WE’RE IN STRIFE, BUT NOTHING’S CHANGING!
On 13 January 2010 “Online Opinion” published an article “Propping up Australian real estate” in which I asserted that over-investment in real estate is a rational reaction by individuals to the dictates of perverse tax regimes. But how stupid are our representative governments that they refuse to acknowledge penalising people for generating real wealth and rewarding them for inflating real estate bubbles will escalate land prices to all time highs at a terrible cost to the real economy and to society itself?
Unions and the bosses of industry remain light years away from perceiving how tax systems have been set up to benefit speculators at the expense of workers and business alike. So, speculators we’ve had to become. Economic Indicator Services’ Phil Anderson (author of the excellent study “The Secret Life of Real Estate“) was recently moved to tell subscribers to his newsletter:-
“Here’s a very good chart of US wages. Goes to show that under the present monopoly capitalist system, you will get slaughtered as a simple wage earner. But you know that already.”
You start to wonder at what point western governments would ever admit to the complicity of the tax system in cyles of boom and bust which, left uncorrected, direct us into economic depression and war.
This was long ago spelled out in Henry George’s seminal work “Progress and Poverty“. It remains the world’s biggest seller in economics and, in view of the Global Financial Crisis, its sub-title “An inquiry into the cause of industrial depressions and of increase of want with increase of wealth … The Remedy” should be attracting the interest of policy makers. However, as long as the economy’s handmaidens, finance and real estate, rule from the pedestals on which we’ve placed them, the wisdom contained in the book is unlikely to come to the attention of President Barack Obama and Prime Ministers Gordon Brown, Kevin Rudd and others.
So, while China’s getting windy about the incredible rewards given to those who help to inflate real estate bubbles, we’re not addressing this aspect of the economy at all. Instead, we’re still seeking new ways to regulate bank lending, a well-worn path that always leads to a dead end.
We’re wasting time we can ill afford to waste.