knox, USA Today, July 27, 2007
Sales of newly built homes slid 6.6% from May to June and were down a
sharp 22% from June of last year. Sales of existing homes fell last
month to their lowest point in nearly five years. The median price of a
new home last month -- the point at which half the homes cost more and
half cost less -- dropped 2.2% from June of last year, to $237,900.
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4. Movement Progress: 2007 conference treats Georgists to Catholics
The 2007 CGO Conference, Two Views of Social Justice: A
Catholic/Georgist Dialogue, was co-sponsored by the University of
Scranton and the Robert Schalkenbach Foundation from July 20 to 27. It
was a week of insightful dialog and emotional renewal. Old friends
enjoyed each other's company and newcomers made new friends. The
enthusiasm engendered should carry over till next year in Kansas City.
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5a. Likable link: Latest Aussie Guardian available
By David Brooks, July 17, 2007
The July 2007 Guardian is available.
http://people.aapt.net.au/~radical/Guardian.html
Enjoy the reading.
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5b. Likable link: School of Cooperative Individualism update
By Ed Dodson, July 6, 2007
SCI is now in its tenth year of existence as an online research tool.
When I began this project, I had no idea how it would develop. Over
time, many people sent me material for the SCI library, and I gradually
embarked on projects to attract the widest audience possible. Also from
time to time, I changed page structures and formatting.
For the past several months, I have been reformatting the appearance of
every document in the SCI library to improve online readability. This
project is now completed, and I invite you to examine the results. After
a bit of a break, visitors will begin to find more new material being
added.
The SCI home page is a very active page. Several people have commented
that the navigation tools could be improved. So, I have created an
alternative home page as a test. If you have a few minutes, take a look,
try the internal and external links and let me know if you think this is
an improvement. Here's the link:
http://www.cooperativeindividualism.org/index-revised.html.
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6a. What You Can Do: Flash Movies regarding LAND, etc.
By Tony Payne, happiocracy at gmail.com, July 12, 2007
Dan Pedersen and I have spent many hundreds of hours delving into the
complexities of Flash. We are convinced that short Flash presentations
can help to communicate ideas succinctly and effectively. We have
produced a number of rudimentary movies and offer them for your critique
and feedback:
1. What Makes Property Unaffordable? (69 seconds)
The facts (inspired by Dave Wetzel's PowerPoint presentation)
http://www.happiocracy.dk/happiocracy/f.house.html
2. Why the Growing Gap Between Rich and Poor? (98 seconds)
The justice argument
http://www.happiocracy.dk/happiocracy/f.richpoor.html
3. A Journey Through Space From the Milky Way (107 seconds)
The moral argument
http://www.happiocracy.dk/happiocracy/f.space.html
In these movies you will notice a "justification" button that takes the
viewer to a list of bullet points for each movie. The idea is to
consolidate into one place as many relevant features and benefits as
possible.
We really appreciate the valuable input from Land Cafe members. Their
main purpose is to get the message across. We should particularly like
your opinion on how this aspect of the movies can be improved.
The movies are subject to a Creative Commons license, so feel free to
alter and improve them without asking permission, as long as the same
Creative Commons license is also used.
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6b. What You Can Do: Book applies George's cycle theory
by Fred Foldvary, July 12, 2007
How much money would you pay to know when the next economic recession
will take place? It will only cost you $25! With a money-back guarantee
for Fred Foldvary's booklet, The Depression of 2008.
Foldvary, who teaches economics at Santa Clara University, California,
has been studying and writing about business cycles for the past 20
years. He combined Friedrich Hayek's Austrian-school theory of the
business cycle, based on capital goods, interest rates, and money, with
the Henry George theory based on land values, and the real estate cycle
research of Homer Hoyt. He discovered that this geo-Austrian synthesis
matched every U.S. depression for the past 200 years. It also fit the
cycles of other countries, including the Japanese boom of the 1980s and
subsequent bust.
Ten years ago in public, Foldvary predicted that the next depression
would take place in 2008. He repeated that prediction in several later
articles. He does not want the financial world to claim that nobody
warned the public, that no economist saw the depression coming.
You can buy the 36-page booklet, The Depression of 2008, for $25,
including postage, from The Gutenberg Press, PO Box 9597, Berkeley, CA,
94709. Mail a check payable to The Gutenberg Press. It will be sent to
you by first class mail. For international, please send $30 in U.S.
dollars.
The Gutenberg Press (gutenbergpress at pobox.com) guarantees to refund
your payment if you think the booklet does not deliver knowledge and
insights well worth the price.
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7. At the Margin: Quips and Quotes
It's frustrating when you know all the answers but nobody bothers to ask
you the questions. -- Anonymous
Don't question authority: they don't know either. -- Anonymous
"Go outside, to the fields, enjoy nature and the sunshine, go out and
try to recapture the happiness in yourself and in God. Think of all the
beauty that's still left in and around you and be happy." -- Anne Frank
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8a. Publication affairs: Contributing to this issue
David Brooks, Ed Dodson, Godfrey Dunkley, Fred Foldvary, Mark Monson,
Tony Payne.
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 August 25.
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About The Georgist News
The Georgist News, a project of the Robert Schalkenbach Foundation,
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The Georgist News, Volume Ten, Number Two, August 1, 2007